Document:

Exhibit 4.3

 

 

EXHIBIT
A

 

FORM OF
GLOBAL NOTE

 

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

 

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

 

This Security
is one of a duly authorized issue of securities of the Company (as defined below) (herein called the “Securities”
and each, a “Security”) issued and to be issued in one or more series under and governed by the Contingent
Convertible Securities Indenture, dated as of August 10, 2015, as amended and supplemented by the Fifth Supplemental Indenture
dated as of August 19, 2020 (the “Contingent Convertible Securities Indenture”), as supplemented by the Seventh
Supplemental Indenture, dated as of [●], 2021 (the “Seventh Supplemental Indenture” and, together with
the Contingent Convertible Securities Indenture, the “Indenture”). Capitalized terms used herein but not otherwise
defined shall have the meaning ascribed to them in the Seventh Supplemental Indenture.

 

The rights
of the Holder and Beneficial Owners of this Security are, to the extent and in the manner set forth in Section 6.01 of the Seventh
Supplemental Indenture (which amends in its entirety Section 12.01(a) of the Contingent Convertible Securities Indenture), subordinated
to the claims of other creditors of the Company, and this Security is issued subject to the provisions of that Section 6.01, and
the Holder (and Beneficial Owners) of this Security, by accepting the same, agrees to, and shall be bound by, such provisions.
The provisions of Sections 6.01 and 6.02 of the Seventh Supplemental Indenture and the terms of this paragraph are governed by,
and shall be construed in accordance with, Scots law.

 

The rights
of the Holder of this Security are subject to ‎Section 3.16
of the Seventh Supplemental Indenture. Effective upon, and following, the occurrence of the Automatic Conversion, provided that
the Company issues and delivers the Settlement Shares to the

 

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

 

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

 

NATWEST
GROUP PLC

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

 

	No. [            ]	£[         ]

 

COMMON
CODE [        ]

ISIN NO. [        ]

 

NATWEST GROUP
plc (herein called the “Company”, which term includes any successor Person under the Indenture (as defined
on the reverse hereof)), for value received, hereby promises to pay to the Bank of New York Depository (Nominees) Limited, or
registered assignees, the principal sum of £[●] ([●] pounds sterling), if and to the extent due, and to pay
interest thereon, if any, in accordance with the terms hereof and the Indenture. The Contingent Capital Notes shall have no fixed
maturity or fixed redemption date. From (and including) the Issue Date to (but excluding) [●], 20[●] (the “First
Reset Date”), the interest rate on the Contingent Capital Notes shall be [●]% per annum. From and including the
First Reset Date and each fifth anniversary date thereafter

 

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(each such
date, a “Reset Date”), to (but excluding) the next succeeding Reset Date, the applicable per annum interest
rate will be equal to the sum of the applicable Reference Bond Rate on the relevant Reset Determination Date and          %,
converted to a quarterly rate in accordance with market convention (rounded to three decimal places, with 0.005 being rounded
down). Subject to the provisions on the reverse of this Security relating to cancellation and deemed cancellation of interest
and to ‎Section 3.03, ‎Section
3.04, ‎Section 3.16(h) and ‎Section
6.01 of the Seventh Supplemental Indenture and to the two last sentences of this paragraph, interest, if any, shall be payable
in four equal quarterly installments in arrear on [●], [●], [●] and [●] of each year (each, an “Interest
Payment Date”). The first date on which interest may be paid will be [●], 2021. Subject to the limitations specified
on the reverse of this Security, if any interest payment is to be made in respect of the Contingent Capital Notes on any date
other than an Interest Payment Date, including on any scheduled redemption date, it shall be calculated by the Calculation Agent
on the basis of a year of 365 days and the actual number of days elapsed in the relevant interest period and rounding the resulting
figure to the nearest cent (half a cent being rounded upwards).

 

“Reference
Bond Rate” means, with respect to any Reset Date for which such rate applies and related Reset Determination Date, the
gross redemption yield expressed as a percentage and calculated by the Calculation Agent on the basis set out by the United Kingdom
Debt Management Office in the paper "Formulae for Calculating Gilt Prices from Yields", page 5, Section One: Price/Yield
Formulae "Conventional Gilts; Double dated and Undated Gilts with Assumed (or Actual) Redemption on a Quasi-Coupon Date"
(published on 8 June 1998 and updated on 15 January 2002 and 16 March 2005, and as further amended, updated, supplemented or replaced
from time to time) or, if such basis is no longer in customary market usage at such time (as determined by the Issuer in good
faith), a gross redemption yield calculated in accordance with generally accepted market practice at such time as determined and
notified in writing to the Calculation Agent by the Issuer following consultation with an investment bank or financial institution
determined to be appropriate by the Issuer (which, for the avoidance of doubt, could be the Calculation Agent, or another affiliate
of the Issuer), on a semi-annual compounding basis (converted to an annualised yield and rounded up (if necessary) to four decimal
places) of the Reset Reference Bond in respect of that Reset Period, assuming a price for the Reset Reference Bond (expressed
as a percentage of its principal amount) equal to the Reference Bond Price for such Reset Determination Date.

 

“Initial
Interest Rate” means the rate of interest in respect of the period from (and including) the Issue Date to (but excluding)
the First Reset Date, which will be [●] per annum.

 

“Reference
Bond Price” means, with respect to any Reset Determination Date, (i) the arithmetic average of the Reference Government
Bond Dealer Quotations for such Reset Determination Date, after excluding the highest and lowest such Reference Government Bond
Dealer Quotations, or (ii) if fewer than five such Reference Government Bond Dealer Quotations are received, the arithmetic average
of all such quotations (or, alternatively, if only one Reference Government Bond Dealer Quotation is received, the Reference Bond
Price shall be equal to such quotation); provided, however,

 

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that if no
Reference Government Bond Dealer Quotations are received, the Subsequent Interest Rate for the relevant Reset Period shall be
equal to the Rate of Interest last determined in relation to the Contingent Capital Notes in respect of the preceding Reset Period
(or, alternatively, in the case of the first Reset Determination Date, the Rate of Interest applicable to the first Reset Period
shall be the Initial Interest Rate).

 

“Reference
Government Bond Dealer” means each of five banks selected by the Issuer (following, where practicable, consultation
with an investment bank or financial institution of financial repute determined to be appropriate by the Issuer, which for the
avoidance of doubt, could be the Calculation Agent), or the affiliates of such banks, which are (i) primary government securities
dealers, and their respective successors, or (ii) market makers in pricing corporate bond issues.

 

“Reference
Government Bond Dealer Quotations” means, with respect to each Reference Government Bond Dealer and any Reset Determination
Date, the arithmetic average, as determined by the Calculation Agent, of the bid and offered prices for the Reset Reference Bond
(expressed in each case as a percentage of its principal amount) as at 11:00 a.m. (London time) on the Reset Determination Date
and, if relevant, on a dealing basis for settlement that is customarily used at such time, and quoted in writing to the Calculation
Agent by such Reference Government Bond Dealer.

 

The “Reset
Determination Date” shall be the second Business Day immediately preceding each Reset Date.

 

“Reset
Period” means any period from and including each Reset Date to but excluding the next succeeding Reset Date.

 

“Rate
of Interest” means the Initial Interest Rate and/or the relevant Subsequent Interest Rate, as the case may be.

 

“Subsequent
Interest Rate” means the rate of interest in respect of each Reset Period which shall be a rate per annum equal to the
aggregate of the applicable Reference Bond Rate on the relevant Reset Determination Date and [●]%, such sum being converted
to a quarterly rate in accordance with market convention (rounded to three decimal places, with 0.005 rounded down).

 

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

 

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

 

The interest,
if any, so payable, and paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this

 

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Security is
registered at the close of business on the Regular Record Date or if the Security is held in registered form, 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 the Seventh Supplemental Indenture, no payment of
the principal amount of this Security following any proposed redemption or payment of interest on this Security shall become due
and payable after the exercise of any U.K. bail-in power by the relevant U.K. authority unless, at the time that such repayment
or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under
the laws and regulations of the United Kingdom and the European Union applicable to the Company and the Group.

 

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

 

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

 

Without limitation
on the foregoing paragraph, the Company shall cancel any interest in respect of the Contingent Capital Notes (or, as appropriate,
any part thereof) on any Interest Payment Date (and such interest payment shall therefore be deemed to have been cancelled and
thus shall not be due and payable on such Interest Payment Date) if in respect of such Interest Payment Date (a) the Company has
an amount of Distributable Items on such scheduled Interest Payment Date that is less than the sum of (i) all payments (other
than redemption payments which do not reduce Distributable Items) made or declared by the Company since the end of the Company’s
latest financial year and prior to such Interest Payment Date on or in respect of any Parity Securities, the Contingent Capital
Notes and any Junior Securities and (ii) all payments (other than redemption payments which do not reduce Distributable Items)
payable by the Company on such Interest Payment Date (x) on the Contingent Capital Notes and (y) on or in respect of any Parity
Securities or any Junior Securities, in the case of each of (i) and (ii), excluding any payments already accounted for in determining
the Distributable Items, or

 

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(b) if the
Solvency Condition is not (or would not be) satisfied in respect of such amounts payable on such Interest Payment Date.

 

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

 

Interest
on the Contingent Capital Notes shall only be due and payable on an Interest Payment Date to the extent it is not cancelled or
deemed cancelled under the terms of this Security and Sections 3.02(b), 3.03(a), 3.04, 3.16(h) and Section 6.01 of the Seventh
Supplemental Indenture. Any interest cancelled or deemed cancelled (in each case, in whole or in part) in the circumstances described
in this Security shall not be due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners
of the Contingent Capital Notes shall have no rights thereto or to receive any additional interest or compensation as a result
of such cancellation or deemed cancellation of interest in respect of the Contingent Capital Notes. The Company may use such cancelled
payment without restriction to meet its obligations as they fall due.

 

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

 

This Security
shall be governed by and construed in accordance with the laws of the State of New York, irrespective of conflicts of laws principles,
except as stated in Section 10.07 of the Seventh Supplemental Indenture and as stated herein, and except that the authorization
and execution of this Security shall be governed by (in addition to the laws of the State of New York relevant to execution) the
respective jurisdictions of the Company and the Trustee, as the case may be.

 

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

 

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

 

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

 

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

 

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

 

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

 

Date: [ ]

 

	 	NATWEST GROUP PLC
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

   

 

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Trustee’s
Certificate of Authentication

 

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

 

Date: [ ]

 

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

    as Trustee
	 	 
	 	 
	 	By:	 
	 	 	Authorized Signatory

  

 

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(Reverse
of Security)

 

This Security
is one of a duly authorized issue of securities of the Company (herein called the “Securities” and each, a
“Security”) issued and to be issued in one or more series under and governed by the Contingent Convertible
Securities Indenture, dated as of August 10, 2015 (herein called the “Contingent Convertible Securities Indenture”),
between the Company and The Bank of New York Mellon, London Branch, as Trustee (herein called the “Trustee,”
which term includes any successor trustee under the Contingent Convertible Securities Indenture), as supplemented and amended
by the Seventh Supplemental Indenture, dated as of [●], 2021 (the “Seventh Supplemental Indenture” and,
together with the Contingent Convertible Securities Indenture, the “Indenture”), and reference is hereby made
to the Indenture, the terms of which are incorporated herein by reference, for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the Holders of the Contingent Capital Notes and of the
terms upon which the Contingent Capital Notes are, and are to be, authenticated and delivered. Insofar as the provisions of the
Indenture may conflict with the provisions set forth in this Security, the former shall control for purposes of this Security.

 

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

 

All payments
of principal and/or interest to the Holders by or on behalf of the Company in respect of the Contingent Capital Notes shall be
made without withholding or deduction for or on account of any present or future tax, duty, assessment or governmental charge
of whatsoever nature imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any authority thereof
or therein having power to tax, unless such withholding or deduction is required by law. In that event, and in respect of withholding
or deduction imposed by a Taxing Jurisdiction in respect of interest only (and not, for the avoidance of doubt, principal), the
Company shall pay such additional amounts (“Additional Amounts”) as will result (after such withholding or
deduction) in receipt by the Holders of the sums which would have been receivable (in the absence of such withholding or deduction)
from it in respect of their Contingent Capital Notes; except that no such Additional Amounts shall be payable with respect to
any Contingent Capital Note in accordance with Section 10.04 of the Contingent Convertible Securities Indenture (as amended and
restated with respect to the Contingent Capital Notes only by Section 9.01 of the Seventh Supplemental Indenture).

 

Payments
under the Contingent Capital Notes will be subject in all cases to any applicable fiscal or other laws and regulations in the
place of payment or other laws and regulations to which the Company or its Paying Agents agree to be subject and the Company will
not, save as provided under Section 10.04 of the Contingent Convertible

 

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Securities
Indenture (as amended and restated with respect to the Contingent Capital Notes only by Section 9.01 of the Seventh Supplemental
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 Solvency Condition and the pre-conditions specified below, the Company may, at the Company’s option and in its sole
discretion, redeem the Contingent Capital Notes, in whole but not in part, on the First Call Date or on any Reset Date thereafter
at a redemption price equal to 100% of the principal amount of the Contingent Capital Notes then outstanding, together with any
Accrued Interest to (but excluding) the date fixed for redemption.

 

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

 

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

 

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

 

		(b)	a payment of interest on the
                                         next Interest Payment Date in respect of any of the Contingent Capital Notes would be
                                         treated as a “distribution” within the

 

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meaning
of Section 1000 of the U.K. Corporation Tax Act 2010 (or any statutory modification or re-enactment thereof for the time being);

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Before the
Company may redeem the Contingent Capital Notes pursuant to any of the preceding paragraphs relating to the Company’s rights
of redemption, the Company shall deliver to the Clearing Systems as the Holder of the Global Securities (or, if the Contingent
Capital Notes are in definitive form, to the Holders directly at their addresses shown on the Contingent Convertible Security
Register) prior notice of not less than fifteen (15) days, nor more than thirty (30) days. The Company shall deliver written notice
of such redemption of the Contingent Capital Notes to the Trustee at least five (5)

 

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Business Days
prior to the date on which the relevant notice of redemption is sent to the Holders (unless a shorter notice period shall be satisfactory
to the Trustee).

 

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

 

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

 

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

 

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

 

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

 

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

 

    13 

     

    

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 required by the PRA as a prerequisite to its permission
for such redemption, such notice of redemption shall be automatically rescinded and shall be of no force and effect, and no payment
in respect of the redemption amount shall be due and payable.

 

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

 

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

 

Any redemption,
repurchase, substitution or variation of the Contingent Capital Notes by the Company as provided under ‎‎Section
3.08, ‎‎Section 3.09, ‎‎Section
3.10, ‎Section 3.11, Section 3.12 and ‎‎Section
3.14 of the Seventh Supplemental Indenture, is subject to (except to the extent the Capital Regulations no longer so require)
the Company having met the following conditions:

 

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

 

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

 

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

 

(ii)           
the Company has demonstrated to the satisfaction of the PRA that its Tier 1 capital and Tier 2 capital (as defined by the
Capital Regulations) would, following such redemption or repurchase, exceed the capital ratios required under CRD and the combined
buffer requirement defined in CRD by a margin that the

 

    14 

     

    

PRA
may consider necessary on the basis set out in CRD for it to determine the appropriate level of capital of an institution;

 

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

 

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

 

(e)           
with respect to Sections 3.09 and 3.10 of the Seventh Supplemental Indenture only, and except to the extent that the PRA
no longer so requires, the Company may only redeem the Contingent Capital Notes before five years after the Issue Date if, in
addition to the conditions set out in (a), (b), (c) and (d) above, the following conditions are met:

 

(i)           
in the case of a redemption due to a Tax Event pursuant to Section 3.09 of the Seventh Supplemental Indenture, the Company
demonstrates to the satisfaction of the PRA that the Tax Event relating to the Contingent Capital Notes is material and was not
reasonably foreseeable at the time of issuance of the Contingent Capital Notes; or

 

(ii)           
in the case of a redemption due to the occurrence of a Capital Disqualification Event pursuant to Section 3.10 of the Seventh
Supplemental Indenture, (x) the PRA considers such change to be sufficiently certain and (y) the Company demonstrates to the satisfaction
of the PRA that the Capital Disqualification Event was not reasonably foreseeable at the time of the issuance of the Contingent
Capital Notes.

 

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

 

    15 

     

    

The procedures
set forth in this Security and Section 3.16 of the Seventh Supplemental Indenture are subject to change to reflect changes in
the Clearing Systems’ practices, and the Company may make changes to the procedures set forth in Section 3.16 to the extent
reasonably necessary, in the opinion of the Company, to reflect such changes in Clearing Systems’ practices. Any such changes
shall be subject to the provisions of Section 8.01 of the Seventh Supplemental Indenture.

 

Notwithstanding
anything to the contrary contained in the Indenture or this Security, once the Company has delivered a Conversion Trigger Notice
following the occurrence of a Conversion Trigger Event, (i) subject to the right of the Holders and Beneficial Owners pursuant
to ‎Section 5.03 in the event of a failure by the Company
to issue and deliver any Settlement Shares to the Settlement Share Depository on the Conversion Date, the Indenture shall impose
no duties upon the Trustee whatsoever with regard to an Automatic Conversion upon a Conversion Trigger Event and the Holders and
Beneficial Owners shall have no rights whatsoever under the Indenture or the Contingent Capital Notes to instruct the Trustee
to take any action whatsoever, and (ii) as of the date of the Conversion Trigger Notice, except for any indemnity and/or security
provided by any Holder or by any Beneficial Owner in such direction or related to such direction, any direction previously given
to the Trustee by any Holder or by any Beneficial Owner shall cease automatically and shall be null and void and of no further
effect; except in each case of (i) and (ii) of this paragraph, with respect to any rights of the Holders or Beneficial Owners
with respect to any payments under the Contingent Capital Notes that were unconditionally due and payable prior to the date of
the Conversion Trigger Notice or unless the Trustee is instructed in writing by the Company to act otherwise.

 

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

 

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

 

Following
the issuance and delivery of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient in accordance
with the terms of the Contingent Capital Notes, as applicable) on the Conversion Date, this Contingent Capital Note shall remain
in existence until the applicable Cancellation Date for the sole purpose

 

    16 

     

    

of evidencing
the Holders’ and Beneficial Owners’ right to receive Settlement Shares, or, if the Holder elects, ADSs or the Alternative
Consideration, as the case may be, from the Settlement Share Depository (or such other relevant recipient, as applicable).

 

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

 

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

 

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

 

The Conversion
Price shall be subject to adjustment as provided in Article 4 of the Seventh Supplemental Indenture.

 

In the Company’s
sole and absolute discretion, within ten (10) Business Days following the Conversion Date, the Company may elect that the Settlement
Share Depository (or an agent on its behalf) make an offer of all or some of the Settlement Shares to all or some of the Company’s
Shareholders upon Automatic Conversion, such offer to be at a cash price per Settlement Share that will be no less than the Conversion
Price (the “Settlement Shares Offer”).

 

    17 

     

    

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

 

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

 

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

 

    18 

     

    

ordinary shares,
other securities or other obligations in connection with the exercise of any U.K. bail-in power by the relevant U.K. authority
is separate and distinct from the Automatic Conversion following a Conversion Trigger Event.

 

By its acquisition
of the Contingent Capital Notes, each Holder and Beneficial Owner (i) acknowledges and agrees that the exercise of the U.K. bail-in
power by the relevant U.K. authority with respect to the Contingent Capital Notes or any cancellation or deemed cancellation of
interest pursuant to ‎Section 3.03 or ‎Section
3.04 of the Seventh Supplemental Indenture and the terms of this Security shall not give rise to a default for purposes of Section
315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the U.S. Trust Indenture
Act of 1939, (ii) to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees
not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that
the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant
U.K. authority with respect to the Contingent Capital Notes, (iii) acknowledges and agrees that, (a) upon the exercise of any
U.K. bail-in power by the relevant U.K. authority, the Trustee shall not be required to take any further directions from Holders
or Beneficial Owners of the Contingent Capital Notes under Section 5.12 of the Contingent Convertible Securities Indenture and
(b) the Indenture shall impose no duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by
the relevant U.K. 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. authority, the Contingent Capital Notes remain outstanding, (for example, if the exercise of
the U.K. bail-in power results in only a partial write-down of the principal of the Contingent Capital Notes) then the Trustee’s
duties under the Indenture shall remain applicable with respect to the Contingent Capital Notes following such completion to the
extent that the Company and the Trustee agree pursuant to a supplemental indenture, unless the Company and the Trustee agree that
a supplemental indenture is not necessary, and (iv) shall be deemed to have (y) consented to the exercise of any U.K. bail-in
power as it may be imposed without any prior notice by the relevant U.K. authority of its decision to exercise such power with
respect to the Contingent Capital Notes and (z) authorized, directed and requested Clearstream, Luxembourg and/or Euroclear and
any direct participant in Clearstream, Luxembourg and/or Euroclear or other intermediary through which it holds such Securities
to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Contingent
Capital Notes as it may be imposed, without any further action or direction on the part of such Holder and such Beneficial Owner
or the Trustee.

 

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

 

    19 

     

    

event of a
Non-Qualifying Takeover Event and the limitations on remedies specified in this Security and Section 5.04 of the Seventh Supplemental
Indenture.

 

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

 

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

 

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

 

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

 

If a Winding-up
or Administration Event occurs prior to the occurrence of a Conversion Trigger Event, subject to the subordination provisions
of Article 6 of the Seventh Supplemental Indenture, the principal amount of the Contingent Capital Notes shall become immediately
due and payable, without the need of any further action on the part of the Trustee, the Holders or any other Person, including
the declaration by the Trustee, the Holders or any other Person that the principal amount of the Contingent Capital Notes will
become immediately due and payable.

 

Subject to
‎Section 3.13 of the Seventh Supplemental Indenture, if the
Company does not make payment of principal in respect of the Contingent Capital Notes for a period of fourteen (14) calendar days
or more after the date on which such payment is due (a “Non-Payment Event”), then the Trustee, on behalf of
the Holders and Beneficial Owners, may, at its discretion, or shall at the direction of Holders of 25% or more of the aggregate
principal amount of Outstanding Contingent Capital Notes, subject to any applicable laws, institute proceedings for the winding
up of the Company. In the event of a Winding-up or Administration Event 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 or Administration
Event of the Company and/or claim in the liquidation of the Company, such claims as set out in ‎Section
6.01 of the Seventh Supplemental Indenture. For the avoidance of doubt, the Trustee may not

 

    20 

     

    

declare the
principal amount of any outstanding Contingent Capital Notes to be due and payable and may not pursue any other legal remedy,
including a judicial proceeding for the collection of the sums due and unpaid on the Contingent Capital Notes.

 

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

 

Other than
the limited remedies specified in this Security and Article 5 of the Seventh Supplemental Indenture, and subject to the second
paragraph below, no remedy against the Company shall be available to the Trustee (acting on behalf of the Holders) or to the Holders
and Beneficial Owners, whether for the recovery of amounts owing in respect of such Securities or under the Indenture, or in respect
of any breach by the Company of any of the Company’s obligations under or in respect of the terms of such Securities or
under the Indenture in relation thereto; provided, however, that the Company’s obligations to the Trustee
under, and the Trustee’s lien provided for in, Section 6.07 of the Contingent Convertible Securities Indenture and the Trustee’s
rights to have money collected applied first to pay amounts due to it under such Section pursuant to Section 5.06 of the Contingent
Convertible Securities Indenture expressly survive any Enforcement Event and are not subject to the subordination provisions of
‎Section 6.01 of the Seventh Supplemental Indenture.

 

    21 

     

    

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

 

Notwithstanding
the limitations on remedies specified in this Security and under Article 5 of the Seventh Supplemental Indenture, (i) the Trustee
shall have such powers as are required to be authorized to it under the Trust Indenture Act in respect of the rights of the Holders
and Beneficial Owners of the Contingent Capital Notes under the provisions of the Indenture, and (ii) nothing shall impair the
right of a Holder or Beneficial Owner of the Contingent Capital Notes under the Trust Indenture Act, absent such Holder’s
or Beneficial Owner’s consent, to sue for any payment due but unpaid with respect to the Contingent Capital Notes; provided
that, in the case of (i) and (ii) above, any payments in respect of, or arising from, the Contingent Capital Notes, including
any payments or amounts resulting or arising from the enforcement of any rights under the Trust Indenture Act in respect of the
Contingent Capital Notes, shall be subject to the subordination provisions set forth in ‎Section
6.01 of the Seventh Supplemental Indenture.

 

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

 

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

 

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

 

With respect
to the Contingent Capital Notes only, and pursuant to Section 12.01(a) of the Contingent Convertible Securities Indenture, the
extent and manner in which the payment of principal of (and premium, if any) and interest, if any, on the Contingent Convertible
Securities is subordinated to the claims of the holders of certain other present or future obligations of the Company shall be
determined as set out in ‎Section 6.01 of the Seventh Supplemental
Indenture. References in the Contingent Convertible Securities Indenture to Section 12.01(a) thereof shall be to ‎Section
6.01 of the Seventh Supplemental Indenture. For the avoidance of doubt, no provision of Article 12 of the Contingent Convertible
Securities Indenture other than replacing Section 12.01(a) with ‎Section
6.01 of the Seventh Supplemental Indenture shall be amended by the Seventh Supplemental Indenture.

 

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

 

    22 

     

    

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

 

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

 

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

 

    23 

     

    

Other than
in the event of a Winding-up or Administration Event of the Company, or in relation to the Cash Component of any Alternative Consideration
in any Settlement Shares Offer payments in respect of or arising from the Contingent Capital Notes (including any damages for
breach of any obligations thereunder) shall, in addition to the right of the Company to cancel payments of interest pursuant to
the terms of the Seventh Supplemental Indenture or this Security, be conditional upon the Company’s being solvent at the
time when the relevant payment is due to be made, and no principal, interest or other amount shall be due and payable in respect
of or arising from the Contingent Capital Notes except to the extent that the Company could make such payment and still be solvent
immediately thereafter (such condition referred to herein as the “Solvency Condition”).

 

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

 

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

 

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

 

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

 

    24 

     

    

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

 

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

 

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

 

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

 

This Security shall be governed
by and construed in accordance with the laws of the State of New York, except (i) as otherwise provided for pursuant to Section
1.12 of the Contingent Convertible Securities Indenture and ‎Section
10.07 of the Seventh Supplemental Indenture, the subordination provisions referred to herein and in ‎Section
6.01 of the Seventh Supplemental Indenture (which replaces in its entirety Section 12.01(a) of the Contingent Convertible Securities
Indenture) and the waiver of the right to set-off referred to herein and in ‎Section
6.02 of the Seventh Supplemental Indenture, which are governed by, and construed in accordance with, Scots law (other than the
Trustee’s own rights, duties or immunities under Article 12 of the Contingent Convertible Securities Indenture, as amended
by ‎Section 6.01 of the Seventh Supplemental Indenture,
or otherwise), and (ii) the authorization and execution by the Company of this Security shall be governed by (in addition to the
laws of the State of New York relevant to execution) the jurisdiction of the Company.

 

    25Document

Exhibit 4.5

DESCRIPTION OF SECURITIES
The following is a brief description of the securities of SuRo Capital Corp. a Maryland corporation (the “Company,” “we,” “our” or “us”), registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This description of our securities does not purport to be complete and is subject to and qualified in its entirety by reference to the applicable provisions of Maryland General Corporation Law (the “MGCL”) and the full text of our charter and bylaws.  As of December 31, 2020 and the date hereof, our common stock is the only securities that we have registered under Section 12 of the Exchange Act.  
Common Stock
As of December 31, 2020, our authorized stock consisted solely of 100,000,000 shares of common stock, par value $0.01 per share, and no shares of preferred stock. Our common stock is listed on the Nasdaq Capital Market under the ticker symbol “SSSS.” As of December 31, 2020, 1,627,967 shares of common stock were authorized for issuance under the SuRo Capital Corp. Amended and Restated 2019 Equity Incentive Plan.  There are no outstanding options or warrants to purchase our common stock. Under Maryland law, our stockholders generally are not personally liable for our debts or obligations.

Under our charter our board of directors is authorized to classify and reclassify any unissued shares of stock into other classes or series of stock without obtaining stockholder approval. As permitted by the MGCL, our charter provides that the board of directors, without any action by our stockholders, may amend the charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue.

All shares of our common stock have equal rights as to earnings, assets, voting, and distributions and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. Distributions may be paid to the holders of our common stock if, as and when authorized by our board of directors and declared by us out of assets legally available therefor. Shares of our common stock have no preemptive, conversion or redemption rights and are freely transferable, except where their transfer is restricted by federal and state securities laws or by contract. In the event of our liquidation, dissolution or winding up, each share of our common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time. Each share of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other class or series of stock, the holders of our common stock will possess exclusive voting power. There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock can elect all of our directors, and holders of less than a majority of such shares will be unable to elect any director.

Limitation on Liability of Directors and Officers; Indemnification and Advance of Expenses
 
The MGCL permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains such a provision which eliminates directors’ and officers’ liability to the maximum extent permitted by the MGCL, subject to the requirements of the Investment Company Act of 1940, as amended (the “1940 Act”).
 
Our charter authorizes us, to the maximum extent permitted by the MGCL and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any individual who, while serving as our director or officer and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her 

service in any such capacity and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. Our bylaws obligate us, to the maximum extent permitted by the MGCL and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any individual who, while serving as our director or officer and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee and who is made, or threatened to be made, a party to the proceeding by reason of his or her service in that capacity from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in any such capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding. The charter and bylaws also permit us to indemnify and advance expenses to any person who served a predecessor of us in any of the capacities described above and any of our employees or agents or any employees or agents of our predecessor. In accordance with the 1940 Act, we will not indemnify any person for any liability to which such person would be subject by reason of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.
 
The MGCL requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that capacity. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made, or threatened to be made, a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under the MGCL, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received unless, in either, case a court orders indemnification, and then only for expenses. In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer in advance of final disposition of a proceeding upon the corporation’s receipt of (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.

Certain Provisions of the MGCL and Our Charter and Bylaws

The MGCL and our charter and bylaws contain provisions that could make it more difficult for a potential acquirer to acquire us by means of a tender offer, proxy contest or otherwise, the material ones of which are discussed below. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We expect the benefits of these provisions to outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such proposals may improve their terms.

Classified Board of Directors

Our board of directors is divided into three classes of directors serving staggered three-year terms. The current terms of the first, second and third classes will expire in 2021, 2022, and 2023, respectively, and in each case, those directors will serve until their successors are elected and qualify. Upon expiration of their terms, directors of each class will be elected to serve for three-year terms and until their successors are duly elected and qualify and each year one class of directors will be elected by the stockholders. A classified Board may render a change in control of us or removal of our incumbent management more difficult. We believe, however, that the longer time required to elect a majority of a classified board of directors will help to ensure the continuity and stability of our management and policies.

Election of Directors

Our bylaws, as authorized by our charter, provide that a plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum is present is required to elect a director. Pursuant to our charter our board of directors may amend the bylaws to alter the vote required to elect directors.

Number of Directors; Vacancies; Removal

Our charter provides that the number of directors will be set only by the board of directors in accordance with our bylaws. Our bylaws provide that a majority of our entire board of directors may at any time increase or decrease the number of directors. However, unless our bylaws are amended, the number of directors may never be less than one nor more than nine. Our charter provides that, at such time as we have at least three independent directors and our common stock is registered under the Exchange Act, as amended, we elect to be subject to the provision of Subtitle 8 of Title 3 of the MGCL regarding the filling of vacancies on the board of directors. Accordingly, at such time, except as may be provided by the board of directors in setting the terms of any class or series of preferred stock, any and all vacancies on the board of directors may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is elected and qualifies, subject to any applicable requirements of the 1940 Act.

Our charter provides that a director may be removed only for cause, as defined in our charter, and then only by the affirmative vote of at least two-thirds of the votes entitled to be cast in the election of directors.

Action by Stockholders

Under the MGCL, stockholder action can be taken only at an annual or special meeting of stockholders or (unless the charter provides for stockholder action by less than unanimous written consent, which our charter does not) by unanimous written consent in lieu of a meeting. These provisions, combined with the requirements of our bylaws regarding the calling of a stockholder-requested special meeting of stockholders discussed below, may have the effect of delaying consideration of a stockholder proposal until the next annual meeting.

Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals

Our bylaws provide that with respect to an annual meeting of stockholders, nominations of persons for election to the board of directors and the proposal of business to be considered by stockholders may be made only (1) pursuant to our notice of the meeting, (2) by the board of directors or (3) by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice procedures of our bylaws. With respect to special meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of persons for election to the board of directors at a special meeting may be made only (1) pursuant to our notice of the meeting, (2) by the board of directors or (3) provided that the board of directors has determined that directors will be elected at the meeting, by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice provisions of the bylaws.

The purpose of requiring stockholders to give us advance notice of nominations and other business is to afford our board of directors a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our board of directors, to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure for conducting meetings of stockholders. Although our bylaws do not give our board of directors any power to disapprove stockholder nominations for the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.

Calling of Special Meetings of Stockholders

Our bylaws provide that special meetings of stockholders may be called by our board of directors and certain of our officers. Additionally, our bylaws provide that, subject to the satisfaction of certain procedural and informational requirements by the stockholders requesting the meeting, a special meeting of stockholders will be called by the secretary of the corporation upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting.

Approval of Extraordinary Corporate Action; Amendment of Charter and Bylaws

Under the MGCL, a Maryland corporation generally cannot dissolve, amend its charter, merge, convert, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business, unless approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our charter generally provides for approval of charter amendments and extraordinary transactions by the stockholders entitled to cast at least a majority of the votes entitled to be cast on the matter. Our charter also provides that the following matters require the approval of stockholders entitled to cast at least 80% of the votes entitled to be cast: (i) certain charter amendments; (ii) any proposal for our conversion, whether by merger or otherwise, from a closed-end company to an open-end company; (iii) any proposal for our liquidation or dissolution; or (iv) any proposal regarding a merger, consolidation, share exchange or sale or exchange of all or substantially all of our assets that the MGCL requires to be approved by our stockholders. However, if such amendment or proposal is approved by a majority of our continuing directors (in addition to approval by our board of directors), such amendment or proposal may be approved by a majority of the votes entitled to be cast on such a matter. The “continuing directors” are defined in our charter as (1) our current directors, (2) those directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority of our current directors then on the board of directors or (3) any successor directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority of continuing directors or the successor continuing directors then in office. In any event, in accordance with the requirements of the 1940 Act, any amendment or proposal that would have the effect of changing the nature of our business so as to cause us to cease to be, or to withdraw our election as, a business development company would be required to be approved by a majority of our outstanding voting securities, as defined under the 1940 Act.

Our charter and bylaws provide that the board of directors will have the exclusive power to make, alter, amend or repeal any provision of our bylaws.

No Appraisal Rights

Except with respect to appraisal rights arising in connection with the Control Share Act discussed below, as permitted by the MGCL, our charter provides that stockholders will not be entitled to exercise appraisal rights unless a majority of the board of directors shall determine such rights apply.

Control Share Acquisitions

The MGCL, pursuant to the Control Share Act (the “Control Share Act”), provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by directors who are employees of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the increasing ranges of voting power listed in the Control Share Act. The requisite stockholder approval must be obtained each time an acquiror crosses one of the thresholds of voting power. Control shares do not include shares the acquiring person is 

then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the acquisition of control shares, subject to certain exceptions. 

Our bylaws contain a provision exempting from the Control Share Act any and all acquisitions by any person of our shares of stock. There can be no assurance that such provision will not be amended or eliminated at any time in the future. However, we will amend our bylaws to be subject to the Control Share Act only if our board of directors determines that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Control Share Act does not conflict with the 1940 Act. The SEC staff has issued informal guidance setting forth its position that, if a closed-end investment company opts in to and triggers the Control Share Act, it would not violate Section 18(i) of the 1940 Act if the determination do so by the board of directors of the closed-end investment company was taken with reasonable care on a basis consistent with other applicable duties and laws, including those to the fund and its shareholders generally. 

Business Combinations

Under the MGCL, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder (the “Business Combination Act”). These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:
									
		•	any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock; or

									
		•	an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.

A person is not an interested stockholder under this statute if the board of directors approved in advance the transaction by which the stockholder otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of directors.

After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least:
									
		•	80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

									
		•	two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.

The statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder. Our board of directors has adopted a resolution that any business combination between us and any other person is exempted from the provisions of the Business Combination Act, provided that the business combination is first approved by the board of directors, including a majority of the directors who are not “interested pers as defined in the 1940 Act. This resolution may be altered or repealed in whole or in part at any time; however, our board of directors will adopt 

resolutions so as to make us subject to the provisions of the Business Combination Act only if the board of directors determines that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Business Combination Act does not conflict with the 1940 Act. If this resolution is repealed, or the board of directors does not otherwise approve a business combination, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

Conflict with 1940 Act

Our bylaws provide that, if and to the extent that any provision of the MGCL, including the Control Share Act (if we amend our bylaws to be subject to such Act) and the Business Combination Act, or any provision of our charter or bylaws conflicts with any provision of the 1940 Act, the applicable provision of the 1940 Act will control.

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