F-3

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CGn828IZdeSmu8VwQ/BFYtyog0UsBN4dLfWHvdTY0KcMIXzhknnT9Yi692Sw9YYT u53lis0j/M8KFlK5ExQwIQ== 0000950103-05-001206.txt : 20050408 0000950103-05-001206.hdr.sgml : 20050408 20050408172755 ACCESSION NUMBER: 0000950103-05-001206 CONFORMED SUBMISSION TYPE: F-3 PUBLIC DOCUMENT COUNT: 14 FILED AS OF DATE: 20050408 DATE AS OF CHANGE: 20050408 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROYAL BANK OF SCOTLAND GROUP PLC CENTRAL INDEX KEY: 0000844150 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL BANKS, NEC [6029] IRS NUMBER: 000000000 STATE OF INCORPORATION: X0 FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: F-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-123972 FILM NUMBER: 05742362 BUSINESS ADDRESS: STREET 1: PO BOX 31 STREET 2: 42 ST ANDREW SQUARE CITY: EDINBURGH SCOTLAND STATE: X0 ZIP: EH2 2YE BUSINESS PHONE: 442077144467 MAIL ADDRESS: STREET 1: PO BOX 31 STREET 2: 42 ST ANDREW SQUARE CITY: EDINBURGH SCOTLAND STATE: X0 ZIP: EH2 2YE F-3 1 rbsg_f-3.htm F-3

As filed with the Securities and Exchange Commission on April 8, 2005

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

The Royal Bank of Scotland Group plc

(Exact Name of Registrant as Specified in Its Charter)

Scotland

(State or Other Jurisdiction of Incorporation or Organization)

Not Applicable

(I.R.S. Employer Identification No.)

42 St Andrew Square
Edinburgh EH2 2YE
United Kingdom
011-44-131-556-8555

(Address and Telephone Number of Registrant’s Principal Executive Offices)

CT Corporation System
111 Eighth Avenue
New York, NY 10011
(212) 894-8940

(Name, Address and Telephone Number of Agent for Service)

Please send copies of all communications to:

Keith Kearney
DAVIS POLK & WARDWELL
99 Gresham Street
London EC2V 7NG
England
Tel. No.: 011-44-20-7418-1300

Hugh Frame
SIDLEY AUSTIN BROWN & WOOD LLP
Woolgate Exchange
25 Basinghall Street
London EC2V 5HA
England
Tel. No.: 011-44-20-7360-3600

     Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
     If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o
     If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box. x
     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o _____
     If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o______
     If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit(1)	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee
Debt Securities	$10,000,000,000(3)	100%	$10,000,000,000	$1,177,000
Dollar Preference Shares(2)

(Footnotes on next page)

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.
(2)	American Depositary Shares evidenced by American Depositary Receipts issuable upon deposit of the Dollar Preference Shares registered hereby will be registered under a separate Registration Statement on Form F-6.
(3)	Not specified as to each class of securities to be registered pursuant to General Instruction II.C of Form F-3. In no event will the aggregate initial public offering price of the Debt Securities and Dollar Preference Shares issued under this Registration Statement exceed $10,000,000,000 or, if any Debt Securities are issued (i) at an original issue discount, such greater amount as shall result in aggregate net proceeds not in excess of $10,000,000,000 to the Registrant or (ii) with a principal amount denominated in a foreign currency or composite currency, such amount as shall result in an aggregate initial offering price equivalent to a maximum of $10,000,000,000 at the time of initial offering.

PROSPECTUS

THE ROYAL BANK OF SCOTLAND GROUP plc

By this prospectus we may offer —

DEBT SECURITIES
DOLLAR PREFERENCE SHARES

up to an aggregate initial offering price of $10,000,000,000
or the equivalent thereof.

We will provide the
specific terms of these
securities in supplements to
this prospectus. You should
read this prospectus and the
supplements carefully
before you invest.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus may not be used to sell securities unless it is accompanied by a prospectus supplement.

The date of this prospectus is April 8, 2005.

TABLE OF CONTENTS

About this Prospectus	2
Use of Proceeds	2
The Royal Bank of Scotland Group	2
Description of Debt Securities	3
Description of Dollar Preference Shares	15
Description of American Depositary Receipts	24
Plan of Distribution	29
Legal Opinions	30
Experts	30
Expenses of The Issue	30
Enforcement of Civil Liabilities	31
Where You Can Find More Information	31
Incorporation of Documents by Reference	32

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the US Securities and Exchange Commission (“SEC”) using a “shelf” registration or continuous offering process. Under this shelf process, we may sell the securities described in this prospectus in one or more offerings up to a total dollar amount of $10,000,000,000 or the equivalent in one or more foreign currencies or currency units.

This prospectus provides you with a general description of the debt securities and dollar preference shares we may offer, which we will refer to collectively as the “securities”. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement will provide information regarding certain tax consequences of the purchase, ownership and disposition of the offered securities. The prospectus supplement may also add to, update or change information contained in this prospectus. If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the information in that prospectus supplement. We will file each prospectus supplement with the Securities and Exchange Commission. You should read both this prospectus and the applicable prospectus supplement, together with the additional information described under the heading “Where You Can Find More Information”.

The registration statement containing this prospectus, including exhibits to the registration statement, provides additional information about us and the securities offered under this prospectus. The registration statement can be read at the SEC’s offices or obtained from the SEC’s website mentioned under the heading “Where You Can Find More Information”.

Certain Terms

In this prospectus, the terms “we”, “us” and “our” refer to The Royal Bank of Scotland Group plc, the term “Group” or “RBSG” means The Royal Bank of Scotland Group plc and its subsidiaries, the term “RBS plc” means The Royal Bank of Scotland plc, the term “RBS” or the “Royal Bank” means RBS plc and its subsidiaries, the term “NWB Plc” means National Westminster Bank Plc and the term “NatWest” means NWB Plc and its subsidiaries.

We publish our consolidated financial statements in pounds sterling (“£” or “sterling”). In this prospectus and any prospectus supplement, references to “dollars” and “$” are to United States dollars.

USE OF PROCEEDS

Unless we have disclosed a specific plan in the accompanying prospectus supplement, we will use the net proceeds from the sale of the securities offered by this prospectus in the general business of our Group and to strengthen further our Group’s capital base. The Group has raised capital in various markets from time to time and we expect to continue to raise capital in appropriate markets as and when required.

THE ROYAL BANK OF SCOTLAND GROUP

The Royal Bank of Scotland Group plc is the holding company of one of the world’s largest banking and financial services groups, with a market capitalisation of £55.6 billion at the end of 2004. Headquartered in Edinburgh, the Group operates in the UK, US and internationally through its two principal subsidiaries, The Royal Bank of Scotland plc and National Westminster Bank Plc. Both the Royal Bank and NatWest are major UK clearing banks whose origins go back over 275 years. The Group has a large and diversified customer base and provides a wide range of products and services to personal, commercial and large corporate and institutional customers. Our registered office is 36 St Andrew Square, Edinburgh EH2 2YB, Scotland and our principal place of business is 42 St Andrew Square, Edinburgh EH2 2YE, Scotland, telephone +44 131 556 8555.

DESCRIPTION OF DEBT SECURITIES

The following is a summary of the general terms of the debt securities. Each time that we issue debt securities, we will file a prospectus supplement with the SEC, which you should read carefully. The prospectus supplement may contain additional terms of those debt securities. The terms presented here, together with the terms contained in the prospectus supplement, will be a description of the material terms of the debt securities, but if there is any inconsistency between the terms presented here and those in the prospectus supplement, those in the prospectus supplement will apply and will replace those presented here. You should also read the indentures under which we will issue the debt securities, which we have filed with the SEC as exhibits to the registration statement of which this prospectus is a part.

All of these debt securities of any series will be our subordinated obligations. Debt securities that have no stated maturity will be issued under a capital securities indenture. Other debt securities will be issued under a subordinated debt indenture. The Bank of New York is trustee under both indentures.

General

The debt securities are not deposits and are not insured by the United States Federal Deposit Insurance Corporation or any other government agency of the United States or the United Kingdom.

The indentures do not limit the amount of debt securities that we may issue. We may issue debt securities in one or more series. The relevant prospectus supplement for any particular series of debt securities will describe the terms of the offered debt securities, including some or all of the following terms:

whether they are capital securities or subordinated debt securities;
their specific designation, authorized denomination and aggregate principal amount;
the price or prices at which they will be issued;
the annual interest rate or rates, or how to calculate the interest rate or rates;
the date or dates from which interest, if any, will accrue or the method, if any, by which such date or dates will be determined;
the times and places at which any interest payments are payable;
any date of maturity;
the terms of any mandatory or optional redemption, including the amount of any premium;
any modifications or additions to the events of defaults with respect to the debt securities offered;
any provisions relating to conversion or exchange for other securities issued by us;
the currency or currencies in which they are denominated and in which we will make any payments;
any index used to determine the amount of any payments on the debt securities;
any restrictions that apply to the offer, sale and delivery of the debt securities and the exchange of debt securities of one form for debt securities of another form;
whether and under what circumstances, if other than those described in this prospectus, we will pay additional amounts on the debt securities following certain developments with respect to withholding tax or information reporting laws and whether, and on what terms, if other than those described in this prospectus, we may redeem the debt securities following those developments;
the terms of any mandatory or optional exchange; and

any listing on a securities exchange.

In addition, the prospectus supplement will describe the material US federal and UK tax considerations that apply to any particular series of debt securities.

Debt securities may bear interest at a fixed rate or a floating rate. We will sell any subordinated debt securities that bear no interest, or that bear interest at a rate that at the time of issuance is below the prevailing market rate, at a discount to their stated principal amount.

Holders of debt securities shall have no voting rights except those described under “— Modification and Waiver” below.

Form of Debt Securities; Book-Entry System

General

Unless the relevant prospectus supplement states otherwise, the debt securities shall initially be represented by one or more global securities in registered form, without coupons attached, and will be deposited with or on behalf of one or more depositary, including, without limitation, The Depository Trust Company (“DTC”), Euroclear Bank S.A./N.V. (“Euroclear Bank”), as operator of the Euroclear System (“Euroclear”) and/or Clearstream Banking S.A. (“Clearstream Luxembourg”), and will be registered in the name of such depositary or its nominee. Unless and until the debt securities are exchanged in whole or in part for other securities that we issue or the global securities are exchanged for definitive securities, the global securities may not be transferred except as a whole by the depositary to a nominee or a successor of the depositary.

The debt securities may be accepted for clearance by DTC, Euroclear and Clearstream Luxembourg. Unless the relevant prospectus supplement states otherwise, the initial distribution of the debt securities will be cleared through DTC only. In such event, beneficial interests in the global debt securities will be shown on, and transfers thereof will be effected only through, the book-entry records maintained by DTC and its direct and indirect participants, including, as applicable, Euroclear and Clearstream Luxembourg.

The laws of some states may require that certain investors in securities take physical delivery of their securities in definitive form. Those laws may impair the ability of investors to own interests in book-entry securities.

So long as the depositary, or its nominee, is the holder of a global debt security, the depositary or its nominee will be considered the sole holder of such global debt security for all purposes under the indentures. Except as described below under “—Issuance of Definitive Securities”, no participant, indirect participant or other person will be entitled to have debt securities registered in its name, receive or be entitled to receive physical delivery of debt securities in definitive form or be considered the owner or holder of the debt securities under the indentures. Each person having an ownership or other interest in debt securities must rely on the procedures of the depositary, and, if a person is not a participant in the depositary, must rely on the procedures of the participant or other securities intermediary through which that person owns its interest to exercise any rights and obligations of a holder under the indentures or the debt securities.

Payments on the Global Debt Security

Payments of any amounts in respect of any global securities will be made by the trustee to the depositary. Payments will be made to beneficial owners of debt securities in accordance with the rules and procedures of the depositary or its direct and indirect participants, as applicable. Neither we nor the trustee nor any of our agents will have any responsibility or liability for any aspect of the records of any securities intermediary in the chain of intermediaries between the depositary and any beneficial owner of an interest in a global security, or the failure of the depositary or any intermediary to pass through to any beneficial owner any payments that we make to the depositary.

The Clearing Systems

DTC, Euroclear and Clearstream Luxembourg have advised us as follows:

DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities of its participants and to facilitate the clearance and settlement of transactions among its participants in those securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC participants include securities brokers and dealers, including parties that may act as underwriters, dealers or agents with respect to the securities, banks, trust companies, clearing corporations and certain other organizations, some of which, along with certain of their representatives and others, own DTC. Access to the DTC book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

Euroclear. Euroclear Bank holds securities for its participants and clears and settles transactions between its participants through simultaneous electronic book-entry delivery against payment. Euroclear Bank provides various other services, including safekeeping, administration, clearance and settlement and securities lending and borrowing, and interfaces with domestic markets in several countries. Securities clearance accounts and cash accounts with Euroclear Bank are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable law (collectively, the “Euroclear Terms and Conditions”). The Euroclear Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear.

Clearstream Luxembourg. Clearstream Luxembourg is incorporated under the laws of The Grand Duchy of Luxembourg as a professional depositary. Clearstream Luxembourg holds securities for its participants and facilitates the clearance and settlement of securities transactions between its participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Clearstream Luxembourg provides to its participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream Luxembourg interfaces with domestic markets in several countries.

Issuance of Definitive Securities

So long as the depositary holds the global securities of a particular series of debt securities, such global securities will not be exchangeable for definitive securities of that series unless:

the depositary notifies the trustee that it is unwilling or unable to continue to act as depositary for the debt securities and the trustee does not appoint a successor to the depositary within 120 days;
we are wound up and we fail to make a payment on the debt securities when due; or
at any time we determine in our sole discretion that the global securities of a particular series of debt securities should be exchanged for definitive debt securities of that series in registered form.

Each person having an ownership or other interest in a debt security must rely exclusively on the rules or procedures of the depositary as the case may be, and any agreement with any direct or indirect participant of the depositary, including Euroclear or Clearstream Luxembourg and their participants, as applicable, or any other securities intermediary through which that person holds its interest, to receive or direct the delivery of possession of any definitive security. The indentures permit us to determine at any time and in our sole discretion that debt securities shall no longer be represented by global securities. DTC has advised us that, under its current practices, it would notify its participants of our request, but will only withdraw beneficial interests from the global securities at the request of each DTC participant. We would issue definitive certificates in exchange for any such beneficial interests withdrawn.

Definitive debt securities will be issued in registered form only. To the extent permitted by law, we, the trustee and any paying agent shall be entitled to treat the person in whose name any definitive security is registered as its absolute owner.

Payments in respect of each series of definitive securities will be made to the person in whose name the definitive securities are registered as it appears in the register for that series of debt securities. Payments will be made in respect of the debt securities by check drawn on a bank in New York or, if the holder requests, by transfer to the holder’s account in New York. Definitive securities should be presented to the paying agent for redemption.

If we issue definitive debt securities of a particular series in exchange for a particular global debt security, the depositary, as holder of that global debt security, will surrender it against receipt of the definitive debt securities, cancel the book-entry debt securities of that series, and distribute the definitive debt securities of that series to the persons and in the amounts that the depositary specifies.

If definitive securities are issued in the limited circumstances described above, those securities may be transferred in whole or in part in denominations of any whole number of securities upon surrender of the definitive securities certificates together with the form of transfer endorsed on it, duly completed and executed at the specified office of a paying agent. If only part of a securities certificate is transferred, a new securities certificate representing the balance not transferred will be issued to the transferor within three business days after the paying agent receives the certificate. The new certificate representing the balance will be delivered to the transferor by uninsured post at the risk of the transferor, to the address of the transferor appearing in the records of the paying agent. The new certificate representing the securities that were transferred will be sent to the transferee within three business days after the paying agent receives the certificate transferred, by uninsured post at the risk of the holder entitled to the securities represented by the certificate, to the address specified in the form of transfer.

Settlement

Initial settlement for each series of debt securities and settlement of any secondary market trades in the debt securities will be made in same-day funds. Book-entry debt securities held through DTC will settle in DTC’s Same-Day Funds Settlement System.

Payments

We will make any payments of interest and, in the case of subordinated debt securities, principal, on any particular series of debt securities on the dates and, in the case of payments of interest, at the rate or rates, that we set out in, or that are determined by the method of calculation described in, the relevant prospectus supplement.

Subordinated Debt Securities

Unless the relevant prospectus supplement provides otherwise, if we do not make a payment on that series of subordinated debt securities on any payment date, our obligation to make that payment shall be deferred, if it is an interest payment, until the date upon which we pay a dividend on any class of our share capital and, if it is a principal payment, until the first business day after the date that falls six months after the original payment date (a “Deferred Payment Date”). If we fail to make a payment before the Deferred Payment Date, that failure shall not create a default or otherwise allow any holder to sue us for the payment or take any other action. Each payment that is deferred in this way will accrue interest at the rate prevailing in accordance with the terms of the series of debt securities immediately before the original payment date. Any payment deferred in this way shall not be treated as due for any purpose, including for the purposes of ascertaining whether or not a Subordinated Debt Security Default has occurred, until the Deferred Payment Date.

Capital Securities

We are not required to make payments on any series of capital securities on any payment date and if we fail to make a payment, that shall not create a default. Any payment that we do not make in respect of any series of capital securities on any applicable payment date, together with any other unpaid payments, so long as they remain unpaid, shall be “Missed Payments” and will accumulate until paid. Missed Payments will not bear interest.

We may choose to pay any Missed Payments in whole or in part at any time on not less than 14 days’ notice to the trustee, but all Missed Payments on all capital securities of a particular series outstanding at the time shall become due and payable in full upon the occurrence of an “Event of Default” or, subject to the “solvency

condition”, a “Capital Security Default”. These terms are defined below under “—Events of Default and Defaults; Limitation of Remedies”. If we give notice that we intend to pay all or part of the Missed Payments on the capital securities of any series, we shall be obliged, subject to the solvency condition, to do so at the time specified in our notice.

Except in a winding up, all payments on the capital securities of any series will be conditional upon our being solvent at the time of payment, and we will not make any payment unless we will still be solvent immediately afterwards. This is called the “solvency condition”. For this purpose, we shall be solvent if we are able to pay our debts as they fall due and our total non-consolidated assets exceed our total non-consolidated liabilities, excluding liabilities that do not constitute “Senior Claims” (as defined under “—Subordination” below) except in the case of the optional redemption or repurchase of any capital securities. A report as to our solvency by a director or, in certain circumstances, our auditors shall, unless there is a manifest error, be treated and accepted by us, the trustee and any holder of capital securities as correct and sufficient evidence of solvency or insolvency. If we fail to make any payment as a result of failure to satisfy the solvency condition, that payment will constitute a Missed Payment and will accumulate with any other Missed Payments until paid. In a winding up, the amount payable on capital securities of any series will be determined in accordance with the capital security subordination provisions described under “ —Subordination” below.

You should note that if we are unable to make any payment on the capital securities of any series because we are not able to satisfy the solvency condition, the amount of any payment which we would otherwise make will be available to meet our losses.

Subordination

Subordinated Debt Securities

Unless the relevant prospectus supplement provides otherwise, in a winding up, all payments on any series of subordinated debt securities will be subordinate to, and subject in right of payment to the prior payment in full of, all claims of all of our creditors other than claims in respect of any liability that is, or is expressed to be, subordinated, whether only in the event of a winding up or otherwise, to the claims of all or any of our creditors, in the manner provided in the subordinated debt indenture.

Capital Securities

Unless the relevant prospectus supplement provides otherwise, in a winding up, the principal amount of, and payments and any Missed Payments on, any series of capital securities will be subordinate to, and subject in right of payment to the prior payment in full of, all Senior Claims. The following are “Senior Claims” in respect of any series of capital securities:

all claims of our unsubordinated creditors admitted in the winding up;
all claims of our creditors in respect of liabilities that are, or are expressed to be, subordinated, whether only in the event of a winding up or otherwise, to the claims of our unsubordinated creditors but not further or otherwise; and
all other claims except those that rank, or are expressed to rank, equally with or junior to the claims of any holder of capital securities of any series.

Additional senior claims, if any, may be set forth in the accompanying prospectus supplement.

If at any time an order is made or a shareholders’ resolution is passed for a winding up, any amounts that would have been payable in respect of the capital securities of any series if, on and after the day immediately before the winding up began, any holder of those capital securities had been the holder of preference shares in our capital with a preferential right to a return of assets in the winding up over the holders of all other issued shares, including all classes of our preference shares, will be payable on those capital securities. These amounts will be calculated assuming that such preference shares were entitled, to the exclusion of all other rights or privileges, to receive as a return of capital an amount equal to the principal amount of the capital securities of the series then outstanding,

together with all payments accrued to the date of repayment at the rate provided for in those capital securities and any Missed Payments. Accordingly, no amount will be payable in a winding up on any series of capital securities until all Senior Claims admitted in the winding up have been paid in full.

General

As a consequence of these subordination provisions, if winding up proceedings should occur, each holder may recover less ratably than the holders of our unsubordinated liabilities and, in the case of the holders of capital securities, the holders of certain of our subordinated liabilities, including the holders of subordinated debt securities. If, in any winding up, the amount payable on any series of debt securities and any claims ranking equally with that series are not paid in full, those debt securities and other claims ranking equally will share ratably in any distribution of our assets in a winding up in proportion to the respective amounts to which they are entitled. If any holder is entitled to any recovery with respect to the debt securities in any winding up or liquidation, the holder might not be entitled in those proceedings to a recovery in US dollars and might be entitled only to a recovery in pounds sterling or any other lawful currency of the UK.

In addition, because we are a holding company, our rights to participate in the assets of any subsidiary if it is liquidated will be subject to the prior claims of its creditors, including, in the case of our bank subsidiaries, their depositors, except to the extent that we may be a creditor with recognized claims against the subsidiary.

Additional Amounts

Unless the relevant prospectus supplement provides otherwise, we will pay any amounts to be paid by us on any series of debt securities without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings imposed, levied, collected, withheld or assessed by or on behalf of the UK or any UK political subdivision or authority that has the power to tax (a “UK taxing jurisdiction”), unless such deduction or withholding is required by law. If at any time a UK taxing jurisdiction requires us to make such deduction or withholding, we will pay additional amounts with respect to the principal of, and payments and Missed Payments on, the debt securities (“Additional Amounts”) that are necessary in order that the net amounts paid to the holders of those debt securities, after the deduction or withholding, shall equal the amounts of principal and any payments and Missed Payments which would have been payable on that series of debt securities if the deduction or withholding had not been required. However, this will not apply to any tax that would not have been payable or due but for the fact that:

the holder or the beneficial owner of the debt securities is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, a UK taxing jurisdiction or otherwise having some connection with the UK taxing jurisdiction other than the holding or ownership of a debt security, or the collection of any payment of, or in respect of, principal of, or any payments or Missed Payments on, any debt security of the relevant series;
except in the case of a winding up in the UK, the relevant debt security is presented (where presentation is required) for payment in the UK;
the relevant debt security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the holder would have been entitled to the Additional Amounts on presenting the debt security for payment at the close of that 30 day period;
the holder or the beneficial owner of the relevant debt security or the beneficial owner of any payment of or in respect of principal of, or any payments or Missed Payments on, the debt security failed to comply with a request by us or our liquidator or other authorized person addressed to the holder to provide information concerning the nationality, residence or identity of the holder or the beneficial owner or to make any declaration or other similar claim to satisfy any information requirement, which is required or imposed by a statute, treaty, regulation or administrative practice of a UK taxing jurisdiction as a precondition to exemption from all or part of the tax;

the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such directive;
the relevant debt security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant debt security to another paying agent in a Member State of the European Union; or
any combination of the above items;

nor shall Additional Amounts be paid with respect to the principal of, and payments and Missed Payments on, the debt securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any taxing jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.

Whenever we refer in this prospectus and any prospectus supplement, in any context, to the payment of the principal of or any payments, or any Missed Payments on, or in respect of, any debt security of any series, we mean to include the payment of Additional Amounts to the extent that, in the context, Additional Amounts are, were or would be payable.

Redemption

Unless the relevant prospectus supplement provides otherwise and, in the case of capital securities, if the solvency condition is satisfied, we will have the option to redeem the debt securities of any series as a whole upon not less than 30 nor more than 60 days’ notice, on any payment date, at a redemption price equal to 100% of their principal amount together with any accrued but unpaid payments of interest, and all Missed Payments in the case of Capital Securities, to the redemption date, or, in the case of discount securities, their accreted face amount, together with any accrued interest, if we determine that as a result of a change in or amendment to the laws or regulations of a UK taxing jurisdiction, including any treaty to which it is a party, or a change in an official application or interpretation of those laws or regulations, including a decision of any court or tribunal, which becomes effective on or after the date of the applicable prospectus supplement:

in making any payments or Missed Payments on the particular series of debt securities, we have paid or will or would on the next payment date be required to pay Additional Amounts;
payments, including Missed Payments, on the next payment date in respect of any of the series of debt securities would be treated as “distributions” within the meaning of Section 209 of the Income and Corporation Taxes Act 1988 of the UK, or any statutory modification or re-enactment of the Act; or
on the next payment date we would not be entitled to claim a deduction in respect of the payments in computing our UK taxation liabilities, or the value of the deduction to us would be materially reduced.

In each case we shall be required, before we give a notice of redemption, to deliver to the trustee a written legal opinion of independent UK counsel of recognized standing, selected by us, in a form satisfactory to the trustee confirming that we are entitled to exercise our right of redemption.

The relevant prospectus supplement will specify whether or not we may redeem the debt securities of any series, in whole or in part, at our option, in any other circumstances and, if so, the prices and any premium at which and the dates on which we may do so. In the case of capital securities, redemption will only be allowed if the solvency condition is satisfied. Any notice of redemption of debt securities of any series will state, among other items:

the redemption date;
the amount of debt securities to be redeemed if less than all of the series is to be redeemed;
the redemption price;
that the redemption price will, subject to the solvency condition, become due and payable on the redemption date and that payments will cease to accrue on such date; and
the place or places at which each holder may obtain payment of the redemption price.

In the case of a partial redemption, the trustee shall select the debt securities to be redeemed in any manner which it deems fair and appropriate.

We or any of our subsidiaries may at any time and from time to time purchase debt securities of any series in the open market or by tender (available to each holder of debt securities of the relevant series) or by private agreement, if applicable law allows and if, in the case of capital securities, the solvency condition is satisfied. Any debt securities of any series that we purchase beneficially for our own account, other than in connection with dealing in securities, will be treated as cancelled and will no longer be issued and outstanding.

Under existing UK Financial Services Authority requirements, we may not make any redemption or repurchase of any debt securities beneficially for our own account, other than a repurchase in connection with dealing in securities, unless the UK Financial Services Authority consents in advance. The UK Financial Services Authority may impose conditions on any redemption or repurchase.

Modification and Waiver

We and the trustee may make certain modifications and amendments of the applicable indenture with respect to any series of debt securities without the consent of the holders of the debt securities. We may make other modifications and amendments with the consent of the holder or holders of not less than 66 2/3% in aggregate principal amount of the debt securities of the series outstanding under the indenture that are affected by the modification or amendment, voting as one class. However, we may not make any modification or amendment without the consent of the holder of each debt security affected that would:

change the stated maturity of the principal amount of any subordinated debt security or the terms of any capital security to include a stated maturity date;
reduce the principal amount of or the payments or any Missed Payments with respect to any debt security;
change our obligation (or our successor’s) to pay Additional Amounts;
change the currency of payment;
impair the right to institute suit for the enforcement of any payment due and payable;
reduce the percentage in aggregate principal amount of outstanding debt securities of the series necessary to modify or amend the indenture or to waive compliance with certain provisions of the indenture and any past Event of Default, Subordinated Debt Security Default or Capital Security Default;
modify the subordination provisions or the terms of our obligations in respect of the due and punctual payment of the amounts due and payable on the debt securities in a manner adverse to the holders; or
modify the above requirements.

In addition, material variations in the terms and conditions of debt securities of any series, including modifications relating to subordination, redemption, Events of Default, Subordinated Debt Security Defaults, Capital Security Defaults or Capital Security Payment Events, may require the consent of the UK Financial Services Authority.

Events of Default and Defaults; Limitation of Remedies

Events of Default

Unless the relevant prospectus supplement provides otherwise, if (i) a court of competent jurisdiction makes an order which is not successfully appealed within 30 days or (ii) an effective shareholders’ resolution is validly adopted, for our winding up, other than under or in connection with a scheme of amalgamation or reconstruction not involving a bankruptcy or insolvency, that order or resolution will constitute an “Event of Default” with respect to the debt securities of each series. If an Event of Default occurs and is continuing, the trustee or the holder or holders of at least 25% in aggregate principal amount of the outstanding debt securities of each series may declare the principal amount of, any accrued but unpaid payments (or, in the case of discount securities, the accreted face amount, together with any accrued interest), and any Missed Payments, on the debt securities of the series to be due and payable immediately in accordance with the terms of the indenture. However, after this declaration but before the trustee obtains a judgment or decree for payment of money due, the holder or holders of a majority in aggregate principal amount of the outstanding debt securities of the series may rescind the declaration of acceleration and its consequences, but only if all Events of Default have been remedied and all payments due, other than those due as a result of acceleration, have been made.

Subordinated Debt Security Defaults

Unless the relevant prospectus supplement provides otherwise, it shall be a “Subordinated Debt Security Default” with respect to any series of subordinated debt securities if:

any installment of interest upon any subordinated debt security of that series is not paid on or before its Deferred Payment Date and such failure continues for 14 days; or
all or any part of the principal of any subordinated debt security of that series is not paid on its Deferred Payment Date, or when it otherwise becomes due and payable, whether upon redemption or otherwise, and such failure continues for 7 days.

If a Subordinated Debt Security Default occurs and is continuing, the trustee may pursue all legal remedies available to it, including commencing a proceeding for our winding up in England or Scotland (but not elsewhere), but the trustee may not declare the principal amount of any outstanding subordinated debt security due and payable. However, failure to make any payment on a series of subordinated debt securities shall not be a Subordinated Debt Security Default if it is withheld or refused in order to comply with any applicable fiscal or other law or regulation or order of any court of competent jurisdiction, or if there is doubt as to the validity or applicability of any law, regulation or order, in accordance with advice given at any time before the expiry of the applicable 14-day or 7-day period by independent legal advisers acceptable to the trustee. In the second case, the trustee may require us to take action (including proceedings for a court declaration) to resolve the doubt, if counsel advises it that such action is appropriate and reasonable in the circumstances, in which case we shall immediately take and expeditiously proceed with the action and shall be bound by any final resolution of the doubt. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the payment shall become due and payable on the expiration of the applicable 14-day or 7-day period after the trustee gives written notice to us informing us of such determination.

By accepting a subordinated debt security, each holder and the trustee will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to the subordinated debt securities or the applicable indenture (or between our obligations under or in respect of any subordinated debt security and any liability owed by a holder or the trustee to us) that they might otherwise have against us, whether before or during our winding up.

Capital Security Defaults

Unless the relevant prospectus supplement provides otherwise, it shall be a “Capital Security Default” with respect to any series of capital securities if:

we fail to pay or to set aside a sum to provide for payment of any Missed Payments on or prior to the date upon which a dividend is paid on any class of our share capital, or we make a redemption or repurchase of any other capital securities of the same series other than a repurchase in connection with dealing in securities, and such failure continues for 30 days; or
we fail to pay or to set aside a sum to provide for payment of the principal amount, any accrued but unpaid payments and any Missed Payments on the date fixed for redemption of the capital security and such failure continues for 7 days.

If any Capital Security Default shall occur and is continuing, the trustee may pursue all legal remedies available to it, including commencing a judicial proceeding for the collection of the sums due and unpaid or a proceeding for our winding up in England or Scotland (but not elsewhere), but the trustee may not declare the principal amount of any outstanding capital security to be due and payable. If we fail to make payment as described above and the solvency condition is not satisfied at the end of the 30-day or 7-day period following that failure, it shall not create a Capital Security Default but instead shall create a “Capital Security Payment Event”. On a Capital Security Payment Event, the trustee may institute proceedings in England or Scotland (but not elsewhere) for our winding up but may not pursue any other legal remedy, including a judicial proceeding for the collection of the sums due and unpaid.

By accepting a capital security, each holder and the trustee will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to the capital securities or the applicable indenture (or between our obligations under or in respect of any capital securities and any liability owed by a holder or the trustee to us) that they might otherwise have against us, whether before or during our winding up.

General

The holder or holders of not less than a majority in aggregate principal amount of the debt securities of any series may waive any past Event of Default, Subordinated Debt Security Default, Capital Security Default or Capital Security Payment Event with respect to the series, except an Event of Default, Subordinated Debt Security Default or Capital Security Default in respect of the payment of principal of or payments or Missed Payments on, any debt security or a covenant or provision of the applicable indenture which cannot be modified or amended without the consent of each holder of debt securities of such series.

Subject to the provisions of the applicable indenture relating to the duties of the trustee, if an Event of Default, Subordinated Debt Security Default, Capital Security Default or Capital Security Payment Event occurs and is continuing with respect to the debt securities of any series, the trustee will be under no obligation to any holder or holders of the debt securities of the series, unless they have offered reasonable indemnity to the trustee. Subject to the indenture provisions for the indemnification of the trustee, the holder or holders of a majority in aggregate principal amount of the outstanding debt securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the series, if the direction is not in conflict with any rule of law or with the applicable indenture and the trustee does not determine that the action would be unjustly prejudicial to the holder or holders of any debt securities of any series not taking part in that direction. The trustee may take any other action that it deems proper which is not inconsistent with that direction.

The indentures provide that the trustee will, within 90 days after the occurrence of an Event of Default, Subordinated Debt Security Default, Capital Security Default or Capital Security Payment Event with respect to the debt securities of any series, give to each holder of the debt securities of the affected series notice of the Event of Default, Subordinated Debt Security Default, Capital Security Default, or Capital Security Payment Event known to it, unless the Event of Default, Subordinated Debt Security Default, Capital Security Default or Capital Security Payment Event has been cured or waived. However, the trustee shall be protected in withholding notice if it determines in good faith that withholding notice is in the interest of the holders.

We are required to furnish to the trustee annually a statement as to our compliance with all conditions and covenants under the indenture.

Consolidation, Merger and Sale of Assets; Assumption

We may, without the consent of the holders of any of the debt securities, consolidate with, merge into or transfer or lease our assets substantially as an entirety to, any person, provided that any successor corporation formed by any consolidation or amalgamation, or any transferee or lessee of our assets, is a company organized under the laws of any part of the United Kingdom that assumes our obligations on the debt securities and under the applicable indenture, and that certain other conditions are met.

Subject to applicable law and regulation, any of our wholly-owned subsidiaries may assume our obligations under the debt securities of any series without the consent of any holder, provided that we unconditionally guarantee, on a subordinated basis in substantially the manner described under “—Subordination” above, the obligations of the subsidiary under the debt securities of that series. If we do, all of our direct obligations under the debt securities of the series and the applicable indenture shall immediately be discharged. Any Additional Amounts under the debt securities of the series will be payable in respect of taxes imposed by the jurisdiction in which the assuming subsidiary is incorporated, subject to exceptions equivalent to those that apply to any obligation to pay Additional Amounts in respect of taxes imposed by any UK taxing jurisdiction, rather than taxes imposed by any UK taxing jurisdiction. However, if we make payment under the guarantee, we shall be required to pay Additional Amounts related to taxes, subject to the exceptions described in “—Additional Amounts” above, imposed by any UK taxing jurisdiction by reason of the guarantee payment. The subsidiary that assumes our obligations will also be entitled to redeem the debt securities of the relevant series in the circumstances described in “—Redemption” above with respect to any change or amendment to, or change in the application or official interpretation of, the laws or regulations (including any treaty) of the assuming subsidiary’s jurisdiction of incorporation which occurs after the date of the assumption. However, the determination of whether the solvency condition has been satisfied shall continue to be made with reference to The Royal Bank of Scotland Group plc, unless applicable law requires otherwise.

An assumption of our obligations under the debt securities of any series might be deemed for US federal income tax purposes to be an exchange of those debt securities for new debt securities by each beneficial owner, resulting in a recognition of taxable gain or loss for those purposes and possibly certain other adverse tax consequences. You should consult your tax advisor regarding the US federal, state and local income tax consequences of an assumption.

Governing Law

The debt securities and the indentures will be governed by and construed in accordance with the laws of the State of New York, except that, as the indentures specify, the subordination provisions of each series of debt securities and the indentures will be governed by and construed in accordance with the laws of England.

Notices

All notices to holders of registered debt securities shall be validly given if in writing and mailed, first-class postage prepaid, to them at their respective addresses in the register maintained by the trustee.

The Trustee

The Bank of New York is the trustee under the indentures. The trustee shall have and be subject to all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act of 1939. Subject to the provisions of the Trust Indenture Act of 1939, the trustee is under no obligation to exercise any of the powers vested in it by the indentures at the request of any holder of notes, unless offered reasonable indemnity by the holder against the costs, expense and liabilities which might be incurred thereby. We and certain of our subsidiaries maintain deposit accounts and conduct other banking transactions with The Bank of New York in the ordinary course of our business. The Bank of New York is also the book-entry depositary with respect to certain of our debt securities and the depositary with respect to the ADSs representing certain of our preference shares, and trustee with respect to certain of our exchangeable capital securities.

Consent to Service of Process

Under the indentures, we irrevocably designate CT Corporation System as our authorized agent for service of process in any legal action or proceeding arising out of or relating to the indentures or any debt securities brought in any federal or state court in The City of New York, New York and we irrevocably submit to the jurisdiction of those courts.

DESCRIPTION OF DOLLAR PREFERENCE SHARES

The following is a summary of the general terms of the dollar preference shares of any series. Each time that we issue dollar preference shares, we will file a prospectus supplement with the SEC, which you should read carefully. The prospectus supplement will designate the terms of the dollar preference shares of the particular series, which are set out in the resolutions establishing the series that our board of directors or an authorized committee thereof (referred to in this section as the board of directors) adopt. These terms may be different from those summarized below, and if so the applicable prospectus supplement will state that, and the description of the dollar preference shares of that series contained in the prospectus supplement will apply. You should also read our Articles of Association, which we have filed with the SEC as an exhibit to the registration statement of which this prospectus is a part. You should read the summary of the general terms of the ADR deposit agreement under which American Depositary Receipts evidencing American Depositary Shares that may represent dollar preference shares may be issued, under the heading “Description of American Depositary Receipts”.

General

Under our Articles of Association, our board of directors is authorized to provide for the issuance of dollar preference shares, in one or more series, with the dividend rights, liquidation value per share, redemption provisions, voting rights and other rights, preferences, privileges, limitations and restrictions that are set forth in resolutions providing for their issue adopted by our board of directors. Our board of directors may only provide for the issuance of dollar preference shares of any series if a resolution of our shareholders has authorized the allotment of shares.

The dollar preference shares of any series will have the dividend rights, rights upon liquidation, redemption provisions and voting rights described below, unless the relevant prospectus supplement provides otherwise. You should read the prospectus supplement for the specific terms of any series, including:

the number of shares offered, the number of shares offered in the form of ADSs and the number of dollar preference shares represented by each ADS;
the public offering price of the series;
the liquidation value per share of that series;
the dividend rate, or the method of calculating it;
the place where we will pay dividends;
the dates on which dividends will be payable;
the circumstances under which dividends may not be payable;
voting rights;
the restrictions applicable to the sale and delivery of the dollar preference shares;
whether and under what circumstances we will pay additional amounts on the dollar preference shares in the event of certain developments with respect to withholding tax or information reporting laws;
any redemption, conversion or exchange provisions;
any listing on a securities exchange; and
any other rights, preferences, privileges, limitations and restrictions relating to the series.

The prospectus supplement will also describe material US and UK tax considerations that apply to any particular series of dollar preference shares.

The dollar preference shares of any series will rank junior as to dividends to the cumulative preference shares, equally as to dividends with other non-cumulative preference shares, the exchange preference shares of any series and the sterling preference shares, equally as to repayment of capital on a winding up or liquidation with other non-cumulative preference shares, the exchange preference shares of any series, the sterling preference shares and the cumulative preference shares and, unless the resolutions of our board of directors establishing any series of dollar preference shares specify otherwise and the related prospectus supplement so states, will rank equally in all respects with the dollar preference shares of each other series and any other of our shares which are expressed to rank equally with them. The preferential rights to dividends of the holders of the cumulative preference shares are cumulative whereas the preferential rights to dividends of the holders of any series of dollar preference shares, any series of exchange preference shares, the euro preference shares, and any sterling preference shares will be or are non-cumulative. Holders of dollar preference shares will have no pre-emptive rights.

The dollar preference shares will rank in priority to our additional value shares and our ordinary shares as regards the right to receive dividends and rights to repayment of capital if we are wound up or liquidated, whether or not voluntarily.

There are no restrictions under our articles of association or under Scots law as currently in effect that limit the right of non-resident or foreign owners, as such, to acquire dollar preference shares of any series freely or, when entitled to vote dollar preference shares of a particular series, to vote those dollar preference shares. There are currently no English or Scots laws, decrees, or regulations that would prevent the remittance of dividends or other payments on the dollar preference shares of any series to non-resident holders.

Dividends

Non-cumulative preferential dividends on each series of dollar preference shares will be payable at the rate or rates and on the dates set out in the relevant prospectus supplement and will accrue from their date of issue.

Pursuant to our articles of association, our board of directors may resolve prior to the issue and allotment of any series of dollar preference shares that full dividends on such series of dollar preference shares in respect of a particular dividend payment date will not be declared and paid if, (i) in its sole and absolute discretion, the board of directors resolves prior to the relevant dividend payment date that such dividend (or part thereof) shall not be paid and/or (ii) in the opinion of the board of directors, payment of a dividend would breach or cause a breach of the capital adequacy requirements of the UK Financial Services Authority that apply at that time to us and/or any of our subsidiaries, or subject to the next following paragraph, our distributable profits, after the payment in full, or the setting aside of a sum to provide for the payment in full, of all dividends stated to be payable on or before the relevant dividend payment date on the cumulative preference shares (and any arrears of dividends thereon), are insufficient to cover the payment in full of dividends on that series of dollar preference shares and dividends on any of our other preference shares stated to be payable on the same date as the dividends on that series and ranking equally as to dividends with the dollar preference shares of that series (including the payment in full of any arrears of dividends on any equally ranking cumulative preference shares then in issue). The UK Companies Act 1985 defines “distributable profits” as, in general terms, and subject to adjustment, accumulated realized profits less accumulated realized losses.

Unless the applicable prospectus supplement states otherwise, if dividends are to be paid but our distributable profits are, in the opinion of the board of directors, insufficient to enable payment in full of dividends on any series of dollar preference shares on any dividend payment date and also the payment in full of all other dividends stated to be payable on such date on any other non-cumulative preference shares and any other share capital (other than the cumulative preference shares) expressed to rank pari passu therewith as regards participation in profits, after payment in full, or the setting aside of a sum to cover the payment in full, of all dividends stated to be payable on or before such date on any cumulative preference share, then the board of directors shall (subject always to sub-clauses (i) and (ii) of the preceding paragraph) declare and pay dividends to the extent of the available distributable profits on a pro rata basis so that (subject as aforesaid) the amount of dividends declared per share on the dollar preference shares of the series and the dividends stated to be payable on such date on any other non-cumulative preference shares and any other share capital (other than the cumulative preference shares) expressed to rank pari passu therewith will bear to each other the same ratio that accrued dividends per share on the dollar preference shares of the series and other non-cumulative preference shares and any other share capital (other than cumulative preference shares), bear to each other. If any dividend or part of a dividend on any series of dollar preference shares is not payable for the reasons described above, the board of directors may, if applicable law permits, pay a special non-cumulative preferential dividend on the series of dollar preference shares at a rate not exceeding one US cent per share. However, under our articles of association, no dividend shall be payable in contravention of the special rights attaching to any of our shares.

Dividends on the cumulative preference shares, including any arrears, are payable in priority to any dividends on any series of dollar preference shares, and as a result, we may not pay any dividend on any series of dollar preference shares unless we have declared and paid in full dividends on the cumulative preference shares, including any arrears.

If we have not declared and paid in full the dividend stated to be payable on any series of dollar preference shares on the most recent dividend payment date, or if we have not set aside a sum to provide for payment in full, in either case for the reasons set out in sub-clause (ii) of the second paragraph of this section, we may not declare or pay any dividends upon any of our other share capital (other than the cumulative preference shares) and we may not set aside any sum to pay such dividends, unless, on the date of declaration, we set aside an amount equal to the dividend for the then-current dividend period payable on that series of dollar preference shares to provide for the payment in full of the dividend on that series of dollar preference shares on the next dividend payment date. If we have not declared and paid in full any dividend payable on any series of dollar preference shares on any dividend payment date, or if we have not set aside a sum to provide for payment in full, in either case for the reasons set out in sub-clause (ii) of the second paragraph of this section, we may not redeem, purchase or otherwise acquire for any consideration any of our other share capital and may not set aside any sum or establish any sinking fund to redeem, purchase or otherwise acquire them, until we have declared and paid in full dividends on that series of dollar preference shares in respect of successive dividend periods singly or together aggregating no less than 12 months.

In addition, if we have not declared and paid in full the dividend stated to be payable on any other series of dollar preference shares, or on any of our non-cumulative preference shares, or if we have not set aside a sum to provide for payment in full, in either case for the reasons set out in sub-clause (ii) of the second paragraph of this section, then:

we may not declare or pay dividends on that series of dollar preference shares, and we may not set aside any sum for payment of such dividends, unless, on the declaration date, we set aside an amount equal to the dividend on that other series of non-cumulative dollar preference shares or other non-cumulative preference shares for the then-current dividend period for payment in full on the next applicable dividend payment date; and

we may not redeem, repurchase or otherwise acquire any dollar preference shares of that series, and we may not set aside any sum nor establish any sinking fund therefor, until such time as we have declared and paid in full dividends on that other series of non-cumulative dollar preference shares or other non-cumulative preference shares in respect of successive dividend periods singly or together aggregating no less than 12 months.

To the extent that any dividend on any dollar preference share to which sub-clause (i) of the second paragraph of this section applies is, on any occasion, not declared and paid by reason of the exercise of the directors’ discretion referred to in sub-clause (i) of the second paragraph of this section, holders of such dollar preference shares shall have no claim in respect of such non-payment. In addition, such non-payment shall not prevent or restrict (a) the declaration and payment of dividends on any other series of dollar preference shares or on any of our non-cumulative preference shares expressed to rank pari passu with our dollar preference shares, (b) the setting aside of sums for the payment of dividends referred to in (a), (c) except as set forth in the following paragraph, the redemption, purchase or other acquisition of our shares by us, or (d) except as set forth in the following paragraph, the setting aside of sums, or the establishment of sinking funds, for any such redemption, purchase or other acquisition by us.

If we have not declared and paid in full the dividend stated to be payable on any series of dollar preference shares as a result of the directors’ discretion referred to in sub-clause (i) of the second paragraph of this section, then we may not redeem, purchase or otherwise acquire for any consideration any of our share capital ranking after such dollar preference shares, and may not set aside any sum nor establish any sinking fund for the redemption, purchase or other acquisition thereof, until such time as we have declared and paid in full dividends on such series of dollar preference shares in respect of successive dividend periods singly or together aggregating no less than 12 months. In addition, no dividend may be declared or paid on any of our share capital ranking after such dollar preference shares as to dividends until such time as the dividend stated to be payable on the dollar preference shares to which the discretion in sub-clause (i) of the second paragraph of this section applies in respect of a dividend period has thereafter been declared and paid in full.

No series of dollar preference shares shall be treated as ranking after any other series of preference shares with which it is expressed to rank pari passu as regards participation in profits, by reason only of the directors’ discretion referred to in sub-clause (i) of the second paragraph of this section, or any dividend on that series not being paid by virtue of such discretion.

Dividends on the dollar preference shares of any series will be non-cumulative. If the board of directors does not pay a dividend or any part of a dividend when due on a dividend payment date in respect of any series of dollar preference shares because it is not required to do so, then holders of dollar preference shares of the applicable series will have no claim in respect of the non-payment and we will have no obligation to pay the dividend accrued for the dividend period or to pay any interest on the dividend, whether or not dividends on the dollar preference shares of the series are declared for any future dividend period. The holders of the dollar preference shares of any series will have no right to participate in our profits.

Any dividend which has remained unclaimed for 12 years from the date when it became due shall, if the board of directors so resolves, be forfeited and shall revert to us.

We will calculate the amount of dividends payable on the dollar preference shares of any series for each dividend period using the method determined by the board of directors before the shares are issued, except for any dividend period shorter than a full dividend period, for which the amount of dividend payable will be calculated on the basis of 12 30-day months, a 360-day year and the actual number of days elapsed in the period.

Dividends declared on the dollar preference shares of any series will be payable to the ADR depositary or the record holders as they appear on the register on the appropriate record dates, which will be the number of days before the relevant dividend payment dates that the board of directors determines before the allotment of the particular series. If applicable fiscal or other laws and regulations permit, each payment will be made, in the case of dollar preference shares of any series in bearer form, by dollar check drawn on, or by transfer to a dollar account maintained by the payee with, a bank in London or in The City of New York or, in the case of

dollar preference shares of any series in registered form, by dollar check drawn on a bank in London or in The City of New York and mailed to the record holder at the holder’s address as it appears on the register for the dollar preference shares. If any date on which dividends are payable on the dollar preference shares of any series is not a business day, then we will pay the dividend on the next business day, without any interest or other payment in respect of the delay, unless it falls in the next calendar month, in which case we will make the payment on the preceding business day. A “business day” is any day on which banks are open for business, and foreign exchange dealings may be conducted, in London and The City of New York.

Liquidation Rights

If we are wound up or liquidated, whether or not voluntarily, the holders of the dollar preference shares of each series will be entitled to receive out of our surplus assets available for distribution to shareholders, after payment of arrears (if any) of dividends on the cumulative preference shares up to the date of payment, equally with our cumulative preference shares, any other series of non-cumulative preference shares then outstanding, and all of our other shares ranking equally with that series of dollar preference shares as regards participation in our surplus assets, a distribution in US dollars per dollar preference share equal to the liquidation value per share, together with an amount equal to dividends for the then current dividend period accrued to the date of payment, before any distribution or payment may be made to holders of our ordinary shares or any other class of our shares ranking after the dollar preference shares of that series. If the assets available for distribution are insufficient to pay in full the amounts payable with respect to the dollar preference shares of that series and any of our other preference shares ranking equally as to any such distribution with those dollar preference shares, the holders of those dollar preference shares and other preference shares will share ratably in any distribution of our surplus assets in proportion to the full respective preferential amounts to which they are entitled. After payment of the full amount of the liquidation distribution to which they are entitled, the holders of the dollar preference shares will have no right or claim to any of our surplus assets and will not be entitled to any further participation in surplus assets. If the holders of the dollar preference shares are entitled to any recovery with respect to the dollar preference shares in any winding up or liquidation, they might not be entitled in such proceedings to a recovery in US dollars and might be entitled only to a recovery in pounds sterling.

Optional Redemption

Unless the relevant prospectus supplement specifies otherwise, we may redeem the dollar preference shares of each series, at our option, in whole or in part from time to time, on any date later than five years after they are issued, in accordance with the notice period and at the redemption prices set forth in the prospectus supplement plus the dividends otherwise payable for the then-current dividend period accrued to the redemption date.

Each notice of redemption will specify:

the redemption date;
the particular dollar preference shares of the series to be redeemed;
the redemption price, specifying the amount of the accrued but unpaid dividend per share to be included and stating that dividends shall cease to accrue on redemption; and
the place or places where holders may surrender documents of title and obtain payment of the redemption price.

Our Articles of Association provide that no defect in the notice of redemption or in the giving of the notice will affect the validity of the redemption proceedings.

If fewer than all of the outstanding dollar preference shares of a series are to be redeemed, our Articles of Association provide that, for the purposes of determining the particular dollar preference shares to be redeemed, we shall cause a drawing to be made in the presence of our independent auditors.

If certain limitations contained in the Articles of Association, the special rights of any of our shares, and the provisions of applicable law permit, we may, at any time or from time to time, purchase outstanding dollar

preference shares of any series by tender, available to all holders of those dollar preference shares, in the open market, or by private agreement, in each case upon the terms and conditions that the board of directors shall determine. Any dollar preference shares of any series that we purchase for our own account will pursuant to applicable law be treated as cancelled and will no longer be issued and outstanding.

Under existing UK Financial Services Authority requirements, we may not redeem or purchase any dollar preference shares unless the UK Financial Services Authority consents in advance. The UK Financial Services Authority may impose conditions on any redemption or purchase.

Voting Rights

The holders of the dollar preference shares of any series will not be entitled to receive notice of, attend or vote at any general meeting of our shareholders except as provided by applicable law or as described below.

If any resolution is proposed for adoption by our shareholders varying or abrogating any of the rights attaching to the dollar preference shares of a particular series or proposing that we be wound up, the holders of the outstanding dollar preference shares will be entitled to receive notice of and to attend the general meeting of shareholders at which the resolution is to be proposed and will be entitled to speak and vote on that resolution, but not on any other resolution. In addition, if, before any general meeting of shareholders, we have failed to pay in full the dividend payable on the dollar preference shares of a particular series for a number of dividend periods specified in the relevant prospectus supplement, the holders of the dollar preference shares of that series shall be entitled to receive notice of, attend, speak and vote at that meeting on all matters. In these circumstances only, the rights of the holders of dollar preference shares of that series to vote shall continue until we have resumed the payment in full of dividends on the dollar preference shares of that series for the number of dividend periods specified in the prospectus supplement. Holders of any series of dollar preference shares shall be entitled to receive notice of, attend, speak and vote at general meetings in other circumstances if the board of directors determines, as specified in the prospectus supplement.

Whenever holders of dollar preference shares are entitled to vote at a general meeting of shareholders, on a show of hands each holder present in person shall have one vote and on a poll each holder present in person or by proxy shall have the number of votes for each dollar preference share of the relevant series that the board of directors determines, as specified in the relevant prospectus supplement.

Our Articles of Association provide that all resolutions shall be decided on a show of hands unless, either before or on the declaration of the result of the vote taken on a show of hands, a poll is demanded by:

the chairman of the meeting;
not less than three shareholders present in person or by proxy;
the ADR depositary;
a shareholder or shareholders, including holders of any series of dollar preference shares entitled to vote on the resolution, present in person or by proxy who represent at least 10% of the total voting rights of all shareholders entitled to vote on the resolution; or
a shareholder or shareholders present in person or by proxy and holding shares conferring a right to vote at the meeting on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all shares conferring that right.

The holders, including holders of any series of dollar preference shares at a time when they have voting rights as a result of our having failed to pay dividends on the series for the number of dividend periods specified in the applicable prospectus supplement, of not less than 10% of the paid up capital that at the relevant date carries the right of voting at our general meetings are entitled to require our board of directors to convene an extraordinary general meeting. In addition, the holders of any series of dollar preference shares may have the right to vote separately as a class in certain circumstances as described below under the heading “–Variation of Rights”.

At December 31, 2004, we had approximately 3,173 million ordinary shares outstanding. The dollar preference shares of any series will not limit our ability to issue additional ordinary shares.

Form and Denomination

The dollar preference shares of any series will, when issued, be fully paid and, as such, will not be subject to a call for any additional payment. For each dollar preference share of each series issued, an amount equal to its nominal value will be credited to our issued share capital account and an amount equal to the difference between its issue price and its nominal value will be credited to our share premium account.

The dollar preference shares of each series will be represented by a single certificate. If in registered form, the certificate will be issued to the ADR depositary and if in bearer form the certificate will be deposited with the ADR depositary under the ADR deposit agreement. We may consider the ADR depositary one holder of any series of dollar preference shares so deposited for all purposes. Unless the relevant prospectus supplement specifies otherwise, dollar preference shares of any series withdrawn from deposit under the ADR deposit agreement will be evidenced by share certificates in registered form without dividend coupons. If an ADR holder elects to receive share certificates in registered form, the share certificates will be delivered at the time of withdrawal. Unless the prospectus supplement specifies otherwise, the dollar preference shares of any series may not be withdrawn from deposit in bearer form.

Title to dollar preference shares of any series in registered form will pass by transfer and registration on the register for the dollar preference shares of the series. Title to dollar preference shares of any series in bearer form, or to any dividend coupons appertaining to them, will pass by delivery of the relevant bearer share warrants or dividend coupons. If our Articles of Association and the limitations described in the following paragraph and in any relevant prospectus supplement permit, dollar preference shares of a particular series in bearer form will be exchangeable for the same number of dollar preference shares of the series in registered form upon surrender of the relevant bearer share warrants and all unmatured dividend coupons, if any, appertaining to them. Unless the prospectus supplement specifies otherwise, dollar preference shares of any series in registered form will not be exchangeable, in whole or in part, for dollar preference shares of such series in bearer form.

Each exchange or registration of transfer of dollar preference shares of any series in registered form will be effected by entry on the register for the dollar preference shares of the series kept by our registrar at its office in the UK. See “— Registrar and Paying Agent” below. Any exchange or registration of transfer will be effected without charge to the person requesting the exchange or registration, but the requesting person will be required to pay any related taxes, stamp duties or other governmental charges. The exchange of dollar preference shares of any series in bearer form for the dollar preference shares of such series in registered form will also be subject to applicable UK tax laws and regulations in effect at the time of the exchange. No exchange will be made unless any resulting taxes, stamp duties or other governmental charges have been paid to us.

Variation of Rights

If applicable law permits, the rights attached to any series of dollar preference shares may be varied or abrogated only with the written consent of the holders of 75% in nominal value of the outstanding dollar preference shares of that series or with the sanction of an extraordinary resolution passed at a separate class meeting of the holders of the outstanding dollar preference shares of that series. An extraordinary resolution will be adopted if passed by a majority of 75% of those holders voting in person or by proxy at the meeting. The quorum required for any such class meeting will be two persons at least holding or representing by proxy one-third in nominal amount of the outstanding dollar preference shares of the particular series affected, except at any adjourned meeting, where any two holders present in person or by proxy will constitute a quorum.

The written consent of the holders of 75% in nominal value of the outstanding dollar preference shares of a particular series or the sanction of an extraordinary resolution passed at a separate class meeting of holders of the outstanding dollar preference shares of the series will be required if our directors propose to authorize, create or increase the amount of any shares of any class or any security convertible into shares of any class ranking as regards rights to participate in our profits or assets, other than if we redeem or purchase the shares, in priority to the series of dollar preference shares.

If we have paid the most recent dividend payable on the dollar preference shares of a particular series in full, the rights attached to that series will not be deemed to be varied by the creation or issue of any further series of dollar preference shares or of any sterling preference shares or of any other further shares ranking equally as regards participation in our profits or assets with or junior to the dollar preference shares of that series, whether carrying identical rights or different rights in any respect, including as to dividend, premium on a return of capital, redemption or conversion or denominated in dollars or any other currency.

Notices of Meetings

We will cause a notice of any meeting at which holders of dollar preference shares of a particular series are entitled to vote to be mailed to each record holder of dollar preference shares of that series. Each such notice will state:

the date of the meeting;
a description of any resolution to be proposed for adoption at the meeting on which those holders are entitled to vote; and
instructions for the delivery of proxies.

A holder of dollar preference shares of any series in registered form who is not registered with an address in the UK and who has not supplied an address within the UK to us for the purpose of notices is not entitled to receive notices of meetings. For a description of notices that we will give to the ADR depositary and that the ADR depositary will give to ADR holders, you should see “Where You Can Find More Information”.

Governing Law

The creation and issuance of the dollar preference shares of any series and the rights attached to them shall be governed by and construed in accordance with Scots law.

Registrar and Paying Agent

Unless the relevant prospectus supplement specifies otherwise, Computershare Services PLC will act as registrar and paying agent for the dollar preference shares of each series. Computershare’s current address is P.O. Box 435, Owen House, 8 Bankhead Crossway North, Edinburgh EH11 4BR, Scotland.

DESCRIPTION OF AMERICAN DEPOSITARY RECEIPTS

The following is a summary of the general terms and provisions of the ADR deposit agreement under which the ADR depositary will issue the ADRs. The ADR deposit agreement is among us, The Bank of New York, as depositary, and all holders from time to time of ADRs issued under it. This summary does not purport to be complete. You should read the ADR deposit agreement, which we have filed with the SEC as an exhibit to the registration statement of which this prospectus is a part. You may also read the ADR deposit agreement at the principal offices of The Bank of New York in The City of New York and London.

American Depositary Receipts

ADRs will evidence ADSs of a particular series, which will represent dollar preference shares of a corresponding series. Unless the relevant prospectus supplement specifies otherwise, each ADS will represent one dollar preference share, or evidence of rights to secure one dollar preference share, deposited with the ADR depositary or the London branch of The Bank of New York, as custodian. An ADR may evidence any number of ADSs of the corresponding series.

Deposit and Withdrawal of Deposited Securities

Upon receipt of dollar preference shares of a particular series or evidence of rights to receive dollar preference shares, and subject to the terms of the ADR deposit agreement, the ADR depositary will execute and deliver at its principal office, which is presently located at 101 Barclay Street, New York, New York 10286, USA, to the person or persons specified by the depositor in writing upon payment of the fees, charges and taxes provided in the ADR deposit agreement, an ADR or ADRs registered in the name of that person or persons evidencing the number of ADSs of the series corresponding to the dollar preference shares of that series.

Upon surrender of ADRs at the principal office of the ADR depositary and upon payment of the taxes, charges and fees provided in the ADR deposit agreement and subject to the terms of the ADR deposit agreement, an ADR holder is entitled to delivery to or upon its order, at the principal office of the ADR depositary or at the office of the custodian in London, of dollar preference shares of the relevant series in registered form in respect of the deposited dollar preference shares and any other documents of title evidenced by the surrendered ADRs. The forwarding of share certificates and other documents of title for delivery at the principal office of the ADR depositary will be at the risk and expense of the ADR holder.

The ADR depositary will not deliver ADRs except upon receipt of dollar preference shares of the relevant series and will not deliver dollar preference shares of the relevant series except on receipt of ADRs issued under the ADR deposit agreement.

Dividends and Other Distributions

The ADR depositary will distribute all cash dividends or other cash distributions that it receives in respect of deposited dollar preference shares of a particular series to ADR holders in proportion to their holdings of ADSs of the series representing the dollar preference shares. The cash amount distributed will be reduced by any amounts that we or the ADR depositary must withhold on account of taxes.

If we make any distribution other than in cash in respect of any deposited dollar preference shares of a particular series, the ADR depositary will distribute the property received by it to ADR holders in proportion to their holdings of ADSs of the series representing the dollar preference shares. If a distribution that we make in respect of deposited dollar preference shares of a particular series consists of a dividend in, or free distribution of, dollar preference shares of the series, the ADR depositary may, if we approve, and will, if we request, distribute to ADR holders, in proportion to their holdings of ADSs of the series representing the dollar preference shares, additional ADRs for an aggregate number of ADSs of that series received as the dividend or free distribution. If the ADR depositary does not distribute additional ADRs, each ADS of that series will from then also represent the additional dollar preference shares of the corresponding series distributed in respect of the deposited dollar preference shares before the dividend or free distribution.

If the ADR depositary determines that any distribution in property, other than cash or dollar preference shares of a particular series, cannot be made proportionately among ADR holders or if for any other reason, including any requirement that we or the ADR depositary withhold an amount on account of taxes, the ADR depositary deems that such a distribution is not feasible, the ADR depositary may dispose of all or a portion of the property in the amounts and in the manner, including by public or private sale, that it deems equitable and practicable, and it will distribute the net proceeds of any such sale or the balance of any such property after deduction of any taxes that we or the ADR depositary must withhold to ADR holders as in the case of a distribution received in cash.

Redemption of ADSs

If we redeem any dollar preference shares of a particular series, the ADR depositary will redeem, from the amounts that it receives from the redemption of deposited dollar preference shares, a number of ADSs of the series representing those dollar preference shares which corresponds to the number of deposited dollar preference shares. The ADS redemption price will correspond to the redemption price per share payable with respect to the redeemed dollar preference shares. If we redeem less than all of the outstanding dollar preference shares of a particular series, the ADR depositary will select the ADSs of the corresponding series to be redeemed, either by lot or in proportion to the number of dollar preference shares represented. We must give our notice of redemption in respect of the dollar preference shares of a particular series to the ADR depositary before the redemption date and the ADR depositary will promptly deliver the notice to all holders of ADRs of the corresponding series.

Record Dates

Whenever any dividend or other distribution becomes payable or shall be made in respect of dollar preference shares of a particular series, or any dollar preference shares of a particular series are to be redeemed, or the ADR depositary receives notice of any meeting at which holders of dollar preference shares of a particular series are entitled to vote, the ADR depositary will fix a record date for the determination of the ADR holders who are entitled to receive the dividend, distribution, amount in respect of redemption of ADSs of the corresponding series, or the net proceeds of their sale, or to give instructions for the exercise of voting rights at the meeting, subject to the provisions of the ADR deposit agreement. Such record date will be as close in time as practicable to the record date for the dollar preference shares.

Voting of the Underlying Deposited Securities

Upon receipt of notice of any meeting at which holders of dollar preference shares of a particular series are entitled to vote, the ADR depositary will, as soon as practicable thereafter, mail to the record holders of ADRs of the corresponding series a notice which shall contain:

a summary of the notice of meeting;
a statement that the record holders of ADRs at the close of business on a specified record date are entitled under the ADR deposit agreement, if applicable laws and regulations and our Articles of Association permit, to instruct the ADR depositary as to the exercise of the voting rights pertaining to the dollar preference shares of the series represented by their ADSs; and
a brief statement of how they may give instructions, including an express indication that they may instruct the ADR depositary to give a discretionary proxy to a designated member or members of our board of directors.

The ADR depositary has agreed that it will try, if practicable, to vote or cause to be voted the dollar preference shares in accordance with any written nondiscretionary instructions of record holders of ADRs that it receives on or before the date set by the ADR depositary. The ADR depositary has agreed not to vote the dollar preference shares except in accordance with written instructions from the record holders of ADRs.

Inspection of Transfer Books

The ADR depositary will keep books, at its transfer office in The City of New York, for the registration and transfer of ADRs that at all reasonable times will be open for inspection by ADR holders. However, this inspection may not be for the purpose of communicating with ADR holders in the interest of a business or object other than our business or a matter related to the ADR deposit agreement or the ADRs.

Reports and Notices

The ADR depositary will make available at its principal office for inspection by ADR holders any reports and communications received from us that are both received by the ADR depositary as the holder of dollar preference shares of the applicable corresponding series and made generally available to the holders of those dollar preference shares by us, including our annual report and accounts. The ADR depositary will also mail copies of those reports to ADR holders when furnished by us as provided in the ADR deposit agreement.

On or before the first date on which we give notice, by publication or otherwise, of any meeting at which holders of the dollar preference shares of a particular series are entitled to vote, or of any reconvening of any such adjourned meeting of holders, or of the taking of any action in respect of any cash or other distributions on or any redemption of dollar preference shares of a particular series, we shall transmit to the ADR depositary a copy of the notice in the form given or to be given to holders of the dollar preference shares. The ADR depositary will, at our expense, arrange for the prompt transmittal by the custodian to the ADR depositary of such notices, and, if we request in writing, arrange for the mailing, at our expense, of copies to all holders of ADRs evidencing ADSs of the corresponding series.

Amendment and Termination of the ADR Deposit Agreement

The form of the ADRs evidencing ADSs of a particular series and any provisions of the ADR deposit agreement relating to those ADRs may at any time and from time to time be amended by agreement between us and the ADR depositary in any respect which we may deem necessary or desirable. Any amendment that imposes or increases any fees or charges, other than taxes and other governmental charges, or that otherwise prejudices any substantial existing right of holders of outstanding ADRs evidencing ADSs of a particular series, will not take effect as to any ADRs until 30 days after notice of the amendment has been given to the record holders of those ADRs. Every holder of any ADR at the time an amendment becomes effective, if it has been given notice, will be deemed by continuing to hold the ADR to consent and agree to the amendment and to be bound by the ADR deposit agreement or the ADR as amended. In no event may any amendment impair the right of any holder of ADRs to surrender ADRs and receive in return the dollar preference shares of the corresponding series and other property represented by the ADRs.

Whenever we direct, the ADR depositary has agreed to terminate the ADR deposit agreement as to dollar preference shares of any and all series and the deposited securities, ADSs and ADRs of all corresponding series by mailing a termination notice to the record holders of all those outstanding ADRs at least 30 days before the date fixed in the notice for termination. The ADR depositary may likewise terminate the ADR deposit agreement as to dollar preference shares of any and all series and the deposited securities, ADSs and ADRs of all corresponding series by mailing a termination notice to us and the record holders of all those outstanding ADRs at any time 60 days after it has delivered to us a written notice of its election to resign, if a successor depositary has not been appointed and accepted its appointment as provided in the ADR deposit agreement. If any ADRs evidencing ADSs of a particular series remain outstanding after the date of any termination, the ADR depositary will then discontinue the registration of transfers of those ADRs, will suspend the distribution of dividends to holders and will not give any further notices or perform any further acts under the ADR deposit agreement with respect to those ADRs, except that it will continue to collect dividends and other distributions pertaining to the dollar preference shares of the corresponding series and any other property represented by those ADRs, and will continue the delivery of dollar preference shares of the corresponding series, together with any dividends or other distributions received with respect to them and the net proceeds of the sale of any property, in exchange for ADRs surrendered to it. At any time after two years from the date of termination of the ADR deposit agreement as to ADRs evidencing ADSs of a particular series, the ADR depositary may sell the dollar preference shares of the corresponding series and any other property represented by those ADRs and may hold the net proceeds, together with any other cash then held by it

under the ADR deposit agreement in respect of those ADRs, without liability for interest, for the ratable benefit of the holders of ADRs that have not previously been surrendered.

Charges of ADR Depositary

The ADR depositary will charge the party to whom it delivers ADRs against deposits, and the party surrendering ADRs for delivery of dollar preference shares of a particular series or other deposited securities, property and cash, $5 for each 100, or fraction of 100, ADSs evidenced by the ADRs issued or surrendered. We will pay all other charges of the ADR depositary and those of any registrar, co-transfer agent and co-registrar under the ADR deposit agreement, but, unless the relevant prospectus supplement with respect to a particular series of dollar preference shares or securities convertible into or exchangeable for dollar preference shares of any series states otherwise, we will not pay:

taxes, including UK stamp duty or UK stamp duty reserve tax, and other governmental charges;
any applicable share transfer or registration fees on deposits or withdrawals of dollar preference shares;
cable, telex, facsimile transmission and delivery charges which the ADR deposit agreement provides are at the expense of the holders of ADRs or persons depositing or withdrawing dollar preference shares of any series; or
expenses incurred or paid by the ADR depositary in any conversion of foreign currency into dollars.

You will be responsible for any taxes or other governmental charges payable on your ADRs or on the deposited securities underlying your ADRs (including UK stamp duty or UK stamp duty reserve tax, but not stamp duty reserve tax arising on issue of the securities underlying your ADRs). The ADR depositary may refuse to transfer your ADRs or allow you to withdraw the deposited securities underlying your ADRs until such taxes or other charges are paid. The ADR depositary may withhold any dividends or other distributions, or may sell for the account of the holder any part or all of the deposited securities evidenced by the ADR, and may apply dividends or other distributions or the proceeds of any sale in payment of the tax or other governmental charge, with the ADR holder remaining liable for any deficiency.

General

Neither the ADR depositary nor we will be liable to ADR holders if prevented or forbidden or delayed by any present or future law of any country or by any governmental authority, or by reason of any provision, present or future, of our Memorandum or Articles of Association, or any act of God or war or other circumstances beyond our control in performing our obligations under the ADR deposit agreement. The obligations of both of us under the ADR deposit agreement are expressly limited to performing our duties without gross negligence or bad faith.

If any ADSs of a particular series are listed on one or more stock exchanges in the US, the ADR depositary will act as registrar or, if we request or with our approval, appoint a registrar or one or more co-registrars, for registration of the ADRs evidencing the ADSs in accordance with any exchange requirements. The registrars or co-registrars may be removed and a substitute or substitutes appointed by the ADR depositary if we request or with our approval.

The ADRs evidencing ADSs of any series are transferable on the books of the ADR depositary. However, the ADR depositary may close the transfer books as to ADRs evidencing ADSs of a particular series at any time or from time to time when it deems it expedient to do so in connection with the performance of its duties or if we request. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination or surrender of any ADR evidencing ADSs of a particular series, or transfer and withdrawal of dollar preference shares of the corresponding series, the ADR depositary or the custodian may require the person presenting the ADR or depositing the dollar preference shares to pay a sum sufficient to reimburse it for any related tax or other governmental charge and any share transfer or registration fee and any applicable fees payable as provided in the ADR deposit agreement, and the ADR depositary may withhold any dividends or other distributions, or may sell for the account of the holder any part or all of the dollar preference shares evidenced by the ADR, and may apply dividends or other distributions or the proceeds of any sale in payment of the tax or other governmental charge, with the ADR holder remaining

liable for any deficiency. Any person presenting dollar preference shares of any series for deposit or any holder of an ADR may be required from time to time to furnish the ADR depositary or the custodian with proof of citizenship or residence, exchange control approval, information relating to the registration on our books or registers or those maintained for us by the registrar for the dollar preference shares of that series, or other information, to execute certificates and to make representations and warranties that the ADR depositary or the custodian deems necessary or proper. Until those requirements have been satisfied, the ADR depositary may withhold the delivery or registration of transfer of any ADR or the distribution of any dividend or other distribution or proceeds of any sale or distribution. The delivery, transfer and surrender of ADRs of any series generally may be suspended during any period when the transfer books of the ADR depositary are closed or if we or the ADR depositary deem necessary or advisable at any time or from time to time because of any requirement of law or of any government or governmental authority, body or commission, or under any provision of the ADR deposit agreement or for any other reason, subject to the provisions of the following sentence. The surrender of outstanding ADRs of any series and withdrawal of deposited securities may only be suspended as a result of:

temporary delays caused by closing our transfer books or those of the ADR depositary or the deposit of dollar preference shares of the corresponding series in connection with voting at a shareholders’ meeting or the payment of dividends;
the non-payment of fees, taxes and similar charges; and
compliance with any US or foreign laws or governmental regulations relating to the ADRs of the series or to the withdrawal of the deposited securities.

The ADR deposit agreement and the ADRs are governed by and construed in accordance with New York law.

PLAN OF DISTRIBUTION

We may sell relevant securities to or through underwriters or dealers and also may sell all or part of such securities directly to other purchasers or through agents.

The distribution of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.

In connection with the sale of securities, we may compensate underwriters in the form of discounts, concessions or commissions or in any other way that the applicable prospectus supplement describes. Underwriters may sell securities to or through dealers, and the dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of securities may be deemed to be underwriters, and any discounts or commissions that we pay them and any profit on the resale of securities by them may be deemed to be underwriting discounts and commissions, under the Securities Act. Any such underwriter or agent will be identified, and any such compensation that we pay will be described, in the prospectus supplement.

Under agreements which we may enter into, we may be required to indemnify underwriters, dealers and agents who participate in the distribution of securities against certain liabilities, including liabilities under the Securities Act.

Unless a prospectus supplement specifies otherwise, we will not offer any securities or any investments representing securities, including ADSs or ADRs, of any series to the public in the UK. Unless otherwise specified in any agreement which we may enter into, underwriters, dealers and/or agents in relation to the distribution of securities or any investments representing securities, including ADSs or ADRs, of any series and subject to the terms of any such agreement, any underwriter, dealer or agent in connection with an offering of securities or any investments representing securities, including ADSs or ADRs, of any series will represent and agree that:

it has not offered or sold and, prior to the expiry of the period of six months from the date of closing of each particular issue of securities, in respect of such securities it will not offer or sell any such securities or any investments representing such securities, including ADSs or ADRs, of such series to persons in the UK except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the UK within the meaning of the Public Offers of Securities Regulations 1995 (as amended);
it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 (the “FSMA”) with respect to anything done by it in relation to the securities or any investments representing securities, including ADSs or ADRs, of such series in, from or otherwise involving the UK; and
it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the securities or any investments representing the securities (including ADSs or ADRs) (including without limitation the registration statement, the prospectus, any preliminary prospectus, any ADR registration statement or any ADR prospectus) in circumstances in which Section 21(1) of the FSMA does not apply to the issuer of the securities or in our case, would not apply to us, if we were not an authorized person.

Each new series of debt securities or dollar preference shares will be a new issue of securities with no established trading market. If securities of a particular series are not listed on a US national securities exchange, certain broker-dealers may make a market in those securities, but will not be obligated to do so and may discontinue any market making at any time without notice. We cannot give any assurance that any broker-dealer will make a market in securities of any series or as to the liquidity of the trading market for those securities.

Delayed Delivery Arrangements

If so indicated in the prospectus supplement, we may authorize underwriters or other persons acting as its agents to solicit offers by certain institutions to purchase dollar preference shares or debt securities from it pursuant to contracts providing for payment and delivery on a future date. Institutions with which such contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases such institutions must be approved by us. The obligations of any purchaser under any such contract will be subject to the condition that the purchase of the offered securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject. The underwriters and such other agents will not have any responsibility in respect of the validity or performance of such contracts.

LEGAL OPINIONS

Our United States counsel, Davis Polk & Wardwell, will pass upon certain legal matters relating to the securities. Our Scottish solicitors, Dundas & Wilson CS LLP, will pass upon the validity of the dollar preference shares under Scots law. Our English solicitors, Linklaters, will pass upon certain matters of English law relating to the subordination provisions of the securities.

EXPERTS

The financial statements incorporated in this prospectus by reference from The Royal Bank of Scotland Group plc Annual Report on Form 20-F have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

EXPENSES OF THE ISSUE

We will pay or cause to be paid the following estimated expenses (not including underwriting discounts and commissions and expenses reimbursed by us) to be incurred in connection with the issuance and distribution of the securities registered under the registration statement of which this prospectus is a part. Other than the SEC registration fee, all of these expenses are estimated.

	Amount to be Paid

Securities and Exchange Commission registration fee	$	1,177,000
Printing and engraving expenses		55,000
Legal fees and expenses (including Blue Sky Fees)		550,000
Accountants’ fees and expenses		11,000
Trustee’s fees and expenses		22,000
Miscellaneous		11,000

Total	$	1,826,000

ENFORCEMENT OF CIVIL LIABILITIES

We are a public limited company incorporated in Great Britain and registered in Scotland. All but one of our directors and executive officers, and certain experts named in this prospectus, reside outside the United States. All or a substantial portion of our assets and the assets of those non-resident persons are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or those persons or to enforce against them judgments obtained in US courts predicated upon civil liability provisions of the federal securities laws of the United States. We have been advised by our Scottish solicitors, Dundas & Wilson CS LLP (as to Scots law), and our English solicitors, Linklaters (as to English law), that, both in original actions and in actions for the enforcement of judgments of US courts, there is doubt as to whether civil liabilities predicated solely upon the US federal securities laws are enforceable in Scotland and England.

WHERE YOU CAN FIND MORE INFORMATION

Ongoing Reporting

We file reports and other information with the SEC. You can read and copy these reports and other information at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, USA. You may call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. The SEC also maintains a website at http://www.sec.gov which contains in electronic form each of the reports and other information that we have filed electronically with the SEC. You can also read this material at the offices of The New York Stock Exchange, 20 Broad Street, New York, New York 10005, USA, on which certain of our securities are listed.

We will provide the trustee for any debt securities and the ADR depositary for any dollar preference shares with our annual reports, which will include a description of operations, and our annual audited consolidated financial statements, together with a US GAAP reconciliation of consolidated net income and consolidated ordinary shareholders’ equity. We will also provide any trustee or ADR depositary with interim reports that will include unaudited interim summary consolidated financial information and, if we choose, may contain a US GAAP reconciliation of consolidated net income and consolidated ordinary shareholders’ equity. Upon receipt, the trustee or the ADR depositary will mail the reports to all record holders of the debt securities or dollar preference shares. In addition, we will provide the trustee or the ADR depositary with all notices of meetings at which holders of debt securities or dollar preference shares are entitled to vote, and all other reports and communications that are made generally available to holders of debt securities or dollar preference shares.

Registration Statement

This prospectus is part of a registration statement that we filed with the SEC. As exhibits to the registration statement, we have also filed the indentures, the ADR deposit agreement and our Articles of Association. Statements contained in this prospectus as to the contents of any contract or other document referred to in this prospectus are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference. For further information, you should refer to the registration statement. You can obtain the full registration statement from the SEC or from us.

INCORPORATION OF DOCUMENTS BY REFERENCE

The SEC allows us to “incorporate by reference” the information that we file with the SEC. This permits us to disclose important information to you by referring to these filed documents. Any information referred to in this way is considered part of this prospectus, and any information that we file with the SEC after the date of this prospectus will automatically be deemed to update and supersede this information.

We incorporate by reference our Annual Report on Form 20-F for the fiscal year ended December 31, 2004 filed with the SEC on March 29, 2005. We also incorporate by reference any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 and certain Reports on Form 6-K, if they state that they are incorporated by reference into this prospectus, that we furnish to the SEC after the date of this prospectus and until we or any underwriters sell all of the securities.

Upon written or oral request, we will provide free of charge a copy of any or all of the documents that we incorporate by reference into this prospectus, other than exhibits which are not specifically incorporated by reference into this prospectus. To obtain copies you should contact us at Citizens Financial Group, Inc., 28 State Street, Boston, Massachusetts 02109 USA; Attention: Donald J. Barry, telephone (617) 725-5810.

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 8. Indemnification of Directors and Officers

Except as hereinafter set forth, there is no provision of the Memorandum and Articles of Association of The Royal Bank of Scotland Group plc (the “Company”) or any contract, arrangement or statute under which any director or officer of the Company is insured or indemnified in any manner against any liability that he may incur in his capacity as such.

Deed of Indemnity

The Company has entered into Deeds of Indemnity with the directors and officers of the Company and its wholly-owned subsidiaries (referred to herein as the “Royal Bank Group”) that, subject to certain conditions precedent, in consideration of such director or officer continuing in or accepting office as a (i) director of officer of (a) any company within the Royal Bank Group or (b) a company in which a member of the Royal Bank Group is to invest or has invested in less than 50% of the issued share capital of such company (an “Investee Company”), or (ii) an authorized or approved person (or equivalent) under the rule of any regulatory body, the Company will indemnify the director or officer, his estate and his personal representatives from all costs, charges, losses, expenses and liabilities incurred by him in the actual or purported execution and/or discharge of his duties and/or the exercise or purported exercise of his powers and/or otherwise in relation to or in connection with his duties, powers or office including any liability incurred by him as an authorized or approved person (or equivalent) (but only to the extent that such position is held in pursuance of the business of the Royal Bank Group) or in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of any company within the Royal Bank Group (or of an Investee Company) and in which decree or judgment is given in his favor (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his part) or in which he is acquitted or in connection with any application for relief from liability in respect of any such act or omission in which relief is granted to him by the Court.

In light of recent amendments to the Companies Act 1985, on March 30, 2005, the board of directors of the Company approved an amended form of Deed of Indemnity, which will be subject to the provisions of Section 309A of the Companies Act 1985.

Article 169 of the Company’s Articles of Association provides:

“Subject to the provisions of and so far as may be consistent with the Statutes, every Director, Secretary or other officer of the Company, and, if the Directors so determine, an Auditor, shall be entitled to be indemnified out of the assets of the Company against all costs, charges, losses, expenses and liabilities incurred by him in the actual or purported execution and/or discharge of his duties and/or the exercise or purported exercise of his powers and/or otherwise in relation to or in connection with his duties, powers or office including (without prejudice to the generality of the foregoing) any liability incurred by him in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee or Auditor of the Company and in which decree or judgment is given in his favor (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his part) or in which he is acquitted or in connection with any application for relief from liability in respect of any such act or omission in which relief is granted to him by the Court”.

Section 309A of the Companies Act 1985 (as amended by the Companies (Audit, Investigations and Community Enterprise) Act 2004) provides:

(1) This section applies in relation to any liability attaching to a director of a company in connection with any negligence, default, breach of duty or breach of trust by him in relation to the company.

(2) Any provision which purports to exempt (to any extent) a director of a company from any liability within subsection (1) is void.

(3) Any provision by which a company directly or indirectly provides (to any extent) an indemnity for a director of–

(a) the company, or (b) an associated company,

against any liability within subsection (1) is void

This is subject to subsections (4) and (5).

(4) Subsection (3) does not apply to a qualifying third party indemnity provision (see section 309B(1)).

(5) Subsection (3) does not prevent a company from purchasing and maintaining for a director of–

(a) the company, or (b) an associated company,

insurance against any liability within subsection (1).

(6) In this section–

“associated company”, in relation to a company (“C”), means a company which is C’s subsidiary, or C’s holding company or a subsidiary of C’s holding company; “provision” means a provision of any nature, whether or not it is contained in a company’s articles or in any contract with a company.

Section 309B of the Companies Act 1985 (as amended by the Companies (Audit, Investigations and Community Enterprise) Act 2004) provides:

(1) For the purposes of Section 309A(4) a provision is a qualifying third party indemnity provision if it is a provision such as is mentioned in Section 309A(3) in relation to which conditions A to C below are satisfied.

(2) Condition A is that the provision does not provide any indemnity against any liability incurred by the director–

(a) to the company, or (b) to any associated company.

(3) Condition B is that the provision does not provide any indemnity against any liability incurred by the director to pay–

(a) a fine imposed in criminal proceedings, or (b) a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising).

(4) Condition C is that the provision does not provide any indemnity against any liability incurred by the director–

(a) in defending any criminal proceedings in which he is convicted, or (b) in defending any civil proceedings brought by the company, or an associated company, in which judgment is given against him, or (c) in connection with any application under any of the following provisions in which the court refuses to grant him relief, namely–

(i) section 144(3) or (4) (acquisition of shares by innocent nominee), or (ii) section 727 (general power to grant relief in case of honest and reasonable conduct).

(5) In paragraph (a), (b) or (c) of subsection (4) the reference to any such conviction, judgment or refusal of relief is a reference to one that has become final.

(6) For the purposes subsection (5) a conviction, judgment or refusal of relief becomes final–

(a) if not appealed against, at the end of the period for bringing an appeal, or (b) if appealed against, at the time when the appeal (or any further appeal) is disposed of.

(7) An appeal is disposed of–

(a) if it is determined and the period for bringing any further appeal has ended, or (b) if it is abandoned or otherwise ceases to have effect.

(8) In this section “associated company” and “provision” have the same meaning as in Section 309A.

Section 727 of the Companies Act 1985 provides:

“(1) If in any proceedings for negligence, default, breach of duty or breach of trust against an officer of a company or a person employed by a company as auditor (whether he is or is not an officer of the company) it appears to the court hearing the case that that officer or person is or may be liable in respect of the negligence, default, breach of duty or breach of trust, but that he has acted honestly and reasonably, and that having regard to all the circumstances of the case (including those connected with his appointment) he ought fairly to be excused for the

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negligence, default, breach of duty or breach of trust, that the court may relieve him, either wholly or partly, from his liability on such terms as it thinks fit.

(2) If any such officer or person as above-mentioned has reason to apprehend that any claim will or might be made against him in respect of any negligence, default, breach of duty or breach of trust, he may apply to the court for relief; and the court on the application has the same power to relieve him as under this section it would have had if it had been a court before which proceedings against that person for negligence, default, breach of duty or breach of trust had been brought.

(3) Where a case to which subsection (1) applies is being tried by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant or defender ought in pursuance of that subsection to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case in whole or in part from the jury and forthwith direct judgment to be entered for the defendant or defender on such terms as to costs or otherwise as the judge may think proper”.

Any underwriters of securities registered on this registration statement will each agree, severally, to indemnify the Company’s directors, the Company’s officers who sign the registration statement and the Company’s authorized representative in the United States from and against certain civil liabilities based on information relating to such underwriter furnished in writing by such underwriter expressly for use herein.

The Company will agree to indemnify the Company’s authorized representative in the United States from and against certain directors’ and officers’ liabilities.

In addition, the Company has obtained directors’ and officers’ insurance coverage, which, subject to policy terms and limitations, includes coverage to reimburse the Company for amounts that it may be required or permitted by law to pay directors or officers of the Company and its consolidated subsidiaries.

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Item 9. Exhibits


EXHIBIT INDEX

	Number		Description
	1.1		Form of Underwriting Agreement for the debt securities.
	1.2		Form of Underwriting Agreement for the dollar preference shares.
	4.1		Subordinated Debt Indenture between the Company and The Bank of New York, as Trustee (originally filed in preliminary form as an Exhibit to the Registration Statement on Form F-3 Registration No. 333-73950).
	4.2		Capital Security Indenture between the Company and The Bank of New York, as Trustee (originally filed in preliminary form as an Exhibit to the Registration Statement on Form F-3 Registration No. 333-73950).
	4.3	*	Memorandum and Articles of Association of the Company, as amended (filed as Exhibit 4.3 to Post-effective Amendment No. 2 to the Registration Statement on Form F-3 Registration No. 333-100661).
	4.4		Amended and Restated Deposit Agreement among the Company, The Bank of New York and all holders from time to time of American Depositary Receipts issued thereunder, including the Form of the American Depositary Receipt (previously filed in preliminary form as an Exhibit to Post-effective Amendment No. 1 to the Registration Statement on Form F-6 Registration No. 333-11490).
	5.1		Opinion of Dundas & Wilson CS LLP, Scottish solicitors to the Company, as to the legality of the Non-Cumulative Dollar Preference Shares.
	5.2		Opinion of Linklaters, English solicitors to the Company, as to the legality of the subordination provisions of the securities.
	5.3		Opinion of Davis Polk & Wardwell, US counsel to the Company, as to the validity of the securities.
	23.1		Consent of Dundas & Wilson CS LLP (included in Exhibit 5.1 above).
	23.2		Consent of Linklaters (included in Exhibit 5.2 above).
	23.3		Consent of Davis Polk & Wardwell (included in Exhibit 5.3 above).
	23.4		Consent of Deloitte & Touche LLP.
	24		Powers of Attorney (included on signature page to the registration statement).
	25	*	Statement of eligibility of The Bank of New York, as Indenture Trustee, on Form T-1 (filed as an Exhibit to the Registration Statement on Form F-3 Registration No. 333-73950).

*	Incorporated by reference.

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Item 10. Undertakings

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(i)		to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”);

	(ii)		to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

	(iii)		to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs (1)(i) and (1)(ii) above shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are incorporated by reference in this registration statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F, or to incorporate such financial statements by reference to a report filed pursuant to the Exchange Act, at the start of any delayed offering or throughout a continuous offering.

(5) For the purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of the prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(6) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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(7) For the purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or l5(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by a final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement on Form F-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in Edinburgh, Scotland, on the 8th day of April, 2005.

THE ROYAL BANK OF SCOTLAND GROUP plc

By:	/s/ Sir George Ross Matthewson

	Sir George Ross Matthewson
	Chairman

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Miller Roy McLean, Hew Campbell and Alan Wallace McKean and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, with full power of substitution, and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement or any registration statement in connection herewith that is to be effective upon filing pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission granting unto said attorneys-in-fact and agents and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Sir George Ross Matthewson

Sir George Ross Mathewson	(Chairman)	April 8, 2005



Sir Angus McFarlane McLeod Grossart	(Vice-Chairman)

/s/ Sir Iain David Thomas Vallance

The Lord Vallance of Tummel	(Vice-Chairman)	April 8, 2005




Lawrence Kingsbaker Fish	(Director)


/s/ Sir Frederick Anderson Goodwin

Sir Frederick Anderson Goodwin	(Director and Group Chief
	Executive and Principal Executive Officer)	April 8, 2005

/s/ Gordon Francis Pell

Gordon Francis Pell	(Director)	April 8, 2005

Signature	Title	Date



Iain Samuel Robertson	(Director)

/s/ Frederick Inglis Watt

Frederick Inglis Watt	(Director, Principal Financial and	April 8, 2005
	Accounting Officer)

/s/ Colin Alexander Mason Buchan

Colin Alexander Mason Buchan	(Director)	April 8, 2005



James McGill Currie	(Director)

/s/ Eileen Alison Mackay

Eileen Alison Mackay	(Director)	April 8, 2005

/s/ Sir Stephen Arthur Robson

Sir Stephen Arthur Robson	(Director)	April 8, 2005

/s/ Robert Avisson Scott

Robert Avisson Scott	(Director)	April 8, 2005

/s/ Peter Denis Sutherland

Peter Denis Sutherland	(Director)	April 8, 2005

/s/ Archibald Hunter

Archibald Hunter	(Director)	April 8, 2005



Charles John Koch	(Director)

/s/ Joseph Patrick MacHale

Joseph Patrick MacHale	(Director)	April 8, 2005

/s/ Donald J. Barry, Jr.

Donald J. Barry, Jr.	(Authorized US Representative)	April 8, 2005


EXHIBIT INDEX

	Number		Description
	1.1		Form of Underwriting Agreement for the debt securities.
	1.2		Form of Underwriting Agreement for the dollar preference shares.
	4.1		Subordinated Debt Indenture between the Company and The Bank of New York, as Trustee (originally filed in preliminary form as an Exhibit to the Registration Statement on Form F-3 Registration No. 333-73950).
	4.2		Capital Security Indenture between the Company and The Bank of New York, as Trustee (originally filed in preliminary form as an Exhibit to the Registration Statement on Form F-3 Registration No. 333-73950).
	4.3	*	Memorandum and Articles of Association of the Company, as amended (filed as Exhibit 4.3 to Post-effective Amendment No. 2 to the Registration Statement on Form F-3 Registration No. 333-100661).
	4.4		Amended and Restated Deposit Agreement among the Company, The Bank of New York and all holders from time to time of American Depositary Receipts issued thereunder, including the Form of the American Depositary Receipt (previously filed in preliminary form as an Exhibit to Post-effective Amendment No. 1 to the Registration Statement on Form F-6 Registration No. 333-11490).
	5.1		Opinion of Dundas & Wilson CS LLP, Scottish solicitors to the Company, as to the legality of the Non-Cumulative Dollar Preference Shares.
	5.2		Opinion of Linklaters, English solicitors to the Company, as to the legality of the subordination provisions of the securities.
	5.3		Opinion of Davis Polk & Wardwell, US counsel to the Company, as to the validity of the securities.
	23.1		Consent of Dundas & Wilson CS LLP (included in Exhibit 5.1 above).
	23.2		Consent of Linklaters (included in Exhibit 5.2 above).
	23.3		Consent of Davis Polk & Wardwell (included in Exhibit 5.3 above).
	23.4		Consent of Deloitte & Touche LLP.
	24		Powers of Attorney (included on signature page to the registration statement).
	25	*	Statement of eligibility of The Bank of New York, as Indenture Trustee, on Form T-1 (filed as an Exhibit to the Registration Statement on Form F-3 Registration No. 333-73950).

*	Incorporated by reference.

EX-1.1 2 ex0101.htm ex0101

Exhibit 1.1

THE ROYAL BANK OF SCOTLAND GROUP plc

$ [ ]
[ ]% Subordinated Notes
Due _____

Underwriting Agreement^*

_________ __, _____

[NAMES OF REPRESENTATIVES]

Ladies and Gentlemen:

The terms of, and rights attached to, any particular issuance of Securities shall be as specified in the Pricing Agreement relating thereto and in or pursuant to a subordinated debt indenture (the “Indenture”). The offering of the Securities will be governed by this Agreement, as supplemented by the Pricing Agreement. From and after the date of the execution and delivery of the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.

1.	Particular sales of the Securities may be made from time to time to the Underwriters of such Securities, for whom the firms designated as representatives of the Underwriters of such Securities in the Pricing Agreement relating thereto will act as representatives (the “Representatives”). The term “Representatives” also refers to a single firm acting as sole representative of the Underwriters and to an Underwriter or

^* [To be modified as appropriate for issuances of capital securities.]

Underwriters who act without any firm being designated as its or their representatives. This Underwriting Agreement shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase the Securities. The obligation of the Company to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase any of the Securities shall be evidenced by the Pricing Agreement with respect to the Securities specified therein. Each Pricing Agreement shall specify the aggregate principal amount of such Securities, the initial public offering price of such Securities, the purchase price to the Underwriters of such Securities, the names of the Underwriters of such Securities, the names of the Representatives of such Underwriters and the principal amount of such Securities to be purchased by each Underwriter and shall set forth the date, time and manner of delivery of such Securities and payment therefor. The Pricing Agreement shall also specify (to the extent not set forth in the Indenture and the Registration Statement (as defined below) and prospectus with respect thereto) the terms of such Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of facsimile communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint.

The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form F-3 (No. 333-________ ) and related preliminary prospectus for the registration of, among other securities, certain debt securities of the Company, including the Securities, in accordance with the provisions of the U.S. Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations of the Commission thereunder (the “1933 Act Regulations”).

The registration statement on Form F-3, as amended to the date on which it became effective prior to the date of this Agreement, and the prospectus constituting a part thereof (including in each case all documents, if any, incorporated by reference therein to such date) are hereinafter referred to as the “Registration Statement” and the “Prospectus”, respectively, except that if any revised prospectus or prospectus supplement shall be provided to the Underwriters by the Company for use in connection with the offering of the Securities which differs from the Prospectus on file at the Commission at the time the Registration Statement became effective (whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the term “Prospectus” shall refer to such revised prospectus or include such prospectus supplement, as the case may be, from and after the time such revised prospectus or prospectus supplement is first provided to the Underwriters for such use and if the Company files any documents pursuant to Section 13, 14 or 15 of the Securities Exchange Act of 1934, as amended (the “1934 Act”),

	after the Registration Statement became effective and prior to the termination of the offering of the Securities by the Underwriters, which documents are deemed to be or, in the case of a Report on Form 6-K, are designated as being incorporated by reference into the Prospectus pursuant to Form F-3 under the 1933 Act Regulations, the term “Prospectus” shall refer to said prospectus as modified to include the documents so filed from and after the time said documents are filed with or furnished to the Commission.

2.	The Company represents and warrants to, and agrees with, each of the Underwriters, that:

	(a)	The Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Registration Statement or Prospectus, provided, further, that the representations and warranties in this subsection shall not apply to that part of the Registration Statement that constitutes the Statement of Eligibility (the “Form T-1”) under the U.S. Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), of the trustee (the “Trustee”).

	(b)	The documents incorporated by reference in the Registration Statement, at the time they were filed with the Commission, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”) and, at the time the Registration Statement became effective, the Registration Statement complied in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations and the Trust Indenture Act and the rules and regulations of the Commission thereunder and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and any further documents deemed to be or, in the case of a Report on Form 6-K, designated as being incorporated by reference in the Registration Statement after the date of this Agreement but prior to the termination of the offering of Securities, will, when they are filed with or furnished to the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and, when read together with the other information included or incorporated in the Registration Statement, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that the representations and warranties in this subsection shall not apply to the Form T-1 of the Trustee.

	(c)	The audited consolidated financial statements of the Company for the years ended December 31, ____, _____ and _____ were prepared in accordance with accounting principles generally accepted in the United Kingdom and correctly reflect (in conjunction with the notes thereto) the financial position of the Company for the years then ended.

	(d)	[The unaudited consolidated financial statements of the Company for the six month periods ended June 30, _____ and _____ have been stated on a basis substantially consistent with that of the audited consolidated financial statements included in the Registration Statement.]

	(e)	Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise set forth or contemplated therein, there has been no material adverse change in the condition, financial or otherwise, or in the results of operations of the Company and its subsidiaries considered as one enterprise.

	(f)	The Company (A) has been duly incorporated in Great Britain and is validly registered under the laws of Scotland; (B) has the requisite corporate power and authority to execute and deliver this Agreement and the Pricing Agreement and had the requisite corporate power and authority to execute and deliver the Indenture and, in each case, to perform its obligations hereunder and thereunder; and (C) has duly authorized, executed and delivered this Agreement and the Pricing Agreement and this Agreement and the Pricing Agreement constitute the valid and legally binding agreement of the Company enforceable in accordance with its terms, except as rights to indemnity or contribution may be limited by applicable law and subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

	(g)	The Royal Bank of Scotland plc (the “Bank”) has been duly incorporated in Great Britain and is validly registered under the laws of Scotland, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; and all of the issued and outstanding share capital or capital stock of the Bank is owned, directly or indirectly, by the Company. National Westminster Bank Plc (“NatWest”) has been duly incorporated under the laws of England, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; and all of the issued and outstanding ordinary share capital of NatWest is owned, directly or indirectly, by the Company.

	(h)	The Indenture has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Trustee, will constitute the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles; the Securities have been duly authorized by the Company and, when executed, authenticated, issued and delivered against payment therefor as contemplated hereby and by the Indenture, will have been duly executed, authenticated, issued and delivered and will constitute the legal, valid and

		binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and will be entitled to the benefits of the Indenture.

	(i)	Each of the Indenture and the Securities will conform in all material respects to the descriptions thereof contained in the Prospectus.

	(j)	All consents, approvals, authorizations, orders and decrees of any court or governmental agency or body of the United States or the United Kingdom having jurisdiction over the Company required for the consummation by the Company of the transactions contemplated by this Agreement or the Pricing Agreement or to permit the Company to effect interest payments in United States dollars on the Securities in accordance with the terms of the Indenture have been obtained and are in full force and effect, except as may be required by United States state securities laws (the “Blue Sky laws”).

	(k)	The execution, delivery and performance of this Agreement, the Pricing Agreement and Indenture, the issuance, authentication, sale and delivery of the Securities and the compliance by the Company with the respective terms thereof, and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach under any agreement or instrument to which the Company is a party or by which the Company is bound that is material to the Company and its subsidiaries, taken as a whole, nor will such action result in any violation that is material to the Company and its subsidiaries, taken as a whole, of the provisions of the Memorandum and Articles of Association of the Company or any statute or any order, filing, rule or regulation of any United States, English or Scottish court or governmental agency or regulatory body having jurisdiction over the Company.

	(l)	The Company is not, and after giving effect to the offer and sales of the Securities and application of the proceeds thereof as described in the Prospectus, will not be, required to register as an “investment company,” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

	(m)	The Company was informed, prior to any public announcement of the issue of the Securities, of the existence of the Financial Services Authority’s informational guidance referred to in MAR 2.3.2R(4) of the price stabilizing rules made under section 144(1) of the Financial Services and Markets Act 2000, and the Company represents, warrants and undertakes that it has not issued and will not issue, without the prior consent of the Representatives, any

		communication to which MAR 2.3.2R(1) of those rules applies unless that communication adequately discloses that stabilizing action may take place in relation to the issue of the Securities and complies with MAR 2.3.3E of those rules.

	(n)	No event has occurred or circumstances arisen which (after the issuance of the Securities) will constitute, or which, with the giving of notice and/or the lapse of time would constitute, an Event of Default or a Default under the Securities.

	(o)	There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened against or affecting the Company or any subsidiary, which is required to be disclosed in the Registration Statement (other than as disclosed therein).

3.	Upon the execution of the Pricing Agreement applicable to any Securities and authorization by the Representatives of the release of such Securities, the several Underwriters propose to offer such Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented.

4.	The Securities to be purchased by each Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriters, against payment by the Underwriters, or by the Representatives on behalf of the Underwriters, of the purchase price therefor by wire transfer of immediately available funds to an account designated by the Company as specified in the Pricing Agreement, all in the manner and at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the “Time of Delivery” for such Securities.

5.	The Company agrees with each of the Underwriters of any Securities:

	(a)	The Company will notify the Representatives immediately on becoming aware of (i) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information relating to the Registration Statement or the offering of the Securities, and (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company will make every reasonable

		effort to prevent the issuance of any such stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.

	(b)	The Company will, for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities, file promptly all reports required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and will give the Representatives notice of its intention to file any amendment to the Registration Statement or any amendment or supplement to the Prospectus (including any revised prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Securities which differs from the Prospectus, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) under the 1933 Act Regulations and will furnish the Representatives with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus without prior consultation with the Representatives.

	(c)	The Company will prepare the Prospectus in relation to the applicable Securities and file such Prospectus pursuant to Rule 424(b) under the 1933 Act not later than the time required by Rule 424(b) following the execution and delivery of the Pricing Agreement relating to the applicable Securities.

	(d)	The Company will deliver to each Representative a conformed copy of the Registration Statement as originally filed, and of each amendment thereto (including exhibits and documents filed therewith or incorporated by reference, as the case may be, into the Registration Statement).

	(e)	The Company will furnish the Underwriters with copies of the Prospectus in such quantities as the Representatives may from time to time reasonably request, and will use all reasonable efforts to make the initial delivery of the Prospectus by no later than 9:00 a.m. on the second business day prior to the Time of Delivery and, if the delivery of a Prospectus is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering and sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any reason it shall be necessary during such period to amend or supplement the Prospectus in order

		to comply with the 1933 Act, notify the Underwriters and upon the Representatives’ request prepare and furnish without charge to each Underwriter as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case any Underwriter is required to deliver a Prospectus in connection with sales of the Securities at any time nine months or more after the time of issue of the Prospectus, upon the Representatives’ request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the 1933 Act.

	(f)	The Company shall at the reasonable request of the Underwriters at any time prior to the completion (in the view of the Underwriters) of distribution of the Securities, amend or supplement the Prospectus in order to comply with applicable law or the requirements of the [Luxembourg Stock Exchange] [London Stock Exchange] and deliver to the Underwriters from time to time as many copies of the relevant amendment or supplement as the Underwriters may reasonably request.

	(g)	The Company will endeavour, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Representatives may designate; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. In each jurisdiction in which the Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualifications in effect for as long as necessary to complete the distribution of the Securities but in no event for a period longer than one year from the date of this Agreement.

	(h)	The Company will make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement, an earnings statement (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158).

	(i)	During the period beginning from the date of the Pricing Agreement for such Securities and continuing to and including the termination of trading restrictions for such Securities, as notified to the Company by the Representatives, the Company will not offer, sell, contract to sell or otherwise

		dispose of, pursuant to a public offering in the United States, any securities of the Company which mature more than one year after such Time of Delivery and which are substantially similar to such Securities, without the prior written consent of the Representatives, which consent shall not be unreasonably withheld.

	(j)	Prior to the first payment due under the terms of the Securities, the Securities will be listed on a “recognised stock exchange” within section 841 of the Income and Corporation Taxes Act 1988; as soon as practicable, application will be made to list the Securities on the [Luxembourg Stock Exchange] [London Stock Exchange].

	(k)	The Company will apply the net proceeds from the sale of the Securities as set forth in the Prospectus.

	(l)	The Company will cooperate with the Underwriters and use its best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of The Depository Trust Company (“DTC”), Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme, as the case may be.

	(m)	Prior to the issuance of the Securities, the Company will have obtained all consents, approvals, authorizations, orders, registrations, qualifications and decrees of any court or governmental agency or body of the United States and the United Kingdom necessary or required for the valid issuance of the Securities and to permit the Company to make interest payments on the Securities in U.S. dollars.

The Company will pay all expenses incident to the performance of its obligations under this Agreement, any Pricing Agreement, Indenture, and the Securities, including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, the Prospectus and any related preliminary prospectus (and any amendments or supplements thereto) and the cost of furnishing copies thereof to the Underwriters; (ii) the printing, if any, of this Agreement, the Pricing Agreement, the Indenture and the Blue Sky Survey; (iii) the printing or reproduction, preparation, issuance and delivery of the certificates, if any, for the Securities to (or at the direction of) the Underwriters, including any transfer or other taxes or duties payable upon the delivery of the Securities to a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme, as the case may be, or the sale of the Securities to the Underwriters; (iv) the fees and disbursements of the Company’s counsel and accountants; (v) the qualification of the Securities under the applicable securities laws in accordance with the provisions of Section 5(g) hereof, including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith in an aggregate amount not in excess of $5,000 with respect to a particular issue of the Securities and in connection with the preparation of the Blue Sky Survey and any

	Legal Investment Survey, if any; (vi) the delivery to the Underwriters of copies of the Blue Sky Survey, if any; (vii) any costs, fees and charges of any paying agent appointed under the Indenture; (viii) all expenses and listing fees in connection with the listing of the Securities, if any, on the [Luxembourg Stock Exchange] [London Stock Exchange] and the clearance and settlement of the Securities through the facilities of DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme, as the case may be; (ix) any fees charged by securities rating services for rating the Securities; (x) the fees and expenses incurred in connection with the filing of any materials with the National Association of Securities Dealers, Inc., if any; (xi) any fees associated with a Bloomberg roadshow presentation; (xii) any United Kingdom stamp duty, stamp duty reserve tax or similar tax or duty imposed by the United Kingdom or any political subdivision thereof upon the original issuance by, or on behalf of, the Company of the Securities, the initial delivery of the Securities, the deposit of the Securities with a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme, as the case may be, the purchase by the Underwriters of the Securities, the sale and delivery of the Securities by the Underwriters to the initial purchasers thereof, and the execution and delivery of this Agreement, the Pricing Agreement and the Indenture; (xiii) the fees and expenses of the Trustee and any authorized agent of the Trustee, and the reasonable fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; and (xiv) any value added taxes payable in the United Kingdom in respect of any of the above expenses.

	If this Agreement is terminated by the Representatives in accordance with the provisions of Section 7 or Section 11(a)(i) hereof, the Company shall reimburse the Underwriters for their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters, except that in the case of a termination in accordance with Section 11(a)(i) hereof, such reimbursement shall include only any expenses actually incurred (not to exceed $•).

7.	The obligations of the Underwriters of any Securities under the Pricing Agreement relating to such Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties of the Company in or incorporated by reference in the Pricing Agreement relating to such Securities are, at and as of the Time of Delivery for such Securities, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

	(a)	The Registration Statement is effective and at the Time of Delivery no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission. The Prospectus shall have been transmitted to the

	Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the time period prescribed by Rule 424(b) of the 1933 Act Regulations, and prior to the Time of Delivery the Company shall have provided evidence satisfactory to the Representatives of such timely filing.

(b)	At the Time of Delivery, the Representatives shall have received:

	(1)	The opinion, dated as of the Time of Delivery, of Davis Polk & Wardwell, United States counsel for the Company, with respect to the matters set forth in Annex II hereto, subject to modifications to which the Underwriters do not reasonably object.

	(2)	The opinion, dated as of the Time of Delivery, of Dundas & Wilson CS LLP, Scottish solicitors to the Company, with respect to the matters set forth in Annex III hereto, subject to modifications to which the Underwriters do not reasonably object.

	(3)	The opinion, dated as of the Time of Delivery, of Linklaters, English solicitors to the Company, with respect to the matters set forth in Annex IV hereto, subject to modifications to which the Underwriters do not reasonably object.

	(4)	The opinion, dated as of the Time of Delivery, of Sidley Austin Brown & Wood, counsel for the Underwriters, with respect to the matters set forth in Annex V hereto.

(c)	At the Time of Delivery for such Securities, Deloitte & Touche LLP, the independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to the Representatives a letter, dated the date of the Time of Delivery, with regard to matters customarily covered by accountants’ “comfort letters” and otherwise in form and substance satisfactory to the Representatives.

(d)	If required pursuant to the Pricing Agreement, an application shall have been made for listing the Securities on the [Luxembourg Stock Exchange] [London Stock Exchange].

(e)	At the Time of Delivery (1) there shall not have been, since the date of the Pricing Agreement or since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition,

		financial or otherwise, or in the results of operations of the Company and its subsidiaries considered as one enterprise, and (2) the Representatives shall have received a certificate of the Company executed on its behalf by an officer of the Company, dated as of the Time of Delivery, to the effect that (i) the representations and warranties in Section 2 hereof are true and correct in all material respects as though expressly made at and as of the Time of Delivery; (ii) the Company has complied in all material respects with all agreements hereunder and satisfied in all material respects all conditions on its part to be performed or satisfied hereunder at or prior to the Time of Delivery; and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and, to the knowledge of the Company, no proceedings for that purpose have been initiated or threatened by the Commission.

	(f)	The Company shall have furnished to the Underwriters a certificate, dated the Time of Delivery, of a deputy secretary of the Company stating that to the best knowledge and belief of the deputy secretary signing such certificate after reasonable inquiry, the issue and sale of the Securities in the manner contemplated in the Prospectus do not and will not result in a breach, default or acceleration of any payment or amount under any contract, agreement or undertaking to which the Company or any of its subsidiaries is a party (or by which any such entity is bound), which breach, default or acceleration would have a material adverse effect on the Company and its subsidiaries taken as a whole.

	(g)	The Securities shall have been rated “A+” by Standard & Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., “Aa3” by Moody’s Investors Service, Inc. and “AA-” by Fitch, Inc.

	(h)	If an affiliate (as defined in applicable National Association of Securities Dealers (“NASD”) rules) of the Company is participating in the offering of the Securities, the NASD shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.

	If any condition specified in this Section 7 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the Time of Delivery, and such termination shall be without liability of any party to any other party except as provided in Section 6 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 herein shall remain in effect.

8.	(a)	The Company agrees to indemnify and hold harmless each Underwriter, each of the Underwriters’ affiliates, directors, officers and employees, and each

		person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows:

		(i)	against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be part of the Registration Statement pursuant to Rule 430A(b) of the 1933 Act Regulations, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or any related preliminary prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

		(ii)	against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and

		(iii)	against any and all expense whatsoever, as reasonably incurred (including, subject to Section 8(c) hereof, the fees and disbursements of counsel chosen by the Representatives), in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above;


		provided, however, that this indemnity agreement shall not apply to (A) any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), the Prospectus or any

		related preliminary prospectus (or any amendment or supplement thereto) or (B) any loss, liability, claim, damage or expense to the extent arising out of an untrue statement or omission or alleged untrue statement or omission of a material fact in the Prospectus or any related preliminary prospectus (or any amendment or supplement thereto) delivered to any person if such untrue statement or omission was corrected in the Prospectus, or any subsequent related preliminary prospectus (or any amendment or supplement thereto), if copies thereof were delivered to such Underwriter and a copy thereof was not furnished to such person prior to the confirmation of the sale of Securities to such person if required by law.

	(b)	Each Underwriter severally agrees to indemnify and hold harmless each of the Company, its directors, each of the officers of the Company who signed the Registration Statement, the Company’s authorized representative in the United States and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 8 as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), the Prospectus, any related preliminary prospectus (or any amendment or supplement thereto) or in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), or the Prospectus or such preliminary prospectus (or any amendment or supplement thereto).

	(c)	Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement.

		Any indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. In the case of parties indemnified pursuant to Section 8(a) above, counsel to the indemnified parties shall be selected by the Underwriters, and, in the case of parties indemnified pursuant to Section 8(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own

		expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.

	(d)	If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Securities on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall, if permitted by applicable law, contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts, concessions and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to

	include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint.

	(e)	The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act.

9.	If one or more of the Underwriters shall fail at the Time of Delivery to purchase the Securities which it is or they are obligated to purchase under this Agreement and the Pricing Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; provided, however, that if the Representatives shall not have completed such arrangements within such 24-hour period, then:

	(a)	if the number of Defaulted Securities does not exceed 10% of the Securities which the Underwriters are obligated to purchase at the Time of Delivery, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations under the Pricing Agreement relating to such Securities bear to the underwriting obligations of all non-defaulting Underwriters, or

	(b)	if the number of Defaulted Securities exceeds 10% of the Securities which the Underwriters are obligated to purchase at the Time of Delivery, the Pricing Agreement relating to such Securities shall terminate without liability on the part of any non-defaulting Underwriter.

		No action taken pursuant to this Section 9 shall relieve any defaulting Underwriter from liability in respect of its default.

		In the event of any such default which does not result in a termination of the relevant Pricing Agreement, either the Representatives or the Company shall have the right to postpone the Time of Delivery for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements.

10.	All representations, warranties and agreements contained in this Agreement and any Pricing Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriters pursuant to this Agreement.

11.	(a)	The Representatives may terminate this Agreement, immediately upon notice to the Company, at any time prior to the Time of Delivery (i) if there has been, since the date of the Pricing Agreement or the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations, of the Company and its subsidiaries considered as one enterprise, or (ii) if there has occurred any outbreak or escalation of hostilities involving the United States or the United Kingdom or the declaration by the United States or the United Kingdom of a national emergency or war, or (iii) the occurrence of another calamity or crisis or any change in financial, political or economic conditions or currency exchange rates or controls in the United States, the United Kingdom or elsewhere, if the effect of any such event specified in clause (ii) and (iii) in the reasonable judgment of the Representatives (after consultation with the Company) makes it impracticable or inadvisable to market the Securities or enforce contracts for the sale of the Securities in the manner contemplated in the Prospectus, or (iv) if there has occurred a suspension or material limitation in trading in securities generally on the New York Stock Exchange, London Stock Exchange or any other stock exchange on which the Company’s securities are listed, or (v) if there has occurred a suspension or

	material limitation in trading the Company’s securities on the New York Stock Exchange or the London Stock Exchange, or (vi) if there has occurred a material adverse change in the financial markets in the United States or in the international financial markets, or (vii) if a banking moratorium on commercial banking activities has been declared by the relevant authorities in New York or London, or a material disruption in commercial banking or securities settlement or clearance services in the United States or the United Kingdom has occurred, or (viii) if there has occurred a change or development involving a prospective change in the United States or the United Kingdom taxation affecting the Company or the Securities or the transfer thereof, or (ix) if there is any lowering of the rating of any of the Company’s debt securities, preference shares, American depositary shares representing preference shares or American depositary receipts evidencing American depositary shares representing preference shares by Moody’s Investor Services, Inc., Standard and Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., or Fitch, Inc.

	(b)	If this Agreement is terminated pursuant to Sections 7, 9 or 11 hereof, such termination shall be without liability of any party to any other party except as provided in Section 6 or Section 9 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 shall remain in effect.

12.	In all dealings hereunder, the Representatives of the Underwriters of the Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement.

	All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Company Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

13.		This Agreement and any Pricing Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement or any Pricing Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers, directors, and authorized representative of the Company referred to in Section 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Pricing Agreement or any provision herein or therein contained. This Agreement and any Pricing Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers, directors and authorized representative of the Company and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

14.	(a)	The Company irrevocably consents and agrees, for the benefit of the Underwriters, that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement or the Pricing Agreement may be brought in the courts of the State of New York or the courts of the United States of America located in the Borough of Manhattan, The City of New York and hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself and in respect of its properties, assets and revenues.

	(b)	The Company hereby irrevocably designates, appoints, and empowers CT Corporation System with offices at 111 Eighth Avenue, New York, New York 10011, as its designee, appointee and agent to take process, receive and forward process or to be served with process for and on its behalf of any and all legal process, summons, notices and documents which may be served in any such action, suit or proceeding brought in any such United States or State court which may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, the Company agrees to designate a new designee, appointee and agent in The City of New York on the terms and for the purposes of this Section 14 satisfactory to the Representatives. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents out of any of the aforesaid courts in any such action,

		suit or proceeding by serving a copy thereof upon the relevant agent for service of process referred to in this Section 14 (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by registered or certified air mail, first class, postage prepaid, to each of them at their respective addresses specified in or designated pursuant to this Agreement. The Company agrees that the failure of any such designee, appointee and agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any way be deemed to limit the ability of any Underwriter to serve any such legal process, summons, notices and documents in any other manner permitted by applicable law or to obtain jurisdiction over the undersigned or bring actions, suits or proceedings against the undersigned in any jurisdictions, and in any manner, as may be permitted by applicable law. The Company hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Agreement or the Pricing Agreement brought in the United States federal courts or the courts of the State of New York located in the Borough of Manhattan, The City of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

15.	(a)	Each Underwriter severally represents and agrees that (i) it has not offered or sold and, prior to the expiry of the period of six months from the Time of Delivery for the Securities, it will not offer or sell any Securities or any investments representing Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 (as amended); (ii) it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 (the “FSMA”) with respect to anything done by it in relation to the Securities or any investments representing Securities in, from or otherwise involving the United Kingdom; and (iii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the Securities or any investments

		representing the Securities in circumstances in which Section 21(1) of the FSMA does not apply to the Company.

	[(b)	If global offering: Each Underwriter further severally represents and agrees that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell in the Netherlands any of the Securities with an aggregate amount of less than €50,000 (or its foreign currency equivalent) other than to persons who trade or invest in securities in the conduct of a profession or business (which include banks, stockbrokers, insurance companies, pension funds, other institutional investors and finance companies and treasury departments of large enterprises) unless one of the other exemptions from or exceptions to the prohibition contained in article 3 of the Dutch Securities Transactions Supervision Act 1995 (Wet toezicht effectenverkeer 1995) is applicable and the conditions attached to such exemptions or exception are complied with.]

	[(c)	If global offering: No action has or will be taken by the Company in any jurisdiction (other than the United States) that would permit a public offering of the Securities or any investments representing the Securities or possession or distribution of any registration statement, preliminary prospectus or prospectus or any amendment or supplement thereto or any other offering material relating to the Securities or any investments representing the Securities in any country or jurisdiction (other than the United States) where action for that purpose is required. Each Underwriter represents and agrees that it has complied and will comply with all applicable laws and regulations in each jurisdiction in which it acquires, offers, sells or delivers Securities or any investments representing Securities or has in its possession or distributes any registration statement, prospectus or any amendment or supplement thereto or any such other material, in each case at its own expense.]

16.	Time shall be of the essence of each Pricing Agreement. As used herein, “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

17.	This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to conflict of laws provisions thereof. Specified times of day refer to New York City time.

18.	This Agreement may be executed in one or more counterparts and, when a counterpart has been executed by each party, all such counterparts taken together shall constitute one and the same agreement.

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

If the foregoing is in accordance with your understanding, please sign and return to us [ ] counterparts hereof.

Very truly yours,


THE ROYAL BANK OF SCOTLAND GROUP plc


By:

	Name:
	Title:

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

Accepted as of the date hereof:


[NAMES OF REPRESENTATIVES]


By:

	Name:
	Title:

For themselves and as representatives of the several Underwriters

Annex I

Pricing Agreement

[Names of Representatives]

[As Representatives of the several
Underwriters named in Schedule I hereto,]

___________ __, ____

Ladies and Gentlemen:

The Royal Bank of Scotland Group plc, a public limited company organized under the laws of Great Britain and registered in Scotland (the “Company”), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated ________ __, ____ (the “Underwriting Agreement”), between the Company on the one hand [and Names of Representatives and] the other several Underwriters on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”) the securities specified in Schedule II hereto (the “Securities”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or supplemented relating to the Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto.

An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.

Subject to the terms and conditions set forth herein (including Schedules I and II hereto) and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Securities set forth opposite the name of such Underwriter in Schedule I hereto.

If the foregoing is in accordance with your understanding, please sign and return to us [ ] counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.

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

Very truly yours,


THE ROYAL BANK OF SCOTLAND GROUP plc


By:

	Name:
	Title:

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

Accepted as of the date hereof:


[NAMES OF REPRESENTATIVES]


By:

	Name:
	Title:

For themselves and as representatives of the several Underwriters

SCHEDULE I


		Principal Amount of Securities to be Purchased
Underwriter

[Names of Representatives]	$	[ ]

[Names of other Underwriters]	$	[ ]

Total	$	[ ]

SCHEDULE II

Capitalized terms used herein, unless otherwise stated, shall have the meaning set forth in the Underwriting Agreement.

Title of Securities:

[ ]% Subordinated Notes due [ ]

Aggregate principal amount:

$[ ] principal amount of subordinated notes

Price to Public:

[ ]% of the principal amount of the Securities

Purchase Price by Underwriters:

[ ]% of the principal amount of the Securities

Underwriting Commission:

[ ]%

Form of Securities:

Book-entry only form represented by one or more global securities deposited with a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System and Clearstream Banking, sociéte anonyme, as the case may be.

Specified funds for payment of purchase price:

Wire transfer of immediately available funds

Time of Delivery:

9:30 a.m. (New York time), __________ __, ____

Indenture:

Indenture dated as of September 30, 2002 between the Company and The Bank of New York, as Trustee

Maturity:

__________ __, ____

Interest Rate:

[ ]%

Interest Payment Dates:

Interest will be paid on the Securities on ________ ___ and ________ ___ of each year, commencing __________ __, ____.

Redemption Provisions:

The Securities may be redeemed as described in the Prospectus.

Sinking Fund Provisions:

No sinking fund provisions

Closing location for delivery of Securities:

Offices of Davis Polk & Wardwell, 99 Gresham Street, London EC2V 7NG, United Kingdom

Names and addresses of Representatives:

Designated Representatives:

Address for Notices:

Stock Exchange Listing:

The [Luxembourg Stock Exchange] [London Stock Exchange]

Other Terms:

The Securities will have additional terms as more fully described in the Prospectus.

ANNEX II

FORM OF OPINION OF
DAVIS POLK & WARDWELL, UNITED STATES COUNSEL
FOR THE COMPANY

[To be included as a Statement of Fact before the opinion:
We have been informed by a member of the Commission staff that the Registration Statement was declared effective as of [ ].]

Based upon the foregoing, we are of the opinion that:

1.	Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, except as rights to indemnity and contribution thereunder may be limited by applicable law.

2.	Assuming the Indenture and the Securities have been duly authorized, executed and delivered by the Company insofar as Scots law is concerned and assuming due authorization, execution and delivery of the Indenture by the Trustee and due authentication of the Securities by the Trustee, the Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended, and the Securities have been duly authorized, executed, authenticated and delivered; and the Indenture (other than the terms governed by English law as to which we express no opinion) constitutes, and, upon payment therefor in accordance with the terms of the Underwriting Agreement and Pricing Agreement, the Securities (other than the terms governed by English law as to which we express no opinion) will constitute, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles and entitled to the benefits of the Indenture.

3.	The performance by the Company of its obligations under the Underwriting Agreement (including the Pricing Agreement), the Indenture and the Securities will not contravene any statute of the State of New York or the United States, or any order, rule or regulation of any governmental agency or body of the United States or the State of New York that in our experience is normally applicable to transactions of the type contemplated by the Underwriting Agreement (including the Pricing Agreement), the Indenture and the Securities.

4.	No consent, approval, registration, filing, authorization or order of, or qualification with, any governmental body or agency under United States federal or New York state law that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated by the Underwriting Agreement (including the Pricing Agreement), is required for the performance by the Company of its obligations under the Underwriting Agreement (including the Pricing Agreement) except such as have been obtained and such as may be required under state securities or Blue Sky laws in connection with the offer and sale of the Securities.

5.	The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus, will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

6.	Assuming the validity of such action under Scots law, under the laws of the State of New York relating to submission to jurisdiction, the Company has, pursuant to Section 14 of the Underwriting Agreement and Section 1.14 of the Indenture, validly and irrevocably submitted to the personal jurisdiction of any New York state or U.S. federal court located in the State of New York, Borough of Manhattan in the City of New York (each a “New York Court”), in any action arising out of or relating to the Underwriting Agreement, the Pricing Agreement or the Indenture, and has, to the fullest extent permitted by law, validly and irrevocably waived any objection to the laying of venue of a proceeding in any such court, and has validly and irrevocably appointed CT Corporation System as its initial authorized agent for the purposes described in Section 14 of the Underwriting Agreement or Section 1.14 of the Indenture; and service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement or Section 1.14 of the Indenture will be effective service of process in any such action upon the Company.

We have considered the matters required to be included in the Prospectus under the caption “Description of Debt Securities” insofar as they summarize provisions of the Securities and the Indenture. In our opinion, such statements fairly summarize these provisions in all material respects.

We have also considered the statements set forth in the Prospectus under the caption “Certain US Federal and UK Tax Consequences – United States” insofar as they purport to describe certain US federal income tax laws as they relate to US Holders (as defined therein). In our opinion, such statements constitute a fair summary of the principal US federal income tax consequences to such US Holders of an investment in the Securities.

We have not ourselves checked the accuracy or completeness of, or otherwise verified, the information furnished with respect to other matters in the Registration Statement or the Prospectus. We have generally reviewed and discussed with certain officers and employees of, and solicitors and independent public accountants for, the Company and with representatives of the Underwriters and counsel for the Underwriters the information furnished, whether or not subject to our check and verification. On the basis of such consideration, review and discussion, but without independent check or verification, except as stated, (1) in our opinion, the Registration Statement and the Prospectus appear on their face to be appropriately responsive in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, (2) nothing has come to our attention that causes us to believe that the Registration Statement, at the time it became effective, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as of its date and as of the date hereof, included any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (3) in our opinion, the documents incorporated by reference in the Prospectus appear on their face to be appropriately responsive in all material respects to the applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. In expressing the foregoing opinions and belief, we have not been called to pass upon, and we express no opinion or belief as to, (1) the financial statements or financial schedules or other financial or statistical data included in the Registration Statement or Prospectus or (2) the Statement of Eligibility of the Trustee on Form T-1. For purposes of this paragraph, the term “financial data” includes, without limitation, the data required to be included in the Registration Statement and Prospectus under the Act by Guide 3, Statistical Disclosure by Bank Holding Companies.

ANNEX III

FORM OF OPINION OF
DUNDAS & WILSON CS LLP, SCOTTISH SOLICITORS
TO THE COMPANY

Based upon and subject to the foregoing and subject to the qualifications set out below and to any matters not disclosed to us, it is our opinion that so far as the present law of Scotland is concerned:-

	1.	The Company and the Bank have been duly incorporated in Great Britain as limited liability companies and are validly registered under the law of Scotland, are not in liquidation, and have the corporate power and authority under such law to conduct their respective businesses as described in the Prospectus and the Prospectus Supplement.

	2.	The execution, delivery and performance by the Company of the Underwriting Agreement and the Pricing Agreement is within the corporate power of the Company and has been duly authorized by all necessary corporate action on the part of the Company.

	3.	The creation and issuance of the Securities and the execution, delivery and performance by the Company of the Indenture is within the corporate power of the Company and has been duly authorized by all necessary corporate action on the part of the Company; assuming, inter alia, due authorization and execution of the Indenture by the Trustee, the obligations on the part of the Company under the Indenture are valid and legally binding against the Company, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

	4.	The Securities (in global or definitive form) (when executed by the Company in accordance with the Indenture), insofar as Scots law governs the formalities of execution and delivery thereof, will have been duly executed by or on behalf of the Company and (upon their issue, authentication and delivery in accordance with the terms of the Underwriting Agreement, the Pricing Agreement and the Indenture) will have been duly issued and delivered, and they will constitute valid and legally binding obligations of the Company subject as to enforcement to bankruptcy, insolvency, reorganisation and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

5.	The obligations on the part of the Company under the Indenture are valid and legally binding against the Company subject as to enforcement to bankruptcy, insolvency, reorganisation and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

6.	No authorisations, approvals, consents or licences of governmental, judicial or public bodies or authorities of or in Scotland (together “consents”), except such consents as may be required under statutory provisions (other than the Companies Acts, 1985 and 1989 as they apply to a company having its registered office in Scotland) or regulations or practices applying in Great Britain as a whole, are required by the Company as a result of the Company being a Scottish registered company for the execution, issue and delivery of the Securities.

7.	Neither the execution, delivery and performance by the Company of the Indenture, nor the execution, issue and delivery of the Securities, will of itself result in any violation in any material respect of:

	(a)	the Memorandum or Articles of Association of the Company or the Bank; or

	(b)	any existing applicable mandatory provision of Scots law or regulation; or

	(c)	any existing judgment, order or decree of any Scottish court.

8.	The Underwriters would under current practice of the Scottish courts (assuming the effect of Section 14 of the Underwriting Agreement is not to prorogate the exclusive jurisdiction of the United States courts or the courts of or in the State of New York) be permitted to commence proceedings in the Scottish courts for enforcement of the Underwriting Agreement and Pricing Agreement and the Scottish courts would accept jurisdiction in any proceedings for so long as the Company remained domiciled in Scotland and, upon proper averments being made in a Scottish court in any such proceedings, the choice of the law of the State of New York as the proper law of the Underwriting Agreement would be upheld as a valid choice of law by that court.

9.	The submission by the Company in Section 14 of the Underwriting Agreement to the jurisdiction of the courts of or in New York, and the designation, appointment and empowerment by the Company under the said Section 14 of an agent for service, would be upheld by the Scottish courts as valid and effective.

	10.	In relation to any Agreement which is expressed to be governed by the law of the State of New York as its proper law, a judgment of the courts of the State of New York as the relevant forum would be recognised in Scotland through an action of decree conform under common law in the Court of Session in Scotland, assuming that (I) the court which issued the judgment had jurisdiction and acted judicially with no element of unfairness, (II) such judgment was final, not obtained by fraud, or a revenue or penal action, remained capable of enforcement in the place it was pronounced and was not contrary to natural justice, and (III) enforcement of the judgment is not contrary to Scottish public policy.

	11.	The Underwriting Agreement, the Pricing Agreement and the Indenture have, insofar as Scots law governs the formalities of execution and delivery thereof, been duly executed and delivered by or on behalf of the Company.

	12.	Assuming that the subordination provisions in Section 12.01 of the Indenture are, in respect of the Subordinated Debt Securities (as defined in the Indenture), legal and valid and binding obligations of the Company and each holder of the Subordinated Debt Securities (including each holder of the Securities), enforceable against each of them (and against a liquidator or administrator of the Company), in accordance with their terms, under English law, such provisions will, in respect of the Securities, be given effect by the courts of Scotland (including, without limitation, in the event of a winding-up, administration or other insolvency proceeding of or affecting the Company) in accordance with their terms.

Annex IV

FORM OF OPINION OF LINKLATERS, ENGLISH SOLICITORS TO THE COMPANY

We are of the opinion that:-


1.	It is not necessary to obtain any approval, consent, order or permission of, or to effect any further filing, recording or registration with, any public authority or governmental agency in England or authorisation from any regulatory authority, government department or court in England (other than any consents, approvals or authorisations required under the Companies Act 1985 as it applies to a company having its registered office in Scotland - as to which we understand you are relying upon an opinion of Dundas & Wilson CS LLP) in respect of the execution, delivery or performance of the Securities, the Underwriting Agreement, the Pricing Agreement, or the Indenture or, in particular:

	(i)	for the valid issue and delivery of the Securities to, or at the direction of, the Underwriters; or

	(ii)	to enable the Company to make any payment to the Holders (as defined in the Indenture) including any payment on a return of capital on a winding up of the Company to the Holders of the Securities in United States dollars except for the approval of The Financial Services Authority in the circumstances detailed in the terms and conditions of the Securities set out in the Prospectus and the Prospectus Supplement;

2.	The statements in the Prospectus under the section headed “Certain US Federal and UK Tax Consequences”, insofar as such statements constitute a general summary of both current United Kingdom tax law and United Kingdom Inland Revenue practice relevant to the issue of the Securities fairly and accurately summarise the matters referred to therein;

3.	The subordination provisions of the Securities and in the Indenture, each as they are described in the Prospectus, are accurate in all material respects; provided however that we express no opinion as to the reasonableness, completeness or fairness of such statements in the context of a prospectus issued publicly in the United States of America or as to the compliance of such statements with the requirements of the securities laws of the United States of America or any part thereof;

4.	No United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes are payable by the Underwriters on the creation, issue or delivery of the Securities;

5.	No United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes should be payable in the United Kingdom on the creation, issue or delivery by, or on behalf of, the Company of the Securities in registered form, the execution and delivery of the Pricing Agreement, the Underwriting Agreement or the consummation of the transactions contemplated thereby;

6.	No United Kingdom value added tax will be payable by the Underwriters in respect of their underwriting commissions under the Underwriting Agreement.

7.	Payments of interest in respect of the Securities may be made without withholding taxes or duties in the United Kingdom provided that the Securities are listed on a “recognised stock exchange” within the meaning of section 841 of the Income and Corporation Taxes Act 1988 at the time of the payment; The [Luxembourg Stock Exchange] [London Stock Exchange] is a “recognised stock exchange” for purposes of section 841;

8.	Each Holder of a Security is, if and when a cause of action which is enforceable by a Holder arises under the Securities, entitled to sue as claimant in the English courts for the enforcement of its rights against the Company and such entitlement will not be subject to any conditions which are not applicable to residents of England, save that an English court may require a person who is not resident of England to provide security for costs and that a claim may be stayed or struck out on the grounds of:

	(a)	forum non conveniens (where there is some other forum with competent jurisdiction which is more appropriate for the trial of the action);

	(b)	lis alibi pendens (where proceedings are pending in another jurisdiction); or

	(c)	res judicata (where the merits of the issues in dispute have already been judicially determined or should have been raised in previous proceedings between the parties).

9.	Neither the execution and delivery of the Underwriting Agreement, the Pricing Agreement and the Indenture by the Company, nor the compliance by the Company with its obligations under the Underwriting Agreement, the Pricing Agreement or the Indenture, will, of itself, breach (A) any mandatory provision of English law of general application binding on the Company, or (B) any covenant (other than any financial or similar covenant) contained in any of the following documents:-

	(a)	Trust Deed dated 2 May 1985 between the Company and The Law Debenture Trust Corporation p.l.c. constituting £200,000,000 floating rate notes due 2005;

	(b)	Trust Deed dated 11 December 1985 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$350,000,000 undated floating rate primary capital notes;

	(c)	Trust Deed dated 24 August 1989 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$400,000,000 undated floating rate primary capital notes;

	(d)	First Supplemental Trust Deed dated 1 March 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £150,000,000 10½% subordinated bonds 2013;

	(e)	Second Supplemental Trust Deed dated 12 August 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £200,000,000 9½% undated subordinated bonds;

	(f)	Trust Deed dated 10 June 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting €1,250,001,000 fixed/floating rate callable subordinated notes due 2042;

	(g)	Trust Deed dated 5 December 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$750,001,000 fixed rate callable subordinated notes due 2042;

	(h)	Trust Deed dated 10 December 2003 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$650,001,000 fixed/floating rate callable subordinated notes due 2043;

	(i)	Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$950,001,000 fixed/floating rate callable subordinated notes due 2044; and

	(j)	Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$550,001,000 fixed/floating rate callable subordinated notes due 2044.

	[Add any subsequent Trust Deeds]

	For the purposes of the opinion contained in paragraph 9 above we have interpreted the effect of the Underwriting Agreement, the Pricing Agreement, the Indenture and the Securities as if they were governed by and construed in accordance with English law. Such opinion should not be taken as expressing an opinion as to the observance of any financial or similar covenant contained in the documents listed above.

(10)	Assuming the entry into the Indenture has been duly authorized by the Company in accordance with Scots law, the Indenture (to the extent only of the subordination provisions thereof which are expressed to be governed by English law) when executed and delivered, will constitute a legal, valid and binding obligation of the Company enforceable against the Company in the English courts, subject to paragraph 8 above, and the subordination provided for therein will be binding upon a liquidator or administrator of the Company or any holder of the Securities.

(11)	Assuming the issue of the Securities has been duly authorized by the Company in accordance with Scots law, the Securities (to the extent only of the subordination provisions thereof which are expressed to be governed by English law) when executed and delivered, will constitute legal, valid and binding obligations of the Company enforceable against the Company in the English courts, subject to paragraph 8 above, and the subordination provided for therein will be binding upon a liquidator or administrator of the Company or any holder of the Securities.

ANNEX V

FORM OF OPINION OF SIDLEY AUSTIN BROWN & WOOD,
UNITED STATES COUNSEL FOR THE UNDERWRITERS

	Based upon the foregoing, we are of the opinion that:

	(i)	The Registration Statement has been declared effective under the 1933 Act.

	(ii)	The Registration Statement, the Prospectus, and any supplements or amendments thereto (except for financial statements and other financial data as to which we do not express any opinion) appear on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations.

	(iii)	Assuming the Indenture and the Securities have been duly authorized, executed and delivered by the Company pursuant to Scots law, and assuming due authorization, execution and delivery of the Indenture by the Trustee and due authentication of the Securities by the Trustee, the Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, and the Securities have been duly executed, authenticated and delivered; and the Indenture (except for the subordination provisions thereof, as to which we do not express an opinion) constitutes, and, upon payment therefor in accordance with the terms of the Underwriting Agreement and the Pricing Agreement, the Securities (except for the subordination provisions thereof, as to which we do not express an opinion) will constitute, valid and binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

	(iv)	Each of the Indenture (except for the subordination provisions thereof, as to which we do not express an opinion) and the Securities (except for the subordination provisions thereof, as to which we do not express an opinion) conform in all material respects as to legal matters to the descriptions thereof contained in the Prospectus.

contained or incorporated by reference in the Registration Statement and Prospectus, and have made no independent check or verification thereof. On the basis of the document review described in the [ ] paragraph of this opinion and the foregoing conferences in which we participated, no fact has come to our attention that has caused us to believe that the Registration Statement (except for financial statements and schedules and other financial data included or incorporated by reference therein or omitted therefrom and the Forms T-1, as to which we do not make any statement), at the time the Registration Statement became effective with respect to the Underwriters, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except for financial statements and schedules and other financial data included or incorporated therein or omitted therefrom, as to which we do not make any statement), as of its date or at the date hereof, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

In rendering our opinion that the Registration Statement has been declared effective, we relied solely upon the order by the Commission stating that the Registration Statement has been declared effective.

EX-1.2 3 ex0102.htm Exhibit 1.2

Exhibit 1.2

THE ROYAL BANK OF SCOTLAND GROUP plc

[ ] American Depositary Shares, Series [ ] Representing

[ ] Non-Cumulative Dollar Preference Shares, Series [ ] (Nominal Value $.01 each)

Underwriting Agreement

_______________ __, ____

[NAMES OF REPRESENTATIVES]

Ladies and Gentlemen:

From time to time The Royal Bank of Scotland Group plc, a public limited company organized under the laws of Great Britain and registered in Scotland (the “Company”), proposes to enter into one or more Pricing Agreements (each a “Pricing Agreement”) in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to [Names of Representatives and] the several firms named in Schedule I, if any, to the applicable Pricing Agreement (such firms constituting the “Underwriters” with respect to such Pricing Agreement and the securities specified therein) an aggregate number of American depositary shares representing non-cumulative preference shares as specified in Schedule II to the Pricing Agreement. It is contemplated hereby that a Pricing Agreement will be entered into on the date hereof with respect to [ ] authorized but unissued Category II Non-cumulative Dollar Preference Shares, Series [ ] in the capital of the Company, having a nominal value of $.01 each (the “Series [ ] Preference Shares”), to be represented by [ ] American Depositary Shares, Series [ ] (the “ADSs”, and together with the Series [ ] Preference Shares, the “Securities”). In accordance with the Nominee Agreement dated October 16, 1996 between the Company and RBS Shelf Nominees Limited, the Series [ ] Preference Shares are to be issued to RBS Shelf Nominees Limited in fully registered form, and then subsequently in bearer form. RBS Shelf Nominees Limited will deposit the Series [ ] Preference Shares with The Bank of New York, as depositary (the “ADR Depositary”), in bearer form, on behalf of the Company pursuant to a deposit agreement, as amended and restated as of November 2, 2001 (the “ADR Deposit Agreement”) among the Company, the ADR Depositary and the holders from time to time of the American Depositary Receipts to be issued thereunder representing the Series [ ] Preference Shares. The American Depositary Receipts evidencing the ADSs are herein referred to as the “ADRs.”

The terms of, and rights attached to, any particular issuance of Securities shall be as specified in the Pricing Agreement relating thereto. The offering of the Securities will be governed by this Agreement, as supplemented by the Pricing Agreement. From and after the date of the execution and delivery of the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.

Particular sales of Securities may be made from time to time to the Underwriters of such Securities, for whom the firms designated as representatives of the Underwriters of such Securities in the Pricing Agreement relating thereto will act as representatives (the “Representatives”). The term “Representatives” also refers to a single firm acting as sole representative of the Underwriters and to an Underwriter or Underwriters who act without any firm being designated as its or their representatives. This Underwriting Agreement shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase the Securities. The obligation of the Company to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase any of the Securities shall be evidenced by the Pricing Agreement with respect to the Securities specified therein. Each Pricing Agreement shall specify the aggregate number of shares of such Securities, the initial public offering price of such Securities, the purchase price to the Underwriters of such Securities, the names of the Underwriters of such Securities, the names of the Representatives of such Underwriters and the number of shares of such Securities to be purchased by each Underwriter and shall set forth the date, time and manner of delivery of such Securities and payment therefor. The Pricing Agreement shall also specify (to the extent not set forth in the Registration Statement (as defined below) and prospectus with respect thereto) the terms of such Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of facsimile communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint.

The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form F-3 (No. 333-_______) and related preliminary prospectus for the registration of, among other securities, dollar preference shares of the Company, including the Series [ ] Preference Shares, in accordance with the provisions of the U.S. Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations of the Commission thereunder (the “1933 Act Regulations”). In addition, the Company has prepared and filed with the Commission a registration statement on Form F-6 (No. 333-11490/________) and a related prospectus for the registration under the 1933 Act of the ADSs.

The registration statement on Form F-3, as amended to the date on which it became effective prior to the date of this Agreement, and the prospectus constituting a part thereof (including in each case all documents, if any, incorporated by reference therein to such date) are hereinafter referred to as the “Registration Statement” and the “Prospectus”, respectively, except that if any revised prospectus or prospectus supplement shall be provided to the Underwriters by the Company for use in connection with the offering of the Securities which differs from the Prospectus on file at the Commission at the time the Registration Statement became effective (whether or not such revised prospectus is required to be filed by the Company

pursuant to Rule 424(b) of the 1933 Act Regulations), the term “Prospectus” shall refer to such revised prospectus or include such prospectus supplement, as the case may be, from and after the time such revised prospectus or prospectus supplement is first provided to the Underwriters for such use and if the Company files any documents pursuant to Section 13, 14 or 15 of the Securities Exchange Act of 1934, as amended (the “1934 Act”), after the Registration Statement became effective and prior to the termination of the offering of the Securities by the Underwriters, which documents are deemed to be or, in the case of a Report on Form 6-K, are designated as being incorporated by reference into the Prospectus pursuant to Form F-3 under the 1933 Act Regulations, the term “Prospectus” shall refer to said prospectus as modified to include the documents so filed from and after the time said documents are filed with or furnished to the Commission.

The registration statement on Form F-6 for the registration of the ADSs evidenced by ADRs, in the form in which it became effective prior to the date of this Agreement, and the prospectus included therein are hereinafter called the “ADR Registration Statement” and the “ADR Prospectus”, respectively.

The Company represents and warrants to, and agrees with, each of the Underwriters that:


	(a)	The Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Registration Statement or Prospectus, provided, further, that the representations and warranties in this subsection shall not apply to that part of the Registration Statement that constitutes the Statement of Eligibility (the “Form T-1”) under the U.S. Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), of the trustee (the “Trustee”).

	(b)	The documents incorporated by reference in the Registration Statement, at the time they were filed with the Commission, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”) and, at the time the Registration Statement became effective, the Registration Statement complied in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and any further documents deemed to be or, in the case of a Report on Form 6-K, designated as being incorporated by reference in the Registration Statement after the date of this Agreement but prior to the termination of the offering of Securities, will, when they are filed with or furnished to the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and, when read together with the other information included or incorporated in the Registration Statement, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that the representations

		and warranties in this subsection shall not apply to the Form T-1 of the Trustee.

	(c)	At the time the ADR Registration Statement became effective, the ADR Registration Statement and the ADR Prospectus complied in all material respects with the provisions of the 1933 Act and the 1933 Act Regulations and the ADR Registration Statement did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The ADR Prospectus, as amended or supplemented, if applicable, will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they will be made, not misleading.

	(d)	The audited consolidated financial statements of the Company for the years ended December 31, ____, ____ and ____ were prepared in accordance with accounting principles generally accepted in the United Kingdom and correctly reflect (in conjunction with the notes thereto) the financial position of the Company for the years then ended.

	(e)	[The unaudited consolidated financial statements of the Company for the six month periods ended June 30, ____ and ____ have been stated on a basis substantially consistent with that of the audited consolidated financial statements included in the Registration Statement.]

	(f)	Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise set forth or contemplated therein, there has been no material adverse change in the condition, financial or otherwise, or in the results of operations of the Company and its subsidiaries considered as one enterprise.

	(g)	The Company (A) has been duly incorporated in Great Britain and is validly registered under the laws of Scotland; (B) has the requisite corporate power and authority to execute and deliver this Agreement and the Pricing Agreement and had the requisite corporate power and authority to execute and deliver the ADR Deposit Agreement and, in each case, to perform its obligations hereunder and thereunder; and (C) has duly authorized, executed and delivered this Agreement and the Pricing Agreement and this Agreement and the Pricing Agreement constitute the valid and legally binding agreement of the Company enforceable in accordance with its terms, except as rights to indemnity or contribution may be limited by applicable law and subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

	(h)	The ADR Deposit Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the ADR Depositary, constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of

		general applicability relating to or affecting creditors’ rights generally and to general equity principles.

	(i)	The Royal Bank of Scotland plc (the “Bank”) has been duly incorporated in Great Britain and is validly registered under the laws of Scotland, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; and all of the issued and outstanding share capital or capital stock of the Bank is owned, directly or indirectly, by the Company. National Westminster Bank Plc (“NatWest”) has been duly incorporated under the laws of England, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; and all of the issued and outstanding ordinary share capital of NatWest is owned, directly or indirectly, by the Company.

	(j)	The Series [ ] Preference Shares are to be represented by the ADSs and, when allotted, issued and paid for in accordance with this Agreement and the Pricing Agreement, the Series [ ] Preference Shares (a) will be validly issued in accordance with the requirements of the Companies Act of 1985 of Great Britain and will be fully paid and not subject to further call or contribution and (b) no holder thereof will be subject to any personal liability to the Company or to creditors of the Company solely by reason of being such a holder.

	(k)	Each of the Series [ ] Preference Shares and the ADRs will conform in all material respects to the descriptions thereof contained in the Prospectus.

	(l)	All consents, approvals, authorizations, orders and decrees of any court or governmental agency or body of the United States or the United Kingdom having jurisdiction over the Company required for the consummation by the Company of the transactions contemplated by this Agreement or the Pricing Agreement or to permit the Company to effect dividend payments in United States dollars on the Securities have been obtained and are in full force and effect, except as may be required by United States state securities laws (the “Blue Sky laws”).

	(m)	The execution, delivery and performance of this Agreement and the Pricing Agreement, the allotment, issuance, authentication, sale and delivery of the Securities and the compliance by the Company with the respective terms thereof, and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach under any agreement or instrument to which the Company is a party or by which the Company is bound that is material to the Company and its subsidiaries, taken as a whole, nor will such action result in any violation that is material to the Company and its subsidiaries, taken as a whole, of the provisions of the Memorandum and Articles of Association of the Company or any statute or any order, filing, rule or regulation of any United States, English or Scottish court or governmental agency or regulatory body having jurisdiction over the Company.

	(n)	The Company is not, and after giving effect to the offer and sales of the Securities and application of the proceeds thereof as described in the Prospectus, will not be, required to register as an “investment company,” as

		defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

	(o)	The Company was informed, prior to any public announcement of the issue of the Securities, of the existence of the Financial Services Authority’s informational guidance referred to in MAR 2.3.2R(4) of the price stabilizing rules made under section 144(1) of the Financial Services and Markets Act 2000, and the Company represents, warrants and undertakes that it has not issued and will not issue, without the prior consent of the Representatives, any communication to which MAR 2.3.2R(1) of those rules applies unless that communication adequately discloses that stabilizing action may take place in relation to the issue of the Securities and complies with MAR 2.3.3E of those rules.

	(p)	There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened against or affecting the Company or any subsidiary, which is required to be disclosed in the Registration Statement (other than as disclosed therein).

3.	Upon the execution of the Pricing Agreement applicable to any Securities and authorization by the Representatives of the release of such Securities, the several Underwriters propose to offer such Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented.

4.	The Securities to be purchased by each Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriters (which may include any direction by the Underwriters to deposit the Series [ ] Preference Shares in global form with the ADR Depositary), against payment by the Underwriters, or by the Representatives on behalf of the Underwriters, of the purchase price therefor by wire transfer of immediately available funds to an account designated by the Company as specified in the Pricing Agreement, all in the manner and at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the “Time of Delivery” for such Securities.

5.	The Company agrees with each of the Underwriters of any Securities:

	(a)	The Company will notify the Representatives immediately on becoming aware of (i) any request by the Commission for any amendment to the Registration Statement or the ADR Registration Statement or any amendment or supplement to the Prospectus or ADR Prospectus or for additional information relating to the Registration Statement, the ADR Registration Statement or the offering of the Securities, and (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the ADRRegistration Statement or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any

		such stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.

	(b)	The Company will, for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities, file promptly all reports required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and will give the Representatives notice of its intention to file any amendment to the Registration Statement or any amendment to the ADR Registration Statement or any amendment or supplement to the Prospectus or ADR Prospectus (including any revised prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Securities which differs from the Prospectus, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) under the 1933 Act Regulations) and will furnish the Representatives with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus without prior consultation with the Representatives.

	(c)	The Company will prepare the Prospectus in relation to the applicable Securities and file such Prospectus pursuant to Rule 424(b) under the 1933 Act not later than the time required by Rule 424(b) following the execution and delivery of the Pricing Agreement relating to the applicable Securities.

	(d)	The Company will deliver to each Representative a conformed copy of the Registration Statement and the ADR Registration Statement in each case, as originally filed, and of each amendment thereto (including exhibits and documents filed therewith or incorporated by reference, as the case may be, into the Registration Statement).

	(e)	The Company will furnish the Underwriters with copies of the Prospectus in such quantities as the Representatives may from time to time reasonably request, and will use all reasonable efforts to make the initial delivery of the Prospectus by no later than 9:00 a.m. on the second business day prior to the Time of Delivery and, if the delivery of a Prospectus is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering and sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any reason it shall be necessary during such period to amend or supplement the Prospectus in order to comply with the 1933 Act, notify the Underwriters and upon the Representatives’ request prepare and furnish without charge to each Underwriter as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case any Underwriter is required to deliver a Prospectus in connection with sales of the Securities at any time nine months or more after the time of issue

	of the Prospectus, upon the Representatives’ request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the 1933 Act.

	(f)	The Company will endeavour, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Representatives may designate; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. In each jurisdiction in which the Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualifications in effect for as long as necessary to complete the distribution of the Securities but in no event for a period longer than one year from the date of this Agreement.

	(g)	The Company will make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement, an earnings statement (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158).

	(h)	During the period beginning from the date of the Pricing Agreement for such Securities and continuing to and including the termination of trading restrictions for such Securities, as notified to the Company by the Representatives, the Company will not offer, sell, contract to sell or otherwise dispose of, pursuant to a public offering in the United States, any securities of the Company which are substantially similar to such Securities, without the prior written consent of the Representatives, which consent shall not be unreasonably withheld.

	(i)	The Company will cooperate with the Underwriters and use its best efforts to permit the ADRs to be eligible for clearance and settlement through the facilities of The Depositary Trust Company (“DTC”).

	(j)	Prior to the issuance of the Securities, the Company will have obtained all consents, approvals, authorizations, orders, registrations, qualifications and decrees of any court or governmental agency or body of the United States and the United Kingdom necessary or required for the valid issuance of the Securities and to permit the Company to make dividend payments on the Securities in U.S. dollars.

6.	The Company will pay all expenses incident to the performance of its obligations under this Agreement, any Pricing Agreement and the Securities, including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, the ADR Registration Statement, the Prospectus and any related preliminary prospectus (or any amendments or supplements thereto), and the cost of furnishing copies thereof to the Underwriters; (ii) the printing, if any, of this Agreement, the Pricing Agreement, the ADR Deposit Agreement, the ADRs and the

	Blue Sky Survey; (iii) the printing or reproduction, preparation, issuance and delivery of the certificates, if any, for the Securities to (or at the direction of) the Underwriters or the ADR Depositary, including any stock transfer or other taxes or duties payable upon the delivery of the Series [ ] Preference Shares to the ADR Depositary or the sale of the Securities to the Underwriters; (iv) the fees and disbursements of the Company’s counsel and accountants; (v) the qualification of the Securities under the applicable securities laws in accordance with the provisions of Section 5(f) hereof, including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith in an aggregate amount not in excess of $5,000 with respect to a particular issue of the Securities and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey; (vi) the delivery to the Underwriters of copies of the Blue Sky Survey, if any; (vii) any costs, fees and charges of the ADR Depositary in connection with the issuance and delivery of Series [ ] Preference Shares to the ADR Depositary and ADSs to the registered holders thereof and all other costs, fees and charges of the ADR Depositary and any transfer agent or registrar; (viii) all expenses and listing fees in connection with the listing of the Securities, if any, and the clearance and settlement of the Securities through the facilities of DTC; (ix) any fees charged by securities rating services for rating the Securities; (x) the fees and expenses incurred in connection with the filing of any materials with the National Association of Securities Dealers, Inc., if any; (xi) any fees associated with a Bloomberg roadshow presentation; (xii) any United Kingdom stamp duty, stamp duty reserve tax or similar tax or duty imposed by the United Kingdom or any political subdivision thereof upon the original issuance by, or on behalf of, the Company of the Securities, the initial delivery of the Securities, the deposit of Series [ ] Preference Shares under the ADR Deposit Agreement by the Company, the purchase by the Underwriters of the Securities, the sale and delivery of the Securities by the Underwriters to the initial purchasers thereof, and the execution and delivery of this Agreement, the Pricing Agreement and the ADR Deposit Agreement; and (xiii) on production of a value added tax invoice, any value added taxes payable in the United Kingdom in respect of any of the above expenses

	If this Agreement is terminated by the Representatives in accordance with the provisions of Section 7 or Section 11(a)(i) hereof, the Company shall reimburse the Underwriters for their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters, except that in the case of a termination in accordance with Section 11(a)(i) hereof, such reimbursement shall include only any expenses actually incurred (not to exceed $[• ]).

7.	The obligations of the Underwriters of any Securities under the Pricing Agreement relating to such Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties of the Company in or incorporated by reference in the Pricing Agreement relating to such Securities are, at and as of the Time of Delivery for such Securities, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

	(a)	The Registration Statement is effective and at the Time of Delivery no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission. The Prospectus shall have been transmitted to the

	Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the time period prescribed by Rule 424(b) of the 1933 Act Regulations, and prior to the Time of Delivery the Company shall have provided evidence satisfactory to the Representatives of such timely filing.

(b)	At the Time of Delivery, the Representatives shall have received:

	(1)	The opinion, dated as of the Time of Delivery, of Davis Polk & Wardwell, United States counsel for the Company, with respect to the matters set forth in Annex II hereto, subject to modifications to which the Underwriters do not reasonably object.

	(2)	The opinion, dated as of the Time of Delivery, of Dundas & Wilson CS LLP, Scottish solicitors to the Company, with respect to the matters set forth in Annex III hereto, subject to modifications to which the Underwriters do not reasonably object.

	(3)	The opinion, dated as of the Time of Delivery, of Linklaters, English solicitors to the Company, with respect to the matters set forth in Annex IV hereto, subject to modifications to which the Underwriters do not reasonably object.

	(4)	The opinion, dated as of the Time of Delivery, of Emmett, Marvin & Martin, counsel to the ADR Depositary with respect to the matters set forth in Annex V hereto, subject to modifications to which the Underwriters do not reasonably object.

	(5)	The opinion, dated as of the Time of Delivery, of Sidley Austin Brown & Wood, counsel for the Underwriters, with respect to the matters set forth in Annex VI.

(c)	At the Time of Delivery for such Securities, Deloitte & Touche LLP, the independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to the Representatives a letter, dated the date of the Time of Delivery with regard to matters customarily covered by accountants’ “comfort letters” and otherwise in form and substance satisfactory to the Representatives.

(d)	If required pursuant to the Pricing Agreement, the Securities shall have been duly authorized for listing by the New York Stock Exchange, Inc.

(e)	At the Time of Delivery (1) there shall not have been, since the date of the Pricing Agreement or since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations of the Company and its subsidiaries considered as one enterprise, and (2) the Representatives shall have received a certificate of the Company executed on its behalf by an officer of the Company, dated as of the Time of Delivery, to the effect that (i) the representations and warranties in Section 2 hereof are true and correct in all

		material respects as though expressly made at and as of the Time of Delivery; (ii) the Company has complied in all material respects with all agreements hereunder and satisfied in all material respects all conditions on its part to be performed or satisfied hereunder at or prior to the Time of Delivery; and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and, to the knowledge of the Company, no proceedings for that purpose have been initiated or threatened by the Commission.

	(d)	The Company shall have furnished to the Underwriters a certificate, dated the Time of Delivery, of a deputy secretary of the Company stating that to the best knowledge and belief of the deputy secretary signing such certificate after reasonable inquiry, the issue and sale of the Securities in the manner contemplated in the Prospectus do not and will not result in a breach, default or acceleration of any payment or amount under any contract, agreement or undertaking to which the Company or any of its subsidiaries is a party (or by which any such entity is bound), which breach, default or acceleration would have a material adverse effect on the Company and its subsidiaries taken as a whole.

	(e)	If an affiliate (as defined in applicable National Association of Securities Dealers (“NASD”) rules) of the Company is participating in the offering of the Securities, the NASD shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.

	If any condition specified in this Section 7 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the Time of Delivery, and such termination shall be without liability of any party to any other party except as provided in Section 6 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 herein shall remain in effect.

8.	(a)	The Company agrees to indemnify and hold harmless each Underwriter, each of the Underwriters’ affiliates, directors, officers and employees, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows:

		(i)	against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be part of the Registration Statement pursuant to Rule 430A(b) of the 1933 Act Regulations, if applicable, the ADR Registration Statement or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or any related preliminary Prospectus (or any amendment or supplement thereto) or the ADR Prospectus or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

	(ii)	against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and

	(iii)	against any and all expense whatsoever, as reasonably incurred (including, subject to Section 8(c) hereof, the fees and disbursements of counsel chosen by the Representatives), in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above;

	provided, however, that no indemnified party may be indemnified under this Section 8(a), if and to the extent that such indemnification is not permissible pursuant to Section 151 of the Companies Act 1985 of Great Britain and that this indemnity agreement shall not apply to (A) any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), the ADR Registration Statement (or any amendment thereto) or the Prospectus or any related preliminary prospectus (or any amendment or supplement thereto) or (B) any loss, liability, claim, damage or expense to the extent arising out of an untrue statement or omission or alleged untrue statement or omission of a material fact in the Prospectus or any related preliminary prospectus (or any amendment or supplement thereto) delivered to any person if such untrue statement or omission was corrected in the Prospectus, or any subsequent related preliminary prospectus (or any amendment or supplement thereto), if copies thereof were delivered to such Underwriter and a copy thereof was not furnished to such person prior to the confirmation of the sale of Securities to such person if required by law.

(b)	Each Underwriter severally agrees to indemnify and hold harmless each of the Company, its directors, each of the officers of the Company who signed the Registration Statement or the ADR Registration Statement, the Company’s authorized representative in the United States and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 8 as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), the ADR Registration Statement (or any amendment thereto), the Prospectus, any related preliminary prospectus (or any amendment or supplement thereto) or the ADR Prospectus in reliance upon and in conformity with

		written information furnished to the Company by such Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), the ADR Registration Statement (or any amendment thereto), or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto) or the ADR Prospectus.

	(c)	Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement. Any indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. In the case of parties indemnified pursuant to Section 8(a) above, counsel to the indemnified parties shall be selected by the Underwriters, and, in the case of parties indemnified pursuant to Section 8(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.

	(d)	If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Securities on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall, if permitted by applicable law, contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts, concessions and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the

		untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission; provided, however, that no person will be entitled to contribution from the Company under this subsection (d) if, and to the extent that, such contribution payment is not permissible pursuant to Section 151 of the Companies Act 1985 of Great Britain. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint.

	(e)	The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act.

9.	If one or more of the Underwriters shall fail at the Time of Delivery to purchase the Securities which it is or they are obligated to purchase under this Agreement and the Pricing Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; provided, however, that if the Representatives shall not have completed such arrangements within such 24-hour period, then:

	(a)	if the number of Defaulted Securities does not exceed 10% of the Securities which the Underwriters are obligated to purchase at the Time of Delivery, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations under the Pricing Agreement relating to such Securities bear to the underwriting obligations of all non-defaulting Underwriters, or

	(b)	if the number of Defaulted Securities exceeds 10% of the Securities which the Underwriters are obligated to purchase at the Time of Delivery, the Pricing Agreement relating to such Securities shall terminate without liability on the part of any non-defaulting Underwriter.

	No action taken pursuant to this Section 9 shall relieve any defaulting Underwriter from liability in respect of its default.

	In the event of any such default which does not result in a termination of the relevant Pricing Agreement, either the Representatives or the Company shall have the right to postpone the Time of Delivery for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the ADR Registration Statement or Prospectus or in any other documents or arrangements.

10.	All representations, warranties and agreements contained in this Agreement and any Pricing Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriters pursuant to this Agreement.

11.	(a)	The Representatives may terminate this Agreement, immediately upon noticeto the Company, at any time prior to the Time of Delivery (i) if there has been, since the date of the Pricing Agreement or the respective dates as of which information is given in the Registration Statement, the ADR Registration Statement and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations, of the Company and its subsidiaries considered as one enterprise, or (ii) if there has occurred any outbreak or escalation of hostilities involving the United States or the United Kingdom or the declaration by the United States or the United Kingdom of a national emergency or war, or (iii) the occurrence of another calamity or crisis or any change in financial, political or economic conditions or currency exchange rates or controls in the United States, the United Kingdom or elsewhere, if the effect of any such event specified in clause (ii) and (iii) in the reasonable judgment of the Representatives (after consultation with the Company) makes it impracticable or inadvisable to market the Securities or enforce contracts for the sale of the Securities in the manner contemplated in the Prospectus, or (iv) if there has occurred a suspension or material limitation in trading in securities generally on the New York Stock Exchange, London Stock Exchange or any other stock exchange on which the Company’s securities are listed, or (v) if there has occurred a suspension or material limitation in trading the Company’s securities on the New York Stock Exchange or the London Stock Exchange, or (vi) if there has occurred a material adverse change in the

		financial markets in the United States or in the international financial markets, or (vii) if a banking moratorium on commercial banking activities has been declared by the relevant authorities in New York or London, or a material disruption in commercial banking or securities settlement or clearance services in the United States or the United Kingdom has occurred, or (viii) if there has occurred a change or development involving a prospective change in the United States or the United Kingdom taxation affecting the Company or the Securities or the transfer thereof, or (ix) if there is any lowering of the rating of any of the Company’s debt securities, preference shares, American depositary shares representing preference shares or American depositary receipts evidencing American depositary shares representing preference shares by Moody’s Investor Services, Inc., Standard and Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., or Fitch, Inc.

	(b)	If this Agreement is terminated pursuant to Sections 7, 9 or 11 hereof, such termination shall be without liability of any party to any other party except as provided in Section 6 or Section 9 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 shall remain in effect.

12	In all dealings hereunder, the Representatives of the Underwriters of the Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement.

	All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Company Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

13.	This Agreement and any Pricing Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement or any Pricing Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers, directors and authorized representative of the Company referred to in Section 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Pricing Agreement or any provision herein or therein contained. This Agreement and any Pricing Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers, directors and authorized representative of the Company and their heirs and legal representatives,

	and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

14.	(a)	The Company irrevocably consents and agrees, for the benefit of the Underwriters, that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement or the Pricing Agreement may be brought in the courts of the State of New York or the courts of the United States of America located in the Borough of Manhattan, The City of New York and hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself and in respect of its properties, assets and revenues.

	(b)	The Company hereby irrevocably designates, appoints, and empowers CT Corporation System with offices at 111 Eighth Avenue, New York, New York 10011, as its designee, appointee and agent to take process, receive and forward process or to be served with process for and on its behalf of any and all legal process, summons, notices and documents which may be served in any such action, suit or proceeding brought in any such United States or State court which may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, the Company agrees to designate a new designee, appointee and agent in The City of New York on the terms and for the purposes of this Section 14 satisfactory to the Representatives. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents out of any of the aforesaid courts in any such action, suit or proceeding by serving a copy thereof upon the relevant agent for service of process referred to in this Section 14 (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by registered or certified air mail, first class, postage prepaid, to each of them at their respective addresses specified in or designated pursuant to this Agreement. The Company agrees that the failure of any such designee, appointee and agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any way be deemed to limit the ability of any Underwriter to serve any such legal process, summons, notices and documents in any other manner permitted by applicable law or to obtain jurisdiction over the undersigned or bring actions, suits or proceedings against the undersigned in any jurisdictions, and in any manner, as may be permitted by applicable law. The Company hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Agreement or the Pricing Agreement brought in the United States federal courts or the courts of the State of New York located in the Borough of Manhattan, The City of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that

		any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

15.	Each Underwriter severally represents and agrees that (i) it has not offered or sold and, prior to the expiry of the period of six months from the Time of Delivery for the Securities, it will not offer or sell any Securities or any investments representing Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 (as amended), (ii) it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 (the “FSMA”) with respect to anything done by it in relation to the Securities or any investments representing Securities in, from or otherwise involving the United Kingdom; and (iii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the Securities or any investments representing Securities in circumstances in which Section 21(1) of the FSMA does not apply to the Company.

16.	Time shall be of the essence of each Pricing Agreement. As used herein, “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

17.	This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to conflict of laws provisions thereof. Specified times of day refer to New York City time.

18.	This Agreement may be executed in one or more counterparts and, when a counterpart has been executed by each party, all such counterparts taken together shall constitute one and the same agreement.

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

If the foregoing is in accordance with your understanding, please sign and return to us [ ] counterparts hereof.

Very truly yours,

THE ROYAL BANK OF SCOTLAND GROUP plc

By:

	Name:
	Title:

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

Accepted as of the date hereof:

[NAMES OF REPRESENTATIVES]


By:

	Name:
	Title:

For themselves and as representatives of the several Underwriters

Annex I

Pricing Agreement

[NAMES OF REPRESENTATIVES]

[As Representatives of the several
Underwriters named in Schedule I hereto,]

___________ __, ____

Ladies and Gentlemen:

The Royal Bank of Scotland Group plc, a public limited company organized under the laws of Great Britain and registered in Scotland (the “Company”), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated ___________ __, ____ (the “Underwriting Agreement”), between the Company on the one hand [and Names of Representatives and] the other several Underwriters on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”) the securities specified in Schedule II hereto (the “Securities”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or supplemented relating to the Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto.

Subject to the terms and conditions set forth herein (including Schedules I and II hereto) and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the number of Securities set forth opposite the name of such Underwriter in Schedule I hereto.

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

Very truly yours,

THE ROYAL BANK OF SCOTLAND GROUP plc

By:

	Name:
	Title:

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

Accepted as of the date hereof:

[NAMES OF REPRESENTATIVES]


By:

	Name:
	Title:

For themselves and as representatives of the several Underwriters

SCHEDULE I

		Number of Securities to be Purchased

[Names of Representatives]		[ ]
[Names of other Underwriters]		[ ]

	Total:	[_____]

SCHEDULE II

Capitalized terms used herein, unless otherwise stated, shall have the meaning set forth in the Underwriting Agreement.

TITLE OF SECURITIES:

Category II Non-cumulative Dollar Preference Shares, Series [ ], to be represented by American Depositary Shares, Series [ ], to be evidenced by American Depositary Receipts, with one American Depositary Share representing one Non-cumulative Dollar Preference Share

NUMBER OF SHARES:

[ ]

PRICE TO PUBLIC:

UNDERWRITING COMMISSION:

FORM OF SECURITIES:

American Depositary Receipts evidencing American Depositary Shares, Series [ ] representing Non-cumulative Dollar Preference Shares, Series [ ], to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery at the office of the Representatives.

SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:

Wire transfer of immediately available funds

TIME OF DELIVERY:

9:30 a.m. (New York time) on __________ __, ____

REDEMPTION PROVISIONS:

INITIAL DIVIDEND PAYMENT DATE:

__________ __, ____

DIVIDENDS:

$[ ] per Series [ ] Preference Share per annum, payable quarterly on each March 31, June 30, September 30 and December 31

VOTES PER PREFERENCE SHARE:

One in certain circumstances only

CLOSING LOCATION:

Offices of Davis Polk & Wardwell, 99 Gresham Street, London EC2V 7NG, United Kingdom

NAMES AND ADDRESSES OF REPRESENTATIVES:

Designated Representatives:

Address for Notices, etc.:

OTHER TERMS:

The Securities will have additional terms as more fully described in the Prospectus.

ANNEX II

FORM OF OPINION OF
DAVIS POLK & WARDWELL, UNITED STATES COUNSEL
FOR THE COMPANY

Based upon the foregoing, we are of the opinion that:

	(i)	The Deposit Agreement dated as of August 17, 1992 as amended and restated as of February 8, 1999 and as of November 2, 2001 between the Company and The Bank of New York, as depositary (the “ADR Depositary”) and all holders from time to time of ADRs (the “ADR Deposit Agreement”) constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

	(ii)	Assuming the ADRs are issued in conformity with the Deposit Agreement, the ADRs conform in all material respects as to legal matters to the description thereof contained in the Prospectus.

	(iii)	Upon due issuance by the ADR Depositary of the ADRs evidencing the ADSsagainst deposit of the Series [ ] Preference Shares in accordance with the provisions of the ADR Deposit Agreement, such ADRs will be duly and validly issued and persons in whose names such ADRs are registered will be entitled to the rights of registered holders of ADRs specified therein and in the ADR Deposit Agreement.

	(iv)	The Company is not and, after giving effect to the offering and sale of the Series [ ] Preference Shares and the application of the proceeds thereof as described inthe Prospectus, will not be required to register as an “investment company”, assuch term is defined in the Investment Company Act of 1940, as amended.

	(v)	No consent, approval, authorization or order of, or qualification with, any governmental body or agency under United States federal or New York state law that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated by the Underwriting Agreement (including the Pricing Agreement), is required for the performance by the Company of its obligations under the Underwriting Agreement (including the Pricing Agreement), except such as have been obtained and such as may be required under state securities or Blue Sky laws in connection with the offer and sale of the Series [ ] Preference Shares.

	(vi)	The Series [ ] Preference Shares are among the dollar preference shares covered by the Registration Statement.

	(vi)	Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law

		is concerned, the Underwriting Agreement, including the Pricing Agreement, has been duly executed and delivered by the Company and is a valid and binding agreement of the Company, except as rights to indemnity and contribution thereunder may be limited by applicable law.

	(vii)	The performance by the Company of its obligations under the Underwriting Agreement (including the Pricing Agreement) will not contravene any statute of the State of New York or the United States, or any order, rule or regulation of any governmental agency or body of the United States or the State of New York that in our experience is normally applicable to transactions of the type contemplated by the Underwriting Agreement (including the Pricing Agreement).

	(viii)	Assuming the validity of such action under Scots law, under the laws of the State of New York relating to submission to jurisdiction, the Company has, pursuant to Section 14 of the Underwriting Agreement validly and irrevocably submitted to the personal jurisdiction of any New York state or U.S. federal court located in the State of New York, Borough of Manhattan in the City of New York (each a “New York Court”), in any action arising out of or relating to the Underwriting Agreement and the Pricing Agreement and has, to the fullest extent permitted by law, validly and irrevocably waived any objection to the laying of venue of a proceeding in any such court, and has validly and irrevocably appointed CT Corporation System as its initial authorized agent for the purposes described in Section 14 of the Underwriting Agreement; and service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement will be effective service of process in any such action upon the Company.

We have considered the statements set forth in the Prospectus under the caption “Certain US Federal and UK Tax Consequences,” insofar as they purport to describe certain US federal income tax laws as they relate to US Holders (as defined therein). In our opinion, such statements constitute a fair summary of the principal US federal income tax consequences to such US Holders of an investment in the Securities.

reference in the Prospectus appear on their face to be appropriately responsive in all material respects to the applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. In expressing the foregoing opinions and belief, we have not been called to pass upon, and we express no opinion or belief as to, (1) the financial statements or financial schedules or other financial or statistical data included in the Registration Statement or Prospectus or (2) any Statement of Eligibility of the Trustee on Form T-1. For purposes of this paragraph, the term “financial data” includes, without limitation, the data required to be included in the Registration Statement and Prospectus under the Act by Guide 3, Statistical Disclosure by Bank Holding Companies.

ANNEX III

FORM OF OPINION OF
DUNDAS & WILSON CS LLP, SCOTTISH SOLICITORS
TO THE COMPANY

(1)	The Company and the Bank have been duly incorporated in Great Britain as limited liability companies and are validly registered under the law of Scotland, are not in liquidation, and have the corporate power and authority under such law to conduct their respective businesses as described in the Prospectus and/or the Prospectus Supplement.

(2)	The Series [ ] Preference Shares have been duly created and, when allotted, issued and paid for in accordance with the Pricing Agreement, the Underwriting Agreement (including payment in full of premium) and the Nominee Agreement (a) will be validly issued, fully paid and not subject to further calls or contribution and (b) no holder thereof will be subject to personal liability to the Company or any creditors thereof by reason only of being such a holder, and the issue of Preference Shares will not be subject to the pre-emptive rights of any shareholder of the Company.

(3)	The statements made in the Prospectus with regard to Scots law under the heading “Description of Dollar Preference Shares”, and in the Prospectus Supplement with regard to Scots law under the heading “Certain Terms of the Series [ ] Preference Shares” insofar as such statements constitute a summary of certain of the rights and privileges of the holders of the Series [ ] Preference Shares under Scots law or a summary of the documents, legal matters or proceedings under Scots law referred to therein, are accurate in all material respects, provided that we express no opinion as to the reasonableness, completeness or fairness of such statements as an indication of shareholder rights generally in the context of a prospectus issued publicly in the United States of America.

(4)	The creation and issue of the Series [ ] Preference Shares and the execution, delivery and performance by the Company of the Agreements and the Nominee Agreement is within the corporate power of the Company and have been duly authorised by all necessary corporate action of the Company.

(5)	The obligations on the part of the Company under the Deposit Agreement and the Nominee Agreement are valid and legally binding against the Company, subject as to enforcement to bankruptcy, insolvency, re-organisation and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

(6)	No authorisations, approvals, consents or licences of governmental, judicial or public bodies or authorities of or in Scotland (together “consents”), except such consents as may be required under statutory provisions (other than the Companies Acts, 1985 and 1989 as they apply to a company having its registered office in Scotland) or regulations or practices applying in Great Britain as a whole, are required by the Company as a result of the Company being a Scottish registered company for the valid creation, allotment, issue and delivery of the Series [ ] Preference Shares.

(7)	Neither the execution, delivery and performance by the Company of the Agreements and the Nominee Agreement, nor the creation, allotment and issue of the Series [ ] Preference Shares will of itself result in any violation in any material respect of:-

	(a)	the Memorandum or Articles of Association of the Company or the Bank; or

	(b)	any existing applicable mandatory provision of Scots law or regulation; or

	(c)	any existing judgment, order of decree or any Scottish court.

(8)	The Underwriters would under current practice of the Scottish courts (assuming the effect of Section 14 of the Underwriting Agreement is not to prorogate the exclusive jurisdiction of the United States courts or the courts of or in the State of New York) be permitted to commence proceedings in the Scottish courts for enforcement of the Underwriting Agreement and the Scottish courts would accept jurisdiction in any proceedings for so long as the Company remained domiciled in Scotland and, upon proper averments being made in a Scottish court in any such proceedings, the choice of the law of the State of New York as the proper law of the Underwriting Agreement would be upheld as a valid choice of law by that court.

(9)	The Agreements and the Nominee Agreement have, insofar as Scots law governs the formalities of execution and delivery thereof, been duly executed by or on behalf of the Company.

(10)	The submission by the Company in Section 14 of the Underwriting Agreement to the jurisdiction of the courts of or in New York, and the designation, appointment and empowerment by the Company under the said Section 14 of an agent for service, would be upheld by the Scottish courts as valid and effective.

(11)	In relation to any Agreement which is expressed to be governed by the law of the State of New York as its proper law, a judgment of the courts of the State of New York as the relevant forum would be recognised in Scotland through an action of decree–conform under common law in the Court of Session in Scotland, assuming that (I) the court which issued the judgment had jurisdiction and acted judicially with no element of unfairness, (II) such judgment was final, not obtained by fraud, or a revenue or penal action, remained capable of enforcement in the place it was pronounced and was not

contrary to natural justice, and (III) enforcement of the judgment is not contrary to Scottish public policy.

ANNEX IV

FORM OF OPINION OF LINKLATERS
ENGLISH SOLICITORS TO THE COMPANY

We are of the opinion that:-

1.	It is not necessary to obtain any approval, consent, order or permission of, or to effect any further filing, recording or registration with, any public authority or governmental agency in England or authorisation from any regulatory authority, government department or court in England (other than any consents, approvals or authorisations required under the Companies Act 1985 as it applies to a company having its registered office in Scotland - as to which we understand you are relying upon an opinion of Dundas & Wilson CS LLP) in respect of the execution, delivery or performance of the Securities, the ADR Deposit Agreement, the Underwriting Agreement, the Pricing Agreement, the Nominee Agreement, or, in particular:

	(i)	for the valid authorisation, allotment, issue and delivery of the Securities to, or at the direction of, the Underwriters; or

	(ii)	to enable the Company to make any payment to the holder of the Securities including any payment on a return of capital on a winding up of the Company to the holders of the Securities in United States dollars;

2.	No filing or registration of the Registration Statement, the Prospectus and Prospectus Supplement, the ADR Registration Statement, the ADR Prospectus, or any other prospectus or circular is necessary under legislation of general application in the United Kingdom (other than any filings or registrations required under the Companies Act 1985 as it applies to a company having its registered office in Scotland - as to which we do not express an opinion) in connection with the allotment, issue and delivery of the Preference Shares or the sale of Preference Shares to the Underwriters.

3.	The statements in the Prospectus under the section headed “Certain US Federal and UK Tax Consequences”, insofar as such statements constitute a general summary of both current United Kingdom tax law and United Kingdom Inland Revenue practice relevant to the issue of the Securities fairly and accurately summarise the matters referred to therein; provided however that we express no opinion as to the reasonableness, completeness or fairness of such statements in the context of a prospectus issued publicly in the United States of America or as to the compliance of such statements with the requirements of the securities laws of the United States of America or any part thereof.

4.	Subject as described under the heading “Stamp Duty and Stamp Duty Reserve Tax” in the section of the Prospectus Supplement headed “Certain U.S. Federal and U.K. Tax Consequences”, no United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes are payable in the United Kingdom on (i) the creation, issue or delivery by, or on behalf of, the Company of the Preference Shares in

	bearer form or (ii) the deposit with the Depositary of the Preference Shares in bearer form, the execution and delivery of the Pricing Agreement, the Underwriting Agreement, the Nominee Agreement or the Deposit Agreement or the consummation of the transactions contemplated thereby.

5.	No United Kingdom value added tax will be payable by the Underwriters in respect of their underwriting commissions under the Underwriting Agreement and the Pricing Agreement.

6.	Neither the execution and delivery of the Underwriting Agreement, the Pricing Agreement, the Nominee Agreement and the ADR Deposit Agreement by the Company, nor the compliance by the Company with its obligations under the Underwriting Agreement, the Pricing Agreement, the Nominee Agreement or the ADR Deposit Agreement will, of itself, breach (A) any mandatory provision of English law of general application binding on the Company, or (B) any covenant (other than any financial or similar covenant) contained in any of the following documents:-

	(a)	Trust Deed dated 2 May 1985 between the Company and The Law Debenture Trust Corporation p.l.c. constituting £200,000,000 floating rate notes due 2005;

	(b)	Trust Deed dated 11 December 1985 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$350,000,000 undated floating rate primary capital notes;

	(c)	Trust Deed dated 24 August 1989 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$400,000,000 undated floating rate primary capital notes;

	(d)	First Supplemental Trust Deed dated 1 March 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £150,000,000 10½% subordinated bonds 2013;

	(e)	Second Supplemental Trust Deed dated 12 August 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £200,000,000 9½% undated subordinated bonds;

	(f)	Trust Deed dated 10 June 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting €1,250,001,000 fixed/floating rate callable subordinated notes due 2042;

	(g)	Trust Deed dated 5 December 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$750,001,000 fixed rate callable subordinated notes due 2042;

	(h)	Trust Deed dated 10 December 2003 between the Company and The LawDebenture Trust Corporation p.l.c. constituting US$650,001,000 fixed/floating rate callable subordinated notes due 2043;

	(i)	Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$950,001,000 fixed/floating rate callable subordinated notes due 2044; and

	(j)	Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting US$550,001,000 floating rate callable subordinated notes due 2044.

	[Add any subsequent Trust Deeds]

7.	As a matter of English law, by which the Nominee Agreement is expressed to be governed, the effect of the arrangements in relation to the issue of the Preference Shares to RBSNominee in accordance with the arrangements contemplated in the Nominee Agreement and in the Underwriting Agreement, the Pricing Agreement and the ADR Deposit Agreement is that RBS Nominee will hold such Preference Shares on implied trust and that the Company is not beneficially interested under that trust.

For the purposes of the opinion contained in paragraph 6 above we have interpreted the effect of the Underwriting Agreement, the Pricing Agreement, the Nominee Agreement, and the ADR Deposit Agreement as if they were governed by and construed in accordance with English law. Such opinion should not be taken as expressing an opinion as to the observance of any financial or similar covenant contained in the documents listed above.

ANNEX V

FORM OF OPINION OF EMMETT, MARVIN & MARTIN,
COUNSEL TO THE ADR DEPOSITARY

(i) the Deposit Agreement has been duly authorized, executed and delivered by the Depositary and, assuming due authorization, execution and delivery of the Deposit Agreement by the Company and further assuming that the Deposit Agreement is a valid and binding agreement of the Company, constitutes a valid and legally binding obligation of the Depositary enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws of general application relating to or affecting creditors’ rights and by general principles of equity; and

(ii) upon the issuance by the Depositary of ADRs evidencing ADSs against the deposit of Shares in accordance with the provisions of the Deposit Agreement (assuming such Shares were, at the time of such deposit, (a) duly authorized and validly issued, fully paid and not subject to further calls or contribution and (b) registered in compliance with the Securities Act of 1933, as amended), such ADRs will be duly and validly issued and will entitle the holder thereof to the rights specified therein and in the Deposit Agreement.

ANNEX VI

FORM OF OPINION OF SIDLEY AUSTIN BROWN & WOOD,
UNITED STATES COUNSEL FOR THE UNDERWRITERS

1.	Assuming that the Underwriting Agreement and Pricing Agreement have been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Underwriting Agreement and Pricing Agreement have been duly executed and delivered by the Company.

2.	The Registration Statement (except the financial statements and other financial data included therein or incorporated therein by reference, and Exhibit 25 as to which no view need be expressed), at the time it became effective, and the Prospectus (except as aforesaid), as of the date thereof, appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the 1933 Rules and Regulations and the documents incorporated by reference in the Prospectus comply as to form in all material respects with the applicable requirements of the Exchange Act and the rules and regulations of the Commission thereunder.

3.	The Registration Statement has been declared effective under the 1933 Act.

4.	The Securities conform in all material respects as to legal matters to the descriptions thereof contained in the Prospectus.

We have participated in conferences with officers and representatives of the Company, representatives of the independent accountants of the Company and the representatives of the Underwriters at which the contents of the Registration Statement and Prospectus and related matters were discussed. We have not participated in the preparation of the Company’s Annual Report on Form 20-F for the year ended December 31, ____ or of any of the Company’s Reports on Form 6-K, which are incorporated by reference in the Registration Statement and Prospectus. We are not passing upon, or assuming responsibility for, the accuracy, completeness or fairness of the statements contained or incorporated by reference in the Registration Statement and Prospectus, and have made no independent check or verification thereof. On the basis of the document review described in the [ ] paragraph of this opinion and the foregoing conferences in which we participated, no fact has come to our attention that has caused us to believe that the Registration Statement (except for financial statements and schedules and other financial data included or incorporated by reference therein or omitted therefrom and the Forms T-1, as to which we do not make any statement), at the time the Registration Statement became effective with respect to the Underwriters, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except for financial statements and schedules and other financial data included or incorporated therein or omitted therefrom, as to which we do not make any statement), as of its date or at the date hereof, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

EX-4.1 4 ex0401.htm sd-ind

Exhibit 4.1

THE ROYAL BANK OF SCOTLAND GROUP plc,
as Issuer

THE BANK OF NEW YORK,
as Trustee

INDENTURE

Dated as of September 30, 2002

Subordinated Debt Securities

THE ROYAL BANK OF SCOTLAND GROUP plc

Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and Subordinated Debt Securities Indenture, dated September 30, 2002.

Trust Indenture Act Section		Subordinated Debt Securities Indenture Section

§310(a)	(1)	6.09
(a)	(2)	6.09
(a)	(3)	Not Applicable
(a)	(4)	Not Applicable
(b)		6.08, 6.10
(c)		Not Applicable
§311(a)		6.13
(b)		6.13
(b)	(2)	7.03(a), 7.03(b)
(c)		Not Applicable
§312(a)		7.01, 7.02(a)
(b)		7.02(b)
(c)		7.02(c)
§313(a)		7.03(a)
(b)		7.03(a)
(c)		1.06, 7.03(a)
(d)		7.03(b)
§ 314(a)		7.04, 10.06
(b)		Not Applicable
(c)	(1)	1.02
(c)	(2)	1.02
(c)	(3)	Not Applicable
(d)		Not Applicable
(e)		1.02
(f)		Not Applicable
§315(a)		6.01
(b)		6.02, 7.03(a)
(c)		6.01
(d)		6.01
(d)	(1)	6.01
(d)	(2)	6.01
(d)	(3)	6.01
(e)		5.14
§316(a)	(1)(A)	5.02, 5.12


Trust Indenture Act Section		Subordinated Debt Securities Indenture Section

(a)	(l)(B)	5.13
(a)	(2)	Not Applicable
(a)	(last sentence)	1.01
(b)		5.08
§317(a)	(1)	5.03
(a)	(2)	5.04
(b)		10.03
§318(a)		1.07

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

TABLE OF CONTENTS

		PAGE
	ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01.	Definitions	1
SECTION 1.02.	Compliance Certificates and Opinions	11
SECTION 1.03.	Form of Documents Delivered to Trustee	11
SECTION 1.04.	Acts of Holders	12
SECTION 1.05.	Notices, Etc. to Trustee and Company	13
SECTION 1.06.	Notice to Holders; Waiver	13
SECTION 1.07.	Conflict with Trust Indenture Act	14
SECTION 1.08.	Effect of Headings and Table of Contents	15
SECTION 1.09.	Successors and Assigns	15
SECTION 1.10.	Separability Clause	15
SECTION 1.11.	Benefits of Subordinated Debt Securities Indenture	15
SECTION 1.12.	Governing Law	15
SECTION 1.13.	Saturdays, Sundays and Legal Holidays	15
SECTION 1.14.	Appointment of Agent for Service	16
SECTION 1.15.	Calculation Agent	16

	ARTICLE 2 SUBORDINATED DEBT SECURITY FORMS

SECTION 2.01.	Forms Generally	17
SECTION 2.02.	Form of Trustee’s Certificate of Authentication	17

	ARTICLE 3 THE SUBORDINATED DEBT SECURITIES

SECTION 3.01.	Amount Unlimited; Issuable in Series	18
SECTION 3.02.	Denominations	21
SECTION 3.03.	Execution, Authentication, Delivery and Dating	22
SECTION 3.04.	Temporary Subordinated Debt Securities	23
SECTION 3.05.	Registration, Registration of Transfer and Exchange	23
SECTION 3.06.	Mutilated, Destroyed, Lost and Stolen Subordinated Debt Securities	28
SECTION 3.07.	Payment; Interest Rights Preserved	29
SECTION 3.08.	Persons Deemed Owners	30

		PAGE

SECTION 3.09.	Cancellation	30
SECTION 3.10.	Computation of Interest	31
SECTION 3.11.	Cusip Numbers	31

	ARTICLE 4 SATISFACTION AND DISCHARGE

SECTION 4.01.	Satisfaction and Discharge of Subordinated Debt Securities Indenture	31
SECTION 4.02.	Application of Trust Money	33
SECTION 4.03.	Repayment to Company	33

	ARTICLE 5 REMEDIES

SECTION 5.01.	Events of Default	33
SECTION 5.02.	Acceleration of Maturity; Rescission and Annulment	34
SECTION 5.03.	Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee	35
SECTION 5.04.	Trustee May File Proofs of Claim	36
SECTION 5.05.	Trustee May Enforce Claims Without Possession of Subordinated Debt Securities	37
SECTION 5.06.	Application of Money Collected	37
SECTION 5.07.	Limitation on Suits	38
SECTION 5.08.	Unconditional Right of Holders to Receive Principal, Premium and Interest, if any	39
SECTION 5.09.	Restoration of Rights and Remedies	39
SECTION 5.10.	Rights and Remedies Cumulative	39
SECTION 5.11.	Delay or Omission Not Waiver	40
SECTION 5.12.	Control by Holders	40
SECTION 5.13.	Waiver of past Defaults	40
SECTION 5.14.	Undertaking for Costs	41

	ARTICLE 6 THE TRUSTEE

SECTION 6.01.	Certain Duties and Responsibilities	41
SECTION 6.02.	Notice of Defaults	42
SECTION 6.03.	Certain Rights of Trustee	42
SECTION 6.04.	Not Responsible for Recitals or Issuance of Subordinated Debt Securities	43
SECTION 6.05.	May Hold Subordinated Debt Securities	44

		PAGE

SECTION 6.06.	Money Held in Trust	44
SECTION 6.07.	Compensation and Reimbursement	44
SECTION 6.08.	Disqualification; Conflicting Interests	45
SECTION 6.09.	Corporate Trustee Required; Eligibility	45
SECTION 6.10.	Resignation and Removal; Appointment of Successor	46
SECTION 6.11.	Acceptance of Appointment by Successor	48
SECTION 6.12.	Merger, Conversion, Consolidation or Succession to Business .	49
SECTION 6.13.	Preferential Collection of Claims	50
SECTION 6.14.	Appointment of Authenticating Agent	50

	ARTICLE 7 HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.01.	Company to Furnish Trustee Names and Addresses of Holders	52
SECTION 7.02.	Preservation of Information; Communication to Holders	52
SECTION 7.03.	Reports by Trustee	53
SECTION 7.04.	Reports by Company	53

	ARTICLE 8 CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

SECTION 8.01.	Company May Consolidate, Etc., Only on Certain Terms	54
SECTION 8.02.	Successor Corporation Substituted	55
SECTION 8.03.	Assumption of Obligations	55

	ARTICLE 9 SUPPLEMENTAL INDENTURES

SECTION 9.01.	Supplemental Indentures Without Consent of Holders	57
SECTION 9.02.	Supplemental Indentures with Consent of Holders	58
SECTION 9.03.	Execution of Supplemental Indentures	60
SECTION 9.04.	Effect of Supplemental Indentures	60
SECTION 9.05.	Conformity with Trust Indenture Act	60
SECTION 9.06.	Reference in Subordinated Debt Securities to Supplemental Indentures
		60
	ARTICLE 10 COVENANTS

SECTION 10.01.	Payment of Principal, Premium, and Interest	61
SECTION 10.02.	Maintenance of Office or Agency	61
SECTION 10.03.	Money for Payments to Be Held in Trust	62

iii

		PAGE

SECTION 10.04.	Additional Amounts	63
SECTION 10.05.	Corporate Existence	65
SECTION 10.06.	Statement as to Compliance	66
SECTION 10.07.	Original Issue Document	66

	ARTICLE 11 REDEMPTION OF SUBORDINATED DEBT SECURITIES

SECTION 11.01.	Applicability of Article	66
SECTION 11.02.	Election to Redeem; Notice to Trustee	66
SECTION 11.03.	Selection by Trustee of Subordinated Debt Securities to Be Redeemed	66
SECTION 11.04.	Notice of Redemption	67
SECTION 11.05.	Deposit of Redemption Price	68
SECTION 11.06.	Subordinated Debt Securities Payable on Redemption Date	68
SECTION 11.07.	Subordinated Debt Securities Redeemed in Part	68
SECTION 11.08.	Optional Redemption Due to Changes in Tax Treatment	69
SECTION 11.09.	[Reserved]	70

	ARTICLE 12 SUBORDINATION OF SUBORDINATED DEBT SECURITIES

SECTION 12.01.	Subordinated Debt Securities Subordinate to Claims of Senior Creditors	70
SECTION 12.02.	Provisions Solely to Define Relative Rights	70
SECTION 12.03.	Trustee to Effectuate Subordination	71
SECTION 12.04.	No Waiver of Subordination Provisions	71
SECTION 12.05.	Notice to Trustee	71
SECTION 12.06.	Reliance on Judicial Order or Certificate of Liquidating Agent	72

SECTION 12.07.	Trustee Not Fiduciary for Senior Creditors	72
SECTION 12.08.	Rights of Trustee as Senior Creditor; Preservation of Trustee’s	73
	Rights
SECTION 12.09.	Article Applicable to Paying Agents	73
SECTION 12.10.	Exchanges Not Deemed Payment	73

	ARTICLE 13 EXCHANGE OF SUBORDINATED DEBT SECURITIES

SECTION 13.01.	Applicability of Article	74
SECTION 13.02.	Election to Exchange; Notice to Trustee	74
SECTION 13.03.	Notice of Exchange	74

		PAGE

SECTION 13.04.	Deposit of Interest	75
SECTION 13.05.	Surrender of Subordinated Debt Securities	75
SECTION 13.06.	Issuance of Dollar Preference Shares or Exchange Securities	76
SECTION 13.07.	Effect of Exchange	76
SECTION 13.08.	Validity of Dollar Preference Shares or Exchange Securities	77
SECTION 13.09.	Legal and Regulatory Compliance	77
SECTION 13.10.	Taxes and Charges	78
SECTION 13.11.	Trustee Not Liable	79

SUBORDINATED DEBT SECURITIES INDENTURE, dated as of September 30, 2002 between THE ROYAL BANK OF SCOTLAND GROUP plc, a company incorporated in Great Britain and registered in Scotland (the “Company”), having its registered office at 36 St Andrew Square, Edinburgh EH2 2YB, United Kingdom and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the “Trustee”), having its Corporate Trust Office at 101 Barclay Street, New York, New York, 10286.

RECITALS OF THE COMPANY

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

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

NOW, THEREFORE, THIS SUBORDINATED DEBT SECURITIES INDENTURE WITNESSETH:

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

ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

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

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

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

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

     (4) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Subordinated Debt Securities Indenture as a whole and not to any particular Article, Section or other subdivision; and

     (5) any reference to an “Article” or a “Section” refers to an Article or Section of this Subordinated Debt Securities Indenture.

Certain terms, used principally in Articles Six and Thirteen, are defined in those Articles.

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

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

“ADR Custodian” means the custodian under the ADR Deposit Agreement.

“ADR Deposit Agreement” means the Deposit Agreement dated as of August 17, 1992, and amended and restated as of February 8, 1999, and as further amended and restated as of November 2, 2001 as may be further amended from time to time between the Company and The Bank of New York and the holders from time to time of American Depositary Receipts issued thereunder.

“ADR Depositary ” means the depositary under the ADR Deposit Agreement.

when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled ” have meanings correlative to the foregoing.

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

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

“Authenticating Agent” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Subordinated Debt Securities.

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

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

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

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

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

“Clearstream Luxembourg” means, Clearstream Banking, société anonyme, or its nominee or its or their successor.

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

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

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

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

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

“Default” has the meaning specified in Section 5.03.

“Deferred Interest” has the meaning specified in Section 3.07.

“Deferred Payment Date” has the meaning specified in Section 3.07.

“Deferred Record Date”, when used for the interest payable on any Deferred Payment Date on registered Subordinated Debt Securities of any series, means the date specified for the purpose pursuant to Section 3.01.

“Depositary” means, with respect to any series of Subordinated Debt Securities, a clearing agency that is designated to act as Depositary for the Global

Securities evidencing all or part of such Subordinated Debt Securities as contemplated by Section 3.01.

“Discount Security” means any Subordinated Debt Security which provides for an amount less than the principal amount to be due and payable upon a declaration of the Maturity thereof pursuant to Section 5.02.

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

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

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

“euro”or “€” means the single currency of the participating member states in the Third Stage of European economic and monetary union pursuant to the Treaty establishing the European Community (as amended from time to time). “participating member states” means those member states of the European Union from time to time which adopt a single, shared currency in the Third Stage, as defined and identified in the EMU legislation.

“Euroclear” means, the Euroclear Bank S.A./N.V. as operator of the Euroclear System, or its nominee, or its or their successor.

“Event of Default” has the meaning specified in Section 5.01.

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

“Exchange Date”, when used with respect to any applicable series of Subordinated Debt Securities, has the meaning specified in Section 13.03.

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

“Foreign Currency” means the euro or any currency issued by the government of any country (or a group of countries or participating member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts

“Foreign Government Securities” means with respect to Subordinated Debt Securities of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.

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

“Holder” means a Person in whose name a Subordinated Debt Security in global or definitive form is registered in the Subordinated Debt Security Register.

The term “interest”, when used with respect to a Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

“Interest Payment Date”, when used with respect to any Subordinated Debt Security, means the Stated Maturity of any instalment of interest on such Subordinated Debt Security.

“Liquidator” has the meaning specified in Section 12.06.

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

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

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

“Outstanding”, when used with respect to Subordinated Debt Securities or any series of Subordinated Debt Securities means, as of the date of determination, all Subordinated Debt Securities or all Subordinated Debt

Securities of such series, as the case may be, theretofore authenticated and delivered under this Subordinated Debt Securities Indenture, except:

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

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

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

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

Subordinated Debt Securities and that the pledgee is not the Company or any other obligor upon the Subordinated Debt Securities or any Affiliate of the Company or of such other obligor.

“Paying Agent” means any Person (which may include the Company) authorized by the Company to pay the principal of (and premium, if any) or interest, if any on any Subordinated Debt Securities on behalf of the Company.

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

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

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

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

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

“Regular Record Date” for the interest payable on any Interest Payment Date on registered Subordinated Debt Securities of any series means the date specified for the purpose pursuant to Section 3.01.

“Responsible Officer”, when used with respect to the Trustee, means any officer of the Trustee assigned to or working in the corporate trust department of the Trustee or, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and

familiarity with the particular subject and who shall have direct responsibility for the administration of this Subordinated Debt Securities Indenture.

“Senior Creditors” means creditors of the Company except creditors in respect of Subordinated Indebtedness.

“Stated Maturity”, when used with respect to any Subordinated Debt Security or any instalment of principal thereof or interest thereon, means the date, if any, specified in, or determined in accordance with the terms of, such Subordinated Debt Security as the fixed date on which the principal of such Subordinated Debt Security is due and payable.

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

“Subordinated Debt Securities Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Subordinated Debt Securities established pursuant to Section 3.01.

“Subordinated Debt Security” means one of the Subordinated Debt Securities.

“Subordinated Debt Security Register” and “Subordinated Debt Security Registrar” have the respective meanings specified in Section 3.05.

“Subordinated Indebtedness” means claims in respect of any liability of the Company however arising for the payment of money, the right to payment of which by the Company by the terms thereof that are or are expressed to be, subordinated (whether only in the event of a winding-up of the Company or otherwise) to the claims of all or any of the creditors of the Company.

“Subsidiary” has the meaning attributed thereto by Section 736 of the Companies Act 1985 of Great Britain as in force at the date as of which this instrument was executed.

“Taxing Jurisdiction” has the meaning specified in Section 10.04.

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor trustee shall have become such pursuant to the

applicable provisions of this Subordinated Debt Securities Indenture, and thereafter “Trustee” shall mean the Person who is then the Trustee hereunder, and if at any time there is more than one such Person, “Trustee” shall mean and include each such Person; and “Trustee” as used with respect to the Subordinated Debt Securities of any series shall mean the Trustee with respect to the Subordinated Debt Securities of such series.

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

“United Kingdom” means the United Kingdom of Great Britain and Northern Ireland.

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

“U.S. Government Obligations” means noncallable (i) direct obligations of the United States for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.

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

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

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

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

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

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

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

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

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

opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

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

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

SECTION 1.04. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Subordinated Debt Securities Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, when it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Subordinated Debt Securities Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

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

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

(a) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile) to the Trustee at its Corporate Trust Office, or

(b) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, in the case of the Company, first-class postage prepaid, addressed to it at the address of its principal office specified in the first paragraph of this Subordinated Debt Securities Indenture (unless another address has been previously furnished in writing to the Trustee by the Company, in which case at the last such address) marked “Attention: Company Secretary”.

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

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

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

If the Subordinated Debt Securities are listed on the Luxembourg Stock Exchange, all notices to Holders, will be published in an Authorized Newspaper in Luxembourg.

SECTION 1.07. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Subordinated Debt Securities Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. If at any future time any provision required to be included herein by the Trust Indenture Act as in force at the date as of which this Subordinated Debt Securities Indenture was executed or any limitation imposed by the Trust Indenture Act at such date on any provision otherwise included herein would not be so required or imposed (in whole or in part) if this Subordinated Debt Securities Indenture were executed at such future time, the Company and the Trustee may enter into one or more indentures supplemental hereto pursuant to Section 9.01 to change or eliminate (in whole or in part) such provision or limitation of this Subordinated Debt Securities Indenture in conformity with the requirements of the Trust Indenture Act as then in force, except that (subject to Article Nine) no provision or limitation required to be included herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust Indenture Act as in force at the date as of which this Subordinated Debt Securities Indenture was executed may be so changed or eliminated.

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

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

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

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

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

SECTION 1.13. Saturdays, Sundays and Legal Holidays. The terms of the Subordinated Debt Securities shall provide that, in any case where any Interest Payment Date, Redemption Date, Exchange Date, Maturity or Stated Maturity, of a Subordinated Debt Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Subordinated Debt Securities Indenture or the Subordinated Debt Securities other than a provision in the Subordinated Debt Securities that specifically states that such provision shall apply in lieu of this Section) payments of interest, if any (and premium, if any) or principal and the exchange of the Subordinated Debt Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment (or such other Business Day as shall be provided in such Subordinated Debt Security) with the same force and effect as if made on such Interest Payment Date, Redemption Date, Exchange Date, Maturity or Stated Maturity, provided that no interest shall accrue on such payment for the period

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

SECTION 1.14. Appointment of Agent for Service. The Company has designated and appointed CT Corporation System, 111 Eighth Avenue, 13^th floor, New York, New York 10011 as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York arising out of or relating to the Subordinated Debt Securities or this Subordinated Debt Securities Indenture, but for that purpose only, and agrees that service of process upon said CT Corporation System shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Subordinated Debt Securities remain Outstanding until the appointment of a successor by the Company and such successor’s acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee of the name and address of such successor. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of said CT Corporation System in full force and effect so long as any of the Subordinated Debt Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take any such action. The Company hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

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

ARTICLE 2
UBORDINATED DEBT SECURITY FORMS

SECTION 2.01. Forms Generally. The Subordinated Debt Securities of each series shall be issuable as registered securities without coupons and in such forms as shall be established by or pursuant to action of the Company’s Board of Directors, or in one or more indentures supplemental hereto, pursuant to Section 3.01, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by this Subordinated Debt Securities Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or rule or regulation made pursuant thereto or with the rules of any securities exchange or Depositary therefor, or as may, consistently herewith, be determined by the officers executing such Subordinated Debt Securities, all as evidenced by any such execution; provided, however, that such Subordinated Debt Securities shall have endorsed thereon a statement in the following form or in substantially the following form:

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

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

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

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

CERTIFICATE OF AUTHENTICATION

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

THE BANK OF NEW YORK as Trustee


By:

		Authorized Signatory

ARTICLE 3
THE SUBORDINATED DEBT SECURITIES

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

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

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

     (b) any limit upon the aggregate principal amount of the

Subordinated Debt Securities of the series which may be authenticated and delivered under this Subordinated Debt Securities Indenture (except for Subordinated Debt Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Subordinated Debt Securities of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07);

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

     (d) the rate or rates, if any, at which the Subordinated Debt Securities of the series shall accrue interest or the manner of calculation of such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07(a), the Deferred Payment Date(s) or other terms applicable to deferred payments and, in the case of registered Subordinated Debt Securities, the Regular Record Date for the interest payable on any Interest Payment Date, the Deferred Record Date for the interest payable on any Deferred Payment Date and any dates required to be established pursuant to Section 7.01;

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

     (f) the place or places where the principal of (and premium, if any) and any interest on Subordinated Debt Securities of the series shall be payable, and the Paying Agent or Paying Agents who shall be authorized to pay principal of (and premium, if any) and interest on Subordinated Debt Securities of such series, at least one of such Paying Agents having offices or agencies in the Borough of Manhattan, The City of New York and if the Subordinated Debt Securities are listed on the Luxembourg Stock Exchange, in Luxembourg;

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

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

     (i) if other than denominations of $25 and any multiple thereof, the denominations in which Subordinated Debt Securities of the series in each applicable form shall be issuable;

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

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

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

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

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

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

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

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

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

     (s) any other Events of Default, Defaults or covenants with respect to the Subordinated Debt Securities of such series and if other than as specified in Section 5.03, the terms of any Default;

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

     (u) the forms of Subordinated Debt Securities of the series; and

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

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

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

SECTION 3.02. Denominations. The Subordinated Debt Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specification with respect to Subordinated Debt Securities of any series, the Subordinated Debt Securities of each series shall be issuable in denominations of $25 each and any integral multiple thereof. Unless otherwise specified in accordance with Section

3.01, any Global Security issued and delivered to the Holder shall be issued in the form of units with each $25 principal amount of such Global Security constituting one unit.

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

At any time and from time to time after the execution and delivery of this Subordinated Debt Securities Indenture, the Company may deliver Subordinated Debt Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Subordinated Debt Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Subordinated Debt Securities. In authenticating such Subordinated Debt Securities and accepting the additional responsibilities under this Subordinated Debt Securities Indenture in relation to such Subordinated Debt Securities the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Subordinated Debt Securities Indenture.

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

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

No Subordinated Debt Security appertaining thereto shall be entitled to any benefit under this Subordinated Debt Securities Indenture or be valid or obligatory for any purpose unless there appears on such Subordinated Debt Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual signature, and such certificate upon any Subordinated Debt Security shall be conclusive evidence, and

the only evidence, that such Subordinated Debt Security has been duly authenticated and delivered hereunder and that such Subordinated Debt Security is entitled to the benefits of this Subordinated Debt Securities Indenture.

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

If temporary Subordinated Debt Securities of any series are issued, the Company will cause, if so required by the terms of such temporary Subordinated Debt Securities, definitive Subordinated Debt Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Subordinated Debt Securities of such series, the temporary Subordinated Debt Securities of such series shall be exchangeable for definitive Subordinated Debt Securities of such series containing identical terms and provisions upon surrender of the temporary Subordinated Debt Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Subordinated Debt Securities of any series the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, a like aggregate principal amount of definitive Subordinated Debt Securities of the same series of authorized denominations containing identical terms and provisions. Until so exchanged, unless otherwise provided therein or in a supplemental indenture relating thereto, the temporary Subordinated Debt Securities of any series shall in all respects be entitled to the same benefits (but shall be subject to all the limitations of rights) under this Subordinated Debt Securities Indenture as definitive Subordinated Debt Securities of such series.

SECTION 3.05. Registration, Registration of Transfer and Exchange.

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

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

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

Except as otherwise specified as contemplated by Section 3.01 hereof, any Global Security shall be exchangeable for definitive Subordinated Debt Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section only (i) if the relevant Depositary notifies the Trustee that it is unwilling or unable to continue to act as Depositary and a successor depositary is not appointed by the Trustee within 120 days of such notification, (ii) if, in the event of a winding-up of the Company, the Company fails to make a payment on the Subordinated Debt Securities when due, or (iii) at any time if the Company at its option and in its sole discretion determines that the Global Securities of a particular series should be exchanged for definitive Subordinated Debt Securities of that series in registered form. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for, unless otherwise specified or contemplated by Section 3.01, definitive Subordinated Debt Securities in registered form bearing interest (if any) at the same rate or pursuant to the same formula, having the same date of issuance, the same date or dates from which such interest shall accrue, the same Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Subordinated Debt Securities in registered form shall be registered in the names of the owners of the beneficial interests in such Global Securities as such names are from time to time provided by the Holder to the Trustee.

Any Global Security that is exchangeable pursuant to the preceding paragraph, unless otherwise specified as contemplated by Section 3.01, shall be

exchangeable for Subordinated Debt Securities issuable in authorized denominations of a like aggregate principal amount and tenor.

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

In the event that a Global Security is surrendered for redemption or exchange for Dollar Preference Shares or Exchange Securities in part pursuant to Section 11.07 or Section 13.05, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.

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

In connection with any exchange of interests in a Global Security for definitive Subordinated Debt Securities of another authorized form, as provided in this subsection 3.05(a), then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Subordinated Debt Securities in aggregate principal amount equal to the principal amount of such Global Security or the portion to be exchanged executed by the Company. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Holder to the Trustee, as the Company’s agent for such

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

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

(b) Except as otherwise specified pursuant to Section 3.01, registered Subordinated Debt Securities of any series may only be exchanged for a like aggregate principal amount of registered Subordinated Debt Securities of such series of other authorized denominations containing identical terms and provisions. Subordinated Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Subordinated Debt Security or Subordinated Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.

Debt Security Register shall be maintained in any office or agency in the United Kingdom other than in Scotland) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of registered Subordinated Debt Securities and of transfers of such Subordinated Debt Securities. The Trustee is hereby appointed “Subordinated Debt Security Registrar” for the purpose of registering Subordinated Debt Securities in registered form and transfers of Subordinated Debt Securities in registered form as herein provided.

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

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

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

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

The Company shall not be required (i) to issue, register the transfer of or exchange any Subordinated Debt Security of any series during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of Subordinated Debt Securities of such series selected for redemption under Section 11.03 and ending at the close of business on the day of the giving of

such notice, or (ii) to register the transfer of or exchange any Subordinated Debt Security so selected for redemption in whole or in part, except the unredeemed portion of any Subordinated Debt Securities being redeemed in part.

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

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

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

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

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

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

SECTION 3.07. Payment; Interest Rights Preserved. (a) Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, if the Company does not make a payment of principal of (and premium, if any, on) or interest, if any, with respect to any series of Subordinated Debt Securities on the original due date for payment, the obligation to make such payment shall be deferred until (i) in the case of a payment of interest, the date upon which a dividend is paid on any class of the Company’s share capital and (ii) in the case of a payment of principal, the first Business Day after the date that falls six months after the original due date for payment (a “Deferred Payment Date”). Failure by the Company to make any such payment prior to such Deferred Payment Date shall not constitute a Default by the Company or otherwise allow any Holder to sue the Company for such payment or take any other action. Each payment so deferred will accrue interest at the rate prevailing immediately before the original due date with respect to such payment. Any amount the due date of which is deferred pursuant to the above shall not be treated as due for any purpose (including, without limitation, for the purposes of ascertaining whether or not a Default has occurred) until the Deferred Payment Date.

(b) Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, interest, if any, on any Subordinated Debt Securities which is payable, and is paid or duly provided for, on any Interest Payment Date shall be paid, in the case of registered Subordinated Debt Securities, to the Person in whose name that Subordinated Debt Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest or, in the case of Global Securities held by any Holder, to the Holder including through a Paying Agent of the Company designated pursuant to Section 3.01 outside the United Kingdom for collection by the Holder.

In the case of registered Subordinated Debt Securities where payment is to be made in Dollars, payment at any Paying Agent’s office outside The City of New York will be made in Dollars by check drawn on, or, at the request of the Holder, by transfer to a Dollar account maintained by the payee with, a bank in The City of New York.

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

Any interest on any Subordinated Debt Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date is herein called “Deferred Interest”. Deferred Interest on any registered Subordinated Debt Security of any series shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue then of having been such Holder, and such Deferred Interest may be paid, in the case of registered Subordinated Debt Securities, to the Person in whose name that Subordinated Debt Security (or one or more Predecessor Subordinated Debt Securities) is registered at the close of business on the Deferred Record Date for such interest or may be paid by the Company, at its election, to the person who is the Holder on the record date established by the Company for such purpose.

Subject to the foregoing provisions of this Section, each Subordinated Debt Security delivered under this Subordinated Debt Securities Indenture upon registration of transfer of or in exchange for or in lieu of any other Subordinated Debt Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Subordinated Debt Security.

SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a registered Subordinated Debt Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Subordinated Debt Security is registered as the owner of such Subordinated Debt Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Subordinated Debt Security and for all other purposes whatsoever, whether or not such Subordinated Debt Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

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

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

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

ARTICLE 4
SATISFACTION AND DISCHARGE

SECTION 4.01. Satisfaction and Discharge of Subordinated Debt Securities Indenture. This Subordinated Debt Securities Indenture shall upon Company Request cease to be of further effect with respect to Subordinated Debt Securities of any series (except as to any surviving rights of registration of transfer or exchange of Subordinated Debt Securities of such series herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series when

(a) either

(i) all Subordinated Debt Securities of such series theretofore authenticated and delivered (other than (A) Subordinated Debt Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (B) Subordinated Debt Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the

Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or

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

     (A) have become due and payable or will become due and payable at their Stated Maturity within one year, or

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

     (C) are to be exchanged for Dollar Preference Shares or Exchange Securities and notice of exchange of such Subordinated Debt Securities for Dollar Preference Shares or Exchange Securities pursuant to Article Thirteen shall have been given,

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

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

     (c) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of

this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series have been complied with.

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

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

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

ARTICLE 5
REMEDIES

SECTION 5.01. Events of Default. “Event of Default”, wherever used herein with respect to Subordinated Debt Securities of a particular series, means (i) the making of an order by a court of competent jurisdiction which is not successfully appealed within 30 days of the making of such order, or valid adoption by the shareholders of the Company of an effective resolution, for the winding-up of the Company (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) or (ii)

any other Event of Default provided with respect to Subordinated Debt Securities of such series pursuant to Section 3.01.

SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs with respect to Subordinated Debt Securities of any series and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series may declare the principal amount (or, in the case of Discount Securities, the accreted face amount together with accrued interest, if any, on) of all the Subordinated Debt Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.

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

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

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

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

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

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

SECTION 5.03. Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee. Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, “Default” wherever used herein with respect to Subordinated Debt Securities of a particular series, means any one of the following events (whatever the reason for such Default and whether it shall be voluntary or involuntary or be effected by operation of law pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a) the Company fails to pay any instalment of interest on any Subordinated Debt Security of such series on or before its Deferred Payment Date and such failure continues for 14 days; or

(b) the Company fails to pay all or any part of the principal of (and premium, if any, on) any Subordinated Debt Security of such series on its Deferred Payment Date, or when such principal shall otherwise become due and payable, whether upon redemption or otherwise, and such failure continues for seven days;

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

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

Notwithstanding the foregoing, failure to make any payment in respect of a series of Subordinated Debt Securities shall not be a Default in respect of such Subordinated Debt Securities if such payment is withheld or refused (i) in order to comply with any fiscal or other law or regulation or with the order of any court of competent jurisdiction, in each case applicable to such payment, or (ii) in case of doubt as to the validity or applicability of any such law, regulation or order, in accordance with advice given as to such validity or applicability at any time before the expiry of such period of 14 days (in the case of payments under clause

5.03(a) above) or seven days (in the case of payments under clause 5.03(b) above) by independent legal advisers acceptable to the Trustee, provided, however, that the Trustee may by notice to the Company require the Company to take such action (including but not limited to proceedings for a declaration by a court of competent jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days (in the case of payments under clause 5.03(a) above) or seven days (in the case of payments under clause 5.03(b) above) after the Trustee gives written notice to the Company informing it of such resolution.

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

SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, winding-up or other judicial proceeding relative to the Company or any other obligor upon the Subordinated Debt Securities of any series or to the property of the Company or such other obligor or their creditors (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency), the Trustee (irrespective of whether the principal of the Subordinated Debt Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and premium, if any) or interest, if any) shall be entitled and empowered, by intervention in such

proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys and other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of a Subordinated Debt Security to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders or holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 6.07.

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

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

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

SECTION 5.06. Application of Money Collected. Any money collected by the Trustee pursuant to this Article in respect of any series of Subordinated Debt Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (and premium, if any) or interest, if any, upon presentation of such Subordinated Debt

Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

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

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

THIRD: To the payment of the balance, if any, to the Company or any other Person or Persons legally entitled thereto.

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

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

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

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

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

     (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a

majority in principal amount of the Outstanding Subordinated Debt Securities of such series;

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

SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any. Notwithstanding any other provision in this Subordinated Debt Securities Indenture, the Holder of any Subordinated Debt Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Subordinated Debt Security on the respective Stated Maturities as expressed in such Subordinated Debt Security (or, in the case of redemption or exchange, on the Redemption Date or Exchange Date, as the case may be) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder or holder.

SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any Holder of any Subordinated Debt Security has instituted any proceeding to enforce any right or remedy under this Subordinated Debt Securities Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders of Subordinated Debt Securities shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders of Subordinated Debt Securities shall continue as though no such proceeding had been instituted.

SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Subordinated Debt Securities in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Subordinated Debt Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or

employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

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

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

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

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

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

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

(a) in the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security of such series, or

(b) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the

Holder of each Outstanding Subordinated Debt Security of such series affected.

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

SECTION 5.14. Undertaking for Costs. All parties to this Subordinated Debt Securities Indenture agree, and each Holder of any Subordinated Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Subordinated Debt Securities Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Subordinated Debt Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security on or after the respective Stated Maturities expressed in such Subordinated Debt Security (or, in the case of redemption or exchange, on or after the Redemption Date or the Exchange Date, as the case may be).

ARTICLE 6
THE TRUSTEE

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

provided, every provision of this Subordinated Debt Securities Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01.

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 6.04. Not Responsible for Recitals or Issuance of Subordinated Debt Securities. The recitals contained herein and in the Subordinated Debt

Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Subordinated Debt Securities Indenture or of the Subordinated Debt Securities, except that the Trustee represents and warrants that it has duly authorized, executed and delivered this Subordinated Debt Securities Indenture. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Subordinated Debt Securities or the proceeds thereof.

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

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

SECTION 6.07. Compensation and Reimbursement.

The Company agrees

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

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

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

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

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

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

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

trustee on reasonable and customary terms, having its corporate trust office or agency in the Borough of Manhattan, The City of New York, New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 6.

SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

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

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

(d) If at any time:

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

(ii) the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or by any

Holder who has been a bona fide Holder of a Subordinated Debt Security for at least six months, or

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

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

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

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Subordinated Debt Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Subordinated Debt Securities of such series (it being understood that any successor Trustee may be appointed with respect to the Subordinated Debt Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Subordinated Debt Securities of any particular series), and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Subordinated Debt Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Subordinated Debt Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Subordinated Debt

Securities of any series shall have been so appointed by the Company or the Holders of Subordinated Debt Securities of such series and accepted appointment in the manner hereinafter required by Section 6.11, any Holder who has been a bona fide Holder of a Subordinated Debt Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Subordinated Debt Securities of such series.

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

SECTION 6.11. Acceptance of Appointment by Successor.

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

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

the retiring Trustee with respect to the Subordinated Debt Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Subordinated Debt Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates.

(c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section 6.11, as the case may be.

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

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

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

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

Any corporation or national banking association into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or national banking association resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation or national banking association succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation or national

banking association shall be otherwise eligible under this Section 6.14, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice to the Holders of Subordinated Debt Securities in the manner and to the extent provided in Section 1.06. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section 6.14.

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

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

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

THE BANK OF NEW YORK as Trustee


By:		,

		as Authenticating Agent



By:

		Authorized Signatory

ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

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

(a) quarterly, not more than 15 days after each Regular Record Date (or after each of the dates to be specified for such purpose for non-interest bearing Subordinated Debt Securities and Subordinated Debt Securities on which interest is paid less frequently than quarterly as contemplated by Section 3.01), a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of registered Subordinated Debt Securities as of such Regular Record Date or such specified date, and

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

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

SECTION 7.02. Preservation of Information; Communication to Holders.

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

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

     (c) Every Holder, by receiving and holding a Subordinated Debt Security, agrees with the Company and the Trustee that neither the Company nor

the Trustee nor any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 7.02(b) or otherwise made pursuant to the Trust Indenture Act.

SECTION 7.03. Reports by Trustee.

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

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

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

SECTION 7.04. Reports by Company. The Company shall:

(a) file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then

it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constrictive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate);

(b) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Subordinated Debt Securities Indenture as may be required from time to time by such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate); and

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

ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms. The Company may, without the consent of Holders of any Subordinated Debt Securities of any series Outstanding under this Subordinated Debt Securities Indenture, consolidate or amalgamate with or merge into any other corporation or

convey or transfer or lease its properties and assets substantially as an entirety to any Person, provided that:

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

(b) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger, conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

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

SECTION 8.03. Assumption of Obligations. With respect to the Subordinated Debt Securities of any series, a wholly-owned subsidiary of the Company (a “successor entity”) may without the consent of any Holder assume the obligations of the Company (or any corporation which shall have previously assumed the obligations of the Company) for the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, on any series of Subordinated Debt Securities in accordance with the provisions of such

Subordinated Debt Securities and this Subordinated Debt Securities Indenture and the performance of every covenant of this Subordinated Debt Security Indenture and such series of Subordinated Debt Securities on the part of the Company to be performed or observed provided, that:

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

     (b) such successor entity shall confirm in such amendment to the Subordinated Debt Securities Indenture that such successor entity will pay all Additional Amounts, if any, payable pursuant to Section 10.04 in respect of all the Subordinated Debt Securities (provided, however, that for these purposes such successor entity’s country of organization will be substituted for the references to the United Kingdom);

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

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

Upon any such assumption, the successor entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Subordinated Debt Securities Indenture with respect to any such Subordinated Debt Securities with the same effect as if such successor entity had been named as the Company in this Subordinated Debt Securities Indenture, and the Company or any legal and valid successor corporation which shall theretofore have become

such in the manner prescribed herein, shall be released from all liability as obligor upon any such Subordinated Debt Securities except as provided in clause (a) of this Section 8.03.

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

ARTICLE 9
SUPPLEMENTAL INDENTURES

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

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

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

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

     (d) to add to, change or eliminate any of the provisions of this Subordinated Debt Securities Indenture, or any supplemental indenture, provided that any such change or elimination shall become effective only when there is no Subordinated Debt Security Outstanding of any series

created prior to the execution of such supplemental indenture effecting such change or elimination which is entitled to the benefit of such provision, and adversely affected by such addition, change or elimination;

     (e) to secure the Subordinated Debt Securities;

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

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

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

     (i) to make any other provisions with respect to matters or questions arising under this Subordinated Debt Securities Indenture, provided such action shall not adversely affect the interests of the Holders of Subordinated Debt Securities of any series in any material respect;

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

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

SECTION 9.02. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Outstanding Subordinated Debt Securities of each series affected by such supplemental Subordinated Debt Securities Indenture (voting as a class), by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Subordinated Debt Securities Indenture or of modifying in any manner the rights of the Holders of Subordinated Debt Securities of such series under this Subordinated Debt Securities Indenture; provided, however, that no such supplemental indenture

may, without the consent of the Holder of each Outstanding Subordinated Debt Security affected thereby,

     (a) change the Stated Maturity, if any, of any principal amount or any interest amounts in respect of any such Subordinated Debt Security, reduce the principal amount thereof or the rate of interest, if any, thereon, or any premium payable upon the redemption thereof, or reduce the amount of principal of a Discount Security that would be due and payable upon an acceleration of the Maturity thereof pursuant to Section 5.02, or change the obligation of the Company (or its successor) to pay Additional Amounts pursuant to Section 10.04 (except as contemplated by Section 8.01(a) and permitted by Section 9.01(a)) on the Subordinated Debt Securities, or the currency of payment of the principal amount of, premium, if any, or interest on, any such Subordinated Debt Security, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption or exchange, on or after the Redemption Date or the Exchange Date as the case may be); or

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

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

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

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

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

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

SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Subordinated Debt Securities Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Subordinated Debt Securities Indenture for all purposes; and every Holder of Subordinated Debt Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby, except as otherwise expressed therein.

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

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

such supplemental indenture may be prepared and executed by the Company and such Subordinated Debt Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Subordinated Debt Securities of such series.

ARTICLE 10
COVENANTS

SECTION 10.01. Payment of Principal, Premium, and Interest. The Company covenants and agrees for the benefit of each series of Subordinated Debt Securities that it will duly and punctually pay the principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on the Subordinated Debt Securities of that series in accordance with the terms of the Subordinated Debt Securities and this Subordinated Debt Securities Indenture.

SECTION 10.02. Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Subordinated Debt Securities an office or agency where Subordinated Debt Securities of that series may be presented or surrendered for payment, where Subordinated Debt Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Subordinated Debt Securities of that series and this Subordinated Debt Securities Indenture may be served; provided, however, that at the option of the Company in the case of registered Subordinated Debt Securities of such series, payment of any interest thereon may be made by check mailed to the address of the Person entitled herein as such address shall appear in the Subordinated Debt Security Register. With respect to the Subordinated Debt Securities of any series, such office or agency in each Place of Payment shall be specified as contemplated by Section 3.01, and if not so specified, initially shall be the Corporate Trust Office of the Trustee. Unless otherwise specified pursuant to Section 3.01, the Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Company in respect of Subordinated Debt Securities of any series and this Subordinated Debt Securities Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company hereby appoints the Trustee as its agent to receive all presentations, surrenders, notices and demands.

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

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

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

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

(b) give the Trustee notice of any default by the Company (or any other obligor upon the Subordinated Debt Securities of that series) in the making of any payment, when due and payable, or principal of (and

premium, if any) or interest, if any, on Subordinated Debt Securities of that series; and

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

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

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

SECTION 10.04. Additional Amounts. Unless otherwise specified in any Board Resolution establishing the terms of Subordinated Debt Securities of a series in accordance with Section 3.01, all amounts of principal, and premium, if any, and interest, if any, on any series of Subordinated Debt Securities will be paid by the Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law.

If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of, premium, if any, and interest, if any, on any series of Subordinated Debt Securities (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders of Subordinated Debt Securities of the particular series, after such deduction or withholding, shall equal the respective amounts of principal, premium, if any, and interest, if any, which would have been payable in respect of such Subordinated Debt Securities had no such deduction or withholding been required; provided, however, that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that:

     (i) the Holder or the beneficial owner of the Subordinated Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Subordinated Debt Security, or the collection of any payment of (or in respect of) principal of, premium, if any, or interest, if any, on any Subordinated Debt Security of the relevant series,

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

     (iii) the relevant Subordinated Debt Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting (where presentation is required) the same for payment at the close of such 30 day period, or

     (iv) the Holder or the beneficial owner of the relevant Subordinated Debt Security or the beneficial owner of any payment of (or in respect of) principal of, or interest, if any, on such Subordinated Debt Security failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make any declaration or other similar claim to satisfy any information requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative

practice of the Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

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

     (vi) the relevant Subordinated Debt Security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting (where presentation is required) the relevant Subordinated Debt Security to another paying agent in a Member State of the European Union; or

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

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Subordinated Debt Securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.

Whenever in this Subordinated Debt Securities Indenture there is mentioned, in any context, the payment of the principal of (and premium, if any) or interest, if any, on, or in respect of, any Subordinated Debt Security of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

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

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

SECTION 10.07. Original Issue Document. The Company shall provide to the Trustee on a timely basis such information, if any, as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders of the Subordinated Debt Securities relating to any original issue discount, including, without limitation, Form 1099-OID or any successor form.

ARTICLE 11
REDEMPTION OF SUBORDINATED DEBT SECURITIES

SECTION 11.01. Applicability of Article. Subordinated Debt Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series) in accordance with this Article 11.

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

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

Subordinated Debt Securities of that series or any multiple thereof) of the principal amount of Subordinated Debt Securities of such series of a denomination larger than the minimum authorized denomination for Subordinated Debt Securities of that series.

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

For all purposes of this Subordinated Debt Securities Indenture, unless the context otherwise requires, all provisions relating to the redemption of Subordinated Debt Securities shall relate in the case of any Subordinated Debt Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such registered Subordinated Debt Security which has been or is to be redeemed.

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

All notices of redemption shall state:

     (a) the Redemption Date,

     (b) the Redemption Price,

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

     (d) that on the Redemption Date the Redemption Price will become due and payable upon each such Subordinated Debt Security to be redeemed and, if applicable, that interest thereon will cease to accrue on or after the said date,

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

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

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

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

SECTION 11.06. Subordinated Debt Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Subordinated Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Subordinated Debt Securities shall cease to accrue interest. Upon surrender of any such Subordinated Debt Security for redemption in accordance with said notice, such Subordinated Debt Security shall be paid by the Company at the Redemption Price, together with accrued but unpaid interest to the Redemption Date; provided, however, that with respect to any Subordinated Debt Securities in registered form, unless otherwise specified as contemplated by Section 3.01, a payment of interest which is payable on a Interest Payment Date which is the Redemption Date, shall be payable to the Holders of such Subordinated Debt Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular or Deferred Record Date according to the terms of the Subordinated Debt Securities and the provisions of Section 3.07.

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

SECTION 11.07. Subordinated Debt Securities Redeemed in Part. Any Subordinated Debt Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, only in the case of Subordinated Debt Securities in registered form, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Subordinated Debt Security without

service charge, a new Subordinated Debt Security or Subordinated Debt Securities of the same series of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Subordinated Debt Security so surrendered.

SECTION 11.08. Optional Redemption Due to Changes in Tax Treatment. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Subordinated Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 nor more than 60 days’ notice, on any Interest Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such series of Subordinated Debt Securities to the date fixed for redemption (or, in the case of Discount Securities, the accreted face amount thereof, together with accrued interest, if any), if, at any time, the Company shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after a date included in the terms of such series of Subordinated Debt Securities pursuant to Section 3.01:

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

     (b) the payment of interest on the next Interest Payment Date in respect of any of the Subordinated Debt Securities would be treated as “distributions” within the meaning of Section 209 of the Income and Corporation Taxes Act 1988 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

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

In any case where the Company shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Subordinated Debt Securities of any series, the Company shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of

recognized standing (selected by the Company) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.

SECTION 11.09. [Reserved].

ARTICLE 12
SUBORDINATION OF SUBORDINATED DEBT SECURITIES

SECTION 12.01. Subordinated Debt Securities Subordinate to Claims of Senior Creditors.

(a) Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company covenants and agrees, and each Holder of Subordinated Debt Securities of each series, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article Twelve, the Subordinated Debt Securities of such series and the payment of the principal of, premium, if any and interest, if any, on each and all of the Subordinated Debt Securities of such series are hereby expressly made in the event of a winding-up of the Company subordinate and subject in right of payment to the prior payment in full of all claims of the Senior Creditors.

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

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

SECTION 12.02. Provisions Solely to Define Relative Rights. The provisions of this Article Twelve are and are intended solely for the purpose of

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

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

SECTION 12.04. No Waiver of Subordination Provisions. No right of any present or future Senior Creditors to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such Senior Creditor or by any noncompliance by the Company with the terms, provisions and covenants of this Subordinated Debt Securities Indenture, regardless of any knowledge thereof any such Senior Creditor may have or be otherwise charged with.

SECTION 12.05. Notice to Trustee. Upon the occurrence of any Event of Default or Default, the Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment when due to or by the Trustee in respect of the Subordinated Debt Securities of a series. Notwithstanding the provisions of this Article or any other provisions of this Subordinated Debt Securities Indenture but subject to the provisions of Section 12.01, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment when due to or by the Trustee in respect of such Subordinated Debt Securities unless and until the Trustee shall have received written notice thereof from the Company or a Senior

Creditor or from any trustee therefor; and, prior to the receipt of any such written notice by a Responsible Officer of the Trustee, the Trustee, subject to the provisions of Section 6.01, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of and any premium and interest, if any, on any Subordinated Debt Security), then, subject to the provisions of Section 12.01, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date.

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

SECTION 12.06. Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 6.01, the Holders of the Subordinated Debt Securities of the series shall be entitled to rely upon (i) any order or decree entered by any court in England or Scotland (but not elsewhere) in which such winding-up of the Company or similar case or proceeding, including a proceeding for the suspension of payments under English or Scottish law, is pending, or (ii) a certificate of the liquidator of the Company (the “Liquidator”), assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or the Holders of such Subordinated Debt Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the Senior Creditors and other claims against the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12.

distribute to Holders of Subordinated Debt Securities of the series or to the Company or to any other Person cash, property or securities to which any Senior Creditors shall be entitled by virtue of this Article or otherwise.

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

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

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

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

ARTICLE 13
EXCHANGE OF SUBORDINATED DEBT SECURITIES

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

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

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

All notices of exchange shall state:

     (A) the Exchange Date;

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

     (C) if less than all the Outstanding Subordinated Debt Securities of any series are to be exchanged, the identification of the particular Subordinated Debt Securities to be exchanged, which Subordinated Debt Securities shall be selected by the Trustee, from the Outstanding Subordinated Debt Securities of such series not

previously called for exchange, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for exchange of portions (equal to the minimum authorized denomination for Subordinated Debt Securities of that series or any multiple thereof) of the principal amount of Subordinated Debt Securities of such series of a denomination larger than the minimum authorized denomination for Subordinated Debt Securities of that series; and

(D) the place or places where such Subordinated Debt Securities are to be surrendered for exchange; and

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

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

SECTION 13.04. Deposit of Interest. Prior to any Exchange Date, the Company shall deposit with the Trustee an amount of money sufficient to pay accrued interest, if any, to the Exchange Date on all Subordinated Debt Securities of such series.

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

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

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

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

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

SECTION 13.07. Effect of Exchange. Notice of exchange having been given as aforesaid, the Subordinated Debt Securities so to be exchanged shall on the Exchange Date cease to exist for any purpose. Upon surrender of any such

Subordinated Debt Security for exchange in accordance with the said notice and this Article Thirteen, accrued interest, if any, on such Subordinated Debt Security to the Exchange Date shall be paid by the Company to the Holder surrendering such Subordinated Debt Security. Such payment shall be a condition to the exchange and no exchange shall occur unless such payments are made.

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

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

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

     (a) as of such Exchange Date, there is no accrued but unpaid interest (including amounts paid on the Exchange Date);

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

     (c) as of such Exchange Date, there has not been, in any one instance or in the aggregate, an adverse effect on the rights, powers,

privileges, validity or enforceability of the Dollar Preference Shares or Exchange Securities;

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

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

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

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

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

Custodian) being “Excepted Persons” or (ii) a transfer involved in the issuance and delivery of any such Dollar Preference Share or Exchange Securities to any Person other than any Holder (not being an Excepted Person) of the Subordinated Debt Security to be exchanged, or in the case of Global Securities, the ADR Depositary or the ADR Custodian, and the Company shall not be required to issue or deliver or procure the delivery of such Dollar Preference Shares or Exchange Securities unless and until the Person requesting the issuance or delivery thereof shall have paid to the Company the amount of such tax or other governmental charge or shall have established to the satisfaction of the Company that such tax or other governmental charge has been paid.

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

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

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

THE ROYAL BANK OF SCOTLAND GROUP plc


By:	/s/ Norman Cardie McLuskie

	Name:	Norman Cardie McLuskie
	Title:	Director


By:	/s/ Hew Campbell

	Name:	Hew Campbell
	Title:	Deputy Secretary


THE BANK OF NEW YORK

/s/ Sunjeeve Patel

Name: Sunjeeve Patel
Title: Assistant Vice President

EX-4.2 5 ex0402.htm

Exhibit 4.2

THE ROYAL BANK OF SCOTLAND GROUP plc,
as Issuer

THE BANK OF NEW YORK,
as Trustee

_________________

INDENTURE

Dated as of August 20, 2001

________________

Capital Securities

THE ROYAL BANK OF SCOTLAND GROUP plc

Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and Capital Securities Indenture, dated as of August 20, 2001

Trust Indenture Act Section		Capital Securities Indenture Section

§310	(a)(1)	6.09
	(a)(2)	6.09
	(a)(3)	Not Applicable
	(a)(4)	Not Applicable
	(b)	6.08, 6.10
	(c)	Not Applicable
§311	(a)	6.13
	(b)	6.13
	(b)(2)	7.03(a)
		7.03(b)
	(c)	Not Applicable
§312	(a)	7.01
		7.02(a)
	(b)	7.02(b)
	(c)	7.02(c)
§313	(a)	7.03(a)
	(b)	7.03(a)
	(c)	1.06, 7.03(a)
	(d)	7.03(b)
§314	(a)	7.04
	(b)	Not Applicable
	(c)(1)	1.02
	(c)(2)	1.02
	(c)(3)	Not Applicable
	(d)	Not Applicable
	(e)	1.02
	(f)	Not Applicable
§315	(a)	6.01
	(b)	6.02
		7.03(a)
	(c)	6.01
	(d)	6.01
	(d)(1)	6.01
	(d)(2)	6.01
	(d)(3)	6.01
	(e)	5.14
§316	(a)(1)(A)	5.02, 5.12
	(a)(l)(B)	5.13
	(a)(2)	Not Applicable
	(a)(last sentence)	1.01
	(b)	5.08
§317	(a)(1)	5.03
	(a)(2)	5.04
	(b)	10.03
§318	(a)	1.07

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

ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01.	Definitions	1
SECTION 1.02.	Compliance Certificates and Opinions	9
SECTION 1.03.	Form of Documents Delivered to Trustee	10
SECTION 1.04.	Acts of Holders	11
SECTION 1.05.	Notices, Etc. to Trustee and Company	12
SECTION 1.06.	Notice to Holders; Waiver	12
SECTION 1.07.	Conflict with Trust Indenture Act	13
SECTION 1.08.	Effect of Headings and Table of Contents	13
SECTION 1.09.	Successors and Assigns	13
SECTION 1.10.	Separability Clause	13
SECTION 1.11.	Benefits of Capital Securities Indenture	13
SECTION 1.12.	Governing Law	13
SECTION 1.13.	Saturdays, Sundays and Legal Holidays	14
SECTION 1.14.	Appointment of Agent for Service	14
SECTION 1.15.	Calculation Agent	14

ARTICLE 2
CAPITAL SECURITY FORMS

SECTION 2.01.		Forms Generally		15
SECTION 2.02.		Form of Trustee’s Certificate of Authentication		15

ARTICLE 3
THE CAPITAL SECURITIES

SECTION 3.01.	Amount Unlimited; Issuable in Series	16
SECTION 3.02.	Denominations	19
SECTION 3.03.	Execution, Authentication, Delivery and Dating	19
SECTION 3.04.	Temporary Capital Securities	20
SECTION 3.05.	Registration, Registration of Transfer and Exchange	21
SECTION 3.06.	Mutilated, Destroyed, Lost and Stolen Capital Securities	24
SECTION 3.07.	Payments; Rights Preserved	25
SECTION 3.08.	Persons Deemed Owners	26
SECTION 3.09.	Cancellation	27
SECTION 3.10.	Computation of Payments	27
SECTION 3.11.	CUSIP Numbers	27

ARTICLE 4
SATISFACTION AND DISCHARGE

SECTION 4.01.	Satisfaction and Discharge of Capital Securities Indenture	27
SECTION 4.02.	Application of Trust Money	29
SECTION 4.03.	Repayment to Company	29

ARTICLE 5
REMEDIES

SECTION 5.01.	Events of Default	29
SECTION 5.02.	Acceleration of Maturity; Rescission and Annulment	29
SECTION 5.03.	Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee	30
SECTION 5.04.	Trustee May File Proofs of Claim	31
SECTION 5.05.	Trustee May Enforce Claims Without Possession of Capital Securities	32
SECTION 5.06.	Application of Money Collected	32
SECTION 5.07.	Limitation on Suits	33
SECTION 5.08.	Unconditional Right of Holders to Receive Principal, Premium and Payments, If Any	33
SECTION 5.09.	Restoration of Rights and Remedies	34
SECTION 5.10.	Rights and Remedies Cumulative	34
SECTION 5.11.	Delay or Omission Not Waiver	34
SECTION 5.12.	Control by Holders	34
SECTION 5.13.	Waiver of past Defaults	35
SECTION 5.14.	Undertaking for Costs	35

ARTICLE 6
THE TRUSTEE

SECTION 6.01.	Certain Duties and Responsibilities	36
SECTION 6.02.	Notice of Defaults	36
SECTION 6.03.	Certain Rights of Trustee	36
SECTION 6.04.	Not Responsible for Recitals or Issuance of Capital Securities	38
SECTION 6.05.	May Hold Capital Securities	38
SECTION 6.06.	Money Held in Trust	38
SECTION 6.07.	Compensation and Reimbursement	38
SECTION 6.08.	Disqualification; Conflicting Interests	39
SECTION 6.09.	Corporate Trustee Required; Eligibility	39
SECTION 6.10.	Resignation and Removal; Appointment of Successor	39
SECTION 6.11.	Acceptance of Appointment by Successor	41
SECTION 6.12.	Merger, Conversion, Consolidation or Succession to Business	42
SECTION 6.13.	Preferential Collection of Claims	42
SECTION 6.14.	Appointment of Authenticating Agent	43

ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.01.	Company to Furnish Trustee Names and Addresses of Holders	44
SECTION 7.02.	Preservation of Information; Communication to Holders	45
SECTION 7.03.	Reports by Trustee	45
SECTION 7.04.	Reports by Company	45

iii

ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

SECTION 8.01.	Company May Consolidate, Etc., Only on Certain Terms	46
SECTION 8.02.	Successor Corporation Substituted	47
SECTION 8.03.	Assumption of Obligations	47

ARTICLE 9
SUPPLEMENTAL INDENTURES

SECTION 9.01.	Supplemental Indenture Without Consent of Holders	49
SECTION 9.02.	Supplemental Indentures with Consent of Holders	50
SECTION 9.03.	Execution of Supplemental Indentures	51
SECTION 9.04.	Effect of Supplemental Indentures	51
SECTION 9.05.	Conformity with Trust Indenture Act	51
SECTION 9.06.	Reference in Capital Securities to Supplemental Indentures	51

ARTICLE 10
COVENANTS

SECTION 10.01.	Payment of Principal, Premium, Payments and Missed Payments	52
SECTION 10.02.	Maintenance of Office or Agency	52
SECTION 10.03.	Money for Payments to Be Held in Trust	52
SECTION 10.04.	Additional Amounts	54
SECTION 10.05.	Corporate Existence	55
SECTION 10.06.	Statement as to Compliance	56

ARTICLE 11
REDEMPTION OF CAPITAL SECURITIES

SECTION 11.01.	Applicability of Article	56
SECTION 11.02.	Election to Redeem; Notice to Trustee	56
SECTION 11.03.	Selection by Trustee of Capital Securities to Be Redeemed	56
SECTION 11.04.	Notice of Redemption	56
SECTION 11.05.	Deposit of Redemption Price	57
SECTION 11.06.	Capital Securities Payable on Redemption Date	57
SECTION 11.07.	Capital Securities Redeemed in Part	58
SECTION 11.08.	Optional Redemption Due to Changes in Tax Treatment	58

ARTICLE 12
SUBORDINATION OF CAPITAL SECURITIES

SECTION 12.01.	Capital Securities Subordinate to Senior Claims	59
SECTION 12.02.	Provisions Solely to Define Relative Rights	60
SECTION 12.03.	Trustee to Effectuate Subordination	61
SECTION 12.04.	No Waiver of Subordination Provisions	61
SECTION 12.05.	Notice to Trustee	61
SECTION 12.06.	Reliance on Judicial Order or Certificate of Liquidating Agent	62
SECTION 12.07.	Trustee Not Fiduciary for Senior Creditors	62

SECTION 12.08.	Rights of Trustee as Senior Creditor; Preservation of Trustee’s Rights	62
SECTION 12.09.	Article Applicable to Paying Agents	62
SECTION 12.10.	Exchanges Not Deemed Payment	62

ARTICLE 13
EXCHANGE OF CAPITAL SECURITIES

SECTION 13.01.	Applicability of Article	63
SECTION 13.02.	Election to Exchange; Notice to Trustee	63
SECTION 13.03.	Notice of Exchange	63
SECTION 13.04.	Deposit of Payments	64
SECTION 13.05.	Surrender of Capital Securities	64
SECTION 13.06.	Issuance of Dollar Preference Shares or Exchange Securities	64
SECTION 13.07.	Effect of Exchange	65
SECTION 13.08.	Validity of Dollar Preference Shares or Exchange Securities	66
SECTION 13.09.	Legal and Regulatory Compliance	66
SECTION 13.10.	Taxes and Charges	67
SECTION 13.11.	Trustee Not Liable	67
TESTIMONIUM		67
SIGNATURES AND SEALS		68

CAPITAL SECURITIES INDENTURE, dated as of August 20, 2001 between THE ROYAL BANK OF SCOTLAND GROUP plc, a company incorporated in Great Britain and registered in Scotland (herein called the “Company”), having its registered office at 36 St Andrew Square, Edinburgh EH2 2YB, United Kingdom and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (herein called the “Trustee”), having its Corporate Trust Office at 101 Barclay Street, New York, New York, 10286.

RECITALS OF THE COMPANY

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

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

NOW, THEREFORE, THIS CAPITAL SECURITIES INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Capital Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of Capital Securities and holders of Coupons, if any, as follows:

ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

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

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

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

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

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

(e) unless the context requires, any reference to an “Article” or a “Section” refers to an Article or Section of this Agreement.

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

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

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

“ADR Custodian” means the custodian under the ADR Deposit Agreement.

“ADR Deposit Agreement” means the Deposit Agreement dated as of August 17, 1992, and amended and restated as of February 8, 1999 as may be further amended from time to time between the Company and The Bank of New York and the holders from time to time of American Depositary Receipts issued thereunder.

“ADR Depositary” means the depositary under the ADR Deposit Agreement.

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

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

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

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

Stock Exchange, and if it shall be impracticable in the opinion of the Trustee to make any publication of any notice required hereby in any such newspaper, shall mean any publication or other notice in lieu thereof which is made or given with the approval of the Trustee.

“Book-Entry Depositary” means, with respect to Capital Securities issuable or issued in whole or in part in the form of one or more Global Securities in bearer form, the Person, if any, appointed as agent by the Company under the Capital Security Deposit Agreement dated October 28, 1996 for the purposes of maintaining records in which it shall record the ownership, transfer and increases and decreases in the principal amount of certificate less depositary interests in a Global Security (or a successor Book-Entry Depositary), and if at any time there is more than one such Person, “Book-Entry Depositary” as used with respect to the Capital Securities shall mean the respective Book-Entry Depositary with respect to particular Capital Securities.

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

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

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

“Capital Securities Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Capital Securities established pursuant to Section 3.01.

“Capital Security” means one of the Capital Securities.

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

“Clearstream” means, Clearstream Banking, société anonyme (formerly Cedelbank), or its nominee or its or their successor.

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

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

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

“Coupon” or “Coupons” means any interest coupon or coupons, as the case may be, appertaining to any Capital Securities.

“Default” has the meaning specified in Section 5.03.

“Depositary” means, with respect to Capital Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities in registered form, a clearing agency that is designated to act as Depositary for such Global Securities as contemplated by Section 3.01.

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

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

“DTC” means The Depository Trust Company or its nominee or its or their successor.

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

Union from time to time which adopt a single, shared currency in the Third Stage, as defined and identified in the EMU legislation.

“Euroclear” means, the Euroclear Bank, as operator of the Euroclear System, or its nominee, or its or their successor.

“Event of Default” has the meaning specified in Section 5.01.

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

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

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

“Foreign Currency” means the euro or any currency issued by the government of any country (or a group of counties or participating member states) other than the United States of America which as at the time of payment is legal tender for the payment of public and private debts.

“Foreign Government Securities” means with respect to Capital Securities and Coupons, if any, of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.

“Global Security” means (i) with respect to Capital Securities issued in bearer form, a global security in bearer form evidencing all or a part of a series of Capital Securities without coupons for payments attached, authenticated and delivered to the Holder for such series or such portion of such series, or any other Holder and, (ii) with respect to Capital Securities issued in registered form, a global certificate evidencing all or part of a series of Capital Securities, authenticated and delivered to the Holder and registered in the name of the Holder or its nominee.

“Holder” means a Person who shall at the time be the bearer of any bearer Capital Security in global or definitive form or in whose name a registered Capital Security in global or definitive form is registered in the Capital Security Register.

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Capital Securities established pursuant to Section 3.01.

“Liquidator” has the meaning specified in Section 12.06.

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

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

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

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

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

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

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

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Capital Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of a Capital Security denominated in a Foreign Currency shall be the Dollar equivalent, determined on the date of original issuance of such Capital Security, of the principal amount of such Capital Security; and (ii) Capital Securities beneficially owned by the Company or any other obligor upon the Capital Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding except

that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Capital Securities which a Responsible Officer of the Trustee actually knows to be so beneficially owned shall be so disregarded; provided, further, however, that Capital Securities so beneficially owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Capital Securities and that the pledgee is not the Company or any other obligor upon the Capital Securities or any Affiliate of the Company or of such other obligor.

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

“Payment” means, unless otherwise provided by Section 3.01 hereof, a payment made to Holders at a rate per annum of the principal amount of the Capital Securities of a series as determined by the Company and set forth in such Capital Securities or determinable pursuant to the terms of such Capital Securities.

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

“Payment Event” has the meaning specified in Section 5.03.

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

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

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

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

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

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

“Securities Act” means the United States Securities Act of 1933, as amended.

“Senior Claims” in respect of any series of capital securities means (i) all claims of unsubordinated creditors of the Company admitted in the winding-up, (ii) all claims of creditors of the Company in respect of liabilities of the Company that are, or are expressed to be, subordinated (whether only in the event of the winding-up of the Company or otherwise) to the claims of unsubordinated creditors of the Company but not further or otherwise, (iii) all other claims except those which rank, or are expressed to rank, equally with or junior to the claims of Holders of any series of Capital Securities and (iv) any other Senior Claims provided with respect to Capital Securities of such series pursuant to Section 3.01.

“Senior Creditors” means the creditors of the Company holding the Senior Claims.

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

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

“successor entity” has the meaning specified in Section 8.03.

“Taxing Jurisdiction” has the meaning specified in Section 10.04.

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor trustee shall have become such pursuant to the

applicable provisions of this Capital Securities Indenture, and thereafter “Trustee” shall mean the Person who is then the Trustee hereunder, and if at any time there is more than one such Person, “Trustee” shall mean and include each such Person; and “Trustee” as used with respect to the Capital Securities of any series shall mean the Trustee with respect to the Capital Securities of such series.

“United Kingdom” means the United Kingdom of Great Britain and Northern Ireland.

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

“U.S. Government Obligations” means noncallable (i) direct obligations of the United States of America for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.

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

SECTION 1.02. Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Capital Securities Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Capital Securities Indenture relating to the proposed action

have been complied with and an Opinion of Counsel stating that in the opinion of the legal advisor rendering such opinion all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Capital Securities Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

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

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

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

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

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

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

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

SECTION 1.04. Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Capital Securities Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, when it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Capital Securities Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

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

(d) The ownership of a bearer Capital Security or Coupon, and the principal amount and serial number of such Capital Security or Coupon and the date of holding the same, may be proved by the production of such Capital Security or Coupon or by a certificate executed by any trust company, bank, banker or securities dealer satisfactory to the Trustee if such certificate shall be deemed by the Trustee to be satisfactory. Each such certificate shall be dated and shall state that on the date thereof a bearer Capital Security or Coupon of a particular series of a specified principal amount and bearing a specified serial number was deposited with or exhibited to such trust company, bank, banker or securities dealer by the Person named in such certificate. Any such certificate may be issued in respect of one or more Capital Securities or Coupons specified therein. The holding by the Person named in any such certificate of any Capital Security or Coupons specified therein shall be presumed to continue for a period of one year from the date of such certificate unless at the time of any determination of such holding (1) another certificate bearing the same or a later date issued in respect of the same Capital Security or Coupon shall be produced, or (2) the Capital Security or Coupon specified in such certificate shall be produced by some other Person, or (3) the Capital Security or Coupon specified in such certificate shall have ceased to be Outstanding.

(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Capital Security shall bind every future

Holder of the same Capital Security and the Holder of every Capital Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of any thing done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Capital Security or such other Capital Security.

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

(a) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile) to the Trustee at its Corporate Trust Office, or

(b) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, in the case of the Company, first-class postage prepaid, addressed to it at the address of its principal office specified in the first paragraph of this Capital Securities Indenture (unless another address has been previously furnished in writing to the Trustee by the Company, in which case at the last such address) marked “Attention: Company Secretary”.

SECTION 1.06. Notice to Holders; Waiver. When this Capital Securities Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) with respect to Global Securities in bearer form, if in writing and delivered or mailed and received, first-class postage prepaid, to the Holder affected by such event, at the address previously furnished in writing by the Holder to the Trustee and the Company and (i) if Outstanding bearer definitive Capital Securities are affected by such event, published at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York, and (ii) if Outstanding registered Capital Securities are affected, if given in writing and mailed, first-class postage prepaid, to each Holder of a registered Capital Security affected by such event in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act with respect to reports pursuant to Section 7.03(a) .

Any notice published pursuant to clause (i) of the preceding paragraph shall be deemed to have been given on the date of such publication or, if published more than once, on the date of the first publication. If publication is not practicable, notice will be valid if given in such other manner, and shall be deemed to have been given on such date, as the Company shall determine. For so long as the Capital Securities of any series are represented by Global Securities, the Company will deliver a copy of all notices with respect to such series to the Holder (if the address of such Holder is known to the Company).

When notice to Holders of registered Capital Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Capital Securities Indenture provides for notice in any

manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

SECTION 1.07. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Capital Securities Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. If at any future time any provision required to be included herein by the Trust Indenture Act as in force at the date as of which this Capital Securities Indenture was executed or any limitation imposed by the Trust Indenture Act at such date on any provision otherwise included herein would not be so required or imposed (in whole or in part) if this Capital Securities Indenture were executed at such future time, the Company and the Trustee may enter into one or more indentures supplemental hereto pursuant to Section 9.01 to change or eliminate (in whole or in part) such provision or limitation of this Capital Securities Indenture in conformity with the requirements of the Trust Indenture Act as then in force, except that (subject to Article 9) no provision or limitation required to be included herein by Sections 3.10(a)(1) and (a)(2), 3.15(a), (c), (d)(l), (d)(2), (d)(3) and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust Indenture Act as in force at the date as of which this Capital Securities Indenture was executed may be so changed or eliminated.

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

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

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

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

SECTION 1.12. Governing Law. This Capital Securities Indenture and the Capital Securities and the Coupons, if any, shall be governed by and construed in accordance with the laws of the State of New York, except as stated in Section

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

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

SECTION 1.14. Appointment of Agent for Service. The Company has designated and appointed CT Corporation System, 111 Eighth Avenue, 13^th floor, New York, New York 10011 as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York arising out of or relating to the Capital Securities, the Coupons or this Capital Securities Indenture, but for that purpose only, and agrees that service of process upon said CT Corporation System shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Capital Securities remain Outstanding until the appointment of a successor by the Company and such successor’s acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee of the name and address of such successor. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of said CT Corporation System in full force and effect so long as any of the Capital Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take any such action. The Company hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

SECTION 1.15. Calculation Agent. If the Company appoints a Calculation Agent pursuant to Section 3.01 with respect to any series of Capital Securities, any determination of the interest rate on, or other amounts in relation to, such series of Capital Securities in accordance with the terms of such series of Capital Securities by such Calculation Agent shall (in the absence of manifest error, bad faith or willful misconduct) be binding on the Company, the Trustee and all

Holders and (in the absence of manifest error, bad faith or willful misconduct) no liability to the Holders shall attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions.

ARTICLE 2
CAPITAL SECURITY FORMS

SECTION 2.01. Forms Generally. The Capital Securities of each series and the Coupons, if any, to be attached thereto shall be in such forms as shall be established by or pursuant to action of the Company’s Board of Directors, or in one or more indentures supplemental hereto, pursuant to Section 9.01, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or rule or regulation made pursuant thereto or with the rules of any securities exchange or Depositary therefor, or as may, consistently herewith, be determined by the officers executing such Capital Securities and Coupons, all as evidenced by any such execution; provided however, that such Capital Securities and Coupons shall have endorsed thereon a statement in the following form or in substantially the following form:

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

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

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

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

CERTIFICATE OF AUTHENTICATION

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

Dated:


THE BANK OF NEW YORK
	as Trustee

By:

	Authorized Signatory

ARTICLE 3
THE CAPITAL SECURITIES

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

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

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

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

     (d) the rate or rates, if any, at which Payments on the Capital Securities of the series shall accrue or the manner of calculation of such rate or rates, if any, the issue date with respect to Capital Securities in bearer form, the date or dates from which such Payments shall accrue, the Payment Dates on which such Payments shall be payable or the manner of determination of such Payment Dates and, in the case of registered Capital Securities, the Regular Record Date for the interest payable on any Payment Date and any dates required to be established pursuant to Section 7.01;

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

     (f) the place or places where the principal of (and premium, if any) and any Payments or Missed Payments on Capital Securities of the series shall be payable, and the Paying Agent or Paying Agents who shall be authorized to pay principal of (and premium, if any) and any Payments or Missed Payments on Capital Securities of such series, at least one of such Paying Agents having an office or agency in the Borough of Manhattan, The City of New York (and none shall have any office or agency in the United Kingdom in the case of Payments on bearer Capital Securities);

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

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

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

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

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

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

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

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

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

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

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

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

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

     (t) the forms of Capital Securities of the series and any Coupons appertaining thereto; and

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

All Capital Securities of any one series shall be substantially identical except as to denomination and the fact that Capital Securities of any one series may be issuable in both bearer and registered form and except as may otherwise be provided in or pursuant to such action or in any such indenture supplemental hereto.

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

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

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

At any time and from time to time after the execution and delivery of this Capital Securities Indenture, the Company may deliver Capital Securities of any series executed by the Company and, in the case of bearer Capital Securities other than a Global Security, having attached thereto appropriate Coupons, if any, to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Capital Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Capital Securities. In authenticating such Capital Securities and accepting the additional responsibilities under this Capital Securities Indenture in relation to such Capital Securities the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Capital Securities Indenture.

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

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

Each bearer Capital Security shall be dated the date specified pursuant to Section 3.01.

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

The Trustee shall not authenticate or deliver any bearer Capital Securities until any matured Coupons appertaining thereto shall have been detached and cancelled, except as otherwise provided in Section 3.04 or 3.05 or as permitted in Section 3.06.

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

If temporary Capital Securities of any series are issued, the Company will cause, if so required by the terms of such temporary Capital Securities, definitive Capital Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Capital Securities of such series, the temporary Capital Securities of such series shall be exchangeable for definitive Capital Securities of such series containing identical terms and provisions upon surrender of the temporary Capital Securities of such series (including any and all unmatured Coupons or matured Coupons in default attached thereto) at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Capital Securities of any series the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, a like aggregate principal amount of definitive Capital Securities of the same series of authorized denominations containing identical terms and provisions and, in the case of bearer Capital Securities, having attached thereto any appropriate Coupons. Until so exchanged, unless otherwise provided therein or in a supplemental indenture relating thereto, the temporary Capital Securities of any series shall in all respects be entitled to the same benefits (but shall be subject to all the limitations of rights) under this Capital Securities Indenture as definitive Capital Securities of such series.

The provisions of this Section 3.04 are subject to any restrictions or limitations on the issue and delivery of temporary bearer Capital Securities of any series that may be established pursuant to Section 3.01 (including any provision that bearer Capital Securities of such series initially be issued in the form of a Global Security to be delivered to a depositary of the Company located outside

the United States of America and the procedures pursuant to which definitive bearer Capital Securities of such series would be issued in exchange for such Global Security).

SECTION 3.05. Registration, Registration of Transfer and Exchange.

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

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

Except as otherwise specified as contemplated by Section 3.01 hereof, any Global Security shall be exchangeable for definitive Capital Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section only (i) if the relevant Depositary or Book-Entry Depositary, if any, notifies the Company that it is unwilling or unable to continue to act as Depositary or Book-Entry Depositary, as applicable, or the relevant Depositary or Book-Entry Depositary ceases to be a clearing agency registered under the Exchange Act and a successor depositary is not appointed by the Company within 120 days of such notification, (ii) if, in the event of a winding-up of the Company, the Company fails to make a payment on the Capital Securities when due or (iii) at any time if the Company at its option and in its sole discretion determines that the Global Securities of a particular series should be exchanged for definitive Capital Securities of that series in registered form. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for, unless otherwise specified or contemplated by Section 3.01, definitive Capital Securities in registered form only bearing Payments (if any) at the same rate or pursuant to the same formula, having the same date of issuance, the same date or dates from which interest shall accrue, the same Payment Dates or manner of determination of such Payment Dates, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Capital Securities in registered form shall be registered in the names of the owners of the beneficial interests in such Global Securities as such names are from time to time provided by the Holder to the Trustee.

Any Global Security that is exchangeable pursuant to the preceding paragraph, unless otherwise specified as contemplated by Section 3.01, shall be

exchangeable for Capital Securities issuable in authorized denominations of a like aggregate principal amount and tenor.

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

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

In connection with any exchange of interests in a Global Security for definitive Capital Securities of another authorized form, as provided in this subsection 3.05(a), then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Capital Securities in aggregate principal amount equal to the principal amount of such Global Security or the portion to be exchanged, executed by the Company. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Holder to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Capital Securities without charge (unless the definitive Capital Securities in registered form are to be issued to an Excepted Person (as defined in Section 13.10) in which case the Company or Trustee may require payment of any taxes or governmental charges arising) and the Trustee shall authenticate and deliver, in exchange for each portion of such Global Security, an equal aggregate principal amount of definitive Capital Securities of authorized denominations as the portion of such Global Security to be exchanged. Any Global Security that is exchangeable pursuant to this Section 3.05 shall be exchangeable for Capital Securities issuable in the

denominations specified as contemplated by Section 3.01 and registered in such names as the Holder of such Global Security shall direct. If a definitive Capital Security in registered form is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any record date and before the opening of business at such office or agency on the relevant Payment Date, Payments will not be payable on such Payment Date in respect of such definitive Capital Security, but will be payable on such Payment Date only to the person to whom Payments in respect of such portion of such Global Security are payable.

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

(b) Except as otherwise specified pursuant to Section 3.01, registered Capital Securities of any series may only be exchanged for a like aggregate principal amount of registered Capital Securities of such series of other authorized denominations containing identical terms and provisions, and, if bearer Capital Securities of any series are issued in more than one authorized denomination, such bearer Capital Securities may only be exchanged for a like aggregate principal amount of bearer Capital Securities of other authorized denominations containing identical terms and provisions. If Capital Securities of any series are issued in both registered and bearer form, bearer Capital Securities of such series may be exchanged for a like aggregate principal amount of registered Capital Securities of such series of authorized denominations containing identical terms and provisions and registered Capital Securities of such series may be exchanged for a like aggregate principal amount of bearer Capital Securities of such series of authorized denominations. Capital Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Capital Security or Capital Securities of the same series which the Holder making the exchange shall be entitled to receive. All bearer Capital Securities surrendered for exchange shall have attached all unmatured Coupons appertaining thereto, if any, and, in case at the time of any such exchange any Payment on such Capital Securities is in default, shall in addition have attached all matured Coupons in default appertaining thereto.

Except as otherwise specified pursuant to Section 3.01, the Company shall cause to be kept in the principal corporate trust office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Capital Security Register” provided, no such Capital Security Register shall be maintained in any office or agency in the United Kingdom) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of registered Capital Securities and of transfers of such Capital Securities. The Trustee is hereby appointed “Capital Security Registrar” for the purpose of registering Capital Securities in registered form and transfers of Capital Securities in registered form as herein provided.

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

Bearer Capital Securities and Coupons shall be transferable by delivery.

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

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

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

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

Notwithstanding anything herein or in the terms of any series of Capital Securities to the contrary, neither the Company nor the Trustee (which shall rely on an Officer’s Certificate and an Opinion of Counsel) shall be required to exchange any bearer Capital Security for a registered Capital Security or any registered Capital Security for a bearer Capital Security if such exchange would result in any adverse tax consequence to the Company under then applicable tax laws of the United States of America or the United Kingdom or any political subdivision thereof or therein.

SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Capital Securities. If any mutilated Capital Security or Coupon (including any Global Security) is surrendered to the Trustee, the Company may execute and the Trustee shall, in the case of a Capital Security, authenticate and deliver, or in the case of a Coupon

deliver, in exchange therefor a new Capital Security or Coupon of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

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

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

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

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

SECTION 3.07. Payments; Rights Preserved.

Except as otherwise provided in a supplemental indenture:

(a) The Company has no obligation to make any Payments with respect to any series of Capital Securities except in the case of an Event of Default and then to the extent (but only to the extent) provided in Section 5.02 and in the case of a Default and then to the extent (but only to the extent) provided in Section 5.03.

(b) Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Capital Securities, Payments or Missed Payments, if any,

on any Capital Securities which are payable, and are paid or duly provided for, on any Payment Date shall be paid, in the case of registered Capital Securities, to the Person in whose name that Capital Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such Payments and, in the case of definitive Capital Securities in bearer form, upon presentation and surrender of the Coupon appertaining thereto to a Paying Agent of the Company outside the United Kingdom in respect of the Payment or Missed Payments to be paid on such Payment Date or, in the case of Global Securities held by any Holder, to the Holder including through a Paying Agent of the Company designated pursuant to Section 3.01 outside the United Kingdom for collection by the Holder. Any payment of Missed Payments on a registered Capital Security which is not made on a Payment Date or at Maturity shall be made to the person who is the Holder on the record date established by the Company for such purpose.

In the case of registered Capital Securities where payment is to be made in Dollars, payment at any Paying Agent’s office outside The City of New York will be made in Dollars by check drawn on, or, at the request of the Holder, by transfer to a Dollar account maintained by the payee with, a bank in The City of New York.

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

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

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

SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a registered Capital Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Capital Security is registered as the owner of such Capital Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.05 and Section 3.07) any Payment and Missed Payments, if any, on such Capital Security and for all other purposes whatsoever, whether or not such Capital Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

The Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any bearer Capital Security or any Coupon as the owner of such Capital Security or Coupon, as the case may be, for the purpose of receiving payment of principal of (and premium, if any) and any Payment and Missed Payments, if any, on such Capital Security or payment of such Coupon, as the case

may be, and for all other purposes whatsoever, whether or not such Capital Security or Coupon be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

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

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

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

ARTICLE 4
SATISFACTION AND DISCHARGE

SECTION 4.01. Satisfaction and Discharge of Capital Securities Indenture. This Capital Securities Indenture shall upon Company Request cease to be of further effect with respect to Capital Securities of any series (except as to any surviving rights of registration of transfer or exchange of Capital Securities of such series herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Capital Securities Indenture with respect to the Capital Securities of such series when

(a) either

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

     (ii) all such Capital Securities and Coupons, if any, not theretofore delivered to the Trustee for cancellation

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

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

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

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

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

Notwithstanding any satisfaction and discharge of this Capital Securities Indenture, the obligations of the Company to the Trustee under Section 6.07, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if

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

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

ARTICLE 5
REMEDIES

SECTION 5.01. Events of Default. “Event of Default”, wherever used herein with respect to Capital Securities of a particular series, means (i) the making of an order by a court of competent jurisdiction which is not successfully appealed within 30 days of the making of such order, or valid adoption by the shareholders of the Company of an effective resolution, for the winding-up of the Company (other than under or in connection with a scheme of amalgamation, arrangement or reconstruction not involving bankruptcy or insolvency) or (ii) any other Event of Default provided with respect to Capital Securities of such series pursuant to Section 3.01.

SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs with respect to Capital Securities of any series and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Capital Securities of such series may declare the principal amount of, any accrued but unpaid Payments and any Missed Payments on, the Capital Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.

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

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

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

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

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

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

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

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

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

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

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

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

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

If a Default occurs and is continuing, the Trustee may pursue all legal remedies available to it, including commencing a judicial proceeding for the collection of the sums so due and unpaid or a proceeding for the winding-up in England or Scotland (but not elsewhere) of the Company, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount of any of the Outstanding Capital Securities to be due and payable. If a Payment Event occurs, the Trustee may institute proceedings in England or Scotland (but not elsewhere) for the winding-up of the Company but may not pursue any other legal remedy including a judicial proceeding for the collection of the sums so due and unpaid. The Trustee and Holders of Capital Securities by their acceptance of such Capital Securities will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to such Capital Securities or this Indenture (or between the obligations under or in respect of any Capital Securities and any liability owed by a Holder or the Trustee to the Company) that they might otherwise have against the Company in any such winding-up.

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

and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and premium, if any) or Payments and Missed Payments, if any) shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys and other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of a Capital Security and each holder of a Coupon to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders or holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 6.07.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium and Payments, If Any. Notwithstanding any other provision in this Capital Securities Indenture, the Holder of

any Capital Security or the holder of any Coupon appertaining thereto shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 3.07) any Payment or Missed Payments, if any, on such Capital Security when due and payable in accordance with the provisions of the Capital Securities Indenture and as expressed in such Capital Security or Coupon (or, in the case of redemption or exchange, on the Redemption Date or Exchange Date, as the case may be) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder or holder.

SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any Holder of any Capital Security or the holder of any Coupon has instituted any proceeding to enforce any right or remedy under this Capital Securities Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder or holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders of Capital Securities and the holders of any Coupons shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders of Capital Securities and the holders of any Coupons shall continue as though no such proceeding had been instituted.

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

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

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

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

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

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

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

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

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

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

SECTION 5.14. Undertaking for Costs. All parties to this Capital Securities Indenture agree, and each Holder of any Capital Security and each holder of any Coupon by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Capital Securities Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Capital Securities of any series, or to any suit instituted by any Holder or holder of a Coupon for the enforcement of the payment of the principal of (or premium, if any) or Payments or Missed Payments, if any, on any Capital Security on or after the dates upon which such Payments or Missed Payments become due and payable pursuant to the terms hereof or the terms expressed in such Capital

Security or Coupon (or, in the case of redemption or exchange, on or after the Redemption Date or the Exchange Date, as the case may be).

ARTICLE 6
THE TRUSTEE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 6.07. Compensation and Reimbursement. The Company agrees

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

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

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

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

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

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

SECTION 6.10. Resignation and Removal; Appointment of Successor.

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

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

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

(d) If at any time:

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

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

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

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

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

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Capital Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to

the Capital Securities of such series (it being understood that any successor Trustee may be appointed with respect to the Capital Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Capital Securities of any particular series), and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Capital Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Capital Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Capital Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Capital Securities of any series shall have been so appointed by the Company or the Holders of Capital Securities of such series and accepted appointment in the manner hereinafter required by Section 6.11, any Holder who has been a bona fide Holder of a Capital Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Capital Securities of such series.

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

SECTION 6.11. Acceptance of Appointment by Successor.

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

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

which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Capital Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Capital Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Capital Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Capital Securities of such series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Capital Securities of such series to which the appointment of such successor Trustee relates.

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

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

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

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

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice to the Holders of Capital Securities in the manner and to the extent provided in Section 1.06. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No

successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

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

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

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

THE BANK OF NEW YORK
	as Trustee

By:

	as Authenticating Agent

By:

	Authorized Signatory

ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

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

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

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

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

SECTION 7.02. Preservation of Information; Communication to Holders.

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

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

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

SECTION 7.03. Reports by Trustee.

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

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

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

SECTION 7.04. Reports by Company.

The Company shall:

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

     (b) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Capital Securities Indenture as may be required from time to time by such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate); and

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

ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

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

The Company may, without the consent of Holders of any Capital Securities of any series Outstanding under this Capital Securities Indenture, consolidate or amalgamate with or merge into any other corporation or convey or

transfer or lease its properties and assets substantially as an entirety to any Person, provided that:

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

(b) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger, conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

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

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

(a) the successor entity shall expressly assume such obligations by an amendment to the Capital Securities Indenture, executed by the Company and such successor entity, if applicable, and delivered to the Trustee, in form satisfactory to the Trustee, and the Company shall, by amendment to the Capital Securities Indenture, unconditionally guarantee

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

     (b) such successor entity shall confirm in such amendment to the Capital Securities Indenture that such successor entity will pay all Additional Amounts, if any, payable pursuant to Section 10.04 in respect of all the Capital Securities and any related Coupons (provided, however, that for these purposes such successor entity’s country of organization will be substituted for the references to the United Kingdom);

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

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

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

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

ARTICLE 9
SUPPLEMENTAL INDENTURES

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

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

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

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

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

     (e) to secure the Capital Securities;

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

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

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

     (i) to make any other provisions with respect to matters or questions arising under this Capital Securities Indenture, provided such action shall not adversely affect the interests of the Holders of Capital Securities of any series in any material respect;

     (j) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Capital Securities of one or more series and to add to or change any of the provisions of this

Capital Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11(b); or

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

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

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

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

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

     (d) change in any manner adverse to the interests of the Holders of any Capital Securities the subordination provisions of the Capital

Securities or the terms and conditions of the obligations of the Company in respect of the due and punctual payment of any amounts due and payable on the Capital Securities.

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

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

SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Capital Securities Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Capital Securities Indenture for all purposes; and every Holder of Capital Securities theretofore or thereafter authenticated and delivered hereunder and every holder of Coupons, if any, shall be bound thereby, except as otherwise expressed therein.

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

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

ARTICLE 10
COVENANTS

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

SECTION 10.02. Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Capital Securities an office or agency where Capital Securities of that series and any Coupons appertaining thereto may be presented or surrendered for payment, where Capital Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Capital Securities of that series and any Coupons appertaining thereto and this Capital Securities Indenture may be served; provided, however, that at the option of the Company in the case of registered Capital Securities of such series, payment of any Payments or Missed Payments thereon may be made by check mailed to the address of the Person entitled herein as such address shall appear in the Capital Security Register. With respect to the Capital Securities of any series, such office or agency in each Place of Payment shall be specified as contemplated by Section 3.01, and if not so specified, initially shall be the Corporate Trust Office of the Trustee. Unless otherwise specified pursuant to Section 3.01, the Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Company in respect of Capital Securities of any series and any Coupons appertaining thereto and this Capital Securities Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company hereby appoints the Trustee as its agent to receive all presentations, surrenders, notices and demands.

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

SECTION 10.03. Money for Payments to Be Held in Trust. If the Company shall at any time act as Paying Agent with respect to the Capital Securities of any series and any Coupons appertaining thereto, it will, on or before each due date

for payment of the principal of (and premium, if any) or Payments or Missed Payments, if any, on any of the Capital Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or Payments or Missed Payments so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its failure so to act.

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

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

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

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

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

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or Payments or Missed Payments on any Capital Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or Payments or Missed Payments have become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Capital Security and the holder of any Coupon appertaining thereto shall thereafter, as an unsecured general

creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published at least once, in an Authorized Newspaper, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be paid to the Company.

SECTION 10.04. Additional Amounts. Unless otherwise specified in any Board Resolution establishing the terms of Capital Securities of a series in accordance with Section 3.01, all amounts of principal, and premium, if any, and Payments, including Missed Payments, if any, on any series of Capital Securities will be paid by the Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts with respect to the principal amount of, premium, if any, Payments and Missed Payments, on any series of Capital Securities (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders of Capital Securities of the particular series, after such deduction or withholding, shall equal the respective amounts of principal, premium, if any, and Payments and Missed Payments, if any, which would have been payable in respect of such Capital Securities had no such deduction or withholding been required; provided, however, that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that:

     (i) the Holder or the beneficial owner of the Capital Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Capital Security, or the collection of any payment of (or in respect of) principal of, premium, if any, or any Payments or Missed Payments on any Capital Security of the relevant series;

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

     (iii) the relevant Capital Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting (where presentation is required) the same for payment at the close of such 30 day period; or

     (iv) the Holder or the beneficial owner of the relevant Capital Security or the beneficial owner of any payment of (or in respect of) principal of, or any Payments or Missed Payments on such Capital Security failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make any declaration or other similar claim to satisfy any information requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

     (v) the withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to any European Union Directive on the taxation of savings implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 or any law implementing or complying with, or introduced in order to conform to, such directive;

     (vi) the relevant Capital Security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting (where presentation is required) the relevant Capital Security to another paying agent in a Member State of the European Union; or

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

nor shall Additional Amounts be paid with respect to the principal of, and payments and Missed Payments on, the Capital Securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.

Whenever in this Capital Securities Indenture there is mentioned, in any context, the payment of the principal of (and premium, if any) or any Payments, or Missed Payments, if any, on, or in respect of, any Capital Security of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

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

ARTICLE 11
REDEMPTION OF CAPITAL SECURITIES

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

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

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

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

For all purposes of this Capital Securities Indenture, unless the context otherwise requires, all provisions relating to the redemption of Capital Securities shall relate in the case of any Capital Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such registered Capital Security which has been or is to be redeemed.

SECTION 11.04. Notice of Redemption. Notice of redemption shall be given not less than 30 nor more than 60 days prior to the Redemption Date to each

Holder of Capital Securities to be redeemed in the manner and to the extent provided in Section 1.06.

     All notices of redemption shall state:

     (a) the Redemption Date,

     (b) the Redemption Price,

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

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

     (e) the place or places where such Capital Securities are to be surrendered for payment of the Redemption Price and that, unless otherwise specified in such notice, bearer Capital Securities in definitive form (if any) surrendered for payment must be accompanied by all Coupons maturing subsequent to the Redemption Date, failing which the amount of any such missing Coupon or Coupons will be deducted from the sum due for payment, and

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

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

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

SECTION 11.06. Capital Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Capital Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and Payments and Missed Payments, if any) such Capital Securities shall cease to accrue Payments for the period following the Redemption Date. Upon surrender of any such Capital Security for redemption in accordance with said notice, such Capital Security shall be paid by the Company at the Redemption Price, together with accrued but unpaid Payments to the Redemption Date and Missed Payments, if any, accumulated to the Redemption Date; provided, however, that with respect to

any Capital Securities in registered form, unless otherwise specified as contemplated by Section 3.01, a Payment which is payable on a Payment Date which is the Redemption Date, shall be payable to the Holders of such Capital Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Dates according to the terms of the Capital Securities and the provisions of Section 3.07. The obligation of the Company to redeem Capital Securities of a series on a Redemption Date shall be subject to the Solvency Condition.

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

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

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

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

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

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

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

ARTICLE 12
SUBORDINATION OF CAPITAL SECURITIES

SECTION 12.01. Capital Securities Subordinate to Senior Claims.

(a) The Company covenants and agrees, and each Holder of Capital Securities of each series and each holder of Coupons appertaining thereto, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article 12, the Capital Securities of such series and the payment of the principal of, premium, if any, and Payments, and Missed Payments, if any, on each and all of the Capital Securities of such series are hereby expressly made in the event of a winding up of the Company subordinate and subject in right of payment to the prior payment in full of all Senior Claims and, except in a winding-up, conditional upon the Solvency Condition being satisfied at the time of payment by the Company, and no principal, premium, if any, Payments or Missed Payments, if any, in respect of the Capital Securities of such series which under the terms of such series or the provisions of this Capital Securities Indenture would otherwise be due for payment when the Solvency Condition is not satisfied shall be due and payable (without prejudice to the provision of Section 5.03 with respect to a Payment Event), and instead such principal, premium, if any, Payments or Missed Payments, if any, will become due and payable only if and when and to the extent that the Company could make such payment in whole or in part and still satisfy the Solvency Condition immediately thereafter. In a winding-up, the amount payable in respect of the Capital Securities is determined in accordance with the provisions of Section 12.01(c) .

(b) No payment of principal, premium, if any, Payments or Missed Payments, if any, in respect of the Capital Securities of any series and no purchase of any Capital Securities of any series beneficially by or for the account of the Company or any of its Subsidiaries (other than a purchase in connection with dealing in securities) shall be made unless a director of the Company or (in the case of the optional redemption by the Company of all or some of the Capital Securities of the series or a purchase of any Capital Securities of the series as aforesaid or if a director of the Company has not reported as mentioned below) the Auditors shall have reported to the Trustee within 14 days before such

payment or within 6 months before such purchase that in their opinion or, as the case may be, his opinion, the Solvency Condition would be satisfied both at the time of and immediately after such payment or purchase. Any such report shall, in the absence of manifest error, be treated and accepted by the Company, the Trustee, the Holders and holders of Coupons as correct and sufficient evidence of such satisfaction of the Solvency Condition.

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

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

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

SECTION 12.02. Provisions Solely to Define Relative Rights. The provisions of this Article 12 are and are intended solely for the purpose of defining the relative rights of the Holders of the Capital Securities of each series and the holders of the Coupons appertaining thereto, if any, on the one hand and the Senior Creditors on the other hand. Nothing contained in this Article or elsewhere in this Capital Securities Indenture or in such Capital Securities is intended to or shall (a) impair, as among the Company and the Holders of the Capital Securities and any Coupons, the obligation of the Company, which is absolute and unconditional, to pay to the holders of such claims the principal of, premium, if any, and Payments, or Missed Payments, if any, on such Capital Securities as and when the same shall become due and payable in accordance with their terms and this Capital Securities Indenture; or (b) affect the relative rights against the Company of the Holders of such Capital Securities and of such Coupons; or (c) prevent the Trustee or the Holder of any Capital Securities of the

series or the holder of any such Coupon from exercising all remedies otherwise permitted by applicable law upon default under this Capital Securities Indenture, subject to the rights, if any, under this Article of the Senior Creditors to receive cash, property or securities otherwise payable or deliverable to the Trustee or such holder.

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

SECTION 12.04. No Waiver of Subordination Provisions. No right of any present or future Senior Creditors to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such Senior Creditor or by any noncompliance by the Company with the terms, provisions and covenants of this Capital Securities Indenture, regardless of any knowledge thereof any such Senior Creditor may have or be otherwise charged with.

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

reasonable satisfaction of the Trustee as to the amount of claims held by such Person, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

SECTION 12.06. Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 6.01, the Holders of the Capital Securities of the series and the holders of the Coupons appertaining thereto shall be entitled to rely upon (i) any order or decree entered by any court in England or Scotland (but not elsewhere) in which such winding-up of the Company or similar case or proceeding, including a proceeding for the suspension of payments under English or Scottish law, is pending, or (ii) a certificate of the liquidator of the Company (the “Liquidator”), assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee, the Holders of such Capital Securities or holders of such Coupons, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the Senior Creditors and other claims against the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12.

SECTION 12.07. Trustee Not Fiduciary for Senior Creditors. The Trustee shall not be deemed to owe any fiduciary duty to the Senior Creditors and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Capital Securities of the series or holders of Coupons appertaining thereto or to the Company or to any other Person cash, property or securities to which any Senior Creditors shall be entitled by virtue of this Article or otherwise.

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

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

SECTION 12.10. Exchanges Not Deemed Payment. For the purposes of this Article 12 only, delivery of Dollar Preference Shares or Exchange Securities upon exchange of Capital Securities in accordance with Article 13, if applicable to

a particular series of Capital Securities, shall not be deemed to constitute a payment or distribution on account of the principal of Capital Securities or on account of the purchase or other acquisition of Capital Securities. Nothing contained in this Article or elsewhere in this Capital Securities Indenture or in the Capital Securities is intended to or shall impair, as among the Company, its creditors and the Holders of the Capital Securities and holders of Coupons, the right, which if applicable to a particular series of Capital Securities is absolute and unconditional, of the Company to exchange the Capital Securities in accordance with Article 13.

ARTICLE 13
EXCHANGE OF CAPITAL SECURITIES

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

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

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

All notices of exchange shall state:

(a) the Exchange Date;

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

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

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

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

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

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

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

the Company shall (i) in the case of Dollar Preference Shares, unless the Company shall have notified the Trustee otherwise in accordance with Section 13.03, deliver or procure the delivery of a single share warrant to bearer to the ADR Depositary representing all of the Dollar Preference Shares in respect of which such Capital Securities are to be exchanged in accordance with the provisions of this Article 13 or (ii) in the case of Exchange Securities, deliver or procure the delivery of the Exchange Securities to the Trustee or to such other Person as may be specified pursuant to Section 3.01.

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

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

SECTION 13.07. Effect of Exchange. Notice of exchange having been given as aforesaid, the Capital Securities so to be exchanged shall on the Exchange Date cease to exist for any purpose. Upon surrender of any such Capital Security for exchange in accordance with the said notice and this Article 13, accrued Payments on such Capital Security to the Exchange Date plus Missed Payments, if any, accumulated to the Exchange Date shall be paid by the Company to the Holder surrendering such Capital Security including any such Coupons for Payments and Missed Payments. Such payment shall be a condition to the exchange and no exchange shall occur unless such payments are made.

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

Securities into which such Capital Security was exchanged as if it had so surrendered such Capital Security.

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

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

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

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

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

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

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

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

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

or such holders’ access to the courts of the United Kingdom and other applicable governmental authorities to enforce such rights.

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

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

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

THE ROYAL BANK OF SCOTLAND
	GROUP plc


By:	/s/ Hew Campbell

	Name: Hew Campbell
	Title: Deputy Secretary

THE BANK OF NEW YORK


By:	/s/ Alison Mitchell

	Name: Alison Mitchell
	Title: AT

EX-4.4 6 ex0404.htm

Exhibit 4.4

_________________________________________________________________

THE ROYAL BANK OF SCOTLAND GROUP plc

AND

THE BANK OF NEW YORK,

As Depositary

AND

HOLDERS OF AMERICAN DEPOSITARY RECEIPTS

________________________

Deposit Agreement
_________________________

Dated as of August 17, 1992

Amended and Restated as of February 8, 1999

Amended and Restated as of November 2, 2001

_________________________________________________________________

ARTICLE 1. DEFINITIONS		1

SECTION 1.01	AMERICAN DEPOSITARY SHARES	1
SECTION 1.02	BOARD RESOLUTIONS	2
SECTION 1.03	COMMISSION	2
SECTION 1.04	COMPANIES ACT OF 1985	2
SECTION 1.05	COMPANY	2
SECTION 1.06	CUSTODIAN	2
SECTION 1.07	DEPOSIT AGREEMENT	3
SECTION 1.08	DEPOSITARY	3
SECTION 1.09	DEPOSITED SECURITIES	3
SECTION 1.10	DOLLARS	3
SECTION 1.11	HOLDER	3
SECTION 1.12	MEMORANDUM AND ARTICLES OF ASSOCIATION	3
SECTION 1.13	OFFICER'S CERTIFICATE	3
SECTION 1.14	RECEIPTS	3
SECTION 1.15	RECEIPT REGISTRAR	4
SECTION 1.16	SECURITIES ACT OF 1933	4
SECTION 1.17	SERIES	4
SECTION 1.18	SHARES	4
SECTION 1.19	SHARE REGISTRAR	4
SECTION 1.20	SHARE IN REGISTERED FORM; REGISTERED SHARE	5
SECTION 1.21	SHARE IN BEARER FORM; BEARER SHARE	5

ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS		5

SECTION 2.01	FORM AND TRANSFERABILITY OF RECEIPTS	5
SECTION 2.02	DEPOSIT OF SHARES	6
SECTION 2.03	EXECUTION AND DELIVERY OF RECEIPTS	7
SECTION 2.04	TRANSFER, COMBINATION AND SPLIT-UP OF RECEIPTS	8
SECTION 2.05	SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES	8
SECTION 2.06	LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS	9
SECTION 2.07	LOST RECEIPTS, ETC	10
SECTION 2.08	CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS	10

ARTICLE 3. CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS		11

SECTION 3.01	FILING PROOFS, CERTIFICATES AND OTHER INFORMATION	11
SECTION 3.02	LIABILITY OF HOLDER FOR TAXES	11
SECTION 3.03	WARRANTIES ON DEPOSIT OF SHARES	11
SECTION 3.04	DISCLOSURE OF INTERESTS	12

ARTICLE 4. THE DEPOSITED SECURITIES		12

SECTION 4.01	CASH DISTRIBUTIONS	12
SECTION 4.02	DISTRIBUTIONS OTHER THAN CASH OR SHARES	13
SECTION 4.03	DISTRIBUTIONS IN SHARES	13
SECTION 4.04	RIGHTS	14
SECTION 4.05	REDEMPTION	15
SECTION 4.06	CONVERSION OF FOREIGN CURRENCY	15
SECTION 4.07	FIXING OF RECORD DATE	16
SECTION 4.08	VOTING OF DEPOSITED SECURITIES	16
SECTION 4.09	CHANGES AFFECTING DEPOSITED SECURITIES	17

SECTION 4.10	REPORTS	17
SECTION 4.11	AVAILABLE INFORMATION	18
SECTION 4.12	LISTS OF HOLDERS OF RECEIPTS	18
SECTION 4.13	WITHHOLDING	18
SECTION 4.14	DISTRIBUTIONS WITH RESPECT TO DEPOSITED SECURITIES IN BEARER FORM	19

ARTICLE 5. THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY		19

SECTION 5.01	MAINTENANCE OF OFFICE AND TRANSFER BOOKS BY THE DEPOSITARY	19
SECTION 5.02	PREVENTION OR DELAY IN PERFORMANCE BY THE DEPOSITARY OR THE COMPANY	20
SECTION 5.03	OBLIGATIONS OF THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY	20
SECTION 5.04	RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR DEPOSITARY.	21
SECTION 5.05	THE CUSTODIAN	22
SECTION 5.06	NOTICES AND REPORTS	23
SECTION 5.07	ISSUANCE OF ADDITIONAL SHARES, ETC	23
SECTION 5.08	INDEMNIFICATION	24
SECTION 5.09	CHARGES OF DEPOSITARY	24

ARTICLE 6. AMENDMENT AND TERMINATION		25

SECTION 6.01	AMENDMENT	25
SECTION 6.02	TERMINATION	25

ARTICLE 7. MISCELLANEOUS		26

SECTION 7.01	COUNTERPARTS	26
SECTION 7.02	NO THIRD PARTY BENEFICIARIES	26
SECTION 7.03	SEVERABILITY	26
SECTION 7.04	HOLDERS PARTIES; BINDING EFFECT	27
SECTION 7.05	NOTICES	27
SECTION 7.06	GOVERNING LAW	27

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DEPOSIT AGREEMENT dated as of August 17, 1992, as amended and restated as of February 8, 1999, and as further amended and restated as of November 2, 2001 among THE ROYAL BANK OF SCOTLAND GROUP plc, a public limited company incorporated in Great Britain and registered in Scotland (the "Company"), THE BANK OF NEW YORK, a New York banking corporation, as depositary hereunder and any successor as depositary hereunder (the "Depositary"), and all Holders from time to time of American Depositary Receipts issued hereunder.

W I T N E S S E T H:

WHEREAS, the Company has duly authorized the issue from time to time of its Non-cumulative Dollar Preference Shares, to be issued in one or more Series and with such terms and provisions as shall be specified in or pursuant to one or more resolutions of its Board of Directors or an authorized committee thereof; and

WHEREAS, the Company desires to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of Non-cumulative Dollar Preference Shares, of any Series from time to time with the Depositary or with the Custodian, as agent of the Depositary, for the purposes set forth in this Deposit Agreement, for the creation of American Depositary Shares of one or more corresponding Series representing such Non-cumulative Dollar Preference Shares of each such Series so deposited and for the execution and delivery of American Depositary Receipts of one or more corresponding Series evidencing American Depositary Shares of each such corresponding Series; and

WHEREAS, the American Depositary Receipts of each such Series are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement and as shall be specified in or pursuant to any resolution of the Company's Board of Directors or an authorized committee thereof.

NOW, THEREFORE, in consideration of the premises, it is agreed by and among the parties hereto as follows:

ARTICLE 1.
Definitions

The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Deposit Agreement:

SECTION 1.01 American Depositary Shares.

The term "American Depositary Shares" shall mean, with respect to any Receipts of any Series, the rights evidenced by the Receipts of such Series issued hereunder, including the interests in the Deposited Securities of the corresponding Series

granted to the Holders of Receipts of such Series pursuant to the terms and conditions of this Deposit Agreement. As of the first date of issue of Shares of the Series corresponding thereto, each American Depositary Share of a particular Series shall represent the right to receive one (or a fraction or multiple of one) Share of the corresponding Series, as set forth in the Board Resolution or Officer's Certificate relating to the Shares of such corresponding Series, until there shall occur a distribution upon the Deposited Securities of the corresponding Series covered by Section 4.03 or a change in such Deposited Securities covered by Section 4.09 with respect to which additional Receipts of the corresponding Series are not executed and delivered, and thereafter the American Depositary Shares of such Series shall represent rights to receive the kind and amount of such Deposited Securities specified in or pursuant to such Sections.

SECTION 1.02 Board Resolutions.

The term "Board Resolution" shall mean a copy of one or more authorized resolutions, certified by the Secretary, a Deputy Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors of the Company or an authorized committee thereof and to be in full force and effect, as delivered to the Depositary.

SECTION 1.03 Commission.

The term "Commission" shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

SECTION 1.04 Companies Act of 1985.

The term "Companies Act 1985" shall mean the Companies Act 1985 applicable in Great Britain as amended from time to time, or any legislation substituted therefor.

SECTION 1.05 Company.

The term "Company" shall mean The Royal Bank of Scotland Group plc having its registered office at 42 St. Andrew Square, Edinburgh EH2 2YE, Scotland, and its successors.

SECTION 1.06 Custodian.

The term "Custodian" shall mean The Bank of New York, a New York banking corporation acting through its principal London office in its capacity as Custodian hereunder, and any other or additional firm or corporation which may hereafter be appointed by the Depositary pursuant to Section 5.05 as a Custodian hereunder, which

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other or additional firm or corporation shall act as agent of the Depositary for the purposes of this Deposit Agreement.

SECTION 1.07 Deposit Agreement.

The term "Deposit Agreement" shall mean this Agreement, as the same may be amended from time to time in accordance with the provisions hereof.

SECTION 1.08 Depositary.

The term "Depositary" shall mean The Bank of New York, a New York banking corporation, presently having its principal office ("Principal Office") at One Wall Street, New York, New York 10286, and its successors as depositary hereunder.

SECTION 1.09 Deposited Securities.

The term "Deposited Securities" as of any time shall mean, with respect to any American Depositary Shares of any Series, the Shares of the corresponding Series at such time deposited under this Deposit Agreement and any and all other securities, property and cash received at any time by the Depositary or the Custodian in respect or in lieu of deposited Shares of such corresponding Series.

SECTION 1.10 Dollars.

The term "dollars" shall mean United States dollars.

SECTION 1.11 Holder.

The term "Holder" shall mean the person in whose name a Receipt is registered on the books of the Depositary maintained for such purpose.

SECTION 1.12 Memorandum and Articles of Association.

The terms "Memorandum and Articles of Association" and "Memorandum" and "Articles of Association" shall mean the Memorandum of Association and/or the Articles of Association of the Company, as the case may be, in each case as amended from time to time.

SECTION 1.13 Officer's Certificate.

The term "Officer's Certificate" shall mean a certificate delivered to the Depositary and signed by any Director or the Secretary or any Deputy Secretary or Assistant Secretary of the Company.

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SECTION 1.14 Receipts.

The term "Receipts" shall mean, with respect to any American Depositary Shares of any Series, the American Depositary Receipts executed and delivered hereunder of the corresponding Series issued hereunder in substantially the form of Exhibit A hereto evidencing such American Depositary Shares, as the same may be amended from time to time in accordance with the provisions hereof.

SECTION 1.15 Receipt Registrar.

The term "Receipt Registrar" shall mean any bank or trust company having an office in the Borough of Manhattan, The City of New York, appointed by the Company to register transfers of Receipts of one or more Series and to countersign Receipts of such Series as herein provided and shall include any co-registrar appointed by the Depositary upon the request or with the approval of the Company for such purposes.

SECTION 1.16 Securities Act of 1933.

The term "Securities Act of 1933" shall mean the United States Securities Act of 1933, as from time to time amended. The term "Securities Exchange Act of 1934" shall mean the United States Securities Exchange Act of 1934, as from time to time amended.

SECTION 1.17 Series.

The term "Series" shall mean, (a) with respect to Shares, all Shares (1) having identical nominal value per share, dividend rights, liquidation value per share, voting rights, redemption provisions and other rights, preferences, privileges, limitations and restrictions and (2) designated by the Company by or pursuant to a Board Resolution as constituting a single series of Shares; (b) with respect to Deposited Securities, the Shares of the corresponding Series at such time deposited under this Deposit Agreement and any and all other Deposited Securities in respect of deposited Shares of such Series; (c) with respect to American Depositary Shares, the American Depositary Shares representing Deposited Securities of the corresponding Series; and (d) with respect to Receipts, the Receipts evidencing American Depositary Shares of the corresponding Series.

SECTION 1.18 Shares.

The term "Shares" shall mean the Company's Non-cumulative Dollar Preference Shares of any Series, and shall include evidence of rights to receive such Shares, with respect to which the full purchase price (including premium payable on issue) has been paid.

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SECTION 1.19 Share Registrar.

The term "Share Registrar" shall mean, with respect to any Series of Shares in registered form, The Royal Bank of Scotland Group plc acting in its capacity as registrar for the Shares of such Series in registered form or such other registrar as may be appointed from time to time by the Company with respect to the Shares of such Series.

SECTION 1.20 Share in registered form; registered Share.

The term "Share in registered form" or "registered Share" shall mean a Share of any Series in respect of which the name of the holder and such other matters as are required by the Companies Act 1985 have been entered in the Company's register of Shareholders.

SECTION 1.21 Share in bearer form; bearer Share.

The term "Share in bearer form" or "bearer Share" shall mean a Share of any Series in respect of which a share warrant has been issued and which may be transferred by delivery of the warrant.

ARTICLE 2.
Form of Receipts, Deposit of Shares, Execution and
Delivery, Transfer and Surrender of Receipts

SECTION 2.01 Form and Transferability of Receipts.

Receipts shall be issued in one or more Series each of which shall correspond to, and evidence interests in, American Depositary Shares of the corresponding Series. A separate Series of Receipts shall be issued hereunder to correspond to each separate Series of Shares deposited hereunder. Definitive Receipts of each Series shall be engraved or printed or lithographed (on, if required by any exchange or market on which such Receipts are listed or traded, steel-engraved borders) and shall be substantially in the form set forth in Exhibit A hereto with appropriate insertions, modifications and omissions, as hereinafter provided. Receipts of any Series shall be executed by the Depositary by the manual signature of a duly authorized officer of the Depositary; provided, however, that such signature may be a facsimile if a Receipt Registrar shall have been appointed and Receipts of such Series are countersigned by the manual signature of a duly authorized officer of such Receipt Registrar or any co-registrar. No Receipt of any Series shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been executed by the Depositary by the manual signature of a duly authorized officer or, if a Receipt Registrar shall have been appointed, by the manual signature of a duly authorized officer of such Receipt Registrar. For each Series of Receipts, the Depositary shall maintain separate books on which each Receipt of such Series so executed and delivered

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as hereinafter provided, and the transfer of each such Receipt, shall be registered. Receipts bearing the facsimile signature of any person who was at any time a duly authorized officer of the Depositary shall bind the Depositary, notwithstanding that such officer has ceased to hold such office prior to the execution of such Receipts by the Receipt Registrar or any co-registrar and the delivery of such Receipts or did not hold such office at the date of the issuance of such Receipts.

Each Receipt shall indicate on the face thereof the Series of Receipts of which it is a part. The Series of American Depositary Shares evidenced thereby and the Series of Shares represented by such Series of American Depositary Shares may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law or regulations or with the rules and regulations of any securities exchange or market upon which Receipts of any Series may be traded or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date of issuance of the underlying Deposited Securities or otherwise.

Title to a Receipt (and to the American Depositary Shares evidenced thereby), when properly endorsed or accompanied by proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that the Company and the Depositary, notwithstanding any notice to the contrary, may treat the Holder thereof as the absolute owner thereof for the purpose of determining the person entitled to any distribution of dividends or other distributions with respect thereto (including distributions upon the redemption thereof) or to any notice provided for in this Deposit Agreement and for all other purposes.

SECTION 2.02 Deposit of Shares.

Subject to (i) the terms and conditions of this Deposit Agreement and (ii) the delivery to the Depositary of the Board Resolution by or pursuant to which the rights, preferences, privileges, limitations and restrictions relating to the Shares of a particular Series are or were established (and, to the extent that such terms and provisions are or were established pursuant to (rather than in) such Board Resolution, the Officer's Certificate setting forth the establishment of such terms and provisions) the Shares of any Series and any coupons or talons appertaining thereto may be deposited upon the original issuance thereof by delivery thereof to the Depositary or the Custodian by the Company, and thereafter Shares in registered form only may be deposited by delivery thereof to the Custodian, in each case properly endorsed or accompanied by an appropriate instrument or instruments of transfer in form satisfactory to the Depositary or the Custodian together with all such certifications and payments as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement and together with a written order directing the Depositary to execute and deliver to, or upon the written

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order of, the person or persons stated in such order a Receipt or Receipts of the corresponding Series for the number of American Depositary Shares of the corresponding Series representing such deposited Shares. If required by the Depositary, Shares of a particular Series in registered form presented for deposit at any time, whether or not the transfer books or registers of the Company or the Share Registrar with respect to the Shares of such Series are closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Shares of such Series or to receive other property, which any person in whose name such Shares are or have been recorded may thereafter receive upon or in respect of or upon redemption of such deposited Shares, or in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.

At the request and risk and expense of any holder of Shares, and for the account of such holder, the Depositary may receive certificates for Shares to be deposited, together with the other documents and payments herein specified, for the purpose of forwarding such certificates to the Custodian for deposit hereunder.

Upon each delivery to the Custodian of a certificate or certificates representing Shares of any Series (or other Deposited Securities pursuant to Sections 4.02, 4.03, 4.04 or 4.09) in registered form to be deposited hereunder, together with the other documents above specified, the Custodian shall, as soon as practicable, present such certificate or certificates to the Company or the Share Registrar for registration of transfer of the Shares (or other Deposited Securities) being deposited in the name of the Depositary or its nominee or the Custodian or its nominee at the cost and expense of the person making such deposit.

Deposited Shares shall be held by the Depositary, or by the Custodian for the account and to the order of the Depositary, at such place or places as the Depositary shall determine, provided that the Depositary shall ensure that the Shares are at all times in safe custody.

SECTION 2.03 Execution and Delivery of Receipts.

Upon receipt by the Custodian of any Shares of a particular Series deposited pursuant to Section 2.02 hereunder (and in addition, in the case of Shares of such Series in registered form, if the transfer books of the Company or the Share Registrar with respect to the Shares of such Series are open, a proper acknowledgment or other evidence from the Company or such Share Registrar satisfactory to the Depositary that any such deposited Shares have been recorded upon such books in the name of the Depositary or its nominee or the Custodian or its nominee, together with the other documents required as above specified), the Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order a Receipt or

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Receipts of the corresponding Series are deliverable in respect thereof and the number of American Depositary Shares of the corresponding Series to be represented thereby. Such notification shall be made by letter or, at the request and risk and expense of the person making the deposit, by cable, telex or facsimile transmission. Upon receiving such notice from the Custodian, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver at the Depositary's Office, to or upon the order of the person or persons named in the notice delivered to the Depositary, a Receipt or Receipts of the Series corresponding to the Series of such deposited Shares, registered in the name or names requested by such person or persons, and evidencing in the aggregate the number of American Depositary Shares of the corresponding Series to which such person or persons is or are entitled, but only upon payment by or on behalf of such person or persons to the Depositary of the fee of the Depositary for the execution and delivery of such Receipt or Receipts and of all taxes and governmental charges and fees payable in connection with such deposit and the transfer of the deposited Shares.

SECTION 2.04 Transfer, Combination and Split-up of Receipts.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall, as soon as practicable, register transfers of Receipts of a particular Series, on its transfer books with respect to the Receipts of such Series from time to time, upon any surrender at any of its designated transfer offices of a Receipt of such Series, by the Holder in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer and duly stamped as may be required by applicable law. Thereupon the Depositary shall execute a new Receipt or Receipts of such Series evidencing the same aggregate number of American Depositary Shares of the corresponding Series as the Receipt or Receipts surrendered and deliver the same to or upon the order of the person entitled thereto.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall, upon surrender at any of its designated transfer offices of a Receipt or Receipts of a particular Series for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts of such Series for any authorized number of American Depositary Shares of the corresponding Series requested, evidencing the same aggregate number of American Depositary Shares of the corresponding Series as the Receipt or Receipts surrendered.

SECTION 2.05 Surrender of Receipts and Withdrawal of Shares.

Upon surrender at the Depositary's Office of a Receipt of a particular Series for the purpose of withdrawal of the Deposited Securities of the corresponding Series evidenced thereby, and upon payment of the fee of the Depositary for the cancellation of such Receipt, subject to the terms and conditions of this Deposit Agreement, and subject to the limitations set forth in the second to last sentence of

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Section 2.06, the Holder of such Receipt shall be entitled to delivery, to or upon the order of such Holder, of the Deposited Securities of such Series at the time evidenced by such Receipt. Delivery of Deposited Securities of such Series, in registered form only shall be made by delivery of a share certificate or certificates issued by the Company to such Holder or such Holder's order. Such delivery shall be made, as hereinafter provided, without unreasonable delay.

A Receipt surrendered for such purposes may be required by the Depositary to be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and the Holder thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be delivered to or upon the written order of the person or persons designated in such order. Thereupon the Depositary shall direct the Custodian to deliver at its principal London office, subject to the other terms and conditions of this Deposit Agreement, to or upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the Deposited Securities at the time evidenced by such Receipt, except that the Depositary may, in its discretion, make delivery to such person or persons at the Depositary's Office of any cash, dividends, distributions or rights with respect to the Deposited Securities evidenced by such Receipt, or of any proceeds of sale of any such cash, dividends, distributions or rights, which may at the time be held by the Depositary in respect of such Deposited Securities.

At the request, risk and expense of any Holder so surrendering a Receipt, the Depositary shall direct the Custodian to transfer or forward any cash, rights or other property comprising, and to forward any certificate or certificates and other proper documents of title for, the Deposited Securities evidenced by such Receipt to the Depositary for delivery at the Depositary's Office. Such direction shall be given by letter or, at the request, risk and expense of the Holder of such Receipt, by cable, telex or facsimile transmission.

SECTION 2.06 Limitations on Execution and Delivery, Transfer and Surrender of Receipts.

As a condition precedent to the execution and delivery, registration of transfer, split-up, combination or surrender of any Receipt or the transfer and withdrawal of any Deposited Securities, the Depositary or the Custodian may require payment from the presenter of the Receipt or the depositor of Shares of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees as herein provided, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any laws or governmental regulations relating to Receipts or to the withdrawal of Deposited Securities.

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The delivery of Receipts of a particular Series against deposits of Shares of the corresponding Series generally or against deposits of particular Shares of the corresponding Series may be suspended, or the delivery of particular Receipts of the corresponding Series against the deposit of Shares of a particular Series may be withheld, or the registration of transfer or surrender of Receipts of a particular Series in particular instances may be refused, or the registration of transfer or surrender of outstanding Receipts of a particular Series generally may be suspended, during any period when the transfer books of the Depositary with respect to the Receipts of a particular Series or the books of the Company or those maintained for the Company by the Share Registrar, are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental authority, body or commission, or under any provision of this Deposit Agreement, or for any other reason, subject to the provisions of the following sentence. The surrender of outstanding Receipts of the corresponding Series and withdrawal of Deposited Securities of such Series may not be suspended subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Shares of a particular Series in connection with voting at a shareholders' meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the Receipts of a particular Series or to the withdrawal of the Deposited Securities of the corresponding Series. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any Shares required to be registered under the provisions of the Securities Act of 1933, unless a registration statement is in effect as to such Shares.

SECTION 2.07 Lost Receipts, etc.

In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary shall execute and deliver a new Receipt of like tenor and of the same Series, in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed or lost or stolen Receipt, upon the Holder thereof filing with the Depositary (a) a request for such execution and delivery before the Depositary has notice that such Receipt has been acquired by a bona fide purchaser and (b) a sufficient indemnity bond and satisfying any other reasonable requirements imposed by the Depositary.

SECTION 2.08 Cancellation and Destruction of Surrendered Receipts.

All Receipts surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy Receipts so cancelled.

The Depositary agrees to maintain records of all Receipts surrendered and Deposited Securities withdrawn under Section 2.05, substitute Receipts delivered under

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Section 2.07, and Receipts cancelled or destroyed under this Section, in keeping with procedures ordinarily followed by stock transfer agents located in New York City.

ARTICLE 3.
Certain Obligations of Holders of Receipts

SECTION 3.01 Filing Proofs, Certificates and Other Information.

Any person presenting Shares for deposit or any Holder of a Receipt may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, legal or beneficial ownership of Receipts, Deposited Securities or other securities, compliance with all applicable laws and regulations and all applicable provisions of or governing Deposited Securities of a particular Series, such information relating to the registration on the books of the Company or those maintained for the Company by the relevant Share Registrar of the Shares presented for deposit or other information, to execute such certificates and to make such representations and warranties as, in each case, the Depositary may deem necessary or proper or as the Company may require by written request to the Depositary or the Custodian. The Depositary may withhold the delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other distribution or rights or of the proceeds thereof or, subject to the limitations set out in the second to last sentence of Section 2.06, the delivery of any Deposited Securities pertaining to such Receipt until the foregoing is accomplished to the Depositary's satisfaction. The Depositary shall, upon the Company's written request, provide the Company with copies of any such proofs or other information which the Depositary or the Custodian receives.

SECTION 3.02 Liability of Holder for Taxes.

If any tax or other governmental charge shall become payable with respect to any Receipt of any Series or any Deposited Securities of any Series represented by any Receipt, such tax or other governmental charge shall be payable by the Holder of such Receipt to the Depositary. The Depositary may refuse to effect any transfer of such Receipt or any transfer and withdrawal of Deposited Securities represented thereby until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Holder thereof any part or all of the Deposited Securities represented by such Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge, the Holder of such Receipt remaining liable for any deficiency.

SECTION 3.03 Warranties on Deposit of Shares.

Every person depositing Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that such Shares and each certificate therefor are validly issued and outstanding, fully paid, nonassessable and free of pre-emptive rights

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and that the person making such deposit is duly authorized so to do. Such representations and warranties shall survive the deposit of Shares and the issuance of Receipts.

SECTION 3.04 Disclosure of Interests.

Notwithstanding any other provision of this Deposit Agreement and without prejudice to any disclosure obligations which may from time to time apply in respect of the Shares contained in the Companies Act 1985 and any other applicable law or which may be contained in the Memorandum and Articles of Association of the Company and the remedies of the Company for non-compliance therewith, each Holder agrees to comply with requests from the Company or the Depositary which are made under relevant legislation to provide information, inter alia, as to the capacity in which such Holder owns Receipts and regarding the identity of any other person having an interest in such Receipts and the nature of such interest and shall forfeit the right to direct the voting of Shares as to which compliance is not made, all as if such Receipts were to the extent practicable the Shares represented thereby, and the Depositary agrees to use its reasonable efforts to comply with any instructions received from the Company requesting that the Depositary take the reasonable actions specified therein to obtain such information.

ARTICLE 4.
The Deposited Securities

SECTION 4.01 Cash Distributions.

Whenever the Depositary shall receive any cash dividend or other cash distribution by the Company in respect of any Deposited Securities (including cash in respect of redemption), if such cash dividend or other cash distribution is received in dollars, the Depositary shall distribute the dollars so received, and if such cash dividend or other cash distribution is received in a currency other than dollars (such currency being hereinafter referred to as a "foreign currency"), the Depositary shall, subject to the provisions of Section 4.06, convert such dividend or distribution into dollars and shall distribute the amount thus received, in either case to the Holders of Receipts evidencing American Depositary Shares representing such Deposited Securities entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, by checks drawn on a bank in The City of New York; provided, however, that in the event that either the Company or the Depositary shall be required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, the amount distributed to the Holders of Receipts for American Depositary Shares representing such Deposited Securities shall be reduced accordingly. The Depositary shall distribute only such amount, however, as can be distributed without distributing to any Holder of a Receipt a fraction of one cent, and any such fractional amounts shall be

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rounded to the nearest whole cent and so distributed to Holders entitled thereto. The Company will remit to the appropriate governmental authority or agency in the United Kingdom all amounts (if any) required to be withheld and owing to such authority or agency by the Company. The Depositary will forward to the Company such information from its records as the Company may reasonably request to enable the Company to file necessary reports with governmental authorities or agencies, and either the Depositary or the Company may file any such reports necessary to obtain benefits under the applicable tax treaties for the Holders of Receipts.

SECTION 4.02 Distributions Other Than Cash or Shares.

Whenever the Depositary shall receive any distribution (other than cash or Shares of the corresponding Series) upon any Deposited Securities of a particular Series the Depositary shall cause the securities or property which it so receives to be distributed to the Holders entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Holders entitled thereto, or if for any other reason (including any requirement that the Company or the Depositary withhold an amount on account of taxes) the Depositary deems such distribution not to be feasible, the Depositary may adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, and the net proceeds of any such sale shall be distributed by the Depositary to the Holders entitled thereto as in the case of a distribution received in cash.

SECTION 4.03 Distributions in Shares.

If any distribution upon any Deposited Securities of a particular Series consists of a dividend in, or free distribution of, Shares of the corresponding Series, the Depositary may with the Company's approval, and shall if the Company shall so request, distribute to the Holders entitled thereto, in proportion to the number of American Depositary Shares of the corresponding Series representing such Deposited Securities held by them respectively, additional Receipts of the corresponding Series for an aggregate number of American Depositary Shares of the corresponding Series representing the amount of such Shares received as such dividend or free distribution. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary may sell the amount of Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.02. If additional Receipts of a particular Series are not so distributed, each American Depositary Share of the corresponding Series shall

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thenceforth also represent the additional Shares distributed upon the Deposited Securities represented thereby.

SECTION 4.04 Rights.

In the event that the Company shall offer or cause to be offered to the holder or holders of any Deposited Securities of a particular Series any rights to subscribe for additional Shares of the corresponding Series or any rights of any other nature, the Depositary shall, after consultation with the Company and subject to the Memorandum and Articles of Association, the Companies Act 1985 and all applicable legislation and regulations, have discretion as to the procedure to be followed in making such rights available to Holders of Receipts of the Series corresponding to the Series of Deposited Securities in respect of which such offer is made or in disposing of such rights on behalf of such Holders and making the net proceeds available in dollars to such Holders; provided, however, that the Depositary will, if requested by the Company, take action as follows:

(i) if at the time of the offering of any such rights the Depositary determines that it is lawful and feasible to make such rights available to such Holders by means of warrants or otherwise, the Depositary shall distribute such warrants or other instruments therefor in such form as it may determine to the Holders entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities, or employ such other method as it may deem feasible in order to facilitate the exercise, sale or transfer of rights by such Holders; or

(ii) if at the time of the offering of any rights the Depositary determines that it is not lawful or not feasible to make such rights available to such Holders by means of warrants or otherwise, or if the rights represented by such warrants or such other instruments are not exercised and appear to be about to lapse, the Depositary in its discretion may sell such rights or such warrants or other instruments at public or private sale, at such place or places and upon such terms as it may deem proper, and may allocate the proceeds of such sales for the account of the Holders otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practicable basis without regard to any distinctions among such Holders because of exchange restrictions, or the date of delivery of any Receipt or Receipts, or otherwise.

If a registration statement under the Securities Act of 1933 is required with respect to the securities to which any rights relate in order for the Company to offer such rights to Holders and sell the securities represented by such rights, the Depositary will not offer such rights to Holders having an address in the United States unless and until such a registration statement is in effect; provided that nothing contained in this sentence shall create, or be construed to create, any obligation on the part of the Company to file such a

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registration statement or to endeavor to have such a registration statement declared effective.

SECTION 4.05 Redemption.

In the event that the Company exercises any right of redemption in respect of Shares of any Series, the Depositary will redeem, from the amounts received by it in respect of such redemption, that number of American Depositary Shares of the Series corresponding to the Series of Shares with respect to which such right of redemption is exercised which represents the number of Shares of such Series deposited hereunder so redeemed. Subject to Sections 4.01, 4.02 and 4.06 hereof (to the extent applicable), the redemption price per American Depositary Share to be redeemed will be equal to the per share amount received by the Depositary upon the redemption of the Shares represented by such American Depositary Share multiplied by the number of Shares (or the fraction of a Share) represented by each such American Depositary Share. If less than all of the outstanding Shares of a particular Series are redeemed, the American Depositary Shares of the corresponding Series to be redeemed will be selected by lot or redeemed pro rata as may be determined by the Depositary.

The Company will deliver notice of its exercise of its right of redemption in respect of any Series of Shares to the Depositary prior to the date fixed for redemption. Promptly after receiving such notice from the Company, the Depositary will mail copies thereof to all Holders of Receipts of the relevant Series.

SECTION 4.06 Conversion of Foreign Currency.

Whenever the Depositary shall receive a payment in a foreign currency, by way of dividends or other distributions (including amounts received in respect of redemptions) or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof such foreign currency can in the judgment of the Depositary be converted on a reasonable basis into dollars and the resulting dollars transferred to the United States, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such foreign currency into dollars, and such dollars shall be distributed to the Holders entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such dollars, then to the holders of such warrants and/or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Holders entitled to such distribution on account of exchange restrictions or otherwise.

If such conversion or distribution can be effected only with the approval or license of any government or governmental agency, the Depositary shall file such application for approval or license, if any, as it may deem desirable and shall forward a copy of such application to the Company.

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If at any time the Depositary shall determine that in its judgment any foreign currency received by it is not convertible on a reasonable basis into dollars transferable to the United States, or if any approval or license of any government or governmental agency which is required for such conversion is denied or in the reasonable opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by it to, or in its discretion may hold such foreign currency for the respective accounts of, the Holders entitled to receive the same.

If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some Holders entitled thereto, the Depositary may in its discretion make such conversion and distribution in dollars to the extent practicable to the Holders entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance for the respective accounts of, the Holders entitled thereto for whom such conversion and distribution is not practicable.

SECTION 4.07 Fixing of Record Date.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever the Company shall redeem any of the Shares deposited hereunder, or whenever rights shall be issued, with respect to the Deposited Securities of a particular Series, or whenever the Depositary shall receive notice of any meeting at which holders of Shares of a particular Series or other Deposited Securities of the corresponding Series are entitled to be present or vote, the Depositary shall fix a record date, after consultation with the Company, if such date is to be different from the record date applicable to Shares or other Deposited Securities of a particular Series, for the determination of the Holders of the Receipts of the corresponding Series who shall be entitled to receive such dividend, distribution, amount in respect of redemption or rights, or the net proceeds of the sale thereof, or to attend or give instructions for the exercise of voting rights at any such meeting. Subject to the provisions of Sections 4.01 through 4.06 and Section 4.08 and to the other terms and conditions of this Deposit Agreement, the Holders of Receipts of the corresponding Series on such record date shall be entitled to receive the amount distributable by the Depositary with respect to such dividend or other distribution or such rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares of the corresponding Series held by them respectively, or to give such voting instructions.

SECTION 4.08 Voting of Deposited Securities.

Upon receipt of notice of any meeting at which holders of Shares or other Deposited Securities of any Series are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the Holders of the ADSs of the corresponding Series a

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notice which shall contain (a) such information as is contained in such notice of meeting, and (b) a statement that the Holders at the close of business on a specified record date will be entitled, subject to any applicable laws or regulations and to the Memorandum and Articles of Association, to instruct the Depositary as to the exercise of the voting rights pertaining to the number of Shares or other Deposited Securities of such Series represented by the American Depositary Shares of such Series evidenced by such Holders' Receipts, and a brief statement as to the manner in which such instructions may be given, including an express indication that instructions may be given to the Depositary to give a discretionary proxy to a designated member or members of the Board of Directors of the Company. The Depositary shall furnish the Company with copies of all such notices and statements and any other materials relating thereto prior to the mailing thereof by the Depositary. Subject to Section 3.04 above, upon the written request of a Holder on such record date, received on or before the date established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable and permitted under the provisions of or governing Deposited Securities of such Series to vote or cause to be voted the number of Shares or other Deposited Securities of such Series represented by the American Depositary Shares of such Series evidenced by such Holder's Receipt in accordance with any nondiscretionary instructions set forth in such request. The Depositary shall not vote Shares or other Deposited Securities of a particular Series represented by ADSs of the corresponding Series except in accordance with written instructions from the Holder of the Receipt evidencing such ADS.

SECTION 4.09 Changes Affecting Deposited Securities.

Upon any change in nominal value, split-up, consolidation or any other reclassification of Deposited Securities of any Series, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting the Company or to which it is a party, any securities which are received by the Depositary in exchange for or in conversion of or in respect of such Deposited Securities shall be treated as new Deposited Securities of such series under this Deposit Agreement, and the American Depositary Shares of the Series theretofore representing the Deposited Securities of the Series in respect of which such securities are received shall thenceforth represent the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case, the Depositary may, with the Company's approval, and shall if the Company shall so request, execute and deliver additional Receipts as in the case of a stock dividend, or call for the surrender of outstanding Receipts of the corresponding Series to be exchanged for new Receipts of the corresponding Series specifically describing such new Deposited Securities.

SECTION 4.10 Reports.

The Depositary shall make available for inspection by Holders of Receipts of any Series, at the Depositary's Office and at any other designated transfer offices, any

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reports and communications received from the Company which are both (a) received by the Depositary or its nominee or nominees as the holder of Deposited Securities of the corresponding Series and (b) made generally available to the holders of Deposited Securities of such Series by the Company. The Depositary shall also send to such Holders copies of such reports when furnished by the Company pursuant to Section 5.06.

In addition, upon notice that the Company has not furnished the Commission with public reports, documents or other information as required by the Securities Exchange Act of 1934, the Depositary shall, without, however, thereby relieving the Company of its obligation under the Securities Exchange Act of 1934 to do so, and without incurring any liability for failure to do so, furnish promptly to the Commission copies of all annual or other periodic reports and other notices or communications which the Depositary receives from the Company as a holder of Deposited Securities of any Series and which are not otherwise furnished to or filed with the Commission pursuant to any other requirement of the Commission.

SECTION 4.11 Available Information.

The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and accordingly files certain reports with the Commission. Such reports and other information may be inspected and copied at the public reference facilities maintained by the Commission located at the date hereof at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.

SECTION 4.12 Lists of Holders of Receipts.

Promptly upon request by the Company, the Depositary shall furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares of any Series by all persons in whose names Receipts of the corresponding Series are registered on the books of the Depositary.

SECTION 4.13 Withholding.

Notwithstanding any other provision of this Deposit Agreement, in the event that the Depositary determines that any distribution in property (including Shares or rights to subscribe therefor) is subject to any tax which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property, after deduction of such taxes, to the Holders entitled thereto in proportion to the number of American Depositary Shares with respect to which such disposition was made held by them respectively.

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SECTION 4.14 Distributions with Respect to Deposited Securities in Bearer Form.

Subject to the terms of this Article IV, distributions in respect of Shares in bearer form that are held by the Depositary shall be made to the Depositary for the account of the respective Holders of Receipts of the Series corresponding to the Series of Shares with respect to which any such distribution is made upon due presentation by the Depositary or the Custodian to the Company of any relevant coupons, talons or certificates. The Depositary and the Custodian shall promptly present such coupons, talons or certificates, as the case may be, in connection with any such distribution.

ARTICLE 5.
The Depositary, the Custodian and the Company

SECTION 5.01 Maintenance of Office and Transfer Books by the Depositary.

Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain in the Borough of Manhattan, The City of New York, facilities for the execution and delivery, registration, registration of transfer and surrender of Receipts of each Series in accordance with the provisions of this Deposit Agreement.

For each Series of Receipts the Depositary shall keep books at such transfer office for the registration of Receipts of such Series and transfers of Receipts of such Series, which at all reasonable times shall be open for inspection by the Holders of such Receipts, provided that such inspection shall not be for the purpose of communicating with Holders of such Receipts in the interest of a business or object other than the business of the Company or a matter related to this Deposit Agreement or the Receipts of such Series.

The Depositary may close the transfer books with respect to the Receipts of a particular Series, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder or at the request of the Company.

If any Receipts of a particular Series or the American Depositary Shares evidenced thereby are listed on one or more stock exchanges in the United States, the Depositary shall act as Receipt Registrar with respect to the Receipts of such Series or, upon the request or with the approval of the Company, shall appoint a Receipt Registrar with respect to the Receipts of such Series or one or more co-registrars for registration of such Receipts in accordance with any requirements of such exchange or exchanges. Such Receipt Registrar or co-registrars may be removed and a substitute or substitutes appointed by the Depositary upon the request or with the approval of the Company.

The Depositary may perform its obligations under Section 4.12 and this Section 5.01 through any agent appointed by it, provided that the Depositary shall notify

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the Company of such appointment and shall remain responsible for the performance of such obligations as if no agent were appointed.

SECTION 5.02 Prevention or Delay in Performance by the Depositary or the Company.

Neither the Depositary nor the Company shall incur any liability to any Holder, if by reason of any provision of any present or future law of the United Kingdom or any other country, or of any other governmental authority, or by reason of any provision, present or future, of the Company's Memorandum or Articles of Association, or of the Deposited Securities or by reason of any act of God or war or other circumstances beyond its control, the Depositary or the Company shall be prevented or forbidden from, or delayed in, doing or performing any act or thing which by the terms of this Deposit Agreement it is provided shall be done or performed; nor shall the Depositary or the Company incur any liability to any Holder by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of this Deposit Agreement it is provided shall or may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement.

SECTION 5.03 Obligations of the Depositary, the Custodian and the Company.

The Company assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to Holders, except to perform such obligations as are specifically set forth in this Deposit Agreement without gross negligence or bad faith.

The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to Holders, except to perform such obligations as are specifically set forth in this Deposit Agreement without gross negligence or bad faith.

The Depositary undertakes not to issue any Receipt of any Series other than to evidence American Depositary Shares of the corresponding Series representing Deposited Securities of such Series then on deposit with the Custodian. The Depositary also undertakes not to sell (except as expressly provided herein), pledge or lend Deposited Securities of any Series held by it as Depositary.

Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required, and the Custodian shall not be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary.

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Neither the Depositary nor the Company shall be liable for any action or non-action by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, or any other person believed by it in good faith to be competent to give such advice or information.

The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or for the effect of any such vote, provided that any such action or non-action is in good faith.

The Depositary may own and deal in any class of securities of the Company and its affiliates and in Receipts.

No disclaimer of liability under the Securities Act of 1933 is intended by any provision of this Deposit Agreement.

SECTION 5.04 Resignation and Removal of the Depositary; Appointment of Successor Depositary.

The Depositary may at any time resign as Depositary hereunder with respect to any or all Series of Deposited Securities by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary in respect of the Series of Deposited Securities with respect to which the Depositary has given such notice and the acceptance by such successor depositary of such appointment as hereinafter provided. The Company may at any time remove the Depositary with respect to any or all Series of Deposited Securities by written notice of such removal delivered to the Depositary, which removal shall be effective upon the appointment of a successor depositary in respect of the Series of Deposited Securities with respect to which the Depositary is to be removed and the acceptance by such successor depositary of such appointment as hereinafter provided.

In case at any time the Depositary acting hereunder shall resign or be removed with respect to any or all Series of Deposited Securities, the Company shall use its best efforts to appoint a successor depositary in respect of the Series of Deposited Securities with respect to which the Depositary has so resigned or been removed which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor in respect of the Series of Deposited Securities with respect to which such appointment has been made, but such predecessor, nevertheless, upon payment of all sums due to it and on the written request of the Company shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder in respect of the Series of

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Deposited Securities with respect to which the Depositary has so resigned or been removed, and such predecessor shall thereupon duly assign, transfer and deliver all right, title and interest in the Deposited Securities of such Series to such successor, and shall deliver to such successor a list of the Holders of all Receipts of the corresponding Series then outstanding. Any such successor depositary shall promptly mail notice of its appointment to such Holders.

Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

SECTION 5.05 The Custodian.

The Custodian in acting hereunder shall be subject at all times and in all respects to the directions of the Depositary for the Series of Shares and the corresponding Series of Deposited Securities, American Depositary Shares and Receipts with respect to which the Custodian acts as custodian and shall be responsible solely to such Depositary. The Custodian may resign and be discharged from its duties hereunder with respect to any or all Series of Deposited Securities by notice of such resignation delivered to the Depositary at least 30 days prior to the date on which such resignation is to become effective. The Depositary shall promptly after receiving such notice appoint a substitute custodian with respect to the Series of Deposited Securities with respect to which the Custodian has so resigned, which shall thereafter be a Custodian hereunder. Whenever the Depositary in its discretion determines that it is in the best interest of the Holders to do so, it may appoint a substitute custodian with respect to any or all Series of Deposited Securities, which shall thereafter be a Custodian hereunder, and upon demand of the Depositary, any predecessor Custodian shall deliver the Deposited Securities of the Series with respect to which a substitute custodian has been so appointed held by it to the substitute custodian so appointed by the Depositary. Any such substitute custodian shall deliver to the Depositary, forthwith upon its appointment, an acceptance of such appointment satisfactory in form and substance to the Depositary. Immediately upon any such change, the Depositary shall give notice thereof in writing to all Holders of Receipts of the Series with respect to which such appointment has been made.

Upon the appointment of any successor depositary with respect to any Series of Deposited Securities and the corresponding Series of Shares, American Depositary Shares and Receipts hereunder, the Custodian then acting hereunder with respect to such Series of Deposited Securities shall forthwith become, without any further act or writing, the agent hereunder of such successor depositary with respect to such Series of Deposited Securities and the appointment of such successor depositary shall in no way impair the authority of the Custodian hereunder with respect to such Series of Deposited Securities; but such successor depositary so appointed shall, nevertheless, on the written request of such Custodian, execute and deliver to such Custodian all such

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instruments as may be proper to give to such Custodian full and complete power and authority as such agent hereunder of such successor depositary.

SECTION 5.06 Notices and Reports.

On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting at which holders of any Deposited Securities of a particular Series are entitled to be present or to vote, or of any reconvening of any such meeting that has been adjourned, or of the taking of any action in respect of any cash or other distribution or any redemption or the offering of any rights in respect of Deposited Securities of a particular Series, the Company shall transmit to the Custodian a copy of the notice thereof in the form given or to be given to holders of Deposited Securities of such Series.

The Depositary will arrange for the prompt transmittal by the Custodian to the Depositary of such notices and any other reports and communications which are made generally available by the Company to holders of Shares of a particular Series, and, if requested in writing by the Company, will arrange for the mailing, at the Company's expense, of copies thereof to all Holders of Receipts of the corresponding Series.

The Company shall, with respect to each Series of Shares, deliver to each of the Depositary and the Custodian a copy of the provisions of or governing the Shares of such Series and any other Deposited Securities issued by the Company or an affiliate of the Company in connection with such Series of Shares, and promptly upon any amendment thereto or change therein, the Company shall deliver to the Depositary and the Custodian a copy of such provisions as so amended or changed. The Depositary may rely upon such copy for all purposes of this Deposit Agreement. The Depositary will, at the expense of the Company, make such copy and any other notices, reports and other communications issued by the Company in connection therewith available for inspection by the Holders of the Receipts of the Series evidencing the Shares of the Series governed by such provisions at the Depositary's Office, at the office of the Custodian and at any other designated transfer office.

SECTION 5.07 Issuance of Additional Shares, etc.

The Company agrees that prior to (a) the issuance of (1) Shares that may be deposited hereunder pursuant to Section 2.02, (2) rights to subscribe for such Shares, (3) securities convertible into or exchangeable for such Shares, or (4) rights to subscribe for any such securities, or (b) the deposit of any Shares under this Deposit Agreement by the Company or any company controlled by or under common control with the Company, it will either promptly deliver an Officer's Certificate to the Depositary stating that a registration statement under the Securities Act of 1933 is in effect in respect of such rights or securities or any Receipts to be issued in connection therewith or promptly furnish to the Depositary a written opinion from counsel for the Company in the United

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States, which counsel shall be reasonably satisfactory to the Depositary, stating that no such registration statement is required.

SECTION 5.08 Indemnification.

The Company shall indemnify the Depositary and the Custodian against, and hold each of them harmless from, any loss, liability or expense which may arise out of acts performed or omitted in accordance with the provisions of this Deposit Agreement and the Receipts, as the same may be amended from time to time, (i) by either the Depositary or the Custodian, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by the Company or any of its agents. The Depositary agrees to indemnify the Company and hold it harmless from any loss, liability or expense which may arise out of acts performed or omitted by the Depositary or the Custodian due to the negligence or bad faith of either the Depositary or the Custodian.

The obligations set forth in this Section 5.08 shall survive the termination of this Deposit Agreement and the succession or substitution of any person indemnified hereby.

Any person seeking indemnification hereunder (an "indemnified person") shall notify the person from whom it is seeking indemnification (the "indemnifying person") of the commencement of any action or claim in respect of which indemnification may be sought promptly after such indemnified person becomes aware of such commencement (provided that the failure to make such notification shall not affect such indemnified person's rights under this Section 5.08) and shall consult in good faith with the indemnifying person as to the conduct of the defense of such action or claim, which shall be reasonable in the circumstances. No indemnified person shall compromise or settle any such action or claim without the consent of the indemnifying person.

SECTION 5.09 Charges of Depositary.

The Company agrees to pay all charges and expenses of the Depositary as shown in Exhibit B hereto, and those of the Receipt Registrar any co-registrar and any co-transfer agent under this Deposit Agreement, that are shown in Exhibit B hereto to be payable by the Company, notwithstanding the succession or substitution of such person, with respect to Shares, Deposited Securities, American Depositary Shares or Receipts, or the termination of this Deposit Agreement; provided, however, that the Depositary will pay such charges and expenses to the extent agreed between the Depositary and the Company. Any other charges and expenses of the Depositary hereunder will be paid by the Company after consultation and agreement between the Depositary and the Company as to the amount and nature of such charges and expenses. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

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ARTICLE 6.
Amendment and Termination

SECTION 6.01 Amendment.

The form of Receipt to be issued in respect of the Shares of a particular Series and any provisions of this Deposit Agreement with respect to such Series may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges), or which shall otherwise prejudice any substantial existing right of Holders of Receipts of a particular Series shall not, however, become effective as to outstanding Receipts of such Series until the expiration of thirty days after notice of such amendment to this Deposit Agreement shall have been given to the Holders of outstanding Receipts of such Series. Every Holder of a Receipt of the relevant Series at the time any such amendment to this Deposit Agreement so becomes effective, if such Holder shall have been given such notice, shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by the Deposit Agreement or the Receipts of such Series as amended thereby. In no event shall any amendment impair the right of the Holder of any Receipt of the relevant Series to surrender such Receipt and receive therefor the Deposited Securities of the corresponding Series represented thereby.

SECTION 6.02 Termination.

The Depositary shall at any time at the direction of the Company terminate this Deposit Agreement as to Shares of any and all Series and the Deposited Securities, American Depositary Shares and Receipts of all corresponding Series by mailing notice of such termination to the Holders of all Receipts of such Series then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate this Deposit Agreement as to shares of any and all Series and the Deposited Securities, American Depositary Shares and Receipts of all corresponding Series by mailing notice of such termination to the Company and the Holders of all Receipts of such Series then outstanding if at any time 60 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign with respect to such Series and a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.04. If any Receipts of a particular Series shall remain outstanding after the date of termination of this Deposit Agreement as to Receipts of such Series, the Depositary thereafter shall discontinue the registration of transfers of Receipts of such Series, shall suspend the distribution of dividends to the Holders entitled thereto, and shall not give any further notices or perform any further acts under this Deposit Agreement with respect to Receipts of such Series or Shares, Deposited Securities and American Depositary Shares of all corresponding Series,

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except that the Depositary shall continue to collect dividends and other distributions (including amounts in respect of any redemption) pertaining to Deposited Securities of the corresponding Series, shall sell rights as provided in this Deposit Agreement, and shall continue to deliver Deposited Securities of the corresponding Series, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts of such Series evidencing American Depositary Shares of the corresponding Series representing Deposited Securities of the corresponding Series, surrendered to the Depositary. At any time after the expiration of two years from the date of termination of this Deposit Agreement as to the Receipts of a particular Series the Depositary may sell the Deposited Securities of the corresponding Series then held by it hereunder and may thereafter hold the net proceeds of any such sale, together with any other cash then held by it hereunder with respect to the Receipts of such Series, in an unsegregated account, without liability to any party for interest thereon, for the pro rata benefit of the Holders of Receipts of such Series evidencing American Depositary Shares of the corresponding Series representing Deposited Securities of the corresponding Series which had not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except to account for such net proceeds and other cash. Upon the termination of this Deposit Agreement as to the Receipts of any or all Series, all obligations under this Deposit Agreement as to the Receipts of such Series shall be discharged except for obligations under Sections 5.08, 5.09 and 6.02 hereof.

ARTICLE 7.
Miscellaneous

SECTION 7.01 Counterparts.

This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Custodian and shall be open to inspection by any Holder during business hours.

SECTION 7.02 No Third Party Beneficiaries.

This Deposit Agreement is for the exclusive benefit of the parties hereto and shall not give any legal or equitable right, remedy or claim whatsoever to any other person.

SECTION 7.03 Severability.

In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any

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respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

SECTION 7.04 Holders Parties; Binding Effect.

The Holders from time to time of Receipts of all Series shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of their Receipts by acceptance thereof.

SECTION 7.05 Notices.

Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by first class registered mail or by cable, telex or facsimile transmission, in each case confirmed by letter, addressed to it at 42 St. Andrew Square, Edinburgh, EH2 2YE, United Kingdom, Attention: The Secretary, or any other address which the Company may specify in writing.

Any and all notices to be given to the Depositary shall be deemed to have been duly given if personally delivered or sent by mail or by cable, telex or facsimile transmission in each case confirmed by letter, addressed to The Bank of New York, 101 Barclay Street, New York, New York, 10286, Attention: American Depositary Receipt Administration, or any other address which the Depositary may specify in writing.

Any and all notices to be given to any Holder of a Receipt shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to such Holder at the address of such Holder as it appears on the transfer books for Receipts maintained by the Depositary, or, if such Holder shall have filed with the Depositary a written request that notices intended for such Holder be mailed to some other address, at the address designated in such request.

Delivery of a notice sent by mail or cable, telex or facsimile transmission shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Company may, however, act upon any cable, telex or facsimile transmission received by it from the other or from any Holder of a Receipt, notwithstanding that such cable, telex or facsimile transmission shall not subsequently be confirmed by letter as aforesaid.

SECTION 7.06 Governing Law.

This Deposit Agreement and the Receipts shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York.

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IN WITNESS WHEREOF, THE ROYAL BANK OF SCOTLAND GROUP plc and THE BANK OF NEW YORK have duly executed this Deposit Agreement as of the day and year first above set forth and all Holders and owners of Receipts of any Series shall become parties hereto upon becoming Holders or owners of Receipts of any Series issued in accordance with the terms hereof.

THE ROYAL BANK OF SCOTLAND
	GROUP plc


By:	/s/ Hew Campbell

	Name: Hew Campbell
	Title:

THE BANK OF NEW YORK


By:	/s/ David S. Stueber

	Name: David S. Stueber
	Title: Vice President

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EXHIBIT A

[FORM OF FACE OF RECEIPT]

AMERICAN DEPOSITARY RECEIPT, SERIES __1

evidencing

AMERICAN DEPOSITARY SHARES, SERIES __*

representing

NON-CUMULATIVE DOLLAR PREFERENCE SHARES, SERIES __*

THE ROYAL BANK OF SCOTLAND GROUP plc

(Incorporated under the laws of
Great Britain and registered in Scotland)

No.

THE BANK OF NEW YORK, a New York banking corporation, as Depositary (the "Depositary"), hereby certifies that is the owner of __________ American Depositary Shares, Series __* (the "American Depositary Shares"), representing deposited Non-cumulative Dollar Preference Shares, Series __* (including evidence of rights to receive such Shares, hereinafter referred to as "Shares") of The Royal Bank of Scotland Group plc, a public limited company incorporated under the laws of Great Britain and registered in Scotland (the "Company"). At the date hereof, each American Depositary Share represents ___ Share[s] deposited under the Deposit Agreement (as defined below) at the principal London office of The Bank of New York, a New York banking corporation (the "Custodian").

(1) This American Depositary Receipt is one of the American Depositary Receipts, Series __ (the "Receipts") issued and to be issued upon the terms and conditions set forth in the Deposit Agreement dated as of August 17, 1992, as amended and restated as of February 8, 1999, and as further amended and restated as of November 2, 2001 (as amended from time to time, the "Deposit Agreement"), among the Company, the Depositary and all holders and owners from time to time of Receipts of any series issued thereunder, each of whom by holding or owning a Receipt agrees to become
_________________________

¹*Insert Series designation and any additional designation of the relevant Series of Shares.

a party thereto and becomes bound by all the terms and provisions thereof. The Deposit Agreement sets forth the rights of holders of the Receipts and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other securities, property and cash from time to time received in respect thereof (the "Deposited Securities"). Copies of the Deposit Agreement are on file at the principal offices of the Depositary and the Custodian. The statements made on the face and the reverse of this Receipt are summaries of certain provisions of the Deposit Agreement as such provisions apply to the Receipts, the Shares and the American Depositary Shares and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. The Depositary makes no representation or warranty as to the validity or worth of the Deposited Securities or the meaning or interpretation of any term or provision of any Deposited Security.

(2) Upon surrender at the Depositary's Office (set forth below) of this Receipt, and upon payment of the fee of the Depositary provided in paragraph (7) of this Receipt, subject to the terms and conditions of the Deposit Agreement, and subject to the limitations set forth in the second to last sentence of Article 3 below, the holder hereof is entitled to delivery, to him or upon his order, of the Deposited Securities then represented by the American Depositary Shares evidenced by this Receipt. Delivery of such Deposited Securities shall be made in registered form only by the delivery of a share certificate or certificates in the name of the holder hereof or as ordered by such holder or by the delivery of certificates properly endorsed (or accompanied by appropriate instruments of transfer). Such delivery will be made without unreasonable delay and, at the option of the holder hereof, either at the office of the Custodian or at the Depositary's Office, provided that the forwarding of share certificates evidencing Deposited Securities for such delivery at the Depositary's Office in The City of New York shall be at the risk and expense of the holder hereof.

(3) Transfers of this Receipt may be registered on the books of the Depositary by the holder hereof in person or by duly authorized attorney, upon surrender of this Receipt at any designated transfer office properly endorsed or accompanied by proper instruments of transfer and duly stamped as may be required by applicable law; provided, however, that the Depositary may close the transfer books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties under the Deposit Agreement or at the request of the Company. This Receipt may be split into other Receipts or may be combined with other Receipts into one Receipt, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination or surrender of any Receipt or the transfer or withdrawal of any Deposited Securities, the Depositary or the Custodian may require payment of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fees with respect thereto and payment of any applicable fees as provided in paragraph (7) of this Receipt, may require the production of proof satisfactory

to it as to the identity and genuineness of any signature and may also require compliance with any laws or governmental regulations relating to Receipts or to the withdrawal of Deposited Securities.

The Depositary may refuse to execute and deliver Receipts, register the transfer of any Receipt or make any distribution of, or related to, Deposited Securities until it has received such proof of citizenship, residence, exchange control approval, legal or beneficial ownership of Receipts, Deposited Securities or other securities, compliance with all applicable laws and regulations and all applicable provisions of or governing Deposited Securities, or other information as it may deem necessary or proper or as the Company may require by written request to the Depositary or the Custodian. The delivery of Receipts against deposits of Shares generally or against deposits of particular Shares may be suspended, or the delivery of Receipts against the deposit of particular Shares may be withheld, or the registration of transfer or surrender of Receipts in particular instances may be refused, or the registration of transfer or surrender of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary, or the transfer books of the Company or any Share registrar, are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time, or for any other reason, subject to the following sentence. The surrender of outstanding Receipts and withdrawal of Deposited Securities may not be suspended subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of shares in connection with voting at a shareholders' meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the Receipts or to the withdrawal of the Deposited Securities. Without limitation of the foregoing, the Depositary will not knowingly accept for deposit under the Deposit Agree ment any Shares which, if sold by the holder thereof in the United States or its territories, would be subject to the registration provisions of the Securities Act of 1933, as amended, unless a registration statement is in effect as to such Shares.

(4) If any tax or other governmental charge shall become payable with respect to this Receipt or any Deposited Securities represented hereby, such tax or other governmental charge shall be payable by the holder hereof to the Depositary. The Depositary may refuse to effect any registration of transfer of this Receipt or any transfer and withdrawal of Deposited Securities represented by this Receipt until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the holder hereof any part or all of the other Deposited Securities represented hereby, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge, the holder hereof remaining liable for any deficiency.

(5) Every person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that such Shares and each certificate therefor are validly issued and outstanding, fully paid, nonassessable and free of pre-emptive rights and that the person making such deposit is duly authorized so to do. Such representations and warranties shall survive the deposit of Shares and issuance of Receipts therefor.

(6) Notwithstanding any other provision of the Deposit Agreement and without prejudice to any disclosure obligations which may from time to time apply in respect of the Shares contained in the Companies Act 1985 and any other applicable law or which may be contained in the Memorandum and Articles of Association of the Company and the remedies of the Company for non-compliance therewith, each holder agrees to comply with requests from the Company or the Depositary which are made under relevant legislation to provide information, inter alia, as to the capacity in which such holder owns Receipts and regarding the identity of any other person having an interest in such Receipts and the nature of such interest and shall forfeit the right to direct the voting of Shares as to which compliance is not made, all as if such Receipts were to the extent practicable the Shares represented thereby, and the Depositary agrees to use its reasonable efforts to comply with any instructions received from the Company requesting that the Depositary take the reasonable actions specified therein to obtain such information.

(7) The Depositary will charge the party to whom Receipts are delivered against deposits (with the exception of the initial deposit of Shares), and the party surrendering Receipts for delivery of Deposited Securities, $5 for each 100 American Depositary Shares (or portion thereof) evidenced by the Receipts issued or surrendered. The Company will pay all other charges and expenses of the Depositary and those of any Receipt registrar, with the exception of (i) taxes and other governmental charges, (ii) stock transfer and registration fees on deposits of Shares and withdrawals of Deposited Securities, (iii) such cable, telex and facsimile transmission and delivery charges as are expressly provided in the Deposit Agreement to be at the expense of persons depositing or withdrawing Shares or holders of Receipts, and (iv) such expenses as are incurred or paid by the Depositary in the conversion of foreign currency, if any, into United States dollars (which are reimbursable out of such foreign currency).

(8) It is a condition of this Receipt, and every successive holder or owner hereof by holding or owning the same consents and agrees, that title to this Receipt (and to the Deposited Securities represented by the American Depositary Shares evidenced hereby), when properly endorsed or accompanied by proper instruments of transfer, is transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that the Company and the Depositary, notwithstanding any notice to the contrary, may treat the person in whose name this Receipt is registered on the books of the Depositary (a "Holder") as the absolute owner hereof for the purpose

of determining the person entitled to distribution of dividends or other distributions with respect hereto (including distributions upon the redemption of the Deposited Securities) or to any notice provided for in the Deposit Agreement and for all other purposes.

(9) This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been executed by the Depositary by the manual signature of a duly authorized officer or, if a registrar for the Receipts shall have been appointed, by the manual signature of a duly authorized officer of such registrar.

(10) The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, and accordingly files certain reports with the Securities and Exchange Commission (the "Commission"). Such reports and other information may be inspected and copied at the public reference facilities maintained by the Commission located at the date of the Deposit Agreement at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.

	THE BANK OF NEW YORK
		as Depositary and Registrar

Dated:

	By:

		Authorized Officer

The address of the Principal Office of the Depositary is One Wall Street, New York, New York, 10286. The address of the Depositary for the administration of American Depositary Receipts is 101 Barclay Street, New York, New York, 10286.

[FORM OF REVERSE OF RECEIPT]

SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT

(11) Dividends and Distributions; Rights. Whenever the Depositary shall receive any cash dividend or other cash distribution by the Company in respect of any Deposited Securities (including cash in respect of redemption), if such cash dividend or other cash distribution is received in United States dollars, the Depositary shall distribute the dollars so received, and if such cash dividend or other cash distribution is received in a currency other than United States dollars, the Depositary will, if at the time of receipt thereof such amounts of foreign currency can in the judgment of the Depositary be converted on a reasonable basis into United States dollars transferable to the United States and subject to the provisions of the Deposit Agreement, convert such dividend or distribution into United States dollars and distribute the amount thus received, in either case to the Holders entitled thereto in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively; provided, however, that the amount distributed will be reduced by any amounts required to be withheld by the Company, its agent or the Depositary on account of taxes. If in the judgment of the Depositary amounts received in foreign currency may not be converted on a reasonable basis into United States dollars transferable to the United States, or may not be so convertible for all of the Holders entitled thereto, the Depositary may in its discretion make such conversion, if any, and distribution in United States dollars to the extent permissible to the Holders entitled thereto and may distribute the balance of the foreign currency received and not so convertible by the Depositary to, or hold such balance for the account of, the Holders entitled thereto. If in the opinion of the Depositary any distribution other than cash or Shares upon any Deposited Securities cannot be made proportionately among the Holders entitled thereto, or if for any other reason the Depositary deems such distribution not to be feasible, the Depositary may adopt such method as it may deem equitable for the purpose of effecting such distribution, including the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale will be distributed by the Depositary to the Holders entitled thereto as in the case of a distribution received in cash. If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Depositary may with the Company's approval, and shall if the Company shall so request, distribute to the Holders entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, additional Receipts for an aggregate number of American Depositary Shares representing the amount of Shares received as such dividend or free distribution. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary may sell the amount of Shares represented by the aggregate of such fractions and distribute the net proceeds as though such proceeds had been a distribution of cash or other property. If additional Receipts are not so distributed, each American

Depositary Share shall thenceforth also represent the additional Shares distributed upon the Deposited Securities represented thereby. In the event that the Company shall offer or cause to be offered to the holder of any Deposited Securities any rights to subscribe for additional Shares or any rights of any other nature, the Depositary, after consultation with the Company and subject to the Memorandum and Articles of Association, the Companies Act 1985 and all applicable legislation and regulations, shall have discretion as to the procedure to be followed in making such rights available to Holders or in disposing of such rights on behalf of Holders; provided, however, that the Depositary will, if requested by the Company, either (a) make such rights available to Holders by means of warrants or otherwise, if lawful and feasible, or (b) if making such rights available is not lawful or not feasible, or if the rights represented by such warrants or other instruments are not exercise d and appear to be about to lapse, sell such rights or warrants or other instruments at public or private sale, at such place or places and upon such terms as the Depositary may deem proper, and allocate the proceeds of such sales for the account of the Holders otherwise entitled thereto upon an averaged or other practicable basis without regard to any distinctions among such Holders because of exchange restrictions, or the date of delivery of any Receipt or Receipts, or otherwise.

(12) Redemption. In the event that the Company exercises any right of redemption in respect of Shares, the Depositary will redeem, from the amounts received by it in respect of such redemption, that number of American Depositary Shares which represents the number of Shares so redeemed. Subject to certain provisions of the Deposit Agreement regarding payments or the making of distributions with respect to the Deposited Securities, the redemption price per American Depositary Share to be redeemed will be equal to the per share amount received by the Depositary upon the redemption of the Shares multiplied by the number of Shares (or the fraction of a Share) represented by each such American Depositary Share. If less than all of the outstanding Shares are redeemed, the American Depositary Shares to be redeemed will be selected by lot or redeemed pro rata as may be determined by the Depositary.

The Company will deliver notice of its exercise of its right of redemption to the Depositary prior to the date fixed for redemption. Promptly after receiving such notice from the Company, the Depositary will mail copies thereof to all Holders of Receipts.

(13) Record Dates. Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued, with respect to the Deposited Securities, or whenever the Company shall redeem any of the Shares, or whenever the Depositary shall receive notice of any meeting at which holders of Shares or other Deposited Securities shall be entitled to be present or vote, the Depositary will fix a record date for the determination of the Holders who shall be entitled to receive such dividend, distribution, amounts in respect of redemption or rights, or the net proceeds of any sale thereof, or to attend or to give

instructions for the exercise of voting rights at any such meeting, subject to the provisions of the Deposit Agreement.

(14) Voting of Deposited Securities. Upon receipt of notice of any meeting at which holders of Deposited Securities are entitled to vote, the Depositary will mail to the Holders a notice which will contain (a) such information as is contained in such notice of meeting and (b) a statement that the Holders at the close of business on a specified record date will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the number of Shares or other Deposited Securities represented by their respective American Depositary Shares evidenced by such Holders' Receipts, and a brief statement as to the manner in which such instructions may be given. Subject to Article 6 above, upon the written request of a Holder of a Receipt or Receipts on such record date, received on or before the date established by the Depositary for such purpose, the Depositary will endeavor insofar as practicable to vote or cause to be voted the number of Shares or other Deposited Securities underlying the American Depositary Shares evidenced by such Receipt or Receipts in accordance with any such nondiscretionary instructions. The Depositary shall not vote Shares or other Deposited Securities underlying a Receipt except in accordance with written instructions from the Holder of such Receipt.

(15) Changes Affecting Deposited Securities. Upon any change in nominal value, split-up, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting the Company or to which it is a party, any securities which shall be received by the Depositary in exchange for or in conversion of or in respect of Deposited Securities shall be treated as new Deposited Securities under the Deposit Agreement, and the American Depositary Shares shall thenceforth represent the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may with the Company's approval, and shall if the Company shall so request, execute and deliver additional Receipts as in the case of a stock dividend, or call for the surrender of outstanding Receipts to be exchanged for new Receipts.

(16) Reports; Inspection of Transfer Books. The Depositary will make available for inspection by Holders at the Depositary's Office and at any other designated transfer offices any reports and communications received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities, and (b) made generally available to the holder or holders of such Deposited Securities by the Company. Upon the written request of the Company, the Depositary will also send to Holders copies of such reports when furnished by the Company as provided in the Deposit Agreement. The Depositary will arrange for the mailing to all Holders of any notice received by it in respect of any meeting at which holders of Deposited Securities are entitled to be present or to vote, or of any reconvening of any such meeting that has

been adjourned, or of the taking of any action in respect of any cash or other distribution or any redemption or the offering of any rights in respect of Deposited Securities. The Depositary will keep books for the registration of Receipts and their transfer which at all reasonable times will be open for inspection by the Holders, provided that such inspection shall not be for the purpose of communicating with Holders in the interest of a business or object other than the business of the Company or a matter related to the Deposit Agreement or the Receipts.

(17) Withholding. Notwithstanding any other provision of the Deposit Agreement, in the event that the Depositary determines that any distribution in property (including Shares or rights to subscribe therefor) is subject to any tax which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes to the Holders entitled thereto.

(18) Liability of the Company and Depositary. Neither the Depositary nor the Company shall incur any liability to any Holder of this Receipt, if by reason of any provision of any present or future law of any country, or of any governmental authority, or by reason of any provision, present or future, of the Memorandum or Articles of Association of the Company or of the Deposited Securities or by reason of any act of God or war or other circumstance beyond its control, the Depositary or the Company shall be prevented or forbidden from, or delayed in, doing or performing any act or thing which by the terms of the Deposit Agreement it is provided shall be done or performed. Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Holders, except to perform such obligations as are specifically set forth in the Deposit Agreement without gross negligence or bad faith. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts, which in its opinion may involve it in expense and liability, unless indemnity satisfactory to it against all expense and liability shall be furnished as often as may be required, and the Custodian shall not be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary. Neither the Depositary nor the Company shall be liable for any action or non-action by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, or any other person believed by it in good faith to be competent to give such advice or information. The Depositary will not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or non-action is in good faith. The Depositary may own and deal in any class of securities of the Company and its affiliates and in Receipts. The Company shall indemnify the Depositary

and the Custodian against, and hold each of them harmless from, any loss, liability or expense which may arise out of acts performed or omitted in accordance with the provisions of the Deposit Agreement and the Receipts, as the same may be amended from time to time, (i) by the Depositary or the Custodian, except for any liability arising out of the negligence or bad faith of either of them or (ii) by the Company or any of its agents.

(19) Resignation and Removal of Depositary; Substitution of Custodian. The Depositary may at any time resign as Depositary under the Deposit Agreement with respect to the Receipts by written notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company, effective upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time appoint one or more substitute custodians and the term "Custodian" shall refer to each substitute.

(20) Amendment of Deposit Agreement and Receipts. The Receipts and the Deposit Agreement as it applies to the Receipts may at any time and from time to time be amended by agreement between the Company and the Depositary. Any amendment which shall impose or increase any fees or charges (other than taxes or other governmental charges), or which shall otherwise prejudice any substantial existing right of Holders, shall not, however, become effective as to outstanding Receipts until the expiration of thirty days after notice of such amendment shall have been given to the Holders of outstanding Receipts. Every Holder at the time any amendment so becomes effective, if such Holder shall have been given such notice, shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by the Deposit Agreement a s amended thereby. In no event shall any amendment impair the right of the Holder to surrender this Receipt and receive therefor the Deposited Securities represented hereby.

(21) Termination of Deposit Agreement. The Depositary will at any time at the direction of the Company terminate the Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement by mailing notice of such termination to the Company and the Holders of all Receipts then outstanding at any time 60 days after the Depositary shall have resigned, if a successor depositary shall not have been appointed and accepted its appointment. If any Receipts shall remain outstanding after the date of termination of the Deposit Agreement, the Depositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the Holders thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights as provided in the

Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions (including amounts in respect of any redemption) received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary. At any time two years from the date of termination of the Deposit Agreement, the Depositary may sell the Deposited Securities then held by it under the Deposit Agreement and hold the net proceeds of any such sale and any other cash then held by it under the Deposit Agreement, in an unsegregated account, without liability to any party for interest thereon, for the pro rata benefit of the Holders of theretofore unsurrendered Receipts.

EXHIBIT B

CHARGES OF THE DEPOSITARY

Service By Whom Paid		Rate
(1) Issuance by Depositary of Receipts against deposits of Shares ²	$5 per 100 American Depositary Shares or portion	Party to whom Receipts are delivered thereof
(2) Delivery by Custodian of Deposited Securities against surrender of Receipts	$5 per 100 American Depositary Shares or fraction	Party surrendering Receipts thereof

The Company will pay all other charges of the Depositary and those of any Receipt Registrar, co-transfer agent and co-registrar plus reasonable out-of-pocket expenses for printing, stationery, postage, and similar items, incurred by the Depositary in the exercise of its duties and obligations under the Deposit Agreement, in accordance with agreements in writing entered into between the Depositary and the Company from time to time, except for (a) taxes and other governmental charges, (b) such cable, telex and facsimile transmission and delivery charges as are expressly provided in the Deposit Agreement to be at the expense of persons depositing Shares or Holders, (c) such stock transfer and registration fees as may from time to time be in effect for the registration of transfers of Shares generally on any Share register of the Company (or any appointed agent of the Company for transfer and registration of Shares) and accordingly applicable to transfers of Shares to the name of th e Depositary, the Custodian or the nominee of either on the making of deposits hereunder, which shall be borne by the depositing Shareholder, and (d) such expenses as are incurred or paid by the Depositary in the conversion of foreign currency, if any, into dollars (which are reimbursable out of such foreign currency).
_________________________

² The initial deposit of American Depositary Shares with the Depositary shall not be subject to any charge by the Depositary.

EX-5.1 7 ex0501.htm

Exhibit 5.1

Our ref DIC/RBG 001.0232

The Royal Bank of Scotland Group plc
42 St Andrew Square
Edinburgh
EH2 2YE

8 April 2005

Dear Sirs

We have acted as solicitors in Scotland for The Royal Bank of Scotland Group plc (the Company) in connection with the registration under the US Securities Act of 1933, as amended (the Securities Act), of $10,000,000,000 aggregate principal amount of Capital Securities (the Capital Securities), Subordinated Debt Securities (the Subordinated Debt Securities) and Category II Non-cumulative Dollar Preference Shares of $0.01 each (the Dollar Preference Shares) pursuant to a registration statement on Form F-3 (the Registration Statement) filed under the Securities Act with the Securities and Exchange Commission. The Capital Securities are to be issued under and pursuant to a Capital Security Indenture between the Company and The Bank of New York, as Trustee. The Subordinated Debt Securities are to be issued under and pursuant to a Subordinated Debt Securities Indenture between the Company and The Bank of New York, as Trustee.

We have examined the Registration Statement, the prospectus included therein, and resolutions adopted by the shareholders of the Company in general meeting on 29 April 2004 and the Board of Directors of the Company on December 15, 2004. In addition, we have examined such other documents and have made such further examinations and enquiries as we have deemed necessary to enable us to express the opinions set forth herein.

Based upon the foregoing, we are of the opinion that so far as the law of Scotland at the date hereof is concerned:

(a)	the Company is duly incorporated and not in liquidation under the laws of Scotland; and

(b)	the Dollar Preference Shares, when issued by the Company, will, upon the passing of all necessary resolutions and the taking of all necessary corporate action in connection therewith (including the determining of the terms of issue of the Dollar Preference Shares in accordance with the Articles of Association of the Company), and assuming the issue price of the shares is not less than the nominal value thereof and is fully paid on issue, be duly authorised and validly issued and fully paid and will not be subject to further call or contribution under the laws of Scotland.

We hereby consent (i) to the use of our name in the prospectus forming a part of the Registration Statement in the forms and contexts in which it appears, (ii) to the filing of this

opinion as an exhibit to the Registration Statement and (iii) to the incorporation of this opinion and consent in a registration statement filed pursuant to Rule 462(b) of the Securities Act.

Yours faithfully

/s/ Dundas & Wilson CS LLP

Dundas & Wilson CS LLP

EX-5.2 8 ex0502.htm

Exhibit 5.2

	One Silk Street London EC2Y 8HQ Telephone (44-20) 7456 2000 Facsimile (44-20) 7456 2222 Group 4 Fax (44-20) 7374 9318 DX Box Number 10 CDE Direct Line (44-20) 7456 2000 Direct Fax (44-20) 7456 2222
The Royal Bank of Scotland Group plc 42 St Andrew Square Edinburgh EH2 2YE
	8 April 2005

Our Ref SRRE/GILM

Dear Sirs

We are acting as English solicitors to The Royal Bank of Scotland Group plc (the “Company”) in connection with the Registration Statement on Form F-3 (the “Registration Statement”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”), filed with the U.S. Securities and Exchange Commission for the purpose of registering up to U.S.$10,000,000,000 aggregate principal amount of the Company’s perpetual capital securities, dated subordinated debt securities and/or Category II non-cumulative dollar preference shares of U.S.$0.01 each. The perpetual capital securities (the “Capital Securities”) are to be issued pursuant to a Capital Securities Indenture dated 20 August 2001 (the “Capital Securities Indenture”) between the Company and The Bank of New York, as Trustee. The dated subordinated debt securities (the “Subordinated Debt Securities”) are to be issued pursuant to a Subordinated Debt Securities Indenture dated 30 September 2002 (the “Subordinated Debt Securities Indenture”) between the Company and The Bank of New York, as Trustee (together with the Capital Securities Indenture, the “Indentures”).

This opinion is limited to English law as applied by the English courts which is stated to be the law governing Sections 12.01 and as stated in Sections 2.01 of each of the Indentures and is given on the basis that these provisions, contained in each of the Indentures, will be governed by and construed in accordance with English law. We have made no investigation of the laws of any jurisdiction other than England and neither express nor imply any opinion as to any other laws and in particular the laws of Scotland, the laws of the State of New York and the laws of the United States of America and our opinion is subject to such laws including the matters stated in the opinions of Dundas & Wilson CS LLP and Davis Polk & Wardwell respectively.

In providing this opinion we have assumed:

(a)	that the Company had the necessary capacity, power and authority to execute and deliver each of the Indentures and to perform its obligations under each of the Indentures and that

A list of the names of the partners and their professional qualifications is open to inspection at the above office. The partners are solicitors, registered foreign lawyers or registered European lawyers. The firm is regulated by the Law Society.

Please refer to www.linklaters.com/regulation for important information on the regulatory position of the firm.

	each of the Indentures was duly authorised, executed and delivered by each of the parties thereto in accordance with all applicable laws;

(b)	that each of the Indentures was duly authorised, executed and delivered by each of the parties thereto, and constitutes legal, valid and binding obligations of each of the parties thereto enforceable under all applicable laws (other than, in the case of the Company, in respect of Sections 2.01 and 12.01 of each of the Indentures, the laws of England); and

(c)	in a winding up of the Company in Scotland a Scottish court would apply the relevant provisions of the English insolvency legislation and English law to the subordination arrangements for the Capital Securities and/or the Subordinated Debt Securities, as the case may be, in the same way as an English court in an English winding up.

It is our view that, subject to the matters referred to below:

1	the subordination arrangements relating to the Capital Securities set out in Sections 2.01 and 12.01 of the Capital Securities Indenture would be effective to ensure that in a liquidation of the Company in accordance with English insolvency rules the holders of the Capital Securities would not receive any amounts (whether by means of any claim in the liquidation, the operation of any set-off (by virtue of the operation of Section 5.03 of the Capital Securities Indenture) or otherwise) in respect of the Capital Securities until all Senior Creditors (as defined in the Capital Securities Indenture) of the Company had been paid in full;

2	the subordination arrangements relating to the Subordinated Debt Securities set out in Sections 2.01 and 12.01 of the Subordinated Debt Securities Indenture would be effective to ensure that in a liquidation of the Company in accordance with English insolvency rules the holders of the Subordinated Debt Securities would not receive any amounts (whether by means of any claim in the liquidation, the operation of any set-off (by virtue of the operation of Section 5.03 of the Subordinated Debt Securities Indenture) or otherwise) in respect of the Subordinated Debt Securities until all Senior Creditors (as defined in the Subordinated Debt Securities Indenture) of the Company had been paid in full; and

3	the choice of English law to govern Sections 12.01 and as stated in Sections 2.01 of each of the Capital Services Indenture and the Subordinated Debt Securities Indenture respectively would be recognised and upheld by the English courts.

The opinions expressed above are subject to the following qualifications:

(a)	The effectiveness of subordination arrangements under English law is not definitively established either in legislation or case law. However, the decision of Vinelott J. in the case In re Maxwell Communications Corporation plc (No.2) [1993] 1 WLR 1402 is helpful, although it is a decision of a court of first instance.

	There are, broadly, two grounds on which subordination arrangements of the type envisaged by the Capital Securities or the Subordinated Debt Securities might be capable of challenge. First, there is uncertainty as to whether subordination (by whatever means) is in breach of the rules on pari passu distributions in an insolvency and therefore is ineffective on public policy grounds: an argument to this effect would be based on the decision of the House of Lords in the case of British Eagle International Air Lines Ltd v Compagnie Nationale Air France [1975] 1 WLR 758. Secondly, there is a question as to whether or not mandatory set-off (under Rule 4.90 of the Insolvency Rules 1986) would operate in respect of an issue of subordinated debt securities. Both these grounds were considered in the Maxwell Communications case.

Page 2 of 4

	We consider that there are grounds for distinguishing the arrangements contemplated by the subordination of the Capital Securities and the Subordinated Debt Securities from the facts which led to the decision in the British Eagle case. The Maxwell Communications decision provides support for this, drawing a distinction between an arrangement where a creditor is preferred above other creditors and a situation where a creditor agrees to subordinate its claim (thereby waiving the benefit of the pari passu rule). In the latter situation, the court held that the pari passu rule was not mandatory and that such an arrangement would be effective in the event of the debtor’s liquidation.

	We also consider that the subordination provisions relating to the Capital Securities set out in Sections 2.01 and 12.01 of the Capital Securities Indenture and the subordination provisions relating to the Subordinated Debt Securities set out in Sections 2.01 and 12.01 of the Subordinated Debt Securities Indenture should be effective so as to ensure that, during the course of the winding-up of the Company and for so long as the Company was not able to pay all its Senior Creditors (as defined in the Capital Securities Indenture with respect to Capital Securities and in the Subordinated Debt Securities Indenture with respect to Subordinated Debt Securities) in full, the amount for which the holders of such Capital Securities or Subordinated Debt Securities as the case may be, could prove in the liquidation would be zero. Accordingly, whilst a contractual provision such as Section 5.03 in the Capital Securities Indenture and Section 5.03 in the Subordinated Debt Securitie s Indenture cannot in principle exclude the applicability of Rule 4.90 of the Insolvency Rules 1986, we do not consider that there would be any actual amount in respect of which the holders of the Capital Securities or the holders of the Subordinated Debt Securities, as the case may be, would be able to exercise a right of set-off under Rule 4.90 of the Insolvency Rules 1986 for so long as the Senior Creditors (as defined in the Capital Securities Indenture with respect to Capital Securities and in the Subordinated Debt Securities Indenture with respect to Subordinated Debt Securities) have not been paid in full.

	The Financial Services Authority of the United Kingdom (“FSA”) has required that a waiver of set-off rights be included in the terms and conditions relating to the Capital Securities and the Subordinated Debt Securities.

	We are doubtful as to the effectiveness of the waiver of set-off rights in a liquidation of the Company and note that the FSA in its Interim Prudential Sourcebook for Banks, Chapter CA, section 8.2 paragraph 1(b)(ii), note (b), acknowledges that it is not possible to contract out of the statutory rights of set-off in Rule 4.90 of the Insolvency Rules 1986. This opinion on subordination does not require us to address the effectiveness of the waiver of set-off rights prior to a liquidation of the Company. We confirm, however, that our comments in respect of the waiver of set-off rights do not affect our opinion, set out above, as to the efficacy of the subordination arrangements for the Capital Securities and the Subordinated Debt Securities on a liquidation of the Company.

(b)	The choice of English law to govern Section 12.01 and as stated in Section 2.01 of each of the Capital Services Indenture and the Subordinated Debt Securities Indenture would not be recognised or upheld if there were reasons for avoiding the choice of law on the grounds that its application would be manifestly incompatible with public policy. The choice of English law would not be upheld, for example, if it was made with the intention of evading the law of the jurisdiction with which a contract had its most substantial connection and which, in the absence of English law, would have invalidated the contract or been inconsistent therewith.

This opinion is addressed to you solely for your own benefit in relation to the Registration Statement and, except with our prior written consent, is not to be transmitted or disclosed to or relied upon by any person. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the

Page 3 of 4

reference to us and our opinion under the heading “Legal Opinions” in the Prospectus constituting part of the Registration Statement. In addition, we consent to the incorporation by reference of this opinion and consent into a registration statement filed pursuant to Rule 462(b) under the Securities Act.

Yours faithfully

Linklaters

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Exhibit 5.3

April 8, 2005

The Royal Bank of Scotland Group plc
42 St. Andrew Square
Edinburgh
EH2 2YE
Scotland

Ladies and Gentlemen:

We are acting as special United States counsel to The Royal Bank of Scotland Group plc (the “Company”) in connection with the registration statement on Form F-3 (the “Registration Statement”) filed with the United States Securities and Exchange Commission on the date hereof by the Company for the purpose of registering under the United States Securities Act of 1933, as amended (the “Act”) the Company’s capital securities, subordinated debt securities and dollar preference shares, having an aggregate initial offering price not to exceed $10,000,000,000. The capital securities are to be issued pursuant to a capital securities indenture dated August 20, 2001 (the “Capital Securities Indenture”) between the Company and The Bank of New York, as Trustee. The subordinated debt securities are to be issued pursuant to a subordinated debt securities indenture dated September 30, 2002 (the “Subordinated Debt Indenture”) between the Company and The Bank of New York, as Trustee. Capitalized terms used but not defined herein have the meaning assigned to them in the Capital Securities Indenture or the Subordinated Debt Indenture as applicable.

We have examined the originals or copies, certified or otherwise identified to our satisfaction, of such corporate records of the Company and such other documents and certificates as we have deemed necessary as a basis for the opinions hereinafter expressed.

Based upon and subject to the foregoing, we are of the opinion that:

The Royal Bank of Scotland Group plc

April 8, 2005

(i) Assuming that the Capital Securities Indenture has been duly authorized and executed by the parties thereto and that the capital securities have been duly authorized by the Company, when the capital securities have been duly executed and authenticated in accordance with the Capital Securities Indenture and duly delivered to and paid for by the purchasers thereof, the capital securities will, insofar as New York law is concerned, constitute valid and binding obligations of the Company; and

(ii) Assuming that the Subordinated Debt Indenture has been duly authorized and executed by the parties thereto and that the subordinated debt securities have been duly authorized by the Company, when the subordinated debt securities have been duly executed and authenticated in accordance with the Subordinated Debt Indenture and duly delivered to and paid for by the purchasers thereof, the subordinated debt securities will, insofar as New York law is concerned, constitute valid and binding obligations of the Company.

We are members of the Bar of the State of New York, and we express no opinion as to the laws of any jurisdiction other than the laws of the State of New York and the federal laws of the United States.

We hereby consent to the use of our name under the caption “Legal Opinions” in the Prospectus forming a part of the Registration Statement and to the filing, as an exhibit to the Registration Statement, of this opinion. In addition, we consent to the incorporation by reference of this opinion and consent into a registration statement filed pursuant to Rule 462(b) under the Act.

	Very truly yours,


	/s/ Davis Polk & Wardwell

EX-23.4 13 ex2304.htm

Exhibit 23.4

Deloitte & Touche LLP
Saltire Court
20 Castle Terrace
Edinburgh EH1 2DB

Tel: +44(0) 131 221 0002
Fax: +44 (0) 131 535 7888
DX 553050 Edinburgh 18
www.deloitte.co.uk

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement on Form F-3 of our report dated 23 February 2005, relating to the financial statements of The Royal Bank of Scotland Group plc appearing in the Annual Report on Form 20-F for the year ended 31 December 2004 and to the reference to us under the heading “Experts” in the Prospectus, which is part of this Registration Statement.

/s/ Deloitte & Touche LLP

Edinburgh
8 April 2005

Audit_•Tax_•Consulting_•Corporate Finance_•

Deloitte & Touche LLP is a limited liability partnership registered in England and Wales with registered
number OC303675. A list of members’ names is available for inspection at Stonecutter Court,
1 Stonecutter Street, London EC4A 4TR, United Kingdom, the firm’s principal place of business and
registered office. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.

Member firm
Deloitte Touche Tohmatsu

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