Document:

EXHIBIT 4.1

 

 

 

 

 

LLOYDS BANKING GROUP PLC

 

as Company,

 

and

 

THE BANK OF NEW YORK MELLON acting
through its

London Branch

 

as Trustee

 

 

SECOND SUPPLEMENTAL INDENTURE

 

dated as of October 10, 2018

 

to

 

CAPITAL SECURITIES INDENTURE

 

dated as of March 6, 2014

 

in respect of

 

$1,500,000,000 Fixed Rate Reset Additional
Tier 1 Perpetual Subordinated Contingent Convertible Securities

 

 

 

 

 

     

     

    

TABLE
OF CONTENTS

_________________ 

Page

Article
1

Definitions

	Section 1.01.  Definition of Terms	2
	Section 1.02.  Separability Clause	20
	Section 1.03.  Benefits of Instrument	20
	Section 1.04.  Relation to Capital Securities Indenture	20

Article
2

The Additional Tier 1 Securities

	Section 2.01.  Form, Title, Terms and Payments	20
	Section 2.02.  Interest	22
	Section 2.03.  Interest Payments Discretionary	23
	Section 2.04.  Restriction on Interest Payments	24
	Section 2.05.  Agreement to Interest Cancellation	24
	Section 2.06.  Notice of Interest Cancellation	25
	Section 2.07.  Payment of Principal, Interest and Other Amounts	25
	Section 2.08.  Optional Redemption	26
	Section 2.09.  Optional Tax Redemption	26
	Section 2.10.  Regulatory Event Redemption	28
	Section 2.11.  Substitution or Variation	28
	Section 2.12.  Notice of Redemption, Substitution or Variation	29
	Section 2.13.  Canceled Interest Not Payable Upon Redemption	31
	Section 2.14.  Condition to Redemption, Purchase, Substitution or Variation	31
	Section 2.15.  Automatic Conversion upon Trigger Event	32
	Section 2.16.  Settlement Shares	36
	Section 2.17.  Settlement Shares Offer	37
	Section 2.18.  Settlement Procedure	38
	Section 2.19.  Failure to Deliver a Settlement Notice	40
	Section 2.20.  Delivery of ADSs	40
	Section 2.21.  Agreement with Respect to Exercise of U.K. Bail-in Power	41

Article
3

Anti-Dilution

	Section 3.01.  Adjustment of Conversion Price	43
	Section 3.02.  Qualifying Relevant Event	48
	Section 3.03.  Agreement to Write-down in Connection with a Non-Qualifying Relevant Event	49

 

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Article
4

Enforcement Events and Remedies

	Section 4.01.  Winding-up or Administration Event	50
	Section 4.02.  Non-Payment Event	50
	Section 4.03.  Limited Remedies for Breach of Performance Obligations	51
	Section 4.04.  No Other Remedies and Other Terms	51
	Section 4.05.  Waiver of Past Defaults	52

Article
5

Subordination

	Section 5.01.  Subordination to Claims of Senior Creditors	53
	Section 5.02.  No Set-Off	54

Article
6

Covenants

	Section 6.01.  Undertakings	55

Article
7

Satisfaction and Discharge

	Section 7.01.  Satisfaction and Discharge of Indenture	56

Article
8

Supplemental Indentures

	Section 8.01.  Amendments or Supplements Without Consent of Holders	56
	Section 8.02.  Amendments or Supplements With Consent of Holders	57
	Section 8.03.  Holders Approval of Amendments	57
	Section 8.04.  Relevant Regulator Consent	57
		 

 

Article
9

Miscellaneous

 

	Section 9.01.  Effect of Supplemental Indenture	57
	Section 9.02.  Other Documents to Be Given to the Trustee	57
	Section 9.03.  Notices to, and Consents Required from, the Relevant Regulator to Be Given to the Trustee	58
	Section 9.04.  Survival	58
	Section 9.05.  Confirmation of Indenture	58
	Section 9.06.  Concerning the Trustee	58
	Section 9.07.  Governing Law	58
	Section 9.08.  Counterparts	59

 

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This SECOND
SUPPLEMENTAL INDENTURE (“Second Supplemental Indenture”), dated as of October 10, 2018, between, LLOYDS BANKING
GROUP PLC, a company incorporated in Scotland with registered number 95000, as issuer (the “Company”) and THE
BANK OF NEW YORK MELLON, a banking corporation duly organized and existing under the laws of the State of New York acting through
its London Branch, as trustee under the Capital Securities Indenture hereinafter referred to (the “Trustee”)
having its Corporate Trust Office at One Canada Square, London E14 5AL, United Kingdom.

 

WITNESSETH:

 

WHEREAS,
the Company and the Trustee have executed and delivered a Capital Securities Indenture, dated as of March 6, 2014 (the “Capital
Securities Indenture” and, together with this Second Supplemental Indenture, the “Indenture”), to
provide for the issuance of the Company’s Capital Securities (the “Securities”);

 

WHEREAS,
the Company hereto desires to issue a series of Securities to be known as the $1,500,000,000 Fixed Rate Reset Additional Tier
1 Perpetual Subordinated Contingent Convertible Securities (the “Additional Tier 1 Securities”);

 

WHEREAS,
the parties hereto desire to establish that the Additional Tier 1 Securities shall be issued in the form of one of more Global
Securities substantially in the form of Exhibit A to this Second Supplemental Indenture pursuant to Sections 2.01 and 3.01 of
the Capital Securities Indenture;

 

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

 

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

 

WHEREAS,
this Second Supplemental Indenture shall amend and supplement the Capital Securities Indenture but only with respect to the Additional
Tier 1 Securities; to the extent the terms of the Capital Securities Indenture are inconsistent with such provisions of this Second
Supplemental Indenture, the terms of this Second Supplemental Indenture shall govern, but only with respect to the Additional
Tier 1 Securities;

 

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

 

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

 

     

     

    

performed,
and the execution and delivery of this Second Supplemental Indenture has been duly authorized in all respects,

 

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

 

Article
1

Definitions

 

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

 

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

 

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

 

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

 

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

 

(e)           
for purposes of this Second Supplemental Indenture and the Capital Securities Indenture, the term “series”
shall mean the series of Securities designated as the Additional Tier 1 Securities;

 

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

 

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

 

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

 

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

 

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

 

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

 

(l)            
for purposes of Article III of this Second Supplemental Indenture, references therein to any act or statute or any provision
of any act or statute shall be

 

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deemed
also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder
or under such modification or re-enactment; and

 

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

 

“Accrued
Interest” means any accrued and unpaid interest on the Additional Tier 1 Securities, excluding any interest which has
been canceled or deemed to be canceled as described in ‎Section
2.03 and ‎Section 2.04 hereof.

 

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

 

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

 

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

 

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

 

“Alternative
Consideration” means in respect of each Additional Tier 1 Security and as determined by the Company (i) if all of the
Settlement Shares to be issued and delivered following Automatic Conversion are sold in the Settlement Shares Offer, the pro
rata share of the cash proceeds from the sale of such Settlement Shares attributable to such Additional Tier 1 Security translated
from pounds sterling into U.S. dollars at a then-prevailing exchange rate as determined by the Settlement Share Depository (less
the pro rata share of any foreign exchange transaction costs and an amount equal to the pro rata share of any stamp
duty, stamp duty reserve tax, or any other capital, issue, transfer, registration, financial transaction or documentary tax that
may arise or be paid in connection with the issue and delivery of Settlement Shares to the Settlement Share Depository pursuant
to the Settlement Shares Offer), (ii) if some but not all of such Settlement Shares to be issued and delivered upon Automatic
Conversion are sold in the Settlement Shares Offer, (x) the pro rata share of the cash proceeds from the sale of such Settlement
Shares attributable to such Additional Tier 1 Security translated from pounds sterling into U.S. dollars at a then-prevailing
exchange rate as determined by the Settlement Share Depository (less the pro rata share of any foreign exchange transaction
costs and an amount equal to the pro rata share of any stamp duty, stamp duty reserve tax, or any other capital, issue,
transfer, registration, financial transaction or documentary

 

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tax that may
arise or be paid in connection with the delivery of the Settlement Shares to the Settlement Share Depository pursuant to the Settlement
Shares Offer) and (y) the pro rata share of such Settlement Shares not sold pursuant to the Settlement Shares Offer attributable
to such Additional Tier 1 Security rounded down to the nearest whole number of Settlement Shares and (iii) if no Settlement Shares
are sold in the Settlement Shares Offer, the relevant number of Settlement Shares that would have been received had the Company
not elected that the Settlement Share Depository should carry out a Settlement Shares Offer.

 

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

 

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

 

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

 

“Automatic
Conversion” means the irrevocable and automatic release of all of the Company’s obligations under the Additional
Tier 1 Securities in consideration of the Company’s issuance and delivery of the Settlement Shares at the Conversion Price
on the Conversion Date to the Settlement Share Depository (on behalf of the Holders and Beneficial Owners of the Additional Tier
1 Securities) in accordance with the terms of the Additional Tier 1 Securities.

 

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

 

“Business
Day” means any day (other than a Saturday, a Sunday or a public holiday) on which commercial banks and foreign exchange
markets are open for business in both London, England and in New York City.

 

“Calculation
Agent” means The Bank of New York Mellon, acting through its London Branch, or its successor appointed by the Company
pursuant to the Calculation Agent Agreement between the Company and The Bank of New York Mellon, dated as of the date hereof.

 

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“Cancellation
Date” means (i) with respect to any Additional Tier 1 Security for which a Settlement Notice is received by the Settlement
Share Depository on or before the Notice Cut-off Date, the applicable Settlement Date and (ii) with respect to any Additional
Tier 1 Security for which a Settlement Notice is not received by the Settlement Share Depository on or before the Notice Cut-off
Date, the Final Cancellation Date.

 

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

 

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

 

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

 

“CET1
Ratio” means, at any date, the ratio of the Group’s CET1 Capital as of such date to Risk Weighted Assets as of
the same such date, expressed as a percentage, and on the basis that all measures used in such calculation shall be calculated
on a Fully Loaded basis.

 

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

 

“Compliant
Securities” means securities issued directly by the Company that, (a) have terms not materially less favorable to an
investor than the terms of the Additional Tier 1 Securities (as reasonably determined by the Company in consultation with an investment
bank or financial adviser of international standing (which in either case is independent of the Company)) and provided that the
Company has delivered an officer’s certificate to such effect (including as to such consultation) to the Trustee (upon which
the Trustee shall be entitled to rely without further enquiry and without liability to any person) prior to the issue or variation
of the relevant securities); (b) subject to (a) above (1) contain terms which comply with the then current requirements of the
Relevant Regulator in relation to additional tier 1 capital; (2) provide for the same interest rate and Interest Payment Dates
from time to time applying to the Additional Tier 1 Securities; (3) rank pari passu with the ranking of the Additional
Tier 1 Securities; (4) preserve any existing rights under the Indenture to any accrued interest or other amounts which have

 

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not been either
paid or canceled (but without prejudice to the right of the Company to cancel the same under the terms of the Compliant Securities,
if applicable); (5) preserve the obligations (including the obligations arising from the exercise of any right) of the Company
as to payments of principal in respect of the Additional Tier 1 Securities, including (without limitation) as to the timing and
amount of such payments; and (6) contain terms providing for the conversion of the Additional Tier 1 Securities, the cancellation
of payments of interest thereon or write-down of the principal of the Additional Tier 1 Securities only if such terms are not
materially less favorable to an investor than the terms of the Additional Tier 1 Securities; (c) are (1) listed on the Global
Exchange Market of Euronext Dublin or (2) listed on such other stock exchange as is a Recognized Stock Exchange at that time as
selected by the Company and; (d) where the Additional Tier 1 Securities which have been substituted or varied had a published
rating (solicited by, or assigned with the cooperation of, the Company) from a Rating Agency immediately prior to their substitution
or variation, each such Rating Agency has ascribed, or announced its intention to ascribe, an equal or higher published rating
to the relevant Compliant Securities;

 

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

 

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

 

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

 

“Conversion
Date” means the date specified in the Conversion Trigger Notice and shall occur without delay upon the occurrence of
a Trigger Event (and shall be no later than one month following the occurrence of the relevant Trigger Event, or such shorter
period as the Relevant Regulator may require).

 

“Conversion
Price” means $0.821, subject to the anti-dilution provisions set forth under ‎Article
3.

 

“Conversion
Trigger Notice” means the written notice (substantially in the form attached hereto as Exhibit B) to be delivered by
the Company to the Trustee directly and to DTC, the Holder of the Global Securities (or, if the Securities are definitive Securities,
by the Company to the Trustee directly and to the Holders at their addresses shown on the Capital Securities Register) specifying
(i) the CET1 Ratio, (ii) the Conversion Date, (iii) the then-prevailing Conversion Price (which Conversion Price shall remain
subject to any subsequent adjustment pursuant to ‎Article
3 up to the Conversion Date), (iv) the contact details of any Settlement Share Depository, or, if the Company has been unable
to appoint a Settlement Share Depository, such other arrangements for the issuance and/or delivery of the Settlement Shares, ADSs
or any Alternative Consideration to the Holders of the Additional Tier 1 Securities as it shall consider reasonable in the circumstances,
and (v) that the Additional Tier 1 Securities shall remain in existence for the sole purpose

 

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of evidencing
the Holder’s right to receive Settlement Shares, ADSs or the Alternative Consideration, as applicable, from the Settlement
Share Depository and that the Additional Tier 1 Securities may continue to be transferable until the Suspension Date.

 

“CRD
IV” means the legislative package consisting of Directive 2013/36/EU on access to the activity of credit institutions
and the prudential supervision of credit institutions and investment firms, as the same may be amended or replaced from time to
time (the “Directive”) and Regulation (EU) No. 575/2013 on prudential requirements for credit institutions
and investment firms of the European Parliament and of the Council of 26 June 2013, as the same may be amended or replaced from
time to time (the “Regulation”).

 

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

 

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

 

“Current
Market Price” means, in respect of an Ordinary Share at a particular date, the average of the daily Volume Weighted
Average Price of an Ordinary Share on each of the five (5) consecutive Dealing Days (or, for the purposes of ‎Section
3.01(d), ten (10) consecutive Dealing Days) ending on the Dealing Day immediately preceding such date; provided that, if at any
time during the said five (5) (or ten (10)) Dealing-Day period the Volume Weighted Average Price shall have been based on a price
ex-dividend (or ex-any other entitlement) and during some other part of that period the Volume Weighted Average Price shall have
been based on a price cum-dividend (or cum- any other entitlement), then:

 

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

 

		(ii)	if the Ordinary Shares to be
                                         issued and delivered do rank for the Dividend (or entitlement) in question, the Volume
                                         Weighted Average Price on the dates on which the Ordinary Shares shall have been based
                                         on a price ex-dividend (or ex- any other entitlement) shall, for the purposes of this
                                         definition, be deemed to be the amount thereof increased by an amount equal to the Fair
                                         Market Value of any such dividend or entitlement per Ordinary Share as at the date of
                                         first public announcement relating to such

 

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dividend
or entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made
for or on account of tax, and disregarding any associated tax credit,

 

and
provided further that, if on each of the said five (5) Dealing Days (or, for the purposes of ‎Section
3.01(d), the said ten (10) Dealing Days), the Volume Weighted Average Price shall have been based on a price cum-dividend (or
cum-any other entitlement) in respect of a dividend (or other entitlement) which has been declared or announced but the Ordinary
Shares to be issued and delivered do not rank for that dividend (or other entitlement), the Volume Weighted Average Price on each
of such dates shall, for the purposes of this definition, be deemed to be the amount thereof reduced by an amount equal to the
Fair Market Value of any such dividend or entitlement per Ordinary Share as at the date of first public announcement relating
to such dividend or entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required
to be made for or on account of tax, and disregarding any associated tax credit,

 

and
provided further that, if the Volume Weighted Average Price of an Ordinary Share is not available on one or more of the said five
(5) Dealing Days (or, for the purposes of ‎Section 3.01(d),
the said ten (10) Dealing Days) (disregarding for this purpose the proviso to the definition of Volume Weighted Average Price),
then the average of such Volume Weighted Average Prices which are available in that five (5) (or ten (10)) Dealing-Day period
shall be used (subject to a minimum of two such prices) and if only one, or no, such Volume Weighted Average Price is available
in the relevant period, the Current Market Price shall be determined in good faith by an Independent Adviser.

 

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

 

“Designated
LIBOR Page” means the Bloomberg page USISDA05 display page, or any successor page, on Bloomberg or any successor service
(or any such other service(s) as may be nominated by ICE Benchmark Administration Limited (“IBA”) or its successor
or such other entity assuming the responsibility of IBA or its successor in calculating the London interbank offered rate in the
event IBA or its successor no longer does so for the purpose of displaying London interbank offered rates for U.S. dollar mid-market
swap rates).

 

“Distributable
Items” shall have the meaning assigned to such term in CRD IV (as the same may be amended or replaced from time to time),
as interpreted and applied in accordance with the Applicable Regulations then applicable to the Company, but

 

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amended so
that any reference therein to “before distributions to holders of own funds instruments” shall be read as a reference
to “before distributions by the Company to holders of Parity Securities, the Additional Tier 1 Securities or any Junior
Securities”.

 

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

 

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

 

“EEA
Regulated Market” means a market as defined by Article 4.1(21) of Directive 2014/65/EU of the European Parliament and
of the Council on markets in financial instruments.

 

“Enforcement
Event” means any of (i) a Winding-up or Administration Event, (ii) a Non-payment Event, or (iii) a breach of a Performance
Obligation.

 

“Exempt
Newco Scheme” means a Newco Scheme where, immediately after completion of the relevant Scheme of Arrangement, the ordinary
shares or units or equivalent of Newco (or depositary or other receipts or certificates representing ordinary shares or units
or equivalent of Newco) are (i) admitted to trading on the Relevant Stock Exchange or (ii) admitted to listing on such other Regulated
Market as the Company or Newco may determine.

 

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

 

“Fair
Market Value” means, with respect to any property on any date, the fair market value of that property as determined
by an Independent Adviser in good faith, provided that (i) the Fair Market Value of a Cash Dividend shall be the amount of such
Cash Dividend; (ii) the Fair Market Value of any other cash amount shall be the amount of such cash; (iii) where Other Securities,
options, warrants or other rights are publicly traded on a stock exchange or securities market of adequate liquidity (as determined
in good faith by an Independent Adviser), the Fair Market Value (a) of such Other Securities shall equal the arithmetic mean of
the daily Volume Weighted Average Prices of such Securities and (b) of such options, warrants or other rights shall equal the
arithmetic mean of the daily closing prices of such options, warrants or other rights, in the case of (a) and (b), during the
period of five (5) Dealing Days on the relevant stock exchange or securities market commencing on such date (or, if later, the
first such Dealing Day such Other Securities, options, warrants or other rights are publicly traded) or such shorter period as
such Other Securities, options, warrants or other rights are publicly traded; (iv) where Other Securities, options, warrants or
other rights are not publicly traded on a stock exchange or securities market of adequate liquidity (as aforesaid), the Fair Market
Value of such Other Securities, options, warrants or other rights shall be determined in good faith by an Independent Adviser,
on the basis of a

 

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commonly accepted
market valuation method and taking account of such factors as it considers appropriate, including the market price per Ordinary
Share, the dividend yield of an Ordinary Share, the volatility of such market price, prevailing interest rates and the terms of
such Other Securities, options, warrants or other rights, including as to the expiry date and exercise price (if any) thereof.
Such amounts shall, in the case of (i) above, be translated into the Relevant Currency (if declared, announced, made, paid or
payable in a currency other than the Relevant Currency, and if the relevant dividend is payable at the option of the Company or
a shareholder in any currency additional to the Relevant Currency, the relevant dividend shall be treated as payable in the Relevant
Currency) at the rate of exchange used to determine the amount payable to shareholders who were paid or are to be paid or are
entitled to be paid the Cash Dividend in the Relevant Currency; and, in any other case, shall be translated into the Relevant
Currency (if expressed in a currency other than the Relevant Currency) at the Prevailing Rate on that date. In addition, in the
case of (i) and (ii) above, the Fair Market Value shall be determined on a gross basis and disregarding any withholding or deduction
required to be made for or on account of tax, and disregarding any associated tax credit.

 

“Final
Cancellation Date” means the date, as specified in the Settlement Request Notice, on which the Additional Tier 1 Securities
in relation to which no Settlement Notice has been received by the Settlement Share Depository on or before the Notice Cut-off
Date shall be canceled, which date may be up to twelve (12) Business Days following the Notice Cut-off Date.

 

“First
Call Date” means September 27, 2025.

 

“Fully
Loaded” means, in relation to a measure that is presented or described as being on a “Fully Loaded basis”,
that such measure is calculated without applying the transitional provisions set out in Part Ten of the Regulation (as may be
amended from time to time) in accordance with the Applicable Regulations as at the time such measure is determined.

 

“Independent
Adviser” means an independent financial institution of international repute or an independent adviser of recognized
standing and expertise appointed by the Company at its own expense.

 

“Interest
Payment Date” means March 27, June 27, September 27 and December 27 of each year, commencing on December 27, 2018.

 

“Issue
Date” means October 10, 2018, being the date of the initial issue of the Additional Tier 1 Securities.

 

“Junior
Securities” means (i) any Ordinary Share or other securities of the Company ranking, or expressed to rank, junior to
the Additional Tier 1 Securities in a Winding-up or Administration Event occurring prior to a Trigger Event and/or (ii) any securities
issued by any other member of the Group where the terms of such securities benefit from a guarantee or support agreement entered
into by the Company which ranks,

 

    10

     

    

or is expressed
to rank, junior to the Additional Tier 1 Securities in a Winding-up or Administration Event occurring prior to a Trigger Event.

 

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

 

“London
Banking Day” means any day (other than a Saturday, a Sunday or a public holiday) in which dealings in U.S. dollars are
transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

 

“Mid-Market
Swap Rate” means the mid-market U.S. dollar swap rate LIBOR basis having a 5-year maturity appearing on the Designated
LIBOR Page as of 11:00 a.m. (New York time) on the Reset Determination Date, for such Reset Period as determined by the Calculation
Agent. If no rate appears on the Designated LIBOR Page, the Mid-Market Swap Rate will be determined on the basis of the rates
at approximately 11:00 a.m., London time, on such Reset Determination Date at which swaps are offered to prime banks in the London
inter-bank U.S. dollar swap rate market by four major banks in such market selected by the Company, for a term of five years and
in a Representative Amount. The Company will request that the principal London office of each of such banks provide a quotation
of its rate. If at least two such quotations are provided, the Mid-Market Swap Rate with respect to the relevant Reset Period
will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, the Mid-Market Swap Rate for the
Reset Date will be the arithmetic mean of the rates quoted at approximately 11:00 a.m. in the City of New York on such Reset Determination
Date by three major banks in New York City, selected by the Company, for U.S. dollar swaps to leading European banks, for a term
of five years and in a Representative Amount. If at least two such quotations are provided, the Mid-Market Swap Rate for the Reset
Date will be the arithmetic mean of such quotations. If fewer than two such quotations are provided (including if no published
Mid-Market Swap Rate is available and banks are unable or unwilling to provide quotations for the calculation of Mid-Market Swap
Rate), then the applicable Reset Rate of Interest for the relevant Reset Period will be the Reset Rate of Interest last calculated
in accordance with this provision or (if none) the rate of interest applicable between the Issue Date and the First Call Date.

 

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

 

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

 

    11

     

    

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

 

	NCP = ECP ×  	VWAPRS 

    VWAPOS

 

where:

 

		NCP	is the New Conversion Price.

 

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

 

		VWAPRS	means the average of the
                                         Volume Weighted Average Price of the Relevant Shares (translated, if necessary, into
                                         U.S. dollars at the Prevailing Rate on the relevant Dealing Day) on each of the 10 Dealing
                                         Days ending on the Dealing Day prior to the date the Relevant Event shall have occurred
                                         (and where references in the definition of “Volume Weighted Average Price”
                                         to “Ordinary Shares” shall be construed as a reference to the Relevant Shares
                                         and in the definition of “Dealing Day”, references to the “Relevant
                                         Stock Exchange” shall be to the primary Regulated Market on which the Relevant
                                         Shares are then listed, admitted to trading or accepted for dealing).

 

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

 

“Newco
Scheme” means a scheme of arrangement or analogous proceeding (“Scheme of Arrangement”) which effects the
interposition of a limited liability company (“Newco”) between the Shareholders immediately prior to the Scheme of
Arrangement (the “Existing Shareholders”) and the Company; provided that (i) only ordinary shares or units or equivalent
of Newco or depositary or other receipts or certificates representing ordinary shares or units or equivalent of Newco are issued
to Existing Shareholders; (ii) immediately after completion of the Scheme of Arrangement the only holders of ordinary shares,
units or equivalent of Newco or, as the case may be, the only holders of depositary or other receipts or certificates representing
ordinary shares or units or equivalent of Newco, are Existing Shareholders holding in the same proportions as immediately prior
to completion of the Scheme of Arrangement (disregarding de minimis holdings by initial subscribers, if applicable); (iii)
immediately after completion of the Scheme of Arrangement, Newco is (or one or more wholly-owned Subsidiaries of Newco are) the
only shareholder of the Company; (iv) all Subsidiaries of the Company immediately prior to the Scheme of Arrangement (other than
Newco, if Newco is then a Subsidiary of the Company) are Subsidiaries of the Company (or of Newco) immediately

 

    12

     

    

after completion
of the Scheme of Arrangement; and (v) immediately after completion of the Scheme of Arrangement the Company (or Newco) holds,
directly or indirectly, the same percentage of the Ordinary Share Capital and Equity Share Capital of those Subsidiaries as was
held by the Company immediately prior to the Scheme of Arrangement.

 

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

 

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

 

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

 

“Notional
Preference Shares” has the meaning specified in ‎Section
5.01(c).

 

“Ordinary
Share Capital” has the meaning provided in Section 1119 of the U.K. Corporation Tax Act 2010.

 

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

 

“outstanding”,
when used with respect to the Additional Tier 1 Securities means, as of the date of determination, all Securities theretofore
authenticated and delivered, except:

 

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

 

(ii)       Securities,
or portions thereof, for whose payment or redemption money, 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 the Additional Tier 1 Securities; provided, that, if the Additional
Tier 1 Securities are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor
satisfactory to the Trustee has been made; and

 

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

 

provided,
however, that in determining whether the Holders of the requisite principal amount of the outstanding Securities have given
any request, demand,

 

    13

     

    

authorization,
direction, notice, consent or waiver hereunder, Securities beneficially owned by the Company or any other obligor upon the Additional
Tier 1 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 Securities which a Responsible Officer of the Trustee has received an Officer’s Certificate
stating that such Securities are so beneficially owned shall be so disregarded; provided, further, however, that 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 Securities and that the pledgee is not the Company or
any other obligor upon the Additional Tier 1 Securities or any Affiliate of the Company or of such other obligor.

 

“Parity
Securities” means (i) the most senior ranking class or classes of preference shares in the capital of the Company from
time to time and any other securities of the Company ranking, or expressed to rank, pari passu with the Additional Tier
1 Securities and/or such preference shares following a Winding-up or Administration Event occurring prior to a Trigger Event and/or
(ii) any securities issued by any other member of the Group, where the terms of the securities benefit from a guarantee or support
agreement entered into by the Company which ranks or is expressed to rank pari passu with the Additional Tier 1 Securities
and/or such preference shares following a Winding-up or Administration Event occurring prior to a Trigger Event.

 

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

 

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

 

“Prospectus”
means the prospectus on Form F-3 related to the offering and sale of the Additional Tier 1 Securities dated June 2, 2016, as supplemented.

 

“Prudential
Regulation Authority” or “PRA” means the Prudential Regulation Authority of the United Kingdom or
such other governmental authority in the United Kingdom (or if the Company becomes domiciled in a jurisdiction other than the
United Kingdom, such other jurisdiction) having primary responsibility for the prudential supervision of the Company.

 

“Qualifying
Relevant Event” means a Relevant Event where:

 

		(i)	the Acquirer is an Approved Entity;
                                         and

 

    14

     

    

		(ii)	the New Conversion Condition
                                         is satisfied.

 

“Recognized
Stock Exchange” means a recognized stock exchange as defined in section 1005 of the U.K. Income Tax Act 2007 as the
same may be amended from time to time and any provision, statute or statutory instrument replacing the same from time to time.

 

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

 

“Regular
Record Date” means, with respect to the payment of interest on the Additional Tier 1 Securities, the 15th calendar day
(whether or not a Business Day) preceding an Interest Payment Date.

 

“Regulated
Market” means an EEA Regulated Market or another regulated, regularly operating, recognized stock exchange or securities
market in an OECD member state (including, without limitation, the main market of the London Stock Exchange).

 

“Regulatory
Event” has the meaning specified in ‎Section 2.10.

 

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

 

A “Relevant
Event” shall occur if any person or persons acting in concert (as defined in the Takeover Code of the United Kingdom
Panel on Takeovers and Mergers) acquires control of the Company (other than as a result of a Newco Scheme).

 

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

 

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

 

“Relevant
Regulator” means the Prudential Regulation Authority or any successor or other authority having primary responsibility
for the prudential supervision of the Company and the Group.

 

“Relevant
Regulator Consent” means any necessary permission, following the giving of due notice, from the Relevant Regulator in
respect of redemption, payment, repayment, purchase, modification or substitution, as the case may be.

 

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

 

    15

     

    

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

 

“Relevant
U.K. Resolution Authority” means any authority with the ability to exercise a U.K. Bail-in Power.

 

“Representative
Amount” means an amount that in the Company’s judgment is representative for a single transaction in U.S. dollars
in such market at such time.

 

“Reset
Determination Date” means the second London Banking Day immediately preceding the Reset Date.

 

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

 

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

 

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

 

“Settlement
Date” means:

 

(i)       with
respect to any Additional Tier 1 Security in relation to which a Settlement Notice is received by the Settlement Share Depository
on or before the Notice Cut-off Date where the Company has not elected that the Settlement Share Depository will carry out a Settlement
Shares Offer in accordance with ‎Section 2.17, the date that
is two (2) Business Days after the latest of (i) the Conversion Date, (ii) the date on which the Company announces that it will
not elect for the Settlement Share Depository to carry out a Settlement Shares Offer (or, if no such announcement is made, the
last date on which the Company is entitled to give a Settlement Shares Offer Notice), and (iii) the date on which the relevant
Settlement Notice has been received by the Settlement Share Depository;

 

(ii)       with
respect to any Additional Tier 1 Security in relation to which a Settlement Notice is received by the Settlement Share Depository
on or before the Notice Cut-off Date where the Company has elected that the Settlement Share Depository will

 

    16

     

    

carry out a
Settlement Shares Offer in accordance with ‎Section 2.17,
the date that is the later of ‎(a) two (2) Business Days
after the day on which the Settlement Shares Offer Period expires or is terminated and ‎(b)
two (2) Business Days after the date on which such Settlement Notice has been so received by the Settlement Share Depository;
and

 

(iii)       with
respect to any Additional Tier 1 Security in relation to which a Settlement Notice is not so received by the Settlement Share
Depository on or before the Notice Cut-off Date, the date on which the Settlement Share Depository delivers the relevant Settlement
Shares, ADSs or Alternative Consideration, as applicable, to Holders or Beneficial Owners.

 

“Settlement
Notice” means a written notice (substantially in the form attached hereto as Exhibit F) to be delivered by a Holder
or Beneficial Owner (or custodian, broker, nominee or other representative thereof) to the Settlement Share Depository, with a
copy to the Trustee, on or before the Notice Cut-off Date containing the following information: (i) the name of the Holder or
Beneficial Owner (or custodian, broker, nominee or other representative thereof), (ii) the Tradable Amount of the book-entry interests
in the Additional Tier 1 Securities held by such Holder or Beneficial Owner (or custodian, broker, nominee or other representative
thereof) on the date of such notice, (iii) the name to be entered in the Company’s share register, (iv) whether Settlement
Shares are to be delivered to the Holder or Beneficial Owner or ADSs are to be deposited with the ADS Depositary on behalf of
the Holder or Beneficial Owner into the Company’s ADS facility, (v) the details of the CREST or other clearing system account,
the details of the registered account in the Company’s ADS facility or, if the Settlement Shares are not a participating
security in CREST or another clearing system, the address to which the Settlement Shares (or the Settlement Share Component, if
any, of any Alternative Consideration) and/or cash (if not expected to be delivered through DTC) should be delivered and (vi)
such other details as may be required by the Settlement Share Depository.

 

“Settlement
Request Notice” means the written notice (substantially in the form attached hereto as Exhibit E) to be delivered by
the Company to the Trustee directly and to DTC as the Holder of the Global Securities (or, if the Additional Tier 1 Securities
are in definitive form, by the Company to the Trustee directly and to the Holders at their registered addresses as shown on the
Capital Securities Register) on the Suspension Date requesting that Holders and Beneficial Owners complete a Settlement Notice
and specifying (i) the Notice Cut-off Date and (ii) the Final Cancellation Date.

 

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

 

“Settlement
Share Depository” means a reputable financial institution, depository entity, trust company or similar entity (which
in each such case is wholly independent of the Company) to be appointed by the Company on or prior to any date when a function
ascribed to the Settlement Share Depository in the Indenture is required to be performed, to perform such functions and which
will be required to undertake, for the benefit of the Holders and Beneficial Owners, to hold the Settlement Shares (and the

 

    17

     

    

Alternative
Consideration, if any) on behalf of such Holders and Beneficial Owners in one or more segregated accounts, unless otherwise required
to be transferred out of such accounts for the purposes of the Settlement Shares Offer, and otherwise on terms consistent with
the Indenture.

 

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

 

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

 

“Settlement
Shares Offer Notice” means the written notice (substantially in the form attached hereto as Exhibit D) to be delivered
by the Company to the Trustee directly and to DTC as the Holder of the Global Securities (or, if the Additional Tier 1 Securities
are definitive Securities, by the Company to the Trustee directly and to the Holders at their addresses shown on the Capital Security
Register) if the Company has elected that a Settlement Shares Offer be made specifying (i) the Settlement Shares Offer Period,
and (ii) the Suspension Date, if the Suspension Date has not previously been specified in the Conversion Trigger Notice.

 

“Settlement
Shares Offer Period” means the period of time for which the Settlement Shares Offer shall be made, which shall end no
later than forty (40) Business Days after the delivery of the Settlement Shares Offer Notice.

 

“Shareholders”
means the holders of Ordinary Shares.

 

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

 

“Subsidiary”
has the meaning provided in Section 1159 of the U.K. Companies Act 2006.

 

“Suspension
Date” means the date specified in the Conversion Trigger Notice or Settlement Shares Offer Notice as the date on which
DTC shall suspend all clearance and settlement of transactions in the Additional Tier 1 Securities in accordance with its rules
and procedures.

 

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

 

“Tax
Law Change” has the meaning specified in ‎Section
2.09.

 

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

 

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

 

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

 

    18

     

    

“Trigger
Event” shall occur on any date if the CET1 Ratio is less than 7.00% on such date, as determined by the Company, the
Relevant Regulator or any agent appointed for such purpose by the Relevant Regulator.

 

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

 

“Volume
Weighted Average Price” means, in respect of an Ordinary Share or Other Security on any Dealing Day, the order book
volume-weighted average price of an Ordinary Share or Other Security published by or derived (in the case of an Ordinary Share)
from the relevant Bloomberg page or (in the case of Other Securities (other than Ordinary Shares), options, warrants or other
rights) from the principal stock exchange or securities market on which such Other Securities, options, warrants or other rights
are then listed or quoted or dealt in, if any or, in any such case, such other source as shall be determined in good faith to
be appropriate by an Independent Adviser on such Dealing Day, provided that if on any such Dealing Day such price is not available
or cannot otherwise be determined as provided above, the Volume Weighted Average Price of an Ordinary Share, Other Security, option,
warrant or other right, as the case may be, in respect of such Dealing Day shall be the Volume Weighted Average Price, determined
as provided above, on the immediately preceding Dealing Day on which the same can be so determined or determined as an Independent
Adviser might otherwise determine in good faith to be appropriate.

 

“Winding-up
or Administration Event” means:

 

(i) an order
is made, or an effective resolution is passed, for the winding-up of the Company (except in any such case, a solvent winding-up
solely for the purposes of a reorganization, reconstruction or amalgamation of the Company or the substitution in place of the
Company of a successor in the business of the Company, the terms of which (i) have previously been approved in writing by Holders
of not less than 2/3 (two thirds) in aggregate principal amount of the Additional Tier 1 Securities and (ii) do not provide that
the Additional Tier 1 Securities shall thereby become redeemable or repayable in accordance with their terms); or

 

    19

     

    

(ii) the
appointment of an administrator of the Company and such administrator declares, or gives notice that it intends to declare and
distribute a dividend.

 

Section 1.02.     
Separability Clause. In case any provision in this Second Supplemental Indenture or the Additional Tier 1 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 1.03.     
Benefits of Instrument. Nothing in this Second Supplemental Indenture, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under the Indenture.

 

Section 1.04.     
Relation to Capital Securities Indenture. This Second Supplemental Indenture constitutes an integral part of the
Capital Securities Indenture. Notwithstanding any other provision of this Second Supplemental Indenture, all provisions of this
Second Supplemental Indenture are expressly and solely for the benefit of the Holders and Beneficial Owners of the Additional
Tier 1 Securities and any such provisions shall not be deemed to apply to any other Securities issued under the Capital Securities
Indenture and shall not be deemed to amend, modify or supplement the Capital Securities Indenture for any purpose other than with
respect to the Additional Tier 1 Securities; provided that pursuant to and in accordance with Section 3.08 of the Capital Securities
Indenture, the duties of the Trustee under the Indenture shall extend only to the Holders of the Additional Tier 1 Securities.

 

Article
2

The Additional Tier 1 Securities

 

Section 2.01.     
Form, Title, Terms and Payments. The form of any Security that is designated as an Additional Tier 1 Security shall
be evidenced by one or more global notes in registered form (each, a “Global Note”) deposited with, or on behalf
of, DTC on the Issue Date. The Global Notes shall be registered in the name of Cede & Co. and executed and delivered in substantially
the form attached hereto as Exhibit A. The terms of the Global Notes are hereby incorporated herein by reference and made a part
hereof as if set forth herein in full.

 

(a)           
There is hereby established a new series of Securities designated as the $1,500,000,000 Fixed Rate Reset Additional Tier
1 Perpetual Subordinated Contingent Convertible Securities (the “Additional Tier 1 Securities”).

 

(b)           
The Additional Tier 1 Securities shall be issued in denominations of $200,000 principal amount and integral multiples of
$1,000 in excess thereof.

 

(c)           
The Additional Tier 1 Securities shall be initially limited in aggregate principal amount to $1,500,000,000, which amount
shall be as set forth in a Company

 

    20

     

    

Order
for the authentication and delivery of Securities pursuant to ‎Section
3.03 of the Capital Securities Indenture. The Company may from time to time, without the consent of the Holders of the Additional
Tier 1 Securities, issue additional Additional Tier 1 Securities having the same ranking and same interest rate, interest cancellation
terms, redemption terms, Conversion Price and other terms as the Additional Tier 1 Securities described in this Second Supplemental
Indenture, except for the price to public and Issue Date. Any such additional Additional Tier 1 Securities subsequently issued
shall rank equally and ratably with the Additional Tier 1 Securities in all respects, so that such further Additional Tier 1 Securities
shall be consolidated and form a single series with the Additional Tier 1 Securities.

 

(d)           
The Additional Tier 1 Securities shall be perpetual Securities and shall have no Stated Maturity in respect of principal.

 

(e)           
The Additional Tier 1 Securities shall not have a sinking fund.

 

(f)            
Any proposed transfer of an interest in Additional Tier 1 Securities held in the form of a Global Note shall be effected
through the book-entry system maintained by DTC.

 

(g)           
The interest rate on the Additional Tier 1 Securities is set forth in ‎Section
2.02 hereof.

 

(h)           
All references to Foreign Government Securities and U.S. Government Obligations in the Capital Securities Indenture shall
be deleted in their entirety and be inapplicable to the Additional Tier 1 Securities, including but not limited to the definition
of outstanding in the Capital Securities Indenture and any references to such terms in Sections 4.01, 4.02 and 4.03 of the Capital
Securities Indenture.

 

(i)            
Payments in respect of the Additional Tier 1 Securities, including payments of principal and interest, shall be subject
to the conditions set forth under ‎Section 2.03, ‎Section
2.04 and ‎Section 2.14 hereof.

 

(j)            
The Additional Tier 1 Securities shall be subject to Automatic Conversion following the occurrence of a Trigger Event as
provided in ‎Section 2.16 hereof and shall be subject
to the Enforcement Events as provided in ‎Article 4
hereof.

 

(k)           
The Company may redeem, vary or substitute the Additional Tier 1 Securities in accordance with ‎Section
2.11 hereof.

 

(l)            
No modifications in respect of Additional Amounts, pursuant to Section 10.04 of the Capital Securities Indenture, shall
be applicable to the Additional Tier 1 Securities.

 

(m)            
The Company shall undertake reasonable efforts to list the Additional Tier 1 Securities on the Global Exchange Market of
the Irish Stock Exchange plc trading as Euronext Dublin (“Euronext Dublin”) within two months following the
Issue Date. The

 

    21

     

    

Company shall
endeavor to maintain such listing as long as the Additional Tier 1 Securities remain outstanding.

 

(n)           
The denomination of each interest in a Global Note shall be the “Tradable Amount” of such book-entry interest.
Prior to the Automatic Conversion, the aggregate Tradable Amount of the interests in each Global Note shall equal such Global
Note’s outstanding principal amount. Following the Automatic Conversion, the principal amount of each Additional Tier 1
Security shall equal zero, but the Tradable Amount of the book-entry interests in each Additional Tier 1 Security shall remain
unchanged as a result of the Automatic Conversion.

 

Section 2.02.     
Interest.

 

(a)           
From (and including) the Issue Date to (but excluding) the First Call Date, the interest rate on the Additional Tier 1
Securities shall be 7.500% per annum. From (and including) each Reset Date to (but excluding) the next succeeding Reset Date,
the interest will accrue on the Additional Tier 1 Securities at a rate per annum calculated by the Calculation Agent as being
equal to the sum of the then-prevailing Mid-Market Swap Rate on the relevant Reset Determination Date and 4.496%, such sum being
converted to a quarterly rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down).
Subject to Sections ‎2.03 and ‎2.04 and the last sentence of this paragraph below, interest, if any, shall
be payable (with a short first interest period) in quarterly installments in arrear on each Interest Payment Date, provided
that if such Interest Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business
Day, and no further interest or other payment shall be owed or made in respect of such delay. If any scheduled redemption date
is not a Business Day, payment of interest, if any, and principal shall be postponed to the next Business Day, but interest on
that payment will not accrue during the period from and after any scheduled redemption date. If any Reset Date is not a Business
Day, the Reset Date shall occur on the next succeeding Business Day. Subject to Sections ‎2.03 and ‎2.04
below, interest on the Additional Tier 1 Securities, if any, shall be computed by the Calculation Agent and payable in arrear
and on the basis of a year of 360 days consisting of twelve (12) months of thirty (30) days each and, in the case of an incomplete
month, the actual number of days elapsed, from (and including) the first day in such period to (but excluding) the last day in
such period.

 

(b)           
If the Mid-Market Swap Rate has been permanently discontinued, the Calculation Agent will, as directed by the Company,
use as a substitute for the Mid-Market Swap Rate for the relevant Reset Determination Date and (subject to any further application
of this paragraph) for each future Reset Determination Date, the alternative reference rate selected by the central bank, reserve
bank, monetary authority or any similar institution (including any committee or working group thereof) that is consistent with
accepted market practice (the “Alternative Rate”). As part of such substitution, the Calculation Agent will,
as directed by the Company, make such adjustments to the Alternative Rate or the spread thereon, as well as the Business Day convention,
Reset Determination Dates and related provisions and definitions (“Adjustments”), in each case that are consistent
with accepted market practice for the use of such Alternative Rate

 

    22

     

    

for debt obligations
such as the Additional Tier 1 Securities; provided, however, that if there is no clear market consensus as to whether any
rate has replaced the Mid-Market Swap Rate in customary market usage, the Company, upon no less than five (5) Business Days prior
notice to the Calculation Agent and the Trustee, will appoint in its sole discretion an Independent Financial Adviser (in such
capacity, the “IFA”) to determine an appropriate Alternative Rate and any Adjustments, and the decision of
the IFA will be binding on the Company, the Calculation Agent, the Trustee, the Paying Agent and the holders of the Additional
Tier 1 Securities.

 

If the Company
is unable to appoint an IFA, or the IFA appointed by the Company determines that there is no such Alternative Rate as provided
above, or otherwise fails to specify an Alternative Rate or any relevant Adjustments, then the Reset Rate of Interest for the
relevant Reset Period will be equal to the Reset Rate of Interest in effect with respect to the immediately preceding Reset Period
or, in the case of the first Reset Period, the rate of interest will be equal to the rate of interest applicable between the Issue
Date and the First Call Date.

 

(c)           
In addition to any other restrictions on payments of principal and interest contained in this Second Supplemental Indenture,
no repayment of the principal amount of the Additional Tier 1 Securities or payment of interest on the Additional Tier 1 Securities
shall become due and payable after the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority unless, at
the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted
to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company
or other members of the Group.

 

Section 2.03.     
Interest Payments Discretionary.

 

(a)           
Interest on the Additional Tier 1 Securities shall be due and payable only at the sole discretion of the Company, and the
Company shall have sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment
that would otherwise be payable on any Interest Payment Date. If the Company does not make an interest payment in respect of the
Additional Tier 1 Securities on the relevant Interest Payment Date (or if the Company elects to make a payment of a portion, but
not all, of such interest payment), such non-payment shall evidence the Company’s exercise of its discretion to cancel such
interest payment (or the portion of such interest payment not paid), and accordingly such interest payment (or the portion thereof
not paid) shall not be or become due and payable. For the avoidance of doubt, if the Company provides notice to cancel a portion,
but not all, of an interest payment in respect of the Additional Tier 1 Securities, and the Company subsequently does not make
a payment of the remaining portion of such interest payment on the relevant Interest Payment Date, such non-payment shall evidence
the Company’s exercise of its discretion to cancel such remaining portion of such interest payment, and accordingly such
remaining portion of the interest payment shall also not be due and payable.

 

    23

     

    

(b)           
Interest shall only be due and payable on an Interest Payment Date to the extent it is not canceled or deemed canceled
(in each case, in whole or in part) in accordance with the provisions set forth in ‎Section
2.02(b), ‎Section 2.03(a), ‎Section
2.04, ‎Section 2.15(h) and ‎Section 5.01 hereof, respectively, and any interest canceled or deemed canceled
(in each case, in whole or in part) pursuant to such sections shall not be due and shall not accumulate or be payable at any time
thereafter, and Holders and Beneficial Owners of the Additional Tier 1 Securities shall have no rights thereto or to receive any
additional interest or compensation as a result of such cancellation or deemed cancellation.

 

(c)           
The Additional Tier 1 Securities shall cease to bear interest from, and including, the date of any redemption of the Additional
Tier 1 Securities as described under ‎Section 2.11
and ‎Section 2.14 unless payment and performance of
all amounts and obligations due by the Company in respect of the Additional Tier 1 Securities is not properly and duly made, in
which event interest shall continue to accrue on the Additional Tier 1 Securities until payment and performance of all amounts
and obligations has been properly and duly made (subject to the Company’s discretion to cancel all interest payments).

 

Section 2.04.     
Restriction on Interest Payments.

 

(a)           
Without limitation on the provisions of ‎Section
2.03 and subject to the extent permitted in paragraph (b) below in respect of partial interest payments in respect of the Additional
Tier 1 Securities, the Company shall not make an interest payment in respect of the Additional Tier 1 Securities on any Interest
Payment Date (and such interest payment shall therefore be deemed to have been canceled and thus shall not be due and payable
on such Interest Payment Date):

 

(i)           
to the extent an amount of Distributable Items on any scheduled Interest Payment Date is less than the sum of (i)
all payments (other than redemption payments) made or declared by the Company since the end of its last financial year and prior
to such Interest Payment Date on or in respect of any Parity Securities, the Additional Tier 1 Securities and any Junior Securities
and (ii) all payments (other than redemption payments) payable by the Company on such Interest Payment Date (x) on the Additional
Tier 1 Securities and (y) on or in respect of any Parity Securities or any Junior Securities, in the case of each of (i) and (ii),
excluding any payments already accounted for (by way of deduction) in determining the Distributable Items; or

 

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

 

(b)           
For purposes of this Second Supplemental Indenture, any interest canceled pursuant to ‎Section
2.04(a) shall be “deemed canceled” under the terms of the Additional Tier 1 Securities and the Indenture and shall
not be due and payable.

 

Section 2.05.     
Agreement to Interest Cancellation.

 

    24

     

    

(a)           
By its acquisition of the Additional Tier 1 Securities, each Holder and each Beneficial Owner shall be deemed to have contracted
and agreed that:

 

(i)           
interest is payable solely at the discretion of the Company, and no amount of interest shall become due and payable in
respect of the relevant interest period to the extent that it has been (x) canceled (in whole or in part) by the Company at the
Company’s sole discretion and/or (y) deemed canceled (in whole or in part) pursuant to ‎Section 2.04(a);
and

 

(ii)           
a cancellation or deemed cancellation of interest (in each case, in whole or in part) in accordance with the terms of the
Indenture shall not constitute a default in payment or otherwise under the terms of the Additional Tier 1 Securities or the Indenture.

 

(b)           
Interest on the Additional Tier 1 Securities shall only be due and payable on an Interest Payment Date to the extent it
is not canceled or deemed canceled under ‎Section 2.03,
‎Section 2.04, ‎Section
2.15(h) or ‎Section 5.01 hereof. Any interest canceled
or deemed canceled (in each case, in whole or in part) in the circumstances described in ‎Section 2.03, ‎Section
2.04, ‎Section 2.15‎Section 2.15(h) or ‎Section 5.01 above shall not be due and shall not accumulate
or be payable at any time thereafter, and Holders and Beneficial Owners of the Additional Tier 1 Securities shall have no rights
thereto or to receive any additional interest or compensation as a result of such cancellation or deemed cancellation of interest
in respect of the Additional Tier 1 Securities.

 

Section 2.06.     
Notice of Interest Cancellation. Notwithstanding anything to the contrary in the Indenture (including Section 1.06
of the Capital Securities Indenture), if practicable, the Company shall provide notice of any cancellation or deemed cancellation
of interest (in each case, in whole or in part) to the Holders of the Additional Tier 1 Securities through DTC (or, if the Additional
Tier 1 Securities are held in definitive form, to the Holders directly at their addresses shown in the Capital Securities Register)
and to the Trustee directly on or prior to the relevant Interest Payment Date. Failure to provide such notice shall have no impact
on the effectiveness of, or otherwise invalidate, any such cancellation or deemed cancellation of interest, or give the Holders
and Beneficial Owners of the Additional Tier 1 Securities any rights as a result of such failure.

 

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

 

(a)           
Payments of principal of and interest, if any, on the Additional Tier 1 Securities shall be made in such coin or currency
of the United States of America as at the time of payment is legal tender for payment of public and private debts and such payments
on Securities represented by a Global Note shall be made through one or more Paying Agents appointed under the Capital Securities
Indenture to DTC or its nominee, as the Holder of the Global Note. Initially, the Paying Agent and the Security Registrar for
the Additional Tier 1 Securities shall be The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL, United
Kingdom. The Company may change the Paying Agent without prior notice to the Holders of the Additional Tier 1

 

    25

     

    

Securities,
and in such an event the Company may act as Paying Agent or Capital Securities Registrar.

 

(b)           
Payments of principal, interest and other amounts in respect of on the Additional Tier 1 Securities represented by a Global
Note shall be made by wire transfer of immediately available funds on the date such payment is scheduled to be paid. The Company
shall, on each date on which any payment in respect of the AT1 Securities becomes due, transfer to the Paying Agent such amount
as may be required for the purposes of such payment.

 

(c)           
Where any interest payment (or relevant portion thereof) is canceled in accordance with the provisions of this Second Supplemental
Indenture and the Additional Tier 1 Securities and the Paying Agent has paid any interest payment (or relevant portion thereof)
scheduled to be paid in accordance with the provisions of this Second Supplemental Indenture and the Additional Tier 1 Securities
prior to its receipt of notice of such cancellation of interest in accordance with ‎Section 2.06 and subject to the
Paying Agent having first used all reasonable efforts to recover such payment from DTC or its nominee, as the Holder of the Global
Note, prior to onward payment of such amounts to the Holders or Beneficial Owners, the Company shall on demand reimburse the Paying
Agent in accordance with ‎Section 2.07(d) below.

 

(d)           
If the Paying Agent pays any amount due in respect of the Additional Tier 1 Securities in accordance with the provisions
of this Second Supplemental Indenture and the Additional Tier 1 Securities before receipt of the amount due under ‎Section
2.07(b), the Company shall on demand reimburse the Paying Agent for the relevant amount and pay interest to the Paying Agent on
such amount that is outstanding from the date on which it is paid out to the date of reimbursement at the rate per annum equal
to the cost to the Paying Agent of funding the amount paid out, as certified by the Paying Agent. Such interest shall be compounded
daily.

 

Section 2.08.     
 Optional Redemption. Subject to the limitations specified in ‎Section 2.12 and ‎Section 2.14
of this Second Supplemental Indenture, the Company may, at the Company’s option, redeem the Additional Tier 1 Securities,
in whole but not in part, on the First Call Date or on any Reset Date thereafter at a redemption price equal to 100% of the principal
amount, together with any accrued and unpaid interest on the Additional Tier 1 Securities, excluding any interest which has been
canceled or deemed to be canceled as described under Section 2.05 above then outstanding, together with any Accrued Interest to
(but excluding) the date fixed for redemption.

 

Section 2.09.     
Optional Tax Redemption.

 

(a)           
Subject to ‎Section 2.12 and ‎Section 2.14 of this Second Supplemental Indenture, the Company may,
at the Company’s option, redeem the Additional Tier 1 Securities, in whole but not in part, at a redemption price equal
to 100% of the principal amount of the Additional Tier 1 Securities then outstanding, together with any Accrued Interest to (but
excluding) the date fixed for redemption, if at any time:

 

    26

     

    

(i)           
the Company determines that as a result of a change in, or amendment to, the laws or regulations of the United Kingdom,
or any political subdivision or authority therein or thereof, having the power to tax, including any treaty to which the United
Kingdom is a party, or any change in any generally published application or interpretation of such laws, including a decision
of any court or tribunal, or any change in the generally published application or interpretation of such laws by any relevant
tax authority or any generally published pronouncement by any tax authority, which change, amendment or pronouncement (x) (subject
to (y)) becomes effective on or after the Issue Date, or (y) in the case of a change in law, if such change is enacted by United
Kingdom Act of Parliament or implemented by statutory instrument, on or after the Issue Date (a “Tax Law Change”),
the Company has paid or will or would on the next payment date be required to pay Additional Amounts to any Holder of the Additional
Tier 1 Securities; and/or

 

(ii)           
a Tax Law Change would:

 

(A)           
result in the Company not being entitled to claim a deduction in respect of any payments (or its corresponding funding
costs are recognised in its financial statements) in respect of the Additional Tier 1 Securities in computing the Company’s
taxation liabilities or the amount or value of such deduction to the Company would be materially reduced;

 

(B)           
prevent the Additional Tier 1 Securities from being treated as loan relationships for United Kingdom tax purposes;

 

(C)           
as a result of the Additional Tier 1 Securities being in issue, result in the Company not being able to have losses or
deductions set against the profits or gains, or profits or gains offset by the losses or deductions, of companies with which it
is or would otherwise be so grouped for applicable United Kingdom tax purposes (whether under the group relief system current
as at the date of issue of the Additional Tier 1 Securities or any similar system or systems having like effect as may from time
to time exist);

 

(D)           
result in a United Kingdom tax liability, or the receipt of income or profit which would be subject to United Kingdom tax,
in respect of a write-down of the principal amount of the Additional Tier 1 Securities or the conversion of the Additional Tier
1 Securities into Settlement Shares; or

 

(E)           
result in an Additional Tier 1 Security or any part thereof being treated as a derivative or an embedded derivative for
United Kingdom tax purposes,

 

    27

     

    

(each such
change (or deemed change) in tax law or regulation or the official application or interpretation thereof, a “Tax Event”);
provided, however, in each case that the Company could not avoid the consequences of the Tax Event by taking measures
reasonably available to it.

 

(b)           
Prior to the giving of any such notice of redemption the Company shall deliver to the Trustee an Officer’s Certificate
stating that a Tax Event has occurred and setting out the details thereof. The Trustee shall be entitled to accept such Officer’s
Certificate without any further inquiry, in which event such Officer’s Certificate shall be conclusive and binding on the
Trustee, the Holders and the Beneficial Owners.

 

Section 2.10.     
Regulatory Event Redemption.

 

(a)           
Subject to ‎Section 2.12 and ‎Section 2.14 of this Second Supplemental Indenture, the Company may,
at the Company’s option, at any time redeem the Additional Tier 1 Securities, in whole but not in part, at a redemption
price equal to 100% of the principal amount of the Additional Tier 1 Securities then outstanding, together with any Accrued Interest
to (but excluding) the date fixed for redemption, if, at any time, the Company determines that as a result of a change (which
has occurred or which the Relevant Regulator considers to be sufficiently certain) to the regulatory classification of the Additional
Tier 1 Securities under the Applicable Regulations, in any such case becoming effective on or after the Issue Date, some or all
of the outstanding aggregate principal amount of the Additional Tier 1 Securities ceases to be included in, or count towards,
the Tier 1 Capital (howsoever defined in the Applicable Regulations) of the Group (a “Regulatory Event”).

 

(b)           
Prior to the giving of any such notice of redemption the Company shall deliver to the Trustee an Officer’s Certificate
stating that a Regulatory Event has occurred and setting out the details thereof. The Trustee is entitled to accept such Officer’s
Certificate without any further inquiry, in which event such Officer’s Certificate shall be conclusive and binding on the
Trustee, the Holders and the Beneficial Owners.

 

Section 2.11.     
Substitution or Variation. Upon the occurrence of a Tax Event or a Regulatory Event, the Company may, subject to
‎Section 2.12 and ‎Section 2.14, but without any requirement for the consent or approval of the Holders
of the Additional Tier 1 Securities, at any time (whether before, on or following the First Call Date) either substitute all (but
not some only) of the Additional Tier 1 Securities for, or vary the terms of the Additional Tier 1 Securities so that they remain
or, as appropriate, become, Compliant Securities, and the Trustee shall (subject to ‎Section 2.12 and ‎Section
2.14) agree to such substitution or variation. Upon the expiry of such notice, the Company shall either vary the terms of or substitute
the Additional Tier 1 Securities, as the case may be. The Company may redeem the Additional Tier 1 Securities prior to the First
Call Date as provided in, as appropriate, ‎Section 2.09 or ‎Section 2.10 or thereafter as provided in ‎Section
2.08.

 

Prior to
the giving of any notice of substitution or variation, the Company must deliver to the Trustee an officer’s certificate
stating that a Regulatory Event or Tax Event,

 

    28

     

    

as the case may be, has occurred,
setting out the details thereof, and stating that the terms of the relevant Compliant Securities comply with the definition thereof.
The Trustee shall be entitled to accept such officer’s certificate without any further inquiry, in which event such officer’s
certificate shall be conclusive and binding on the Trustee and the Holders and Beneficial Owners of the Additional Tier 1 Securities.

 

Section 2.12.     
Notice of Redemption, Substitution or Variation

 

(a)           
Before the Company may redeem, substitute or vary the Additional Tier 1 Securities pursuant to Sections ‎2.08,
‎2.09, ‎2.10 or ‎2.11, the Company shall deliver to DTC as the Holder of the Global Securities
(or, if the Additional Tier 1 Securities are in definitive form, to the Holders at their addresses shown on the Capital Securities
Register) prior notice of not less than thirty (30) days, nor more than sixty (60) days to the Holders of the Additional Tier
1 Securities. The Company shall deliver written notice of such redemption of the Additional Tier 1 Securities to the Trustee at
least five (5) Business Days prior to the date on which the relevant notice of redemption, substitution or variation is sent to
Holders (unless a shorter notice period shall be satisfactory to the Trustee). Such notice shall specify the Company’s election
to redeem, substitute or vary the Additional Tier 1 Securities, as the case may be, and the date fixed for such redemption, substitution
or variation, as the case may be, and shall be irrevocable except in the limited circumstances described in paragraphs ‎(b),
‎(c), ‎(d), (e) or ‎(f) below.

 

(b)           
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.12,
but the Solvency Condition is not satisfied immediately prior to, and immediately following, the date specified for redemption
in such notice, such redemption notice shall be automatically rescinded and shall be of no force and effect, and no payment in
respect of the redemption amount shall be due and payable.

 

(c)           
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.12,
but prior to the payment of the redemption amount with respect to such redemption a Conversion Trigger Notice has been delivered
pursuant to ‎Section 2.15(b), such notice of redemption shall be automatically rescinded and shall be of no force and
effect, no payment in respect of the redemption amount shall be due and payable.

 

(d)           
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.12,
but prior to the date of any such redemption the Company has not given notice to the Relevant Regulator and/or the Relevant Regulator
has not granted permission to the Company to redeem the relevant Additional Tier 1 Securities (in each case to the extent, and
in the manner, required by the relevant Applicable Regulations), such notice of redemption shall be automatically rescinded and
shall be of no force and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.

 

(e)           
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.12,
but in respect of any redemption proposed to be made prior to the fifth anniversary of the
Issue Date, if and to the extent then required under the Applicable 

 

    29

     

    

Regulations
(A) in the case of redemption following the occurrence of a Tax Event, the Company has not demonstrated to the satisfaction of
the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by the Company as at the
Issue Date, or (B) in the case of redemption following the occurrence of a Regulatory Event, the Company has not demonstrated
to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the
Issue Date; such notice of redemption shall be automatically rescinded and shall be of no
force and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.

 

(f)            
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.12,
but prior to the payment of the redemption amount with respect to such redemption the Company is not in compliance with any alternative
or additional pre-conditions set out in the relevant Applicable Regulations for the time being, such notice of redemption shall
be automatically rescinded and shall be of no force and effect, no payment in respect of the redemption amount shall be due and
payable.

 

If any of
the events specified in paragraphs ‎(b), ‎(c), ‎(d), ‎(d) or ‎(f) above
occurs, the Company shall promptly deliver notice to DTC, as the Holder of the Global Securities (or, if the Additional Tier 1
Securities are definitive Securities, to the Holders at their addresses shown on the Capital Securities Register) and to the Trustee
directly, specifying the occurrence of the relevant event.

 

Any
notice of redemption shall state:

 

(i)           
the redemption date;

 

(ii)           
that on the redemption date the redemption price will, subject to the satisfaction of the conditions set forth in the Indenture,
become due and payable upon each Additional Tier 1 Security being redeemed and that, subject to certain exceptions, interest will
cease to accrue on or after that date;

 

(iii)           
the place or places where the Additional Tier 1 Securities are to be surrendered for payment of the redemption price; and

 

(iv)           
the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to the Additional Tier 1 Securities being redeemed.

 

In addition,
if the Company has elected to redeem, substitute or vary the Additional Tier 1 Securities and:

 

(i)           
(in the case of redemption only) the Solvency Condition is not (or, if payment were made, would not be) satisfied in respect
of the relevant payment on the date scheduled for redemption; or

 

(ii)           
(in any case) prior to the redemption, substitution or variation a Trigger Event occurs,

 

    30

     

    

the relevant
notice of redemption, substitution or variation (as the case may be) shall be automatically rescinded and shall be of no force
and effect, no such redemption, substitution or variation shall occur and the Company shall give notice thereof to the Holders
and to the Trustee as soon as reasonably practicable (but failure to give such notice shall not constitute a default for any purpose
nor shall it affect the rescission of the original notice of redemption, substitution or variation (as the case may be)). Further,
no notice of redemption, substitution or variation shall be given following a determination that a Trigger Event has occurred.

 

Section 2.13.     
Canceled Interest Not Payable Upon Redemption. Any interest payments that have been canceled or deemed canceled
pursuant to Sections ‎2.03 or ‎2.04 hereof shall not be payable if the Additional Tier 1 Securities are
redeemed pursuant to Sections ‎2.08, ‎2.09 or ‎2.10 hereof.

 

Section 2.14.     
Condition to Redemption, Purchase, Substitution or Variation. Any redemption, purchase, substitution or variation,
other than a purchase in the ordinary course of business dealing in securities, of the Additional Tier 1 Securities by or on behalf
of the Company or its subsidiaries, is subject to

 

(i)           
the Company giving notice to the Relevant Regulator, and the Relevant Regulator granting permission to, the Company to
redeem, purchase, substitute or vary the terms of the relevant Additional Tier 1 Securities, as the case may be (in each case
to the extent, and in the manner, required by the relevant Applicable Regulations);

 

(ii)           
in the case of any redemption or purchase, if and to the extent then required under the then-prevailing Applicable Regulations,
either: (A) the Company having replaced the Additional Tier 1 Securities with own funds instruments of equal or higher quality
at terms that are sustainable for the income capacity of the Company; or (B) the Company having demonstrated to the satisfaction
of the Relevant Regulator that the own funds of the Company would, following such redemption or purchase, exceed its minimum capital
requirements (including any capital buffer requirements) by a margin that the Relevant Regulator considers necessary at such time;

 

(iii)           
in respect of any redemption proposed to be made prior to the fifth anniversary of the Issue Date, if and to the extent
then required under the Applicable Regulations (A) in the case of redemption following the occurrence of a Tax Event, the Company
having demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably
foreseeable by the Company as at the Issue Date or (B) in the case of redemption following the occurrence of a Regulatory Event,
the Company having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable
by the Company as at the Issue Date;

 

    31

     

    

(iv)           
in the case of any redemption or purchase, the satisfaction of the Solvency Condition both immediately prior to and immediately
following the redemption or purchase date;

 

(v)           
a Trigger Event not having occurred; and

 

(vi)           
in the case of any substitution or variation, such substitution or variation being effected in compliance with applicable
regulatory and legal requirements, including the Trust Indenture Act.

 

Subject to
applicable law in force at the relevant time, including the Applicable Regulations and U.S. federal securities law, the Company
or any of its subsidiaries may, directly or indirectly, purchase the Additional Tier 1 Securities at any price in the open market,
by tender or by private agreement. Any Additional Tier 1 Securities purchased beneficially by the Company for the account of the
Company and any of its subsidiaries (other than in connection with dealing in securities) will be treated as canceled and will
no longer be issued and outstanding.

 

Any refusal
by the Relevant Regulator to give its permission as contemplated above shall not constitute a default for any purpose.

 

Notwithstanding
the above conditions, if, at the time of any redemption, purchase, substitution or variation, the then-prevailing Applicable Regulations
permit the redemption, purchase, substitution or variation only after compliance with one or more alternative or additional pre-conditions
to those set out above, the Company shall instead comply with such other and/or, as appropriate, additional pre-condition(s).

 

Section 2.15.     
Automatic Conversion upon Trigger Event.

 

(a)           
If a Trigger Event has occurred, then the Automatic Conversion shall occur on the Conversion Date and all of the Company’s
obligations under the Additional Tier 1 Securities shall be irrevocably and automatically released in consideration of the Company’s
issuance and delivery of the Settlement Shares to the Settlement Share Depository, and the principal amount of the Additional
Tier 1 Securities shall equal zero at all times thereafter (for the avoidance of doubt, the Tradable Amount shall remain unchanged
as a result of the Automatic Conversion). Under no circumstances shall such released obligations be reinstated. If the Company
has been unable to appoint a Settlement Share Depository, it shall effect, by means it deems reasonable in the circumstances (including,
without limitation, issuance of the Settlement Shares to another independent nominee or to the Holders of the Additional Tier
1 Securities directly), the issuance and delivery of the Settlement Shares or of the Alternative Consideration, as applicable,
to the Holders of the Additional Tier 1 Securities, and such issuance and delivery shall irrevocably and automatically release
all of the Company’s obligations under the Additional Tier 1 Securities as if the Settlement Shares had been issued and
delivered to the Settlement Share Depository and, in which case, where the context so admits, references in this Second Supplemental
Indenture and the Additional Tier 1

 

    32

     

    

Securities
to the issue and delivery of Settlement Shares to the Settlement Share Depository shall be construed accordingly and apply mutatis
mutandis.

 

(b)           
The determination as to whether a Trigger Event has occurred shall be made by the Company, the Relevant Regulator or any
agent appointed for such purpose by the Relevant Regulator. Any such determination shall be binding on the Company, the Trustee
and the Holders and the Beneficial Owners of the Additional Tier 1 Securities. Upon its determination that a Trigger Event has
occurred, the Company shall ‎(a) immediately inform the Relevant Regulator of the occurrence of a Trigger Event, ‎(b)
prior to the delivery of the Conversion Trigger Notice, deliver to the Trustee an Officer’s Certificate substantially in
the form attached hereto as Exhibit C, specifying that a Trigger Event has occurred, which the Trustee shall accept without any
further enquiry as sufficient evidence of such matters, in which event such certificate will be conclusive and binding on the
Trustee and the Holders and Beneficial Owners of the Additional Tier 1 Securities, and (c) deliver a Conversion Trigger Notice
to the Trustee directly and to DTC as the Holder of the Global Securities within five (5) Business Days (or such shorter period
as the Relevant Regulator may require) after the date on which such determination is made.

 

(c)           
The date on which the Conversion Trigger Notice shall be deemed to have been given shall be the date on which it is dispatched
by the Company to DTC (or, if the Additional Tier 1 Securities are in definitive form, to the Holders and Beneficial Owners directly).

 

(d)           
The Company shall request that DTC post the Conversion Trigger Notice on its Reorganization Inquiry for Participants System
pursuant to DTC’s procedures then in effect (or such other system as DTC uses for providing notices to holders of securities).

 

(e)           
The Settlement Shares to be issued and delivered shall be so issued and delivered on terms permitting a Settlement Shares
Offer and shall, except where the Company has been unable to appoint a Settlement Share Depository and/or as otherwise provided
herein and by the Additional Tier 1 Securities, initially be registered in the name of the Settlement Share Depository, which,
subject to a Settlement Shares Offer, shall hold such Settlement Shares on behalf of the Holders and Beneficial Owners of the
Additional Tier 1 Securities. By virtue of its holding of any Additional Tier 1 Securities, each Holder and Beneficial Owner shall
be deemed to have irrevocably directed the Company to issue and deliver the Settlement Shares corresponding to the conversion
of its holding of Additional Tier 1 Securities to the Settlement Share Depository (or to such other relevant recipient).

 

(f)            
The Settlement Share Depository (or the relevant recipient in accordance with the terms of the Additional Tier 1 Securities,
as applicable) shall hold the Settlement Shares (and the Alternative Consideration, if any) on behalf of the Holders and Beneficial
Owners of the Additional Tier 1 Securities. For so long as the Settlement Shares are held by the Settlement Share Depository,
each Holder and Beneficial Owner shall be entitled to direct the Settlement Share Depository or such other relevant recipient,
as applicable, to exercise on its behalf all rights of an ordinary Shareholder (including voting rights and

 

    33

     

    

rights to receive
dividends); provided, however, that Holders and Beneficial Owners shall not have any rights to sell or otherwise transfer such
Settlement Shares unless and until such time as the Settlement Shares have been delivered to the Holders or Beneficial Owners
in accordance with the procedures set forth under ‎Section 2.17 hereof.

 

(g)           
Provided that the Company issues and delivers the Settlement Shares to the Settlement Share Depository (or the relevant
recipient in accordance with the terms of the Additional Tier 1 Securities) in accordance with the terms of the Additional Tier
1 Securities, with effect from and on the Conversion Date, Holders and Beneficial Owners of the Additional Tier 1 Securities shall
have recourse only to the Settlement Share Depository (or to such other relevant recipient, as applicable) for the delivery to
them of Settlement Shares, ADSs or, if applicable, the Alternative Consideration to which such Holders and Beneficial Owners are
entitled. Subject to the occurrence of a Winding-up or Administration Event on or following a Trigger Event, if the Company fails
to issue and deliver the Settlement Shares upon Automatic Conversion to the Settlement Share Depository on the Conversion Date,
the only right of Holders and Beneficial Owners shall be to claim to have such Settlement Shares so issued and delivered.

 

(h)           
Effective upon, and following, the occurrence of the Automatic Conversion, provided that the Company issues and delivers
the Settlement Shares to the Settlement Share Depository (or the relevant recipient in accordance with the terms of the Additional
Tier 1 Securities) in accordance with the terms of the Additional Tier 1 Securities, Holders and Beneficial Owners shall not have
any rights against the Company with respect to repayment of the principal amount of the Additional Tier 1 Securities or payment
of interest or any other amount on or in respect of such Additional Tier 1 Securities, which liabilities of the Company shall
be automatically released, and accordingly the principal amount of the Additional Tier 1 Securities shall equal zero at all times
thereafter. Any interest in respect of an interest period ending on any Interest Payment Date falling between the date of a Trigger
Event and up to (and including) the Conversion Date shall be deemed to have been canceled pursuant to ‎Section 2.03
above upon the occurrence of such Trigger Event and shall not be due and payable.

 

(i)            
Notwithstanding any other provision herein, by its acquisition of the Additional Tier 1 Securities, each Holder and each
Beneficial Owner shall be deemed to have (i) agreed to all of the terms and conditions of the Additional Tier 1 Securities, including,
without limitation, to those related to (x) Automatic Conversion of its Additional Tier 1 Securities following a Trigger Event
and (y) the appointment of the Settlement Share Depository, the issuance of the Settlement Shares to the Settlement Share Depository
(or to the relevant recipient in accordance with the terms of this Second Supplemental Indenture or the Additional Tier 1 Securities)
and the potential sale of the Settlement Shares pursuant to a Settlement Shares Offer and acknowledged that such events in (x)
and (y) may occur without any further action on the part of such Holders or Beneficial Owners or the Trustee, (ii) agreed that
effective upon, and following, the occurrence of the Automatic Conversion, no amount shall be due and payable to the Holders or
the Beneficial Owners under the Additional Tier 1 Securities and the liability of the Company to pay any such amounts (including
the principal amount of, or any interest in respect of, the Additional Tier 1 Securities) shall be automatically released,

 

    34

     

    

and
the Holders and the Beneficial Owners shall not have the right to give any direction to the Trustee with respect to the Trigger
Event and any related Automatic Conversion and (iii) waived, to the extent permitted by the Trust Indenture Act, any claim against
the Trustee arising out of its acceptance of its trusteeship under, and the performance of its duties, powers and rights in respect
of, the Indenture and in connection with the Additional Tier 1 Securities, including, without limitation, claims related to or
arising out of or in connection with a Trigger Event and/or any Automatic Conversion, and (iv) authorized, directed and requested
DTC and any direct participant in DTC or other intermediary through which it holds such Additional Tier 1 Securities to take any
and all necessary action, if required, to implement the Automatic Conversion without any further action or direction on the part
of such Holder or Beneficial Owner or the Trustee.

 

(j)            
The procedures set forth in this ‎Section 2.15 are subject to change to reflect changes in DTC practices, and
the Company may make changes to the procedures set forth in this ‎Section 2.15 to the extent reasonably necessary,
in the opinion of the Company, to reflect such changes in DTC practices. Any such changes shall be subject to the provisions of
‎Section 8.01.

 

(k)           
Notwithstanding anything to the contrary contained in the Indenture or the Additional Tier 1 Securities, once the Company
has delivered a Conversion Trigger Notice following the occurrence of a Trigger Event, (i) subject to the right of Holders and
Beneficial Owners pursuant to ‎Section 4.03 in the event of a failure by the Company to issue and deliver any Settlement
Shares to the Settlement Share Depository on the Conversion Date, the Indenture shall impose no duties upon the Trustee whatsoever
with regard to an Automatic Conversion upon a Trigger Event and the Holders and Beneficial Owners shall have no rights whatsoever
under the Indenture or the Additional Tier 1 Securities to instruct the Trustee to take any action whatsoever, and (ii) as of
the date of the Conversion Trigger Notice, except for any indemnity and/or security provided by any Holder or by any Beneficial
Owner in such direction or related to such direction, any direction previously given to the Trustee by any Holders or by any Beneficial
Owners shall cease automatically and shall be null and void and of no further effect; except in each case of ‎(i) and
‎(ii) of this ‎Section 2.15(k), with respect to any rights of Holders or Beneficial Owners with respect
to any payments under the Additional Tier 1 Securities that were unconditionally due and payable prior to the date of the Conversion
Trigger Notice or unless the Trustee is instructed in writing by the Company to act otherwise.

 

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

 

(m)            
The Trustee shall not be liable with respect to (i) the calculation or accuracy of the CET1 Ratio in connection with the
occurrence of a Trigger Event and the timing of such Trigger Event, (ii) the failure of the Company to post or deliver the underlying
CET1 Ratio calculations of a Trigger Event to DTC, the Holders or the Beneficial Owners, (iii) any aspect of the Company’s
decision to deliver a Conversion Trigger

 

    35

     

    

Notice or the
related Automatic Conversion, (iv) the adequacy of the disclosure of these provisions in the Prospectus or any other offering
material in respect of the Additional Tier 1 Securities or for the direct or indirect consequences thereof or (v) any other requirement
of the Company contained herein related to a Trigger Event or the Automatic Conversion.

 

(n)           
Following the issuance and delivery of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient
in accordance with the terms of the Additional Tier 1 Securities) on the Conversion Date, the Additional Tier 1 Securities shall
remain in existence until the applicable Cancellation Date for the sole purpose of evidencing the Holders’ and Beneficial
Owners’ right to receive Settlement Shares, ADSs or the Alternative Consideration, as the case may be, from the Settlement
Share Depository (or such other relevant recipient, as applicable).

 

(o)           
The Holders and Beneficial Owners shall not at any time have the option to convert to the Additional Tier 1 Securities
into Settlement Shares.

 

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

 

Section 2.16.     
Settlement Shares.

 

(a)           
The number of Settlement Shares to be issued to the Settlement Share Depository on the Conversion Date shall equal the
quotient obtained by dividing the (i) aggregate principal amount of the Additional Tier 1 Securities outstanding immediately prior
to the Automatic Conversion on the Conversion Date, by (ii) the Conversion Price prevailing on the Conversion Date. The number
of Settlement Shares to be delivered to each Holder shall be rounded down, if necessary, to the nearest whole number of Settlement
Shares. Fractions of Settlement Shares will not be delivered to the Settlement Share Depository following the Automatic Conversion
and no cash payment shall be made in lieu thereof. The number of Settlement Shares to be held by the Settlement Share Depository
for the benefit of each Holder shall equal the quotient obtained by dividing (i) the number of Settlement Shares thus calculated
by (ii) the Tradable Amount of the book-entry interests in the Additional Tier 1 Securities held by such Holder on the Conversion
Date rounded down, if necessary, to the nearest whole number of Settlement Shares.

 

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

 

(c)           
The procedures set forth in this ‎Section 2.16 are subject to change to reflect changes in DTC practices, and
the Company may make changes to the procedures set forth in this ‎Section 2.16 to the extent reasonably necessary,
in the opinion of the

 

    36

     

    

Company, to
reflect such changes in DTC practices. Any such changes shall be subject to the provisions of ‎Section 8.01.

 

Section 2.17.     
Settlement Shares Offer.

 

(a)           
Within ten (10) Business Days following the Conversion Date, the Company may, in its sole and absolute discretion, elect
that the Settlement Share Depository (or an agent on its behalf) make an offer of, in the Company’s sole and absolute discretion,
all or some of the Settlement Shares to, at the Company’s sole and absolute discretion, all or some of the Shareholders
upon Automatic Conversion, such offer to be at a cash price per Settlement Share that will be no less than the Conversion Price
(translated from U.S. dollars into pounds sterling at the then-prevailing rate as determined by the Company in its sole discretion),
subject as provided in this ‎Section 2.17 (the “Settlement Shares Offer”).

 

(b)           
The Company reserves the right, in its sole and absolute discretion, to elect that the Settlement Share Depository terminate
the Settlement Shares Offer at any time during the Settlement Shares Offer Period. If the Company makes such an election, it shall
provide at least three (3) Business Days’ notice to the Trustee directly and to DTC as the Holder of the Global Securities
(or, if the Additional Tier 1 Securities are definitive Securities, by the Company to the Trustee directly and to the Holders
at their addresses shown on the Capital Securities Register). The Settlement Share Depository may then, in its sole and absolute
discretion, take steps (including, without limitation, changing the Suspension Date) to deliver to Holders and Beneficial Owners
(or the custodian, nominee, broker or other representative thereof) of the Additional Tier 1 Securities the Settlement Shares
or ADSs at a time that is earlier than the time at which such Holders and Beneficial Owners (or the custodian, nominee, broker
or other representative thereof) would have otherwise received the Alternative Consideration, had the Settlement Shares Offer
been completed.

 

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

 

(d)           
The Cash Component of any Alternative Consideration shall be payable by the Settlement Share Depository to the Holders
and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) of the Additional Tier 1 Securities
whether or not the Solvency Condition is satisfied.

 

(e)           
If the Company elects, in its sole and absolute discretion, that a Settlement Shares Offer be conducted by the Settlement
Share Depository, each Holder or Beneficial

 

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Owner, by its
acquisition of the Additional Tier 1 Securities, shall be deemed to have (i) irrevocably consented to any Settlement Shares Offer
and, notwithstanding that such Settlement Shares are held by the Settlement Share Depository on behalf of Holders and Beneficial
Owners, to the Settlement Share Depository using the Settlement Shares delivered to it to settle any Settlement Shares Offer,
(ii) irrevocably consented to the transfer of the beneficial interest it holds in the Settlement Shares delivered upon Automatic
Conversion to the Settlement Share Depository or to one or more purchasers identified by the Settlement Share Depository in connection
with the Settlement Shares Offer, (iii) irrevocably agreed that the Company and the Settlement Share Depository may take any and
all actions necessary to conduct the Settlement Shares Offer in accordance with the terms of the Additional Tier 1 Securities,
(iv) irrevocably agreed that none of the Company, the Trustee or the Settlement Share Depository shall, to the extent permitted
by applicable law, incur any liability to the Holders or Beneficial Owners in respect of the Settlement Shares Offer (except for
the obligations of the Settlement Share Depository in respect of the Holders’ and Beneficial Owners’ entitlement to,
and subsequent delivery of, any Alternative Consideration) and (v) authorized, directed and required the clearing systems, any
direct participant in the clearing systems or other intermediary through which it holds the Additional Tier 1 Securities to take
any and all necessary action to implement the Automatic Conversion (including, without limitation, any Settlement Shares Offer).

 

Section 2.18.     
Settlement Procedure.

 

(a)           
Delivery of the Settlement Shares, ADSs or Alternative Consideration, as applicable, to the Holders and Beneficial Owners
of the Additional Tier 1 Securities shall be made in accordance with the procedures set forth in this ‎Section 2.18,
which remain subject to change to reflect changes in DTC practices.

 

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

 

(c)           
On the Suspension Date, the Company shall deliver, to the Trustee directly and to DTC as the Holder of the Global Securities
(or, if the Additional Tier 1 Securities are in definitive form, to the Holders at their addresses shown on the Capital Securities
Register) a Settlement Request Notice, pursuant to which the Company shall request that Holders and Beneficial Owners complete
a Settlement Notice and shall specify the Notice Cut-off Date and the Final Cancellation Date.

 

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

 

    38

     

    

(e)           
If the Additional Tier 1 Securities are held through DTC, the Settlement Notice must be given in accordance with the standard
procedures of DTC (which may include, without limitation, delivery of the notice to the Settlement Share Depository by electronic
means) and in a form acceptable to DTC and the Settlement Share Depository. With respect to any Additional Tier 1 Securities held
in definitive form, the Settlement Notice must be delivered to the specified office of the Settlement Share Depository together
with the relevant Additional Tier 1 Security.

 

(f)            
Subject to satisfaction of the requirements and limitations set forth in this ‎Section 2.18 and provided that
the Settlement Notice and the relevant Additional Tier 1 Securities, if applicable, are delivered on or before the Notice Cut-off
Date, the Settlement Share Depository shall deliver the relevant Alternative Consideration or Settlement Shares (rounded down
to the nearest whole number of Settlement Shares) to, or shall deposit such relevant Settlement Shares with the ADS Depositary
on behalf of, the relevant Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) of the relevant
Additional Tier 1 Securities completing the relevant Settlement Notice or its nominee in accordance with the instructions given
in such Settlement Notice on the applicable Settlement Date.

 

(g)           
Each Settlement Notice shall be irrevocable. The Settlement Share Depository shall determine, in its sole and absolute
discretion, whether any Settlement Notice has been properly completed and delivered, and such determination shall be conclusive
and binding on the relevant Holder or Beneficial Owner. If any Holder or Beneficial Owner fails to properly complete and deliver
a Settlement Notice and the relevant Additional Tier 1 Securities, if applicable, the Settlement Share Depository shall be entitled
to treat such Settlement Notice as null and void.

 

(h)           
Neither the Company nor any member of the Group shall pay any taxes or capital, stamp, issue and registration or transfer
taxes or duties arising upon Automatic Conversion or that may arise or be paid as a consequence of the issue and delivery of Settlement
Shares to the Settlement Share Depository. A Holder or Beneficial Owner must pay any taxes and capital, stamp, issue and registration
and transfer taxes or duties arising upon Automatic Conversion in connection with the issue and delivery of the Settlement Shares
to the Settlement Share Depository and such Holder or Beneficial Owner must pay all, if any, such taxes or duties arising by reference
to any disposal or deemed disposal of such Holders or Beneficial Owner’s Additional Tier 1 Security or interest therein.
Any taxes and capital, stamp, issue and registration and transfer taxes or duties arising on delivery or transfer of Settlement
Shares to a purchaser in any Settlement Shares Offer shall be payable by the relevant purchaser of those Settlement Shares.

 

(i)            
The Settlement Shares (and the Settlement Share Component, if any, of any Alternative Consideration) and ADSs shall not
be available for delivery (i) to, or to a nominee for, Euroclear or Clearstream, Luxembourg or any other person providing a clearance
service within the meaning of Section 96 of the U.K. Finance Act 1986 or (ii) to a person, or nominee or agent for a person, whose
business is or includes issuing depository receipts within the meaning of Section 93 of the U.K. Finance Act 1986, in

 

    39

     

    

each case at
any time prior to the “abolition day” as defined in Section 111(1) of the U.K. Finance Act 1990, or (iii) to the CREST
account of such a person described in ‎(i) or ‎(ii).

 

(j)            
The Company may make changes to the procedures set forth in this ‎Section 2.18 to the extent such changes are
reasonably necessary, in the opinion of the Company, to effect the delivery of the Settlement Shares or ADSs, as applicable, to
the Holders and Beneficial Owners of the Additional Tier 1 Securities.

 

Section 2.19.     
Failure to Deliver a Settlement Notice. If any Holder or Beneficial Owner (or custodian, nominee, broker or other
representative thereof) fails to deliver a Settlement Notice and the relevant Additional Tier 1 Securities, if applicable, to
the Settlement Share Depository on or before the Notice Cut-off Date, the Settlement Share Depository shall continue to hold the
Settlement Shares or Alternative Consideration in respect of such Holder or Beneficial Owner, until a Settlement Notice (and the
relevant Additional Tier 1 Securities, if applicable) is so delivered; provided, however, that the relevant Additional
Tier 1 Securities shall be canceled on the Final Cancellation Date, and any Holder or Beneficial Owner (or custodian, nominee,
broker or other representative thereof) of Additional Tier 1 Securities delivering a Settlement Notice after the Notice Cut-off
Date shall be required provide evidence of its entitlement to the relevant Settlement Shares, ADSs or Alternative Consideration
satisfactory to the Settlement Share Depository in its sole and absolute discretion in order to receive delivery of such Settlement
Shares, Alternative Consideration or ADSs (to be deposited with the ADS Depositary on its behalf). The Company shall have no liability
to any Holder or Beneficial Owner of the Additional Tier 1 Securities for any loss resulting from such Holder’s or Beneficial
Owner’s failure to receive any Alternative Consideration, Settlement Shares or ADSs, or from any delay in the receipt thereof,
in each case as a result of such Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) failing
to duly submit a Settlement Notice and the relevant Additional Tier 1 Securities, if applicable, on a timely basis or at all.

 

Section 2.20.     
Delivery of ADSs. In respect of Settlement Shares for which Holders or Beneficial Owners elect to be converted into
ADSs as specified in the Settlement Notice, subject to the Company’s right to elect that a Settlement Shares Offer be made
in accordance with ‎Section 2.17(a), the Settlement Share Depository shall deposit with the ADS Depositary, the number
of Settlement Shares to be issued upon Automatic Conversion of the Additional Tier 1 Securities, and the ADS Depositary shall
issue the corresponding number of ADSs to such Holder or Beneficial Owner (per the ADS-to-Ordinary Share ratio in effect on the
Conversion Date). Once deposited, the ADS Depositary shall be entitled to the economic rights of a holder or beneficial owner
of the Settlement Shares for the purposes of any dividend entitlement and otherwise on behalf of the ADS holders, and the Holder
or Beneficial Owner will become the record holder of the related ADSs for all purposes under the ADS Deposit Agreement. However,
the issuance of the ADSs by the ADS Depositary may be delayed until the depositary bank or the custodian receives confirmation
that all required approvals have been given and that the Settlement Shares have been duly transferred to the custodian and that
all applicable depositary fees and payments have been paid to the ADS Depositary.

 

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

 

(a)           
Notwithstanding any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial
Owner of the Additional Tier 1 Securities, by purchasing or acquiring the Additional Tier 1 Securities, each Holder (including
each Beneficial Owner) of the Additional Tier 1 Securities acknowledges, accepts, agrees to be bound by and consents to the exercise
of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority that may result in (i) the reduction or cancellation of all,
or a portion, of the principal amount of, or interest on, the Additional Tier 1 Securities; (ii) the conversion of all, or a portion,
of the principal amount of, or interest on, the Additional Tier 1 Securities into shares or other securities or other obligations
of the Company or another person; and/or (iii) the amendment or alteration of the maturity of the Additional Tier 1 Securities,
or amendment of the amount of interest due on the Additional Tier 1 Securities, or the dates on which interest becomes payable,
including by suspending payment for a temporary period; any U.K. Bail-in Power may be exercised by means of variation of the terms
of the Additional Tier 1 Securities solely to give effect to the exercise by the Relevant U.K. Resolution Authority of such U.K.
Bail-in Power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal
and interest that have become due and payable (including principal that has become due and payable at the maturity date), but
which have not been paid, prior to the exercise of any U.K. Bail-in Power. Each Holder and each Beneficial Owner of the Additional
Tier 1 Securities further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Additional
Tier 1 Securities are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. Bail-in
Power by the Relevant U.K. Resolution Authority.

 

(b)           
By its acquisition of the Additional Tier 1 Securities, each Holder and Beneficial Owner:

 

(i)           
acknowledges and agrees that no exercise of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority with respect
to the Additional Tier 1 Securities or cancellation or deemed cancellation of interest on the Additional Tier 1 Securities pursuant
to Sections ‎2.03 or ‎2.04 shall give rise to a default for purposes of Section 315(b) (Notice
of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act;

 

(ii)           
to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate
a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes,
or abstains from taking, in either case in accordance with the exercise of the U.K. Bail-in Power by the Relevant U.K. Resolution
Authority with respect to the Additional Tier 1 Securities.

 

(iii)           
acknowledges and agrees that, (A) upon the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority,
the Trustee shall not be required to take any further directions from Holders or Beneficial Owners of the Additional Tier 1 Securities
under Section 5.12 of the Capital Securities Indenture

 

    41

     

    

and
(B) the Indenture shall impose no duties upon the Trustee whatsoever with respect to the exercise of any U.K. Bail-in Power by
the Relevant U.K. Resolution Authority. Notwithstanding the foregoing, if, following the completion of the exercise of the U.K.
Bail-in Power by the Relevant U.K. Resolution Authority, the Additional Tier 1 Securities remain outstanding (for example, if
the exercise of the U.K. Bail-in Power results in only a partial write-down of the principal of the Additional Tier 1 Securities)
then the Trustee’s duties under the Indenture shall remain applicable with respect to the Additional Tier 1 Securities following
such completion to the extent that the Company and the Trustee agree pursuant to a supplemental indenture, unless the Company
and the Trustee agree that a supplemental indenture is not necessary.

 

(iv)           
shall be deemed to have (i) consented to the exercise of any U.K. Bail-in Power as it may be imposed without any prior
notice by the Relevant U.K. Resolution Authority of its decision to exercise such power with respect to the Additional Tier 1
Securities and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which
it holds such Additional Tier 1 Securities to take any and all necessary action, if required, to implement the exercise of any
U.K. Bail-in Power with respect to the Additional Tier 1 Securities as it may be imposed, without any further action or direction
on the part of such Holder and such Beneficial Owner or the Trustee.

 

(c)           
Each Holder or Beneficial Owner that acquires its Additional Tier 1 Securities in the secondary market shall be deemed
to acknowledge, agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders
and Beneficial Owners of the Additional Tier 1 Securities that acquire the Additional Tier 1 Securities upon their initial issuance,
including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the
Additional Tier 1 Securities, including in relation to interest cancellation, the Automatic Conversion, the U.K. Bail-in Power,
the Settlement Shares Offer, the write-down in the event of a Non-Qualifying Relevant Event and the limitations on remedies specified
in ‎Section 4.04 hereof.

 

(d)           
No repayment of principal following any proposed redemption of the Additional Tier 1 Securities or payment of interest
on the Additional Tier 1 Securities shall become due and payable after the exercise of any U.K. Bail-in Power by the Relevant
U.K. Resolution Authority unless, at the time that such repayment or payment, respectively is scheduled to become due, such repayment
or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European
Union applicable to the Company or other members of the Group.

 

(e)           
Upon the exercise of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority with respect to the Additional Tier
1 Securities, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. Bail-in
Power for purposes of notifying Holders and Beneficial Owners of such occurrence. The Company shall also deliver a copy of such
notice to the Trustee for information purposes only.

 

    42

     

    

(f)            
The Company’s obligations to indemnify the Trustee in accordance with Section 6.07 of the Capital Securities Indenture
shall survive any exercise of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority with respect to the Additional
Tier 1 Securities and any Automatic Conversion hereunder.

 

(g)           
The exercise of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority with respect to the Additional Tier 1
Securities shall not constitute an Enforcement Event.

 

Article
3

Anti-Dilution

 

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

 

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

 

	 	A

    B

 

		where:	

 

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

 

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

 

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

 

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

 

    43

     

    

otherwise),
the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue by the following
fraction:

 

	 	A

    B

 

		where:	

 

		A	is the aggregate number of Ordinary
                                         Shares in issue immediately before such issue; and

 

		B	is the aggregate number of Ordinary
                                         Shares in issue immediately after such issue.

 

Such
adjustment shall become effective on the date of issue of such Ordinary Shares.

 

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

 

	 	A – B

       A

 

		where:	

 

		A	is the Current Market Price of one
                                         Ordinary Share on the Effective Date; and

 

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

 

Such
adjustment shall become effective on the Effective Date.

 

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

 

(d)           
If and whenever the Company shall issue Ordinary Shares to its Shareholders as a class by way of rights or the Company
or any member of the Group or (at the direction or request or pursuant to arrangements with the Company or any member of the Group)
any other company, person or entity, shall issue or grant to Shareholders as a class by way of rights, any options, warrants or
other rights to subscribe for or purchase

 

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Ordinary Shares,
or any Other Securities which by their terms of issue carry (directly or indirectly) rights of conversion into, or exchange or
subscription for, any Ordinary Shares (or shall grant any such rights in respect of existing Other Securities so issued), in each
case at a price per Ordinary Share which is less than 95% of the Current Market Price per Ordinary Share on the Effective Date,
the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by
the following fraction:

 

	 	A + B

    A + C

 

		where:	

 

		A	is the number of Ordinary Shares
                                         in issue on the Effective Date;

 

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

 

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

 

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

 

Such adjustment
shall become effective on the Effective Date, which means, in respect of this ‎Section
3.01(d), the first date on which the Ordinary Shares are traded ex-rights, ex-options or ex-warrants on the Relevant Stock Exchange.

 

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

 

    45

     

    

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

 

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

 

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

 

		(iv)	in determining the consideration
                                         or price pursuant to the above, no deduction shall be made for any commissions or fees
                                         (howsoever described) or any expenses paid or incurred for any underwriting, placing
                                         or management of the issue of the relevant Ordinary Shares or Other Securities or options,
                                         warrants or rights, or otherwise in connection therewith; and

 

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

 

    46

     

    

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

 

(i)           
where the events or circumstances giving rise to any adjustment to the Conversion Price have resulted or will result in
an adjustment to the Conversion Price or where more than one event which gives rise to an adjustment to the Conversion Price occurs
within such a short period of time that, in the opinion of the Company, a modification to the adjustment provisions is required
to give the intended result, such modification shall be made as may be determined in good faith by an Independent Adviser to be
in its opinion appropriate, including to ensure that (i) an adjustment to the Conversion Price or the economic effect thereof
shall not be taken into account more than once, (ii) the economic effect of an Extraordinary Dividend is not taken into account
more than once, and (iii) to reflect a redenomination of the issued Ordinary Shares for the time being into a new currency;

 

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

 

(iii)           
no adjustment will be made to the Conversion Price where Ordinary Shares or Other Securities (including rights, warrants
and options) are issued, offered, exercised, allotted, purchased, appropriated, modified or granted to, or for the benefit of,
employees or former employees (including directors holding or formerly holding executive office or the personal service company
of any such person) or their spouses or relatives, in each case, of the Company or any of its Subsidiaries or any associated company
or to a trustee or trustees to be held for the benefit of any such person, in any such case pursuant to any share or option scheme;

 

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

 

(v)           
Notice of any adjustments to the Conversion Price shall be given by the Company to DTC as the Holder of the Global Securities
(or, if the

 

    47

     

    

Additional Tier 1
Securities are in definitive form, via the Trustee) promptly after the determination thereof;

 

(vi)           
any adjustment to the Conversion Price shall be subject to such Conversion Price not being less than the U.S. dollar equivalent
of the nominal amount of an Ordinary Share at such time (currently £0.10). The Company undertakes that it shall not take
any action, and shall procure that no action is taken, that would otherwise result in an adjustment to the Conversion Price to
below such nominal value then in effect; and

 

(vii)           
references to the Conversion Price and Ordinary Shares shall be deemed to include any New Conversion Price and any Relevant
Shares, such that any New Conversion Price shall be subject to price adjustments upon the occurrence of the events of set forth
in Sections ‎3.01(a) – ‎(d) above, subject to any modifications as an Independent Adviser
shall determine to be appropriate.

 

Section 3.02.     
Qualifying Relevant Event.

 

(a)           
Within ten (10) days following the occurrence of a Relevant Event, the Company shall give notice thereof to the Holders
and Beneficial Owners of the Additional Tier 1 Securities by means of a “Relevant Event Notice”, with a copy to the
Trustee.

 

(b)           
The Relevant Event Notice shall specify:

 

		(1)	the identity of the Acquirer;

 

		(2)	whether the Relevant Event
is a Qualifying Relevant Event or a Non-Qualifying Relevant Event;

 

		(3)	in the case of a Qualifying
Relevant Event, the New Conversion Price; and

 

		(4)	in the case of a Non-Qualifying
Relevant Event, unless the Conversion Date shall have occurred prior to the date of the Non-Qualifying Relevant Event, that outstanding
Additional Tier 1 Securities shall not be subject to Automatic Conversion at any time notwithstanding that a Trigger Event may
occur subsequently but that, instead, upon any subsequent Trigger Event, the principal amount of each Additional Tier 1 Security
will automatically be written down to zero, the Additional Tier 1 Securities will be canceled, the Holders and Beneficial Owners
will be automatically deemed to have irrevocably waived their right to receive, and no longer have any rights against the Company
with respect to repayment of the aggregate principal amount of the Additional Tier 1 Securities so written down and all Accrued
Interest and any other amounts payable on the Additional Tier 1 Securities shall be canceled, irrespective of whether such amounts
have become due and payable prior to the occurrence of the Trigger Event.

 

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(c)           
If a Qualifying Relevant Event occurs, the Additional Tier 1 Securities shall, where the Conversion Date (if any) falls
on or after the New Conversion Condition Effective Date, be converted on such Conversion Date into Relevant Shares of the Approved
Entity, mutatis mutandis as provided under ‎Section 2.15 above, at a Conversion Price that shall be the New
Conversion Price. Such conversion shall be effected by the delivery by the Company of such number of Settlement Shares as set
forth under ‎Section 2.15 above to, or to the order of, the Approved Entity. Such delivery shall irrevocably discharge
and satisfy all of the Company’s obligations under the Additional Tier 1 Securities, but shall be without prejudice to the
rights of the Trustee and the Holders and Beneficial Owners against the Approved Entity in connection with its undertaking to
deliver Relevant Shares as provided in the definition of “New Conversion Condition”. Such delivery shall be in consideration
of the Approved Entity irrevocably undertaking for the benefit of the Holders and Beneficial Owners to deliver the Relevant Shares
to the Settlement Share Depository. For the avoidance of doubt, the Company may elect that a Settlement Shares Offer be made by
the Settlement Share Depository in respect of the Relevant Shares.

 

(d)           
The New Conversion Price shall be subject to adjustments in the circumstances provided for under Sections ‎3.01(a)
– ‎3.01(d)‎(d) above (if necessary with such modifications as an Independent Adviser shall determine
to be appropriate), and the Company shall give notice to the Holders of the Additional Tier 1 Securities of the New Conversion
Price and of any such modifications and amendments thereafter.

 

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

 

(i)           
the Company shall, on or prior to the New Conversion Condition Effective Date, enter into such agreements and arrangements
(including, without limitation, supplemental indentures to the Indenture and amendments and modifications to the terms and conditions
of the Additional Tier 1 Securities and the Indenture) as may be required to ensure that, with effect from the New Conversion
Condition Effective Date, the Additional Tier 1 Securities shall (following the occurrence of a Trigger Event) be convertible
into, or exchangeable for, Relevant Shares of the Approved Entity, mutatis mutandis in accordance with, and subject to,
the provisions of ‎Section 2.15 of this Second Supplemental Indenture (as may be supplemented or amended), at
the New Conversion Price;

 

(ii)           
the Company shall, where the Conversion Date falls on or after the New Conversion Condition Effective Date, procure the
issue and/or delivery of the relevant number of Relevant Shares mutatis mutandis in the manner provided under ‎Section
2.15 of this Second Supplemental Indenture (as may be supplemented or amended).

 

Section 3.03.     
Agreement to Write-down in Connection with a Non-Qualifying Relevant Event. By acquiring the Additional Tier 1 Securities,
Holders and Beneficial Owners acknowledge and agree that if a Non-Qualifying Relevant Event occurs, then upon the occurrence of
a Trigger Event (and unless the Conversion Date shall have

 

    49

     

    

occurred prior to the date of
any Non-Qualifying Relevant Event), the outstanding Additional Tier 1 Securities shall not be subject to Automatic Conversion
but that instead, the outstanding principal amount of each Additional Tier 1 Security shall automatically and permanently be written
down to zero, the Additional Tier 1 Securities shall be canceled, the Holders and Beneficial Owners shall be automatically deemed
to have irrevocably waived their right to receive, and no longer have any rights against the Company with respect to repayment
of the aggregate principal amount of the Additional Tier 1 Securities so written down and all Accrued Interest and any other amounts
payable on the Additional Tier 1 Securities shall be canceled, irrespective of whether such amounts have become due and payable
prior to the occurrence of the Trigger Event.

 

Article
4

Enforcement Events and Remedies

 

With respect
to the Additional Tier 1 Securities only, ‎Section 5.01 of
the Capital Securities Indenture shall be amended and restated in its entirety as follows in ‎Section
4.01 hereof, ‎Section 5.02 of the Capital Securities Indenture
shall be amended and restated in its entirety as follows in ‎4.02
and ‎4.03 hereof, Section 5.03(a) of the Capital Securities
Indenture shall be amended and restated in its entirety as follows in ‎Section
4.04 hereof, Section 5.13 of the Capital Securities Indenture shall be amended and restated in its entirety as follows in ‎Section
4.05 hereof, and references in the Capital Securities Indenture to such Sections shall be to such Sections as amended and restated
in entirety by this Second Supplemental Indenture. Section 5.10 of the Capital Securities Indenture shall apply to the Additional
Tier 1 Securities subject to the limitations on remedies specified in this ‎Article
4.

 

Section 4.01.     
Winding-up or Administration Event. If a Winding-Up or Administration Event occurs before the occurrence of a Trigger
Event, subject to the subordination provisions of ‎ ‎Article 5, the principal amount of the Additional Tier 1 Securities
shall become immediately due and payable, without the need of any further action on the part of the Trustee, the Holders or any
other Person, including the declaration by the Trustee, the Holders or any other Person that the principal amount of the Additional
Tier 1 Securities has become immediately due and payable.

 

Section 4.02.     
Non-Payment Event. Subject to ‎Section 2.12, if the Company fails to pay any amount of principal in respect
of the Additional Tier 1 Securities and such non-payment is not remedied within a period of seven (7) calendar days or more after
the date on which such payment is due (a “Non-Payment Event”), the Trustee may, on behalf of the Holders and
Beneficial Owners, at its discretion, or shall at the direction of Holders of 25% of the aggregate principal amount of outstanding
Additional Tier 1 Securities, subject to any applicable laws, institute proceedings for the winding up of the Company. In the
event of a winding-up or liquidation of the Company (whether or not instituted by the Trustee) the Trustee may prove the claims
of the Holders, Beneficial Owners and the Trustee in the winding-up proceeding of the Company and/or claim in the liquidation
of the Company, such claims as are set out in Section 5.01(c) and Section 5.01(d). For the avoidance of doubt, the Trustee may
not declare the principal amount of

 

    50

     

    

any outstanding Additional Tier
1 Securities to be due and payable and may not pursue any other legal remedy, including a judicial proceeding for the collection
of the sums due and unpaid on the Additional Tier 1 Securities.

 

Section 4.03.     
Limited Remedies for Breach of Performance Obligations. In the event of a breach of any term, obligation or condition
binding upon the Company under the Additional Tier 1 Securities or the Indenture (other than any payment obligation of the Company
under or arising from the Additional Tier 1 Securities or the Indenture, including payment of any principal or interest, including
any damages awarded for breach of any obligations) (such obligation, a “Performance Obligation”), the
Trustee may without further notice institute such proceedings against the Company as it may deem fit to enforce the Performance
Obligation, provided that the Company shall not by virtue of the institution of any such proceedings be obliged to pay
any sum or sums, in cash or otherwise (including any damages) earlier than the same would otherwise have been payable under the
Additional Tier 1 Securities or the Indenture. For the avoidance of doubt, the breach by the Company of any Performance Obligation
shall not confer upon the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Additional
Tier 1 Securities any claim for damages and, in the event of such a breach of a Performance Obligation, the sole and exclusive
remedy that the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Additional Tier 1 Securities
may seek under the Additional Tier 1 Securities and the Indenture is specific performance under the laws of the State of New York.
By its acquisition of the Additional Tier 1 Securities, each Holder and Beneficial Owner of the Additional Tier 1 Securities acknowledges
and agrees (i) that such Holder and Beneficial Owner shall not seek, and shall not direct the Trustee (acting on their behalf)
to seek, any claim for damages against the Company in respect of any breach by the Company of a Performance Obligation, and (ii)
that the sole and exclusive remedy that such Holder and Beneficial Owner and/or the Trustee (acting on their behalf) may seek
under the Additional Tier 1 Securities and the Indenture for a breach by the Company of a Performance Obligation is specific performance
under the laws of the State of New York.

 

Section 4.04.     
No Other Remedies and Other Terms.

 

(a)           
Other than the limited remedies specified in this ‎Article 4, and subject to paragraph ‎(c) below,
no remedy against the Company shall be available to the Trustee (acting on behalf of the Holders) or the Holders and Beneficial
Owners, whether for the recovery of amounts owing in respect of such Additional Tier 1 Securities or under the Indenture, or in
respect of any breach by the Company of any of the Company’s obligations under or in respect of the terms of such Additional
Tier 1 Securities or under the Indenture in relation thereto; provided, however, that the Company’s obligations
to the Trustee under, and the Trustee’s lien provided for in, Section 6.07 of the Capital Securities Indenture and the Trustee’s
rights to have money collected applied first to pay amounts due to it under such Section pursuant to Section 5.06 of the Capital
Securities Indenture shall not be limited or impaired by this Article 4 or otherwise and expressly survive any Enforcement Event
and are not subject to the subordination provisions of ‎Section 5.01 and the waiver of set-off provisions of ‎Section
5.02 of this Second Supplemental Indenture.

 

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

 

(c)           
Notwithstanding the limitations on remedies specified under this ‎Article 4, (1) the Trustee shall have such
powers as are required to be authorized to it under the Trust Indenture Act in respect of the rights of the Holders and Beneficial
Owners of the Additional Tier 1 Securities under the provisions of the Indenture, and (2) nothing shall impair the right of a
Holder or Beneficial Owner of the Additional Tier 1 Securities under the Trust Indenture Act, absent such Holder’s or Beneficial
Owner’s consent, to sue for any payment due but unpaid with respect to the Additional Tier 1 Securities; provided
that, in the case of (1) and (2) above, any payments in respect of, or arising from, the Additional Tier 1 Securities, including
any payments or amounts resulting or arising from the enforcement of any rights under the Trust Indenture Act in respect of the
Additional Tier 1 Securities, shall be subject to the subordination provisions set forth in ‎Section 5.01 and the waiver
of set-off provisions in ‎Section 5.02‎ of this Second Supplemental Indenture.

 

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

 

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

 

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

 

Section 4.05.     
Waiver of Past Defaults.

 

(a)           
Holders of not less than a majority in aggregate principal amount of the Outstanding Securities may on behalf of the Holders
of all of the Additional Tier 1 Securities waive any past Enforcement Event that results from a breach by the Company of a Performance
Obligation. Holders of a majority of the aggregate principal amount of the outstanding Additional Tier 1 Securities shall not
be entitled to waive any past default that results from a Winding-up or Administration Event or a Non-Payment Event.

 

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

 

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Article
5

Subordination

 

Section 5.01.     
Subordination to Claims of Senior Creditors.

 

(a)           
With respect to the Additional Tier 1 Securities only, Section 12.01(a) of the Capital Securities Indenture shall be amended
and restated in its entirety as follows in this ‎Section 5.01. References in the Capital Securities Indenture to Section
12.01(a) thereof shall be to ‎Section 5.01 hereof. For the avoidance of doubt, no provision of Article 12 of the Capital
Securities Indenture other than Section 12.01(a) shall be amended by this Second Supplemental Indenture.

 

(b)           
The Additional Tier 1 Securities shall constitute the Company’s direct, unsecured and subordinated obligations, ranking
equally without any preference among themselves. The rights and claims of the Holders and Beneficial Owners of the Additional
Tier 1 Securities in respect of or arising from the Additional Tier 1 Securities shall be subordinated to the claims of Senior
Creditors.

 

(c)           
If a Winding-up or Administration Event occurs prior to the date on which a Trigger Event occurs, there shall be payable
by the Company in respect of each Additional Tier 1 Security (in lieu of any other payment by the Company) such amount, if any,
as would have been payable to the Holder or Beneficial Owner if, throughout such Winding-up or Administration Event, such Holder
or Beneficial Owner were the holder of one of a class of preference shares in the capital of the Company (“Notional Preference
Shares”) having an equal right to a return of assets in the Winding-up or Administration Event to, and so ranking pari
passu with, the holders of the most senior class or classes of issued preference shares in the capital of the Company from
time to time (if any) and which have a preferential right to a return of assets in the Winding-up or Administration Event over,
and so rank ahead of, the holders of all other classes of issued shares for the time being in the capital of the Company but ranking
junior to the claims of Senior Creditors and on the assumption that the amount that such holder was entitled to receive in respect
of each Notional Preference Share is an amount equal to the principal amount of, the relevant Additional Tier 1 Security together
with, to the extent not otherwise included within the foregoing, any other amounts attributable to such Additional Tier 1 Security,
including any Accrued Interest thereon and any damages awarded for breach of any obligations in respect thereof, regardless of
whether the Solvency Condition is satisfied on the date upon which the same would otherwise be due and payable (and, in the case
of an administration, on the assumption that such shareholders were entitled to claim and recover in respect of their shares to
the same degree as in a winding up or liquidation).

 

(d)           
If a Winding-up or Administration Event occurs at any time on or following the date on which a Trigger Event occurs but
the Settlement Shares to be issued and delivered to the Settlement Share Depository on the Conversion Date have not been so delivered,
there shall be payable by the Company in respect of each Additional Tier 1 Security (in lieu of any other payment by the Company)
such amount, if any, as would have been payable to the Holder or Beneficial Owner of such Additional Tier 1 Security

 

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in a Winding-up
or Administration Event if the Conversion Date in respect of the Automatic Conversion had occurred immediately before the occurrence
of a Winding-up or Administration Event and, accordingly, as if such holder were, throughout such Winding-up or Administration
Event, the holder of such number of Ordinary Shares as it would have been entitled to receive upon Automatic Conversion (ignoring
for this purpose the Company’s right to make an election for a Settlement Shares Offer to be effected pursuant to ‎Section
2.17), regardless of whether the Solvency Condition is satisfied on such date (and, in the case of an administration, on the assumption
that shareholders were entitled to claim and recover in respect of their shares to the same degree as in a winding up or liquidation).

 

(e)           
Other than in the event of a Winding-up or Administration Event of the Company as described in paragraph ‎(c)
and ‎(d) above, or in relation to the Cash Component of any Alternative Consideration in any Settlement Shares Offer,
payments in respect of or arising under the Additional Tier 1 Securities (including any damages for breach of any obligations
thereunder) shall, in addition to the cancellation of any interest payment pursuant to ‎Section 2.03 or ‎2.04
hereof, be conditional (i) upon the Company’s being solvent at the time when the relevant payment is due to be made, and
(ii) in that no principal, interest or other amount payable shall be due and payable in respect of or arising from the Additional
Tier 1 Securities except to the extent that the Company could make such payment and still be solvent immediately thereafter (such
condition referred to herein as the “Solvency Condition”). For purposes of determining whether the Solvency
Condition is met, the Company shall be considered to be solvent at a particular point in time if (i) it is able to pay its debts
owed to Senior Creditors as they fall due and (ii) its Assets are at least equal to its Liabilities. An Officer’s Certificate
shall, unless there is manifest error, be treated and accepted by the Company, the Trustee, the Holders and the Beneficial Owners
as correct and sufficient evidence that the Solvency Condition is or is not satisfied. For the avoidance of doubt, if the Company
fails to make a payment because the Solvency Condition is not (or following such payment would not be) satisfied, that payment,
shall not be or become due and payable.

 

Section 5.02.     
No Set-Off. Subject to applicable law, no Holder of Additional Tier 1 Securities may exercise, claim or plead any
right of set-off, compensation or retention in respect of any amount owed to it by the Company arising under, or in respect of,
or in connection with, the Additional Tier 1 Securities and each Holder of Additional Tier 1 Securities shall, by virtue of its
holding of any Additional Tier 1 Securities, be deemed to have waived all such rights of set-off, compensation or retention. Notwithstanding
the previous sentence, if any amount owing to any holder of any Additional Tier 1 Security by the Company in respect of, or arising
under or in connection with the Additional Tier 1 Securities is discharged by set-off, such holder shall, subject to applicable
law, immediately pay an amount equal to the amount of such discharge to the Company (or, in the event of its winding-up or administration,
the liquidator or, as appropriate, administrator of the Company) and, until such time as payment is made, shall hold an amount
equal to such amount in trust for the Company (or the liquidator or, as appropriate, administrator of the Company) and accordingly
any such discharge shall be deemed not to have taken place.

 

    54

     

    

Article
6

Covenants

 

Section 6.01.     
Undertakings. While any Additional Tier 1 Security remains outstanding, the Company shall (if and to the extent
permitted by the Applicable Regulations from time to time and only to the extent that such undertaking would not cause a Regulatory
Event to occur), save with the approval of an extraordinary Shareholder resolution:

 

(a)           
not make any issue, grant or distribution or take or omit to take any other action if the effect thereof would be that,
upon Automatic Conversion of the Additional Tier 1 Securities, Ordinary Shares could not, under any applicable law then in effect,
be legally issued as fully paid;

 

(b)           
in the event of a Newco Scheme, take (or shall procure that there is taken) all necessary action to ensure that the Newco
Scheme is an Exempt Newco Scheme and that immediately after completion of the Scheme of Arrangement, any amendments to the Indenture
as may be necessary to ensure that the Additional Tier 1 Securities may be converted into or exchanged for ordinary shares or
units or the equivalent in Newco in accordance with the Indenture;

 

(c)           
use all reasonable endeavors to ensure that the Settlement Shares issued upon Automatic Conversion of the Additional Tier
1 Securities following a Trigger Event shall be admitted to listing and trading on the Relevant Stock Exchange;

 

(d)           
following the Automatic Conversion of the Additional Tier 1 Securities, take all reasonable actions as may be necessary
to ‎(a) register any additional ADSs, ‎(b) deposit a sufficient number of ADSs with the ADS Depositary,
and (c) ensure that such ADSs shall continue to be listed on the New York Stock Exchange or, if the ADSs cease to be listed on
such exchange, to be admitted to trading on a national securities exchange in the United States;

 

(e)           
notwithstanding any Settlement Shares Offer, at all times keep available for issue, free from pre-emptive or other preferential
rights, sufficient Ordinary Shares to enable Automatic Conversion of the Additional Tier 1 Securities to be satisfied in full;

 

(f)            
in circumstances where the provisions of this Second Supplemental Indenture or the Additional Tier 1 Securities contemplate
the appointment of a Settlement Share Depository, the Company shall use all reasonable endeavors to promptly appoint such Settlement
Share Depository; and

 

(g)           
where the provisions of the Indenture require or provide for a determination by an Independent Adviser, the Company shall
use all reasonable endeavors promptly to appoint an Independent Adviser for such purpose.

 

    55

     

    

Article
7

Satisfaction and Discharge

 

Section 7.01.     
Satisfaction and Discharge of Indenture. For purposes of the Additional Tier 1 Securities, ‎Section 4.01
of the Capital Securities Indenture shall be amended and restated in its entirety and shall read as follows:

 

This Indenture shall
upon Company Request, subject to ‎Section 4.04 of the Capital
Securities Indenture, cease to be of further effect with respect to the Additional Tier 1 Securities (except as to any surviving
rights of registration of transfer or exchange of the Securities herein expressly provided for), and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and discharge of the Indenture with respect to the
Additional Tier 1 Securities when:

 

(a)           
all Additional Tier 1 Securities theretofore authenticated and delivered (other than Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided in Section 3.06 of the Capital Securities Indenture) have been
delivered to the Trustee for cancellation;

 

(b)           
the Company has paid or caused to be paid all other sums payable hereunder (including Accrued Interest, if any) by the
Company with respect to the Additional Tier 1 Securities; and

 

(c)           
the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and discharge of the Indenture with respect to the Additional
Tier 1 Securities have been complied with.

 

(d)           
Notwithstanding any satisfaction and discharge of the Indenture, the obligations of the Company to the Trustee under Section
6.07 of the Capital Securities Indenture, the obligations of the Trustee to any Authenticating Agent under Section 6.15 of the
Capital Securities Indenture and the obligations of the Trustee under ‎Section 4.02 of the Capital Securities Indenture
and the last paragraph of Section 10.03 of the Capital Securities Indenture shall survive such satisfaction and discharge.

 

Article
8

Supplemental Indentures

 

Section 8.01.     
Amendments or Supplements Without Consent of Holders. In addition to any permitted amendment or supplement to the
Capital Securities Indenture pursuant to ‎Section 9.01 of the Capital Securities Indenture, the Company and the Trustee
may amend or supplement the Indenture or the Additional Tier 1 Securities without notice to or the consent of any Holder of the
Additional Tier 1 Securities (i) to conform this Second Supplemental Indenture and the form or terms of the Additional Tier 1
Securities to the section entitled “Description of the Additional Tier 1 Securities” as set forth in the Prospectus,
(ii) to reflect changes to the procedures set forth in ‎Section 2.15

 

    56

     

    

or ‎Section
2.16 above, (iii) to ensure that in the event of a Newco Scheme, the Additional Tier 1 Securities may be converted into or exchanged
for ordinary shares or units or the equivalent in accordance with ‎Section 6.01(b) and/or procure that Newco is substituted
under the Additional Tier 1 Securities as the issuer or (iv) pursuant to Section 2.20(b)(iii).

 

Section 8.02.     
Amendments or Supplements With Consent of Holders. The Company and the Trustee may amend the Additional Tier 1 Securities
and the Indenture with respect to the Additional Tier 1 Securities as provided in ‎Section 9.02 of the Capital Securities
Indenture. Notwithstanding the foregoing provision and in addition to the provisions of ‎Section 9.02 of the Capital
Securities Indenture, without the consent of each Holder of an outstanding Additional Tier 1 Security affected thereby, no amendment
or waiver may make any change that adversely affects the conversion rights of any of the Additional Tier 1 Securities.

 

Section 8.03.     
Holders Approval of Amendments. The consent of the Holders is not necessary under the Indenture to approve the particular
form of any proposed amendment, supplement or waiver, but it will be sufficient if such consent approves the substance of such
proposed amendment, supplement or waiver. After an amendment, supplement or waiver becomes effective, the Company shall give to
the Holders affected by such amendment, supplement or waiver a notice in accordance with the Indenture briefly describing such
amendment, supplement or waiver. The Company shall mail supplemental indentures to Holders upon request. Any failure of the Company
to mail such notice, or any defect in such notice, will not, however, in any way impair or affect the validity of any such supplemental
indenture or waiver.

 

Section 8.04.     
Relevant Regulator Consent. No modification shall be effected to this Second Supplemental Indenture or in relation
to the Additional Tier 1 Securities, unless the Company has received any Relevant Regulator Consent as may be required under the
Applicable Regulations. The Trustee is entitled to request and rely on an Officer’s Certificate as to the satisfaction of
this condition precedent to any modification without further enquiry.

 

Article
9

Miscellaneous

 

Section 9.01.     
Effect of Supplemental Indenture. Upon the execution and delivery of this Second Supplemental Indenture by each
of the Company and the Trustee, the Capital Securities Indenture shall be supplemented and amended in accordance herewith, and
this Second Supplemental Indenture shall form a part of the Capital Securities Indenture for all purposes in respect of any Additional
Tier 1 Securities.

 

Section 9.02.     
Other Documents to Be Given to the Trustee. As specified in ‎Section 9.03 of the Capital Securities Indenture
and subject to the provisions of Section 6.03 of the Capital Securities Indenture, the Trustee shall be entitled to receive an
Officer’s Certificate stating the recitals contained in ‎Section 1.02 of the Capital Securities Indenture have
been complied with and an Opinion of Counsel stating that this Second

 

    57

     

    

Supplemental
Indenture is permitted by the Capital Securities Indenture, conforms to the requirements of the Trust Indenture Act, and (subject
to ‎Section 1.03 of the Capital Securities Indenture) constitutes valid and binding obligations of the Company enforceable
in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally, concepts of reasonableness and equitable principles of general applicability. The Trustee shall be entitled to rely
on such Officer’s Certificate and Opinion of Counsel as conclusive evidence that this Second Supplemental Indenture complies
with the applicable provisions of the Capital Securities Indenture.

 

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

 

Section 9.04.     
Survival. Anything herein to the contrary notwithstanding, for purposes of the Additional Tier 1 Securities, Section
6.08 of the Capital Securities Indenture is hereby amended in its entirety as follows: The Trustee’s right to payment of
its fees, reimbursement and indemnity under, and in its lien provided for in, Sections 5.06 and 6.07 of the Capital Securities
Indenture shall survive the payment in full of the Additional Tier 1 Securities, the satisfaction and discharge of the Indenture,
the Automatic Conversion upon a Trigger Event, the resignation or removal of the Trustee, the termination for any reason of the
Indenture and any exercise of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority with respect to the Additional
Tier 1 Securities.

 

Section 9.05.     
Confirmation of Indenture. The Capital Securities Indenture, as supplemented and amended by this Second Supplemental
Indenture, is in all respects ratified and confirmed, and the Capital Securities Indenture and this Second Supplemental Indenture
shall, in respect of any Additional Tier 1 Securities, be read, taken and construed as one and the same instrument. This Second
Supplemental Indenture constitutes an integral part of the Capital Securities Indenture with respect to the Additional Tier 1
Securities. In the event of a conflict between the terms and conditions of the Capital Securities Indenture and the terms and
conditions of this Second Supplemental Indenture, the terms and conditions of this Second Supplemental Indenture shall prevail
with respect to the Additional Tier 1 Securities.

 

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

 

Section 9.07.     
Governing Law. This Second Supplemental Indenture and the Additional Tier 1 Securities shall be governed by and
construed in accordance with the laws of the State of New York, except that (i) Section 5.01 of this Second Supplemental

 

    58

     

    

Indenture (other
than the Trustee’s own rights, duties or immunities thereunder) and Section 5.02 shall be governed by and construed in accordance
with Scots law and (ii) the authorization and execution by the Company of this Second Supplemental Indenture and the Additional
Tier 1 Securities shall be governed by (in addition to the laws of the State of New York relevant to execution) the jurisdiction
of the Company.

 

Section 9.08.     
Counterparts. This Second Supplemental Indenture may be executed in any number of counterparts, each of which shall
be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this
Second Supplemental Indenture and of signature pages by facsimile or electronic format (i.e., “pdf” or “tif”)
transmission shall constitute effective execution and delivery of this Second Supplemental Indenture as to the parties hereto
and may be used in lieu of the original Second Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted
by facsimile or electronic format (i.e., “pdf” or “tif”) shall be deemed to be their original signatures
for all purposes.

 

[Signature
Pages Follow]

 

    59

     

    

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

 

	 	LLOYDS BANKING GROUP PLC, as Company
	 	 
	 	 
	 	By:	 /s/ Andrew Wood
	 	 	Name: Andrew Wood
	 	 	Title: Head of Group Capital Management  

  

 

	 	THE BANK OF NEW YORK MELLON, acting through its London Branch, as Trustee
	 	 
	 	 
	 	By:	 /s/ Thomas Vanson
	 	 	Name: Thomas Vanson
	 	 	Title: Authorised Signatory

   

 

[Signature
Page to Second Supplemental Indenture]

 

     

     

    

EXHIBIT
A

 

FORM
OF GLOBAL NOTE

 

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

 

This Additional
Tier 1 Security is one of a duly authorized issue of securities of the Company (as defined below) (herein called the “Additional
Tier 1 Securities” and each, an “Additional Tier 1 Security”) issued and to be issued in one or more
series under and governed by the Capital Securities Indenture, dated as of March 6, 2014 (the “Capital Securities Indenture”),
as supplemented by the Second Supplemental Indenture, dated as of October 10, 2018 (the “Second Supplemental Indenture”
and, together with the Capital Securities Indenture, the “Indenture”). Capitalized terms used herein but not
otherwise defined shall have the meaning ascribed to them in the Second Supplemental Indenture.

 

The rights
of the Holder and Beneficial Owners of this Additional Tier 1 Security are, to the extent and in the manner set forth in Section
5.01 of the Second Supplemental Indenture (which amends in its entirety Section 12.01(a) of the Capital Securities Indenture),
subordinated to the claims of other creditors of the Company, and this Additional Tier 1 Security is issued subject to the provisions
of that Section 5.01, and the Holder of this Additional Tier 1 Security, by accepting the same, agrees to, and shall be bound
by, such provisions. The provisions of Sections 5.01 (other than the Trustee’s own rights, duties or immunities thereunder)
and 5.02 of the Second Supplemental Indenture are governed by, and shall be construed in accordance with, Scots law.

 

The rights
of the Holder of this Additional Tier 1 Security are subject to ‎Section
2.15 of the Second Supplemental Indenture. Effective upon, and following, the occurrence of the Automatic Conversion, provided
that the Company issues and delivers the Settlement Shares to the Settlement Share Depository (or the relevant recipient in accordance
with this Additional Tier 1 Security or the Second Supplemental Indenture), Holders and Beneficial Owners shall not have any rights
against the Company with respect to repayment of the principal amount of this Additional Tier 1 Security or payment of interest
or any other amount on or in respect of this Additional Tier 1 Security, which liabilities of the Company shall be irrevocably
and automatically released, and accordingly the principal amount of this Additional Tier 1 Security shall equal zero at all times
thereafter.

 

Notwithstanding
any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of this Additional
Tier 1 Security, by

 

    1 

     

    

purchasing
or acquiring the Additional Tier 1 Securities, each Holder (including each Beneficial Owner) of the Additional Tier 1 Securities
acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution
Authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on,
the Additional Tier 1 Securities; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Additional
Tier 1 Securities into shares or other securities or other obligations of the Company or another person; and/or (iii) the amendment
or alteration of the maturity of the Additional Tier 1 Securities, or amendment of the amount of interest due on the Additional
Tier 1 Securities, or the dates on which interest becomes payable, including by suspending payment for a temporary period; any
U.K. Bail-in Power may be exercised by means of variation of the terms of the Additional Tier 1 Securities solely to give effect
to the exercise by the Relevant U.K. Resolution Authority of such U.K. Bail-in Power. With respect to (i), (ii) and (iii) above,
references to principal and interest shall include payments of principal and interest that have become due and payable (including
principal that has become due and payable at the maturity date), but which have not been paid, prior to the exercise of any U.K.
Bail-in Power. Each Holder and each Beneficial Owner of the Additional Tier 1 Securities further acknowledges and agrees that
the rights of the Holders and/or Beneficial Owners under the Additional Tier 1 Securities are subject to, and will be varied,
if necessary, solely to give effect to, the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority.

 

LLOYDS
BANKING GROUP PLC

$1,500,000,000 Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities

(Callable September 27, 2025 and Every Five Years Thereafter)

 

	No. [    ]	$[    ]

CUSIP
NO. 539439 AU3

ISIN NO. US539439AU36

 

LLOYDS BANKING
GROUP PLC, a company incorporated in Scotland with registered number 095000 herein called the “Company”, which
term includes any successor Person under the Indenture hereinafter referred to, for value received, hereby promises to pay to
Cede & Co., or registered assigns, the principal sum of $[500,000,000] ([five hundred million] Dollars), if and to the extent
due, and to pay interest thereon, if any, in accordance with the terms hereof and the Indenture. The Additional Tier 1 Securities
shall have no fixed maturity or fixed redemption date. From (and including) the Issue Date to (but excluding) September 27, 2025
(the “First Call Date”), the interest rate on the Additional Tier 1 Securities shall be 7.500% per annum. From
and including the First Call Date and each fifth anniversary date thereafter (each such date, a “Reset Date”),
to (but excluding) the next succeeding Reset Date, the interest will accrue on the Additional Tier 1 Securities at a rate per
annum calculated by the Calculation Agent as being equal to the sum of the then-prevailing Mid-Market Swap Rate on the relevant
Reset Determination Date and 4.496% converted to a quarterly rate in accordance with market convention (rounded to three decimal
places, with 0.0005 rounded down). Subject

 

    2 

     

    

to the provisions
on the reverse of this Additional Tier 1 Security relating to cancellation and deemed cancellation of interest and to ‎Section
2.03, ‎Section 2.04, ‎Section
2.15(h) and ‎Section 5.01 of the Second Supplemental Indenture
and to the last sentence of this paragraph, interest, if any, shall be payable in quarterly installments in arrear (with a short
first interest period) on March 27, June 27, September 27 and December 27 of each year (each, an “Interest Payment Date”).
The first date on which interest may be paid will be December 27, 2018 for the period commencing on (and including) October 10,
2018 and ending (but excluding) December 27, 2018 (short first coupon).

 

“Mid-Market
Swap Rate” means the mid-market U.S. dollar swap rate LIBOR basis having a 5-year maturity appearing on the Designated
LIBOR Page as of 11:00 a.m. (New York time) on the Reset Determination Date, for such Reset Period as determined by the Calculation
Agent. If no rate appears on the Designated LIBOR Page, the Mid-Market Swap Rate will be determined on the basis of the rates
at approximately 11:00 a.m., London time, on such Reset Determination Date at which swaps are offered to prime banks in the London
inter-bank U.S. dollar swap rate market by four major banks in such market selected by the Company, for a term of five years and
in a Representative Amount. The Company will request that the principal London office of each of such banks provide a quotation
of its rate. If at least two such quotations are provided, the Mid-Market Swap Rate with respect to the relevant Reset Period
will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, the Mid-Market Swap Rate for the
Reset Date will be the arithmetic mean of the rates quoted at approximately 11:00 a.m. in the City of New York on such Reset Determination
Date by three major banks in New York City, selected by the Company, for U.S. dollar swaps to leading European banks, for a term
of five years and in a Representative Amount. If at least two such quotations are provided, the Mid-Market Swap Rate for the Reset
Date will be the arithmetic mean of such quotations. If fewer than two such quotations are provided (including if no published
Mid-Market Swap Rate is available and banks are unable or unwilling to provide quotations for the calculation of Mid-Market Swap
Rate), then the applicable Reset Rate of Interest for the relevant Reset Period will be the Reset Rate of Interest last calculated
in accordance with this provision or (if none) the rate of interest applicable between the Issue Date and the First Call Date.

 

If the Mid-Market
Swap Rate has been permanently discontinued, the Calculation Agent will, as directed by the Company, use as a substitute for the
Mid-Market Swap Rate for the relevant Reset Determination Date and (subject to any further application of this paragraph) for
each future Reset Determination Date, the alternative reference rate selected by the central bank, reserve bank, monetary authority
or any similar institution (including any committee or working group thereof) that is consistent with accepted market practice
(the “Alternative Rate”). As part of such substitution, the Calculation Agent will, as directed by the Company,
make such adjustments to the Alternative Rate or the spread thereon, as well as the Business Day convention, Reset Determination
Dates and related provisions and definitions (“Adjustments”), in each case that are consistent with accepted
market practice for the use of such Alternative Rate for debt obligations such as the Additional Tier 1 Securities; provided,
however, that if there is no clear market consensus as to whether any rate has replaced the Mid-Market Swap Rate in customary
market usage, the Company, upon no less than five (5) Business Days prior

 

    3 

     

    

notice to the Calculation Agent
and the Trustee, will appoint in its sole discretion an Independent Financial Adviser (in such capacity, the “IFA”)
to determine an appropriate Alternative Rate and any Adjustments, and the decision of the IFA will be binding on the Company,
the Calculation Agent, the Trustee, the Paying Agent and the holders of the Additional Tier 1 Securities.

 

If the Company
is unable to appoint an IFA, or the IFA appointed by the Company determines that there is no such Alternative Rate as provided
above, or otherwise fails to specify an Alternative Rate or any relevant Adjustments, then the Reset Rate of Interest for the
relevant Reset Period will be equal to the Reset Rate of Interest in effect with respect to the immediately preceding Reset Period
or, in the case of the first Reset Period, the rate of interest will be equal to the rate of interest applicable between the Issue
Date and the First Call Date.

 

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

 

Subject
to the limitations specified on the reverse of this Additional Tier 1 Security, interest shall be calculated by the Calculation
Agent on the basis of the 30/360 day count fraction and rounding the resulting figure to the nearest cent (half a cent being rounded
upwards). For this purpose “30/360” means, in respect of any period, the number of days in the relevant period,
from and including the first day in such period to but excluding the last day in such period, such number of days being calculated
on the basis of a 360 day year consisting of 12 months of 30 days each, divided by 360.

 

The interest,
if any, so payable, and paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Additional Tier 1 Security is registered at the close of business on the Regular Record Date for
such interest which shall be the 15th calendar day preceding each Interest Payment Date, whether or not such day is a Business
Day.

 

In addition
to any other restrictions on payments of principal and interest contained in this Second Supplemental Indenture, no repayment
of the principal amount of this Additional Tier 1 Security or payment of interest on this Additional Tier 1 Security shall become
due and payable after the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority unless, at the time that
such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by
the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company or other members
of the Group.

 

Interest
on the Additional Tier 1 Securities shall be due and payable only at the sole discretion of the Company, and the Company shall
have sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that

 

    4 

     

    

would otherwise
be payable on any Interest Payment Date. If the Company does not make an interest payment in respect of the Additional Tier 1
Securities on the relevant Interest Payment Date (or if the Company elects to make a payment of a portion, but not all, of such
interest payment), such non-payment shall evidence the Company’s exercise of its discretion to cancel such interest payment
(or the portion of such interest payment not paid), and accordingly such interest payment (or the portion thereof not paid) shall
not be or become due and payable.

 

Any interest
canceled or deemed canceled (in each case, in whole or in part) pursuant to this Additional Tier 1 Security shall not be due and
shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners of the Additional Tier 1 Securities
shall have no right to or claim against the Company with respect to such interest amount. In addition, any such cancellation or
deemed cancellation shall not constitute a default under this Additional Tier 1 Security and Holders and Beneficial Owners of
this Additional Tier 1 Security shall have no rights thereto or to receive any additional interest or compensation as a result
of such cancellation or deemed cancellation.

 

Without limitation
on the foregoing paragraph, the Company shall cancel any interest in respect of the Additional Tier 1 Securities (or, as appropriate,
any part thereof) on any Interest Payment Date (and such interest payment shall therefore be deemed to have been canceled and
thus shall not be due and payable on such Interest Payment Date) (a) to the extent an amount of Distributable Items on any scheduled
Interest Payment Date is less than the sum of (i) all payments (other than redemption payments) made or declared by the
Company since the end of its last financial year and prior to such Interest Payment Date on or in respect of any Parity Securities,
the Additional Tier 1 Securities and any Junior Securities and (ii) all payments (other than redemption payments) payable by the
Company on such Interest Payment Date (x) on the Additional Tier 1 Securities and (y) on or in respect of any Parity Securities
or any Junior Securities, in the case of each of (i) and (ii), excluding any payments already accounted for (by way of deduction)
in determining the Distributable Items, or (b) if the Solvency Condition is not satisfied in respect of such interest payment.

 

By its acquisition
of the Additional Tier 1 Securities, each Holder and each Beneficial Owner shall be deemed to have contracted and agreed that
(i) interest is payable solely at the discretion of the Company, and no amount of interest shall become due and payable in respect
of the relevant interest period to the extent that it has been (x) canceled (in whole or in part) by the Company at the Company’s
sole discretion and/or (y) deemed canceled (in whole or in part) pursuant to Section 2.04(a) of the Second Supplemental Indenture,
and (ii) a cancellation or deemed cancellation of interest (in each case, in whole or in part) in accordance with the terms of
the Indenture shall not constitute a default in payment or otherwise under the terms of the Additional Tier 1 Securities or the
Indenture.

 

Interest
on the Additional Tier 1 Securities shall only be due and payable on an Interest Payment Date to the extent it is not canceled
or deemed canceled under the terms of this Additional Tier 1 Security and ‎Section
2.03, ‎Section 2.04, ‎Section
2.15(h) and

 

    5 

     

    

‎Section
5.01 of the Second Supplemental Indenture. Any interest canceled or deemed canceled (in each case, in whole or in part) in the
circumstances described in this Additional Tier 1 Security shall not be due and shall not accumulate or be payable at any time
thereafter, and Holders and Beneficial Owners of the Additional Tier 1 Securities shall have no rights thereto or to receive any
additional interest or compensation as a result of such cancellation or deemed cancellation of interest in respect of the Additional
Tier 1 Securities.

 

Payments
of principal of and interest, if any, on the Additional Tier 1 Securities shall be made in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of public and private debts and such payments shall be
made through one or more Paying Agents appointed under the Capital Securities Indenture to the Holder of this Additional Tier
1 Security. Initially, the Paying Agent and the Security Registrar for the Additional Tier 1 Securities shall be The Bank of New
York Mellon, London Branch, One Canada Square, London E14 5AL, United Kingdom. The Company may change the Paying Agent without
prior notice to the Holders of the Additional Tier 1 Securities, and in such an event the Company may act as Paying Agent or Capital
Securities Registrar. Payments of principal, interest and other amounts in respect of on the Additional Tier 1 Securities shall
be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal,
this Additional Tier 1 Security is first surrendered to the Paying Agent.

 

This Additional
Tier 1 Security shall be governed by and construed in accordance with the laws of the State of New York, irrespective of conflicts
of laws principles, except as stated in Section 1.12 of the Capital Securities Indenture and in Section 5.01 and Section 5.02
of the of the Second Supplemental Indenture, and except that the authorization and execution of this Additional Tier 1 Security
shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of
the Company and the Trustee, as the case may be.

 

Reference
is hereby made to the further provisions of this Additional Tier 1 Security set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.

 

All terms
used in this Additional Tier 1 Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture,
as defined herein.

 

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

 

Unless the
certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this Additional Tier 1 Security shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.

 

    6 

     

    

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

 

Date:

 

	LLOYDS BANKING GROUP PLC
	 
	 
	By:	 
	 	Name:
	 	Title:

 

Trustee’s
Certificate of Authentication

 

This is one
of the Additional Tier 1 Securities of the series designated herein referred to in the Indenture.

 

Date:

 

	THE BANK OF NEW YORK MELLON, acting through its London
    Branch

    as Trustee
	 
	 
	By:	 
	 	Authorized Signatory

 

Signature
Page to Global Note

(Reverse of Security)

 

This Additional
Tier 1 Security is one of a duly authorized issue of securities of the Company (herein called the “Additional Tier 1
Securities” and each, an “Additional Tier 1 Security”) issued and to be issued in one or more series
under and governed by the Capital Securities Indenture, dated as of March 6, 2014 (herein called the “Capital Securities
Indenture”), between the Company and The Bank of New York Mellon, London Branch, as Trustee (herein called the “Trustee,”
which term includes any successor trustee under the Capital Securities Indenture), as supplemented and amended by the Second Supplemental
Indenture, dated as of October 10, 2018, (the “Second Supplemental Indenture” and, together with the Capital
Securities Indenture, the “Indenture”), and reference is hereby made to the Indenture, the terms of which are
incorporated herein by reference, for a statement of the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee, the Holders of the Additional Tier 1 Securities and of the terms upon which the Additional Tier 1
Securities are, and are to be, authenticated and delivered. Insofar as the provisions of the Indenture may conflict with the provisions
set forth in this Additional Tier 1 Security, the former shall control for purposes of this Additional Tier 1 Security.

 

This Additional
Tier 1 Security is one of the series designated on the face hereof, limited to a principal amount of $1,500,000,000, which amount
may be increased at the

 

    7 

     

    

option of the
Company if in the future it determines that it may wish to sell additional Securities of this series. References herein to “this
series” mean the series designated on the face hereof.

 

All payments
of principal and/or interest and/or any other amounts to Holders by or on behalf of the Company in respect of the Additional Tier
1 Securities shall be made without withholding or deduction for or on account of any present or future tax, duty, assessment or
governmental charge of whatsoever nature imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom
or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In that event,
the Company shall pay, to the extent it has sufficient Distributable Items, such additional amounts in respect of payments of
interest (but not in respect of payments of principal or any other amounts) (“Additional Amounts”) as will
result (after such withholding or deduction) in receipt by the Holders and Beneficial Owners of the sums of interest which would
have been receivable (in the absence of such withholding or deduction) from it in respect of their Additional Tier 1 Securities;
except that no such Additional Amounts shall be payable with respect to any Additional Tier 1 Security in accordance with Section
10.04 of the Capital Securities Indenture.

 

Payments
under the Additional Tier 1 Securities will be subject in all cases to any applicable fiscal or other laws and regulations in
the place of payment or other laws and regulations to which the Company or its Paying Agents agree to be subject and the Company
will not, save as provided under Section 10.04 of the Capital Securities Indenture, be liable for any taxes or duties of whatever
nature imposed or levied by such laws, regulations or agreements. No commission or expenses shall be charged to the Holders in
respect of such payments.

 

Subject to
the limitations specified below, the Company may, at the Company’s option, redeem the Additional Tier 1 Securities, in whole
but not in part, on the First Call Date or on any Reset Date thereafter at a redemption price equal to 100% of the principal amount
of the Additional Tier 1 Securities then Outstanding, together with any Accrued Interest (excluding any interest which has been
canceled or deemed to be canceled as described under Section 2.05 of the Second Supplemental Indenture) to (but excluding) the
date fixed for redemption.

 

Subject to
the limitations specified below, the Company may, at the Company’s option, redeem the Additional Tier 1 Securities, in whole
but not in part at a redemption price equal to 100% of the principal amount of the Additional Tier 1 Securities then Outstanding,
together with any Accrued Interest to (but excluding) the date fixed for redemption, if at any time the Company determines that
as a result of a change (which the Relevant Regulator considers to be sufficiently certain) to the regulatory classification of
the Additional Tier 1 Securities under the Applicable Regulations, in any such case becoming effective on or after the Issue Date,
some or all of the Outstanding Additional Tier 1 Securities ceases to be included in, or count towards, the Tier 1 Capital (howsoever
defined in the Applicable Regulations) of the Group (a “Regulatory Event”).

 

    8 

     

    

Subject to
the limitations specified below, the Company may, at the Company’s option, redeem the Additional Tier 1 Securities, in whole
but not in part, at a redemption price equal to 100% of the principal amount of the Additional Tier 1 Securities then Outstanding,
together with any Accrued Interest to (but excluding) the date fixed for redemption, if at any time the Company determines (i)
that as a result of a change in, or amendment to, the laws or regulations of the United Kingdom, or any political subdivision
or authority therein or thereof, having the power to tax, including any treaty to which the United Kingdom is a party, or any
change in any generally published application or interpretation of such laws, including a decision of any court or tribunal, or
any change in the generally published application or interpretation of such laws by any relevant tax authority or any generally
published pronouncement by any tax authority, which change, amendment or pronouncement (x) (subject to (y)) becomes effective
on or after the Issue Date, or (y) in the case of a change in law, if such change is enacted by United Kingdom Act of Parliament
or implemented by statutory instrument, on or after the Issue Date (a “Tax Law Change”), the Company has paid
or will or would on the next payment date be required to pay Additional Amounts to any Holder of the Additional Tier 1 Securities;
and/or (ii) a Tax Law Change would (a) result in the Company not being entitled to claim a deduction in respect of any payments
(or its corresponding funding costs are recognised in its financial statements) in respect of the Additional Tier 1 Securities
in computing the Company’s taxation liabilities or the amount or value of such deduction to the Company would be materially
reduced, (b) prevent the Additional Tier 1 Securities from being treated as loan relationships for United Kingdom tax purposes,
(c) as a result of the Additional Tier 1 Securities being in issue, result in the Company not being able to have losses or deductions
set against the profits or gains, or profits or gains offset by the losses or deductions, of companies with which it is or would
otherwise be so grouped for applicable United Kingdom tax purposes (whether under the group relief system current as at the date
of issue of the Additional Tier 1 Securities or any similar system or systems having like effect as may from time to time exist),
(d) result in a United Kingdom tax liability, or the receipt of income or profit which would be subject to United Kingdom tax,
in respect of a write-down of the principal amount of the Additional Tier 1 Securities or the conversion of the Additional Tier
1 Securities into Settlement Shares, or (e) result in an Additional Tier 1 Security or any part thereof being treated as a derivative
or an embedded derivative for United Kingdom tax purposes (each such change (or deemed change) in tax law or regulation or the
official application or interpretation thereof, a “Tax Event”); provided, however, in each case that the Company
could not avoid the consequences of the Tax Event by taking measures reasonably available to it.

 

Upon the
occurrence of a Tax Event or a Regulatory Event, the Company may, subject to ‎Section
2.12 and ‎Section 2.14 of the Second Supplemental Indenture,
but without any requirement for the consent or approval of the Holders of the Additional Tier 1 Securities, at any time (whether
before, on or following the First Call Date) either substitute all (but not some only) of the Additional Tier 1 Securities for,
or vary the terms of the Additional Tier 1 Securities so that they remain or, as appropriate, become, Compliant Securities, and
the Trustee shall (subject to ‎Section 2.12 and ‎Section
2.14 of the Second Supplemental Indenture) agree to such substitution or variation. Upon the expiry of such notice, the Company
shall either vary the terms of or substitute the

 

    9 

     

    

Additional
Tier 1 Securities, as the case may be. The Company may redeem the Additional Tier 1 Securities prior to the First Call Date as
provided in, as appropriate, ‎Section 2.09 or ‎Section
2.10 or thereafter as provided in ‎Section 2.08.

 

Any interest
payments that have been canceled or deemed canceled pursuant to the terms of this Additional Tier 1 Security and the Indenture
shall not be payable if the Additional Tier 1 Securities are redeemed pursuant to any of the three preceding paragraphs.

 

Before the
Company may redeem, substitute or vary the Additional Tier 1 Securities pursuant to any of the preceding paragraphs relating to
the Company’s rights of redemption, substitution or variation, the Company shall deliver to DTC as the Holder of the Global
Securities (or, if the Additional Tier 1 Securities are in definitive form, to the Holders at their addresses shown on the Capital
Securities Register) prior notice of not less than thirty (30) days, nor more than sixty (60) days to the Holders of the Additional
Tier 1 Securities. The Company shall deliver written notice of such redemption, substitution or variation of the Additional Tier
1 Securities to the Trustee at least five (5) Business Days prior to the date on which the relevant notice of redemption, substitution
or variation is sent to Holders (unless a shorter notice period shall be satisfactory to the Trustee) and shall, except as otherwise
provided herein, be irrevocable.

 

Such notice
shall specify the Company’s election to redeem, substitute or vary the Additional Tier 1 Securities, as the case may be,
and the date fixed for such redemption, substitution or variation, as the case may be, and shall be irrevocable except in the
limited circumstances described below.

 

Any notice
of redemption shall state (i) the redemption date, (ii) that on the redemption date the redemption price will, subject to the
satisfaction of the conditions set forth in the Indenture, become due and payable upon each Additional Tier 1 Security being redeemed
and that, subject to certain exceptions, interest will cease to accrue on or after that date, (iii) the place or places where
the Additional Tier 1 Securities are to be surrendered for payment of the redemption price, and (iv) the CUSIP, Common Code and/or
ISIN number or numbers, if any, with respect to the Additional Tier 1 Securities being redeemed.

 

In addition,
if the Company has elected to redeem, substitute or vary the Additional Tier 1 Securities and:

 

(i)           
(in the case of redemption only) the Solvency Condition is not (or, if payment were made, would not be) satisfied in respect
of the relevant payment on the date scheduled for redemption; or

 

(ii)           
(in any case) prior to the redemption, substitution or variation a Trigger Event occurs,

 

the relevant
notice of redemption, substitution or variation (as the case may be) shall be automatically rescinded and shall be of no force
and effect, no such redemption, substitution or variation shall occur and the Company shall give notice thereof to the

 

    10 

     

    

Holders and
to the Trustee as soon as reasonably practicable (but failure to give such notice shall not constitute a default for any purpose
nor shall it affect the rescission of the original notice of redemption, substitution or variation (as the case may be)). Further,
no notice of redemption, substitution or variation shall be given following a determination that a Trigger Event has occurred.

 

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

 

If the Company
has delivered a notice of redemption, but prior to the payment of the redemption amount with respect to such redemption a Conversion
Trigger Notice has been delivered, such redemption notice shall be automatically rescinded and shall be of no force and effect,
no payment in respect of the redemption amount shall be due and payable, and, pursuant to the terms of this Additional Tier 1
Security and the Indenture, the Automatic Conversion shall occur after such Trigger Event.

 

If the Company
has delivered a notice of redemption, but prior to the date of any such redemption the Company has not given notice to the Relevant
Regulator and/or the Relevant Regulator has not granted permission to the Company to redeem the relevant Additional Tier 1 Securities
(in each case to the extent, and in the manner, required by the relevant Applicable Regulations), such notice of redemption shall
be automatically rescinded and shall be of no force and effect and no payment in respect of any redemption amount, if applicable,
shall be due and payable.

 

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

 

If the Company
has delivered a notice of redemption but prior to the payment of the redemption amount with respect to such redemption the Company
is not in compliance with any alternative or additional pre-conditions set out in the relevant Applicable Regulations for the
time being, such notice of redemption shall be automatically rescinded and shall be of no force and effect, no payment in respect
of the redemption amount shall be due and payable.

 

    11 

     

    

If any of
the events specified in each of the preceding five paragraphs occurs, the Company shall promptly deliver notice to DTC as the
Holder of the Global Securities (or, if the Additional Tier 1 Securities are definitive Securities, to the Holders at their addresses
shown on the Capital Securities Register) and to the Trustee directly, specifying the occurrence of the relevant event.

 

Prior to
the giving of any notice of redemption in connection with a Tax Event or a Regulatory Event, the Company shall deliver to the
Trustee an Officer’s Certificate stating that a Tax Event or a Regulatory Event, as applicable, has occurred and setting
out the details thereof. The Trustee is entitled to conclusively rely on and accept such Officer’s Certificate without any
duty whatsoever of further inquiry, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee,
the Holders and the Beneficial Owners.

 

Any redemption,
purchase, substitution or variation, other than a purchase in the ordinary course of business dealing in securities, of the Additional
Tier 1 Securities by or on behalf of the Company or its subsidiaries, is subject to (i) the Company giving notice to the Relevant
Regulator, and the Relevant Regulator granting permission to, the Company to redeem, purchase, substitute or vary the terms of
the relevant Additional Tier 1 Securities, as the case may be (in each case to the extent, and in the manner, required by the
relevant Applicable Regulations); (ii) in the case of any redemption or purchase, if and to the extent then required under the
then-prevailing Applicable Regulations, either: (A) the Company having replaced the Additional Tier 1 Securities with own funds
instruments of equal or higher quality at terms that are sustainable for the income capacity of the Company; or (B) the Company
having demonstrated to the satisfaction of the Relevant Regulator that the own funds of the Company would, following such redemption
or purchase, exceed its minimum capital requirements (including any capital buffer requirements) by a margin that the Relevant
Regulator considers necessary at such time; (iii) in respect of any redemption proposed to be made prior to the fifth anniversary
of the Issue Date, if and to the extent then required under the Applicable Regulations (A) in the case of redemption following
the occurrence of a Tax Event, the Company having demonstrated to the satisfaction of the Relevant Regulator that the relevant
change or event is material and was not reasonably foreseeable by the Company as at the Issue Date or (B) in the case of redemption
following the occurrence of a Regulatory Event, the Company having demonstrated to the satisfaction of the Relevant Regulator
that the relevant change was not reasonably foreseeable by the Company as at the Issue Date; (iv) in the case of any redemption
or purchase, the satisfaction of the Solvency Condition both immediately prior to and immediately following the redemption or
purchase date; (v) a Trigger Event not having occurred; and (vi) in the case of any substitution or variation, such substitution
or variation being effected in compliance with applicable regulatory and legal requirements, including the Trust Indenture Act.
Subject to applicable law in force at the relevant time, including the Applicable Regulations and U.S. federal securities law,
the Company or any of its subsidiaries may, directly or indirectly, purchase the Additional Tier 1 Securities at any price in
the open market, by tender or by private agreement. Any Additional Tier 1 Securities purchased beneficially by the Company for
the account of the Company and

 

    12 

     

    

any of its
subsidiaries (other than in connection with dealing in securities) will be treated as canceled and will no longer be issued and
outstanding.

 

If a Trigger
Event has occurred, then the Automatic Conversion shall occur on the Conversion Date and all of the Company’s obligations
under the Additional Tier 1 Securities shall be irrevocably and automatically released in consideration of the Company’s
issuance and delivery of the Settlement Shares to the Settlement Share Depository, and the principal amount of the Additional
Tier 1 Securities shall equal zero at all times thereafter (for the avoidance of doubt, the Tradable Amount shall remain unchanged
as a result of the Automatic Conversion). Under no circumstances shall such released obligations be reinstated. If the Company
has been unable to appoint a Settlement Share Depository, it shall effect, by means it deems reasonable in the circumstances (including,
without limitation, issuance of the Settlement Shares to another independent nominee or to the Holders of the Additional Tier
1 Securities directly), the issuance and delivery of the Settlement Shares or of the Alternative Consideration, as applicable,
to the Holders of the Additional Tier 1 Securities, and such issuance and delivery shall irrevocably and automatically release
all of the Company’s obligations under the Additional Tier 1 Securities as if the Settlement Shares had been issued and
delivered to the Settlement Share Depository and, in which case, where the context so admits, references in the Second Supplemental
Indenture and in this Additional Tier 1 Security to the issue and delivery of Settlement Shares to the Settlement Share Depository
shall be construed accordingly and apply mutatis mutandis.

 

The procedures
set forth in this Additional Tier 1 Security and ‎Section
2.15 of the Second Supplemental Indenture are subject to change to reflect changes in DTC practices, and the Company may make
changes to the procedures set forth in ‎Section 2.15 of the
Second Supplemental Indenture to the extent reasonably necessary, in the opinion of the Company, to reflect such changes in DTC
practices. Any such changes shall be subject to the provisions of Section 8.01 of the Second Supplemental Indenture.

 

Notwithstanding
anything to the contrary contained in the Indenture or this Additional Tier 1 Security, once the Company has delivered a Conversion
Trigger Notice following the occurrence of a Trigger Event, (i) subject to the right of Holders and Beneficial Owners pursuant
to Section 4.03 in the event of a failure by the Company to issue and deliver any Settlement Shares to the Settlement Share Depository
on the Conversion Date, the Indenture shall impose no duties upon the Trustee whatsoever with regard to an Automatic Conversion
upon a Trigger Event and the Holders and Beneficial Owners shall have no rights whatsoever under the Indenture or the Additional
Tier 1 Securities to instruct the Trustee to take any action whatsoever, and (ii) as of the date of the Conversion Trigger Notice,
except for any indemnity and/or security provided by any Holder or by any Beneficial Owner in such direction or related to such
direction, any direction previously given to the Trustee by any Holders or by any Beneficial Owners shall cease automatically
and shall be null and void and of no further effect; except in each case of (i) and (ii) of this paragraph, with respect to any
rights of Holders or Beneficial Owners with respect to any payments under the Additional Tier 1 Securities that were unconditionally
due and payable prior to the date of the Conversion Trigger Notice or unless the Trustee is instructed in writing by the Company
to act otherwise.

 

    13 

     

    

All authority
conferred or agreed to be conferred by each Holder and Beneficial Owner pursuant to this Additional Tier 1 Security, including
the consents given by such Holder and Beneficial Owner, shall be binding upon the successors, assigns, heirs, executors, administrators,
trustees in bankruptcy and legal representatives of such Holder and Beneficial Owner.

 

The Trustee
shall not be liable with respect to (i) the calculation or accuracy of the CET1 Ratio in connection with the occurrence of a Trigger
Event and the timing of such Trigger Event, (ii) the failure of the Company to post or deliver the underlying CET1 Ratio calculations
of a Trigger Event to DTC, the Holders or the Beneficial Owners, (iii) any aspect of the Company’s decision to deliver a
Conversion Trigger Notice or the related Automatic Conversion, (iv) the adequacy of the disclosure of these provisions in the
Prospectus or any other offering material in respect of the Additional Tier 1 Securities or for the direct or indirect consequences
thereof, or (v) any other requirement of the Company contained herein related to a Trigger Event or the Automatic Conversion.

 

Following
the issuance and delivery of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient in accordance
with the terms of the Additional Tier 1 Securities) on the Conversion Date, this Additional Tier 1 Security shall remain in existence
until the applicable Cancellation Date for the sole purpose of evidencing the Holders’ and Beneficial Owners’ right
to receive Settlement Shares, ADSs or Alternative Consideration, as the case may be, from the Settlement Share Depository (or
such other relevant recipient, as applicable).

 

The Holders
and Beneficial Owners shall not at any time have the option to convert the Additional Tier 1 Securities into Settlement Shares.

 

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

 

Notwithstanding
any other provision herein, by its acquisition of the Additional Tier 1 Securities, each Holder and each Beneficial Owner shall
be deemed to have (i) agreed to all of the terms and conditions of the Additional Tier 1 Securities, including, without limitation,
to those related to (x) Automatic Conversion of its Additional Tier 1 Securities following a Trigger Event and (y) the appointment
of the Settlement Share Depository, the issuance of the Settlement Shares to the Settlement Share Depository (or to the relevant
recipient in accordance with the terms of this Second Supplemental Indenture or the Additional Tier 1 Securities) and the potential
sale of the Settlement Shares pursuant to a Settlement Shares Offer and acknowledged that such events in (x) and (y) may occur
without any further action on the part of such Holders or Beneficial Owners or the Trustee, (ii) agreed that effective upon, and
following, the occurrence of the Automatic Conversion, no amount shall be due and payable to the Holders or the Beneficial Owners
under the Additional Tier 1 Securities and the liability of the Company to pay any such amounts (including the principal amount
of, or any interest in respect of, the Additional Tier 1 Securities) shall be automatically released, and the Holders and the
Beneficial Owners shall not have the right to give any direction to the

 

    14 

     

    

Trustee with
respect to the Trigger Event and any related Automatic Conversion and (iii) waived, to the extent permitted by the Trust Indenture
Act, any claim against the Trustee arising out of its acceptance of its trusteeship under, and the performance of its duties,
powers and rights in respect of, the Indenture and in connection with the Additional Tier 1 Securities, including, without limitation,
claims related to or arising out of or in connection with a Trigger Event and/or any Automatic Conversion, and (iv) authorized,
directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Additional Tier
1 Securities to take any and all necessary action, if required, to implement the Automatic Conversion without any further action
or direction on the part of such Holder or Beneficial Owner or the Trustee.

 

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

 

Within ten
(10) Business Days following the Conversion Date, the Company may, in its sole and absolute discretion, elect that the Settlement
Share Depository (or an agent on its behalf) make an offer of, in the Company’s sole and absolute discretion, all or some
of the Settlement Shares to, at the Company’s sole and absolute discretion, all or some of the Shareholders upon Automatic
Conversion, such offer to be at a cash price per Settlement Share that will be no less than the Conversion Price (translated from
U.S. dollars into pounds sterling at the then-prevailing rate as determined by the Company in its sole discretion), subject as
provided in ‎Section 2.17 of the Second Supplemental Indenture
(the “Settlement Shares Offer”).

 

If the Company
elects, in its sole and absolute discretion, that a Settlement Shares Offer be conducted by the Settlement Share Depository, each
Holder or Beneficial Owner, by its acquisition of the Additional Tier 1 Securities, shall be deemed to have: (i) irrevocably consented
to any Settlement Shares Offer and, notwithstanding that such Settlement Shares are held by the Settlement Share Depository on
behalf of Holders and Beneficial Owners, to the Settlement Share Depository using the Settlement Shares delivered to it to settle
any Settlement Shares Offer, (ii) irrevocably consented to the transfer of the beneficial interest it holds in the Settlement
Shares delivered upon Automatic Conversion to the Settlement Share Depository or to one or more purchasers identified by the Settlement
Share Depository in connection with the Settlement Shares Offer in accordance with the terms of the Additional Tier 1 Securities,
(iii) irrevocably agreed that the Company and the Settlement Share Depository may take any and all actions necessary to conduct
the Settlement Shares Offer in accordance with the terms of the Additional Tier 1 Securities, (iv) irrevocably agreed that none
of the Company, the Trustee or the Settlement Share Depository shall, to the extent permitted by applicable law, incur any liability
to the Holders or Beneficial Owners in respect of the Settlement Shares Offer (except for the obligations of the Settlement Share
Depository in respect of the Holders’ and Beneficial Owners’ entitlement to, and subsequent delivery of, any Alternative
Consideration) and (v) authorized, directed and required the clearing systems, any direct participant in the clearing systems
or other intermediary through which it holds the Additional Tier 1 Securities to take any and all necessary action to implement
the Automatic Conversion (including, without limitation, any Settlement Shares Offer).

 

    15 

     

    

Notwithstanding
any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of this Additional
Tier 1 Security, by purchasing or acquiring the Additional Tier 1 Securities, each Holder (including each Beneficial Owner) of
the Additional Tier 1 Securities acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. Bail-in
Power by the Relevant U.K. Resolution Authority that may result in (i) the reduction or cancellation of all, or a portion, of
the principal amount of, or interest on, the Additional Tier 1 Securities; (ii) the conversion of all, or a portion, of the principal
amount of, or interest on, the Additional Tier 1 Securities into shares or other securities or other obligations of the Company
or another person; and/or (iii) the amendment or alteration of the maturity of the Additional Tier 1 Securities, or amendment
of the amount of interest due on the Additional Tier 1 Securities, or the dates on which interest becomes payable, including by
suspending payment for a temporary period; any U.K. Bail-in Power may be exercised by means of variation of the terms of the Additional
Tier 1 Securities solely to give effect to the exercise by the Relevant U.K. Resolution Authority of such U.K. Bail-in Power.
With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest
that have become due and payable (including principal that has become due and payable at the maturity date), but which have not
been paid, prior to the exercise of any U.K. Bail-in Power. Each Holder and each Beneficial Owner of the Additional Tier 1 Securities
further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Additional Tier 1 Securities
are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. Bail-in Power by the Relevant
U.K. Resolution Authority.

 

By its acquisition
of the Additional Tier 1 Securities, each Holder and Beneficial Owner (i) acknowledges and agrees that no exercise of the U.K.
Bail-in Power by the Relevant U.K. Resolution Authority with respect to the Additional Tier 1 Securities or cancellation or deemed
cancellation of interest pursuant to the Second Supplemental Indenture and the terms of this Additional Tier 1 Security shall
give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee
in Case of Default) of the U.S. Trust Indenture Act of 1939, as amended, (ii) to the extent permitted by the Trust Indenture
Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees
that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance
with the exercise of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority with respect to the Additional Tier 1 Securities,
(iii) acknowledges and agrees that, (a) upon the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority,
the Trustee shall not be required to take any further directions from Holders or Beneficial Owners of the Additional Tier 1 Securities
under Section 5.12 of the Capital Securities Indenture and (b) the Indenture shall impose no duties upon the Trustee whatsoever
with respect to the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority. Notwithstanding the foregoing
in (iii), if, following the completion of the exercise of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority, the
Additional Tier 1 Securities remain outstanding (for example, if the exercise of the U.K. Bail-in Power results in only a partial
write-down of the principal of the Additional Tier 1 Securities) then the Trustee’s duties under the Indenture shall remain
applicable with respect to the Additional Tier 1 Securities following such

 

    16 

     

    

completion
to the extent that the Company and the Trustee agree pursuant to a supplemental indenture, unless the Company and the Trustee
agree that a supplemental indenture is not necessary, and (iv) shall be deemed to have (a) consented to the exercise of any U.K.
Bail-in Power as it may be imposed without any prior notice by the Relevant U.K. Resolution Authority of its decision to exercise
such power with respect to the Additional Tier 1 Securities and (b) authorized, directed and requested DTC and any direct participant
in DTC or other intermediary through which it holds such Additional Tier 1 Securities to take any and all necessary action, if
required, to implement the exercise of any U.K. Bail-in Power with respect to the Additional Tier 1 Securities as it may be imposed,
without any further action or direction on the part of such Holder and such Beneficial Owner or the Trustee.

 

Each Holder
and Beneficial Owner that acquires its Additional Tier 1 Securities in the secondary market shall be deemed to acknowledge and
agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial
Owners of the Additional Tier 1 Securities that acquire the Additional Tier 1 Securities upon their initial issuance, including,
without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Additional
Tier 1 Securities, including in relation to interest cancellation, the Automatic Conversion, the Settlement Shares Offer, the
U.K. Bail-in Power, the write-down in the event of a Non-Qualifying Relevant Event and the limitations on remedies specified in
this Additional Tier 1 Security and Section 4.04 of the Second Supplemental Indenture.

 

No repayment
of principal following any proposed redemption of the Additional Tier 1 Securities or payment of interest on the Additional Tier
1 Securities shall become due and payable after the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority
unless, at the time that such repayment or payment, respectively is scheduled to become due, such repayment or payment would be
permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to
the Company or the other members of the Group.

 

Upon the
exercise of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority with respect to the Additional Tier 1 Securities,
the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. Bail-in Power for
purposes of notifying Holders and Beneficial Owners of such occurrence. The Company shall also deliver a copy of such notice to
the Trustee for information purposes only.

 

The Company’s
obligations to indemnify the Trustee in accordance with Section 6.07 of the Capital Securities Indenture shall survive any exercise
of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority with respect to the Additional Tier 1 Securities and any Automatic
Conversion.

 

The exercise
of the U.K. Bail-in Power by the Relevant U.K. Resolution Authority with respect to the Additional Tier 1 Securities shall not
constitute an Enforcement Event.

 

    17 

     

    

A “Winding-up
or Administration Event” shall result if (i) an order is made, or an effective resolution is passed, for the winding-up
of the Company (except in each such case, a solvent winding-up solely for the purposes of a reorganization, reconstruction or
amalgamation of the Company or the substitution in place of the Company of a successor in business of the Company, the terms of
which (i) have previously been approved in writing by Holders of not less than 2/3 (two thirds) in aggregate principal amount
of the Additional Tier 1 Securities and (ii) do not provide that the Additional Tier 1 Securities shall thereby become redeemable
or repayable in accordance with their terms); or (ii) an administrator of the Company is appointed and such administrator declares,
or gives notice that it intends to declare and distribute a dividend.

 

If a Winding-up
or Administration Event occurs before the occurrence of a Trigger Event, subject to the subordination provisions of Article 5
of the Second Supplemental Indenture, the principal amount of the Additional Tier 1 Securities shall become immediately due and
payable, without the need of any further action on the part of the Trustee, the Holders or any other Person, including the declaration
by the Trustee, the Holders or any other Person that the principal amount of the Additional Tier 1 Securities has become immediately
due and payable.

 

Subject to
‎Section 2.12 of the Second Supplemental Indenture, if the
Company fails to pay any amount of principal in respect of the Additional Tier 1 Securities and such non-payment is not remedied
within a period of seven (7) calendar days or more after the date on which such payment is due (a “Non-Payment Event”),
the Trustee may, on behalf of the Holders and Beneficial Owners, at its discretion, or shall at the direction of Holders of 25%
of the aggregate principal amount of outstanding Additional Tier 1 Securities, subject to any applicable laws, institute proceedings
for the winding up of the Company. In the event of a winding-up or liquidation of the Company (whether or not instituted by the
Trustee) the Trustee may prove the claims of the Holders, Beneficial Owners and the Trustee in the winding-up proceeding of the
Company and/or claim in the liquidation of the Company, such claims as are set out in Sections 5.01(c) and 5.01(d) of the Second
Supplemental Indenture. For the avoidance of doubt, the Trustee may not declare the principal amount of any outstanding Additional
Tier 1 Securities to be due and payable and may not pursue any other legal remedy, including a judicial proceeding for the collection
of the sums due and unpaid on the Additional Tier 1 Securities.

 

In the event
of a breach of any term, obligation or condition binding upon the Company under the Additional Tier 1 Securities or the Indenture
(other than any payment obligation of the Company under or arising from the Additional Tier 1 Securities or the Indenture, including
payment of any principal or interest, including any damages awarded for breach of any obligations) (such obligation, a “Performance
Obligation”), the Trustee may without further notice institute such proceedings against the Company as it may deem fit
to enforce the Performance Obligation, provided that the Company shall not by virtue of the institution of any such proceedings
be obliged to pay any sum or sums, in cash or otherwise (including any damages) earlier than the same would otherwise have been
payable under the Additional Tier 1 Securities or the Indenture. For the avoidance of doubt, the breach by the Company of any
Performance Obligation shall not confer upon the Trustee (acting on behalf of the Holders) and/or the Holders or

 

    18 

     

    

Beneficial
Owners of the Additional Tier 1 Securities any claim for damages and, in the event of such a breach of a Performance Obligation,
the sole and exclusive remedy that the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the
Additional Tier 1 Securities may seek under the Additional Tier 1 Securities and the Indenture is specific performance under the
laws of the State of New York. By its acquisition of the Additional Tier 1 Securities, each Holder and Beneficial Owner of the
Additional Tier 1 Securities acknowledges and agrees (i) that such Holder and Beneficial Owner shall not seek, and shall not direct
the Trustee (acting on their behalf) to seek, any claim for damages against the Company in respect of any breach by the Company
of a Performance Obligation, and (ii) that the sole and exclusive remedy that such Holder and Beneficial Owner and/or the Trustee
(acting on their behalf) may seek under the Additional Tier 1 Securities and the Indenture for a breach by the Company of a Performance
Obligation is specific performance under the laws of the State of New York.

 

Other than
the limited remedies specified in this Additional Tier 1 Security and Article IV of the Second Supplemental Indenture, and subject
to the second paragraph below, no remedy against the Company shall be available to the Trustee (acting on behalf of the Holders)
or the Holders and Beneficial Owners, whether for the recovery of amounts owing in respect of such Additional Tier 1 Securities
or under the Indenture, or in respect of any breach by the Company of any of the Company’s obligations under or in respect
of the terms of such Additional Tier 1 Securities or under the Indenture in relation thereto; provided, however,
that the Company’s obligations to the Trustee under, and the Trustee’s lien provided for in, Section 6.07 of the Capital
Securities Indenture and the Trustee’s rights to have money collected applied first to pay amounts due to it under such
Section pursuant to Section 5.06 of the Capital Securities Indenture shall not be limited or impaired by Article IV of the Second
Supplemental Indenture or otherwise and expressly survive any Enforcement Event and are not subject to the subordination provisions
of ‎Section 5.01 and the waiver of set-off provisions of ‎Section
5.02 of the Second Supplemental Indenture.

 

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

 

Notwithstanding
the limitations on remedies specified in this Additional Tier 1 Security and under Article IV of the Second Supplemental Indenture,
(1) the Trustee shall have such powers as are required to be authorized to it under the Trust Indenture Act in respect of the
rights of the Holders and Beneficial Owners of the Additional Tier 1 Securities under the provisions of the Indenture, and (2)
nothing shall impair the right of a Holder or Beneficial Owner of the Additional Tier 1 Securities under the Trust Indenture Act,
absent such Holder’s or Beneficial Owner’s consent, to sue for any payment due but unpaid with respect to the Additional
Tier 1 Securities; provided that, in the case of (1) and (2) above, any payments in respect of, or arising from, the Additional
Tier 1 Securities, including any payments or amounts resulting or arising from the enforcement of any rights under the Trust Indenture
Act in respect of the Additional Tier

 

    19 

     

    

1 Securities,
shall be subject to the subordination provisions set forth in ‎Section
5.01 and the waiver of set-off provisions of ‎Section 5.02
of the Second Supplemental Indenture.

 

In furtherance
of Section 6.01 of the Capital Securities Indenture:

 

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

 

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

 

With respect
to the Additional Tier 1 Securities only, Section 12.01(a) of the Capital Securities Indenture shall be amended and restated in
its entirety by Section 5.01 of the Capital Securities Indenture. References in the Capital Securities Indenture to Section 12.01(a)
thereof shall be to Section 5.01 of the Capital Securities Indenture. For the avoidance of doubt, no provision of Article 12 of
the Capital Securities Indenture other than Section 12.01(a) shall be amended by the Second Supplemental Indenture.

 

The Additional
Tier 1 Securities shall constitute the Company’s direct, unsecured and subordinated obligations, ranking equally without
any preference among themselves. The rights and claims of the Holders and Beneficial Owners of the Additional Tier 1 Securities
in respect of or arising from the Additional Tier 1 Securities shall be subordinated to the claims of Senior Creditors.

 

If a Winding-up
or Administration Event occurs prior to the date on which a Trigger Event occurs, there shall be payable by the Company in respect
of each Additional Tier 1 Security (in lieu of any other payment by the Company) such amount, if any, as would have been payable
to the Holder or Beneficial Owner if, throughout such Winding-up or Administration Event, such Holder or Beneficial Owner were
the holder of one of a class of preference shares in the capital of the Company (“Notional Preference Shares”)
having an equal right to a return of assets in the Winding-up or Administration Event to, and so ranking pari passu with,
the holders of the most senior class or classes of issued preference shares in the capital of the Company from time to time (if
any) and which have a preferential right to a return of assets in the Winding-up or Administration Event over, and so rank ahead
of, the holders of all other classes of issued shares for the time being in the capital of the Company but ranking junior to the
claims of Senior Creditors and on the assumption that the amount that such holder was entitled to receive in respect of each Notional
Preference Share is an amount equal to the principal amount of, the relevant Additional Tier 1 Security together with, to the
extent not otherwise included within the foregoing, any other amounts attributable to such Additional Tier 1 Security, including
any Accrued Interest thereon and any damages awarded for breach of any obligations in respect thereof, regardless of whether the
Solvency Condition is satisfied on the date upon which the same would otherwise be due and payable (and, in the case of an administration,
on the assumption that such

 

    20 

     

    

shareholders
were entitled to claim and recover in respect of their shares to the same degree as in a winding up or liquidation).

 

If a Winding-up
or Administration Event occurs at any time on or following the date on which a Trigger Event occurs but the Settlement Shares
to be issued and delivered to the Settlement Share Depository on the Conversion Date have not been so delivered, there shall be
payable by the Company in respect of each Additional Tier 1 Security (in lieu of any other payment by the Company) such amount,
if any, as would have been payable to the Holder or Beneficial Owner of such Additional Tier 1 Security in a Winding-up or Administration
Event if the Conversion Date in respect of the Automatic Conversion had occurred immediately before the occurrence of a Winding-up
or Administration Event and, accordingly, as if such holder were, throughout such Winding-up or Administration Event, the holder
of such number of Ordinary Shares as it would have been entitled to receive upon Automatic Conversion (ignoring for this purpose
the Company’s right to make an election for a Settlement Shares Offer to be effected pursuant to ‎Section
2.17 of the Second Supplemental Indenture), regardless of whether the Solvency Condition is satisfied on such date (and, in the
case of an administration, on the assumption that shareholders were entitled to claim and recover in respect of their shares to
the same degree as in a winding up or liquidation).

 

Other than
in the event of a Winding-up or Administration Event of the Company, payments in respect of or arising under the Additional Tier
1 Securities (including any damages for breach of any obligations thereunder) shall, in addition to the cancellation of any interest
payment pursuant to the terms of the Second Supplemental Indenture or this Additional Tier 1 Security, be conditional (i) upon
the Company’s being solvent at the time when the relevant payment is due to be made, and (ii) in that no principal, interest
or other amount payable shall be due and payable in respect of or arising from the Additional Tier 1 Securities except to the
extent that the Company could make such payment and still be solvent immediately thereafter (such condition referred to herein
as the “Solvency Condition”).

 

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

 

Subject to
applicable law, no Holder of Additional Tier 1 Securities may exercise, claim or plead any right of set-off, compensation or retention
in respect of any amount owed to it by the Company arising under, or in respect of, or in connection with, the Additional Tier
1 Securities and each Holder of Additional Tier 1 Securities shall, by virtue of its holding of any Additional Tier 1 Securities,
be deemed to have waived all such rights of set-off, compensation or retention. Notwithstanding the previous sentence, if any
amount owing to any holder of any Additional Tier 1 Security by the Company in respect of, or arising under or in connection with
the Additional Tier 1 Securities is discharged by set-off, such holder shall, subject to applicable law, immediately pay an amount
equal to the amount of such discharge to the Company (or, in the event of its winding-up or administration, the liquidator or,
as appropriate, administrator of the

 

    21 

     

    

Company) and,
until such time as payment is made, shall hold an amount equal to such amount in trust for the Company (or the liquidator or,
as appropriate, administrator of the Company) and accordingly any such discharge shall be deemed not to have taken place.

 

The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Additional Tier 1 Securities of each series to be affected under the Indenture
at any time by the Company and the Trustee with the consent of the Holders of not less than 2/3 (two thirds) in aggregate majority
in principal amount of the Additional Tier 1 Securities then outstanding of each series to be affected.

 

Holders of
not less than a majority in aggregate principal amount of the Outstanding Securities may on behalf of the Holders of all of the
Additional Tier 1 Securities waive any past Enforcement Event that results from a breach by the Company of a Performance Obligation.
Holders of a majority of the aggregate principal amount of the outstanding Additional Tier 1 Securities shall not be entitled
to waive any past default that results from a Winding-up or Administration Event or a Non-Payment Event.

 

As provided
in and subject to the provisions of the Indenture, the Holder of this Additional Tier 1 Security shall not have any right to institute
any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Enforcement
Event with respect to the Additional Tier 1 Securities of this series specifying such Enforcement Event, the Holders of not less
than 25% in aggregate principal amount of the Additional Tier 1 Securities of this series then outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Enforcement Event as Trustee and offered to the Trustee indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request, the Trustee for
60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding, and 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 aggregate principal amount of Additional Tier 1 Securities of this series.

 

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

 

    22 

     

    

Prior to
due presentment of this Additional Tier 1 Security for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Additional Tier 1 Security is registered as the owner hereof for
all purposes, whether or not this Additional Tier 1 Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.

 

This Additional Tier 1 Security
shall be governed by and construed in accordance with the laws of the State of New York, except as otherwise provided for (i)
pursuant to Section 1.12 of the Capital Securities Indenture and Section 9.07 of the Second Supplemental Indenture, the subordination
provisions referred to herein and in Section 5.01 of the Second Supplemental Indenture (which amends in its entirety Section 12.01(a)
of the Capital Securities Indenture) and Section 5.02 of the Second Supplemental Indenture, which are governed by, and construed
in accordance with, Scots law (other than the Trustee’s own rights, duties or immunities under Article 12 of the Capital
Securities Indenture, as amended by Section 5.01 of the Second Supplemental Indenture, or otherwise), and (ii) the authorization
and execution by the Company of this Additional Tier 1 Security shall be governed by (in addition to the laws of the State of
New York relevant to execution) the jurisdiction of the Company.

 

    23 

     

    

Exhibit
B

 

Form
of Conversion Trigger Notice1

 

NOTICE
TO DTC AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

 

[Lloyds
Letterhead]

 

		To:	The Depository Trust Company

                                         55 Water Street, 25th Floor

                                         New York, NY 10041-0099

                                         Attn: Mandatory Reorganization Department

                                         Fax: +1 (212) 855-5488

                                         Email: mandatoryreorgannouncements@dtcc.com

 

	Cc:	The
Bank of New York Mellon 

        One
Canada Square 

        London
E14 5AL 

        United
Kingdom 

        
	The
Bank of New York Mellon 

        240
        Greenwich Street

        

        New
York, NY 10286 

        United
States of America 

        

	 	Attn:

                                                                                Email:

                                                                                Fax:

                                                                                Tel:
	[      ]

[      ]

[      ]

[      ]	Attn:

                                                                                Email:

                                                                                Fax:

                                                                                Tel:
	[      ]

[      ]

[      ]

[      ]  

 

Re: Lloyds
Banking Group plc $1,500,000,000 Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP:
539439 AU3, ISIN: US539439AU36) – Notice to DTC, Holders and Beneficial Owners of the Occurrence of a Trigger Event

 

This notice
is in relation to Lloyds Banking Group plc’s (the “Company”) $1,500,000,000 Fixed Rate Reset Additional
Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: 539439 AU3, ISIN: US539439AU36) issued on October 10,
2018 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March 6, 2014, between the
Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as supplemented by the
Second Supplemental Indenture, dated October 10, 2018, between the Company and the Trustee (together, the “Indenture”),
and pursuant to the prospectus dated June 2, 2016 as supplemented by the prospectus supplement dated October 2, 2018. Capitalized
terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

The Company
hereby notifies The Depository Trust Company (“DTC”), the Holders and Beneficial Owners of the Additional Tier
1 Securities that a Trigger Event has occurred with respect to the Additional Tier 1 Securities. Such Trigger Event has

 

____________________ 

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

 

    24 

     

    

occurred because
the Group’s CET1 Ratio as of [date], as published by the Company was less than 7.00%.

 

Upon the
occurrence of the Trigger Event, the terms of the Additional Tier 1 Securities provide for the Automatic Conversion of the Additional
Tier 1 Securities on the Conversion Date, which is expected to be [date], at the Conversion Price. Upon the Automatic Conversion,
all of the Company’s obligations under the Additional Tier 1 Securities shall be irrevocably and automatically released
in consideration of the Company’s issuance and delivery of Settlement Shares to the Settlement Share Depository (or other
relevant recipient). However, the terms of the Additional Tier 1 Securities provide that the Additional Tier 1 Securities shall
remain in existence until the applicable Settlement Date for the sole purpose of evidencing a right to receive Settlement Shares,
ADSs or Alternative Consideration, as applicable, from the Settlement Share Depository.

 

Accordingly,
the Company hereby instructs DTC to indicate to all participants that payments of principal and interest are no longer payable
under the Additional Tier 1 Securities as of the Conversion Date and that the Additional Tier 1 Securities will have no further
entitlement to interest or principal as of such date by making a note to that effect in its systems.

 

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

 

Should DTC,
any Holder or any Beneficial Owner of the Additional Tier 1 Securities have any inquiries, please contact either the Company at
[Telephone, Fax, Email] or [Name], the Settlement Share Depository, at [Telephone, Fax, Email] 2

 

_____________________ 

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

 

    25 

     

    

Exhibit
C

 

Form
of Trigger Event Officer’s Certificate

 

LLOYDS
BANKING GROUP PLC

 

Trigger
Event Officer’s Certificate

 

This Officer’s
Certificate is being delivered in relation to Lloyds Banking Group plc’s (the “Company”) $1,500,000,000
Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: 539439 AU3, ISIN: US539439AU36)
issued on October 10, 2018 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March
6, 2014, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as
amended and supplemented by the Second Supplemental Indenture, dated October 10, 2018, between the Company and the Trustee (together,
the “Indenture”).

 

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

 

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

 

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

 

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

 

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

 

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

 

(e)           
a Trigger Event has occurred with respect to the Additional Tier 1 Securities. Such Trigger Event has occurred because
the Group’s CET1 Ratio as of [date], as published by the Company, was less than 7.00%.

 

[Concurrently
with][Immediately following] the delivery of this Trigger Event Officer’s Certificate, the Company is delivering to The
Depository Trust Company

 

    26 

     

    

(“DTC”)
the Conversion Trigger Notice attached hereto as Exhibit A as a notice to DTC and for publication as a notice to Holders and Beneficial
Owners in the form set forth in Exhibit B to the Second Supplemental Indenture.

 

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

 

Dated: [•]

 

	 	 
	 	 	 
	 	 	Name:
	 	 	Title:

   

 

    27 

     

    

Exhibit
D

 

Form
of Settlement Shares Offer Notice3

 

NOTICE
TO DTC AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

 

[LBG
Letterhead]

 

	To:	The
Depository Trust Company 

        55
Water Street, 25th Floor 

        New
York, NY 10041-0099 

        Attn:
Mandatory Reorganization Department 

        Fax:
+1 (212) 855-5488 

        Email:
mandatoryreorgannouncements@dtcc.com 
	

        

         

	 	 	 
	Cc:	The
Bank of New York Mellon 

        One
Canada Square 

        London
E14 5AL 

        United
Kingdom  
	The
Bank of New York Mellon 

        240
Greenwich Street 

        New
York, NY 10286 

        United
States of America 

	 	Attn:

                                                                                Email:

                                                                                Fax:

                                                                                Tel:
	[      ]

[      ]

[      ]

[      ]	Attn:

                                                                                Email:

                                                                                Fax:

                                                                                Tel:
	[      ]

[      ]

[      ]

[      ]  

 

Re: Lloyds
Banking Group plc $1,500,000,000 Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP:
539439 AU3, ISIN: US539439AU36) – Notice to DTC, Holders and Beneficial Owners –Election to Conduct a Settlement Shares
Offer

 

This notice
is in relation to Lloyds Banking Group plc’s (the “Company”) $1,500,000,000 Fixed Rate Reset Additional
Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: 539439 AU3, ISIN: US539439AU36) issued on October 10,
2018 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March 6, 2014, between the
Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as supplemented by the
Second Supplemental Indenture, dated October 10, 2018, between the Company and the Trustee (together, the “Indenture”),
and pursuant to the prospectus dated June 2, 2016, as supplemented by the prospectus supplement dated October 2, 2018 (the “Prospectus”).
Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

_________________ 

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

 

    28 

     

    

The Company
hereby notifies The Depository Trust Company (“DTC”), the Holders and the Beneficial Owners of the Additional
Tier 1 Securities that it has elected that the Settlement Share Depository conduct a Settlement Shares Offer. The Settlement Shares
Offer Period will extend from the date of this notice until [date]4.

 

[In addition,
the Company hereby notifies DTC, the Holders and the Beneficial Owners of the Additional Tier 1 Securities that the Suspension
Date shall be [date]5. Accordingly, the Company hereby instructs DTC to implement a “chill” on the
clearance and settlement of the Additional Tier 1 Securities on the Suspension Date. As described in the Prospectus, Holders and
Beneficial Owners will not be able to settle the transfer of any Additional Tier 1 Securities following the Suspension Date, and
any sale or other transfer of the Additional Tier 1 Securities that a Holder or Beneficial Owner may have initiated prior to the
commencement to the Suspension Date that is scheduled to settle after the Suspension Date will be rejected by DTC and will not
be settled within DTC.] 6

 

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

 

Should DTC,
any Holder or any Beneficial Owner of the Additional Tier 1 Securities have any inquiries, please contact either the Company at
[Telephone, Fax, Email] or [Name], the Settlement Share Depository, at [Telephone, Fax, Email]7

 

_________________ 

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

 

5
Note: Insert the Suspension Date, which is the date on which DTC shall suspend all clearance and settlement of the Additional
Tier 1 Securities.

 

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

 

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

 

    29 

     

    

Exhibit
E

 

Form
of Settlement Request Notice8

 

NOTICE
TO DTC AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

 

[LBG
Letterhead]

 

	To:	The
Depository Trust Company 

        55
Water Street, 25th Floor 

        New
York, NY 10041-0099 

        Attn:
Mandatory Reorganization Department 

        Fax:
+1 (212) 855-5488 

        Email:
mandatoryreorgannouncements@dtcc.com 
	

        

         

	 	 	 
	Cc:	The
Bank of New York Mellon 

        One
Canada Square 

        London
E14 5AL 

        United
Kingdom 
	The
Bank of New York Mellon 

        240
Greenwich Street 

        New
York, NY 10286 

        United
States of America 

        

	 	Attn:

                                                                                Email:

                                                                                Fax:

                                                                                Tel:
	[      ]

[      ]

[      ]

[      ]	Attn:

                                                                                Email:

                                                                                Fax:

                                                                                Tel:
	[      ]

[      ]

[      ]

[      ]  

 

Re: Lloyds
Banking Group plc $1,500,000,000 Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP:
539439 AU3, ISIN: US539439AU36) – Notice to DTC, Holders and Beneficial Owners –Election to Conduct a Settlement
Shares Offer

 

This notice
is in relation to Lloyds Banking Group plc’s (the “Company”) $1,500,000,000 Fixed Rate Reset Additional
Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: 539439 AU3, ISIN: US539439AU36) issued on October 10,
2018 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March 6, 2014, between the
Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as supplemented by the
Second Supplemental Indenture, dated October 10, 2018, between the Company and the Trustee (together, the “Indenture”),
and pursuant to the prospectus dated June 2, 2016, as supplemented by the prospectus supplement dated October 2, 2018 (the “Prospectus”).
Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

The Company
hereby requests that Holders and Beneficial Owners of the Additional Tier 1 Securities provide notice to [Name of Settlement Share
Depository (or

 

__________________

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

 

    30 

     

    

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

 

If a Holder
or Beneficial Owner of the Additional Tier 1 Securities properly completes and delivers a Settlement Notice on or before the Notice
Cut-off Date, the Settlement Share Depository shall, in accordance with the terms of the Second Supplemental Indenture, deliver
to such Holder or Beneficial Owner the relevant Settlement Shares (rounded down to the nearest whole number of Settlement Shares),
ADSs or Alternative Consideration, as applicable, two (2) Business Days after the date on which the Settlement Notice is received
by the Settlement Share Depository .

 

If a Holder
or Beneficial Owner of the Additional Tier 1 Securities fails to properly complete and deliver a Settlement Notice before the
Notice Cut-off Date, the Settlement Share Depository shall continue to hold the relevant Settlement Shares or Alternative Consideration.
However, the relevant Securities shall be canceled on the Final Cancellation Date, which shall be [Date],10
and any Holder or Beneficial Owner delivering a Settlement Notice after the Notice Cut-off Date will have to provide evidence
of its entitlement to the relevant Settlement Shares, ADSs or Alternative Consideration, as applicable, satisfactory to the Settlement
Share Depository in its sole and absolute discretion in order to receive delivery of such Settlement Shares, ADSs or Alternative
Consideration.

 

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

 

Should DTC,
any Holder or any Beneficial Owner of the Additional Tier 1 Securities have any inquiries, please contact either the Company at
[Telephone, Fax, Email] or [Name], the [Settlement Share Depository], at [Telephone, Fax, Email].

 

 

 

____________________

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

 

10
Note: The Final Cancellation Date may be up to twelve (12) business days following the Notice Cut-off Date.

 

    31 

     

    

Exhibit
F

 

Form
of Settlement Notice11

NOTICE TO THE [SETTLEMENT SHARE DEPOSITORY AND] DTC

 

	To:	The
Depository Trust Company 

        55
Water Street, 25th Floor 

        New
York, NY 10041-0099 

        Attn:
Mandatory Reorganization Department 

        Fax:
+1 (212) 855-5488 

        Email:
mandatoryreorgannouncements@dtcc.com 
	

        

         

	 	 	 
	Cc:	The
Bank of New York Mellon 

        One
Canada Square 

        London
E14 5AL 

        United
Kingdom 
	The
Bank of New York Mellon 

        240
Greenwich Street 

        New
York, NY 10286 

        United
States of America 

	 	Attn:

                                                                                Email:

                                                                                Fax:

                                                                                Tel:
	[      ]

[      ]

[      ]

[      ]	Attn:

                                                                                Email:

                                                                                Fax:

                                                                                Tel:
	[      ]

[      ]

[      ]

[      ]  

 

Re: Lloyds
Banking Group plc $1,500,000,000 Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP:
539439 AU3, ISIN: US539439AU36) – Notice to DTC, Holders and Beneficial Owners –Election to Conduct a Settlement Shares
Offer

 

This notice
is in relation to Lloyds Banking Group plc’s (the “Company”) $1,500,000,000 Fixed Rate Reset Additional
Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: 539439 AU3, ISIN: US539439AU36) issued on October 10,
2018 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March 6, 2014, between the
Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as supplemented by the
Second Supplemental Indenture, dated October 10, 2018, between the Company and the Trustee (together, the “Indenture”),
and pursuant to the prospectus dated June 2, 2016, as supplemented by the prospectus supplement dated October 2, 2018 (the “Prospectus”).
Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

___________________ 

11
Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and
to changes in DTC and CREST (or successor clearing system) policies and procedures.

 

    32 

     

    

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

 

Surname/Company
Name:

 

First name:

 

Name to
be entered in the share register of Lloyds Banking Group plc:

 

Tradable
Amount of the Additional Tier 1 Securities held on the date hereof:

 

Securities
to be delivered:

 

☐ Settlement
Shares

 

CREST participant
ID:

 

CREST member
account (if applicable):

 

[Account
details of clearing system account]12

 

[Address
to which any Settlement Shares should be delivered]13

 

☐ American
Depositary Shares

 

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

 

Cash account
details (if applicable):

 

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

 

If you fail
to properly complete and deliver the Settlement Notice on or before the Notice Cut-off Date, the Settlement Share Depository shall
continue to hold your Settlement Shares or Alternative Consideration. However, your Additional Tier 1 Securities shall be canceled
on the Final Cancellation Date, which shall be [date],14 and you will have to provide evidence of your entitlement
to the relevant Settlement Shares, ADSs or Alternative Consideration, as applicable, satisfactory to the Settlement Share

 

__________________ 

12
Note: To be included if the Settlement Shares will be delivered through a clearing system account other than CREST.

 

13
Note: To be included if the Settlement Shares are not a participating security in CREST or any another clearing system.

 

14
Note: The Final Cancellation Date may be up to twelve (12) Business Days following the Notice Cut-off Date.

 

    33 

     

    

 

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

 

    34EX-10.1

 Exhibit 10.1 

SECOND AMENDMENT TO 

CREDIT AGREEMENT 

This Second Amendment to Credit Agreement is dated as of October 10, 2018, by and among DSW Inc., an Ohio corporation (the “Lead
Borrower”), the Guarantors party hereto, PNC Bank, National Association (“PNC Bank”) and the other Lenders party hereto, and PNC Bank, in its capacity as administrative agent for the Lenders (hereinafter referred to in such
capacity as the “Administrative Agent”) (the “Second Amendment”). 
 W I T N
E S S E T H: 
 WHEREAS, the Lead Borrower, the Designated Borrowers from time to time party
thereto, the Guarantors from time to time party thereto, the Lenders from time to time party thereto and the Administrative Agent have entered into that certain Credit Agreement, dated as of August 25, 2017 (as amended by that certain First
Amendment to Credit Agreement, dated as of January 30, 2018, by and among the Lead Borrower, the Lenders party thereto and the Administrative Agent and as may be further amended, restated, modified or supplemented from time to time (including,
without limitation, by this Second Amendment), the “Credit Agreement”); 
 WHEREAS, the Lead Borrower, through certain of
its Subsidiaries and Joint Ventures, intends to consummate the Camuto Transactions pursuant the Camuto Transaction Documents, as each such term is defined in Section 2 of this Second Amendment; 

WHEREAS, in addition, the Lead Borrower, on behalf of itself and the other Loan Parties hereby requests that the Revolving Credit Commitments
be increased by One Hundred Million and 00/100 Dollars ($100,000,000.00) in accordance with Section 2.9 of the Credit Agreement, such that the aggregate amount of Revolving Credit Commitments after giving effect to such increase shall be Four
Hundred Million and 00/100 Dollars ($400,000,000) following the occurrence of the Camuto Acquisition Closing (as such term is defined in Section 2 of this Second Amendment); and 

WHEREAS, in connection with the foregoing, the Lead Borrower and the other Loan Parties desire to amend certain provisions of the Credit
Agreement, and the Lenders party hereto and the Administrative Agent shall permit such amendments pursuant to the terms and conditions set forth herein. 

NOW, THEREFORE, in consideration of the premises contained herein and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows: 
 1. All capitalized terms used herein
which are defined in the Credit Agreement shall have the same meanings herein as in the Credit Agreement unless the context clearly indicates otherwise. 

2. Effective as of the Effective Date 1 (as defined below), the Credit Agreement is amended as follows: 

 

 (A) Section 1.1 is hereby amended by inserting the following definitions in their
appropriate alphabetical order: 
 “Article II JV means Article II JV, LLC, a Delaware limited liability company.

 BC/VC means BC/VC Ventures LLC, a Delaware limited liability company. 

Beneficial Ownership Regulation means 31 C.F.R. § 1010.230. 

Benefit Plan means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I
of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975
of the Code) the assets of any such “employee benefit plan” or “plan”. 
 Camuto Acquisition means
the acquisition by the Lead Borrower, directly or through one or more of its Subsidiaries, of all of the outstanding membership interests of CG Opco LLC, a Delaware limited liability company, Camuto Overseas Holding Subsidiary, LLC, an Ohio limited
liability company, and CCI Opco LLC, a Delaware limited liability company, and all related transactions pursuant to the Camuto Acquisition Agreement and the related Camuto Transaction Documents. 

Camuto Acquisition Agreement has the meaning given to such term in the definition of Camuto Transaction Documents. 

Camuto Acquisition Closing means the “Closing” (as defined in the Camuto Acquisition Agreement). 

Camuto Castillo means Camuto Castillo LLC, a Delaware limited liability company. 

Camuto Entities means, collectively, Camuto Group LLC, a Delaware limited liability company, Camuto Consulting Inc, a
Connecticut corporation,. and any Person that is a Subsidiary thereof immediately prior to the Camuto Acquisition Closing (regardless of whether such Person subsequently ceases to be a Subsidiary thereof as a result of the Camuto Transactions or
otherwise). For the avoidance of doubt, each of Camuto LLC, an Ohio limited liability company, CCI Operations LLC, an Ohio limited liability company, Camuto Overseas Holding Subsidiary, 

  
 - 2 - 

 
LLC, an Ohio limited liability company, Camuto IPCo, LLC, a Delaware limited liability company, Chaus IPCo, LLC, a Delaware limited liability company, Vincent Camuto LLC, a Connecticut limited
liability company, Sole Society Group, Inc., a Delaware corporation, VCJS LLC, a Connecticut limited liability company, VCS Group LLC, a Delaware limited liability company, VCRK Holdings LLC, a Delaware limited liability company, VM Retail Ventures
LLC, a Delaware limited liability company, Hot on Time LLC, a Connecticut limited liability company, VC Line Building Services LLC, a Connecticut limited liability company, VC Footwear LLC, a Connecticut limited liability company, Bernard Chaus
Inc., a New York corporation, Camuto Overseas Holdings LLC, a Delaware limited liability company, the Article II JV, BC/VC and Camuto Castillo shall constitute a Camuto Entity. 

Camuto Transaction Documents means (i) that certain Securities Purchase Agreement, dated as of October 10,
2018, by and among DSW Shoe Warehouse, Inc., a Missouri corporation, and IPCo JV, as buyers, Camuto Group LLC, a Delaware limited liability company, and Camuto Consulting Inc., a Connecticut corporation, as sellers, the Camuto Owners (as defined
therein), Clear Thinking Group LLC, in the person of Stuart H. Kessler, as sellers’ representative, the Lead Borrower and Authentic Brands Group LLC (as amended, restated, modified or supplemented from time to time, together with all schedules
and exhibits with respect thereto, the “Camuto Acquisition Agreement”), (ii) that certain Limited Liability Company Agreement of IPCo JV, dated on or prior to the date on which the Camuto Acquisition Closing occurs (as amended,
restated, modified or supplemented from time to time, together with all schedules and exhibits with respect thereto, the “IPCo JV LLC Agreement”) and (iii) the related agreements, instruments and other documents executed in
connection with the foregoing. 
 Camuto Transactions means, collectively, the transactions contemplated by the Camuto
Transaction Documents, including, without limitation, the Camuto Acquisition and the IPCo JV Investments. 
 Excluded
Domestic Subsidiary means any Subsidiary of any Loan Party that is a Domestic Person if the execution of a Guaranty Agreement and/or Guarantor Joinder would cause material adverse tax consequences to any Loan Party or any Affiliate of a Loan
Party (pursuant to Section 956 of the Internal Revenue Code and the United States Income Tax Regulations promulgated thereunder, or otherwise) as demonstrated to the reasonable satisfaction of the Administrative Agent. 

  
 - 3 - 

 Factoring Agreements means receivables purchase or factoring
agreements entered into by one or more Camuto Entities and The CIT Group/Commercial Services, Inc. or other factor, as such agreements may be amended, modified, supplemented, restated or replaced from time to time; provided that, other than
pursuant to an unsecured guaranty by the Lead Borrower or any of its Subsidiaries of the obligations of one or more Camuto Entities thereunder, none of the Lead Borrower or any Subsidiary thereof (other than any Camuto Entity) shall become party to
any such agreement pursuant to any such agreement, amendment, modification, supplement, restatement or replacement. 

IPCo JV means ABG-Camuto, LLC, a Delaware limited liability company. 

IPCo JV Investments means (i) the acquisition, by the Lead Borrower, directly or through one or more of its
Subsidiaries, of 40% of the outstanding membership interests of the IPCo JV, (ii) the acquisition by the IPCo JV, directly or through one or more of its Subsidiaries, of all of the outstanding membership interests of CCI IPCo LLC, a Delaware
limited liability company, (iii) the acquisition by the IPCo JV, directly or through one or more of its Subsidiaries, of 50% of the outstanding membership interests of BCI LLC, a Delaware limited liability company, and (iv) the acquisition
by the IPCo JV, directly or through one or more of its Subsidiaries, of certain other assets of Camuto Group LLC, a Delaware limited liability company, Camuto Consulting Inc., a Connecticut corporation, and their respective subsidiaries, and all
related transactions pursuant to the Camuto Transaction Documents. 

IPCo JV LLC Agreement has the meaning given to such term in the definition of Camuto Transaction Documents. 

PTE means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be
amended from time to time.” 
 (B) Section 1.1 is hereby amended by deleting the following definitions in their entirety and in
their stead inserting the following: 
 “Acquisition Period means a period of four consecutive fiscal quarters of
the Lead Borrower beginning with a fiscal quarter during which (i) the Lead Borrower or one of its Subsidiaries consummates a Permitted Acquisition for which the aggregate Consideration payable exceeds the Dollar Equivalent of One Hundred
Million and 00/100 Dollars ($100,000,000.00) or (ii) the 

  
 - 4 - 

 
Camuto Acquisition Closing occurs, and including such fiscal quarter and the immediately three succeeding fiscal quarters. The Lead Borrower may elect to designate in writing to the
Administrative Agent the commencement of an Acquisition Period (which election shall be made prior to the last day of the fiscal quarter in which the relevant Permitted Acquisition is consummated or the Camuto Acquisition Closing occurs, as
applicable), and only one Acquisition Period shall be designated during the term of this Agreement. 
 Consolidated
EBITDAR means, for any period of determination, without duplication, consolidated net income plus (i) the following (to the extent deducted from such calculation of consolidated net income): depreciation, amortization, non-cash expenses related to stock based compensation, other non-cash charges, non-cash expenses, or
non-cash losses to net income (provided, however that cash payments made in such period or in any future period in respect of such non-cash charges, expenses or losses
shall be subtracted from consolidated net income in calculating Consolidated EBITDAR), interest expense, income tax expense and Consolidated Rental Expense, transaction expenses incurred in connection with the Camuto Transactions and Permitted
Acquisitions in an aggregate cumulative amount for the balance of the term of this Agreement not greater than $40,000,000, minus (ii) non-cash credits or non-cash
gains (to the extent included in such calculation of consolidated net income), in each case determined and consolidated for the Lead Borrower and its Subsidiaries in accordance with GAAP; provided that the foregoing shall exclude the income (or
deficit) of any Person (other than a Subsidiary) in which the Lead Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Lead Borrower or such Subsidiary in the form of
dividends or similar distributions. For purposes of calculating Consolidated EBITDAR, (a) with respect to a business acquired by the Loan Parties pursuant to a Permitted Acquisition or the Camuto Transactions, Consolidated EBITDAR shall be
calculated on a pro forma basis, using historical numbers, in accordance with GAAP as if the Permitted Acquisition or the Camuto Transactions, as applicable, had been consummated at the beginning of such period (provided it is deemed that $0.00
shall be attributed to Consolidated EBITDAR in accordance with this clause (a) with respect to the Camuto Transactions for any period ending on or prior to the date on which the Camuto Acquisition Closing occurs), and (b) with respect to a
business liquidated, sold or disposed of by the Loan Parties pursuant to Section 7.2.7 [Dispositions of Assets or Subsidiaries], Consolidated EBITDAR shall be calculated on a pro forma basis, using historical numbers, in accordance with
GAAP as if such liquidation, sale or disposition had been consummated at the beginning of such period. 

  
 - 5 - 

 Domestic Subsidiary means any Subsidiary of any Loan Party that is a
Domestic Person (other than any Excluded Domestic Subsidiary). 
 Foreign Subsidiary means (i) any
Subsidiary of the Lead Borrower that is not a Domestic Person and (ii) any Excluded Domestic Subsidiary. 

Subsidiary of any Person at any time means any corporation, trust, partnership, limited liability company or other
business entity (i) of which more than fifty percent (50%) of the outstanding voting securities or other interests normally entitled to vote for the election of one or more directors or trustees (regardless of any contingency which does or may
suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s Subsidiaries, or (ii) which is controlled or capable of being controlled by such Person or one or more of such
Person’s Subsidiaries. Notwithstanding the foregoing or anything herein to the contrary, none of the Article II JV, BC/VC, Camuto Castillo, the IPCo JV and their respective Subsidiaries shall constitute a Subsidiary of the Lead Borrower or any
Subsidiary of the Lead Borrower for purposes of this Agreement, but shall each be considered a Joint Venture for purposes hereof.” 

(C) The definition of Permitted Liens set forth in Section 1.1 is hereby amended to (a) delete the reference to
“and” at the end of clause (xii) thereof, (b) re-number the existing clause (xiii) thereof as clause (xvi) thereof and (c) add the following new clauses (xiii), (xiv) and (xv),
immediately following clause (xii): 
 “(xiii) Liens arising under any Factoring Agreement against accounts receivable
and other property upon which Liens are customarily granted in connection with the financing or securitization of accounts receivable; provided that such Liens do not extend to any assets other than those of the Camuto Entities; 

(xiv) Liens on cash collateral or backstop letters of credit securing letters of credit issued for the account of one or more
Camuto Entities to the extent such letters of credit were outstanding as of the Camuto Acquisition Closing; 

  
 - 6 - 

 (xv) Liens on property acquired pursuant to the Camuto Transactions or any
Permitted Acquisition, or on property of a Subsidiary of the Lead Borrower in existence at the time such Subsidiary is acquired pursuant to the Camuto Transactions or a Permitted Acquisition so long as such Liens (x) are not incurred in
connection with, or in contemplation or anticipation of, such acquisition, (y) do not extend to any categories of property other than those categories of property subject to such Liens at the time of the Camuto Acquisition Closing or the time
such property or Subsidiary is acquired, as applicable, and (z) secure only those obligations which they secure at the time of the Camuto Acquisition Closing or the time such property or Subsidiary is acquired, as applicable (as such
obligations may be amended, supplemented, modified or restated from time to time as permitted hereunder); and” 
 (D) The following new
Section 3.6 is hereby added thereto, immediately following Section 3.5: 
 “3.6 Successor Euro-Rate Index. 

(i) If the Administrative Agent determines (which determination shall be final and conclusive, absent manifest error) that
either (a) (i) the circumstances set forth in Section 3.4.1 [Unascertainable] have arisen and are unlikely to be temporary, or (ii) the circumstances set forth in Section 3.4.1 [Unascertainable] have not arisen but the applicable
supervisor or administrator (if any) of the Euro-Rate or an Official Body having jurisdiction over the Administrative Agent has made a public statement identifying the specific date after which the Euro-Rate shall no longer be used for determining
interest rates for loans (either such date, a “Euro-Rate Termination Date”), or (b) a rate other than the Euro-Rate has become a widely recognized benchmark rate for newly originated syndicated loans in the U.S. market, then
the Administrative Agent may (in consultation with the Lead Borrower) choose a replacement index for the Euro-Rate and make adjustments to applicable margins and related amendments to this Agreement as referred to below such that, to the extent
practicable, the all-in interest rate based on the replacement index will be substantially equivalent to the all-in Euro-Rate-based interest rate in
effect prior to its replacement. 
 (ii) The Administrative Agent and the Borrowers shall enter into an amendment to this
Agreement to reflect the replacement index, the adjusted margins and such other related amendments as may be appropriate for the implementation and administration of the replacement index-based rate. Notwithstanding anything to the contrary in this
Agreement or the other Loan Documents (including, without limitation, Section 10.1 

  
 - 7 - 

 
[Modifications, Amendments or Waivers], such amendment shall become effective without any further action or consent of any other party to this Agreement at 5:00 p.m. on the fifth (5th) Business Day after the date a draft of the amendment is provided to the Lenders, unless the Administrative Agent receives, on or before such fifth
(5th) Business Day, a written notice from the Required Lenders stating that such Lenders object to such amendment. 

(iii) Selection of the replacement index, adjustments to the applicable margins, and amendments to this Agreement (i) will
be determined with due consideration to the then-current market practices for determining and implementing a rate of interest for newly originated syndicated loans in the United States and loans converted from a Euro-Rate-based rate to a replacement
index-based rate, and (ii) may also reflect adjustments to account for (x) the effects of the transition from the Euro-Rate to the replacement index and (y) yield- or risk-based differences between the Euro-Rate and the replacement
index. 
 (iv) Until an amendment reflecting a new replacement index in accordance with this Section 3.6 [Successor
Euro-Rate Index] is effective, each advance, conversion and renewal of a Loan under the Euro-Rate Option will continue to bear interest with reference to the Euro-Rate; provided however, that if the Administrative Agent determines
(which determination shall be final and conclusive, absent manifest error) that a Euro-Rate Termination Date has occurred, then following the Euro-Rate Termination Date, all Loans as to which the Euro-Rate Option would otherwise apply shall
automatically be converted to the Base Rate Option (and, in the case of Loans in any Optional Currency, such Loans shall be redenominated into Loans in Dollars at the Base Rate Option) until such time as an amendment reflecting a replacement index
and related matters as described above is implemented. 
 (v) Notwithstanding anything to the contrary contained herein, if
at any time the replacement index is less than zero, at such times, such index shall be deemed to be zero for purposes of this Agreement.” 

(E) Section 6.2 is hereby amended to delete the reference in clause (v) thereof to “the USA Patriot Act and the AML
Legislation”, and in its stead insert a reference to “the USA Patriot Act, the AML Legislation and, solely to the extent applicable to the Designated Borrower (without any exemption or exception therefrom being applicable to the Designated
Borrower), the Beneficial Ownership Regulation”. 

  
 - 8 - 

 (F) Section 7.1.7 is hereby amended to add the phrase “, the Camuto
Transactions” immediately following the phrase “Capital Expenditures” contained therein. 
 (G) Section 7.2.1 is hereby
amended to (a) delete the reference to “and” at the end of clause (xi) thereof, (b) re-number the existing clause (xii) thereof as clause (xiv) thereof, and (c) add the
following new clauses (xii) and (xiii), immediately following clause (xi): 
 “(xii) letters of credit issued for
the account of one or more Camuto Entities to the extent such letters of credit were outstanding as of the Camuto Acquisition Closing; 

(xiii) (a) Indebtedness of a Subsidiary of the Lead Borrower acquired pursuant to the Camuto Transactions or a Permitted
Acquisition so long as such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, the Camuto Transactions or any such Permitted Acquisition and (b) unsecured Indebtedness of the Lead Borrower or any
Subsidiary thereof in respect of any earnout obligation or similar deferred or contingent obligation of any Loan Party or any Subsidiary incurred or created in connection with the Camuto Transactions or any Permitted Acquisition; and” 

(H) Section 7.2.3 is hereby amended to (a) delete the reference to “and” at the end of clause (ii) thereof and
replace it with a “,”, (b) delete the reference to “.” at the end of clause (iii) thereof and in its stead insert a reference to “;”, and (c) add the following new clauses (iv), (v) and (vi) to the end
thereof, immediately following clause (iii): 
 “(iv) Contingent Obligations arising with respect to indemnification
obligations in favor of sellers in connection with the Camuto Transactions or Permitted Acquisitions; (v) guaranties by the Lead Borrower or any Subsidiary thereof of performance or other obligations (other than Indebtedness) of the Lead
Borrower, any Subsidiary thereof or any Joint Venture to the extent such obligations are not prohibited hereunder; and (vi) guaranties by any Loan Party or any Subsidiary thereof of Indebtedness of any Subsidiary that is not a Loan Party or any
Joint Venture in an aggregate amount of such guarantees under this subsection (vi) not to exceed Twenty-Five Million and 00/100 Dollars ($25,000,000.00) at any one time.” 

(I) Section 7.2.4 is hereby amended to delete clause (iv) thereof in its entirety and in its stead insert the following: 

“(iv) transactions permitted by Section 7.2.6 [Liquidations, Mergers, Consolidations, Acquisitions] (including,
without limitation, loans, advances and investments in Foreign Subsidiaries and Joint Ventures held by any Person acquired pursuant to the Camuto Transactions or a Permitted Acquisition immediately prior to the Camuto Acquisition Closing or the
consummation of such Permitted Acquisition, as applicable);” 

  
 - 9 - 

 (J) Section 7.2.4 is hereby amended to (a) delete the reference to “and”
at the end of clause (x) thereof, (b) delete the reference to “.” at the end of clause (xi) thereof and in its stead insert a reference to “;”, and (c) add the following new clauses (xii) and (xiii) to the end
thereof, immediately following clause (xi): 
 “(xii) the IPCo JV Investments and investments in Article II JV, BC/VC,
Camuto Castillo and their respective Subsidiaries in connection with the Camuto Transactions; and 
 (xiii) loans by the Lead
Borrower or any of its Subsidiaries to one or more Camuto Entities (such loans, “Interim Loans”) in an aggregate amount not to exceed Fifteen Million and 00/100 Dollars ($15,000,000.00) at any time outstanding; provided that
no Interim Loan permitted under this subsection may remain outstanding following the earlier of (a) the Camuto Acquisition Closing and (b) December 3, 2018; provided further that the termination of the foregoing
permission in respect of Interim Loans shall not limit the ability of the Lead Borrower or any of its Subsidiaries from making loans to any Camuto Entity acquired pursuant to the Camuto Transactions that are otherwise permitted by
Section 7.2.4.” 
 (K) Section 7.2.5 is hereby amended to (a) delete the reference to “and” at the end of
clause (i) thereof, (b) delete the reference to “.” at the end of clause (ii) thereof and in its stead insert a reference to “,”, and (c) add the following new clause (iii) to the end thereof, immediately
following clause (ii): 
 “(iii) Subsidiaries of any Loan Party may declare, pay and make (as applicable) any dividends
or distributions to any holder of its equity interests so long as, if such Subsidiary is not wholly-owned, the Lead Borrower or the applicable Subsidiary thereof receives at least its pro rata share of such dividend or distribution.” 

(L) Section 7.2.6 is hereby amended to (a) delete the reference in sub-clause (A) of
clause (iv) thereof to “Domestic Person”, and in its stead insert a reference to “Domestic Person (other than any Excluded Domestic Subsidiary)”, (b) delete the “.” at the end of clause (iv) thereof and in its
stead insert a reference to “; and”, and (c) add the following new clause (v) to the end thereof, immediately following clause (iv): 

“(v) the Lead Borrower and its Subsidiaries may execute and deliver the Camuto Transaction Documents and consummate the
Camuto Transactions; provided that, for the avoidance of doubt, nothing herein will affect the Loan Parties’ obligations to deliver Guarantor Joinders and related items following the Camuto Transactions pursuant to
Section 10.14.” 

  
 - 10 - 

 (M) Section 7.2.7 is hereby amended to (a) delete the reference to “and”
at the end of clause (vi) thereof, (b) delete the reference to “above” in clause (vii) thereof and in its stead insert a reference to “above or below”, (c) delete the reference to “.” at the end of clause
(vii) thereof and in its stead insert a reference to “; and”, and (d) add the following new clause (viii) to the end thereof, immediately following clause (vii): 

“(viii) dispositions of receivables pursuant to any Factoring Agreement.” 

(N) Section 7.2.8 is hereby amended to delete clause (e) thereof in its entirety and in its stead insert the following: 

“(e) transactions permitted by Section 7.2.6.” 

(O) Section 7.2.10 is hereby deleted in its entirety and in its stead is inserted the following: 

“7.2.10 Continuation of or Change in Business. Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, engage in any business other than (i) operation of designer and name brand shoe stores and related accessories or operation of licensed shoe departments substantially as conducted and operated by such Loan Party or Subsidiary
during the present fiscal year, (ii) marketing, designing, sourcing and distributing footwear, handbags, accessories and apparel and licensing related intellectual property and (iii) any other business reasonably related or complementary
thereto, and such Loan Party or Subsidiary shall not permit any fundamental change in such business.” 
 (P) Section 7.2.15 is
hereby deleted in its entirety and in its stead is inserted the following: 
 “7.2.15 Limitation on Negative
Pledges. Each of the Loan Parties shall not, and shall not permit any Subsidiary, to enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of such Loan Party or any of its Subsidiaries to create,
incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, to secure the Obligations, other than (a) this Agreement and the other Loan Documents (b) with respect to a Subsidiary
imposed pursuant to an agreement that has been entered into in connection with a disposition of assets permitted under this Agreement of all or substantially all of the equity interests or assets of such Subsidiary, (c) any agreements governing
Purchase Money Security Interests 

  
 - 11 - 

 
or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby), (d) customary provisions
restricting assignment of any licensing agreement (in which a Loan Party or its Subsidiaries are the licensee) with respect to a contract entered into by a Loan Party or its Subsidiaries in the ordinary course of business, (e) customary
provisions restricting granting Liens on, or subletting, sublicensing or assignment of, any intellectual property license (or any inventory subject thereto) or any lease governing any leasehold interests of a Loan Party and its Subsidiaries,
(f) customary provisions restricting the transfer of, or the grant of Liens on, any equity interest held in a Joint Venture or any Subsidiary that is not wholly-owned, directly or indirectly, by the Lead Borrower, (g) any agreement of any
Subsidiary acquired in connection with the Camuto Transactions or any Permitted Acquisition so long as agreements are not entered into in connection with, or in contemplation or anticipation of, the Camuto Transactions or any such Permitted
Acquisition and (h) the Factoring Agreements (in the case of this clause (h), so long as any such prohibition or limitation shall only apply against accounts receivable and other property customarily subject to such prohibitions or limitations
in connection with the financing or securitization of accounts receivable).” 
 (Q) The following new Section 9.1.12 is hereby
added thereto, immediately following Section 9.1.11: 
 “9.1.12 Certain ERISA Matters 

(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and
(y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the
Borrowers or any other Loan Party, that at least one of the following is and will be true: 
 (i) such Lender is not using
“plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of
Credit, the Commitments or this Agreement, 
 (ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain

  
 - 12 - 

 
transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled
separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement, 
 (iii) (A) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer
and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the
requirements of sub-sections (b) through (g) of Part I of PTE 84¬14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or 

(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole
discretion, and such Lender. 
 (b) In addition, unless either (1) sub-clause
(i) in the immediately preceding clause (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in
the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such
Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that the Administrative Agent is not a fiduciary with respect
to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement (including in connection with the reservation or
exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).” 

  
 - 13 - 

 (R) Subsection (b) of Section 10.13 is hereby amended by deleting such subsection
in its entirety and in its stead inserting the following: 
 “(b) Foreign Subsidiaries shall not guarantee any Obligations of any
Domestic Loan Party (and for the avoidance of doubt, any Guaranty delivered by an Excluded Domestic Subsidiary to the extent that such Guaranty is not required by Section 7.2.9 shall be null and void ab initio).” 

(S) Section 10.14 is hereby amended by (a) deleting the each reference therein to “ten (10) Business Days” and in its
stead, in each case, inserting a reference to “thirty (30) days” and (b) adding the following at the end of the second sentence prior to the “.”: “provided that, notwithstanding the foregoing and solely in respect
of the formation of any Subsidiary to consummate the Camuto Transactions, such Subsidiary shall not be required to deliver such Guarantor Joinder and all related documents until thirty (30) days following the Camuto Acquisition Closing”.

 (T) Exhibit 7.2.6 [Acquisition Compliance Certificate] is hereby deleted in its entirety and in its stead is inserted the
Exhibit 7.2.6 [Acquisition Compliance Certificate] attached hereto as Exhibit B. 
 (U) Exhibit 7.3.3 [Quarterly
Compliance Certificate] is hereby deleted in its entirety and in its stead is inserted the Exhibit 7.3.3 [Quarterly Compliance Certificate] attached hereto as Exhibit C. 

3. The provisions of Section 2 of this Second Amendment shall become effective on the date that the Administrative Agent has reasonably
determined that it has received, or the Required Lenders have otherwise waived the requirement for the Administrative Agent to receive, each of the following, in each case in form and substance reasonably satisfactory to the Administrative Agent
(the date of such effectiveness, the “Effective Date 1”): 
 (i) this Second Amendment, duly executed by the
Loan Parties, the Administrative Agent and the Required Lenders (which includes each Increasing Lender and New Lender (if applicable) required to execute this Second Amendment pursuant to Section 2.9 of the Credit Agreement); 

(ii) true and correct copies of the Camuto Acquisition Agreement as in effect on the Effective Date 1 and the form of the IPCo
JV LLC Agreement currently agreed between the expected parties thereto on the Effective Date 1; 
 (iii) a compliance
certificate, dated as of the Effective Date 1, which shall demonstrate that the Loan Parties shall be in pro forma compliance with the Leverage Ratio after giving effect to the Camuto Transactions (including in such computation Indebtedness or
other liabilities projected to be assumed or incurred in connection with the Camuto Transactions); 

  
 - 14 - 

 (iv) a certificate of the Lead Borrower signed by an Authorized Officer,
dated as of the Effective Date 1, stating that (a) all representations and warranties of the Loan Parties set forth in the Credit Agreement and each other Loan Document are true and correct in all material respects (without duplication of any
materiality qualifier contained therein) (except to the extent any representation or warranty is stated to relate solely to an earlier date, in which case, such representation and warranty shall have been true and correct on such earlier date), (b)
the Loan Parties are in compliance with each of the covenants and conditions under the Credit Agreement and the other Loan Documents in all material respects (without duplication of any materiality qualifier contained therein), (c) no Event of
Default or Potential Default exists, and (d) no Material Adverse Change has occurred since the date of the last audited financial statements of the Lead Borrower delivered to the Administrative Agent; 

(v) all documentation and other information requested by any Lender to the extent required by bank regulatory authorities under
applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA Patriot Act to the extent requested at least five Business Days prior to the date of this Second Amendment; and 

(vi) payment of all reasonable fees and expenses owed to the Administrative Agent and its counsel and the Lenders in connection
with this Second Amendment and the Credit Agreement as of the Effective Date 1 to the extent an invoice in respect thereof has been delivered to the Lead Borrower at least one Business Day prior to the date of this Second Amendment (including,
without limitation, any such fees and expenses payable pursuant to any separate fee letter executed and delivered by the Administrative Agent and acknowledged and agreed to by the Lead Borrower in connection herewith). 

4. Effective as of the Effective Date 2 (as defined below), the Credit Agreement is amended as follows: 

(A) Part 1 of Schedule 1.1(B) [Commitments of Lenders, Etc.] is hereby deleted in its entirety and in its stead is inserted Part 1 of
Schedule 1.1(B) [Commitments of Lenders, Etc.] attached hereto as Exhibit A. 

  
 - 15 - 

 5. The provisions of Section 4 of this Second Amendment (the “Accordion
Provisions”) shall become effective on the date that the following conditions have been satisfied: (A) the conditions set forth in Section 3 have been satisfied and the Effective Date 1 has occurred, (B) there shall exist no
Event of Default or Potential Default and (C) the Administrative Agent has reasonably determined that it has received, or the Required Lenders have otherwise waived the requirement for the Administrative Agent to receive, each of the
following, in each case in form and substance reasonably satisfactory to the Administrative Agent (the date of such effectiveness, the “Effective Date 2”); provided that the Accordion Provisions shall not become effective
unless the Effective Date 2 occurs on or prior to December 3, 2018: 
 (i) restated and/or new Notes, as applicable,
each dated as of the Effective Date 2, duly executed by the Lead Borrower in favor of each Lender with an increasing or new Revolving Credit Commitment; 

(ii) a certificate signed by the Secretary or an Assistant Secretary or other Authorized Officer of each of the Loan Parties,
each dated as of the Effective Date 2, certifying as appropriate as to: (a) true copies of all corporate or other organizational action taken by each Loan Party relative to this Second Amendment and any other Loan Documents to be executed and
delivered by such Loan Party in connection herewith; (b) the names of the Authorized Officers authorized to sign the Second Amendment and such other Loan Documents and their true signatures; and (c) copies of its organizational documents
in effect certified (to the extent applicable) by the appropriate state official where such documents are filed in a state office (or in the alternative if applicable, certifying that such organizational documents have not been amended since the
Closing Date) together with certificates from the appropriate state officials as to the continued existence and good standing of each Loan Party in each state where organized; 

(iii) certificates from the appropriate state officials as to the continued existence and good standing of each Loan Party in
each state where organized; 
 (iv) legal opinion, dated as of the Effective Date 2, with respect to the Loan Parties from
Vorys, Sater, Seymour and Pease LLP; 
 (v) UCC lien searches with respect to each Loan Party in its jurisdiction of
organization (and if necessary based on such results, evidence that all necessary termination statements in connection with all Liens (other than Permitted Liens) have been filed or satisfactory arrangements have been made for such filing); 

  
 - 16 - 

 (vi) evidence that the Camuto Acquisition Closing has occurred pursuant to
the terms and conditions of the Camuto Transaction Documents, as heretofore reviewed by the Administrative Agent; and 

(vii) payment of all reasonable fees and expenses owed to the Administrative Agent and its counsel and the Lenders in
connection with this Second Amendment and the Credit Agreement as of the Effective Date 2 to the extent an invoice in respect thereof has been delivered to the Lead Borrower at least one Business Day prior to the Effective Date 2 (including, without
limitation, any such fees and expenses payable pursuant to any separate fee letter executed and delivered by the Administrative Agent and acknowledged and agreed to by the Lead Borrower in connection herewith). 

6. The Lead Borrower hereby reconfirms and reaffirms all representations and warranties made by the Lead Borrower and the other Loan Parties
pursuant to the terms and conditions of the Credit Agreement and the other Loan Documents as of the Effective Date 1 and the Effective Date 2 (except to the extent any representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been true and correct on such earlier date), except as such representations and warranties may have heretofore been amended, modified or waived in writing in accordance with the Credit Agreement.

 7. The Lead Borrower hereby represents and warrants to the Lenders and the Administrative Agent as of the Effective Date 1 and the
Effective Date 2 that (i) it has the legal power and authority to execute and deliver this Second Amendment, (ii) the officer of the Lead Borrower executing this Second Amendment has been duly authorized to execute and deliver the same and
bind the Lead Borrower with respect to the provisions hereof, (iii) the execution and delivery hereof by the Lead Borrower and the performance and observance by the Lead Borrower and the other Loan Parties of the provisions hereof and of the
Credit Agreement and all documents executed or to be executed herewith or therewith, do not violate or conflict with (A) the organizational agreements of any Loan Party or (B) any Law applicable to such Loan Party or result in a breach of
any provision of or constitute a default under any other agreement, instrument or document binding upon or enforceable against such Loan Party, in each case under clause (B) except as would not result in a Material Adverse Change, and
(iv) this Second Amendment and the documents executed or to be executed by any Loan Party in connection herewith or therewith constitute valid and binding obligations of such Loan Party in every respect, enforceable in accordance with their
respective terms, except to the extent that enforceability of thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally or limiting the right
of specific performance or by general principles of equity. 
 8. The Lead Borrower represents and warrants that as of the Effective Date 1
and the Effective Date 2, after giving effect to the amendments set forth in this Second Amendment (i) no Event of Default exists under the Credit Agreement, nor will any occur as a result of the execution and delivery of this Second Amendment
or the performance or observance of any 

  
 - 17 - 

 
provision hereof, and (ii) the schedules attached to and made a part of the Credit Agreement, are true and correct in all material respects as of the date hereof, except as such schedules
may have heretofore been amended or modified in writing in accordance with the Credit Agreement. 
 9. Each reference to the Credit
Agreement that is made in the Credit Agreement or any other document executed or to be executed in connection therewith shall hereafter be construed as a reference to the Credit Agreement as amended hereby. 

10. The agreements contained in this Second Amendment are limited to the specific agreements made herein. Except as amended hereby, all of the
terms and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect. This Second Amendment amends the Credit Agreement and is not a novation thereof. 

11. This Second Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of
which, when so executed, shall be deemed to be an original, but all such counterparts shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page of this Second Amendment by e-mail or telecopy shall be effective as delivery of a manually executed counterpart of this Second Amendment. 

12. This Second Amendment shall be deemed to be a contract under the Laws of the State of Ohio without regard to its conflict of laws
principles. Each Loan Party hereby consents to the exclusive jurisdiction of the courts of the State of Ohio sitting in Franklin County, Ohio and of the United States District Court for the Southern District of Ohio, and any appellate court from any
thereof, with respect to any suit arising out of or mentioning this Second Amendment. 
 [INTENTIONALLY LEFT BLANK] 

  
 - 18 - 

 IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have caused this
Second Amendment to be duly executed by their duly authorized officers the day and year first above written. 
  

			
	LEAD BORROWER:
	
	DSW Inc., an Ohio corporation,

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer

 
			
	
	GUARANTORS:
	
	810 AC LLC,
	an Ohio limited liability company

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer
	
	Brand Card Services LLC,
	an Ohio limited liability company

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer

 
			
	
	DSW Shoe Warehouse, Inc.,
	a Missouri corporation

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer

 
			
	DSW Information Technology LLC,
	an Ohio limited liability company

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer

 
			
	
	DSW MS LLC,
	an Ohio limited liability company

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer

 
			
	
	Ebuys, Inc.
	a California corporation

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer

 
			
	
	DSW Leased Business Division LLC,
	an Ohio limited liability company

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer

 
			
	
	eTailDirect LLC,
	a Delaware limited liability company

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer

 [Signature Page to Second Amendment to Credit Agreement – DSW Inc.] 

 
			
	Retail Ventures Services, Inc.,
	an Ohio corporation

 
			
		
	By:	 	/s/ Jared A. Poff
	Name:	 	Jared A. Poff
	Title:	 	Senior Vice President and Chief Financial Officer

 [Lender Signature Pages Follow] 

 
			
	ADMINISTRATIVE AGENT AND LENDERS:
	
	 PNC Bank, National Association,

	as a Lender and as Administrative Agent

 
			
		
	By:	 	/s/ George M. Gevas
	Name:	 	George M. Gevas
	Title:	 	Senior Vice President

 [Signature Page to Second Amendment to Credit Agreement – DSW Inc.] 

 
			
	 Wells Fargo Bank, National Association,

as a Lender

 
			
		
	By:	 	/s/ Carl Hinrichs
	Name:	 	Carl Hinrichs
	Title:	 	Director

 [Signature Page to Second Amendment to Credit Agreement – DSW Inc.] 

 
			
	 Branch Banking and Trust Company,

as a Lender

		
	By:	 	/s/ Brian J. Blomeke
	Name:	 	Brian J. Blomeke
	Title:	 	Senior Vice President

 [Signature Page to Second Amendment to Credit Agreement – DSW Inc.] 

 
			
	 Bank of America, N.A.,
 as a
Lender

		
	By:	 	/s/ John M. Quarles, Jr.
	Name:	 	John M. Quarles, Jr.
	Title:	 	Senior Vice President

 [Signature Page to Second Amendment to Credit Agreement – DSW Inc.] 

 

 
			
	 The Huntington National Bank,

as a Lender

		
	By:	 	/s/ Dan Swanson
	Name:	 	Dan Swanson
	Title:	 	Vice President

 [Signature Page to Second Amendment to Credit Agreement – DSW Inc.] 

 

 
			
	 BMO Harris Bank, N.A.,

as a Lender

		
	By:	 	/s/ Chris Spillane
	Name:	 	Chris Spillane
	Title:	 	AVP

 [Signature Page to Second Amendment to Credit Agreement – DSW Inc.] 

 EXHIBIT A 

Part 1 of Schedule 1.1(B) - Commitments of Lenders and Addresses for Notices to Lenders 

 

							
	 	  	 Lender
	  	 Amount of 

Commitment for 
 Revolving
Credit 
 Loans
	  	 Ratable Share

	Name:	  	PNC Bank, National Association	  	$100,000,000.00	  	25.000000000%
	Address:	  	155 East Broad Street	  		  	
		  	Columbus, OH 43215	  		  	
	Attention:	  	George Gevas	  		  	
	Telephone:	  	(614) 463-7346	  		  	
	Telecopy:	  	(614) 463-6770	  		  	
				
	Name:	  	Wells Fargo Bank, National Association	  	$80,000,000.00	  	20.000000000%
	Address:	  	333 S. Grand Ave., 10th Floor	  		  	
		  	Suite 1000	  		  	
		  	Los Angeles, CA 90071	  		  	
	Attention:	  	Beatriz Duran	  		  	
	Telephone:	  	(213) 253-7368	  		  	
	Telecopy:	  	(866) 358-0924	  		  	
				
	Name:	  	Branch Banking and Trust Company	  	$80,000,000.00	  	20.000000000%
	Address:	  	8044 Montgomery Rd, Suite 700	  		  	
		  	Cincinnati, OH 45236	  		  	
	Attention:	  	Brian J. Blomeke	  		  	
	Telephone:	  	(513) 699-8074	  		  	
	Telecopy:	  	(513)791-2367	  		  	
				
	Name:	  	Bank of America, N.A.	  		  	
	Address:	  	1 Cleveland Center	  	$53,333,333.33	  	13.3333333325%
		  	1375 E 9th Street	  		  	
		  	Cleveland, OH 44114	  		  	
	Attention:	  	Gregg Bush	  		  	
	Telephone:	  	(216) 776-4832	  		  	
	Telecopy:	  	(312) 453-2053	  		  	
				
	Name:	  	The Huntington National Bank	  	$53,333,333.33	  	13.3333333325%
	Address:	  	41 S. High Street	  		  	
		  	Columbus, OH 43215	  		  	

							
	Attention:	  	Dan Swanson	  		  	
	Telephone:	  	(614) 480-3534	  		  	
	Telecopy:	  	(888) 424-9162	  		  	
	Name:	  	BMO Harris Bank, N.A.	  		  	
	Address:	  	191 Nationwide Blvd	  	$33,333,333.34	  	8.333333335%
		  	Columbus, OH 43215	  		  	
	Attention:	  	Joseph Jackson, Vice President	  		  	
	Telephone:	  	(614) 460-0692	  		  	
	Telecopy:	  	(317) 269-2169	  		  	
		  	Total	  	$400,000,000.00	  	100.000000000%

 EXHIBIT B 

[See attached] 

 EXHIBIT 7.2.6 

FORM OF 
 ACQUISITION
COMPLIANCE CERTIFICATE 

                    ,
20         
 PNC Bank, National Association, as Administrative Agent 

155 East Broad Street 
 Columbus, Ohio 43215 

Ladies and Gentlemen: 
 I refer to the Credit
Agreement, dated as of August 25, 2017, by and among DSW Inc., an Ohio corporation (the “Lead Borrower”), the Designated Borrowers party thereto, the Guarantors party thereto, the Lenders party thereto, and PNC Bank,
National Association, in its capacity as administrative agent for the Lenders (the “Administrative Agent”), as amended by that certain (i) First Amendment to Credit Agreement, dated as of January 30, 2018
(the “First Amendment”), by and among the Lead Borrower, the Lenders party thereto and the Administrative Agent and (ii) Second Amendment to Credit Agreement, dated October [9], 2018 (the “Second
Amendment”), by and among the Lead Borrower, the Guarantors party thereto, the Lenders party thereto and the Administrative Agent (as so amended by the First Amendment and the Second Amendment and as may be further amended, modified,
supplemented or restated from time to time, the “Credit Agreement”). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein with the same meanings. 

                       
      [insert name of applicable Loan Party] intends to enter into a Permitted Acquisition with
                     [enter name of the target company] pursuant to which
                     [insert name of applicable Loan Party] will
                     [provide a brief description of the transactions contemplated by such Permitted Acquisition]. This Certificate is
delivered to the Administrative Agent in accordance with Section 7.2.6 [Liquidations, Mergers, Consolidations, Acquisitions] of the Credit Agreement. I, the
                     [Insert Name of Authorized Officer] of the Lead Borrower, do hereby certify as of
                             , 20        , which
is at least five (5) days prior to any Permitted Acquisition (the “Report Date”), as follows: 
 1. The representations and
warranties of the Loan Parties contained in Section 5 [Representations and Warranties] of the Credit Agreement and in each of the other Loan Documents to which they are a party are true and correct in all material respects (unless qualified by
materiality or reference to the absence of a Material Adverse Change, in which event such representations and warranties are true and correct in all respects) on and as of the Report Date (except representations and warranties which relate solely to
an earlier date or time which representations and warranties shall be true and correct in all material respects (unless qualified by materiality or reference to the absence of a Material Adverse Change, in which event such representations and
warranties are true and correct in all respects) on and as of the specific date or times referred to in said representations and warranties). 

 2. No Event of Default or Potential Default exists on the Report Date; no Event of Default
or Potential Default has occurred or is continuing since the date of the previously delivered Compliance Certificate; no Event of Default or Potential Default shall exist immediately prior to and after giving effect to such Permitted Acquisition; no
Material Adverse Change has occurred since the date of the most recently delivered Compliance Certificate. 
 [NOTE: If any Event of Default,
Potential Default, Material Adverse Change has occurred or is continuing, set forth on an attached sheet the nature thereof and the action which the Loan Parties have taken, are taking or propose to take with respect thereto.] 

3. Maximum Leverage Ratio. After giving effect to such Permitted Acquisition (including in such computation Indebtedness or other
liabilities assumed or incurred in connection with such Permitted Acquisition and calculated if such Permitted Acquisition has been made in the applicable measurement period), the Leverage Ratio is
             to 1.0 for the period equal to four (4) consecutive fiscal quarters most recently ended. 

(A) Total Funded Debt1 of the Lead Borrower and its Subsidiaries as of the Report Date
equals $                    . 

(B) Consolidated Rental Expense of the Lead Borrower and its Subsidiaries for the period equal to the four (4) consecutive fiscal quarters
ending as of the Report Date equals $                    . 

(C) The product of (i) five (5), multiplied by (ii) item 3(B) equals
$                    . 
 (D) The
sum of item 3(A) plus item 3(C) equals $                    . 

(E) Consolidated EBITDAR2 calculated as of the Report Date for the period equal to the
four (4) consecutive fiscal quarters then ended equals $                    , and is computed as follows3: 
  

	1 	 Total Funded Debt means, as of any date of determination, the sum of all Indebtedness representing
borrowed money, including both current and long term portion thereof and guaranty obligations with respect thereto, Capital Lease Obligations and reimbursement obligations under letters of credit, in each case of the Lead Borrower on a Consolidated
Basis. 

	2 	 For purposes of calculating Consolidated EBITDAR, (a) with respect to a business acquired by the Loan
Parties pursuant to a Permitted Acquisition or the Camuto Transactions, Consolidated EBITDAR shall be calculated on a pro forma basis, using historical numbers, in accordance with GAAP as if the Permitted Acquisition or the Camuto Transactions, as
applicable, had been consummated at the beginning of such period (provided it is deemed that $0.00 shall be attributed to Consolidated EBITDAR in accordance with this clause (a) with respect to the Camuto Transactions for any period ending on
or prior to the date on which the Camuto Acquisition Closing occurs), and (b) with respect to a business liquidated, sold or disposed of by the Loan Parties pursuant to Section 7.2.7 [Dispositions of Assets or Subsidiaries], Consolidated
EBITDAR shall be calculated on a pro forma basis, using historical numbers, in accordance with GAAP as if such liquidation, sale or disposition had been consummated at the beginning of such period. 

	3 	 The following shall exclude the income (or deficit) of any Person (other than a Subsidiary) in which the Lead
Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Lead Borrower or such Subsidiary in the form of dividends or similar distributions. 

  
 - 2 - 

							
	 Component
	  	Amount	 
	 (i)
	  	net income	  	$	                     	 
	 (ii)
	  	depreciation	  	$	                     	 
	 (iii)
	  	amortization	  	$	                     	 
	 (iv)
	  	non-cash expenses related to stock based compensation	  	$	                     	 
	 (v)
	  	other non-cash charges, non-cash expenses, or non-cash losses to net income (provided, however that cash
payments made in such period or in any future period in respect of such non-cash charges, expenses or losses shall be subtracted from consolidated net income in calculating Consolidated EBITDAR)	  	$	                     	 
	 (vi)
	  	interest expense	  	$	                     	 
	 (vii)
	  	income tax expense	  	$	                     	 
	 (viii)
	  	Consolidated Rental Expense	  	$	                     	 
	 (ix)
	  	transaction expenses incurred in connection with the Camuto Transactions and Permitted Acquisitions4	  	$	                     	 
	 (x)
	  	The sum of items (i) through (ix)	  	$	                     	 
	 (xi)
	  	non-cash credits or non-cash gains to net income	  	$	                     	 
	 (xii)
	  	The difference between item (x) minus item (xi) eauals Consolidated EBITDAR	  	$	                     	 

 (F) The ratio of item 3(D) to item 3(E) equals the Leverage Ratio. 

Under Section 7.2.6(iv)(E) of the Credit Agreement, the Leverage Ratio is not permitted to be greater than the ratio of (i) 3.25 to 1.00
during all times other than an Acquisition Period and (ii) 3.50 to 1.00 during an Acquisition Period5. Therefore, the Loan Parties
                     [will/will not] be in compliance with Section 7.2.6(iv)(E) of the Credit Agreement after giving effect to such
Permitted Acquisition. 
 [INTENTIONALLY LEFT BLANK] 
  

 

	4 	 Shall not exceed $40,000,000 in the aggregate during the term of the Credit Agreement. 

	5 	 In no event shall the Leverage Ratio modification that occurs in connection with an Acquisition Period occur
more than once during the term of this Agreement. 

  
 - 3 - 

 IN WITNESS WHEREOF, and intending to be legally bound, the undersigned has executed this
Acquisition Compliance Certificate this                  day of
                    , 20        . 

 

			
	LEAD BORROWER:
	
	DSW Inc.
		
	By:	 	
                 

	Name:	 	      

	Title:	 	      

 EXHIBIT C 

[See attached] 

 EXHIBIT 7.3.3 

FORM OF 
 COMPLIANCE
CERTIFICATE 

                       
         , 20         
 PNC Bank, National Association, as
Administrative Agent 
 155 East Broad Street 
 Columbus, Ohio
43215 
 Ladies and Gentlemen: 
 I refer to
the Credit Agreement, dated as of August 25, 2017, by and among DSW Inc., an Ohio corporation (the “Lead Borrower”), the Designated Borrowers party thereto, the Guarantors party thereto, the Lenders party thereto, and PNC Bank,
National Association, in its capacity as administrative agent for the Lenders (the “Administrative Agent”), as amended by that certain (i) First Amendment to Credit Agreement, dated as of January 30, 2018 (the
“First Amendment”), by and among the Lead Borrower, the Lenders party thereto and the Administrative Agent and (ii) Second Amendment to Credit Agreement, dated as of October [9], 2018 (the “Second Amendment”),
by and among the Lead Borrower, the Guarantors party thereto, the Lenders party thereto and the Administrative Agent (as so amended by the First Amendment and the Second Amendment and as may be further amended, modified, supplemented or restated
from time to time, the “Credit Agreement”). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein with the same meanings. 

I, the
                                 [Responsible Financial Officer] of the
Lead Borrower, do hereby certify on behalf of the Loan Parties as of the                  [quarter/year] ended
                             , 20         (the
“Report Date”), as follows: 
  

	1.	 CHECK ONE: 

  

	 	        	 The annual financial statements of the Lead Borrower, consisting of an audited consolidated balance sheet as of
the end of such fiscal year, and related audited consolidated statements of income, shareholders’ equity and cash flows, being delivered to the Administrative Agent and the Lenders with this Compliance Certificate (a) are all in reasonable
detail and set forth in comparative form the financial statements as of the end of and for the preceding fiscal year, and (b) comply with the reporting requirements for such financial statements as set forth in Section 7.3.2 [Annual
Financial Statements] of the Credit Agreement 

 OR 

 

	 	        	 The quarterly financial statements of the Lead Borrower, consisting of a consolidated balance sheet as of the
end of such fiscal quarter and related consolidated statements of income and cash flows being delivered to the 

	 	
Administrative Agent and the Lenders with this Compliance Certificate (a) are all in reasonable detail and have been prepared in accordance with GAAP, consistently applied (subject to normal
year-end audit adjustments), and set forth in comparative form the respective financial statements for the corresponding date and period in the previous fiscal year, and (b) comply with the reporting
requirements for such financial statements as set forth in Section 7.3.1 [Quarterly Financial Statements] of the Credit Agreement. 

 2.
The representations and warranties of the Loan Parties contained in Article 5 [Representations and Warranties] of the Credit Agreement and in each of the other Loan Documents to which they are a party are true and correct in all material respects
(unless qualified by materiality or reference to the absence of a Material Adverse Change, in which event such representations and warranties are true and correct in all respects) on and as of the Report Date (except representations and warranties
which relate solely to an earlier date or time which representations and warranties shall be true and correct in all material respects (unless qualified by materiality or reference to the absence of a Material Adverse Change, in which event such
representations and warranties are true and correct in all respects) on and as of the specific date or times referred to in said representations and warranties). The Loan Parties are in compliance with, and since the date of the previously delivered
Compliance Certificate have performed and complied with all covenants and conditions contained in the Credit Agreement. 
 3. No Event of Default or
Potential Default exists on the Report Date; no Event of Default or Potential Default has occurred or is continuing since the date of the previously delivered Compliance Certificate; no Material Adverse Change has occurred since the date of the
previously delivered Compliance Certificate; and no event has occurred or is continuing since the date of the previously delivered Compliance Certificate that may reasonably be expected to result in a Material Adverse Change. 

[NOTE: If any Event of Default, Potential Default, Material Adverse Change or event which may reasonably be expected to
result in a Material Adverse Change has occurred or is continuing, set forth on an attached sheet the nature thereof and the action which the Loan Parties have taken, are taking or propose to take with respect thereto.] 

4. Indebtedness (Section 7.2.1(iii), Section 7.2.1(v) and Section 7.2.1(xiv)): 

(A) Indebtedness of the Loan Parties and their Subsidiaries, in the aggregate, as of the Report Date of
$                 which is in the form of Purchase Money Security Interests or Capital Leases, which is not more than the permitted maximum of Twenty Million and
00/100 Dollars ($20,000,000.00) in the aggregate at any time outstanding. 
 (B) Indebtedness of Domestic Loan Parties to Foreign
Subsidiaries which is subordinated pursuant to the Intercompany Subordination Agreement, in the aggregate, as of the Report Date of $                , which is
not more than the permitted maximum of Sixty Million and 00/100 Dollars ($60,000,000.00) in the aggregate at any time outstanding. 

  
 - 2 - 

 (C) Unsecured Indebtedness of the Loan Parties and their Subsidiaries not otherwise
permitted in Section 7.2.1 of the Credit Agreement, in the aggregate as of the Report Date of $                , which is not more than the permitted maximum
of Seventy-Five Million and 00/100 Dollars ($75,000,000.00) at any time outstanding. 
 5. Guaranties (Section 7.2.3(vi)). Guaranties by the Loan
Parties and their Subsidiaries of Indebtedness of any Subsidiary that is not a Loan Party or any Joint Venture, in the aggregate as of the Report Date of
$                , which is not more than the permitted maximum of Twenty-Five Million and 00/100 Dollars ($25,000,000.00) at any time outstanding. 

6. Liens; Lien Covenants (Clauses (xii) and (xvi) of the definition of Permitted Liens): 

(A) Proceeds secured by Liens granted in connection with securities lending transactions or reverse repurchase agreements involving United
States Treasury bonds, in the aggregate, as of the Report Date equals $                , which is not more than the permitted maximum of Ten Million and 00/100
Dollars ($10,000,000.00) at any one time outstanding. 
 (B) Obligations secured by other Liens not otherwise permitted by the definition of
Permitted Liens, in the aggregate, as of the Report Date equals $                , which is not more than the permitted maximum of Twenty Million and 00/100
Dollars ($20,000,000.00) in the aggregate at any time outstanding. 
 7. Loans and Investments (Section 7.2.4(viii), Section 7.2.4(ix) and
Section 7.2.4(x)(a)): 
 (A) Investments in the nature of seller financing or other consideration received in any disposition (including
any sale, lease, sale-leaseback, assignment or transfer) of assets or property by any Loan Party or any Subsidiary of a Loan Party, in the aggregate, as of the Report Date equals
$                , which is not more than the permitted maximum of Ten Million and 00/100 Dollars ($10,000,000.00) at any time (based on the value at the time of
acquisition thereof but reduced by payments or other realization thereon). 
 (B) Loans, advances and investments not otherwise permitted by
Section 7.2.4 of the Credit Agreement by Domestic Loan Parties in or to Foreign Subsidiaries and Joint Ventures, in the aggregate, as of the Report Date equals
$                , which is not more than the permitted maximum of Seventy-Five Million and 00/100 Dollars ($75,000,000.00) in the aggregate at any one time
outstanding. 
 (C) Loans, advances and investments by DSW Canada in or to Town Shoes, in the aggregate, as of the Report Date equals
$                , which is not more than the permitted maximum of One Hundred Million and 00/100 Canadian Dollars (CAD $100,000,000.00) in the aggregate at any
one time outstanding. 
 8. Dispositions of Assets (Section 7.2.7(i) and Section 7.2.7(vii)): 

(A) In addition to sales of Inventory under subsection (a) of clause (i) of Section 7.2.7 of the Credit Agreement, the sale of
slow moving inventory outside of the ordinary course (including in respect of a liquidation thereof) during the current fiscal year, in the 

  
 - 3 - 

 aggregate, as of the Report Date equals
$                , which is not more than the permitted maximum of Five Million and 00/100 Dollars ($5,000,000) during such fiscal year. 

(B) The sale, transfer or lease of assets by the Lead Borrower and its Subsidiaries, other than those specifically excepted by
Section 7.2.7 of the Credit Agreement (so long as in each case both immediately before and immediately after giving effect thereto there exists no Event of Default or Potential Default), during the current fiscal year, in the aggregate, as of
the Report Date equals $                , which is not more than the permitted maximum of Twenty Million and 00/100 Dollars ($20,000,000) during such fiscal year.

 9. Minimum Fixed Charge Coverage Ratio (Section 7.2.13). The Fixed Charge Coverage Ratio for the period equal to the four (4) consecutive
fiscal quarters ending as of the Report Date is [Insert from item 8(C) below] to 1.0, which is not less than the required ratio for such period as determined by reference to Table 1. 

TABLE 1 
  

					
	 Fiscal Quarters Ending
	  	Required Fixed Charge
Coverage Ratio	 
	 October 28, 2017 through and including February 1, 2020
	  	 	1.75 to 1.00	 
	 May 2, 2020 and thereafter
	  	 	2.00 to 1.00	 

 The Fixed Charge Coverage Ratio shall be computed as follows: 

(A) Consolidated EBITDAR1 of the Lead Borrower and its Subsidiaries for the period equal
to the four (4) consecutive fiscal quarters ending as of the Report Date equals $                , and is computed as follows2: 
  
  

 

	1 	 For purposes of calculating Consolidated EBITDAR, (a) with respect to a business acquired by the Loan
Parties pursuant to a Permitted Acquisition or the Camuto Transactions, Consolidated EBITDAR shall be calculated on a pro forma basis, using historical numbers, in accordance with GAAP as if the Permitted Acquisition or the Camuto Transactions, as
applicable, had been consummated at the beginning of such period (provided it is deemed that $0.00 shall be attributed to Consolidated EBITDAR in accordance with this clause (a) with respect to the Camuto Transactions for any period ending on
or prior to the date on which the Camuto Acquisition Closing occurs), and (b) with respect to a business liquidated, sold or disposed of by the Loan Parties pursuant to Section 7.2.7 [Dispositions of Assets or Subsidiaries], Consolidated
EBITDAR shall be calculated on a pro forma basis, using historical numbers, in accordance with GAAP as if such liquidation, sale or disposition had been consummated at the beginning of such period. 

	2 	 The following shall exclude the income (or deficit) of any Person (other than a Subsidiary) in which the Lead
Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Lead Borrower or such Subsidiary in the form of dividends or similar distributions. 

  
 - 4 - 

											
	 	  	 Component
	  	Amount	 
	 (i)
	  	net income	  	$	                 	 	  			
		  		  	  
	  
	 	  			
	 (ii)
	  	depreciation	  	$	                 	 	  			
		  		  	  
	  
	 	  			
	 (iii)
	  	amortization	  	$	                 	 	  			
		  		  	  
	  
	 	  			
	 (iv)
	  	non-cash expenses related to stock based	  	$	                 	 	  			
		  		  	  
	  
	 	  			
	 	  	compensation	  	 	 	  	 	 
	 (v)
	  	other non-cash charges, non-cash expenses, or non-cash losses to net income (provided, however that cash
payments made in such period or in any future period in respect of such non-cash charges, expenses or losses shall be subtracted from consolidated net income in calculating Consolidated EBITDAR)	  	$	 	 	  			
		  		  	  
	  
	 	  			
	 (vi)
	  	interest expense	  	$	 	 	  			
		  		  	  
	  
	 	  			
	 (vii)
	  	income tax expense	  	$	 	 	  			
		  		  	  
	  
	 	  			
	 (viii)
	  	Consolidated Rental Expense	  	$	 	 	  			
		  		  	  
	  
	 	  			
	 (ix)
	  	transaction expenses incurred in connection with the Camuto Transactions and Permitted Acquisitions3	  	$	 	 	  			
		  		  	  
	  
	 	  			
	 (x)
	  	The sum of items (i) through (ix)	  				  	$	 	 
		  		  				  	  
	  
	 
	 (xi)
	  	non-cash credits or non-cash gains to net income	  	$	 	 	  			
		  		  	  
	  
	 	  			
	 (xii)
	  	The difference between item (x) minus item (xi) equals Consolidated EBITDAR	  				  	$	                 	 
		  		  				  	  
	  
	 

 (B) Fixed Charges4 calculated as of the Report Date for
the period equal to the four (4) consecutive fiscal quarters then ended equals $                . 

(C) the ratio of item 9(A) to item 9(B) equals the Fixed Charge Coverage Ratio. 

10. Maximum Leverage Ratio (Section 7.2.14). The Leverage Ratio for the period equal to the four (4) consecutive fiscal quarters ending as of the
Report Date is [Insert from item 9(F) below] to 1.0, which is not greater than the required ratio of (i) 3.25 to 1.00 during all times other than an Acquisition Period and (ii) 3.50 to 1.00 during an Acquisition Period5. 
  
  

 
  

 

	3 	 Shall not exceed $40,000,000 in the aggregate during the term of the Credit Agreement. 

	4 	 Fixed Charges means for any period of determination, the sum of (a) cash interest expense,
plus (b) Consolidated Rental Expense, in each case of the Lead Borrower on a Consolidated Basis. 

	5 	 In no event shall the Leverage Ratio modification that occurs in connection with an Acquisition Period occur
more than once during the term of this Agreement. 

  
 - 5 - 

 (A) Total Funded Debt6 of the Lead
Borrower and its Subsidiaries as of the Report Date equals $                        . 

(B) Consolidated Rental Expense of the Lead Borrower and its Subsidiaries for the period equal to the four (4) consecutive fiscal quarters
ending as of the Report Date equals $                    . 

(C) The product of (i) five (5), multiplied by (ii) item 10(B) equals
$                    . 
 (D) The
sum of item 10(A) plus item 10(C) equals $                    . 

(E) Consolidated EBITDAR calculated as of the Report Date for the period equal to the four (4) consecutive fiscal quarters then ended
equals $                     (per item 9(A) above). 

(F) The ratio of item 10(D) to item 10(E) equals the Leverage Ratio. 

 

	6 	 Total Funded Debt means, as of any date of determination, the sum of all Indebtedness representing
borrowed money, including both current and long term portion thereof and guaranty obligations with respect thereto, Capital Lease Obligations and reimbursement obligations under letters of credit, in each case of the Lead Borrower on a Consolidated
Basis. 

  
 - 6 - 

 IN WITNESS WHEREOF, and intending to be legally bound, the undersigned has executed this
Compliance Certificate this              day of                 ,
20    . 
  

			
	 DSW Inc., as the Lead Borrower

		
	 By:
	 	  

	 Name:
	 	  

	 Title:

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