Document:

EXHIBIT 4.2
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                     THE ROYAL BANK OF SCOTLAND GROUP plc,
                                   as Issuer

                                       TO

                             THE BANK OF NEW YORK,
                                   as Trustee

                               -----------------

                                   INDENTURE

                         Dated as of November __, 2001

                                ----------------

                               Capital Securities

================================================================================

                             DAVIS POLK & WARDWELL

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                      THE ROYAL BANK OF SCOTLAND GROUP plc

     Reconciliation and tie between Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, and Capital Securities Indenture, dated
as of November __, 2001

Trust Indenture                                               Capital Securities
Act Section                                                   Indenture Section
---------------                                               -----------------
ss.310   (a)(1)................................................ 6.09
         (a)(2)................................................ 6.09
         (a)(3)................................................ Not Applicable
         (a)(4)................................................ Not Applicable
         (b)................................................... 6.08, 6.10
         (c)................................................... Not Applicable
ss.311   (a)................................................... 6.13
         (b)................................................... 6.13
         (b)(2)................................................ 7.03(a)
                                                                7.03(b)
         (c)................................................... Not Applicable
ss.312   (a)................................................... 7.01
                                                                7.02(a)
         (b)................................................... 7.02(b)
         (c)................................................... 7.02(c)
ss.313   (a)................................................... 7.03(a)
         (b)................................................... 7.03(a)
         (c)................................................... 1.06, 7.03(a)
         (d)................................................... 7.03(b)
ss.314   (a)................................................... 7.04, 10.06
         (b)................................................... Not Applicable
         (c)(1)................................................ 1.02
         (c)(2)................................................ 1.02
         (c)(3)................................................ Not Applicable
         (d)................................................... Not Applicable
         (e)................................................... 1.02
         (f)................................................... Not Applicable
ss.315   (a)................................................... 6.01
         (b)................................................... 6.02
                                                                7.03(a)
         (c)................................................... 6.01
         (d)................................................... 6.01
         (d)(1)................................................ 6.01
         (d)(2)................................................ 6.01
         (d)(3)................................................ 6.01
         (e)................................................... 5.14
ss.316   (a)(1)(A)............................................. 5.02 , 5.12
         (a)(l)(B)............................................. 5.13
         (a)(2)................................................ Not Applicable
         (a)(last sentence).................................... 1.01

                                       i

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         (b).............................................................. 5.08
ss.317   (a)(1)........................................................... 5.03
         (a)(2)........................................................... 5.04
         (b).............................................................. 10.03
ss.318   (a).............................................................. 1.07

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Capital Securities Indenture.

                                       ii

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                                   ARTICLE 1
            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01.  Definitions.....................................................1
Section 1.02.  Compliance Certificates and Opinions............................9
Section 1.03.  Form of Documents Delivered to Trustee..........................9
Section 1.04.  Acts of Holders................................................10
Section 1.05.  Notices, Etc. to Trustee and Company...........................11
Section 1.06.  Notice to Holders; Waiver......................................11
Section 1.07.  Conflict with Trust Indenture Act..............................12
Section 1.08.  Effect of Headings and Table of Contents.......................12
Section 1.09.  Successors and Assigns.........................................12
Section 1.10.  Separability Clause............................................12
Section 1.11.  Benefits of Capital Securities Indenture.......................12
Section 1.12.  Governing Law..................................................12
Section 1.13.  Saturdays, Sundays and Legal Holidays..........................12
Section 1.14.  Appointment of Agent for Service...............................13
Section 1.15.  Calculation Agent..............................................13

                                   ARTICLE 2
                             CAPITAL SECURITY FORMS

Section 2.01.  Forms Generally................................................13
Section 2.02.  Form of Trustee's Certificate of Authentication................14

                                   ARTICLE 3
                             THE CAPITAL SECURITIES

Section 3.01.  Amount Unlimited; Issuable in Series...........................15
Section 3.02.  Denominations..................................................17
Section 3.03.  Execution, Authentication, Delivery and Dating.................17
Section 3.04.  Temporary Capital Securities...................................18
Section 3.05.  Registration, Registration of Transfer and Exchange............19
Section 3.06.  Mutilated, Destroyed, Lost and Stolen Capital Securities.......22
Section 3.07.  Payments; Rights Preserved.....................................23
Section 3.08.  Persons Deemed Owners..........................................24
Section 3.09.  Cancellation...................................................24
Section 3.10.  Computation of Payments........................................24
Section 3.11.  CUSIP Numbers..................................................24

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                                   ARTICLE 4
                           SATISFACTION AND DISCHARGE

Section 4.01.  Satisfaction and Discharge of Capital Securities Indenture.....25
Section 4.02.  Application of Trust Money.....................................26
Section 4.03.  Repayment to Company...........................................26

                                   ARTICLE 5
                                    REMEDIES

Section 5.01.  Events of Default..............................................26
Section 5.02.  Acceleration of Maturity; Rescission and Annulment.............27
Section 5.03.  Defaults; Collection of Indebtedness and Suits for
                 Enforcement by Trustee.......................................27
Section 5.04.  Trustee May File Proofs of Claim...............................29
Section 5.05.  Trustee May Enforce Claims Without Possession of Capital
                 Securities...................................................29
Section 5.06.  Application of Money Collected.................................30
Section 5.07.  Limitation on Suits............................................30
Section 5.08.  Unconditional Right of Holders to Receive Principal, Premium
                 and Payments, If Any.........................................31
Section 5.09.  Restoration of Rights and Remedies.............................31
Section 5.10.  Rights and Remedies Cumulative.................................31
Section 5.11.  Delay or Omission Not Waiver...................................31
Section 5.12.  Control by Holders.............................................31
Section 5.13.  Waiver of past Defaults........................................32
Section 5.14.  Undertaking for Costs..........................................32

                                   ARTICLE 6
                                  THE TRUSTEE

Section 6.01.  Certain Duties and Responsibilities............................33
Section 6.02.  Notice of Defaults.............................................33
Section 6.03.  Certain Rights of Trustee......................................33
Section 6.04.  Not Responsible for Recitals or Issuance of Capital
                 Securities...................................................34
Section 6.05.  May Hold Capital Securities....................................35
Section 6.06.  Money Held in Trust............................................35
Section 6.07.  Compensation and Reimbursement.................................35
Section 6.08.  Disqualification; Conflicting Interests........................36
Section 6.09.  Corporate Trustee Required; Eligibility........................36
Section 6.10.  Resignation and Removal; Appointment of Successor..............36
Section 6.11.  Acceptance of Appointment by Successor.........................38
Section 6.12.  Merger, Conversion, Consolidation or Succession to
                 Business ....................................................39

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Section 6.13.  Preferential Collection of Claims.............................39
Section 6.14.  Appointment of Authenticating Agent...........................39

                                   ARTICLE 7
                HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 7.01.  Company to Furnish Trustee Names and Addresses of Holders
          ....................................................................41
Section 7.02.  Preservation of Information; Communication to Holders..........41
Section 7.03.  Reports by Trustee.............................................42
Section 7.04.  Reports by Company.............................................42

                                   ARTICLE 8
                 CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

Section 8.01.  Company May Consolidate, Etc., Only on Certain Terms...........43
Section 8.02.  Successor Corporation Substituted..............................44
Section 8.03.  Assumption of Obligations......................................44

                                   ARTICLE 9
                            SUPPLEMENTAL INDENTURES

Section 9.01.  Supplemental Indenture Without Consent of Holders..............46
Section 9.02.  Supplemental Indentures with Consent of Holders................47
Section 9.03.  Execution of Supplemental Indentures...........................48
Section 9.04.  Effect of Supplemental Indentures..............................48
Section 9.05.  Conformity with Trust Indenture Act............................48
Section 9.06.  Reference in Capital Securities to Supplemental Indentures.....48

                                   ARTICLE 10
                                   COVENANTS

Section 10.01.  Payment of Principal, Premium, Payments and Missed
                  Payments ...................................................49
Section 10.02.  Maintenance of Office or Agency...............................49
Section 10.03.  Money for Payments to Be Held in Trust........................49
Section 10.04.  Additional Amounts............................................51
Section 10.05.  Corporate Existence...........................................52
Section 10.06.  Statement as to Compliance....................................52

                                   ARTICLE 11
                        REDEMPTION OF CAPITAL SECURITIES

Section 11.01.  Applicability of Article......................................53
Section 11.02.  Election to Redeem; Notice to Trustee.........................53

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Section 11.03.  Selection by Trustee of Capital Securities to Be Redeemed.....53
Section 11.04.  Notice of Redemption..........................................53
Section 11.05.  Deposit of Redemption Price...................................54
Section 11.06.  Capital Securities Payable on Redemption Date.................54
Section 11.07.  Capital Securities Redeemed in Part...........................55
Section 11.08.  Optional Redemption Due to Changes in Tax Treatment...........55

                                   ARTICLE 12
                      SUBORDINATION OF CAPITAL SECURITIES

Section 12.01.  Capital Securities Subordinate to Senior Claims...............56
Section 12.02.  Provisions Solely to Define Relative Rights...................57
Section 12.03.  Trustee to Effectuate Subordination...........................57
Section 12.04.  No Waiver of Subordination Provisions.........................58
Section 12.05.  Notice to Trustee.............................................58
Section 12.06.  Reliance on Judicial Order or Certificate of Liquidating
                  Agent ......................................................58
Section 12.07.  Trustee Not Fiduciary for Senior Creditors....................59
Section 12.08.  Rights of Trustee as Senior Creditor; Preservation of
                  Trustee's Rights............................................59
Section 12.09.  Article Applicable to Paying Agents...........................59
Section 12.10.  Exchanges Not Deemed Payment..................................59

                                   ARTICLE 13
                         EXCHANGE OF CAPITAL SECURITIES

Section 13.01.  Applicability of Article......................................60
Section 13.02.  Election to Exchange; Notice to Trustee.......................60
Section 13.03.  Notice of Exchange............................................60
Section 13.04.  Deposit of Payments...........................................61
Section 13.05.  Surrender of Capital Securities...............................61
Section 13.06.  Issuance of Dollar Preference Shares or Exchange
                  Securities .................................................61
Section 13.07.  Effect of Exchange............................................62
Section 13.08.  Validity of Dollar Preference Shares or Exchange
                   Securities ................................................62
Section 13.09.  Legal and Regulatory Compliance...............................62
Section 13.10.  Taxes and Charges.............................................63
Section 13.11.  Trustee Not Liable............................................64

SIGNATURES....................................................................65
TESTIMONIUM...................................................................66

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<PAGE>

     CAPITAL SECURITIES INDENTURE, dated as of November __, 2001 between THE
ROYAL BANK OF SCOTLAND GROUP plc, a company incorporated in Great Britain and
registered in Scotland (the "Company"), having its registered office at 36 St
Andrew Square, Edinburgh EH2 2YB, United Kingdom and THE BANK OF NEW YORK, a
New York banking corporation, as Trustee (the "Trustee"), having its Corporate
Trust Office at 101 Barclay Street, New York, New York, 10286.

                            RECITALS OF THE COMPANY

     The Company has duly authorized the execution and delivery of this Capital
Securities Indenture to provide for the issuance from time to time of its
Capital Securities (the "Capital Securities"), to be issued in one or more
series, represented by one or more Global Securities in registered form without
coupons for payments attached, or represented by definitive Capital Securities
in registered form without coupons for payments attached, the amount and terms
of each such series to be determined as hereinafter provided.

     All things necessary to make this Capital Securities Indenture a valid and
binding agreement of the Company, in accordance with its terms, have been done.

     NOW, THEREFORE, THIS CAPITAL SECURITIES INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Capital
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of Capital Securities as
follows:

                                   ARTICLE 1
            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

     Section 1.01. Definitions. For all purposes of this Capital Securities
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:

     (a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;

     (b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;

<PAGE>

     (c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with accounting principles generally accepted in
the United Kingdom;

     (d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Capital Securities Indenture as a whole and not to
any particular Article, Section or other subdivision; and

     (e) any reference to an "Article" or a "Section" refers to an Article or
Section of this Capital Securities Indenture.

     Certain terms, used principally in Articles 6 and 13, are defined in those
Articles.

     "Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.

     "Additional Amounts" shall have the meaning set forth in Section 10.04, of
this Agreement.

     "ADR Custodian" means the custodian under the ADR Deposit Agreement.

     "ADR Deposit Agreement" means the Deposit Agreement dated as of August 17,
1992, and amended and restated as of February 8, 1999, and as further amended
and restated as of November 2, 2001 as may be further amended from time to time
between the Company and 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.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     "Agent Member" means a member of, or participant in, any Depositary.

                                       2

<PAGE>

     "Auditors" means the Auditors from time to time of the Company or if there
shall be joint Auditors of the Company any one or more of such joint Auditors.

     "Authenticating Agent" means any Person authorized by the Trustee to act
on behalf of the Trustee to authenticate Capital Securities.

     "Authorized Newspaper" means a newspaper in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in the place in
connection with which the term is used, which, in the United Kingdom, will be
the Financial Times of London, if practicable, and which, in the United States,
will be the Wall Street Journal, if practicable and which, in Luxembourg, will
be the Luxemburger Wort, if practicable and for so long as and only with
respect to any Capital Securities listed on the Luxembourg Stock Exchange, and
if it shall be impracticable in the opinion of the Trustee to make any
publication of any notice required hereby in any such newspaper, shall mean any
publication or other notice in lieu thereof which is made or given with the
approval of the Trustee.

     "Board of Directors" means either the board of directors, or any committee
of such board duly authorized to act with respect hereto, of the Company, which
board of directors or committee may, to the extent permitted by applicable law,
delegate its authority.

     "Board Resolution" means a copy of a resolution certified by the Secretary
or a Deputy or Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or an authorized committee thereof and to be in full
force and effect on the date of such certification and delivered to the
Trustee.

     "Business Day" means, with respect to any Place of Payment, except as may
otherwise be provided in the form of Capital Securities of any particular
series, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.

     "Calculation Agent" means the Person, if any, authorized by the Company to
calculate the interest rate or other amounts from time to time in relation to
any series of Capital Securities.

     "Capital Securities" has the meaning set forth in the recitals of the
Company herein and more particularly means any series of Capital Securities
issued, authenticated and delivered under this Capital Securities Indenture.

     "Capital Securities Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or

                                       3

<PAGE>

more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms and forms of particular series of
Capital Securities established pursuant to Section 3.01.

     "Capital Security" means one of the Capital Securities.

     "Capital Security Register" and "Capital Security Registrar" have the
respective meanings specified in Section 3.05.

     "Clearstream" means, Clearstream Banking, societe anonyme, or its nominee
or its or their successor.

     "Commission" means the United States Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.

     "Company" means the Person named as the "Company" in the first paragraph
of this Capital Securities Indenture until a successor corporation shall have
become such pursuant to the applicable provisions of this Capital Securities
Indenture, and thereafter "Company" shall mean such successor corporation.

     "Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by an Executive Director or
Director or the Secretary or a Deputy or Assistant Secretary, and delivered to
the Trustee.

     "Corporate Trust Office" means the office of the Trustee in which its
corporate trust business is principally administered, located at 101 Barclay
Street, Floor 21 West, New York, New York 10286.

     The term "corporation" includes corporations, associations, companies and
business trusts.

     "Default" has the meaning specified in Section 5.03.

     "Depositary" means, with respect to any series of Capital Securities, a
clearing agency that is designated to act as Depositary for the Global
Securities evidencing all or part of such Capital Securities as contemplated by
Section 3.01.

     "Dollar" or "$" or any similar reference means the coin or currency of the
United States of America which as at the time of payment is legal tender for
the payment of public and private debts.

                                       4

<PAGE>

     "Dollar Preference Shares" means a designated series of non-cumulative
dollar preference shares, nominal value of $.01 each, of the Company for which,
if applicable to a particular series of Capital Securities, the Company may
exchange or convert any series of Capital Securities.

     "DTC" means the Depository Trust & Clearing Company or its nominee or its
or their successor.

     "euro"or "(U)" means the single currency of the participating member
states in the Third Stage of European economic and monetary union pursuant to
the Treaty establishing the European Community (as amended from time to time).

     "Euroclear" means, the Euroclear Bank S.A./N.V., or its nominee, or its or
their successor.

     "Event of Default" has the meaning specified in Section 5.01.

     "Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.

     "Exchange Date", when used with respect to any applicable series of
Capital Securities, has the meaning specified in Section 13.03.

     "Exchange Securities" has the meaning specified in Section 3.01(l).

     "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 of America 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 Capital Securities
of any series that are denominated in a Foreign Currency, non-callable (i)
direct obligations of the participating member state or government that 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.

     "Global Security" means a global certificate evidencing all or part of a
series of Capital Securities, authenticated and delivered to the Holder and
registered in the name of the Holder or its nominee.

                                       5

<PAGE>

     "Holder" means a Person in whose name a Capital Security in global or
definitive form is registered in the Capital Security Register.

     "Liquidator" has the meaning specified in Section 12.06.

     "Maturity", when used with respect to any Capital Security, means the
date, if any, on which the principal of such Capital Security becomes due and
payable as therein or herein provided, whether by call for redemption,
winding-up of the Company or otherwise.

     "Missed Payment" has the meaning specified in Section 3.07(d).

     "Officer's Certificate" means a certificate delivered to the Trustee and
signed by an Executive Director or an Assistant Director or the Secretary or a
Deputy or Assistant Secretary of the Company.

     "Opinion of Counsel" means a written opinion of legal advisors, who may be
an employee of or legal advisors for the Company or other legal advisors.

     "Outstanding", when used with respect to Capital Securities or any series
of Capital Securities means, as of the date of determination, all Capital
Securities or all Capital Securities of such series, as the case may be,
theretofore authenticated and delivered under this Capital Securities
Indenture, except:

          (i) Capital Securities theretofore cancelled by the Trustee or
     delivered to the Trustee for cancellation;

         (ii) Capital Securities, or portions thereof, for whose payment or
     redemption money, U.S. Government Obligations or Foreign Government
     Securities in the necessary amount have been theretofore deposited with
     the Trustee or any Paying Agent (other than the Company) in trust or set
     aside and segregated in trust by the Company (if the Company shall act as
     its own Paying Agent) for the Holders of such Capital Securities;
     provided, that, if such Capital Securities are to be redeemed, notice of
     such redemption has been duly given pursuant to this Capital Securities
     Indenture or provision therefor satisfactory to the Trustee has been made;
     and

        (iii) Capital Securities which have been paid pursuant to Section
     11.06 or in exchange for or in lieu of which other Capital Securities have
     been authenticated and delivered pursuant to this Capital Securities
     Indenture, other than any such Capital Securities in respect of which
     there shall have been presented to the Trustee proof satisfactory to it
     that such Capital Securities are held by a bona fide purchaser in whose
     hands such Capital Securities are valid obligations of the Company;

                                       6

<PAGE>

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Capital Securities of any series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, (i) the principal amount of a Capital Security denominated in a
Foreign Currency shall be the Dollar equivalent, determined on the date of
original issuance of such Capital Security, of the principal amount of such
Capital Security; and (ii) Capital Securities beneficially owned by the Company
or any other obligor upon the Capital Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Capital Securities which a Responsible Officer of the
Trustee actually knows to be so beneficially owned shall be so disregarded;
provided, further, however, that Capital Securities so beneficially owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Capital Securities and that the pledgee is not the Company
or any other obligor upon the Capital Securities or any Affiliate of the
Company or of such other obligor.

     "participating member states" means those member states of the European
Union from time to time which adopt a single, shared currency in the Third
Stage, as defined and identified in the EMU legislation.

     "Paying Agent" means any Person (which may include the Company) authorized
by the Company to pay the principal of (and premium, if any) and Payments
(including Missed Payments, if any) on any Capital Securities on behalf of the
Company.

     "Payment" means a payment made to Holders at a rate per annum of the
principal amount of the Capital Securities of a series as determined pursuant
to Section 3.01 and set forth in such Capital Securities or determinable
pursuant to the terms of such Capital Securities.

     "Payment Date", when used with respect to any Capital Security, means the
date for payment of any Payment on such Capital Security, as determined by the
Company and set forth in such Capital Security.

     "Payment Event" has the meaning specified in Section 5.03.

     "Payment Period", when used with respect to any series of Capital
Securities, means the period beginning on the date of issue of the series of
Capital Securities up to (but excluding) the first Payment Date and each
successive period from (and including) a Payment Date up to (but excluding) the
next succeeding Payment Date.

                                       7

<PAGE>

     "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     "Place of Payment", when used with respect to the Capital Securities of
any series, means the place or places where the principal of (and premium, if
any) Payments and Missed Payments, if any, on the Capital Securities of that
series are payable as specified pursuant to Section 3.01 or, if not so
specified, as specified in Section 10.02.

     "Predecessor Security" of any particular Capital Security means every
previous Capital Security evidencing all or a portion of the same debt as that
evidenced by such particular Capital Security; and, for the purposes of this
definition, any Capital Security authenticated and delivered under Section 3.06
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Capital
Security shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Capital Security.

     "Redemption Date", when used with respect to any Capital Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Capital Securities Indenture.

     "Redemption Price", when used with respect to any Capital Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Capital Securities Indenture.

     "Regular Record Date" for the Payment payable on any Payment Date on
registered Capital Securities of any series means the date specified for the
purpose pursuant to Section 3.01.

     "Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee assigned to or working in the corporate trust department
of the Trustee or, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his or her knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Capital Securities Indenture.

     "Senior Claims" in respect of any series of capital securities means (i)
all claims of unsubordinated creditors of the Company admitted in the
winding-up, (ii) all claims of creditors of the Company in respect of
liabilities of the Company that are, or are expressed to be, subordinated
(whether only in the event of the winding-up of the Company or otherwise) to
the claims of unsubordinated creditors of the Company but not further or
otherwise, (iii) all other claims except those which rank, or are expressed to
rank, equally with or junior to the claims of

                                       8

<PAGE>

Holders of any series of Capital Securities and (iv) any other Senior Claims
provided with respect to Capital Securities of such series pursuant to Section
3.01.

     "Senior Creditors" means the creditors of the Company holding the Senior
Claims.

     "Solvency Condition" means that, at the relevant time, the Company is
solvent by virtue of (a) it being able to pay its debts as they fall due, and
(b) the total non-consolidated assets of the Company exceed the Company's total
non-consolidated liabilities other than, except in the case of the optional
redemption by the Company or repurchase of any Capital Securities by the
Company or any of its subsidiaries, liabilities that do not constitute Senior
Claims. The determination of whether the Solvency Condition has been satisfied
shall be made in accordance with Section 12.01(b).

     "Subsidiary" has the meaning attributed thereto by Section 7.36 of the
Companies Act 1985 of Great Britain as in force at the date as of which this
instrument was executed.

     "successor entity" has the meaning specified in Section 8.03.

     "Taxing Jurisdiction" has the meaning specified in Section 10.04.

     "Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor trustee shall have become such pursuant to
the applicable provisions of this Capital Securities Indenture, and thereafter
"Trustee" shall mean the Person who is then the Trustee hereunder, and if at
any time there is more than one such Person, "Trustee" shall mean and include
each such Person; and "Trustee" as used with respect to the Capital Securities
of any series shall mean the Trustee with respect to the Capital Securities of
such series.

     "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this instrument was executed, except as provided in Section 9.05.

     "United Kingdom" means the United Kingdom of Great Britain and Northern
Ireland.

     "United States" and "U.S."mean the United States of America and, except in
the case of Sections 6.09 and 6.14, its territories and possessions.

     "U.S. Government Obligations" means noncallable (i) direct obligations of
the United States of America 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

                                       9

<PAGE>

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.

     "U.S. Person" means a person who, for U.S. tax purposes, is a citizen or
resident of the United States, any corporation, partnership or other entity
organized under the laws of the United States of America or any political
subdivision thereof or an estate or trust the income of which is subject to
United States income taxation, regardless of its source.

     "Vice President", when used with respect to the Trustee, means any vice
president, whether or not designated by a number or a word or words added
before or after the title "vice president".

     "Voting Stock" means stock or other interests of any class or classes,
however designated, having ordinary voting power for the election of a majority
of the board of directors of a corporation, other than stock or other interests
having such power only by reason of the happening of a contingency.

     Section 1.02. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Capital Securities Indenture, the Company shall furnish to the Trustee
an Officer's Certificate stating that all conditions precedent, if any,
provided for in this Capital Securities Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of the legal advisor rendering such opinion all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Capital Securities Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.

     Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Capital Securities Indenture shall include:

          (a) a statement that each Person signing such certificate or opinion
     has read such covenant or condition and the definitions herein relating
     thereto;

                                       10

<PAGE>

          (b) a brief statement as to the nature and scope of the examination
     or investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (c) a statement that, in the opinion of each such Person, he has made
     such examination or investigation as is necessary to enable him to express
     an informed opinion as to whether or not such covenant or condition has
     been complied with; and

          (d) a statement as to whether, in the opinion of each such Person,
     such condition or covenant has been complied with.

     Section 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.

     Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, legal advisors, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of, or
representations by, legal advisors may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such legal
advisors know, or in the exercise of reasonable care should know, that the
certificate or opinion or representation with respect to such matters is
erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Capital Securities Indenture, they may, but need not, be
consolidated and form one instrument.

     Section 1.04. Acts of Holders.

     (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Capital Securities Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly

                                       11

<PAGE>

appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, when it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Capital Securities Indenture and (subject to Section 6.01) conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section.

     (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. When such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

     (c) The ownership of registered Capital Securities shall be proved by the
Capital Security Register.

     (d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Capital Security shall bind every future
Holder of the same Capital Security and the Holder of every Capital Security
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of any thing done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Capital Security or such other Capital Security.

     Section 1.05. Notices, Etc. to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Capital Securities Indenture to be made
upon, given or furnished to, or filed with,

          (a) 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)
     to the Trustee at its Corporate Trust Office, or

          (b) 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 mailed, in the case of the Company, first-class

                                       12

<PAGE>

     postage prepaid, addressed to it at the address of its principal office
     specified in the first paragraph of this Capital Securities 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".

     Section 1.06. Notice to Holders; Waiver. When this Capital Securities
Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if given in
writing and mailed, first-class postage prepaid, to each Holder affected by
such event in the manner and to the extent provided in Section 313(c) of the
Trust Indenture Act with respect to reports pursuant to Section 7.03(a).

     For so long as the Capital Securities of any series are represented by
Global Securities, the Company will deliver a copy of all notices with respect
to such series to the Holder (if the address of such Holder is known to the
Company).

     When notice to Holders of registered Capital Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Capital Securities Indenture provides
for notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver. In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.

     Section 1.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Capital Securities Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control. If at any
future time any provision required to be included herein by the Trust Indenture
Act as in force at the date as of which this Capital Securities Indenture was
executed or any limitation imposed by the Trust Indenture Act at such date on
any provision otherwise included herein would not be so required or imposed (in
whole or in part) if this Capital Securities Indenture were executed at such
future time, the Company and the Trustee may enter into one or more indentures
supplemental hereto pursuant to Section 9.01 to change or eliminate (in whole
or in part) such provision or limitation of this Capital Securities Indenture
in conformity with the requirements of the Trust Indenture Act as then in
force, except that (subject to

                                       13

<PAGE>

Article 9) no provision or limitation required to be included herein by
Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e),
316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust
Indenture Act as in force at the date as of which this Capital Securities
Indenture was executed may be so changed or eliminated.

     Section 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

     Section 1.09. Successors and Assigns. All covenants and agreements in this
Capital Securities Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.

     Section 1.10. Separability Clause. In case any provision in this Capital
Securities Indenture or in the Capital Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

     Section 1.11. Benefits of Capital Securities Indenture. Nothing in this
Capital Securities Indenture or in the Capital Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Holders of Capital Securities, any benefit or any legal or
equitable right, remedy or claim under this Capital Securities Indenture.

     Section 1.12. Governing Law. This Capital Securities Indenture and the
Capital Securities shall be governed by and construed in accordance with the
laws of the State of New York, except as stated in Section 2.01 and except for
Section 12.01 which shall be governed by and construed in accordance with the
laws of England, and except that the authorization and execution of this
Capital Securities Indenture and the Capital Securities shall be governed by
the respective jurisdictions of organization of the Company and the Trustee, as
the case may be.

     Section 1.13. Saturdays, Sundays and Legal Holidays. The terms of the
Capital Securities shall provide that, in any case where any Payment Date,
Redemption Date or Exchange Date of a Capital Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this
Capital Securities Indenture or the Capital Securities other than a provision
in the Capital Securities that specifically states that such provision shall
apply in lieu of this Section) Payments and Missed Payments, if any (and
premium, if any) or principal and the exchange of the Capital 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 (or such other Business Day as
shall be provided in such Capital Security) with the same force and effect as
if made on such Payment Date, Redemption Date or Exchange Date, provided that
no Payment shall accrue for

                                       14

<PAGE>

the period from and after such Payment Date, Redemption Date or Exchange Date,
as the case may be.

     Section 1.14. Appointment of Agent for Service. The Company has designated
and appointed CT Corporation System, 111 Eighth Avenue, 13th floor, New York,
New York 10011 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 arising out of or relating to the Capital Securities or
this Capital Securities Indenture, but for that purpose only, and agrees that
service of process upon said CT Corporation System 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 Capital
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 said CT Corporation System in full force and effect so long as any of the
Capital 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 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 objection it may have now or hereafter to the laying of the venue of
any such suit or proceeding.

     Section 1.15. Calculation Agent. If the Company appoints a Calculation
Agent pursuant to Section 3.01 with respect to any series of Capital
Securities, any determination of the interest rate on, or other amounts in
relation to, such series of Capital Securities in accordance with the terms of
such series of Capital Securities by such Calculation Agent shall (in the
absence of manifest error, bad faith or willful misconduct) be binding on the
Company, the Trustee and all Holders and (in the absence of manifest error, bad
faith or willful misconduct) no liability to the Holders shall attach to the
Calculation Agent in connection with the exercise or non-exercise by it of its
powers, duties and discretions.

                                       15

<PAGE>

                                   ARTICLE 2
                             CAPITAL SECURITY FORMS

     Section 2.01. Forms Generally. The Capital Securities of each series shall
be issuable as registered securities without coupons attached and in such forms
as shall be established by or pursuant to action of the Company's Board of
Directors, or in one or more indentures supplemental hereto, pursuant to
Section 9.01, in each case with such insertions, omissions, substitutions and
other variations as are required or permitted by this Capital Securities
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with any applicable law or rule or regulation made pursuant thereto or with the
rules of any securities exchange or Depositary therefor, or as may,
consistently herewith, be determined by the officers executing such Capital
Securities, all as evidenced by any such execution; provided however, that such
Capital Securities shall have endorsed thereon a statement in the following
form or in substantially the following form:

     "The rights of the holder of the Capital Security are, to the extent and
     in the manner set forth in Section 12.01 of the Capital Securities
     Indenture, subordinated to the claims of other creditors of the Company,
     and this Capital Security is issued subject to the provisions of that
     Section 12.01, and the holder of this Capital Security, by accepting the
     same, agrees to and shall be bound by such provisions. The provisions of
     Section 12.01 of the Capital Securities Indenture and the terms of this
     paragraph are governed by, and shall be construed in accordance with, the
     laws of England."

     The Trustee's certificates of authentication shall be in substantially the
form set forth in Section 2.02 or Section 6.14.

     The definitive Capital Securities shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Capital Securities may be listed, all as determined by the officers executing
such Capital Securities, as evidenced by their execution thereof.

     Section 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:

                                       16

<PAGE>

                         CERTIFICATE OF AUTHENTICATION

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

Dated: ______________________

                                            THE BANK OF NEW YORK
                                                 as Trustee

                                            By:
                                               ---------------------------------
                                                 Authorized Signatory

                                   ARTICLE 3
                             THE CAPITAL SECURITIES

     Section 3.01. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Capital Securities which may be authenticated and delivered
under this Capital Securities Indenture is unlimited. The Capital Securities
may be issued in one or more series.

     There shall be established by or pursuant to action of the Board of
Directors of the Company or established in one or more indentures supplemental
hereto, prior to the initial issuance of Capital Securities of any series,

          (a) the title of the Capital Securities of the series (which shall
     distinguish the Capital Securities of the series from all other Capital
     Securities);

          (b) any limit upon the aggregate principal amount of the Capital
     Securities of the series which may be authenticated and delivered under
     this Capital Securities Indenture (except for Capital Securities
     authenticated and delivered upon registration of transfer of, or in
     exchange for, or in lieu of, other Capital Securities of the series
     pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07);

          (c) the date or dates, if any, on which the principal of (and
     premium, if any, on) the Capital Securities of the series is payable;

          (d) the rate or rates, if any, at which Payments on the Capital
     Securities of the series shall accrue or the manner of calculation of such

                                       17

<PAGE>

     rate or rates, if any, the date or dates from which such Payments shall
     accrue, the Payment Dates on which such Payments shall be payable or the
     manner of determination of such Payment Dates and the Regular Record Date
     for the interest payable on any Payment Date and any dates required to be
     established pursuant to Section 7.01;

          (e) whether any premium, upon redemption or otherwise, shall be
     payable by the Company on Capital Securities of the series;

          (f) the place or places where the principal of (and premium, if any)
     and any Payments or Missed Payments on Capital Securities of the series
     shall be payable, and the Paying Agent or Paying Agents who shall be
     authorized to pay principal of (and premium, if any) and any Payments or
     Missed Payments on Capital Securities of such series, at least one of such
     Paying Agents having an office or agency in the Borough of Manhattan, The
     City of New York;

          (g) other than with respect to any redemption of the Capital
     Securities pursuant to Section 11.08, whether or not such series of
     Capital Securities are to be redeemable, in whole or in part, at the
     Company's option and, if so redeemable, the period or periods within
     which, the price or prices at which and the terms and conditions upon
     which, Capital Securities of the series may be redeemed, including the
     date referred to in Section 11.08;

          (h) the obligation, if any, of the Company to redeem or purchase
     Capital Securities of the series pursuant to any sinking fund or analogous
     provisions or at the option of a Holder thereof and the period or periods
     within which, the price or prices at which, and the terms and conditions
     upon which Capital Securities of the series shall be redeemed or
     purchased, in whole or in part, pursuant to such obligation;

          (i) if other than denominations of $25 and any multiple thereof, the
     denominations in which Capital Securities of the series in each applicable
     form shall be issuable and any provisions relating to redenomination of
     any Capital Securities;

          (j) if other than the principal amount thereof, the portion, or the
     manner of calculation of such portion, of the principal amount of Capital
     Securities of the series which shall be payable upon a declaration of
     acceleration or acceleration of the Maturity thereof pursuant to Section
     5.02, upon redemption of Capital Securities of any series which are
     redeemable before their stated Maturity, or which the Trustee shall be
     entitled to file and prove a claim pursuant to Section 5.04;

                                       18

<PAGE>

          (k) if Additional Amounts, pursuant to Section 10.04, will not be
     payable;

          (l) whether the Capital Securities of any series shall be
     exchangeable at the option of the Company into Dollar Preference Shares or
     other securities of the Company ("Exchange Securities") pursuant to
     Article 13 and if so the terms of the Dollar Preference Shares or the
     nature and terms of the Exchange Securities into which such Capital
     Securities are exchangeable and any additional or other provisions
     relating to such exchange;

          (m) if other than Dollars, provisions, if any, for the Capital
     Securities of the series to be denominated, and payments thereon to be
     made, in Foreign Currencies and specifying the manner and place of payment
     thereon and any other terms with respect thereto;

          (n) if other than the coin or currency in which the Capital
     Securities of that series are denominated, the coin or currency in which
     payment of the principal of and premium and Payments and Missed Payments,
     if any, on the Capital Securities of such series shall be payable;

          (o) if the principal of and premium and Payments and Missed Payments,
     if any, on the Capital Securities of such series are to be payable, at the
     election of the Company or a Holder thereof, in a coin or currency other
     than that in which the Capital Securities are denominated, the period or
     periods within which, and the terms and conditions upon which, such
     election may be made;

          (p) whether the Capital Securities of the series shall be issued in
     whole or in part in the form of one or more Global Securities and the
     initial Holder with respect to such Global Security or Capital Securities;

          (q) if the Capital Securities of such series are to be issuable in
     definitive form (whether upon original issue or upon exchange of a
     temporary Capital Security of such series or otherwise) only upon receipt
     of certain certificates or other documents or satisfaction of other
     conditions, then the form and terms of such certificates, documents or
     conditions;

          (r) if the amounts of payments of principal of (and premium, if any)
     or Payments or Missed Payments, if any, on the Capital Securities of the
     series may be determined with reference to an index or are otherwise not
     fixed on the original issue date thereof, the manner in which such amounts
     shall be determined and the Calculation Agent, if any, who shall be
     appointed and authorized to calculate such amounts;

                                       19

<PAGE>

          (s) any other Events of Default, Defaults or covenants with respect
     to the Capital Securities of such series;

          (t) if other than as provided in Section 12.01, the subordination
     terms with respect to the Capital Securities of the series;

          (u) the forms of Capital Securities of the series; and

          (v) any other terms of the series (which terms shall not be
     inconsistent with the provisions of this Capital Securities Indenture).

     All Capital Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to such action or in any such indenture supplemental hereto.

     If the forms of Capital Securities of any series, or any of the terms
thereof, are established by action taken by the Board of Directors of the
Company, copies of the Board Resolutions in respect thereof shall be delivered
to the Trustee at or prior to the delivery of the Company Order pursuant to
Section 3.03 for the authentication and delivery of such Capital Securities.

     Section 3.02. Denominations. The Capital Securities of each series shall
be issuable in such denominations as shall be specified as contemplated by
Section 3.01. In the absence of any such specification with respect to Capital
Securities of any series, the Capital Securities of each series shall be
issuable in denominations of $25 each and any integral multiple thereof. Unless
otherwise specified in accordance with Section 3.01, any Global Security issued
and delivered to the Holder shall be issued in the form of units with each $25
principal amount of such Global Security constituting one unit.

     Section 3.03. Execution, Authentication, Delivery and Dating. The Capital
Securities shall be executed on behalf of the Company by any two Directors or
by one Director and Secretary to the Company. The signature of any of these
officers on the Capital Securities may be manual or facsimile. Capital
Securities bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Capital Securities.

     At any time and from time to time after the execution and delivery of this
Capital Securities Indenture, the Company may deliver Capital Securities of any
series executed by the Company to the Trustee for authentication, together with
a Company Order for the authentication and delivery of such Capital Securities,
and the Trustee in accordance with the Company Order shall authenticate and
deliver

                                       20

<PAGE>

such Capital Securities. In authenticating such Capital Securities and
accepting the additional responsibilities under this Capital Securities
Indenture in relation to such Capital Securities the Trustee shall be entitled
to receive, and (subject to Section 6.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the form and terms thereof have been
established in conformity with the provisions of this Capital Securities
Indenture.

     The Trustee shall not be required to authenticate such Capital Securities
if the issue of such Capital Securities pursuant to this Capital Securities
Indenture will affect the Trustee's own rights, duties or immunities under the
Capital Securities and this Capital Securities Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.

     Each registered Capital Security shall be dated the date of its
authentication.

     No Capital Security shall be entitled to any benefit under this Capital
Securities Indenture or be valid or obligatory for any purpose unless there
appears on such Capital Security a certificate of authentication substantially
in the form provided for herein executed by or on behalf of the Trustee by
manual signature, and such certificate upon any Capital Security shall be
conclusive evidence, and the only evidence, that such Capital Security has been
duly authenticated and delivered hereunder and that such Capital Security is
entitled to the benefits of this Capital Securities Indenture.

     Section 3.04. Temporary Capital Securities. Pending the preparation of
definitive Capital Securities of any series, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver, temporary Capital
Securities substantially of the tenor of the definitive Capital Securities in
lieu of which they are issued, which Capital Securities may be printed,
lithographed, typewritten, photocopied or otherwise produced. Temporary Capital
Securities shall be issuable as registered Capital Securities without coupons
attached in any authorized denomination, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Capital Securities may determine, all as evidenced by such execution.

     If temporary Capital Securities of any series are issued, the Company will
cause, if so required by the terms of such temporary Capital Securities,
definitive Capital Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Capital Securities of
such series, the temporary Capital Securities of such series shall be
exchangeable for definitive Capital Securities of such series containing
identical terms and provisions upon surrender of the temporary Capital
Securities of such series at the office or agency of the Company in a Place of
Payment for that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Capital Securities

                                       21

<PAGE>

of any series the Company shall execute, and the Trustee shall authenticate and
deliver in exchange therefor, a like aggregate principal amount of definitive
Capital Securities of the same series of authorized denominations containing
identical terms and provisions. Until so exchanged, unless otherwise provided
therein or in a supplemental indenture relating thereto, the temporary Capital
Securities of any series shall in all respects be entitled to the same benefits
(but shall be subject to all the limitations of rights) under this Capital
Securities Indenture as definitive Capital Securities of such series.

     Section 3.05. Registration, Registration of Transfer and Exchange.

     (a) Global Securities. This Section 3.05(a) shall apply to Global
Securities unless otherwise specified, as contemplated by Section 3.01.

     Each Global Security in registered form authenticated under this Capital
Securities Indenture shall be registered in the name of the Depositary
designated for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global
Security shall constitute a single Capital Security for all purposes of this
Capital Securities Indenture.

     With respect to Global Securities in registered form, unless the Global
Security is presented by an authorized representative of the Holder to the
Company or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of a nominee of the Holder and any
payment is made to such nominee, any transfer, pledge or other use of the
Global Security in registered form for value or otherwise shall be wrongful
since the registered owner of such Global Security, the nominee of the Holder,
has an interest in such Global Security.

     Except as otherwise specified as contemplated by Section 3.01 hereof, any
Global Security shall be exchangeable for definitive Capital Securities only as
provided in this paragraph. A Global Security shall be exchangeable pursuant to
this Section only (i) if the relevant Depositary notifies the Trustee that it
is unwilling or unable to continue to act as Depositary and a successor
depositary is not appointed by the Trustee within 120 days of such
notification, (ii) if, in the event of a winding-up of the Company, the Company
fails to make a payment on the Capital Securities when due or (iii) at any time
if the Company at its option and in its sole discretion determines that the
Global Securities of a particular series should be exchanged for definitive
Capital Securities of that series in registered form. Any Global Security that
is exchangeable pursuant to the preceding sentence shall be exchangeable for,
unless otherwise specified or contemplated by Section 3.01, definitive Capital
Securities in registered form only bearing Payments (if any) at the same rate
or pursuant to the same formula, having the same date of issuance, the same
date or dates from which interest shall accrue,

                                       22

<PAGE>

the same Payment Dates or manner of determination of such Payment Dates,
redemption provisions, if any, specified currency and other terms and of
differing denominations aggregating a like amount as the Global Security so
exchangeable. Definitive Capital Securities in registered form shall be
registered in the names of the owners of the beneficial interests in such
Global Securities as such names are from time to time provided by the Holder to
the Trustee.

     Any Global Security that is exchangeable pursuant to the preceding
paragraph, unless otherwise specified as contemplated by Section 3.01, shall be
exchangeable for Capital Securities issuable in authorized denominations of a
like aggregate principal amount and tenor.

     No Global Security in registered form may be transferred except as a whole
by the Holder to a nominee of the Holder or by the Holder or any such nominee
to a successor of the Holder or a nominee of such successor. Except as provided
above, owners solely of beneficial interests in a Global Security shall not be
entitled to receive physical delivery of Capital Securities in definitive form
and will not be considered the holders thereof for any purpose under this
Capital Securities Indenture.

     In the event that a Global Security is surrendered for redemption or
exchange for Dollar 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.

     The Agent Members and any beneficial owners shall have no rights under
this Capital Securities Indenture with respect to any Global Security held on
their behalf by a Holder, and such Holder may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by a Holder or impair, as between any such
Holder or other clearance service and its Agent Members and Holders the
operation of customary practices governing the exercise of the rights of a
holder of any security, including without limitation the granting of proxies or
other authorization of participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
Holder is entitled to give or take under this Capital Securities Indenture.

     In connection with any exchange of interests in a Global Security for
definitive Capital Securities of another authorized form, as provided in this

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<PAGE>

subsection 3.05(a), then without unnecessary delay but in any event not later
than the earliest date on which such interests may be so exchanged, the Company
shall deliver to the Trustee definitive Capital Securities in aggregate
principal amount equal to the principal amount of such Global Security or the
portion to be exchanged, executed by the Company. On or after the earliest date
on which such interests may be so exchanged, such Global Security shall be
surrendered by the Holder to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Capital Securities without charge (unless the definitive Capital Securities in
registered form are to be issued to an Excepted Person (as defined in Section
13.10) in which case the Company or Trustee may require payment of any taxes or
governmental charges arising) and the Trustee shall authenticate and deliver,
in exchange for each portion of such Global Security, an equal aggregate
principal amount of definitive Capital Securities of authorized denominations
as the portion of such Global Security to be exchanged. Any Global Security
that is exchangeable pursuant to this Section 3.05 shall be exchangeable for
Capital Securities issuable in the denominations specified as contemplated by
Section 3.01 and registered in such names as the Holder of such Global Security
shall direct. If a definitive Capital Security in registered form is issued in
exchange for any portion of a Global Security after the close of business at
the office or agency where such exchange occurs on any record date and before
the opening of business at such office or agency on the relevant Payment Date,
Payments will not be payable on such Payment Date in respect of such definitive
Capital Security, but will be payable on such Payment Date only to the person
to whom Payments in respect of such portion of such Global Security are
payable.

     A Depositary may grant proxies and otherwise authorize any person,
including Agent Members and persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take under this
Capital Securities Indenture with respect to the Capital Securities.

     (b) Except as otherwise specified pursuant to Section 3.01, registered
Capital Securities of any series may only be exchanged for a like aggregate
principal amount of registered Capital Securities of such series of other
authorized denominations containing identical terms and provisions. Capital
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 Capital Security or Capital Securities of the same series which
the Holder making the exchange shall be entitled to receive.

     Except as otherwise specified pursuant to Section 3.01, the Company shall
cause to be kept in the principal corporate trust office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as

                                       24

<PAGE>

the "Capital Security Register" provided, no such Capital Security Register
shall be maintained in any office or agency in the United Kingdom other than in
Scotland) in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of registered Capital Securities
and of transfers of such Capital Securities. The Trustee is hereby appointed
"Capital Security Registrar" for the purpose of registering Capital Securities
in registered form and transfers of Capital Securities in registered form as
herein provided.

     Registered Capital Securities shall be transferable only on the Capital
Security Register. Upon surrender for registration of transfer of any
registered Capital Security of any series at an office or agency of the Company
designated pursuant to Section 10.02 for such purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new registered Capital
Securities of the same series of any authorized denominations containing
identical terms and provisions, of a like aggregate principal amount.

     All Capital Securities issued upon any registration of transfer or
exchange of Capital Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this Capital
Securities Indenture, as the Capital Securities surrendered upon such
registration of transfer or exchange.

     Every registered Capital Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Capital Security Registrar
duly executed, by the registered Holder thereof or his attorney duly authorized
in writing.

     No service charge shall be made for any registration of transfer or
exchange of Capital Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Capital Securities,
other than exchanges pursuant to Section 3.04, 9.06 or 11.07 not involving any
transfer.

     The Company shall not be required (i) to issue, register the transfer of
or exchange any Capital Security of any series during a period beginning at the
opening of business 15 days before the day of the giving of a notice of
redemption of Capital Securities of such series selected for redemption under
Section 11.03 and ending at the close of business on the day of the giving of
such notice, or (ii) to register the transfer of or exchange any Capital
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Capital Securities being redeemed in part.

                                       25

<PAGE>

     Section 3.06. Mutilated, Destroyed, Lost and Stolen Capital Securities. If
any mutilated Capital Security (including any Global Security) is surrendered
to the Trustee, the Company may execute and the Trustee shall, in the case of a
Capital Security, authenticate and deliver in exchange therefor a new Capital
Security of the same series containing identical terms and provisions and of
like amount, and bearing a number not contemporaneously outstanding.

     If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Capital Security
(including any Global Security) and (ii) such security or indemnity as may be
required by them to save each of them and any agent of any of them harmless,
then, in the absence of notice to the Company or the Trustee that such Capital
Security has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall authenticate and deliver in lieu of any
such destroyed, lost or stolen Capital Security a new Capital Security of the
same series containing identical terms and provisions and of like amount, and
bearing a number not contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Capital Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Capital Security pay such Capital Security.

     Upon the issuance of any new Capital Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

     Every new Capital Security of any series issued pursuant to this Section
in lieu of any destroyed, lost or stolen Capital Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Capital Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Capital Securities
Indenture equally and proportionately with any and all other Capital Securities
of that series duly issued hereunder.

     The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Capital Securities.

     Section 3.07. Payments; Rights Preserved.

     Except as otherwise provided in a supplemental indenture:

     (a) The Company has no obligation to make any Payments with respect to any
series of Capital Securities except in the case of an Event of Default and

                                       26

<PAGE>

then to the extent (but only to the extent) provided in Section 5.02 and in the
case of a Default and then to the extent (but only to the extent) provided in
Section 5.03.

     (b) Except as otherwise provided as contemplated by Section 3.01 with
respect to any series of Capital Securities, Payments or Missed Payments, if
any, on any Capital Securities which are payable, and are paid or duly provided
for, on any Payment Date shall be paid, in the case of registered Capital
Securities, to the Person in whose name that Capital Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such Payments 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. Any payment of Missed Payments on a registered Capital Security
which is not made on a Payment Date or at Maturity shall be made to the person
who is the Holder on the record date established by the Company for such
purpose.

     In the case of registered Capital 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.

     In the case of registered Capital Securities where payment is to be made
in a Foreign Currency, payment will be made as established pursuant to Section
3.01.

     (c) Subject to the foregoing provisions of this Section 3.07, each Capital
Security delivered under this Capital Securities Indenture upon registration of
transfer of or in exchange for or in lieu of any other Capital Security shall
carry the rights to accrued and unpaid Payments and Missed Payments, if any,
and to accrue Payments, which were carried by such other Capital Security.

     (d) "Missed Payments" means any Payments in respect of the Capital
Securities of a series not paid on any applicable Payment Date, together with
any other Payments in respect of the Capital Securities of such series not paid
on any other Payment Date, so long as the same remain unpaid. Missed Payments
shall accumulate until paid. Missed Payments shall not accrue interest.

     Section 3.08. Persons Deemed Owners. Prior to due presentment of a
registered Capital Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Capital Security is registered as the owner of such Capital
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 3.05 and Section 3.07) any Payment and Missed
Payments, if any, on such

                                       27

<PAGE>

Capital Security and for all other purposes whatsoever, whether or not such
Capital Security 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.

     Section 3.09. Cancellation. All Capital Securities surrendered for
payment, redemption, registration of transfer or exchange shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee
for cancellation any Capital Securities previously authenticated and delivered
hereunder, and all Capital Securities so delivered shall be promptly cancelled
by the Trustee. No Capital Securities shall be authenticated in lieu of or in
exchange for any Capital Securities cancelled as provided in this Section,
except as expressly permitted by the provisions of the Capital Securities of
any series or pursuant to the provisions of this Capital Securities Indenture.
The Trustee shall deliver to the Company all cancelled Capital Securities held
by the Trustee.

     Section 3.10. Computation of Payments. Except as otherwise specified
pursuant to Section 3.01 for Capital Securities of any series, Payments on the
Capital Securities of each series shall be computed on the basis of a 360-day
year of twelve 30-day months.

     Section 3.11. CUSIP Numbers. The Company in issuing Capital Securities may
use "CUSIP", "ISIN" and/or "Common Code" numbers (if then generally in use) or
any successor to such numbers, and, if so, the Trustee shall use "CUSIP",
"ISIN" and/or "Common Code" or successor numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Capital Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Capital Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP", "ISIN" and/or "Common Code" or successor
numbers.

                                   ARTICLE 4
                           SATISFACTION AND DISCHARGE

     Section 4.01. Satisfaction and Discharge of Capital Securities Indenture.
This Capital Securities Indenture shall upon Company Request cease to be of
further effect with respect to Capital Securities of any series (except as to
any surviving rights of registration of transfer or exchange of Capital
Securities of

                                       28

<PAGE>

such series herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Capital Securities Indenture with respect to the Capital
Securities of such series when

          (a) either

               (i) all Capital Securities of such series theretofore
          authenticated and delivered (other than (i) Capital Securities which
          have been destroyed, lost or stolen and which have been replaced or
          paid as provided in Section 3.06 and (ii) Capital Securities for
          whose payment money has theretofore been deposited in trust or
          segregated and held in trust by the Company and thereafter repaid to
          the Company or discharged from such trust, as provided in Section
          10.03) have been delivered to the Trustee for cancellation; or

               (ii) all such Capital Securities not theretofore delivered to
          the Trustee for cancellation

                    (A) are to be called for redemption within one year under
               arrangements satisfactory to the Trustee for the giving of
               notice of redemption by the Trustee in the name, and at the
               expense, of the Company, or

                    (B) are to be exchanged for Dollar Preference Shares or
               Exchange Securities and notice of exchange of such Capital
               Securities for Dollar Preference Shares or Exchange Securities
               pursuant to Article 13 shall have been given,

and the Company has deposited or caused to be deposited with the Trustee, as
trust funds in trust for the purpose, an amount in cash, or U.S. Government
Obligations (with respect to Capital Securities denominated in Dollars) or
Foreign Government Securities (with respect to Capital Securities denominated
in the same Foreign Currency) maturing, in the case of (i) above, as to
principal and any accrued Payments and Missed Payments, if any, and, in the
case of (ii) above, as to any accrued Payments and Missed Payments, if any, in
such amounts and at such times as will ensure the availability of cash
sufficient to pay and discharge all claims with respect to such Capital
Securities not theretofore delivered to the Trustee for cancellation, in the
case of (i) above, for principal (and premium, if any) and any accrued Payments
and Missed Payments, if any, and, in the case of (ii) above, as to any accrued
Payments and Missed Payments, if any, to the date of such deposit (in the case
of Capital Securities which have become due and payable) or to the Redemption
Date or the Exchange Date, as the case may be;

                                       29

<PAGE>

     (b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Capital Securities of such series;
and

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

     Notwithstanding any satisfaction and discharge of this Capital Securities
Indenture, the obligations of the Company to the Trustee under Section 6.07,
the obligations of the Trustee to any Authenticating Agent under Section 6.14
and, if cash, U.S. Government Obligations and/or Foreign Government Securities
shall have been deposited with the Trustee pursuant to subclause 4.01(a)(ii) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive such satisfaction and discharge.

     Section 4.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 10.03, all cash, U.S. Government Obligations and
Foreign Government Securities deposited with the Trustee pursuant to Section
4.01 shall be held in trust and such cash and the proceeds from such U.S.
Government Obligations and/or Foreign Government Securities shall be applied by
it, in accordance with the provisions of the Capital Securities of such series,
and this Capital Securities Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and accrued but unpaid Payments, if any, and Missed Payments,
if any, for the payment of which such cash, U.S. Government Obligations and/or
Foreign Government Securities have been deposited with the Trustee.

     Section 4.03. Repayment to Company. The Trustee, the Calculation Agent and
any Paying Agent promptly shall pay to the Company upon Company Request any
excess money, U.S. Government Obligations and/or Foreign Government Securities
held by them at any time with respect to any series of Capital Securities.

                                   ARTICLE 5
                                    REMEDIES

     Section 5.01. Events of Default. "Event of Default", wherever used herein
with respect to Capital Securities of a particular series, means (i) the making
of an order by a court of competent jurisdiction which is not successfully

                                       30

<PAGE>

appealed within 30 days of the making of such order, or valid adoption by the
shareholders of the Company of an effective resolution, for the winding-up of
the Company (other than under or in connection with a scheme of amalgamation or
reconstruction not involving bankruptcy or insolvency) or (ii) any other Event
of Default provided with respect to Capital Securities of such series pursuant
to Section 3.01.

     Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs with respect to Capital 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 Capital
Securities of such series may declare the principal amount of, any accrued but
unpaid Payments and any Missed Payments on, the Capital 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 principal amount (or specified amount) shall become
immediately due and payable.

     At any time after such a declaration of acceleration with respect to
Capital Securities of any series has been made but before a judgment or decree
for payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holder or Holders of a majority in aggregate
principal amount of the Outstanding Capital Securities of such series, by
written notice to the Company and the Trustee, may rescind or annul such
declaration of acceleration and its consequences (including any Event of
Default under another series of Capital Securities arising therefrom) but only
if

     (a) the Company has paid or deposited with the Trustee a sum sufficient to
pay

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

         (ii) to the extent that payment of such interest is lawful, interest
     upon overdue Payments at the rate or rates prescribed therefor in such
     Capital Securities, and

        (iii) all sums paid or advanced by the Trustee hereunder and the
     reasonable compensation, expenses, disbursements and advances of the
     Trustee, its agents and counsel; and

     (b) all Events of Default with respect to Capital Securities of such
series have been remedied.

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<PAGE>

     No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.

     Section 5.03. Defaults; Collection of Indebtedness and Suits for
Enforcement by Trustee.

     Except as otherwise provided in a supplemental indenture, pursuant to
Section 3.01, "Default" wherever used herein with respect to Capital Securities
of a particular series, means any one of the following events (whatever the
reason for such Default and whether it shall be voluntary or involuntary or be
effected by operation of law pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):

          (a) the Company fails to pay or to set aside a sum to provide for
     payment of any Missed Payments on or prior to the date upon which (a) a
     dividend is paid on any class of ordinary shares or other capital stock of
     the Company, or (b) any other Capital Securities of the particular series
     are redeemed or repurchased (other than a repurchase in connection with
     the dealing in securities), and such failure continues for 30 days; or

          (b) the Company fails to pay or to set aside a sum to provide for
     payment of the principal amount (and premium, if any), any accrued but
     unpaid Payments and any Missed Payments on the date fixed for redemption
     of Capital Securities of such series and such failure continues for seven
     days; or

          (c) any other Default or Payment Event (as defined below) provided
     with respect to Capital Securities of such series pursuant to Section
     3.01;

provided that it shall not be a Default if the Company fails to make payment as
described in (a), (b) or (c) above and the Solvency Condition is not satisfied
on the thirtieth day following such failure, in the case of (a) above or on the
seventh day following such failure, in the case of (b) above and on the
relevant day following such failure, in the case of (c) above. The failure of
the Company to make a payment specified in clause (a), (b) or (c) above because
of a failure to satisfy the Solvency Condition is referred to herein as a
"Payment Event".

     If a Default occurs and is continuing, the Trustee may pursue all legal
remedies available to it, including commencing a judicial proceeding for the
collection of the sums so due and unpaid or a proceeding for the winding-up in
England or Scotland (but not elsewhere) of the Company, provided that the
Trustee may not, upon the occurrence of a Default, declare the principal amount
of any of the Outstanding Capital Securities to be due and payable. If a
Payment

                                       32

<PAGE>

Event occurs, the Trustee may institute proceedings in England or Scotland (but
not elsewhere) for the winding-up of the Company but may not pursue any other
legal remedy including a judicial proceeding for the collection of the sums so
due and unpaid.

     The Trustee and Holders of Capital Securities by their acceptance of such
Capital Securities will be deemed to have waived any right of set-off,
counterclaim or combination of accounts with respect to such Capital Securities
or this Capital Securities Indenture (or between the obligations under or in
respect of any Capital Securities and any liability owed by a Holder or the
Trustee to the Company) that they might otherwise have against the Company.

     No recourse for the payment of the principal of (or premium, if any) or
Payments or Missed Payments, if any, on any Capital Security, or for any claim
based thereon and no recourse under or upon any obligation, covenant or
agreement of the Company in this Capital Securities Indenture, or in any
Capital Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, past, present or future, of the Company or of any successor
corporation of the Company, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that to the extent lawful all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Capital Securities Indenture and the issue of the
Capital Securities.

     Section 5.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition, winding-up or other judicial proceeding
relative to the Company or any other obligor upon the Capital Securities of any
series or to the property of the Company or such other obligor or their
creditors (other than under or in connection with a scheme of amalgamation or
reconstruction not involving bankruptcy or insolvency), the Trustee
(irrespective of whether the principal of the Capital Securities of such series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal (and premium, if any) or
Payments and Missed Payments, if any) shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee
shall be authorized to collect and receive any moneys and other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder of a Capital Security to make such payments to

                                       33

<PAGE>

the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to such Holders or holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due to
the Trustee under Section 6.07.

     Subject to Article 8 and Section 9.02, nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder of any Capital Security any plan of reorganization,
arrangement, adjustment, or composition affecting any Capital Securities or the
rights of any Holder of any Capital Security or to authorize the Trustee to
vote in respect of the claim of any such Holder or holder in any such
proceeding.

     The provisions of this Section 5.04 are subject to the provisions of
Section 12.01.

     Section 5.05. Trustee May Enforce Claims Without Possession of Capital
Securities. All rights of action and claims under this Capital Securities
Indenture or the Capital Securities may be prosecuted and enforced by the
Trustee without the possession of any of the Capital Securities or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel (subject, with regard to the Company, to
the provisions of Section 12.01) be for the ratable benefit of the Holders of
the Capital Securities in respect of which such judgment has been recovered.

     Section 5.06. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article in respect of any series of Capital Securities
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(and premium, if any) or Payments or Missed Payments, if any, upon presentation
of such Capital Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

               FIRST: To the payment of all amounts applicable to such series
          of Capital Securities in respect of which or for the benefit of which
          such money has been collected due the Trustee under Section 6.07;

               SECOND: To the payment of the amounts then due and unpaid for
          principal of (and premium, if any) and Payments or Missed Payments,
          if any, on such series of Capital Securities in respect of which or
          for the benefit of which such money has been collected, ratably,
          without preference or priority of any kind, according to the amounts
          due and

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<PAGE>

          payable on such Capital Securities for principal (and premium, if
          any) and Payments and Missed Payments, if any, respectively; and

               THIRD: To the payment of the balance, if any, to the Company.

     Section 5.07. Limitation on Suits. No Holder of any Capital Security of
any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Capital Securities Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless

          (a) such Holder has previously given written notice to the Trustee of
     a continuing Event of Default or Default with respect to Capital
     Securities of the same series specifying such Event of Default or Default
     and stating that such notice is a "Notice of Default" hereunder;

          (b) the Holders of not less than 25% in aggregate principal amount of
     the Outstanding Capital Securities of such series shall have made written
     request to the Trustee to institute proceedings in respect of such Event
     of Default or Default in its own name, as Trustee hereunder;

          (c) such Holder of a Capital Security has offered to the Trustee
     reasonable indemnity satisfactory to it against the costs, expenses and
     liabilities to be incurred in compliance with such request;

          (d) the Trustee for 60 days after its receipt of such notice, request
     and offer of indemnity has failed to institute any such proceeding; and

          (e) no direction inconsistent with such written request has been
     given to the Trustee during such 60-day period by the Holders of a
     majority in principal amount of the Outstanding Capital Securities of such
     series;

it being understood and intended that no one or more Holders of Capital
Securities of a particular series shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this Capital Securities
Indenture to affect, disturb or prejudice the rights of any other such Holders
or holders, or to obtain or to seek to obtain priority or preference over any
other such Holders or holders or to enforce any right under this Capital
Securities Indenture, except in the manner herein provided and for the equal
and ratable benefit of all Holders of Capital Securities of such series.

     Section 5.08. Unconditional Right of Holders to Receive Principal, Premium
and Payments, If Any. Notwithstanding any other provision in this Capital
Securities Indenture, the Holder of any Capital Security shall have the right,
which is absolute and unconditional, to receive payment of the principal of

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<PAGE>

(and premium, if any) and (subject to Section 3.07) any Payment or Missed
Payments, if any, on such Capital Security when due and payable in accordance
with the provisions of the Capital Securities Indenture and as expressed in
such Capital Security (or, in the case of redemption or exchange, on the
Redemption Date or Exchange Date, as the case may be) and 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 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder of any Capital Security has instituted any proceeding to enforce any
right or remedy under this Capital Securities Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
Capital Securities shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders of Capital Securities shall continue as though no such proceeding
had been instituted.

     Section 5.10. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Capital Securities in the last paragraph of Section 3.06, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Capital Securities is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.

     Section 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Capital Security to exercise any right or
remedy accruing upon any Event of Default or Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or Default
or an acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Holders of Capital Securities may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
by the Holders of Capital Securities, as the case may be.

     Section 5.12. Control by Holders. The Holders of a majority in aggregate
principal amount of the Outstanding Capital Securities of any series shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to the Capital Securities of such series, provided
that

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<PAGE>

          (a) such direction shall not be in conflict with any rule of law or
     with this Capital Securities Indenture;

          (b) the Trustee shall not determine that the action so directed would
     be unjustly prejudicial to the Holders of any Capital Securities of any
     series not taking part in such direction with respect to which the Trustee
     is acting as the Trustee; and

          (c) the Trustee may take any other action deemed proper by the
     Trustee which is not inconsistent with such direction.

     Section 5.13. Waiver of past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Capital Securities of
any series may on behalf of the Holders of all the Capital Securities of such
series waive any past Event of Default or Default or Payment Event hereunder
with respect to such series and its consequences, except an Event of Default or
Default

          (a) in the payment of the principal of (or premium, if any) or
     Payments (including Missed Payments, if any) on any Capital Security of
     such series, or

          (b) in respect of a covenant or provision hereof which under Article
     9 cannot be modified or amended without the consent of the Holder of each
     Outstanding Capital Security of such series affected.

     Upon any such waiver, such Event of Default, Default or Payment Event
shall cease to exist, and any Event of Default or Default or Payment Event with
respect to any series arising therefrom shall be deemed to have been cured and
not to have occurred for every purpose of this Capital Securities Indenture,
but no such waiver shall extend to any subsequent or other Event of Default or
Default or Payment Event or impair any right consequent thereon.

     Section 5.14. Undertaking for Costs. All parties to this Capital
Securities Indenture agree, and each Holder of any Capital 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 Capital Securities 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 Capital Securities of any

                                       37

<PAGE>

series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or Payments or Missed
Payments, if any, on any Capital Security on or after the dates upon which such
Payments or Missed Payments become due and payable pursuant to the terms hereof
or the terms expressed in such Capital Security (or, in the case of redemption
or exchange, on or after the Redemption Date or the Exchange Date, as the case
may be).

                                   ARTICLE 6
                                  THE TRUSTEE

     Section 6.01. Certain Duties and Responsibilities. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act. Notwithstanding the foregoing, no provision of this Capital Securities
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Capital
Securities Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

     Section 6.02. Notice of Defaults. Within 90 days after the occurrence of
any Event of Default, Default or Payment Event hereunder with respect to
Capital Securities of any series of which a Responsible Officer of the Trustee
has actual knowledge the Trustee shall transmit in the manner and to the extent
provided in Section 1.06 to Holders of Capital Securities of such series notice
of such Event of Default, Default or Payment Event hereunder known to the
Trustee, unless such Event of Default, Default or Payment Event shall have been
cured or waived; provided, however, that, the Trustee shall be protected in
withholding such notice if it determines in good faith that the withholding of
such notice is in the interest of the Holders of Capital Securities of such
series.

     Section 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:

          (a) the Trustee may conclusively rely and shall be fully protected in
     acting or refraining from acting upon any resolution, certificate,
     statement, instrument, opinion, report, notice, request, direction,
     consent, order, bond, debenture, note, coupon or other evidence of
     indebtedness or other paper or document (whether in its original or
     facsimile form) believed by it to be genuine and to have been signed or
     presented by the proper party or parties;

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<PAGE>

          (b) any request or direction of the Company mentioned herein shall be
     sufficiently evidenced by a Company Request or Company Order and any
     resolution of the Board of Directors of the Company may be sufficiently
     evidenced by a Board Resolution;

          (c) whenever in the administration of this Capital Securities
     Indenture the Trustee shall deem it desirable that a matter be proved or
     established prior to taking, suffering or omitting any action hereunder,
     the Trustee (unless other evidence be herein specifically prescribed) may,
     in the absence of bad faith on its part, rely upon an Officer's
     Certificate;

          (d) the Trustee may consult with counsel of its own selection and the
     advice of such counsel or any Opinion of Counsel shall be full and
     complete authorization and protection in respect of any action taken,
     suffered or omitted by it hereunder in good faith and in reliance thereon;

          (e) the Trustee shall be under no obligation to exercise any of the
     rights or powers vested in it by this Capital Securities Indenture at the
     request or direction of any of the Holders pursuant to this Capital
     Securities Indenture, unless such Holders shall have offered to the
     Trustee reasonable security or indemnity satisfactory to it against the
     costs, expenses and liabilities which might be incurred by it in
     compliance with such request or direction;

          (f) the Trustee shall not be bound to make any investigation into the
     facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, debenture, note, coupon or other evidence of indebtedness or other
     paper or document, but the Trustee, in its discretion, may make such
     further inquiry or investigation into such facts or matters as it may see
     fit at the expense of the Company and shall incur no liability by reason
     of such inquiry or investigation;

          (g) the Trustee may execute any of the trusts or powers hereunder or
     perform any duties hereunder either directly or by or through agents or
     attorneys and the Trustee shall not be responsible for any misconduct or
     negligence on the part of any agent (other than an officer or employee of
     the Trustee) or attorney appointed with due care by it hereunder;

          (h) the Trustee shall not be liable for any action taken, suffered,
     or omitted to be taken by it in good faith and reasonably believed by it
     to be authorized or within the discretion or rights or powers conferred
     upon it by this Capital Securities Indenture;

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<PAGE>

          (i) the Trustee shall not be deemed to have notice of any Default or
     Event of Default unless a Responsible Officer of the Trustee has actual
     knowledge thereof or unless written notice of any event which is in fact
     such a default is received by the Trustee at the Corporate Trust Office of
     the Trustee; and

          (j) the rights, privileges, protections, immunities and benefits
     given to the Trustee, including, without limitation, its right to be
     indemnified, are extended to, and shall be enforceable by, the Trustee in
     each of its capacities hereunder, and each agent, custodian and other
     Person employed by the Trustee to act hereunder.

     Section 6.04. Not Responsible for Recitals or Issuance of Capital
Securities. The recitals contained herein and in the Capital Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent assumes
any responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Capital Securities Indenture or of
the Capital Securities, except that the Trustee represents and warrants that it
has duly authorized, executed and delivered this Capital Securities Indenture.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Capital Securities or the proceeds
thereof.

     Section 6.05. May Hold Capital Securities. The Trustee, any Authenticating
Agent, any Paying Agent, any Capital Security Registrar and any Calculation
Agent or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Capital Securities and, subject to
Sections 6.08 and 6.13, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Capital Security Registrar, Calculation Agent or such other agent.

     Section 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.

     Section 6.07. Compensation and Reimbursement. The Company agrees

          (a) to pay to the Trustee from time to time compensation for all
     services rendered by it hereunder as agreed upon in writing by the Company
     from time to time (which compensation shall not be limited by any
     provision of law in regard to the compensation of a trustee of an express
     trust);

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<PAGE>

          (b) except as otherwise expressly provided herein, to reimburse the
     Trustee upon its request for all expenses, disbursements and advances
     incurred or made by the Trustee in accordance with any provision of this
     Capital Securities Indenture (including the reasonable compensation and
     the expenses and disbursements of its agents and counsel), except any such
     expense, disbursement or advance as shall be determined by a court of
     competent jurisdiction to have been caused by its own negligence or bad
     faith; and

          (c) to fully indemnify the Trustee for, and to hold it harmless
     against, any and all loss, liability, claim, damage or expense (including
     legal fees and expenses) incurred without negligence or bad faith on its
     part, arising out of or in connection with the acceptance or
     administration of the trust or trusts hereunder including the costs and
     expenses of defending itself against any claim or liability in connection
     with the exercise or performance of any of its powers or duties hereunder
     but excluding any tax liabilities of the Trustee in respect of its net
     profits.

     The Trustee shall notify the Company in writing of the commencement of any
action or claim in respect of which indemnification may be sought promptly
after a Responsible Officer of the Trustee becomes aware of such commencement
(provided that the failure to make such notification shall not affect the
Trustee's rights hereunder) and the Company shall be entitled to participate
in, and to the extent it shall wish, to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Trustee. The Trustee
shall not compromise or settle any such action or claim without the written
consent of the Company, which consent shall not be unreasonably withheld.

     The provisions of this Section 6.07 shall survive termination of this
Capital Securities Indenture or the resignation or removal of the Trustee.

     As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a senior claim to which the Capital
Securities are hereby made subordinate, upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the payment of
principal of (or premium, if any) or Payments or Missed Payments, if any, on
the Capital Securities.

     Section 6.08. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Capital Securities Indenture.

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<PAGE>

     Section 6.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder with respect to each series which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by Federal or
State or District of Columbia authority and, if there be such corporation
willing and able to act as trustee on reasonable and customary terms, having
its corporate trust office or agency in the Borough of Manhattan, The City of
New York, New York. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article 6.

     Section 6.10. Resignation and Removal; Appointment of Successor.

     (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.

     (b) The Trustee may resign at any time with respect to the Capital
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition at
the expense of the Company any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Capital Securities of
such series.

     (c) The Trustee may be removed at any time with respect to the Capital
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Capital Securities of such series delivered to the
Trustee and to the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.11 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of removal, the Trustee may
petition at the expense of the Company any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Capital Securities
of such series.

     (d) If at any time:

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<PAGE>

               (i) the Trustee shall fail to comply with Section 6.08 after
          written request therefor by the Company or by any Holder who has been
          a bona fide Holder of a Capital Security of the series as to which
          the Trustee has a conflicting interest for at least six months, or

              (ii) the Trustee shall cease to be eligible under Section 6.09
          and shall fail to resign after written request therefor by the
          Company or by any Holder who has been a bona fide Holder of a Capital
          Security for at least six months, or

             (iii) the Trustee shall become incapable of acting or shall be
          adjudged a bankrupt or insolvent or a receiver of the Trustee or of
          its property shall be appointed or any public officer shall take
          charge, or control of the Trustee or of its property or affairs for
          the purpose of rehabilitation, conservation or liquidation, or

               (iv) the Trustee shall fail to perform its obligations to the
         Company under the Capital Securities Indenture in any material respect,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to any or all series of Capital Securities or (ii) subject
to Section 5.14 (and except in the case of subparagraph 6.10(d)(iv) above), any
Holder who has been a bona fide Holder of a Capital Security for at least six
months (and, in the case of Section 6.10(d)(i) above, who is a Holder of a
Capital Security of the series as to which the Trustee has a conflicting
interest) may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Capital Securities and the appointment of a successor Trustee or
Trustees.

     (e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Capital Securities of one or more series, the Company, by a
Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Capital Securities of such series (it being understood that any
successor Trustee may be appointed with respect to the Capital Securities of
one or more or all of such series and at any time there shall be only one
Trustee with respect to the Capital Securities of any particular series), and
shall comply with the applicable requirements of Section 6.11. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Capital Securities of any
series shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Capital Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee with
respect to the Capital Securities of such series and to that

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<PAGE>

extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Capital Securities of any series shall
have been so appointed by the Company or the Holders of Capital Securities of
such series and accepted appointment in the manner hereinafter required by
Section 6.11, any Holder who has been a bona fide Holder of a Capital Security
of such series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Capital Securities of
such series.

     (f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Capital Securities of any series and each
appointment of a successor Trustee with respect to the Capital Securities of
any series in the manner and to the extent provided in Section 1.06. Each
notice shall include the name of the successor Trustee with respect to the
Capital Securities of such series and the address of its Corporate Trust
Office.

     Section 6.11. Acceptance of Appointment by Successor.

     (a) In case of the appointment hereunder of a successor Trustee with
respect to all Capital Securities, every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee, all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.

     (b) In case of the appointment hereunder of a successor Trustee with
respect to the Capital Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Capital Securities of such series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Capital Securities of such series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Capital Securities, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Capital Securities of
such series as to which the retiring Trustee is not retiring shall continue to
be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions

                                       44

<PAGE>

of this Capital Securities Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Capital Securities of such series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Capital Securities of such
series to which the appointment of such successor Trustee relates.

     (c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.

     (d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article 6.

     Section 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Capital Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Capital
Securities.

     Section 6.13. Preferential Collection of Claims. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Capital Securities of a series), the Trustee shall be subject to the provisions
of the Trust Indenture Act regarding the collection of claims against the
Company (or any such other obligor).

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<PAGE>

     Section 6.14. Appointment of Authenticating Agent. The Trustee may at any
time appoint an Authenticating Agent or Agents with respect to one or more
series of Capital Securities which shall be authorized to act on behalf of the
Trustee to authenticate Capital Securities of such series upon original issue,
or issued upon exchange, registration of transfer or partial redemption thereof
or in lieu of destroyed, lost or stolen Capital Securities, and Capital
Securities so authenticated shall be entitled to the benefits of this Capital
Securities Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Capital Securities Indenture to the authentication and delivery of Capital
Securities by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation or national banking association organized and doing business
under the laws of the United States, any State thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State or District of Columbia
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.

     Any corporation or national banking association into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation or national banking association succeeding
to the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation or
national banking association shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section,

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<PAGE>

the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Company and shall give notice to the Holders of Capital
Securities in the manner and to the extent provided in Section 1.06. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

     The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section 6.14.

     If an appointment with respect to one or more series is made pursuant to
this Section, the Capital Securities of such series may have endorsed thereon,
in lieu of the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:

     This is one of the Capital Securities referred to in the within-mentioned
Capital Securities Indenture.

                                            THE BANK OF NEW YORK
                                                 as Trustee

                                            By:                                ,
                                               ---------------------------------
                                               as Authenticating Agent

                                            By:
                                               ---------------------------------
                                               Authorized Signatory

                                   ARTICLE 7
                HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

     Section 7.01. Company to Furnish Trustee Names and Addresses of Holders.
The Company, with respect to any series of Capital Securities in registered
form, will furnish or cause to be furnished to the Trustee

          (a) not more than 15 days after each Regular Record Date (or after
     each of the dates to be specified for such purpose for non-Payment bearing
     Capital Securities and Capital Securities on which Payment Dates occur
     less frequently than quarterly as contemplated by Section 3.01), a list,
     in such form as the Trustee may reasonably require, of the names and

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<PAGE>

     addresses of the Holders of registered Capital Securities as of such
     Regular Record Date or such specified date, and

          (b) at such other times as the Trustee may request in writing, within
     30 days after the receipt by the Company of any such request, a list of
     similar form and content as of a date not more than 15 days prior to the
     time such list is furnished.

     The Company need not furnish or cause to be furnished to the Trustee
pursuant to this Section 7.01 the names and addresses of Holders of registered
Capital Securities so long as the Trustee acts as Capital Security Registrar
with respect to such series of Capital Securities.

     Section 7.02. Preservation of Information; Communication to Holders.

     (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders (i) contained in the most
recent list furnished to the Trustee as provided in Section 7.01 and (ii)
received by the Trustee in its capacity as Paying Agent or Capital Security
Registrar (if so acting). The Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.

     (b) The rights of the Holders of Capital Securities of any series to
communicate with other Holders with respect to their rights under this Capital
Securities Indenture or under the Capital Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.

     (c) Every Holder, by receiving and holding a Capital Security, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of any of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with Section 7.02(b) or otherwise made pursuant to the Trust Indenture Act.

         Section 7.03.  Reports by Trustee.

     (a) On or before May 15 in each year following the date hereof, so long as
any Capital Securities are Outstanding hereunder, the Trustee shall transmit to
Holders as provided in the Trust Indenture Act a brief report dated as of a
date required by and in compliance with the Trust Indenture Act.

     (b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each securities exchange upon which the
Trustee has been notified that the Capital Securities are listed, with the
Commission and with the Company. The Company will notify the Trustee when
Capital Securities are listed on any securities exchange.

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<PAGE>

     (c) The Company will furnish the Trustee with interim and annual reports
and upon receipt thereof, the Trustee will mail such reports to all record
holders of Capital Securities. In addition, the Company will furnish the
Trustee with all notices of meetings at which holders of Capital Securities of
a particular series are entitled to vote, and all other reports and
communications that are made generally available to holders of Capital
Securities. The Trustee will, at the Company's expense, make such notices,
reports and communications available for inspection by holders of Capital
Securities in such manner as the Company may determine and, in the case of any
notice received by the Trustee in respect of any meeting at which holders of
Capital Securities of a particular series are entitled to vote, will mail to
all such record holders of Capital Securities, at the Company's expense, a
notice containing a summary of the information set forth in such notice of
meeting.

     Section 7.04. Reports by Company.

     The Company shall:

          (a) file with the Trustee, within 15 days after the Company is
     required to file the same with the Commission, copies of the annual
     reports and of the information, documents and other reports (or copies of
     such portions of any of the foregoing as the Commission may from time to
     time by rules and regulations prescribe) which the Company may be required
     to file with the Commission pursuant to Section 13 or Section 15(d) of the
     Exchange Act; or, if the Company is not required to file information,
     documents or reports pursuant to either of such Sections, then it shall
     file with the Trustee and the Commission, in accordance with rules and
     regulations prescribed from time to time by the Commission, such of the
     supplementary and periodic information, documents and reports which may be
     required pursuant to Section 13 of the Exchange Act in respect of a
     security listed and registered on a national securities exchange as may be
     prescribed from time to time in such rules and regulations. Delivery of
     such reports, information and documents to the Trustee is for
     informational purposes only and the Trustee's receipt of such shall not
     constitute constructive notice of any information contained therein or
     determinable from information contained therein, including the Company's
     compliance with any of its covenants hereunder (as to which the Trustee is
     entitled to rely exclusively on an Officer's Certificate);

          (b) file with the Trustee and the Commission, in accordance with
     rules and regulations prescribed from time to time by the Commission, such
     additional information, documents and reports with respect to compliance
     by the Company with the conditions and covenants of this Capital
     Securities Indenture as may be required from time to time by such

                                       49

<PAGE>

     rules and regulations. Delivery of such reports, information and documents
     to the Trustee is for informational purposes only and the Trustee's
     receipt of such shall not constitute constructive notice of any
     information contained therein or determinable from information contained
     therein, including the Company's compliance with any of its covenants
     hereunder (as to which the Trustee is entitled to rely exclusively on an
     Officer's Certificate); and

          (c) transmit to Holders, in the manner and to the extent required by
     the Trust Indenture Act, within 30 days after the filing thereof with the
     Trustee, such summaries of any information, documents and reports required
     to be filed by the Company pursuant to paragraphs 7.04(a) and 7.04(b) of
     this Section as may be required by rules and regulations prescribed from
     time to time by the Commission.

                                   ARTICLE 8
                 CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

     Section 8.01. Company May Consolidate, Etc., Only on Certain Terms.

     The Company may, without the consent of Holders of any Capital Securities
of any series Outstanding under this Capital Securities Indenture, consolidate
or amalgamate with or merge into any other corporation or convey or transfer or
lease its properties and assets substantially as an entirety to any Person,
provided that:

          (a) the corporation formed by such consolidation or amalgamation or
     into which the Company is merged or the Person which acquires by
     conveyance or transfer the properties and assets of the Company
     substantially as an entirety (i) shall be a company organized and existing
     under the laws of the United Kingdom or any political subdivision thereof,
     and (ii) shall expressly assume, by an indenture supplemental hereto,
     executed and delivered to the Trustee, in form satisfactory to the
     Trustee, the due and punctual payment of the principal of (and premium, if
     any) and Payments and Missed Payments, if any, on all the Capital
     Securities in accordance with the provisions of such Capital Securities
     and this Capital Securities Indenture and the performance of every
     covenant of this Capital Securities Indenture on the part of the Company
     to be performed or observed; and

          (b) the Company shall have delivered to the Trustee an Officer's
     Certificate and an Opinion of Counsel, each stating that such
     consolidation, amalgamation, merger, conveyance or transfer and such

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<PAGE>

     supplemental indenture comply with this Article and that all conditions
     precedent herein provided for relating to such transaction have been
     complied with.

     Section 8.02. Successor Corporation Substituted. Upon any consolidation,
amalgamation or merger or any conveyance or transfer of the properties and
assets of the Company substantially as an entirety in accordance with Section
8.01, the successor corporation formed by such consolidation or amalgamation or
into which the Company is merged or to which such conveyance or transfer is
made shall succeed to and be substituted for, and may exercise every right and
power of, the Company under this Capital Securities Indenture with the same
effect as if such successor corporation had been named as the Company, herein,
and thereafter, the predecessor corporation shall be relieved of all
obligations and covenants under the Capital Securities Indenture and the
Capital Securities.

     Section 8.03. Assumption of Obligations. With respect to the Capital
Securities of any series, a wholly-owned subsidiary of the Company (a
"successor entity") may without the consent of any Holder assume the
obligations of the Company (or any corporation which shall have previously
assumed the obligations of the Company) for the due and punctual payment of the
principal of (and premium, if any, on) and Payments and Missed Payments, if
any, on any series of Capital Securities in accordance with the provisions of
such Capital Securities and this Capital Securities Indenture and the
performance of every covenant of this Capital Security Indenture and such
series of Capital Securities on the part of the Company to be performed or
observed provided, that:

          (a) the successor entity shall expressly assume such obligations by
     an amendment to the Capital Securities Indenture, executed by the Company
     and such successor entity, if applicable, and delivered to the Trustee, in
     form satisfactory to the Trustee, and the Company shall, by amendment to
     the Capital Securities Indenture, unconditionally guarantee (such
     guarantee shall be given on a subordinated basis consistent with Article
     12 hereof) all of the obligations of such successor entity under the
     Capital Securities of such series and the Capital Securities Indenture as
     so modified by such amendment (provided, however, that, for the purposes
     of the Company's obligation to pay Additional Amounts, if any, payable
     pursuant to Section 10.04 in respect of the Capital Securities, references
     to such successor entity's country of organization will be added to
     references to the United Kingdom);

          (b) such successor entity shall confirm in such amendment to the
     Capital Securities Indenture that such successor entity will pay all
     Additional Amounts, if any, payable pursuant to Section 10.04 in respect
     of all the Capital Securities (provided, however, that for these purposes

                                       51

<PAGE>

     such successor entity's country of organization will be substituted for
     the references to the United Kingdom);

          (c) immediately after giving effect to such assumption of
     obligations, no Event of Default, Default or Payment Event and no event
     which, after notice or lapse of time or both, would become an Event of
     Default, Default or Payment Event, shall have occurred and be continuing;
     and

          (d) the Company shall have delivered to the Trustee an Officer's
     Certificate and an Opinion of Counsel, each stating that such assumption
     complies with this Article and that all conditions precedent herein
     provided for relating to such assumption have been complied with.

     Upon any such assumption, the successor entity shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Capital Securities Indenture with respect to any such Capital Securities
with the same effect as if such successor entity had been named as the Company
in this Capital Securities Indenture, and the Company or any legal and valid
successor corporation which shall theretofore have become such in the manner
prescribed herein, shall be released from all liability as obligor upon any
such Capital Securities except as provided in clause 8.03(a) of this Section.

     In the event of any such assumption, any Additional Amounts, if any,
payable pursuant to Section 10.04 will be payable in respect of taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Taxes") imposed by
the jurisdiction in which the assuming corporation is incorporated (subject to
exceptions equivalent to those that apply to any obligation to pay Additional
Amounts in respect of Taxes imposed by any Taxing Jurisdiction) rather than
Taxes imposed by any Taxing Jurisdiction; provided however, that if the Company
makes payment under the guarantee, the Company shall be required to pay
Additional Amounts related to Taxes (subject to the exceptions set forth in
Section 10.04) imposed by any Taxing Jurisdiction by reason of such payments.

     Notwithstanding the foregoing, the determination of whether the Solvency
Condition has been satisfied in accordance with Section 12.01(b) shall,
notwithstanding such assumption, continue to be made with reference to the
Company, unless otherwise required by applicable law or regulation.

                                       52

<PAGE>

                                   ARTICLE 9
                            SUPPLEMENTAL INDENTURES

     Section 9.01. Supplemental Indenture Without Consent of Holders. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:

          (a) to evidence the succession of another corporation to the Company
     and the assumption by any such successor of the covenants of the Company
     herein and in the Capital Securities;

          (b) to add to the covenants of the Company for the benefit of the
     Holders of all or any series of Capital Securities (and, if such covenants
     are to be for the benefit of less than all series of Capital Securities,
     stating that such covenants are expressly being included solely for the
     benefit of such series) or to surrender any right or power herein
     conferred upon the Company;

          (c) to add any additional Events of Default, Defaults or Payment
     Events;

          (d) to add to, change or eliminate any of the provisions of this
     Capital Securities Indenture, or any supplemental indenture, provided that
     any such change or elimination shall become effective only when there is
     no Capital Security Outstanding of any series created prior to the
     execution of such supplemental indenture effecting such change or
     elimination which is entitled to the benefit of such provision and
     adversely affected by such addition, change or elimination;

          (e) to secure the Capital Securities;

          (f) to establish the form or terms of Capital Securities of any
     series as permitted by Sections 2.01 or 3.01;

          (g) to change any Place of Payment, so long as the Place of Payment
     as required by Section 3.01 is maintained;

          (h) to cure any ambiguity, to correct or supplement any provision
     herein which may be defective or inconsistent with any other provision
     herein or in any supplemental indenture;

          (i) to make any other provisions with respect to matters or questions
     arising under this Capital Securities Indenture, provided such

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<PAGE>

     action shall not adversely affect the interests of the Holders of Capital
     Securities of any series in any material respect;

          (j) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Capital Securities of
     one or more series and to add to or change any of the provisions of this
     Capital Securities Indenture as shall be necessary to provide for or
     facilitate the administration of the trusts hereunder by more than one
     Trustee, pursuant to the requirements of Section 6.11(b); or

          (k) to change or eliminate any provision of this Capital Securities
     Indenture as permitted by Section 1.07.

     Section 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than 66 2/3% in aggregate principal amount of
the Outstanding Capital Securities of each series affected by such supplemental
Capital Securities Indenture (voting as a class), by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Capital Securities
Indenture or of modifying in any manner the rights of the Holders of Capital
Securities of such series under this Capital Securities Indenture; provided,
however, that no such supplemental indenture may, without the consent of the
Holder of each Outstanding Capital Security affected thereby,

          (a) change the terms of any Capital Security to include a stated
     maturity date of the principal amount of any such Capital Security, reduce
     the principal amount of, or any premium payable upon the redemption of, or
     the Payments or any Missed Payments payable on, any Capital Security, or
     change the obligation of the Company (or its successor) to pay Additional
     Amounts pursuant to Section 10.04 (except as contemplated by Section
     8.01(a) and permitted by Section 9.01(a)) on the Capital Securities, or
     the currency of payment of the principal amount of, premium, if any, or
     Payments or Missed Payments on, any such Capital Security or impair the
     right to institute suit for the enforcement of any such payment when due
     and payable on or with respect to any Capital Security, or

          (b) reduce the percentage in aggregate principal amount of the
     Outstanding Capital Securities of any series, the consent of whose Holders
     is required for any such supplemental indenture, or the consent of whose
     Holders is required for any waiver (of compliance with certain provisions
     of this Capital Securities Indenture or of certain defaults hereunder and
     their consequences) provided for in this Capital Securities Indenture, or

                                       54

<PAGE>

          (c) modify any of the provisions of this Section 9.02 or Section 5.13
     except to increase any such percentage or to provide that certain other
     provisions of this Capital Securities Indenture cannot be modified or
     waived without the consent of the Holder of each Outstanding Capital
     Security affected thereby; provided, however, that this clause shall not
     be deemed to require the consent of any Holder with respect to changes in
     the references to "the Trustee" and concomitant changes in this Section,
     or the deletion of this proviso, in accordance with the requirements of
     Sections 6.11(b) and 9.01(j), or

          (d) change in any manner adverse to the interests of the Holders of
     any Capital Securities, the subordination provisions of the Capital
     Securities or the terms and conditions of the obligations of the Company
     in respect of the due and punctual payment of any amounts due and payable
     on the Capital Securities.

     It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

     A supplemental indenture which changes or eliminates any covenant or other
provision of this Capital Securities Indenture which has expressly been
included solely for the benefit of one or more particular series of Capital
Securities, or which modifies the rights of the Holders of Capital Securities
of such series with respect to such covenant or other provision, shall be
deemed not to affect the rights under this Capital Securities Indenture of the
Holders of Capital Securities of any other series.

     Section 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Capital Securities Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Capital Securities Indenture. The Trustee may,
but shall not be obliged to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Capital
Securities Indenture or otherwise.

     Section 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Capital Securities Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Capital Securities Indenture for all purposes; and
every Holder

                                       55

<PAGE>

of Capital Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby, except as otherwise expressed therein.

     Section 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act as then in effect.

     Section 9.06. Reference in Capital Securities to Supplemental Indentures.
Capital Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Capital Securities of any series so modified as to conform,
in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and such Capital
Securities may be authenticated and delivered by the Trustee in exchange for
Outstanding Capital Securities of such series.

                                   ARTICLE 10
                                   COVENANTS

     Section 10.01. Payment of Principal, Premium, Payments and Missed
Payments. The Company covenants and agrees for the benefit of each series of
Capital Securities that it will duly and punctually pay the principal of (and
premium, if any) and (subject to Section 3.07) Payments and Missed Payments, if
any, on the Capital Securities of that series when due and payable in
accordance with the terms of the Capital Securities and this Capital Securities
Indenture.

     Section 10.02. Maintenance of Office or Agency. The Company will maintain
in each Place of Payment for any series of Capital Securities an office or
agency where Capital Securities of that series may be presented or surrendered
for payment, where Capital Securities of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Capital Securities of that series and this
Capital Securities Indenture may be served; provided, however, that at the
option of the Company in the case of registered Capital Securities of such
series, payment of any Payments or Missed Payments thereon may be made by check
mailed to the address of the Person entitled herein as such address shall
appear in the Capital Security Register. With respect to the Capital Securities
of any series, such office or agency in each Place of Payment shall be
specified as contemplated by Section 3.01, and if not so specified, initially
shall be the Corporate Trust Office of the Trustee. Unless otherwise specified
pursuant to Section 3.01, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency

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<PAGE>

where notices and demands to or upon the Company in respect of Capital
Securities of any series and this Capital Securities Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee. The Company hereby appoints the Trustee as its agent to
receive all presentations, surrenders, notices and demands.

     The Company may also from time to time designate one or more other offices
or agencies (in or outside the Borough of Manhattan, The City of New York)
where the Capital Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of any obligation to maintain an office or
agency in each Place of Payment (except as otherwise indicated in this Section)
for Capital Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.

     Section 10.03. Money for Payments to Be Held in Trust. If the Company
shall at any time act as Paying Agent with respect to the Capital Securities of
any series, it will, on or before each due date for payment of the principal of
(and premium, if any) or Payments or Missed Payments, if any, on any of the
Capital Securities of that series, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or Payments or Missed Payments so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its failure so to act.

     Whenever the Company shall have one or more Paying Agents for any series
of Capital Securities, it will, prior to each due date for payment of the
principal of (and premium, if any) or Payments or Missed Payments on any
Capital Securities of that series deposit with a Paying Agent a sum sufficient
to pay the principal (and premium, if any) or Payments or Missed Payments so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or Payments or Missed Payments, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or its failure so to act. The Company will cause each Paying
Agent for any series of Capital Securities other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:

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<PAGE>

          (a) hold all sums held by it for the payment of the principal of (and
     premium, if any) or Payments or Missed Payments on Capital Securities of
     that series in trust for the benefit of the Persons entitled thereto until
     such sums shall be paid to such Persons or otherwise disposed of as herein
     provided;

          (b) give the Trustee notice of any default by the Company (or any
     other obligor upon the Capital Securities of that series) in the making of
     any payment, when due and payable, or principal of (and premium, if any)
     or Payments or Missed Payments on Capital Securities of that series; and

          (c) at any time during the continuance of any such default, upon the
     written request of the Trustee, forthwith pay to the Trustee all sums so
     held in trust by such Paying Agent.

     The Company may at the time, for the purpose of obtaining the satisfaction
and discharge of this Capital Securities Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee such Paying Agent shall be released from all further liability with
respect to such money.

     Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or Payments or Missed Payments on any Capital Security of any series and
remaining unclaimed for two years after such principal (and premium, if any) or
Payments or Missed Payments have become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Capital Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published at least once, in an Authorized
Newspaper, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be paid to
the Company.

     Section 10.04. Additional Amounts. Unless otherwise specified in any Board
Resolution establishing the terms of Capital Securities of a series in
accordance with Section 3.01, all amounts of principal, and premium, if any,
and Payments, including Missed Payments, if any, on any series of Capital
Securities

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<PAGE>

will be paid by the Company without deduction or withholding for, or on account
of, any and all present and future income, stamp and other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings now or hereafter
imposed, levied, collected, withheld or assessed by or on behalf of the United
Kingdom or any political subdivision or authority thereof or therein having the
power to tax (the "Taxing Jurisdiction"), unless such deduction or withholding
is required by law. If deduction or withholding of any such taxes, levies,
imposts, duties, charges, fees, deductions or withholdings shall at any time be
required by the Taxing Jurisdiction, the Company will pay such additional
amounts with respect to the principal amount of, premium, if any, Payments and
Missed Payments, on any series of Capital Securities ("Additional Amounts") as
may be necessary in order that the net amounts paid to the Holders of Capital
Securities of the particular series, after such deduction or withholding, shall
equal the respective amounts of principal, premium, if any, and Payments and
Missed Payments, if any, which would have been payable in respect of such
Capital Securities had no such deduction or withholding been required;
provided, however, that the foregoing will not apply to any such tax, levy,
impost, duty, charge, fee, deduction or withholding which would not have been
payable or due but for the fact that:

               (i) the Holder or the beneficial owner of the Capital 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 has some connection with the Taxing
          Jurisdiction other than the holding or ownership of a Capital
          Security, or the collection of any payment of (or in respect of)
          principal of, premium, if any, or any Payments or Missed Payments on
          any Capital Security of the relevant series;

              (ii) except in the case of a winding-up of the Company in the
          United Kingdom, the relevant Capital Security is presented (where
          presentation is required) for payment in the United Kingdom;

             (iii) the relevant Capital 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 such
          Additional Amount on presenting (where presentation is required) the
          same for payment at the close of such 30 day period; or

              (iv) the Holder or the beneficial owner of the relevant Capital
          Security or the beneficial owner of any payment of (or in respect of)
          principal of, or any Payments or Missed Payments on such Capital
          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

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<PAGE>

          or such beneficial owner or (y) to make any declaration or other
          similar claim to satisfy any information 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 such tax, assessment or
          other governmental charge;

               (v) the withholding or deduction is imposed on a payment to or
          for the benefit of an individual and is required to be made pursuant
          to any European Union Directive on the taxation of savings
          implementing the proposal for a European Union Directive presented by
          the European Union Commission on July 18, 2001 or any law
          implementing or complying with, or introduced in order to conform to,
          such directive;

              (vi) the relevant Capital 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 (where presentation is required) the relevant Capital
          Security to another paying agent in a Member State of the European
          Union; or

             (vii) any combination of subclauses (i) through (vi) above;

nor shall Additional Amounts be paid with respect to the principal of, and
payments and Missed Payments on, the Capital Securities to any holder who is a
fiduciary or partnership or settlor with respect to such fiduciary or a member
of such partnership 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 this Capital Securities Indenture there is mentioned, in any
context, the payment of the principal of (and premium, if any) or any Payments,
or Missed Payments, if any, on, or in respect of, any Capital 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.

     Section 10.05. Corporate Existence. Subject to Article 8, the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.

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     Section 10.06. Statement as to Compliance. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year, a certificate in
compliance with Section 314(a)(4) of the Trust Indenture Act.

                                   ARTICLE 11
                        REDEMPTION OF CAPITAL SECURITIES

     Section 11.01. Applicability of Article. Capital Securities of any series
shall be redeemable in accordance with their terms and (except as otherwise
specified pursuant to Section 3.01 for Capital Securities of any series) in
accordance with this Article.

     Section 11.02. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Capital Securities shall be evidenced by a Board
Resolution. The Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount
of Capital Securities of such series to be redeemed and, if applicable, the
tenor of the Capital Securities to be redeemed. In the case of any redemption
of Capital Securities of any series prior to the expiration of any provision
restricting such redemption provided in the terms of such Capital Securities or
elsewhere in this Capital Securities Indenture, the Company shall furnish the
Trustee with respect to such Capital Securities with an Officer's Certificate
evidencing compliance with or waiver of such provision.

     Section 11.03. Selection by Trustee of Capital Securities to Be Redeemed.
If less than all the Capital Securities of any series are to be redeemed, the
particular Capital Securities to be redeemed shall be selected not more than 60
days nor less than 30 days prior to the Redemption Date by the Trustee, from
the Outstanding Capital Securities of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for registered Capital Securities of that
series or any multiple thereof) of the principal amount of Capital Securities
of such series of a denomination larger than the minimum authorized
denomination for Capital Securities of that series.

     The Trustee shall promptly notify the Company in writing of the Capital
Securities selected for redemption and, in the case of any Capital Securities
selected for partial redemption, the principal amount thereof to be redeemed.

     For all purposes of this Capital Securities Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Capital
Securities

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shall relate in the case of any Capital Securities redeemed or to be redeemed
only in part, to the portion of the principal amount of such registered Capital
Security which has been or is to be redeemed.

     Section 11.04. Notice of Redemption. Notice of redemption shall be given
not less than 30 nor more than 60 days prior to the Redemption Date to each
Holder of Capital Securities to be redeemed in the manner and to the extent
provided in Section 1.06.

     All notices of redemption shall state:

          (a) the Redemption Date,

          (b) the Redemption Price,

          (c) if less than all the Outstanding Capital Securities of any series
     are to be redeemed, the principal amount of the Capital Securities to be
     redeemed,

          (d) that on the Redemption Date the Redemption Price will, subject to
     the Solvency Condition, become due and payable upon each such Capital
     Security to be redeemed and, if applicable, that Payments thereon will
     cease to accrue on or after the said date,

          (e) the place or places where such Capital Securities are to be
     surrendered for payment of the Redemption Price, and

          (f) the CUSIP, Common Code, ISIN and/or successor number or numbers,
     if any, with respect to such Capital Securities.

     Notice of redemption of Capital Securities to be redeemed at the selection
of the Company shall be given by the Company or, at the Company's Request, by
the Trustee in the name and at the expense of the Company.

     Section 11.05. Deposit of Redemption Price. On or prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as Paying Agent, segregate and hold in trust as provided
in Section 10.03) an amount of money sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be a Payment Date) accrued but unpaid
Payments (and any Missed Payments accumulated to such Redemption Date) on, all
the Capital Securities which are to be redeemed on that date.

     Section 11.06. Capital Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Capital Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the

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Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and Payments and
Missed Payments, if any) such Capital Securities shall cease to accrue Payments
for the period following the Redemption Date. Upon surrender of any such
Capital Security for redemption in accordance with said notice, such Capital
Security shall be paid by the Company at the Redemption Price, together with
accrued but unpaid Payments to the Redemption Date and Missed Payments, if any,
accumulated to the Redemption Date; provided, however, that with respect to any
Capital Securities in registered form, unless otherwise specified as
contemplated by Section 3.01, a Payment which is payable on a Payment Date
which is the Redemption Date, shall be payable to the Holders of such Capital
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Dates according to the terms
of the Capital Securities and the provisions of Section 3.07. The obligation of
the Company to redeem Capital Securities of a series on a Redemption Date shall
be subject to the Solvency Condition.

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

     Section 11.07. Capital Securities Redeemed in Part. Any Capital Security
which is to be redeemed only in part shall be surrendered at a Place of Payment
therefor (with, only in the case of Capital Securities in registered form, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing),
and the Company shall execute, and the Trustee shall authenticate and deliver
to the Holder of such Capital Security without service charge, a new Capital
Security or Capital Securities of the same series of any authorized
denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Capital
Security so surrendered.

         Section 11.08. Optional Redemption Due to Changes in Tax Treatment.
Unless otherwise provided as contemplated by Section 3.01 with respect to any
series of Capital Securities and subject to satisfaction of the Solvency
Condition, the Capital Securities are redeemable, as a whole but not in part,
at the option of the Company, on not less than 30 nor more than 60 days'
notice, on any Payment Date, at a redemption price equal to 100% of the
principal amount, together with accrued but unpaid Payments and all Missed
Payments, if any, in respect of such series of Capital Securities to the date
fixed for redemption, if, at any time, the Company shall determine that, as a
result of a change in or amendment to the laws or regulations of the Taxing
Jurisdiction (including any treaty to which such Taxing Jurisdiction is a
party), or any change in the official application or

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<PAGE>

interpretation of such laws or regulations (including a decision of any court
or tribunal) which change or amendment becomes effective on or after a date
included in the terms of such series of Capital Securities pursuant to Section
3.01:

          (a) in making payment under the Capital Securities in respect of
     principal or premium, if any, or Payments (including Missed Payments) it
     has or will or would on the next Payment Date become obligated to pay
     Additional Amounts;

          (b) Payments (including Missed Payments) on the next Payment Date in
     respect of any of the Capital Securities would be treated as
     "distributions" within the meaning of Section 209 of the Income and
     Corporation Taxes Act 1988 of the United Kingdom (or any statutory
     modification or re-enactment thereof for the time being); or

          (c) on the next Payment Date the Company would not be entitled to
     claim a deduction in respect of such Payments in computing its United
     Kingdom taxation liabilities (or the value of such deduction to the
     Company would be materially reduced).

     In any case where the Company shall determine that as a result of any
change in the official application or interpretation of any laws or regulations
it is entitled to redeem the Capital Securities of any series the Company shall
be required to deliver to the Trustee prior to the giving of any notice of
redemption a written legal opinion of independent United Kingdom counsel of
recognized standing (selected by the Company) in a form satisfactory to the
Trustee confirming that the relevant change in the official application or
interpretation of such laws or regulations has occurred and that the Company is
entitled to exercise its right of redemption.

                                   ARTICLE 12
                      SUBORDINATION OF CAPITAL SECURITIES

     Section 12.01. Capital Securities Subordinate to Senior Claims.

     (a) Unless otherwise provided as contemplated by section 3.01 with respect
to any series of Capital Securities, the Company covenants and agrees, and each
Holder of Capital 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, the Capital Securities of such series
and the payment of the principal of, premium, if any, and Payments, and Missed
Payments, if any, on each and all of the Capital Securities of such series are
hereby expressly made in the event of a winding-up of the Company subordinate
and subject in right of

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<PAGE>

payment to the prior payment in full of all Senior Claims and, except in a
winding-up, conditional upon the Solvency Condition being satisfied at the time
of payment by the Company, and no principal, premium, if any, Payments or
Missed Payments, if any, in respect of the Capital Securities of such series
which under the terms of such series or the provisions of this Capital
Securities Indenture would otherwise be due for payment when the Solvency
Condition is not satisfied shall be due and payable (without prejudice to the
provision of Section 5.03 with respect to a Payment Event), and instead such
principal, premium, if any, Payments or Missed Payments, if any, will become
due and payable only if and when and to the extent that the Company could make
such payment in whole or in part and still satisfy the Solvency Condition
immediately thereafter. In a winding-up, the amount payable in respect of the
Capital Securities is determined in accordance with the provisions of Section
12.01(c).

     (b) No payment of principal, premium, if any, Payments or Missed Payments,
if any, in respect of the Capital Securities of any series and no purchase of
any Capital Securities of any series beneficially by or for the account of the
Company or any of its Subsidiaries (other than a purchase in connection with
dealing in securities) shall be made unless a director of the Company or (in
the case of the optional redemption by the Company of all or some of the
Capital Securities of the series or a purchase of any Capital Securities of the
series as aforesaid or if a director of the Company has not reported as
mentioned below) the Auditors shall have reported to the Trustee within 14 days
before such payment or within 6 months before such purchase that in their
opinion or, as the case may be, his opinion, the Solvency Condition would be
satisfied both at the time of and immediately after such payment or purchase.
Any such report shall, in the absence of manifest error, be treated and
accepted by the Company, the Trustee and the Holders as correct and sufficient
evidence of such satisfaction of the Solvency Condition.

     (c) If at any time an order is made or a shareholders' resolution is
passed for the winding-up of the Company, there shall be payable with respect
to the Capital Securities of any series, such amounts, if any, as would have
been payable in respect thereof as if, on the day immediately prior to the
commencement of the winding-up and thereafter, the Holders of the Capital
Securities were the holders of preference shares in the capital of the Company
having a preferential right to a return of assets in a winding-up over the
holders of all other issued shares (including all classes of preference shares
of the Company) for the time being in the share capital of the Company, on the
assumption that such preference shares were entitled (to the exclusion of all
other rights or privileges) to receive as a return of capital in such
winding-up an amount equal to the principal amount of the Capital Securities of
such series then Outstanding together with any premium, all Payments accrued to
the date of repayment at the rate provided for in the Capital Securities of
that series and any Missed Payments and subject in right of payment to the
prior payment in full to all Senior Claims of the Company.

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<PAGE>

     (d) The provisions of this Section shall apply only to the payment of
principal, premium, if any, Payments and Missed Payments, if any, in respect of
the Capital Securities of any series and nothing herein shall affect or
prejudice the payment of the costs, charges, expenses, liabilities or
remuneration of the Trustee or the rights and remedies of the Trustee in
respect thereof.

     (e) The provisions of this Section shall not be applicable to any amounts
of principal, premium, if any, or Payments or Missed Payments, if any, in
respect of the Capital Securities of any series for the payment of which funds
have been deposited in trust with the Trustee or any Paying Agent or have been
set aside by the Company in trust in accordance with the provisions of this
Capital Securities Indenture; provided, however, that at the time of such
deposit or setting aside, and immediately thereafter, the foregoing provisions
of this Section are complied with.

     Section 12.02. Provisions Solely to Define Relative Rights. The provisions
of this Article 12 are and are intended solely for the purpose of defining the
relative rights of the Holders of the Capital Securities of each series on the
one hand and the Senior Creditors on the other hand. Nothing contained in this
Article or elsewhere in this Capital Securities Indenture or in such Capital
Securities is intended to or shall (a) impair, as among the Company and the
Holders of the Capital Securities, the obligation of the Company, which is
absolute and unconditional, to pay to the holders of such claims the principal
of, premium, if any, and Payments, or Missed Payments, if any, on such Capital
Securities as and when the same shall become due and payable in accordance with
their terms and this Capital Securities Indenture; or (b) affect the relative
rights against the Company of the Holders of such Capital Securities; or (c)
prevent the Trustee or the Holder of any Capital Securities of the series from
exercising all remedies otherwise permitted by applicable law upon default
under this Capital Securities Indenture, subject to the rights, if any, under
this Article of the Senior Creditors to receive cash, property or securities
otherwise payable or deliverable to the Trustee or such holder.

     Section 12.03. Trustee to Effectuate Subordination. Each Holder of a
Capital Security by his acceptance thereof authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination of the Capital Securities provided in this Article
12 and appoints the Trustee his attorney-in-fact for any and all such purposes.

     Section 12.04. No Waiver of Subordination Provisions. No right of any
present or future Senior Creditors to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such Senior Creditor or by any noncompliance by the Company with the
terms,

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<PAGE>

provisions and covenants of this Capital Securities Indenture, regardless of
any knowledge thereof any such Senior Creditor may have or be otherwise charged
with.

     Section 12.05. Notice to Trustee. Upon the occurrence of any Event of
Default, Default or Payment Event, the Company shall give prompt written notice
to the Trustee of any fact known to the Company which would prohibit the making
of any payment when due to or by the Trustee in respect of the Capital
Securities of a series. Notwithstanding the provisions of this Article or any
other provisions of this Capital Securities Indenture but subject to the
provisions of Section 12.01, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment when
due to or by the Trustee in respect of such Capital Securities unless and until
the Trustee shall have received written notice thereof from the Company or a
Senior Creditor or from any trustee therefor; and, prior to the receipt of any
such written notice by a Responsible Officer of the Trustee, the Trustee,
subject to the provisions of Section 6.01, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section at least three
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of and any premium and Payments, or Missed Payments, if any, on
any Capital Security), then, subject to the provisions of Section 12.01, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within three
Business Days prior to such date.

     Subject to the provisions of Section 6.01, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a Senior Creditor or a trustee therefor, to establish that such
notice has been given by a Senior Creditor, or a trustee therefor. In the event
that the Trustee determines in good faith that further evidence is required
with respect to the right of any Person as a Senior Creditor to participate in
any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of claims held by such Person, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

     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 Capital Securities of the series shall be entitled to rely upon
(i) any order or decree entered by any court in England or Scotland (but not
elsewhere) in which such winding-up of the Company or similar case or
proceeding, including a

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<PAGE>

proceeding for the suspension of payments under English or Scottish law, is
pending, or (ii) a certificate of the liquidator of the Company (the
"Liquidator"), assignee for the benefit of creditors, agent or other person
making such payment or distribution, delivered to the Trustee or the Holders of
such Capital 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 12.07. Trustee Not Fiduciary for Senior Creditors. The Trustee
shall not be deemed to owe any fiduciary duty to the Senior Creditors and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Capital Securities of the series or to the Company
or to any other Person cash, property or securities to which any Senior
Creditors shall be entitled by virtue of this Article or otherwise.

     Section 12.08. Rights of Trustee as Senior Creditor; Preservation of
Trustee's Rights. The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any claims of Senior
Creditors which may at any time be held by it, to the same extent as any other
Senior Creditor, and nothing in this Capital Securities Indenture shall deprive
the Trustee of any of its rights as such holder.

     Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07.

     Section 12.09. Article Applicable to Paying Agents. At all times when a
Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 12.08 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.

     Section 12.10. Exchanges Not Deemed Payment. For the purposes of this
Article 12 only, delivery of Dollar Preference Shares or Exchange Securities
upon exchange of Capital Securities in accordance with Article 13, if
applicable to a particular series of Capital Securities, shall not be deemed to
constitute a payment or distribution on account of the principal of Capital
Securities or on account of the purchase or other acquisition of Capital
Securities. Nothing contained in this Article or elsewhere in this Capital
Securities Indenture or in the Capital Securities is intended to or shall
impair, as among the Company, its creditors and the Holders of the Capital
Securities, the right, which if applicable to

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a particular series of Capital Securities is absolute and unconditional, of the
Company to exchange the Capital Securities in accordance with Article 13.

                                   ARTICLE 13
                         EXCHANGE OF CAPITAL SECURITIES

     Section 13.01. Applicability of Article. If specified pursuant to Section
3.01 for Capital Securities of any series, the Capital Securities of any series
shall be convertible (conversion being referred to herein as "exchange") on any
Payment Date as a whole or in part, at the option of the Company, on the basis
of the principal amount of each Capital Security, into an equivalent amount in
liquidation preference of the series of Dollar Preference Shares or the
principal amount of the series of Exchange Securities specified pursuant to
Section 3.01 and (except as otherwise specified as contemplated by Section 3.01
for Capital Securities of any series) in accordance with this Article 13.

     Section 13.02. Election to Exchange; Notice to Trustee. An election of the
Company to exchange Capital Securities shall be evidenced by an Officer's
Certificate furnished to the Trustee stating that the Company is entitled to
effect such exchange and setting forth a statement of facts demonstrating the
same.

     Section 13.03. Notice of Exchange. Not less than 45 days nor more than 60
days prior to any date fixed for exchange of Capital Securities of a series
(the "Exchange Date"), the Company shall notify the Trustee in writing of its
election to exchange the Capital Securities of such series. The Trustee shall
within 15 days after receipt of notice from the Company, but in no event less
than 30 days nor more than 60 days prior to the Exchange Date, cause notice of
such election to be (i) mailed to the Holder (if the address of such Holder is
known to the Trustee) if the affected Capital Securities are in global form, or
(ii) mailed to each Holder of registered Capital Securities of such series to
be exchanged in accordance with Section 1.06.

     All notices of exchange shall state:

          (a) the Exchange Date;

          (b) that on the Exchange Date, the Capital Securities to be exchanged
     will cease to exist for any purpose on or after such Exchange Date;

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          (c) if less than all the Outstanding Capital Securities of any series
     are to be exchanged, the identification of the particular Capital
     Securities to be exchanged, which Capital Securities shall be selected by
     the Trustee, from the Outstanding Capital Securities of such series not
     previously called for exchange, by such method as the Trustee shall deem
     fair and appropriate and which may provide for the selection for exchange
     of portions (equal to the minimum authorized denomination for Capital
     Securities of that series or any multiple thereof) of the principal amount
     of Capital Securities of such series of a denomination larger than the
     minimum authorized denomination for Capital Securities of that series; and

          (d) the place or places where such Capital Securities are to be
     surrendered for exchange; and

          (e) the form in which the Company will issue the Dollar Preference
     Shares (if not as a single share warrant to bearer delivered to the ADR
     Depositary) or Exchange Securities.

     Notice of any exchange of Capital Securities at the election of the
Company shall be given by the Company or, pursuant to a Company Request by the
Trustee, in the name of and at the expense of the Company.

     Section 13.04. Deposit of Payments. Prior to any Exchange Date, the
Company shall deposit with the Trustee an amount of money sufficient to pay
accrued Payments to the Exchange Date plus Missed Payments, if any, accumulated
to the Exchange Date on all Capital Securities of such series.

     Section 13.05. Surrender of Capital Securities. Any Capital Security which
is to be exchanged shall be surrendered at an office or agency of the Company
designated for that purpose pursuant to Section 10.02 not less than 10 days
prior to the Exchange Date (with, only in the case of registered Capital
Securities and if the Company or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing) accompanied by written notice specifying the Persons (i) in the case
of Dollar Preference Shares, to whom ADRs should be issued by the ADR
Depositary or, if the Company has notified the Trustee in accordance with
Section 13.03 that it will issue Dollar Preference Shares in definitive form,
any direction the Holder may wish to make as referred to in Section 13.06 or
(ii) in the case of Exchange Securities, to whom such Exchange Securities are
to be issued. The Trustee will inform the Company of all such notices and the
Company will, if applicable, direct the ADR Depositary accordingly under the
terms of the ADR Deposit Agreement. Capital Securities surrendered for exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee for delivery by it to

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<PAGE>

the Company or, if delivered to the Trustee, shall be delivered by it to the
Company.

     Section 13.06. Issuance of Dollar Preference Shares or Exchange
Securities. On the Exchange Date with respect to Global Securities of a series,
and on or prior to the Exchange Date with respect to definitive Capital
Securities of a series, in each case surrendered for exchange as provided in
Section 13.05, the Company shall (i) in the case of Dollar Preference Shares,
unless the Company shall have notified the Trustee otherwise in accordance with
Section 13.03, deliver or procure the delivery of a single share warrant to
bearer to the ADR Depositary representing all of the Dollar Preference Shares
in respect of which such Capital Securities are to be exchanged in accordance
with the provisions of this Article 13 or (ii) in the case of Exchange
Securities, deliver or procure the delivery of the Exchange Securities to the
Trustee or to such other Person as may be specified pursuant to Section 3.01.

     In the event that the Company shall have notified the Trustee in
accordance with Section 13.03 that it will not deliver a single share warrant
to bearer in exchange for the Capital Securities of a series surrendered for
exchange as provided in Section 13.05, the Company shall, on or prior to the
Exchange Date, with respect to definitive Capital Securities, deliver or
procure the delivery of individual certificates representing the Dollar
Preference Shares (or the rights to receive such Dollar Preference Shares) of
such series for which such Capital Securities are to be exchanged in accordance
with the provisions of this Article 13, in the case of Dollar Preference Shares
in registered form, to and registered in the names of the Holders of such
Capital Securities in definitive form as they appear on the Capital Security
Register or, at the direction of such Holder, in the name of the ADR Custodian
for the account and benefit of the ADR Depositary who will issue ADRs
evidencing ADSs representing the Dollar Preference Shares to such Holder and,
in the case of Dollar Preference Shares in bearer form, to the bearer of the
bearer Capital Security in definitive form or, at the direction of such bearer,
to the ADR Custodian for the account and benefit of the ADR Depositary who will
issue ADRs evidencing ADSs representing Dollar Preference Shares to such
Holder.

     Any exchange pursuant to this Section 13.06 shall be deemed to have been
made immediately prior to the close of business in New York on the Exchange
Date.

     Section 13.07. Effect of Exchange. Notice of exchange having been given as
aforesaid, the Capital Securities so to be exchanged shall on the Exchange Date
cease to exist for any purpose. Upon surrender of any such Capital Security for
exchange in accordance with the said notice and this Article 13, accrued
Payments on such Capital Security to the Exchange Date plus Missed Payments, if
any, accumulated to the Exchange Date shall be paid by the

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<PAGE>

Company to the Holder surrendering such Capital Security. Such payment shall be
a condition to the exchange and no exchange shall occur unless such payments
are made.

     On and after the Exchange Date for Capital Securities of a particular
series, each Capital Security of the series to be exchanged, until surrendered
shall be deemed to evidence rights to receive Dollar Preference Shares or
Exchange Securities of the relevant series with a liquidation preference
equivalent to the principal amount of such Capital Security. Until a Holder has
surrendered such Capital Security upon such exchange, such Holder shall be
entitled to receive dividends, payments or other distributions in respect of
such Dollar Preference Shares or Exchange Securities and shall have the same
rights with respect to, and shall be deemed to be the Holder of, such Dollar
Preference Shares or Exchange Securities into which such Capital Security was
exchanged as if it had so surrendered such Capital Security.

     Section 13.08. Validity of Dollar Preference Shares or Exchange
Securities. The Company will take all corporate and other action which may be
necessary in order that it may validly and legally issue Dollar Preference
Shares or Exchange Securities upon each exchange of the Outstanding Capital
Securities. The Company covenants that the Dollar Preference Shares or Exchange
Securities will when issued upon such exchange be duly authorized and validly
issued, fully paid and not subject to calls for further funds.

     Section 13.09. Legal and Regulatory Compliance. Notwithstanding any
provision of this Capital Securities Indenture to the contrary, the right of
the Company to cause any exchange of Capital Securities of a series for Dollar
Preference Shares or Exchange Securities on any proposed Exchange Date shall be
subject to the fulfillment of the following conditions with respect to such
Capital Securities:

          (a) as of such Exchange Date, there are no accrued but unpaid
     Payments and there are no Missed Payments (including amounts paid on the
     Exchange Date);

          (b) as of such Exchange Date, no Default or Event of Default or
     Payment Event shall have occurred and be continuing with respect to the
     particular series of Capital Securities;

          (c) as of such Exchange Date, there has not been, in any one instance
     or in the aggregate, an adverse effect on the rights, powers, privileges,
     validity or enforceability of the Dollar Preference Shares or Exchange
     Securities;

                                       72

<PAGE>

          (d) the Dollar Preference Shares to be issued on such Exchange Date
     shall be duly authorized and reserved for issuance upon such exchange and,
     when issued upon such exchange, will be fully paid and not subject to
     calls for further funds;

          (e) no consents, authorizations, approvals or exemptions, except in
     each case such as shall have been obtained, will be required prior to such
     Exchange Date for the issuance and delivery of the Dollar Preference
     Shares or Exchange Securities to be issued upon such exchange;

          (f) the issuance and delivery of the Dollar Preference Shares or
     Exchange Securities to be issued on such Exchange Date shall not violate
     (x) the Articles of Association of the Company or (y) any law, rule or
     regulation applicable to the Company; and

          (g) there shall not have occurred any change in law in Scotland or in
     the jurisdiction of the governing law of any Exchange Securities, or any
     amendment of the Articles of Association of the Company, prior to such
     Exchange Date, materially and adversely affecting the rights and
     privileges attached to the Dollar Preference Shares or Exchange Securities
     (including, without limitation, the rights of the holders thereof in the
     event of a bankruptcy or other similar proceeding with respect to the
     Company) or such holders' access to the courts of the United Kingdom and
     other applicable governmental authorities to enforce such rights.

     Section 13.10. Taxes and Charges. The issuance or delivery of Dollar
Preference Shares or Exchange Securities upon exchange of Capital Securities
pursuant to this Article 13 shall be made without charge to the exchanging
Holder of Capital Securities for such Dollar Preference Shares or Exchange
Securities or for any tax or other governmental charge (other than income or
capital gains taxes) in respect of the issuance or delivery of such Dollar
Preference Shares or Exchange Securities; provided, however, that the Company
shall not be required to pay any tax or other governmental charge which may be
payable in respect of (i) issuance or delivery of Dollar Preference Shares or
Exchange Securities to any Person who is or is a nominee or agent for a Person
whose business is or includes the provision of clearance services within the
meaning of Section 96 or Section 70 of the Finance Act 1986 or whose business
is or includes issuing depositary receipts within the meaning of Section 93 or
Section 67 of the Finance Act 1986, other than the ADR Depositary or ADR
Custodian, all such Persons (other than the ADR Depositary and the ADR
Custodian) being "Excepted Persons" or (ii) a transfer involved in the issuance
and delivery of any such Dollar Preference Share or Exchange Securities to any
Person other than any Holder (not being an Excepted Person) of the Capital
Security to be exchanged, or in the case of Global Securities, the ADR
Depositary or the ADR Custodian, and the Company shall not be required to issue
or deliver or procure the delivery of such Dollar

                                       73

<PAGE>

Preference Shares or Exchange Securities unless and until the Person requesting
the issuance or delivery thereof shall have paid to the Company the amount of
such tax or other governmental charge or shall have established to the
satisfaction of the Company that such tax or other governmental charge has been
paid.

     Section 13.11. Trustee Not Liable. The Trustee shall not be accountable
with respect to the validity or value (or the kind or amount) of any Dollar
Preference Shares or Exchange Securities which may be issued or delivered upon
the exchange of any Capital Security pursuant to this Article 13, and makes no
representation with respect thereto. The Trustee shall not be responsible for
any failure of the Company to issue, transfer or deliver or procure the
delivery of any Dollar Preference Shares or Exchange Securities upon the
surrender of any Capital Security for the purpose of exchange pursuant to this
Article 13 or to comply with any of the covenants of the Company or conditions
contained in this Article 13.

                                       74

<PAGE>

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

     IN WITNESS WHEREOF, the Company and the Trustee have caused this Capital
Securities Indenture to be duly executed, all as of the day and year first
above written.

                                            THE ROYAL BANK OF SCOTLAND
                                                 GROUP plc

                                            By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                            THE BANK OF NEW YORK, as Trustee

                                            By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                       75EXHIBIT 4.3

                        THE COMPANIES ACTS 1948 to 1983
                    ---------------------------------------

                       A PUBLIC COMPANY LIMITED BY SHARES
                    ---------------------------------------

                           MEMORANDUM OF ASSOCIATION

                                       of

                        THE ROYAL BANK OF SCOTLAND GROUP
                             public limited company

         (amended by Resolution of the Directors passed on 28th January, 1982,
         by Special Resolutions passed on 12th January, 1984 and 14th January,
         1993)
                    ---------------------------------------

     1.   The name of the Company is "The Royal Bank of Scotland Group public
          limited company".*

     2.   The Company is to be a public company.

     3.   The registered office of the Company will be situate in Scotland.

   **4.   The objects for which the Company is established are:-

          (1)  To carry on in any part of the world the business of banking in
               all or any of its aspects, conformably with the laws relating to
               banking whether passed before or after the date of adoption of
               this clause in any of the territories in which the powers hereby
               conferred are exercised, and generally in carrying on its said
               business and as ancillary thereto to do all acts and things
               which may seem desirable to be done in the conduct of the
               businesses of banking or dealing in money and securities for
               money or which may conduce or be calculated directly or
               indirectly to facilitate or render profitable the prosecution or
               such businesses or may be calculated to promote the profitable
               employment or use of the assets of the Company; and, in
               particular, and without prejudice to such generality:-

               (i)  to issue notes of all denominations or amounts payable to
                    bearer subject to compliance with any legal requirements
                    from time to time applicable thereto and to any special
                    liability which may attach by law thereto and to perform
                    the obligations thereby undertaken;

               (ii) to receive, collect, obtain, and retain money on deposit,
                    current or savings account or on loan or otherwise, and
                    whether at interest or otherwise, and to obtain the use and
                    control of money and securities and to transmit the same
                    and to employ and use the same in any manner thought fit;

 *Note - The Company was incorporated under the name "National and Commercial
Banking Group Limited" and its name was changed to "The Royal Bank of Scotland
Group Limited" by Special Resolution passed on 4th July, 1979. By Resolution of
the Directors passed on 28th January, 1982, pursuant to section 8 of the
Companies Act, 1980, the name of the Company was changed to "The Royal Bank of
Scotland Group public limited company".

**Note - This clause was substituted by Special Resolution passed on 12th
January, 1984.

<PAGE>

              (iii) to advance, lend, place or deposit money, securities or
                    any other property of every kind whether without security
                    or with security of any nature or kind whatsoever,
                    heritable or moveable, real or personal or otherwise, and
                    generally to grant credit or credit facilities of any
                    nature and to make or negotiate loans and advances, whether
                    to be made by the Company, by the Company and others or by
                    others, to any company or person, all upon such terms as to
                    interest or otherwise as may be thought fit;

               (iv) to draw, accept, endorse, grant, discount, acquire, tender
                    for, subscribe, buy, sell, issue, negotiate, transfer,
                    hold, invest or deal in and borrow against, secure, retire,
                    pay or otherwise dispose of or deal with cheques, orders,
                    drafts, bills of exchange, promissory notes, and other
                    instruments, securities and obligations of every kind
                    (whether or not transferable or negotiable);

               (v)  to grant, issue, negotiate, honour, retire, pay and meet
                    obligations arising from bankers' cards, cheque, guarantee
                    and cash cards, credit cards, letters of credit, circular
                    notes, travel and travellers cheques, drafts and other
                    instruments, and all other cheques, instruments, cards or
                    devices (whether evidenced or recorded by visible,
                    electronic or other means) used for the payment of debts,
                    discharge of obligations or the transfer of funds,
                    certificates and securities, whether to bearer or
                    otherwise, and whether providing for the payment of money
                    or the delivery of bullion or otherwise; to make the same
                    or any of them assignable absolutely or otherwise; and
                    generally to transact business in relation to all kinds of
                    payment or transfer systems or methods used by bankers or
                    others for the transfer of funds and settlement of debts or
                    transactions (whether in securities or otherwise);

               (vi) to buy, hold, sell and deal in foreign exchange, currency,
                    bullion, specie, commodities and futures of any description
                    and precious and other metals;

              (vii) to receive money, valuables, securities, deeds, and any
                    other items or documents on deposit or for safe custody or
                    otherwise, and with or without undertaking liability for
                    any loss thereof or injury thereto and with or without
                    remuneration.

          (2)  To carry on the business of a holding company in all its aspects
               and to co-ordinate, finance, assist, subsidise and manage all or
               any part of the businesses and operations of any and all
               companies in which the Company is interested whether as a
               shareholder or otherwise and whether directly or indirectly.

          (3)  To finance or assist in financing the purchase, improvement,
               retention, hire, lease or sale of any heritable or moveable,
               real or personal property of all and every kind or description
               by way of hire purchase, instalment finance, rental finance,
               deferred payment, factoring or leasing or otherwise, and to
               institute, enter into, carry on, subsidise, finance or assist in
               subsidising or financing the purchase, improvement, retention,
               hire, lease, sale or maintenance of any heritable /

<PAGE>

               heritable or moveable, real or personal property of all and
               every kind and description upon any terms whatsoever, to acquire
               and discount agreements or any rights thereunder, by way of hire
               purchase, instalment finance, rental finance, deferred payment
               or otherwise, whether proprietary or contractual, and to acquire
               by assignation, charge, assignment, or otherwise debts due and
               owing to any company or person and to collect such debts.

          (4)  To subscribe, enter into or tender for, purchase or otherwise
               acquire, and to hold, dispose of and deal with the shares,
               stock, securities and evidence of indebtedness or of the right
               to participate in profits or assets or other similar documents
               issued by any company or person or any other kind of heritable
               or moveable, real or personal property including (but without
               limitation) futures contracts or arrangements of any nature and
               interest exchange arrangements and any options or other rights
               in respect of any securities or any other kind of heritable or
               moveable, real or personal property as aforesaid and generally
               both in relation to securities and in relation to any other kind
               of heritable or moveable, real or personal property to carry on
               the business of a dealing company in all its aspects; and to
               promote, effect, insure, guarantee, underwrite, secure the
               subscription or placing of, subscribe or tender for or procure
               subscription of (whether conditionally or absolutely),
               participate in, manage (whether on commission or not) carry out
               or perform any other function in relation to any issue (public
               or private) of the securities of any company or person, and any
               options or rights in respect thereof and to lend money for the
               purposes of or to facilitate any such issue.

          (5)  To enter into any guarantee, bond, recognisance or contract of
               warranty or indemnity or suretyship of any nature whatsoever and
               generally, whether with or without the Company receiving any
               consideration, to guarantee or to grant any indemnity in respect
               of or to secure or support or otherwise be responsible or liable
               for (whether by way of bond, guarantee or otherwise and with or
               without a personal covenant and with or without a heritable
               security or other fixed security or assignation in security or
               assignation or assignment or other conveyance or mortgage or
               pledge of or charge over or set-off against or lien upon all or
               any part of the undertaking and assets, present and future, and
               the uncalled capital of the Company or in any other manner) the
               performance of any contracts, obligations or commitments of any
               company or person (including but without limitation any company
               which is for the time being a subsidiary or a holding company of
               the Company or another subsidiary of a holding company of the
               Company or which is in any way whatsoever allied to or
               associated with the Company or with any such holding company or
               subsidiary or in which the Company or any such holding company,
               subsidiary or allied or associated company is interested whether
               as a shareholder or otherwise and whether directly or
               indirectly) and in particular (but without prejudice to the
               generality of the foregoing) by all or any of such methods or in
               any other manner to guarantee, provide security for, support and
               become responsible or liable for or in respect of the validity,
               reliability or authenticity of all kinds of titles, securities,
               instruments, deeds and documents and the payment of capital,
               principal, premiums, dividends, interest and other moneys and
               the performance of any obligations secured by or payable or
               performable under or in respect of any securities, to undertake
               the insurance, counter-insurance and reinsurance of all kinds of
               risks, to obtain and receive all kinds of guarantees, /

<PAGE>

               guarantees, counter-guarantees, indemnities and
               counter-indemnities, to take all other kinds of security whether
               by way of bond, personal covenant, heritable or other fixed
               security, assignation in security, assignment, mortgage, pledge,
               or charge or otherwise howsoever for or in respect of the
               performance or implementation of any obligations of any person
               or company and generally to carry on the business of a guarantee
               and indemnity company in all its aspects.

          (6)  To undertake and carry on business as promoters, agents,
               financiers, managers, traders, importers, exporters,
               concessionaires, jobbers, brokers, including commodity and
               mortgage brokers and stockbrokers, merchants, factors,
               mercantile agents, shipbrokers, underwriters, warehousemen,
               surveyors, auctioneers, valuers, property consultants and
               managers, land and estate agents, contractors, travel agents and
               aircraft, ship, hovercraft, and road and rail transport owners,
               hirers, charterers and operators; to undertake insurance and
               reinsurance and generally carry on the business of insurance in
               all its aspects; to act as agent, broker or underwriter for the
               placing of life, marine, fire, accident, fidelity, travel and
               all other classes of insurance; to act as agent or
               representative of owners or other persons having or claiming to
               have, any interest in vessels, aircraft, hovercraft, cargoes,
               freights, motor or railway vehicles or other machinery or other
               general merchandise, and any other subjects of insurance; and
               generally to undertake and carry on every kind of professional,
               mercantile, property or agency business in all its aspects and
               to become a subscriber to or member of or otherwise associated
               with any exchange or similar organisation or trade or other
               association.

          (7)  To act as and to undertake and execute the office and duties of
               executor, administrator, trustee or custodian trustee, and to
               undertake the duties and exercise the rights of a trust
               corporation and to undertake and execute trusts of all kinds,
               whether private or public, and whether inter vivos, contractual
               or mortis causa, including religious, educational or charitable
               trusts, and generally to carry on what is usually known as
               trustee and executor business, and in particular and without
               prejudice to the foregoing generality to undertake and execute
               the office of trustee or executor or administrator of wills,
               estates or settlements, trustee of deeds or documents securing
               debentures, debenture stock or other securities of any company
               or person or of pension, superannuation, benevolent or other
               funds or unit trusts, to establish, promote, continue and manage
               unit trusts, investment trusts, mutual funds and corporations,
               associations and partnerships of all types and to act as agent,
               factor, attorney, tutor, curator, judicial factor, receiver,
               liquidator, guardian, manager, member of committee or any other
               office of trust or responsibility with or without remuneration;
               and to make deposits, enter into recognisances and bonds of
               caution or security and otherwise give security for the due
               execution, and performance of the duties, of any of the said
               offices; with the power to the Company to charge interest at
               such rates as the Company may from time to time fix on all or
               any advances made or debts incurred by the Company while acting
               in any of such capacities.

         (8) /

<PAGE>

          (8)  To accept, carry on, manage, sell, realise, transfer, dispose of
               and deal with any business comprised or included in any trust,
               settlement or estate of which the Company is trustee, executor,
               administrator, agent, factor, attorney, tutor, curator, judicial
               factor, guardian, liquidator, receiver, manager, member of
               committee or otherwise.

          (9)  To undertake on behalf of customers and others the investment,
               holding and management, realisation and re-investment of moneys,
               securities, investments and property of every kind upon such
               terms as may be thought desirable, to provide investment
               management services, to accept and hold either in the name of
               the Company or in any of its subsidiaries, or in any other
               manner moneys, securities, investments and property of any
               description paid, transferred, assigned or conveyed to or vested
               in the Company for management by it.

          (10) To provide management, advisory, consultancy, secretarial,
               accountancy, statistical, legal and any technical, executive,
               supervisory or business services of any kind whatsoever for or
               in relation to any company, person, business or property of any
               description whatsoever.

          (11) To undertake the office of treasurer, factor, registrar,
               director, secretary and transfer agent and to keep for any
               company or person any register relating to any stocks, funds,
               shares, or securities, and to undertake any duties in relation
               to the registration of transfers, the issue of certificates or
               otherwise.

          (12) To create and issue any securities for any purpose including
               (but without limitation) by way of security or indemnity for or
               in respect of or by way of satisfaction of any liability whether
               of the Company or of any other company or person.

          (13) To carry on the business of acquiring, selling, installing,
               operating, leasing, renting and providing data processing,
               storage and retrieval equipment and systems, computers, programs
               and other software, bureaux services and communication and
               information storage and retrieval systems of every kind.

          (14) To apply for and take out, purchase or otherwise acquire any
               trade and service marks and names, designs, patents, patent
               rights, inventions, secret processes, copyrights, concessions,
               licences, grants or other exclusive or non-exclusive rights of
               any kind and to develop and turn to account and deal with the
               same in such manner as may be thought fit and to make
               experiments and tests and to carry on all kinds of research and
               development work.

          (15) To seek for and secure and to utilise and develop any openings
               for the employment of capital and if thought fit to engage and
               employ specialists to investigate, explore and examine, whether
               specifically or generally, the prospects, character, situation,
               conditions and circumstances of any businesses, undertakings and
               concerns and any concessions, rights, properties or assets of
               any nature whatsoever.

          (16) To establish and maintain branches, agencies and representative
               or other offices in any part of the world and to act as agents,
               and to act for and represent, or employ /

<PAGE>

               employ as agents, any company or person resident in the United
               Kingdom or elsewhere.

          (17) To procure the Company to be registered, licensed or otherwise
               legally recognised in or under the laws of any place outside
               Scotland.

          (18) To procure the quotation, registration or listing of securities
               of the Company or securities derived from or related to
               securities of the Company on any stock exchange or other market
               for securities in any part of the world.

          (19) To take or concur in any steps or proceedings (including the
               undertaking of any obligation, monetary or otherwise) calculated
               to uphold or support the credit of the Company or any business
               with which it is associated directly or indirectly or to obtain,
               maintain, restore or justify public confidence, or to avert or
               minimise damage directly or indirectly affecting or likely to
               affect the business of the Company or any such other business as
               aforesaid.

          (20) To borrow or raise money in any manner and on any terms
               whatsoever including (but without limitation) by the issue of
               securities, and to secure the repayment of any money borrowed,
               raised or owing or the performance of any obligation or
               guarantee by granting floating charges, heritable or other fixed
               securities, assignations in security, assignations or other
               conveyances or assignments or by mortgage or pledge of or charge
               over or lien upon, the whole or any part of the Company's
               property or assets (present and future) and any uncalled capital
               of the Company.

          (21) To purchase or otherwise acquire or undertake the whole or any
               part of, or any interest in, the business, property, assets and
               liabilities of any company or person carrying on or interested
               in any business which the Company is empowered to carry on or
               possessed of property or assets suitable for the purposes of the
               Company which the Company is empowered to hold or deal in or
               with, and to continue or participate in the continuance of any
               such whole, part or interest so purchased, acquired or
               undertaken.

          (22) To invest or lend or employ the funds of the Company in or upon
               such investments, securities, futures contracts or other
               arrangements and all other kinds of property (whether heritable
               or moveable, real or personal), rights or options or in such
               other manner as may be thought fit, to hold, sell or otherwise
               deal with such investments, securities, futures contracts,
               arrangements and other kinds of property, rights or options as
               aforesaid and generally to carry on the business of an
               investment company in all its aspects.

          (23) To enter into such agreements and arrangements with bankers and
               others as to the general principles to be applied and method or
               procedure to be adopted in carrying out banking or other
               business in any country or district, or for regulating any of
               the details of such business, as may be proper and convenient.

          (24) To enter into partnership or into any arrangement for sharing
               profits, union of interests, co-operation, joint adventure,
               reciprocal concession or otherwise with any company or person
               carrying on or engaged in or about to carry on or engage in any
               business or transaction capable of being conducted so as
               directly or /

<PAGE>

               or indirectly to benefit the Company and to lend money to,
               guarantee the contracts and obligations of, or otherwise assist
               any such company or person and to take or otherwise acquire
               shares and securities of any such company or person, and to
               sell, hold, re-issue with or without guarantee or otherwise deal
               with the same.

          (25) To amalgamate the Company with or to make arrangements for
               securing reciprocity of interests between the Company and any
               other company or person having objects similar to the objects of
               the Company or any of them, and that by the issue or sale to
               such other company or person of any of the securities of the
               Company or by purchase of all or any of the securities or other
               interest in the business of any such other company or person or
               by an arrangement of the nature of partnership or by an exchange
               of such securities or interests or by the sale of the whole or
               any part of the assets of the Company for the time being or by
               the purchase or acquisition of the whole or any part of the
               assets of such other company or person, and to exchange any of
               the assets of the Company for the time being for any other
               assets which the Company is entitled to hold; and to promote and
               facilitate any arrangements by way of sale or otherwise of
               shares and securities of the Company by the holders thereof
               having for its eventual object all or any of these purposes.

          (26) To acquire and carry on any business carried on by a subsidiary
               or a holding company of the Company or another subsidiary of a
               holding company of the Company.

          (27) To promote or join in the promotion of any company whether or
               not having objects similar (wholly or in part) to those of the
               Company including (but without limitation) the promotion of any
               company for the purpose of acquiring or taking over any part of
               the property and assets and liabilities of the Company or any
               subsidiary of the Company or of any other person or company.

          (28) To purchase, take on lease, hire, take options over, exchange or
               otherwise acquire and to hold, administer, sell, feu, excamb,
               lease, grant options over, pledge, burden, charge, realise,
               invest, improve, manage, build, construct, equip, work, develop,
               turn to account and otherwise dispose of and deal with assets,
               moneys, lands, buildings, estates, works, structures,
               facilities, rights, concessions, licences, grants, patents,
               trade marks and other property, heritable and moveable, real and
               personal of every kind and wherever situated, and all or any
               part of the undertaking, properties, assets and rights of the
               Company or any undertaking, properties, assets and rights in
               which the Company may be interested with others.

          (29) To subscribe, donate or guarantee money or provide sponsorship
               for any international, national, charitable, benevolent,
               educational, social, sporting, public, general or useful object
               or for any exhibition or trade or other association or for any
               purpose which may be considered likely directly or indirectly to
               further the interests of the Company or of its members or of any
               business with which the Company is associated directly or
               indirectly.

         (30) /

<PAGE>

          (30) To establish and maintain, take over, contribute to or otherwise
               subsidise or support any pension, superannuation, benevolent,
               sickness, medical or life assurance fund, scheme or arrangement
               (whether contributory or otherwise) for the benefit of, and to
               pay, give or procure the payment or giving of donations,
               gratuities, pensions, allowances, bonuses, emoluments or any
               other benefits to, any individuals who are or were at any time
               Directors, officers, employees, servants or agents of the
               Company or of any other company which is or was at any time its
               holding company or which is or was at any time a subsidiary of
               the Company or of any such holding company or which is or was at
               any time in any way whatsoever allied to or associated with the
               Company or with any such holding company or subsidiary or in
               which the Company or any such holding company or subsidiary or
               allied or associated company is or was at any time interested
               whether as a shareholder or otherwise and whether directly or
               indirectly or of any predecessor in business of the Company or
               of any subsidiary of the Company or of any such other company
               and the husbands, wives, widowers, widows, children, families,
               dependants and personal representatives of any such individuals
               as aforesaid and any other persons whose service or services
               have directly or indirectly been of benefit to the Company or to
               any such other company or to any such predecessor in business or
               who are considered to have any moral claim on the Company or on
               any such other company or on any such predecessor in business
               and to establish and maintain, take over, contribute to or
               otherwise subsidise or support any companies, institutions,
               associations, clubs, schools, buildings, housing schemes, trusts
               or funds which may be considered likely to benefit any such
               persons as aforesaid or to further the interests of the Company
               or of any such other company or of any such predecessor in
               business and make or provide for or procure the making of
               payments for or towards insuring any such persons as aforesaid
               against risks of all kinds.

          (31) To establish, maintain, take over, operate, contribute to,
               subsidise and support any scheme, arrangement, fund or trust
               under or pursuant to which individuals who are or were at any
               time Directors, officers, employees, servants or agents of the
               Company or of any other company which is or was at any time its
               holding company or which is or was at any time a subsidiary of
               the Company or of any such holding company or which is or was at
               any time in any way whatsoever allied to or associated with the
               Company or with any such holding company or subsidiary or in
               which the Company or any such holding company or subsidiary or
               allied or associated company is or was at any time interested
               whether as a shareholder or otherwise howsoever and whether
               directly or indirectly or of any predecessor in business of the
               Company or of any such holding company or subsidiary or of any
               such other company and the husbands, wives, widowers, widows,
               children, families, dependants and personal representatives of
               any such individuals as aforesaid may share or participate in
               the profits of the Company or of any such holding company or
               subsidiary or of any such other company or may in any other
               manner whatsoever acquire rights or benefits which are referable
               to or dependent upon or otherwise connected with the success or
               prosperity of the Company or of any such holding company or
               subsidiary or of any such other company or under or pursuant to
               which trustees may acquire shares in or other securities of the
               Company or any other company to be held for the benefit of such
               persons as aforesaid or any of them and (without prejudice to
               the generality of the foregoing) to such extent and in such /

<PAGE>

               such manner as shall be legally permissible to lend or otherwise
               provide or procure or subsidise the lending or other provision
               of money to or directly or indirectly for the benefit of any
               such persons as aforesaid with a view to shares in or any other
               securities of the Company or of any such holding company or
               subsidiary or of any such other company being acquired or held
               by or directly or indirectly for the benefit of any such persons
               as aforesaid.

         (32)  (i)  To purchase and maintain insurance for or for the benefit
                    of any persons who are or were at any time Directors,
                    officers or employees of the Company, or of any other
                    company which is its holding company or in which the
                    Company or such holding company or any of the predecessors
                    of the Company or of such holding company has any interest,
                    whether direct or indirect, or which is in any way allied
                    to or associated with the Company, or of any subsidiary
                    undertaking of or any other body, whether or not
                    incorporated ("body") owned by or in which an interest is
                    owned by the Company or any such other company, or who are
                    or were at any time trustees of any pension fund or
                    employees' share scheme in which employees of the company
                    or any such company or subsidiary undertaking or body are
                    interested, including (without prejudice to the generality
                    of the foregoing) insurance against any liability incurred
                    by such persons in respect of any act or omission in the
                    actual or purported execution and/or discharge of their
                    duties and/or the exercise or purported exercise of their
                    powers and/or otherwise in relation to or in connection
                    with their duties, powers or offices in relation to the
                    Company or any such other company, subsidiary undertaking,
                    body, pension fund or employees' share scheme; and

               (ii) to such extent as may be permitted by law otherwise to
                    indemnify or to exempt any such person against or from any
                    such liability.

               For the purposes of this paragraph (32) "subsidiary undertaking"
               and "employees' share scheme" shall have the same meanings as in
               the Companies Act 1989 and the Companies Act 1985 respectively.

          (33) To take over, accept, acquire, carry on or procure the carrying
               on of, the whole or any part of, or any interest in, any
               business or undertaking in which any customers or debtors
               (contingent or otherwise) of the Company or of any predecessor
               in business or subsidiary of the Company may be engaged or
               interested or the carrying on of which may be beneficial to the
               Company or any property or assets which any such customer or
               debtor may be possessed of or interested in, and to enter into
               and perform any obligations in connection therewith.

          (34) To distribute among members of the Company in specie whether by
               way of dividend, bonus or otherwise any property of the Company
               or any proceeds of sale or other disposal of any property or
               assets of the Company, provided that no such distribution shall
               be made amounting to a reduction of capital, except with the
               sanction, if any, for the time being required by law.

         (35) /

<PAGE>

          (35) To accept all charters, dispositions, leases, charges,
               securities, conveyances, transfers, mortgages, assignations,
               assignments, surrenders or other deeds or instruments affecting
               heritable or moveable, real or personal property to be granted
               to the Company, and to execute and subscribe all charters,
               dispositions, leases, charges, securities, conveyances,
               transfers, mortgages, assignations, assignments, surrenders or
               other deeds or instruments to be granted by the Company.

          (36) To enter into any arrangements with any Governments or
               authorities international, supreme, municipal, local or
               otherwise and to obtain from any such Government or authority
               any rights, privileges, charters, contracts, licences, or
               concessions which it may seem desirable to obtain and to carry
               out, exercise and comply therewith.

          (37) To take, make, execute, enter into, commence, carry on,
               prosecute and defend all actions, steps, contracts, agreements,
               negotiations, legal and other proceedings, compromises,
               arrangements and schemes, and to apply for, promote and obtain
               any Acts of Parliament, Orders in Council, Provisional Orders,
               Statutory Instruments or other legislation or any acts,
               enactments, decrees, licences, concessions, orders or
               authorities of any Government or authority, international,
               supreme, municipal, local or otherwise, which may seem desirable
               for the purpose of extending or varying the objects or powers of
               the Company, or altering its constitution, or better enabling
               the Company to carry out its objects or otherwise advancing the
               Company's interests or those of any of its subsidiaries or of
               any person or company associated in business with the Company or
               with any of its subsidiaries and to oppose any bills,
               instruments, orders, proceedings or applications or other
               matters whatsoever which may seem likely directly or indirectly
               to prejudice any such interests.

          (38) To do all or any of such things in any part of the world as
               principals, agents, nominees, attorneys, contractors, trustees
               or otherwise and by or through agents, nominees, subsidiaries,
               attorneys, contractors, trustees or otherwise and either alone
               or in conjunction with others.

          (39) To carry on any other business or activity and do anything of
               any nature which may seem capable of being conveniently carried
               on or done in connection or in conjunction with or as ancillary
               to the above or by way of extension thereof, or likely directly
               or indirectly to enhance the value of or render profitable or
               more profitable all or any part of the Company's undertaking,
               property or assets or any property in which the Company may be
               interested or to utilise its know-how or expertise or to further
               any of its objects or otherwise to advance the interests of the
               Company or of its members.

          (40) To do all such other things as may be deemed incidental or
               conducive to the attainment of the above objects or any of them.

          And it is hereby declared that (i) "company" in this clause, except
          where used in reference to this Company, shall include any Government
          or any authority or body (whether statutory, international, supreme,
          local, municipal, public or otherwise), association, partnership,
          syndicate or other body of persons, whether incorporated or not
          incorporated, and whether formed, incorporated, domiciled or resident
          in the United /

<PAGE>

          United Kingdom or elsewhere, (ii) "person" shall include any person
          acting in any capacity whatsoever, (iii) "subsidiary" and "holding
          company" shall be construed in accordance with Section 154 of the
          Companies Act, 1948 (or any provision of any Act amending, extending
          or re-enacting the same), (iv) "securities" shall include any fully,
          partly or nil paid or no par value share, stock, unit, debenture,
          debenture or loan stock perpetual, redeemable or otherwise, deposit
          receipt, certificate of title, certificate of deposit, depositary
          receipt, bill, bond, note, warrant, coupon, option, right to
          subscribe or convert, fund or similar right, interest or obligation
          payable to bearer or otherwise, (v) references in this clause
          (express or implied and howsoever worded) to money, debts, payments,
          securities, loans, advances, credits, drafts, cheques, instruments,
          devices, letters of credit, obligations, funds or transactions of any
          kind shall be construed respectively as references to money, debts,
          payments, securities, loans, advances, credits, drafts, cheques,
          instruments, devices, letters of credit, obligations, funds or
          transactions of any kind expressed or payable in sterling or in any
          other currency or in any combination of currencies, (vi) "and" and
          "or" shall mean "and/or" where the context so permits, (vii) "other"
          and "otherwise" shall not be construed ejusdem generis where a wider
          construction is possible, and (viii) the objects specified in the
          different paragraphs of this clause shall not, except where the
          context expressly so requires, be in any way limited or restricted by
          reference to or inference from the terms of any other paragraph or
          the order in which the paragraphs occur or by reference to the name
          of the Company, but may be carried out in as full and ample a manner
          and shall be construed in as wide a sense as if each of the said
          paragraphs defined the objects of a separate, distinct and
          independent company.

     5.   The liability of the members is limited.

<PAGE>

     6.   The share capital* of the Company is(pound)2 divided into eight
          Ordinary Shares of 5s. each

*Note -  The share capital of the Company was increased:-
(i)      by Special Resolution passed on 2nd April, 1968 to (pound)6 by the
         creation of two 11 per cent Cumulative Preference Shares of (pound)1
         each and two 5 1/2 per cent Cumulative Preference Shares of (pound)1
         each, and
(ii)     by Ordinary Resolutions passed on 17th July, 1968 to (pound)30,000,000
         by the creation of 116,399,992 additional Ordinary Shares of 5s each,
         499,998 additional 11 per cent Cumulative Preference Shares of
         (pound)1 each and 399,998 additional 5 1/2 per cent Cumulative
         Preference Shares of (pound)1 each.
(iii)    by Ordinary Resolution passed on 10th January, 1974 to
         (pound)60,000,000 by the creation of 120,000,000 additional Ordinary
         Shares of 25p each.
(iv)     by Ordinary Resolution passed on 8th February, 1985 to
         (pound)90,000,000 by the creation of 120,000,000 additional Ordinary
         Shares of 25p each.
(v)      by Special Resolution passed on 30th August, 1989 to
         (pound)290,000,000 by the creation of 200,000,000 Non-cumulative
         Sterling Preference Shares of (pound)1 each.
(vi)     by Ordinary Resolution passed on 30th August, 1989 to
         (pound)460,900,000 by the creation of 683,600,000 additional Ordinary
         Shares of 25p each.
(vii)    by Special Resolution passed on 30th August, 1989 by US$160,000 by the
         creation of 16,000,000 Non-cumulative Dollar Preference Shares of
         US$0.01 each.
(viii)   by Special Resolution passed on 16th January, 1992 by US$160,000 by
         the creation of 16,000,000 Category II Non-cumulative Dollar
         Preference Shares of US$0.01 each.
(ix)     by Special Resolution passed on 14th January, 1993 by US$200,000 by
         the creation of 20,000,000 additional Category II Non-cumulative
         Dollar Preference Shares of US$0.01 each.
(x)      by Ordinary Resolution passed on 18th January, 1996 the creation of
         15,000,000 additional Category II Non-cumulative Dollar Preference
         Shares of US$0.01 each.
(xi)     by Special Resolution passed on 16th January, 1997 the creation of
         8,000,000 additional Category II Non-cumulative Dollar Preference
         Shares of US$0.01 each.
(xii)    by Ordinary Resolution passed on 16th January, 1997 the creation of
         100,000,000 additional Non-cumulative Sterling Preference Shares of
         (pound)1 each.
(xiii)   by Ordinary Resolution passed on 15th January, 1998 the creation of
         8,000,000 additional Category II Non-cumulative Dollar Preference
         Shares of US$0.01 each.
(xiv)    by Ordinary Resolution passed on 14th January, 1999 the creation of
         30,000,000 additional Category II Non-cumulative Dollar Preference
         Shares of US$0.01 each.
(xv)     by Ordinary Resolution passed on 13th January, 2000 the creation of
         43,000,000 additional Category II Non-cumulative Dollar Preference
         Shares of US$0.01 each.
(xvi)    by Special Resolutions passed on 13th January, 2000 the creation of
         25,000,000 Non- cumulative Euro Preference Shares of (euro)0.01 each,
         the creation of 82,500,000 additional Category II Non-cumulative
         Dollar Preference Shares of US$0.01 each, the creation of 41,000,000
         additional Non-cumulative Euro Preference Shares of (euro)0.01 each,
         the creation of 500,000 Non-cumulative Convertible Sterling Preference
         Shares of US$0.01 each and 2,000,000 Non-cumulative Convertible Euro
         Preference Shares of (euro)0.01 each.
(xvii)   by Special Resolution passed on 28th February, 2000 the creation of
         3,039,375,406 additional Ordinary Shares of 25p each, the creation of
         900,000 Category II Non-cumulative Convertible Preference Shares of
         (pound)0.25 each.
(xviii)  by Special Resolution passed on 20th June, 2000 the creation of
         2,700,000 Additional Value Shares of (pound)0.01each and
         32,300,000,000 Non-Voting Deferred Shares of (pound)0.01 each.
(xix)    By Special Resolution passed on 11th April 2001 the creation of
         900,000 additional Non-cumulative Convertible Dollar Preference Shares
         of US$0.01 each, 500,000 additional Non-cumulative Convertible
         Sterling Preference Shares of (pound)0.01 each, 1,000,000 additional
         Non-cumulative Convertible Dollar Preference Shares of US$0.01 each
         and 1,000,000 additional Non-cumulative Convertible Euro Preference
         Shares of (euro)0.01each.

<PAGE>

WE, the several persons whose names and addresses are subscribed, are desirous
of being formed into a Company, in pursuance of this Memorandum of Association,
and we respectively agree to take the number of Shares in the capital of the
Company set opposite our respective names.
--------------------------------------------------------------------------------
Names, Addresses and Descriptions                    Number of Shares taken by
of Subscribers                                                each Subscriber
--------------------------------------------------------------------------------

THOMAS GORDON WATERLOW,                                       ONE
Belhaven House, Dunbar,
Deputy Chairman,
The Royal Bank of Scotland

ALEXANDER PATERSON ROBERTSON,                                 ONE
Bridgend, 116 Bo'ness Road, Grangemouth,
Director and Deputy General Manager,
The Royal Bank of Scotland

ALFRED GEORGE CAMPBELL,                                       ONE
9 Barnton Avenue, Edinburgh,
Director and Assistant General Manager,
The Royal Bank of Scotland

JAMES THOMSON,                                                ONE
32 Telford Road, Edinburgh,
Assistant General Manager,
The Royal Bank of Scotland

IAN WILSON MACDONALD,                                         ONE
24 Hermitage Drive, Edinburgh 10,
Chairman,
National Commercial Bank of Scotland Limited

GEORGE TURCAN CHIENE,                                         ONE
74 Ravelston Dykes, Edinburgh,
Writer to the Signet

PATRICK JAMES OLIPHANT,                                      ONE
Strathaird, Easter Belmont Road, Edinburgh,
Deputy Keeper of the Signet

JOHN GREIG DUNBAR,                                            ONE
23 Corrennie Gardens, Edinburgh,
Company Director                                              ______

         TOTAL SHARES TAKEN                                   EIGHT
                                                              ______
DATED the 18th day of March, 1968

WITNESS to the above signatures

                  ROBERT DAVID DARNEY BERTRAM
                  1 St Colme Street, Edinburgh
                  Apprentice Writer to the Signet

<PAGE>

                        THE COMPANIES ACTS 1985 AND 1989

    ------------------------------------------------------------------------

                       A PUBLIC COMPANY LIMITED BY SHARES
    ------------------------------------------------------------------------

                          NEW ARTICLES OF ASSOCIATION

                                       of

                        THE ROYAL BANK OF SCOTLAND GROUP
                             public limited company

            Adopted by Special Resolution passed on the 15th day of
           January, 1998 (as amended by Special Resolutions passed on
                         the 13th day of January 2000,
            the 28th day of February 2000, the 20th day of June 2000
                        and the 11th day of April 2001)

    ------------------------------------------------------------------------

                                  PRELIMINARY

1.   Non-application of statutory regulations

     The regulations in Table A in the Companies (Tables A to F) Regulations
     1985 (and any Table A applicable to the Company under any former enactment
     relating to companies) shall not apply to the Company.

2.   Definitions and Interpretation

     In these presents (if not inconsistent with the subject or context) the
     words standing in the first column of the table next hereinafter contained
     shall bear the meanings set opposite to them respectively in the second
     column thereof.

                 Words                                     Meanings

     "Additional Value Shares"                   The meaning given in Article
                                                 4D.

     "Applicable Exchange Rate"                  Such market rate of exchange as
                                                 the Directors may consider
                                                 appropriate for the purchase of
                                                 any relevant Foreign Currency
                                                 for Sterling or for any other
                                                 Foreign Currency on such date
                                                 as the Directors may consider
                                                 appropriate.

     "Category II Non-cumulative Convertible     The meaning given in Article
     Sterling Preference Share"                  4C.

     "Category II Non-cumulative Dollar          The meaning given in Article
     Preference Share"                           4(E)(1).

<PAGE>

                                       2

     "Certificated share"                        A share which is not an
                                                 uncertificated share.

     "communication"                             The same meaning as in the
                                                 Electronic Communications
                                                 Act 2000.

     "Convertible Preference Shares"             The meaning given in Article
                                                 4B(4).

     "Cumulative Preference Shares"              The 5 1/2 per cent Cumulative
                                                 Preference Shares and the 11
                                                 per cent Cumulative Preference
                                                 Shares.

     "Directors"                                 The Board of Directors of the
                                                 Company, or an authorised
                                                 Committee thereof.

     "Dividend"                                  Dividend and/or bonus.

     "electronic communication"                  The same meaning as in the
                                                 Electronic Communications Act
                                                 2000.

     "Euro" and "(euro)"                         The single currency of those
                                                 member states of the European
                                                 Union participating in European
                                                 Monetary Union from time to
                                                 time.

     "Foreign Currency"                          Any lawful currency other than
                                                 Sterling.

     "In Writing"                                Written, or produced by any
                                                 legible and non-transitory
                                                 substitute for writing, or
                                                 partly one and partly another.

     "The London Stock Exchange"                 The London Stock Exchange
                                                 Limited.

     "London Stock Exchange dealing day"         A day, other than a Saturday,
                                                 Sunday or public holiday in the
                                                 UK when the London Stock
                                                 Exchange is open or was due to
                                                 be open for trading.

     "Month"                                     Calendar month.

     "New Preference Shares"                     The Non-cumulative Sterling
                                                 Preference Shares, the Non-
                                                 cumulative Dollar Preference
                                                 Shares, the Non-cumulative
                                                 Euro Preference Shares, the
                                                 Category II Non-cumulative
                                                 Dollar Preference Shares, the
                                                 Convertible Preference Shares
                                                 and the Category II
                                                 Non-cumulative Convertible
                                                 Sterling Preference Shares
                                                 (which classes of
                                                 non-cumulative preference
                                                 shares all rank pari passu
                                                 inter se as regards
                                                 participation in the profits
                                                 and assets of the Company),
                                                 together with any other share
                                                 in the capital of the Company
                                                 (other than the Cumulative
                                                 Preference Shares) which is
                                                 expressed to rank as regards
                                                 participation in the profits
                                                 or assets of the Company in
                                                 some or all respects pari
                                                 passu therewith.

<PAGE>

                                        3

     "New Shares"                                New Preference Shares or and
                                                 any further shares in the
                                                 capital of the Company issued
                                                 subsequent to 30th August
                                                 1989.

     "Non-cumulative Convertible Dollar          The meaning given in Article
     Preference Share"                           4B(2).

     "Non-cumulative Convertible Euro            The meaning given in Article
     Preference Share"                           4B(3).

     "Non-cumulative Convertible Sterling        The meaning given in Article
     Preference Share"                           4B(1).

     "Non-cumulative Dollar Preference Shares"   The 16,000,000 Non-cumulative
                                                 Dollar Preference Shares of
                                                 US$0.01 each in the capital of
                                                 the Company.

     "Non-cumulative Euro Preference Share"      The meaning given in Article
                                                 4A.

     "Non-cumulative Sterling Preference         The 200,000,000 Non-cumulative
     Shares"                                     Sterling Preference Shares of
                                                 (pound)1 each in the  capital
                                                 of the Company.

     "Office"                                    The registered office of the
                                                 Company for the time being.

     "Operator"                                  A person approved by the
                                                 Treasury as operator of a
                                                 relevant system under the
                                                 Uncertificated Securities
                                                 Regulations.

     "Paid"                                      Paid or credited as paid.

     "Participating class"                       A class of shares title to
                                                 which is permitted by an
                                                 Operator to be transferred by
                                                 means of a relevant system.

     "Relevant Section"                          Section 133 of the 1989 Act.

     "Relevant system"                           Any computer-based system and
                                                 procedures, permitted by the
                                                 Uncertificated Securities
                                                 Regulations and the rules of
                                                 the London Stock Exchange,
                                                 which enable title to units of
                                                 a security to be evidenced and
                                                 transferred without a written
                                                 instrument and which
                                                 facilitate supplementary and
                                                 incidental matters and shall
                                                 include, without limitation,
                                                 the relevant system of which
                                                 CRESTCO Limited is the
                                                 Operator.

     "Seal"                                      The Common Seal of the Company.

     "Securities Seal"                           An official seal kept by the
                                                 Company by virtue of Section 40
                                                 of the 1985 Act.

<PAGE>

                                        4

     "The Statutes"                              The 1985 Act, the 1989 Act and
                                                 every other Act for the time
                                                 being in force concerning
                                                 companies and affecting the
                                                 Company.

     "Subsidiary undertaking"                    A subsidiary undertaking as
                                                 defined in Section 258 of the
                                                 1985 Act.

     "These presents"                            These Articles of Association
                                                 in their present form or as
                                                 from time to time altered.

     "Transfer Office"                           The place where the Register
                                                 of Members is situate for the
                                                 time being.

     "Uncertificated share"                      A share of a class which is
                                                 for the time being a
                                                 participating class title to
                                                 which is recorded in the
                                                 Register of Members as being
                                                 held in uncertificated form.

     "The Uncertificated Securities              The Uncertificated Securities
     Regulations"                                Regulations 1995 as amended
                                                 from time to time and any
                                                 provisions of or under the
                                                 Statutes which supplement
                                                 or replace such Regulations.

     "Undertaking"                               An undertaking as defined in
                                                 Section 259 of the 1985 Act.

     "The United Kingdom"                        Great Britain and Northern
                                                 Ireland.

     "US$" and "Dollars"                         The lawful currency for the
                                                 time being of the United
                                                 States of America.

     "Year"                                      Calendar Year.

     "5 1/2 per cent Cumulative                  The 400,000 5 1/2 per cent
     Preference Shares"                          Cumulative Preference Shares
                                                 of (pound)1 each in the
                                                 capital of the Company.

     "11 per cent Cumulative                     The 500,000 11 per cent
     Preference Shares"                          Cumulative Preference Shares
                                                 of (pound)1 each in the
                                                 capital of the Company.

         The word "Act" related to a particular year refers to the Companies
         Act of that year.

         The expressions "debenture" and "debenture-holder" shall include
         "debenture stock" and "debenture stockholder" respectively.

         The expression "Base Rate" means the Base Rate from time to time of
         The Royal Bank of Scotland public limited company.

         The expression "Secretary" shall (subject to the provisions of the
         Statutes) include any deputy secretary, assistant secretary and any
         other person appointed by the Directors to perform any of the duties
         of the Secretary and where two or more persons are appointed to act as
         joint secretaries shall include any one of those persons.

<PAGE>

                                        5

         The expressions "recognised clearing house" and "recognised investment
         exchange" shall mean any clearing house or investment exchange (as the
         case may be) granted recognition under the Financial Services Act
         1986.

         All such of the provisions of these presents as are applicable to paid
         up shares (other than those relating to share warrants) shall apply to
         stock, and the words "share" and "shareholder" shall be construed
         accordingly.

<PAGE>

                                       6

         Words denoting the singular shall include the plural and vice versa.
         Words denoting the masculine gender shall include the feminine gender.
         Words denoting persons shall include partnerships, companies and
         corporations.

         References to any statute or statutory provision shall (if not
         inconsistent with the subject or context) include any statutory
         modification or re-enactment thereof for the time being in force.

         Any words or expressions defined in the 1985 Act or the 1989 Act or
         the Uncertificated Securities Regulations shall (if not inconsistent
         with the subject or context) bear the same meaning in these presents,
         save that the word "company" shall include any body corporate.

         Headings and sub-headings to Articles are inserted for convenience
         only and shall not affect the construction of these presents.

         Where for any purpose an Ordinary Resolution of the Company is
         expressed to be required under the provisions of these presents, a
         Special or Extraordinary Resolution shall also be effective, and where
         an Extraordinary Resolution is so expressed to be required a Special
         Resolution shall also be effective.

         In Articles 84(A), 88, 110(A), 157 and 158 to 161 (inclusive)
         "address", in relation to electronic communications, includes any
         number or address used for the purposes of such communications.

                                    BUSINESS

3.       Business activities

         Any activity or kind of business which the Company is either expressly
         or by implication authorised to undertake may be undertaken by the
         Directors at such time or times as they shall think fit, and further
         may be suffered by them to be in abeyance, whether such activity or
         kind of business may have been actually commenced or not, so long as
         the Directors may deem it expedient not to commence or proceed with
         the same.

                                    CAPITAL

4.       Share capital

         The share capital of the Company at the date of adoption of these
         presents is (pound)560,900,000 divided into 500,000 11 per cent
         *Cumulative Preference Shares of (pound)1 each, 400,000 5 1/2 per cent
         *Cumulative Preference Shares of (pound)1 each, 300,000,000
         Non-cumulative Sterling Preference Shares of (pound)1 each and
         1,040,000,000 Ordinary Shares of 25p each, and US$830,000 divided into
         16,000,000 Non-cumulative Dollar Preference Shares of US$0.01 each and
         67,000,000 Category II Non-cumulative Dollar Preference Shares of
         US$0.01

--------
* NOTE: The rates of dividend specified in this Article in relation to the 11
per cent Cumulative Preference Shares and the 5 1/2 per cent Cumulative
Preference Shares are the rates which were in force to 6th April 1973; at 30th
August, 1989 the rates of dividend on such shares are 7 per cent plus tax
credit and 3.85 per cent plus tax credit respectively.

<PAGE>

                                        7

         each.** The rights as regards participation in the profits and
         assets of the Company attaching to those shares shall be as follows:-

         (A)      Dividend rights of cumulative preference shares

                  The 11 per cent Cumulative Preference Shares and the 5 1/2
                  per cent Cumulative Preference Shares shall confer the right
                  to a fixed cumulative preferential dividend at the rate of 11
                  per cent and 5 1/2 per cent per annum respectively on the
                  amounts for the time being paid up or credited as paid up on
                  such shares, to be paid if and so far as in the opinion of
                  the Directors the profits of the Company justify such
                  payments on the 31st day of May and the 31st day of December
                  in every year in respect of the half-years ending on the last
                  preceding day of March or September. Such dividends shall
                  rank pari passu and pro rata with each other and shall be
                  paid in priority to any dividend on the New Preference Shares
                  or on any other class of share.

         (B)      Capital rights of cumulative preference shares

                  On a winding up or liquidation, voluntary or otherwise the
                  surplus assets of the Company available for distribution
                  amongst the members shall be applied:-

                  FIRSTLY - in paying to the holders of the 11 per cent
                  Cumulative Preference Shares and the 5 1/2 per cent
                  Cumulative Preference Shares respectively the arrears (if
                  any) of the fixed cumulative preferential dividends thereon
                  (whether earned or declared or not and including (i) the
                  amount of any dividend which is due for payment after the
                  date of commencement of winding up or liquidation but which
                  is payable in respect of a half-year period ending on or
                  before such date and (ii) any further amount of dividend
                  payable in respect of the period from the beginning of the
                  half-year period then current to the date of commencement of
                  winding up or liquidation) to the date on which repayment is
                  made, in terms of the immediately succeeding paragraph or, if
                  no such repayment is made, the date of payment of such
                  arrears; and

                  SECONDLY - in repaying to the holders of the 11 per cent
                  Cumulative Preference Shares and the 5 1/2 per cent
                  Cumulative Preference Shares respectively, the amounts paid
                  up or credited as paid up on such shares together with a
                  premium of 50p per

-------------------------
** NOTE: At the annual general meeting of the Company held on 14th January
1999, the share capital of the Company was increased by the creation of
30,000,000 additional Category II Non-cumulative Dollar Preference Shares of
US$0.01 each. At the annual general meeting and an extraordinary general
meeting of the Company, both held on 13th January 2000, the share capital of
the Company was increased by the creation of 125,500,000 additional Category II
Non-cumulative Dollar Preference Shares of US$0.01 each, 66,000,000
Non-cumulative Euro Preference Shares of (euro)0.01 each, 500,000
Non-cumulative Convertible Sterling Preference Shares of (pound)0.01 each,
2,000,000 Non-cumulative Convertible Dollar Preference Shares of US$0.01 each
and 2,000,000 Non-cumulative Convertible Euro Preference Shares of (euro)0.01
each. At an extraordinary general meeting of the Company held on 28th February
2000, the share capital of the Company was further increased by the creation of
3,039,375,406 additional Ordinary Shares of 25p each and 900,000,000 Category
II Non-cumulative Convertible Sterling Preference Shares of 25p each. At an
extraordinary general meeting of the Company held on 20 June 2000, the share
capital of the company was further increased by the creation of 2.7 billion
Additional Value Shares of (pound)0.01 each and 32.3 billion Non-Voting
Deferred Shares of (pound)0.01 each. At the annual general meeting of the
Company held on 11th April 2001, the share capital of the Company was further
increased by the creation of 900,000 additional Non-cumulative Convertible
Dollar Preference Shares of US$0.01 each, 500,000 additional Non-cumulative
Convertible Sterling Preference Shares of (pound)0.01 each, 1,000,000
additional Non-cumulative Convertible Dollar Preference Shares of US$0.01 each
and 1,000,000 additional Non-cumulative Convertible Euro Preference Shares of
(euro)0.01 each.

<PAGE>

                                        8

                  share in the case of the 11 per cent Cumulative Preference
                  Shares and of 20p per share in the case of the 5 1/2 per cent
                  Cumulative Preference Shares.

                  Any payments made to the holders of the 11 per cent
                  Cumulative Preference Shares and the 5 1/2 per cent
                  Cumulative Preference Shares in terms of paragraphs FIRSTLY
                  or SECONDLY above shall rank pari passu and pro rata with
                  each other and (in the case of payments in terms of paragraph
                  FIRSTLY) in priority to and (in the case of repayments in
                  terms of paragraph SECONDLY) pari passu and pro rata with any
                  payments to be made to the holders of the Non-cumulative
                  Sterling Preference Shares and the Non-cumulative Dollar
                  Preference Shares pursuant to Articles 4(C)(2) and 4(D)(2)
                  respectively below and to the holders of any other New
                  Preference Shares.

         (C)      Non-cumulative sterling preference shares

                  (1)      The Non-cumulative Sterling Preference Shares shall
                           rank after the Cumulative Preference Shares to the
                           extent specified in this Article 4, and shall rank
                           pari passu inter se and (save as aforesaid) with the
                           Cumulative Preference Shares and with all other New
                           Preference Shares. They shall confer the rights and
                           be subject to the restrictions set out in this
                           Article 4(C) and shall also confer such further
                           rights (not being inconsistent with the rights set
                           out in this Article 4(C)) as may be attached by the
                           Directors to such shares in accordance with this
                           Article 4(C) prior to allotment. Whenever the
                           Directors have power under this Article to determine
                           any of the rights attached to any of the
                           Non-cumulative Sterling Preference Shares, the
                           rights so determined need not be the same as those
                           attached to the Non-cumulative Sterling Preference
                           Shares then allotted or in issue. The Non-cumulative
                           Sterling Preference Shares may be issued in one or
                           more separate series, and each series shall be
                           identified in such manner as the Directors may
                           determine without any such determination or
                           identification requiring any alteration to these
                           presents.

                  (2)      Each Non-cumulative Sterling Preference Share shall
                           confer the following rights as to participation in
                           the profits and assets of the Company, receipt of
                           notices, attendance and voting at meetings and
                           redemption:-

                           (a)      Income

                                    the right (subject to the provisions of
                                    paragraph (b) of this sub-Article, if
                                    applicable) to a non-cumulative
                                    preferential dividend either fixed or not
                                    exceeding a specified amount payable in
                                    Sterling at such rate on such dates (each a
                                    "dividend payment date") in respect of such
                                    periods (each a "dividend period") and on
                                    such other terms and conditions as may be
                                    determined by the Directors prior to
                                    allotment thereof. References in these
                                    presents to a "dividend" on the
                                    Non-cumulative Sterling Preference Shares
                                    include a reference to each dividend in
                                    respect of each dividend period applicable
                                    thereto and references in this Article 4(C)
                                    to dividend payment dates and dividend
                                    periods are to dividend payment dates and
                                    dividend periods in respect of the
                                    Non-cumulative Sterling Preference Shares
                                    only. Such dividends shall be paid in
                                    priority to the payment of any dividends on
                                    the Ordinary Shares. The Non-cumulative
                                    Sterling Preference Shares shall rank for
                                    dividend after the Cumulative Preference
                                    Shares, pari passu with all other New
                                    Preference Shares

<PAGE>

                                        9

                                    expressed to rank pari passu therewith as
                                    regards participation in profits and
                                    otherwise in priority to any other share
                                    capital in the Company.

                           (b)      Further provisions as to income

                                    All or any of the following provisions
                                    shall apply in relation to any particular
                                    Non-cumulative Sterling Preference Shares
                                    if so determined by the Directors prior to
                                    allotment thereof:-

                                    (i)      if, in the opinion of the
                                             Directors, the distributable
                                             profits of the Company are
                                             sufficient to cover the payment in
                                             full of dividends on the
                                             Non-cumulative Sterling Preference
                                             Shares on any dividend payment
                                             date, and also the payment in full
                                             of all other dividends stated to
                                             be payable on such date on any
                                             other New Preference Share
                                             expressed to rank pari passu
                                             therewith as regards participation
                                             in profits, after payment in full,
                                             or the setting aside of a sum to
                                             cover the payment in full, of all
                                             dividends stated to be payable on
                                             such date on any Cumulative
                                             Preference Share, then each such
                                             dividend shall be declared and
                                             paid in full;

                                    (ii)     if, in the opinion of the
                                             Directors, the distributable
                                             profits of the Company are
                                             insufficient to cover the payment
                                             in full of dividends on the
                                             Non-cumulative Sterling Preference
                                             Shares on any dividend payment
                                             date, and also the payment in full
                                             of all other dividends stated to
                                             be payable on such date on any
                                             other New Preference Share
                                             expressed to rank pari passu
                                             therewith as regards participation
                                             in profits, after payment in full,
                                             or the setting aside of a sum to
                                             cover the payment in full, of all
                                             dividends stated to be payable on
                                             or before such date on any
                                             Cumulative Preference Share, then
                                             dividends shall be declared by the
                                             Directors pro rata for the
                                             Non-cumulative Sterling Preference
                                             Shares and such other New
                                             Preference Shares to the extent of
                                             the available distributable
                                             profits (if any) to the intent
                                             that the amount of dividend
                                             declared per share on each such
                                             Non-cumulative Sterling Preference
                                             Share and other New Preference
                                             Share will bear to each other the
                                             same ratio as the dividends
                                             accrued per share on each such
                                             Non-cumulative Sterling Preference
                                             Share and other New Preference
                                             Share bear to each other. If it
                                             shall subsequently appear that any
                                             such dividend which has been paid
                                             should not, in accordance with the
                                             provisions of this sub-paragraph,
                                             have been so paid, then provided
                                             the Directors shall have acted in
                                             good faith, they shall not incur
                                             any liability for any loss which
                                             any shareholder may suffer in
                                             consequence of such payment having
                                             been made;

                                    (iii)    if, in the opinion of the
                                             Directors, the payment of any
                                             dividend on any Non-cumulative
                                             Sterling Preference Shares would
                                             breach or cause a breach of the
                                             Bank of England's capital adequacy
                                             requirements applicable to the
                                             Company

<PAGE>

                                       10

                                             and/or any of its subsidiaries,
                                             then none of such dividend shall be
                                             declared or paid;

                                    (iv)     subject to sub-paragraphs (v) and
                                             (vi) below, the Non-cumulative
                                             Sterling Preference Shares shall
                                             carry no further right to
                                             participate in the profits of the
                                             Company and if and to the extent
                                             that any dividend or part thereof
                                             is on any occasion not paid for
                                             the reasons described in
                                             sub-paragraph (ii) or (iii) above,
                                             the holders of such shares shall
                                             have no claim in respect of such
                                             non-payment;

                                    (v)      if any dividend or part thereof on
                                             any Non-cumulative Sterling
                                             Preference Share is not payable
                                             for the reasons specified in
                                             sub-paragraph (ii) or (iii) above
                                             and if they so resolve, the
                                             Directors may, subject to the
                                             Statutes, pay a special
                                             non-cumulative preferential
                                             dividend on the Non-cumulative
                                             Sterling Preference Shares at a
                                             rate not exceeding(pound)0.01 per
                                             share (but so that reference
                                             elsewhere in this Article and in
                                             Article 4(D) to any dividend
                                             payable on any Non-cumulative
                                             Sterling Preference Shares shall
                                             not be treated as including a
                                             reference to any such special
                                             dividend);

                                    (vi)(A)  the provisions of this
                                             sub-paragraph (vi) shall apply
                                             where any dividend or any part
                                             thereof otherwise payable on a
                                             particular dividend payment date
                                             on any Non-cumulative Sterling
                                             Preference Shares ("a Relevant
                                             Payment") is, for the reasons
                                             specified in sub-paragraph (ii) or
                                             (iii) above, not payable and the
                                             amounts (if any) standing to the
                                             credit of the Company's profit and
                                             loss account together with the
                                             amount of the reserves of the
                                             Company available for the purpose
                                             are in aggregate sufficient to be
                                             applied and capable of being
                                             applied in paying up in full at
                                             par additional Non-cumulative
                                             Sterling Preference Shares on the
                                             basis hereinafter provided in this
                                             sub-paragraph (vi);

                                    (B)      on the date for payment of the
                                             Relevant Payment had such payment
                                             been payable in cash, the
                                             Directors shall, subject to the
                                             Statutes, allot and issue credited
                                             as fully paid to each holder of
                                             Non-cumulative Sterling Preference
                                             Shares such additional nominal
                                             amount of Non-cumulative Sterling
                                             Preference Shares as is equal to
                                             an amount determined by
                                             multiplying the cash amount of the
                                             Relevant Payment which would have
                                             been payable to him had such
                                             payment been made in cash
                                             (exclusive of any associated tax
                                             credit) by a factor to be
                                             determined by the Directors prior
                                             to allotment of the Non-cumulative
                                             Sterling Preference Shares;

                                    (C)      for the purposes of paying up
                                             additional Non-cumulative Sterling
                                             Preference Shares to be allotted
                                             pursuant to this sub-paragraph
                                             (vi), the Directors shall
                                             capitalise, out of such of the
                                             accounts or reserves of the
                                             Company available for the purpose
                                             as they shall determine (including
                                             any Share

<PAGE>

                                      11

                                             Premium  Account), a sum equal to
                                             the aggregate nominal amount of the
                                             additional Non-cumulative Sterling
                                             Preference Shares then to be
                                             allotted and shall make all
                                             appropriations and applications of
                                             such sum and all allotments and
                                             issues of fully paid
                                             Non-cumulative Sterling Preference
                                             Shares for the purpose of giving
                                             effect to this sub-paragraph (vi);

                                    (D)      the additional Non-cumulative
                                             Sterling Preference Shares so
                                             allotted pursuant to this
                                             sub-paragraph (vi) shall confer
                                             the same rights and be subject to
                                             the same limitations as, and shall
                                             rank pari passu and pro rata in
                                             all respects with, the relevant
                                             Non-cumulative Sterling Preference
                                             Shares save only as regards
                                             participation in the Relevant
                                             Payment;

                                    (E)      if any additional Non-cumulative
                                             Sterling Preference Shares falling
                                             to be allotted pursuant to this
                                             sub-paragraph (vi) cannot be
                                             allotted by reason of any
                                             insufficiency in the Company's
                                             authorised share capital or in the
                                             amount of relevant securities
                                             which the Directors are authorised
                                             to allot in accordance with
                                             Section 80 of the 1985 Act, the
                                             Directors shall convene a General
                                             Meeting, to be held as soon as
                                             practicable, for the purpose of
                                             considering a Resolution or
                                             Resolutions effecting an
                                             appropriate increase in the
                                             authorised share capital and
                                             granting the Directors appropriate
                                             authority to allot relevant
                                             securities; and

                                    (F)      the Directors may undertake and do
                                             such acts and things as they may
                                             consider necessary or expedient
                                             for the purpose of giving effect
                                             to the provisions of this
                                             sub-paragraph (vi);

                                    (vii)    if any date on which dividends are
                                             payable on Non-cumulative Sterling
                                             Preference Shares is not a day on
                                             which banks in London are open for
                                             business, and on which foreign
                                             exchange dealings may be conducted
                                             in London ("a Sterling Business
                                             Day"), then payment of the
                                             dividend payable on such date will
                                             be made on the next succeeding
                                             Sterling Business Day and without
                                             any interest or other payment in
                                             respect of such delay unless such
                                             day shall fall within the next
                                             calendar month whereupon such
                                             payment will be made on the
                                             preceding Sterling Business Day;

                                    (viii)   dividends payable on
                                             Non-cumulative Sterling Preference
                                             Shares shall accrue from and to
                                             the dates determined by the
                                             Directors prior to allotment
                                             thereof, and the amount of
                                             dividend payable in respect of any
                                             period shorter than a full
                                             dividend period will be calculated
                                             on the basis of a 365 day year and
                                             the actual number of days elapsed
                                             in such period;

                                    (ix)     if the dividend stated to be
                                             payable on the Non-cumulative
                                             Sterling Preference Shares on the
                                             most recent dividend payment date
                                             has not been declared and paid in
                                             full, or if a sum has not been set
                                             aside to provide for such payment
                                             in full, no dividends may be
                                             declared on any other share
                                             capital

<PAGE>

                                      12

                                             of  the Company (other than the
                                             Cumulative Preference Shares), and
                                             no sum may be set aside for the
                                             payment thereof, unless, on the
                                             date of declaration relative to
                                             any such payment, an amount equal
                                             to the dividend stated to be
                                             payable on the Non-cumulative
                                             Sterling Preference Shares in
                                             respect of the then current
                                             dividend period is set aside for
                                             the payment in full of such
                                             dividend on the dividend payment
                                             date relating to the then current
                                             dividend period;

                                    (x)      if any dividend stated to be
                                             payable on the Non-cumulative
                                             Sterling Preference Shares on any
                                             dividend payment date has not been
                                             declared and paid in full, or if a
                                             sum has not been set aside to
                                             provide for such payment in full,
                                             the Company may not redeem or
                                             purchase or otherwise acquire for
                                             any consideration any other share
                                             capital of the Company and may not
                                             set aside any sum nor establish
                                             any sinking fund for the
                                             redemption, purchase or other such
                                             acquisition thereof, until such
                                             time as dividends stated to be
                                             payable on the Non-cumulative
                                             Sterling Preference Shares in
                                             respect of successive dividend
                                             periods together aggregating no
                                             less than twelve months shall
                                             thereafter have been declared and
                                             paid in full; and

                                    (xi)     notwithstanding any provision of
                                             this Article 4(C), but subject to
                                             sub-paragraphs (ii) and (iii)
                                             above and the special rights
                                             attaching to any other New
                                             Preference Share, the Directors
                                             shall pay a dividend on any
                                             Non-cumulative Sterling Preference
                                             Shares allotted after the coming
                                             into force of the Relevant Section
                                             and due to be redeemed on any
                                             Redemption Date (as defined in
                                             sub-paragraph (2)(f)(ii) of this
                                             Article 4(C)), payable on the
                                             Sterling Business Day immediately
                                             preceding such Redemption Date.
                                             The dividend payable pursuant to
                                             this sub-paragraph (xi) shall be
                                             the amount of any dividend on the
                                             relevant Non-cumulative Sterling
                                             Preference Shares which would
                                             (apart from the proposed
                                             redemption thereof) be due for
                                             payment on the relevant Redemption
                                             Date.

                           (c)      Capital

                                    The right on a winding up or liquidation,
                                    voluntary or otherwise, other than (unless
                                    otherwise provided by the terms of issue of
                                    such share) a redemption or purchase by the
                                    Company of any shares of any class, to
                                    receive in Sterling out of the surplus
                                    assets of the Company available for
                                    distribution amongst the members:-

                                    (i)      after payment of the arrears (if
                                             any) of the fixed cumulative
                                             preferential dividends stated to
                                             be payable in the Cumulative
                                             Preference Shares to the holders
                                             thereof in accordance with Article
                                             4(B) FIRSTLY, and pari passu with
                                             the holders of any other New
                                             Preference Shares expressed to
                                             rank pari passu therewith as
                                             regards participation in
<PAGE>

                                      13

                                             profits  and in priority to the
                                             holders of the Ordinary Shares of
                                             the Company a sum equal to:-

                                            (A)   the amount of any dividend
                                                  which is due for payment after
                                                  the date of commencement of
                                                  winding up or liquidation but
                                                  which is payable in respect of
                                                  a period ending on or before
                                                  such date; and

                                             (B)  any further amount of dividend
                                                  payable in respect of the
                                                  period from the preceding
                                                  dividend payment date to the
                                                  date of payment in accordance
                                                  with sub-paragraph (i);

                                             but only to the extent that any
                                             such amount or further amount was,
                                             or would have been, payable as a
                                             dividend in accordance with or
                                             pursuant to this Article 4(C)
                                             (other than pursuant to this
                                             provision); and

                                    (ii)     subject thereto, pari passu with
                                             the holders of the Cumulative
                                             Preference Shares and any other
                                             New Preference Shares expressed to
                                             rank pari passu therewith as
                                             regards participation in surplus
                                             assets and in priority to the
                                             holders of the Ordinary Shares of
                                             the Company, a sum equal to the
                                             amount paid up or credited as paid
                                             up on the Non-cumulative Sterling
                                             Preference Shares (including any
                                             premium paid to the Company in
                                             respect thereof on issue).

                                    If upon any such winding-up or liquidation,
                                    the amounts available for payment are
                                    insufficient to cover the amounts payable
                                    in full on the Cumulative Preference
                                    Shares, the Non-cumulative Sterling
                                    Preference Shares and on any other New
                                    Preference Shares expressed to rank pari
                                    passu therewith as regards participation in
                                    surplus assets, then the holders of the
                                    Cumulative Preference Shares, the
                                    Non-cumulative Sterling Preference Shares
                                    and such other New Preference Shares will
                                    share rateably in the distribution of
                                    surplus assets (if any) in proportion to
                                    the full respective preferential amounts to
                                    which they are entitled. No Non-cumulative
                                    Sterling Preference Share shall confer any
                                    right to participate in the surplus assets
                                    of the Company other than that set out in
                                    this sub-paragraph (2)(c) of this Article
                                    4(C).

                           (d)      Receipt of Notice

                                    The right to have sent to the holder of
                                    each Non-cumulative Sterling Preference
                                    Share (at the same time as the same are
                                    sent to the holders of Ordinary Shares) a
                                    copy of the Company's Annual Report and
                                    Accounts and Interim Financial Statement,
                                    together with notice of any General Meeting
                                    of the Company at which such holder is
                                    entitled to attend and vote.

<PAGE>

                                      14

                           (e)      Attendance and Voting at Meetings

                                    The right to attend at a General Meeting of
                                    the Company and to speak to or vote upon
                                    any Resolution proposed thereat in the
                                    following circumstances:-

                                    (i)      in respect of a Resolution which
                                             is to be proposed at the Meeting
                                             either varying or abrogating any
                                             of the rights attached to the
                                             Non-cumulative Sterling Preference
                                             Shares or proposing the winding up
                                             of the Company (and then in each
                                             such case only to speak to and
                                             vote upon any such Resolution);

                                    (ii)     in circumstances where the
                                             dividend stated to be payable on
                                             the Non-cumulative Sterling
                                             Preference Shares in respect of
                                             such number of dividend periods as
                                             the Directors shall determine
                                             prior to allotment thereof has not
                                             been declared and paid in full,
                                             and until such date as the
                                             Directors shall likewise
                                             determine; and

                                    (iii)    in such other circumstances as the
                                             Directors may determine prior to
                                             allotment of the Non-cumulative
                                             Sterling Preference Shares,

                                    but not otherwise, together with the right,
                                    in such circumstances and on such terms, if
                                    any, as the Directors may determine prior
                                    to allotment of the Non-cumulative Sterling
                                    Preference Shares, to seek to requisition a
                                    General Meeting of the Company. Whenever
                                    holders of Non-cumulative Sterling
                                    Preference Shares are entitled to vote on a
                                    Resolution, on a show of hands every such
                                    holder who is present in person shall have
                                    one vote and, on a poll, every such holder
                                    who is present in person or by proxy shall
                                    have such number of votes as may be
                                    determined by the Directors prior to
                                    allotment of such Non-cumulative Sterling
                                    Preference Shares.

                           (f)      Redemption

                                    (i)      Unless the Directors shall, prior
                                             to the allotment of any series of
                                             Non-cumulative Sterling Preference
                                             Shares, determine that such series
                                             shall be non-redeemable, each
                                             series of Non-cumulative Sterling
                                             Preference Shares shall, subject
                                             to the provisions of the Statutes,
                                             be redeemable at the option of the
                                             Company in accordance with the
                                             following provisions.

                                    (ii)     In the case of any particular
                                             Non-cumulative Sterling Preference
                                             Shares which are to be so
                                             redeemable:-

                                             (A)  the Company may, subject
                                                  thereto, redeem on any
                                                  Redemption Date (as
                                                  hereinafter defined) all or
                                                  some only of the
                                                  Non-cumulative Sterling
                                                  Preference Shares by giving to
                                                  the holders of the
                                                  Non-cumulative Sterling
                                                  Preference Shares to be

<PAGE>

                                      15

                                                  redeemed not less than 14
                                                  days' prior notice in writing
                                                  (a "Notice of Redemption") of
                                                  the relevant Redemption Date.
                                                  "Redemption Date" means, in
                                                  relation to any Non-cumulative
                                                  Sterling Preference Share, any
                                                  date which either (i) falls no
                                                  earlier than such date (if
                                                  any) as may be fixed by the
                                                  Directors, prior to allotment
                                                  of that share, as being the
                                                  earliest date on which the
                                                  Company may redeem such share,
                                                  and the date so fixed shall be
                                                  no earlier than five years and
                                                  one day, and no later than
                                                  thirty years and one day,
                                                  after the relevant date of
                                                  allotment, or (ii) if no date
                                                  is fixed by the Directors as
                                                  aforesaid under (i) above in
                                                  relation to that share, falls
                                                  no earlier than five years and
                                                  one day after the date of
                                                  allotment of the
                                                  Non-cumulative Sterling
                                                  Preference Share to be
                                                  redeemed;

                                                  provided that in relation to
                                                  any Non-cumulative Sterling
                                                  Preference Share allotted
                                                  after the coming into force of
                                                  the Relevant Section, (i)
                                                  subject to (ii) below, the
                                                  Directors may, prior to the
                                                  allotment of that share, fix
                                                  the date on or by which, or
                                                  dates between which, such
                                                  share is to be or may be
                                                  redeemed and such date or
                                                  dates fixed by the Directors
                                                  may be in place of or in
                                                  addition to any date derived
                                                  from or fixed under the
                                                  provisions of sub-paragraph
                                                  (A) above, (ii) the Redemption
                                                  Date shall be a dividend
                                                  payment date (as defined in
                                                  Article 4(C)(2)(a)), and (iii)
                                                  the Company shall only redeem
                                                  such share if the Directors
                                                  have applied the provisions of
                                                  Article 4(C)(2)(b)(xi) thereto
                                                  and such provisions have been
                                                  satisfied n full in relation
                                                  to such share;

                                             (B)  there shall be paid on each
                                                  Non-cumulative Sterling
                                                  Preference Share so redeemed,
                                                  in Sterling, the aggregate of
                                                  the nominal amount thereof
                                                  together with any premium paid
                                                  on issue and together with (in
                                                  the case of any Non-cumulative
                                                  Sterling Preference Shares
                                                  allotted prior to the coming
                                                  into force of the Relevant
                                                  Section) arrears (if any) of
                                                  dividends thereon (whether
                                                  earned or declared or not) in
                                                  respect of the period from the
                                                  dividend payment date last
                                                  preceding the Redemption Date
                                                  to the Redemption Date;

                                             (C)  in the case of a redemption of
                                                  some only of the
                                                  Non-cumulative Sterling
                                                  Preference Shares in any
                                                  series, the Company shall for
                                                  the purpose of determining the
                                                  particular Non-cumulative
                                                  Sterling Preference Shares to
                                                  be redeemed cause a drawing to
                                                  be made at the Office or such
                                                  other place as the Directors

<PAGE>

                                       16

                                                  may approve in the presence of
                                                  the  Auditors for the time
                                                  being of the Company;

                                             (D)  any Notice of Redemption given
                                                  under sub-paragraph (ii)(A)
                                                  above shall specify the
                                                  applicable Redemption Date,
                                                  the particular Non-cumulative
                                                  Sterling Preference Shares to
                                                  be redeemed and the redemption
                                                  price (specifying (in the case
                                                  of any Non-cumulative Sterling
                                                  Preference Shares allotted
                                                  prior to the coming into force
                                                  of the Relevant Section) the
                                                  amount of the accrued and
                                                  unpaid dividend per share to
                                                  be included therein and
                                                  stating that dividends on the
                                                  Non-cumulative Sterling
                                                  Preference Shares to be
                                                  redeemed will cease to accrue
                                                  on redemption), and shall
                                                  state the place or places at
                                                  which documents of title in
                                                  respect of such Non-cumulative
                                                  Sterling Preference Shares are
                                                  to be presented and
                                                  surrendered for redemption and
                                                  payment of the redemption
                                                  monies is to be effected. Upon
                                                  such Redemption Date, the
                                                  Company shall redeem the
                                                  particular Non-cumulative
                                                  Sterling Preference Shares to
                                                  be redeemed on that date
                                                  subject to the provisions of
                                                  this paragraph and of the
                                                  Statutes. No defect in the
                                                  Notice of Redemption or in the
                                                  giving thereof shall affect
                                                  the validity of the redemption
                                                  proceedings;

                                             (E)  subject to sub-paragraph (I)
                                                  below, the provisions of this
                                                  and the following
                                                  sub-paragraph shall have
                                                  effect in relation to
                                                  Non-cumulative Sterling
                                                  Preference Shares for the time
                                                  being issued and registered in
                                                  the Register of Members
                                                  ("Registered Shares") and
                                                  represented by certificates
                                                  ("Certificates"). Payments in
                                                  respect of the amount due on
                                                  redemption of a Registered
                                                  Share shall be made by
                                                  Sterling cheque drawn on a
                                                  bank in London or upon the
                                                  request of the holder or joint
                                                  holders not later than the
                                                  date specified for the purpose
                                                  in the Notice of Redemption by
                                                  transfer to a Sterling account
                                                  maintained by the payee with a
                                                  bank in London. Such payment
                                                  will be against presentation
                                                  and surrender of the relative
                                                  Certificate at the place or
                                                  one of the places specified in
                                                  the Notice of Redemption and
                                                  if any Certificate so
                                                  surrendered includes any
                                                  Non-cumulative Sterling
                                                  Preference Shares not to be
                                                  redeemed on the relevant
                                                  Redemption Date the Company
                                                  shall within 14 days
                                                  thereafter issue to the
                                                  holder, free of charge, a
                                                  fresh Certificate in respect
                                                  of such Non-cumulative
                                                  Sterling Preference Shares.
                                                  All payments in respect of
                                                  redemption monies will in all
                                                  respects be subject to any
                                                  applicable fiscal or other
                                                  laws;

<PAGE>

                       17

                                             (F)as from the relevant
                                                Redemption Date the dividend
                                                on the Non-cumulative Sterling
                                                Preference Shares due for
                                                redemption shall cease to
                                                accrue except on any such
                                                Non-cumulative Sterling
                                                Preference Share in respect of
                                                which, upon the due surrender
                                                of the Certificate in
                                                accordance with sub-paragraph
                                                (E) above, payment of the
                                                redemption monies due on such
                                                Redemption Date shall be
                                                improperly withheld or
                                                refused, in which case such
                                                dividend, at the rate then
                                                applicable, shall be deemed to
                                                have continued and shall
                                                accordingly continue to accrue
                                                from the relevant Redemption
                                                Date to the date of payment of
                                                such redemption monies Such
                                                Non-cumulative Sterling
                                                Preference Share shall not be
                                                treated as having been
                                                redeemed until the redemption
                                                monies in question together
                                                with the accrued dividend
                                                thereon shall have been paid;

                                             (G)if the due date for the
                                                payment of the redemption
                                                monies on any Non-cumulative
                                                Sterling Preference Share is
                                                not a Sterling Business Day
                                                then payment of such monies
                                                will be made on the next
                                                succeeding day which is a
                                                Sterling Business Day and
                                                without any interest or other
                                                payment in respect of such
                                                delay unless such day shall
                                                fall within the next calendar
                                                month whereupon such payment
                                                will be made on the preceding
                                                Sterling Business Day;

                                             (H)the receipt of the holder for
                                                the time being of any
                                                Registered Share (or in the
                                                case of joint holders the
                                                receipt of any one of them) in
                                                respect of the monies payable
                                                on redemption on such
                                                Registered Share shall
                                                constitute an absolute
                                                discharge to the Company; and

                                             (I)subject as aftermentioned, the
                                                provisions of sub-paragraphs
                                                (E) and (F) above shall have
                                                effect in relation to
                                                Registered Shares which are in
                                                uncertificated form within the
                                                meaning of the Uncertificated
                                                Securities Regulations 1995
                                                (as in force on the date of
                                                adoption of this Article) in
                                                the same manner as they have
                                                effect in relation to
                                                Registered Shares represented
                                                by Certificates, save that (i)
                                                any provision of the said
                                                paragraphs requiring
                                                presentation and surrender of
                                                a Certificate shall be
                                                satisfied in the manner
                                                prescribed or permitted by the
                                                said Regulations (or by any
                                                enactment or subordinate
                                                legislation which amends or
                                                supersedes those Regulations)
                                                or (subject to those
                                                Regulations or such enactment
                                                or subordinate legislation) in
                                                such manner as may from time
                                                to time be prescribed by the
                                                Directors), and (ii) the

<PAGE>

                                       18

                                                  Company shall not be under any
                                                  obligation to issue a fresh
                                                  Certificate under sub-
                                                  paragraph (E);

                                    (iii)    upon the redemption of any
                                             Non-cumulative Sterling Preference
                                             Share the nominal amount of such
                                             shares comprised in the capital of
                                             the Company shall thereafter be
                                             divided into, and reclassified as,
                                             Ordinary Shares without any
                                             further resolution or consent
                                             being required.

                           (g)      Purchase

                                    (i)      Subject to the provisions of the
                                             Statutes and any other applicable
                                             laws, the Company may at any time
                                             and from time to time purchase any
                                             Non-cumulative Sterling Preference
                                             Shares upon such terms as the
                                             Directors shall determine provided
                                             that, in the case of
                                             Non-cumulative Sterling Preference
                                             Shares which are listed on the
                                             London Stock Exchange, the
                                             purchase price, exclusive of
                                             expenses and accrued dividends,
                                             shall not exceed (a) in the case
                                             of a purchase in the open market,
                                             or by tender (which shall be
                                             available alike to all holders of
                                             the Non-cumulative Sterling
                                             Preference Shares), the average of
                                             the closing middle market
                                             quotations of such Non-cumulative
                                             Sterling Preference Shares on the
                                             London Stock Exchange (as derived
                                             from The London Stock Exchange
                                             Daily Official List) for the last
                                             10 dealing days preceding the date
                                             of purchase or (if higher), in the
                                             case of a purchase in the open
                                             market only, the market price on
                                             the date of purchase provided that
                                             such market price is not more than
                                             105 per cent of such average and
                                             (b) in the case of a purchase by
                                             private treaty, 120 per cent of
                                             the closing middle market
                                             quotation of such Non-cumulative
                                             Sterling Preference Shares on the
                                             London Stock Exchange (as derived
                                             from The London Stock Exchange
                                             Daily Official List) for the last
                                             dealing day preceding the date of
                                             purchase; but so that this proviso
                                             shall not apply to any purchase of
                                             Non-cumulative Sterling Preference
                                             Shares made in the ordinary course
                                             of a business of dealing in
                                             securities.

                                    (ii)     Upon the purchase of any
                                             Non-cumulative Sterling Preference
                                             Shares the nominal amount of such
                                             shares comprised in the capital of
                                             the Company shall thereafter be
                                             divided into, and reclassified as,
                                             Ordinary Shares without any
                                             further resolution or consent
                                             being required.

                           (3)      Save with the written consent of the
                                    holders of three-quarters in nominal value
                                    of, or with the sanction of an
                                    Extraordinary Resolution passed at a
                                    separate General Meeting of the holders of
                                    the Non-cumulative Sterling Preference
                                    Shares, the Directors shall not, pursuant
                                    to Article 148 or 149, capitalise any part
                                    of the amounts available for distribution
                                    and referred to therein if after such
                                    capitalisation the aggregate of such
                                    amounts would be less than such multiple,
                                    if any, as may be determined by the
                                    Directors prior to the first allotment of
                                    Non-cumulative Sterling Preference Shares,
                                    of the aggregate amount of the dividends
                                    (exclusive of any associated tax credit)

<PAGE>

                                       19

                                    payable in the twelve month period
                                    following such capitalisation on the
                                    Non-cumulative Sterling Preference Shares
                                    then in issue and any other New Preference
                                    Shares then in issue expressed to rank pari
                                    passu therewith as regards participation in
                                    profits.

                           (4)(a)   Save with the written consent of the
                                    holders of three-quarters in nominal value
                                    of, or with the sanction of an
                                    Extraordinary Resolution passed at a
                                    separate General Meeting of the holders of,
                                    the Non-cumulative Sterling Preference
                                    Shares, the Directors shall not authorise
                                    or create, or increase the amount of, any
                                    shares of any class or any security
                                    convertible into shares of any class
                                    ranking as regards rights to participate in
                                    the profits or assets of the Company (other
                                    than on a redemption or purchase by the
                                    Company of any such shares) in priority to
                                    the Non-cumulative Sterling Preference
                                    Shares;

                              (b)   The special rights attached to any series
                                    of Non-cumulative Sterling Preference
                                    Shares allotted or in issue shall not
                                    (unless otherwise provided by their terms
                                    of issue) be deemed to be varied by the
                                    creation or issue of any New Shares ranking
                                    as regards participation in the profits or
                                    assets of the Company in some or all
                                    respects pari passu with or after such
                                    Non-cumulative Sterling Preference Shares.
                                    Any New Shares ranking pari passu with such
                                    Non-cumulative Sterling Preference Shares
                                    in some or all respects may without their
                                    creation or issue being deemed to vary the
                                    special rights attached to any
                                    Non-cumulative Sterling Preference Share
                                    then in issue either carrying rights
                                    identical in all respects with such
                                    Non-cumulative Sterling Preference Shares
                                    or any of them or rights differing
                                    therefrom in any respect, including, but
                                    without prejudice to the generality of the
                                    foregoing, in that:-

                                    (i)      the rate of or means of
                                             calculating the dividend may
                                             differ and the dividend may be
                                             cumulative or non-cumulative;

                                    (ii)     the New Shares or any series
                                             thereof may rank for dividend as
                                             from such date as may be provided
                                             by the terms of issue thereof and
                                             the dates for payment of dividend
                                             may differ;

                                    (iii)    the New Shares may be denominated
                                             in Sterling or in any Foreign
                                             Currency;

                                    (iv)     a premium may be payable on return
                                             of capital or there may be no such
                                             premium;

                                    (v)      the New Shares may be redeemable
                                             at the option of the holder or of
                                             the Company, or may be
                                             non-redeemable and if redeemable
                                             at the option of the Company, they
                                             may be redeemable at different
                                             dates and on different terms from
                                             those applying to the
                                             Non-cumulative Sterling Preference
                                             Shares; and

                                    (vi)     the New Shares may be convertible
                                             into Ordinary Shares or any other
                                             class of shares ranking as regards
                                             participation in the profits and
                                             assets of the Company pari passu
                                             with or after such Non-cumulative
                                             Sterling Preference Shares in each
                                             case on such terms and conditions
                                             as may be prescribed by the terms
                                             of issue thereof.

<PAGE>

                                      20

         (D)      Non-cumulative dollar preference shares

                  (1)      The Non-cumulative Dollar Preference Shares shall
                           rank after the Cumulative Preference Shares to the
                           extent specified in this Article 4, and shall rank
                           pari passu inter se and (save as aforesaid) with the
                           Cumulative Preference Shares and with all other New
                           Preference Shares. They shall confer the rights and
                           be subject to the restrictions set out in this
                           Article 4(D) and shall also confer such further
                           rights (not being inconsistent with the rights set
                           out in this Article 4(D)) as may be attached by the
                           Directors to such shares in accordance with this
                           Article 4(D) prior to allotment. Whenever the
                           Directors have power under this Article to determine
                           any of the rights attached to any of the
                           Non-cumulative Dollar Preference Shares, the rights
                           so determined need not be the same as those attached
                           to the Non-cumulative Dollar Preference Shares then
                           allotted or in issue. The Non-cumulative Dollar
                           Preference Shares may be issued in one or more
                           separate series, and each series shall be identified
                           in such manner as the Directors may determine
                           without any such determination or identification
                           requiring any alteration to these presents.

                  (2)      Each Non-cumulative Dollar Preference Share shall
                           confer the following rights as to participation in
                           the profits and assets of the Company, receipt of
                           notices, attendance and voting at meetings and
                           redemption:-

                           (a)      Income

                                    the right (subject to the provisions of
                                    paragraph (b) of this sub-Article, if
                                    applicable) to a non-cumulative
                                    preferential dividend not exceeding a
                                    specified amount payable in Dollars at such
                                    rate (which may be fixed or variable and
                                    may be subject to recalculation at fixed
                                    intervals) on such dates (each a "dividend
                                    payment date") in respect of such periods
                                    (each a "dividend period") and on such
                                    other terms and conditions as may be
                                    determined by the Directors prior to
                                    allotment thereof. References in these
                                    presents to a "dividend" on the
                                    Non-cumulative Dollar Preference Shares
                                    include a reference to each dividend in
                                    respect of each dividend period applicable
                                    thereto and references in this Article 4(D)
                                    to dividend payment dates and dividend
                                    periods are to dividend payment dates and
                                    dividend periods in respect of the
                                    Non-cumulative Dollar Preference Shares
                                    only. Such dividends shall be paid in
                                    priority to the payment of any dividends on
                                    the Ordinary Shares. The Non-cumulative
                                    Dollar Preference Shares shall rank for
                                    dividend after the Cumulative Preference
                                    Shares, pari passu with all other New
                                    Preference Shares expressed to rank pari
                                    passu therewith as regards participation in
                                    profits and otherwise in priority to any
                                    other share capital in the Company.

                           (b)      Further provisions as to income

                                    All or any of the following provisions
                                    shall apply in relation to any particular
                                    Non-cumulative Dollar Preference Shares if
                                    so determined by the Directors prior to
                                    allotment thereof:-

<PAGE>

                                       21

                                    (i)      if, in the opinion of the
                                             Directors, the distributable
                                             profits of the Company are
                                             sufficient to cover the payment in
                                             full of dividends on the
                                             Non-cumulative Dollar Preference
                                             Shares on any dividend payment
                                             date and also the payment in full
                                             of all other dividends stated to
                                             be payable on such date on any
                                             other New Preference Share
                                             expressed to rank pari passu
                                             therewith as regards participation
                                             in profits, after payment in full,
                                             or the setting aside of a sum to
                                             cover the payment in full, of all
                                             dividends stated to be payable on
                                             such date on any Cumulative
                                             Preference Share, then each such
                                             dividend shall be declared and
                                             paid in full;

                                    (ii)     if, in the opinion of the
                                             Directors, the distributable
                                             profits of the Company are
                                             insufficient to cover the payment
                                             in full of dividends on the
                                             Non-cumulative Dollar Preference
                                             Shares on any dividend payment
                                             date and also the payment in full
                                             of all other dividends stated to
                                             be payable on such date on any
                                             other New Preference Share
                                             expressed to rank pari passu
                                             therewith as regards participation
                                             in profits, after payment in full,
                                             or the setting aside of a sum to
                                             cover the payment in full, of all
                                             dividends stated to be payable on
                                             or before such date on any
                                             Cumulative Preference Share, then
                                             dividends shall be declared by the
                                             Directors pro rata for the
                                             Non-cumulative Dollar Preference
                                             Shares and such other New
                                             Preference Shares to the extent of
                                             the available distributable
                                             profits (if any) to the intent
                                             that the amount of dividend
                                             declared per share on each such
                                             Non-cumulative Dollar Preference
                                             Share and other New Preference
                                             Share will bear to each other the
                                             same ratio as the dividends
                                             accrued per share on each such
                                             Non-cumulative Dollar Preference
                                             Share and other New Preference
                                             Share bear to each other. If it
                                             shall subsequently appear that any
                                             such dividend which has been paid
                                             should not, in accordance with the
                                             provisions of this sub-paragraph,
                                             have been so paid, then provided
                                             the Directors shall have acted in
                                             good faith, they shall not incur
                                             any liability for any loss which
                                             any shareholder may suffer in
                                             consequence of such payment having
                                             been made;

                                    (iii)    if in the opinion of the
                                             Directors, the payment of any
                                             dividend on any Non-cumulative
                                             Dollar Preference Shares would
                                             breach or cause a breach of the
                                             Bank of England's capital adequacy
                                             requirements applicable to the
                                             Company and/or any of its
                                             subsidiaries, then none of such
                                             dividend shall be declared or
                                             paid;

                                    (iv)     subject to sub-paragraph (v)
                                             below, the Non-cumulative Dollar
                                             Preference Shares shall carry no
                                             further right to participate in
                                             the profits of the Company and if
                                             and to the extent that any
                                             dividend or part thereof is on any
                                             occasion not paid for the reasons
                                             described in sub-paragraph (ii) or
                                             (iii) above, the holders of such
                                             shares shall have no claim in
                                             respect of such non-payment;

<PAGE>

                                       22

                                    (v)      if any dividend or part thereof on
                                             any Non-cumulative Dollar
                                             Preference Share is not payable
                                             for the reasons specified in
                                             sub-paragraphs (ii) or (iii) above
                                             and if they so resolve, the
                                             Directors may, subject to the
                                             Statutes, pay a special
                                             non-cumulative preferential
                                             dividend on the Non-cumulative
                                             Dollar Preference Shares at a rate
                                             not exceeding one (1) US cent per
                                             share (but so that reference
                                             elsewhere in this Article and in
                                             Article 4(C) to any dividend
                                             payable on any Non-cumulative
                                             Dollar Preference Shares shall not
                                             be treated as including a
                                             reference to any such special
                                             dividend);

                                    (vi)     if any date on which dividends are
                                             payable on Non-cumulative Dollar
                                             Preference Shares is not a day on
                                             which banks in London and the City
                                             of New York are open for business,
                                             and on which foreign exchange
                                             dealings may be conducted in such
                                             cities ("a Dollar Business Day"),
                                             then payment of the dividend
                                             payable on such date will be made
                                             on the succeeding Dollar Business
                                             Day and without any interest or
                                             other payment in respect of such
                                             delay unless such day shall fall
                                             within the next calendar month
                                             whereupon such payment will be
                                             made on the preceding Dollar
                                             Business Day;

                                    (vii)    dividends payable on
                                             Non-cumulative Dollar Preference
                                             Shares shall accrue from and to
                                             the dates determined by the
                                             Directors prior to allotment
                                             thereof, and the amount of
                                             dividend payable in respect of any
                                             period shorter than a full
                                             dividend period will be calculated
                                             on the basis of twelve 30 day
                                             months, a 360 day year and the
                                             actual number of days elapsed in
                                             such period;

                                    (viii)   if any dividend stated to be
                                             payable on the Non-cumulative
                                             Dollar Preference Shares on the
                                             most recent dividend payment date
                                             has not been declared and paid in
                                             full, or if a sum has not been set
                                             aside to provide for such payment
                                             in full, no dividends may be
                                             declared on any other share
                                             capital of the Company (other than
                                             the Cumulative Preference Shares),
                                             and no sum may be set aside for
                                             the payment thereof, unless, on
                                             the date of declaration relative
                                             to any such payment, an amount
                                             equal to the dividend stated to be
                                             payable on the Non-cumulative
                                             Dollar Preference Shares in
                                             respect of the then current
                                             dividend period is set aside for
                                             the payment in full of such
                                             dividend on the dividend payment
                                             date relating to the then current
                                             dividend period; and

                                    (ix)     if any dividend stated to be
                                             payable on the Non-cumulative
                                             Dollar Preference Shares on any
                                             dividend payment date has not been
                                             declared and paid in full, or if a
                                             sum has not been set aside to
                                             provide for such payment in full,
                                             the Company may not redeem or
                                             purchase or otherwise acquire for
                                             any consideration any other share
                                             capital of the Company, and may
                                             not set aside any sum nor
                                             establish any sinking fund for the
                                             redemption or purchase or other
                                             such acquisition thereof,

<PAGE>

                                      23

                                             until such time as dividends stated
                                             to be payable on the Non-cumulative
                                             Dollar Preference Shares in respect
                                             of successive dividend periods
                                             together aggregating no less than
                                             twelve months shall thereafter have
                                             been declared and paid in full.

                           (c)      Capital

                                    The right on a winding up or liquidation,
                                    voluntary or otherwise other than (unless
                                    otherwise provided by the terms of issue of
                                    such share) a redemption or purchase by the
                                    Company of any shares of any class to
                                    receive in Dollars out of the surplus
                                    assets of the Company available for
                                    distribution amongst the members:-

                                    (i)      after payment of the arrears (if
                                             any) of the fixed cumulative
                                             preferential dividends stated to
                                             be payable on the Cumulative
                                             Preference Shares to the holders
                                             thereof in accordance with Article
                                             4(B) FIRSTLY and pari passu with
                                             the holders of any other New
                                             Preference Shares expressed to
                                             rank pari passu therewith as
                                             regards participation in profits
                                             and in priority to the holders of
                                             the Ordinary Shares of the Company
                                             a sum equal to:-

                                             (A)  the amount of any dividend
                                                  which is due for payment after
                                                  the date of commencement of
                                                  the winding up or liquidation
                                                  but which is payable in
                                                  respect of a period ending on
                                                  or before such date; and

                                             (B)  any further amount of dividend
                                                  payable in respect of the
                                                  period from the preceding
                                                  dividend payment date to the
                                                  date of payment in accordance
                                                  with this sub-paragraph (i);

                                             but only to the extent that any
                                             such amount or further amount was,
                                             or would have been payable as a
                                             dividend in accordance with or
                                             pursuant to this Article 4(D)
                                             (other than pursuant to this
                                             provision); and

                                    (ii)     subject thereto, pari passu with
                                             the holders of the Cumulative
                                             Preference Shares and any other
                                             New Preference Shares expressed to
                                             rank pari passu therewith as
                                             regards participation in surplus
                                             assets in priority to the holders
                                             of the Ordinary Shares of the
                                             Company, a sum equal to the amount
                                             paid up or credited as paid up on
                                             the Non-cumulative Dollar
                                             Preference Shares (including any
                                             premium paid to the Company in
                                             respect thereof on issue).

                                    If upon any such winding-up or liquidation,
                                    the amounts available for payment are
                                    insufficient to cover the amounts payable
                                    in full on the Cumulative Preference
                                    Shares,

<PAGE>

                                      24

                                    the Non-cumulative Dollar Preference Shares
                                    and on any other New Preference Shares
                                    expressed to rank pari passu therewith as
                                    regards participation in surplus assets,
                                    then the holders of the Cumulative
                                    Preference Shares, the Non-cumulative
                                    Dollar Preference Shares and such other New
                                    Preference Shares will share rateably in
                                    the distribution of surplus assets (if any)
                                    in proportion to the full respective
                                    preferential amounts to which they are
                                    entitled. No Non-cumulative Dollar
                                    Preference Share shall confer any right to
                                    participate in the surplus assets of the
                                    Company other than that set out in this
                                    sub-paragraph (2)(c) of this Article 4(D).

                           (d)      Receipt of Notices

                                    The right to have sent to the holder of
                                    each Non-cumulative Dollar Preference Share
                                    (at the same time as the same are sent to
                                    the holders of Ordinary Shares) a copy of
                                    the Company's Annual Report and Accounts
                                    and Interim Financial Statement together
                                    with notice of any General Meeting of the
                                    Company at which such holder is entitled to
                                    attend and vote.

                           (e)      Attendance and Voting at Meetings

                                    The right to attend at a General Meeting of
                                    the Company and to speak to or vote upon
                                    any Resolution proposed thereat in the
                                    following circumstances:-

                                    (i)      in respect of a Resolution which
                                             is to be proposed at the Meeting
                                             either varying or abrogating any
                                             of the rights attached to the
                                             Non-cumulative Dollar Preference
                                             Shares or proposing the winding up
                                             of the Company (and then in each
                                             such case only to speak to and
                                             vote upon any such Resolution);

                                    (ii)     in circumstances where the
                                             dividend stated to be payable on
                                             the Non-cumulative Dollar
                                             Preference Shares in respect of
                                             such number of dividend periods as
                                             the Directors shall determine
                                             prior to allotment thereof has not
                                             been declared and paid in full,
                                             and until such date as the
                                             Directors shall likewise
                                             determine; and

                                    (iii)    in such other circumstances as the
                                             Directors may determine prior to
                                             allotment of the Non-cumulative
                                             Dollar Preference Shares,

                                    but not otherwise, together with the right,
                                    in such circumstances, if any, as the
                                    Directors may determine prior \to allotment
                                    of the Non-cumulative Dollar Preference
                                    Shares, to seek to requisition a General
                                    Meeting of the Company for which purpose
                                    the Non- cumulative Dollar Preference
                                    Shares will be deemed to carry the number
                                    of votes determined pursuant to the
                                    following sentence. Whenever holders of
                                    Non-cumulative Dollar Preference Shares are
                                    so entitled to vote on a Resolution, on a
                                    show of hands every such holder who is
                                    present in person shall have one vote and,
                                    on a poll, every such holder who is present
                                    in person or by proxy shall have such
                                    number of votes for each Non-cumulative
                                    Dollar Preference Share held as

<PAGE>

                                      25

                                    may be determined by the Directors prior to
                                    allotment of such Non-cumulative Dollar
                                    Preference Shares.

                           (f)      Redemption

                                    (i)      Unless the Directors shall, prior
                                             to the allotment of any series of
                                             Non-cumulative Dollar Preference
                                             Shares, determine that such series
                                             shall be non-redeemable, each
                                             series of Non-cumulative Dollar
                                             Preference Shares shall, subject
                                             to the provisions of the Statutes,
                                             be redeemable at the option of the
                                             Company in accordance with the
                                             following provisions.

                                    (ii)     In the case of any series of
                                             Non-cumulative Dollar Preference
                                             Shares which are to be so
                                             redeemable:-

                                             (A)  the Company may, subject
                                                  thereto, redeem on any
                                                  Redemption Date (as
                                                  hereinafter defined) all or
                                                  some only of the
                                                  Non-cumulative Dollar
                                                  Preference Shares by giving to
                                                  the holders of the
                                                  Non-cumulative Dollar
                                                  Preference Shares to be
                                                  redeemed not less than 30
                                                  days' nor more than 60 days'
                                                  prior notice in writing (a
                                                  "Notice of Redemption") of the
                                                  relevant Redemption Date.
                                                  "Redemption Date" means, in
                                                  relation to a Non-cumulative
                                                  Dollar Preference Share, any
                                                  date which falls no earlier
                                                  than five years and one day
                                                  after the date of allotment of
                                                  the Non-cumulative Dollar
                                                  Preference Share to be
                                                  redeemed;

                                             (B)  there shall be paid on each
                                                  Non-cumulative Dollar
                                                  Preference Share so redeemed,
                                                  in Dollars, the aggregate of
                                                  the nominal amount thereof
                                                  together with any premium paid
                                                  on issue together with, where
                                                  applicable, the Relevant
                                                  Redemption Premium (defined
                                                  below) and together with
                                                  arrears (if any) of dividends
                                                  thereon (whether earned or
                                                  declared or not) in respect of
                                                  the period from the dividend
                                                  payment date last preceding
                                                  the Redemption Date to the
                                                  Redemption Date. "Relevant
                                                  Redemption Premium" means an
                                                  amount calculated in
                                                  accordance with the following
                                                  formula as applied in relation
                                                  to a Redemption Date notified
                                                  under sub-paragraph (A) above
                                                  which falls within the period
                                                  of twelve months commencing on
                                                  the date following the fifth,
                                                  sixth, seventh, eighth or
                                                  ninth anniversary of the
                                                  relevant date of allotment
                                                  ("the Relevant Date"), as the
                                                  case may be. The formula for
                                                  calculation of the Relevant
                                                  Redemption Premium shall be

                                                  A x B

<PAGE>

                                       26

                                                  where:-

                                                  "A" is the amount of dividend
                                                  excluding any associated tax
                                                  credit (not expressed as a
                                                  percentage) calculated at the
                                                  date of allotment to which the
                                                  holder of the Non-cumulative
                                                  Dollar Preference Share to be
                                                  redeemed would become entitled
                                                  in respect of the twelve
                                                  months following allotment by
                                                  virtue of the terms of issue
                                                  thereof on the assumption that
                                                  such amount of dividend had
                                                  accrued on the Non-cumulative
                                                  Dollar Preference Share during
                                                  such period and was payable at
                                                  the end of such period and on
                                                  the further assumption that
                                                  there shall be no change in
                                                  the associated tax credit
                                                  affecting the amount of
                                                  dividend payable in respect of
                                                  such period; and

                                                  "B" in relation to a
                                                  Redemption Date falling within
                                                  the period of twelve months
                                                  commencing on the day
                                                  following the fifth
                                                  anniversary of the Relevant
                                                  Date, is 66.66 per cent,

                                                  or

                                                  in relation to a Redemption
                                                  Date falling within the period
                                                  of twelve months commencing on
                                                  the day following the sixth
                                                  anniversary of the Relevant
                                                  Date, is 53.33 per cent,

                                                  or

                                                  in relation to a Redemption
                                                  Date falling within the period
                                                  of twelve months commencing on
                                                  the day following the seventh
                                                  anniversary of the Relevant
                                                  Date, is 40.00 per cent,

                                                  or

                                                  in relation to a Redemption
                                                  Date falling within the period
                                                  of twelve months commencing on
                                                  the day following the eighth
                                                  anniversary of the Relevant
                                                  Date, is 26.66 per cent,

                                                  or

                                                  in relation to a Redemption
                                                  Date falling within the period
                                                  of twelve months commencing on
                                                  the day following the ninth
                                                  anniversary of the Relevant
                                                  Date is 13.33 per cent. No
                                                  Relevant Redemption Premium
                                                  shall be payable when the
                                                  Redemption Date falls after
                                                  the tenth anniversary of the
                                                  Relevant Date. The product of
                                                  the above formula in respect
                                                  of a Non-cumulative Dollar
                                                  Preference Share may,

<PAGE>

                                       27

                                                  in the Directors' discretion,
                                                  be rounded down to the nearest
                                                  whole cent;

                                             (C)  in the case of a  redemption
                                                  of some only of the
                                                  Non-cumulative Dollar
                                                  Preference Shares in any
                                                  series, the Company shall for
                                                  the purpose of determining the
                                                  particular Non-cumulative
                                                  Dollar Preference Shares to be
                                                  redeemed cause a drawing to be
                                                  made at the Office or such
                                                  other place as the Directors
                                                  may approve in the presence of
                                                  the Auditors for the time
                                                  being of the Company;

                                             (D)  any Notice of Redemption
                                                  given under sub-paragraph (ii)
                                                  (A) above shall specify the
                                                  applicable Redemption Date,
                                                  the particular Non-cumulative
                                                  Dollar Preference Shares to be
                                                  redeemed and the redemption
                                                  price (specifying the amount
                                                  of the accrued and unpaid
                                                  dividend per share to be
                                                  included therein and stating
                                                  that dividends on the
                                                  Non-cumulative Dollar
                                                  Preference Shares to be
                                                  redeemed will cease to accrue
                                                  on redemption), and shall
                                                  state the place or places at
                                                  which documents of title in
                                                  respect of such Non-cumulative
                                                  Dollar Preference Shares are
                                                  to be presented and
                                                  surrendered for redemption and
                                                  payment of the redemption
                                                  monies is to be effected. Upon
                                                  such Redemption Date, the
                                                  Company shall redeem the
                                                  particular Non-cumulative
                                                  Dollar Preference Shares to be
                                                  redeemed on that date subject
                                                  to the provisions of this
                                                  paragraph and of the Statutes.
                                                  No defect in the Notice of
                                                  Redemption or in the giving
                                                  thereof shall affect the
                                                  validity of the redemption
                                                  proceedings;

                                             (E)  the provisions of this and
                                                  the following sub-paragraphs
                                                  shall have effect in relation
                                                  to Non-cumulative Dollar
                                                  Preference Shares for the time
                                                  being issued and registered in
                                                  the Register of Members
                                                  ("Registered Shares") and
                                                  represented by certificates
                                                  ("Certificates") and in
                                                  relation to Non-cumulative
                                                  Dollar Preference Shares
                                                  which, in accordance with
                                                  Article 52 of these presents,
                                                  are for the time being issued
                                                  and represented by a Warrant
                                                  (as defined in the said
                                                  Article 52) ("Bearer Shares").
                                                  Payments in respect of the
                                                  amount due on redemption of a
                                                  Registered Share shall be made
                                                  by Dollar cheque drawn on a
                                                  bank in London or in the City
                                                  of New York or upon the
                                                  request of the holder or joint
                                                  holders not later than the
                                                  date specified for the purpose
                                                  in the Notice of Redemption by
                                                  transfer to a Dollar account
                                                  maintained by the payee with a
                                                  bank in London or in the City
                                                  of New York. Such payment will
                                                  be against presentation and
                                                  surrender

<PAGE>

                                       28

                                                  of the relative Certificate at
                                                  the place or one of the places
                                                  specified in the Notice of
                                                  Redemption and if any
                                                  Certificate so surrendered
                                                  includes any Non-cumulative
                                                  Dollar Preference Shares not
                                                  to be redeemed on the relevant
                                                  Redemption Date the Company
                                                  shall within fourteen days
                                                  thereafter issue to the
                                                  holder, free of charge, a
                                                  fresh Certificate in respect
                                                  of such Non-cumulative Dollar
                                                  Preference Shares. Payment in
                                                  respect of the amount due on
                                                  redemption of a Bearer Share
                                                  shall be made by Dollar cheque
                                                  drawn on a bank in London or
                                                  in the City of New York or
                                                  upon the request of the holder
                                                  not later than the date
                                                  specified for the purpose in
                                                  the Notice of Redemption by
                                                  transfer to a Dollar account
                                                  maintained by the payee with a
                                                  bank in London or in the City
                                                  of New York. Such payments
                                                  will be made against
                                                  presentation and surrender of
                                                  the Warrant and all unmatured
                                                  dividend coupons and talons
                                                  (if any) at the place or the
                                                  places specified in the Notice
                                                  of Redemption. Upon the
                                                  relevant Redemption Date all
                                                  unmatured dividend coupons and
                                                  any talon for additional
                                                  dividend coupons appertaining
                                                  thereto (whether or not
                                                  returned) shall become void
                                                  and no payment will be made in
                                                  respect thereof. If the
                                                  Warrant so surrendered
                                                  represents any Non-cumulative
                                                  Dollar Preference Shares not
                                                  to be redeemed on the relevant
                                                  Redemption Date the Company
                                                  shall issue, free of charge, a
                                                  fresh Warrant representing
                                                  such Bearer Shares which are
                                                  not to be redeemed on such
                                                  Redemption Date.

                                                  All payments in respect of
                                                  redemption monies will in all
                                                  respects be subject to any
                                                  applicable fiscal or other
                                                  laws;

                                             (F)  as from the relevant
                                                  Redemption Date the dividend
                                                  on the Non-cumulative Dollar
                                                  Preference Shares due for
                                                  redemption shall cease to
                                                  accrue except on any such
                                                  Non-cumulative Dollar
                                                  Preference Share in respect of
                                                  which, upon the due surrender
                                                  of the Certificate or, as the
                                                  case may be, the Warrant and
                                                  all unmatured dividend coupons
                                                  and talons (if any) in respect
                                                  thereof, in accordance with
                                                  sub-paragraph (E) above,
                                                  payment of the redemption
                                                  monies due on such Redemption
                                                  Date shall be improperly
                                                  withheld or refused, in which
                                                  case such dividend, at the
                                                  rate then applicable, shall be
                                                  deemed to have continued and
                                                  shall accordingly continue to
                                                  accrue from the relevant
                                                  Redemption Date to the date of
                                                  payment of such redemption
                                                  monies. Such Non-cumulative
                                                  Dollar Preference Share shall
                                                  not be treated as having been
                                                  redeemed until the redemption
                                                  monies

<PAGE>

                                                29

                                                  in question together with the
                                                  accrued dividend thereon shall
                                                  have been paid;

                                             (G)  if the due date for the
                                                  payment of the redemption
                                                  monies on any Non-cumulative
                                                  Dollar Preference Shares is
                                                  not a Dollar Business Day then
                                                  payment of such monies will be
                                                  made on the next succeeding
                                                  day which is a Dollar Business
                                                  Day and without any interest
                                                  or other payment in respect of
                                                  such delay unless such day
                                                  shall fall within the next
                                                  calendar month whereupon such
                                                  payment will be made on the
                                                  preceding Dollar Business Day;
                                                  and

                                             (H)  the receipt of the holder for
                                                  the time being of any
                                                  Registered Share (or in the
                                                  case of joint holders the
                                                  receipt of any one of them)
                                                  and the receipt of the person
                                                  delivering any Warrant to the
                                                  place or one of the places
                                                  specified pursuant to
                                                  sub-paragraph (D) above in
                                                  respect of the monies payable
                                                  on redemption on such
                                                  Registered Share or, as the
                                                  case may be, such Bearer
                                                  Share, shall constitute an
                                                  absolute discharge to the
                                                  Company.

                           (g)      Purchase

                                    Subject to the provisions of the Statutes
                                    and any other applicable laws, the Company
                                    may at any time and from time to time
                                    purchase any Non-cumulative Dollar
                                    Preference Shares upon such terms as the
                                    Directors shall determine provided that, in
                                    the case of Non-cumulative Dollar
                                    Preference Shares which are listed on the
                                    London Stock Exchange, the purchase price,
                                    exclusive of expenses and accrued
                                    dividends, shall not exceed (i) in the case
                                    of a purchase in the open market, or by
                                    tender (which shall be available alike to
                                    all holders of the Non-cumulative Dollar
                                    Preference Shares), the average of the
                                    closing middle market quotations of such
                                    Non-cumulative Dollar Preference Shares on
                                    the London Stock Exchange (as derived from
                                    The London Stock Exchange Daily Official
                                    List) for the last ten dealing days
                                    preceding the date of purchase or (if
                                    higher), in the case of a purchase in the
                                    open market only, the market price on the
                                    date of purchase provided that such market
                                    price is not more than 105 per cent of such
                                    average and (ii) in the case of a purchase
                                    by private treaty, 120 per cent of the
                                    closing middle market quotation of such
                                    Non-cumulative Dollar Preference Shares on
                                    the London Stock Exchange (as derived from
                                    The London Stock Exchange Daily Official
                                    List) for the last dealing day preceding
                                    the date of purchase: but so that this
                                    proviso shall not apply to any purchase of
                                    Non-cumulative Dollar Preference Shares
                                    made in the ordinary course of a business
                                    of dealing in securities.

                  (3)(a)   Save with the written consent of the holders of
                           three-quarters in nominal value of, or with the
                           sanction of an Extraordinary Resolution passed at a
                           separate General Meeting of the holders of, the
                           Non-cumulative Dollar Preference Shares, the
                           Directors shall not authorise or create, or increase
                           the

<PAGE>

                                      30

                           amount of, any shares of any class or any security
                           convertible into shares of any class ranking as
                           regards rights to participate in the profits or
                           assets of the Company (other than on a redemption or
                           purchase by the Company of any such shares) in
                           priority to the Non-cumulative Dollar Preference
                           Shares.

                     (b)   The special rights attached to any series of
                           Non-cumulative Dollar Preference Shares allotted or
                           in issue shall not (unless otherwise provided by
                           their terms of issue) be deemed to be varied by the
                           creation or issue of any New Shares ranking as
                           regards participation in the profits or assets of
                           the Company in some or all respects pari passu with
                           or after such Non-cumulative Dollar Preference
                           Shares. Any new shares ranking in some or all
                           respects pari passu with such Non-cumulative Dollar
                           Preference Shares may without their creation or
                           issue being deemed to vary the special rights
                           attached to any Non-cumulative Dollar Preference
                           Share then in issue either carry rights identical in
                           all respects with such Non-cumulative Dollar
                           Preference Shares or any of them or carry rights
                           differing therefrom in any respect, including, but
                           without prejudice to the generality of the
                           foregoing, in that:-

                           (i)      the rate or means of calculating the
                                    dividend may differ and the dividend may be
                                    cumulative or non-cumulative;

                           (ii)     the New Shares or any series thereof may
                                    rank for dividend as from such date as may
                                    be provided by the terms of issue thereof
                                    and the dates for payment of dividend may
                                    differ;

                           (iii)    the New Shares may be denominated in
                                    Sterling or in any Foreign Currency;

                           (iv)     a premium may be payable on return of
                                    capital or there may be no such premium;

                           (v)      the New Shares may be redeemable at the
                                    option of the holder or of the Company, or
                                    may be non-redeemable and if redeemable at
                                    the option of the Company, they may be
                                    redeemable at different dates and on
                                    different terms from those applying to the
                                    Non-cumulative Dollar Preference Shares;
                                    and

                           (vi)     the New Shares may be convertible into
                                    Ordinary Shares or any other class of
                                    shares ranking as regards participation in
                                    the profits and assets of the Company pari
                                    passu with or after such Non-cumulative
                                    Dollar Preference Shares in each case on
                                    such terms and conditions as may be
                                    prescribed by the terms of issue thereof.

         (E)      Category II non-cumulative dollar preference shares

                  (1)      The rights as regards participation in profits and
                           assets of the Company, receipt of notice, attendance
                           and voting at meetings and redemption attaching to
                           the Category II Non-cumulative Dollar Preference
                           Shares of US$0.01 each in the capital of the
                           Company( "Category II Non-cumulative Dollar
                           Preference Shares") shall be as provided by this
                           Article 4(E).

<PAGE>

                                      31

                  (2)      Article 4(D) (in its present form or as from time to
                           time altered) shall apply to the Category II
                           Non-cumulative Dollar Preference Shares but with the
                           following modifications:-

                           (a)      subject to (b) below, for any reference
                                    (however worded and whether express or
                                    implied) to Non-cumulative Dollar
                                    Preference Shares there shall be deemed to
                                    be substituted a reference to Category II
                                    Non-cumulative Dollar Preference Shares;

                           (b)      references to "New Preference Shares" shall
                                    be deemed to include the Non-cumulative
                                    Dollar Preference Shares;

                           (c)      in Article 4(D)(2)(e) the words "and on
                                    such terms" shall be deemed to be inserted
                                    after "such circumstances" and the words
                                    "for which purpose the Non-cumulative
                                    Dollar Preference Shares will be deemed to
                                    carry the number of votes determined
                                    pursuant to the following sentence" shall
                                    be deemed to be deleted;

                           (d)      in relation to any Category II
                                    Non-cumulative Dollar Preference share
                                    allotted prior to 16 January 1997 or
                                    allotted on exchange of any Exchangeable
                                    Capital Securities, Series A of the
                                    Company, in Article 4(D)(2)(f)(ii)(A) the
                                    last sentence shall be deemed to be deleted
                                    and the following deemed to be substituted
                                    therefor:-

                                    ""Redemption Date" means, in relation to
                                    any Category II Non-cumulative Dollar
                                    Preference Share, any date which either (i)
                                    falls no earlier than such date (if any) as
                                    may be fixed by the Directors, prior to
                                    allotment of that share, as being the
                                    earliest date on which the Company may
                                    redeem such share, and the date so fixed
                                    shall be no earlier than five years and one
                                    day, and no later than ten years and one
                                    day, after the relevant date of allotment,
                                    or (ii) if no date is fixed by the
                                    Directors as aforesaid under (i) above in
                                    relation to that share, falls no earlier
                                    than five years and one day after the date
                                    of allotment of the Category II
                                    Non-cumulative Dollar Preference Share to
                                    be redeemed";

                           (e)      in relation to any Category II
                                    Non-cumulative Dollar Preference Shares
                                    allotted on or after 16 January 1997 (other
                                    than on exchange of any Exchangeable
                                    Capital Securities, Series A of the
                                    Company), sub-paragraphs (A) and (B) of
                                    Article 4(D)(2)(f)(ii) shall be deemed to
                                    be deleted and the following deemed to be
                                    substituted therefor:-

                                    "(A)     the Company may, subject thereto,
                                             redeem on any Redemption Date (as
                                             hereinafter defined) all or some
                                             only of the Category II
                                             Non-cumulative Dollar Preference
                                             Shares by giving to the holders of
                                             the Category II Non-cumulative
                                             Dollar Preference Shares to be
                                             redeemed not less than 30 days nor
                                             more than 60 days prior notice in
                                             writing (a "Notice of Redemption")
                                             of the relevant Redemption Date.
                                             "Redemption Date" means, in
                                             relation to a Category II
                                             Non-cumulative Dollar Preference
                                             Share, any date which falls no
                                             earlier than three years and one
                                             day (or such longer period (if
                                             any) as may be fixed by the
                                             Directors prior to allotment

<PAGE>

                                       32

                                             of such Share) after the date of
                                             allotment of the Category II Non-
                                             cumulative Dollar Preference Share
                                             to be redeemed ("the Relevant
                                             Date") (provided that the Directors
                                             may determine prior to allotment
                                             that a Redemption Date must, in
                                             addition to falling as aforesaid,
                                             fall on such anniversary (or on
                                             such anniversaries) of the date of
                                             allotment as may be fixed by the
                                             Directors prior to allotment);

                                    (B)      there shall be paid on each
                                             Category II Non-cumulative Dollar
                                             Preference Share so redeemed, in
                                             Dollars, the aggregate of the
                                             nominal amount thereof together
                                             with any premium paid on issue
                                             together with, where applicable,
                                             the Relevant Redemption Premium
                                             (defined below) and together with
                                             arrears (if any) of dividends
                                             thereon (whether earned or
                                             declared or not) in respect of the
                                             period from the dividend payment
                                             date last preceding the Redemption
                                             Date to the Redemption Date.
                                             "Relevant Redemption Premium"
                                             means an amount calculated in
                                             accordance with such one (if any)
                                             of the following three formulae as
                                             applied in relation to a
                                             Redemption Date notified under
                                             sub-paragraph (A) above which
                                             falls within the period of twelve
                                             months commencing on the date
                                             following the third, fourth,
                                             fifth, sixth or seventh
                                             anniversary of the Relevant Date,
                                             as the case may be, as may be
                                             determined by the Directors prior
                                             to the Relevant Date. The formula
                                             for calculation of the Relevant
                                             Redemption Premium shall be:-

                                    (a)      A x B

                                             where:-

                                             "A" is the amount of dividend
                                             excluding any associated tax
                                             credit (not expressed as a
                                             percentage) calculated at the
                                             date of allotment to which the
                                             holder of the Category II
                                             Non-cumulative Dollar
                                             Preference Share to be
                                             redeemed would become entitled
                                             in respect of the twelve
                                             months following allotment by
                                             virtue of the terms of issue
                                             thereof on the assumption that
                                             such amount of dividend had
                                             accrued on the Category II
                                             Non-cumulative Dollar
                                             Preference Share during such
                                             period and was payable at the
                                             end of such period and on the
                                             further assumption that there
                                             shall be no change in the
                                             associated tax credit
                                             affecting the amount of
                                             dividend payable in respect of
                                             such period; and

                                             "B" in relation to a
                                             Redemption Date falling within
                                             the period of twelve months
                                             commencing on the day
                                             following the third
                                             anniversary of the Relevant
                                             Date, is 66.66 per cent.,

                                             or

<PAGE>

                                       33

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the fourth
                                             anniversary of the Relevant
                                             Date, is 53.33 per cent.,

                                             or

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the fifth
                                             anniversary of the Relevant
                                             Date, is 40.00 per cent.,

                                             or

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the sixth
                                             anniversary of the Relevant
                                             Date, is 26.66 per cent.,

                                             or

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the seventh
                                             anniversary of the Relevant
                                             Date is 13.33 per cent; or

                                    (b)      C x D

                                             where:-

                                             "C" is the amount of dividend
                                             excluding any associated tax
                                             credit (not expressed as a
                                             percentage) calculated at the
                                             date of allotment to which the
                                             holder of the Category II
                                             Non-cumulative Dollar
                                             Preference Share to be
                                             redeemed would become entitled
                                             in respect of the twelve
                                             months following allotment by
                                             virtue of the terms of issue
                                             thereof on the assumption that
                                             such amount of dividend had
                                             accrued on the Category II
                                             Non-cumulative Dollar
                                             Preference Share during such
                                             period and was payable at the
                                             end of such period and on the
                                             further assumption that there
                                             shall be no change in the
                                             associated tax credit
                                             affecting the amount of
                                             dividend payable in respect of
                                             such period; and

                                             "D" in relation to a
                                             Redemption Date falling within
                                             the period of twelve months
                                             commencing on the day
                                             following the third
                                             anniversary of the Relevant
                                             Date, is 50 per cent.,

                                             or

<PAGE>

                                       34

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the fourth
                                             anniversary of the Relevant
                                             Date, is 40 per cent.,

                                             or

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the fifth
                                             anniversary of the Relevant
                                             Date, is 30 per cent.,

                                             or

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the sixth
                                             anniversary of the Relevant
                                             Date, is 20 per cent.,

                                             or

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the seventh
                                             anniversary of the Relevant
                                             Date is 10 per cent; or

                                    (c)      E x F

                                             where:-

                                             "E" is the amount of US$25; and

                                             "F" in relation to a
                                             Redemption Date falling within
                                             the period of twelve months
                                             commencing on the day
                                             following the third
                                             anniversary of the Relevant
                                             Date, is 33.33 per cent.,

                                             or

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the fourth
                                             anniversary of the Relevant
                                             Date, is 26.66 per cent.,

                                             or

<PAGE>
                                       35

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the fifth
                                             anniversary of the Relevant
                                             Date, is 20 per cent.,

                                             or

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the sixth
                                             anniversary of the Relevant
                                             Date, is 13.33 per cent.,

                                             or

                                             in relation to a Redemption
                                             Date falling within the period
                                             of twelve months commencing on
                                             the day following the seventh
                                             anniversary of the Relevant
                                             Date, is 6.66 per cent.

                                    No Relevant Redemption Premium shall be
                                    payable when the Redemption Date falls
                                    after the eighth anniversary of the
                                    Relevant Date. The product of any of the
                                    above formulae in respect of a Category II
                                    Non-cumulative Dollar Preference Share may,
                                    in the Directors' discretion, be rounded
                                    down to the nearest whole cent.

                                    The Directors may, in their discretion,
                                    determine in relation to any Category II
                                    Non-cumulative Dollar Preference Share,
                                    prior to the Relevant Date, that none of
                                    the above formulae shall apply, in which
                                    event no Relevant Redemption Premium shall
                                    be payable;"", and

                  (f)      notwithstanding the terms of sub-paragraph (e)
                           above, in relation to any Category II Non-cumulative
                           Dollar Preference Shares allotted on or after 14
                           January 2000 (other than on exchange of any
                           Exchangeable Capital Securities, Series A of the
                           Company) the provisions of sub-paragraph (A) and (B)
                           set out in sub-paragraph (e) above shall have effect
                           subject to the following modifications:

                           (i)      the reference in sub-paragraph (A) to three
                                    years and one day shall be deemed to be a
                                    reference to five years and one day;

                           (ii)     notwithstanding the terms of sub-paragraph
                                    (B), a Relevant Redemption Premium shall
                                    only be payable when the relevant
                                    Redemption Date falls after the tenth
                                    anniversary of the Relevant Date and on or
                                    prior to the twentieth anniversary of the
                                    Relevant Date (the "redemption premium
                                    period "). The formula for calculation of
                                    such Relevant Redemption Premium (subject
                                    to rounding down as specified in
                                    sub-paragraph (B)) shall be as specified in
                                    (iii) below. The Directors may, in their
                                    discretion, determine in relation to any
                                    Category II Non-cumulative Dollar
                                    Preference Share, prior to the Relevant
                                    Date, that no Relevant Redemption Premium
                                    shall be payable;

                           (iii)    the formula for calculating the Relevant
                                    Redemption Premium shall be:

                                    A x B

<PAGE>

                                      36

                                    where:

                                    "A"  is as defined in sub-paragraph (e)
                                    above;

                                    "B" is, in relation to any Redemption Date
                                    falling within the redemption premium
                                    period, a percentage determined from the
                                    table below by reference to the anniversary
                                    of the Relevant Date specified in the left-
                                    hand column which is the latest to occur
                                    prior to that Redemption Date:

                                    Anniversary of the
                                    Relevant Date                    Percentage
                                    tenth                               50%
                                    eleventh                            45%
                                    twelfth                             40%
                                    thirteenth                          35%
                                    fourteenth                          30%
                                    fifteenth                           25%
                                    sixteenth                           20%
                                    seventeenth                         15%
                                    eighteenth                          10%
                                    nineteenth                          5%

                  (3)      For the avoidance of doubt, the Category II
                           Non-cumulative Dollar Preference Shares are, for the
                           purposes of Articles 4(C) and 4(D), New Preference
                           Shares expressed to rank pari passu with the
                           Non-cumulative Sterling Preference Shares and the
                           Non-cumulative Dollar Preference Shares as regards
                           participation in surplus profits and surplus assets.

         (F)      Subject to the provisions of Article 4 and to the special
                  rights attached to the Non-cumulative Sterling Preference
                  Shares and the Non-cumulative Dollar Preference Shares and
                  the Category II Non-cumulative Dollar Preference Shares and
                  the Non-cumulative Euro Preference Shares and the Convertible
                  Preference Shares (as defined in Article 4B) and the Category
                  II Non-cumulative Convertible Sterling Preference Shares and
                  to any special rights which are or may be attached to any
                  other class of shares (i) the profits of the Company
                  available for dividend and resolved to be distributed shall
                  be distributed by way of dividend amongst the holders of the
                  Ordinary Shares and (ii) on a winding up or liquidation,
                  voluntary or otherwise, the residue, if any, of the surplus
                  assets of the Company available for distribution amongst the
                  members shall belong to the holders of the Ordinary Shares
                  and be divided amongst them in proportion to the amounts paid
                  up or credited as paid up on such shares held by them
                  respectively.

4A.      Non-cumulative Euro Preference Shares

         Each Non-cumulative Euro Preference Share of (euro)0.01 forming part
         of the share capital of the Company (a "Non-cumulative Euro Preference
         Share") shall confer the rights as to participation in the profits and
         assets of the Company, receipt of notices, attendance and votings at
         meetings and redemption specified or referred to in Schedule 1 to
         these presents ("Schedule 1", which Schedule shall be regarded as part
         of these presents).

<PAGE>

                                      37

4B.      Non-cumulative Convertible Preference Shares

         (1)      Non-cumulative Convertible Sterling Preference Shares: Each
                  Non-cumulative Convertible Sterling Preference Share of
                  (pound)0.01 forming part of the share capital of the Company
                  (a "Non-cumulative Convertible Sterling Preference Share")
                  shall confer the rights as to participation in the profits
                  and assets of the Company, receipt of notices, attendance and
                  voting at meetings, redemption and conversion specified or
                  referred to in Parts 1 and 4 of Schedule 2 to these presents
                  ("Schedule 2" which schedule shall be regarded as part of
                  these presents).

         (2)      Non-cumulative Convertible Dollar Preference Shares: Each
                  Non-cumulative Convertible Dollar Preference Share of US$0.01
                  forming part of the share capital of the Company (a
                  "Non-cumulative Convertible Dollar Preference Share") shall
                  confer the rights as to participation in the profits and
                  assets of the Company, receipt of notices, attendance and
                  voting at meetings, redemption and conversion specified or
                  referred to in Parts 2 and 4 of Schedule 2.

         (3)      Non-cumulative Convertible Euro Preference Shares: Each
                  Non-cumulative Convertible Euro Preference Share of (euro)
                  0.01 forming part of the share capital of the Company (a
                  "Non-cumulative Convertible Euro Preference Share") shall
                  confer the rights as to participation in the profits and
                  assets of the Company, receipt of notices, attendance and
                  voting at meetings, redemption and conversion specified or
                  referred to in Parts 3 and 4 of Schedule 2.

         (4)      In Schedule 2, "Convertible Preference Shares" means all or
                  any of the Non-cumulative Convertible Sterling Preference
                  Shares, the Non-cumulative Convertible Dollar Preference
                  Shares and the Non-cumulative Convertible Euro Preference
                  Shares (each a "Convertible Preference Share").

4C.      Category II Non-cumulative Convertible Sterling Preference Shares

         Each Category II Non-cumulative Convertible Preference Share of
         (pound)0.25 forming part of the share capital of the Company (a
         "Category II Non-cumulative Convertible Sterling Preference Share")
         shall confer the rights as to participation in the profits and assets
         of the Company, receipt of notices, attendance and voting at meetings,
         redemption and conversion specified or referred to in Schedule 3 to
         these presents ("Schedule 3" which schedule shall be regarded as part
         of these presents).

4D.      Additional Value Shares

         Each Additional Value Share of (pound)0.01 forming part of the share
         capital of the Company (an "Additional Value Share") shall confer the
         rights as to participation in the profits and assets of the Company,
         receipt of notices, attendance and voting at meetings and conversion
         specified or referred to in Schedule 4 to these presents ("Schedule
         4") which schedule shall be regarded as part of these presents.

5.       Shares with special rights and redeemable shares

         Without prejudice to any special rights previously conferred on the
         holders of any shares or class of shares for the time being issued
         (which special rights may be varied or abrogated only in the manner
         provided by the next following Article), any share in the Company may
         be issued with such preferred, deferred or other special rights, or
         subject to such restrictions, whether in regard to participation in
         the profits or assets of the Company, voting or

<PAGE>

                                      38

         otherwise, as the Company may from time to time by Ordinary Resolution
         determine (or, failing any such determination or in pursuance of any
         power conferred on the Directors by these presents or by Ordinary
         Resolution, as the Directors may determine) and subject to the
         provisions of the Statutes the Company may issue any shares which are,
         or at the option of the Company or the holder are to be liable, to be
         redeemed.

                              VARIATION OF RIGHTS

6.       Method of varying class rights

         Whenever the share capital of the Company is divided into different
         classes of shares, the special rights attached to any class may,
         subject to the provisions of the Statutes, be varied or abrogated
         either with the consent in writing of the holders of three-fourths of
         the issued shares of the class or with the sanction of an
         Extraordinary Resolution passed at a separate General Meeting of the
         holders of the shares of the class (but not otherwise) and may be so
         varied or abrogated either whilst the Company is a going concern or
         during or in contemplation of a winding up. To every such separate
         General Meeting all the provisions of these presents relating to
         General Meetings of the Company and to the proceedings thereat shall
         mutatis mutandis apply, except that the necessary quorum shall be two
         persons at least holding or representing by proxy one-third in nominal
         amount of the issued shares of the class (but so that if at any
         adjourned meeting a quorum as above defined is not present, any two
         holders of shares of the class present in person or by proxy shall be
         a quorum) and that any holder of shares of the class present in person
         or by proxy may demand a poll and that every such holder shall on a
         poll have one vote for every share of the class held by him. The
         foregoing provisions of this Article shall apply to the variation or
         abrogation of the special rights attached to some only of the shares
         of any class as if the shares concerned and the remaining shares of
         such class formed separate classes.

7.       When share rights deemed to be varied

         The special rights attached to any class of shares having preferential
         rights shall not unless otherwise expressly provided by the terms of
         issue thereof be deemed to be varied by the creation or issue of
         further shares ranking as regards participation in the profits or
         assets of the Company in some or all respects pari passu therewith but
         in no respect in priority thereto.

                             ALTERATION OF CAPITAL

8.       Increase of capital

         The Company may from time to time by Ordinary Resolution increase its
         capital by such sum to be divided into shares of such amounts, and
         denominated in such currencies, as the resolution shall prescribe.

9.       New shares

         All new shares shall be subject to the provisions of the Statutes and
         of these presents with reference to allotment, payment of calls, lien,
         transfer, transmission, forfeiture and otherwise.

10(A).   Alterations permitted by ordinary resolution

         The Company may by Ordinary Resolution:-

<PAGE>

                                      39

         (1)      Consolidate and divide all or any of its share capital into
                  shares of larger amount than its existing shares.

         (2)      Cancel any shares which, at the date of the passing of the
                  resolution, have not been taken, or agreed to be taken, by
                  any person and diminish the amount of its capital by the
                  amount of the shares so cancelled.

         (3)      Sub-divide its shares, or any of them, into shares of smaller
                  amount than is fixed by the Memorandum of Association
                  (subject, nevertheless, to the provisions of the Statutes),
                  and so that the resolution whereby any share is sub-divided
                  may determine that, as between the holders of the shares
                  resulting from such sub-division, one or more of the shares
                  may, as compared with the others, have any such preferred,
                  deferred or other special rights, or be subject to any such
                  restrictions, as the Company has power to attach to unissued
                  or new shares.

(B).     Fractions arising

         Upon any consolidation of fully paid shares into shares of larger
         amount the Directors may settle any difficulty which may arise with
         regard thereto and in particular may as between the holders of shares
         so consolidated determine which shares are consolidated into each
         consolidated share and in the case of any shares registered in the
         name of one holder (or joint holders) being consolidated with shares
         registered in the name of one holder (or joint holders) may make such
         arrangements for the allocation, acceptance or sale of the
         consolidated share and for the distribution of any moneys received in
         respect thereof as may be thought fit and for the purpose of giving
         effect thereto may appoint some person to transfer the consolidated
         share or any fractions thereof and to receive the purchase price
         thereof and any transfer executed in pursuance thereof shall be
         effective and after such transfer has been registered no person shall
         be entitled to question its validity.

11.      Power to purchase own shares

         Subject to the provisions of the Statutes, and to any rights conferred
         on the holders of any class of shares and to any requirements imposed
         by the London Stock Exchange in respect of securities admitted to
         listing, the Company may purchase, or enter into a contract under
         which it will or may purchase, any of its own shares (including any
         redeemable shares). Neither the Company nor the Directors shall be
         required to select the shares to be purchased rateably or in any other
         particular manner as between the holders of shares of the same class
         or as between them and the holders of shares of any other class or in
         accordance with the rights as to dividends or capital conferred by any
         class of shares.

         Unless otherwise provided by the terms of issue, the rights attached
         to any New Preference Share shall not be deemed to be varied or
         abrogated by the purchase or redemption by the Company of any of its
         shares ranking as regards participation in the profits or assets of
         the Company pari passu with or postponed to such share.

12.      Power to reduce capital

         The Company may reduce its share capital or any capital redemption
         reserve, share premium account or other undistributable reserve in any
         manner and with and subject to any incident authorised, and consent
         required, by law. Unless otherwise provided by the terms of issue, the
         rights attached to any New Preference Share shall not be deemed to be
         varied or abrogated by a reduction of any share capital ranking as
         regards participation in the profits and assets of the Company pari
         passu with or postponed to such share.

<PAGE>

                                      40

                                     SHARES

13(A).   Shares at the disposal of the Directors

         Subject to the provisions of the Statutes relating to authority,
         pre-emption rights and otherwise and of any resolution of the Company
         in General Meeting passed pursuant thereto and of these presents, all
         unissued shares in the Company shall be at the disposal of the
         Directors and they may allot (with or without conferring a right of
         renunciation), grant options over or otherwise dispose of them to such
         persons, at such times and on such terms as they think proper. No
         share in the Company may be allotted (a) for cash in a currency other
         than that in which it is denominated or (b) for a consideration other
         than cash unless the value ascribed thereto is denominated in the same
         currency as such share.

  (B).   Directors' authority to allot shares and power to allot shares for cash

         (1)      The Directors shall be generally and unconditionally
                  authorised pursuant to and in accordance with Section 80 of
                  the 1985 Act to exercise for each Section 80 prescribed
                  period all the powers of the Company to allot and to make
                  offers or agreements to allot relevant securities up to an
                  aggregate nominal amount equal to the Section 80 amount (save
                  that the Directors shall not be authorised hereunder to issue
                  any New Preference Shares).

         (2)      During each Section 89 prescribed period the Directors shall
                  be empowered to allot and to make offers or agreements to
                  allot equity securities wholly for cash pursuant to and
                  within the terms of the said authority:-

                  (i)      in connection with a rights issue;

                  (ii)     pursuant to any authority conferred upon the
                           Directors in accordance with and pursuant to Article
                           143; and

                  (iii)    otherwise than pursuant to sub-paragraphs (i) or
                           (ii) above, up to an aggregate nominal amount equal
                           to the Section 89 amount;

                  as if Section 89(1) of the 1985 Act did not apply to any such
                  allotment.

         (3)      By such authority and power, the Directors may during such
                  period make offers or agreements which would or might require
                  the allotment of securities after the expiry of such period.

         (4)      For the purposes of this Article 13(B):

                  (i)      "rights issue" means an offer of equity securities
                           to holders on a fixed record date of (a) Ordinary
                           Shares in proportion to their respective holdings
                           and (b) other equity securities to the extent
                           required or permitted by the rights attached thereto
                           (but subject to such exclusions or other
                           arrangements as the Directors may deem necessary or
                           expedient in relation to fractional entitlements or
                           legal or practical problems under the laws of, or
                           the requirements of any recognised regulator body or
                           any stock exchange in, any territory);

<PAGE>

                                      41

                  (ii)     "Section 80 prescribed period" means, in the first
                           instance, a period of 5 years commencing on the day
                           of the adoption of these Articles and thereafter
                           shall mean any other period (not exceeding 5 years
                           on any occasion) for which the authority conferred
                           by sub-paragraph (1) above is renewed or extended by
                           an Ordinary Resolution of the Company stating the
                           Section 80 amount for such period;

                  (iii)    "Section 89 prescribed period" means, in the first
                           instance, the period from the date of the adoption
                           of these Articles to the date of the Annual General
                           Meeting in 1999 or 15 months from the day of the
                           adoption of these Articles, whichever is the
                           earlier, and shall thereafter mean any period (not
                           exceeding 15 months on any occasion) for which the
                           authority and power conferred by sub-paragraph (2)
                           above is renewed by a Special Resolution of the
                           Company stating the Section 89 amount for such
                           period;

                  (iv)     "Section 80 amount" shall for the first Section 80
                           prescribed period be (pound)44,956,071 and for any
                           other Section 80 prescribed period shall be that
                           stated in the relevant Ordinary Resolution or any
                           increased amount fixed by Ordinary Resolution;

                  (v)      "Section 89 amount" shall for the first Section 89
                           prescribed period be (pound)10,751,951 and for any
                           other Section 89 prescribed period shall be that
                           stated in the relevant Special Resolution; and

                  (vi)     the nominal amount of any securities shall be taken
                           to be, in the case of rights to subscribe for or to
                           convert any securities into shares of the Company,
                           the nominal amount of such shares which may be
                           allotted pursuant to such rights.

14.      Commission

         In addition to all other powers of paying commissions, the Company may
         exercise the powers of paying commissions conferred by the Statutes to
         the full extent thereby permitted. The Company may also on any issue
         of shares pay such brokerage as may be lawful. Subject to the
         Statutes, any such commission or brokerage may be satisfied by the
         payment of cash or by the allotment of fully or partly paid shares or
         partly in one way and partly in another.

15.      Renunciation

         The Directors may at any time after the allotment of any share but
         before any person has been entered in the Register of Members as the
         holder recognise a renunciation thereof by the allottee in favour of
         some other person and may accord to any allottee of a share a right to
         effect such renunciation upon and subject to such terms and conditions
         as the Directors may think fit to impose

16.      Interests not recognised

         Except as required by law, no person shall be recognised by the
         Company as holding any share upon any trust, and the Company shall not
         be bound by or compelled in any way to recognise (even when having
         notice thereof) any equitable, contingent, future or partial interest
         in any share, or any interest in any fractional part of a share, or
         (except only as by these presents or by law otherwise provided) any
         other right in respect of any share, except

<PAGE>

                                      42

         an absolute right to the entirety thereof in the registered holder or,
         in the case of a share warrant, in the bearer of the warrant for the
         time being.

                          EVIDENCE OF TITLE TO SHARES

17.      Uncertificated Shares

         (A)      Pursuant and subject to the Uncertificated Securities
                  Regulations, the Directors may permit title to shares of any
                  class to be evidenced otherwise than by a certificate and
                  title to shares of such a class to be transferred by means of
                  a relevant system and may make arrangements for a class of
                  shares (if all shares of that class are in all respects
                  identical) to become a participating class. Title to shares
                  of a particular class may only be evidenced otherwise than by
                  a certificate where that class of shares is for the time
                  being a participating class. The Directors may also, subject
                  to compliance with the Uncertificated Securities Regulations
                  and the rules of any relevant system, determine at any time
                  that title to shares of any class may from a date specified
                  by the Directors no longer be evidenced otherwise than by a
                  certificate or that title to shares of such a class shall
                  cease to be transferred by means of any particular relevant
                  system. For the avoidance of doubt, shares which are
                  uncertificated shares shall not be treated as forming a class
                  of shares which are separate from certificated shares with
                  the same rights.

         (B)      In relation to a class of shares which is, for the time
                  being, a participating class and for so long as it remains a
                  participating class, no provision of these Articles shall
                  apply or have effect to the extent that it is inconsistent in
                  any respect with:-

                  (i)      the holding of shares of that class in
                           uncertificated form;

                  (ii)     the transfer of title to shares of that class by
                           means of a relevant system; and

                  (iii)    any provision of the Uncertificated Securities
                           Regulations.

         (C)      Shares of a class which is for the time being a participating
                  class may be changed from uncertificated form, and from
                  certificated to uncertificated form, in accordance with and
                  subject as provided in the Uncertificated Securities
                  Regulations and the rules of any relevant system, and the
                  Directors shall record on the register of members that the
                  shares are held in certificated or uncertificated form as
                  appropriate.

18.      Certificated shares

         Subject to the provisions of the Uncertificated Securities
         Regulations, the rules of any relevant system and these presents,
         every person (except a person to whom the Company is not by law
         required to issue a certificate) whose name is entered as a member in
         the register of members in respect of any shares of any one class upon
         the issue or transfer thereof shall be entitled without payment to a
         certificate therefor (in the case of issue) within one month (or such
         longer period as the terms of issue shall provide) after allotment or
         (in the case of a transfer of fully paid shares) within fourteen days
         after lodgement of a transfer or receipt of the relevant
         Operator-instruction by the Company or (in the case of a transfer of
         partly paid shares) within two months after lodgement of a transfer or
         receipt of the relevant Operator-instruction by the Company or (upon
         payment of such reasonable charge (if any) for every certificate after
         the first as the Directors shall from time to time determine) to
         several certificates, each for one or more of his shares of any class.

<PAGE>

                                      43

         Provided that the Company shall not be bound to register more than
         four persons as the joint holders of a share and in the case of a
         share held jointly by several persons the Company shall not be bound
         to issue more than one certificate for each class of shares so held
         and delivery of a certificate to one of such persons shall be deemed
         sufficient delivery to all. A member who has transferred some but not
         all of the shares comprised in a share certificate shall be entitled
         to a certificate for the balance without charge.

19.      Authentication and form of certificates

         Every certificate for shares or debentures or other securities of the
         Company shall (except to the extent that the terms and conditions for
         the time being relating thereto otherwise provide) be issued under the
         Seal (or under a Securities Seal or, in the case of shares on a branch
         register, an official seal for use in the relevant territory) and
         (subject as hereinafter provided) shall bear the autographic
         signatures at least of one Director and the Secretary. Provided that
         the Directors may by resolution determine, either generally or in any
         particular case or cases, that such signatures or either of them shall
         be dispensed with or shall be affixed by some method or system of
         mechanical signature or that certificates may be signed or
         authenticated by some other person or persons. Every such certificate
         shall specify the number and class of shares, debentures or other
         securities to which it relates and the amount paid up thereon. No
         certificate shall be issued representing shares, debentures or other
         securities of more than one class. No certificate need be issued in
         respect of shares, debentures or other securities held by a recognised
         clearing house or a nominee of a recognised clearing house or of a
         recognised investment exchange or any other person in respect of whom
         the Company is not required by law to complete and have ready for
         delivery a certificate as provided herein. Notwithstanding the
         foregoing provisions of this Article, the Directors may by resolution
         determine, either generally or in any particular case or cases, that
         certificates for shares, debentures or other securities shall bear the
         signatures or facsimile signatures of two authorised officers of the
         Company and need not be issued under the Seal or the Securities Seal
         or an official seal.

20.      Cancellation and replacement of certificates

         (A)      Any two or more certificates representing shares of any one
                  class held by any member may at his request be cancelled and
                  a single new certificate for all such shares issued in lieu
                  subject, if the Directors so require, to payment of the
                  reasonable out of pocket expenses of the Company in providing
                  the same.

         (B)      If any member shall surrender for cancellation a share
                  certificate representing shares held by him and request the
                  Company to issue in lieu two or more share certificates
                  representing such shares in such proportions as he may
                  specify, the Directors may, if they think fit, comply with
                  such request.

         (C)      If a share certificate shall be damaged, defaced, worn out,
                  or alleged to have been lost, stolen or destroyed, it shall
                  be replaced by a new certificate on request without fee but
                  on such terms (if any) as to evidence and indemnity and to
                  payment of any exceptional out-of-pocket expenses of the
                  Company in investigating the evidence and preparing the
                  indemnity as the Directors may decide and, where it is
                  defaced or worn out, after delivery of the old certificate to
                  the Company.

         (D)      In the case of shares held jointly by several persons any
                  such request may be made by any one of the joint holders.

<PAGE>

                                      44

                                CALLS ON SHARES

21.      Power to make calls

         The Directors may from time to time make calls upon the members in
         respect of any monies unpaid on their shares (whether on account of
         the nominal value of the shares or by way of premium) and not by the
         terms of issue thereof made payable at fixed times. Each member shall
         (subject to being given at least fourteen days' notice specifying the
         time or times and place of payment) pay to the Company at the time or
         times and place so specified the amount called on his shares. A call
         may be revoked or postponed as the Directors may determine.

22.      Time when call made

         A call shall be deemed to have been made at the time when the
         resolution of the Directors authorising the call was passed and may be
         made payable by instalments.

23.      Liability of joint holders

         The joint holders of a share shall be jointly and severally liable to
         pay all calls in respect thereof.

24.      Interest payable

         If a sum called in respect of a share is not paid before or on the day
         appointed for payment thereof, the person from whom the sum is due
         shall pay interest on the sum from the day appointed for payment
         thereof to the time of actual payment at such rate (not exceeding 5
         per cent per annum above the Base Rate, or in the absence of any Base
         Rate, 20 per cent per annum) as the Directors determine and all
         expenses that may have been incurred by the Company by reason of such
         non-payment, but the Directors shall be at liberty in any case or
         cases to waive payment of such interest and expenses wholly or in
         part.

25.      Deemed calls

         Any sum (whether on account of the nominal value of the share or by
         way of premium) which by the terms of issue of a share becomes payable
         upon allotment or at any fixed date shall for all the purposes of
         these presents be deemed to be a call duly made and payable on the
         date on which by the terms of issue the same becomes payable. In the
         case of non-payment all the relevant provisions of these presents as
         to payment of interest and expenses, forfeiture or otherwise shall
         apply as if such sum had become payable by virtue of a call duly made
         and notified.

26.      Differentiation of calls

         The Directors may at any time and from time to time differentiate
         between the holders as to the amount of calls to be paid and the times
         of payment.

27.      Payment of calls in advance

         The Directors may if they think fit receive from any member willing to
         advance the same all or any part of the monies (whether on account of
         the nominal value of the shares or by way of premium) uncalled and
         unpaid upon the shares held by him and such payment in advance of
         calls shall extinguish pro tanto the liability upon the shares in
         respect of which it is made and upon the monies so received (until and
         to the extent that the same would but for such advance

<PAGE>

                                      45

         become payable) the Company may pay interest at such rate (not
         exceeding the Base Rate or, in the absence of any Base Rate, 12 per
         cent per annum) as the member paying such sum and the Directors agree
         upon. The Directors may at any time repay monies paid in advance of
         calls upon giving to the member not less than one month's notice in
         writing.

                         FORFEITURE, SURRENDER AND LIEN

28.      Notice requiring payment of calls on default

         If a member fails to pay the whole or any part of any call or
         instalment of a call on the day appointed for payment thereof, the
         Directors may at any time thereafter during such time as any part of
         such call or instalment remains unpaid, serve a notice on him
         requiring payment of so much of the call or instalment as is unpaid
         together with any accrued interest and any costs, charges and expenses
         incurred by the Company by reason of such non-payment.

29.      Content of notice

         The notice shall name a further day (not being less than seven days
         from the date of service of the notice) on or before which, and the
         place where, the payment required by the notice is to be made, and
         shall state that in the event of non-payment in accordance therewith
         the shares on which the call was made will be liable to be forfeited.

30.      Forfeiture for non-compliance

         If the requirements of any such notice as aforesaid are not complied
         with, any share in respect of which such notice has been given may at
         any time thereafter, before payment of all calls, interest, costs,
         charges and expenses due in respect thereof has been received by the
         Company, be forfeited by a resolution of the Directors to that effect.
         Such forfeiture shall include all dividends declared in respect of the
         forfeited share and not actually paid before forfeiture. The Directors
         may accept a surrender of any share liable to be forfeited hereunder.
         When a share has been forfeited, the Company shall give notice of the
         forfeiture to the person who was before forfeiture the holder of the
         share or the person entitled by transmission to the share. No
         forfeiture will be invalidated by any omission to give such notice. An
         entry of the fact and date of forfeiture shall be made in the Register
         of Members.

31.      Sale of forfeited shares

         A share so forfeited or surrendered shall become the property of the
         Company and may (subject to the provisions of the Statutes) be sold,
         re-allotted or otherwise disposed of either to the person who was
         before such forfeiture or surrender the holder thereof or entitled
         thereto or to any other person upon such terms and in such manner as
         the Directors shall think fit and at any time before a sale,
         re-allotment or disposition the forfeiture or surrender may be
         cancelled on such terms as the Directors think fit. The Directors may,
         if necessary, authorise some person to transfer a forfeited or
         surrendered share to any such other person as aforesaid.

32.      Extinction of rights

         A member whose shares have been forfeited or surrendered shall cease
         to be a member in respect of the forfeited or surrendered shares but
         shall notwithstanding the forfeiture or surrender remain liable to pay
         to the Company all moneys which at the date of forfeiture or surrender
         were presently payable by him to the Company in respect of the shares
         with interest thereon at 5 per cent per annum above the Base Rate or,
         in the absence of any Base

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                                      46

         Rate, 20 per cent per annum (or in either case such lower rate as the
         Directors may approve) from the date of forfeiture or surrender until
         payment but the Directors may waive payment of such moneys and/or
         interest either wholly or in part and the Directors may enforce
         payment without any allowance for the value of the shares at the time
         of forfeiture or surrender.

33.      Company to have lien on shares

         The Company shall have a first and paramount lien on every share (not
         being a fully paid share) for all moneys (whether presently payable or
         not) called or payable at a fixed time in respect of such share and
         the Company shall also, insofar as is permitted by the Statutes, have
         a first and paramount lien on all shares (other than fully paid
         shares) standing registered in the name of a single member for all the
         debts and liabilities of such member or his estate to the Company and
         that whether the same shall have been incurred before or after notice
         to the Company of any equitable or other interest of any person other
         than such member and whether the period for the payment or discharge
         of the same shall have actually arrived or not and notwithstanding
         that the same are joint debts or liabilities of such member or his
         estate and any other person, whether a member of the Company or not.
         The Company's lien (if any) on a share shall extend to all dividends
         or other moneys payable thereon or in respect thereof. The Directors
         may waive any lien which has arisen and may declare any share to be
         exempt wholly or partially from the provisions of this Article.

34.      Enforcement of lien by sale

         The Company may sell in such manner as the Directors think fit any
         share on which the Company has a lien, but no sale shall be made
         unless some sum in respect of which the lien exists is presently
         payable nor until the expiration of fourteen days after a notice in
         writing stating and demanding payment of the sum presently payable and
         giving notice of the intention to sell in default shall have been
         given to the registered holder for the time being of the share or the
         person entitled thereto by reason of death or bankruptcy.

35.      Application of proceeds

         The net proceeds of such sale after payment of the costs of such sale
         shall be applied in or towards payment or satisfaction of the debts or
         liabilities in respect whereof the lien exists so far as the same are
         presently payable and any residue shall (upon surrender to the Company
         for cancellation of the certificate (if any) for the shares sold and
         subject to a like lien for debts or liabilities not presently payable
         as existed upon the shares prior to the sale) be paid to the person
         entitled to the shares at the time of the sale. For giving effect to
         any such sale the Directors may authorise some person to transfer the
         shares sold to, or in accordance with the directions of, the
         purchaser.

36.      Giving effect to the sale

         A statutory declaration in writing that the declarant is a Director or
         the Secretary of the Company and that a share has been duly forfeited
         or surrendered or sold to satisfy a lien of the Company on a date
         stated in the declaration shall be conclusive evidence of the facts
         therein stated as against all persons claiming to be entitled to the
         share. Such declaration and the receipt of the Company for the
         consideration (if any) given for the share on the sale, re-allotment
         or disposal thereof together with the share certificate (if any)
         delivered to a purchaser or allottee thereof shall (subject to the
         execution of a transfer if the same be required) constitute a good
         title to the share and the person to whom the share is sold,
         re-allotted or disposed of shall be registered as the holder of the
         share and shall not be bound to

<PAGE>

                                      47

         see to the application of the purchase money (if any) nor shall his
         title to the share be affected by any irregularity or invalidity in
         the proceedings in reference to the forfeiture, surrender, sale,
         re-allotment or disposal of the share.

                               TRANSFER OF SHARES

37.      Transfers

         Subject to such of the restrictions of these presents as may be
         applicable:-

         (i)      any member may transfer all or any of his uncertificated
                  shares by means of a relevant system in such manner provided
                  for, and subject as provided in the Uncertificated Securities
                  Regulations and the rules of any relevant system, and
                  accordingly no provision of these present shall apply in
                  respect of an uncertificated share to the extent that it
                  requires or contemplates the effecting of a transfer by an
                  instrument in writing or the production of a certificate for
                  the share to be transferred; and

         (ii)     any member may transfer all or any of his certificated shares
                  by an instrument of transfer in any usual form or in any
                  other form which the Directors may approve.

38.      Execution of transfers

         The instrument of transfer of a certificated share shall be executed
         by or on behalf of the transferor and (except in the case of fully
         paid shares) by or on behalf of the transferee. The transferor shall
         be deemed to remain the holder of the shares concerned until the name
         of the transferee is entered in the Register of Members in respect
         thereof. All instruments of transfer which are registered may be
         retained by the Company.

39.      Suspension of registration

         Subject to the Statutes and the requirements of the London Stock
         Exchange, the registration of transfers may be suspended and the
         Register of Members closed at such times and for such period as the
         Directors may from time to time determine and either generally or in
         respect of any class of shares: Provided that such registration shall
         not be suspended and the Register of Members shall not be closed for
         more than thirty days in any year.

40.      Right to decline to register transfer of partly paid shares

         The Directors may in their absolute discretion and without assigning
         any reason therefor decline to register any transfer of shares (not
         being fully paid shares) provided that where any such share is listed
         on the London Stock Exchange, such discretion may not be exercised in
         such a way as to prevent dealings in the shares of that class from
         taking place on an open and proper basis. If the Directors refuse to
         register a transfer they shall within two months after the date on
         which the transfer was lodged with the Company or, in the case of
         uncertificated shares, within two months after the date on which the
         relevant Operator-instruction is received, send to the transferee
         notice of the refusal.

41.      Further rights to decline to register transfer

         (A)      The Directors may only decline to register a transfer of an
                  uncertificated share in the circumstances set out in the
                  Uncertificated Securities Regulations, and where, in the

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                                      48

                  case of a transfer to joint holders, the number of joint
                  holders to whom the uncertificated share is to be transferred
                  exceeds four.

         (B)      The Directors may decline to register any transfer of a
                  certificated share unless:-

                  (i)      the instrument of transfer is lodged at the Transfer
                           Office or at such other place as the Directors may
                           from time to time determine accompanied by the
                           certificate for the shares to which it relates and
                           such other evidence as the Directors may reasonably
                           require to show the right of the transferor to make
                           the transfer;

                  (ii)     the instrument of transfer is in respect of only one
                           class of share; and

                  (iii)    in the case of a transfer to joint holders, the
                           number of joint holders to whom the share is to be
                           transferred does not exceed four.

42.      No fee payable for registration of transfers

         No fee will be charged by the Company in respect of the registration
         of any instrument of transfer or confirmation or probate or letter of
         administration or certificate of marriage or death or power of
         attorney or other document relating to or affecting the title to any
         shares or otherwise for making any entry in the Register of Members
         affecting the title to any shares.

43.      Renunciations recognised

         Nothing in these presents shall preclude the Directors from
         recognising a renunciation of the allotment of any share by the
         allottee in favour of some other person. In this Article "allottee"
         includes provisional allottee and any person in whose favour an
         allotment has been previously renounced.

                        DESTRUCTION OF DOCUMENTS

44.      Destruction of documents

         The Company shall be entitled to destroy (a) all share certificates
         which have been cancelled at any time after the expiration of one year
         from the date of such cancellation, and (b) all notifications of
         change of name and address and all dividend mandates which have been
         cancelled or have ceased to have effect at any time after the
         expiration of two years from the date of the recording of such
         notification or, as the case may be, the date of such cancellation or
         cessation, and (c) all instruments of transfer of shares which have
         been registered at any time after the expiration of six years from the
         date of registration thereof, and (d) any other documents on the basis
         of which any entry in the Register of Members has been made at any
         time after the expiration of six years from the date of the first
         entry in the Register of Members in respect thereof, and it shall
         conclusively be presumed in favour of the Company that every entry in
         the Register of Members purporting to have been made on the basis of
         an instrument of transfer or other document so destroyed was duly and
         properly made and that every instrument of transfer so destroyed was a
         valid and effective instrument duly and properly registered and every
         share certificate so destroyed was a valid and effective document duly
         and properly cancelled and every other document hereinbefore mentioned
         so destroyed was a valid and effective document in accordance with the
         recorded particulars thereof in the books or records of the Company.

<PAGE>

                                      49

         Provided always that:-

         (i)      The provisions aforesaid shall apply only to the destruction
                  of a document in good faith and without express notice of any
                  claim (regardless of the parties thereto) to which the
                  document might be relevant;

         (ii)     Nothing herein contained shall be construed as imposing upon
                  the Company any liability in respect of the destruction of
                  any such document earlier than as aforesaid or in any other
                  circumstances which would not attach to the Company in the
                  absence of this Article;

         (iii)    References herein to the destruction of any document include
                  references to the disposal thereof in any manner.

                         TRANSMISSION OF SHARES

45.      Transmission

         In case of the death of a registered shareholder, the survivors or
         survivor where the deceased was a joint holder, and the executors or
         administrators of the deceased where he was a sole or only surviving
         holder, shall be the only persons recognised by the Company as having
         any title to his interest in the shares, but nothing in this Article
         shall release the estate of a deceased holder (whether sole or joint)
         from any liability in respect of any share solely or jointly held by
         him.

46(A).   Registration on death, bankruptcy, etc

         Subject to the provisions of the preceding Article any person becoming
         entitled to a share in consequence of the death or bankruptcy of a
         member or otherwise by operation of law may (subject as provided
         elsewhere in these presents) upon such evidence being produced as may
         from time to time properly be required by the Directors (and in the
         case of shares in uncertificated form, subject to the facilities and
         requirements of the relevant system) either (a) be registered as
         holder of the share in a representative capacity or (b) be registered
         himself as holder of the share or (c) transfer such share to some
         other person. The Directors shall, in any case, have the same right to
         decline or suspend registration as they would have had in the case of
         a transfer of the share by that member before his death, bankruptcy or
         other event giving rise to the transmission of his entitlement by
         operation of law, as the case may be.

  (B).   Election for registration

         The intimation to the Company, by or on behalf of any person becoming
         entitled to a share in accordance with paragraph (A) of this Article,
         of the evidence therein required shall be deemed to be a request by
         such person to be registered as holder of the share in a
         representative capacity unless such person shall otherwise elect as
         aftermentioned, provided always that such registration shall not
         impose any personal liability upon such person in respect of the
         share. If the person so becoming entitled shall elect to be registered
         himself, he shall deliver or send to the Company a notice in writing
         in a form acceptable to the Directors signed by him stating that he so
         elects and if he shall elect to have another person registered he
         shall testify his election by, in respect of shares in certificated
         form, executing to that person a transfer of the share or, in respect
         of shares in uncertificated form, making such other arrangements as
         are consistent with the Uncertificated Securities Regulations and the
         facilities and requirements of the relevant system for their transfer
         to such person. All the

<PAGE>

                                      50

         limitations, restrictions and provisions of these presents relating to
         the right to transfer and the registration of transfers of shares
         shall be applicable to any such notice or transfer as aforesaid as if
         the death or bankruptcy of the member, or other event giving rise to
         the transmission of his entitlement by operation of law, had not
         occurred and the notice or transfer were a transfer signed by that
         member.

47.      Rights of persons entitled by transmission

         Save as otherwise provided by or in accordance with these presents, a
         person becoming entitled to a registered share in consequence of the
         death or bankruptcy of a member or otherwise by operation of law (upon
         supplying to the Company such evidence as the Directors may reasonably
         require to show his title to the share) shall be entitled to the same
         dividends and other advantages as those to which he would be entitled
         if he were the registered holder of the share except that he shall not
         be entitled in respect thereof (except with the authority of the
         Directors) to exercise any right conferred by membership in relation
         to meetings of the Company until he shall have been registered as a
         member in respect of the share; Provided that the Directors may at any
         time give notice requiring such person to elect either to be
         registered or to transfer the share and, if the notice is not complied
         with within such period (being not less than 42 days) as the Directors
         may fix, the Company may thereafter:

         (a)      withhold payment of all dividends and other monies payable in
                  respect of the share (but any such action shall not
                  constitute the Company a trustee in respect of any such
                  dividends or other monies) and suspend any other advantages
                  to which such person would otherwise be entitled in respect
                  of the share until the requirements of the notice have been
                  complied with; and/or

         (b)      sell the share at the best price reasonably obtainable in
                  such manner as the Directors think fit and, subject to the
                  provisions of these presents generally, the provisions of
                  Article 48(B) shall apply to such sale.

                             UNTRACED SHAREHOLDERS

48(A).   Power to dispose of shares of untraced shareholders

         The Company shall be entitled to sell at the best price then
         reasonably obtainable the shares of a member or the shares to which a
         person is entitled by virtue of transmission on death or bankruptcy if
         and provided that:-

         (i)      during the period of twelve years ending on the date of the
                  publication of the advertisement referred to in sub-paragraph
                  (ii) below (or, if published on different dates, the later or
                  latest thereof) at least three cash dividends (whether
                  interim or final) have become payable on or in respect of the
                  shares in question but all dividends or other moneys payable
                  on or in respect of such shares during such period remain
                  unclaimed; and

         (ii)     the Company shall have inserted an advertisement in one daily
                  newspaper with a national circulation in the United Kingdom,
                  one Scottish daily newspaper and one newspaper circulating in
                  the area in which the last known address of the member or the
                  address at which service of notices upon such member or other
                  person may be effected in accordance with these presents is
                  located, giving notice of its intention to sell the said
                  shares; and

<PAGE>
                                       51

         (iii)    during the said period of twelve years and the period of
                  three months following the date of the publication of the
                  said advertisement (or, if published on different dates, the
                  later or latest thereof) the Company shall have received
                  indication neither of the whereabouts nor of the existence of
                  such member or person; and

         (iv)     if the shares in question are listed on the London Stock
                  Exchange, notice shall have been given to the London Stock
                  Exchange of the Company's intention to make such sale.

  (B).   Sale procedure and application of proceeds

         To give effect to any such sale the Company may appoint some person to
         execute as transferor an instrument of transfer of the said shares and
         such instrument of transfer shall be as effective as if it had been
         executed by the registered holder of, or person entitled by
         transmission to, such shares and the title of the transferee shall not
         be affected by any irregularity or invalidity in the proceedings
         relating thereto. The Directors may authorise the conversion of shares
         to be sold which are certificated shares into uncertificated shares,
         and vice versa (so far as is consistent with the Uncertificated
         Securities Regulations and the facilities and requirements of the
         relevant system) for their transfer to, or in accordance with the
         directions of, the transferee. The net proceeds of sale shall belong
         to the Company which shall be obliged to account to the former member
         or other person previously entitled as aforesaid for an amount equal
         to such proceeds and shall enter the name of such former member or
         other person in the books of the Company as a creditor for such
         amount. No trust shall be created in respect of the debt, no interest
         shall be payable in respect of the same and the Company shall not be
         required to account for any money earned on the net proceeds, which
         may be employed in the business of the Company or invested in such
         investments (other than shares of the Company or its holding company
         if any) as the Directors may from time to time think fit.

                                     STOCK

49.      Conversion into stock

         The Company may from time to time by Ordinary Resolution convert any
         fully paid shares into stock or reconvert any stock into fully paid
         shares of any denomination. If and whenever any shares of any class in
         the capital of the Company for the time being shall have been issued
         and be fully paid and at that time the shares of that class previously
         issued shall stand converted into stock such further shares upon being
         fully paid shall ipso facto be converted into stock transferable in
         the same units as the existing stock of that class.

50.      Transfer of stock

         The holders of stock may transfer the same or any part thereof in the
         same manner and subject to the same regulations as and subject to
         which the shares from which the stock arose might previously to
         conversion have been transferred (or as near thereto as circumstances
         admit) but no stock shall be transferable except in such units (not
         being greater than the nominal amount of the shares from which the
         stock arose) as the Directors may from time to time determine.

51.      Rights of stockholders

         The holders of stock shall according to the amount of the stock held
         by them have the same rights, privileges and advantages as regards
         dividend, return of capital, voting and other

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                                      52

         matters as if they held the shares from which the stock arose; but no
         such right, privilege or advantage (except as regards participation in
         the profits or assets of the Company) shall be conferred by an amount
         of stock which would not, if existing in shares, have conferred such
         right, privilege or advantage.

                            SHARE WARRANTS TO BEARER

52(A).   Power to issue share warrants to bearer

         Subject to the provisions of the 1985 Act, the Company may issue share
         warrants to bearer (each a "Warrant") and the Directors may
         accordingly, with respect to any share which is fully paid up and with
         respect to any one or more such shares as may be specified from time
         to time in a Warrant (in any case in which they shall in their
         discretion think fit so to do) issue a Warrant stating that the bearer
         of the Warrant is entitled to the shares therein specified, and may in
         any case in which a Warrant is so issued provide by coupons or
         otherwise for payment of the future dividends or other moneys in
         respect of the shares included in such Warrant.

  (B).   Bearer deemed to be a member

         Subject to the provisions of these presents and of the 1985 Act the
         bearer of a Warrant shall be deemed to be a member of the Company, and
         shall be entitled to the same privileges and advantages as if his name
         had been included in the Register of Members as the holder of the
         shares specified in such Warrant.

  (C).   Meetings

         No person shall, as the bearer of a Warrant, be entitled (a) to sign a
         requisition for calling a meeting, or to give notice of intention to
         submit a resolution to a meeting, or (b) to attend or vote by himself
         or by his proxy or exercise any privilege as a member at a meeting,
         unless he shall, in case (a) before or at the time of lodging such
         requisition, or giving such notice of intention as aforesaid, or in
         case (b) four days at least before the day fixed for the meeting, have
         deposited at the Office or a bank to be named or approved by the
         Company for that purpose the Warrant in respect of which he claims to
         act, attend or vote as aforesaid (the place at which the Warrant is so
         deposited being in this Article called "the depository"), and unless
         the Warrant shall remain so deposited until after the meeting and any
         adjournment thereof shall have been held. The names of more than one
         person as joint holders of a Warrant shall not be received.

  (D).   Certificate to attend meetings

         To any person so depositing a Warrant there shall be delivered a
         certificate stating his name and address, and describing the shares
         included in the Warrant so deposited, and bearing the date of issue of
         the certificate, and such certificate shall entitle him or his proxy,
         duly appointed as hereinafter provided, to attend and vote at any
         General Meeting held within three months from the date of the
         certificate and prior to delivery up thereof pursuant to paragraph (E)
         of this Article in the same way as if he were the registered holder of
         the shares specified in the certificate.

  (E).   Return of warrant after meeting

         Upon delivery up of the certificate at the depository, the bearer of
         the certificate shall be entitled to receive the Warrant in respect of
         which the certificate was given.

<PAGE>
                                      53

  (F).   Exercise of other rights

         The holder of a Warrant shall not, save as aforesaid, be entitled to
         exercise any right as a member unless (if called upon by any Director
         or the Secretary so to do) he produce his Warrant or the certificate
         of its deposit, and state his name and address.

  (G).   Issue of new warrants

         The Directors may issue new Warrants or coupons in such manner,
         subject to such conditions and in respect of such number of shares as
         they think fit from time to time and the Directors shall be empowered
         at any time and from time to time to amend any Warrant then in issue
         so that by virtue of such amendments the number of shares which such
         Warrant from time to time represents is accurately shown therein
         provided that no new Warrant or coupon shall be issued in place of one
         lost unless the Directors are satisfied beyond reasonable doubt that
         the original has been destroyed.

  (H).   Transfer of shares included in warrant

         The shares included in any Warrant shall be transferred by the
         delivery of the Warrant without any written transfer and without
         registration, and to shares so included the provisions hereinbefore
         contained with reference to the transfer of shares shall not apply.

  (I).   Coupon for dividend

         The delivery to the Company or to a duly authorised agent of the
         Company of a coupon shall be a good discharge to the Company for the
         dividend represented thereby.

  (J).   Surrender of warrant and registration of holder

         Upon surrender of his Warrant to the Company for cancellation,
         together with all coupons for the future dividends on the shares
         comprised in the Warrant and an application in writing signed by him
         in such form and authenticated in such manner as the Directors shall
         require requesting to be registered as a member in respect of the
         shares included in the Warrant and stating in such application his
         name, address and occupation, the bearer of a Warrant shall be
         entitled to have his name entered as a member in respect of the shares
         included in the Warrant, but the Company shall in no case be
         responsible for any loss or damage incurred by any person by reason of
         the Company entering in its Register of Members, upon surrender of a
         Warrant, the name of any person not the true and lawful owner of the
         Warrant surrendered.

  (K).   Variation of terms

         The Directors may from time to time as they think fit make and vary
         the terms and conditions upon which Warrants may be issued and any
         matters incidental thereto. Subject to these presents the bearer of a
         Warrant shall be subject to the conditions for the time being in force
         relating to Warrants whether made before or after the issue of such
         Warrant.

                                GENERAL MEETINGS

53.      Types of general meetings

         An Annual General Meeting shall be held once in every year, at such
         time (within a period of not more than fifteen months after the
         holding of the last preceding Annual General Meeting)

<PAGE>

                                      54

         and place as may be determined by the Directors. All other General
         Meetings shall be called Extraordinary General Meetings.

54.      Extraordinary general meetings

         The Directors may whenever they think fit, and shall on requisition in
         accordance with the Statutes, proceed to convene an Extraordinary
         General Meeting.

55.      Application to class meeting where no variation of rights involved

         The provisions of these presents relating to General Meetings shall
         apply, with necessary modifications, to any separate meeting of the
         holders of any class of shares of the Company held otherwise than in
         connection with the variation or abrogation of the rights attached to
         shares of the class. All matters to be resolved at any such separate
         meeting shall, unless otherwise required by these presents or by
         statute, be resolved by Extraordinary Resolution, meaning for the
         purposes of this Article a resolution duly passed by a majority
         consisting of not less than three-quarters of the votes given upon the
         resolution at such meeting of which notice specifying the intention to
         propose the resolution as an Extraordinary Resolution shall have been
         duly given.

                           NOTICE OF GENERAL MEETINGS

56.      Period of notice

         An Annual General Meeting and any General Meeting at which it is
         proposed to pass a Special Resolution or (save as provided by the
         Statutes) a resolution of which special notice has been given to the
         Company, shall be called by twenty one days' notice in writing at the
         least, and any other General Meeting by fourteen days' notice in
         writing at the least (exclusive in either case of the day on which it
         is served or deemed to be served and of the day for which it is given)
         given in manner hereinafter mentioned to the Auditors and to all
         members other than such as are not under the provisions of these
         presents entitled to receive such notices from the Company: Provided
         that a General Meeting notwithstanding that it has been called by a
         shorter notice than that specified above shall be deemed to have been
         duly called if it is so agreed:-

         (A)      in the case of an Annual General Meeting, by all the members
                  entitled to attend and vote thereat; and

         (B)      in the case of an Extraordinary General Meeting by a majority
                  in number of the members having a right to attend and vote
                  thereat being a majority together holding not less than 95
                  per cent in nominal value of the shares giving that right.

         Provided also that the accidental omission to give any notice of a
         meeting, or the accidental omission to send any document relating to
         any meeting, or the non-receipt of any such notice or document by any
         person entitled thereto shall not invalidate the proceedings at any
         General Meeting.

         A notice of General Meeting may specify a time, being not more than 48
         hours before the time fixed for the meeting, by which a person must be
         entered on the Register of Members in order to have the right to
         attend or vote at the meeting. Changes made to the entries on the
         Register of Members after the time so specified shall be disregarded
         in determining the rights of any person to attend or vote at the
         meeting.

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                                      55

         For the purposes of this Article (and without prejudice to the other
         provisions of these presents), the cases in which notice in writing is
         to be taken as given to a member include any case in which the notice
         of meeting is sent, or treated as given, using electronic
         communications in accordance with Section 369(4A) and (4B) of the 1985
         Act, and the provisions of subsection (4D) of that Section shall apply
         in respect of the publication of such notice on a web site.

57.      Contents of notice

         (A)      Every notice calling a General Meeting shall specify the
                  place and the day and hour of the meeting, and there shall
                  appear with reasonable prominence in every such notice a
                  statement that a member entitled to attend and vote is
                  entitled to appoint a proxy to attend and, on a poll, vote
                  instead of him and that a proxy need not be a member of the
                  Company.

         (B)      In the case of an Annual General Meeting, the notice shall
                  also specify the meeting as such.

         (C)      In cases where forms of appointment of proxy are sent out
                  with notices, the accidental omission to send such forms of
                  appointment of proxy to, or the non-receipt of such forms of
                  appointment of proxy by, any person entitled to receive
                  notice shall not invalidate the proceedings at any General
                  Meeting.

         (D)      In the case of any General Meeting at which business other
                  than routine business is to be transacted, the notice shall
                  specify the general nature of such business; and if any
                  resolution is to be proposed as an Extraordinary Resolution
                  or as a Special Resolution, the notice shall contain a
                  statement to that effect.

58.      Routine business

         Routine business shall mean and include only business transacted at an
         Annual General Meeting of the following classes, that is to say:-

         (A)      sanctioning or declaring dividends;

         (B)      considering and adopting the accounts, the reports of the
                  Directors and Auditors and other documents required to be
                  annexed to the accounts;

         (C)      re-appointing the retiring Auditors (unless they were last
                  appointed otherwise than by the Company in General Meeting);

         (D)      fixing the remuneration of the Auditors or determining the
                  manner in which such remuneration is to be fixed;

         (E)      appointing or re-appointing Directors to fill vacancies
                  arising at the meeting on retirement by rotation or
                  otherwise.

59.      Notice of resolutions

         The Directors shall on the requisition of members in accordance with
         the provisions of the Statutes, but subject as therein provided:-

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                                      56

         (A)      Give to the members entitled to receive notice of the next
                  Annual General Meeting, notice of any resolution which may
                  properly be moved and is intended to be moved at that
                  meeting;

         (B)      Circulate to the members entitled to have notice of any
                  General Meeting, any statement of not more than one thousand
                  words with respect to the matter referred to in any proposed
                  resolution or the business to be dealt with at that meeting.

60.      Postponement of general meetings

         If the Directors, in their absolute discretion, consider that it is
         impractical or unreasonable for any reason to hold a General Meeting
         on the date or at the time or place specified in the notice calling
         the General Meeting, they may postpone the General Meeting to another
         date, time and place. When a meeting is so postponed, notice of the
         date, time and place of the postponed meeting shall be placed in at
         least one leading Scottish and one leading London daily newspaper.
         Notice of the business to be transacted at such postponed meeting
         shall not be required.

                        PROCEEDINGS AT GENERAL MEETINGS

61.      Overflow arrangements for general meetings

         (A)      The Directors may, notwithstanding that the notice of any
                  General Meeting may specify the place of the meeting (the
                  "principal place"), at which the chairman of the meeting
                  shall preside, make arrangements for simultaneous attendance
                  and participation at other places by members and proxies
                  entitled to attend the General Meeting but unable to attend
                  and participate at the principal place.

         (B)      Such arrangements for simultaneous attendance at the meeting
                  may include arrangements regarding the level of attendance at
                  the other places provided that they shall operate so that any
                  members and proxies excluded from attendance at the principal
                  place are able to attend at one or more of the other places.
                  For the purposes of all other provisions of these presents
                  any such meeting shall be treated as being held and taking
                  place at the principal place.

         (C)      The Directors may, for the purpose of facilitating the
                  organisation and administration of any General Meeting to
                  which such arrangements apply, from time to time make
                  arrangements, whether involving the issue of tickets (on a
                  basis intended to afford all members and proxies entitled to
                  attend the meeting an equal opportunity of being admitted to
                  the principal place) or the imposition of some random means
                  of selection or otherwise as they shall in their absolute
                  discretion consider to be appropriate, and may from time to
                  time vary any such arrangements or make new arrangements in
                  their place and the entitlement of any member or proxy to
                  attend a General Meeting at the principal place shall be
                  subject to the arrangements as may be for the time being in
                  force whether stated in the notice of meeting to apply to
                  that meeting or notified to the members concerned subsequent
                  to the provision of the notice of the meeting.

62.      Quorum

         No business other than the appointment of a chairman of the meeting
         shall be transacted at any General Meeting unless a quorum is present
         at the time when the meeting proceeds to

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                                      57

         business. Five members present in person and entitled to vote at such
         meeting shall be a quorum for all purposes.

63.      If quorum not present

         If within fifteen minutes from the time appointed for a General
         Meeting (or such longer time not exceeding one hour as the chairman of
         the meeting may determine to wait) a quorum is not present, the
         meeting, if convened on the requisition of members, shall be
         dissolved. In any other case it shall stand adjourned to such other
         day and at such other time and place as may have been specified for
         the purpose in the notice convening the meeting or (if not so
         specified) as the chairman of the meeting may determine; in the latter
         case, not less than seven days' notice of the adjourned meeting shall
         be given in like manner as in the case of the original meeting. If at
         such adjourned meeting a quorum is not present within fifteen minutes
         from the time appointed for holding the meeting, the members present
         in person or by proxy and entitled to vote at such meeting shall be a
         quorum.

64.      Security arrangements

         The Directors may direct that persons wishing to attend any General
         Meeting should submit to such searches or other security arrangements
         or restrictions as the Directors shall consider appropriate in the
         circumstances and shall be entitled in their absolute discretion to,
         or to authorise one or more persons who shall include a Director or
         the Secretary or the chairman of the meeting to, refuse entry to, or
         to eject from, such General Meeting any person who fails to submit to
         such searches or to otherwise comply with such security arrangements
         or restrictions.

65.      Chairman

         The Chairman of the Directors, failing whom one of any Deputy Chairmen
         failing whom one of any Vice-Chairmen (to be chosen, if more than one
         are present and in default of agreement amongst themselves, by lot)
         shall preside as chairman at a General Meeting. If there be no such
         Chairman or Deputy Chairman or Vice-Chairman, or if at any meeting
         none of them be present within fifteen minutes after the time
         appointed for holding the meeting and willing to act, the Directors
         present shall choose one of their number (or, if no Director be
         present or if all the Directors present decline to take the chair, the
         members present and entitled to vote at such meeting shall choose one
         of their number) to be chairman of the meeting. The chairman of the
         meeting who presides pursuant to this Article may, at any time during
         a General Meeting of the Company, nominate any Director of the Company
         to be the chairman of the meeting for the remainder of or for any part
         of the meeting.

66.      Orderly Conduct

         The chairman shall take such action as he thinks fit to promote the
         orderly conduct of the business of the meeting as laid down in the
         notice of the meeting and the chairman's decision, taken in good
         faith, on matters of procedure or arising incidentally from the
         business of the meeting shall be final as shall be his determination
         as to whether any matter is of such a nature.

67.      Entitlement to attend and speak

         Each Director shall be entitled to attend and speak at any General
         Meeting of the Company and at any separate General Meeting of the
         holders of any class of shares in the Company. The chairman may invite
         any person to attend and speak at any General Meeting of the

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                                      58

         company whom the chairman considers to be equipped by knowledge or
         experience of the Company's business to assist in the deliberations of
         the meeting.

68.      Adjournments

         The chairman of the meeting may with the consent of any General
         Meeting at which a quorum is present (and shall if so directed by the
         meeting) adjourn the meeting from time to time (or sine die) and from
         place to place. In addition, the chairman of the meeting may at any
         time without the consent of the meeting adjourn the meeting (whether
         or not it has commenced or a quorum is present) to another time and/or
         place where it appears to him that (a) the members wishing to attend
         cannot be conveniently accommodated in the place appointed for the
         meeting, (b) the conduct of persons present prevents or is likely to
         prevent the orderly continuation of business or (c) adjournment is
         otherwise necessary so that the business of the meeting may be
         properly conducted. Nothing in this Article shall limit any other
         power vested in the chairman to adjourn the meeting. No business shall
         be transacted at any adjourned meeting except business which might
         lawfully have been transacted at the meeting from which the
         adjournment took place.

         The chairman may adjourn the meeting notwithstanding that by reason of
         such adjournment some members may be unable to be present at the
         adjourned meeting. Any such member may nevertheless (without prejudice
         to the other provisions of these presents) execute a form of proxy for
         the adjourned meeting which, if delivered by him to the chairman or
         the Secretary of the Company, shall be valid even though it is given
         at less notice than would otherwise be required by these presents.

69.      Time and place of adjourned meetings

         When a meeting is adjourned sine die, the time and place for the
         adjourned meeting shall be fixed by the Directors. When a meeting is
         adjourned for thirty days or more or sine die not less than seven
         days' notice of the adjourned meeting shall be given in like manner as
         in the case of an original meeting. Save as aforesaid and save as
         expressly provided in Article 63, it shall not be necessary to give
         any notice of an adjournment or of the business to be transacted at an
         adjourned meeting.

70.      Amendments to resolutions

         If an amendment shall be proposed to any resolution under
         consideration but shall in good faith be ruled out of order by the
         chairman of the meeting the proceedings on the substantive resolution
         shall not be invalidated by any error in such ruling. In the case of a
         resolution duly proposed as a Special or Extraordinary Resolution no
         amendment thereto (other than a mere clerical amendment to correct a
         patent error) may in any event be considered or voted upon. In the
         case of a resolution duly proposed as an Ordinary Resolution no
         amendment thereto (other than an amendment to correct a patent error)
         may be considered or voted upon unless either at least forty-eight
         hours prior to the time appointed for holding the meeting or adjourned
         meeting at which such Ordinary Resolution is to be proposed notice in
         writing of the terms of the amendment and intention to move the same
         has been lodged at the Office or the chairman decides in his absolute
         discretion that it may be considered or voted upon.

71.      Method of voting

         At any General Meeting a resolution put to the vote of the meeting
         shall be decided on a show of hands unless a poll is (before or on the
         declaration of the result of the show of hands

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                                      59

         or on the withdrawal of any other demand for a poll as hereinafter
         mentioned) demanded by either:-

         (A)      the chairman of the meeting; or

         (B)      not less than three members present in person or by proxy and
                  entitled to vote: or

         (C)      the depository for the time being under any deposit agreement
                  between the Company and such depository providing for the
                  deposit of any New Preference Shares, provided such
                  depository is present in person and entitled to vote; or

         (D)      a member or members present in person or by proxy and
                  representing not less than one tenth of the total voting
                  rights of all the members having the right to vote at the
                  meeting; or

         (E)      a member or members present in person or by proxy and holding
                  shares in the Company conferring a right to vote at the
                  meeting being shares on which an aggregate sum has been paid
                  up equal to not less than one tenth of the total sum paid up
                  on all the shares conferring that right.

72.      Declaration of result and conduct of poll

         A demand for a poll may be withdrawn only with the approval of the
         chairman and if it is so withdrawn:-

         (a)      before the result of a show of hands is declared, the meeting
                  shall continue as if the demand had not been made; or

         (b)      after the result of a show of hands is declared, the demand
                  shall not be taken to have invalidated the result,

         but if a demand is withdrawn, the chairman of the meeting or other
         member or members so entitled may himself or themselves demand a poll.
         Unless a poll be duly demanded (and the demand be not withdrawn), a
         declaration by the chairman of the meeting that a resolution has been
         carried, or carried unanimously, or by a particular majority, or lost,
         and an entry to that effect in the minute book, shall be conclusive
         evidence of that fact without proof of the number or proportion of the
         votes recorded for or against such resolution. If a poll is duly
         demanded (and the demand be not withdrawn), it shall be taken in such
         manner (including the use of ballot or voting papers or tickets) as
         the chairman of the meeting may direct, and the result of a poll shall
         be deemed to be the resolution of the meeting at which the poll was
         demanded. The chairman of the meeting may (and if so directed by the
         meeting shall) appoint scrutineers and may adjourn the meeting to some
         place and time fixed by him for the purpose of declaring the result of
         the poll.

73.      Chairman's casting vote

         In the case of an equality of votes, whether on a show of hands or on
         a poll, the chairman of the meeting at which the show of hands takes
         place or at which the poll is demanded shall be entitled to a casting
         vote in addition to the votes to which he may be entitled as a member
         or as a representative or proxy of a member.

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                                      60

74.      When poll to be taken

         A poll demanded on the election of a chairman or on a question of
         adjournment shall be taken forthwith. A poll demanded on any other
         question shall be taken either immediately or at such subsequent time
         (being not more than thirty days after the date of the meeting at
         which the poll was demanded) and place as the chairman may direct. No
         notice need be given of a poll not taken immediately.

75.      Continuance of meeting

         The demand for a poll shall not prevent the continuance of a meeting
         for the transaction of any business other than the question on which
         the poll has been demanded.

                            VOTES OF MEMBERS

76.      Right to vote

         Subject to any special rights or restrictions as to voting attached by
         or in accordance with these presents to any class of shares and to the
         provisions of these presents, on a show of hands every member who is
         present in person shall have one vote and on a poll every member who
         is present in person or by proxy shall have one vote for each 25p in
         nominal amount of the shares held by him.

77.      Votes of joint holders

         In the case of joint holders of a share the vote of the senior who
         tenders a vote, whether in person or by proxy, shall be accepted to
         the exclusion of the votes of the other joint holders and for this
         purpose seniority shall be determined by the order in which the names
         stand in the Register of Members in respect of the joint holding.

78.      Member under incapacity

         A member who is a patient for any purpose of any statute relating to
         mental health or in respect of whom an order has been made by any
         court having jurisdiction for the protection or management of the
         affairs of persons incapable of managing their own affairs, may vote,
         whether on a show of hands or on a poll, by his committee, receiver,
         curator bonis or other person in the nature of a committee, receiver
         or curator bonis appointed by such court, and any such committee,
         receiver, curator bonis or other person may, on a poll, vote by proxy,
         provided that such evidence as the Directors may require of the
         authority of the person claiming to vote shall have been deposited at
         the Transfer Office, or at such other place (if any) as is specified
         for the delivery of instruments of proxy in accordance with these
         presents, not less than forty eight hours before the time appointed
         for holding the meeting or adjourned meeting or (in the case of a poll
         taken otherwise than at, or on the same day as, the meeting or
         adjourned meeting) for the taking of the poll at which it is desired
         to vote.

79.      Calls in arrears

         No member shall, unless the Directors otherwise determine, be entitled
         in respect of shares held by him to vote at a General Meeting either
         personally or by proxy or to exercise any other right conferred by
         membership in relation to meetings of the Company if any call or other
         sum presently payable by him to the Company in respect of shares in
         the Company remains unpaid.

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                                      61

80.      Objection to voting

         If (i) any objection shall be raised to the qualification of any
         person to vote or to the admissibility of any vote or (ii) any votes
         have been counted which ought not to have been counted or which might
         have been rejected or (iii) any votes are not counted which ought to
         have been counted, the objection or error shall not vitiate the
         decision of the meeting or adjourned meeting on any resolution unless
         the same is raised or pointed out at the meeting or, as the case may
         be, the adjourned meeting at which the vote objected to is given or
         tendered or at which the error occurs. Any objection or error raised
         or pointed out in due time shall be referred to the chairman of the
         meeting and shall only vitiate the decision of the meeting on any
         resolution if the chairman decides that the same may have affected the
         decision of the meeting. The decision of the chairman on such matters
         shall be final and conclusive.

81.      Votes on a poll

         On a poll votes may be given either personally or by proxy and a
         person entitled to more than one vote need not use all his votes or
         cast all the votes he uses in the same way.

82.      Proxy need not be a member

         A proxy need not be a member of the Company.

83.      Form and execution of proxies

         An appointment of a proxy shall be in any usual or common form or in
         any other form which the Directors may prescribe or accept and, in the
         case of an instrument in writing:-

         (a)      in the case of an individual shall be signed by the appointor
                  or by his attorney; and

         (b)      in the case of a corporation shall be either given under its
                  common seal or executed in any manner prescribed by the
                  Statutes to have the same effect as if given under the common
                  seal of the corporation or signed on its behalf by an
                  attorney or duly authorised officer of the corporation.

         The Directors may, but shall not be bound to, require evidence of the
         authority of any such attorney or officer. The signature on such
         instrument need not be witnessed.

         An appointment of a proxy may be contained in an electronic
         communication in accordance with these presents, authenticated or
         executed in such a manner as is specified by the Directors.

84.      Delivery of forms of proxy

         (A)      An appointment of a proxy (together with any evidence of
                  authority required by the directors pursuant to the
                  immediately preceding Article) must:-

                  (a)      in the case of an instrument in writing, be
                           delivered to such place or one of such places (if
                           any) as may be specified for that purpose in, or by
                           way of note to, or in any documents accompanying,
                           the notice convening the meeting or any notice of
                           any adjournment (or, if no place is so specified, to
                           the Transfer Office); and

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                                      62

                  (b)      in the case of an appointment contained in an
                           electronic communication, be received at such
                           address as may have been specified for that purpose
                           in (i) the notice convening the meeting or notice of
                           any adjournment, (ii) any instrument of proxy sent
                           out by the Company in relation to the meeting or
                           adjourned meeting, or (iii) any invitation contained
                           in an electronic communication to appoint a proxy
                           issued by the Company in relation to the meeting or
                           adjourned meeting,

                  in each case not later than forty-eight hours before the time
                  appointed for the holding of the meeting or adjourned meeting
                  or (in the case of a poll taken otherwise than at, or on the
                  same day as, the meeting or adjourned meeting) for the taking
                  of the poll at which it is to be used, and, subject to
                  paragraph (B) of this Article, in default shall not be
                  treated as valid; provided that an appointment of a proxy
                  relating to more than one meeting (including any adjournment
                  thereof) having once been so delivered or received for the
                  purposes of any meeting shall not require again to be
                  delivered or received in relation to any subsequent meetings
                  to which it relates. No appointment of a proxy shall be valid
                  after the expiration of twelve months from the date stated in
                  it as the date of its execution or, in the case of an
                  appointment contained in an electronic communication, the
                  date it was sent.

         (B)      A Director, the Secretary or some person authorised for the
                  purpose by the Secretary may, in the case of an instrument
                  appointing a proxy in writing:

                  (a)      accept a photocopy, or a copy delivered by facsimile
                           transmission, of the instrument appointing the proxy
                           (and of the power of attorney (if any) under which
                           it is signed, or a copy of such authority certified
                           notarially or in some other way approved by the
                           Directors); and/or

                  (b)      accept an instrument appointing a proxy which has
                           not been properly executed or is not supported by
                           the relevant documents as required by paragraph (A)
                           of this Article

                  as a valid instrument of proxy where such person determines,
                  in good faith, that the documents deposited indicate in
                  sufficient detail the member's intention to appoint a proxy.

85.      Differing proxies

         When two or more valid but differing appointments of proxy are
         delivered in respect of the same share for use at the same meeting,
         the one which is last delivered or received (regardless of its date or
         of the date of its execution) shall be treated as replacing and
         revoking the others as regards that share and if the Company is unable
         to determine which was last delivered or received none of them shall
         be treated as valid in respect of that share.

86.      Issue of forms of proxy

         Subject to the provisions of the Statutes, the Directors may, if they
         think fit, at the expense of the Company, issue forms of proxy for use
         by the members with or without prepaid postage and with or without
         inserting therein the names of any of the Directors or any other
         person as proxies.

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                                      63

87.      Rights conferred by form of proxy

         An appointment of a proxy shall be deemed to include the right to
         demand or join in demanding a poll but shall not confer any further
         right to speak at the meeting, except with the permission of the
         chairman of the meeting, and shall be deemed to confer authority to
         vote on any resolution or amendment of a resolution put to the meeting
         for which it is given (including, for the avoidance of doubt, any
         resolution which properly comes before the meeting where notice of the
         same was not included in the notice of the meeting nor specific
         reference thereto made in the appointment of a proxy) as the proxy
         thinks fit. An appointment of a proxy shall, unless the contrary is
         stated thereon, be valid as well for any adjournment of the meeting as
         for the meeting to which it relates.

88.      Intervening events

         A vote cast by proxy shall not be invalidated by the previous death or
         insanity of the principal or by the revocation of the appointment of
         proxy or of the authority under which the appointment was executed
         provided that no intimation of such death, insanity or revocation
         shall have been received by the Company at the Transfer Office or such
         other place (if any) as is specified for the delivery of instruments
         of proxy or, in the case of an appointment of proxy contained in an
         electronic communication, at the address at which such appointment was
         duly received, in each case in accordance with these presents prior to
         one hour before the commencement of the meeting or adjourned meeting
         or (in the case of a poll taken otherwise than at, or on the same day
         as the meeting or adjourned meeting) the time appointed for the taking
         of the poll at which the vote is cast.

                 RESTRICTIONS ON VOTING AND OTHER SHARE RIGHTS

89(A).   Disenfranchisement

         Without prejudice to any other rights or remedies of the Company
         where, in respect of any shares in the Company ("the default shares",
         which expression shall include any further shares which are allotted
         or issued in respect of such shares), any holder of such shares or
         other person appearing to be interested in such shares fails to comply
         with any notice (in this Article called a "statutory notice") given to
         that holder or other person by the Company pursuant to Part VI of the
         1985 Act or, in purported compliance with such a statutory notice,
         makes a statement which is false in a material particular, then not
         earlier than fourteen days after the service of such statutory notice,
         the Directors may serve upon such holder a notice (in this Article
         called a "disenfranchisement notice") stating or to the effect that
         the default shares and, if the Directors so determine, any other
         shares held by the holder shall from the service of the
         disenfranchisement notice confer on him, and on any transferee to
         which any of such shares are transferred other than pursuant to an
         approved transfer (as defined in paragraph (D) of this Article) or
         pursuant to paragraph (B)(i) of this Article, no right to attend or
         vote, in person or by proxy, either at any General Meeting of the
         Company or at any separate General Meeting of the holders of the
         shares of the relevant class or to exercise any other right conferred
         by membership in relation to any such meeting.

  (B).   Other restrictions

         Where the default shares are Ordinary Shares representing at least
         0.25 per cent in nominal value of the issued ordinary share capital as
         at the date of service of the disenfranchisement notice, the
         disenfranchisement notice may also at the discretion of the Directors
         (subject in the case of (i) below, to the requirements of the
         Uncertificated Securities Regulations) direct that:-

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                                      64

         (i)      no transfer of any of the shares held by such holder shall be
                  registered unless (a) such holder is not himself in default
                  as regards supplying the information requested and the
                  transfer is part only of such holder's holding and, when
                  presented for registration, is accompanied by a certificate
                  by such holder in a form satisfactory to the Directors to the
                  effect that, after due and careful enquiry, such holder is
                  satisfied that no person in default as regards supplying such
                  information is interested in any of the shares the subject of
                  the transfer or (b) such transfer is an approved transfer;
                  and/or

         (ii)     any dividend or other moneys which would otherwise be payable
                  on the default shares shall be retained by the Company in
                  whole or in part without any liability to pay interest
                  thereon when such moneys are finally paid to such holder and
                  the holder shall not be entitled to elect pursuant to Article
                  143 to receive shares instead of that dividend.

  (C).   Cessation of disenfranchisement

         Any disenfranchisement notice shall have effect in relation to default
         shares in accordance with its terms but shall cease to have effect:-

         (i)      on the expiry of seven days after the Company has received in
                  writing all information required by it in respect of those
                  default shares pursuant to every statutory notice served on
                  the holder of such shares and each other person appearing to
                  be interested in such shares; or

         (ii)     when the Company receives notice that an approved transfer to
                  a third party has occurred; or

         (iii)    if and to the extent that the Directors so determine.

  (D).   Person interested in shares; approved transfers

         For the purposes of this Article 85:-

         (a)      a person shall be treated as appearing to be interested in
                  any shares if the holder of such shares has given to the
                  Company a notification under Section 212 of the 1985 Act and
                  either (a) the holder has named such person as being so
                  interested, or (b) (after taking into account the said
                  notification and any other relevant Section 212 notification)
                  the Company knows or has reasonable cause to believe that the
                  person in question is or may be interested in the shares; and

         (b)      A transfer of Ordinary Shares is an approved transfer if, but
                  only if:-

                  (i)      it is a transfer to an offeror by way of or in
                           pursuance of acceptance of a takeover offer (as
                           defined for the purposes of Part XIIIA of the 1985
                           Act) for the Company; or

                  (ii)     the Directors are satisfied that the transfer is
                           made pursuant to a bona fide sale of the whole of
                           the beneficial ownership of the shares to a person
                           unconnected with the holder or with any other person
                           appearing to be interested in such shares (including
                           any such sale made through a recognised investment
                           exchange or any stock exchange outside the United
                           Kingdom on which the Company's ordinary shares (or
                           rights in respect of those shares)

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                                      65

               are normally traded). For the purposes of this sub-paragraph
               (ii) any associate (as defined in Section 435 of the Insolvency
               Act 1986) shall be included amongst the persons who are
               connected with the holder or any person appearing to be
               interested in such shares.

                     CORPORATIONS ACTING BY REPRESENTATIVES

90.      Authority of representatives

         Any corporation which is a member of the Company may by resolution of
         its directors or other governing body authorise such person as it
         thinks fit to act as its representative at any meeting of the Company
         or of any class of members of the Company. The person so authorised
         shall be entitled to exercise the same powers on behalf of such
         corporation as the corporation could exercise if it were an individual
         member of the Company and such corporation shall for the purposes of
         these presents be deemed to be present in person at any such meeting
         if a person so authorised is present thereat.

                                   DIRECTORS

91.      Limit on number of directors

         Subject as hereinafter provided the Directors shall not be more than
         twenty-five in number. The Company may by Ordinary Resolution from
         time to time vary the maximum number of Directors.

92.      Directors need not be members

         A Director shall not be required to hold any shares of the Company by
         way of qualification. A Director who is not a member of the Company
         shall nevertheless be entitled to receive notice of and attend and
         speak at General Meetings and all separate meetings of the holders of
         any class of shares of the Company.

93.      Directors' fees

         Each of the Directors may be paid a fee at such rate as may from time
         to time be determined by the Directors provided that, (a) the
         aggregate of all fees so paid to Directors shall not exceed
         (pound)250,000 per annum or such higher amount as may from time to
         time be decided by ordinary resolution of the Company, (b) the
         Directors shall have no authority or power under this Article to
         determine the fees payable in respect of any period commencing prior
         to 15 January 1999, and (c) unless and until the Directors exercise
         their authority and power under this Article to determine the fees
         payable to a Director, such Director shall be entitled to ordinary
         remuneration at the rate last determined pursuant to Article 89 of the
         Articles of Association of the Company in force immediately prior to
         adoption of these presents. Such fees shall accrue from day to day and
         in the case of any Director shall, unless and to the extent that the
         Directors otherwise determine, be independent of any remuneration to
         which such Director may be entitled under any other provision of these
         articles or in respect of any other office or appointment under the
         Company or any other company in which the Company may be interested.

94.      Expenses

         The Directors may repay to any Director all such reasonable expenses
         as he may incur in attending and returning from meetings of the
         Directors or of any committee or General

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                                      66

         Meetings or otherwise in or about the business of the Company or the
         discharge of his duties as a Director, including (without limitation)
         any professional fees incurred by him (with the approval of the
         Directors or in accordance with any procedures stipulated by the
         Directors) in taking independent advice in connection with the
         discharge of such duties.

95.      Extra remuneration

         Any Director who is appointed to any executive office (including for
         this purpose the office of Chairman or Deputy Chairman or
         Vice-Chairman whether or not such office is held in an executive
         capacity) or who serves on any committee or who otherwise performs
         services which in the opinion of the Directors are outside the scope
         of the ordinary duties of a Director, may be paid such extra
         remuneration by way of salary, commission or otherwise as the
         Directors may determine.

96(A).   Retirement and other benefits

         Without prejudice to the general power of the Directors under these
         presents to exercise on behalf of the Company (by establishment or
         maintenance of schemes or otherwise) all the powers of the Company to
         give or procure the giving of pensions, annuities or other allowances
         or benefits to or for the benefit of any person, and without
         restricting the generality of their other powers, the Directors shall
         have power to pay and agree to pay pensions or other retirement,
         superannuation, death or disability benefits or other allowances and
         benefits to any Director or ex-Director of the Company or of any
         company which is a subsidiary undertaking of the Company or is allied
         to or associated with the Company or any such subsidiary undertaking
         or of any predecessor in business of the Company or any other company
         as aforesaid and to the husbands, wives, widowers, widows, children,
         families, dependants and personal representatives of any such Director
         or ex-Director, and for the purpose of providing any such pensions or
         other benefits to establish or contribute to any trust, scheme,
         association, arrangement or fund or to pay premiums, and shall have
         power to establish trusts, schemes, associations, arrangements or
         funds considered to be for the benefit of any such persons aforesaid.
         A Director or ex-Director shall not be accountable to the Company or
         the members for any such pension, allowance or other benefit and the
         receipt of the same shall not disqualify any person from being or
         becoming a Director of the Company.

  (B).   Insurance

         Without prejudice to the provisions of Article 169, the Directors
         shall have the power to purchase and maintain insurance for or for the
         benefit of any persons who are or were at any time directors, officers
         or employees of the Company, or of any other company which is its
         holding company or in which the Company or such holding company or any
         of the predecessors of the Company or of such holding company has any
         interest, whether direct or indirect, or which is in any way allied to
         or associated with the Company, or of any subsidiary undertaking of or
         any other body, whether or not incorporated ("body"), owned by or in
         which an interest is owned by the Company or any such other company,
         or who are or were at any time trustees of any pension fund or
         employees' share scheme in which employees of the Company or any such
         other company or subsidiary undertaking or body are interested,
         including (without prejudice to the generality of the foregoing)
         insurance against any liability incurred by such persons in respect of
         any act or omission in the actual or purported execution and/or
         discharge of their duties and/or the exercise or purported exercise of
         their powers and/or otherwise in relation to or in connection with
         their duties, powers or offices in relation to the Company or any such
         other company, subsidiary undertaking, body, pension fund or
         employees' share scheme.

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                                      67

97(A).   Directors' interests in contracts with the Company

         Subject to the provisions of the Statutes and Article 113, a Director
         or alternate Director may be a customer of the Company or of any of
         its subsidiary undertakings or be party to or in any way interested in
         any contract or arrangement or transaction to which the Company is a
         party or in which the Company is in any way interested and he may hold
         and be remunerated (in addition to any other remuneration provided for
         by or pursuant to any other Article) in respect of any office or place
         of profit (other than the office of Auditor of the Company or any
         subsidiary thereof) under the Company or any other company in which
         the Company is in any way interested and he (or any firm of which he
         is a member) may act in a professional capacity for the Company or any
         such other company and be remunerated therefor and in any such case as
         aforesaid (unless otherwise agreed) the Director may retain for his
         own absolute use and benefit all profits and advantages accruing to
         him thereunder or in consequence thereof.

  (B).   Appointments with other companies

         A Director of the Company may be or become a director or other officer
         of, or otherwise interested in, any undertaking promoted by the
         Company or in which the Company may be interested, and (unless
         otherwise agreed) shall not be accountable to the Company or the
         members for any remuneration, profit or other benefit received by him
         as a director or officer of, or from his interest in, such other
         undertaking. The Directors may also cause the voting power conferred
         by the shares in any other undertaking held or owned by the Company to
         be exercised in such manner in all respects as they think fit,
         including the exercise thereof in favour of any resolution appointing
         themselves or any of them to be directors, officers or servants of
         such other undertaking, or voting or providing for the payment of
         remuneration to the directors, officers or servants of such other
         undertaking.

98(A).   Executive office

         The Directors may from time to time appoint one or more of their body
         to be holder of any executive office (including, where considered
         appropriate, the office of Chairman, Deputy Chairman or Vice-Chairman,
         Managing, Joint Managing, Deputy or Assistant, Managing Director or
         Chief, Deputy Chief or Assistant Chief Executive) on such terms and
         for such period as they may (subject to the provisions of the
         Statutes) determine and without prejudice to the terms of any contract
         entered into in any particular case, may at any time revoke any such
         appointment.

  (B).   When termination of appointment automatic

         The appointment of any Director to any of the executive offices
         specifically mentioned in paragraph (A) above shall automatically
         determine if he ceases to be a Director but without prejudice to any
         claim for damages for breach of any contract of service between him
         and the Company.

  (C).   When termination of appointment not automatic

         The appointment of any Director to any other executive office shall
         not automatically determine if he ceases from any cause to be a
         Director, unless the contract or resolution under which he holds
         office shall expressly state otherwise in which event the termination
         of his office if he ceases to be a Director shall be without prejudice
         to any claim for damages for breach of any contract of service between
         him and the Company.

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                                      68

99.      Delegation of powers

         The Directors may entrust to and confer upon any Director any of the
         powers exercisable by them as Directors upon such terms and conditions
         and with such restrictions as they think fit, and either collaterally
         with or to the exclusion of their own powers, and may from time to
         time revoke, withdraw, alter or vary all or any of such powers.

                    APPOINTMENT AND RETIREMENT OF DIRECTORS

100.     Age Limit

         Any provisions of the Statutes which, subject to the provisions of
         these presents, would have the effect of rendering any person
         ineligible for appointment as a Director or liable to vacate office as
         Director on account of his having reached any specified age or of
         requiring special notice or any other special formality in connection
         with the appointment of any Director over a specified age shall apply
         to the Company.

101.     Vacation of office of director

         The office of a Director shall be vacated in any of the following
         events, namely:-

         (A)      if pursuant to any provisions of the Statutes he is removed
                  or prohibited from being a Director;

         (B)      if he shall resign by writing under his hand left at the
                  Office or if he shall tender his resignation and the
                  Directors shall resolve to accept the same;

         (C)      if he shall have a receiving order made against him, become
                  bankrupt, apparently insolvent, execute a trust deed for
                  behalf of his creditors or shall compound with his creditors
                  generally;

         (D)      if he shall become of unsound mind or otherwise incapax;

         (E)      if he shall be absent from meetings of the Directors for
                  three months without leave and his alternate Director (if
                  any) shall not during such period have attended in his stead
                  and the Directors shall resolve that his office be vacated;
                  or

         (F)      if he shall be removed from office by notice in writing
                  served upon him signed by all his co-Directors, but so that
                  in the case of a Director holding an executive office which
                  automatically determines on his ceasing to be a Director such
                  removal shall be deemed an act of the Company and shall have
                  effect without prejudice to any claim for damages in respect
                  of the consequent termination of his executive office.

102.     Retirement of directors by rotation

         At the Annual General Meeting in each year any Director bound to
         retire under Article 108 and one-third of the other Directors for the
         time being (or, if their number is not three or a multiple of three,
         the number nearest to one-third) shall retire from office, but:--

         (a)      if any Director has at the start of the Annual General
                  Meeting in any year been in office for three years or more
                  since his last appointment or re-appointment (or would be if
                  the Annual General Meeting in that year was on a date
                  numerically

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                                      69

                  corresponding to the date of his last appointment or
                  re-appointment), he shall retire; and

         (b)      if there is only one Director who is subject to retirement by
                  rotation, he shall retire.

103.     Selection of directors to retire

         The Directors to retire by rotation shall include (so far as necessary
         to obtain the number required) any Director who wishes to retire and
         not to offer himself for re-election. Any further Directors so to
         retire shall be those of the other Directors subject to retirement by
         rotation who have been longest in office since their last re-election
         or appointment and so that as between persons who become or were last
         re-elected Directors on the same day those to retire shall (unless
         they otherwise agree among themselves) be determined by lot. The
         Directors to retire on each occasion (both as to number and identity)
         shall be determined by the composition of the Board of Directors of
         the Company at the date of the notice convening the Annual General
         Meeting and no Director shall be required to retire or be relieved
         from retiring by reason of any change in the number or identity of the
         Directors after the date of such notice but before the close of the
         meeting. Subject in the case of a Director who is over the age of
         seventy to a resolution of which special notice has been given being
         passed as required by Section 293(5) of the 1985 Act, a retiring
         Director shall be eligible for re-election.

104.     When directors deemed to be reappointed

         The Company at the meeting at which a Director retires under any
         provision of these presents may (subject to Article 106) by Ordinary
         Resolution fill up the office being vacated by electing thereto the
         retiring Director or some other person eligible for appointment. In
         default the retiring Director shall be deemed to have been re-elected
         except in any of the following cases:-

         (A)      where at such meeting it is expressly resolved not to fill up
                  such office or a resolution for the re-election of such
                  Director is put to the meeting and lost;

         (B)      where such Director has given notice in writing to the
                  Company that he is unwilling to be re-elected;

         (C)      where the default is due to the moving of a resolution in
                  contravention of the next following Article;

         (D)      where such Director has attained any retiring age applicable
                  to him as Director;

         (E)      where, if such Director was re-elected, he would be required
                  to vacate the office of Director pursuant to Article 101.

         The retirement shall not have effect until the conclusion of the
         meeting except where a resolution is passed to elect some other person
         in the place of the retiring Director or a resolution for his
         re-election is put to the meeting and lost and accordingly a retiring
         Director who is re-elected or deemed to have been re-elected will
         continue in office without break, save that notwithstanding the
         provisions of Section 293(6) of the 1985 Act, a person re-appointed a
         Director on retiring on account of age, or a person appointed at an
         Annual General Meeting in place of a Director so retiring, shall be
         deemed for the purpose of the rotation of Directors to have been
         elected at the meeting at which he was so re-appointed or appointed
         and not before.

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                                      70

105.     Resolution

         A resolution for the appointment of two or more persons as Directors
         by a single resolution shall not be moved at any General Meeting
         unless a resolution that it shall be so moved has first been agreed to
         by the meeting without any vote being given against it; and any
         resolution moved in contravention of this provision shall be void.

106.     Notice of intention to appoint a director

         No person other than a Director retiring at the meeting shall, unless
         recommended by the Directors for election, be eligible for appointment
         as a Director at any General Meeting unless not less than seven nor
         more than forty two days (inclusive of the date on which the notice is
         given) before the day appointed for the meeting there shall have been
         left at the Office, addressed to the Secretary, notice in writing
         signed by some member (other than the person to be proposed) duly
         qualified to attend and vote at the meeting for which such notice is
         given of his intention to propose such person for appointment stating
         the particulars which would, if he were so appointed, be required to
         be included in the Company's Register of Directors together with
         notice in writing signed by the person to be proposed of his
         willingness to be elected.

107.     Removal and replacement of directors

         The Company may in accordance with and subject to the provisions of
         the Statutes by Ordinary Resolution of which special notice has been
         given remove any Director from office notwithstanding any provision of
         these presents or of any agreement between the Company and such
         Director, but without prejudice to any claim he may have for damages
         for breach of any such agreement, and by Ordinary Resolution appoint
         another person in place of a Director so removed from office and any
         person so appointed shall be treated for the purpose of determining
         the time at which he or any other Director is to retire by rotation as
         if he had become a Director on the day on which the Director in whose
         place he is appointed was last elected as a Director. In default of
         such appointment the vacancy arising upon the removal of a Director
         from office may be filled by the Directors as a casual vacancy.

108.     Appointment by ordinary resolution or by directors

         The Company may by Ordinary Resolution appoint any person to be a
         Director either to fill a casual vacancy or as an additional Director.
         Without prejudice and in addition thereto, the Directors shall have
         the power at any time so to do, but so that the total number of
         Directors shall not at any time exceed the maximum number (if any)
         fixed by or in accordance with these presents. Any person so appointed
         by the Directors shall hold office only until the next Annual General
         Meeting and shall then be eligible for re-election, but shall not be
         taken into account in determining the number of Directors who are to
         retire by rotation at such meeting.

                              ALTERNATE DIRECTORS

109(A).  Power to appoint alternate directors

         Any Director (other than an alternate Director) may at any time by
         writing under his hand and deposited at the Office, or received by the
         Secretary or delivered at a meeting of the Directors, appoint any
         person (including another Director) to be his alternate Director and
         may in like manner at any time terminate such appointment. If such
         alternate Director is not

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                                      71

         another Director, such appointment, unless previously approved by the
         Directors, shall have effect only upon and subject to being so
         approved.

  (B).   Termination

         The appointment of an alternate Director shall automatically determine
         on the happening of any event which if he were a Director would cause
         him to vacate such office or if his appointor ceases to be a Director
         or if the approval of the Directors to his appointment is withdrawn.
         An alternate Director may by writing under his hand left at the Office
         resign such appointment.

  (C).   Alternate to receive notices

         An alternate Director shall (except when absent from the United
         Kingdom) be entitled, if his appointor so requests, to receive notices
         of meetings of the Directors to the same extent as, but in lieu of,
         the Director appointing him and shall be entitled to attend and vote
         as a Director and be counted for the purposes of a quorum at any such
         meeting at which the Director appointing him is not personally present
         and generally at such meeting to perform all functions, powers and
         duties of his appointor as a Director and for the purposes of the
         proceedings at such meeting the provisions of these presents shall
         apply as if he were a Director. If he shall himself be a Director or
         shall attend any such meeting as an alternate for more than one
         Director his voting rights shall be cumulative. If his appointor is
         for the time being absent from the United Kingdom or temporarily
         unable to act through ill-health or disability his signature to any
         resolution in writing of the Directors shall be as effective as the
         signature of his appointor. To such extent as the Directors may from
         time to time determine in relation to any committees formed under
         Article 118 the foregoing sentences shall also apply mutatis mutandis
         to any meeting of any such committee of which his appointor is a
         member. An alternate Director shall not (save as aforesaid) have power
         to act as a Director nor shall he be deemed to be a Director for the
         purposes of these presents.

  (D).   Alternate may be paid expenses but not remuneration

         An alternate Director may be repaid expenses, and shall be entitled to
         be indemnified, by the Company to the same extent mutatis mutandis as
         if he were a Director but he shall not be entitled to receive from the
         Company any remuneration except only such proportion (if any) of the
         remuneration otherwise payable to his appointor as such appointor may
         by notice in writing to the Company from time to time direct.

                            PROCEEDINGS OF DIRECTORS

110(A).  Meetings of directors

         Subject to the provisions of these presents, the Directors may meet
         together for the despatch of business, adjourn and otherwise regulate
         their meetings as they think fit. Questions arising at any meeting
         shall be determined by a majority of votes. In case of an equality of
         votes the chairman of the meeting shall have a second or casting vote.
         A Director may, and the Secretary on the requisition of a Director
         shall, at any time summon a meeting of the Directors. Notice of a
         meeting of Directors shall be deemed to be properly given to a
         Director if it is given to him personally or by word of mouth or sent
         in writing or by electronic communication to him at his last known
         address or any other address given by him to the Company for this
         purpose. A Director absent or intending to be absent from the United
         Kingdom may request that notices of meetings of Directors shall during
         his absence be sent in writing or by electronic communication to him
         at an address given by him to the Company

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                                      72

         for this purpose, but such notices need not be given any earlier than
         notices given to Directors not so absent and if no such request is
         made it shall not be necessary to give notice of a meeting of
         Directors to any Director who is for the time being absent from the
         United Kingdom. A Director may waive notice of any meeting either
         prospectively or retrospectively.

  (B).   Participation in meetings by telephone

         Any one or more (including, without limitation, all) of the Directors,
         or any committee of the Directors, may participate in a meeting of the
         Directors or of such committee:-

         (a)      by means of a conference telephone or similar communications
                  equipment allowing all persons participating in the meeting
                  to hear each other at the same time; or

         (b)      by a succession of telephone calls to Directors from the
                  chairman of the meeting following disclosure to them of all
                  material points.

         Participating by such means shall constitute presence in person at a
         meeting. Such meeting shall be deemed to have occurred, in the case of
         (a), at the place where most of the Directors participating are
         present or, if there is no such place, where the chairman of the
         meeting is present and, in the case of (b), where the chairman of the
         meeting is present.

111.     Authority to vote

         A Director who is unable to attend any meeting of the Directors and
         has not appointed an alternate Director may authorise any other
         Director to vote for him at that meeting, and in that event the
         Director so authorised shall have a vote for each Director by whom he
         is so authorised in addition to his own vote. Any such authority must
         be in writing or by cable. telegram, telex or facsimile which must be
         produced at the meeting at which the same is to be used and be left
         with the Secretary for retention.

112.     Quorum

         The quorum necessary for the transaction of the business of the
         Directors may be fixed by the Directors and unless so fixed at any
         other number shall be three. A meeting of the Directors at which a
         quorum is present shall be competent to exercise all powers and
         discretions for the time being exercisable by the Directors.

113.     Directors' interests

         A Director who is in any way, whether directly or indirectly,
         interested in a contract or proposed contract (or any transaction or
         arrangement whether or not constituting a contract) with the Company
         shall declare the nature of his interest in accordance with the
         provisions of the Statutes.

114(A).  Restrictions on voting

         Save as herein provided, a Director shall not vote at any meeting of
         the Directors in respect of any contract or arrangement or any other
         proposal whatsoever in which he has an interest which (together with
         any interest of any person connected with him within the meaning of
         Section 346 of the 1985 Act) is, to his knowledge, a material interest
         (otherwise than by virtue of his interests in shares or debentures or
         other securities of, or otherwise in or

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                                      73

         through, the Company). A Director shall not be counted in the quorum
         at a meeting in relation to any resolution on which he is debarred
         from voting.

  (B).   Where interest does not prevent voting

         Subject to the provisions of the Statutes a Director shall (in the
         absence of some other material interest than is indicated below) be
         entitled to vote (and be counted in the quorum) in respect of any
         resolution concerning any of the following matters, namely:-

         (i)      the giving of any security or indemnity to him pursuant to
                  Article 168 or in respect of money lent or obligations
                  incurred by him at the request of or for the benefit of the
                  Company or any of its subsidiary undertakings;

         (ii)     the giving of any security or indemnity to a third party in
                  respect of a debt or obligation of the Company or any of its
                  subsidiary undertakings for which he himself has assumed
                  responsibility in whole or in part under a guarantee or
                  indemnity or by the giving of security;

         (iii)    any proposal concerning an offer of shares or debentures or
                  other securities of or by the Company or any of its
                  subsidiary undertakings for subscription or purchase in which
                  offer he is or may be entitled to participate as a holder of
                  securities or in the underwriting or sub-underwriting of
                  which he is to participate;

         (iv)     any proposal concerning any other company (not being a
                  company in which he owns one per cent or more) in which he is
                  interested, directly or indirectly and whether as an officer,
                  or shareholder, creditor or otherwise howsoever;

         (v)      any proposal concerning the adoption, modification or
                  operation of a pension fund or retirement death or disability
                  benefits scheme or employees' share scheme which relates both
                  to Directors and employees of the Company or of any of its
                  subsidiary undertakings and does not provide in respect of
                  any Director as such any privilege or advantage not accorded
                  to the employees to which the fund or scheme relates;

         (vi)     any contract or arrangement for the benefit of employees of
                  the Company or of any of its subsidiary undertakings under
                  which he benefits or stands to benefit in a similar manner to
                  the employees and which does not accord to any Director as
                  such any privilege or advantage not accorded to the employees
                  to whom the contract or arrangement relates; and;

         (vii)    any proposal concerning insurance which the Company proposes
                  to purchase and/or maintain for the benefit of any Directors
                  of the Company or for persons who include Directors of the
                  Company, provided that for the purposes of this sub-paragraph
                  (vii), insurance shall mean only insurance against liability
                  incurred by a Director in respect of any act or omission by
                  him referred to in Article 96(B), or any other insurance
                  which the Company is empowered to purchase and/or maintain
                  for, or for the benefit of, any groups of persons consisting
                  of or including Directors of the Company.

         For the purposes of sub-paragraph (iv) above, a company shall be
         deemed to be one in which a Director owns one per cent or more if and
         so long as (but only if and so long as) he, taken together with any
         person connected with him within the meaning of Section 346 of the
         1985 Act, is to his knowledge (either directly or indirectly) the
         holder of or beneficially interested in one per cent or more of any
         class of the equity share capital of that company or of the voting
         rights available to members of that company. For the purpose of this
         paragraph there

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                                      74

         shall be disregarded any shares held by the Director or any such
         person as simple trustee under the laws of Scotland or bare or
         custodian trustee under the laws of England and Wales and in which he
         has no beneficial interest, any shares comprised in a trust in which
         his, or any such person's, interest is in reversion or remainder or
         fee if and so long as some other person is entitled to receive the
         income of the trust, and any shares comprised in an authorised unit
         trust scheme in which he, or any such person, is interested only as a
         unit holder. Where a company in which a Director owns one per cent or
         more is materially interested in a contract or arrangement or other
         proposal, he also shall be deemed to be materially interested in that
         contract, arrangement or other proposal.

  (C).   Consideration of matters involving two or more directors

         Where proposals are under consideration concerning the appointment
         (including fixing or varying the terms of appointment) of two or more
         Directors to offices or employments with the Company or any company in
         which the Company is interested, such proposals may be divided and
         considered in relation to each Director separately and in such case
         each of the Directors concerned (if not debarred from voting under
         paragraph (B)(iv) of this Article) shall be entitled to vote (and be
         counted in the quorum) in respect of each resolution except that
         concerning his own appointment.

  (D).   Materiality of directors' interests

         If any question shall arise at any meeting as to the materiality of a
         Director's interest or as to the entitlement of any Director to vote
         and such question is not resolved by his voluntarily agreeing to
         abstain from voting, such question shall be referred to the chairman
         of the meeting (or in the case of a question as to the materiality of
         an interest or entitlement to vote of the chairman, one of the Deputy
         Chairmen or in his absence one of the Vice-Chairmen) and his ruling in
         relation to any other Director shall be final and conclusive except in
         a case where the nature or extent of the interests of such Director
         has not been fairly disclosed.

  (E).   Alternate Directors

         In relation to an alternate Director, the interest of his appointor
         shall, for the purposes of this Article, be treated as the interest of
         the alternate Director in addition to an interest which the alternate
         Director otherwise has. This Article applies to an alternate Director
         as if he were a Director.

  (F).   Relaxation of provisions

         Subject to the Statutes, the Company may by Special Resolution suspend
         or relax the provisions of this Article to any extent or ratify any
         transaction not duly authorised by reason of a contravention of this
         Article.

115.     Proceedings in case of vacancies

         The continuing Directors may act notwithstanding any vacancies in
         their number, but if and so long as the number of Directors is reduced
         below the number fixed by or in accordance with these presents as the
         necessary quorum of Directors the continuing Directors or Director may
         act for the purpose of filling up such vacancies or of summoning
         General Meetings of the Company, but not for any other purpose. If
         there be no Directors or Director able or willing to act, then any two
         members may summon a General Meeting for the purpose of appointing
         Directors.

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                                      75

116.     Chairman

         The Directors may elect a Chairman and one or more Deputy Chairmen and
         one or more Vice-Chairmen and determine the period for which each is
         to hold office. The Chairman or, in his absence, one of any Deputy
         Chairmen or, in his absence, one of any Vice-Chairmen shall preside at
         meetings of the Directors, but if no Chairman or Deputy Chairman or
         Vice-Chairman shall have been appointed, or if at any meeting none of
         them be present within five minutes after the time appointed for
         holding the same, the Directors present may choose one of their number
         to be chairman of the meeting. If at any time there is more than one
         Deputy Chairman or Vice-Chairman the right (in the absence of the
         Chairman or of the Chairman and the Deputy Chairmen respectively) to
         preside at a meeting of Directors shall be determined as between the
         Deputy Chairmen (in the absence of the Chairman) or Vice-Chairmen (in
         the absence of the Chairman and the Deputy Chairmen) present (if more
         than one) by seniority in length of appointment or otherwise as
         resolved by the Directors.

117.     Resolutions in writing

         A resolution in writing signed by all the Directors for the time being
         in the United Kingdom and all the alternate Directors (if any) for the
         time being in the United Kingdom whose appointors are for the time
         being absent from the United Kingdom (provided that their number is
         sufficient to constitute a quorum) or by all the members of a
         committee formed under the next following Article for the time being
         shall be as valid and effective as a resolution passed at a meeting of
         the Directors or, as the case may be, of such committee duly convened
         and held and may consist of several documents in the like form, each
         signed by one or more of the Directors or alternate Directors or
         members of the committee concerned.

118.     Committees of directors

         The Directors may delegate any of their powers, authorities or
         discretions (including, for the avoidance of doubt, any powers,
         authorities or discretions relating to the remuneration of Directors,
         the varying of Directors' terms and conditions of employment or the
         conferring of any benefit on Directors) to committees consisting of
         one or more members of their body and (if thought fit) one or more
         other persons co-opted as hereinafter provided. Insofar as any such
         power, authority or discretion is delegated to a committee, any
         reference in these presents to the exercise by the Directors of the
         power, authority or discretion so delegated shall be read and
         construed as if it were a reference to the exercise by such committee.
         Any committee so formed shall in the exercise of the powers, authority
         or discretions so delegated conform to any regulations which may from
         time to time be imposed by the Directors. Any such regulations may
         provide for or authorise the co-option to the committee of persons
         other than Directors and for such co-opted members to have voting
         rights as members of the committee but so that (i) the number of
         co-opted members shall be less than one half of the total number of
         members of the committee and (ii) no resolution of the committee shall
         be effective unless a majority of the members of the committee present
         at the meeting when the resolution is passed are Directors. The
         Directors may authorise any such committee to sub-delegate all or any
         of the powers, authorities and discretions delegated to it, and the
         Directors may at any time dissolve any such committee or revoke, vary
         or suspend any delegation made to any such committee.

119.     Proceedings of committee

         The meetings and proceedings of any such committee consisting of two
         or more members (including the exercise of all powers, authorities and
         discretions vested in such committee) shall be governed by the
         provisions of these presents regulating the meetings and proceedings

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                                      76

         of the Directors, so far as the same are applicable and are not
         superseded by any regulations made by the Directors under the last
         preceding Article.

120.     Validity of proceedings

         All acts done by any meeting of Directors, or of any such committee,
         or by any person acting as a Director, shall as regards all persons
         dealing in good faith with the Company, notwithstanding that there was
         some defect in the appointment or continuance in office of any such
         Directors (or their alternates), or member of the committee, or person
         acting as aforesaid, or that they or any of them were disqualified or
         had vacated office, or were not entitled to vote, be as valid as if
         every such person had been duly appointed and was qualified and had
         continued to be a Director (or alternate Director) or member of the
         committee and had been entitled to vote.

                                BORROWING POWERS

121.     Power to borrow and grant security

         The Directors may exercise all the powers of the Company to borrow
         money, and to mortgage or charge its undertaking, property and
         uncalled capital, and to issue debentures and other securities,
         whether outright or as collateral security for any debt, guarantee,
         liability or obligation of the Company or of any third party.

                          GENERAL POWERS OF DIRECTORS

122.     Business to be managed by the directors

         The business and affairs of the Company shall be managed by the
         Directors, who may exercise all such powers of the Company as are not
         by the Statutes or by these presents required to be exercised by the
         Company in General Meeting, subject nevertheless to any regulations of
         these presents, to the provisions of the Statutes and to such
         regulations, being not inconsistent with the aforesaid regulations or
         provisions, as may be prescribed by Special Resolution of the Company,
         but no regulation so made by the Company shall invalidate any prior
         act of the Directors which would have been valid if such regulation
         had not been made. The general powers given by this Article shall not
         be limited or restricted by any special authority or power given to
         the Directors by any other Article.

123.     Local boards, etc

         The Directors may make such arrangements as they think fit for the
         management and transaction of the Company's affairs in any specified
         locality whether in the United Kingdom or elsewhere and without
         prejudice to the generality of the foregoing may at any time and from
         time to time (a) establish Regional, Divisional or Local Boards,
         Committees or Agencies in the United Kingdom or elsewhere, (b) appoint
         any one or more of the Directors or any other person or persons to be
         members thereof for such period and at such remuneration as the
         Directors may deem fit, (c) revoke from time to time any such
         appointment, (d) fix the quorum of the said Regional, Divisional or
         Local Boards and Committees, (e) delegate to such Regional, Divisional
         or Local Boards, Committees and Agencies from time to time all or such
         powers, authorities and discretions vested in the Directors (other
         than the power to make calls) as the Directors may deem expedient,
         with power to sub-delegate, and (f) annul or vary any such delegation,
         but no person dealing in good faith and without notice of any such
         annulment or variation shall be affected thereby.

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                                      77

124.     Powers of attorney

         The Directors may from time to time and at any time by power of
         attorney or factory and commission or otherwise appoint any company,
         firm or person or any fluctuating body of persons, whether nominated
         directly or indirectly by the Directors, to be the Attorney or
         Attorneys or Commissioner or Commissioners of the Company for such
         purposes and with such powers, authorities and discretions (not
         exceeding those vested in or exercisable by the Directors under these
         presents) and for such period and subject to such conditions as they
         may think fit, and any such power of attorney or factory and
         commission may contain such provisions for the protection and
         convenience of persons dealing with any such Attorney or Commissioner
         as the Directors may think fit, and may also authorise any such
         Attorney or Commissioner to sub-delegate all or any of the powers,
         authorities and discretions vested in him. The Directors may delegate
         all or any of their powers under this Article.

125.     Official seal for use abroad

         The Company may exercise the powers conferred by the Statutes with
         regard to having an official seal for use abroad and such powers shall
         be vested in the Directors.

126.     Overseas registers

         Subject to and to the extent permitted by the Statutes, the Company,
         or the Directors on behalf of the Company, may cause to be kept in any
         territory outside the United Kingdom a branch register of members
         resident in such territory, and the Directors may make and vary such
         regulations as they may think fit respecting the keeping of any such
         register.

127.     Execution by the Company

         All cheques, promissory notes, drafts, bills of exchange, and other
         negotiable or transferable instruments, and all receipts for moneys
         paid to the Company, shall be signed, drawn, accepted, endorsed, or
         otherwise executed, as the case may be, in such manner as the
         Directors or any duly authorised committee shall from time to time
         determine.

                   DEPARTMENTAL, REGIONAL OR LOCAL DIRECTORS
                              AND OTHER APPOINTEES

128(A).  Use of designation "Director"

         The Directors may from time to time appoint any person to be a
         Departmental, Regional or Local Director or (without prejudice to the
         powers conferred by Article 123) to any other appointment including
         the word "Director" in its title (any person so appointed pursuant to
         this Article being in this Article called "an Appointee").

  (B).   Powers and duties of Appointee

         The Directors may from time to time define, limit or restrict the
         powers and duties of an Appointee and determine his remuneration and
         may at any time remove any such person from such office but without
         prejudice to any claim for damages for breach of any contract of
         service between him and the Company. Any person so appointed as an
         Appointee shall not, by reason only of such appointment, be a Director
         of the Company for any of the purposes of these presents or of the
         Statutes, nor shall he have, by reason only of such appointment, any
         of the powers or duties of a Director save in so far as specific
         powers or duties may be vested

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                                      78

         in him by the Directors as aforesaid. The Directors may at any time
         determine the use of any designation or title including the word
         "Director".

  (C).   Attendance at board meetings

         An Appointee shall not be entitled, by reason only of such
         appointment, to receive notice of or to attend at any meeting of the
         Directors unless he is specifically invited by the Directors to do so,
         and as an Appointee he shall not be entitled to vote thereat.

  (D).   Appointment of other officers

         The Directors may from time to time appoint Chief General Managers,
         Deputy Chief General Managers, Assistant Chief General Managers,
         Senior General Managers, General Managers, Deputy General Managers,
         Assistant General Managers and any other officers on such terms and
         for such period as the Directors may think fit. The Directors may from
         time to time define, limit or restrict the powers and duties of any
         person appointed to any such office and determine his remuneration and
         may at any time remove any such person from such office but without
         prejudice to any claim for damages for breach of any contract of
         service between him and the Company.

                                   SECRETARY

129.     Secretary

         The Secretary shall be appointed by the Directors on such terms and
         for such period as they may think fit. Any Secretary so appointed may
         at any time be removed from office by the Directors, but without
         prejudice to any claim for damages for breach of any contract of
         service between him and the Company. If thought fit two or more
         persons may be appointed as Joint Secretaries. The Directors may also
         appoint from time to time on such terms as they may think fit one or
         more Deputy Secretaries and Assistant Secretaries. Anything by the
         Statutes or by these presents required or authorised to be done by or
         to the Secretary may, if the office is vacant or there is for any
         other reason no Secretary capable of acting, be done by or to any
         Deputy or Assistant Secretary, or if there is no Deputy or Assistant
         Secretary capable of acting, by or to any officer of the Company
         authorised generally or specially in that behalf by the Directors.

                                     SEALS

130(A).  Custody of seal

         The Directors shall provide for the safe custody of the Seal and any
         Securities Seal and neither shall be used without the authority of the
         Directors or a committee authorised by the Directors in that behalf.

  (B).   Formalities for affixing the seal

         Every deed, contract, document, instrument or other writing to which
         the Seal shall be affixed shall (except as permitted by Article 19) be
         signed by a Director or by some other person appointed by the
         Directors for the purpose and countersigned by the Secretary or by a
         second Director or by some other person appointed by the Directors for
         the purpose. Such signature and counter-signature shall not require to
         be witnessed.

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                                      79

  (C).   Use of securities seal

         The Securities Seal shall be used only for sealing securities issued
         by the Company and documents creating or evidencing securities so
         issued. Any such securities or documents sealed with the Securities
         Seal shall not require to be signed.

                             EXECUTION OF DOCUMENTS

131.     Execution of documents

         Subject to the provisions of the Statutes, all deeds, contracts,
         documents, instruments or other writings not executed under Seal may
         be signed by a Director or by the Secretary or by some other person
         appointed by the Directors or by a duly authorised committee for that
         purpose and that whether or not relating to heritable or real
         property. Provided that this Article and the provisions of Article
         130(B) are without prejudice to any other manner of execution of
         documents permitted or prescribed by the Statutes.

                          AUTHENTICATION OF DOCUMENTS

132.     Authentication of documents

         Any Director or the Secretary or any person appointed by the Directors
         or by a duly authorised committee for the purpose shall have power to
         authenticate any documents affecting the constitution of the Company
         and any resolutions passed by the Company or the Directors or any
         committee, and any books, records, documents and accounts relating to
         the business of the Company, and to certify copies thereof or extracts
         therefrom as true copies or extracts; and where any books, records,
         documents or accounts are elsewhere than at the Office the officer,
         servant or agent of the Company having the custody thereof shall be
         deemed to be a person appointed by the Directors as aforesaid. A
         document purporting to be a copy of a resolution, or an extract from
         the minutes of a meeting, of the Company or of the Directors or any
         committee which is certified as aforesaid shall be conclusive evidence
         in favour of all persons dealing with the Company upon the faith
         thereof that such resolution has been duly passed or, as the case may
         be, that such minutes or extract is a true and accurate record of
         proceedings at a duly constituted meeting.

                                   DIVIDENDS

133.     Declaration of dividends

         The Company may by Ordinary Resolution declare dividends but no
         dividend shall be payable except out of the profits of the Company
         available for distribution under the provisions of the Statutes, or in
         excess of the amount recommended by the Directors, or in contravention
         of the special rights attaching to any share. Unless and to the extent
         that the rights attached to any shares or the terms of issue thereof
         otherwise provide, all dividends shall be declared and paid according
         to the amounts paid on the shares in respect of which the dividend is
         paid, and shall (as regards any shares not fully paid throughout the
         period in respect of which the dividend is paid) be apportioned and
         paid pro rata according to the amounts paid on the shares during any
         portion or portions of the period in respect of which the dividend is
         paid. The amounts of any such pro rata apportionments shall be
         determined by the Directors as they think fit in all respects
         including as to any Applicable Exchange Rate applied by them for the
         purposes of converting any amount denominated in one currency into
         another currency for such determination. Provided that the Directors
         act bona fide they shall not incur any responsibility to the holders
         of any share in respect of the determination of such

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                                      80

         pro rata apportionment. For the purposes of this Article no amount
         paid on a share in advance of calls shall be treated as paid on the
         share.

134(A).  Interim dividends

         If and so far as in the opinion of the Directors the profits of the
         Company justify such payment, the Directors may (subject to the
         special rights attaching to any share and provided that the Directors
         may in any event pay an interim dividend on the Ordinary Shares at a
         rate not exceeding (pound)0.01 per Ordinary Share) subject to the
         Statutes declare and pay the fixed dividends or dividends not
         exceeding a specified amount on any class of shares carrying a fixed
         dividend or dividends not exceeding a specified amount expressed to be
         payable on fixed dates on the half-yearly or other dates prescribed
         for the payment thereof and may also from time to time subject to the
         Statutes declare and pay interim dividends on shares of any class of
         such amount and on such dates and in respect of such periods as they
         think fit. For the purpose of ascertaining the distributable profits
         or reserves of the Company available for distribution at any time and
         the extent to which the same may cover fixed dividends or dividends
         not exceeding a specified amount expressed to be payable at such time,
         the Directors may convert any such profits or reserves denominated in,
         and any fixed dividend or dividends not exceeding a specified amount
         expressed to be payable in, a Foreign Currency into Sterling at the
         Applicable Exchange Rate.

  (B).   Directors' responsibility

         Provided that the Directors act bona fide, they shall not incur any
         responsibility to the holders of any share conferring a preference
         which may at any time be issued for any damage they may suffer by
         reason of the payment of an interim dividend on any shares ranking
         after such preference shares. A resolution of the Directors declaring
         the interim dividend shall (once announced) be irrevocable and have
         the same effect in all respects as if such dividend had been declared
         upon the recommendation of the Directors by an Ordinary Resolution of
         the Company.

135.     Profits and losses from past date

         Subject to the provisions of the Statutes, where any asset, business
         or property is bought by, transferred to or vested in the Company as
         from a past date (whether such date be before or after the
         incorporation of the Company) the profits and losses thereof as from
         such date may at the discretion of the Directors in whole or in part
         be carried to revenue account and treated for all purposes as profits
         or losses of the Company. Subject as aforesaid, if any shares or
         securities are purchased cum dividend or interest, such dividend or
         interest may at the discretion of the Directors be treated as revenue,
         and it shall not be obligatory to capitalise the same or any part
         thereof.

136.     Interest not payable

         No dividend or other moneys payable on or in respect of a share shall
         bear interest as against the Company. The provisions of this Article
         shall not affect the provisions of Article 48.

137.     Permitted deductions

         The Directors may deduct from any dividend or other moneys payable to
         any member on or in respect of a share all sums of money (if any)
         presently payable by him to the Company on account of calls or
         otherwise.

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                                      81

138.     Retention of dividends

         The Directors may retain any dividend or other moneys payable on or in
         respect of a share on which the Company has a lien, and may apply the
         same in or towards satisfaction of the debts, liabilities or
         engagements in respects of which the lien exists.

139.     Waiver of dividends

         The waiver in whole or in part of any dividend on any share by any
         document (whether or not under seal) shall be effective only if such
         document is signed by the shareholder (or the person entitled to the
         share in consequence of the death or bankruptcy of the holder or
         otherwise by operation of law) and delivered to the Company and if or
         to the extent that the same is accepted as such or acted upon by the
         Company.

140.     Unclaimed dividends

         All dividends or other moneys payable on or in respect of a share
         unclaimed after having been declared may be invested or otherwise made
         use of by the Directors for the benefit of the Company until, subject
         as provided by these presents, claimed. The payment by the Directors
         of any unclaimed dividend or other moneys payable on or in respect of
         a share into a separate account shall not constitute the Company a
         trustee in respect thereof. The provisions of this Article shall not
         affect the provisions of Article 48.

141.     Forfeiture of unclaimed dividends

         Any dividend unclaimed after a period of twelve years from the date of
         declaration of such dividend shall be forfeited and shall revert to
         the Company.

142.     Dividends in specie

         The Company may upon the recommendation of the Directors by Ordinary
         Resolution direct payment of a dividend in whole or in part by the
         distribution of specific assets (and in particular of paid-up shares
         or debentures of any other company) and the Directors shall give
         effect to such resolution, and where any difficulty arises in regard
         to such distribution, the Directors may (a) settle the same as they
         think expedient and in particular may issue fractional certificates or
         may authorise any person to sell and transfer any fractions or
         disregard fractions altogether, (b) fix the value for distribution of
         such specific assets or any part thereof, (c) determine that cash
         payments shall be made to any members upon the footing of the value so
         fixed in order to adjust the rights of those entitled to participate
         in the dividend, and (d) vest any such specific assets in trustees as
         may seem expedient to the Directors.

143.     Scrip dividend

         The Directors may, subject to the rights attached to any class of
         share and in addition to the provisions of Article 4(C)(2)(b)(vi),
         with the prior sanction of an Ordinary Resolution of the Company,
         offer the holders of Ordinary Shares the right to elect to receive
         Ordinary Shares, credited as fully paid, instead of cash in respect of
         all or part of such dividend or dividends as are specified by such
         resolution. Such offer may be made by the Directors upon such terms
         and conditions as they think fit, provided that the following
         provisions shall apply in any event:-

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                                      82

         (A)      the said Ordinary Resolution may specify all or part of a
                  particular dividend (whether or not already declared) or may
                  specify all or any dividends (or any part of such dividends)
                  declared or to be declared or paid within a specified period,
                  but such period may not end later than the beginning of the
                  fifth Annual General Meeting following the date of the
                  meeting at which such resolution is passed;

         (B)      the entitlement of each holder of Ordinary Shares to new
                  Ordinary Shares shall be such that the relevant value of the
                  entitlement shall be as nearly as possible equal to (but not
                  greater than) the cash amount (disregarding any tax credit)
                  of the dividend that such holder elects to forego provided
                  always that, in calculating the entitlement, the Directors
                  may at their discretion adjust the figure obtained by
                  dividing the relevant value by the amount payable on the
                  Ordinary Shares up or down so as to procure that the
                  entitlement of each shareholder to new Ordinary Shares may be
                  represented by a simple numerical ratio. For this purpose
                  "relevant value" shall be calculated by reference to the
                  average of the middle market quotations for the Company's
                  Ordinary Shares on the London Stock Exchange, as derived from
                  the Daily Official List, on the day on which the Ordinary
                  Shares are first quoted "ex" the relevant dividend and the
                  four subsequent dealing days, or in such other manner as may
                  be determined by the Directors on such basis as they consider
                  fair and reasonable. A certificate or report by the Auditors
                  as to the amount of the average quotation in respect of any
                  dividend shall be conclusive evidence of that amount;

         (C)      the basis of allotment shall be such that no member may
                  receive a fraction of a share. The Directors may make such
                  provisions as they think fit for any fractional entitlements,
                  including provisions whereby, in whole or in part, fractional
                  entitlements are disregarded or the benefit thereof accrues
                  to the Company and/or under which fractional entitlements are
                  accrued and/or retained and in each case accumulated on
                  behalf of any shareholder and such accruals or retentions are
                  applied to the allotment by way of bonus to or cash
                  subscription on behalf of such shareholder of fully paid
                  Ordinary Shares;

         (D)      the Directors, after determining the basis of allotment,
                  shall notify the holders of Ordinary Shares of the right of
                  election offered to them, and shall send with, or following,
                  such notification, forms of election and specify the
                  procedure to be followed and the place at which, and the
                  latest date and time by which, duly completed forms of
                  election must be lodged in order to be effective. Electronic
                  communications may, if the Directors so determine, be used in
                  accordance with these presents (instead of documents in
                  writing) for the notification of the right of election and
                  the sending of completed forms of election;

         (E)      the dividend (or that part of the dividend in respect of
                  which a right of election has been offered) shall not be
                  payable on Ordinary Shares in respect whereof the said
                  election has been duly made ("the elected Ordinary Shares")
                  and instead thereof additional Ordinary Shares shall be
                  allotted to the holders of the elected Ordinary Shares on the
                  basis of allotment determined as aforesaid. For such purpose
                  the Directors shall capitalise out of such of the sums
                  standing to the credit of any of the Company's reserves
                  (including Share Premium Account and Capital Redemption
                  Reserve) or any of the profits which could otherwise have
                  been applied in paying dividends in cash as the Directors may
                  determine, a sum equal to the aggregate nominal amount of the
                  additional Ordinary Shares to be allotted on such basis and
                  apply the same in paying up in full the appropriate number of
                  unissued Ordinary Shares for allotment and distribution to
                  and amongst the holders of the elected Ordinary Shares on
                  such basis. A resolution of the Directors capitalising any
                  part of

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                                      83

                  the reserves or profits hereinbefore mentioned shall have the
                  same effect as if such capitalisation had been declared by
                  Ordinary Resolution of the Company in accordance with Article
                  148;

         (F)      the additional Ordinary Shares so allotted shall rank pari
                  passu in all respects with the fully paid Ordinary Shares
                  then in issue save only as regards participation in the
                  relevant dividend;

         (G)      any resolution of the Company or the Directors, passed on or
                  after the date of adoption of these presents, declaring a
                  dividend in respect of which (or in respect of any part of
                  which) a right of election is offered under this Article
                  (whether before or after the passing of the resolution) shall
                  be deemed to include (if not expressly included) a provision
                  that the dividend declared (or the part thereof in respect of
                  which the right of election is offered) shall not be payable
                  in respect of Ordinary Shares as regards which a valid
                  acceptance of the offer under this Article shall have been
                  received by the Company not later than the final time for
                  receipt of forms of election;

         (H)      Unless the Directors otherwise determine, or unless the
                  Uncertificated Securities Regulations and/or the rules of the
                  relevant system concerned otherwise require, the new Ordinary
                  Share or shares which a member has elected to receive instead
                  of cash in respect of the whole (or some part) of the
                  specified dividend declared in respect of his elected
                  Ordinary Shares shall be in uncertificated form (in respect
                  of the member's elected Ordinary Shares which were in
                  uncertificated form on the date of the member's election) and
                  in certificated form (in respect of the member's elected
                  Ordinary Shares which were in certificated form on the date
                  of the member's election); and

         (I)      the Directors may also from time to time establish, continue
                  or vary a procedure for election mandates, which, for the
                  avoidance of doubt, may include an election by means of a
                  relevant system and mandates given before the adoption of
                  these presents, under which a holder of Ordinary Shares may
                  elect to receive Ordinary Shares credited as fully paid
                  instead of cash in respect of all future rights offered to
                  that holder under this Article until the election mandate is
                  revoked or deemed to be revoked in accordance with the
                  procedure;

         (J)      the Directors may undertake and do such acts and things as
                  they may consider necessary or expedient for the purpose of
                  giving effect to the provisions of this Article;

         (K)      notwithstanding the foregoing, the Directors may at any time
                  prior to payment of the relevant dividend determine, if it
                  appears to them desirable to do so because of a change in
                  circumstances, that the dividend shall be payable wholly in
                  cash after all and if they so determine then all elections
                  made shall be disregarded. The dividend shall be payable
                  wholly in cash if the ordinary share capital of the Company
                  ceases to be listed on the Official List of the London Stock
                  Exchange at any time prior to the due date of issue of the
                  additional shares or if the listing is suspended and not
                  reinstated by the date immediately preceding the due date of
                  such issue;

         (L)      the Directors may on any occasion determine that rights of
                  election hereunder shall be subject to such exclusions,
                  restrictions or other arrangements as the Directors may deem
                  necessary or expedient in relation to legal or practical
                  problems under the laws

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                                      84

                  of, or the requirements of any recognised regulating body or
                  any stock exchange in, any territory; and

         (M)      this Article shall have effect without prejudice to the other
                  provisions of these presents and such provisions shall also
                  have effect without prejudice to the provisions of this
                  Article.

144(A).  Procedure for payment

         Any dividend or other monies payable in cash on or in respect of a
         share may be paid by cheque, warrant or other financial instrument
         sent through the post to the registered address of the member or
         person entitled thereto (or, if two or more persons are registered as
         joint holders of the share or are entitled thereto in consequence of
         the death or bankruptcy of the holder or otherwise by operation of
         law, to any one of such persons), or to such person and such address
         as such member or person or persons may by writing direct Every such
         cheque shall be crossed and bear across its face the words "account
         payee" or "a/c payee" either with or without the word "only", and
         every such cheque or warrant or other financial instrument shall be
         made payable to the order of the person to whom it is sent or to such
         person as the holder or joint holders or person or persons entitled to
         the share in consequence of the death or bankruptcy of the holder or
         otherwise by operation of law may direct. Payment of the cheque or
         warrant or other financial instrument by the banker upon whom it is
         drawn or, in respect of uncertificated shares, the making of payment
         in accordance with the facilities and requirements of the relevant
         system, shall be a good discharge to the Company. Every such cheque or
         warrant or other financial instrument shall be sent at the risk of the
         person entitled to the money represented thereby. In addition, any
         such dividend or other monies may be paid by any usual or common
         banking or funds transfer method (including, without limitation,
         direct debit, bank transfer and electronic funds transfer) and to or
         through such person as the holder or joint holders may in writing
         direct, and the Company shall have no responsibility for any sums lost
         or delayed in the course of any such transfer or where it has acted on
         any such directions.

 (B).    Uncertificated shares

         In respect of uncertificated shares every such payment of dividend or
         other monies made by any method referred to in this Article 144 may be
         made in any such manner as may be consistent with the facilities and
         requirements of the relevant system. Without prejudice to the
         generality of the foregoing, in respect of uncertificated shares, such
         payment may include the sending by the Company or by any person on its
         behalf of an instruction to the Operator of the relevant system to
         credit the cash memorandum account of the holder or joint holders, or
         of such person as the holder or joint holders may in writing direct.

  (C).   Uncashed Dividends

         The Company may cease to send any cheque, warrant or other financial
         instrument through the post or employ any other means of payment,
         including payment by means of a relevant system, for any dividend
         payable on any shares in the Company which is normally paid in that
         manner on those shares if in respect of at least two consecutive
         dividends payable on those shares the cheques, warrants or other
         financial instruments have been returned undelivered or remain
         uncashed or that means of payment has failed. In addition, the Company
         may cease to send any cheque, warrant or other financial instrument
         through the post or may cease to employ any other means of payment if,
         in respect of one dividend payable on those shares, the cheque,
         warrant or other financial instrument has been returned undelivered or
         remains uncashed or that means of payment has failed and reasonable

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                                      85

         enquiries have failed to establish any new address or account of the
         registered holder. Subject to the provisions of these presents, the
         Company may recommence sending cheques, warrants or other financial
         instruments or employing such other means in respect of dividends
         payable on those shares if the holder or person entitled to
         transmission requests such recommencement in writing. All monies
         represented by cheques, warrants or other financial instruments or
         means of payment not sent or employed under this paragraph (C) shall
         be deemed to be unclaimed dividends or monies and the provisions of
         Articles 48 and 140 shall apply thereto.

  (D).   Currency of payment

         Subject to the provisions of these presents and to the rights
         attaching to or the terms of issue of any shares, any dividends or
         other monies on or in respect of a share may be paid in such currency
         on the basis of the Applicable Exchange Rate as the Directors may
         think fit or otherwise determine.

145.     Receipts where joint holders

         If two or more persons are registered as joint holders of any share,
         or are entitled jointly to a share in consequence of the death or
         bankruptcy of the holder, any one of them may give effectual receipts
         for any dividend or other monies payable or property distributable on
         or in respect of the share.

                                  RECORD DATE

146.     Record date

         Notwithstanding any other provision of these presents but without
         prejudice to the rights attached to any shares and subject to the
         Statutes, the Company or the Directors may by resolution specify any
         date (the "record date") as the date at the close of business (or such
         other time as the Directors may determine) on which persons registered
         as the holders of shares or other securities shall be entitled to
         receipt of any dividend, distribution, interest, allotment, issue,
         notice, information, document or circular and such record date may be
         on or at any time before the date on which the same is paid or made or
         (in the case of any dividend, distribution, interest, allotment or
         issue) at any time after the same is recommended, resolved, declared
         or announced but without prejudice to the rights inter se in respect
         of the same of transferors and transferees of any such shares or other
         securities.

                                    RESERVES

147(A).  Reserves

         The Directors may from time to time subject to the rights attaching to
         any share set aside out of the profits of the Company and carry to
         reserve such sums in such currencies as they think proper which, at
         the discretion of the Directors, shall be applicable for any purpose
         to which the profits of the Company may properly be applied and
         pending such application may either be employed in the business of the
         Company or be invested. The Directors may divide the reserve into such
         special funds denominated in such currencies as they think fit, and
         may consolidate into one fund denominated in such currencies as they
         think fit any special funds or any parts of any special funds into
         which the reserve may have been divided. The Directors may also
         without placing the same to reserve carry forward any profits. In
         carrying sums to reserve and in applying the same the Directors shall
         comply with the provisions of the Statutes and these presents.

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                                      86

  (B).   Limitation on carrying sums to reserve

         Notwithstanding the provisions of paragraph (A) of this Article:-

         (i)      unless the Directors shall determine in relation to any New
                  Preference Shares prior to the allotment thereof that this
                  paragraph (B)(i) shall not apply thereto the Directors shall
                  not set aside out of profits and carry to any reserve fund
                  referred to in paragraph (A), or carry forward in the manner
                  described in paragraph (A), any sum then required for the
                  payment of dividend payable on any New Preference Shares
                  which may be properly applied for that purpose; and

         (ii)     if at any time there shall be insufficient profits standing
                  to the credit of the profit and loss account (or any other of
                  the Company's accounts or reserves) and available for
                  distribution for the payment of any such dividend referred to
                  in paragraph (B) (i) above, the Directors shall (subject to
                  the Statutes) withdraw from any such reserve fund referred to
                  in paragraph (A) such sum (calculated at the Applicable
                  Exchange Rate) as may be required for payment of any such
                  dividend (and so that the Directors shall not require the
                  consent of the Company in General Meeting to such
                  withdrawal). Subject to the Statutes, any sum so withdrawn
                  (and any profits previously carried forward pursuant to
                  paragraph (A) subsequently required for the payment of any
                  such dividend) may be applied in or towards payment of such
                  dividend.

  (C).   Different currencies

         Any consolidation of or any credit to, debit from or other transfer
         between reserves denominated in different currencies shall be effected
         at the Applicable Exchange Rate.

                     CAPITALISATION OF PROFITS AND RESERVES

148.     Power to capitalise profits

148(A)   Subject to the Statutes and to the rights attaching to any share, the
         Company may upon the recommendation of the Directors by Ordinary
         Resolution and subject as hereinafter provided, resolve to capitalise
         any part of the undivided profits of the Company (whether or not the
         same are available for distribution) or any part of any sum standing
         to the credit of any of the Company's reserves (including Share
         Premium Account and Capital Redemption Reserve), provided that such
         sum be not required for paying the dividends on any shares carrying a
         fixed cumulative preferential dividend, and authorise the Directors to
         appropriate the profits or sum resolved to be capitalised either in
         accordance with the rights attaching to any share or to the Ordinary
         Shareholders in the proportions in which such profits or sum would
         have been divisible amongst them had the same been applied or been
         applicable in paying a dividend on the Ordinary Shares and to apply
         such profits or sum on their behalf either in or towards paying up the
         amounts (if any) for the time being unpaid on any shares held by them
         respectively, or in paying up in full unissued shares or debentures or
         other securities or obligations of the Company of a nominal amount
         equal to such profits or sum, such shares or debentures or other
         securities or obligations to be allotted and distributed credited as
         fully paid up to and amongst them in the proportion aforesaid, or
         partly in one way and partly in the other:

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                                      87

         Provided that any Share Premium Account and Capital Redemption Reserve
         and any profits which are not available for distribution may only be
         applied hereunder in the paying up of unissued shares to be allotted
         as fully paid.

148(B)   In addition and without limiting the generality of paragraph (A) of
         this Article, the Directors may at any time without any resolution of
         the shareholders capitalise any profit or reserve which may be
         capitalised pursuant to paragraph (A) of this Article and which is
         required to be capitalised to enable the Company to allot and issue
         fully paid shares to the holders of convertible securities pursuant to
         the rights of conversion conferred upon such holders and in any such
         case the Directors shall apply any sum so capitalised in paying up and
         issuing to such holders such number of shares of such nominal amounts
         and conferring such rights and being subject to such restrictions as
         shall be required to enable the Company to comply with its
         obligations.

149(A).  Procedure for capitalisation

         Whenever such a resolution as aforesaid shall have been passed the
         Directors shall make all appropriations and applications of the
         profits or sum resolved to be capitalised thereby and all allotments
         and issues of fully paid shares or debentures or other securities (if
         any) and generally shall do all acts and things required to give
         effect thereto, with full power to the Directors to make such
         provisions as they think fit for the case of shares or debentures or
         other securities becoming distributable in fractions (including
         provisions whereby any fractional entitlements which would arise on
         the basis aforesaid are disregarded or the benefit thereof accrues to
         the Company rather than to the members concerned) and also to
         authorise any person to enter on behalf of all the members interested
         into an agreement with the Company providing for any such
         capitalisation and for matters incidental thereto and any agreement
         made under such authority shall be effective and binding on all
         concerned.

  (B).   Power to capitalise on adjustment of subscription price in an
         employees' share scheme

         Notwithstanding any other provisions contained in these presents, if
         an adjustment is made to the subscription price payable by an option
         holder under any employees' share scheme which results in the adjusted
         price per share payable on the exercise of an option in respect of an
         Ordinary Share being less than the nominal value of such Ordinary
         Share (the "adjusted price"), the Directors may capitalise all or part
         of the Company's reserves available for distribution (excluding any
         Share Premium Account, Capital Redemption Reserve or other
         undistributable reserve), upon the issue of any Ordinary Share in
         respect of and following the exercise of the relevant option (the "new
         share"). The amount to be so capitalised shall be equal to the
         difference between the adjusted price and the nominal value of the new
         share. The Directors shall apply such amount in paying up in full the
         balance payable on the new share. The Directors may take such steps as
         they consider necessary to ensure that the Company has sufficient
         reserves available for such application. No further authority of the
         Company in General Meeting is required.

                               MINUTES AND BOOKS

150.     Keeping of minutes and books

         The Directors shall cause Minutes to be made in books to be provided
         for the purpose:-

         (A)      Of the names of the Directors or their alternates and any
                  other persons present at each meeting of Directors and of any
                  committee formed under Article 118.

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                                      88

         (B)      Of all resolutions and proceedings at all meetings of the
                  Company and of any class of members of the Company and of the
                  Directors and of committees formed under Article 118.

         Any such Minute shall be conclusive evidence of any such proceedings
         if it purports to be signed by the chairman of the meeting at which
         the proceedings were had, or by the chairman of the next succeeding
         meeting.

151.     Safeguarding of minutes and books

         Any register, index, minute book, book of account or other book
         required by these presents or the Statutes to be kept by or on behalf
         of the Company may be kept either by making entries in bound books or
         by recording them in any other manner. In any case in which bound
         books are not used, the Directors shall take adequate precautions for
         guarding against falsification and for facilitating its discovery.

                                    ACCOUNTS

152.     Right to inspect accounts

         Accounting records sufficient to show and explain the Company's
         transactions and otherwise complying with the Statutes shall be kept
         at the Office, or, subject to the Statutes, at such other place or
         places as the Directors think fit, and shall always be open to the
         inspection of the Directors. No member (other than a Director) shall
         have any right of inspecting any account or book or document of the
         Company except as conferred by statute or ordered by a court of
         competent jurisdiction or authorised by the Directors.

153.     Preparation and laying of accounts

         The Directors shall from time to time in accordance with the
         provisions of the Statutes cause to be prepared and to be laid before
         a General Meeting of the Company such profit and loss accounts,
         balance sheets, group accounts (if any) and reports as may be
         necessary.

154.     Accounts to be sent to members

         A copy of every balance sheet and profit and loss account which is to
         be laid before a General Meeting of the Company (including every
         document required by law to be attached or annexed thereto) and of the
         Directors' and Auditors' reports or (where permitted by the Statutes
         and/or any applicable regulations and if the Directors so resolve from
         time to time) a copy of a summary financial statement instead of such
         balance sheet, profit and loss account and reports shall, not less
         than twenty one days before the date of the meeting, be sent to every
         member of, and every holder of debentures of, the Company and to every
         other person who is entitled to receive notices of meetings from the
         Company under the provisions of the Statutes or of these presents;
         Provided that this Article shall not require a copy of these documents
         to be sent to more than one of joint holders or to any person who is
         not entitled to receive notices of meetings and of whose address the
         Company is not aware, but any member or holder of debentures to whom a
         copy of these documents has not been sent shall be entitled to receive
         a copy free of charge on application at the Office. Whenever listing
         or quotation on any stock exchange for all or any of the shares or
         debentures or other securities of the Company shall for the time being
         be in force, there shall be forwarded to the appropriate officer of
         such stock exchange such number of copies of such documents and/or
         statements as may for the time being be required under its regulations
         or practice.

<PAGE>
                                      89

         Reference in this Article (other than in the immediately preceding
         sentence) to copies of the above-mentioned documents and/or statements
         being sent to any person include (without prejudice to any other
         provision of these presents) references to copies of such documents
         and/or statements being sent, or treated as sent, to such person using
         electronic communications in accordance with Section 238(4A) and (4B)
         or Section 251(2A) and (2B) of the 1985 Act, and the provisions of
         Section 238(4D) and 251(2D) of the 1985 Act shall apply in respect of
         the publication of such documents and/or statements on a web site.

                                    AUDITORS

155.     Validity of acts of auditors

         Subject to the provisions of the Statutes, all acts done by any person
         acting as an Auditor shall, as regards all persons dealing in good
         faith with the Company, be valid, notwithstanding that there was some
         defect in his appointment or that he was at the time of his
         appointment not qualified for appointment or subsequently became
         disqualified.

156.     Rights of auditors

         The Auditor shall be entitled to attend any General Meeting and to
         receive all notices of and other communications relating to any
         General Meeting which any member is entitled to receive, and to be
         heard at any General Meeting on any part of the business of the
         meeting which concerns him as Auditor. Notwithstanding the references
         to notice in writing in Article 56, electronic communications may be
         used by the Company pursuant to Section 390(1A) of the 1985 Act (and
         the provisions of the 1985 Act therein referred to) to give notice of
         General Meetings to the Auditors.

                                    NOTICES

157.     Notices to be in writing

         Any notice to be given to or by any person pursuant to these presents
         shall, unless otherwise provided in these presents, be in writing or
         be given using electronic communications to an address for the time
         being notified for that purpose to the person giving the notice.

158(A).  Service of notices

         Any notice or document (including a share certificate) may be served
         on or delivered to any member by the Company either personally or by
         sending it through the post in a prepaid cover addressed to such
         member at his registered address, or (if he has no registered address
         within the United Kingdom) to the address, if any, within the United
         Kingdom supplied by him to the Company as his address for the service
         of notices, or by delivering it to such address addressed as aforesaid
         or, in respect of any shareholder, in accordance with any of the
         rights attaching to his shares for the time being, or by means of a
         relevant system, or by sending it using electronic communications to
         an address for the time being notified to the Company by the member,
         or in accordance with any other arrangements approved by the member
         concerned (which may consist of the Company placing such notice or
         document on a web site and sending the member concerned notification
         of the notice or document on the web site in lieu of sending the
         notice or document). In the case of a member registered on a branch
         register any such notice or document may be posted either in the
         United Kingdom or in the territory in which such branch register is
         maintained.

<PAGE>
                                      90

  (B).   When notice deemed served

         Where a notice or other document is served or sent by post, service or
         delivery shall be deemed to be effected at the expiration of
         twenty-four hours (or where second-class mail is employed, forty-eight
         hours) after the time when the cover containing the same is posted and
         in proving such service or delivery it shall be sufficient to prove
         that such cover was properly addressed, stamped and posted. Any notice
         or documents not sent by post but left by the Company at a registered
         address shall be deemed to have been served or delivered on the day it
         was so left. Any notice served or delivered by the Company by means of
         a relevant system shall be deemed to have been served or delivered
         when the Company or any sponsoring system participant acting on its
         behalf sends the issuer-instruction relating to the notice. Any notice
         or document sent by using electronic communication shall be deemed to
         be served or delivered at the expiration of forty-eight hours after
         the time it was sent, and in proving such service or delivery, proof
         that a notice or document contained in an electronic communication was
         sent in accordance with guidance issued by the Institute of Chartered
         Secretaries and Administrators shall be conclusive evidence that the
         notice or document was served or delivered. Any notice or document
         served or delivered by the Company by any other means authorised by
         the member concerned shall be deemed to have been served when the
         Company has carried out the action it has been authorised to take for
         that purpose.

    (C). Record Date for Service

         Any notice or document may be served or delivered by the Company by
         reference to the Register of Members as it stands at any time not more
         than 15 days before the date of service or delivery. No change in the
         register after that time shall invalidate that service or delivery.
         Where any notice or document is served on or delivered to any person
         in respect of a share in accordance with these presents, no person
         deriving any title or interest in that share shall be entitled to any
         further service or delivery of that notice or document.

159.     Notice to joint holders

         In respect of joint holdings all notices shall be given to that one of
         the joint holders whose name stands first in the Register of Members
         and notice so given shall be sufficient notice to all the joint
         holders in their capacity as such. For such purposes a joint holder
         having no registered address in the United Kingdom and not having
         supplied an address within the United Kingdom for the service of
         notices shall be disregarded.

160.     Notice to persons entitled by transmission

         A person entitled to a share in consequence of the death or bankruptcy
         of a member or otherwise by operation of law upon such evidence being
         produced as may from time to time properly be required by the
         Directors and upon supplying an address within the United Kingdom for
         the service of notices, shall be entitled to have served upon or
         delivered to him at such address any notice or document to which the
         member would have been entitled, and such service or delivery shall
         for all purposes be deemed a sufficient service or delivery of such
         notice or document on all persons interested (whether jointly with or
         as claiming through or under him) in the share. Save as aforesaid any
         notice or document delivered or sent by post to or left at the
         registered address of any member in pursuance of these presents shall,
         notwithstanding that such member be then dead or bankrupt or in
         liquidation, and whether or not the Company have notice of his death
         or bankruptcy or liquidation be deemed to have been duly served or
         delivered in respect of any share registered in the name of such
         member as sole or joint holder.

<PAGE>
                                      91

161.     Untraced members

         A member who (having no registered address within the United Kingdom)
         has not supplied to the Company an address within the United Kingdom
         for the service of notices shall not be entitled to receive notices
         from the Company. If on three consecutive occasions notices have been
         sent through the post to any member at his registered address or his
         address for the service of notices but have been returned undelivered,
         or if, after any one such occasion, the Directors or any committee
         authorised by the Directors in that behalf are of the opinion, after
         the making of all reasonable enquiries, that any further notices to
         such member would, if sent as aforesaid, likewise be returned
         undelivered, such member shall not thereafter be entitled to receive
         notices from the Company until he shall have communicated with the
         Company and supplied in writing to the Transfer Office a new
         registered address or address within the United Kingdom for the
         service of notices.

162.     Signature

         The signature of any notice required to be given by the Company, and
         given in writing, may be typed or printed or otherwise written.

163.     Advertisement of notices

         Any notice required to be given by the Company to the members or any
         of them, and not expressly provided for by or pursuant to these
         presents, shall be sufficiently given if given by advertisement
         inserted once in at least one leading Scottish newspaper and one
         newspaper with a national circulation in the United Kingdom.

164.     Notice during disruption of postal services

         If at any time by reason of the suspension or curtailment of postal
         services within the United Kingdom the Company is unable effectively
         to convene a General Meeting by notices sent through the post, a
         General Meeting may be convened by a notice advertised in at least one
         newspaper with a national circulation in the United Kingdom and one
         leading Scottish newspaper published on the same date and such notice
         shall be deemed to have been duly served on all members entitled
         thereto at noon on the day when the advertisement appears. In any such
         case the Company shall send confirmatory copies of the notice by post
         if at least six clear days prior to the meeting the posting of notices
         to addresses throughout the United Kingdom again becomes practicable.

165.     Notice to warrant holders

         The holders of share warrants shall not, unless otherwise expressed
         therein, be entitled in respect thereof to receive notices from the
         Company.

166.     Statutory requirements

         Nothing in any of the preceding nine Articles shall affect any
         requirement of the Statutes that any particular offer, notice or other
         document be served in any particular manner.

         Nothing in any of the preceding nine Articles shall prevent or
         restrict the Company using any method of sending, or giving access to,
         any particular offer, notice or other document which the Statutes or
         any other provision of these presents permits or enables the Company
         to use.
<PAGE>
                                      92

                                   WINDING UP

167.     Liquidator may distribute in specie

         If the Company shall be wound up (whether the liquidation is
         voluntary, under supervision, or by the Court) the Liquidator may,
         with the authority of an Extraordinary Resolution, divide among the
         members in specie or kind the whole or any part of the assets of the
         Company and whether or not the assets shall consist of property of one
         kind or shall consist of properties of different kinds, and may for
         such purpose set such value as he deems fair upon any one or more
         class or classes of property and may determine how such division shall
         be carried out as between the members or different classes of members.
         The Liquidator may, with the like authority, vest any part of the
         assets in trustees upon such trusts for the benefit of members as the
         Liquidator with the like authority shall think fit, and the
         liquidation of the Company may be closed and the Company dissolved,
         but so that no contributory shall be compelled to accept any shares or
         other property in respect of which there is a liability.

                            PROVISION FOR EMPLOYEES

168.     Provision for employees

         The Directors may by resolution exercise any power conferred by the
         Statutes to make provision for the benefit of persons employed or
         formerly employed by the Company or any of its subsidiaries in
         connection with the cessation or the transfer to any person of the
         whole or part of the undertaking of the Company or that subsidiary.

                                   INDEMNITY

169.     Indemnity

         Subject to the provisions of and so far as may be consistent with the
         Statutes, every Director, Secretary or other officer of the Company,
         and, if the Directors so determine, an Auditor, shall be entitled to
         be indemnified out of the assets of the Company against all costs,
         charges, losses, expenses and liabilities incurred by him in the
         actual or purported execution and/or discharge of his duties and/or
         the exercise or purported exercise of his powers and/or otherwise in
         relation to or in connection with his duties, powers or office
         including (without prejudice to the generality of the foregoing) any
         liability incurred by him in defending any proceedings, civil or
         criminal, which relate to anything done or omitted or alleged to have
         been done or omitted by him as an officer or employee or Auditor of
         the Company and in which decree or judgment is given in his favour (or
         the proceedings are otherwise disposed of without any finding or
         admission of any material breach of duty on his part) or in which he
         is acquitted or in connection with any application for relief from
         liability in respect of any such act or omission in which relief is
         granted to him by the Court.

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                                      93

                                   Schedule 1

                     Non-cumulative Euro Preference Shares

1.       The Non-cumulative Euro Preference Shares are New Preference Shares.
         They shall rank after the Cumulative Preference Shares to the extent
         specified in Article 4 and this Schedule 1, and shall rank pari passu
         inter se and (save as aforesaid) with the Cumulative Preference Shares
         and with all other New Preference Shares. They shall confer the rights
         and be subject to the restrictions set out in this Schedule 1 and
         shall also confer such further rights as may be attached by the
         Directors to such shares in accordance with this Schedule 1 prior to
         allotment. Whenever the Directors have power under this Schedule 1 to
         determine any of the rights attached to any of the Non-cumulative Euro
         Preference Shares, the rights so determined need not be the same as
         those attached to the Non-cumulative Euro Preference Shares then
         allotted or in issue. The Non-cumulative Euro Preference Shares may be
         issued in one or more separate series, and each series shall be
         identified in such manner as the Directors may determine without any
         such determination or identification requiring any alteration to these
         presents.

2.       Each Non-cumulative Euro Preference Share shall confer the following
         rights as to participation in the profits and assets of the Company,
         receipt of notices, attendance and voting at meetings and
         redemption:--

2.1      Income

         The right (subject to the provisions of paragraph 2.2, if applicable)
         to a non-cumulative preferential dividend not exceeding a specified
         amount payable in Euro at such rate on such dates (each a "dividend
         payment date") in respect of such periods (each a "dividend period")
         and on such other terms and conditions as may be determined by the
         Directors prior to allotment thereof. References in these presents to
         a "dividend" on the Non-cumulative Euro Preference Shares include a
         reference to each dividend in respect of each dividend period
         applicable thereto and references in this Schedule 1 to dividend
         payment dates and dividend periods are to dividend payment dates and
         dividend periods in respect of the Non-cumulative Euro Preference
         Shares only. Such dividends shall be paid in priority to the payment
         of any dividends on the Ordinary Shares. The Non-cumulative Euro
         Preference Shares shall rank for dividend after the Cumulative
         Preference Shares, pari passu with the Non-cumulative Sterling
         Preference Shares, the Non-cumulative Dollar Preference Shares, the
         Category II Non-cumulative Dollar Preference Shares and all other New
         Preference Shares expressed to rank pari passu therewith as regards
         participation in profits and otherwise in priority to any other share
         capital in the Company.

2.2      Further provisions as to income

         All or any of the following provisions shall apply in relation to any
         particular Non-cumulative Euro Preference Shares if so determined by
         the Directors prior to allotment thereof:--

         (i)      if, in the opinion of the Directors, the distributable
                  profits of the Company are sufficient to cover the payment in
                  full of dividends on the Non-cumulative Euro Preference
                  Shares on any dividend payment date and also the payment in
                  full of all other dividends stated to be payable on such date
                  on any other New Preference Share expressed to rank pari
                  passu therewith as regards participation in profits, after
                  payment in full, or the setting aside of a sum to cover the
                  payment in full, of all
<PAGE>
                                      94

                  dividends stated to be payable on such date on any Cumulative
                  Preference Share, then each such dividend shall be declared
                  and paid in full;

         (ii)     if, in the opinion of the Directors, the distributable
                  profits of the Company are insufficient to cover the payment
                  in full of dividends on the Non-cumulative Euro Preference
                  Shares on any dividend payment date and also the payment in
                  full of all other dividends stated to be payable on such date
                  on any other New Preference Share expressed to rank pari
                  passu therewith as regards participation in profits, after
                  payment in full, or the setting aside of a sum to cover the
                  payment in full, of all dividends stated to be payable on or
                  before such date on any Cumulative Preference Share, then
                  dividends shall be declared by the Directors pro rata for the
                  Non-cumulative Euro Preference Shares and such other New
                  Preference Shares to the extent of the available
                  distributable profits (if any) to the intent that the amount
                  of dividend declared per share on each such Non-cumulative
                  Euro Preference Share and other New Preference Share will
                  bear to each other the same ratio as the dividends accrued
                  per share on each such Non-cumulative Euro Preference Share
                  and other New Preference Share bear to each other. If it
                  shall subsequently appear that any such dividend which has
                  been paid should not, in accordance with the provisions of
                  this sub-paragraph, have been so paid, then provided the
                  Directors shall have acted in good faith, they shall not
                  incur any liability for any loss which any shareholder may
                  suffer in consequence of such payment having been made;

         (iii)    if in the opinion of the Directors, the payment of any
                  dividend on any Non-cumulative Euro Preference Shares would
                  breach or cause a breach of the capital adequacy requirements
                  of the Financial Services Authority (or any person or body to
                  whom the banking supervision functions of the Financial
                  Services Authority are transferred) applicable to the Company
                  and/or any of its subsidiaries, then none of such dividend
                  shall be declared or paid;

         (iv)     subject to sub-paragraph (v) below, the Non-cumulative Euro
                  Preference Shares shall carry no further right to participate
                  in the profits of the Company and if and to the extent that
                  any dividend or part thereof is on any occasion not paid for
                  the reasons described in sub-paragraph (ii) or (iii) above,
                  the holders of such shares shall have no claim in respect of
                  such non-payment;

         (v)      if any dividend or part thereof on any Non-cumulative Euro
                  Preference Share is not payable for the reasons specified in
                  sub-paragraphs (ii) or (iii) above and if they so resolve,
                  the Directors may, subject to the Statutes, pay a special
                  non-cumulative preferential dividend on the Non-cumulative
                  Euro Preference Shares at a rate not exceeding (euro)0.01 per
                  share (but so that reference elsewhere in this Schedule 1 and
                  in these presents to any dividend payable on any
                  Non-cumulative Euro Preference Shares shall not be treated as
                  including a reference to any such special dividend);

         (vi)     if any date on which dividends are payable on Non-cumulative
                  Euro Preference Shares is not a day on which TARGET is
                  operating and on which banks in London are open for business,
                  and on which foreign exchange dealings may be conducted in
                  Euro ("a Euro Business Day"), then payment of the dividend
                  payable on such date will be made on the succeeding Euro
                  Business Day and without any interest or other payment in
                  respect of such delay unless such day shall fall within the
                  next calendar month whereupon such payment will be made on
                  the preceding Euro Business Day; for these purposes "TARGET"
                  means the Trans-European Real-Time Gross Settlement Express
                  Transfer (TARGET) system;
<PAGE>
                                      95

         (vii)    dividends payable on Non-cumulative Euro Preference Shares
                  shall accrue from and to the dates determined by the
                  Directors prior to allotment thereof, and the amount of
                  dividend payable in respect of any period shorter than a full
                  dividend period will be calculated on the basis of twelve 30
                  day months, a 360 day year and the actual number of days
                  elapsed in such period;

         (viii)   if any dividend stated to be payable on the Non-cumulative
                  Euro Preference Shares on the most recent dividend payment
                  date has not been declared and paid in full, or if a sum has
                  not been set aside to provide for such payment in full, no
                  dividends may be declared on any other share capital of the
                  Company (other than the Cumulative Preference Shares), and no
                  sum may be set aside for the payment thereof, unless, on the
                  date of declaration relative to any such payment, an amount
                  equal to the dividend stated to be payable on the
                  Non-cumulative Euro Preference Shares in respect of the then
                  current dividend period is set aside for the payment in full
                  of such dividend on the dividend payment date relating to the
                  then current dividend period; and

         (ix)     if any dividend stated to be payable on the Non-cumulative
                  Euro Preference Shares on any dividend payment date has not
                  been declared and paid in full, or if a sum has not been set
                  aside to provide for such payment in full, the Company may
                  not redeem or purchase or otherwise acquire for any
                  consideration any other share capital of the Company, and may
                  not set aside any sum nor establish any sinking fund for the
                  redemption or purchase or other such acquisition thereof,
                  until such time as dividends stated to be payable on the
                  Non-cumulative Euro Preference Shares in respect of
                  successive dividend periods together aggregating no less than
                  twelve months shall thereafter have been declared and paid in
                  full.

2.3      Capital

         The right on a winding up or liquidation, voluntary or otherwise other
         than (unless otherwise provided by the terms of issue of such share) a
         redemption or purchase by the Company of any shares of any class to
         receive in Euro out of the surplus assets of the Company available for
         distribution amongst the members:--

         (i)      after payment of the arrears (if any) of the fixed cumulative
                  preferential dividends stated to be payable on the Cumulative
                  Preference Shares to the holders thereof in accordance with
                  Article 4(B) FIRSTLY and pari passu with the holders of any
                  other New Preference Shares expressed to rank pari passu
                  therewith as regards participation in profits and in priority
                  to the holders of the Ordinary Shares of the Company a sum
                  equal to:--

                  (A)      the amount of any dividend which is due for payment
                           after the date of commencement of the winding up or
                           liquidation but which is payable in respect of a
                           period ending on or before such date; and

                  (B)      any further amount of dividend payable in respect of
                           the period from the preceding dividend payment date
                           to the date of payment in accordance with this
                           sub-paragraph (i);

                  but only to the extent that any such amount or further amount
                  was, or would have been payable as a dividend in accordance
                  with or pursuant to this Schedule 1 (other than pursuant to
                  this provision); and
<PAGE>
                                      96

         (ii)     subject thereto, pari passu with the holders of the
                  Cumulative Preference Shares and any other New Preference
                  Shares expressed to rank pari passu therewith as regards
                  participation in surplus assets in priority to the holders of
                  the Ordinary Shares of the Company, a sum equal to the amount
                  paid up or credited as paid up on the Non-cumulative Euro
                  Preference Shares (including any premium paid to the Company
                  in respect thereof on issue).

         If upon any such winding-up or liquidation, the amounts available for
         payment are insufficient to cover the amounts payable in full on the
         Cumulative Preference Shares, the Non-cumulative Euro Preference
         Shares and on any other New Preference Shares expressed to rank pari
         passu therewith as regards participation in surplus assets, then the
         holders of the Cumulative Preference Shares, the Non-cumulative Euro
         Preference Shares and such other New Preference Shares will share
         rateably in the distribution of surplus assets (if any) in proportion
         to the full respective preferential amounts to which they are
         entitled. No Non-cumulative Euro Preference Share shall confer any
         right to participate in the surplus assets of the Company other than
         that set out in this paragraph 2.3.

2.4      Receipt of Notices

         The right to have sent to the holder of each Non-cumulative Euro
         Preference Share (at the same time as the same are sent to the holders
         of Ordinary Shares) a copy of the Company's Annual Report and Accounts
         and Interim Financial Statement together with notice of any General
         Meeting of the Company at which such holder is entitled to attend and
         vote.

2.5      Attendance and Voting at Meetings

         The right to attend at a General Meeting of the Company and to speak
         to or vote upon any Resolution proposed thereat in the following
         circumstances:--

         (i)      in respect of a Resolution which is to be proposed at the
                  Meeting either varying or abrogating any of the rights
                  attached to the Non-cumulative Euro Preference Shares or
                  proposing the winding up of the Company (and then in each
                  such case only to speak to and vote upon any such
                  Resolution);

         (ii)     in circumstances where the dividend stated to be payable on
                  the Non-cumulative Euro Preference Shares in respect of such
                  number of dividend periods as the Directors shall determine
                  prior to allotment thereof has not been declared and paid in
                  full, and until such date as the Directors shall likewise
                  determine; and

         (iii)    in such other circumstances as the Directors may determine
                  prior to allotment of the Non-cumulative Euro Preference
                  Shares,

         but not otherwise, together with the right, in such circumstances and
         on such terms, if any, as the Directors may determine prior to
         allotment of the Non-cumulative Euro Preference Shares, to seek to
         requisition a General Meeting of the Company. Whenever holders of
         Non-cumulative Euro Preference Shares are so entitled to vote on a
         Resolution, on a show of hands every such holder who is present in
         person shall have one vote and, on a poll, every such holder who is
         present in person or by proxy shall have such number of votes for each
         Non-cumulative Euro Preference Share held as may be determined by the
         Directors prior to allotment of such Non-cumulative Euro Preference
         Shares.
<PAGE>
                                      97

2.6      Redemption

         (i)      Unless the Directors shall, prior to the allotment of any
                  series of Non-cumulative Euro Preference Shares, determine
                  that such series shall be non-redeemable, each series of
                  Non-cumulative Euro Preference Shares shall, subject to the
                  provisions of the Statutes, be redeemable at the option of
                  the Company in accordance with the following provisions.

         (ii)     In the case of any series of Non-cumulative Euro Preference
                  Shares which are to be so redeemable:--

                  (A)      the Company may, subject thereto, redeem on any
                           Redemption Date (as hereinafter defined) all or some
                           only of the Non-cumulative Euro Preference Shares by
                           giving to the holders of the Non-cumulative Euro
                           Preference Shares to be redeemed not less than 30
                           days' nor more than 60 days' prior notice in writing
                           (a "Notice of Redemption") of the relevant
                           Redemption Date. "Redemption Date" means, in
                           relation to a Non-cumulative Euro Preference Share,
                           any date which falls no earlier than five years and
                           one day (or such longer period (if any) as may be
                           fixed by the Directors prior to allotment of such
                           Share) after the date of allotment of the
                           Non-cumulative Euro Preference Share to be redeemed;

                  (B)      there shall be paid on each Non-cumulative Euro
                           Preference Share so redeemed, in Euro, the aggregate
                           of the nominal amount thereof together with any
                           premium paid on issue together with, where
                           applicable, the Relevant Redemption Premium (defined
                           below) and together with arrears (if any) of
                           dividends thereon (whether earned or declared or
                           not) in respect of the period from the dividend
                           payment date last preceding the Redemption Date to
                           the Redemption Date. "Relevant Redemption Premium"
                           means an amount calculated in accordance with such
                           one (if any) of the following three formulae as
                           applied in relation to a Redemption Date notified
                           under sub-paragraph (A) above which falls within the
                           period of twelve months commencing on the date
                           following the fifth, sixth, seventh, eighth or ninth
                           anniversary of the relevant date of allotment ("the
                           Relevant Date"), as the case may be, as may be
                           determined by the Directors prior to the Relevant
                           Date. The formula for calculation of the Relevant
                           Redemption Premium shall be:--

                           (a)      A x B

                                    where:--

                                    "A" is the amount of dividend excluding any
                                    associated tax credit (not expressed as a
                                    percentage) calculated at the date of
                                    allotment to which the holder of the
                                    Non-cumulative Euro Preference Share to be
                                    redeemed would become entitled in respect
                                    of the twelve months following allotment by
                                    virtue of the terms of issue thereof on the
                                    assumption that such amount of dividend had
                                    accrued on the Non-cumulative Euro
                                    Preference Share during such period and was
                                    payable at the end of such period and on
                                    the further assumption that there shall be
                                    no change in the associated tax credit
                                    affecting the amount of dividend payable in
                                    respect of such period; and
<PAGE>
                                      98

                                    "B" in relation to a Redemption Date
                                    falling within the period of twelve months
                                    commencing on the day following the fifth
                                    anniversary of the Relevant Date, is 66.66
                                    per cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the sixth
                                    anniversary of the Relevant Date, is 53.33
                                    per cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the seventh
                                    anniversary of the Relevant Date, is 40 per
                                    cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the eighth
                                    anniversary of the Relevant Date, is 26.66
                                    per cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the ninth
                                    anniversary of the Relevant Date is 13.33
                                    per cent.; or

                           (b)      C x D

                                    where:--

                                    "C" is the amount of dividend excluding any
                                    associated tax credit (not expressed as a
                                    percentage) calculated at the date of
                                    allotment to which the holder of the
                                    Non-cumulative Euro Preference Share to be
                                    redeemed would become entitled in respect
                                    of the twelve months following allotment by
                                    virtue of the terms of issue thereof on the
                                    assumption that such amount of dividend had
                                    accrued on the Non-cumulative Euro
                                    Preference Share during such period and was
                                    payable at the end of such period and on
                                    the further assumption that there shall be
                                    no change in the associated tax credit
                                    affecting the amount of dividend payable in
                                    respect of such period; and

                                    "D" in relation to a Redemption Date
                                    falling within the period of twelve months
                                    commencing on the day following the fifth
                                    anniversary of the Relevant Date, is 50 per
                                    cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the sixth
                                    anniversary of the Relevant Date, is 40 per
                                    cent.,
<PAGE>
                                      99

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the seventh
                                    anniversary of the Relevant Date, is 30 per
                                    cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the eighth
                                    anniversary of the Relevant Date, is 20 per
                                    cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the ninth
                                    anniversary of the Relevant Date is 10 per
                                    cent.; or

                           (c)      E x F

                                    where:--

                                    "E" is the amount of(euro)25; and

                                    "F" in relation to a Redemption Date
                                    falling within the period of twelve months
                                    commencing on the day following the fifth
                                    anniversary of the Relevant Date, is 33.33
                                    per cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the sixth
                                    anniversary of the Relevant Date, is 26.66
                                    per cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the seventh
                                    anniversary of the Relevant Date, is 20 per
                                    cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the eighth
                                    anniversary of the Relevant Date, is 13.33
                                    per cent.,

                                    or

                                    in relation to a Redemption Date falling
                                    within the period of twelve months
                                    commencing on the day following the ninth
                                    anniversary of the Relevant Date, is 6.66
                                    per cent.
<PAGE>
                                      100

                           No Relevant Redemption Premium shall be payable when
                           the Redemption Date falls after the tenth
                           anniversary of the Relevant Date. The product of any
                           of the above formulae in respect of a Non-cumulative
                           Euro Preference Share may, in the Directors'
                           discretion, be rounded down to the nearest whole
                           Euro.

                           The Directors may, in their discretion, determine in
                           relation to any Non-cumulative Euro Preference
                           Share, prior to the Relevant Date, that none of the
                           above formulae shall apply, in which event no
                           Relevant Redemption Premium shall be payable;

                (C)        in the case of a redemption of some only of the
                           Non-cumulative Euro Preference Shares in any series,
                           the Company shall for the purpose of determining the
                           particular Non-cumulative Euro Preference Shares to
                           be redeemed cause a drawing to be made at the Office
                           or such other place as the Directors may approve in
                           the presence of the Auditors for the time being of
                           the Company;

                (D)        any Notice of Redemption given under sub-paragraph
                           (A) above shall specify the applicable Redemption
                           Date, the particular Non-cumulative Euro Preference
                           Shares to be redeemed and the redemption price
                           (specifying the amount of the accrued and unpaid
                           dividend per share to be included therein and
                           stating that dividends on the Non-cumulative Euro
                           Preference Shares to be redeemed will cease to
                           accrue on redemption), and shall state the place or
                           places at which documents of title in respect of
                           such Non-cumulative Euro Preference Shares are to be
                           presented and surrendered for redemption and payment
                           of the redemption monies is to be effected. Upon
                           such Redemption Date, the Company shall redeem the
                           particular Non-cumulative Euro Preference Shares to
                           be redeemed on that date subject to the provisions
                           of this paragraph and of the Statutes. No defect in
                           the Notice of Redemption or in the giving thereof
                           shall affect the validity of the redemption
                           proceedings;

                (E)        subject to sub-paragraph (I) below, the provisions
                           of this and the following sub-paragraph shall have
                           effect in relation to Non-cumulative Euro Preference
                           Shares for the time being issued and registered in
                           the Register of Members ("Registered Shares") and
                           represented by certificates ("Certificates") and in
                           relation to Non-cumulative Euro Preference Shares
                           which, in accordance with Article 52 of these
                           presents, are for the time being issued and
                           represented by a Warrant (as defined in the said
                           Article 52) ("Bearer Shares"). Payments in respect
                           of the amount due on redemption of a Registered
                           Share shall be made by Euro cheque drawn on a bank
                           in London or upon the request of the holder or joint
                           holders not later than the date specified for the
                           purpose in the Notice of Redemption by transfer to a
                           Euro account maintained by the payee with a bank in
                           London. Such payment will be against presentation
                           and surrender of the relative Certificate at the
                           place or one of the places specified in the Notice
                           of Redemption and if any Certificate so surrendered
                           includes any Non-cumulative Euro Preference Shares
                           not to be redeemed on the relevant Redemption Date
                           the Company shall within fourteen days thereafter
                           issue to the holder, free of charge, a fresh
                           Certificate in respect of such Non-cumulative Euro
                           Preference Shares. Payment in respect of the amount
                           due on redemption of a Bearer Share shall be made by
                           Euro cheque drawn on a bank in London or upon the
                           request of the holder not later than the date
                           specified for the purpose in the Notice of
<PAGE>
                                      101

                           Redemption by transfer to a Euro account maintained
                           by the payee with a bank in London. Such payments
                           will be made against presentation and surrender of
                           the Warrant and all unmatured dividend coupons and
                           talons (if any) at the place or the places specified
                           in the Notice of Redemption. Upon the relevant
                           Redemption Date all unmatured dividend coupons and
                           any talon for additional dividend coupons
                           appertaining thereto (whether or not returned) shall
                           become void and no payment will be made in respect
                           thereof. If the Warrant so surrendered represents
                           any Non-cumulative Euro Preference Shares not to be
                           redeemed on the relevant Redemption Date the Company
                           shall issue, free of charge, a fresh Warrant
                           representing such Bearer Shares which are not to be
                           redeemed on such Redemption Date.

                           All payments in respect of redemption monies will in
                           all respects be subject to any applicable fiscal or
                           other laws;

                (F)        as from the relevant Redemption Date the dividend on
                           the Non-cumulative Euro Preference Shares due for
                           redemption shall cease to accrue except on any such
                           Non-cumulative Euro Preference Share in respect of
                           which, upon the due surrender of the Certificate or,
                           as the case may be, the Warrant and all unmatured
                           dividend coupons and talons (if any) in respect
                           thereof, in accordance with sub-paragraph (E) above,
                           payment of the redemption monies due on such
                           Redemption Date shall be improperly withheld or
                           refused, in which case such dividend, at the rate
                           then applicable, shall be deemed to have continued
                           and shall accordingly continue to accrue from the
                           relevant Redemption Date to the date of payment of
                           such redemption monies. Such Non-cumulative Euro
                           Preference Share shall not be treated as having been
                           redeemed until the redemption monies in question
                           together with the accrued dividend thereon shall
                           have been paid;

                (G)        if the due date for the payment of the redemption
                           monies on any Non-cumulative Euro Preference Shares
                           is not a Euro Business Day then payment of such
                           monies will be made on the next succeeding day which
                           is a Euro Business Day and without any interest or
                           other payment in respect of such delay unless such
                           day shall fall within the next calendar month
                           whereupon such payment will be made on the preceding
                           Euro Business Day;

                (H)        the receipt of the holder for the time being of any
                           Registered Share (or in the case of joint holders
                           the receipt of any one of them) and the receipt of
                           the person delivering any Warrant to the place or
                           one of the places specified pursuant to
                           sub-paragraph (D) above in respect of the monies
                           payable on redemption on such Registered Share or,
                           as the case may be, such Bearer Share, shall
                           constitute an absolute discharge to the Company; and

                (I)        subject as aftermentioned, the provisions of
                           sub-paragraphs (E) and (F) above shall have effect
                           in relation to Registered Shares which are in
                           uncertificated form within the meaning of the
                           Uncertificated Securities Regulations 1995 (as in
                           force on the date of adoption of this Schedule 1) in
                           the same manner as they have effect in relation to
                           Registered Shares represented by Certificates, save
                           that (i) any provision of the said paragraphs
                           requiring presentation and surrender of a
                           Certificate shall be satisfied in the manner
                           prescribed or permitted by the said Regulations (or
                           by any enactment or subordinate legislation which
                           amends or supersedes those Regulations) or (subject
                           to those Regulations or such enactment or
                           subordinate legislation) in
<PAGE>
                                      102

                           such manner as may from time to time be prescribed
                           by the Directors), and (ii) the Company shall not be
                           under any obligation to issue a fresh Certificate
                           under sub-paragraph (E).

2.7      Purchase

         Subject to the provisions of the Statutes and any other applicable
         laws, the Company may at any time and from time to time purchase any
         Non-cumulative Euro Preference Shares upon such terms as the Directors
         shall determine provided that, in the case of Non-cumulative Euro
         Preference Shares which are listed on the London Stock Exchange, the
         purchase price, exclusive of expenses and accrued dividends, shall not
         exceed (i) in the case of a purchase in the open market, or by tender
         (which shall be available alike to all holders of the Non-cumulative
         Euro Preference Shares), the average of the closing middle market
         quotations of such Non-cumulative Euro Preference Shares on the London
         Stock Exchange (as derived from The London Stock Exchange Daily
         Official List) for the last ten dealing days preceding the date of
         purchase or (if higher), in the case of a purchase in the open market
         only, the market price on the date of purchase provided that such
         market price is not more than 105 per cent. of such average and (ii)
         in the case of a purchase by private treaty, 120 per cent. of the
         closing middle market quotation of such Non-cumulative Euro Preference
         Shares on the London Stock Exchange (as derived from The London Stock
         Exchange Daily Official List) for the last dealing day preceding the
         date of purchase: but so that this proviso shall not apply to any
         purchase of Non-cumulative Euro Preference Shares made in the ordinary
         course of a business of dealing in securities.
3.

         (a)      Save with the written consent of the holders of
                  three-quarters in nominal value of, or with the sanction of
                  an Extraordinary Resolution passed at a separate General
                  Meeting of the holders of, the Non-cumulative Euro Preference
                  Shares, the Directors shall not authorise or create, or
                  increase the amount of, any shares of any class or any
                  security convertible into shares of any class ranking as
                  regards rights to participate in the profits or assets of the
                  Company (other than on a redemption or purchase by the
                  Company of any such shares) in priority to the Non-cumulative
                  Euro Preference Shares.

         (b)      The special rights attached to any series of Non-cumulative
                  Euro Preference Shares allotted or in issue shall not (unless
                  otherwise provided by their terms of issue) be deemed to be
                  varied by the creation or issue of any New Shares ranking as
                  regards participation in the profits or assets of the Company
                  in some or all respects pari passu with or after such
                  Non-cumulative Euro Preference Shares. Any new shares ranking
                  in some or all respects pari passu with such Non-cumulative
                  Euro Preference Shares may without their creation or issue
                  being deemed to vary the special rights attached to any
                  Non-cumulative Euro Preference Share then in issue either
                  carry rights identical in all respects with such
                  Non-cumulative Euro Preference Shares or any of them or carry
                  rights differing therefrom in any respect, including, but
                  without prejudice to the generality of the foregoing, in
                  that:--

                  (i)      the rate or means of calculating the dividend may
                           differ and the dividend may be cumulative or
                           non-cumulative;

                  (ii)     the New Shares or any series thereof may rank for
                           dividend as from such date as may be provided by the
                           terms of issue thereof and the dates for payment of
                           dividend may differ;

                  (iii)    the New Shares may be denominated in Sterling or in
                           any Foreign Currency;
<PAGE>
                                      103

                  (iv)     a premium may be payable on return of capital or
                           there may be no such premium;

                  (v)      the New Shares may be redeemable at the option of
                           the holder or of the Company, or may be
                           non-redeemable and if redeemable at the option of
                           the Company, they may be redeemable at different
                           dates and on different terms from those applying to
                           the Non-cumulative Euro Preference Shares; and

                  (vi)     the New Shares may be convertible into Ordinary
                           Shares or any other class of shares ranking as
                           regards participation in the profits and assets of
                           the Company pari passu with or after such
                           Non-cumulative Euro Preference Shares in each case
                           on such terms and conditions as may be prescribed by
                           the terms of issue thereof.

<PAGE>

                                      104

                                   SCHEDULE 2

                                     PART 1

             Non-cumulative Convertible Sterling Preference Shares

1.       The Non-cumulative Convertible Sterling Preference Shares are New
         Preference Shares. They shall rank after the Cumulative Preference
         Shares to the extent specified in Article 4 and this Schedule 2, and
         shall rank pari passu inter se and (save as aforesaid) with the
         Cumulative Preference Shares and with all other New Preference Shares.
         They shall confer the rights and be subject to the restrictions set
         out or referred to in this Part 1 of Schedule 2 and shall also confer
         such further rights (not being inconsistent with the rights set out or
         referred to in this Part 1) as may be attached by the Directors to
         such shares in accordance with this Part 1 prior to allotment.
         Whenever the Directors have power under this Part to determine any of
         the rights attached to any of the Non-cumulative Convertible Sterling
         Preference Shares, the rights so determined need not be the same as
         those attached to the Non-cumulative Convertible Sterling Preference
         Shares then allotted or in issue. The Non-cumulative Convertible
         Sterling Preference Shares may be issued in one or more separate
         series, and each series shall be identified in such manner as the
         Directors may determine without any such determination or
         identification requiring any alteration to these presents.

2.       Each Non-cumulative Convertible Sterling Preference Share shall confer
         the following rights as to participation in the profits and assets of
         the Company, receipt of notices, attendance and voting at meetings,
         redemption and conversion:

2.1      Income

         The right (subject to the provisions of paragraph 2.2, if applicable)
         to a non-cumulative preferential dividend not exceeding a specified
         amount payable in Sterling at such rate (which, in the case of any
         series allotted after 11th April 2001, may be fixed or variable and
         may be subject to recalculation at fixed intervals) on such dates
         (each a "dividend payment date") in respect of such periods (each a
         "dividend period") and on such other terms and conditions as may be
         determined by the Directors prior to allotment thereof. References in
         these presents to a "dividend" on the Non-cumulative Convertible
         Sterling Preference Shares include a reference to each dividend in
         respect of each dividend period applicable thereto and references in
         this Part of the Schedule to dividend payment dates and dividend
         periods are to dividend payment dates and dividend periods in respect
         of the Non-cumulative Convertible Sterling Preference Shares only.
         Such dividends shall be paid in priority to the payment of any
         dividends on the Ordinary Shares. The Non-cumulative Convertible
         Sterling Preference Shares shall rank for dividend after the
         Cumulative Preference Shares, pari passu with the Non-cumulative
         Sterling Preference Shares, the Non-cumulative Dollar Preference
         Shares, the Category II Non-cumulative Dollar Preference Shares, all
         other Convertible Preference Shares and all other New Preference
         Shares expressed to rank pari passu therewith as regards participation
         in profits and otherwise in priority to any other share capital in the
         Company.

2.2      Further provisions as to income

         All or any of the following provisions shall apply in relation to any
         particular Non-cumulative Convertible Sterling Preference Shares if so
         determined by the Directors prior to allotment thereof:-
<PAGE>
                                      105

         (i)      if, in the opinion of the Directors, the distributable
                  profits of the Company are sufficient to cover the payment in
                  full of dividends on the Non-cumulative Convertible Sterling
                  Preference Shares on any dividend payment date and also the
                  payment in full of all other dividends stated to be payable
                  on such date on any other New Preference Share expressed to
                  rank pari passu therewith as regards participation in
                  profits, after payment in full, or the setting aside of a sum
                  to cover the payment in full, of all dividends stated to be
                  payable on such date on any Cumulative Preference Share, then
                  each such dividend shall be declared and paid in full;

         (ii)     if, in the opinion of the Directors, the distributable
                  profits of the Company are insufficient to cover the payment
                  in full of dividends on the Non-cumulative Convertible
                  Sterling Preference Shares on any dividend payment date and
                  also the payment in full of all other dividends stated to be
                  payable on such date on any other New Preference Share
                  expressed to rank pari passu therewith as regards
                  participation in profits, after payment in full, or the
                  setting aside of a sum to cover the payment in full, of all
                  dividends stated to be payable on or before such date on any
                  Cumulative Preference Share, then dividends shall be declared
                  by the Directors pro rata for the Non-cumulative Convertible
                  Sterling Preference Shares and such other New Preference
                  Shares to the extent of the available distributable profits
                  (if any) to the intent that the amount of dividend declared
                  per share on each such Non-cumulative Convertible Sterling
                  Preference Share and other New Preference Share will bear to
                  each other the same ratio as the dividends accrued per share
                  on each such Non-cumulative Convertible Sterling Preference
                  Share and other New Preference Share bear to each other. If
                  it shall subsequently appear that any such dividend which has
                  been paid should not, in accordance with the provisions of
                  this sub-paragraph, have been so paid, then provided the
                  Directors shall have acted in good faith, they shall not
                  incur any liability for any loss which any shareholder may
                  suffer in consequence of such payment having been made;

         (iii)    if, in the opinion of the Directors, the payment of any
                  dividend on any Non-cumulative Convertible Sterling
                  Preference Shares would breach or cause a breach of the
                  capital adequacy requirements of the Financial Services
                  Authority (or any person or body to whom the banking
                  supervision functions of the Financial Services Authority are
                  transferred) applicable to the Company and/or any of its
                  subsidiaries, then none of such dividend shall be declared or
                  paid;

         (iv)     subject to sub-paragraph (v) below, the Non-cumulative
                  Convertible Sterling Preference Shares shall carry no further
                  right to participate in the profits of the Company and if and
                  to the extent that any dividend or part thereof is on any
                  occasion not paid for the reasons described in sub-paragraph
                  (ii) or (iii) above, the holders of such shares shall have no
                  claim in respect of such non-payment;

         (v)      if any dividend or part thereof on any Non-cumulative
                  Convertible Sterling Preference Share is not payable for the
                  reasons specified in sub-paragraphs (ii) or (iii) above and
                  if they so resolve, the Directors may, subject to the
                  Statutes, pay a special non-cumulative preferential dividend
                  on the Non-cumulative Convertible Sterling Preference Shares
                  at a rate not exceeding (pound)0.01 per share (but so that
                  reference elsewhere in this Schedule 2 and in these presents
                  to any dividend payable on any Non-cumulative Convertible
                  Sterling Preference Shares shall not be treated as including
                  a reference to any such special dividend);

         (vi)     if any date on which dividends are payable on Non-cumulative
                  Convertible Sterling Preference Shares is not a day on which
                  banks in London are open for business, and
<PAGE>
                                      106

                  on which foreign exchange dealings may be conducted in London
                  ("a Sterling Business Day"), then payment of the dividend
                  payable on such date will be made on the succeeding Sterling
                  Business Day and without any interest or other payment in
                  respect of such delay unless such day shall fall within the
                  next calendar month whereupon such payment will be made on
                  the preceding Sterling Business Day;

         (vii)    dividends payable on Non-cumulative Convertible Sterling
                  Preference Shares shall accrue from and to the dates
                  determined by the Directors prior to allotment thereof, and
                  the amount of dividend payable in respect of any period
                  shorter than a full dividend period will be calculated on the
                  basis of twelve 30 day months, a 360 day year and the actual
                  number of days elapsed in such period;

         (viii)   if any dividend stated to be payable on the Non-cumulative
                  Convertible Sterling Preference Shares on the most recent
                  dividend payment date has not been declared and paid in full,
                  or if a sum has not been set aside to provide for such
                  payment in full, no dividends may be declared on any other
                  share capital of the Company (other than the Cumulative
                  Preference Shares), and no sum may be set aside for the
                  payment thereof, unless, on the date of declaration relative
                  to any such payment, an amount equal to the dividend stated
                  to be payable on the Non-cumulative Convertible Sterling
                  Preference Shares in respect of the then current dividend
                  period is set aside for the payment in full of such dividend
                  on the dividend payment date relating to the then current
                  dividend period; and

         (ix)     if any dividend stated to be payable on the Non-cumulative
                  Convertible Sterling Preference Shares on any dividend
                  payment date has not been declared and paid in full, or if a
                  sum has not been set aside to provide for such payment in
                  full, the Company may not redeem or purchase or otherwise
                  acquire for any consideration any other share capital of the
                  Company, and may not set aside any sum nor establish any
                  sinking fund for the redemption or purchase or other such
                  acquisition thereof, until such time as dividends stated to
                  be payable on the Non-cumulative Convertible Sterling
                  Preference Shares in respect of successive dividend periods
                  together aggregating no less than twelve months shall
                  thereafter have been declared and paid in full.

2.3      Capital

         The right on a winding up or liquidation, voluntary or otherwise other
         than (unless otherwise provided by the terms of issue of such share) a
         redemption or purchase by the Company of any shares of any class to
         receive in Sterling out of the surplus assets of the Company available
         for distribution amongst the members:-

         (i)      after payment of the arrears (if any) of the fixed cumulative
                  preferential dividends stated to be payable on the Cumulative
                  Preference Shares to the holders thereof in accordance with
                  Article 4(B) FIRSTLY and pari passu with the holders of any
                  other New Preference Shares expressed to rank pari passu
                  therewith as regards participation in profits and in priority
                  to the holders of the Ordinary Shares of the Company a sum
                  equal to:-

                  (A)      the amount of any dividend which is due for payment
                           after the date of commencement of the winding up or
                           liquidation but which is payable in respect of a
                           period ending on or before such date; and
<PAGE>
                                      107

                  (B)      any further amount of dividend payable in respect of
                           the period from the preceding dividend payment date
                           to the date of payment in accordance with this
                           sub-paragraph (i);

                  but only to the extent that any such amount or further amount
                  was, or would have been payable as a dividend in accordance
                  with or pursuant to this Part of Schedule 2 (other than
                  pursuant to this provision); and

         (ii)     subject thereto, pari passu with the holders of the
                  Cumulative Preference Shares and any other New Preference
                  Shares expressed to rank pari passu therewith as regards
                  participation in surplus assets in priority to the holders of
                  the Ordinary Shares of the Company, a sum equal to the amount
                  paid up or credited as paid up on the Non-cumulative
                  Convertible Sterling Preference Shares (including any premium
                  paid to the Company in respect thereof on issue).

         If upon any such winding-up or liquidation, the amounts available for
         payment are insufficient to cover the amounts payable in full on the
         Cumulative Preference Shares, the Non-cumulative Convertible Sterling
         Preference Shares and on any other New Preference Shares expressed to
         rank pari passu therewith as regards participation in surplus assets,
         then the holders of the Cumulative Preference Shares, the
         Non-cumulative Convertible Sterling Preference Shares and such other
         New Preference Shares will share rateably in the distribution of
         surplus assets (if any) in proportion to the full respective
         preferential amounts to which they are entitled. No Non-cumulative
         Convertible Sterling Preference Share shall confer any right to
         participate in the surplus assets of the Company other than that set
         out in this paragraph 2.3.

2.4      Receipt of Notices

         The right to have sent to the holder of each Non-cumulative
         Convertible Sterling Preference Share (at the same time as the same
         are sent to the holders of Ordinary Shares) a copy of the Company's
         Annual Report and Accounts and Interim Financial Statement together
         with notice of any General Meeting of the Company at which such holder
         is entitled to attend and vote.

2.5      Attendance and Voting at Meetings

         The right to attend at a General Meeting of the Company and to speak
         to or vote upon any Resolution proposed thereat in the following
         circumstances:-

         (i)      in respect of a Resolution which is to be proposed at the
                  Meeting either varying or abrogating any of the rights
                  attached to the Non-cumulative Convertible Sterling
                  Preference Shares or proposing the winding up of the Company
                  (and then in each such case only to speak to and vote upon
                  any such Resolution);

         (ii)     in circumstances where the dividend stated to be payable on
                  the Non-cumulative Convertible Sterling Preference Shares in
                  respect of such number of dividend periods as the Directors
                  shall determine prior to allotment thereof has not been
                  declared and paid in full, and until such date as the
                  Directors shall likewise determine; and

         (iii)    in such other circumstances as the Directors may determine
                  prior to allotment of the Non-cumulative Convertible Sterling
                  Preference Shares, but not otherwise, together with the
                  right, in such circumstances and on such terms, if any, as
                  the Directors may determine prior to allotment of the
                  Non-cumulative Convertible Sterling Preference

<PAGE>
                                      108

                  Shares, to seek to requisition a General Meeting of the
                  Company. Whenever holders of Non-cumulative Convertible
                  Sterling Preference Shares are so entitled to vote on a
                  Resolution, on a show of hands every such holder who is
                  present in person shall have one vote and, on a poll, every
                  such holder who is present in person or by proxy shall have
                  such number of votes for each Non-cumulative Convertible
                  Sterling Preference Share held as may be determined by the
                  Directors prior to allotment of such Non-cumulative
                  Convertible Sterling Preference Shares.

2.6      Redemption

         Each series of Non-cumulative Convertible Sterling Preference Shares
         shall, subject to the provisions of the Statutes, be redeemable at the
         option of the Company in accordance with the following provisions:-

         (A)      the Company may, subject thereto, redeem on any Redemption
                  Date (as hereinafter defined) all or some only of the
                  Non-cumulative Convertible Sterling Preference Shares by
                  giving to the holders of the Non-cumulative Convertible
                  Sterling Preference Shares to be redeemed not less than 120
                  days' nor more than 150 days' prior notice in writing (a
                  "Notice of Redemption ") of the relevant Redemption Date.
                  "Redemption Date" means, in relation to a Non-cumulative
                  Convertible Sterling Preference Share, any date which falls
                  no earlier than ten years and one day after the date of
                  allotment of the Non-cumulative Convertible Sterling
                  Preference Share to be redeemed; provided that the Directors
                  may determine, prior to allotment of any series of
                  Non-cumulative Convertible Sterling Preference Shares, that
                  this sub-paragraph (A) shall have effect in relation to that
                  series as if the reference to ten years was a reference to
                  such longer period (not exceeding thirty years) as they
                  determine prior to allotment. The Company shall not be
                  entitled (save with the consent of the relevant holder) to
                  give a Notice of Redemption under this sub-paragraph (A) in
                  respect of any share for which a Conversion Notice (as
                  defined in paragraph 5 of Part 4 of this Schedule 2) has been
                  given in accordance with that Part and not withdrawn;

         (AA)     notwithstanding the foregoing, in relation to any series of
                  Non-cumulative Convertible Sterling Preference Shares
                  allotted after 11th April 2001, sub-paragraph (A) above shall
                  have effect as if the references to ten years, in both places
                  where they occur, were references to five years;

         (B)      there shall be paid on each Non-cumulative Convertible
                  Sterling Preference Share so redeemed, in Sterling, the
                  aggregate of the nominal amount thereof together with any
                  premium paid on issue and together with arrears (if any) of
                  dividends thereon (whether earned or declared or not) in
                  respect of the period from the dividend payment date last
                  preceding the Redemption Date to the Redemption Date;

         (C)      in the case of a redemption of some only of the
                  Non-cumulative Convertible Sterling Preference Shares in any
                  series, the Company shall for the purpose of determining the
                  particular Non-cumulative Convertible Sterling Preference
                  Shares to be redeemed cause a drawing to be made at the
                  Office or such other place as the Directors may approve in
                  the presence of the Auditors for the time being of the
                  Company, provided that there shall be excluded from such
                  drawing any Non-cumulative Convertible Sterling Preference
                  Shares to be converted pursuant to Part 4 of this Schedule 2;

         (D)      any Notice of Redemption given under sub-paragraph (A) above
                  shall specify the applicable Redemption Date, the particular
                  Non-cumulative Convertible Sterling Preference Shares to be
                  redeemed and the redemption price (specifying the amount
<PAGE>
                                      109

                  of the accrued and unpaid dividend per share to be included
                  therein and stating that dividends on the Non-cumulative
                  Convertible Sterling Preference Shares to be redeemed will
                  cease to accrue on redemption), and shall state the place or
                  places at which documents of title in respect of such
                  Non-cumulative Convertible Sterling Preference Shares are to
                  be presented and surrendered for redemption and payment of
                  the redemption monies is to be effected. Upon such Redemption
                  Date, the Company shall redeem the particular Non-cumulative
                  Convertible Sterling Preference Shares to be redeemed on that
                  date subject to the provisions of this paragraph and of the
                  Statutes. No defect in the Notice of Redemption or in the
                  giving thereof shall affect the validity of the redemption
                  proceedings;

         (E)      subject to sub-paragraph (I) below, the provisions of this
                  and the following sub-paragraph shall have effect in relation
                  to Non-cumulative Convertible Sterling Preference Shares for
                  the time being issued and registered in the Register of
                  Members ( "Registered Shares ") and represented by
                  certificates ( "Certificates ") and in relation to
                  Non-cumulative Convertible Sterling Preference Shares which,
                  in accordance with Article 52 of these presents, are for the
                  time being issued and represented by a Warrant (as defined in
                  the said Article 52) ( "Bearer Shares "). Payments in respect
                  of the amount due on redemption of a Registered Share shall
                  be made by Sterling cheque drawn on a bank in London or upon
                  the request of the holder or joint holders not later than the
                  date specified for the purpose in the Notice of Redemption by
                  transfer to a Sterling account maintained by the payee with a
                  bank in London. Such payment will be against presentation and
                  surrender of the relative Certificate at the place or one of
                  the places specified in the Notice of Redemption and if any
                  Certificate so surrendered includes any Non-cumulative
                  Convertible Sterling Preference Shares not to be redeemed on
                  the relevant Redemption Date (other than Non-cumulative
                  Convertible Sterling Preference Shares to be converted
                  pursuant to Part 4 of this Schedule 2) the Company shall
                  within fourteen days thereafter issue to the holder, free of
                  charge, a fresh Certificate in respect of such Non-cumulative
                  Convertible Sterling Preference Shares. Payment in respect of
                  the amount due on redemption of a Bearer Share shall be made
                  by Sterling cheque drawn on a bank in London or upon the
                  request of the holder not later than the date specified for
                  the purpose in the Notice of Redemption by transfer to a
                  Sterling account maintained by the payee with a bank in
                  London. Such payments will be made against presentation and
                  surrender of the Warrant and all unmatured dividend coupons
                  and talons (if any) at the place or the places specified in
                  the Notice of Redemption. Upon the relevant Redemption Date
                  all unmatured dividend coupons and any talon for additional
                  dividend coupons appertaining thereto (whether or not
                  returned) shall become void and no payment will be made in
                  respect thereof. If the Warrant so surrendered represents any
                  Non-cumulative Convertible Sterling Preference Shares not to
                  be redeemed on the relevant Redemption Date (other than
                  Non-cumulative Convertible Sterling Preference Shares to be
                  converted pursuant to Part 4 of this Schedule 2) the Company
                  shall issue, free of charge, a fresh Warrant representing
                  such Bearer Shares which are not to be redeemed on such
                  Redemption Date.

                  All payments in respect of redemption monies will in all
                  respects be subject to any applicable fiscal or other laws;

         (F)      as from the relevant Redemption Date the dividend on the
                  Non-cumulative Convertible Sterling Preference Shares due for
                  redemption shall cease to accrue except on any such
                  Non-cumulative Convertible Sterling Preference Share in
                  respect of which, upon the due surrender of the Certificate
                  or, as the case may be, the
<PAGE>
                                      110

                  Warrant and all unmatured dividend coupons and talons (if
                  any) in respect thereof, in accordance with sub-paragraph (E)
                  above, payment of the redemption monies due on such
                  Redemption Date shall be improperly withheld or refused, in
                  which case such dividend, at the rate then applicable, shall
                  be deemed to have continued and shall accordingly continue to
                  accrue from the relevant Redemption Date to the date of
                  payment of such redemption monies. Such Non-cumulative
                  Convertible Sterling Preference Share shall not be treated as
                  having been redeemed until the redemption monies in question
                  together with the accrued dividend thereon shall have been
                  paid;

         (G)      if the due date for the payment of the redemption monies on
                  any Non-cumulative Convertible Sterling Preference Shares is
                  not a Sterling Business Day then payment of such monies will
                  be made on the next succeeding day which is a Sterling
                  Business Day and without any interest or other payment in
                  respect of such delay unless such day shall fall within the
                  next calendar month whereupon such payment will be made on
                  the preceding Sterling Business Day;

         (H)      the receipt of the holder for the time being of any
                  Registered Share (or in the case of joint holders the receipt
                  of any one of them) and the receipt of the person delivering
                  any Warrant to the place or one of the places specified
                  pursuant to sub-paragraph (D) above in respect of the monies
                  payable on redemption on such Registered Share or, as the
                  case may be, such Bearer Share, shall constitute an absolute
                  discharge to the Company; and

         (I)      subject as aftermentioned, the provisions of sub-paragraphs
                  (E) and (F) above shall have effect in relation to Registered
                  Shares which are in uncertificated form within the meaning of
                  the Uncertificated Securities Regulations 1995 (as in force
                  on the date of adoption of this Schedule 2) in the same
                  manner as they have effect in relation to Registered Shares
                  represented by Certificates, save that (i) any provision of
                  the said paragraphs requiring presentation and surrender of a
                  Certificate shall be satisfied in the manner prescribed or
                  permitted by the said Regulations (or by any enactment or
                  subordinate legislation which amends or supersedes those
                  Regulations) or (subject to those Regulations or such
                  enactment or subordinate legislation) in such manner as may
                  from time to time be prescribed by the Directors), and (ii)
                  the Company shall not be under any obligation to issue a
                  fresh Certificate under sub-paragraph (E).

2.7      Purchase

         Subject to the provisions of the Statutes and any other applicable
         laws, the Company may at any time and from time to time purchase any
         Non-cumulative Convertible Sterling Preference Shares upon such terms
         as the Directors shall determine provided that, in the case of
         Non-cumulative Convertible Sterling Preference Shares which are listed
         on the London Stock Exchange, the purchase price, exclusive of
         expenses and accrued dividends, shall not exceed (i) in the case of a
         purchase in the open market, or by tender (which shall be available
         alike to all holders of the Non-cumulative Convertible Sterling
         Preference Shares), the average of the closing middle market
         quotations of such Non-cumulative Convertible Sterling Preference
         Shares on the London Stock Exchange (as derived from The London Stock
         Exchange Daily Official List) for the last ten dealing days preceding
         the date of purchase or (if higher), in the case of a purchase in the
         open market only, the market price on the date of purchase provided
         that such market price is not more than 105 per cent of such average
         and (ii) in the case of a purchase by private treaty, 120 per cent of
         the closing middle market quotation of such Non-cumulative Convertible
         Sterling Preference Shares on the London Stock Exchange (as derived
         from The London Stock Exchange Daily Official List) for the last
         dealing day

<PAGE>
                                      111

         preceding the date of purchase: but so that this proviso shall not
         apply to any purchase of Non-cumulative Convertible Sterling
         Preference Shares made in the ordinary course of a business of dealing
         in securities.

2.8      Conversion

         The Non-cumulative Convertible Sterling Preference Shares shall be
         convertible into Ordinary Shares in the manner set out in (and subject
         to the provisions of) Part 4 of this Schedule 2. The provisions of
         paragraph 2.6 of this Part 1 regarding redemption are without
         prejudice to any provisions in the said Part 4 providing for the
         effecting of conversion by means of redemption.

3.       (a)      Save with the written consent of the holders of
                  three-quarters in nominal value of, or with the sanction of
                  an Extraordinary Resolution passed at a separate General
                  Meeting of the holders of, the Non-cumulative Convertible
                  Sterling Preference Shares, the Directors shall not authorise
                  or create, or increase the amount of, any shares of any class
                  or any security convertible into shares of any class ranking
                  as regards rights to participate in the profits or assets of
                  the Company (other than on a redemption or purchase by the
                  Company of any such shares) in priority to the Non-cumulative
                  Convertible Sterling Preference Shares.

         (b)      The special rights attached to any series of Non-cumulative
                  Convertible Sterling Preference Shares allotted or in issue
                  shall not (unless otherwise provided by their terms of issue)
                  be deemed to be varied by the creation or issue of any New
                  Shares ranking as regards participation in the profits or
                  assets of the Company in some or all respects pari passu with
                  or after such Non-cumulative Convertible Sterling Preference
                  Shares. Any new shares ranking in some or all respects pari
                  passu with such Non-cumulative Convertible Sterling
                  Preference Shares may without their creation or issue being
                  deemed to vary the special rights attached to any
                  Non-cumulative Convertible Sterling Preference Share then in
                  issue either carry rights identical in all respects with such
                  Non-cumulative Convertible Sterling Preference Shares or any
                  of them or carry rights differing therefrom in any respect,
                  including, but without prejudice to the generality of the
                  foregoing, in that:-

                  (i)      the rate or means of calculating the dividend may
                           differ and the dividend may be cumulative or
                           non-cumulative;

                  (ii)     the New Shares or any series thereof may rank for
                           dividend as from such date as may be provided by the
                           terms of issue thereof and the dates for payment of
                           dividend may differ;

                  (iii)    the New Shares may be denominated in Sterling or in
                           any Foreign Currency;

                  (iv)     a premium may be payable on return of capital or
                           there may be no such premium;

                  (v)      the New Shares may be redeemable at the option of
                           the holder or of the Company, or may be
                           non-redeemable and if redeemable at the option of
                           the Company, they may be redeemable at different
                           dates and on different terms from those applying to
                           the Non-cumulative Convertible Sterling Preference
                           Shares; and
<PAGE>
                                      112

                  (vi)     the New Shares may be convertible into Ordinary
                           Shares or any other class of shares ranking as
                           regards participation in the profits and assets of
                           the Company pari passu with or after such
                           Non-cumulative Convertible Sterling Preference
                           Shares in each case on such terms and conditions as
                           may be prescribed by the terms of issue thereof.

<PAGE>
                                      113

                                     PART 2

              Non-cumulative Convertible Dollar Preference Shares

1.       The Non-cumulative Convertible Dollar Preference Shares are New
         Preference Shares. They shall rank after the Cumulative Preference
         Shares to the extent specified in Article 4 and this Schedule 2, and
         shall rank pari passu inter se and (save as aforesaid) with the
         Cumulative Preference Shares and with all other New Preference Shares.
         They shall confer the rights and be subject to the restrictions set
         out or referred to in this Part 2 of Schedule 2 and shall also confer
         such further rights (not being inconsistent with the rights set out or
         referred to in this Part 2) as may be attached by the Directors to
         such shares in accordance with this Part 2 prior to allotment.
         Whenever the Directors have power under this Part to determine any of
         the rights attached to any of the Non-cumulative Convertible Dollar
         Preference Shares, the rights so determined need not be the same as
         those attached to the Non-cumulative Convertible Dollar Preference
         Shares then allotted or in issue. The Non-cumulative Convertible
         Dollar Preference Shares may be issued in one or more separate series,
         and each series shall be identified in such manner as the Directors
         may determine without any such determination or identification
         requiring any alteration to these presents.

2.       Each Non-cumulative Convertible Dollar Preference Share shall confer
         the following rights as to participation in the profits and assets of
         the Company, receipt of notices, attendance and voting at meetings,
         redemption and conversion:

2.1      Income

         The right (subject to the provisions of paragraph 2.2, if applicable)
         to a non-cumulative preferential dividend not exceeding a specified
         amount payable in Dollars at such rate (which, in the case of any
         series allotted after 11th April 2001, may be fixed or variable and
         may be subject to recalculation at fixed intervals) on such dates
         (each a "dividend payment date") in respect of such periods (each a
         "dividend period") and on such other terms and conditions as may be
         determined by the Directors prior to allotment thereof. References in
         these presents to a "dividend" on the Non-cumulative Convertible
         Dollar Preference Shares include a reference to each dividend in
         respect of each dividend period applicable thereto and references in
         this Part of the Schedule to dividend payment dates and dividend
         periods are to dividend payment dates and dividend periods in respect
         of the Non-cumulative Convertible Dollar Preference Shares only. Such
         dividends shall be paid in priority to the payment of any dividends on
         the Ordinary Shares. The Non-cumulative Convertible Dollar Preference
         Shares shall rank for dividend after the Cumulative Preference Shares,
         pari passu with the Non-cumulative Sterling Preference Shares, the
         Non-cumulative Dollar Preference Shares, the Category II
         Non-cumulative Dollar Preference Shares, all other Convertible
         Preference Shares and all other New Preference Shares expressed to
         rank pari passu therewith as regards participation in profits and
         otherwise in priority to any other share capital in the Company.

2.2      Further provisions as to income

         All or any of the following provisions shall apply in relation to any
         particular Non-cumulative Convertible Dollar Preference Shares if so
         determined by the Directors prior to allotment thereof:-

         (i)      if, in the opinion of the Directors, the distributable
                  profits of the Company are sufficient to cover the payment in
                  full of dividends on the Non-cumulative Convertible Dollar
                  Preference Shares on any dividend payment date and also the
                  payment in full of all other dividends stated to be payable
                  on such date on any other

<PAGE>
                                      114

                  New Preference Share expressed to rank pari passu therewith
                  as regards participation in profits, after payment in full,
                  or the setting aside of a sum to cover the payment in full,
                  of all dividends stated to be payable on such date on any
                  Cumulative Preference Share, then each such dividend shall be
                  declared and paid in full;

         (ii)     if, in the opinion of the Directors, the distributable
                  profits of the Company are insufficient to cover the payment
                  in full of dividends on the Non-cumulative Convertible Dollar
                  Preference Shares on any dividend payment date and also the
                  payment in full of all other dividends stated to be payable
                  on such date on any other New Preference Share expressed to
                  rank pari passu therewith as regards participation in
                  profits, after payment in full, or the setting aside of a sum
                  to cover the payment in full, of all dividends stated to be
                  payable on or before such date on any Cumulative Preference
                  Share, then dividends shall be declared by the Directors pro
                  rata for the Non-cumulative Convertible Dollar Preference
                  Shares and such other New Preference Shares to the extent of
                  the available distributable profits (if any) to the intent
                  that the amount of dividend declared per share on each such
                  Non-cumulative Convertible Dollar Preference Share and other
                  New Preference Share will bear to each other the same ratio
                  as the dividends accrued per share on each such
                  Non-cumulative Convertible Dollar Preference Share and other
                  New Preference Share bear to each other. If it shall
                  subsequently appear that any such dividend which has been
                  paid should not, in accordance with the provisions of this
                  sub-paragraph, have been so paid, then provided the Directors
                  shall have acted in good faith, they shall not incur any
                  liability for any loss which any shareholder may suffer in
                  consequence of such payment having been made;

         (iii)    if, in the opinion of the Directors, the payment of any
                  dividend on any Non-cumulative Convertible Dollar Preference
                  Shares would breach or cause a breach of the capital adequacy
                  requirements of the Financial Services Authority (or any
                  person or body to whom the banking supervision functions of
                  the Financial Services Authority are transferred) applicable
                  to the Company and/or any of its subsidiaries, then none of
                  such dividend shall be declared or paid;

         (iv)     subject to sub-paragraph (v) below, the Non-cumulative
                  Convertible Dollar Preference Shares shall carry no further
                  right to participate in the profits of the Company and if and
                  to the extent that any dividend or part thereof is on any
                  occasion not paid for the reasons described in sub-paragraph
                  (ii) or (iii) above, the holders of such shares shall have no
                  claim in respect of such non-payment;

         (v)      if any dividend or part thereof on any Non-cumulative
                  Convertible Dollar Preference Share is not payable for the
                  reasons specified in sub-paragraphs (ii) or (iii) above and
                  if they so resolve, the Directors may, subject to the
                  Statutes, pay a special non-cumulative preferential dividend
                  on the Non-cumulative Convertible Dollar Preference Shares at
                  a rate not exceeding 1 (one) US cent per share (but so that
                  reference elsewhere in this Schedule 2 and in these presents
                  to any dividend payable on any Non-cumulative Convertible
                  Dollar Preference Shares shall not be treated as including a
                  reference to any such special dividend);

         (vi)     if any date on which dividends are payable on Non-cumulative
                  Convertible Dollar Preference Shares is not a day on which
                  banks in London and the City of New York are open for
                  business, and on which foreign exchange dealings may be
                  conducted in such cities (a "Dollar Business Day"), then
                  payment of the dividend payable on such date will be made on
                  the succeeding Dollar Business Day and without any interest
                  or other payment in respect of such delay unless such day
                  shall fall within the
<PAGE>
                                      115

                  next calendar month whereupon such payment will be made on
                  the preceding Dollar Business Day;

         (vii)    dividends payable on Non-cumulative Convertible Dollar
                  Preference Shares shall accrue from and to the dates
                  determined by the Directors prior to allotment thereof, and
                  the amount of dividend payable in respect of any period
                  shorter than a full dividend period will be calculated on the
                  basis of twelve 30 day months, a 360 day year and the actual
                  number of days elapsed in such period;

         (viii)   if any dividend stated to be payable on the Non-cumulative
                  Convertible Dollar Preference Shares on the most recent
                  dividend payment date has not been declared and paid in full,
                  or if a sum has not been set aside to provide for such
                  payment in full, no dividends may be declared on any other
                  share capital of the Company (other than the Cumulative
                  Preference Shares), and no sum may be set aside for the
                  payment thereof, unless, on the date of declaration relative
                  to any such payment, an amount equal to the dividend stated
                  to be payable on the Non-cumulative Convertible Dollar
                  Preference Shares in respect of the then current dividend
                  period is set aside for the payment in full of such dividend
                  on the dividend payment date relating to the then current
                  dividend period; and

         (ix)     if any dividend stated to be payable on the Non-cumulative
                  Convertible Dollar Preference Shares on any dividend payment
                  date has not been declared and paid in full, or if a sum has
                  not been set aside to provide for such payment in full, the
                  Company may not redeem or purchase or otherwise acquire for
                  any consideration any other share capital of the Company, and
                  may not set aside any sum nor establish any sinking fund for
                  the redemption or purchase or other such acquisition thereof,
                  until such time as dividends stated to be payable on the
                  Non-cumulative Convertible Dollar Preference Shares in
                  respect of successive dividend periods together aggregating
                  no less than twelve months shall thereafter have been
                  declared and paid in full.

2.3      Capital

         The right on a winding up or liquidation, voluntary or otherwise other
         than (unless otherwise provided by the terms of issue of such share) a
         redemption or purchase by the Company of any shares of any class to
         receive in Dollars out of the surplus assets of the Company available
         for distribution amongst the members:-

         (i)      after payment of the arrears (if any) of the fixed cumulative
                  preferential dividends stated to be payable on the Cumulative
                  Preference Shares to the holders thereof in accordance with
                  Article 4(B) FIRSTLY and pari passu with the holders of any
                  other New Preference Shares expressed to rank pari passu
                  therewith as regards participation in profits and in priority
                  to the holders of the Ordinary Shares of the Company a sum
                  equal to:-

                  (A)      the amount of any dividend which is due for payment
                           after the date of commencement of the winding up or
                           liquidation but which is payable in respect of a
                           period ending on or before such date; and

                  (B)      any further amount of dividend payable in respect of
                           the period from the preceding dividend payment date
                           to the date of payment in accordance with this
                           sub-paragraph (i);
<PAGE>
                                      116

                  but only to the extent that any such amount or further amount
                  was, or would have been payable as a dividend in accordance
                  with or pursuant to this Part of Schedule 2 (other than
                  pursuant to this provision); and

         (ii)     subject thereto, pari passu with the holders of the
                  Cumulative Preference Shares and any other New Preference
                  Shares expressed to rank pari passu therewith as regards
                  participation in surplus assets in priority to the holders of
                  the Ordinary Shares of the Company, a sum equal to the amount
                  paid up or credited as paid up on the Non-cumulative
                  Convertible Dollar Preference Shares (including any premium
                  paid to the Company in respect thereof on issue).

                  If upon any such winding-up or liquidation, the amounts
                  available for payment are insufficient to cover the amounts
                  payable in full on the Cumulative Preference Shares, the
                  Non-cumulative Convertible Dollar Preference Shares and on
                  any other New Preference Shares expressed to rank pari passu
                  therewith as regards participation in surplus assets, then
                  the holders of the Cumulative Preference Shares, the
                  Non-cumulative Convertible Dollar Preference Shares and such
                  other New Preference Shares will share rateably in the
                  distribution of surplus assets (if any) in proportion to the
                  full respective preferential amounts to which they are
                  entitled. No Non-cumulative Convertible Dollar Preference
                  Share shall confer any right to participate in the surplus
                  assets of the Company other than that set out in this
                  paragraph 2.3.

2.4      Receipt of Notices

         The right to have sent to the holder of each Non-cumulative
         Convertible Dollar Preference Share (at the same time as the same are
         sent to the holders of Ordinary Shares) a copy of the Company's Annual
         Report and Accounts and Interim Financial Statement together with
         notice of any General Meeting of the Company at which such holder is
         entitled to attend and vote.

2.5      Attendance and Voting at Meetings

         The right to attend at a General Meeting of the Company and to speak
         to or vote upon any Resolution proposed thereat in the following
         circumstances:-

         (i)      in respect of a Resolution which is to be proposed at the
                  Meeting either varying or abrogating any of the rights
                  attached to the Non-cumulative Convertible Dollar Preference
                  Shares or proposing the winding up of the Company (and then
                  in each such case only to speak to and vote upon any such
                  Resolution);

         (ii)     in circumstances where the dividend stated to be payable on
                  the Non-cumulative Convertible Dollar Preference Shares in
                  respect of such number of dividend periods as the Directors
                  shall determine prior to allotment thereof has not been
                  declared and paid in full, and until such date as the
                  Directors shall likewise determine; and

         (iii)    in such other circumstances as the Directors may determine
                  prior to allotment of the Non-cumulative Convertible Dollar
                  Preference Shares,

         but not otherwise, together with the right, in such circumstances and
         on such terms, if any, as the Directors may determine prior to
         allotment of the Non-cumulative Convertible Dollar Preference Shares,
         to seek to requisition a General Meeting of the Company. Whenever
         holders of Non-cumulative Convertible Dollar Preference Shares are so
         entitled to vote on a

<PAGE>
                                      117

         Resolution, on a show of hands every such holder who is present in
         person shall have one vote and, on a poll, every such holder who is
         present in person or by proxy shall have such number of votes for each
         Non-cumulative Convertible Dollar Preference Share held as may be
         determined by the Directors prior to allotment of such Non-cumulative
         Convertible Dollar Preference Shares.

2.6      Redemption

         Each series of Non-cumulative Convertible Dollar Preference Shares
         shall, subject to the provisions of the Statutes, be redeemable at the
         option of the Company in accordance with the following provisions:-

         (A)      the Company may, subject thereto, redeem on any Redemption
                  Date (as hereinafter defined) all or some only of the
                  Non-cumulative Convertible Dollar Preference Shares by giving
                  to the holders of the Non-cumulative Convertible Dollar
                  Preference Shares to be redeemed not less than 120 days' nor
                  more than 150 days' prior notice in writing (a "Notice of
                  Redemption ") of the relevant Redemption Date. "Redemption
                  Date" means, in relation to a Non-cumulative Convertible
                  Dollar Preference Share, any date which falls no earlier than
                  five years and one day (or such longer period (if any) as may
                  be fixed by the Directors prior to allotment of such Share)
                  after the date of allotment of the Non-cumulative Convertible
                  Dollar Preference Share to be redeemed. The Company shall not
                  be entitled (save with the consent of the relevant holder) to
                  give a Notice of Redemption under this sub-paragraph (A) in
                  respect of any share for which a Conversion Notice (as
                  defined in paragraph 5 of Part 4 of this Schedule 2) has been
                  given in accordance with that Part and not withdrawn;

         (B)      there shall be paid on each Non-cumulative Convertible Dollar
                  Preference Share so redeemed, in Dollars, the aggregate of
                  the nominal amount thereof together with any premium paid on
                  issue and together with arrears (if any) of dividends thereon
                  (whether earned or declared or not) in respect of the period
                  from the dividend payment date last preceding the Redemption
                  Date to the Redemption Date;

         (C)      in the case of a redemption of some only of the
                  Non-cumulative Convertible Dollar Preference Shares in any
                  series, the Company shall for the purpose of determining the
                  particular Non-cumulative Convertible Dollar Preference
                  Shares to be redeemed cause a drawing to be made at the
                  Office or such other place as the Directors may approve in
                  the presence of the Auditors for the time being of the
                  Company, provided that there shall be excluded from such
                  drawing any Non-cumulative Convertible Dollar Preference
                  Shares to be converted pursuant to Part 4 of this Schedule 2;

         (D)      any Notice of Redemption given under sub-paragraph (A) above
                  shall specify the applicable Redemption Date, the particular
                  Non-cumulative Convertible Dollar Preference Shares to be
                  redeemed and the redemption price (specifying the amount of
                  the accrued and unpaid dividend per share to be included
                  therein and stating that dividends on the Non-cumulative
                  Convertible Dollar Preference Shares to be redeemed will
                  cease to accrue on redemption), and shall state the place or
                  places at which documents of title in respect of such
                  Non-cumulative Convertible Dollar Preference Shares are to be
                  presented and surrendered for redemption and payment of the
                  redemption monies is to be effected. Upon such Redemption
                  Date, the Company shall redeem the particular Non-cumulative
                  Convertible Dollar Preference Shares to be redeemed on that
                  date subject to the provisions of this paragraph and of

<PAGE>
                                      118

                  the Statutes. No defect in the Notice of Redemption or in the
                  giving thereof shall affect the validity of the redemption
                  proceedings;

         (E)      subject to sub-paragraph (I) below, the provisions of this
                  and the following sub-paragraph shall have effect in relation
                  to Non-cumulative Convertible Dollar Preference Shares for
                  the time being issued and registered in the Register of
                  Members ( "Registered Shares ") and represented by
                  certificates ( "Certificates ") and in relation to
                  Non-cumulative Convertible Dollar Preference Shares which, in
                  accordance with Article 52 of these presents, are for the
                  time being issued and represented by a Warrant (as defined in
                  the said Article 52) ( "Bearer Shares "). Payments in respect
                  of the amount due on redemption of a Registered Share shall
                  be made by Dollar cheque drawn on a bank in London or in the
                  City of New York or upon the request of the holder or joint
                  holders not later than the date specified for the purpose in
                  the Notice of Redemption by transfer to a Dollar account
                  maintained by the payee with a bank in London or in the City
                  of New York. Such payment will be against presentation and
                  surrender of the relative Certificate at the place or one of
                  the places specified in the Notice of Redemption and if any
                  Certificate so surrendered includes any Non-cumulative
                  Convertible Dollar Preference Shares not to be redeemed on
                  the relevant Redemption Date (other than Non-cumulative
                  Convertible Dollar Preference Shares to be converted pursuant
                  to Part 4 of this Schedule 2) the Company shall within
                  fourteen days thereafter issue to the holder, free of charge,
                  a fresh Certificate in respect of such Non-cumulative
                  Convertible Dollar Preference Shares. Payment in respect of
                  the amount due on redemption of a Bearer Share shall be made
                  by Dollar cheque drawn on a bank in London or in the City of
                  New York or upon the request of the holder not later than the
                  date specified for the purpose in the Notice of Redemption by
                  transfer to a Dollar account maintained by the payee with a
                  bank in London or in the City of New York. Such payments will
                  be made against presentation and surrender of the Warrant and
                  all unmatured dividend coupons and talons (if any) at the
                  place or the places specified in the Notice of Redemption.
                  Upon the relevant Redemption Date all unmatured dividend
                  coupons and any talon for additional dividend coupons
                  appertaining thereto (whether or not returned) shall become
                  void and no payment will be made in respect thereof. If the
                  Warrant so surrendered represents any Non-cumulative
                  Convertible Dollar Preference Shares not to be redeemed on
                  the relevant Redemption Date (other than Non-cumulative
                  Convertible Dollar Preference Shares to be converted pursuant
                  to Part 4 of this Schedule 2) the Company shall issue, free
                  of charge, a fresh Warrant representing such Bearer Shares
                  which are not to be redeemed on such Redemption Date. All
                  payments in respect of redemption monies will in all respects
                  be subject to any applicable fiscal or other laws;

         (F)      as from the relevant Redemption Date the dividend on the
                  Non-cumulative Convertible Dollar Preference Shares due for
                  redemption shall cease to accrue except on any such
                  Non-cumulative Convertible Dollar Preference Share in respect
                  of which, upon the due surrender of the Certificate or, as
                  the case may be, the Warrant and all unmatured dividend
                  coupons and talons (if any) in respect thereof, in accordance
                  with sub-paragraph (E) above, payment of the redemption
                  monies due on such Redemption Date shall be improperly
                  withheld or refused, in which case such dividend, at the rate
                  then applicable, shall be deemed to have continued and shall
                  accordingly continue to accrue from the relevant Redemption
                  Date to the date of payment of such redemption monies. Such
                  Non-cumulative Convertible Dollar Preference Share shall not
                  be treated as having been redeemed until the redemption
                  monies in question together with the accrued dividend thereon
                  shall have been paid;
<PAGE>
                                      119

         (G)      if the due date for the payment of the redemption monies on
                  any Non-cumulative Convertible Dollar Preference Shares is
                  not a Dollar Business Day then payment of such monies will be
                  made on the next succeeding day which is a Dollar Business
                  Day and without any interest or other payment in respect of
                  such delay unless such day shall fall within the next
                  calendar month whereupon such payment will be made on the
                  preceding Dollar Business Day;

         (H)      the receipt of the holder for the time being of any
                  Registered Share (or in the case of joint holders the receipt
                  of any one of them) and the receipt of the person delivering
                  any Warrant to the place or one of the places specified
                  pursuant to sub-paragraph (D) above in respect of the monies
                  payable on redemption on such Registered Share or, as the
                  case may be, such Bearer Share, shall constitute an absolute
                  discharge to the Company; and

         (I)      subject as aftermentioned, the provisions of sub-paragraphs
                  (E) and (F) above shall have effect in relation to Registered
                  Shares which are in uncertificated form within the meaning of
                  the Uncertificated Securities Regulations 1995 (as in force
                  on the date of adoption of this Schedule 2) in the same
                  manner as they have effect in relation to Registered Shares
                  represented by Certificates, save that (i) any provision of
                  the said paragraphs requiring presentation and surrender of a
                  Certificate shall be satisfied in the manner prescribed or
                  permitted by the said Regulations (or by any enactment or
                  subordinate legislation which amends or supersedes those
                  Regulations) or (subject to those Regulations or such
                  enactment or subordinate legislation) in such manner as may
                  from time to time be prescribed by the Directors), and (ii)
                  the Company shall not be under any obligation to issue a
                  fresh Certificate under sub-paragraph (E).

2.7      Purchase

         Subject to the provisions of the Statutes and any other applicable
         laws, the Company may at any time and from time to time purchase any
         Non-cumulative Convertible Dollar Preference Shares upon such terms as
         the Directors shall determine provided that, in the case of
         Non-cumulative Convertible Dollar Preference Shares which are listed
         on the London Stock Exchange, the purchase price, exclusive of
         expenses and accrued dividends, shall not exceed (i) in the case of a
         purchase in the open market, or by tender (which shall be available
         alike to all holders of the Non-cumulative Convertible Dollar
         Preference Shares), the average of the closing middle market
         quotations of such Non-cumulative Convertible Dollar Preference Shares
         on the London Stock Exchange (as derived from The London Stock
         Exchange Daily Official List) for the last ten dealing days preceding
         the date of purchase or (if higher), in the case of a purchase in the
         open market only, the market price on the date of purchase provided
         that such market price is not more than 105 per cent of such average
         and (ii) in the case of a purchase by private treaty, 120 per cent of
         the closing middle market quotation of such Non-cumulative Convertible
         Dollar Preference Shares on the London Stock Exchange (as derived from
         The London Stock Exchange Daily Official List) for the last dealing
         day preceding the date of purchase: but so that this proviso shall not
         apply to any purchase of Non-cumulative Convertible Dollar Preference
         Shares made in the ordinary course of a business of dealing in
         securities.

2.8      Conversion

         The Non-cumulative Convertible Dollar Preference Shares shall be
         convertible into Ordinary Shares in the manner set out in (and subject
         to the provisions of) Part 4 of this Schedule 2. The provisions of
         paragraph 2.6 of this Part 2 regarding redemption are without prejudice
         to

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                                      120

         any provisions in the said Part 4 providing for the effecting of
         conversion by means of redemption.

3.       (a)      Save with the written consent of the holders of
                  three-quarters in nominal value of, or with the sanction of
                  an Extraordinary Resolution passed at a separate General
                  Meeting of the holders of, the Non-cumulative Convertible
                  Dollar Preference Shares, the Directors shall not authorise
                  or create, or increase the amount of, any shares of any class
                  or any security convertible into shares of any class ranking
                  as regards rights to participate in the profits or assets of
                  the Company (other than on a redemption or purchase by the
                  Company of any such shares) in priority to the Non-cumulative
                  Convertible Dollar Preference Shares.

         (b)      The special rights attached to any series of Non-cumulative
                  Convertible Dollar Preference Shares allotted or in issue
                  shall not (unless otherwise provided by their terms of issue)
                  be deemed to be varied by the creation or issue of any New
                  Shares ranking as regards participation in the profits or
                  assets of the Company in some or all respects pari passu with
                  or after such Non-cumulative Convertible Dollar Preference
                  Shares. Any new shares ranking in some or all respects pari
                  passu with such Non-cumulative Convertible Dollar Preference
                  Shares may without their creation or issue being deemed to
                  vary the special rights attached to any Non-cumulative
                  Convertible Dollar Preference Share then in issue either
                  carry rights identical in all respects with such
                  Non-cumulative Convertible Dollar Preference Shares or any of
                  them or carry rights differing therefrom in any respect,
                  including, but without prejudice to the generality of the
                  foregoing, in that:-

                  (i)      the rate or means of calculating the dividend may
                           differ and the dividend may be cumulative or
                           non-cumulative;

                  (ii)     the New Shares or any series thereof may rank for
                           dividend as from such date as may be provided by the
                           terms of issue thereof and the dates for payment of
                           dividend may differ;

                  (iii)    the New Shares may be denominated in Sterling or in
                           any Foreign Currency;

                  (iv)     a premium may be payable on return of capital or
                           there may be no such premium;

                  (v)      the New Shares may be redeemable at the option of
                           the holder or of the Company, or may be
                           non-redeemable and if redeemable at the option of
                           the Company, they may be redeemable at different
                           dates and on different terms from those applying to
                           the Non-cumulative Convertible Dollar Preference
                           Shares; and

                  (vi)     the New Shares may be convertible into Ordinary
                           Shares or any other class of shares ranking as
                           regards participation in the profits and assets of
                           the Company pari passu with or after such
                           Non-cumulative Convertible Dollar Preference Shares
                           in each case on such terms and conditions as may be
                           prescribed by the terms of issue thereof.
<PAGE>
                                      121

                                     PART 3

               Non-cumulative Convertible Euro Preference Shares

1.       The Non-cumulative Convertible Euro Preference Shares are New
         Preference Shares. They shall rank after the Cumulative Preference
         Shares to the extent specified in Article 4 and this Schedule 2, and
         shall rank pari passu inter se and (save as aforesaid) with the
         Cumulative Preference Shares and with all other New Preference Shares.
         They shall confer the rights and be subject to the restrictions set
         out or referred to in this Part 3 of Schedule 2 and shall also confer
         such further rights (not being inconsistent with the rights set out or
         referred to in this Part 3) as may be attached by the Directors to
         such shares in accordance with this Part 3 prior to allotment.
         Whenever the Directors have power under this Part to determine any of
         the rights attached to any of the Non-cumulative Convertible Euro
         Preference Shares, the rights so determined need not be the same as
         those attached to the Non-cumulative Convertible Euro Preference
         Shares then allotted or in issue. The Non-cumulative Convertible Euro
         Preference Shares may be issued in one or more separate series, and
         each series shall be identified in such manner as the Directors may
         determine without any such determination or identification requiring
         any alteration to these presents.

2.       Each Non-cumulative Convertible Euro Preference Share shall confer the
         following rights as to participation in the profits and assets of the
         Company, receipt of notices, attendance and voting at meetings,
         redemption and conversion:

2.1      Income

         The right (subject to the provisions of paragraph 2.2, if applicable)
         to a non-cumulative preferential dividend not exceeding a specified
         amount payable in Euro at such rate (which, in the case of any series
         allotted after 11th April 2001, may be fixed or variable and may be
         subject to recalculation at fixed intervals) on such dates (each a
         "dividend payment date") in respect of such periods (each a "dividend
         period") and on such other terms and conditions as may be determined
         by the Directors prior to allotment thereof. References in these
         presents to a "dividend" on the Non-cumulative Convertible Euro
         Preference Shares include a reference to each dividend in respect of
         each dividend period applicable thereto and references in this Part of
         the Schedule to dividend payment dates and dividend periods are to
         dividend payment dates and dividend periods in respect of the
         Non-cumulative Convertible Euro Preference Shares only. Such dividends
         shall be paid in priority to the payment of any dividends on the
         Ordinary Shares. The Non-cumulative Convertible Euro Preference Shares
         shall rank for dividend after the Cumulative Preference Shares, pari
         passu with the Non-cumulative Sterling Preference Shares, the
         Non-cumulative Dollar Preference Shares, the Category II
         Non-cumulative Dollar Preference Shares, all other Convertible
         Preference Shares and all other New Preference Shares expressed to
         rank pari passu therewith as regards participation in profits and
         otherwise in priority to any other share capital in the Company.

2.2      Further provisions as to income

         All or any of the following provisions shall apply in relation to any
         particular Non-cumulative Convertible Euro Preference Shares if so
         determined by the Directors prior to allotment thereof:-

         (i)      if, in the opinion of the Directors, the distributable
                  profits of the Company are sufficient to cover the payment in
                  full of dividends on the Non-cumulative Convertible Euro
                  Preference Shares on any dividend payment date and also the
                  payment in full of all other dividends stated to be payable
                  on such date on any other
<PAGE>
                                      122

                  New Preference Share expressed to rank pari passu therewith
                  as regards participation in profits, after payment in full,
                  or the setting aside of a sum to cover the payment in full,
                  of all dividends stated to be payable on such date on any
                  Cumulative Preference Share, then each such dividend shall be
                  declared and paid in full;

         (ii)     if, in the opinion of the Directors, the distributable
                  profits of the Company are insufficient to cover the payment
                  in full of dividends on the Non-cumulative Convertible Euro
                  Preference Shares on any dividend payment date and also the
                  payment in full of all other dividends stated to be payable
                  on such date on any other New Preference Share expressed to
                  rank pari passu therewith as regards participation in
                  profits, after payment in full, or the setting aside of a sum
                  to cover the payment in full, of all dividends stated to be
                  payable on or before such date on any Cumulative Preference
                  Share, then dividends shall be declared by the Directors pro
                  rata for the Non-cumulative Convertible Euro Preference
                  Shares and such other New Preference Shares to the extent of
                  the available distributable profits (if any) to the intent
                  that the amount of dividend declared per share on each such
                  Non-cumulative Convertible Euro Preference Share and other
                  New Preference Share will bear to each other the same ratio
                  as the dividends accrued per share on each such
                  Non-cumulative Convertible Euro Preference Share and other
                  New Preference Share bear to each other. If it shall
                  subsequently appear that any such dividend which has been
                  paid should not, in accordance with the provisions of this
                  sub-paragraph, have been so paid, then provided the Directors
                  shall have acted in good faith, they shall not incur any
                  liability for any loss which any shareholder may suffer in
                  consequence of such payment having been made;

         (iii)    if, in the opinion of the Directors, the payment of any
                  dividend on any Non-cumulative Convertible Euro Preference
                  Shares would breach or cause a breach of the capital adequacy
                  requirements of the Financial Services Authority (or any
                  person or body to whom the banking supervision functions of
                  the Financial Services Authority are transferred) applicable
                  to the Company and/or any of its subsidiaries, then none of
                  such dividend shall be declared or paid;

         (iv)     subject to sub-paragraph (v) below, the Non-cumulative
                  Convertible Euro Preference Shares shall carry no further
                  right to participate in the profits of the Company and if and
                  to the extent that any dividend or part thereof is on any
                  occasion not paid for the reasons described in sub-paragraph
                  (ii) or (iii) above, the holders of such shares shall have no
                  claim in respect of such non-payment;

         (v)      if any dividend or part thereof on any Non-cumulative
                  Convertible Euro Preference Share is not payable for the
                  reasons specified in sub-paragraphs (ii) or (iii) above and
                  if they so resolve, the Directors may, subject to the
                  Statutes, pay a special non-cumulative preferential dividend
                  on the Non-cumulative Convertible Euro Preference Shares at a
                  rate not exceeding (euro) 0.01 per share (but so that
                  reference elsewhere in this Schedule 2 and in these presents
                  to any dividend payable on any Non-cumulative Convertible
                  Euro Preference Shares shall not be treated as including a
                  reference to any such special dividend);

         (vi)     if any date on which dividends are payable on Non-cumulative
                  Convertible Euro Preference Shares is not a day on which
                  TARGET is operating and banks in London are open for
                  business, and on which foreign exchange dealings may be
                  conducted in London (a "Euro Business Day "), then payment of
                  the dividend payable on such date will be made on the
                  succeeding Euro Business Day and without any interest or
                  other payment in respect of such delay unless such day shall
                  fall within the next

<PAGE>
                                      123

                  calendar month whereupon such payment will be made on the
                  preceding Euro Business Day; for these purposes "TARGET"
                  means the Trans-European Real-Time Gross Settlement Express
                  Transfer (TARGET) system;

         (vii)    dividends payable on Non-cumulative Convertible Euro
                  Preference Shares shall accrue from and to the dates
                  determined by the Directors prior to allotment thereof, and
                  the amount of dividend payable in respect of any period
                  shorter than a full dividend period will be calculated on the
                  basis of twelve 30 day months, a 360 day year and the actual
                  number of days elapsed in such period;

         (viii)   if any dividend stated to be payable on the Non-cumulative
                  Convertible Euro Preference Shares on the most recent
                  dividend payment date has not been declared and paid in full,
                  or if a sum has not been set aside to provide for such
                  payment in full, no dividends may be declared on any other
                  share capital of the Company (other than the Cumulative
                  Preference Shares), and no sum may be set aside for the
                  payment thereof, unless, on the date of declaration relative
                  to any such payment, an amount equal to the dividend stated
                  to be payable on the Non-cumulative Convertible Euro
                  Preference Shares in respect of the then current dividend
                  period is set aside for the payment in full of such dividend
                  on the dividend payment date relating to the then current
                  dividend period; and

         (ix)     if any dividend stated to be payable on the Non-cumulative
                  Convertible Euro Preference Shares on any dividend payment
                  date has not been declared and paid in full, or if a sum has
                  not been set aside to provide for such payment in full, the
                  Company may not redeem or purchase or otherwise acquire for
                  any consideration any other share capital of the Company, and
                  may not set aside any sum nor establish any sinking fund for
                  the redemption or purchase or other such acquisition thereof,
                  until such time as dividends stated to be payable on the
                  Non-cumulative Convertible Euro Preference Shares in respect
                  of successive dividend periods together aggregating no less
                  than twelve months shall thereafter have been declared and
                  paid in full.

2.3      Capital

         The right on a winding up or liquidation, voluntary or otherwise other
         than (unless otherwise provided by the terms of issue of such share) a
         redemption or purchase by the Company of any shares of any class to
         receive in Euro out of the surplus assets of the Company available for
         distribution amongst the members:-

         (i)      after payment of the arrears (if any) of the fixed cumulative
                  preferential dividends stated to be payable on the Cumulative
                  Preference Shares to the holders thereof in accordance with
                  Article 4(B) FIRSTLY and pari passu with the holders of any
                  other New Preference Shares expressed to rank pari passu
                  therewith as regards participation in profits and in priority
                  to the holders of the Ordinary Shares of the Company a sum
                  equal to:-

                  (A)      the amount of any dividend which is due for payment
                           after the date of commencement of the winding up or
                           liquidation but which is payable in respect of a
                           period ending on or before such date; and

                  (B)      any further amount of dividend payable in respect of
                           the period from the preceding dividend payment date
                           to the date of payment in accordance with this
                           sub-paragraph (i);
<PAGE>
                                      124

                  but only to the extent that any such amount or further amount
                  was, or would have been payable as a dividend in accordance
                  with or pursuant to this Part of Schedule 2 (other than
                  pursuant to this provision); and

         (ii)     subject thereto, pari passu with the holders of the
                  Cumulative Preference Shares and any other New Preference
                  Shares expressed to rank pari passu therewith as regards
                  participation in surplus assets in priority to the holders of
                  the Ordinary Shares of the Company, a sum equal to the amount
                  paid up or credited as paid up on the Non-cumulative
                  Convertible Euro Preference Shares (including any premium
                  paid to the Company in respect thereof on issue).

                  If upon any such winding-up or liquidation, the amounts
                  available for payment are insufficient to cover the amounts
                  payable in full on the Cumulative Preference Shares, the
                  Non-cumulative Convertible Euro Preference Shares and on any
                  other New Preference Shares expressed to rank pari passu
                  therewith as regards participation in surplus assets, then
                  the holders of the Cumulative Preference Shares, the
                  Non-cumulative Convertible Euro Preference Shares and such
                  other New Preference Shares will share rateably in the
                  distribution of surplus assets (if any) in proportion to the
                  full respective preferential amounts to which they are
                  entitled. No Non-cumulative Convertible Euro Preference Share
                  shall confer any right to participate in the surplus assets
                  of the Company other than that set out in this paragraph 2.3.

2.4      Receipt of Notices

         The right to have sent to the holder of each Non-cumulative
         Convertible Euro Preference Share (at the same time as the same are
         sent to the holders of Ordinary Shares) a copy of the Company's Annual
         Report and Accounts and Interim Financial Statement together with
         notice of any General Meeting of the Company at which such holder is
         entitled to attend and vote.

2.5      Attendance and Voting at Meetings

         The right to attend at a General Meeting of the Company and to speak
         to or vote upon any Resolution proposed thereat in the following
         circumstances:-

         (i)      in respect of a Resolution which is to be proposed at the
                  Meeting either varying or abrogating any of the rights
                  attached to the Non-cumulative Convertible Euro Preference
                  Shares or proposing the winding up of the Company (and then
                  in each such case only to speak to and vote upon any such
                  Resolution);

         (ii)     in circumstances where the dividend stated to be payable on
                  the Non-cumulative Convertible Euro Preference Shares in
                  respect of such number of dividend periods as the Directors
                  shall determine prior to allotment thereof has not been
                  declared and paid in full, and until such date as the
                  Directors shall likewise determine; and

         (iii)    in such other circumstances as the Directors may determine
                  prior to allotment of the Non-cumulative Convertible Euro
                  Preference Shares,

         but not otherwise, together with the right, in such circumstances and
         on such terms, if any, as the Directors may determine prior to
         allotment of the Non-cumulative Convertible Euro Preference Shares, to
         seek to requisition a General Meeting of the Company. Whenever holders
         of Non-cumulative Convertible Euro Preference Shares are so entitled
         to vote on a

<PAGE>
                                      125

         Resolution, on a show of hands every such holder who is present in
         person shall have one vote and, on a poll, every such holder who is
         present in person or by proxy shall have such number of votes for each
         Non-cumulative Convertible Euro Preference Share held as may be
         determined by the Directors prior to allotment of such Non-cumulative
         Convertible Euro Preference Shares.

2.6      Redemption

         Each series of Non-cumulative Convertible Euro Preference Shares
         shall, subject to the provisions of the Statutes, be redeemable at the
         option of the Company in accordance with the following provisions:-

         (A)      the Company may, subject thereto, redeem on any Redemption
                  Date (as hereinafter defined) all or some only of the
                  Non-cumulative Convertible Euro Preference Shares by giving
                  to the holders of the Non-cumulative Convertible Euro
                  Preference Shares to be redeemed not less than 120 days' nor
                  more than 150 days' prior notice in writing (a "Notice of
                  Redemption ") of the relevant Redemption Date. "Redemption
                  Date" means, in relation to a Non-cumulative Convertible Euro
                  Preference Share, any date which falls no earlier than five
                  years and one day (or such longer period (if any) as may be
                  fixed by the Directors prior to allotment of such Share)
                  after the date of allotment of the Non-cumulative Convertible
                  Euro Preference Share to be redeemed. The Company shall not
                  be entitled (save with the consent of the relevant holder) to
                  give a Notice of Redemption under this sub-paragraph (A) in
                  respect of any share for which a Conversion Notice (as
                  defined in paragraph 5 of Part 4 of this Schedule 2) has been
                  given in accordance with that Part and not withdrawn;

         (B)      there shall be paid on each Non-cumulative Convertible Euro
                  Preference Share so redeemed, in Euro, the aggregate of the
                  nominal amount thereof together with any premium paid on
                  issue and together with arrears (if any) of dividends thereon
                  (whether earned or declared or not) in respect of the period
                  from the dividend payment date last preceding the Redemption
                  Date to the Redemption Date;

         (C)      in the case of a redemption of some only of the
                  Non-cumulative Convertible Euro Preference Shares in any
                  series, the Company shall for the purpose of determining the
                  particular Non-cumulative Convertible Euro Preference Shares
                  to be redeemed cause a drawing to be made at the Office or
                  such other place as the Directors may approve in the presence
                  of the Auditors for the time being of the Company, provided
                  that there shall be excluded from such drawing any
                  Non-cumulative Convertible Euro Preference Shares to be
                  converted pursuant to Part 4 of this Schedule 2;

         (D)      any Notice of Redemption given under sub-paragraph (A) above
                  shall specify the applicable Redemption Date, the particular
                  Non-cumulative Convertible Euro Preference Shares to be
                  redeemed and the redemption price (specifying the amount of
                  the accrued and unpaid dividend per share to be included
                  therein and stating that dividends on the Non-cumulative
                  Convertible Euro Preference Shares to be redeemed will cease
                  to accrue on redemption), and shall state the place or places
                  at which documents of title in respect of such Non-cumulative
                  Convertible Euro Preference Shares are to be presented and
                  surrendered for redemption and payment of the redemption
                  monies is to be effected. Upon such Redemption Date, the
                  Company shall redeem the particular Non-cumulative
                  Convertible Euro Preference Shares to be redeemed on that
                  date subject to the provisions of this paragraph and of the
                  Statutes. No defect in the Notice of Redemption or in the
                  giving thereof shall affect the validity of the redemption
                  proceedings;
<PAGE>
                                      126

         (E)      subject to sub-paragraph (I) below, the provisions of this
                  and the following sub-paragraph shall have effect in relation
                  to Non-cumulative Convertible Euro Preference Shares for the
                  time being issued and registered in the Register of Members (
                  "Registered Shares ") and represented by certificates (
                  "Certificates ") and in relation to Non-cumulative
                  Convertible Euro Preference Shares which, in accordance with
                  Article 52 of these presents, are for the time being issued
                  and represented by a Warrant (as defined in the said Article
                  52) ( "Bearer Shares "). Payments in respect of the amount
                  due on redemption of a Registered Share shall be made by Euro
                  cheque drawn on a bank in London or upon the request of the
                  holder or joint holders not later than the date specified for
                  the purpose in the Notice of Redemption by transfer to a Euro
                  account maintained by the payee with a bank in London. Such
                  payment will be against presentation and surrender of the
                  relative Certificate at the place or one of the places
                  specified in the Notice of Redemption and if any Certificate
                  so surrendered includes any Non-cumulative Convertible Euro
                  Preference Shares not to be redeemed on the relevant
                  Redemption Date (other than Non-cumulative Convertible Euro
                  Preference Shares to be converted pursuant to Part 4 of this
                  Schedule 2) the Company shall within fourteen days thereafter
                  issue to the holder, free of charge, a fresh Certificate in
                  respect of such Non-cumulative Convertible Euro Preference
                  Shares. Payment in respect of the amount due on redemption of
                  a Bearer Share shall be made by Euro cheque drawn on a bank
                  in London or upon the request of the holder not later than
                  the date specified for the purpose in the Notice of
                  Redemption by transfer to a Euro account maintained by the
                  payee with a bank in London. Such payments will be made
                  against presentation and surrender of the Warrant and all
                  unmatured dividend coupons and talons (if any) at the place
                  or the places specified in the Notice of Redemption. Upon the
                  relevant Redemption Date all unmatured dividend coupons and
                  any talon for additional dividend coupons appertaining
                  thereto (whether or not returned) shall become void and no
                  payment will be made in respect thereof. If the Warrant so
                  surrendered represents any Non-cumulative Convertible Euro
                  Preference Shares not to be redeemed on the relevant
                  Redemption Date (other than Non-cumulative Convertible Euro
                  Preference Shares to be converted pursuant to Part 4 of this
                  Schedule 2) the Company shall issue, free of charge, a fresh
                  Warrant representing such Bearer Shares which are not to be
                  redeemed on such Redemption Date.

                  All payments in respect of redemption monies will in all
                  respects be subject to any applicable fiscal or other laws;

         (F)      as from the relevant Redemption Date the dividend on the
                  Non-cumulative Convertible Euro Preference Shares due for
                  redemption shall cease to accrue except on any such
                  Non-cumulative Convertible Euro Preference Share in respect
                  of which, upon the due surrender of the Certificate or, as
                  the case may be, the Warrant and all unmatured dividend
                  coupons and talons (if any) in respect thereof, in accordance
                  with sub-paragraph (E) above, payment of the redemption
                  monies due on such Redemption Date shall be improperly
                  withheld or refused, in which case such dividend, at the rate
                  then applicable, shall be deemed to have continued and shall
                  accordingly continue to accrue from the relevant Redemption
                  Date to the date of payment of such redemption monies. Such
                  Non-cumulative Convertible Euro Preference Share shall not be
                  treated as having been redeemed until the redemption monies
                  in question together with the accrued dividend thereon shall
                  have been paid;

         (G)      if the due date for the payment of the redemption monies on
                  any Non-cumulative Convertible Euro Preference Shares is not
                  a Euro Business Day then payment of such
<PAGE>
                                      127

                  monies will be made on the next succeeding day which is a
                  Euro Business Day and without any interest or other payment
                  in respect of such delay unless such day shall fall within
                  the next calendar month whereupon such payment will be made
                  on the preceding Euro Business Day;

         (H)      the receipt of the holder for the time being of any
                  Registered Share (or in the case of joint holders the receipt
                  of any one of them) and the receipt of the person delivering
                  any Warrant to the place or one of the places specified
                  pursuant to sub-paragraph (D) above in respect of the monies
                  payable on redemption on such Registered Share or, as the
                  case may be, such Bearer Share, shall constitute an absolute
                  discharge to the Company; and

         (I)      subject as aftermentioned, the provisions of sub-paragraphs
                  (E) and (F) above shall have effect in relation to Registered
                  Shares which are in uncertificated form within the meaning of
                  the Uncertificated Securities Regulations 1995 (as in force
                  on the date of adoption of this Schedule 2) in the same
                  manner as they have effect in relation to Registered Shares
                  represented by Certificates, save that (i) any provision of
                  the said paragraphs requiring presentation and surrender of a
                  Certificate shall be satisfied in the manner prescribed or
                  permitted by the said Regulations (or by any enactment or
                  subordinate legislation which amends or supersedes those
                  Regulations) or (subject to those Regulations or such
                  enactment or subordinate legislation) in such manner as may
                  from time to time be prescribed by the Directors), and (ii)
                  the Company shall not be under any obligation to issue a
                  fresh Certificate under sub-paragraph (E).

2.7      Purchase

         Subject to the provisions of the Statutes and any other applicable
         laws, the Company may at any time and from time to time purchase any
         Non-cumulative Convertible Euro Preference Shares upon such terms as
         the Directors shall determine provided that, in the case of
         Non-cumulative Convertible Euro Preference Shares which are listed on
         the London Stock Exchange, the purchase price, exclusive of expenses
         and accrued dividends, shall not exceed (i) in the case of a purchase
         in the open market, or by tender (which shall be available alike to
         all holders of the Non-cumulative Convertible Euro Preference Shares),
         the average of the closing middle market quotations of such
         Non-cumulative Convertible Euro Preference Shares on the London Stock
         Exchange (as derived from The London Stock Exchange Daily Official
         List) for the last ten dealing days preceding the date of purchase or
         (if higher), in the case of a purchase in the open market only, the
         market price on the date of purchase provided that such market price
         is not more than 105 per cent of such average and (ii) in the case of
         a purchase by private treaty, 120 per cent of the closing middle
         market quotation of such Non-cumulative Convertible Euro Preference
         Shares on the London Stock Exchange (as derived from The London Stock
         Exchange Daily Official List) for the last dealing day preceding the
         date of purchase: but so that this proviso shall not apply to any
         purchase of Non-cumulative Convertible Euro Preference Shares made in
         the ordinary course of a business of dealing in securities.

2.8      Conversion

         The Non-cumulative Convertible Euro Preference Shares shall be
         convertible into Ordinary Shares in the manner set out in (and subject
         to the provisions of) Part 4 of this Schedule 2. The provisions of
         paragraph 2.6 of this Part 3 regarding redemption are without
         prejudice to any provisions in the said Part 4 providing for the
         effecting of conversion by means of redemption.

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                                      128

3.       (a)      Save with the written consent of the holders of
                  three-quarters in nominal value of, or with the sanction of
                  an Extraordinary Resolution passed at a separate General
                  Meeting of the holders of, the Non-cumulative Convertible
                  Euro Preference Shares, the Directors shall not authorise or
                  create, or increase the amount of, any shares of any class or
                  any security convertible into shares of any class ranking as
                  regards rights to participate in the profits or assets of the
                  Company (other than on a redemption or purchase by the
                  Company of any such shares) in priority to the Non-cumulative
                  Convertible Euro Preference Shares.

         (b)      The special rights attached to any series of Non-cumulative
                  Convertible Euro Preference Shares allotted or in issue shall
                  not (unless otherwise provided by their terms of issue) be
                  deemed to be varied by the creation or issue of any New
                  Shares ranking as regards participation in the profits or
                  assets of the Company in some or all respects pari passu with
                  or after such Non-cumulative Convertible Euro Preference
                  Shares. Any new shares ranking in some or all respects pari
                  passu with such Non-cumulative Convertible Euro Preference
                  Shares may without their creation or issue being deemed to
                  vary the special rights attached to any Non-cumulative
                  Convertible Euro Preference Share then in issue either carry
                  rights identical in all respects with such Non-cumulative
                  Convertible Euro Preference Shares or any of them or carry
                  rights differing therefrom in any respect, including, but
                  without prejudice to the generality of the foregoing, in
                  that:-

                  (i)      the rate or means of calculating the dividend may
                           differ and the dividend may be cumulative or
                           non-cumulative;

                  (ii)     the New Shares or any series thereof may rank for
                           dividend as from such date as may be provided by the
                           terms of issue thereof and the dates for payment of
                           dividend may differ;

                  (iii)    the New Shares may be denominated in Sterling or in
                           any Foreign Currency;

                  (iv)     a premium may be payable on return of capital or
                           there may be no such premium;

                  (v)      the New Shares may be redeemable at the option of
                           the holder or of the Company, or may be
                           non-redeemable and if redeemable at the option of
                           the Company, they may be redeemable at different
                           dates and on different terms from those applying to
                           the Non-cumulative Convertible Euro Preference
                           Shares; and

                  (vi)     the New Shares may be convertible into Ordinary
                           Shares or any other class of shares ranking as
                           regards participation in the profits and assets of
                           the Company pari passu with or after such
                           Non-cumulative Convertible Euro Preference Shares in
                           each case on such terms and conditions as may be
                           prescribed by the terms of issue thereof.
<PAGE>
                                      129

                                     PART 4

                  Conversion of Convertible Preference Shares

1.       Each holder of Convertible Preference Share(s) shall be entitled in
         the manner set out in (and subject to the provisions of) this Part 4
         to convert into fully paid Ordinary Shares such of his Convertible
         Preference Shares as have not, as at the Conversion Notice Date,
         either been redeemed or been the subject of a valid Notice of
         Redemption given under paragraph 2.6 of Part 1, 2 or 3 (as applicable)
         of this Schedule 2 and specifying a date on or before the Second
         Conversion Date as the Redemption Date.

2.       For the purposes of this Part 4:

         (A)      the First Conversion Date shall be 25 London Stock Exchange
                  dealing days prior to the Second Conversion Date and the
                  Second Conversion Date shall be, in relation to any
                  Convertible Preference Share, the date specified as such by
                  the Directors prior to allotment thereof which falls not
                  earlier than five years and one day after the issue of that
                  share;

         (B)      the Conversion Notice Date shall be 120 days prior to the
                  Second Conversion Date;

         (C)      the conversion right shall be exercisable by completion of a
                  Conversion Notice (as defined in paragraph 5 below) submitted
                  by holders of Convertible Preference Shares ("Converting
                  Holders") setting out the number of Convertible Preference
                  Shares which are to be converted pursuant to such notice (the
                  "Conversion Amount") and lodging such Conversion Notice with
                  the Company's Registrar at any time during the period and in
                  the manner referred to in paragraph 8 below;

         (D)      the Redemption Amount in relation to a Convertible Preference
                  Share means the nominal amount thereof together with any
                  premium paid on issue;

         (E)      The First Exchange Rate shall be the applicable Foreign
                  Currency/Sterling exchange rate determined by the Broker (as
                  defined below) as determination agent by taking the weighted
                  average (rounded, if necessary, to the
                  nearest(pound)0.0001,(pound)0.00005 being rounded upwards) of
                  the spot rate of exchange for the purchase of the Foreign
                  Currency in which the relevant Conversion Amount is
                  denominated with Sterling as quoted at the request of the
                  Broker by three major banks in the London foreign exchange
                  market selected by the Broker at 11:00 a.m. (London time) on
                  each day during the Broker Bid Period (as defined below) that
                  such banks provide such quote to the Broker. The Second
                  Exchange Rate shall be the applicable Foreign
                  Currency/Sterling exchange rate determined by the Broker as
                  determination agent by taking the weighted average (rounded,
                  if necessary, to the nearest(pound)0.0001,(pound)0.00005
                  being rounded upwards) of the spot rate of exchange for the
                  purchase of the Foreign Currency in which the relevant
                  Conversion Amount is denominated with sterling as quoted at
                  the request of the Broker by three major banks in the London
                  foreign exchange market selected by the Broker at 11:00 a.m.
                  (London time) on each day during the Calculation Period (as
                  defined below) that such banks provide such request to the
                  Broker. For the avoidance of doubt, references in this Part 4
                  to the conversion of any Conversion Price into the Foreign
                  Currency in which the relevant Conversion Amount is
                  denominated shall only apply in the case of a Conversion
                  Amount denominated in Foreign Currency, and shall otherwise
                  be disregarded.
<PAGE>
                                      130

         Each Convertible Preference Share which is the subject of a Conversion
         Notice shall be subject to the cash settlement provisions of this Part
         4. The Company will use its reasonable endeavours, to the extent
         permitted by applicable law, to arrange for the sale of the Ordinary
         Shares into which such Convertible Preference Shares will convert so
         as to raise net cash proceeds of an amount equal to the aggregate
         Redemption Amount of such Convertible Preference Shares. The sale will
         be conducted by means of a process pursuant to which a broker selected
         by the Company (the "Broker") will solicit bids for the relevant
         Ordinary Shares (the "Placing"). Such bids will be solicited during
         the period of the 20 London Stock Exchange dealing days ending five
         London Stock Exchange dealing days before the First Conversion Date
         (the "Broker Bid Period").

3.       The number of Ordinary Shares to be issued on the conversion of each
         Convertible Preference Share shall be determined by dividing the
         Redemption Amount by the Conversion Price.

         (A)      In the case of Convertible Preference Shares which are
                  converted on the First Conversion Date, the Conversion Price
                  shall be established by reference to the bids received and
                  accepted by the Broker pursuant to the Placing and shall be
                  converted into the Foreign Currency in which the relevant
                  Conversion Amount is denominated by reference to the First
                  Exchange Rate (provided that the Company will not in any
                  circumstances be obliged to issue Ordinary Shares in
                  connection with the Placing at a price per share of less than
                  either (aa) 95% of the weighted average closing price per
                  Ordinary Share on the London Stock Exchange during the Broker
                  Bid Period; or (bb) their nominal amount. The Directors shall
                  specify prior to allotment of any particular series of
                  Convertible Preference Shares which of (aa) or (bb) shall
                  apply in respect of that series (the "Base Price ")). The
                  Conversion Price shall be the highest price per Ordinary
                  Share at or above the Base Price at which the Broker is able
                  to place Ordinary Shares so as to raise net cash proceeds
                  (converted as aforesaid) of an amount equal to the aggregate
                  Redemption Amount of the Conversion Amount.

                  On the First Conversion Date:

                  (i)      the Company shall issue to the Broker or as the
                           Broker shall direct the Ordinary Shares so placed
                           (and lodging by a Converting Holder of a Conversion
                           Notice with the Company's Registrar shall be deemed
                           irrevocably to authorise and instruct the Directors
                           to allot the Ordinary Shares arising on conversion
                           of his Convertible Preference Shares pursuant to
                           this Part 4 to the Broker or as the Broker shall
                           direct);

                  (ii)     the Broker shall collect the net cash proceeds of
                           the Placing, exchange such proceeds at the First
                           Exchange Rate into the currency in which the
                           Convertible Preference Shares which have been
                           converted are denominated and hold such proceeds in
                           separate bank account(s) until the Second Conversion
                           Date.

         (B)      On the Second Conversion Date the net cash proceeds of the
                  Placing (if any) held by the Broker (the "Total Cash Amount")
                  shall be paid to the Converting Holders such that each
                  Converting Holder receives the Redemption Amount of his
                  Conversion Amount, provided that if the Total Cash Amount
                  falls short of the aggregate Redemption Amount of the
                  Conversion Amount:

                  (i)      the Total Cash Amount shall be paid to the
                           Converting Holders pro rata to their holding of
                           Conversion Amount, (and the amount (if any) by which
                           the

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                                      131

                           cash paid or payable to a Converting Holder falls
                           short of the aggregate Redemption Amount of his
                           Conversion Amount shall be the "Remaining Redemption
                           Amount"); and

                  (ii)     the Company shall issue to each Converting Holder
                           the whole number of Ordinary Shares (if any)
                           calculated by dividing the Remaining Redemption
                           Amount by the Conversion Price, being 95% of the
                           weighted average closing price per Ordinary Share on
                           the London Stock Exchange during the period of the
                           20 London Stock Exchange dealing days ending five
                           London Stock Exchange dealing days before the Second
                           Conversion Date (the "Calculation Period")
                           (converted into Sterling at the Second Exchange
                           Rate).

         Fractions of Ordinary Shares will not be issued on conversion and no
         cash adjustment will be made. However, if more than one Convertible
         Preference Share held by any holder is to be converted and the
         Ordinary Shares arising on conversion are to be registered in the same
         name, the number of Ordinary Shares to be issued in respect thereof
         shall be calculated on the basis of the aggregate Redemption Amount of
         such Convertible Preference Shares.

         If at the time that the Conversion Price or Base Price is to be
         calculated the Ordinary Shares are not listed and traded on the London
         Stock Exchange, references in this article to the London Stock
         Exchange shall be to such other exchange on which the Ordinary Shares
         are listed and traded.

4.       The entitlement of holders of Convertible Preference Shares to convert
         such shares into fully paid Ordinary Shares shall be conditional on:-

         (A)      the Company, as at the First Conversion Date or the Second
                  Conversion Date (as the case may be), having sufficient
                  authorised but unissued share capital to issue the Ordinary
                  Shares falling to be issued on such date in connection with
                  the conversion of Convertible Preference Shares;

         (B)      the number of Ordinary Shares into which the Directors have
                  been authorised pursuant to Section 80 of the 1985 Act to
                  issue rights to convert being sufficient, as at the First
                  Conversion Date or the Second Conversion Date (as the case
                  may be) to allot the Ordinary Shares falling to be allotted
                  on such date in connection with the conversion of Convertible
                  Preference Shares or the Directors having been authorised
                  prior to such date pursuant to section 80 to allot such
                  shares (together with the condition set out in (A) above, the
                  "Relevant Shareholder Approvals"); and

         (C)      the delivery by the relevant Converting Holder of the
                  Certificates (or an appropriate form of indemnity) for such
                  Convertible Preference Shares as are the subject of a
                  Certificated Conversion Notice (as defined in paragraph 6
                  below) or (as the case may be) the transfer of such
                  Convertible Preference Shares as are the subject of an
                  Uncertificated Conversion Notice (as defined in paragraph 7
                  below) into such account as may be specified in such notice.

         The Company undertakes to review, prior to each Annual General Meeting
         (the "relevant Annual General Meeting"), whether sufficient Relevant
         Shareholder Approvals would be available to permit the allotment and
         issue of three times the number of Ordinary Shares that would fall to
         be allotted and issued if all of the Convertible Preference Shares
         were to be converted into Ordinary Shares on a deemed conversion date
         (the "Deemed Conversion Date") which was 60 days prior to the relevant
         Annual General Meeting, using a deemed Conversion Price of 95% of the
         weighted average closing price per Ordinary Share on the

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                                      132

         London Stock Exchange during the 20 London Stock Exchange dealing days
         ending five London Stock Exchange dealing days prior to such Deemed
         Conversion Date converted into the Foreign Currency in which the
         relevant Conversion Amount is denominated by reference to the First
         Exchange rate provided that for these purposes the Broker Bid Period
         shall be the 20 London Stock Exchange dealing days ending five London
         Stock Exchange dealing days prior to such Deemed Conversion Date. If
         and to the extent that the Relevant Shareholder Approvals would be
         insufficient to permit the allotment and issue of three times the
         number of Ordinary Shares that would fall to be so allotted and
         issued, the Company undertakes to propose such resolutions at the
         relevant succeeding Annual General Meeting, that, when approved, would
         permit the allotment and issue of three times the number of Ordinary
         Shares that would fall to be so allotted and issued.

         If the Relevant Shareholder Approvals are insufficient to permit the
         allotment and issue of such number of Ordinary Shares as fall to be
         allotted and issued on the First Conversion Date or the Second
         Conversion Date in connection with the conversion of Convertible
         Preference Shares, the Company undertakes to convert the maximum
         number of Convertible Preference Shares which it is legally permitted
         to convert under the existing Relevant Shareholder Approvals pro rata
         to the respective Conversion Amounts of Converting Holders. Converting
         Holders may, within 60 days of the Second Conversion Date submit a
         written notice to the Company (the "Withdrawal Notice") setting out
         the number of Convertible Preference Shares which they wish to
         withdraw from the conversion procedure set out in this Part 4. Any
         Convertible Preference Shares so withdrawn will lose the right to
         convert into Ordinary Shares. In relation to any Convertible
         Preference Shares so withdrawn which are the subject of a Certificated
         Conversion Notice, the Company will as soon as practicable after
         receipt of the relevant Withdrawal Notice, return the relevant
         Certificates for such shares which were lodged with the relevant
         Conversion Notice. In relation to any Convertible Preference Shares so
         withdrawn which are the subject of an Uncertificated Conversion
         Notice, the Company will as soon as practicable after receipt of the
         relevant Withdrawal Notice, transfer the relevant Convertible
         Preference Shares into such account as may be specified by the
         relevant Converting Holder. Any Convertible Preference Shares which
         were the subject of a Conversion Notice and which could not be
         converted under the Relevant Shareholder Approvals in place as at the
         First Conversion Date and the Second Conversion Date and which are not
         the subject of a Withdrawal Notice shall be "Unconverted Preference
         Shares". The Company undertakes that for so long as Unconverted
         Preference Share(s) remain outstanding, such resolutions will be
         proposed at each subsequent Annual General Meeting that, when
         approved, would permit the conversion of the Unconverted Preference
         Shares. Following shareholder approval of the relevant resolutions,
         the Unconverted Preference Shares will be converted into Ordinary
         Shares and paragraphs 2 and 3 of this Part 4 shall apply to the
         conversion of such Unconverted Preference Shares subject to the
         following amendments:-

         (A)      the Second Conversion Date shall be 60 London Stock Exchange
                  dealing days after the granting of shareholder approval for
                  the relevant resolutions; and

         (B)      the Conversion Price shall be converted into the Foreign
                  Currency in which the relevant Conversion Amount is
                  denominated by reference to the Second Exchange Rate,
                  provided that for these purposes the Calculation Period shall
                  be the 20 London Stock Exchange dealing days ending five
                  London Stock Exchange dealing days prior to the Second
                  Conversion Date.

5.       For the purposes of this Part 4, a Conversion Notice means, in
         relation to any Convertible Preference Shares that, as at the date of
         such notice, are Registered Shares (as defined in Part 1, 2 or 3 (as
         the case may be) of this Schedule 2), a Certificated Conversion Notice
         (as

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                                      133

         defined in paragraph 6 below) or, in relation to any Convertible
         Preference Shares that, as at the date of such notice, are Bearer
         Shares (as defined in Part 1, 2 or 3 (as the case may be) of this
         Schedule 2), an Uncertificated Conversion Notice (as defined in
         paragraph 7 below).

6.       In relation to any Convertible Preference Shares that, as at the date
         of the relevant Conversion Notice are Registered Shares, the right to
         convert shall be exercised if the registered holder of any such
         Convertible Preference Shares, shall have delivered to the Company's
         Registrar, at any time during the period referred to in paragraph 8
         below, a duly signed and completed Conversion Notice in such form as
         may from time to time be prescribed by the Directors (and obtainable
         from the Company's Registrar) (a "Certificated Conversion Notice")
         together with the Certificate for such shares (or an appropriate form
         of indemnity).

7.       In relation to any Convertible Preference Shares that, as at the date
         of the relevant Conversion Notice, are Bearer Shares, the right to
         convert shall be exercised if an Uncertificated Conversion Notice is
         received as referred to below at any time during the period referred
         to in paragraph 8 below. For these purposes, an Uncertificated
         Conversion Notice shall mean an instruction and/or notification
         received by the Company or such person as it may require in such form
         and having such effect as may in each case from time to time be
         prescribed by the Directors (subject always to the facilities and
         requirements of the relevant system) and details of which shall be
         obtainable from the Company's Registrar. Without prejudice to the
         generality of the foregoing, the form of Conversion Notice referred to
         above may be such as to require the holder of the Convertible
         Preference Shares concerned to transfer such Convertible Preference
         Shares into such account as may be specified by the Company in the
         Uncertificated Conversion Notice.

8.       The period referred to in paragraphs 6 and 7 above for the delivery of
         a Conversion Notice is the period falling not less than 90 and not
         more than 120 days prior to the Second Conversion Date. Unless the
         Directors otherwise determine in any case or cases, a Conversion
         Notice once delivered shall be irrevocable (save by means of a valid
         Withdrawal Notice given pursuant to paragraph 4).

9.       The following provisions shall apply to conversion of the Convertible
         Preference Shares:-

         (A)      conversion may be effected in such manner as the Directors
                  shall, subject to the requirements of applicable law and the
                  provisions hereof, from time to time determine and, without
                  prejudice to the generality of the foregoing, may be
                  effected:

                           (aa) by the redemption of Convertible Preference
                           Shares on the relevant Conversion Date for the
                           Redemption Amount (converted into Sterling by
                           reference to the rate which the Directors determine
                           on the First Conversion Date in the case of
                           Convertible Preference Shares converted on the First
                           Conversion Date and on the Second Conversion Date in
                           the case of Convertible Preference Shares converted
                           on the Second Conversion Date to be the appropriate
                           rate for the purchase of Sterling with the currency
                           in which the relevant Redemption Amount is
                           denominated) and the application of the redemption
                           moneys on behalf of the holder of the Convertible
                           Preference Shares so redeemed as herein provided. In
                           the case of a conversion effected by means of the
                           redemption of Convertible Preference Shares, the
                           Directors may effect redemption of the relevant
                           Convertible Preference Shares out of profits of the
                           Company which would otherwise be available for
                           dividend, out of the proceeds of a fresh issue of
                           shares or in any other manner for the time being
                           permitted by law. In the case of redemption

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                                      134

                           out of profits, the Directors shall apply the
                           Redemption Amount (converted into Sterling as
                           aforesaid) in the name of the holder of the
                           Convertible Preference Shares to be converted in
                           subscribing for the appropriate number of Ordinary
                           Shares as determined in accordance with the
                           provisions hereof at such premium per Ordinary Share
                           as shall represent the amount (if any) by which the
                           aggregate Redemption Amount (converted into Sterling
                           as aforesaid) exceeds the aggregate nominal amount
                           of the Ordinary Shares to which the holder is so
                           entitled divided by the number of such Ordinary
                           Shares. In the case of redemption out of the
                           proceeds of a fresh issue of shares, the Directors
                           may arrange for the issue of the appropriate number
                           of Ordinary Shares to the secretary of the Company
                           or any other person selected by the Directors on
                           terms that such person will subscribe and pay, as
                           agent on the holder's behalf, for such shares at
                           such premium per Ordinary Share as shall represent
                           the amount (if any) by which the aggregate
                           Redemption Amount (converted into Sterling as
                           aforesaid) exceeds the aggregate nominal amount of
                           the Ordinary Shares to which the holder is so
                           entitled divided by the number of such Ordinary
                           Shares (and such person shall be deemed to have
                           authority to borrow for such purpose) and, in any
                           such case, the Conversion Notice given by or
                           relating to a holder of the relevant Convertible
                           Preference Shares shall be deemed irrevocably to
                           authorise and instruct the Directors to apply the
                           Redemption Amount (converted into Sterling as
                           aforesaid) in payment to the holder's agent, who
                           shall be entitled to retain the same for his own
                           benefit without being accountable therefor to the
                           holder. In relation to any Convertible Preference
                           Shares which at the date of the relevant Conversion
                           Notice are Bearer Shares, and which are to be
                           redeemed in accordance with this paragraph 9(A)(aa)
                           the Directors shall be entitled in their absolute
                           discretion to determine the procedures for the
                           redemption and cancellation of such Convertible
                           Preference Shares (subject always to the facilities
                           and requirements of the relevant system concerned
                           and to the redemption on the relevant Conversion
                           Date of the Convertible Preference Shares concerned)
                           and the provisions of this paragraph shall apply
                           mutatis mutandis in respect of such redemption; or

                  (bb)     by means of a capitalisation issue and
                           consolidation. In that case the requisite
                           capitalisation issue and consolidation may be
                           effected pursuant to the authority conferred by the
                           passing of the resolution which created the
                           Convertible Preference Shares, by the Company
                           capitalising from profits or reserves (including any
                           share premium account or capital redemption reserve)
                           such number of new Ordinary Shares as shall bring
                           the total nominal amount of the Convertible
                           Preference Shares (converted into sterling by
                           reference to the rate which the Directors determine
                           on the First Conversion Date in the case of
                           Convertible Preference Shares converted on the First
                           Conversion Date and on the Second Conversion Date in
                           the case of Convertible Preference Shares converted
                           on the Second Conversion Date to be the appropriate
                           rate for the purchase of Sterling with the currency
                           in which the relevant Redemption Amount is
                           denominated) and the new Ordinary Shares to at least
                           the total nominal amount of the Ordinary Shares into
                           which the Convertible Preference Shares will convert
                           on the relevant Conversion Date, consolidating all
                           the relevant shares into one share (the
                           "Consolidated Share ") and sub-dividing the
                           Consolidated Share into the number of Ordinary
                           Shares arising from the conversion of the
                           Convertible Preference Shares. The balance of such
                           sub-divided share (including any fraction) shall be
                           non-voting deferred shares of such nominal amount as

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                                      135

                           the Directors may determine ( "Non-Voting Deferred
                           Shares "), shall be certificated shares and shall
                           have the following rights and restrictions:-

                           (1)      on a winding-up or other return of capital,
                                    the Non-Voting Deferred Shares shall
                                    entitle the holders of the shares only to
                                    payment of the amounts paid up on those
                                    shares, after repayment to the holders of
                                    the Ordinary Shares of the nominal amount
                                    paid up on the Ordinary Shares held by them
                                    respectively and the payment of (pound)0.01
                                    on each Ordinary Share;

                           (2)      the Non-Voting Deferred Shares shall not
                                    entitle the holders of the shares to the
                                    payment of any dividend or to receive
                                    notice of or to attend or vote at any
                                    general meeting of the Company;

                           (3)      the Non-Voting Deferred Shares shall not,
                                    save as provided in sub-paragraph (4)
                                    below, be transferable;

                           (4)      such conversion shall be deemed to confer
                                    irrevocable authority on the Company to
                                    appoint any person to execute on behalf of
                                    the holders of any Non-Voting Deferred
                                    Shares an instrument of transfer of the
                                    shares, and/or an agreement to transfer the
                                    shares, to such person or persons as the
                                    Company may determine as a custodian of the
                                    shares or to purchase or to cancel the
                                    shares in accordance with the provisions of
                                    the Statutes in any such case for not more
                                    than (pound)0.01 for all the shares being
                                    transferred, purchased or cancelled (to be
                                    paid to such one of the holders as may be
                                    selected by lot) without obtaining the
                                    sanction of the holder or holders of the
                                    shares, and pending such transfer or
                                    purchase or cancellation to retain the
                                    certificate for such Non-Voting Deferred
                                    Shares; and

                           (5)      the Company may at its option at any time
                                    after the creation of any Non-Voting
                                    Deferred Shares redeem all of those shares
                                    then in issue at a price not exceeding
                                    (pound)0.01 for all the shares redeemed at
                                    any one time (to be paid to such one of the
                                    holders as may be selected by lot), upon
                                    giving the holders of the Non-Voting
                                    Deferred Shares not less than 28 days'
                                    previous notice in writing of its intention
                                    so to do, fixing a time and place for the
                                    redemption. The Non-Voting Deferred Shares
                                    will not be listed on the London Stock
                                    Exchange. Upon or after the redemption of
                                    any Non-Voting Deferred Shares pursuant to
                                    this sub-paragraph (bb) the Directors may
                                    pursuant to the authority conferred by the
                                    passing of the resolution which created the
                                    Convertible Preference Shares consolidate
                                    and/or sub-divide and/or convert the
                                    authorised Non-Voting Deferred Share
                                    capital existing as a consequence of such
                                    redemption into shares of any other class
                                    of share capital into which the authorised
                                    share capital of the Company is or may at
                                    that time be divided of a like nominal
                                    amount (as nearly as may be) as the shares
                                    of such class or into unclassified shares
                                    of the same nominal amount (as nearly as
                                    may be) as the shares of such class or into
                                    unclassified shares of the same nominal
                                    amount as the Non-Voting Deferred Shares;

         (B)      the preferential dividend on Convertible Preference Shares
                  which converted pursuant to this Part 4 shall cease to accrue
                  with effect from the First Conversion Date in the

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                                      136

                  case of Convertible Preference Shares converted on such date
                  and with effect from the Second Conversion Date in the case
                  of Convertible Preference Shares converted on such date.
                  Ordinary Shares arising on conversion will be allotted and
                  registered as of the First Conversion Date in the case of
                  Ordinary Shares arising from Convertible Preference Shares
                  converted on such date and as of the Second Conversion Date
                  in the case of Ordinary Shares arising from Convertible
                  Preference Shares converted on such date, in each case to and
                  in the name of the holder of the relevant Convertible
                  Preference Shares or, subject to paragraph 3(A)(i) of this
                  Part 4, his nominee and shall rank pari passu with the
                  Ordinary Shares in issue on such Conversion Date except that
                  the Ordinary Shares so allotted will not rank for any
                  dividend or other distribution which has been announced,
                  declared, recommended or resolved prior to such Conversion
                  Date by the Directors or by the Company in general meeting to
                  be paid or made, if the record date for such dividend or
                  other distribution is on or prior to such Conversion Date or
                  (in any other case) if and so far as an adjustment relating
                  to the dividend, distribution or right has become effective;

         (C)      unless the Directors otherwise determine, or unless the
                  Uncertificated Securities Regulations and/or the requirements
                  of the relevant system otherwise require, the Ordinary Shares
                  arising on conversion of any Convertible Preference Shares
                  shall be or shall be issued (as appropriate) as certificated
                  shares (where the Convertible Preference Shares converted
                  were, on the date of the relevant Conversion Notice,
                  Registered Shares or where the relevant Converting Holder has
                  not specified a Crest account for this purpose in the
                  relevant Uncertificated Conversion Notice) or as
                  uncertificated shares (where the Convertible Preference
                  Shares converted were, on the date of the relevant Conversion
                  Notice, uncertificated shares and the relevant Converting
                  Holder has specified a Crest account for this purpose in the
                  relevant Uncertificated Conversion Notice), provided that if
                  the Company is unable under the facilities and requirements
                  of the relevant system to issue Ordinary Shares in respect of
                  the person entitled thereto in uncertificated form, such
                  shares shall be issued as certificated shares; and

         (D)      the Company shall procure that there shall be despatched or
                  made free of charge (but uninsured and at the risk of the
                  holder or the person entitled thereto, or the first-named
                  thereof, as the case may be):-

                  (aa)     a certificate in respect of Ordinary Shares arising
                           on conversion which are, in accordance with
                           sub-paragraph (C) above, certificated shares, and a
                           new certificate for any unconverted Convertible
                           Preference Shares comprised in any share certificate
                           surrendered by the holder, not later than 28 days
                           after the relevant Conversion Date; and

                  (bb)     payment in respect of the accrued preferential
                           dividend on the Convertible Preference Shares
                           converted, on the payment date in respect of such
                           dividend next following the relevant Conversion Date
                           (unless such Conversion Date is also a dividend
                           payment date, in which case on such dividend payment
                           date).

         (E)      For the purposes of this paragraph 9, whether any Convertible
                  Preference Shares are certificated shares or uncertificated
                  shares on the relevant Conversion Date shall be determined by
                  reference to the register of members as at 12.01 a.m. on the
                  relevant Conversion Date or such other time as the Directors
                  may (subject to the facilities and requirements of the
                  relevant system concerned) in their absolute discretion
                  determine.
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                                      137

         (F)      The Company shall use reasonable endeavours to procure that
                  the Ordinary Shares arising on conversion of Convertible
                  Preference Shares are admitted to the Official List of The
                  London Stock Exchange at the earliest practicable date
                  following issue and allotment of such.

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                                      138

                                   SCHEDULE 3

       Non-Cumulative Category II Convertible Sterling Preference Shares

1.       The Non-cumulative Category II Convertible Sterling Preference Shares
         are New Preference Shares. They shall rank after the Cumulative
         Preference Shares to the extent specified in Article 4 and this
         Schedule 3, and shall rank pari passu inter se and (save as aforesaid)
         with the Cumulative Preference Shares and with all other New
         Preference Shares. They shall confer the rights and be subject to the
         restrictions set out or referred to in this Schedule 3. The
         Non-cumulative Category II Convertible Sterling Preference Shares may
         be issued in one or more separate series, and each series shall be
         identified in such manner as the Directors may determine without any
         such determination or identification requiring any alteration to these
         presents.

2.       Each Non-cumulative Category II Convertible Sterling Preference Share
         shall confer the following rights as to participation in the profits
         and assets of the Company, receipt of notices, attendance and voting
         at meetings, redemption and conversion:

2.1      Income

         The right (subject to the provisions of paragraph 2.2, if applicable)
         to a non-cumulative preferential dividend at nine per cent per annum,
         accruing daily, payable twice yearly on 31 March and 30 September
         (each a "dividend payment date" and each such period being a "dividend
         period") (whether earned or declared or not) with the first dividend
         payment date being 31 March 2000. References in these presents to a
         "dividend" on the Non-cumulative Category II Convertible Sterling
         Preference Shares include a reference to each dividend in respect of
         each dividend period applicable thereto and references in this
         Schedule to dividend payment dates and dividend periods are to
         dividend payment dates and dividend periods in respect of the
         Non-cumulative Category II Convertible Sterling Preference Shares
         only. Such dividends shall be paid in priority to the payment of any
         dividends on the Ordinary Shares. The Non-cumulative Category II
         Convertible Sterling Preference Shares shall rank for dividend after
         the Cumulative Preference Shares, pari passu with the Non-cumulative
         Sterling Preference Shares, the Non-cumulative Dollar Preference
         Shares, the Category II Non-cumulative Dollar Preference Shares, all
         other Convertible Preference Shares and all other New Preference
         Shares expressed to rank pari passu therewith as regards participation
         in profits and otherwise in priority to any other share capital in the
         Company.

2.2      Further provisions as to income

         The following provisions shall apply:

         (i)      if, in the opinion of the Directors, the distributable
                  profits of the Company are sufficient to cover the payment in
                  full of dividends on the Non-cumulative Category II
                  Convertible Sterling Preference Shares on any dividend
                  payment date and also the payment in full of all other
                  dividends stated to be payable on such date on any other New
                  Preference Share expressed to rank pari passu therewith as
                  regards participation in profits, after payment in full, or
                  the setting aside of a sum to cover the payment in full, of
                  all dividends stated to be payable on such date on any
                  Cumulative Preference Share, then each such dividend shall be
                  paid in full;

         (ii)     if, in the opinion of the Directors, the distributable
                  profits of the Company are insufficient to cover the payment
                  in full of dividends on the Non-cumulative

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                                      139

                  Category II Convertible Sterling Preference Shares on any
                  dividend payment date and also the payment in full of all
                  other dividends stated to be payable on such date on any
                  other New Preference Share expressed to rank pari passu
                  therewith as regards participation in profits, after payment
                  in full, or the setting aside of a sum to cover the payment
                  in full, of all dividends stated to be payable on or before
                  such date on any Cumulative Preference Share, then dividends
                  shall be paid pro rata for the Non-cumulative Category II
                  Convertible Sterling Preference Shares and such other New
                  Preference Shares to the extent of the available
                  distributable profits (if any) to the intent that the amount
                  of dividend paid per share on each such Non-cumulative
                  Category II Convertible Sterling Preference Share and other
                  New Preference Share will bear to each other the same ratio
                  as the dividends accrued per share on each such
                  Non-cumulative Category II Convertible Sterling Preference
                  Share and other New Preference Share bear to each other. If
                  it shall subsequently appear that any such dividend which has
                  been paid should not, in accordance with the provisions of
                  this sub-paragraph, have been so paid, then provided the
                  Directors shall have acted in good faith, they shall not
                  incur any liability for any loss which any shareholder may
                  suffer in consequence of such payment having been made;

         (iii)    if, in the opinion of the Directors, the payment of any
                  dividend on any Non-cumulative Category II Convertible
                  Sterling Preference Shares would breach or cause a breach of
                  the capital adequacy requirements of the Financial Services
                  Authority (or any person or body to whom the banking
                  supervision functions of the Financial Services Authority are
                  transferred) applicable to the Company and/or any of its
                  subsidiaries, then none of such dividend shall be declared or
                  paid;

         (iv)     subject to sub-paragraph (v) below, the Non-cumulative
                  Category II Convertible Sterling Preference Shares shall
                  carry no further right to participate in the profits of the
                  Company and if and to the extent that any dividend or part
                  thereof is on any occasion not paid for the reasons described
                  in sub-paragraph (ii) or (iii) above, the holders of such
                  shares shall have no claim in respect of such non-payment;

         (v)      if any date on which dividends are payable on Non-cumulative
                  Category II Convertible Sterling Preference Shares is not a
                  day on which banks in London are open for business (a
                  Sterling Business Day), then payment of the dividend payable
                  on such date will be made on the succeeding Sterling Business
                  Day and without any interest or other payment in respect of
                  such delay unless such day shall fall within the next
                  calendar month whereupon such payment will be made on the
                  preceding Sterling Business Day;

         (vi)     dividends payable on Non-cumulative Category II Convertible
                  Sterling Preference Shares shall accrue from and including
                  the date of issue thereof, and the amount of dividend payable
                  in respect of any period shorter than a full dividend period
                  will be calculated on the basis of twelve 30 day months, a
                  360 day year and the actual number of days elapsed in such
                  period;

         (vii)    if any dividend stated to be payable on the Non-cumulative
                  Category II Convertible Sterling Preference Shares on the
                  most recent dividend payment date has not been paid in full,
                  no dividends may be paid on any other share capital of the
                  Company (other than the Cumulative Preference Shares); and

         (viii)   if any dividend stated to be payable on the Non-cumulative
                  Category II Convertible Sterling Preference Shares on any
                  dividend payment date has not been paid in full, or if a sum
                  has not been set aside to provide for such payment in full,
                  the Company may

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                                      140

                  not redeem or purchase or otherwise acquire for any
                  consideration any other share capital of the Company, and may
                  not set aside any sum nor establish any sinking fund for the
                  redemption or purchase of other such acquisition thereof,
                  until such time as dividends stated to be payable on the
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares in respect of successive dividend periods together
                  aggregating no less than twelve months shall thereafter have
                  been declared and paid in full.

2.3      Capital

         Subject to sub-paragraph 2.3(iii), the right on a winding up or
         liquidation, voluntary or otherwise other than (unless otherwise
         provided by the terms of issue of such share) a redemption or purchase
         by the Company of any shares of any class to receive in Sterling out
         of the surplus assets of the Company available for distribution
         amongst the members:

         (i)      after payment of the arrears (if any) of the fixed cumulative
                  preferential dividends stated to be payable on the Cumulative
                  Preference Shares to the holders thereof in accordance with
                  Article 4(B) FIRSTLY and pari passu with the holders of any
                  other New Preference Shares expressed to rank pari passu
                  therewith as regards participation in profits and in priority
                  to the holders of the Ordinary Shares of the Company a sum
                  equal to:

                  (A)      the amount of any dividend which is due for payment
                           after the date of commencement of the winding up or
                           liquidation but which is payable in respect of a
                           period ending on or before such date; and

                  (B)      any further amount of dividend payable in respect of
                           the period from the preceding dividend payment date
                           to the date of payment in accordance with this
                           sub-paragraph (i);

                  but only to the extent that any such amount or further amount
                  was, or would have been payable as a dividend in accordance
                  with or pursuant to this Schedule 3 (other than pursuant to
                  this provision); and

         (ii)     subject thereto, pari passu with the holders of the
                  Cumulative Preference Shares and any other New Preference
                  Shares expressed to rank pari passu therewith as regards
                  participation in surplus assets in priority to the holders of
                  the Ordinary Shares of the Company, a sum equal to the amount
                  paid up or credited as paid up on the Non-cumulative Category
                  II Convertible Sterling Preference Shares (including any
                  premium paid to the Company in respect thereof on issue).

                  If upon any such winding-up or liquidation, the amounts
                  available for payment are insufficient to cover the amounts
                  payable in full on the Cumulative Preference Shares, the
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares and on any other New Preference Shares expressed to
                  rank pari passu therewith as regards participation in surplus
                  assets, then the holders of the Cumulative Preference Shares,
                  the Non-cumulative Category II Convertible Sterling
                  Preference Shares and such other New Preference Shares will
                  share rateably in the distribution of surplus assets (if any)
                  in proportion to the full respective preferential amounts to
                  which they are entitled. No Non-cumulative Category II
                  Convertible Sterling Preference Share shall confer any right
                  to participate in the surplus assets of the Company other
                  than that set out in this paragraph 2.3.
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                                      141

         (iii)    If, whilst any Non-cumulative Category II Convertible
                  Sterling Preference Shares remain in issue, an effective
                  resolution is passed or an order of a court of competent
                  jurisdiction is made for the winding-up of the Company, then
                  (unless it be for the purpose of a solvent reconstruction,
                  amalgamation, merger or other similar arrangement) the
                  Company will forthwith give notice in writing to the holders
                  of any Non-cumulative Category II Convertible Sterling
                  Preference Shares that such a resolution has been passed or
                  such an order has been made. Any holder of any Non-cumulative
                  Category II Convertible Sterling Preference Shares shall be
                  entitled at any time within three months after the date on
                  which such notice is published to elect by notice in writing
                  delivered to the Company to be treated as if he had,
                  immediately before the date of the passing of such resolution
                  or the making of such order exercised his right to convert in
                  respect of some or all (as specified in such latter notice)
                  of any Non-cumulative Category II Convertible Sterling
                  Preference Shares held by him pursuant to the procedure for
                  conversion set out in paragraph 2.7 below and by reference to
                  a deemed Conversion Date being the date of the passing of
                  such resolution or the making of such order and he shall be
                  entitled to receive out of the assets which would otherwise
                  be available in the liquidation to the Ordinary Shareholders,
                  such a sum, if any, which he would have received had he been
                  the holder of the Ordinary Shares to which he would have
                  become entitled by virtue of such exercise.

2.4      Receipt of Notices

         The right to have sent to the holder of each Non-cumulative Category
         II Convertible Sterling Preference Share (at the same time as the same
         are sent to the holders of Ordinary Shares) a copy of the Company's
         Annual Report and Accounts and Interim Financial Statement and any
         other document sent to holders of Ordinary Shares.

2.5      Attendance and Voting at Meetings

         The right to attend at a General Meeting of the Company and to speak
         to or vote upon any Resolution proposed thereat in the following
         circumstances:

         (i)      in respect of a Resolution which is to be proposed at the
                  Meeting either varying or abrogating any of the rights
                  attached to the Non-cumulative Category II Convertible
                  Sterling Preference Shares or proposing the winding up of the
                  Company (and then in each such case only to speak to and vote
                  upon any such Resolution); and

         (ii)     in circumstances where, at the date of the notice convening
                  the relevant meeting, the dividend stated to be payable on
                  the Non-cumulative Category II Convertible Sterling
                  Preference Shares in respect of the last completed dividend
                  period has not been paid in full, and until the next dividend
                  payment date when the dividend in respect of a dividend
                  period is paid in full

         but not otherwise, together with the right, in such circumstances and
         on such terms, if any, as the Directors may determine prior to
         allotment of the Non-cumulative Category II Convertible Sterling
         Preference Shares, to seek to requisition a General Meeting of the
         Company. Whenever holders of Non-cumulative Category II Convertible
         Sterling Preference Shares are so entitled to vote on a Resolution, on
         a show of hands every such holder who is present in person shall have
         one vote and, on a poll, every such holder who is present in person or
         by proxy shall have such number of votes for each Non-cumulative
         Category II Convertible Sterling Preference Share held he would have
         had if that share had been converted into Ordinary Shares on the date
         of the notice of the meeting pursuant to the

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                                      142

         conversion procedure set out in paragraph 2.7 of this Schedule 3 and
         at a price per Ordinary Share calculated on the basis that the date of
         the notice of the meeting was a Conversion Date.

2.6      Redemption

         Each series of Non-cumulative Category II Convertible Sterling
         Preference Shares shall, subject to the provisions of the Statutes,
         and subject, where applicable, to the prior consent of the Financial
         Services Authority, be redeemable at the option of the Company in
         accordance with the following provisions:

         (A)      the Company may, subject thereto, redeem on any Redemption
                  Date (as hereinafter defined) all or some only of the
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares by giving to the holders of the Non-cumulative
                  Category II Convertible Sterling Preference Shares to be
                  redeemed not less than 7 days' nor more than 14 days' prior
                  notice in writing (a Notice of Redemption) of the relevant
                  Redemption Date. Redemption Date means in relation to a
                  Non-cumulative Category II Convertible Sterling Preference
                  Share, any date which falls no earlier than 30 days after the
                  date of allotment of the Non-cumulative Category II
                  Convertible Sterling Preference Share to be redeemed. The
                  Company shall not be entitled (save with the consent of the
                  relevant holder) to give a Notice of Redemption under this
                  sub-paragraph (A) in respect of any share for which a
                  Conversion Notice (as defined in paragraph 2.7(v) of this
                  Schedule 3) has been given in accordance with that Part and
                  not withdrawn;

         (B)      there shall be paid on each Non-cumulative Category II
                  Convertible Sterling Preference Share so redeemed in
                  Sterling, the aggregate of the nominal amount thereof
                  together with any premium paid on issue and together with
                  accruals (if any) of dividends thereon in respect of the
                  period from the dividend payment date last preceding the
                  Redemption Date (whether earned or declared or not) to the
                  Redemption Date;

         (C)      in the case of a redemption of some only of the
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares in any series, the Company shall for the purpose of
                  determining the particular Non-cumulative Category II
                  Convertible Sterling Preference Shares to be redeemed cause a
                  drawing to be made at the Office or such other place as the
                  Directors may approve in the presence of the Auditors for the
                  time being of the Company, provided that there shall be
                  excluded from such drawing any Non-cumulative Category II
                  Convertible Sterling Preference Shares to be converted
                  pursuant to paragraph 2.7 of this Schedule 3;

         (D)      any Notice of Redemption given under sub-paragraph (A) above
                  shall specify the applicable Redemption Date, the particular
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares to be redeemed and the redemption price (specifying
                  the amount of the accrued and unpaid dividend per share to be
                  included therein and stating that dividends on the
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares to be redeemed will cease to accrue on redemption),
                  and shall state the place or places at which documents of
                  title in respect of such Non-cumulative Category II
                  Convertible Sterling Preference Shares are to be presented
                  and surrendered for redemption and payment of the redemption
                  monies is to be effected. Upon such Redemption Date, the
                  Company shall redeem the particular Non-cumulative Category
                  II Convertible Sterling Preference Shares to be redeemed on
                  that date subject to the provisions of this paragraph and of
                  the Statutes. No defect in

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                                      143

                  the Notice of Redemption or in the giving thereof shall
                  affect the validity of the redemption proceedings;

         (E)      subject to sub-paragraph (I) below, the provisions of this
                  and the following sub-paragraph shall have effect in relation
                  to Non-cumulative Category II Convertible Sterling Preference
                  Shares for the time being issued and registered in the
                  Register of Members (Registered Shares) and represented by
                  certificates (Certificates) and in relation to Non-cumulative
                  Category II Convertible Sterling Preference Shares which, in
                  accordance with Article 52 of these presents, are for the
                  time being issued and represented by a Warrant (as defined in
                  the said Article 52) (Bearer Shares). Payments in respect of
                  the amount due on redemption of a Registered Share shall be
                  made by Sterling cheque drawn on a bank in London or upon the
                  request of the holder or joint holders not later than the
                  date specified for the purpose in the Notice of Redemption by
                  transfer to a Sterling account maintained by the payee with a
                  bank in London. Such payment will be against presentation and
                  surrender of the relative Certificate at the place or one of
                  the places specified in the Notice of Redemption and if any
                  Certificate so surrendered includes any Non-cumulative
                  Category II Convertible Sterling Preference Shares not to be
                  redeemed on the relevant Redemption Date (other than
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares to be converted pursuant to paragraph 2.7 of this
                  Schedule 3) the Company shall within fourteen days thereafter
                  issue to the holder, free of charge, a fresh Certificate in
                  respect of such Non-cumulative Category II Convertible
                  Sterling Preference Shares. Payment in respect of the amount
                  due on redemption of a Bearer Share shall be made by Sterling
                  cheque drawn on a bank in London or upon the request of the
                  holder not later than the date specified for the purpose in
                  the Notice of Redemption by transfer to a Sterling account
                  maintained by the payee with a bank in London. Such payments
                  will be made against presentation and surrender of the
                  Warrant and all unmatured dividend coupons and talons (if
                  any) at the place or the places specified in the Notice of
                  Redemption. Upon the relevant Redemption Date all unmatured
                  dividend coupons and any talon for additional dividend
                  coupons appertaining thereto (whether or not returned) shall
                  become void and no payment will be made in respect thereof.
                  If the Warrant so surrendered represents any Non-cumulative
                  Category II Convertible Sterling Preference Shares not to be
                  redeemed on the relevant Redemption Date (other than
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares to be converted pursuant to paragraph 2.7 of this
                  Schedule 3) the Company shall issue, free of charge, a fresh
                  Warrant representing such Bearer Shares which are not to be
                  redeemed on such Redemption Date.

                  All payments in respect of redemption monies will in all
                  respects be subject to any applicable fiscal or other laws;

         (F)      as from the relevant Redemption Date the dividend on the
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares due for redemption shall cease to accrue except on any
                  such Non-cumulative Category II Convertible Sterling
                  Preference Shares in respect of which, upon the due surrender
                  of the Certificate or, as the case may be, the Warrant and
                  all unmatured dividend coupons and talons (if any) in respect
                  thereof, in accordance with sub-paragraph (E) above, payment
                  of the redemption monies due on such Redemption Date shall be
                  improperly withheld or refused, in which case such dividend,
                  at the rate then applicable, shall be deemed to have
                  continued and shall accordingly continue to accrue from the
                  relevant Redemption Date to the date of payment of such
                  redemption monies. Such Non-cumulative Category II
                  Convertible Sterling Preference Share shall not be treated as
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                                      144

                  having been redeemed until the redemption monies in question
                  together with the accrued dividend thereon shall have been
                  paid;

         (G)      if the due date for the payment of the redemption monies on
                  any Non-cumulative Category II Convertible Sterling
                  Preference Shares is not a Sterling Business Day then payment
                  of such monies will be made on the next succeeding day which
                  is a Sterling Business Day and without any interest or other
                  payment in respect of such delay unless such day shall fall
                  within the next calendar month whereupon such payment will be
                  made on the preceding Sterling Business Day;

         (H)      the receipt of the holder for the time being of any
                  Registered Share (or in the case of joint holders the receipt
                  of any one of them) and the receipt of the person delivering
                  any Warrant to the place or one of the places specified
                  pursuant to sub-paragraph (D) above in respect of the monies
                  payable on redemption on such Registered Share or, as the
                  case may be, such Bearer Share, shall constitute an absolute
                  discharge to the Company; and

         (I)      subject as aftermentioned, the provisions of sub-paragraph
                  (E) and (F) above shall have effect in relation to Registered
                  Shares which are in uncertificated form within the meaning of
                  the Uncertificated Securities Regulations 1995 (as in force
                  on the date of adoption of this Schedule 3) in the same
                  manner as they have effect in relation to Registered Shares
                  represented by Certificates, save that (i) any provision of
                  the said paragraphs requiring presentation and surrender of a
                  Certificate shall be satisfied in the manner prescribed or
                  permitted by the said Regulations (or by any enactment or
                  subordinate legislation which amends or supersedes those
                  Regulations) or (subject to those Regulations or such
                  enactment or subordinate legislation) in such manner as may
                  from time to time be prescribed by the Directors), and (ii)
                  the Company shall not be under any obligation to issue a
                  fresh Certificate under sub-paragraph (E).

2.7      Conversion

         (i)      Each holder of Non-cumulative Category II Convertible
                  Sterling Preference Shares shall be entitled in the manner
                  set out in (and subject to the provisions of) this paragraph
                  2.7 to convert into fully paid Ordinary Shares such of his
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares as have not, as at the last date, prior to the
                  relevant Conversion Date, for the provision of notice of
                  conversion under sub-paragraph (viii) below, either been
                  redeemed or been the subject of a valid Notice of Redemption
                  given under paragraph 2.6 of this Schedule 3.

         (ii)     If, as at the Final Conversion Date, any of the
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares have not been either redeemed, the subject of a valid
                  Notice of Redemption given under paragraph 2.6 of this
                  Schedule 3 or converted into Ordinary Shares, then all such
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares will convert into fully paid Ordinary Shares in the
                  manner set out in (and subject to the provisions of) this
                  paragraph 2.7.

         (iii)    For the purpose of this paragraph 2.7:

                  (A)      the Conversion Dates shall be 30 September 2001, 31
                           March 2002, 30 September 2002 and the Final
                           Conversion Date (which is also for the avoidance of
                           doubt a Conversion Date) shall be 31 March 2003;
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                                      145

                  (B)      the conversion right referred to in sub-paragraph
                           (i) above shall be exercisable by completion of a
                           Conversion Notice (as defined in sub-paragraph (v)
                           below) submitted by holders of Non-cumulative
                           Category II Convertible Sterling Preference Shares
                           (Converting Holders) setting out the number of
                           Non-cumulative Category II Convertible Sterling
                           Preference Shares which are to be converted pursuant
                           to such notice (the Conversion Amount) and lodging
                           such Conversion Notice with the Company's Registrar
                           at any time during the period and in the manner
                           referred to in sub-paragraph (viii) below;

                  (C)      the Redemption Amount in relation to a
                           Non-cumulative Category II Convertible Sterling
                           Preference Share means the nominal amount thereof
                           together with any premium paid on issue;

         (iv)     The number of Ordinary Shares to be issued on the conversion
                  of each Non-cumulative Category II Convertible Sterling
                  Preference Share shall be determined by dividing the
                  Redemption Amount by the Conversion Price. In the case of
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares which are converted on any of the Conversion Dates,
                  the Conversion Price shall be the higher of:

                  (A)      the weighted average closing price per Ordinary
                           Share on the London Stock Exchange during the period
                           of the 20 London Stock Exchange dealing days (on
                           which the trading in the Ordinary Shares is not
                           fully suspended) ending five London Stock Exchange
                           dealing days before the relevant Conversion Date;
                           and

                  (B)      (pound)5

                  Fractions of Ordinary Shares will not be issued on conversion
                  and no cash adjustment will be made. However, if more than
                  one Non-cumulative Category II Sterling Preference Share held
                  by any holder is to be converted and the Ordinary Shares
                  arising on conversion are to be registered in the same name,
                  the number of Ordinary Shares to be issued in respect thereof
                  shall be calculated on the basis of the aggregate Redemption
                  Amount of such Non-cumulative Category II Sterling Preference
                  Shares.

                  If at the time that the Conversion Price is to be calculated
                  the Ordinary Shares are not listed and traded on the London
                  Stock Exchange, references in this article to the London
                  Stock Exchange shall be to such other exchange on which the
                  Ordinary Shares are listed and traded.

         (v)      For the purposes of conversion pursuant to sub-paragraph (i)
                  above, a Conversion Notice means, in relation to any
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares, which as at the date of such notice, are Registered
                  Shares (as defined in paragraph 2.6 of this Schedule 3), a
                  Certificated Conversion Notice (as defined in sub-paragraph
                  (vi) below) or, in relation to any Non-cumulative Category II
                  Convertible Sterling Preference Shares that, as at the date
                  of such notice, are Bearer Shares (as defined in the said
                  paragraph 2.6), an Uncertificated Conversion Notice (as
                  defined in sub-paragraph (vii) below).

         (vi)     In relation to any Non-cumulative Category II Convertible
                  Sterling Preference Shares that, as at the date of the
                  relevant Conversion Notice, are Registered Shares, the right
                  to convert shall be exercised if the registered holder of any
                  such Category II

<PAGE>
                                      146

                  Convertible Sterling Preference Shares, shall have delivered
                  to the Company's Registrar, at any time during the period
                  referred to in sub-paragraph (viii) below, a duly signed and
                  completed Conversion Notice in such form as may from time to
                  time be prescribed by the Directors (and obtainable from the
                  Company's Registrar) (a Certified Conversion Notice) together
                  with the Certificate for such shares (or an appropriate form
                  of indemnity).

         (vii)    In relation to any Non-cumulative Category II Convertible
                  Sterling Preference Shares that, as at the date of the
                  relevant Conversion Notice, are Bearer Shares, the right to
                  convert shall be exercised if an Uncertificated Conversion
                  Notice is received as referred to below at any time during
                  the period referred to in sub-paragraph (viii) below. For
                  these purposes, an Uncertificated Conversion Notice shall
                  mean an instruction and/or notification received by the
                  Company or such person as it may require in such form and
                  having such effect as may in each case from time to time be
                  prescribed by the Directors (subject always to the facilities
                  and requirements of the relevant system) and details of which
                  shall be obtainable from the Company's Registrar. Without
                  prejudice to the generality of the foregoing, the form of
                  Conversion Notice referred to above may be such as to require
                  the holder of the Non-cumulative Category II Convertible
                  Sterling Preference Shares concerned to transfer such
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares into such account as may be specified by the Company
                  in the Uncertified Conversion Notice.

         (viii)   The period referred to in sub-paragraphs (vi) and (vii) above
                  for the delivery of a Conversion Notice is the period falling
                  not less than 7 and not more than 30 days prior to the
                  relevant Conversion Date. Unless the Directors otherwise
                  determine in any case or cases, a Conversion Notice once
                  delivered shall be irrevocable.

         (ix)     The following provisions shall apply to conversion of the
                  Non-cumulative Category II Convertible Sterling Preference
                  Shares:-

                  (A)      conversion may be effected in such manner as the
                           Directors shall, subject to the requirements of
                           applicable law and the provisions hereof, from time
                           to time determine and, without prejudice to the
                           generality of the foregoing, may be effected:

                           (aa)     by the redemption of Non-cumulative
                                    Category II Convertible Sterling Preference
                                    Shares on the relevant Conversion Date for
                                    the Redemption Amount and the application
                                    of the redemption moneys on behalf of the
                                    holder of the Non-cumulative Category II
                                    Convertible Sterling Preference Shares so
                                    redeemed as herein provided. In the case of
                                    a conversion effected by means of the
                                    redemption of Non-cumulative Category II
                                    Convertible Sterling Preference Shares, the
                                    Directors may effect redemption of the
                                    relevant Non-cumulative Category II
                                    Convertible Sterling Preference Shares out
                                    of profits of the Company which would
                                    otherwise be available for dividend, out of
                                    the proceeds of a fresh issue of shares or
                                    in any other manner for the time being
                                    permitted by law. In the case of redemption
                                    out of profits, the Directors shall apply
                                    the Redemption Amount in the name of the
                                    holder of the Non-cumulative Category II
                                    Convertible Sterling Preference Shares to
                                    be converted in subscribing for the
                                    appropriate number of Ordinary Shares as
                                    determined in accordance with the
                                    provisions hereof at such premium per
                                    Ordinary Share as shall represent the
                                    amount (if

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                                      147

                                    any) by which the aggregate Redemption
                                    Amount exceeds the aggregate nominal amount
                                    of the Ordinary Shares to which the holder
                                    is so entitled divided by the number of
                                    such Ordinary Shares. In the case of
                                    redemption out of the proceeds of a fresh
                                    issue of shares, the Directors may arrange
                                    for the secretary of the Company or any
                                    other person selected by the Directors to
                                    subscribe and pay, as agent on the holder's
                                    behalf, for the appropriate number of
                                    Ordinary Shares at such premium per
                                    Ordinary Share as shall represent the
                                    amount (if any) by which the aggregate
                                    Redemption Amount exceeds the aggregate
                                    nominal amount of the Ordinary Shares to
                                    which the holder is so entitled divided by
                                    the number of such Ordinary Shares (and
                                    such person shall be deemed to have
                                    authority to borrow for such purpose) and,
                                    in any such case, a holder of
                                    Non-cumulative Category II Convertible
                                    Sterling Preference Shares shall be deemed
                                    irrevocably to have authorised and
                                    instructed the Directors to apply the
                                    Redemption Amount in payment to the
                                    holder's agent, who shall be entitled to
                                    retain the same for his own benefit without
                                    being accountable therefor to the holder.
                                    In relation to any Non-cumulative Category
                                    II Convertible Sterling Preference Shares
                                    which at the date of the relevant
                                    Conversion Notice are Bearer Shares, and
                                    which are to be redeemed in accordance with
                                    this sub-paragraph (ix)(A)(aa) the
                                    Directors shall be entitled in their
                                    absolute discretion to determine the
                                    procedures for the redemption and
                                    cancellation of such Non-cumulative
                                    Category II Convertible Sterling Preference
                                    Shares (subject always to the facilities
                                    and requirements of the relevant system
                                    concerned and to the redemption on the
                                    relevant Conversion Date of the
                                    Non-cumulative Category II Convertible
                                    Sterling Preference Shares concerned) and
                                    the provisions of this sub-paragraph shall
                                    apply mutatis mutandis in respect of such
                                    redemption; or

                           (bb)     by means of a capitalisation issue and
                                    consolidation. In that case the requisite
                                    capitalisation issue and consolidation may
                                    be effected pursuant to the authority
                                    conferred by the passing of the resolution
                                    which created the Non-cumulative Category
                                    II Convertible Sterling Preference Shares,
                                    by the Company capitalising from profits or
                                    reserves (including any share premium
                                    account, merger reserve or capital
                                    redemption reserve) such number of new
                                    Ordinary Shares as shall bring the total
                                    nominal amount of the Non-cumulative
                                    Category II Convertible Sterling Preference
                                    Shares and the new Ordinary Shares to at
                                    least the total nominal amount of the
                                    Ordinary Shares into which the
                                    Non-cumulative Category II Convertible
                                    Sterling Preference Shares will convert on
                                    the relevant Conversion Date, consolidating
                                    all the relevant shares into one share (the
                                    Consolidated Share) and sub-dividing the
                                    Consolidated Share into the number of
                                    Ordinary Shares arising from the conversion
                                    of the Convertible Preference Shares. The
                                    balance of such sub-divided share
                                    (including any fraction) shall be
                                    non-voting deferred shares of such nominal
                                    amount as the Directors may determine
                                    (Non-Voting Deferred Shares), shall be
                                    certificated shares and shall have the
                                    following rights and restrictions:
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                                      148

                                    (1)     on a winding-up or other return of
                                            capital, the Non-Voting Deferred
                                            Shares shall entitle the holders of
                                            the shares only to payment of the
                                            amounts paid up on those shares,
                                            after repayment of the holders of
                                            the Ordinary Shares of the nominal
                                            amount paid up on the Ordinary
                                            Shares held by them respectively
                                            and the payment of (pound)0.01 on
                                            each Ordinary Share;

                                    (2)     the Non-Voting Deferred Shares
                                            shall not entitle the holders of
                                            the shares to the payment of any
                                            dividend or to receive notice of or
                                            to attend or vote at any general
                                            meeting of the Company;

                                    (3)     the Non-Voting Deferred Shares
                                            shall not, save as provided in
                                            sub-paragraph (4) below, be
                                            transferable;

                                    (4)     such conversion shall be deemed to
                                            confer irrevocable authority on the
                                            Company to appoint any person to
                                            execute on behalf of the holders or
                                            any Non-Voting Deferred Shares an
                                            instrument of transfer of the
                                            shares, and/or an agreement to
                                            transfer the shares, to such person
                                            or persons as the Company may
                                            determine as a custodian of the
                                            shares or to purchase or to cancel
                                            the shares in accordance with the
                                            provisions of the Statutes in any
                                            such case for not more than
                                            (pound)0.01 for all the shares
                                            being transferred, purchased or
                                            cancelled (to be paid to such one
                                            of the holders as may be selected
                                            by lot) without obtaining the
                                            sanction of the holder or holders
                                            of the shares, and pending such
                                            transfer or purchase or
                                            cancellation to retain the
                                            certificate for such Non-Voting
                                            Deferred Shares; and

                                    (5)     the Company may at its option at
                                            any time after the creation of any
                                            Non-Voting Deferred Shares redeem
                                            all of those shares then in issue
                                            at a price not exceeding
                                            (pound)0.01 for all the shares
                                            redeemed at any one time (to be
                                            paid to such one of the holders as
                                            may be selected by lot), upon
                                            giving the holders of the
                                            Non-Voting Deferred Shares not less
                                            than 28 days' previous notice in
                                            writing of its intention so to do,
                                            fixing a time and place for the
                                            redemption. The Non-Voting Deferred
                                            Shares will not be listed on the
                                            London Stock Exchange. Upon or
                                            after the redemption of any
                                            Non-Voting Deferred Shares pursuant
                                            to this sub-paragraph (bb) the
                                            Directors may pursuant to the
                                            authority conferred the passing of
                                            the resolution which created the
                                            Non-cumulative Category II
                                            Convertible Sterling Preference
                                            Shares consolidate and/or
                                            sub-divide and/or convert the
                                            authorised Non-Voting Deferred
                                            Share capital existing as a
                                            consequence of such redemption into
                                            shares of any other class of share
                                            capital into which the authorised
                                            share capital of the Company is or
                                            may at that time be divided of a
                                            like nominal amount (as nearly as
                                            may be) as the shares of such class
                                            or into

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                                      149

                                            unclassified shares of the
                                            same nominal amount (as nearly as
                                            may be) as the shares of such class
                                            or into unclassified shares of the
                                            same nominal amount as the
                                            Non-Voting Deferred Shares.

                  (B)      the preferential dividend on Non-cumulative Category
                           II Convertible Sterling Preference Shares which are
                           converted pursuant to this paragraph 2.7 shall cease
                           to accrue with effect from the relevant Conversion
                           Date. Ordinary Shares arising on conversion will be
                           allotted and registered as of the relevant
                           Conversion Date, in each case to and in the name of
                           the holder of the relevant Non-cumulative Category
                           II Convertible Sterling Preference Shares and shall
                           rank pari passu with the Ordinary Shares in issue on
                           such Conversion Date except that the Ordinary Shares
                           so allotted will not rank for any dividend or other
                           distribution which has been announced, declared,
                           recommended or resolved prior to such Conversion
                           Date by the Directors or by the Company in general
                           meeting to be paid or made, if the record date for
                           such dividend or other distribution is on or prior
                           to such Conversion Date;

                  (C)      unless the Directors otherwise determine, or unless
                           the Uncertificated Securities Regulations and/or the
                           requirements of the relevant system otherwise
                           require, the Ordinary Shares arising on conversion
                           of any Non-cumulative Category II Convertible
                           Sterling Preference Shares shall be or shall be
                           issued (as appropriate) as certificated shares
                           (where the Non-cumulative Category II Convertible
                           Sterling Preference Shares converted were, on the
                           date of the relevant Conversion Notice, Registered
                           Shares or where the relevant Converting Holder has
                           not specified a Crest account for this purpose in
                           the relevant Uncertificated Conversion Notice) or as
                           uncertificated shares (where the Non-cumulative
                           Category II Convertible Sterling Preference Shares
                           converted were, on the date of the relevant
                           Conversion Notice, uncertificated shares and the
                           relevant Converting Holder has specified a Crest
                           account for this purpose in the relevant
                           Uncertificated Conversion Notice), provided that if
                           the Company is unable under the facilities and
                           requirements of the relevant system to issue
                           Ordinary Shares in respect of the person entitled
                           thereto in uncertificated form, such shares shall be
                           issued as certificates shares; and

                  (D)      the Company shall procure that there shall be
                           dispatched or made free of charge (but uninsured and
                           at the risk of the holder or the person entitled
                           thereto, or the first-named thereof, as the case may
                           be):

                           (aa)     a certificate in respect of Ordinary Shares
                                    arising on conversion which are, in
                                    accordance with sub-paragraph (C) above,
                                    certificated shares, and a new certificate
                                    for any unconverted Non-cumulative Category
                                    II Convertible Sterling Preference Shares
                                    comprised in any share certificate
                                    surrendered by the holder, not later than
                                    28 days after the relevant Conversion Date;
                                    and

                           (bb)     payment in respect of the accrued
                                    preferential dividend on the Non-cumulative
                                    Category II Convertible Sterling Preference
                                    Shares converted, on the payment date in
                                    respect of such dividend next following the
                                    relevant Conversion Date (unless such
                                    Conversion Date is also a dividend payment
                                    date, or unless there are no Non-cumulative
                                    Category II Convertible Sterling Preference
                                    Shares outstanding following such
                                    conversion in which case on such dividend
                                    payment date).
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                                      150

                  (E)      For the purposes of this paragraph 2.7, whether any
                           Non-cumulative Category II Convertible Sterling
                           Preference Shares are certificated shares or
                           uncertificated shares on the relevant Conversion
                           Date shall be determined by reference to the
                           register of members as at 12.01 a.m. on the relevant
                           Conversion Date or such other time as the Directors
                           may (subject to the facilities and requirements of
                           the relevant system concerned) in their absolute
                           discretion determine.

                  (F)      The Company shall use reasonable endeavours to
                           procure that the Ordinary Shares arising on
                           conversion of Non-cumulative Category II Convertible
                           Sterling Preference Shares are admitted to the
                           Official List of The London Stock Exchange at the
                           earliest practicable date following issue and
                           allotment of such.

                  (G)      The Company shall ensure that at the relevant
                           Conversion Dates sufficient authorised but unissued
                           share capital is available in order to permit
                           conversion of the Non-cumulative Category II
                           Convertible Sterling Preference Shares outstanding
                           on such relevant Conversion Date;

3.       (a)      save with the written consent of the holder(s) of
                  three-quarters in nominal value of, or with the sanction of
                  an Extraordinary Resolution passed at a separate General
                  Meeting of the holders of, the Non-cumulative Category II
                  Convertible Sterling Preference Shares, the Directors shall
                  not: (i) authorise or create, or increase the amount of, any
                  shares of any class or any security convertible into shares
                  of any class ranking as regards rights to participate in the
                  profits or assets of the Company (other than on a redemption
                  or purchase by the Company of any such shares) in priority to
                  the Non-cumulative Category II Convertible Sterling
                  Preference Shares; or (ii) delist the Ordinary Shares from
                  the London Stock Exchange, except in connection with a
                  listing of such shares on another stock exchange of
                  comparable standing;

         (b)      the special rights attached in any series of Non-cumulative
                  Category II Convertible Sterling Preference Shares allotted
                  or in issue shall not (unless otherwise provided by their
                  terms of issue) be deemed to be varied by the creation or
                  issue of any New Shares ranking as regards participation in
                  the profits and assets of the Company pari passu with or
                  after such Non-cumulative Category II Convertible Sterling
                  Preference Shares. Any new shares ranking pari passu with
                  such Non-cumulative Category II Convertible Sterling
                  Preference Shares may without their creation or issue being
                  deemed to vary the special rights attached to any
                  Non-cumulative Category II Convertible Sterling Preference
                  Share then in issue either carry rights identical in all
                  respects with such Non-cumulative Category II Convertible
                  Sterling Preference Shares or any of them or carry rights
                  differing therefrom in any respect, including, but without
                  prejudice to the generality of the foregoing, in that:

                  (i)      the rate or means of calculating the dividend may
                           differ and the dividend may be cumulative or
                           non-cumulative;

                  (ii)     the New Shares or any series thereof may rank for
                           dividend as from such date as may be provided by the
                           terms of issue thereof and the dates for payment of
                           dividend may differ;

                  (iii)    the New Shares may be denominated in Sterling or any
                           Foreign Currency;
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                                      151

                  (iv)     a premium may be payable on return of capital or
                           there may be no such premium;

                  (v)      the New Shares may be redeemable at the option of
                           the holder or of the Company, or may be
                           non-redeemable and if redeemable at the option of
                           the Company, they may be redeemable at different
                           dates and on different terms from those applying to
                           the Non-cumulative Category II Convertible Sterling
                           Preference Shares; and

                  (vi)     the New Shares may be convertible into Ordinary
                           Shares or any other class of shares ranking as
                           regards participation in the profits and assets of
                           the Company pari passu with or after such
                           Non-cumulative Category II Convertible Sterling
                           Preference Shares in each case on such terms and
                           conditions as may be prescribed by the terms of
                           issue thereof.

         (c)      Prior to 30 September 2000 the directors may, in their
                  absolute discretion and without giving any reason refuse to
                  register the transfer of a Non-cumulative Category II
                  Sterling Convertible Preference Share to any person, whether
                  or not it is fully paid.

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                                      152

                                   SCHEDULE 4

                            Additional Value Shares

1.       The Company shall have a class of Additional Value Shares. They shall
         confer the rights and be subject to the restrictions set out or
         referred to in this Schedule 4.

2.       Each Additional Value Share shall confer the following rights as to
         participation in the profits and assets of the Company, receipt of
         notices, attendance and voting at meetings and conversion.

2.1      Income

         The right to dividends to be paid out of the distributable profits of
         the Company, subject in each case to declaration by and at the
         discretion of the Directors and the provisions of sub-paragraph 2.2,
         as follows:

         (i)      15 pence per Additional Value Share on 1 December 2001;

         (ii)     30 pence per Additional Value Share on 1 December 2002; and

         (iii)    55 pence per Additional Value Share on 1 December 2003 (the
                  "Final Dividend Date").

         References in this Schedule to a "dividend" on the Additional Value
         Shares include a reference to each dividend paid on the Additional
         Value Shares (whether or not in accordance with the proposed dividends
         set out in this sub-paragraph 2.1 and including any dividend of a
         lesser amount than stated or any dividend aggregating two or more such
         dividends or any part thereof) and references to "dividend payment
         dates" are to dividend payment dates in respect of the Additional
         Value Shares only (such dividend payment dates being, subject to
         sub-paragraph 2.2, those specified in this sub-paragraph 2.1).

2.2      Further provisions as to income

         The following provisions shall apply:

         (i)      In deciding whether to declare and pay a dividend on the
                  Additional Value Shares the Directors shall have regard inter
                  alia to the following factors:

                  (A)      whether the distributable profits of the Company are
                           sufficient to cover the payment in full of dividends
                           on the Additional Value Shares on any dividend
                           payment date and also the payment in full of all
                           other dividends (if any) stated to be payable on any
                           Cumulative Preference Share or New Preference Share
                           provided that in any event the Directors shall not
                           pay any dividend due on the Additional Value Shares
                           if in their opinion the distributable profits of the
                           Company are not likely to be sufficient to pay any
                           dividend due on any Cumulative Preference Share or
                           New Preference Share due for payment within 90 days
                           of the relevant dividend payment date;

                  (B)      whether the distributable profits of the Company are
                           adequate or are likely to be adequate having regard
                           to the Company's obligation to make dividend
                           payments on any Cumulative Preference Share or New
                           Preference Share;
<PAGE>
                                      153

                  (C)      the effect of the payment of such dividend on the
                           regulatory capital structure of the Company and on
                           its consolidated banking and trading book target and
                           trigger ratios as prescribed by the Financial
                           Services Authority Limited from time to time; and

                  (D)      the Company's best interests having regard to its
                           future cash requirements and actual and contingent
                           liabilities.

         (ii)     Without prejudice to the foregoing and for the avoidance of
                  doubt, no dividend shall be paid on the Additional Value
                  Shares if and to the extent that such payment would
                  constitute an unauthorised variation or abrogation of the
                  rights as to participation in profits attached to the
                  Cumulative Preference Shares or any New Preference Shares.

         (iii)    Holders of Additional Value Shares shall have no claim in
                  respect of the failure of the Directors to declare and/or pay
                  any dividend(s) and the Directors shall not be bound to give
                  their reasons for not declaring or paying such a dividend
                  save that the Directors shall

         announce their intention in respect of the payment of any dividend
         referred to in sub-paragraph 2.1 no later than 14 days prior to the
         relevant dividend payment date (save in respect of the Final Dividend
         Date in which case notice must be given on or before 1 September
         2003).

         (iv)     Dividends declared by the Directors shall be payable without
                  necessity for any resolution on the part of the Company in
                  General Meeting on the relevant dividend payment date to
                  holders of Additional Value Shares entered on the register of
                  members at the close of business on the date which falls one
                  calendar month before the relevant dividend payment date (or
                  on such other date prior to the relevant dividend payment
                  date as the Directors may in their absolute discretion
                  decide).

         (v)      Subject to sub-paragraph 2.1 and this sub-paragraph 2.2, if
                  and to the extent that any dividend is not declared for
                  payment on any dividend payment date (whether in whole or in
                  part), such amount shall fall to be considered for payment on
                  the following dividend payment date in addition to any
                  dividend falling to be considered for payment on that date.

         (vi)     No Additional Value Share shall carry any right to
                  participate in the profits of the Company other than as set
                  out in sub-paragraph 2.1 above and this sub-paragraph 2.2.

         (vii)    If any dividend payment date in respect of which dividends
                  are declared to be payable in accordance with sub-paragraph
                  2.1 above is not a day on which banks in London are open for
                  business (a "Business Day"), then payment of the dividend
                  payable on such date will be made on the next succeeding
                  Business Day and without any interest or other payment in
                  respect of such delay.

         (viii)   Save as set out in sub-paragraph 2.7(xiv) and for the
                  avoidance of doubt, the Company shall be free to pay
                  dividends or make other distributions to any holder of any
                  other class of shares in the capital of the Company
                  (including for the avoidance of doubt, the Cumulative
                  Preference Shares, New Preference Shares and the Ordinary
                  Shares) notwithstanding that the Directors have not declared
                  and/or paid any dividend on the Additional Value Shares.
<PAGE>
                                      154

2.3      Capital

         The right on a winding up, liquidation or other return of capital
         other than a redemption or purchase by the Company of any shares of
         any class, to receive in respect of each Additional Value Share in
         Sterling out of the surplus assets of the Company available for
         distribution amongst the members in priority to the holders of the
         Ordinary Shares of the Company but after payment of all amounts
         outstanding to holders of Cumulative Preference Shares and New
         Preference Shares and any other share in the capital of the Company
         expressed to rank as to participation in capital or assets in priority
         to the Additional Value Shares, an amount of (pound)1 less the
         aggregate amount of any dividends paid in respect of each Additional
         Value Share prior to the date of the winding up or liquidation (but
         for the avoidance of doubt excluding any distribution paid in the
         winding up or liquidation).

         If on any such winding up, liquidation or other return of capital the
         amounts available for payment are insufficient to cover in full the
         amounts payable on the Additional Value Shares on such return of
         capital, the holders of such Additional Value Shares will share
         rateably in the distribution of assets (if any) in proportion to the
         full amounts to which they are respectively entitled under this
         sub-paragraph 2.3.

         No Additional Value Share shall confer any further right to
         participate in the capital or assets of the Company available for
         distribution among the members other than as set out in this
         sub-paragraph 2.3.

2.4      Receipt of Notices

         The right to have sent to the holder of each Additional Value Share
         (at the same time as the same are sent to the holders of Ordinary
         Shares) a copy of the Company's Annual Report and Accounts and/or
         Interim Financial Statement together with any notice of any General
         Meeting of the Company at which such holder is entitled to attend and
         vote.

2.5      Attendance and Voting at Meetings

         The right to attend at a General Meeting of the Company and to speak
         to or vote upon any Resolution proposed thereat in circumstances where
         it is proposed at the Meeting either to vary or abrogate any of the
         rights attached to the Additional Value Shares or proposing the
         winding up of the Company (and then in each such case only to speak to
         and vote upon any such Resolution) but not otherwise.

         Whenever holders of Additional Value Shares are so entitled to vote on
         a Resolution, on a show of hands every such holder who is present in
         person shall have one vote and, on a poll, every such holder who is
         present in person or by proxy shall have such number of votes for the
         Additional Value Shares held by him as he would have had if those
         shares had been converted into Ordinary Shares on the date of the
         notice of the meeting pursuant to the conversion procedure set out in
         paragraph 2.7 of this Schedule 4 and at a price per Additional Value
         Share calculated on the basis that the date of the notice of the
         meeting was the Second Conversion Date.

2.6      De-listing and Conversion into Non-Voting Deferred Shares

         The Directors shall be entitled (without being required to obtain the
         sanction of any holder of any Additional Value Share) in their
         absolute discretion and shall have irrevocable authority at any time
         after the payment of aggregate dividends of (pound)1 in respect of
         each Additional Value Share to procure that the Additional Value
         Shares be de-listed from the Official List of the UK

<PAGE>
                                      155

         Listing Authority and from trading on the London Stock Exchange's
         market for listed securities. The Additional Value Shares shall
         convert automatically into non-voting deferred shares of (pound)0.01
         ("Non-Voting Deferred Shares"), which shall be certificated shares and
         shall have the following rights and restrictions only:

         (i)      On a winding-up or other return of capital, the Non-Voting
                  Deferred Shares shall entitle the holders of such shares only
                  to payment of the amounts paid up on those shares, after
                  repayment to the holders of Ordinary Shares of the nominal
                  amount paid up on the Ordinary Shares held by them
                  respectively and the payment of (pound)100,000 on each
                  Ordinary Share.

         (ii)     The Non-Voting Deferred Shares shall not entitle the holders
                  of such shares to the payment of any dividend or other
                  distribution or to receive notice of or to attend or vote at
                  any general meeting of the Company or otherwise receive any
                  shareholder communication.

         (iii)    The Non-Voting Deferred Shares shall not, save as provided
                  below or otherwise with the written consent of the Directors,
                  be transferable.

         (iv)     Notwithstanding any other provision in these presents and
                  unless specifically required by the provisions of the 1985
                  Act, the Company shall not be required to issue any
                  certificates in respect of any Non-Voting Deferred Shares.

         (v)      Following conversion, the Non-Voting Deferred Shares shall be
                  transferred for no consideration to such person as may be
                  nominated by the Directors, whether or not an officer of the
                  Company (and for such purposes the Directors shall have
                  irrevocable authority to appoint a person on behalf of any
                  holder of Non-Voting Deferred Shares to enter into an
                  agreement to transfer and to execute and deliver a transfer
                  of his Non-Voting Deferred Shares to such other person).

2.7      Conversion into Ordinary Shares

         (i)      If on 1 September 2003 aggregate dividends of(pound)1 have
                  not been paid in respect of each Additional Value Share, then
                  unless the Directors have resolved that a dividend be paid on
                  the Additional Value Shares on or before the Final Dividend
                  Date of such amount that aggregate dividends paid on
                  Additional Value Shares will be(pound)1 (and that dividend is
                  duly paid on or before the Final Dividend Date or the
                  following Business Day where that date is not a Business
                  Day), the Additional Value Shares shall be converted into
                  fully paid up Ordinary Shares in the manner set out (and
                  subject to the provisions of) this paragraph 2.7 and the
                  Company shall use its reasonable efforts, to the extent
                  permitted by applicable law, to arrange for a sale of the
                  Ordinary Shares arising on conversion pursuant to paragraph
                  2.7(iii) below.

         (ii)     For the purpose of this paragraph 2.7:

                  (A)      the Settlement Amount in relation to each Additional
                           Value Share means an amount of (pound)1 less the
                           aggregate amount of any dividends paid in respect of
                           that share;

                  (B)      the Aggregate Settlement Amount in relation to any
                           particular holding of Additional Value Shares means
                           the aggregate Settlement Amount relating to the
                           number of Additional Value Shares comprised in that
                           holding and where the

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                                      156

                           context requires, the Aggregate Settlement Amount
                           relating to all Additional Value Shares to be
                           converted;

                  (C)      the First Conversion Date shall be 25 London Stock
                           Exchange trading days prior to the Second Conversion
                           Date and the Second Conversion Date shall be the
                           Final Dividend Date;

                  (D)      the expression "holder" shall include a person
                           entitled by transmission and the expressions "hold"
                           and "holding" shall be construed accordingly; and

                  (E)      each joint holding in respect of which names of the
                           joint holders differ or are listed in a different
                           order shall be treated as a separate holding and the
                           expressions "held" and "holder" shall be construed
                           accordingly.

         (iii)    The Company will use its reasonable efforts, to the extent
                  permitted by applicable law, to arrange for the sale of the
                  Ordinary Shares into which such Additional Value Shares will
                  convert so as to raise net cash proceeds of an amount equal
                  to the Aggregate Settlement Amount in respect of such
                  Additional Value Shares. The sale will be conducted by means
                  of a process pursuant to which a broker selected by the
                  Company (the "Broker") will solicit bids for the relevant
                  Ordinary Shares (the "Placing"). Such bids will be solicited
                  during the period of 20 London Stock Exchange trading days
                  ending five London Stock Exchange trading days before the
                  First Conversion Date. The Company will not in any
                  circumstances be obliged to procure the transfer of Ordinary
                  Shares in connection with the Placing at a price per share of
                  less than the nominal value of the Ordinary Shares (the "Base
                  Price").

         (iv)     On the First Conversion Date there shall be converted in
                  accordance with sub-paragraph 2.7(xv) the whole or such
                  proportion of each holding of Additional Value Shares as
                  shall be determined by the Directors in the light of the
                  outcome of the Placing. The number of Ordinary Shares into
                  which each Additional Value Share which is converted on the
                  First Conversion Date is to be converted shall be such that
                  the aggregate number of Ordinary Shares arising on the First
                  Conversion Date shall be sufficient for the purposes of the
                  Placing.

         (v)      On the First Conversion Date:

                  (A)      the Company shall procure the transfer to the Broker
                           or as the Broker shall direct, of the Ordinary
                           Shares so placed; and

                  (B)      the Broker shall collect the net cash proceeds of
                           the Placing and hold such proceeds in separate bank
                           account(s) until the Second Conversion Date.

                  The Directors shall have irrevocable authority on behalf of
                  each holder of an Additional Value Share to appoint any
                  person on behalf of such holder to enter into an agreement to
                  transfer and to execute and deliver a transfer of the
                  Ordinary Shares resulting from conversion on the First
                  Conversion Date.

         (vi)     If the proceeds of the Placing are sufficient to enable the
                  Company to pay to each holder of Additional Value Shares the
                  Aggregate Settlement Amount in respect of his holding, the
                  whole of the Additional Value Shares shall be converted on
                  the First Conversion Date and on the Second Conversion Date
                  the net cash proceeds of the Placing (if any) held by the
                  Broker (the "Total Cash Amount") shall be paid to the persons
                  who were holders of the Additional Value Shares immediately
                  prior to conversion.
<PAGE>
                                      157

         (vii)    If the proceeds of the Placing are not sufficient to enable
                  the Company to pay to each holder of Additional Value Shares
                  the Aggregate Settlement Amount then part only of the
                  Additional Value Shares (determined in accordance with
                  paragraph (iv) above) shall be converted on the First
                  Conversion Date and on the Second Date:

                  (A)      the Total Cash Amount shall be paid to the persons
                           who were holders of the Additional Value Shares
                           immediately prior to conversion pro rata to their
                           holding of Additional Value Shares, and the amount
                           (if any) by which the cash paid or payable to a
                           holder falls short of the Aggregate Settlement
                           Amount shall be the "Remaining Settlement Amount";
                           and

                  (B)      on the Second Conversion Date the remaining
                           Additional Value Shares shall be converted into such
                           number of Ordinary Shares so that the persons who
                           were holders of Additional Value Shares immediately
                           prior to conversion receive the whole number of
                           Ordinary Shares (if any) calculated by dividing the
                           Remaining Settlement Amount by the Conversion Price,
                           being the higher of (i) 95% of the weighted average
                           closing price per Ordinary Share on the London Stock
                           Exchange during the period of 20 London Stock
                           Exchange dealing days ending five London Stock
                           Exchange dealing days before the Second Conversion
                           Date and (ii) the nominal value of the Ordinary
                           Shares.

         (viii)   If there is no Placing or if a dividend resolved upon as at 1
                  September 2003 is not paid on the Final Dividend Date (or the
                  following Business Day where that date is not a Business Day)
                  then on or as soon as possible after the Second Conversion
                  Date all the Additional Value Shares shall be converted into
                  such number of Ordinary Shares so that each holder receives
                  the whole number of Ordinary Shares (if any) calculated by
                  dividing the Settlement Amount by the Conversion Price, being
                  the higher of (i) 95% of the weighted average closing price
                  per Ordinary Share on the London Stock Exchange during the
                  period of 20 London Stock Exchange dealing days ending five
                  London Stock Exchange dealing days before the Second
                  Conversion Date and (ii) the nominal value of the Ordinary
                  Shares.

         (ix)     Where the conversion would otherwise result in a holder being
                  entitled to a fraction of an Ordinary Share such holder's
                  entitlement shall be rounded up or down as the Directors may
                  determine.

         (x)      If at the time that the Conversion Price or Base Price is to
                  be calculated the Ordinary Shares are not traded on the
                  London Stock Exchange, references in this article to the
                  London Stock Exchange shall be to such other competent
                  authority or exchange with or on which the Ordinary Shares
                  are listed or traded (as the case may be).

         (xi)     The conversion of Additional Value Shares into fully paid
                  Ordinary Shares shall be conditional on:

                  (A)      the Company, as at the First Conversion Date or the
                           Second Conversion Date (as the case may be), having
                           sufficient authorised but unissued share capital to
                           issue such Non-Voting Deferred Shares of (pound)0.01
                           as may fall to be issued on such date in connection
                           with the conversion of Additional Value Shares;

                  (B)      the number of Non-Voting Deferred Shares of
                           (pound)0.01 which the Directors have been authorised
                           to issue pursuant to Section 80 of the 1985 Act
                           being sufficient, as at the First Conversion Date or
                           the Second Conversion Date (as the case may

<PAGE>
                                      158

                           be) to allot the shares falling to be allotted on
                           such date in connection with the conversion of
                           Additional Value Shares or the Directors having been
                           authorised prior to such date pursuant to section 80
                           to allot such shares (together with the condition
                           set out in (A) above, the "Relevant Shareholder
                           Approvals"); and

                  (C)      there being sufficient profits or reserves available
                           for capitalisation to enable the Company to allot
                           credited as fully paid the number of Non-Voting
                           Deferred Shares of (pound)0.01 each falling to be
                           allotted as aforesaid.

         (xii)    The Company shall use its reasonable efforts to ensure that
                  sufficient authorised but unissued share capital and
                  sufficient profits or reserves are available in order to
                  permit conversion of the Additional Value Shares outstanding
                  on the relevant Conversion Date. If the Relevant Shareholder
                  Approvals (or profits or reserves) are insufficient to permit
                  the allotment and issue of such number of Non-Voting Deferred
                  Shares as fall to be allotted and issued on the First
                  Conversion Date or the Second Conversion Date in connection
                  with the conversion of Additional Value Shares, the Company
                  undertakes to convert the maximum number of Additional Value
                  Shares which it is legally permitted to convert under the
                  existing Relevant Shareholder Approvals (and having regard to
                  existing profits or reserves) pro rata to the respective
                  entitlement of holders. Any Additional Value Shares which
                  could not be converted as at the First Conversion Date and
                  the Second Conversion Date shall be "Unconverted Additional
                  Value Shares".

         (xiii)   Unconverted Additional Value Shares will be converted into
                  Ordinary Shares as soon as the Company has sufficient
                  authorised and unissued shares, and sufficient available
                  profits or reserves, to permit conversion of Unconverted
                  Additional Value Shares in full. Paragraphs (ii) to (x) of
                  this Paragraph 2.7 shall apply to the conversion of such
                  Unconverted Additional Value Shares provided that the Second
                  Conversion Date shall be 60 London Stock Exchange dealing
                  days after the first day of the month following the month in
                  which the Company becomes able to convert such shares in
                  full. The Company undertakes that for so long as Unconverted
                  Additional Value Shares remain outstanding:

                  (A)      such resolutions will be proposed at each subsequent
                           Annual General Meeting that, when approved, would
                           permit the Unconverted Additional Value Shares to be
                           converted in full; and

                  (B)      no available profit or reserve will be applied by
                           the Company for any other purpose.

         (xiv)    If any Additional Value Shares are to be converted pursuant
                  to this paragraph 2.7, but have not, on the Final Dividend
                  Date (or the following Business Day where that date is not a
                  Business Day) been so converted, ("converted" for the
                  avoidance of doubt, comprising the payment to each holder of
                  Additional Value Shares of the Aggregate Settlement Amount
                  and/or the allotment of Ordinary Shares in respect of the
                  settlement of any Remaining Settlement Amount (as the case
                  may be)) no dividends may be declared on any Ordinary Share
                  in the capital of the Company, and no sum may be set aside
                  for the payment thereof, unless on the date of declaration
                  relative to any such payment, the Aggregate Settlement Amount
                  has been paid in full or set aside or Ordinary Shares
                  delivered in respect of the Aggregate Settlement Amount or
                  any Remaining Settlement Amount.
<PAGE>
                                      159

         (xv)     The following provisions shall apply to conversion of the
                  Additional Value Shares:

                  (A)      Conversion of Additional Value Shares may be
                           effected in such manner as the Directors shall,
                           subject to the requirements of applicable law and
                           the provisions hereof, from time to time determine
                           and, without prejudice to the generality of the
                           foregoing, may be effected, in each case pursuant to
                           the authority conferred by the passing of the
                           resolution which created the Additional Value
                           Shares, by the Company:

                           (aa)     capitalising from profits or reserves
                                    (including, without limitation, any share
                                    premium account, merger reserve or capital
                                    redemption reserve) and allotting and
                                    issuing to a holder of Additional Value
                                    Shares to be converted such number of new
                                    Non-Voting Deferred Shares of(pound)0.01
                                    each having the rights and restrictions set
                                    out in paragraph 2.6 above as shall bring
                                    the total nominal amount of the Additional
                                    Value Shares and the new Non-Voting
                                    Deferred Shares to the total nominal amount
                                    of the Ordinary Shares into which the
                                    Additional Value Shares are to be converted
                                    on the relevant Conversion Date,
                                    consolidating all the Non-Voting Deferred
                                    Shares and Additional Value Shares to be
                                    converted into one Share (the "Consolidated
                                    Share ") and sub-dividing and redesignating
                                    the Consolidated Share into the number of
                                    Ordinary Shares into which the Additional
                                    Value Shares are to be converted;

                           (bb)     consolidating such Additional Value Shares
                                    into one share (the "Consolidated Share")
                                    and sub-dividing and redesignating the
                                    Consolidated Share into the number of
                                    Ordinary Shares into which the Additional
                                    Value Shares are to be converted and as to
                                    any balance into Non-Voting Deferred Shares
                                    of (pound)0.01 such Non-Voting Deferred
                                    Shares being certificated shares having the
                                    rights and restrictions set out in
                                    sub-paragraph 2.6 above.

                  (B)      Ordinary Shares arising on conversion shall rank
                           pari passu with the Ordinary Shares in issue on the
                           relevant Conversion Date except that the Ordinary
                           Shares so arising will not rank for any dividend or
                           other distribution which has been announced,
                           declared, recommended or resolved on prior to the
                           relevant Conversion Date by the Directors or by the
                           Company in general meeting, if the record date for
                           such dividend or other distribution is on or prior
                           to the relevant Conversion Date.

                  (C)      Unless the Directors otherwise determine, or unless
                           the Uncertificated Securities Regulations and/or the
                           requirements of the relevant system otherwise
                           require, the Ordinary Shares arising on conversion
                           of any Additional Value Shares shall be in
                           certificated form (where the Additional Value Shares
                           converted were, on the date of conversion, in
                           certificated form) or as uncertificated shares
                           (where the Additional Value Shares converted were,
                           on the date of conversion, in Uncertificated Form)
                           provided that if the Company is unable under the
                           facilities and requirements of the relevant system
                           to arrange for Ordinary Shares in respect of the
                           person entitled thereto to be held in Uncertificated
                           Form, such shares shall be in certificated form.

                  (D)      The Company shall procure that there shall be
                           dispatched or made free of charge (but uninsured and
                           at the risk of the holder or the person entitled
                           thereto, or the first-named thereof, as the case may
                           be) a certificate in respect of Ordinary
<PAGE>
                                      160

                           Shares arising on conversion which are, in
                           accordance with sub-paragraph 2.7(xv)(C) above,
                           certificated shares not later than 28 days after the
                           relevant Conversion Date.

                  (E)      For the purposes of this paragraph 2.7(xv), whether
                           any Additional Value Shares are in certificated form
                           or Uncertificated Form on the Conversion Date shall
                           be determined by reference to the register of
                           members as at 12.01 a.m. on the relevant Conversion
                           Date or such other time as the Directors may
                           (subject to the facilities and requirements of the
                           relevant system concerned) in their absolute
                           discretion determine.

                  (F)      The Company shall use reasonable efforts to procure
                           that the Ordinary Shares arising on conversion of
                           Additional Value Shares are admitted to the Official
                           List of the UK Listing Authority and admitted to
                           trading on the London Stock Exchange's market for
                           listed securities at the earliest practicable date.

2.8      Class Rights

         The Company may from time to time create, allot and issue further
         shares, whether ranking pari passu with, in priority to, or behind the
         Additional Value Shares in any respect (including, without limitation,
         as to priority in payment of dividends or as to capital in a
         liquidation of the Company), and such creation, allotment or issue of
         any such further shares (whether or not ranking in any respect in
         priority to the Additional Value Shares and whether or not the same
         confer on the holders voting rights more favourable than those
         conferred by the Additional Value Shares) shall be deemed not to
         involve a variation of the rights attaching to the Additional Value
         Shares for any purpose.

2.9      Additional Limitations

         No Additional Value Share shall (save as otherwise specifically set
         out herein) confer any right to participate in:

         (i)      the profits or assets of the Company;

         (ii)     any offer or invitation by way of rights or otherwise to
                  subscribe for additional shares in the capital of the
                  Company; or

         (iii)    any future capitalisation or bonus issue of shares in the
                  capital of the Company.

<PAGE>

<TABLE>

                        INDEX TO ARTICLES OF ASSOCIATION

Subject                        Description                                         Article No.       Page No.
-------                        -----------                                         -----------       --------

<S>                            <C>                                                 <C>               <C>
ACCOUNTS                       Accounts to be sent to members                      154               85
                               Preparation and laying of accounts                  153               85
                               Right to inspect accounts                           152               85

AUDITORS                       Rights of auditors                                  156               86
                               Validity of acts of auditors                        155               86

AUTHENTICATION OF DOCUMENTS    Authentication of documents                         132               76

BUSINESS                       Business activities                                 3                 5

CALLS ON SHARES                Deemed calls                                        25                42
                               Differentiation of calls                            26                42
                               Interest payable                                    24                42
                               Liability of joint holders                          23                42
                               Payment of calls in advance                         27                42
                               Power to make calls                                 21                42
                               Time when call made                                 22                42

CAPITAL                        Alteration of capital:
                                   Alterations permitted by ordinary resolution    10(A)             37
                                   Fractions arising                               10(B)             37
                                   Increase of capital                             8                 36
                                   New shares                                      9                 36
                                   Power to purchase own shares                    11                37
                                   Power to reduce capital                         12                37

                               Share capital:
                                   Additional Value Shares                         4D and
                                                                                   Schedule 4        35
                                   Capital rights of cumulative preference shares  4(B)              6
                                   Category II non-cumulative dollar preference
                                   shares                                          4(E)              29
                                   Category II Non-cumulative Convertible          4C and            35
                                   Sterling Preference Shares                      Schedule 3
                                   Dividend rights of cumulative preference
                                   shares                                          4(A)              6
                                   Non-cumulative dollar preference shares         4(D)              18
                                   Non-cumulative euro preference shares
                                                                                   4A and Schedule 1 35

                                   Non-cumulative convertible preference shares    4B and Schedule 2 35
                                   (sterling, dollar and euro)
                                   Non-cumulative sterling preference shares       4(C)              7
                                   Shares with special rights and redeemable       5                 36
                                   shares
<PAGE>
                                      162

Subject                        Description                                         Article No.       Page No.
-------                        -----------                                         -----------       --------

                               Variation of rights:
                                   Method of varying class rights                  6                 36
                                   When share rights deemed to be varied           7                 36

CAPITALISATION OF PROFITS      Power to capitalise on adjustment of subscription
AND RESERVES                   price in an employee's share scheme                 149(B)            84
                               Power to capitalise profits                         148               83
                               Procedure for capitalisation                        149(A)            84

CORPORATIONS ACTING BY         Authority of representatives                        90                62
REPRESENTATIVES

DEPARTMENTAL, REGIONAL OR      Appointment of other officers                       128(D)            75
LOCAL DIRECTORS AND OTHER      Attendance at board meetings                        128(C)            75
APPOINTEES                     Powers and duties of appointee                      128(B)            75
                               Use of designation "Director"                       128(A)            75

DESTRUCTION OF DOCUMENTS       Destruction of documents                            44                46

DIRECTORS                      Alternate directors:
                                   Alternate may be paid expenses but not
                                   remuneration                                    109(D)            68
                                   Alternate to receive notices                    109(C)            68
                                   Power to appoint alternate directors            109(A)            68
                                   Termination                                     109(B)            68
                                   Appointments with other companies               97(B)             64
                               Appointment & retirement of directors:
                                   Age limit                                       100               65
                                   Appointment by ordinary resolution or by
                                   directors                                       108               68
                                   Notice of intention to appoint a director       106               67
                                   Removal and replacement of directors            107               67
                                   Resolution                                      105               67
                                   Retirement of directors by rotation             102               66
                                   Selection of directors to retire                103               66
                                   Vacation of office of director                  101               65
                                   When directors deemed to be
                                   re-appointed                                    104               66
<PAGE>
                                      163

Subject                        Description                                         Article No.       Page No.
-------                        -----------                                         -----------       --------

                               Borrowing powers:
                                   Power to borrow and grant security              121               73
                                   Delegation of powers                            99                65
                                   Directors need not be a member                  92                62
                                   Directors' interests in contracts with the
                                   company                                         97(A)             64
                                   Directors' fees                                 93                63
                                   Executive Office                                98(A)             64
                                   Expenses                                        94                63
                                   Extra remuneration                              95                63
                               General powers of directors:
                                   Business to be managed by the directors         122               73
                                   Execution by the company                        127               74
                                   Local boards, etc                               123               74
                                   Official seal for use abroad                    125               74
                                   Overseas registers                              126               74
                                   Powers of attorney                              124               74
                                   Insurance                                       96(B)             64
                                   Limit on number of directors                    91                62
                                   Proceedings of directors:
                                   Alternate directors                             114(E)            71
                                   Authority to vote                               111               69
                                   Chairman                                        116               72
                                   Committees of directors                         118               72
                                   Consideration of matters involving two or
                                   more directors                                  114(C)            71
                                   Director's interests                            113               70
                                   Materiality of directors' interests             114(D)            71
                                   Meetings of directors                           110(A)            69
                                   Participation in meetings by telephone          110(B)            69
                                   Proceedings in case of vacancies                115               72
                                   Proceedings of committee                        119               73
                                   Quorum                                          112               69
                                   Relaxation of provisions                        114(F)            72
                                   Resolutions in writing                          117               72
                                   Restrictions on voting                          114(A)            70
                                   Validity of proceedings                         120               73
                                   Where interest does not prevent voting          114(B)            70
                                   Retirement and other benefits                   96(A)             63
                                   When termination of appointment automatic       98(B)             65
                                   When termination of appointment not automatic   98(C)             65
<PAGE>
                                      164

Subject                        Description                                         Article No.       Page No.
-------                        -----------                                         -----------       --------

DIVIDENDS                      Currency of payment                                 144(D)            82
                               Declaration of dividends                            133               77
                               Directors' responsibility                           134(B)            77
                               Dividends in specie                                 142               78
                               Dividends on uncertificated shares                  144(B)            81
                               Forfeiture of unclaimed dividends                   141               78
                               Interest not payable                                136               78
                               Interim dividends                                   134(A)            77
                               Permitted deductions                                137               78
                               Procedure for payment                               144(A)            81
                               Profits and losses from past date                   135               77
                               Receipts where joint holders                        145               82
                               Retention of dividends                              138               78
                               Scrip dividend                                      143               79
                               Uncashed dividends                                  144(C)            81
                               Unclaimed dividends                                 140               78
                               Waiver of dividends                                 139               78

EVIDENCE OF TITLE TO SHARES    Authentication and form of certificates             19                41
                               Cancellation and replacement of certificates        20                41
                               Certificated shares                                 18                40
                               Uncertificated shares                               17                40

EXECUTION OF DOCUMENTS         Execution of documents                              131               76

FORFEITURE, SURRENDER AND      Application of proceeds                             35                44
LIEN                           Company to have lien on shares                      33                44
                               Content of notice                                   29                43
                               Enforcement of lien by sale                         34                44
                               Extinction of rights                                32                43
                               Forfeiture for non-compliance                       30                43
                               Giving effect to the sale                           36                44
                               Notice requiring payment of calls on default        28                43
                               Sale of forfeited shares                            31                43

GENERAL MEETINGS               Application to class meeting where no variation
                               of rights involved                                  55                52
                               Extraordinary general meetings                      54                51
                               Types of general meetings                           53                51
                               Notice of general meetings:
                                   Contents of notice                              57                52
                                   Notice of resolutions                           59                53
                                   Period of notice                                56                52
                                   Postponement of general meetings                60                53
                                   Routine business                                58                53
<PAGE>
                                      165

Subject                        Description                                         Article No.       Page No.
-------                        -----------                                         -----------       --------

                               Proceedings at general meetings:
                                   Adjournments                                    68                55
                                   Amendments to resolutions                       70                56
                                   Chairman                                        65                55
                                   Chairman's casting vote                         73                57
                                   Continuance of meeting                          75                57
                                   Declaration of result and conduct of poll       72                56
                                   Entitlement to attend and speak                 67                55
                                   If quorum not present                           63                54
                                   Orderly conduct                                 66                55
                                   Overflow arrangements for general meetings      61                54
                                   Method of voting                                71                56
                                   Quorum                                          62                54
                                   Security arrangements                           64                54
                                   Time and place of adjourned meetings            69                56
                                   When poll to be taken                           74                57

                               Restrictions on voting and other share rights:

                                   Cessation of disenfranchisement                 89(C)             61
                                   Disenfranchisement                              89(A)             60
                                   Other restrictions                              89(B)             61
                                   Person interested in shares; approved
                                   transfers                                       89(D)             62

                               Votes of members:
                                   Appointment of proxies by electronic mail       88A               60
                                   Calls in arrears                                79                58
                                   Delivery of forms of proxy                      84                59
                                   Differing proxies                               85                59
                                   Form and execution of proxies                   83                58
                                   Intervening events                              88                60
                                   Issue of forms of proxy                         86                59
                                   Member under incapacity                         78                58
                                   Objection to voting                             80                58
                                   Proxy need not be a member                      82                58
                                   Right to vote                                   76                57
                                   Rights conferred by form of proxy               87                60
                                   Votes of joint holders                          77                57
                                   Votes on a poll                                 81                58

INDEMNITY                      Indemnity                                           169               89

MINUTES AND BOOKS              Keeping of minutes and books                        150               84
                               Safeguarding of minutes and books                   151               85
<PAGE>
                                      166

Subject                        Description                                         Article No.       Page No.
-------                        -----------                                         -----------       --------

NOTICES                        Advertisement of notices                            163               88
                               Notice to be in writing                             157               86
                               Notice during disruption of postal services         164               88
                               Notice to joint holders                             159               87
                               Notice to persons entitled by transmission          160               87
                               Notice to warrant holders                           165               88
                               Record date for service                             158(C)            87
                               Service of notices                                  158(A)            86
                               Signature                                           162               87
                               Statutory requirements                              166               88
                               Untraced members                                    161               87
                               When notice deemed served                           158(B)            86

PRELIMINARY                    Definitions and interpretation                      2                 1
                               Non-applications of statutory regulations           1                 1

PROVISION FOR EMPLOYEES        Provision for employees                             168               88

RECORD DATE                    Record date                                         146               82

RESERVES                       Different currencies                                147(C)            83
                               Limitation on carrying sums to reserve              147(B)            83
                               Reserves                                            147(A)            82

SEALS                          Custody of seal                                     130(A)            76
                               Formalities for affixing the seal                   130(B)            76
                               Use of securities seal                              130(C)            76

SECRETARY                      Secretary                                           129               75

SHARES                         Calls on (see CALLS ON SHARES)
                               Commission                                          14                39
                               Directors' authority to allot shares and power to
                               allot shares for cash                               13(B)             38
                               Interest not recognised                             16                39
                               Renunciation                                        15                39
                               Restriction on share rights (see GENERAL MEETINGS)
                               Shares at the disposal of the directors             13(A)             38

SHARE WARRANTS TO BEARER       Bearer deemed to be a member                        52(B)             50
                               Certificate to attend meetings                      52(D)             50
                               Coupon for dividend                                 52(I)             51
                               Exercise of other rights                            52(F)             50
                               Issue of new warrants                               52(G)             51
                               Meetings                                            52(C)             50
<PAGE>
                                      167

Subject                        Description                                         Article No.       Page No.
-------                        -----------                                         -----------       --------

                               Power to issue share warrants to bearer             52(A)             50
                               Return of warrant after meeting                     52(E)             50
                               Surrender of warrant and registration of holder     52(J)             51
                               Transfer of shares included in warrant              52(H)             51
                               Variation of terms                                  52(K)             51

STOCK                          Conversion into stock                               49                49
                               Rights of shareholders                              51                49
                               Transfer of stock                                   50                49

TRANSFER OF SHARES             Execution of transfers                              38                45
                               Further rights to decline to register transfer      41                45
                               No fee payable for registration of transfers        42                46
                               Renunciations recognised                            43                46
                               Right to decline to register transfer of partly
                               paid shares                                         40                45
                               Suspension of registration                          39                45
                               Transfers                                           37                45

TRANSMISSION OF SHARES         Election for registration                           46(B)             47
                               Registration on death, bankruptcy, etc              46(A)             47
                               Rights of persons entitled by transmission          47                48
                               Transmission                                        45                47

UNTRACED SHAREHOLDERS          Power to dispose of shares of untraced
                               shareholders                                        48(A)             48
                               Sale procedure and application of proceeds          48(B)             49

WINDING UP                     Liquidator may distribute in specie                 167               88
</TABLE>

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