Document:

Exhibit 10.2

 

 

Fortis SA/NV

For the attention of Mr. Gilbert Mittler

Chief Financial Officer

Rue Royale 20

1000 Brussels

Belgium

 

Fortis N.V.

For the attention of Mr. Gilbert Mittler

Chief Financial Officer

Archimedelaan 6

3584 BA Utrecht

The Netherlands

 

16 May 2007

 

Dear Sirs

 

Re:                            ABN AMRO Holding N.V. - Standby Underwriting Commitment in
favour of Fortis

 

1.             We are writing in connection with
the proposed participation of Fortis SA/NV and Fortis N.V. (together Fortis) in a
consortium comprising Fortis, The Royal Bank of Scotland Group plc and Banco
Santander Central Hispano, S.A. (together, the Investors) formed for the sole purpose
of acquiring the entire issued and to be issued share capital of ABN AMRO
Holding N.V. (ABN AMRO)
(the Proposed
Acquisition)
on terms to be agreed by the Investors. 
In order to finance Fortis’s participation in the Proposed Acquisition,
Fortis is contemplating effecting an equity offering to raise up to
EUR17,000,000,000 (the Financing
Amount).

2.             On the basis of and subject to the
terms of this letter, Merrill Lynch International (MLI) hereby
undertakes to underwrite an equity offering by Fortis to raise an amount not
exceeding EUR17,000,000,000 solely for the purposes of financing Fortis’s
participation in the Proposed Acquisition, and Fortis SA/NV and Fortis N.V.
undertake to effect such equity offering, subject to shareholders’ approval, at
such price as shall be determined by Fortis and MLI pursuant to paragraph 9
below.  Such standby underwriting
commitment cannot be sub-underwritten without prior express consent of
Fortis (such consent not to be unreasonably withheld or delayed).

3.             Each of Fortis SA/NV and Fortis
N.V. hereby irrevocably undertakes:

(a)                                  if the condition set out in paragraph 4 is
fulfilled, to raise the Financing Amount by way of an issue of new Fortis
unified shares (New
Fortis Shares), each representing one share in Fortis SA/NV and
one share in Fortis N.V., to Fortis’s existing shareholders by way of a
(statutory, or as the case may be, non statutory) rights issue (which, for the
avoidance of doubt, includes any associated rump offering), structured in
accordance with applicable Belgian and Dutch corporate law (the Rights Issue);

	
  Merrill
  Lynch International

  	
   

  	
  Merrill Lynch Financial Centre

  2 King Edward Street

  London EC1A 1HQ

  	
   

  	
  Tel:         020 7628 1000

  

 

Registered
in England (No. 2312079). Registered Office: Merrill Lynch Financial Centre, 2
King Edward Street, London EC1A 1HQ. VAT No. GB 245 1224 93.

A subsidiary of Merrill Lynch & Co., Inc., Delaware, U.S.A. Regulated by
The Financial Services Authority Limited. Member of the London Stock Exchange.

 

 

(b)                                 to take any and all actions which are
necessary for such Rights Issue including, without limitation:

(i)                      preparing and submitting to any applicable stock exchange
or exchanges or other regulatory authority or authorities in such
jurisdictions, if any, which may be agreed by Fortis and MLI at the time of the
Rights Issue based on Fortis’s shareholding structure, a prospectus and/or
other documents (including but not limited to public notices) and obtaining any
necessary approvals and consents that may be required in connection with the
Rights Issue under any applicable law or regulation in such jurisdictions;

(ii)                   providing MLI and its advisers with all documentation,
data and other information as MLI may reasonably request in connection with
customary due diligence to be performed for the purposes of the Rights
Issue  and, upon reasonable notice and at
reasonable times, reasonable access to its officers, employees, auditors, legal
counsel, properties, offices, plants and other facilities;

(iii)                as soon as reasonably practicable following the
approval by Fortis’s boards of directors of the making of a formal offer,
together with the Investors, for the entire issued and to be issued share
capital of ABN AMRO (the ABN
AMRO Offer), to convene extraordinary general meetings of each
of Fortis SA/NV and Fortis N.V. at which resolutions authorising each of Fortis
SA/NV’s and Fortis N.V.’s boards of directors to issue such number of New
Fortis Shares as is necessary to raise the maximum Financing Amount shall be
submitted for approval by shareholders (it being understood that the maximum
number of New Fortis Shares to which such authorisation will relate will be
limited to the maximum permitted under Belgian and Dutch law and Fortis
acknowledges that MLI’s underwriting commitment shall be limited to the
underwriting of such maximum number of New Fortis Shares at an issue price to
be determined in accordance with paragraph 9); and

(iv)               to instruct Fortis’s auditors in relation to the
accounting work to be undertaken (including the provision of comfort letters
and, as applicable, opinions customarily given by auditors and/or reporting
accountants, as the case may be) in connection with rights issues.

4.             The obligations of MLI to
underwrite the Rights Issue are conditional upon the Investors making a formal
offer for the entire issued and to be issued share capital of ABN AMRO by no
later than 30 September 2007.

5.             If the condition set out in
paragraph 4 is not fulfilled, MLI’s obligation to underwrite a Rights Issue
shall terminate and no party to this letter shall have any claim against any
other party to this letter for costs, damages, compensation or otherwise except
that:

(a)                                  such termination shall be without prejudice
to any accrued rights or obligations under the terms of this letter; and

(b)                                 Fortis shall pay the commissions, fees and
expenses specified in the Side Letter (as defined below).

 

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6.             MLI shall be entitled, in its
absolute discretion and upon such terms as it thinks fit, to extend the time
provided for in paragraph 4 in respect of all or any part of the performance
thereof.

7.             If the condition set out in paragraph
4 is not fulfilled by 30 September 2007, the obligations of MLI to underwrite a
Rights Issue shall terminate (without prejudice to paragraph 12 below) and
Fortis shall have no claim against MLI for costs, damages, compensation or
otherwise that arise in connection therewith.

8.             If the ABN AMRO Offer lapses or
expires, or if the Investors announce that the ABN AMRO Offer will not be made
or has been terminated, or if all of the conditions to the ABN AMRO Offer are
not satisfied or waived by 31 December 2007, this letter and the undertakings
in it shall automatically terminate.

9.             Fortis and MLI acknowledge and
agree that the issue price of the New Fortis Shares proposed to be issued in
connection with the Rights Issue will be determined by Fortis and MLI at the
time the Rights Issue is launched, acting reasonably and in good faith and
taking account of, amongst other things, the results of MLI’s due diligence
exercise, investor feedback, the then prevailing market conditions, the
applicable Belgian and Dutch company law requirements, the listing rules of
Euronext Amsterdam and Euronext Brussels, the market price of a Fortis share on
Euronext Amsterdam and Euronext Brussels immediately prior to launch, and
customary discounts to market price for rights issues.

10.

(a)                                  Fortis and MLI undertake and agree to
negotiate reasonably and in good faith the terms and conditions of an
underwriting agreement to be entered into by the parties in connection with the
Rights Issue at the latest on the day before the day of the opening of the
subscription period (the Underwriting
Agreement).  The parties
agree that the terms and conditions of the Underwriting Agreement will be
customary for international rights issues, including, for example, the
inclusion of an obligation for Fortis to prepare a prospectus in compliance
with the Belgian and Dutch legal requirements and meeting international
disclosure standards, the provision of customary representations and warranties
by Fortis, the provision of comfort letters from Fortis’s auditors in respect
of any financial statements of Fortis forming part of any prospectus, the
provision of customary opinions and disclosure letters from Fortis’s legal
counsel, the provision of customary indemnities by Fortis in favour of MLI and
any other banks which may be party to that Underwriting Agreement, the
obtaining of irrevocable undertakings and customary conditions.  Fortis and MLI shall ensure that the
termination and force majeure provisions in the Underwriting Agreement are
aligned with any material adverse change provisions in the ABN AMRO Offer, and
agree that should any inconsistency between such provisions subsist, the terms
of the ABN AMRO Offer shall  prevail.

In addition,
the parties agree that the Underwriting Agreement will, if necessary, contain
provisions to ensure that a Change of Control (as defined in paragraph 19
below) does not occur or a breach of the relevant legal or regulatory
restrictions relating to a Change of Control does not occur.

For the
avoidance of doubt, the term “customary” when used in this paragraph 10 shall
mean customary (a) for rights issues involving an international distribution of

 

3

 

securities,
including into the Benelux and the United States, (b) at the time the relevant
Underwriting Agreement is entered into, and (c) for global investment banks of
international repute.

(b)                                 Any termination of the Underwriting
Agreement shall be without prejudice to MLI’s undertaking to underwrite an
equity offering by Fortis to raise an amount not exceeding EUR17,000,000,000
pursuant to paragraph 2.  In the event of
any such termination, Fortis and MLI undertake and agree to negotiate
reasonably and in good faith the terms and conditions of a new Underwriting
Agreement on the basis set out in paragraph 10(a).

11.           If Fortis reasonably believes that
MLI:

(a)                                  is not acting reasonably and in good faith
or in accordance with paragraph 9 above in relation to the setting of the issue
price of the New Fortis Shares proposed to be issued in connection with the
Rights Issue; and/or

(b)                                 is not negotiating reasonably and in good
faith the terms and conditions of the Underwriting Agreement in accordance with
paragraph 10 above,

Fortis will
notify MLI in writing of its belief and, if within 48 hours after receipt
thereof by MLI, there has not been reasonable and good faith action taken by
MLI to agree an issue price for the New Fortis Shares that is more acceptable
to Fortis, Fortis may then seek to agree a higher issue price (the Third Party Issue Price)
and/or terms and conditions more favourable than those being offered by MLI
(the Third Party Terms),
with a third party or third parties.  If
Fortis is successful, it will notify MLI of that Third Party Issue Price and/or
those Third Party Terms. If, within 48 hours from receipt of such notice, MLI
has not confirmed in writing its agreement to manage and underwrite the Rights
Issue at that Third Party Issue Price and/or to enter into the Underwriting
Agreement on terms no less favourable to Fortis than the Third Party Terms,
then Fortis’s undertakings contained in paragraphs 3(a) and (b) shall cease to
apply and Fortis and MLI will cease to have any obligations under this letter.

12.           In consideration of MLI entering into
this letter and the letter of even date herewith (the Side  Letter), Fortis
agrees to pay to MLI certain fees as more particularly set out in the Side
Letter.

13.           In addition to the fees payable
pursuant to paragraph 12 above, Fortis agrees to pay (or procure that the same
is paid) to MLI certain commissions as more particularly set out in the
Underwriting Agreement (reflecting the terms of the Side Letter).

14.           Fortis acknowledges and agrees that
(a) MLI may arrange for the offer of New Fortis Shares pursuant to the Rights
Issue in the United States to persons reasonably believed to be qualified
institutional buyers (within the meaning of Rule 144A (Rule 144A) under the
U.S. Securities Act of 1933, as amended (the Securities Act)) in reliance on the
exemption from the registration requirements of the Securities Act provided by
Rule 144A or another exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, and (b) New Fortis Shares
offered outside the United States pursuant to the Rights Issue will be offered
in reliance on Regulation S under the Securities Act.

15.           Unless otherwise specified in this
letter, each obligation of Fortis under this letter is a joint and several
obligation of Fortis SA/NV and Fortis N.V.

 

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16.           No variation of the terms of this
letter shall be effective unless in writing and signed by or on behalf of the
parties.

17.           A person who is not party to this
letter has no rights under the Contracts (Rights of Third Parties) Act 1999.

18.           Without prejudice to MLI’s
obligations to underwrite a Rights Issue, if the allotment, issue or delivery
of New Fortis Shares pursuant to the Underwriting Agreement or the performance
by MLI of its obligations under the Underwriting Agreement would give rise to a
Change of Control, MLI will give written notice to Fortis, and MLI and Fortis
will consult together and take all such steps as are necessary to ensure that a
Change of Control does not occur or that the relevant legal and/or regulatory
restrictions relating to a Change of Control are complied with (or otherwise
not breached).

19.           For the purposes of this letter Change of Control
means any circumstances arising pursuant to which MLI acquires control of, or a
controlling interest or qualified participation in, Fortis SA/NV and/or Fortis
N.V., as such terms are defined under applicable Belgian and Dutch law or by
any analogous provision of foreign law or regulation.

20.           This letter is confidential and is
not to be disclosed by you to nor relied on by any other person, except that
you may disclose a copy to your advisers and to ABN AMRO and its advisers on a
non-reliance basis, on the condition that ABN AMRO agrees to keep the existence
and contents of this letter confidential. If you are asked by the relevant
regulatory authority in the Netherlands and/or in Belgium to disclose this
letter to them, you may do so subject to obtaining MLI’s prior written consent.

21.           This letter may be entered into in
any number of counterparts and by the parties to it on separate counterparts
each of which when so executed and delivered shall be an original, but all
counterparts shall together constitute one and the same instrument.

22.           This letter shall be governed by and
construed in accordance with English law and the parties submit to the
exclusive jurisdiction of the English Courts in relation to matters relating to
this letter.

23.           Any notice in connection with this
letter shall be in writing and shall be validly effected to each of Fortis
SA/NV and Fortis N.V. by notice to Jeaninne Quaetaert, General Counsel, Rue
Royale 20, B-1000 Brussels, and to MLI by notice to H James O’Neil, Merrill
Lynch International, Merrill Lynch Financial Centre, 2 King Edward Street,
London EC1A 1HQ.

24.           Please confirm your agreement with
the terms of this letter by signing, dating and returning the enclosed copy of
this letter to H James O’Neil at MLI (fax no.: + 44 20 7995-0662).

 

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Yours faithfully,

 

 

For and on behalf of

Merrill Lynch International

 

/s/ Andrea Orcel

 

 

Name: Andrea Orcel

Title: Head of Global Markets & Investment Banking

          Europe,
Middle East & Africa

 

 

Accepted and Agreed.

 

 

For and on behalf of

Fortis SA/NV

 

/s/ Jean-Paul Votron                                            /s/
Gilbert Mittler

 

 

Name:

Title:

Date:

 

 

Accepted and Agreed.

For and on behalf of

Fortis N.V.

 

 

/s/ Jean-Paul Votron                                            /s/
Gilbert Mittler

 

 

Name:

Title:

Date

 

6Exhibit 10.3

 

 

Global Markets & Investment Banking Group

 

 

The Royal Bank of
Scotland Group plc

For the attention of Mr. Guy Whittaker

RBS Gogarburn 

PO Box 1000

Edinburgh EH12 1HQ 

United Kingdom

 

28 May
2007

 

Dear Sirs

 

Re:                             ABN
AMRO Holding N.V. - Standby Underwriting Commitment in favour of RBSG

 

1.             We are writing in connection with
the proposed participation of The Royal Bank of Scotland Group plc (RBSG)  in a consortium comprising RBSG, Banco
Santander Central Hispano, S.A., Fortis SA/NV and Fortis N.V. (together, the Investors)  formed for the sole purpose of acquiring
the entire issued and to be issued share capital of ABN AMRO Holding N.V. (ABN AMRO)  (the Proposed Acquisition)  on terms to be agreed by the Investors.
In order to finance RBSG’s participation in the Proposed Acquisition, RBSG is
contemplating effecting (and/or procuring that one or more of its directly or
indirectly owned entities effects) one or more issuances of Relevant Securities
(as defined below) to raise up to EUR6,230,000,000 (the Financing Amount).

 

2.             On
the basis of and subject to the terms of this letter, Merrill Lynch
International (MLI)  hereby undertakes to underwrite one or
more issues of Relevant Securities by RBSG (and/or by one or more directly or
indirectly owned entities of RBSG, provided that any issue of Relevant
Securities by any such entity (other than Royal Bank of Scotland plc) is fully
and unconditionally guaranteed on a subordinated basis by RBSG) to raise an
amount not exceeding the Financing Amount in aggregate solely for the purposes
of financing RBSG’s participation in the Proposed Acquisition. For the purposes
of this letter, underwrite  means MLI subscribing for or procuring
subscribers for the Relevant Securities.

 

3.             RBSG hereby proposes, subject to
paragraph 7:

 

(a)                                  if
the condition set out in paragraph 4 is fulfilled, to raise the Financing
Amount through (and/or to procure that one or more of its directly or
indirectly owned entities raises the Financing Amount through):

 

(i)                                     an
issue of securities eligible to be treated as part of the innovative or
non-innovative tier 1 capital of the RBSG group by Financial Services Authority
(Tier 1 Securities);  and/or

 

 

	
  Merrill Lynch International

  	
   

  	
  Merrill Lynch Financial Centre

  	
   

  	
  Tel:            
  020 7628 1000

  
	
   

  	
   

  	
  2 King Edward Street

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  London EC1A 1HQ

  	
   

  	
   

  	
   

  	
   

  

 

Registered in England
(No. 2312079). Registered Office: Merrill Lynch Financial Centre, 2 King Edward
Street, London EC1A 1HQ, VAT No. GB 245 1224 93.

A subsidiary of Merrill
Lynch & Co., Inc., Delaware, U.S.A. Authorised and Regulated by the
Financial Services Authority. Member of the London Stock Exchange.

 

 

(ii)                                  an
issue of convertible securities convertible into new RBSG ordinary shares (Convertibles  and, together with the Tier 1 Securities,
the Relevant Securities);

 

(b)                                 to
take any and all actions which are necessary for the issue of such Relevant
Securities including, without limitation:

 

(i)                                     preparing
and submitting, or procuring the preparation and submission, to any applicable
stock exchange or exchanges or other regulatory authority or authorities in
such jurisdictions, if any, as may be agreed by RBSG and MLI at the time of
issue of the relevant Relevant Securities, a prospectus and/or other documents
(including but not limited to public notices) and obtaining any necessary
approvals and consents that may be required in connection with the issue of the
relevant Relevant Securities under any applicable law or regulation in such
jurisdictions;

 

(ii)                                  providing
MLI and its advisers with all documentation, data and other information as MLI
may reasonably request in connection with customary due diligence to be
performed for the purposes of the issue of the relevant Relevant Securities
(which, for the avoidance of doubt, shall include the obligation to procure all
necessary assistance from any of RBSG’s directly or indirectly owned entities
which will effect the issue of the relevant Relevant Securities and, where
reasonably practicable, ABN AMRO, and where necessary, other members of the ABN
AMRO Group (as defined in paragraph 18 below), in each case, in connection
therewith) and, upon reasonable notice and at reasonable times, reasonable
access to its (and any of RBSG’s directly or indirectly owned entities which
will effect the issue of the relevant Relevant Securities, and where
practicable and as applicable, ABN AMRO’s, and where necessary, other members
of the ABN AMRO Group’s) officers, employees, auditors, legal counsel,
properties, offices and other facilities;

 

(iii)                               prior
to executing the relevant Subscription Agreement(s) (as defined in paragraph
9(a)), to convene and hold:

 

(A)                              meetings
of the board of directors or a duly authorised committee of the board of RBSG
(and procure that RBSG’s relevant directly or indirectly owned entity or
entities convene a meeting or meetings of its or their boards of directors or
equivalent) at which the issue of the relevant Relevant Securities (and, if
applicable, any subordinated guarantee or support agreement provided by RBSG)
is authorised; and

 

(B)                                where
relevant and to the extent necessary, extraordinary general meetings of RBSG
(and procure that RBSG’s relevant directly or indirectly owned entity or
entities convene an extraordinary general meeting or extraordinary general
meetings) at which the issue of such number of shares as is necessary in
connection with the issuance of any Convertibles (or other convertible Relevant
Securities) shall be submitted for approval by shareholders;

 

2

 

(iv)                              that
where one or more of RBSG’s directly or indirectly owned entities (other than
Royal Bank of Scotland plc) will effect any issue of Relevant Securities, RBSG
will fully and unconditionally guarantee such issue on a subordinated basis;
and

 

(v)                                 to
instruct RBSG’s (and its relevant directly or indirectly owned entity or
entities’ and, to the extent practicable and necessary, ABN AMRO’s, and where
necessary, other members of the ABN AMRO Group’s) auditors in relation to the
accounting work to be undertaken (including the provision of comfort letters
and, as applicable, opinions customarily given by auditors and/or reporting
accountants, as the case may be) in connection with issues of the Relevant
Securities in question.

 

4.             The obligations of MLI to
underwrite any issue of Relevant Securities is conditional upon the Investors
making a formal offer for the entire issued and to be issued share capital of
ABN AMRO by no later than 30 September 2007.

 

5.             If the condition set out in
paragraph 4 is not fulfilled, MLI’s obligation to underwrite any issue of
Relevant Securities shall terminate and no party to this letter shall have any
claim against any other party to this letter for costs, damages, compensation
or otherwise except that:

 

(a)                                  such
termination shall be without prejudice to any accrued rights or obligations
under the terms of this letter; and

 

(b)                                 RBSG
shall pay the commissions, fees and expenses specified in the Side Letter (as
defined below).

 

6.                                       MLI
shall be entitled, in its absolute discretion and upon such terms as it thinks
fit, to extend the time provided for fulfilment of such condition.

 

7.                                       If
the formal offer by the Investors for the entire issued and to be issued share
capital of ABN AMRO (the ABN
AMRO Offer)  lapses
or expires, or if the Investors announce that the ABN AMRO Offer will not be
made or has been terminated, or if all of the conditions to the ABN AMRO Offer
are not satisfied or waived by 31 December 2007, this letter and the
undertakings in it shall automatically terminate.

 

8.             RBSG and MLI acknowledge and agree
that the terms of each issue of Relevant Securities (including, for the
avoidance of doubt and without limitation, the identity of the issuer(s), the
type of securities to be issued, the issue price, the coupon, the term, the
denomination, the issue size, the status of the relevant Relevant Securities,
the redemption terms, the negative pledge, the events of default, the
covenants, the undertakings, the call provisions (if any), the conversion price
(if relevant), the anti-dilution provisions (if relevant), the structure of the
issue and the security package (if any)) will be determined by RBSG and MLI at
the time of issue of the relevant Relevant Securities and RBSG and MLI
undertake and agree to (and, where it is anticipated that one or more of RBSG’s
directly or indirectly owned entities will effect an issue of Relevant
Securities, RBSG agrees to procure that such entity or entities, as the case
may be, will) determine those terms acting reasonably and in good faith and
taking account of, amongst other things, customary terms for issues of such
securities in the relevant market, the results of MLI’s due diligence exercise,
investor

 

3

 

feedback, the then
prevailing market conditions and the listing rules of the stock exchange(s) on
which the relevant issue of Relevant Securities is to be listed and/or admitted
to trading.

 

9.               (a)   Without prejudice to the undertaking on the
part of MLI contained in paragraph 2 to underwrite (as defined in that paragraph)
issues of Relevant Securities as contemplated by this letter, but in order to
establish the terms of any underwriting in a relevant Subscription Agreement
(as defined below) and to facilitate the process of syndication of such issues,
RBSG and MLI undertake and agree to (and, where it is anticipated that one or
more of RBSG’s directly or indirectly owned entities will effect an issue of
Relevant Securities, RBSG agrees to procure that such entity or entities, as
the case may be, will) negotiate reasonably and in good faith the terms and
conditions of the subscription agreement to be entered into in connection with
each issue of Relevant Securities (each a Subscription Agreement).  RBSG and MLI agree (and, where it is
anticipated that one or more of RBSG’s directly or indirectly owned entities
will effect an issue of Relevant Securities, RBSG agrees to procure that such
entity or entities, as the case may be, will agree) that the terms and
conditions of any Subscription Agreement will be customary for issues of
Relevant Securities of the type proposed to be issued, including, for example,
the inclusion of an obligation for RBSG to prepare a prospectus in compliance
with Directive 2003/71/EC (the Prospectus Directive) and/or the rules of the
stock exchange(s) and/or other relevant regulatory authority responsible for
regulating the market or exchange on which the relevant issue of Relevant
Securities is to be listed and/or admitted to trading and meeting customary
international disclosure standards, the provision of customary representations
and warranties by RBSG (and, where it is anticipated that one or more of RBSG’s
directly or indirectly owned entities will effect the issue of the relevant
Relevant Securities, by such entity or entities), the provision of customary
comfort letters from RBSG’s auditors (and, where it is anticipated that one or
more of RBSG’s directly or indirectly owned entities will effect the issue of
the relevant Relevant Securities, by such entity’s or entities’ auditors and,
if practicable and as applicable, ABN AMRO’s auditors) in respect of any
financial statements of RBSG (or such entity or entities and/or any member of
the ABN AMRO Group) forming part of any prospectus, the provision of customary
opinions and disclosure letters from RBSG’s legal counsel (and, where it is
anticipated that one or more of RBSG’s directly or indirectly owned entities
will effect the issue of the relevant Relevant Securities, by such entity’s or
entities’ legal counsel) and, where practicable, ABN AMRO’s legal counsel, the
provision of customary indemnities by RBSG (and, where it is anticipated that
one or more of RBSG’s directly or indirectly owned entities will effect the
issue of the relevant Relevant Securities, by such entity or entities) in
favour of MLI and any other banks which may be party to that Subscription
Agreement, customary conditions, orderly market and termination provisions and
customary force majeure provisions. In addition, the parties agree that any
Subscription Agreement will, if necessary, contain provisions to ensure that a
Change of Control (as defined in paragraph 18 below) does not occur or a breach
of the relevant legal or regulatory restrictions relating to a Change of
Control does not occur. For the avoidance of doubt, the term “customary” when
used in this paragraph 9 shall mean customary (i) for issues of securities of
the type proposed to be issued, (ii) at the time the relevant Subscription
Agreement is entered into, (iii) for global investment banks of international
repute of securities of the type proposed to be issued which may involve a
distribution of securities into the United States, and (iv)

 

4

 

which is consistent with
any similar issues made by RBSG or entities owned by RBSG and underwritten by
MLI or affiliates of MLI in the relevant market.

 

(b)                                 Any
termination of a Subscription Agreement shall be without prejudice to MLI’s
undertaking to underwrite one or more issues of Relevant Securities by RBSG
(and/or by one or more directly or indirectly owned entities of RBSG) pursuant
to paragraph 2.

 

10.                                 If
RBSG reasonably believes that MLI:

 

(a)                                  is
not acting reasonably and in good faith or in accordance with paragraph 8 above
in relation to the determination of the issue price and/or other key terms of
the Relevant Securities; and/or

 

(b)                                 is
not negotiating reasonably and in good faith the terms and conditions of the
relevant Subscription Agreement in accordance with paragraph 9 above,

 

RBSG
will notify MLI in writing of its belief and, if within 48 hours after receipt
thereof by MLI, there has not been reasonable and good faith action taken by
MLI to agree an indicative issue price and/or the other relevant key terms of
the relevant Relevant Securities that are more commercially acceptable to RBSG,
RBSG may then seek to agree an indicative issue price and/or the other key
terms (the Third Party
Issue Terms)  and/or
terms and conditions more favourable than those being offered by MLI (the Third Party Terms),
with a third party or third parties. If RBSG is successful, it will notify MLI
of those Third Party Issue Terms and/or those Third Party Terms. If, within 24
hours from receipt of such notice, MLI has not confirmed in writing its
agreement to lead manage (jointly or solely) and underwrite the issue of the
relevant Relevant Securities on the Third Party Issue Terms and/or to enter
into the Subscription Agreement on terms no less favourable to RBSG than the
Third Party Terms, then RBSG’s undertakings contained in paragraphs 3(a) and
(b) shall cease to apply provided that such issue is undertaken at a price no
less favourable to RBSG than the indicative issue price described above and MLI
will cease to have any obligations under this letter in relation to the
relevant issue of Relevant Securities.

 

11.           In consideration of
MLI entering into this letter and the letter of even date herewith (the Side Letter), RBSG agrees to pay to MLI certain fees
as more particularly set out in the Side Letter.

 

12.           In addition to the
fees payable pursuant to paragraph 11 above, RBSG agrees to pay (or procure
that the same is paid) to MLI certain commissions as more particularly set out
in the Subscription Agreement (reflecting the terms of the Side Letter).

 

13.           RBSG acknowledges
and agrees that (a) MLI may arrange for the offer of any Relevant Securities in
the United States to persons reasonably believed to be qualified institutional
buyers (within the meaning of Rule 144 A (Rule 144A)
under the U.S. Securities Act of 1933, as amended (the Securities Act))  in reliance on the exemption from the
registration requirements of the Securities Act provided by Rule 144A or
another exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, and (b) Relevant Securities offered outside
the United States will be offered in reliance on Regulation S under the
Securities Act.

 

5

 

14.           No variation of the
terms of this letter shall be effective unless in writing and signed by or on
behalf of the parties.

 

15.           A person who is not
party to this letter has no rights under the Contracts (Rights of Third
Parties) Act 1999.

 

16.           This letter is
confidential and is not to be disclosed by you to anyone nor relied on by any
other person, except that you may disclose a copy to your advisers and to ABN
AMRO and its advisers on a non-reliance basis, on the condition that ABN AMRO
agrees to keep the existence and contents of this letter confidential. If you
are asked by the relevant regulatory authority in the Netherlands or the United
Kingdom to disclose this letter to them, you may do so subject to obtaining MLI’s
prior written consent (not to be unreasonably withheld).

 

17.           Without prejudice to
MLI’s obligations to underwrite any issue of Relevant Securities, if the issue
or delivery of Relevant Securities pursuant to a Subscription Agreement or the
performance by MLI of its obligations under a Subscription Agreement would give
rise to a Change of Control, MLI will give written notice to RBSG, and MLI and
RBSG will consult together and take all such steps as are necessary in order to
ensure that a Change of Control does not occur or a breach of the relevant
legal or regulatory restrictions relating to a Change of Control does not occur
or that the relevant legal and/or regulatory restrictions relating to a Change
of Control are complied with (or otherwise not breached). Unless the parties
agree otherwise, to the extent that the issue or delivery of Relevant
Securities pursuant to the Subscription Agreement or the performance by MLI of
its obligations under the Subscription Agreement would give rise to a Change of
Control or result in a breach of the relevant legal and/or regulatory
restrictions relating to a Change of Control, the issue and delivery of such
Relevant Securities to MLI will be delayed until such time or times as may be
requested by MLI. No such delay in the issue and delivery of Relevant
Securities will delay the due date for payment to RBSG for such Relevant
Securities. RBSG agrees to issue the number of Relevant Securities requested by
MLI within three trading days of each such request and, if an interest payment
or other distribution is paid or made in respect of any Relevant Securities
that are issued, to pay or distribute an equivalent amount to MLI in respect of
the Relevant Securities that would have been issued but for a delay in its
issue due to this paragraph.

 

18.           For the purposes of
this letter:

 

(a)                                  ABN AMRO Group  means ABN AMRO and its subsidiary
undertakings; and

 

(b)                                 Change of Control  means any circumstances arising pursuant
to which MLI acquires control of, or a controlling interest or qualified
participation in, RBSG as such terms are defined under section 178 of the
Financial Services and Markets Act 2000 or by any analogous provision of
foreign law or regulation.

 

19.           This letter may be entered into in
any number of counterparts and by the parties to it on separate counterparts
each of which when so executed and delivered shall be an original, but all
counterparts shall together constitute one and the same instrument.

 

20.           This letter shall be
governed by and construed in accordance with English law and the parties submit
to the exclusive jurisdiction of the English Courts in relation to matters
relating to this letter.

 

6

 

21.           RBSG shall at all times maintain an
agent for service of process and any other documents and proceedings in England
or any other proceedings in connection with this letter and the Side Letter.
Such agent shall be The Royal Bank of Scotland Group plc of 280 Bishopsgate,
London EC2M 4RB, United Kingdom (marked “For the attention of the Group
Secretary”), and any claim form, judgment or other notice of legal process
shall be sufficiently served on RBSG if delivered to such agent at its address
for the time being. If such process agent ceases to be able to act, RBSG
irrevocably undertakes to appoint another such agent with an address in England
and advise MLI of such change. If RBSG fails to appoint another agent within 14
days, MLI shall be entitled to appoint one on RBSG’s behalf and at RBSG’s
expense.

 

22.           Please confirm your agreement with
the terms of this letter by signing, dating and returning the enclosed copy of
this letter to H James O’Neil at MLI (fax no.: + 44 20 7995-0662).

 

Yours faithfully,

 

 

	
  For and on behalf of

  Merrill Lynch International

  
	
   

  
	
   

  
	
       /s/
  Matthew Greenburgh

  	
   

  
	
   

  
	
  Name:

  
	
  Title:

  

 

 

Accepted and Agreed.

 

	
  For and on behalf of

  The Royal Bank of Scotland Group plc

  
	
   

  
	
       /s/
  Miller McLean

  	
   

  
	
   

  
	
  Name:

  
	
  Title:

  
	
  Date:

  

 

7

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