Document:

Exhibit 4.23

 

 

Dated 26 November 2009

 

 

THE COMMISSIONERS OF HER MAJESTY’S TREASURY

 

and

 

THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS

 

and

 

THE ROYAL BANK OF SCOTLAND PLC

 

and

 

THE ROYAL BANK OF SCOTLAND GROUP PLC

 

and

 

ABN AMRO BANK N.V.

 

 

_________________________________________________________

 

AGREEMENT TO FOREGO TAX RELIEFS

 

in connection with an Accession Agreement relating to the UK Asset Protection Scheme

 

__________________________________________________________

 

 

 

Slaughter and May

One Bunhill Row

London EC1Y 8YY

(GI)

TX093020022

 

 

 

 

 

THIS DEED is made as a deed on 26 November 2009

 

BETWEEN:

 

	
(1)

	
THE COMMISSIONERS OF HER MAJESTY’S TREASURY of 1 Horse Guards Road, London SW1A 2HQ (the “Treasury”);

 

	
(2)

	
THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS of 100 Parliament Street, London SW1A 2BQ (the “Commissioners for HMRC”);

 

	
(3)

	
THE ROYAL BANK OF SCOTLAND PLC, a public limited company incorporated in Scotland with registered number SC090312, whose registered office is at 36 St Andrew Square, Edinburgh, Midlothian EH2 2YB (the “Participant”);

 

	
(4)

	
THE ROYAL BANK OF SCOTLAND GROUP PLC, a public limited company incorporated in Scotland with registered number SC045551, whose registered office is at 36 St Andrew Square, Edinburgh, Midlothian EH2 2YB (the “Initial Parent”); and

 

	
(5)

	
ABN AMRO BANK N.V., a public company with limited liability incorporated under the laws of the Netherlands (registered no. 33002587), having its office address at Gustav Mahlerlaan 10 (1082 PP), Amsterdam, the Netherlands (“ABN Amro”).

 

WHEREAS:

 

	
(A)

	
On 19th January 2009, Her Majesty’s Government of the United Kingdom announced its intention to offer the Asset Protection Scheme (the “Scheme”) to protect certain eligible financial institutions against exceptional credit losses on certain portfolios of assets and exposures.

 

	
(B)

	
On 26th February 2009, the Treasury announced the proposed implementation, and issued a statement summarising the proposed terms, of the Scheme.

 

	
(C)

	
On 26th February 2009, the Initial Parent announced its intention to participate in the Scheme and entered into discussions with the Treasury regarding the terms of the Scheme and the accession of the Participant to it.

 

	
(D)

	
The Participant, the Initial Parent and the Treasury have entered into an Accession Agreement on or about the date of this Deed relating to the Participant’s participation in the Scheme (the “Accession Agreement”).

 

	
(E)

	
The Accession Agreement contemplates that this Deed will provide for the matters described herein, and the Participant’s participation in the Scheme is conditional upon, inter alia, the execution of this Deed.

 

	
(F)

	
The Participant’s participation in the Scheme on the terms described in, inter alia, the Accession Agreement, the Conditions and this Deed is an arrangement of the kind described in sub-section (2) of Section 25 of the Finance Act 2009.  The Treasury has 

 

 

 

 

 

	
 

	
designated or intends to designate such arrangement under sub-section (1) of Section 25 of the Finance Act 2009.

 

IT IS AGREED as follows:

 

PART 1 – DEFINITIONS AND INTERPRETATION

 

	
1.

	
In this Deed (or, in any case where it is provided that a definition is to apply only for the purposes of certain provisions of this Deed, in those provisions), the following expressions shall have the following meanings (and cognate expressions shall be construed accordingly), unless otherwise provided in this Deed:

 

	 	 “ABN Acquisition Date” means 17th October 2007;
	 	 
	
  

	
“Accountants” has the meaning given to it in Clause 11;

 

	
  

	
“Accounting Period” means, in relation to any RBS Company, any “accounting period” (as defined in Section 12 of ICTA 1988 or Chapter 2 of Part 2 of CTA 2009, as appropriate) of such RBS Company;

 

	
  

	
“Annual Fee” has the meaning given to it in the Accession Agreement;

 

	
  

	
“arrangement” includes any agreement, understanding, scheme, action, transaction or series of actions or transactions, in each case whether or not legally enforceable (and, without limitation, includes the making of any claim, election or notice for the purposes of any of the relevant enactments);

 

	
  

	
“Contingent Capital Fee Tax Assets Agreement” means the “Agreement to Forego Tax Assets in connection with an Acquisition and Contingent Capital Agreement” entered into by the Treasury, the Commissioners for HMRC, the Participant, the Initial Parent and ABN Amro dated on or about the date of this Deed;

	 	 
	 	
“CTA 2009” means the Corporation Tax Act 2009;

 

	
  

	
“Disclosure Consent” has the meaning given to it in Clause 38;

 

	
  

	
“Disclosure Consent Notice” means a notice in the form set out in Schedule 1;

 

	
  

	
“Exit Fee Tax Assets Agreement” means the “Agreement to Forego Tax Assets in connection with an Exit Fee payable under an Accession Agreement relating to the UK Asset Protection Scheme” entered into by the Treasury, the Commissioners for HMRC, the Participant, the Initial Parent and ABN Amro dated on or about the date of this Deed;

 

“financial year” has the meaning given to it in the Interpretation Act 1978;

 

	
  

	
“First Tax Assets Determination Date” means 15th March 2010 (or, if such date is not a Business Day, the next preceding Business Day);

 

 

3

 

 

	
  

	
“First Payment Date” has the meaning given to it in the Accession Agreement;

 

	
  

	
“HMRC” means the Commissioners and officers of Her Majesty’s Revenue and Customs as referred to in Section 4 of the Commissioners for Revenue and Customs Act 2005;

 

“ICTA 1988” means the Income and Corporation Taxes Act 1988;

 

	
  

	
“Interest Rate” has the meaning given to it in Clause 27;

 

“Lower Verified Amount” has the meaning given to it in Clause 16;

 

	
  

	
“Participation Agreement” means an agreement in the form set out in Schedule 2;

 

	
  

	
“Payment Date” has the meaning given to it in the Accession Agreement;

 

	
  

	
“Payment Proposal Notice” has the meaning given to it in the Accession Agreement;

 

	
  

	
“Qualifying Tax Asset” has the meaning given to it in Clause 6;

 

	
  

	
“RBS Companies” means the Participant and its Group Members from time to time (including, for the avoidance of doubt, since the ABN Acquisition Date, ABN Amro and its Subsidiary Undertakings from time to time);

 

	
  

	
“Reference Date” has the meaning given to it in the Accession Agreement;

 

“Relevant HMRC Information” has the meaning given to it in Clause 39;

 

“Relevant Company” has the meaning given to it in Clause 6;

 

“Relevant Payment Date” has the meaning given to it in Clause 6;

 

“Relevant RBS Information” has the meaning given to it in Clause 30;

 

“Relevant Tax Asset” has the meaning given to it in Clause 6;

 

	
  

	
“Tax Asset” means any of the following which would (but for this Deed) be taken into account for United Kingdom corporation tax purposes:

 

	
  

	
(a)

	
any trading loss available to be set off under Sections 393 or 393A of ICTA 1988, any Schedule A loss, any UK property business loss, any loss incurred in an overseas property business, any Schedule D Case VI loss, any loss to which Section 396 of ICTA 1988 applies, any non-trading deficit on loan relationships, any non-trading loss on intangible fixed assets, any expense of management and any allowable loss for the purposes of corporation tax on chargeable gains (and includes, for the avoidance of doubt, any part of any of the foregoing); and

 

 

4

 

 

	
  

	
(b)

	
any other loss, allowance, credit, deduction or other Tax benefit which the Treasury and the Participant agree in writing may be treated as a “Tax Asset” for the purposes of this Deed; and

 

“Tax Assets Determination Date” means:

 

	
  

	
(a)

	
in relation to the First Payment Date, the First Tax Assets Determination Date; and

 

	
  

	
(b)

	
in relation to any other Payment Date, the 14th December which next precedes such Payment Date (or, if such date is not a Business Day, the next preceding Business Day).

 

	
2.

	
Any word or expression defined in Section 25 of the Finance Act 2009 shall have the same meaning in this Deed.

 

	
3.

	
Unless otherwise provided in this Deed, any word or expression defined in the Accession Agreement (but excluding the expressions “Relevant Annual Fee”, “Relevant Payment Date” and any other word or expression defined only for the purposes of specific sub-Clauses of the Accession Agreement), shall have the same meaning in this Deed.  Unless otherwise provided in this Deed, any word or expression defined in the Conditions shall have the same meaning in this Deed.

 

	
4.

	
Unless otherwise provided in this Deed, Condition 57 (Interpretation) shall apply, with any necessary modifications, in relation to this Deed.  Without limitation of the foregoing, any headings and sub-headings in this Deed are included for ease of reference only and shall not affect the interpretation of this Deed.

 

	
5.

	
The Conditions are deemed to form part of this Deed.

 

PART 2 – CONDITIONS FOR RELEVANT TAX ASSET TO BE A QUALIFYING TAX ASSET

 

Qualifying Tax Assets

 

	
6.

	
Subject to the provisions of this Deed, a Tax Asset shall be a “Qualifying Tax Asset” for the purposes of this Deed if (and only if):

 

	
  

	
(a)

	
a “Tax Asset Notice” is deemed under the Accession Agreement to have been served for the purposes of this Deed, in consequence of the service of a Payment Proposal Notice under the Accession Agreement.  In such a case (subject to Clauses 7, 8 and 9):

 

	
  

	
(i)

	
the “Relevant Annual Fee” means, for the purposes of this Deed, the Annual Fee to which such Payment Proposal Notice relates;

 

 

5

 

 

	
  

	
(ii)

	
the “Relevant Company” means, for the purposes of this Deed, the “Tax Asset Company” referred to in paragraph 2(c) of such Payment Proposal Notice;

 

	
  

	
(iii)

	
the “Relevant Payment Date” means, for the purposes of this Deed, the Payment Date to which such Payment Proposal Notice relates; and

 

	
  

	
(iv)

	
the “Relevant Tax Asset” means, for the purposes of this Deed, the Tax Asset specified in paragraph 2(c) of such Payment Proposal Notice;

 

	
  

	
(b)

	
the Relevant Company is, on the relevant Tax Assets Determination Date, an RBS Company;

 

	
  

	
(c)

	
the Relevant Company has been, at all times from (and including) the beginning of the Accounting Period in which the Relevant Tax Asset arose to (and excluding) the relevant Tax Assets Determination Date:

 

	
  

	
(i)

	
an RBS Company; or

 

	
  

	
(ii)

	
in relation to any period of time falling before the ABN Acquisition Date, ABN Amro or a Subsidiary Undertaking of ABN Amro;

 

	
  

	
(d)

	
the Relevant Tax Asset arose in the Relevant Company in respect of an Accounting Period ending on or before the relevant Reference Date;

 

	
  

	
(e)

	
the Relevant Tax Asset has not been set off or otherwise utilised (whether by carry forward, carry back, carry across, surrender under Chapter 4 of Part 10 of ICTA 1988 or otherwise) in any Accounting Period (or part thereof) beginning on or before the relevant Tax Assets Determination Date;

 

	
  

	
(f)

	
the Relevant Tax Asset has been verified by the Accountants in accordance with Clauses 11 to 14 (inclusive);

 

	
  

	
(g)

	
the Relevant Tax Asset has been verified by HMRC in accordance with Clauses 15 to 18 (inclusive);

 

	
  

	
(h)

	
the use of the Relevant Tax Asset has been approved by the Treasury in accordance with Clause 19;

 

	
  

	
(i)

	
the Relevant Company has, on or before the relevant Reference Date, given a Disclosure Consent to HMRC pursuant to Clause 34, 35, 36 or 37;

 

	
  

	
(j)

	
if the Relevant Company is not otherwise a party to this Deed as at the relevant Tax Assets Determination Date, the Relevant Company has, on or before the relevant Tax Assets Determination Date, agreed to be bound by this Deed in accordance with Clause 46;

 

 

6

 

 

	
  

	
(k)

	
the Relevant Tax Asset has not been treated as a Qualifying Tax Asset in consequence of any other application of this Deed; and

 

	
  

	
(l)

	
the Relevant Tax Asset has not been treated as a “Qualifying Tax Asset” for the purposes of the Contingent Capital Fee Tax Assets Agreement or the Exit Fee Tax Assets Agreement,

 

	
  

	
unless, in the case of any of the conditions set out in sub-Clauses (b) to (f) above, the Treasury has agreed in writing with the Participant, on or before the relevant Tax Assets Determination Date, that such condition shall not apply in relation to the Relevant Tax Asset.

 

Multiple Relevant Tax Assets

 

	
7.

	
If more than one Tax Asset is described in paragraph 2(c) of the relevant Payment Proposal Notice, any reference in this Deed to “the Relevant Tax Asset” shall be construed as a reference to each such Tax Asset (and any reference in this Deed to “the Relevant Company” shall be construed as a reference to the “Tax Asset Company” referred to in paragraph 2(c) of such Payment Proposal Notice in relation to such Tax Asset).

 

Substitute or additional Relevant Tax Assets

 

	
8.

	
Subject to Clause 9, if, at any time falling after the relevant Reference Date and before the relevant Tax Assets Determination Date, the Treasury and the Participant agree in writing that paragraph 2(c) of the relevant Payment Proposal Notice is to be treated as having specified any Tax Asset (the “Additional Tax Asset”) in substitution for, or in addition to, any Tax Asset which is in fact specified in paragraph 2(c) of the relevant Payment Proposal Notice:

 

	
  

	
(a)

	
the relevant Payment Proposal Notice shall be deemed for the purposes of this Deed to have so specified the Additional Tax Asset (in substitution for, or in addition to, any Tax Asset which is in fact specified in paragraph 2(c) of the relevant Payment Proposal Notice, as the case may be); and

 

	
  

	
(b)

	
any reference in sub-Clause (i) of Clause 6 to the relevant Reference Date shall be deemed to be, in relation to the Additional Tax Asset, a reference to the date on which such agreement is made (or such other date as may be agreed in writing by the Treasury and the Participant for such purposes).

 

	
9.

	
Clause 8 shall not apply in any case where the relevant agreement between the Treasury and the Participant is made on or after the date falling 30 Business Days before the relevant Tax Assets Determination Date unless HMRC is also a party to such agreement.

 

 

7

 

 

Accounting Period in which Tax Asset arises

 

	
10.

	
Any Tax Asset which arises or (but for this Deed) would have arisen to the Relevant Company for the purposes of any of the relevant enactments shall be treated for the purposes of this Deed as arising (and as arising only) in the Accounting Period of the Relevant Company in which it is treated as first arising or is first brought into account for the purposes of the relevant enactments (unless the Relevant Company, the Participant, the Treasury and HMRC agree otherwise in writing in relation to any Tax Asset, in which case such Tax Asset shall be treated for the purposes of this Deed as arising in the Accounting Period of the Relevant Company so agreed).

 

Verification by the Accountants

 

	
11.

	
Any reference in this Deed to the “Accountants” means any firm of chartered accountants (which may be, for the avoidance of doubt, the auditors of the Initial Parent):

 

	
  

	
(a)

	
which is appointed by the Participant for the purposes of providing the certification referred to in Clause 12 in respect of the Relevant Tax Asset and making any related inquiries contemplated by Clause 12; and

 

	
  

	
(b)

	
whose appointment for such purposes has been approved by the Treasury, in advance of such appointment, by notice served on the Participant by the Treasury.

 

	
12.

	
The Relevant Tax Asset shall be treated for the purposes of this Deed as having been verified by the Accountants if (and only if) the Accountants certify to the Treasury, in terms reasonably satisfactory to the Treasury, on or before the relevant Tax Assets Determination Date, that they are satisfied, having made due inquiry into the relevant facts and circumstances, that if the consolidated annual report and accounts of the Initial Parent for the accounting period ending on the last accounting reference date falling on or before the Reference Date had been audited by the Accountants and had been published on the Reference Date (or, in a case where such annual reports are required by Applicable Law to be published on a date falling before the Reference Date, such date), the Relevant Tax Asset (for the avoidance of doubt, in an amount not less than that specified in paragraph 2(c) of the relevant Payment Proposal Notice) would have been treated as available to the Relevant Company for use in one or more subsequent accounting period(s) in the calculation of any provision, reserve, allowance or asset in respect of Tax (including deferred Tax) which would have been shown in the audited consolidated balance sheet set out in such annual report and accounts.

 

	
13.

	
For the avoidance of doubt, the Accountants may, in making any due inquiry into the relevant facts and circumstances for the purposes of Clause 12, take into account any audited consolidated annual report and accounts of the Initial Parent for the accounting period referred to in Clause 12 which have in fact been published on or before the relevant Reference Date and any related working papers made available to them.

 

 

8

 

 

	
14.

	
The Participant shall pay and bear, and shall indemnify the Treasury against, any fees, costs and expenses incurred in connection with the appointment of the Accountants and the exercise and performance of their rights and responsibilities contemplated in this Deed.

 

Verification by HMRC

 

	
15.

	
The Relevant Tax Asset shall be treated for the purposes of this Deed as having been verified by HMRC if (and only if):

 

	
 

	
(a) 

	
either:

 

	
  

	
(i)

	
if the corporation tax return of the Relevant Company for the Accounting Period in which the Relevant Tax Asset arose has become final and incapable of amendment on or before the relevant Reference Date, the Relevant Tax Asset (for the avoidance of doubt, in an amount not less than that specified in paragraph 2(c) of the relevant Payment Proposal Notice) was shown in such corporation tax return as being available to the Relevant Company and HMRC has notified the Treasury, on or before the relevant Tax Assets Determination Date, that the foregoing is the case; or

 

	
  

	
(ii)

	
HMRC has notified the Treasury, on or before the relevant Tax Assets Determination Date, that it is satisfied that the Relevant Tax Asset (for the avoidance of doubt, in an amount not less than that specified in paragraph 2(c) of the relevant Payment Proposal Notice) was available to the Relevant Company in the Accounting Period in which the Relevant Tax Asset arose; and

 

	
  

	
(b)

	
HMRC has notified the Treasury, on or before the relevant Tax Assets Determination Date, that it is satisfied that:

 

	
  

	
(i)

	
the Relevant Tax Asset has not, to any extent, been set off or otherwise utilised (whether by carry forward, carry back, carry across, surrender under Chapter 4 of Part 10 of ICTA 1988 or otherwise) in any Accounting Period; and

 

	
  

	
(ii)

	
no claim, election or notice has been made by or on behalf of the Relevant Company or any other RBS Company, and there are no other facts or circumstances known to HMRC, as a result of which the Relevant Tax Asset may, to any extent, be set off or otherwise utilised (whether by carry forward, carry back, carry across, surrender under Chapter 4 of Part 10 of ICTA 1988 or otherwise) in any Accounting Period beginning on or before the Relevant Payment Date.

 

 

9

 

 

	
16.

	
If:

 

	
  

	
(a)

	
HMRC is not satisfied as to the matters described in Clause 15, but HMRC would have been satisfied as to those matters if the amount of the Relevant Tax Asset specified in paragraph 2(c) of the relevant Payment Proposal Notice had been an amount (the “Lower Verified Amount”) which is less than the amount in fact so specified;

 

	
  

	
(b)

	
HMRC notifies the Treasury of the foregoing (including, for the avoidance of doubt, the Lower Verified Amount) on or before the relevant Tax Assets Determination Date; and

 

	
  

	
(c)

	
the Treasury agrees in writing with the Participant on or before the relevant Tax Assets Determination Date that this Clause 16 is to have effect,

 

then:

 

	
  

	
(i)

	
the relevant Payment Proposal Notice shall be deemed for the purposes of this Deed to have specified the Lower Verified Amount as being the amount of the Relevant Tax Asset (in place of the amount which is in fact so specified in paragraph 2(c) of the relevant Payment Proposal Notice); and

 

	
  

	
(ii)

	
the Relevant Tax Asset shall be treated for the purposes of this Deed as having been verified by HMRC in an amount equal to the Lower Verified Amount,

 

	
  

	
but without prejudice to sub-Clause (a) of Clause 27.

 

	
17.

	
HMRC shall use reasonable endeavours to notify the Treasury, on or before the relevant Tax Assets Determination Date, whether or not the conditions referred to in Clause 15 are satisfied.

 

	
18.

	
For the avoidance of doubt, HMRC shall not be treated as having failed to comply with, or to provide any notification contemplated in, Clause 15, 16 or 17 in any case where HMRC is unable to provide any notification contemplated in Clause 15, 16 or 17 in consequence of any breach by the Participant, the Relevant Company or any other RBS Company of any of Clauses 28 to 40 (inclusive) or in any other case where HMRC is unable to provide any such notification because any relevant information is not available to HMRC when required.

 

Approval by the Treasury

 

	
19.

	
The use of the Relevant Tax Asset shall be treated for the purposes of this Deed as having been approved by the Treasury if (and only if) the Treasury notifies the Participant, on or before the relevant Tax Assets Determination Date, that it consents to the use of the Relevant Tax Asset for the purposes of this Deed.

 

 

10

 

 

Notification by the Treasury to the Participant

 

	
20.

	
The Treasury shall notify the Participant, on or before the relevant Tax Assets Determination Date, whether in its opinion the conditions set out in Clause 6 are satisfied in relation to the Relevant Tax Asset.

 

PART 3 – CONSEQUENCES WHERE RELEVANT TAX ASSET IS A QUALIFYING TAX ASSET

 

Agreement to forego tax reliefs

 

	
21.

	
Each RBS Company shall hereby, on the relevant Tax Assets Determination Date, forego any tax relief and any right to any tax relief (in each case, whenever arising, and for the avoidance of doubt whether arising before or after the relevant Tax Assets Determination Date) if and to the extent that such tax relief, or such right to any tax relief, would not have arisen but for the use or availability of any Qualifying Tax Asset.

 

Section 25 of the Finance Act 2009

 

	
22.

	
Each of the Participant, the Initial Parent, ABN Amro, each other RBS Company which from time to time enters into a Participation Agreement and the Treasury agree that they intend that Section 25 of the Finance Act 2009 shall apply in relation to this Deed, the Accession Agreement, the Conditions and the matters contemplated therein (such that, for the avoidance of doubt, no tax relief will be given to any person by virtue of any tax relief or right to any tax relief foregone under Clause 21 or anything resulting from or representing any tax relief or right to any tax relief foregone under Clause 21).

 

	
23.

	
Each of the Participant, the Initial Parent, ABN Amro, each other RBS Company which from time to time enters into a Participation Agreement, the Treasury and the Commissioners for HMRC may amend this Deed by written agreement between them from time to time, and each of the Participant, the Initial Parent, ABN Amro, each other RBS Company which from time to time enters into a Participation Agreement and the Treasury agree that they intend that Section 25 of the Finance Act 2009 shall continue to apply in relation to this Deed as so amended.

 

	
24.

	
Each of the Participant, the Initial Parent, ABN Amro and each other RBS Company which from time to time enters into a Participation Agreement shall take any action reasonably required by the Treasury for the purpose of ensuring that Section 25 of the Finance Act 2009 applies in relation to this Deed, the Accession Agreement, the Conditions and the matters contemplated therein (including, without limitation, following any amendment of this Deed from time to time as mentioned in Clause 23).

 

Amount of Relevant Annual Fee to be treated as discharged

 

	
25.

	
If Clause 21 has effect in relation to the Qualifying Tax Asset, the Relevant Annual Fee shall be deemed for the purposes of the Accession Agreement, to the extent of the following amount, to be due for payment on the relevant Tax Assets Determination Date 

 

 

11

 

 

immediately after Clause 21 has effect in relation to the Qualifying Tax Asset, and shall be deemed for the purposes of the Accession Agreement, at that same time, to be discharged by an amount of tax relief foregone equal to the following amount (and, for the avoidance of doubt, if Clause 21 does not have effect in relation to the Relevant Tax Asset on the relevant Tax Assets Determination Date, such amount shall be deemed for the purposes of the Accession Agreement to be nil):

 

	
  

	
(a)

	
if the Treasury and the Participant agree in writing on or before the relevant Tax Assets Determination Date that the amount of the Relevant Annual Fee is to be treated as discharged by an amount of tax relief foregone equal to a specified amount (which amount may, for the avoidance of doubt, be greater or lesser that the amount referred to in sub-Clause (b)), the amount so specified; or

 

	
  

	
(b)

	
in any other case where Clause 21 has effect in relation to the Qualifying Tax Asset, an amount equal to  A  x  B  x  (1 + (C/(1 – C)))  x  (1 – D), where:

 

	 	
“A” 

	
means the amount of the Qualifying Tax Asset;

 

	 	
“B”

	
has the following meaning:

 

	
  

	
(i)

	
in any case where the Qualifying Tax Asset falls within sub-Clause (a) of the definition of “Tax Asset” set out in Clause 1, or falls within sub-Clause (b) of the definition of “Tax Asset” set out in Clause 1 and is of such a nature that it is available to be set off or otherwise utilised against income, profits or gains for the purposes of the relevant enactments (assuming that sufficient income, profits or gains are available for such purpose), amount “B” shall equal the rate (expressed as a decimal) of corporation tax for the financial year in which the relevant Tax Assets Determination Date falls (ignoring for these purposes any small companies rate provided for in Section 13 ICTA 1988 and any other rate applicable only to limited classes of company); and

 

	
  

	
(ii)

	
in any case where the Qualifying Tax Asset falls within sub-Clause (b) of the definition of “Tax Asset” set out in Clause 1 and is of such a nature (including any credit for foreign taxes under Part 18 ICTA 1988) that it is available to be set off or otherwise utilised against any liability to corporation tax for the purposes of the relevant enactments (assuming that a sufficient liability to corporation tax is available for such purposes), amount “B” shall equal one;

 

	
  

	
“C”

	
means the rate (expressed as a decimal) of corporation tax for the financial year in which the relevant Tax Assets Determination Date falls (ignoring for these purposes any small companies rate provided for in Section 13 ICTA 1988 and any other rate applicable only to limited classes of company); and

 

 

12

 

 

	
  

	
“D”

	
means the greater of C and 0.2 (or, if they are equal, 0.2).

 

Anti-frustration undertaking

 

	
  

	
26.

	
If Clause 21 has effect in relation to any Qualifying Tax Asset:

 

	
  

	
(a)

	
no RBS Company shall, with effect from the relevant Tax Assets Determination Date, enter into any arrangement, including without limitation:

 

	
  

	
(i)

	
any arrangement one of whose (direct or indirect) effects is to avoid or defer any liability to Tax which would otherwise arise under any of the relevant enactments or the accrual, realisation or recognition of any income, profit or gain which would otherwise arise for the purposes of any of the relevant enactments;

 

	
  

	
(ii)

	
any arrangement required to be disclosed pursuant to Part 7 of the Finance Act 2004 or any regulations made thereunder, as the same may be amended from time to time (or which would have been required to be so disclosed but for any disclosure by any other person); or

 

	
  

	
(iii)

	
any arrangement where one of such RBS Company’s main purposes in being a party to such arrangement is to secure a tax advantage (as defined in Section 840ZA of ICTA 1988) for itself or any other person,

 

	
  

	
where it would be reasonable to assume that one of the main purposes of such arrangement is to reduce the net cost (taking into account the time value of money) to the Participant, the Initial Parent, the Relevant Company, any other RBS Company or the RBS Companies taken together, of the application of Clause 21 in relation to the Qualifying Tax Asset; and

 

	
  

	
(b)

	
each of the Participant, the Initial Parent, ABN Amro and each other RBS Company which from time to time enters into a Participation Agreement warrants and represents that, as at the relevant Tax Assets Determination Date, no RBS Company has, on or after 26th February 2009, entered into any such arrangement.

 

PART 4 – INTEREST RATE WHERE ANY RELEVANT TAX ASSET IS NOT A QUALIFYING TAX ASSET

 

	
  

	
27.

	
If, on the relevant Tax Assets Determination Date, the Relevant Tax Asset is not a Qualifying Tax Asset (or, if more than one Tax Asset is specified in paragraph 2(c) of the relevant Payment Proposal Notice, any one or more of such Relevant Tax Assets is not a Qualifying Tax Asset), then:

 

	
  

	
(a)

	
if the Relevant Tax Asset would have been a Qualifying Tax Asset but for any failure to satisfy the condition referred to in sub-Clause (h) of Clause 6 (or, if more than one Tax Asset is specified in paragraph 2(c) of the relevant Payment 

 

 

13

 

 

Proposal Notice, all of such Relevant Tax Assets would have been Qualifying Tax Assets but for any failure to satisfy the condition referred to in sub-Clause (h) of Clause 6), the “Interest Rate” shall be equal to the Funding Rate (assuming for these purposes that the Quarter referred to in Condition 8.17 is the Quarter beginning on 1 January 2010).  In any case where Clause 16 otherwise has effect in relation to any Relevant Tax Asset, Clause 16 shall be disregarded for the purposes of this sub-Clause (a) unless the relevant Lower Verified Amount is at least equal to 90% of the amount of such Relevant Tax Asset which is in fact specified in paragraph 2(c) of the relevant Payment Proposal Notice; and

 

	
  

	
(b)

	
the “Interest Rate” shall otherwise be equal to the Funding Rate (assuming for these purposes that the Quarter referred to in Condition 8.17 is the Quarter beginning on 1 January 2010) plus 5 per cent per annum.

 

PART 5 – INFORMATION, CONSULTATION, ADMINISTRATION ETC.

 

Provision of information by RBS Companies to the Treasury or the Accountants

 

	
28.

	
Each RBS Company shall provide to the Treasury any Relevant RBS Information requested by the Treasury.  Such information shall be provided promptly, and in any event within 15 Business Days after the Treasury requests such Relevant RBS Information from the Participant or such RBS Company.

 

	
29.

	
Each RBS Company shall provide to the Accountants any Relevant RBS Information requested by the Accountants.  Such information shall be provided promptly, and in any event within 15 Business Days after the Accountants request such Relevant RBS Information from the Participant or such RBS Company.

 

	
30.

	
For the purposes of this Deed, “Relevant RBS Information” means any information:

 

(a)           reasonably requested by the Treasury for the purpose of:

 

	
  

	
(i)

	
determining whether any condition mentioned in Clause 6 is satisfied in relation to the Relevant Tax Asset;

 

	
  

	
(ii)

	
determining any amount under Clause 25 in respect of any Qualifying Tax Asset; and/or

 

	
  

	
(iii)

	
determining whether any RBS Company has breached, or will or may breach, any obligation which is stated in this Deed to be undertaken by or to relate to such RBS Company; or

 

	
  

	
(b)

	
reasonably requested by the Accountants for the purposes of providing the certification referred to in Clause 12 and making any related inquiries contemplated by Clause 12.

 

 

14

 

 

	
31.

	
Any Relevant RBS Information provided by any RBS Company to the Treasury pursuant to Clause 28 (including any such information which the Treasury or any of its Representatives prepares and which contains or reflects or is generated from such information) shall be treated as “Participant Confidential Information” for the purposes of the Conditions, except to the extent that it is Excluded Information (as defined in the Conditions).

 

Provision of information by RBS Companies to HMRC

 

	
32.

	
Each RBS Company shall provide to HMRC any information reasonably requested by HMRC for the purposes of determining whether any notification referred to in Clauses 15 to 17 (inclusive) is to be provided (or the terms in which it is to be provided) or making any inquiries for such purposes.  Such information shall be provided promptly, and in any event within 15 Business Days after HMRC requests such information from the Participant or such RBS Company.

 

	
33.

	
HMRC acknowledges that Section 18 of the Commissioners for Revenue and Customs Act 2005 shall apply in relation to any information provided by any RBS Company to HMRC pursuant to Clause 32 (but, for the avoidance of doubt, Section 18(1) of that Act shall not apply where any Disclosure Consent has been provided by such RBS Company as referred to in Clauses 34 to 37 (inclusive), to the extent provided in such Disclosure Consent).

 

Provision of information by HMRC to the Treasury

 

	
34.

	
Each of the Participant, the Initial Parent and ABN Amro hereby gives a Disclosure Consent to HMRC.

 

	
35.

	
Each of the Participant and the Initial Parent shall use its best endeavours to procure that each RBS Company shall promptly following any reasonable request by the Treasury give a Disclosure Consent to HMRC by serving a Disclosure Consent Notice on HMRC.

 

	
36.

	
ABN Amro shall use its best endeavours to procure that each RBS Company which is a Group Undertaking of ABN Amro shall promptly following any reasonable request by the Treasury give a Disclosure Consent to HMRC by serving a Disclosure Consent Notice on HMRC.

 

	
37.

	
Any RBS Company may, at its discretion at any time, give a Disclosure Consent to HMRC by serving a Disclosure Consent Notice on HMRC.

 

	
38.

	
For the purposes of this Deed, a “Disclosure Consent” means a consent (including, but without limitation, for the purposes of Section 18(2)(h) of the Commissioners for Revenue and Customs Act 2005) to the disclosure of all Relevant HMRC Information by HMRC to the Treasury.

 

 

15

 

 

	
39.

	
For the purposes of this Deed, “Relevant HMRC Information” means all information if and to the extent that:

 

	
  

	
(a)

	
such information is set out in any notification provided by HMRC to the Treasury pursuant to any of Clauses 15 to 17 (inclusive) or is reasonably requested by the Treasury for the purpose of:

 

	
  

	
(i)

	
determining whether any condition mentioned in Clause 6 is satisfied in relation to any Relevant Tax Asset;

 

	
  

	
(ii)

	
determining any amount as contemplated in Clause 25 in respect of any Qualifying Tax Asset; and/or

 

	
  

	
(iii)

	
determining whether any RBS Company has breached, or will or may breach, any obligation which is stated in this Deed to be undertaken by or to relate to such RBS Company;

 

	
  

	
(b)

	
such information is held by or on behalf of HMRC from time to time and either:

 

	
  

	
(i)

	
HMRC has received such information from any RBS Company (or any person acting on behalf of or at the request or direction of any RBS Company); or

 

	
  

	
(ii)

	
such information contains, reflects or is generated from information of the kind referred to in sub-Clause (b)(i) above;

 

	
  

	
(c)

	
such information does not relate specifically to the tax affairs of any identifiable individual; and

 

	
  

	
(d)

	
the disclosure of such information by HMRC to the Treasury does not require the consent of any third party (not including, for the avoidance of doubt, any RBS Company or any agent or adviser of any RBS Company).

 

	
40.

	
Any Relevant HMRC Information provided by HMRC to the Treasury pursuant to Clause 34 to 37 (inclusive) (including any such information which the Treasury or any of its Representatives prepares and which contains or reflects or is generated from such information) shall be treated as “Participant Confidential Information” for the purposes of the Conditions, except to the extent that it is Excluded Information (as defined in the Conditions).

 

Consultation with the Treasury and HMRC

 

	
41.

	
If the Participant at any time:

 

	
  

	
(a)

	
provides the Treasury and HMRC with advance notice of any arrangement proposed to be entered into by any RBS Company, including the steps 

 

 

16

 

 

proposed to be taken and a description of the Tax implications of the arrangement for each RBS Company; and

 

	
  

	
(b)

	
asks the Treasury and HMRC to consider whether such proposed arrangement would (if entered into) constitute or give rise to a breach of Clause 26 and consults with the Treasury and HMRC in good faith as to the same,

 

	
  

	
the Treasury and HMRC will respond reasonably promptly to such request and will use reasonable endeavours to provide a confirmation of whether in their view such proposed arrangement would (if entered into) constitute or give rise to such a breach.

 

	
42.

	
The Treasury shall be entitled, by serving notice on the Participant, to delegate its rights and/or obligations under Clause 41 to HMRC or to revoke any such delegation.

 

PART 6 – COMPLIANCE WITH AND ACCESSION TO THIS DEED

 

Undertaking to comply and procure compliance

 

	
43.

	
Each of the Participant, the Initial Parent and ABN Amro agrees to comply with this Deed.

 

	
44.

	
Each of the Participant and the Initial Parent agrees to use its best endeavours to procure that each RBS Company shall comply with any obligation or requirement which is stated in this Deed to be undertaken by or to relate to any RBS Company.

 

	
45.

	
ABN Amro agrees to use its best endeavours to procure that each RBS Company which is a Subsidiary Undertaking of ABN Amro shall comply with any obligation or requirement which is stated in this Deed to be undertaken by or to relate to any RBS Company.

 

Accession

 

	
46.

	
Any RBS Company which is not otherwise a party to this Deed may agree to be bound by this Deed by entering into a Participation Agreement with the Treasury and the Commissioners for HMRC, in which case it shall be bound by this Deed with effect from the date on which such Participation Agreement is entered into between such RBS Company, the Treasury and the Commissioners for HMRC.

 

	
47.

	
For the avoidance of doubt, the Relevant Company may enter into such Participation Agreement acting through the agency of the Participant or the Initial Parent (in which case the Participant or the Initial Parent, as the case may be, shall promptly provide such evidence of its authority to act on behalf of the Relevant Company as may reasonably be required by the Treasury or the Commissioners for HMRC).

 

 

17

 

 

PART 7 – MISCELLANEOUS

 

The Treasury’s discretion

 

	
48.

	
For the avoidance of doubt, the Treasury shall be entitled to exercise its absolute discretion in relation to any approval, consent or agreement which this Deed contemplates may be given or made by it (including, without limitation, as contemplated in Clause 6, 8, 10, 11, 16, 19 and/or 25) (provided that, if the Treasury exercises any such discretion in any particular way upon any application of any provision of this Deed and notifies the Participant of such exercise of such discretion, such exercise of such discretion shall be irrevocable unless the Treasury and the Participant agree otherwise in writing and, if any such agreement is made, such agreement shall be irrevocable unless the Treasury and the Participant agree otherwise in writing).

 

HMRC’s powers and discretions

 

	
49.

	
Nothing in this Deed shall limit, prejudice or restrict any right, power, function or discretion of the Commissioners for HMRC or HMRC arising under Applicable Law (including, for the avoidance of doubt, the Commissioners for Revenue and Customs Act 2005) or any exercise thereof.

 

Group reorganisations etc. affecting the Initial Parent

 

	
50.

	
If at any time the Initial Parent ceases to be the Parent Undertaking of the Participant, the Treasury shall have the right to require (by notice served on the Participant) that the references in this Deed, or any specified references in this Deed, to the Initial Parent shall, with effect from any date reasonably specified by the Treasury in such notice, be taken instead to refer to such other Group Undertaking or Group Undertakings of the Participant as the Treasury may reasonably specify in such notice.

 

Costs and expenses

 

	
51.

	
For the avoidance of doubt, neither the Treasury nor HMRC shall be liable to indemnify or reimburse any RBS Company in respect of any costs or expenses incurred in complying with, or exercising any rights under, this Deed.

 

Scheme Documents

 

	
52.

	
The Treasury and the Participant hereby agree and designate that this Deed is a Scheme Document for the purposes of the Conditions, and that any Participation Agreement entered into in connection with this Deed shall be a Scheme Document for the purposes of the Conditions.

 

Application of Tax Conditions

 

	
53.

	
Without prejudice to the application of Conditions 38.1 to 38.6 (inclusive) and Condition 41.6 regardless of this Clause 53, those Conditions shall also apply in relation to this 

 

 

18

 

 

Deed, with any necessary modifications, as they would apply if any reference therein to the Participant were a reference to each of the Participant, the Initial Parent, ABN Amro and any RBS Company which from time to time enters into a Participation Agreement (as applicable).

 

Termination

 

	
54.

	
This Deed shall not have any effect in relation to any period of time falling after the 20th (twentieth) anniversary of the Accession Date (but, for the avoidance of doubt, without prejudice to its application in relation to any earlier period or periods of time).

 

	
55.

	
For the avoidance of doubt, nothing in this Deed shall be prejudiced, restricted or otherwise affected by any termination of the Participant’s participation in the Scheme or by any termination or amendment of any provision of the Accession Agreement, the Contingent Capital Fee Tax Assets Agreement or the Exit Fee Tax Assets Agreement.

 

Notices

 

	
56.

	
Condition 51 (Notices) shall apply in relation to this Deed and any Participation Agreement entered into in connection with this Deed, but on the basis described in Clauses 57, 58 and 59 and with any other necessary modifications.

 

	
57.

	
Subject to Condition 51.5, the address and attention details for ABN Amro referred to in Condition 51.3 are as follows:

 

	 	
Address:

	
ABN AMRO Bank N.V.

	 	 	
Head Office

	 	 	
Gustav Mahlerlaan 10

	 	 	
1082 PP Amsterdam

	 	 	
The Netherlands

	 	 	 
	 	
Email address:

	
gwendolyn.van.tunen@nl.abnamro.com

	 	 	 
	 	
Attention:  

	Gwendolyn van Tunen

 

	
58.

	
Subject to Condition 51.5, the address and attention details for the Commissioners for HMRC referred to in Condition 51.3 are as follows:

 

	 	
Address:

	

Her Majesty’s Revenue and Customs

	 	 	
100 Parliament Street

	 	 	

London

	 	 	

SW1A 2BQ

	 	 	 
	 	
Email address:

	

Aidan.Reilly@hmrc.gsi.gov.uk

	 	 	 
	 	
Attention:  

	Aidan Reilly

                 

 

19

 

 

	
59.

	
Subject to Condition 51.5, the address and attention details referred to in Condition 51.3 for any RBS Company which enters into a Participation Agreement shall be as specified in such Participation Agreement.

 

Counterparts

 

	
60.

	
This Deed may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart.  Each counterpart shall constitute an original of this Deed, but all the counterparts together shall constitute one and the same instrument.

 

 

20

 

 

Schedule 1

 

(Form of Disclosure Consent Notice)

 

[Note:  This notice is to be served on the Commissioners for HMRC and the Treasury by the relevant RBS Company.]

 

[Note:  Insert date]

 

Dear Sirs,

 

Agreement to Forego Tax Assets in connection with an Accession Agreement relating to the UK Asset Protection Scheme

 

Disclosure Consent Notice

 

We refer to the “Agreement to Forego Tax Assets in connection with an Accession Agreement relating to the UK Asset Protection Scheme” entered into by The Commissioners of Her Majesty’s Treasury, The Commissioners for Her Majesty’s Revenue and Customs, The Royal Bank of Scotland PLC, The Royal Bank of Scotland Group PLC and ABN Amro Bank N.V. on 24 November 2009 (the “Tax Assets Agreement”).

 

Any word or expression defined in the Tax Assets Agreement shall have the same meaning below in this notice.

 

We hereby consent (including, but without limitation, for the purposes of Section 18(2)(h) of the Commissioners for Revenue and Customs Act 2005) to the disclosure of all Relevant HMRC Information by HMRC to the Treasury.

 

Yours faithfully,

 

[Note:   To be validly executed by the relevant RBS Company]

 

 

21

 

 

  Schedule 2

 

(Form of Participation Agreement)

 

This Deed is entered into as a deed on [        ]  [Note: Insert date]

 

Between:

 

	
(1)

	
The Commissioners of Her Majesty’s Treasury of 1 Horse Guards Road, London SW1A 2HQ (the “Treasury”);

 

	
(2)

	
The Commissioners for Her Majesty’s Revenue and Customs of 100 Parliament Street, London SW1A 2BQ (the “Commissioners for HMRC”); and

 

	
(3)

	
[            ], a [          ] incorporated in [     ] with registered number [        ], whose registered office is at [        ] (the “Participating Company”).  [Note:  Insert name and details of the Relevant Company]

 

It is agreed:

 

	
1.

	
In this Deed, any reference to the “Tax Assets Agreement” means the “Agreement to Forego Tax Assets in connection with an Accession Agreement relating to the UK Asset Protection Scheme” entered into by the Treasury, the Commissioners for HMRC, The Royal Bank of Scotland PLC, The Royal Bank of Scotland Group PLC and ABN Amro on 24 November 2009.

 

	
2.

	
Any word or expression defined in the Tax Assets Agreement shall have the same meaning in this Deed.  Any word or expression defined in the Conditions shall have the same meaning in this Deed.  Condition 57 (Interpretation) shall apply in relation to this Deed with any necessary modifications.

 

	
3.

	
The Participating Company hereby agrees to comply with the Tax Assets Agreement as if it had been a party to that agreement.  Without limitation of the foregoing, the Participating Company hereby agrees to comply with any obligation or requirement which is stated in the Tax Assets Agreement to be undertaken by or to relate to it and hereby makes any representation or warranty expressed to be given by it in the Tax Assets Agreement.

 

	
4.

	
Clauses 56 to 59 (inclusive) of the Tax Assets Agreement shall apply in relation to this Deed. Subject to Condition 51.5, the address and attention details for the Participating Company referred to in Condition 51.3 and Clause 59 of the Tax Assets Agreement are as follows:

 

	
  

	
Address:

	

[Note:  Insert address]

 

	
  

	
Email address:

	

[Note:  Insert email address]

 

 

22

 

 

Attention:  [Note:  Insert details]

 

	
5.

	
This Deed shall be governed by and construed in accordance with English law.  Any matter, claim or dispute arising out of or in connection with this Deed (including any Dispute), whether such matter, claim or dispute is contractual or non-contractual, shall be governed by and determined in accordance with English law.

 

	
6.

	
This Deed may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart.  Each counterpart shall constitute an original of this Deed, but all the counterparts together shall constitute one and the same instrument.

 

In witness of which this Deed has been executed and delivered as a deed on the date stated at the beginning of this Deed.

 

[Note:  To be validly executed as a deed by the Participating Company, the Treasury and the Commissioners for HMRC]

 

 

23

 

 

IN WITNESS of which this Deed has been executed and delivered as a deed on the date stated at the beginning of this Deed.

 

	
Executed as a deed by two of

THE COMMISSIONERS OF HER 

MAJESTY’S TREASURY

in the presence of:

 

 

Date:

	
)

)

)

)

)

)

	  

 

 

	
Executed as a deed by two of

THE COMMISSIONERS FOR

HER MAJESTY’S REVENUE

AND CUSTOMS

in the presence of:

 

 

 

Date:

	
)

)

)

)

)

)

	  

 

 

	
Executed as a deed by

THE ROYAL BANK OF SCOTLAND PLC

acting by:

 

 

Date:

	
)

)

)

)

)

	
 

 

.......................................

Director

 

.......................................

Director/Secretary

 

 

24

 

 

	
Executed as a deed by

THE ROYAL BANK OF SCOTLAND 

GROUP PLC

acting by:

 

 

Date:

	
)

)

)

)

)

	
 

 

.......................................

Director

 

.......................................

Director/Secretary

 

 

 

	
Executed as a deed by

ABN AMRO BANK N.V.

acting by:

 

acting under the authority of ABN Amro Bank N.V.

 

 

 

Date:

	
)

)

)

)

)

	
 

 

.......................................

Authorised signatory

 

 

.......................................

Authorised signatory

 

 

 

25Exhibit
4.24

    
      

      EXECUTION
VERSION

      

      

      

      

      

      

      

      

      

      

      DATED     November
2009

      

      

      

      

      
         
THE
COMMISSIONERS OF HER MAJESTY’S TREASURY

         

        and

         

         

      

      THE
ROYAL BANK OF  SCOTLAND GROUP PLC

      

      

      

      

      

      

      

      

      
         

      

      
 

      
        
          

        

      

       

      STATE
AID COMMITMENT DEED

      

      
        
 

      

      

      

      

      

      

      

      

      
 

      CA093130055

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                CONTENTS

              
	 
	
                1.

              	
                DEFINITIONS
      AND INTERPRETATION

              	
                4

              
	 	 	 
	
                2.

              	
                CONDITIONS
      AND EFFECTIVENESS

              	
                5

              
	 	 	 
	
                3.

              	
                STATE AID
      COMMITMENTS; CO-OPERATION

              	
                6

              
	 	 	 
	
                4.

              	
                RECOVERY OF
      STATE AID

              	
                6

              
	 	 	 
	
                5.

              	
                WARRANTY

              	
                6

              
	 	 	 
	
                6.

              	
                TAX
      MATTERS

              	
                6

              
	 	 	 
	
                7.

              	
                ANNOUNCEMENTS
      AND PUBLICITY

              	
                7

              
	 	 	 
	
                8.

              	
                CONFIDENTIALITY;
      FREEDOM OF INFORMATION

              	
                7

              
	 	 	 
	
                9.

              	
                ASSIGNMENT

              	
                12

              
	 	 	 
	
                10.

              	
                REMEDIES

              	
                12

              
	 	 	 
	
                11.

              	
                FURTHER
      ASSURANCE

              	
                13

              
	 	 	 
	
                12.

              	
                INVALIDITY

              	
                13

              
	 	 	 
	
                13.

              	
                NOTICES

              	
                13

              
	 	 	 
	
                14.

              	
                CONTRACTS
      (RIGHTS OF THIRD PARTIES) ACT 1999

              	
                14

              
	 	 	 
	
                15.

              	
                COUNTERPARTS

              	
                14

              
	 	 	 
	
                16.

              	
                VARIATION

              	
                14

              
	 	 	 
	
                17.

              	
                GOVERNING
      LAW

              	
                15

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      THIS
DEED OF COMMITMENT is made
on        November 2009

      

      BETWEEN:

      

      
        	
                (1)  

              	
                THE COMMISSIONERS OF HER MAJESTY’S
      TREASURY of 1 Horse Guards Road, London SW1A 2HQ (the “Treasury”);
and

              

      

      

      
        	
                (2)  

              	
                THE ROYAL BANK OF SC OTLAND GROUP PLC, a
      public company incorporated in Scotland with registered number SC045551
      and whose registered office is at 36 St Andrew Square, Edinburgh, Scotland
      EH2 2YB (“RBSG”).

              

      

      

      WHEREAS:

      

      
        	
                (A)  

              	
                On 19 January
      2009, Her Majesty’s Government of the United Kingdom (the “Government”) announced its intention to
      offer the Asset Protection Scheme (the “Scheme”) to protect certain eligible
      financial institutions against exceptional future credit losses on certain
      portfolios of assets and exposures. The Scheme constitutes “financial
      assistance” for the purpose of section 257 of the Banking Act
      2009.

              

      

      

      
        	
                (B)  

              	
                On 26
      February 2009, RBSG announced its intention to participate in the Scheme
      and entered into discussions with the Treasury regarding the terms of the
      Scheme and the accession of The Royal Bank of Scotland plc (the “Participant”) to
  it.

              

      

      

      
        	
                (C)  

              	
                On 3 November
      2009, RBSG announced the proposed terms attaching to the intended
      participation of the Participant in the Scheme and, on or about the date
      of this Deed, RBSG and the Participant entered into an accession agreement
      with the Treasury pursuant to which the Participant will participate in
      the Scheme on and subject to the terms and conditions set out therein (the
      “Accession
    Agreement”).

              

      

      

      
        	
                (D)  

              	
                The terms and
      conditions of the Scheme (as amended, modified, supplemented or replaced
      from time to time, the “Conditions”) are the terms and conditions
      set out in the document entitled “UK Asset Protection Scheme Terms and
      Conditions” which is designated in writing by or on behalf of the Treasury
      and the Participant as being in the agreed form for the purpose of the
      Accession Agreement.

              

      

      

      
        	
                (E)  

              	
                In addition
      to the Participant’s intended participation in the Scheme, it is intended
      that the Treasury will subscribe for £25.5 billion of ‘B’ shares in RBSG
      (the “Subscription”) and commit to
      subscribe in certain circumstances for an additional £8 billion of ‘B’
      shares (the “Contingent
      Capital”).

              

      

      

      
        	
                (F)  

              	
                RBSG is a
      participant in: (i) the recapitalisation scheme (the “Recapitalisation Scheme”); and (ii) the
      credit guarantee scheme, the terms of which were announced by the
      Government on 8 October 2008.

              

      

      

      
        	
                (G)  

              	
                The
      participation of the Participant in the Scheme, and RBSG’s accession to
      the Scheme and participation in the Recapitalisation Scheme, and the
      Subscription and the Contingent Capital, are each subject to approval from
      the European Commission (either on a temporary or final basis) as aid
      compatible with article 87 of the EC
Treaty.

              

      

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      
        	
                (H)  

              	
                The
      commitments and undertakings contained in this Deed incorporate
      commitments from RBSG to the Treasury that are designed to ensure that the
      Treasury is able to comply with the commitments or conditions subject to
      which the European Commission has granted (or it is anticipated will
      grant) the State Aid Approvals in respect of the aid provided by the
      Treasury referred to in Recital (G) (the “State
Aid”).

              

      

      

      NOW
THIS DEED WITNESSES AS FOLLOWS:

      

      
        	
                1.

              	
                DEFINITIONS
      AND INTERPRETATION

              

      

      

      
        	
                1.1  

              	
                In this Deed
      (including the Recitals):

              

      

      

      “Accession Agreement” has the meaning given in
Recital (C);

      

      “Conditions” has the meaning given in Recital
(D) and “Condition” shall be construed
accordingly;

      

      “Government Entity” means: (i) any department,
non-departmental public body, authority or agency of the Government or the
Crown; (ii) any of Her Majesty’s Secretaries of State and any other Minister of
the Crown; (iii) the Treasury Solicitor; (iv) any body corporate established by
statute some or all of the members of which are appointed by a Secretary of
State or Minister of the Crown; and (v) any other entity or person directly
owned or established by any of the foregoing, including UK Financial Investments
Limited;

      

      “Participant” has the meaning given in Recital
(B); 

       

      “State Aid” has the meaning given in Recital
(H);

       

      “State Aid Approvals” means any state aid
approval for the State Aid in their original terms, as supplemented, modified or
replaced subject to and in accordance with this Deed;

      

      “State Aid Commitments” means: (i) the
commitments set out in the paper entitled “State Aid Commitments” (as initialled
by or on behalf of both the Treasury and RBSG on or before the date of this
Deed); and (ii) such other commitments given to the European Commission in
connection with the State Aid Approvals, each as supplemented, modified or
replaced from time to time subject to and in accordance with this Deed;
and

      

      “Subscription” has the meaning given to it in
recital (E).

      

      
        	
                1.2  

              	
                Capitalised
      terms used but not defined in this Deed shall have the respective meanings
      given to them in Condition 56.

              

      

      

      
        	
                1.3  

              	
                In this Deed,
      unless otherwise specified:

              

      

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (A)  

              	
                references to
      clauses and sub-clauses are to clauses and sub-clauses of this
      Deed;

              

      

      

      
        	 	
                (B)  

              	
                the words
      “include ” and “including ” shall be deemed to be followed by the phrase
      “without limitation”;

              

      

      

      
        	 	
                (C)  

              	
                headings and
      sub-headings in this Deed are included for ease of reference only and
      shall not affect the interpretation of this
  Deed;

              

      

      

      
        	 	
                (D)  

              	
                any reference
      to a “person ” shall be construed so as to include any individual, firm,
      company, corporation, body corporate, government, state or agency of a
      state, local or municipal authority or governmental body or any joint
      venture, association or partnership (whether or not having separate legal
      personality);

              

      

      

      
        	 	
                (E)  

              	
                any reference
      to any statute, statutory provision or rules or regulations made
      thereunder shall be construed as a reference to the same as it may have
      been, or may from time to time be, amended, modified, re-enacted or
      replaced; and

              

      

      

      
        	 	
                (F)  

              	
                a reference
      to any other document is a reference to that other document as amended,
      varied or supplemented at any time.

              

      

      

      
        	
                1.4  

              	
                For the
      purposes of the Accession Agreement and the Conditions, this Deed
      constitutes the “State Aid
      Deed”.

              

      

      

      
        	
                1.5  

              	
                This Deed is
      a “Scheme Document ” for the
      purposes of the Conditions.

              

      

      

      
        	
                1.6  

              	
                This Deed is
      being entered into, amongst other things, in order to ensure that the
      Treasury is able to comply with the State Aid Approvals. If there is: (i)
      any ambiguity or inconsistency in the provisions of this Deed; or (ii) any
      dispute as to the interpretation or intended effect of this Deed or any
      provision contained in it, such ambiguity, inconsistency or dispute shall
      be resolved, to the extent possible, by reference to the terms of the
      State Aid Approvals.

              

      

      

      
        	
                2.  

              	
                CONDITIONS
      AND EFFECTIVENESS

              

      

      

      
        	
                2.1  

              	
                Subject to
      clause 2.2, all provisions of this Deed shall have full force and effect
      upon execution and delivery of this Deed by the parties to
    it.

              

      

      

      
        	
                2.2  

              	
                Clause 3 is
      in all respects conditional on the State Aid Approvals having been
      obtained.

              

      

      

      
        	
                2.3  

              	
                If the
      condition in clause 2.2 is satisfied, but: (A) the Participant does not
      accede to the Scheme; and/or (B) the Subscription is not effected, in
      either case on or prior to the Long-Stop Date (as defined in the Accession
      Agreement), then the Treasury shall seek a modification to, or replacement
      or deletion of, the commitments or conditions subject to which the
      European Commission has given the State Aid Approvals so that such
      commitments and conditions reflect only the aid which the Participant
      and/or RBSG has received. The Treasury undertakes that it will, prior to
      making any submission to the

              

      

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

         

      

      European Commission
in connection with the foregoing, discuss such submission in good faith with
RBSG.

      

      
        	
                3.  

              	
                STATE
      AID COMMITMENTS; CO-OPERATION

              

      

      

      Save to the extent
that the State Aid Approvals have been annulled or suspended by the European
Court of First Instance or the European Court of Justice, or revoked by the
European Commission, RBSG undertakes to do all acts and things necessary to
ensure that the Treasury is able to comply with the State Aid Approvals,
including:

      

      
        	 	
                (A)  

              	
                complying (or
      procuring compliance) with the State Aid Commitments;
  and

              

      

      

      
        	 	
                (B)  

              	
                promptly
      complying (or procuring compliance) with any and all requests from the
      Treasury for information, documentation or explanations, and doing all
      such other acts and things requested in writing by the Treasury, which are
      in the Treasury’s opinion (acting
reasonably):

              

      

      

      
        	 	
                (i)  

              	
                required in
      order to enable the Treasury or the European Commission to monitor
      compliance with the State Aid Approvals or this Deed;
  or

              

      

      

      
        	 	
                (ii)  

              	
                required to
      respond to requests for information, documentation or explanations from
      the European Commission in relation to the State Aid Approvals or
      monitoring compliance with the State Aid
  Approvals.

              

      

      

      
        	
                4.  

              	
                RECOVERY
      OF STATE AID

              

      

      

      
        	
                4.1  

              	
                If the
      European Commission adopts a decision that the United Kingdom must recover
      any state aid (a “Repayment
      Decision”) and the recovery order of the Repayment Decision has not
      been annulled or suspended by the Court of First Instance or the European
      Court of Justice, then RBSG shall repay to the Treasury any aid ordered to
      be recovered under the Repayment
Decision.

              

      

      

      
        	
                4.2  

              	
                The amount
      which RBSG is obliged to repay to the Treasury under clause 4.1 shall be
      calculated by the Treasury and shall be calculated in accordance with
      Council Regulation No 659/1999 and Commission Regulation 794/2004
      (including with respect to the calculation of payable
      interest).

              

      

      

      
        	
                5.  

              	
                WARRANTY

              

      

      

      RBSG represents and
warrants to the Treasury on the date of this Deed that it has duly executed and
delivered this Deed.

      

      
        	
                6.  

              	
                TAX
      MATTERS

              

      

      

      Without prejudice
to the application of Conditions 38.1 to 38.6 (inclusive) regardless of this
clause 6, those Conditions shall also apply in relation to this Deed, with
any

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

        
 

      

      necessary
modifications, as they would apply if any reference therein to the “Participant”
were instead a reference to RBSG.

      

      
        	
                7.  

              	
                ANNOUNCEMENTS
      AND PUBLICITY

              

      

      

      Any announcement or
public statement proposed to be made, published, issued or released by RBSG or
any member of its Group (or any of their respective Representatives) in relation
to, or which refers to: (i) this Deed (or any ancillary matter); (ii) the
Treasury in connection with this Deed; or (iii) the State Aid Approvals, the
State Aid or the State Aid Commitments, each constitutes a “Scheme Statement” for the purposes of the
Conditions and will therefore be subject to the restrictions imposed by the
Conditions on such announcements and public statements.

      

      
        	
                8.  

              	
                CONFIDENTIALITY;
      FREEDOM OF INFORMATION

              

      

      

      
        	
                8.1  

              	
                Each party
      (the “first party”) shall treat as
      confidential any information that is covered by the obligation of
      professional secrecy as referred to in articles 24 and 25 of Council
      Regulation No 659/1999; and (ii) the other party (or its Representatives)
      has provided to the first party (or its Representatives) with respect to
      the matters referred to in this Deed (“Confidential
    Information”).

              

      

      

      
        	
                8.2  

              	
                Each party
      shall:

              

      

      

      
        	 	
                (A)  

              	
                not, without
      the prior written consent of the other party, disclose any Confidential
      Information to any person other than to its respective
      Representatives:

              

      

      

      
        	 	
                (i)  

              	
                in the case
      of disclosure by the Treasury, to enable or assist the Treasury to fulfil
      any of the Treasury Permitted Purposes;
and

              

      

      

      
        	 	
                (ii)  

              	
                in the case
      of disclosure by RBSG, to the extent that such Representatives require the
      Confidential Information to enable or assist RBSG to comply with its
      responsibilities and obligations, or exercise its rights, under this
      Deed;

              

      

      

      
        	 	
                (B)  

              	
                procure that
      any person to whom any Confidential Information is so disclosed by it
      complies with the restrictions contained in this clause 8 as if such
      person were a party to this Deed;
and

              

      

      

      
        	 	
                (C)  

              	
                have in place
      and maintain security measures and procedures to protect the
      confidentiality of Confidential
Information.

              

      

      

      
        	
                8.3  

              	
                The Treasury
      shall use (and shall ensure that its Representatives will use)
      Confidential Information only for the Treasury Permitted Purposes (or, in
      the case of any Permitted Government Recipient referred to in sub-clause
      8.5(B), for the purposes of enabling or assisting such person to fulfil
      its functions). In particular, the Treasury shall (and shall ensure that
      its Representatives shall) not use the Confidential Information for the
      benefit

              

      

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
 

      of
any third party, including any financial institution which is also a participant
or in which the Treasury has an ownership interest from time to time or in
communications or discussions with such financial institutions or any of their
group members or representatives.

      

      
        	
                8.4  

              	
                RBSG shall
      use (and shall ensure that its Representatives will use) Confidential
      Information only to enable or assist RBSG to comply with its
      responsibilities and obligations, and exercise its rights, under this
      Deed.

              

      

      

      
        	
                8.5  

              	
                The
      restrictions in clauses 8.1 and 8.2 shall not prevent the Treasury from
      disclosing Confidential
Information:

              

      

      

      
        	 	
                (A)  

              	
                to the
      European Commission, if and to the extent that the Treasury considers such
      disclosure is necessary in connection with (i) the application of the
      state aid rules of the EC Treaty, (ii) any European Commission decision
      relating to those rules or (iii) compliance with any of the United
      Kingdom’s reporting requirements under the State Aid
      Approvals;

              

      

      

      
        	 	
                (B)  

              	
                on a
      confidential basis, to any Permitted Government Recipient or any successor
      organisation of any Permitted Government Recipient to the extent that the
      Treasury considers (acting reasonably) that such disclosure is required to
      enable or assist: (i) the Treasury to fulfil any of the Treasury Permitted
      Purposes; or (ii) any Permitted Government Recipient (or any of its
      successors) to fulfil its
functions;

              

      

      

      
        	 	
                (C)  

              	
                to Parliament
      or to any Parliamentary committee (including the Public Accounts
      Committee, the House of Commons Treasury Select Committee and any Select
      Committee of the Parliament of the United Kingdom), in each case if and to
      the extent that the Treasury considers (acting reasonably) that such
      disclosure is required to enable or assist the Treasury to fulfil any
      Treasury Permitted Purpose;

              

      

      

      
        	 	
                (D)  

              	
                on a
      confidential basis, where the Treasury considers (acting reasonably) that
      such disclosure is required to enable or assist it to fulfil any Treasury
      Permitted Purpose; or

              

      

      

      
        	 	
                (E)  

              	
                where RBSG
      has agreed in advance to such
disclosure,

              

      

      

      subject as provided
in clause 8.9 in the case of disclosure in reliance on the exceptions in either
of sub-clauses (B) and (D) above.

      

      
        	
                8.6  

              	
                Prior to any
      disclosure of Confidential Information by the Treasury or any of its
      Representatives in reliance on an exception set out in sub-clause 8.5(C),
      the Treasury shall, so far as it is lawful and the Treasury considers it
      is reasonably practicable, and not inconsistent with Parliamentary
      convention, to do so in the circumstances, use reasonable endeavours to
      notify the Participant in writing of the Confidential
      Information

              

      

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      
        
 

      

      to
be disclosed. The notification obligation in this clause 8.6 shall not apply to
the disclosure of Confidential Information comprised in any non-scripted oral
statement.

      

      
        	
                8.7  

              	
                Prior to any
      disclosure of Confidential Information by the Treasury or any of its
      Representatives in reliance on an exception set out in sub-clause 8.5(A)
      the Treasury shall, so far as it is lawful and the Treasury considers it
      is reasonably practicable to do so:

              

      

      

      
        	 	
                (A)  

              	
                consult with
      RBSG as soon as reasonably practicable as to the Confidential Information
      that the Treasury (or any of its Representatives) proposes to disclose and
      the reason for disclosure and, as part of any such consultation process,
      the Treasury shall take into account any representation from RBSG as to
      whether such information is commercially sensitive and/or subject to
      contractual, legal or regulatory restrictions on disclosure owed to third
      parties, and any other representations from RBSG as to whether or not (and
      the extent to which) such information is required to be disclosed and as
      to the timing and nature of such
disclosure;

              

      

      

      
        	 	
                (B)  

              	
                if the
      Treasury determines that such disclosure is required and RBSG has objected
      to such disclosure, give RBSG as much prior notice as is reasonably
      practicable of the Confidential Information to be disclosed and the
      proposed timing and nature of such disclosure;
  and

              

      

      

      
        	 	
                (C)  

              	
                having regard
      to any representations received from RBSG pursuant to sub- clause (A),
      anonymise the relevant Confidential Information (whether by aggregation,
      redaction or otherwise) if and to the extent that the Treasury considers
      that the relevant requirement or need for disclosure can be satisfied by
      the disclosure of anonymised
Information.

              

      

      

      
        	
                8.8  

              	
                If the
      Treasury is informed that it (or any of its Representatives) is in
      possession of any Inside Information as a result of a notification from
      RBSG to the Treasury that any Confidential Information is Inside
      Information (or pursuant to the consultation process described in
      Condition 42.29), then the Treasury shall (and shall ensure that its
      Representatives will) upon disclosure of any Inside Information in
      reliance on an exception set
      out in either of sub-clauses (B) and (D) of clause 8.5, notify the
      relevant recipient (a "third party
      recipient") that the Confidential Information being disclosed
      constitutes Inside Information and that such Inside Information should be
      kept confidential.

              

      

       

      
        	
                8.9  

              	
                If any
      disclosure of Inside Information is made in reliance on an exception set
      out in either of sub-clauses (B) and (D) of clause 8.5, the Treasury shall
      (and shall ensure that its Representatives
  will):

              

      

      

      
        	 	
                (A)  

              	
                keep a record
      of the persons to whom such Inside Information is
    disclosed;

              

      

      

      
        	 	
                (B)  

              	
                notify RBSG
      of the Inside Information it has disclosed to the relevant third party
      recipient but only if and to the extent that such notification complies
      with

              

      

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
 

      Applicable Law and
is not otherwise prejudicial either to the purpose for which the Inside
Information has been disclosed or the purpose for which the Inside Information
may be used by the third party recipient; and

      

      
        	 	
                (C)  

              	
                use
      reasonable endeavours to ensure that, prior to any public disclosure of
      Inside Information by any third party recipient,
  either:

              

      

      

      
        	 	
                (i)  

              	
                (a) the third
      party recipient notifies the Treasury in writing of any Confidential
      Information proposed to be publicly disclosed by such third party
      recipient; and (b) the Treasury notifies RBSG of the Confidential
      Information to be publicly disclosed by the third party recipient;
      or

              

      

      

      
        	 	
                (ii)  

              	
                the third
      party recipient notifies RBSG in writing of the Confidential Information
      proposed to be publicly disclosed by such third party
      recipient,

              

      

      

      but in each case
only if and to the extent that such notification complies with Applicable Law
and is not otherwise prejudicial either to the purpose for which the Inside
Information has been disclosed or the purpose for which the Inside Information
may be used by the third party recipient.

      

      
        	
                8.10  

              	
                Nothing in
      this Deed is intended to facilitate or permit the Treasury to disclose
      Confidential Information if and to the extent that such disclosure is in
      contravention of or inconsistent with Applicable Law relating to market
      abuse or insider dealing.

              

      

      

      
        	
                8.11  

              	
                The
      restrictions in clauses 8.1 and 8.2 shall not prevent the Treasury or RBSG
      from disclosing Confidential
Information:

              

      

      

      
        	 	
                (A)  

              	
                which is
      required by: (i) Applicable Law, or (ii) the rules of the Bank of England
      or of any securities exchange, clearing system or Authority (including the
      FSA and the European Commission) to which it is subject or
      submits;

              

      

      

      
        	 	
                (B)  

              	
                if and to the
      extent required for the purpose of any judicial proceedings, any
      arbitration pursuant to the Dispute Resolution Procedure or any expert
      determination pursuant to Condition
34;

              

      

      

      
        	 	
                (C)  

              	
                if and to the
      extent the information has come into the public domain other than as a
      result of a breach of confidence or contractual obligations;
      or

              

      

      

      
        	 	
                (D)  

              	
                where the
      Treasury has agreed in advance to such
  disclosure.

              

      

      

      
        	
                8.12  

              	
                If the
      Treasury is requested to disclose any Confidential Information pursuant to
      the provisions of the Freedom of Information Act (the “FOI Act”, and such a request, an “FOI Request”), the Treasury shall (to the
      extent practicable and permissible under the FOI Act and consistent with
      the Code of Practice of the Secretary of State for Constitutional Affairs
      on discharge of public authorities’ functions under Part 1 of the FOI
      Act):

              

      

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
 

      
        	 	
                (A)  

              	
                notify RBSG
      in writing of the nature and content of such FOI Request as soon as
      practicable;

              

      

      

      
        	 	
                (B)  

              	
                prior to the
      making of a disclosure pursuant to an FOI Request, for a period of no less
      than 5 Business Days consult with RBSG as to: (i) whether such FOI Request
      is valid; (ii) whether or not disclosure pursuant to the FOI Act is
      required; and (iii) (if the Treasury determines that disclosure pursuant
      to the FOI Act is required) the scope and content of any proposed
      disclosure, and, as part of such consultation process, the Treasury shall
      take into account any representation from RBSG as to whether the
      Confidential Information is commercially sensitive and any other
      representations from RBSG as to whether or not there is an obligation to
      disclose such Confidential Information and/or the extent of any such
      required disclosure; and

              

      

      

      
        	 	
                (C)  

              	
                (if the
      Treasury determines that disclosure pursuant to the FOI Act is required
      and RBSG has objected to such disclosure or the extent of the proposed
      disclosure) give RBSG as much prior notice as is reasonably practicable
      prior to such disclosure being
made.

              

      

      

      
        	
                8.13  

              	
                The
      obligations set out in this clause 8 shall continue notwithstanding
      cessation of the Participant’s participation in the
  Scheme.

              

      

      

      
        	
                8.14  

              	
                For the
      purposes of this clause 8:

              

      

      

      
        	 	
                (A)  

              	
                “Treasury Permitted Purposes” means: (i)
      complying with the Treasury’s responsibilities and obligations, and
      exercising its rights, powers and discretions, under or in connection with
      this Deed (including with respect to the State Aid Approvals); (ii)
      providing or enabling the provision of financial support to RBSG or
      protecting or enhancing the stability of the financial system of the
      United Kingdom; (iii) reporting on compliance with this Deed by RBSG
      (including with respect to the State Aid Approvals); and (iv) discharging
      the Treasury’s responsibilities and
functions;

              

      

      

      
        	 	
                (B)  

              	
                “Representatives” means: (i) in the
      context of the Treasury, the Treasury Solicitor and any of Her Majesty’s
      Secretaries of State (and any other Minister of the Crown) and any and all
      directors, officers, officials, employees, agents, professional advisers
      and contractors of the foregoing; and (ii) in the context of RBSG and its
      Group, directors, officers, employees, agents, professional advisers and
      contractors;

              

      

      

      
        	 	
                (C)  

              	
                “Permitted Government Recipient”
      means:

              

      

      

      
        	 	
                (i)  

              	
                the FSA, the
      Bank of England, HMRC, the National Audit Office, the National Archive and
      the Cabinet Office; and

              

      

      

      
        	 	
                (ii)  

              	
                any
      Government Entity other than (a) any person falling only within paragraph
      (iv) of the definition of “Government Entity” (an
  “excluded

              

      

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
 

      government entity”)
and (b) any entity or person directly or indirectly wholly-owned by, or held on
trust for, any excluded government entity; and

      

      
        	 	
                (D)  

              	
                “Inside Information” means Confidential
      Information received by the Treasury or any of its Representatives from
      RBSG or any member of its Group (or any of their respective
      Representatives) which is “inside information” within the meaning of
      section 118C of FSMA or section 56 of the Criminal Justice Act 1993 in
      relation to RBSG or any member of its
Group.

              

      

      

      
        	
                9.  

              	
                ASSIGNMENT

              

      

      

      
        	
                9.1  

              	
                The Treasury
      may effect a Transfer to any Government Entity on such terms as it
      considers appropriate.

              

      

      

      
        	
                9.2  

              	
                The Treasury
      shall effect a Transfer by giving not less than 10 Business Days prior
      written notice to RBSG specifying the identity of the transferee and the
      rights, powers, discretions
      or obligations under this Deed that are to be the subject of the Transfer
      (the “Substituted Rights and
      Obligations”).

              

      

      

      

      
        	
                9.3  

              	
                If a
      notification is given by the Treasury pursuant to clause 9.2, RBSG shall
      enter into such further agreements as are necessary in order to substitute
      the relevant transferee for the Treasury in respect of the Substituted
      Rights and Obligations.

              

      

      

      
        	
                9.4  

              	
                If the
      Treasury effects any Transfer pursuant to this clause 9, RBSG shall not
      incur any greater liability under clause 6 than would have been the case
      but for such Transfer.

              

      

      

      
        	
                9.5  

              	
                For the
      purposes of this clause 9, “Transfer” means (i) the assignment of all
      or any part of the Treasury’s rights and benefits of or under this Deed;
      (ii) the declaration of a trust in respect of or the entry into of any
      arrangement whereby the Treasury agrees to hold in trust for any person
      all or any part of the benefit of, or its rights or benefits under, this
      Deed; or (iii) the transfer (whether by way of novation, sub-contract,
      delegation or otherwise), or the entry into an arrangement whereby any
      person is to perform, any or all of the Treasury’s obligations under this
      Deed.

              

      

      

      
        	
                10.  

              	
                REMEDIES

              

      

      

      
        	
                10.1  

              	
                No delay or
      omission by the Treasury or RBSG (as the case may be) in exercising any
      right, power or remedy provided by law or under or pursuant to the Deed
      shall: (i) affect that right, power or remedy; or (ii) operate as a waiver
      of it.

              

      

      

      
        	
                10.2  

              	
                The single or
      partial exercise by the Treasury of any right, power or remedy provided by
      law or under or pursuant to this Deed shall not, unless otherwise
      expressly stated, preclude any other or further exercise of it or the
      exercise of any other right, power or
remedy.

              

      

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      
        	
                10.3  

              	
                Any right of
      the Treasury is cumulative and not exclusive of any other right (whether
      provided by law or otherwise).

              

      

      

      
        	
                10.4  

              	
                RBSG
      acknowledges and agrees that damages may not be an adequate remedy for any
      breach of any of this Deed, and further acknowledges and agrees that,
      without prejudice to any other rights or remedies which the Treasury may
      have, whether pursuant to a provision of this Deed or otherwise equitable
      relief (including specific performance and injunction) for any such breach
      (or potential breach) will normally be appropriate. RBSG agrees not to
      raise any objection to any application by the Treasury for any such
      remedies.

              

      

      

      
        	
                11.  

              	
                FURTHER
      ASSURANCE

              

      

      

      RBSG shall at its
own cost, and so far as it is able to do so in accordance with Applicable Law,
from time to time on request, do or procure the doing of all acts and/or execute
or procure the execution of all documents in a form satisfactory to the Treasury
which the Treasury may (acting reasonably) consider necessary for giving full
effect to this Deed and securing to the Treasury the full benefit of the rights,
powers and remedies conferred upon the Treasury under or pursuant to this
Deed.

      

      
        	
                12.  

              	
                INVALIDITY

              

      

      

      If any provision of
this Deed shall be held to be illegal, invalid or unenforceable, in whole or in
part, under any enactment or rule of law, such provision or part shall to that
extent be deemed not to form part of this Deed but the legality, validity and
enforceability of the remainder of this Deed shall not be affected.

      

      
        	
                13.  

              	
                NOTICES

              

      

      

      
        	
                13.1  

              	
                Except as
      otherwise provided in this Deed, a notice under this Deed shall only be
      effective if it is in writing. Facsimile transmissions are permitted but
      email is not.

              

      

      

      
        	
                13.2  

              	
                Notices under
      this Deed shall be sent to a party to this Deed at its address or number
      and for the attention of the individual set out
  below:

              

      

      

      
        	
                Party and title
      of

              	
                Address

              	
                Facsimile
      no.

              
	
                individual

              	 
      	 
      
	 	 	 
	
                RBSG

              	
                Gogarburn,
      Edinburgh,

              	
                0131 626
      3081

              
	 
      	
                EH12
      1HQ

              	 
      
	 	 	 
	 
      	
                Attention:
      Group General Counsel

              	 
      
	 
      	
                and Group
      Secretary

              	 
      
	 	 	 
	
                Treasury

              	
                1 Horse
      Guards Road

              	
                020 7270
      4844

              
	 
      	
                London SW1A
      2HQ

              	 
      

      

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

         

        
          
            	
                     

                  	
                    
                      Attention:
      Team Leader, Financial

                    

                  	 
	 
      	
                    
                      Stability

                    

                  	 
      

          

           

          
provided that a
party may change its notice details on giving notice to the other party of the
change in accordance with this clause 13. That notice shall only be effective on
the day falling five clear Business Days after the notification has been
received or such later date as may be specified in the
notice.

        

      

      

      
        	
                13.3  

              	
                Any notice
      given under this Deed shall, in the absence of earlier receipt, be deemed
      to have been duly given as follows:

              

      

      

      
        	 	
                (A)  

              	
                if delivered
      personally, on delivery;

              

      

      

      
        	 	
                (B)  

              	
                if sent by
      first class post, two clear Business Days after the date of posting;
      and

              

      

      

      
        	 	
                (C)  

              	
                if sent by
      facsimile, when despatched.

              

      

      

      
        	
                13.4  

              	
                Any notice
      given under this Deed outside Working Hours in the place to which it is
      addressed shall be deemed not to have been given until the start of the
      next period of Working Hours in such
place.

              

      

      

      
        	
                13.5  

              	
                The
      provisions of this clause 13 shall not apply in relation to the service of
      Service Documents.

              

      

      

      
        	
                14.  

              	
                CONTRACTS
      (RIGHTS OF THIRD PARTIES) ACT 1999

              

      

      

      The parties to this
Deed do not intend that any term of this Deed should be enforceable, by virtue
of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a
party to this Deed.

      

      
        	
                15.  

              	
                COUNTERPARTS

              

      

      

      This Deed may be
executed in any number of counterparts, and by the parties on separate
counterparts, but shall not be effective until each party has executed at least
one counterpart. Each counterpart shall constitute an original of this Deed, but
all the counterparts together shall constitute one and the same
instrument.

      

      
        	
                16.  

              	
                VARIATION

              

      

      

      
        	
                16.1  

              	
                Any term of
      this Deed may be amended, and the observance of any term of this Deed may
      be waived (either generally or in a particular instance and either
      retroactively or prospectively), only with the written consent of the
      Treasury.

              

      

      

      
        	
                16.2  

              	
                Subject to
      clauses 2.3 and 16.3, and except where the State Aid Approvals have been
      annulled or suspended by the Court of First Instance or the European Court
      of Justice, if the Treasury considers at any time that it is necessary to
      modify the State Aid Commitments:

              

      

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      
 

      
        	 	
                (A)  

              	
                in order to
      reflect that the commitments or conditions subject to which it was
      anticipated the European Commission would give the State Aid Approvals are
      different from the commitments or conditions subject to which the European
      Commission ultimately does give the State Aid Approvals;
  or

              

      

      

      
        	 	
                (B)  

              	
                to reflect a
      change to the State Aid Approvals,

              

      

      

      then, in either
case, the Treasury may by notice to RBSG supplement, modify, replace or delete
any part of the State Aid Commitments in such a manner as the Treasury considers
necessary (acting reasonably), provided that the Treasury shall first consult
with RBSG in good faith about such supplement, modification, replacement or
deletion.

      

      
        	
                16.3  

              	
                If, at any
      time following receipt of a State Aid Approval, the Treasury or the
      European Commission seeks to supplement, modify or replace any part of the
      State Aid Commitments or a State Aid Approval, then RBSG and the Treasury
      will each cooperate in good faith with a view to agreeing an appropriate
      response to such proposals. However, the Treasury will not, without the
      consent of RBSG (acting reasonably) agree to any such supplement,
      modification or replacement that would have the general effect of making
      any of the State Aid Commitments or a State Aid Approval significantly
      more onerous to RBSG.

              

      

      

      
        	
                17.  

              	
                GOVERNING
      LAW

              

      

      

      Any matter, claim
or dispute arising out of or in connection with this Deed, whether such matter,
claim or dispute is contractual or non-contractual, shall be governed by and
determined in accordance with the laws of England.

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      

      IN WITNESS WHEREOF this document has been
executed and delivered as a deed the day and year first before
written.

      

      
        	
                Executed as a
      deed by two of

              	
                )

              	 
      	 
      
	
                THE
      COMMISSIONERS OF HER

              	
                )

              	 
      	 
      
	
                MAJESTY’S
      TREASURY

              	
                )

              	
                By:

              	
                .................................................

              
	 
      	
                )

              	 
      	 
      
	 
      	
                )

              	 
      	 
      
	 
      	
                )

              	 
      	 
      
	 
      	
                )

              	
                By:

              	
                .................................................

              

      

      

      

      

      

      
        	
                Executed as a
      deed by

              	
                )

              	 
      	 
      
	
                THE
      ROYAL BANK OF SCOTLAND

              	
                )

              	 
      	 
      
	
                GROUP
      PLC

              	
                )

              	
                By:

              	
                ..................................................

              
	
                acting by a
      director and its secretary/two

              	
                )

              	 
      	 
      
	
                directors:

              	
                )

              	 
      	
                Director

              
	 
      	
                )

              	 
      	 
      
	 
      	
                )

              	 
      	 
      
	 
      	
                )

              	
                By:

              	
                ..................................................

              
	 
      	
                )

              	 
      	 
      
	 
      	
                )

              	 
      	
                Director/Secretary

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
         

        
           

          
            
TERM SHEET FOR UK STATE AID COMMITMENTS IN
RESPECT OF RBS

             

            
              	
                      1.  

                    	
                      Definitions

                    

            

             

            
              	
                      1.1  

                    	
                      “ABN AMRO Group” means
      ABN AMRO Holding N.V. (which will be renamed RBS Holdings N.V. on or
      around Separation) and its direct and indirect subsidiaries and subsidiary
      undertakings.

                    

            

             

            
              	
                      1.2  

                    	
                      “ABN Instruments” has the
      meaning set out in clause 4.4.

                    

            

             

            
              	
                      1.3  

                    	
                      “APS” means the asset
      protection scheme announced by the UK Government on 19 January
      2009.

                    

            

             

            
              	
                      1.4  

                    	
                      “APS Conditions” means the terms
      and conditions of the APS (as amended, modified, supplemented or replaced
      from time to time).

                    

            

             

            
              	
                      1.5  

                    	
                      “Aviva JV Business” means
      the joint venture between RBS and Aviva plc which underwrites life
      assurance, pensions and investment products for distribution to RBS and
      NatWest retail and commercial
customers.

                    

            

             

            
              	
                      1.6  

                    	
                      “Bancassurance
      Activities” means the underwriting and distribution of life
      assurance, pension and investment products for retail and commercial
      banking customers.

                    

            

             

            
              	
                      1.7  

                    	
                      ***.

                    

            

             

            
              	
                      1.8  

                    	
                       “Businesses” or “Divestment Businesses”
      means the Rainbow Business and the Operating Businesses and “Business” or “Divestment
      Business” shall be construed
      accordingly.

                    

            

             

            
              	
                      1.9  

                    	
                      “Buyer’s Group” means (a)
      the buyer; (b) those undertakings in which the buyer, directly or
      indirectly: (i) owns more than half of the capital or business assets;
      (ii) has the power to exercise more than half the voting rights; (iii) has
      the power to appoint more than half the members of the supervisory board,
      the administrative board or bodies legally representing the undertakings;
      or (iv) has the right to manage the undertakings’ affairs; (c) those
      undertakings which have in the buyer the rights or powers listed in (b);
      (d) those undertakings in which an undertaking referred to in (c) has the
      rights or powers listed in (b); and (e) those undertakings in which two or
      more undertakings as referred to in (a) to (d) jointly have the rights or
      powers listed in (b).

                    

            

             

            
              	
                      1.10  

                    	
                      “Contingent Divestment”
      means further disposals of identifiable businesses and associated assets
      as they appear in the RBS accounts for the first half of 2009 such that
      the contingent divestment results in at least a £60 billion reduction in
      the Risk Weighted Assets of the RBS Regulatory Group (calculated in
      accordance with the methodology set out in clause
  1.24(B)).

                    

            

             

             

            
              
                

              

            

            *** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

               

            

            
              	
                      1.11  

                    	
                      “Contingent
      Subscription” means the contingent
      commitment by HM Treasury to subscribe for up to an additional £8 billion
      (in two or more tranches) of
      Contingent Capital Shares issued by RBS as set out in the Acquisition and
      Contingent Capital Agreement dated 26 November
  2009.

                    

            

             

            
              	
                      1.12  

                    	
                      “Divestiture Trustee” has
      the meaning set out in clause 3.6.

                    

            

             

            
              	
                      1.13  

                    	
                      “Decision Date” means the
      date of the European Commission decision(s) referred to in clause 2 (or,
      if more than one, the date of the first
  decision).

                    

            

             

            
              	
                      1.14  

                    	
                      “Deferral Period” has the meaning set out in clause 4.1.

                    

            

             

            
              	
                      1.15  

                    	
                      ***.

                    

            

             

            
              	
                      1.16  

                    	
                      “First Marketing Date”
      has the meaning set out in clause
3.11.

                    

            

             

            
              	
                      1.17  

                    	
                      “FSA” means the Financial
      Services Authority of the United
Kingdom.

                    

            

             

            
              	
                      1.18  

                    	
                      “Global All Debt League Table”
      is a single aggregate measure comprising all bonds globally and all
      syndicated loans globally.  It excludes self-led, self-funded,
      money market, short term deals and other debt not eligible for inclusion
      under Dealogic standard industry criteria for published league
      tables.  The table is measured by deal volume in US Dollars and
      using Dealogic Strategy Manager (as updated or replaced or, should
      Dealogic cease to publish relevant figures, as calculated by a comparable
      successor provider of market
information).

                    

            

             

            
              	
                      1.19  

                    	
                      “Hold Separate Manager”
      has the meaning set out in clause
3.14.

                    

            

             

            
              	
                      1.20  

                    	
                      “Monitoring Trustee” has
      the meaning set out in clause 10.1.

                    

            

             

            
              	
                      1.21  

                    	
                      “Non-Core Activities”
      means activities that form part of the non-core division of RBS as
      referred to in RBS’s interim results for the half-year ending 30 June
      2009.

                    

            

             

            
              	
                      1.22  

                    	
                      “Operating Businesses”
      means:

                    

            

             

            
              	
                      ·  

                    	
                      “Global Merchant
      Services” (as described in more detail in Schedule
    2);

                    

            

             

            
              	
                      ·  

                    	
                      “RBS Insurance” (as described in
      more detail in Schedule 3); and

                    

            

             

            
              	
                      ·  

                    	
                      The “RBS Sempra Ownership
      Interest” (as described in more detail in Schedule
    4).

                    

            

             

            
              	
                      1.23  

                    	
                      “Rainbow Business” means
      the business described in Schedule
5.

                    

            

             

            
              	
                      1.24  

                    	
                      ***.

                    

            

             

             

            
              

            

            *** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                2

                
                  

                

              

              
                 

              

               

            

            
              	
                      1.25  

                    	
                      "RBS" means The Royal
      Bank of Scotland Group plc, a public company incorporated in Scotland with
      registered number SC045551 and whose registered office is at 36 St Andrew
      Square, Edinburgh, Scotland EH2
2YB.

                    

            

             

            
              	
                      1.26  

                    	
                      "RBS Group" means RBS
      including its subsidiaries from time to
time.

                    

            

             

            
              	
                      1.27  

                    	
                      “RBS Instruments” has the
      meaning set out in clause 4.1.

                    

            

             

            
              	
                      1.28  

                    	
                      “RBS Regulatory Group” has
      the same meaning as “Regulatory Group” as set out in clause 1.1 of the
      Acquisition and Contingent Capital Agreement dated 26 November
      2009.

                    

            

             

            
              	
                      1.29  

                    	
                      “Recapitalisation” means
      the Acquisition of the B Shares for £25.5 billion by HM Treasury as set
      out in the Acquisition and Contingent Capital Agreement dated 26 November
      2009.

                    

            

             

            
              	
                      1.30  

                    	
                      “Separation” means the
      transfer of the Dutch State acquired businesses in the ABN AMRO Group out
      of the ABN AMRO Group.

                    

            

             

            
              	
                      1.31  

                    	
                      “SME market” means the
      market in the United Kingdom for the provision of banking services to
      business and commercial customers with an annual turnover of up to £25
      million and “SME”
      shall be defined accordingly.

                    

            

             

            
              	
                      2.  

                    	
                      Conditionality

                    

            

             

            The commitments set
out below are conditional on the European Commission reaching a decision or
decisions that all state aid received by RBS to date and any state aid that may
be provided to RBS in connection with the APS, the Recapitalisation and the
Contingent Subscription are compatible with the common market.

             

            
              	
                      3.  

                    	
                      Divestment
      Obligation

                    

            

             

            
              	
                      3.1  

                    	
                      Subject to
      clause 3.10 below, RBS shall:

                    

            

             

            
              	 	
                      (A)  

                    	
                      divest its
      entire interest in each of the Rainbow Business and RBS Insurance and its
      entire RBS Sempra Ownership Interest;
and

                    

            

             

            
              	 	
                      (B)  

                    	
                      divest its entire interest in each of the
      Global Merchant Services businesses or, if
      requested by a purchaser, divest its
      interest such that RBS retains no more than a 20% ownership interest in
      each of the Global Merchant Services
      businesses.

                    

            

             

            
              	
                      3.2  

                    	
                      RBS must
      dispose of the Businesses in accordance with the following
      provisions:

                    

            

             

            
              	 	
                      (A)  

                    	
                      ***

                    

            

             

            
              	 	
                      (B)  

                    	
                      ***

                    

            

             

             

            
              
 ***
Indicates omission of material, which has been separately filed, pursuant to a
request for confidential treatment.

             

            
              
                 

              

              
                3

                
                  

                

              

              
                 

              

               

            

            
              	 	
                      (C)  

                    	
                      RBS must
      complete the disposals set out in clause 3.1 above, except for the
      disposal of RBS Insurance, by no later than 31 December 2013;
      and

                    

            

             

            
              	 	
                      (D)  

                    	
                      RBS must
      divest its interest in RBS Insurance to a level below that at which it
      would be considered to exercise control of RBS Insurance within the
      meaning of Article 3(2) of Council Regulation 139/2004 by 31 December 2013
      and dispose of its entire interest in RBS Insurance by 31 December
      2014.

                    

            

             

            
              	
                      3.3  

                    	
                      If
      either:

                    

            

             

            
              	 	
                      (A)  

                    	
                      the RBS
      Capital Ratio falls below 5 per cent at any time before 31 December 2014;
      or

                    

            

             

            
              	 	
                      (B)  

                    	
                      the Balance
      Sheet Target Level has not been achieved by 31 December
    2013,

                    

            

             

            then, subject to
clause 3.4 and 3.10 below, RBS must implement the Contingent Divestment. Where
clause 3.3(A) applies the Contingent Divestment must be completed by *** or, if
the RBS Capital Ratio falls below 5 per cent after 31 December 2011 and before
***, within *** of the date on which the RBS Capital Ratio falls below the
specified level.  Where clause 3.3(B) applies the Contingent
Divestment must be completed by ***.  Where clauses 3.3 (A) and (B)
both apply, the Contingent Divestment must be completed ***.

             

            
              	
                      3.4  

                    	
                      ***.

                    

            

             

            
              	
                      3.5  

                    	
                      ***.

                    

            

             

            
              	
                      3.6  

                    	
                      *** above, the UK Government must appoint a
      trustee that will, within *** of appointment, dispose of the
      Businesses at no minimum price, including a negative price, (and in the
      case of the Rainbow Business to a purchaser as envisaged by clause 3.12
      below) if the disposal of the Businesses has not been completed by the
      dates specified in clauses 3.2(C) and
      (D) above (the “Divestiture Trustee”).  If RBS is under an obligation to
      make the Contingent Divestment and has not done so by the date(s)
      specified in clause 3.3 *** then the Divestiture Trustee will also be
      empowered to implement the Contingent Divestment on the same
      basis.

                    

            

             

            
              	
                      3.7  

                    	
                      The following
      provisions apply to the appointment of a Divestiture
    Trustee:

                    

            

             

            
              	 	
                      (A)  

                    	
                      *** above, the UK Government must propose to the
      European Commission for approval, no later than one month before the
      deadlines specified in 3.2(C) or
      (D) as appropriate (or, in respect of
      the Contingent
      Divestment,  one  month  before the deadline
      for completion of the Contingent Divestment) a list of one or more persons
      whom it proposes to appoint as Divestiture
  Trustee;

                    

            

             

            

            
              
*** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                4

                
                  

                

              

              
                 

              

               

            

            
              	 	
                      (B)  

                    	
                      the
      Divestiture Trustee must be appointed within one week of the European
      Commission’s approval in accordance with the mandate approved by the
      European Commission;

                    

            

             

            
              	 	
                      (C)  

                    	
                      ***.

                    

            

             

            
              	 	
                      (D)  

                    	
                      ***.

                    

            

             

            
              	 	
                      (E)  

                    	
                      ***.

                    

            

             

            
              	
                      3.8  

                    	
                      ***

                    

            

             

            
              	
                      3.9  

                    	
                      The sale
      procedures for the Businesses and, if relevant, the Contingent Divestment,
      do not all have to take place at the same
time.

                    

            

             

            
              	
                      3.10  

                    	
                      RBS may also
      at its sole discretion choose to dispose
of:

                    

            

             

            
              	 	
                      (A)  

                    	
                      the Rainbow
      Business by way of initial public offering of all of the shares in an
      entity(ies) that owns the entirety of the Rainbow Business (or, provided
      the European Commission has indicated that it is satisfied for the purpose
      of clause 3.15 below, partly by way of initial public offering and partly
      by way of tendering or other appropriate asset and/or share sale
      procedure), provided that RBS shall have disposed of its entire ownership
      interest in the Rainbow Business by 31 December
  2013;

                    

            

             

            
              	 	
                      (B)  

                    	
                      any or all of
      the Operating Businesses by way of initial public offering provided
      that:

                    

            

             

            
              	 	
                      (a)  

                    	
                      it shall have
      completed the disposal of the RBS Sempra Ownership Interest by 31 December
      2013;

                    

            

             

            
              	 	
                      (b)  

                    	
                      it shall have
      reduced its interest in each of the Global Merchant Services businesses
      such that RBS retains no more than a 20% ownership interest in each of the
      Global Merchant Services businesses as a whole by 31 December
      2013;

                    

            

             

            
              	 	
                      (c)  

                    	
                      it shall have
      reduced its interest in RBS Insurance to a level below that at which it
      would be considered to exercise control of the Business within the meaning
      of Article 3(2) of Council Regulation 139/2004  by 31 December 2013 and shall have completed the
      disposal of its entire interest in RBS Insurance by 31st December 2014;
      and/or

                    

            

             

            
              	 	
                      (C)  

                    	
                      if relevant,
      the Contingent Divestment (or any part of the Contingent Divestment) by
      way of initial public offering on a basis that it shall have completed the
      Contingent Divestment by the date specified in clause
  3.3.

                    

            

             

            

            
              
*** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                5

                
                  

                

              

              
                 

              

               

            

            
              	
                      3.11  

                    	
                      The Rainbow
      Business is described in Schedule
5.

                    

            

             

            
              	 	
                      (A)  

                    	
                      ***.

                    

            

             

            
              	 	
                      (B)  

                    	
                      ***.

                    

            

             

            
              	
                      3.12  

                    	
                      The buyer of
      the Rainbow Business must:

                    

            

             

            
              	 	
                      (A)  

                    	
                      together with the rest of the Buyer’s Group, in
      combination with the Rainbow Business, have a market share of less than
      *** in the SME market, measured by number of customers served in the UK
      and by reference to the most recent
      pH annual survey (or, should pH cease to publish relevant figures, as
      calculated by a comparable successor provider of market information)
      issued prior to the signing of the sale and purchase agreement relating to
      the sale of the Rainbow Business to the
  Buyer;

                    

            

             

            
              	 	
                      (B)  

                    	
                      be
      independent of RBS and must not be connected to RBS within the meaning of
      Article 11 of the European Commission Block Exemption Regulation No
      2790/1999 regarding vertical
agreements;

                    

            

             

            
              	 	
                      (C)  

                    	
                      satisfy the
      relevant competition authorities that it is in a reasonable position to
      satisfy all the necessary conditions imposed by the relevant competition
      authorities as part of any merger control process and by other authorities
      for the acquisition of the Rainbow Businesses or relevant part
      thereof;

                    

            

             

            
              	 	
                      (D)  

                    	
                      satisfy the
      FSA (or its successor body) as to the adequacy of its financial resources
      (both in respect of liquidity and capital), the competency and experience
      of the leadership, the adequacy of its risk and control standards, the
      adequacy of its attitude to customers in terms of fair customer treatment,
      adequate service and fair pricing, and the long term viability, success
      and sustainability of the entity, assessed by reference to (amongst other
      things) its business plan; and

                    

            

             

            
              	 	
                      (E)  

                    	
                      have
      sufficient resources and incentive to maintain and develop the Rainbow
      Business provided that if the buyer satisfies sub-clause 3.12 (D) above it
      shall be presumed also to satisfy this sub-clause 3.12
  (E).

                    

            

             

            
              	
                      3.13  

                    	
                      ***.

                    

            

             

            
              	
                      3.14  

                    	
                      With a view
      to ensuring the continued economic viability, marketability and
      competitiveness of the Rainbow Business, RBS shall appoint a person to
      manage the Rainbow Business (the “Hold Separate Manager”)
      no later than 6 months after the Decision Date and shall ensure that the
      Hold Separate Manager operates independently.  The Hold Separate
      Manager must remain appointed until the completion of the disposal of the
      Rainbow Business.  The Hold Separate Manager can be the
      current  CEO  (or other senior employee)  of
      the Rainbow Business.  The Hold
  Separate

                    

            

             

            
              

            

            *** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                6

                
                  

                

              

              
                 

              

               

            

            Manager will
oversee the management of the Rainbow Business in its best interests, in common
consultation with RBS and consistent with the board of RBS’s fiduciary duties to
RBS’s shareholders and as monitored by the Monitoring Trustee appointed in
accordance with clause 10 below.  ***.

             

            
              	
                      3.15  

                    	
                      Each of the
      Operating Businesses and Contingent Divestment can be disposed of in parts
      or as a whole.  The expectation is that RBS will dispose of the
      Rainbow Business as a whole (although it is envisaged that the Rainbow
      Business may be disposed of separately and at different times from the
      Operating Businesses).  However, if the European Commission is
      satisfied that the disposal of the Rainbow Business in parts would be
      equally effective in improving competition RBS may dispose of it in such
      parts rather than as a whole.

                    

            

             

            
              	
                      4.  

                    	
                      Payment
      of coupons on hybrid capital
instruments

                    

            

             

            
              	
                      4.1  

                    	
                      Unless the
      European Commission agrees otherwise, neither RBS nor any of its direct or
      indirect subsidiaries (excluding any companies in the ABN AMRO Group)
      shall pay investors any dividends or coupons on existing hybrid capital
      instruments (including preference shares, B shares and upper and lower
      tier-2 instruments, together the “RBS Instruments”) from a
      date starting not later than 30 April 2010 and for a period of two years
      thereafter (the "Deferral
      Period") or exercise any call rights in relation to the same
      between 24 November 2009 and the end of the Deferral Period, unless there
      is a legal obligation to do so. *** if any, shall be exempt from this
      prohibition provided such date falls on or prior to 30 June
      2010.

                    

            

             

            
              	
                      4.2  

                    	
                      New hybrid
      capital instruments, i.e. hybrid capital instruments issued after 24
      November 2009, shall not be subject to the ban on dividend or coupon
      payments or call options, *** or the terms of those securities are
      otherwise consistent with the principles of burden sharing and are
      approved by the European
Commission.

                    

            

             

            
              	
                      4.3  

                    	
                      RBS certifies
      that the payment of dividends or coupons on new securities will not create
      a legal obligation to make any dividend or coupon payments on RBS'
      existing hybrid capital instruments (including preference shares, B shares
      and upper and lower tier-2 instruments) and therefore that the payment of
      dividends or coupons on any such new securities will not reduce the effect
      of the commitment not to pay discretionary dividends or coupons on such
      existing securities.

                    

            

             

            
              	
                      4.4  

                    	
                      In addition
      unless the European Commission agrees otherwise, the hybrid capital
      instruments  existing  on  the  date  hereof
      which are retained in ABN AMRO Group after Separation is complete (the
      "ABN Instruments")
      shall be subject to the restriction on the payment of dividends and
      coupons on hybrid capital instruments and on the exercise of any call
      rights, unless in any such case there is a legal obligation to do so, for
      an effective period of two years after the proposed capital restructuring
      of RFS Holdings B.V. (that is intended to take place soon after
      Separation) and following the expiry of any "pusher" periods following
      Separation and such capital
restructuring.

                    

            

             

            
              

            

            *** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                7

                
                  

                

              

              
                 

              

               

            

            
              	
                      4.5  

                    	
                      RBS certifies
      that the payment of dividends or coupons on these securities issued by the
      ABN AMRO Group in the period until the starting date of the two year
      period will not create a legal obligation to make any dividend or coupon
      payments on the RBS Instruments and therefore that the payment of
      dividends or coupons on the ABN Instruments will not reduce the effect of
      the commitment not to pay discretionary dividends or coupons on the RBS
      Instruments.

                    

            

             

            
              	
                      4.6  

                    	
                      RBS will use
      its reasonable endeavours to develop and, subject to market conditions and
      requisite approvals, implement a plan to continue the improvement and
      optimisation of its capital base in a manner which is consistent with the
      principles of burden sharing. RBS expects to provide final details of the
      plan to the European Commission towards the end of December
      2009.

                    

            

             

            
              	
                      4.7  

                    	
                      The RBS Instruments
      relevant to this clause 4 are set out in Schedule
  6.

                    

            

             

            
              	
                      5.  

                    	
                      Remuneration

                    

            

             

            
              	
                      5.1  

                    	
                      RBS is
      committed to the principle that, from 1 January 2010 until 31 December
      2013, it should be at the leading edge of implementing the G20 principles,
      the FSA Remuneration Code and any remuneration provisions accepted by the
      Government from the Walker Review, that are implemented in
      regulations.

                    

            

             

            
              	
                      6.  

                    	
                      GBM
      Commitments

                    

            

             

            
              	
                      6.1  

                    	
                      Until 31
      December 2012 RBS will ensure
      that its overall annual position in the Global All Debt League Table is no
      higher than fifth.

                    

            

             

            
              	
                      7.  

                    	
                      Restrictions
      on further acquisitions and business
activities

                    

            

             

            
              	
                      7.1  

                    	
                      Except to the
      extent that the cumulative purchase price (excluding the assumption of
      debt) paid by RBS for all acquisitions as specified in (A) or (B) below,
      is less than £500 million, RBS:

                    

            

             

            
              	 	
                      (A)  

                    	
                      will not
      acquire any Financial Institutions;
and

                    

            

             

            
              	 	
                      (B)  

                    	
                      will not make
      any other acquisitions the purpose of which is to expand RBS’s activities
      outside of its business model,

                    

            

             

            until the later of
31 December 2012 and the date on which the last of the Businesses has been
divested (save that in the case of RBS Insurance it will be sufficient for the
purposes of this clause for RBS to have divested to a level below that at which
RBS would be considered to exercise control of RBS Insurance within the meaning
of Article 3(2) of Council Regulation 139/2004).

             

            
              	
                      7.2  

                    	
                      RBS may,
      subject to clause 7.3 below, continue to conduct all of its activities as
      at the date hereof in the ordinary course of
  business.

                    

            

             

            
              	
                      7.3  

                    	
                      Until 31
      December 2014, RBS will not restart (including by acquisition) any
      activity that, as at the date hereof, it only carries on by virtue of the
      Non-Core Activities. For the avoidance of doubt, nothing in this clause
      7.3 shall prevent RBS from carrying on Non-Core Activities where such
      Non-

                    

            

             

            
              
                 

              

              
                8

                
                  

                

              

              
                 

              

               

              
                Core Activities are
ancillary or incidental to the activities carried on by RBS as at the date
hereof in the ordinary course of its business.

              

               

            

            
              	
                      7.4  

                    	
                      RBS will
      not:

                    

            

             

            
              	 	
                      (A)  

                    	
                      restart or set up, or acquire or re-acquire any
      ownership interest in, a business
      that competes with any of the Operating Businesses until 31 December
      2014.  For the avoidance of doubt, this clause is not intended
      to prevent RBS from acquiring an interest co-incidentally to the carrying
      on of its business in the ordinary course, as at the date hereof, or to
      prevent RBS from carrying out the activities which it is permitted to
      carry out under clause 8; or

                    

            

             

            
              	 	
                      (B)  

                    	
                      ***

                    

            

             

            
              	
                      8.  

                    	
                      Conduct
      in relation to the Businesses

                    

            

             

            
              	
                      8.1  

                    	
                      Subject to
      Clause 8.2, ***.

                    

            

             

            
              	
                      8.2  

                    	
                      ***

                    

            

             

            
              	
                      8.3  

                    	
                      ***

                    

            

             

            
              	
                      8.4  

                    	
                      ***

                    

            

             

            
              	
                      8.5  

                    	
                      Between the
      Decision Date and appointment of the Hold Separate Manager of the Rainbow
      Business:

                    

            

             

            
              	 	
                      (A)  

                    	
                      RBS shall
      carry on the Rainbow Business as a going concern in the ordinary and usual
      course as carried on prior to the Decision Date;
  and

                    

            

             

            
              	 	
                      (B)  

                    	
                      RBS shall
      ensure that its management of the Rainbow Business is consistent with the
      commitments in Schedule 7(A).

                    

            

             

            but nothing in this
provision will prevent any reorganisation or restructuring of the Rainbow
business in preparation for disposal in accordance with the provisions of this
term sheet.

             

            
              	
                      8.6  

                    	
                      For the term
      of the Hold Separate Manager of the Rainbow
  Business:

                    

            

             

            
              	 	
                      (A)  

                    	
                      RBS shall
      provide the appropriate support to enable the Hold Separate Manager to
      carry on the Rainbow Business as a going concern in the ordinary and usual
      course as carried on prior to the Decision Date;
  and

                    

            

             

            
              

            

            *** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                9

                
                  

                

              

              
                 

              

               

            

            
              	 	
                      (B)  

                    	
                      RBS shall
      provide the appropriate support to the Hold Separate Manager so that the
      management of the Rainbow Business is consistent with the Business
      Preservation Metrics in Schedule
7(B),

                    

            

             

            but nothing in this
provision will prevent any reorganisation or restructuring of the Rainbow
business in preparation for disposal in accordance with the provisions of this
term sheet.

             

            
              	
                      8.7  

                    	
                      ***

                    

            

             

            
              	
                      8.8  

                    	
                      From the
      Decision Date to the time at which a sale and purchase agreement has been
      signed with respect to each Business (or, in the case of an initial public
      offering, until the time that a prospectus has been issued for the
      Business), RBS will not actively target employees working within the
      relevant Business to transfer to roles outside of the relevant
      Business.

                    

            

             

            
              	
                      9.  

                    	
                      References
      to state support

                    

            

             

            RBS shall not refer
to the fact that it enjoys any state support or to the fact that the UK State is
a shareholder in RBS in any of RBS’s advertising.

             

            
              	
                      10.  

                    	
                      Monitoring
      Trustee

                    

            

             

            
              	
                      10.1  

                    	
                      RBS shall
      appoint, subject to European Commission’s approval, a trustee in charge of
      the overall task of monitoring and ensuring, under European Commission’s
      instructions, compliance with the commitments (the “Monitoring
      Trustee”).  For that purpose the United Kingdom shall
      propose to the European Commission for approval, no later than three
      months from the Decision Date, a list of one or more persons whom it
      proposes to appoint as Monitoring Trustee.  The Monitoring
      Trustee shall be appointed within one week of the European Commission’s
      approval in accordance with the mandate approved by the European
      Commission and shall report to the European Commission on a quarterly
      basis as to RBS’s compliance with the
  commitments.

                    

            

             

            
              	
                      10.2  

                    	
                      RBS shall
      provide and cause its advisors to provide to the Monitoring Trustee all
      such co-operation, assistance and information as it may reasonably require
      to perform its tasks, including the possibility to appoint
      advisors.  The Monitoring Trustee shall be remunerated by RBS in
      a way that does not impede the independent and effective fulfilment of its
      mandate.

                    

            

             

             

              
                

              

            

            *** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                10

                
                  

                

              

              
                 

              

            

             

            Schedule
1 – Currency Exchange Rates

             

            ***                                                         

             

            

             

             

             

             

             

             

             

            
              
*** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                11

                
                  

                

              

              
                 

              

            

             

            Schedule
2 – Description of Global Merchant Services

             

             

            
              	
                      1  

                    	
                      GMS
      Business

                    

            

             

            
              	
                      1.1  

                    	
                      Global
      Merchant Services is a provider of global card payment services, enabling
      businesses to accept card payments either at point of sale (POS) or over
      the internet in exchange for goods and/or
  services.

                    

            

             

            
              	
                      1.2  

                    	
                      The GMS
      Business includes the following
businesses:

                    

            

             

            
              	 	
                      (i)  

                    	
                      the acquiring
      business in National Westminster Bank, trading as Streamline or as
      Streamline International;

                    

            

             

            
              	 	
                      (ii)  

                    	
                      the acquiring
      business in Ulster Bank, trading as Ulster Bank Merchant
      Services;

                    

            

             

            
              	 	
                      (iii)  

                    	
                      RBS Lynk
      Incorporated;

                    

            

             

            
              	 	
                      (iv)  

                    	
                      WorldPay
      GmbH;

                    

            

             

            
              	 	
                      (v)  

                    	
                      Bibit B.V.
      and its subsidiaries Bibit France SARL, Bibit SL (Spain), Bibit Payments
      KK (Japan), Bibit Inc., and the following non-trading subsidiaries:
      Payplus B.V., Bibit Internet Payments Ltd, and Bibit Internet Billing
      Services N.V.;

                    

            

             

            
              	 	
                      (vi)  

                    	
                      WorldPay
      Limited (Jersey) (which does not trade and is a UK tax resident) and its
      subsidiaries WorldPay Limited UK, WorldPay Inc (which does not trade) and
      WorldPay Pte (Singapore) which is a trading
  company;

                    

            

             

            
              	 	
                      (vii)  

                    	
                      RBS WorldPlay Canada
      Corporation and Payment Trust Limited (both subsidiaries of RBS
      plc).

                    

            

             

            Streamline,
Streamline International, Ulster Bank Merchant Services and RBS Lynk are
acquiring businesses. Bibit, WorldPay Ltd and Payment Trust Ltd are payment
gateways that provide the connectivity between the cardholder, the merchant and
the acquirer to facilitate the acceptance of payments of different methods
(examples include cards and bank transfers) in the e-commerce
environment.

             

            In addition, Bibit
and Payment Trust provide additional electronic payment services for the
e-commerce environment such as risk management and fraud screening services and
management reconciliation services.

             

            RBS WorldPay Canada
Corporation is a software developer. WorldPay GmbH sells Bibit
products.

             

            
              
                 

              

              
                12

                
                  

                

              

              
                 

              

               

            

            Schedule
3 – Description of RBS Insurance

             

             

            
              	
                      1  

                    	
                      RBS
      Insurance

                    

            

             

            RBS Insurance sells
and underwrites retail and SME insurance over the telephone and internet, as
well as through brokers and partnerships. Its brands include Direct Line,
Churchill and Privilege, which sell general insurance products direct to the
customer, as well as Green Flag and NIG.  Through its international
division, RBS Insurance sells general insurance, mainly motor, in Germany and
Italy. The Intermediary and Broker division sells general insurance products
through independent brokers.

             

            The holding company
of RBS Insurance is RBS Insurance Group Limited which has the following key
subsidiaries:

             

            
              	 	
                      (i)  

                    	
                      Direct Line
      Insurance plc - authorised UK general insurance underwriter operating
      under the Direct Line and Privilege
brands

                    

            

             

            
              	 	
                      (ii)  

                    	
                      Churchill
      Insurance Company Limited - authorised UK general insurance underwriter
      operating under the Churchill brand as well as supporting partner
      brands

                    

            

             

            
              	 	
                      (iii)  

                    	
                      UK Insurance
      Limited (“UKI”) - authorised UK general insurance underwriter supporting
      various partner brands

                    

            

             

            
              	 	
                      (iv)  

                    	
                      The National
      Insurance and Guarantee Corporation Limited (“NIG”) - authorised UK
      general insurance underwriter distributing commercial and personal
      insurance through brokers

                    

            

             

            
              	 	
                      (v)  

                    	
                      Direct Line
      Life Insurance Company Limited – authorised UK life assurance
      underwriter

                    

            

             

            
              	 	
                      (vi)  

                    	
                      Direct Line
      Insurance S.p.a - authorised general insurance underwriter in
      Italy

                    

            

             

            
              	 	
                      (vii)  

                    	
                      Headrow
      Reinsurance Limited - authorised general insurance underwriter in
      Guernsey

                    

            

             

            
              	 	
                      (viii)  

                    	
                      Green Flag
      Limited - provider of motor roadside assistance
  services

                    

            

             

            
              	 	
                      (ix)  

                    	
                      RBS Insurance
      Services Limited - provider of support services to the entities within RBS
      Insurance

                    

            

             

            In addition, the
following RBS Group company is managed by RBS Insurance, although it is owned by
a company outside of the RBS Insurance Group:

             

            
              	 	
                      (x)  

                    	
                      Direct Line
      Versicherung A.G. - authorised general insurance underwriter in
      Germany

                    

            

             

            
              
                 

              

              
                13

                
                  

                

              

              
                 

              

               

            

            Schedule
4 – Description of RBS Sempra Ownership Interest

             

             

            
              	
                      1  

                    	
                      RBS
      Sempra

                    

            

             

            
              	
                      1.1  

                    	
                      RBS Sempra
      Commodities is a commodities trading platform operated within RBS Sempra
      Commodities LLP, a UK limited liability partnership between RBS (with 51%
      initial capital contribution and the right to control the board) and
      Sempra (with 49% initial capital contribution) (“RBS
      Sempra”).  The business is active in the trading of
      physical commodities and innovative financial risk management products in
      the natural gas, natural gas liquids, power, petroleum and petroleum
      products, coal, emissions, ethanol and base metal markets.  RBS
      Sempra Commodities acts as a holding company for the following principal
      subsidiaries:

                    

            

             

            
              	 	
                      (i)  

                    	
                      Sempra Energy
      Trading LLC (Delaware);

                    

            

             

            
              	 	
                      (ii)  

                    	
                      Sempra Energy
      Solutions LLC (California);

                    

            

             

            
              	 	
                      (iii)  

                    	
                      Sempra Oil
      Trading Pte. Ltd. (Singapore);

                    

            

             

            
              	 	
                      (iv)  

                    	
                      RBS Sempra
      Commodities Holdings IV B.V.
(Netherlands);

                    

            

             

            
              	 	
                      (v)  

                    	
                      RBS Sempra
      Commodities Cooperatief W.A.;

                    

            

             

            
              	 	
                      (vi)  

                    	
                      RBS Sempra
      Energy Europe Espana S.L. (Spain);

                    

            

             

            
              	 	
                      (vii)  

                    	
                      RBS Sempra
      Energy Trading Holdings Sarl
(Switzerland);

                    

            

             

            
              	 	
                      (viii)  

                    	
                      RBS Sempra
      Energy Europe (Hungary);

                    

            

             

            
              	 	
                      (ix)  

                    	
                      RBS Sempra
      Energy Europe d.o.o. (Serbia);

                    

            

             

            
              	 	
                      (x)  

                    	
                      RBS Sempra
      Energy Trading Mexico (Mexico);

                    

            

             

            
              	 	
                      (xi)  

                    	
                      RBS Sempra
      Products Limited (UK);

                    

            

             

            
              	 	
                      (xii)  

                    	
                      RBS Sempra
      Metals Group Limited (UK);

                    

            

             

            
              	 	
                      (xiii)  

                    	
                      RBS Sempra
      Metals Far East Limited (Hong
Kong);

                    

            

             

            
              	 	
                      (xiv)  

                    	
                      Canadian
      Choice Energy Corp. (Ontario); and

                    

            

             

            
              	 	
                      (xv)  

                    	
                      Henry Bath
      & Son Limited (UK).

                    

            

             

            
              
                 

              

              
                14

                
                  

                

              

              
                 

              

               

            

            Schedule
5  - Description of the Rainbow Business

             

            
              	
                      1  

                    	
                      Rainbow
      Business

                    

            

             

            
              	
                      1.1  

                    	
                      The Rainbow
      Business is the RBS branch-related Retail and SME business in England and
      Wales, and the NatWest branch-related Retail and SME business in Scotland,
      along with the Direct SME1 business and, to the extent transfer is
      within the control of RBS, the accounts and assets pertaining to and
      services provided to approximately *** mid-corporate customers (where a
      ‘mid-corporate customer’ is a customer who has turnover of between £25
      million and £1 billion per annum), subject to clause 1.5
      below).

                    

            

             

            
              	
                      1.2  

                    	
                      ***

                    

            

             

            
              	
                      1.3  

                    	
                      The Rainbow
      Business consists of the following
assets:

                    

            

             

            
              	 	
                      (i)  

                    	
                      Leasehold or
      freehold interest in 311 RBS branches and sub-branches in England and
      Wales, and 7 NatWest branches and sub-branches in
  Scotland.

                    

            

             

            
              	 	
                      (ii)  

                    	
                      Further
      Banking Infrastructure, including leasehold or freehold interests in
      buildings to be utilised as:

                    

            

             

            
              	 	
                      ·  

                    	
                      40 Business
      and Commercial Banking Centres.

                    

            

             

            
              	 	
                      ·  

                    	
                      4 Corporate
      Banking Centres ***.

                    

            

             

            
              	 	
                      ·  

                    	
                      2 Direct
      Business Banking Centres

                    

            

             

            
              	 	
                      ·  

                    	
                      3 Personal
      Relationship Manager Centres; and

                    

            

             

            
              	 	
                      ·  

                    	
                      3 Operational
      Centres.2

                    

            

             

            
              	 	
                      (iii)  

                    	
                      ***

                    

            

             

            
              	 	
                      (iv)  

                    	
                      Approximately
      6000 employees, including approximately 850 relationship managers, or
      appropriate number as a result of any efficiency improvements that may
      have taken place between the Decision Date and divestment date;
      and

                    

            

             

            
              	 	
                      (v)  

                    	
                      Arrangements
      for the supply of certain products / services on reasonable commercial
      terms by RBS or a subsidiary as defined in agreement with a potential
      purchaser, for a transitional period from the divestment date as defined
      in agreement with a potential
purchaser.

                    

            

             

            
              	
                      1.4  

                    	
                      The Rainbow
      Business consists of the following intangible
  assets:

                    

            

             

            
              	 	
                      (i)  

                    	
                      the Williams
      & Glyn’s brand. ***.

                    

            

             

            
              	
                      1.5  

                    	
                      ***:

                    

            

             

            

              
                

              

            

            
              
                	
                        1

                      	
                        The Direct
      business is a discrete set of *** customers who do not have relationship
      managers and bank 'direct'. Some are NatWest customers, so not associated
      with the Rainbow branches.

                      

              

               

            

            
              
                	
                        2

                      	
                        ***.

                      

              

               

              

               

              
                
                  

                
***
Indicates omission of material, which has been separately filed, pursuant to a
request for confidential treatment.

               

              
                
                   

                

                
                  15

                  
                    

                  

                

                
                   

                

                 

              

            

             Schedule
6

             

            List
of payment obligations in relation to hybrid capital instruments (including
preference shares, upper tier 2 and lower tier 2 instruments)

             

            Part
1 – Securities on which payments will be stopped when the restriction on
payments on hybrid capital instruments begins

             

            
              	
                      ·  

                    	
                      ***

                    

            

             

            

             

            

             

            

             

            

             

            

             

            

             

            

             

            

             

            
              
                

              

            

            *** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

            
              
                 

              

              
                16

                
                  

                

              

              
                 

              

            

             

            Schedule
7

             

            ***

             

            

             

            

             

            

             

            

             

            

             

            

             

            

             

            

             

            

             

            

             

              
                

              

            

            *** Indicates
omission of material, which has been separately filed, pursuant to a request for
confidential treatment.

             

             

            17

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