EXHIBIT 4(a) (viii)


Dated as of 7 March 2009 

and Amended and Restated as at 20 March 2009


LLOYDS
BANKING GROUP PLC


and


and


and


and


THE
COMMISSIONERS OF HER MAJESTY’S TREASURY


	
 


	



	
 


	
PLACING
 AND OPEN OFFER AGREEMENT


	
 


	






Slaughter and May

One Bunhill Row

London

EC1Y 8YY


(RRO/CPYC)


CD090780056






Contents


	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Page

	
 
	
 
	
 
	
 
	
 

	
1.
	
INTERPRETATION
	
 
	
2
	
 

	
 
	
 
	
 
	
 
	
 

	
2.
	
CONDITIONS
	
 
	
19
	
 

	
 
	
 
	
 
	
 
	
 

	
3.
	
THE PLACING AND OPEN OFFER AND APPOINTMENTS
	
 
	
24
	
 

	
 
	
 
	
 
	
 
	
 

	
4.
	
ALLOTMENT OF THE NEW SHARES, CONSIDERATION AND
 REGISTRATION
	
 
	
31
	
 

	
 
	
 
	
 
	
 
	
 

	
5.
	
OVERSEAS SHAREHOLDERS
	
 
	
32
	
 

	
 
	
 
	
 
	
 
	
 

	
6.
	
HM TREASURY SUBSCRIPTION
	
 
	
35
	
 

	
 
	
 
	
 
	
 
	
 

	
7.
	
CAPACITY
	
 
	
38
	
 

	
 
	
 
	
 
	
 
	
 

	
8.
	
FEES, COMMISSIONS, EXPENSES AND VAT
	
 
	
39
	
 

	
 
	
 
	
 
	
 
	
 

	
9.
	
COVENANTS
	
 
	
42
	
 

	
 
	
 
	
 
	
 
	
 

	
10.
	
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
	
 
	
45
	
 

	
 
	
 
	
 
	
 
	
 

	
11.
	
INDEMNITIES
	
 
	
47
	
 

	
 
	
 
	
 
	
 
	
 

	
12.
	
CONTRIBUTION
	
 
	
51
	
 

	
 
	
 
	
 
	
 
	
 

	
13.
	
TERMINATION
	
 
	
52
	
 

	
 
	
 
	
 
	
 
	
 

	
14.
	
EXCLUSIONS OF LIABILITY
	
 
	
55
	
 

	
 
	
 
	
 
	
 
	
 

	
15.
	
MISCELLANEOUS
	
 
	
55
	
 

	
 
	
 
	
 
	
 
	
 

	
16.
	
GENERAL
	
 
	
56
	
 

	
 
	
 
	
 
	
 
	
 

	
17.
	
ASSIGNMENT OR NOVATION
	
 
	
58
	
 

	
 
	
 
	
 
	
 
	
 

	
18.
	
NOTICES
	
 
	
59
	
 

	
 
	
 
	
 
	
 
	
 

	
19.
	
GOVERNING LAW AND SUBMISSION TO JURISDICTION
	
 
	
60
	
 

	
 
	
 
	
 
	
 
	
 

	
SCHEDULE 1
	
 
	
63
	
 

	
 
	
 
	
 
	
 

	
CERTIFICATES TO BE DELIVERED
	
 
	
63
	
 

	
 
	
 
	
 
	
 

	
SCHEDULE 2 DOCUMENTS TO BE DELIVERED
	
 
	
66
	
 

	
 
	
 
	
 
	
 

	
SCHEDULE 3 WARRANTIES
	
 
	
73
	
 

	 
	 
	 
	 

	
SCHEDULE 4 PRO FORMA NOVATION AGREEMENT
	
 
	
99
	
 

	
 
	
 
	
 
	
 

	
SCHEDULE 5 US INVESTOR LETTER
	
 
	
104
	
 











	
 

	
 


	
THIS
AGREEMENT is effective (as between the Company and HM Treasury only) as of 7
March 2009 and amended and restated by the parties hereto as of, and effective
from 20 March 2009 among:


	
 

	
 


	
(1)

	
LLOYDS BANKING GROUP PLC, a company incorporated in Scotland with
 registered number 095000 and whose registered office is at Henry Duncan
 House, 120 George St, Edinburgh, Scotland EH2 4LH (the “Company”); and


	
 

	
 


	
(2)

	
;


	
 

	
 


	
(3)

	
; 


	
 

	
 


	
(4)

	
and


	
 

	
 


	
(5)

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






	
 

	
 


	
WHEREAS:


	
 

	
 


	
(A)

	
The Company and HM
 Treasury have agreed, subject, inter alia, to the passing of the Resolutions
 and the resolutions contemplated in clause 2.1(CC) as set out herein that the
 Preference Shares are to be redeemed as provided in this Agreement. The amount payable on redemption is to be
 funded by the issue of the New Shares. 


	
 

	
 


	
(B)

	
Each of the Joint
 Bookrunners is willing (severally and not jointly or jointly and severally),
 on the terms and subject to the conditions set out in this Agreement, to use
 reasonable endeavours to procure Placees to acquire the New Shares on such
 terms and conditions as may be agreed by HM Treasury, including the Treasury
 Solicitor, and at a price not lower than the Issue Price on the basis that the
 New Shares shall be subject to clawback to the extent they are subscribed for
 under the Open Offer.


	
 

	
 


	
(C)

	
The Company proposes to
 invite Qualifying Shareholders to apply to subscribe for New Shares at the
 Issue Price by way of an open offer and otherwise on the terms and subject to
 the conditions to be set out in the Prospectus and the Application Form.


	
 

	
 


	
(D)

	
To the extent not placed
 or taken up under the Open Offer and subject to the provisions of this
 Agreement, HM Treasury is willing to subscribe for (or procure that its
 nominee subscribes for) such New Shares itself.


	
 

	
 


	
(E)

	
The Company proposes,
 subject, inter alia, to the passing
 of the Resolutions, to allot and issue the New Shares to such persons as the
 Joint Bookrunners may direct (with the consent of HM Treasury), or, failing
 which, to HM Treasury (or its nominee) as Placee.


	
 

	
 


	
(F)

	
Application will be made
 to the FSA and the London Stock Exchange for the admission of the New Shares
 to the Official List and to trading on the London Stock Exchange’s main
 market for listed securities.


	
 

	
 


	
(G)

	
Pursuant to the placing
 and open offer agreement among the Company and HM Treasury entered into on 7
 March 2009 (the “Original Placing
 Agreement”), the













2


	
 

	
 


	
 

	
Company has agreed,
 inter alia, to appoint joint sponsors and joint bookrunners in connection
 with the Placing and Open Offer.


	
 

	
 


	
(H)

	
The Joint Sponsors
 shall act as Joint Sponsors in connection with the applications for Admission
 and, to the extent required, the publication of the Circular and the Joint
 Bookrunners shall act as joint bookrunners and joint placing agents in
 connection with the Placing, all on the terms and subject to the conditions
 set out in this Agreement.


	
 

	
 


	
NOW THEREFORE IT IS AGREED as follows:


	
 


	
1. 

	
INTERPRETATION 


	
 

	
 


	
1.1

	
In this Agreement (including the Recitals):








	
 

	
 

	
 

	
 


	
 

	
“Acceptance”

	
means application and
 payment validly made (or, where the context so requires, treated as validly
 made) in accordance with the procedures to be set out in the Prospectus and
 (where appropriate) the Application Form (including, for the avoidance of
 doubt, any such application and payment validly made in respect of New Shares
 in addition to Qualifying Shareholders’ pre-emptive entitlements);


	
 

	
 

	
 


	
 

	
“Accepted Shares”

	
has the meaning given
 in clause 6.1(A);


	
 

	
 

	
 


	
 

	
“Accounts”

	
means the audited
 consolidated accounts of the Group for the three years ended 31 December
 2006, 2007 and 2008 (including, without limitation, the related directors’
 and auditors’ reports, the consolidated income statement, the consolidated
 balance sheet, the consolidated cashflow statement, the consolidated
 statement of changes in equity and all related notes);


	
 

	
 

	
 


	
 

	
“Accounts Date”

	
means 31 December 2008;


	
 

	
 

	
 


	
 

	
“Admission”

	
means the admission of
 the New Shares to the Official List becoming effective in accordance with
 paragraph 3.2.7G of the Listing Rules and admission to trading on the London
 Stock Exchange’s main market for listed securities becoming effective in
 accordance with paragraph 2.1 of the Admission and Disclosure Standards;












3


	
 

	
 

	
 

	
 


	
 

	
“Admission and Disclosure

 Standards”

	
means the Admission and
 Disclosure Standards of the London Stock Exchange, as amended from time to
 time;


	
 

	
 

	
 


	
 

	
“ADSs”

	
means American
 depositary shares issued pursuant to the Deposit Agreement, each representing
 the right to receive four New Shares, and reference to Ordinary Shares or New
 Shares shall be deemed to include any such Ordinary Shares or New Shares
 represented by ADSs;


	
 

	
 

	
 


	
 

	
“Adverse Interest”

	
means any option, lien,
 mortgage, charge, equity, trust, any other right or interest of any third
 party and any other encumbrance of any kind;


	
 

	
 

	
 


	
 

	
“Affiliate”

	
means, unless otherwise
 specified herein, “affiliate” as defined in Rule 405 under the Securities Act
 or, as the context may require, Rule 501(b) under Regulation D of the
 Securities Act;


	
 

	
 

	
 


	
 

	
“Application Form”

	
means the application
 form, in a form acceptable to HM Treasury and to the Joint Sponsors and the
 Joint Bookrunners, acting reasonably, to be despatched for use in connection
 with the Open Offer;


	
 

	
 

	
 


	
 

	
“APS”

	
means the asset
 protection scheme to be established by HM Treasury;


	
 

	
 

	
 


	
 

	
“Auditors”

	
means
 PricewaterhouseCoopers LLP and, with respect to any historical financial
 information of the HBOS Group, KPMG Audit plc;


	
 

	
 

	
 


	
 

	
“Board”

	
means the Board of
 Directors of the Company or a duly authorised committee thereof;


	
 

	
 

	
 


	
 

	
“Business Day”

	
means any day (other
 than a Saturday or Sunday) on which clearing banks are open for a full range
 of banking transactions in London;


	
 

	
 

	
 


	
 

	
“CA 1985”

	
means the Companies Act
 1985;


	
 

	
 

	
 


	
 

	
“CA 2006”

	
means the Companies Act
 2006;


	
 

	
 

	
 


	
 

	
“Capital Resources

 Requirement”

	
has the meaning given
 in the FSA Rules;












4


	
 

	
 

	
 

	
 


	
 

	
“Circular”

	
means the circular, in
 a form acceptable to HM Treasury and,
 to the extent their approval is required under the Listing Rules, the
 Joint Sponsors, to be sent to the Qualifying Shareholders (other than the
 Prohibited Shareholders) giving details of the Placing and Open Offer and the
 redemption of the Preference Shares and containing notice of the GM;


	
 

	
 

	
 


	
 

	
“Claims”

	
means any and all
 claims, actions, liabilities, demands, proceedings, investigations, judgments
 or awards whatsoever (and in each case whether or not successful, compromised
 or settled and whether joint or several) threatened, asserted, established or
 instituted against any Indemnified Person and “Claim” shall be construed
 accordingly;


	
 

	
 

	
 


	
 

	
“Class B Shares”

	
means the B shares in
 the Company which are proposed to be issued in connection with the APS;


	
 

	
 

	
 


	
 

	
“Closing Date”

	
means the last date for
 Acceptance under the terms of the Open Offer;


	
 

	
 

	
 


	
 

	
“Companies Acts”

	
means the CA 1985
 and/or the CA 2006 as the context requires;


	
 

	
 

	
 


	
 

	
“CREST”

	
means the relevant
 system (as defined in the Regulations) in respect of which Euroclear is the
 Operator (as defined in the Regulations);


	
 

	
 

	
 


	
 

	
“Dealing Day”

	
means a day on which
 dealings in securities may take place on, and with the authority of, the
 London Stock Exchange;


	
 

	
 

	
 


	
 

	
“Deposit Agreement”

	
means the deposit
 agreement dated 27 November 2001 made between the Company, The Bank of New
 York, as depositary, and the owners and holders of ADSs issued thereunder (as
 amended and restated);


	
 

	
 

	
 


	
 

	
“Directors”

	
means the directors of
 the Company from time to time;


	
 

	
 

	
 


	
 

	
“DTRs”

	
means the Disclosure
 and Transparency Rules, as amended from time to time, made by the FSA
 pursuant to Part VI of FSMA;


	
 

	
 

	
 


	
 

	
“Due Diligence Meetings”

	
means:












5


	
 

	
 

	
 

	
 


	
 

	
 

	
(a)

	
in the case of HM
 Treasury (including, for the avoidance of doubt, in the context of any
 qualification of the Warranties), the due diligence meetings held on dates
 between 11 February 2009 and the date hereof between representatives of the
 Group and HM Treasury (including their respective legal counsel, accountants
 and financial advisors); and


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
in the case of the
 Joint Sponsors and the Joint Bookrunners (including, for the avoidance of
 doubt, in the context of any qualification of the Warranties), the Telephone
 Note prepared by Linklaters LLP and dated 26 February 2009 (the “26
 February Note”), the Telephone Note prepared by Linklaters LLP and
 dated 6 March 2009 and the Appendix thereto (the “6 March Note”), the
 document entitled “Lark - Note of call with E&Y on 25 February 2009 on
 sanctions” (the “Sanctions Note”) and the memorandum from
 Nicola Myatt to the Company’s Audit Committee dated 13 February 2009 (the “Audit
 Committee Memo” and, together with the 26 February Note, the 6
 March Note and the Sanctions Note, the “Due Diligence Materials”), in each case
 in the form agreed between Linklaters LLP (on behalf of the Company) and
 Freshfields Bruckhaus Deringer LLP (on behalf of the Joint Sponsors and the
 Joint Bookrunners). For the avoidance
 of doubt, the term Due Diligence Meetings for the purposes of this paragraph
 (b) does not include any agreement, contract, document, note, script, report,
 e-mail, information, matter, disclosure, meeting, conversation or discussion
 referred to but not included in any of the Due Diligence Materials;


	
 

	
 

	
 

	
 


	
 

	
“EEA”

	
means the European Economic
 Area;


	
 

	
 

	
 


	
 

	
“Effective Date”

	
means 7 March 2009;


	
 

	
 

	
 


	
 

	
“Enablement Letter”

	
means a letter, in a
 form acceptable to HM Treasury and to the Joint Sponsors and to the Joint
 Bookrunners, acting reasonably, from the












6


	
 

	
 

	
 

	
 


	
 

	
 

	
Company to Euroclear
 confirming that the conditions for admission of the New Shares to CREST are
 satisfied;


	
 

	
 

	
 

	
 


	
 

	
“Engagement Letters”

	
means the engagement
 letters agreed or to be agreed between the Company and each of the Joint
 Sponsors relating to the Placing and Open Offer, and the engagement letter
 between the Company and the Joint Bookrunners;


	
 

	
 

	
 


	
 

	
“Euroclear”

	
means Euroclear UK
 & Ireland Limited;


	
 

	
 

	
 


	
 

	
“Exchange Act”

	
means the United States
 Securities Exchange Act of 1934;


	
 

	
 

	
 


	
 

	
“FCPA”

	
means the US Foreign
 Corrupt Practices Act of 1977, including the rules and regulations
 thereunder;


	
 

	
 

	
 


	
 

	
“Form of Proxy”

	
means the form of
 proxy, in a form acceptable to HM Treasury and to the Joint Sponsors and the
 Joint Bookrunners, acting reasonably, to be sent to Qualifying Shareholders (other
 than Prohibited Shareholders) in connection with the GM;


	
 

	
 

	
 


	
 

	
“FSA”

	
means the Financial
 Services Authority acting in its capacity as the competent authority for the
 purposes of Part VI of the FSMA;


	
 

	
 

	
 


	
 

	
“FSA Rules”

	
means the rules, as
 amended from time to time, made by the FSA under the FSMA;


	
 

	
 

	
 


	
 

	
“FSMA”

	
means the Financial
 Services and Markets Act 2000 including any regulations made pursuant
 thereto;


	
 

	
 

	
 


	
 

	
“GM”

	
means the general
 meeting of the Company to be convened at which the Resolutions, and the
 resolutions contemplated by clause 2.1 (CC), are to be proposed, or any
 adjournment of it;


	
 

	
 

	
 


	
 

	
“GM Date”

	
means the date on which
 the GM is held, being no later than 30 June 2009, or such later date as HM
 Treasury may require (but not later than 31 December 2009);


	
 

	
 

	
 


	
 

	
“Group”

	
means the Company and
 its subsidiary undertakings from time to time and “Group Company” means any of
 them (and for the avoidance of doubt, references in this Agreement












7


	
 

	
 

	
 

	
 


	
 

	
 

	
to the “Group”, “Group
 Companies” and “members of the Group” include, without limitation, the HBOS
 Group);


	
 

	
 

	
 


	
 

	
“HBOS”

	
means HBOS plc, a
 company incorporated in Scotland with registered number SC218813 and whose
 registered office is at The Mound, Edinburgh EH1 1YZ;


	
 

	
 

	
 


	
 

	
“HBOS Accounts”

	
means the audited
 consolidated accounts of the HBOS Group for the three years ended 31 December
 2006, 2007 and 2008 (including, without limitation, the related directors’
 and auditors’ reports, the consolidated income statement, the consolidated
 balance sheet, the consolidated cashflow statement, the consolidated
 statement of recognised income and expense and all related notes);


	
 

	
 

	
 


	
 

	
“HBOS Accounts Date”

	
means 31 December 2008;


	
 

	
 

	
 


	
 

	
“HBOS Group”

	
means HBOS and its
 subsidiaries and subsidiary undertakings;


	
 

	
 

	
 


	
 

	
“HMT Indemnified Persons”

	
means:


	
 

	
 

	
 


	
 

	
 

	
(a)

	
The Commissioners of
 Her Majesty’s Treasury;


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
the Treasury;


	
 

	
 

	
 

	
 


	
 

	
 

	
(c)

	
the Treasury Solicitor;


	
 

	
 

	
 

	
 


	
 

	
 

	
(d)

	
any entity to which HM
 Treasury novates its rights and obligations under this Agreement pursuant to
 clause 17; and


	
 

	
 

	
 

	
 


	
 

	
 

	
(e)

	
any person who is, on
 or at any time after the date of this Agreement, a director, officer,
 official, agent or employee of or under any person specified in paragraph
 (a), (b), (c) or (d) above;


	
 

	
 

	
 

	
 


	
 

	
 

	
and “HMT
 Indemnified Person” shall be construed accordingly;


	
 

	
 

	
 


	
 

	
“IFRS”

	
means International
 Financial Reporting Standards as adopted by the European Union;












8


	
 

	
 

	
 

	
 


	
 

	
“Indemnified Persons”

	
means each and any HMT
 Indemnified Person, each and any Indemnified Person, each and any Indemnified
 Person and each and any Indemnified Person “Indemnified Person” shall
 be construed accordingly;


	
 

	
 

	
 


	
 

	
“Intellectual Property Rights”

	
means patents, trade
 marks, service marks, logos, get-up, trade names, rights in designs,
 copyright (including rights in computer software), internet domain names,
 moral rights, utility models, rights in know how, rights in databases and
 other intellectual property rights, in each case whether registered or
 unregistered and including applications for the grant of any such rights and
 all rights or forms of protection having equivalent or similar effect
 anywhere in the world;


	
 

	
 

	
 


	
 

	
“Investment Company Act”

	
means the United States
 Investment Company Act of 1940;


	
 

	
 

	
 


	
 

	
“Issue Documents”

	
means the Press
 Announcement, the Application Form, the Circular, the Form of Proxy, the
 Prospectus, any Supplementary Prospectus, the Presentation, any interim
 management statement published after the Effective Date and before Admission
 and any other document published or issued after the Effective Date by or on
 behalf of the Company in connection with the Placing, the Open Offer or the
 redemption of the Preference Shares;


	
 

	
 

	
 


	
 

	
“Issue Price”

	
means the price of
 38.43 pence per New Share;


	
 

	
 

	
 


	
 

	
“Joint Bookrunners”

	
means ;


	
 

	
 

	
 


	
 

	
“Joint Sponsors”

	
means ;


	
 

	
 

	
 

	
 


	
 

	
“Listing Rule Resolutions”

	
means those
 resolutions, in a form acceptable to HM Treasury, if and to the extent
 required under Chapters 10 and/or 11 of the Listing Rules in connection with
 the Placing and Open Offer and the redemption of the Preference Shares to be
 proposed at the GM;


	
 

	
 

	
 


	
 

	
“Listing Rules”

	
means the Listing Rules
 made by the FSA pursuant to section 73A of the FSMA, as amended from time to
 time;












9


	
 

	
 

	
 

	
 


	
 

	
“London Stock Exchange”

	
means London Stock
 Exchange plc;


	
 

	
 

	
 


	
 

	
“Losses”

	
means any and all loss,
 damage, cost, liability, demand, charge or expense (including legal fees), in
 each case whether joint or several, which any Indemnified Person may suffer
 or incur (including, but not limited to, all Losses suffered or incurred in
 investigating, preparing for or disputing or defending or settling any Claim
 and/or in establishing its right to be indemnified pursuant to clause 11
 and/or in seeking advice regarding any Claim or in any way related to or in
 connection with the indemnity contained in clause 11) and “Loss”
 shall be construed accordingly;


	
 

	
 

	
 


	
 

	
“Material Adverse Effect”

	
means an event has
 occurred or is reasonably likely to occur which has resulted in or may result
 in a material adverse change in or affecting the condition (financial,
 operational, legal or otherwise), profitability, prospects, solvency,
 business affairs or operations of the Group taken as a whole, whether or not
 arising in the ordinary course of business;


	
 

	
 

	
 


	
 

	
“New Shares”

	
means 10,408,535,000
 new Ordinary Shares;


	
 

	
 

	
 


	
 

	
“Non-Accepted Shares”

	
has the meaning given
 in clause 6.1(B);


	
 

	
 

	
 


	
 

	
“Notifying Sponsor”

	
has the meaning given
 in clause 13.4;


	
 

	
 

	
 


	
 

	
“OECD Convention”

	
means the OECD
 Convention on Combating Bribery of Foreign Public Officials in International Business
 Transactions;


	
 

	
 

	
 


	
 

	
“Official List”

	
means the Official List
 maintained by the FSA in its capacity as UK Listing Authority;


	
 

	
 

	
 


	
 

	
“Open Offer”

	
means the conditional
 invitation by the Company to Qualifying Shareholders to apply to subscribe
 for New Shares on the basis to be referred to in the Prospectus and, as
 relevant, the Application Form; 


	
 

	
 

	
 


	
 

	
“Open Offer Acceptors”

	
means those Qualifying
 Shareholders that have validly applied (or are treated as having validly
 applied) to subscribe for New Shares under the Open Offer;


	
 

	
 

	
 


	
 

	
“Open Offer Date”

	
means the date on which
 the Application Form is issued;












10


	
 

	
 

	
 

	
 


	
 

	
“Open Offer Documents”

	
means the Prospectus,
 any Supplementary Prospectus and the Application Form;


	
 

	
 

	
 


	
 

	
“Open Offer Entitlement”

	
an entitlement to apply
 to subscribe for New Shares allocated to a Qualifying Shareholder pursuant to
 the Open Offer;


	
 

	
 

	
 


	
 

	
“Ordinary Shareholders”

	
means holders of
 Ordinary Shares;


	
 

	
 

	
 


	
 

	
“Ordinary Shares”

	
means ordinary shares
 of 25 pence each in the capital of the Company;


	
 

	
 

	
 


	
 

	
“Overall Financial Resources

 Rule”

	
has the meaning given
 in the FSA Rules;


	
 

	
 

	
 


	
 

	
“Panel”

	
means the Panel on
 Takeovers and Mergers;


	
 

	
 

	
 


	
 

	
“Participating Security”

	
has the meaning given
 to it in the Regulations (and “Participating Securities” shall be
 construed accordingly);


	
 

	
 

	
 


	
 

	
“Placees”

	
means any placees
 procured by the Joint Bookrunners pursuant to this Agreement to subscribe for
 New Shares pursuant to the Placing and approved by HM Treasury in advance of
 any subscription by them of New Shares, which may include QIBs in the United
 States and HM Treasury in respect of any Residual Shares;


	
 

	
 

	
 


	
 

	
“Placing”

	
means the proposed
 arrangements for the procuring of Placees for the New Shares on such terms
 and conditions as may be agreed by HM Treasury, including the Treasury
 Solicitor, and at a price not lower than the Issue Price, subject to a right
 of clawback in respect of any New Shares which are taken up under the Open
 Offer;


	
 

	
 

	
 


	
 

	
“Placing and Open Offer”

	
means the Placing and
 the Open Offer or any of them;


	
 

	
 

	
 


	
 

	
“Placing Documents”

	
means the Press
 Announcement, the Presentation, the Prospectus, any Supplementary Prospectus
 and the Placing Letters;


	
 

	
 

	
 


	
 

	
“Placing Letters”

	
means the UK Placing
 Letter and the US Placing Letter;












11


	
 

	
 

	
 

	
 


	
 

	
“Placing Schedule”

	
has the meaning given
 to it in clause 3.6;


	
 

	
 

	
 


	
 

	
“Posting Date”

	
means the date on which
 the Company publishes the Prospectus and despatches the Circular to
 Qualifying Shareholders (other than Prohibited Shareholders);


	
 

	
 

	
 


	
 

	
“Preference Share Dividend”

	
means the dividend
 accrued on the Preference Shares from and including 15 January 2009 to but
 excluding the date of Admission;


	
 

	
 

	
 


	
 

	
“Preference Shares”

	
means the 4,000,000
 preference shares of £0.25 each in the Company owned by HM Treasury;


	
 

	
 

	
 


	
 

	
“Presentation”

	
means any presentation,
 in the form to be agreed, used by the Company during presentations to
 institutional investors in connection with the Placing and any other
 publicity materials relating to the Placing and Open Offer prepared by or at
 the request of the Company;


	
 

	
 

	
 


	
 

	
“Press Announcement”

	
means the press
 announcement issued by the Company dated the Effective Date giving details
 of, inter alia, the Placing and Open Offer and the redemption of the
 Preference Shares;


	
 

	
 

	
 


	
 

	
“Previous Announcements”

	
means all documents
 issued (including circulars, annual reports and prospectuses) and
 announcements (other than the Press Announcement) made by or on behalf of the
 Company or any member of the Group through a Regulatory Information Service
 or by way of a public regulatory filing in the three year period immediately
 prior to the Effective Date of this Agreement which, for the avoidance of
 doubt, shall include the prospectus issued by HBOS on 18 November 2008, the
 supplementary prospectus published by HBOS on 18 December 2008, the
 supplementary prospectus published by the Company on 18 December 2008 and the
 Previous Prospectus;


	
 

	
 

	
 


	
 

	
“Previous Prospectus”

	
means the prospectus
 issued by the Company in respect of Ordinary Shares on 18 November 2008;


	
 

	
 

	
 


	
 

	
“Prohibited Shareholders”

	
means holders of
 Ordinary Shares with registered addresses in any jurisdiction(s) in which the
 Placing and Open Offer cannot lawfully be made, as may be agreed by the
 Company and the Joint Sponsors and ;












12


	
 

	
 

	
 

	
 


	
 

	
“Prospectus”

	
means the document
 (including the information incorporated by reference therein) comprising a
 prospectus for the purposes of the Prospectus Rules to be published by the
 Company in relation to the Placing and Open Offer, in the form to be agreed;


	
 

	
 

	
 


	
 

	
“Prospectus Directive”

	
means Directive
 2003/71/EC;


	
 

	
 

	
 


	
 

	
“Prospectus Rules”

	
has the meaning given
 in Section 73A(4) of FSMA;


	
 

	
 

	
 


	
 

	
“Qualifying CREST

 Shareholders”

	
means Qualifying
 Shareholders whose Ordinary Shares on the register of members of the Company
 at the close of business on the Record Date are in uncertificated form;


	
 

	
 

	
 


	
 

	
“Qualifying Non-CREST

 Shareholders”

	
means Qualifying
 Shareholders whose Ordinary Shares are held in certificated form;


	
 

	
 

	
 


	
 

	
“Qualifying Shareholders”

	
means holders of
 Ordinary Shares whose names are on the register of members of the Company as
 at the close of business on the Record Date;


	
 

	
 

	
 


	
 

	
“QIB Purchasers”

	
has the meaning given
 in clause 5.8(C)(i);


	
 

	
 

	
 


	
 

	
“QIBs”

	
has the meaning given
 to it in clause 5.2;


	
 

	
 

	
 


	
 

	
“Receiving Agent”

	
means the receiving
 agent to be appointed pursuant to clause 3.9;


	
 

	
 

	
 


	
 

	
“Receiving Agent Agreement”

	
means an agreement
 among the Company, HM Treasury
 and the Receiving Agent relating to the Placing and Open Offer, in the form
 to be agreed;


	
 

	
 

	
 


	
 

	
“Record Date”

	
means the record date
 for the Open Offer, being such date as the Company, HM Treasury, and the
 Joint Bookrunners shall agree, all acting reasonably;


	
 

	
 

	
 


	
 

	
“Registrars”

	
means Equiniti Limited;


	
 

	
 

	
 


	
 

	
“Regulations”

	
means the
 Uncertificated Securities Regulations 2001;


	
 

	
 

	
 


	
 

	
“Regulation D”

	
means Regulation D
 under the Securities Act;


	
 

	
 

	
 


	
 

	
“Regulation S”

	
means Regulation S
 under the Securities Act;












13


	
 

	
 

	
 

	
 


	
 

	
“Regulatory Information

 Service”

	
has the meaning given
 in the Listing Rules;


	
 

	
 

	
 


	
 

	
“Relevant Cost”

	
has the meaning given
 in clause 8.9;


	
 

	
 

	
 


	
 

	
“Relevant Member State”

	
has the meaning given
 in clause 5.6;


	
 

	
 

	
 


	
 

	
“Relevant Time”

	
has the meaning given
 in clause 6.1(C) (iii);


	
 

	
 

	
 


	
 

	
“Reports”

	
means the reports and
 letters prepared by the Auditors in connection with the Placing and Open
 Offer;


	
 

	
 

	
 


	
 

	
“Residual Shares”

	
has the meaning given
 to it in clause 6.3;


	
 

	
 

	
 


	
 

	
“Resolutions”

	
means the Share Capital
 Resolutions, the Whitewash Resolutions and the Listing Rule Resolutions;


	
 

	
 

	
 


	
 

	
“SDRT”

	
means stamp duty
 reserve tax;


	
 

	
 

	
 


	
 

	
“Securities Act”

	
means the United States
 Securities Act of 1933;


	
 

	
 

	
 


	
 

	
“Share Capital Resolutions”

	
means the resolutions,
 in a form acceptable to HM Treasury, acting reasonably:


	
 

	
 

	
 


	
 

	
 

	
(a)

	
to increase the
 authorised share capital of the Company to allow for the creation and issue
 of the New Shares;


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
to authorise the
 Directors to allot under Section 80 of CA 1985 such number of Ordinary Shares
 as equals or exceeds the number of New Shares;


	
 

	
 

	
 

	
 


	
 

	
 

	
(c)

	
to authorise the Directors
 pursuant to Section 95 of CA 1985 to allot such number of Ordinary Shares as
 equals or exceeds the number of New Shares as if Section 89(1) of CA 1985 did
 not apply to any such allotment; and


	
 

	
 

	
 

	
 


	
 

	
 

	
(d)

	
to amend the terms of
 the Preference Shares to enable redemption of the Preference Shares,


	
 

	
 

	
 

	
 


	
 

	
 

	
to be proposed at the
 GM;


	
 

	
 

	
 

	
 


	
 

	
“Solicitors to the Joint

 Sponsors and Joint
Bookrunners”

	
means Freshfields
 Bruckhaus Deringer LLP;












14


	
 

	
 

	
 

	
 


	
 

	
“Specified Event”

	
means an event
 occurring or matter arising on or after the Effective Date, which:


	
 

	
 

	
 


	
 

	
 

	
(a)

	
if it had occurred or
 arisen before or at the Effective Date; or


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
if it had been known by
 the Directors before or at the Effective Date,


	
 

	
 

	
 

	
 


	
 

	
 

	
would have rendered any
 of the Warranties (whether under the Original Placing Agreement or this
 Agreement) untrue, inaccurate or misleading in any respect;


	
 

	
 

	
 


	
 

	
“Stamp Tax”

	
means any stamp,
 documentary, registration or capital duty or tax (including, without
 limitation, stamp duty, SDRT and any
 other similar duty or similar tax) and any fines, penalties and/or interest
 relating thereto;


	
 

	
 

	
 


	
 

	
“Supplementary Prospectus”

	
means any prospectus
 supplementary to the Prospectus published by the Company pursuant to section
 87G of FSMA;


	
 

	
 

	
 


	
 

	
“Tax” or “Taxation”

	
means all forms of
 taxation and statutory, governmental, state, provincial, local governmental
 or municipal impositions, duties, contributions and levies (including, for
 the avoidance of doubt, Stamp Tax), in each case in the nature of taxation,
 duty, contribution or levy, whether of the United Kingdom or elsewhere in the
 world whenever imposed and whether chargeable directly or primarily against
 or attributable directly or primarily to a Group Company or any other person
 and all penalties, charges, costs and interest relating thereto;


	
 

	
 

	
 


	
 

	
“Tax Authority”

	
means any government,
 state, municipal, local, federal or other fiscal, revenue, customs or excise
 authority, body or official anywhere in the world having the power to impose,
 collect or administer any Tax or exercising a fiscal, revenue, customs or
 excise function with respect to Tax (including, without limitation, H.M.
 Revenue and Customs);


	
 

	
 

	
 


	
 

	
“The New York Stock

 Exchange”

	
means The New York
 Stock Exchange, Inc.;












15


	
 

	
 

	
 

	
 


	
 

	
“Time of Sale”

	
means, with respect to
 the Placing, each time identified to the Company by the Joint Bookrunners as
 a Time of Sale (with respect to which they are obtaining commitments from
 Placees to take up the New Shares), provided that there shall not be more
 than two times that are treated as a “Time of Sale” for purposes of this
 Agreement without the consent of the Company; such consent will not be
 unreasonably withheld; 


	
 

	
 

	
 


	
 

	
“Time of Sale Documents”

	
means the documents
 specified as being delivered at, or with respect to, the Time of Sale in Part
 IV of Schedule 2;


	
 

	
 

	
 


	
 

	
“Treasury Solicitor”

	
has the same meaning as
 in the Treasury Solicitor Act 1876;


	
 

	
 

	
 


	
 

	
“UK Listing Authority”

	
means the Financial
 Services Authority acting in its capacity as the competent authority for the
 purposes of Part VI of the FSMA and in the exercise of its functions in
 respect of the admission of securities to the Official List otherwise than in
 accordance with Part VI of the FSMA;


	
 

	
 

	
 


	
 

	
“UK Placing Letter”

	
means a letter, in a
 form acceptable to the Company, HM Treasury and to the Joint Bookrunners,
 acting reasonably, to be sent by the Company to and executed by Placees
 (other than QIBs and HM Treasury) by which New Shares are to be offered to
 Placees on such terms and conditions as may be agreed by HM Treasury,
 including the Treasury Solicitor, and at a price not lower than the Issue
 Price, subject to a right of clawback in respect of any New Shares which are
 taken up under the Open Offer;


	
 

	
 

	
 


	
 

	
“United States”

	
means the United States
 of America, its territories and possessions, any state of the United States
 and the District of Columbia;


	
 

	
 

	
 


	
 

	
“US Placing Letter”

	
means a letter, in a
 form acceptable to the Company, HM Treasury and to the Joint Bookrunners,
 acting reasonably, to be sent by the Company to and executed by QIBs by which
 New Shares are to be offered to QIBs on such terms and conditions as may be
 agreed by HM Treasury, including the Treasury Solicitor and at a price not












16


	
 

	
 

	
 

	
 


	
 

	
 

	
lower than the Issue
 Price, subject to a right of clawback in respect of any New Shares which are
 taken up under the Open Offer;


	
 

	
 

	
 


	
 

	
“US Shareholders”

	
means Ordinary
 Shareholders who are within the United States or are holding Ordinary Shares
 on behalf of, or for the account or benefit of, persons within the United
 States for whom they are acting without investment discretion (but only with
 respect to any such holdings);


	
 

	
 

	
 


	
 

	
“VAT”

	
means:


	
 

	
 

	
 


	
 

	
 

	
(a)

	
any tax imposed in
 conformity with the council directive of 28 November 2006 on the common
 system of value added tax (EC Directive 2006/112) (including, in relation to
 the United Kingdom, value added tax imposed by the VATA and legislation
 and/or any regulations supplemental thereto); and


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
any other tax of a
 similar nature (whether imposed in a member state of the European Union in
 substitution for or in addition to the tax referred to in sub-paragraph (a)
 or imposed elsewhere);


	
 

	
 

	
 

	
 


	
 

	
“VATA”

	
means the Value Added
 Tax Act 1994;


	
 

	
 

	
 

	
 


	
 

	
“Verification Materials”

	
means verification
 materials in a form acceptable to HM Treasury and to the Joint Sponsors and
 to , acting reasonably, evidencing the verification process supporting the
 accuracy of certain information contained in the Issue Documents, including
 the verification questions and the answers thereto, signed by each of the
 persons named therein as being responsible for such answers; 


	
 

	
 

	
 


	
 

	
“Warranties”

	
means the
 representations, warranties and undertakings contained in Schedule 3;


	
 

	
 

	
 


	
 

	
“Whitewash Resolutions”

	
means the resolutions
 in a form acceptable to HM Treasury, acting reasonably, pursuant to which
 Ordinary Shareholders are to waive any obligation of HM Treasury to make an
 offer under Rule 9 of the City Code on Takeovers and Mergers in relation to
 the matters contemplated by the Agreement and which may arise from the
 subscription and holding of Class B Shares












17


	
 

	
 

	
 

	
 


	
 

	
 

	
(including as a result
 of their conversion to Ordinary Shares and the voting rights attaching to the
 Class B Shares becoming exercisable);


	
 

	
 

	
 


	
 

	
“Wholly Owned Entity”

	
has the meaning given
 in clause 17.1; and


	
 

	
 

	
 


	
 

	
“Working Capital Report”

	
means the working
 capital review report to be prepared by PricewaterhouseCoopers LLP, in the
 form to be agreed, relating to the Group, to be dated the date of the
 Prospectus.





 


	
 

	
 

	
 

	
 


	
1.2

	
Any reference to a
 document being “in the agreed form” or “form to be
 agreed” means in the form of the draft or proof thereof signed or
 initialled for the purpose of identification by Linklaters LLP (on behalf of
 the Company), Slaughter and May (on behalf of HM Treasury) and Freshfields
 Bruckhaus Deringer LLP (on behalf of the Joint Sponsors and/or the Joint
 Bookrunners) or (in the case of documents to be agreed) in such form as may
 be satisfactory to HM Treasury and the Joint Bookrunners, the Joint Sponsors
 and the Joint Bookrunners (acting reasonably), and initialled, for the
 purposes of identification only, by such firms on behalf of their
 clients. No such initialling shall
 imply approval of all or any part of its contents by or on behalf of the
 person initialling it or any of the parties to this Agreement. 


	
 

	
 


	
1.3

	
The Interpretation Act
 1978 shall apply to this Agreement in the same way as it applies to an
 enactment.


	
 

	
 


	
1.4

	
References to a
 statutory provision include any subordinate legislation made from time to time
 under that provision.


	
 

	
 


	
1.5

	
References to a
 statutory provision include that provision as from time to time modified,
 supplemented or re-enacted so far as such modification or re-enactment
 applies or is capable of applying to any transactions entered into in
 accordance with this Agreement.


	
 

	
 


	
1.6

	
In this Agreement, a
 reference to a “subsidiary undertaking” or “parent undertaking” is to
 be construed in accordance with section 1162 (and Schedule 7) of the CA 2006
 and a “subsidiary”
 or “holding
 company” is to be construed in accordance with section 1159 of the
 CA 2006.


	
 

	
 


	
1.7

	
Expressions defined or
 used in the Regulations shall have the same meaning in this Agreement (except
 where the context otherwise requires).


	
 

	
 


	
1.8

	
References to this
 Agreement include its Schedules and references in this Agreement to clauses,
 sub-clauses and Schedules are to clauses and sub-clauses of, and Schedules
 to, this Agreement.


	
 

	
 


	
1.9

	
The obligations of the
 Joint Sponsors and the Joint Bookrunners under this Agreement shall be
 several and not joint or joint and several.
 No provision of this Agreement shall impose any liability on any of
 the Joint Sponsors or the Joint Bookrunners for, nor shall the rights or
 remedies of any of the Joint Sponsors or the Joint Bookrunners be 












18


	
 
	
 
	
 
	
 

	
 
	
adversely affected by,
 any act or omission by any other Joint Sponsor or any other Joint Bookrunner
 or for any breach by the other Joint Sponsor of the provisions of this
 Agreement. The obligations owed by
 the Company to the Joint Sponsors and the Joint Bookrunners are owed to them
 as separate and independent obligations, and each Joint Sponsor and each
 Joint Bookrunner shall have the right to protect and enforce its rights
 hereunder without joining any other Joint Sponsor or the Joint Bookrunners in
 any proceedings.

	
 
	
 

	
1.10
	
Headings shall be
 ignored in construing this Agreement.

	
 
	
 

	
1.11
	
References to time of
 day are to London time unless otherwise stated.

	
 
	
 

	
1.12
	
When construing any
 provision relating to VAT, any reference in this Agreement to any person
 shall (where appropriate) be deemed, at any time when such person is a member
 of a group of companies for VAT purposes, to include a reference to the
 representative member of such group at such time.

	
 
	
 

	
1.13
	
Any reference to any
 indemnity, covenant to pay or payment (a “Payment Obligation”) being
 given or made on an “after-Tax basis” or expressed to be calculated on an
 “after-Tax basis” means that, in calculating the amount payable pursuant to
 such Payment Obligation (the “Payment”), there shall be taken into
 account (if and to the extent that the same has not already been taken into
 account in the calculation of the Payment):

	
 
	
 

	
 
	
(A)
	
any Tax suffered by the
 person entitled to receive the Payment to the extent that it arises as a
 result of the matter giving rise to the Payment Obligation or as a result of
 receiving, or being entitled to receive, the Payment; and

	
 
	
 
	
 

	
 
	
(B)
	
any relief, exemption,
 allowance or credit which is available to set against any Tax otherwise
 payable or against any income, profits or gains for Tax purposes, and any
 right to any refund or reimbursement of any Tax, which in each case is
 available to the person entitled to receive the Payment if and to the extent
 that the same arises as a result of the matter giving rise to the Payment
 Obligation or as a result of receiving, or being entitled to receive, the
 Payment,

	
 
	
 
	
 
	
 

	
 
	
such that the person
  entitled to receive the Payment is in the same economic position after Tax
  that it would have been in if the matter giving rise to the Payment
  Obligation had not occurred.

	
 
	
 

	
1.14
	
Each reference in this
 Agreement to the Joint Sponsors, the Joint Bookrunners or any of them by any
 description or in any capacity includes a reference to it in each other
 capacity in which it may act pursuant to this Agreement or otherwise with the
 agreement of the Company in connection with the Placing and Open Offer and/or
 the publication of the Circular and/or Admission.

	
 
	
 

	
1.15
	
Any reference to the
 Joint Sponsors, the Joint Bookrunners or to HM Treasury approving or agreeing
 the form of an Issue Document, shall be a reference to such approval or
 agreement being given solely for the purposes of this Agreement.










19


	
 

	
 

	
 

	
 


	
1.16

	
A reference to “certificated”
 or “certificated
 form” in relation to a share or other security is a reference to a
 share or other security title to which is recorded on the relevant register
 of the share or other security as being held in certificated form.


	
 

	
 


	
1.17

	
A reference to “uncertificated” or “uncertificated form”
 in relation to a share or other security is a reference to a share or other
 security title to which is recorded on the relevant register of the share or
 other security as being held in uncertificated form, and title to which, by
 virtue of the Regulations, may be transferred by means of CREST.


	
 

	
 


	
1.18

	
Words and expressions
 defined in the Companies Acts shall bear the same meaning.


	
 

	
 


	
2.

	
CONDITIONS


	
 

	
 


	
2.1

	
The obligations of HM
 Treasury and of the Joint Sponsors and the Joint Bookrunners under this
 Agreement (save for the obligations under clauses 3.4 and 3.5 and such other
 obligations hereunder which fall due for performance before Admission) are
 conditional on:


	
 

	
 


	
 

	
(A)

	
the release of the
 Press Announcement via a Regulatory Information Service by 8.00 a.m. on the
 Effective Date;


	
 

	
 

	
 


	
 

	
(B)

	
there having occurred,
 as at Admission, no material default or breach by the Company of the terms of
 this Agreement;


	
 

	
 

	
 


	
 

	
(C)

	
the New Shares being
 validly created under applicable law and forming part of the Company’s
 authorised but unissued share capital;


	
 

	
 

	
 


	
 

	
(D)

	
the Directors being
 duly authorised under applicable law to allot and issue the New Shares in
 accordance with the terms of this Agreement;


	
 

	
 

	
 


	
 

	
(E)

	
the Company having
 obtained such approvals, authorisations, permits and consents as may be
 required by any government, state or other regulatory body and all necessary
 filings having been made and all necessary waiting periods having expired, in
 each case in any part of the world and as a consequence of the actions
 contemplated by this Agreement;


	
 

	
 

	
 


	
 

	
(F)

	
HM Treasury having
 obtained such approvals, authorisations, permits and consents as may be
 required by any governmental, state or other regulatory body in any part of
 the world and all necessary filings having been made and all necessary
 waiting periods having expired, in each case as a consequence of the issue of
 New Shares and/or redemption of the Preference Shares contemplated by this
 Agreement;


	
 

	
 

	
 


	
 

	
(G)

	
each Warranty in Part I
 of Schedule 3 of this Agreement being true and accurate in all material
 respects and not misleading in any material respect as at Effective Date with
 respect to HM Treasury and when given under clause 10.1A in respect of the
 Joint Bookrunners and remaining true and accurate in all material respects and
 not misleading in any material respect on the Posting Date, at such time as a
 Supplementary Prospectus shall be issued in accordance with this Agreement
 before Admission, at each Time of Sale (if any)












20


	
 

	
 

	
 

	
 


	
 

	
 

	
and immediately prior
 to Admission by reference to the facts and circumstances then existing;


	
 

	
 

	
 


	
 

	
(H)

	
each Warranty in Part
 II of Schedule 3 of this Agreement being true and accurate in all material
 respects and not misleading in any material respect on the Posting Date and
 remaining true and accurate in all material respects and not misleading in
 any material respect, at such time as a Supplementary Prospectus shall be
 issued in accordance with this Agreement before Admission, at each Time of
 Sale (if any) and immediately prior to Admission by reference to the facts
 and circumstances then existing;


	
 

	
 

	
 


	
 

	
(I)

	
there being, in the
 opinion of HM Treasury (acting in good faith), no Material Adverse Effect;


	
 

	
 

	
 


	
 

	
(J)

	
there being no
 contracts or arrangements to which the Company or any member of the Group are
 party which would become capable of being terminated by a party thereto
 (other than a member of the Group) or would permit such a party to exercise a
 right against a member of the Group or may otherwise give rise to material
 adverse consequences for the Group as a whole, in each case as a result of
 the issue of New Shares and/or redemption of the Preference Shares
 contemplated by this Agreement, in each case where this or any other
 consequences thereof would be, or would be reasonably likely to be, material
 in the context of the business of the Group or the Placing and Open Offer,
 redemption of the Preference Shares or any subscription for New Shares by HM
 Treasury, Qualifying Shareholders or Placees, Admission or post-Admission
 dealings in the Ordinary Shares;


	
 

	
 

	
 


	
 

	
(K)

	
the delivery to HM
 Treasury and to the Joint Sponsors and , as applicable:


	
 

	
 

	
 


	
 

	
 

	
(i)

	
simultaneously with the
 execution of this Agreement, of the documents listed in Part I of Schedule 2;


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
prior to despatch of
 the Circular, of the documents listed in Part II of Schedule 2;


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
prior to the
 publication of the Prospectus, of the documents listed in Part III of
 Schedule 2;


	
 

	
 

	
 

	
 


	
 

	
 

	
(iv)

	
at the date of each
 Supplementary Prospectus, the documents (or “bring downs” from such
 documents) listed in Part III of Schedule 2 (as applicable) requested by the
 Joint Sponsors, and by HM Treasury in
 respect of such Supplementary Prospectus and dated as of such date;


	
 

	
 

	
 

	
 


	
 

	
 

	
(v)

	
at each Time of Sale,
 if any, the Time of Sale Documents required to be delivered at such Time of
 Sale listed in Part IV of Schedule 2; and


	
 

	
 

	
 

	
 


	
 

	
 

	
(vi)

	
immediately prior to
 Admission, of the documents listed in Part IV of Schedule 2,












21


	
 

	
 

	
 

	
 


	
 

	
 

	
in each case to the
 extent not already delivered and provided that HM Treasury shall not be
 entitled to rely on this condition in the case of non-delivery of any
 document which is not material, in the respective judgments of HM Treasury
 and the Joint Sponsors and , in the context of the Placing and Open Offer or
 the applications for Admission or the redemption of the Preference Shares;


	
 

	
 

	
 

	
 


	
 

	
(L)

	
the GM being duly
 convened and held no later than the GM Date;


	
 

	
 

	
 


	
 

	
(M)

	
subject to applicable
 law, (including directors’ fiduciary duties), the Directors recommending (without
 qualification and maintaining such recommendation) that the Company’s
 shareholders vote in favour of the Resolutions, and the resolutions
 contemplated in clause 2.1(CC);


	
 

	
 

	
 


	
 

	
(N)

	
subject to applicable
 law, the Directors voting all Ordinary Shares held by them in favour of the
 Resolutions, and the resolutions contemplated in clause 2.1(CC);


	
 

	
 

	
 


	
 

	
(O)

	
the Company’s
 shareholders passing the Resolutions (without amendment) at the GM;


	
 

	
 

	
 


	
 

	
(P)

	
the Prospectus and, to
 the extent necessary, the Circular being approved by the FSA in accordance
 with the Prospectus Rules, the Listing Rules and FSMA;


	
 

	
 

	
 


	
 

	
(Q)

	
the Company having
 reached agreement with the FSA as to the redemption of the Preference Shares
 on or before the date of Admission;


	
 

	
 

	
 


	
 

	
(R)

	
the Circular being
 approved by the Panel in relation to the Whitewash Resolutions;


	
 

	
 

	
 


	
 

	
(S)

	
subject to satisfaction
 of the condition set out in clause 2.1(P), the Prospectus being made
 available to Qualifying Shareholders (other than Prohibited Shareholders and
 US Shareholders) with, as relevant, an Application Form, in accordance with
 clause 3 and in accordance with the Prospectus Rules;


	
 

	
 

	
 


	
 

	
(T)

	
subject to satisfaction
 of the conditions set out in clauses 2.1(P) and 2.1(R), the posting to
 Qualifying Shareholders of the Company (other than Prohibited Shareholders)
 of the Circular and the Form of Proxy;


	
 

	
 

	
 


	
 

	
(U)

	
the Company having
 applied for Admission and admission of the New Shares to CREST as
 Participating Securities and all of the conditions to such admissions having
 been satisfied, in each case, on or before Admission;


	
 

	
 

	
 


	
 

	
(V)

	
the Company allotting,
 subject only to Admission, the New Shares to the relevant Placees in
 accordance with clauses 3 and 4 or to HM Treasury (or its nominee) in
 accordance with clause 6;


	
 

	
 

	
 


	
 

	
(W)

	
the Directors having
 waived all change of control provisions set out in their respective service
 contracts which would otherwise be or have been triggered as a result of the
 redemption of the Preference Shares and/or the issue of New Shares contemplated
 by this Agreement;












22


	
 

	
 

	
 

	
 


	
 

	
(X)

	
no event referred to in
 Section 87G of the FSMA arising between the time of publication of the
 Prospectus and the time of Admission and no Supplementary Prospectus being
 published by or on behalf of the Company before Admission which, in any of
 the foregoing cases, HM Treasury or the Joint Sponsors or consider in their respective sole judgment
 acting in good faith to be (singly or in the aggregate) material in the
 context of the business of the Group, the Placing and Open Offer, the
 redemption of the Preference Shares, any subscription for New Shares by HM
 Treasury, Ordinary Shareholders or Placees, Admission or post-Admission
 dealings in the Ordinary Shares;


	
 

	
 

	
 


	
 

	
(Y)

	
Admission occurring at
 or before 8.00 a.m. on 7 July 2009 (or such later time or date as HM Treasury
 may agree);


	
 

	
 

	
 


	
 

	
(Z)

	
the Prospectus and the
 Circular containing and not omitting disclosure of any fact, matter or
 circumstance material in the context of the Group or the Placing and Open
 Offer, any subscription for New Shares by HM Treasury, Ordinary Shareholders
 or Placees, the redemption of the Preference Shares or Admission or
 post-Admission dealings in the Ordinary Shares and the Circular containing
 all such disclosures as are required by the Listing Rules;


	
 

	
 

	
 


	
 

	
(AA)

	
HM Treasury, having
 consulted with the Company, being satisfied, as at Admission, that the
 arrangements contemplated by this Agreement continue to be proportionate and
 appropriate for the maintenance of the financial stability of the Company,
 each in the context of the general economic and market conditions then
 prevailing; 


	
 

	
 

	
 


	
 

	
(BB)

	
the Company not having
 indicated an intention not to participate in the APS; and


	
 

	
 

	
 


	
 

	
(CC)

	
all necessary
 resolutions being passed by shareholders of the Company to approve the
 participation of the Company, and relevant Group Companies, in the APS and
 create and authorise the issue of the Class B Shares in connection therewith,
 definitive legal documentation for the purposes of the Company’s, and such Group
 Companies’, participation in the APS being executed by the Company, such
 relevant Group Companies and HM Treasury and all conditions precedent to such
 participation being satisfied or, where permitted, waived save for any
 conditions relating to this agreement becoming unconditional.


	
 

	
 

	
 


	
2.2

	
Subject to the
 fiduciary duties of the Directors, the Company shall use all reasonable
 endeavours to procure the fulfilment of the conditions set out in clause 2.1
 and, where applicable, by the times and dates stated therein (or such later
 times and/or dates as HM Treasury may agree) and shall notify HM Treasury
 forthwith in the event that the Company or any of the Directors becomes aware
 that any of the conditions set out in clause 2.1 has become or might reasonably
 be expected to become incapable of fulfilment by the time and/or date stated
 in such condition (or such later time and/or date as HM Treasury may agree)
 or at all. In addition, the Company
 shall provide HM Treasury with such information as it may reasonably require
 to enable it to ascertain whether the condition in clause 2.1(J) has been
 satisfied.


	
 

	
 


	
2.3

	
Each Joint Sponsor
 shall use its reasonable endeavours to provide to the Company such assistance
 as the Company shall reasonably request in connection with the













	
 

	
 

	
 


	
23


	
 

	
 

	
 


	
 

	
procedural steps
 required for the performance of the obligations of the Company set out in
 clauses 2.1(P), (U), and (Y).


	
 

	
 


	
2.4

	
Subject to clause 2.7,
 HM Treasury shall be entitled, in its absolute discretion and upon such terms
 as it shall think fit, to waive fulfilment of all or any of the conditions
 set out in clause 2.1 (other than clauses 2.1(C) and 2.1(E), 2.1(O) (save in
 relation to the Whitewash Resolutions), 2.1(P) and 2.1(Y)) or to extend the
 time provided for fulfilment of any of the conditions set out in clause 2.1
 in respect of all or any part of the performance thereof.


	
 

	
 

	
 


	
2.5

	
The Company shall be
 entitled to waive fulfilment of the condition set out in clause 2.1(E).


	
 

	
 

	
 


	
2.6

	
If the condition set
 out in clause 2.1(E) is not satisfied at the time at which all other
 conditions set out in clause 2.1 are satisfied or, to the extent permitted,
 waived, the parties shall treat such condition as waived (and the Company
 shall be treated as having waived such condition) if the relevant matter in
 respect of which the condition has not been satisfied is not likely to lead
 to material consequences for the Company or the Directors and is not material
 in the judgment of HM Treasury, the Joint Sponsors or the Joint Bookrunners
 in the context of the Placing, the Open Offer, the redemption of the
 Preference Shares, Admission or post-Admission dealings in the Ordinary
 Shares and, in all cases, for the avoidance of doubt, taking account of the
 financial circumstances of the Company.


	
 

	
 

	
 


	
2.7

	
If:

	
 


	
 

	
 

	
 


	
 

	
(A)

	
any of the conditions
 set out in clause 2.1 (other than clause 2.1(AA)) is not fulfilled or, if
 capable of waiver pursuant to clause 2.4 or clause 2.5, waived, or treated as
 waived pursuant to clause 2.6, by the time and/or date specified therein (or
 such later time and/or date as HM Treasury may agree); and


	
 

	
 

	
 


	
 

	
(B)

	
HM Treasury does not
 consider it to be necessary that the arrangements contemplated by this
 Agreement proceed to completion in order to maintain the financial stability
 of the United Kingdom, 


	
 

	
 

	
 


	
 

	
or

	
 


	
 

	
 

	
 


	
 

	
(C)

	
the condition set out
 in clause 2.1(AA) is not fulfilled as at Admission,


	
 

	
 

	
 


	
 

	
then on notice from HM
 Treasury to the Joint Sponsors and the Company, the Joint Sponsors shall, on
 behalf of the Company, withdraw any application made to the FSA and/or the
 London Stock Exchange in connection with Admission, this Agreement shall
 cease and determine and no party to this Agreement shall have any claim
 against any other party to this Agreement for costs, damages, compensation or
 otherwise except as provided in clause 2.9.


	
 

	
 


	
2.8

	
Without prejudice to
 the rights of HM Treasury, the Joint Sponsors and under clause 13, if any of
 the conditions set out in clause 2.1 are not fulfilled or, if capable of
 waiver pursuant to clause 2.4 or clause 2.5, waived, or treated as waived
 pursuant to clause 2.6, by the date and/or time specified herein (or such
 later time as HM Treasury may 












	
 

	
 

	
 


	
24


	
 

	
 

	
 


	
 

	
agree) and if HM
 Treasury does consider it necessary that the arrangements contemplated by
 this Agreement proceed to completion in order to maintain the financial
 stability of the United Kingdom, HM Treasury shall treat as waived any
 outstanding conditions in clause 2.1 (other than any condition referred to as
 not being waivable by HM Treasury).


	
 

	
 

	
 


	
2.9

	
Where this Agreement
 has terminated pursuant to clause 2.7:


	
 

	
 

	
 


	
 

	
(A)

	
such termination shall
 be without prejudice to any accrued rights or obligations under this
 Agreement;


	
 

	
 

	
 


	
 

	
(B)

	
the Company shall pay
 any commissions, fees and expenses as are payable in such circumstance under
 and in accordance with clauses 8.1 and 8.2; and


	
 

	
 

	
 


	
 

	
(C)

	
the provisions of this
 clause 2.9 and clauses 1, 8, 9.2, 9.3, 9.11, 10, 11, 12, 14, 15, 16, 17, 18
 and 19 shall remain in full force and effect.


	
 

	
 

	
 


	
2.10

	
HM Treasury and the
 Company shall use all reasonable endeavours to procure that, by no later than
 Admission, all approvals, authorisations and consents as may be required from
 any government, state or other regulatory body shall have been obtained in
 order that the conditions set out in clauses 2.1(E) and 2.1(F) may be
 satisfied. The Company and HM Treasury shall co-operate with each other (at
 the cost of the Company) in order that the conditions set out in clauses
 2.1(E) and 2.1(F) may be satisfied, which co-operation shall include the
 Company:


	
 

	
 

	
 


	
 

	
(A)

	
promptly providing to
 HM Treasury and to HM Treasury’s lawyers and other advisers where
 appropriate, any necessary information and documents reasonably required for
 the purpose of obtaining such approvals, authorisations, permits and consents
 and making such necessary filings;


	
 

	
 

	
 


	
 

	
(B)

	
promptly notifying HM
 Treasury or HM Treasury’s lawyers and other advisers where appropriate, of
 any material communications received in the course of obtaining such
 approvals, authorisations, permits and consents and making such necessary
 filings; and


	
 

	
 

	
 


	
 

	
(C)

	
generally supporting HM
 Treasury in obtaining such approvals, authorisations, permits and consents
 and making such necessary filings.


	
 

	
 

	
 


	
2.11

	
Upon Admission, each of
 the conditions set out in clause 2.1 shall, to the extent not fulfilled, be
 deemed to have been fulfilled or waived.


	
 

	
 

	
 


	
3.

	
THE
 PLACING AND OPEN OFFER AND APPOINTMENTS


	
 

	
 

	
 


	
3.1

	
The Company hereby:


	
 

	
 

	
 


	
 

	
(A)

	
appoints (i) each of as
 joint sponsors in connection with the applications for Admission and, if and
 to the extent that a sponsor is required by the Listing Rules to be appointed
 in respect of or to provide guidance in connection with the Circular, the
 publication of the Circular, and (ii) each of as joint bookrunners 












	
 

	
 

	
 


	
25


	
 

	
 

	
 


	
 

	
 

	
and joint placing
 agents in connection with the Placing and Open Offer and each of accepts such
 appointments;


	
 

	
 

	
 


	
 

	
(B)

	
agrees that such
 appointments shall confer on each of the Joint Sponsors and each of the Joint
 Bookrunners all powers, authorities and discretions on behalf of the Company
 which are necessary for or incidental to the performance of its function as
 joint sponsor, joint bookrunner and/or joint placing agent, as the case may
 be, to the Placing and Open Offer (including the power to appoint sub-agents
 or to delegate the exercise of any of its powers, authorities or discretions
 to such persons as it may think fit); and


	
 

	
 

	
 


	
 

	
(C)

	
agrees to ratify and
 approve all documents, acts and things which each of the Joint Sponsors and
 Joint Bookrunners shall lawfully do in the exercise of such appointments,
 powers, authorities and discretions.


	
 

	
 

	
 


	
3.2

	
This Agreement amends
 and restates the Original Placing Agreement. For the avoidance of doubt, this
 Agreement does not affect any accrued rights of the Company or HM Treasury
 under the Original Placing Agreement.


	
 

	
 

	
 


	
3.3

	
The Company hereby
 agrees, subject always to clause 5.1, to invite Qualifying Shareholders who
 are not Prohibited Shareholders or US Shareholders by means of the Prospectus
 and, as relevant, the Application Form to apply to subscribe for the New
 Shares at the Issue Price and otherwise on the terms and conditions set out
 therein. The Company shall procure that, under the terms of the Placing and
 Open Offer, Qualifying Shareholders who are not Prohibited Shareholders or US
 Shareholders shall be entitled (i) to subscribe for their pre-emptive
 entitlements, and (ii) to the extent reasonably practicable (and provided
 always that Qualifying Shareholders who are not Prohibited Shareholders or US
 Shareholders are treated equally) and to the extent that such pre-emptive
 entitlements are not taken up by other Qualifying Shareholders who are not
 Prohibited Shareholders or US Shareholders, to apply to subscribe for
 additional New Shares (either in their capacity as Qualifying Shareholders
 or, if such structure is not reasonably practicable, as Placees whose
 application for additional New Shares the parties hereby agree will be
 allocated in full to the extent possible and failing which will be scaled
 back on a pro rata basis).


	
 

	
 

	
 


	
3.4

	
Subject to the next
 following sentence, each of the Joint Bookrunners hereby agrees severally
 (and not jointly or jointly and severally), and in reliance on the
 representations, warranties and undertakings of the Company set out in this
 Agreement, as agent of the Company to use reasonable endeavours to procure
 Placees to subscribe for the New Shares on such terms and conditions as may
 be agreed upon by HM Treasury, including the Treasury Solicitor, and at a price
 not lower than the Issue Price, subject to a right of clawback as a result of
 the New Shares being subscribed for under the Open Offer and otherwise upon
 and subject to the terms and conditions in the Placing Letters and on the
 basis of the information in the other Placing Documents, it being understood
 that if having used such reasonable endeavours, the Joint Bookrunners are
 unable to procure Placees, or if any Placees who are so procured fail to meet
 their payment obligations, for all or any of the New Shares the Joint
 Bookrunners shall not themselves be obliged to subscribe for such New Shares
 which shall be Residual Shares to be taken up solely by HM Treasury in
 accordance with clause 6.3. Any obligation of each of the Joint Bookrunners
 to use reasonable endeavours to procure Placees pursuant to 












	
 

	
 

	
 


	
26


	
 

	
 

	
 


	
 

	
the preceding sentence
 shall not apply until publication of the Prospectus in accordance with the
 provisions of this Agreement, provided that each of the Joint Bookrunners
 shall be permitted to endeavour to procure Placees prior to such publication.


	
 

	
 

	
 


	
3.5

	
Subject to compliance
 with this clause 3 and with the restrictions in clause 5, each of the Joint
 Bookrunners shall have discretion to procure Placees in the manner and
 otherwise as it thinks fit in compliance with applicable laws as are
 customarily complied with by banks of international reputation, including the
 last time at which Placing Letters may be despatched, allocations pursuant
 thereto may be made and acceptances pursuant thereto received. 


	
 

	
 

	
 


	
3.6

	
The Joint Bookrunners
 will procure that a schedule is delivered to the Company (or the Registrar on
 behalf of the Company) and to HM Treasury no later than 5.00 p.m. on the
 third Business Day following the Closing Date following completion of the
 procedure set out in clause 3.4 showing the names and registration details of
 Placees allocated Non-Accepted Shares (and the number of New Shares comprised
 in such allocations) and shall specify whether such shares are to be issued
 in certificated or uncertificated form together with details of (and the
 number of New Shares comprised in) the proposed number of Residual Shares to
 be subscribed for by HM Treasury (or its nominee) pursuant to clause 6.3 (the
 “Placing
 Schedule”). HM Treasury, the Company and the Joint Bookrunners
 will consult each other in respect of, and agree a final version of, the
 Placing Schedule within one Business Day of the date of its delivery pursuant
 to this clause 3.5. 


	
 

	
 

	
 


	
3.7

	
Without prejudice to
 the Joint Sponsors’ obligations under Chapter 8 of the Listing Rules, the
 Company acknowledges and agrees that none of the Joint Sponsors nor the Joint
 Bookrunners nor HM Treasury is responsible for and has not authorised and
 will not authorise the contents of any Issue Document and that none of the
 Joint Sponsors nor the Joint Bookrunners nor HM Treasury shall be responsible
 for verifying the accuracy, completeness or fairness of any information in
 any of the Issue Documents (or any supplement or amendment to any of the
 foregoing).


	
 

	
 

	
 


	
3.8

	
The Company consents to
 each Joint Sponsor or disclosing to the FSA at any time before or after
 Admission, any information that such Joint Sponsor is required to disclose to
 satisfy its obligations as a sponsor under the Listing Rules and/or the DTRs
 provided that, where legally permitted and practicable, such Joint Sponsor or
 notifies the Company prior to making, and consults as to the timing and
 manner of, such disclosure.


	
 

	
 

	
 


	
3.9

	
The Company undertakes
 that it will appoint a receiving agent to act as registrar and receiving
 agent in connection with the Placing and Open Offer on terms acceptable to HM
 Treasury and in particular that:


	
 

	
 

	
 


	
 

	
(A)

	
until Admission, all
 proceeds of subscriptions for New Shares received from Ordinary Shareholders
 and Placees pursuant to the Placing and Open Offer will be held for the
 benefit of the relevant Ordinary Shareholders and Placees (including, if
 relevant, HM Treasury) under the Placing and Open Offer, in proportion to the
 amounts they have each paid;












	
 

	
 

	
 


	
27


	
 

	
 

	
 


	
 

	
(B)

	
on and after Admission,
 to the extent that such amounts are to be used to subscribe for the New
 Shares, such amounts will be held for the benefit of the Company, such amount
 to be used solely for the purpose of redeeming the Preference Shares in
 accordance with the terms of this Agreement (including an amount equal to the
 Preference Share Dividend) and paying the commissions due to HM Treasury in
 terms of clauses 8.1(A) and 8.1(B); and


	
 

	
 

	
 


	
 

	
(C)

	
immediately upon
 redemption of the Preference Shares and until completion of the transfer of
 such amount to HM Treasury, such amount will be held on trust for the benefit
 of HM Treasury,


	
 

	
 

	
 


	
 

	
and that the Receiving
 Agent will be admitted as registrar and receiving agent in respect of CREST.
 The Company shall not unreasonably refuse consent to executing such documents
 and doing such things as HM Treasury may reasonably require to ensure that
 amounts received by the Receiving Agent in connection with the Placing and
 Open Offer are applied to redeem the Preference Shares in accordance with the
 terms of this Agreement (including an amount equal to the Preference Share
 Dividend) and to pay the commissions due to HM Treasury in terms of clauses
 8.1(A) and 8.1(B) on the date of Admission.


	
 

	
 

	
 


	
3.10

	
The Company shall give
 all such assistance and provide all such information as each of the Joint
 Sponsors and the Joint Bookrunners may reasonably require for the making and
 implementation of the Placing and Open Offer, including Admission, and will
 do (or procure to be done) all such things and execute (or procure to be
 executed) all such documents as may be reasonably necessary or desirable to
 be done or executed by the Company or by its officers, employees or agents in
 connection therewith.


	
 

	
 

	
 


	
3.11

	
The Company undertakes
 that it shall release the Press Announcement to a Regulatory Information
 Service at, or as soon as practicable after, 7.00 a.m. on the Effective Date.


	
 

	
 

	
 


	
3.12

	
The Company undertakes
 to:


	
 

	
 

	
 








	
 

	
 

	
 

	
 


	
 

	
(A)

	
make an application:


	
 

	
 

	
 


	
 

	
 

	
(i)

	
(within the meaning of
 and for the purposes of the Prospectus Rules) to the FSA for the approval of
 the Prospectus and, to the extent required under the Listing Rules, the
 Circular; and


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
to the Panel for the
 approval of the Circular in relation to the Whitewash Resolutions; and


	
 

	
 

	
 

	
 


	
 

	
(B)

	
apply to the FSA and to
 the London Stock Exchange for Admission and further undertakes to provide
 such information, supply and/or execute such documents, pay such fees, give
 such undertakings and do all such acts and things as may be required (a) by
 the UK Listing Authority and the London Stock Exchange for the purposes of
 obtaining formal approval of the Circular and the Prospectus, any
 Supplementary Prospectus and obtaining Admission, and (b) to comply with the
 Listing Rules, the Prospectus Rules, the Admission and Disclosure Standards,
 FSMA and the Companies Acts, and (c) by the UK Listing Authority for the
 passporting of the Prospectus into any Relevant Member State in which 












	
 

	
 

	
 


	
28


	
 

	
 

	
 


	
 

	
 

	
New Shares will be
 offered to the public (within the meaning set out in clause 5.6) for the
 purposes of the Prospectus Directive, and (d) by Euroclear for the purposes
 of obtaining permission for the admission of the New Shares as Participating
 Securities in CREST and (e) by the FSA and the London Stock Exchange, in each
 case to obtain the grant of such Admission. Subject to the fiduciary duties
 of the Directors, the Company will use all reasonable endeavours to obtain
 the grant of Admission (subject only to the allotment of the New Shares) by
 no later than 8.00 a.m. on 7 July 2009 (or such later time or date as HM
 Treasury may require in writing).


	
 

	
 


	
3.13

	
The Company undertakes
 that it shall not include any reference to HM Treasury or the Joint Sponsors
 or in any of the Issue Documents without the prior written consent of HM
 Treasury or the Joint Sponsors or , as applicable.


	
 

	
 


	
3.14

	
Subject to obtaining
 the approval of the Circular by the FSA (if and to the extent required under
 the Listing Rules) and the Panel in relation to the Whitewash Resolutions,
 the Company shall procure that:


	
 

	
 


	
 

	
(A)

	
the Circular and the
 Forms of Proxy are posted to Qualifying Shareholders (other than Prohibited
 Shareholders) on the Posting Date; and


	
 

	
 

	
 


	
 

	
(B)

	
if required , a copy of
 the Circular is filed with the FSA pursuant to the Listing Rules and, if
 required, with the Panel.


	
 

	
 

	
 


	
3.15

	
Subject to obtaining
 the approval of the Prospectus by the FSA and such other regulators as may be
 appropriate the Company shall procure that:


	
 

	
 


	
 

	
(A)

	
the Prospectus is made
 available to Qualifying Shareholders (other than Prohibited Shareholders and
 US Shareholders) in accordance with the Prospectus Rules subject to clause 5;


	
 

	
 

	
 


	
 

	
(B)

	
a copy of the
 Prospectus is filed with the FSA pursuant to the Prospectus Rules;


	
 

	
 

	
 


	
 

	
(C)

	
copies of the
 Prospectus, together with any other required documents, are made available to
 the public by or on behalf of the Company in accordance with the Prospectus
 Rules;


	
 

	
 

	
 


	
 

	
(D)

	
Application Forms are
 posted to, amongst others, all Qualifying Non-CREST Shareholders (other than
 Prohibited Shareholders and US Shareholders) with the Prospectus; and


	
 

	
 

	
 


	
 

	
(E)

	
the Open Offer
 Entitlements of Qualifying CREST Shareholders (other than Prohibited
 Shareholders and US Shareholders) are credited to their respective stock
 accounts on the first Dealing Day after the Ordinary Shares go ‘ex’ the
 entitlement to apply under the Open Offer.


	
 

	
 

	
 


	
3.16

	
As soon as practicable
 after the Posting Date, the Company shall procure delivery to Euroclear of
 security application forms in a form acceptable to HM Treasury and to the
 Joint Sponsors and the Joint Bookrunners, acting reasonably, in respect of
 the Open Offer Entitlements and the New Shares and the Company undertakes to
 use reasonable 












	
 

	
 

	
 


	
29


	
 

	
 

	
 


	
 

	
endeavours to obtain permission
 for the admission of each of the Open Offer Entitlements and the New Shares
 as a Participating Security in CREST.


	
 

	
 

	
 


	
3.17

	
On the Posting Date,
 prior to the despatch of the Circular, the Company shall deliver, or procure
 there are delivered:


	
 

	
 

	
 


	
 

	
(A)

	
if and to the extent
 that a sponsor is required by the Listing Rules to be appointed in respect of
 or to provide guidance in connection with the Circular, to the Joint
 Sponsors; and


	
 

	
 

	
 


	
 

	
(B)

	
to HM Treasury,


	
 

	
 

	
 


	
 

	
those documents listed
 in Part II of Schedule 2.


	
 

	
 

	
 


	
3.18

	
On the Posting Date,
 prior to publication of the Prospectus and on the date on which any
 Supplementary Prospectus is published, prior to the publication of such
 Supplementary Prospectus, the Company shall deliver or procure there are
 delivered to the Joint Sponsors, and to HM Treasury those documents listed in
 Part III of Schedule 2.


	
 

	
 

	
 


	
3.19

	
At or with respect to
 the date of any Time of Sale, the Company shall deliver or procure there are
 delivered to the Joint Sponsors, and to HM Treasury the documents listed in
 Part IV of Schedule 2.


	
 

	
 

	
 


	
3.20

	
The Company authorises
 the Joint Sponsors and to date the Enablement Letter and deliver it to
 Euroclear.


	
 

	
 

	
 


	
3.21

	
Subject always to the
 fiduciary duties of the Directors, the Company shall procure that the GM is
 duly convened and held no later than 30 June 2009 or such later date as HM
 Treasury may require in writing (but in any case not later than 31 December
 2009) and that the Resolutions, and the resolutions contemplated in clause
 2.1(CC), are proposed at it.


	
 

	
 

	
 


	
3.22

	
Subject to clause 3.23,
 neither the Placing and Open Offer, nor any of its terms and conditions shall
 be varied, extended, amended or withdrawn without the prior written consent
 of HM Treasury, except as required by any applicable law or regulation.


	
 

	
 

	
 


	
3.23

	
If at any time between
 the Posting Date and the Closing Date: (i) any event shall have occurred as a
 result of which the Prospectus, as amended or supplemented from time to time,
 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 document is
 delivered, not misleading, or if for any other reason, including compliance with
 Section 87G of FSMA, it shall be necessary to amend or supplement the
 Prospectus, the Company will (without prejudice to the rights of HM Treasury,
 the Joint Sponsors and under this Agreement) promptly:


	
 

	
 

	
 


	
 

	
(A)

	
notify HM Treasury, the
 Joint Sponsors and of the relevant circumstances;












	
 

	
 

	
 


	
30


	
 

	
 

	
 


	
 

	
(B)

	
consult with HM
 Treasury, the Joint Sponsors and in considering any requirement to publish a
 Supplementary Prospectus;


	
 

	
 

	
 


	
 

	
(C)

	
consult with HM
 Treasury, the Joint Sponsors and as to the contents of any Supplementary
 Prospectus and comply with all reasonable requirements of in relation
 thereto; and


	
 

	
 

	
 


	
 

	
(D)

	
publish such
 Supplementary Prospectus in such manner as may be required by the Prospectus
 Rules.


	
 

	
 

	
 


	
3.24

	
On the Open Offer Date,
 the Company shall deliver or procure that there are delivered to the Joint
 Sponsors and (a) four certified copies of the resolution of the Board of
 Directors (or of the duly authorised Committee of such Board) approving and
 authorising the issue of the Application Form and any other documents to be
 issued on the Open Offer Date (and, if the said resolution is of such a
 Committee, a certified copy of the resolution of the Board of Directors
 appointing such Committee), (b) four copies of the Application Form, and
 (iii) four copies of any other document issued on the Open Offer Date.


	
 

	
 

	
 


	
3.25

	
Immediately prior to
 Admission, the Company shall deliver or procure that there are delivered to
 the Joint Sponsors, and to HM Treasury those documents listed in the Part IV
 of Schedule 2.


	
 

	
 

	
 


	
3.26

	
The Company shall
 procure (to the extent that it lies in its power to do so) to be communicated
 or delivered to the Joint Sponsors and the Joint Bookrunners all such
 information and documents (signed by the appropriate person where so required)
 as the Joint Sponsors and the Joint Bookrunners may reasonably require to
 enable them to discharge their obligations hereunder and pursuant to or in
 connection with obtaining Admission, the Placing and Open Offer or as may be
 required to comply with the requirements of the FSMA, the FSA or the London
 Stock Exchange.


	
 

	
 

	
 


	
3.27

	
The Company confirms to
 the Joint Sponsors, and to HM Treasury that a meeting or meetings of the
 Board has been held (and/or, in the case of (C), (D), (E) and (F) below,
 undertakes to hold such a meeting) which has (or will have, as the case may
 be):


	
 

	
 

	
 


	
 

	
(A)

	
authorised the Company
 to enter into and perform its obligations under this Agreement;


	
 

	
 

	
 


	
 

	
(B)

	
approved the form and
 release of the Press Announcement;


	
 

	
 

	
 


	
 

	
(C)

	
approved the form of
 the Circular, Prospectus, and Form of Proxy and authorised and approved the
 publication of the Circular, Prospectus, the Form of Proxy, each of the other
 Issue Documents and all other documents connected with the Placing and Open
 Offer, the redemption of the Preference Shares and Admission, as appropriate;


	
 

	
 

	
 


	
 

	
(D)

	
approved the making of
 the Placing and Open Offer and the redemption of the Preference Shares;


	
 

	
 

	
 


	
 

	
(E)

	
approved the making of
 the applications for Admission; and 












	
 

	
 

	
 


	
31


	
 

	
 

	
 


	
 

	
(F)

	
authorised (or
 authorise, as the case may be) all necessary steps to be taken by the Company
 in connection with each of the above matters.


	
 

	
 

	
 


	
3.28

	
The Company irrevocably
 authorises each of the Joint Sponsors and each of the Joint Bookrunners to
 give to the Registrars and/or Euroclear any instructions consistent with this
 Agreement and/or the Issue Documents that it reasonably considers to be
 necessary for, or incidental to, the performance of its functions as joint
 sponsor or joint bookrunner or placing agent (as the case may be).


	
 

	
 

	
 


	
3.29

	
The Company
 acknowledges that the Joint Sponsors’ responsibilities as sponsors pursuant
 to the Listing Rules are owed solely to the FSA and that agreeing to act as
 sponsor does not of itself extend any duties or obligations to any one else,
 including the Company.








	
 

	
 

	
 

	
 


	
4.

	
ALLOTMENT
 OF THE NEW SHARES, CONSIDERATION AND REGISTRATION


	
 

	
 

	
 

	
 


	
4.1

	
The Company shall,
 prior to Admission, pursuant to a resolution of the Board, allot, conditional
 only on Admission, the New Shares to the Open Offer Acceptors in each case in
 accordance with the terms of the Open Offer Documents.


	
 

	
 

	
 

	
 


	
4.2

	
The Company shall, in
 relation to the Placing, as soon as reasonably practicable following receipt
 of the Placing Schedule and in any event (subject only to such receipt) prior
 to Admission:


	
 

	
 

	
 

	
 


	
 

	
(A)

	
as regards the New
 Shares required by Placees to be certificated shares, pursuant to a
 resolution of the Board, allot, conditional only upon Admission, such New
 Shares as certificated shares, subject to the prior consent of HM Treasury
 and to the terms of the Placing Documents, to the Placees of such New Shares
 in the proportions set out in the Placing Schedule; and


	
 

	
 

	
 

	
 


	
 

	
(B)

	
as regards the New
 Shares which are required by Placees to be uncertificated shares, pursuant to
 a resolution of the Board, allot, conditional only upon Admission, such New
 Shares as uncertificated shares, subject to the prior consent of HM Treasury
 and to the terms of the Placing Documents: 


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
in the case of Placees
 procured by , to such CREST account of such entity as will be notified by to
 the Company no later than five Business Days prior to Admission, such person
 to hold such New Shares as nominee for such Placees;


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
in the case of Placees
 procured by , to such CREST account of such entity as will be notified by to
 the Company no later than five Business Days prior to Admission, such person
 to hold such New Shares as nominee for such Placees; and


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
in the case of Placees
 procured by , to such CREST account of such entity as will be notified by to
 the Company no later than five Business Days prior to Admission, such person
 to hold such New Shares as nominee for such Placees.












	
 

	
 

	
 

	
 


	
32


	
 

	
 

	
 

	
 


	
4.3

	
On the date of Admission, and subject to compliance by the Company
 with the provisions of clauses 4.1 and 4.2, subject to clause 3.4, each Joint
 Bookrunner shall pay or procure payment to the Receiving Agent (on behalf of
 the Company) of an amount equal to the aggregate amount it has received from
 Placees procured by such Joint Bookrunner in terms of this Agreement (if
 any).


	
 

	
 


	
 

	
For the avoidance of doubt, each of the Joint Bookrunners will be
 under no obligation to pay or procure payment to the Receiving Agent of an
 amount in excess of the amount received by them from Placees.


	
 

	
 


	
4.4

	
Following payment of
 the consideration to the Receiving Agent (on behalf of the Company) in
 accordance with clause 4.3, the Company shall procure that the Receiving
 Agent will, without delay on the day of Admission: 


	
 

	
 


	
 

	
(A)

	
effect the
 registration, without registration fee, of the persons referred to in clauses
 4.1 and 4.2 above as the holders of the relevant New Shares and shall procure
 that such New Shares are credited to any relevant accounts as specified in
 CREST (without charging any administration fee); 


	
 

	
 

	
 


	
 

	
(B)

	
effect the
 registration, without registration fee, of HM Treasury (or its nominee) as
 the holder of the Residual Shares in the register of members, in accordance
 with clause 6.3, and to issue a definitive certificate, and


	
 

	
 

	
 


	
 

	
(C)

	
effect the
 registration, without registration fee, of the Placees referred to in clause
 4.2(A) in the register of members and to issue definitive certificates. 


	
 

	
 

	
 


	
4.5

	
The New Shares will, as
 from the date when they are issued, rank pari passu in all respects with, and
 be identical to, the Ordinary Shares then in issue and will rank in full for
 all dividends and other distributions declared, made or paid on the Ordinary
 Shares after such date of issue. The New Shares shall be allotted and issued
 free from all Adverse Interests.


	
 

	
 


	
5.

	
OVERSEAS
 SHAREHOLDERS


	
 

	
 


	
5.1

	
The Company shall
 procure that no Application Forms and no copies of the Prospectus (or any
 Supplementary Prospectus) shall be posted to Prohibited Shareholders or US
 Shareholders and that no Open Offer Entitlements are credited to stock
 accounts in CREST of Prohibited Shareholders or US Shareholders unless they
 have supplied the Company with an address in the United Kingdom for the
 giving of notices to them.


	
 

	
 


	
5.2

	
The Application Forms,
 together with the Prospectus and any Supplementary Prospectus shall specify,
 to the reasonable satisfaction of the Joint Sponsors and the Joint
 Bookrunners, such procedures as to ensure that no New Shares are credited to
 the account or for the benefit of any person located in the United States
 unless they have established to the reasonable satisfaction of the Company
 that, in the case of US Shareholders, they are qualified institutional buyers
 (“QIBs”)
 as defined in Rule 144A under the Securities Act or accredited investors as
 defined in Rule 501 under the Securities Act, or in the case of Prohibited
 Shareholders, they may take up their entitlements to the New Shares in
 accordance with an applicable exemption from local securities laws.












	
 

	
 

	
 

	
 


	
33


	
 

	
 

	
 

	
 


	
5.3

	
The Company shall not
 without the written consent of the Joint Sponsors and the Joint Bookrunners,
 not to be unreasonably withheld, make the New Shares available to the holders
 of ADSs representing the Ordinary Shares with respect to any Ordinary Shares
 underlying such holder’s ADSs.


	
 

	
 


	
5.4

	
Each of the Joint
 Sponsors and the Joint Bookrunners (severally and not jointly or jointly and
 severally) and the Company acknowledges and agrees that offers and sales of
 New Shares will be made as described in the Prospectus and in accordance with
 the terms of this Agreement. The rights of Prohibited Shareholders and US
 Shareholders to participate in the Open Offer and Placing shall be limited as
 set out in the Prospectus and in this Agreement.


	
 

	
 


	
5.5

	
It is agreed and
 understood that the New Shares do not meet the eligibility requirements of
 Rule 144A under the Securities Act.


	
 

	
 


	
5.6

	
Each of the Company and
 the Joint Sponsors and the Joint Bookrunners (severally and not jointly or
 jointly and severally) confirms and agrees that, except in relation to each
 Member State of the EEA which has implemented the Prospectus Directive (each
 a “Relevant
 Member State”), none of the New Shares have been or will be
 offered to the public for the purposes of the Prospectus Directive in that
 Relevant Member State prior to the publication of a prospectus in relation to
 the New Shares which has been approved by the competent authority in that
 Relevant Member State or, where appropriate, approved in another Relevant
 Member State and notified to the competent authority in that Relevant Member
 State, all in accordance with the Prospectus Directive, except:


	
 

	
 


	
 

	
(A)

	
to legal entities which
 are authorised or regulated to operate in the financial markets or, if not so
 authorised or regulated, whose corporate purpose is solely to invest in
 securities;


	
 

	
 

	
 

	
 


	
 

	
(B)

	
to any legal entity
 which has two or more of:


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
an average of at least
 250 employees during the last financial year; 


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
a total balance sheet
 of more than €43,000,000; and 


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
an annual net turnover
 of more than €50,000,000, as shown in its last annual or consolidated
 accounts; or


	
 

	
 

	
 

	
 


	
 

	
(C)

	
in any other
 circumstances which do not require the publication by the Company of a
 prospectus pursuant to Article 3 of the Prospectus Directive,


	
 

	
 

	
 


	
 

	
provided that no such
 offer of any New Shares shall result in a requirement for the publication of
 a prospectus pursuant to Article 3 of the Prospectus Directive or any measure
 implementing the Prospectus Directive in the Relevant Member State.


	
 

	
 

	
 


	
 

	
For the purposes of
 this provision, the expression an “offer of New Shares to the public” in
 relation to any New Shares in any Relevant Member State means the
 communication in any form and by any means of sufficient information on the
 terms of the offer and the New Shares to be offered so as to enable an
 investor to decide to












	
 

	
 

	
 

	
 


	
34


	
 

	
 

	
 

	
 


	
 

	
purchase or subscribe
 for the New Shares, as the same may be varied in that Member State by any
 measure implementing the Prospectus Directive in that Member State.


	
 

	
 

	
 

	
 


	
5.7

	
Each of the Company, HM
 Treasury and the Joint Sponsors and the Joint Bookrunners (severally and not
 jointly or jointly and severally) acknowledges and agrees that the New Shares
 and the Open Offer Entitlements have not been and will not be registered
 under the Securities Act and may not be offered or sold except in accordance
 with Rule 903 of Regulation S, to QIBs or to certain pre-identified US
 employees of the Company who are accredited investors (as defined in Rule 501
 under the Securities Act) only if such employees have executed and delivered
 to the Company an investor letter in a form reasonably satisfactory to the
 Joint Sponsors, the Joint Bookrunners and HM Treasury, in each case pursuant
 to an exemption from, or in a transaction not subject to, the registration
 requirements of the Securities Act.


	
 

	
 

	
 

	
 


	
5.8

	
Each of the Company, HM
 Treasury and the Joint Sponsors and the Joint Bookrunners (severally and not
 jointly or jointly and severally) represents, warrants and agrees that it:


	
 

	
 

	
 

	
 


	
 

	
(A)

	
has not engaged and
 will not engage in any directed selling efforts (within the meaning of
 Regulation S) in the United States with respect to the New Shares;


	
 

	
 

	
 

	
 


	
 

	
(B)

	
has not offered or sold
 and will not offer or sell New Shares in the United States by means of any
 form of general solicitation or general advertising within the meaning of
 Rule 502(c) under the Securities Act or in a manner involving a public
 offering within the meaning of Section 4(2) of the Securities Act;


	
 

	
 

	
 

	
 


	
 

	
(C)

	
has only solicited and
 will only solicit subscriptions of and has only offered or sold and will only
 offer or sell the New Shares:


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
to persons that it
 reasonably believes are QIBs pursuant to an exemption from, or in a transaction
 not subject to, the registration requirements of the Securities Act, (“QIB
 Purchasers”) and only if such QIB Purchasers, have executed and
 delivered an investor letter in the form of Schedule 5 of this Agreement,
 which in the case of the Joint Sponsors and does not need to be until the
 delivery of any New Shares to any such QIB Purchasers;


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
to certain
 pre-identified US employees of the Company who are accredited investors (as
 defined in Rule 501 under the Securities Act) only if such employees have
 executed and delivered to the Company an investor letter in a form reasonably
 satisfactory to the Joint Sponsors and the Joint Bookrunners in accordance
 with an applicable exemption from local securities laws;


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
in reliance upon and in
 compliance with Regulation S; or


	
 

	
 

	
 

	
 


	
 

	
 

	
(iv)

	
to Prohibited
 Shareholders in accordance with an applicable exemption from local securities
 laws and in reliance upon and in compliance with Regulation S; and 












	
 

	
 

	
 


	
35


	
 

	
 

	
 


	
 

	
(D)

	
has complied and will
 comply with all applicable provisions of FSMA and all other applicable
 securities laws with respect to anything done by it in relation to any New
 Shares in, from or otherwise involving the United Kingdom.


	
 

	
 

	
 


	
5.9

	
The Company
 acknowledges and agrees that it has not, directly or indirectly:


	
 

	
 

	
 


	
 

	
(A)

	
made nor will it make
 offers or sales of any security;


	
 

	
 

	
 


	
 

	
(B)

	
solicited nor will it
 solicit offers or sales of any security;


	
 

	
 

	
 


	
 

	
(C)

	
otherwise negotiated
 nor will it negotiate in respect of any security;


	
 

	
 

	
 


	
 

	
(D)

	
taken nor will it take
 any other action,


	
 

	
 

	
 


	
 

	
in any of the foregoing
 cases under circumstances that would require registration of the New Shares
 under the Securities Act.


	
 

	
 


	
5.10

	
For so long as any New
 Shares are “restricted securities” within the meaning of Rule 144(a)(3) under
 the Securities Act, the Company will during any period in which it is neither
 subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting
 pursuant to Rule 12g3-2(b) thereunder, provide to any holder or beneficial
 owner of such restricted securities or to any prospective purchaser of such
 restricted securities designated by such holder or beneficial owner, upon the
 request of such holder, beneficial owner or prospective purchaser, the
 information required to be provided by Rule 144A(d)(4) under the Securities
 Act; this undertaking is also for the benefit of the holders and beneficial
 owners from time to time of such restricted securities and prospective
 purchasers designated by such holders or beneficial owners from time to time.


	
 

	
 

	
 


	
5.11

	
The Company shall
 ensure that each of its Affiliates and each person acting on behalf of the
 Company or its Affiliates (other than the Joint Sponsors or Joint Bookrunners
 and their respective Affiliates and persons acting on behalf of any of the
 Joint Sponsors or Joint Bookrunners and their respective Affiliates) has
 complied and will comply with clauses 5.6, 5.7, 5.8 and 5.9.


	
 

	
 


	
5.12

	
Each of the Joint
 Sponsors and the Joint Bookrunners shall ensure that each of its Affiliates and
 each person acting on its behalf or on behalf of its Affiliates has complied
 and will comply with clauses 5.6, 5.7, and 5.8.


	
 

	
 


	
6.

	
HM
 TREASURY SUBSCRIPTION


	
 

	
 


	
6.1

	
For the purposes of
 this clause 6:


	
 

	
 


	
 

	
(A)

	
“Accepted Shares” shall mean
 any New Shares in respect of which an Acceptance has been made before 11.00
 a.m. on the Closing Date;


	
 

	
 

	
 


	
 

	
(B)

	
“Non-Accepted Shares” shall
 mean any New Shares which are not Accepted Shares together with any New
 Shares which are treated as Non-Accepted Shares pursuant to clauses 6.1(C);
 and












	
 

	
 

	
 

	
 


	
36


	
 

	
 

	
 

	
 


	
 

	
(C)

	
the Company shall, with
 the consent of HM Treasury, be entitled to treat as Non-Accepted Shares:


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
any New Shares
 comprised in an Acceptance which has been validly rejected by the Company,
 with the consent of HM Treasury, not later than 2.00 p.m. on the Closing Date
 in accordance with the terms of the Open Offer, by reason of insufficient
 evidence as to identity having been received by that time in accordance with
 the procedures maintained by the Registrars under the Money Laundering
 Regulations 2007;


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
any New Shares
 comprised in an Acceptance which has been validly withdrawn pursuant to the
 rights of investors to withdraw acceptances in accordance with Section 87Q of
 FSMA; 


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
any New Shares
 comprised in an Acceptance in respect of which cleared payment has not been
 received by 5:00 pm on the third Business Day following the Closing Date
 (the “Relevant
 Time”); and


	
 

	
 

	
 

	
 


	
 

	
 

	
(iv)

	
any New Shares
 comprised in any other Acceptance which the Company, with the consent of HM
 Treasury, has elected not later than 2.00 p.m. on the Closing Date to treat
 as invalid, in accordance with the terms of the Open Offer.


	
 

	
 

	
 

	
 


	
6.2

	
Without prejudice to
 clause 8, if there are no Non-Accepted Shares, obligations with regards to
 Non-Accepted Shares under this clause 6 will cease.


	
 

	
 

	
 

	
 


	
6.3

	
If by the Relevant Time
 there are Non-Accepted Shares for which no Placees have been arranged and
 consented to by HM Treasury (being “Residual Shares”) and subject to the conditions
 set out in clause 2.1 having been satisfied or, where permitted by clauses
 2.4 to 2.6, waived or treated as waived and to this Agreement not having been
 terminated under clause 2.7 or clause 13, and subject to clause 8.4, HM
 Treasury shall itself (or shall procure that its nominee shall) subscribe for
 such Residual Shares at the Issue Price and on the terms, subject to the
 conditions and on the basis of the information contained in the Issue
 Documents and in reliance on the Warranties given under clause 10. If HM Treasury is required to subscribe for any
Residual Shares
 pursuant to this clause 6.3, on Admission HM Treasury will hold the
 subscription monies for such Residual Shares for the benefit of the Company
 and the Company hereby irrevocably and unconditionally authorises HM Treasury
 on behalf of the Company to apply such subscription monies in redemption, pro
 tanto, of the Preference Shares on the date of Admission (including an amount
 equal to the Preference Share Dividend) and in paying the commissions due to
 HM Treasury in terms of clauses 8.1(A) and 8.1(B). Such application shall
 constitute a complete discharge of HM Treasury’s obligations to make payment
 in respect of the Residual Shares. If, following the Relevant Time, payment
 is dishonoured in respect of any Acceptances previously made, the relevant
 New Shares shall be dealt with in accordance with the terms of the Open Offer
 and shall not be Residual Shares.


	
 

	
 

	
 

	
 


	
6.4

	
If HM Treasury (or its
 nominee) subscribes for New Shares pursuant to this clause 6, it has, in
 addition to any other rights and remedies it may have, the rights and
 remedies of a person subscribing for New Shares on the basis of the Issue
 Documents.













37


	
 

	
 

	
 


	
6.5

	
The Company agrees that it shall, on the date of Admission, or, if earlier,
prior to the date on
 which it or relevant members of its Group accede to the APS:


	
 

	
 

	
 


	
 

	
(A)

	
amend the terms of the registration rights
 agreement entered into with HM Treasury on 12 January 2009 (the “US
 Registration Rights Agreement”) to include as “Registrable
 Securities” (as defined in the US Registration Rights Agreement) any New
 Shares subscribed for hereunder, any Class B Shares and other securities held
 by the Treasury in the Company from time to time, and any securities of any
 description issued by HM Treasury from time to time and which are
 exchangeable for, convertible into, give rights over or are referable to such
 New Shares or other securities;
 and


	
 

	
 

	
 


	
 

	
(B)

	
enter into a resale
 rights agreement (the “Resale Rights Agreement”) with HM
 Treasury, in the form and substance reasonably satisfactory to HM Treasury,
 in order to enable the Ordinary Shares, Class B Shares and other securities
 held by HM Treasury in the Company from time to time, and any securities of
 any description issued by HM Treasury from time to time and which are
 exchangeable for, convertible into, give rights over or are referable to such
 ordinary shares or other securities, to be sold in such jurisdictions and in
 such manner as HM Treasury may determine, including, without limitation, the
 provision of assistance with due diligence, marketing and such documentation
 (including without limitation any offering memorandum, whether or not a
 prospectus) as HM Treasury may reasonably require.


	
 

	
 

	
 


	
6.6

	
HM Treasury and the
 Company agree that neither the Company nor any member of its Group shall be
 required under the Resale Rights Agreement:


	
 

	
 

	
 


	
 

	
(A)

	
to obtain a listing for
 any securities on any exchange or in any market in which it does not already
 have a listing where the Company and HM Treasury, both acting reasonably,
 decide that obtaining such listing would be unduly onerous having regard to
 the additional listing obligations to which the Company or the relevant
 member of its Group would be subject as a result of or in connection with
 obtaining such listing; or


	
 

	
 

	
 


	
 

	
(B)

	
to provide any
 assistance to HM Treasury prior to 22 July 2009 in relation to the
 preparation of any prospectus, listing particulars, offering memorandum or
 other marketing materials if such work would require (in the view of the
 Company and HM Treasury, both acting reasonably) onerous financial,
 accounting or audit work in order to ensure that the requested materials
 comply with relevant securities laws.


	
 

	
 

	
 


	
6.7

	
Without prejudice to
 the obligations of each of the Joint Bookrunners pursuant to clause 3.5, the
 Company confirms to the Joint Bookrunners that any information which of the
 Joint Bookrunners may obtain as to whether or not Placees have been procured
 to take up any Non-Accepted Shares or, if any such Placees have been so
 procured, as to the identities of any such persons, is not information
 obtained by the Joint Bookrunners as financial advisers to the Company.
 Accordingly (and notwithstanding any relationship which Joint Bookrunners may
 have with the Company as financial adviser), the Joint Bookrunners shall be
 under no obligation to disclose to the Company any of such information.












38


	
 

	
 

	
 


	
6.8

	
Without prejudice to
 the condition in clause 2.1(X), in the event that a Supplementary Prospectus
 is issued by the Company two or fewer Business Days prior to the Closing Date
 (or such later date as may be agreed between the parties) all references to
 the Closing Date in this Agreement (other than in this clause 6.8) shall be
 deemed to be the date which is three Business Days after the date of issue of
 the Supplementary Prospectus and all dates in this Agreement referenced to
 the Closing Date (excluding, without limitation, the date specified in clause
 2.1(Y) (or such later date as HM Treasury may agree)) shall also be extended
 mutatis mutandis and the obligations of the parties under this Agreement
 shall, to the extent applicable, be required to be performed by the relevant
 party by reference to such extended dates.


	
 

	
 

	
 


	
6.9

	
Each party shall
 execute such documents (including, without limitation, any agreement varying
 the terms of this Agreement) and do such acts and things as may be required
 for the purpose of giving full effect to the extension of the timetable for
 the Placing and Open Offer as contemplated by clause 6.8 above.


	
 

	
 

	
 


	
7.

	
CAPACITY


	
 

	
 

	
 


	
7.1

	
Any transaction carried
 out by the Joint Bookrunners pursuant to clause 3.4 will constitute a
 transaction carried out in the capacity of agent at the request of the
 Company and not in respect of the Joint Bookrunners’ own account.


	
 

	
 

	
 


	
7.2

	
Notwithstanding that
 the Joint Bookrunners may act as the Company’s agent in connection with the
 Placing and Open Offer, the Joint Bookrunners and any of their respective
 Affiliates and/or their agents may:


	
 

	
 

	
 


	
 

	
(A)

	
receive and keep for
 their own benefit any commissions, fees, brokerage or other benefits paid to
 or received by them in connection with the Placing and Open Offer and shall
 not be liable to account to the Company for any such commissions, fees,
 brokerage or other benefits; and


	
 

	
 

	
 


	
 

	
(B)

	
acting as investors for
 their own account, take-up their entitlements to, or subscribe for or
 purchase, New Shares in the Open Offer and, in that capacity, may retain,
 purchase, sell or offer to sell for their own account(s) such New Shares and
 any securities of the Company or related investments issued otherwise than in
 connection with the Placing and Open Offer.


	
 

	
 

	
 


	
7.3

	
The Joint Bookrunners
 will not be responsible for any loss or damage to any person arising from any
 insufficiency or alleged insufficiency of the amount obtained from the
 Placing, the Open Offer or from the timing of any such transaction.


	
 

	
 

	
 


	
7.4

	
The Company
 acknowledges and agrees that HM Treasury and the Joint Sponsors and the Joint
 Bookrunners are acting solely pursuant to a contractual relationship with the
 Company on an arm’s length basis with respect to the Placing and Open Offer
 and the redemption of the Preference Shares (including in connection with
 determining the terms of the Placing and Open Offer) and not, in relation to
 the Placing and Open Offer or the redemption of the Preference Shares, as
 financial advisers (except in the cases of the Joint Bookrunners and Joint
 Sponsors, solely on and subject to the strict terms of the Engagement
 Letters) or fiduciaries to the Company or any other person. Additionally, the
 Company acknowledges that neither HM Treasury nor the Joint 


	
 

	
 

	
 












39


	
 

	
 

	
 


	
 

	
Sponsors nor Joint
 Bookrunners are advising the Company or any other person as to any legal,
 tax, investment, accounting or regulatory matters in any jurisdiction. The
 Company shall consult with its own advisors concerning such matters and shall
 be responsible for making its own independent investigation and appraisal of
 the transactions contemplated hereby and neither HM Treasury nor the Joint
 Sponsors nor the Joint Bookrunners shall have any responsibility or liability
 to the Company with respect thereto. The Company further acknowledges and
 agrees that any review by HM Treasury and/or the Joint Sponsors and/or the
 Joint Bookrunners (or their respective advisers and agents) of the Company,
 the Placing and Open Offer, the redemption of the Preference Shares, the
 Issue Documents and other matters relating thereto will be performed solely
 for the benefit of HM Treasury and/or the Joint Sponsors and/or the Joint
 Bookrunners, as relevant, and shall not be on behalf of the Company or any
 other person. This is without prejudice to any obligations of the Joint Sponsors
 under the FSA Rules, including any obligations to make recommendations to the
 Company concerning the allocation of the Placing and Open Offer under the
 Engagement Letters.


	
 

	
 

	
 


	
8.

	
FEES,
 COMMISSIONS, EXPENSES AND VAT 


	
 

	
 

	
 


	
8.1

	
Subject to clause 8.2,
 in consideration of HM Treasury and the Joint Sponsors and Joint Bookrunners
 agreeing to provide their services under this Agreement, the Company shall
 pay:


	
 

	
 

	
 


	
 

	
(A)

	
to HM Treasury a
 commission of 0.5 per cent. of the aggregate value of the New Shares at the Issue
 Price per New Share; 


	
 

	
 

	
 


	
 

	
(B)

	
subject to Admission
 occurring, to HM Treasury a further commission of 1 per cent. of the
 aggregate value of the New Shares subscribed for by HM Treasury (or its
 nominee) or by Placees (including for the avoidance of doubt HM Treasury) at
 the Issue Price per New Share; and 


	
 

	
 

	
 


	
 

	
(C)

	
each of HM Treasury’s
 and the Joint Sponsors’ and the Joint Bookrunners’ legal and other costs and
 expenses (properly incurred in the case of the Joint Sponsors and the Joint
 Bookrunners) and the costs and expenses of HM Treasury’s financial advisers,
 in each case incurred for the purpose of or in connection with the Placing
 and Open Offer, the redemption of the Preference Shares or any arrangements
 referred to in, or contemplated by, this Agreement or the Placing Letters.


	
 

	
 

	
 


	
8.2

	
With respect to the
 fees, commissions and expenses payable pursuant to clause 8.1 above:


	
 

	
 

	
 


	
 

	
(A)

	
the commissions
 referred to in clause 8.1(A) shall be payable on the earlier of Admission and
 the second Business Day after the day on which this Agreement is terminated;


	
 

	
 

	
 


	
 

	
(B)

	
the commissions
 referred to in clause 8.1(B) shall be payable on the date of Admission; and












40


	
 

	
 

	
 


	
 

	
(C)

	
the expenses referred
 to in clause 8.1(C) shall be payable whether or not this Agreement becomes
 unconditional or is terminated for any reason and shall be payable on the
 earlier of Admission and the second Business Day after the day on which this
 Agreement is terminated.


	
 

	
 

	
 


	
8.3

	
Each of the Joint
 Sponsors, the Joint Bookrunners and the Company agree that, with the
 exception of the reimbursement of expenses referred to in clause 8.1(C)
 above, no fees or commissions shall be payable to the Joint Sponsors, the
 Joint Bookrunners or any of them by the Company for the services to be
 performed by such Joint Sponsor and the Joint Bookrunners under this
 Agreement or otherwise in connection with or in any way related to the
 transactions contemplated by this Agreement.


	
 

	
 

	
 


	
8.4

	
HM Treasury may deduct
 the amount of the commissions and expenses payable under clause 8.1 together
 with, in each case, an amount in respect of any VAT chargeable thereon, from
 any payment to be made by HM Treasury to the Company under clause 6.3. For
 the avoidance of doubt, HM Treasury acknowledges and agrees that the Company shall
 not be required to pay any commission except that provided for in clauses
 8.1(A) and 8.1(B) in respect of any New Shares subscribed for by Placees
 other than HM Treasury. As such, any commission payable to such Placees shall
 be subject to separate negotiation between HM Treasury and the relevant
 Placees.


	
 

	
 

	
 


	
8.5

	
Without prejudice to
 clause 8.1(C), the Company shall bear all reasonable costs and expenses of or
 incidental to the Placing and Open Offer, the matters contemplated by this
 Agreement (including, for the avoidance of doubt, any applicable amounts in
 respect of VAT thereon, in accordance with clause 8.9), such expenses
 including, without limitation, the fees and expenses of its professional
 advisers, the cost of preparation, advertising, printing and distribution of
 the Issue Documents and all other documents connected with the Placing and
 Open Offer, the redemption of the Preference Shares, the Registrars’ fees,
 the listing fees of the FSA, any charges by CREST and the fees of the London
 Stock Exchange. The Company shall forthwith (and, in relation to VAT, in
 accordance with clause 8.9) upon demand by HM Treasury or any of the Joint
 Sponsors or the Joint Bookrunners (accompanied by the relevant receipt
 therefor) reimburse such person the amount of any such expenses. This clause
 8.5 shall not apply to any Tax (provision for which is, for the avoidance of
 doubt, made in clauses 8.6, 8.7, 8.8 and 8.9), except to the extent provided
 for in clauses 8.6, 8.7, 8.8 or 8.9. 


	
 

	
 

	
 


	
8.6

	
The Company shall pay
 and bear any Stamp Tax which is payable or paid (whether by HM Treasury, any
 of the Joint Sponsors, the Joint Bookrunners or otherwise) in connection with
 the allotment and issue of the New Shares, the redemption of the Preference
 Shares, the delivery of the New Shares and/or the subscription for the New
 Shares in the manner contemplated by this Agreement or the execution,
 delivery, performance or enforcement of this Agreement, provided that this
 clause 8.6 shall not apply to:


	
 

	
 

	
 


	
 

	
(A)

	
any Stamp Tax payable
 in respect of transfers of, or agreements to transfer, New Shares subsequent
 to any such New Shares having been subscribed for by HM Treasury in the
 manner contemplated by this Agreement; or












41


	
 

	
 

	
 


	
 

	
(B)

	
any stamp duty
 chargeable at a rate determined under section 67 or 70 of the Finance Act
 1986 or SDRT chargeable under section 93 or 96 of the Finance Act 1986.


	
 

	
 

	
 


	
 

	
References in this
 clause 8.6 to New Shares include any interest in or rights to allotment of
 New Shares.


	
 

	
 

	
 


	
8.7

	
If any of the Joint Sponsors,
 , HM Treasury or any other Indemnified Person is subject to Tax in respect of
 any sum payable under this Agreement (other than any fees or commission
 payable under clause 8.1, clause 8.2 or clause 8.3) or any sum payable on
 redemption of the Preference Shares, or if any such sum is taken into account
 in computing the taxable profits or income of any of the Joint Sponsors, or
 HM Treasury or such other Indemnified Person, the sum payable shall be
 increased to such amount as will ensure that after payment of such Tax
 (including, for the avoidance of doubt, any additional Tax payable as a
 result of such increase) the relevant Joint Sponsor, , HM Treasury or the
 relevant Indemnified Person (as the case may be) retains a sum equal to the
 sum that it would have received and retained in the absence of such Tax.


	
 

	
 

	
 


	
8.8

	
All sums (including,
 for the avoidance of doubt, any fees or commission payable under clause 8.1,
 clause 8.2 or clause 8.3) payable by the Company (the “Payer”) to HM Treasury, to
 the Joint Sponsors (or any of them), to or to any other Indemnified Person
 (the “Payee”)
 pursuant to this Agreement are expressed exclusive of any amount in respect
 of VAT which is chargeable on the supply or supplies for which such sums (or
 any part thereof) is or are the whole or part of the consideration for VAT
 purposes. If any Payee makes (or is deemed for VAT purposes to make) any
 supply to the Payer pursuant to this Agreement and VAT is or becomes
 chargeable in respect of such supply, the Payer shall pay to the Payee
 (within 14 days of the receipt of a valid VAT invoice) an additional sum
 equal to the amount of such VAT.


	
 

	
 

	
 


	
8.9

	
In any case where the
 Company is obliged to pay a sum to HM Treasury, to the Joint Sponsors (or any
 one of them) to or to any other Indemnified Person under this Agreement by
 way of indemnity, reimbursement, damages or compensation for or in respect of
 any fee, liability, cost, charge or expense (the “Relevant Cost”), the
 Company shall pay to HM Treasury, to the Joint Sponsors (or any one of them)
 to or to any other Indemnified Person (as the case may be) at the same time
 an additional amount determined as follows:


	
 

	
 

	
 


	
 

	
(A)

	
if the Relevant Cost is
 for VAT purposes the consideration for a supply of goods or services made to
 HM Treasury, to the Joint Sponsors (or any one of them), to or to any other
 Indemnified Person (including, for the avoidance of doubt, where such supply
 is made to HM Treasury, the Joint Sponsors (or any of them), or any other
 Indemnified Person acting as agent for the Company within the terms of
 section 47 VATA), such additional amount shall be equal to any input VAT
 which was incurred by HM Treasury, by any Joint Sponsor, by or by any other
 Indemnified Person (as the case may be) in respect of that supply and which it
 is not able to recover from the relevant Tax Authority; and


	
 

	
 

	
 


	
 

	
(B)

	
if the Relevant Cost is
 for VAT purposes a disbursement incurred by HM Treasury, any Joint Sponsor, ,
 or any other Indemnified Person as agent on behalf of the Company and the
 relevant supply is made to the Company for VAT












42


	
 

	
 

	
 


	
 

	
 

	
purposes, such
 additional amount shall be equal to any amount in respect of VAT which was
 paid in respect of the Relevant Cost by HM Treasury, by any Joint Sponsor, by
 or by any other Indemnified Person, and HM Treasury, the relevant Joint
 Sponsor, or the relevant other Indemnified Person shall use reasonable
 endeavours to procure that the relevant third party issues a valid VAT
 invoice in respect of the Relevant Cost to the Company.


	
 

	
 

	
 


	
9.

	
COVENANTS


	
 

	
 

	
 


	
9.1

	
The Company shall
 comply in all material respects with the Companies Acts, FSMA, the Prospectus
 Rules, the Listing Rules, the DTRs and the Admission and Disclosure Standards
 and all other applicable laws and regulations, in each case insofar as they
 are relevant to the Placing and Open Offer (including, for the avoidance of
 doubt, the allotment and issue of the New Shares), the redemption of the
 Preference Shares or Admission.


	
 

	
 

	
 


	
9.2

	
Except for the
 publication of the Issue Documents, the Company undertakes to HM Treasury, to
 the Joint Sponsors and to that, until the close of business on the sixtieth
 day after the Closing Date, it shall not, and will procure that each Group
 Company does not, publish, make or despatch a public announcement or
 communication concerning, or which is reasonably likely to be material in the
 context of, the Placing and Open Offer, the redemption of the Preference
 Shares or implementation of, and the Company’s participation in, the APS:


	
 

	
 

	
 


	
 

	
(A)

	
where the announcement
 or communication is required by law, the FSA, the DTRs, the LSE, or under the
 Regulations or the rules, practices and procedures laid down by Euroclear,
 without prior consultation with HM Treasury, the Joint Sponsors and (where
 legally permitted and practicable) and having due regard to all reasonable
 requests which HM Treasury or the Joint Sponsors or may make; or


	
 

	
 

	
 


	
 

	
(B)

	
in any other case,
 without the prior consent of HM Treasury, the Joint Sponsors and as to the
 content, timing and manner of the publication, making or despatch of the
 announcement or communication (such consent not to be unreasonably withheld).


	
 

	
 

	
 


	
9.3

	
Between the date of
 this Agreement and the close of business on the sixtieth day after the
 Closing Date, the Company undertakes to HM Treasury, to the Joint Sponsors
 and to that it shall:


	
 

	
 

	
 


	
 

	
(A)

	
not, and shall procure
 that each Group Company shall not, without the prior written consent of HM
 Treasury, the Joint Sponsors and , take any steps (including, without
 limitation, making any public statement or issuing or publishing any material
 or document) which, in the opinion of HM Treasury or the Joint Sponsors or
 (acting in good faith), would be materially inconsistent with any expression
 of policy or intention or statement contained in the Prospectus, subject in
 each case to applicable law and regulation (including the fiduciary duties of
 the Directors) (provided that where any Group Company considers itself or the
 directors thereof consider themselves bound by law or by 












43


	
 

	
 

	
 


	
 

	
 

	
regulation to take any
 such steps they shall consult with HM Treasury, the Joint Sponsors and before
 doing so);


	
 

	
 

	
 


	
 

	
(B)

	
use, and shall procure
 that each Group Company uses, all reasonable endeavours to ensure that the
 Company or Group Company concerned consults with HM Treasury, the Joint
 Sponsors and as early as reasonably practicable in advance of the entry into
 or variation (other than in the ordinary course of business) of any
 commitment, agreement or arrangement, or any Group Company placing itself in
 a position where it is obliged to announce that any commitment, agreement or
 arrangement may be entered into or varied which, in any case, is either
 material in the context of the Group or may involve an increase in the issued
 capital of a Group Company (other than an increase in the issued capital of a
 Group Company where all the capital is to be issued to another Group
 Company);


	
 

	
 

	
 


	
 

	
(C)

	
consult with HM
 Treasury, the Joint Sponsors and as early as reasonably practicable in
 advance regarding any public statement or document which relates to the
 Group’s results, dividends, participation in the APS or prospects, or to any
 acquisition, disposal, re-organisation, takeover, management development or
 any other significant matter (whether or not similar to the foregoing) and which
 it or any Group Company proposes to make or publish; and


	
 

	
 

	
 


	
 

	
(D)

	
consult with HM
 Treasury, the Joint Sponsors and as early as reasonably practicable in
 advance with respect to any other information which may be required to be
 notified to a Regulatory Information Service in accordance with Chapter 2 of
 the DTRs.


	
 

	
 

	
 


	
9.4

	
The Company shall use
 all reasonable endeavours to procure that employees of the Company and its
 subsidiaries and advisers to and agents of the Company (other than the Joint
 Sponsors, Joint Bookrunners and their respective Affiliates) and its
 subsidiaries observe the restrictions set out in clauses 9.2 and 9.3 as if
 they were parties thereto.


	
 

	
 

	
 


	
9.5

	
The Company shall not
 (without the prior written consent of HM Treasury) directly or indirectly,
 issue, offer, pledge, sell, contract to issue or sell, issue or sell any
 option or contract to purchase or subscribe, purchase any option or contract
 to sell or issue, grant any option, right or warrant to purchase, deposit
 into any depositary receipt facility or otherwise transfer or dispose of (or
 publicly announce any such issue, pledge, sale, grant, deposit, transfer or
 disposal of) any Ordinary Shares or any securities convertible into or
 exercisable or exchangeable for Ordinary Shares or enter into any swap or
 other agreement that transfers, in whole or in part, directly or indirectly
 any of the economic consequences of the ownership of Ordinary Shares at any
 time before the expiry of the period of 60 days following Admission save in
 respect of the New Shares and any Ordinary Shares or Class B Shares to be
 issued to HM Treasury pursuant to the APS or any Ordinary Shares to be issued
 pursuant to the grant or exercise of options, awards or other rights to
 acquire Ordinary Shares pursuant to any employee share scheme or the grant of
 options or making of awards under the Group’s employee share incentive plans
 provided that this clause 9.5 shall not prevent the Company from doing any
 thing or executing any document which is conditional upon this Agreement
 lapsing, failing to become unconditional or being terminated.












44


	
 

	
 

	
 


	
9.6

	
The Company undertakes
 to make all such announcements concerning the Placing and Open Offer and the
 redemption of the Preference Shares as shall be necessary to comply with the
 Listing Rules, the DTRs, the Prospectus Rules, the Admission and Disclosure
 Standards and section 118, sections 118A to 118C inclusive and
 section 397 of the FSMA, or which any of the Joint Sponsors, or HM
 Treasury otherwise reasonably considers to be necessary or desirable and any
 of the Joint Sponsors, and HM Treasury shall be entitled to make any such
 announcement if the Company fails (in the opinion of HM Treasury or such
 Joint Sponsor or acting in good faith) promptly to fulfil its obligations under
 this clause 9.6.


	
 

	
 

	
 


	
9.7

	
The Company undertakes
 to provide:


	
 

	
 

	
 


	
 

	
(A)

	
publications, reports
 and other information with respect to the Company and its subsidiaries and
 affiliates and their businesses; and 


	
 

	
 

	
 


	
 

	
(B)

	
access to the books and
 records and management and other employees of the Company and its
 subsidiaries and affiliates and their businesses,


	
 

	
 

	
 


	
 

	
as may be required in
 order to allow HM Treasury (including any agent or nominee of HM Treasury) to
 comply fully with all legal and regulatory and other requirements under the
 laws and regulations of any jurisdiction applicable to HM Treasury (and/or
 any such agent or nominee of HM Treasury) as a direct or indirect consequence
 of its shareholdings in the Company, including by subscription for New Shares
 and the redemption of the Preference Shares.


	
 

	
 

	
 


	
9.8

	
The Company will
 promptly provide to the Joint Sponsors and the Joint Bookrunners, during the
 period commencing on the date hereof and ending on the date that is 90 days
 after Admission, as many copies of the Prospectus, the Circular and any
 Supplementary Prospectus as they may reasonably require.


	
 

	
 

	
 


	
9.9

	
The Company will
 procure that each of the Circular and the Prospectus (and any amendments or
 supplements to either of them) is filed, published and /or issued in
 accordance with, or complies with, the Prospectus Rules and the Listing Rules
 (insofar as they apply) and that:


	
 

	
 

	
 


	
 

	
(A)

	
sufficient copies of
 the Prospectus and the Circular (and any amendment or supplement to either of
 them) are made available at the appropriate times to the public and at the
 offices of the Registrars and the Document Viewing Facility, in accordance
 with the requirements of the FSA and the London Stock Exchange; and


	
 

	
 

	
 


	
 

	
(B)

	
the documents described
 in the Prospectus and the Circular (and any amendment or supplement to any of
 them) as being available for inspection are made available as described.


	
 

	
 

	
 


	
9.10

	
The Company undertakes
 to HM Treasury that it shall apply the proceeds of the issue of the New
 Shares to effect the redemption of the Preference Shares and to pay the
 commissions due to HM Treasury in terms of clauses 8.1(A) and 8.1(B) and, to
 the extent the proceeds of the issue of the New Shares are insufficient for
 such purpose, shall provide additional finance from its own resources and
 make use of its own 












45


	
 

	
 


	
 

	
reserves to enable such
 redemption to be effected in full. The Company and HM Treasury agree that the
 Preference Shares shall be redeemed on the date of Admission at an amount
 equal to £4,040,000,000 together with an amount equal to the dividend accrued
 on the Preference Shares from and including 15 January 2009 to but excluding
 the date of Admission. The Company shall, as soon as is practicable after the
 date hereof, propose such amendments to the terms of the Preference Shares to
 enable such redemption to take place and HM Treasury agrees, in its capacity
 as the holder of the Preference Shares, to vote in favour of such amendments
 and, in its capacity as a holder of Ordinary Shares, to vote in favour of the
 Resolutions (to the extent permitted to do so under the Listing Rules and
 applicable law. Upon such redemption, the Preference Share Subscription
 Agreement will terminate without further liability for any party thereto (but
 without prejudice to any accrued rights thereunder).


	
 

	
 


	
9.11

	
The Company undertakes
 to HM Treasury to comply in full with all statements, conditions and
 undertakings which are set out in the Press Announcement.


	
 

	
 


	
9.12

	
The Company undertakes
 to HM Treasury that it shall not issue any New Shares which are to be
 subscribed for by HM Treasury pursuant to this Agreement to any person
 referred to in section 67 or 70 of the Finance Act 1986 or section 93 or 96
 of the Finance Act 1986 (such that stamp duty or SDRT would apply at the rate
 determined under any such section) unless HM Treasury requests that such New
 Shares are to be so issued.


	
 

	
 


	
10.

	
REPRESENTATIONS,
 WARRANTIES AND UNDERTAKINGS


	
 

	
 


	
10.1

	
The Company represents,
 warrants and undertakes to HM Treasury that, save as fairly disclosed in any
 Previous Announcement or in any Due Diligence Meetings, the representations,
 warranties and undertakings set out in Part I of Schedule 3 are true,
 accurate and not misleading as at the date of the Original Placing Agreement.


	
 

	
 


	
10.1A

	
The Company represents,
 warrants and undertakes to each of the Joint Sponsors and to each of the
 Joint Bookrunners that, save as fairly disclosed in any Previous Announcement
 or in any Due Diligence Meetings, the representations, warranties and
 undertakings set out in Part I of Schedule 3 are true, accurate and not
 misleading as at the date of this Agreement.


	
 

	
 


	
10.2

	
All Warranties in
 paragraphs 5 to 13 and paragraph 15 of Part II of Schedule 3 are qualified by
 information fairly disclosed in the Circular, the Prospectus, any Previous
 Announcement or in any Due Diligence Meetings or, if such Warranties are
 given on or after the publication of any Supplementary Prospectus, as fairly
 disclosed in the Prospectus as supplemented by such Supplementary Prospectus.


	
 

	
 


	
10.3

	
The Company agrees with
 HM Treasury and with each of the Joint Sponsors and each of the Joint
 Bookrunners that subject to clause 10.2, each statement set out in Part II of
 Schedule 3 will be true and accurate and not misleading on the Posting Date,
 at such time as a Supplementary Prospectus shall be issued in accordance with
 this Agreement, at each Time of Sale, if any, and immediately prior to
 Admission, in each case by reference to the facts and circumstances then
 existing and will be treated as Warranties given and/or repeated on such
 dates. Warranties shall be deemed to be repeated under this clause in
 relation to the relevant document, announcement or event 












46


	
 

	
 


	
 

	
on the basis that any
 reference in any such Warranty to something being done or something being the
 case in relation to such document, announcement or event which is expressed
 in the future tense shall be regarded as being expressed in the present
 tense.


	
 

	
 


	
10.4

	
If it comes to the
 knowledge of the Company or any of the Directors that any of the Warranties
 was breached or untrue or inaccurate when made (whether under the Original
 Placing Agreement or this Agreement) and/or that any of the Warranties is or
 would be breached or untrue or inaccurate if it were to be repeated by
 reference to the facts and circumstances or the knowledge, opinions,
 intentions or expectations of any of the Directors subsisting at any time up
 to immediately prior to Admission, it will notify HM Treasury, the Joint
 Sponsors and the Joint Bookrunners immediately. The Company will make
 reasonable enquiries to ascertain whether any of the Warranties was, or if so
 repeated would be, breached or untrue or inaccurate and as to whether a
 Specified Event has occurred.


	
 

	
 


	
10.5

	
If, at any time prior
 to Admission, HM Treasury and the Joint Sponsors and the Joint Bookrunners
 shall receive a notice pursuant to clause 10.4 or otherwise become aware of
 any of the Warranties being or becoming or being likely (if repeated as
 referred to in clause 10.4) to become untrue or inaccurate, HM Treasury and
 the Joint Sponsors and the Joint Bookrunners may (without prejudice to any
 other provision of this Agreement) require the Company, at its own expense,
 to make or procure the making of such announcement or announcements and/or
 despatch such communication to Ordinary Shareholders as HM Treasury and the
 Joint Sponsors and the Joint Bookrunners shall, in their absolute discretion
 but after consultation with the Company, consider necessary.


	
 

	
 


	
10.6

	
The Warranties shall
 remain in full force and effect notwithstanding completion of the Placing and
 Open Offer and the redemption of the Preference Shares and all other matters
 and arrangements referred to in or contemplated by this Agreement.


	
 

	
 


	
10.7

	
The Company will
 deliver to HM Treasury and the Joint Sponsors and the Joint Bookrunners a
 certificate in the form set out in Part A of Schedule 1 prior to and with
 effect immediately before Admission and in the form set out in Part B of
 Schedule 1 prior to and with effect immediately before the issue of any
 Supplementary Prospectus and at each Time of Sale, if any.


	
 

	
 


	
10.8

	
The Company
 acknowledges that HM Treasury and the Joint Sponsors and the Joint
 Bookrunners are entering into this Agreement in reliance on the Warranties
 and each such representation, warranty and undertaking shall not be limited
 by reference (express or implied) to the terms of any other representation,
 warranty or undertaking or any other provision of this Agreement.


	
 

	
 


	
10.9

	
For the purposes of
 this clause 10 and Schedule 3, where any of the Warranties is qualified by a
 reference to knowledge, awareness or belief, that reference shall be deemed
 to include a statement to the effect that it has been given after reasonable
 enquiry.


	
 

	
 


	
10.10

	
The Company undertakes
 to HM Treasury and to the Joint Sponsors and the Joint Bookrunners:












47


	
 

	
 

	
 

	
 


	
 

	
(A)

	
promptly to give notice
 to HM Treasury and to the Joint Sponsors and the Joint Bookrunners of the
 occurrence of any Specified Event, which shall come to the knowledge of the
 Company prior to the earlier of:


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
this Agreement being
 terminated in accordance with its terms; and 


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
the date of allotment
 of the New Shares pursuant to clauses 4 and/or 6 (as appropriate) (whichever
 is later); and


	
 

	
 

	
 

	
 


	
 

	
(B)

	
not to cause and to use
 all reasonable endeavours not to permit, and to procure that each Group
 Company and the Directors do not cause and use all reasonable endeavours not
 to permit, any Specified Event to occur before the earlier of:


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
this Agreement being
 terminated in accordance with its terms; and 


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
the date of allotment
 of the New Shares pursuant to clauses 4 and/or 6 (as appropriate) (whichever
 is later),


	
 

	
 

	
 

	
 


	
 

	
 

	
provided that any
 breach of the covenant in this clause 10.10(B) will not give rise to a remedy
 in damages against the Company in respect of such breach in circumstances
 where this Agreement has been terminated pursuant to clause 13 as a result of
 a Specified Event.


	
 

	
 

	
 

	
 


	
10.11

	
For the purposes of
 clauses 10.10(A) and 10.10(B), each of the Warranties and the undertakings
 contained in this clause 10 shall take effect with the exclusion of any
 qualification contained therein with respect to the knowledge, information,
 awareness or belief of the Company or any of the Directors or any other
 person. 


	
 

	
 

	
 

	
 


	
10.12

	
Each Joint Sponsor and
 the Joint Bookrunners severally represents, warrants and undertakes to the
 Company that it is an “accredited investor” as defined in Rule 501(a) of
 Regulation D under the Securities Act.


	
 

	
 

	
 

	
 


	
11.

	
INDEMNITIES


	
 

	
 

	
 

	
 


	
11.1

	
The Company agrees to
 fully and effectively indemnify and hold harmless each Indemnified Person on
 an after-Tax basis from and against any and all Losses or Claims, whatsoever,
 as incurred, (and whether or not the relevant Loss or Claim is suffered or
 incurred or arises in respect of circumstances or events existing or
 occurring before, on or after the Effective Date and regardless of the
 jurisdiction in which such Loss or Claim is suffered or incurred) if such
 Losses or Claims, arise, directly or indirectly, out of, or are attributable
 to, or connected with, anything done or omitted to be done by any person
 (including by the relevant Indemnified Person) in connection with the Placing
 and Open Offer, the redemption of the Preference Shares, Admission or the
 arrangements contemplated by the Issue Documents or any of them (or any
 amendment or supplement to any of them), or this Agreement or any other
 agreement relating to the Placing and Open Offer or the redemption of the
 Preference Shares, including but not limited to:












48


	
 

	
 

	
 

	
 


	
 

	
(A)

	
any and all Losses or
 Claims whatsoever, as incurred, arising out of the Issue Documents, or any of
 them (or any amendment or supplement to any of them) not containing or fairly
 presenting, or being alleged not to contain or not to fairly present, all
 information required to be contained therein, or arising out of any untrue or
 inaccurate statement or alleged untrue or inaccurate statement of a material
 fact contained in the Issue Documents, or any of them (or any amendment or
 supplement to any of them), or the omission or alleged omission therefrom of
 a fact necessary in order to make the statements therein not misleading in
 any material respect, or any statement therein being or being alleged to be
 in any respect not based on reasonable grounds, in the light of the
 circumstances in which they were made; and/or


	
 

	
 

	
 

	
 


	
 

	
(B)

	
any and all Losses or
 Claims whatsoever, as incurred, arising out of any breach or alleged breach
 by the Company of any of its obligations, including any of the Warranties or
 the representations, covenants and undertakings set out in this Agreement or
 out of the arrangements contemplated by the Issue Documents or any of them
 (or any amendment or supplement to any of them) or this Agreement or any
 other agreement relating to the Placing and Open Offer or the redemption of
 the Preference Shares; and/or


	
 

	
 

	
 

	
 


	
 

	
(C)

	
any and all Losses or
 Claims whatsoever, as incurred, in connection with or arising out of the
 issue, publication or distribution of the Issue Documents, or any of them (or
 any amendment or supplement to any of them) and/or any other documents or
 materials relating to the applications for Admission; and/or


	
 

	
 

	
 

	
 


	
 

	
(D)

	
any and all Losses or
 Claims whatsoever, as incurred, in connection with or arising out of any
 failure or alleged failure by the Company or any of the Directors or any of
 its or his agents, employees or advisers to comply with CA 1985, CA 2006,
 FSMA, the Listing Rules, the Prospectus Rules, the DTRs, the rules and
 regulations of the London Stock Exchange and the Admission and Disclosure
 Standards or any other requirement or statute or regulation in any
 jurisdiction in relation to the application for Admission, the Placing and
 Open Offer, or the arrangements contemplated by the Issue Documents
 (including, without limitation, the issue and allotment of the New Shares and
 the redemption of the Preference Shares), or any of them (or any amendment or
 supplement to any of them), or this Agreement or any other agreement relating
 to the Placing and Open Offer or the redemption of the Preference Shares;
 and/or


	
 

	
 

	
 

	
 


	
 

	
(E)

	
any and all Losses or
 Claims whatsoever, as incurred, suffered or incurred by such Indemnified
 Person:


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
as a person who has
 communicated or approved the contents of any financial promotion (other than
 the Issue Documents, or any of them, or any amendment or supplement to any of
 them) made in connection with the Placing and Open Offer or the applications
 for Admission for the purpose of section 21 of FSMA; or












49


	
 
	
 
	
 
	
 

	
 
	
 
	
(ii)
	
(in the case of each of
 the Joint Sponsors only) in their capacity as sponsor to the Company’s
 applications for Admission and, if required as sponsor in relation to the
 publication of the Circular,

	
 
	
 
	
 
	
 

	
 
	
PROVIDED THAT, the
 indemnity contained in this clause 11.1 shall not apply to any Losses or
 Claims (i) in respect of HM Treasury (otherwise than in connection with the
 matters referred to in clauses 11.1(A), (B), (C), (D) and (E)) to the extent
 finally and judicially determined to have arisen as a result of the fraud, bad
 faith or wilful default of that HMT Indemnified Person; (ii) in respect of ,
 and (otherwise than in connection with the matters referred to in clauses
 11.1(A), (B), (C) and (D)) to the extent judicially determined to have arisen
 as a result of the fraud, negligence, bad faith or wilful default of that
 Indemnified Person or that Indemnified Person or that Indemnified Person or
 (iii) if and to the extent arising out of a decline in market value of the
 New Shares suffered or incurred by HM Treasury as a result of it having been
 required to subscribe for New Shares pursuant to clause 6, save to the extent
 such decline is caused by or results from or is attributable to or would not
 have arisen but for (in each case directly or indirectly) the neglect or default
 of the Company in relation to the content, publication, issue or distribution
 of the Issue Documents or any breach by the Company of any of its obligations
 under this Agreement, including any of the Warranties, representations,
 undertakings or covenants. This clause 11.1 shall not apply to any Loss or
 Claim in respect of Tax which is covered by clauses 8.6, 8.7, 8.8 and 8.9 (or
 which would have been so covered but for any exclusion contained therein).

	
 
	
 
	
 
	
 

	
11.2
	
Each Indemnified Person
 shall and shall procure that its Indemnified Persons shall:

	
 
	
 
	
 
	
 

	
 
	
(A)
	
give notice as promptly
 as reasonably practicable to the Company of any action commenced against it
 after receipt of a written notice of any Claim or the commencement of any
 action, claim, suit, investigation or proceeding in respect of which a Claim
 for indemnification may be sought under this clause 11; and

	
 
	
 
	
 
	
 

	
 
	
(B)
	
as promptly as
 reasonably practicable notify the Company after any such action is formally
 commenced (by way of service with a summons or other legal process giving
 information as to the nature and basis of the claim),

	
 
	
 
	
 
	
 

	
 
	
and shall keep the
  Company informed of, and, to the extent reasonably practicable, consult with
  the Company in relation to, all material developments in respect thereof, but
  in each case, only insofar as may be consistent with the terms of any
  relevant insurance policy and provided (in each case) that to do so would
  not, in such Indemnified Person’s view (acting in good faith), be prejudicial
  to it (or to any Indemnified Person connected to it) or to any obligation of
  confidentiality or other legal or regulatory obligation which that
  Indemnified Person owes to any third party or to any regulatory request that
  has been made of it. However, the failure to so notify the Company and keep
  the Company informed shall not relieve the Company from any liability
  hereunder to the extent it is not materially prejudiced as a result thereof
  and in any event shall not relieve the Company from any liability which it
  may have otherwise than on account of the indemnity set out in this clause
  11.

	
 
	
 
	
 
	
 

	
11.3
	
Legal advisers for
 Indemnified Persons shall be selected by HM Treasury in respect of HMT
 Indemnified Persons, in respect of Indemnified Persons, in respect of
 Indemnified Persons and in respect of Indemnified Persons.. The Company may











50


	
 

	
 

	
 

	
 


	
 

	
participate at its own
 expense in the defence of any action commenced against it provided however
 that legal advisers for the Company shall not (except with the consent of the
 relevant Indemnified Person) also be legal advisers for the Indemnified
 Person.


	
 

	
 


	
11.4

	
In no event shall the
 Company be liable for fees and expenses of more than one legal adviser (in
 addition to any local legal advisers) separate from its own legal advisers
 for all Indemnified Persons, Indemnified Persons and Indemnified Persons 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.


	
 

	
 


	
11.5

	
The Company shall not,
 without the prior written consent of the relevant Indemnified Persons (acting
 in good faith), settle or compromise or consent to the entry of any judgment
 with respect to any litigation, or any investigation or proceeding by any
 governmental agency or body, commenced or threatened, or any claim whatsoever
 in respect of which indemnification or contribution could be sought under
 this clause 11 or clause 12 (whether or not the Indemnified Persons are
 actual or potential parties thereto), unless such settlement, compromise or
 consent:


	
 

	
 


	
 

	
(A)

	
includes an unconditional
 release of each Indemnified Person from all liability arising out of such
 litigation, investigation, proceeding or claim; and


	
 

	
 

	
 


	
 

	
(B)

	
does not include a
 statement as to or an admission of fault, culpability or a failure to act by
 or on behalf of any Indemnified Person.


	
 

	
 

	
 


	
11.6

	
The Company will
 promptly notify HM Treasury and each of the Joint Sponsors and the Joint
 Bookrunners of any limitation (whenever arising) on the extent to which the
 Company and/or any of its respective subsidiary undertakings, affiliates, or
 associates may claim against any third party or parties and/or of any waiver
 or release of any right of the Company to so claim (each a “Limitation”)
 in respect of anything which may arise, directly or indirectly, out of or is
 based upon or is in connection with the Placing and Open Offer, the
 redemption of the Preference Shares, Admission or the subject matter of the
 obligations or services to be performed under this Agreement or in connection
 with the Placing and Open Offer itself or the redemption of the Preference
 Shares, by HM Treasury or the Joint Bookrunners or by the Joint Sponsors or
 on its or their behalf. Where any damage or loss is suffered by the Company
 for which any Indemnified Person would otherwise be jointly and severally
 liable with any third party or third parties to the Company, or any of its
 relevant subsidiary undertakings, affiliates, or associates, the extent to
 which such damage or loss will be recoverable from the Indemnified Person
 shall be limited so as to be in proportion to the contribution of the
 Indemnified Person to the overall fault for such damage or loss, as agreed
 between the parties, or, in the absence of agreement, as determined by a
 court of competent jurisdiction, but in any event, the Indemnified Person
 shall have no greater liability than if the Limitation did not apply.


	
 

	
 


	
11.7

	
The degree to which any
 Indemnified Person shall be entitled to rely on the work of any adviser to
 the Company or any other third party will be unaffected by any Limitation (as
 defined in clause 11.6) which the Company may have agreed with any third
 party.











51


	
 

	
 

	
 

	
 


	
11.8

	
The provisions of this
 clause 11 will remain in full force and effect notwithstanding the completion
 of all matters and arrangements referred to in or contemplated by this
 Agreement.


	
 

	
 


	
12.

	
CONTRIBUTION


	
 

	
 


	
12.1

	
If and to the extent
 that the indemnification provided for in clause 11 is unavailable to or
 insufficient to hold harmless (to the extent specified in clause 11) an
 Indemnified Person in respect of any Loss or Claim referred to therein, then
 the Company, in lieu of indemnifying such Indemnified Person thereunder,
 shall contribute to the amount paid or payable by such Indemnified Person as
 a result of such Loss or Claim (i) in such proportion as is appropriate to
 reflect the relative benefits received by the Company on the one hand and HM
 Treasury or the Joint Sponsors or the Joint Bookrunners on the other hand
 from the Placing and Open Offer or (ii) if the allocation provided by
 sub-clause (i) above is not permitted by applicable law, in such proportion
 as is appropriate to reflect not only the relative benefits referred to in
 sub-clause (i) above but also the relative fault of the Company on the one
 hand and HM Treasury or the Joint Sponsors or the Joint Bookrunners on the
 other in connection with the statements or omissions that resulted in such
 losses, claims, damages or liabilities, as well as any other relevant
 equitable considerations. The relative benefits received by HM Treasury on
 the one hand and the Company on the other shall be deemed to be in the same
 respective proportions respectively as the total fees received by HM Treasury
 pursuant to this Agreement bear to the aggregate Issue Price. The relative
 benefits received by the Company on the one hand and the Joint Sponsors and
 the Joint Bookrunners on the other shall be deemed to be in the same
 respective proportions respectively as the aggregate Issue Price and the
 total fees received by the Joint Bookrunners and the Joint Sponsors, as set forth
 in the Engagement Letters and not paid to Placees, bear to the aggregate
 Issue Price. The relative fault of the Company on the one hand and HM
 Treasury or the Joint Sponsors and the Joint Bookrunners on the other 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 or by HM Treasury or the Joint Sponsors or the Joint Bookrunners and
 the parties’ relative intent, knowledge, access to information and
 opportunity to correct or prevent such statement or omission.


	
 

	
 


	
12.2

	
Notwithstanding the
 provisions of this clause 12, neither HM Treasury nor the Joint Sponsors nor
 the Joint Bookrunners will be entitled to recover from the Company by way of
 contribution under clause 12.1 any amount in excess of the amount that the
 Company would have been liable to pay to HM Treasury or to the Joint Sponsors
 or the Joint Bookrunners (as the case may be) had the indemnification
 provided for in clause 11 been available to the extent provided in that
 clause in respect of the relevant Loss or Claim.


	
 

	
 


	
12.3

	
The parties hereto
 agree that it would not be just and equitable if contribution pursuant to this
 clause 12 were determined by pro rata allocation (even if HM Treasury and the
 Joint Sponsors and the Joint Bookrunners were treated as one entity for such
 purposes) or by any other method of allocation that does not take account of
 the equitable considerations referred to in clause 12.1. The amount paid or
 payable by an Indemnified Person as a result of the Loss or Claim referred to
 in clause 12.1 shall be deemed to 












52


	
 

	
 

	
 

	
 


	
 

	
include, any legal or
 other expenses incurred by such Indemnified Person in connection with
 investigating or defending any such action or claim.


	
 

	
 


	
12.4

	
The indemnity and
 contribution agreements contained in this clause 12 are in addition to and
 shall not be construed to limit, affect or prejudice any liability which the
 Company may otherwise have to the Indemnified Persons referred to above or
 any other right or remedy in law or otherwise available to any Indemnified
 Person.


	
 

	
 


	
13.

	
TERMINATION


	
 

	
 


	
13.1

	
If following the date
 of this Agreement but before Admission it shall come to the notice of HM
 Treasury or any of the Joint Sponsors or that:


	
 

	
 


	
 

	
(A)

	
any statement contained
 in the Issue Documents (or any amendment or supplement thereto) has become or
 been discovered to be untrue, inaccurate or misleading; or


	
 

	
 

	
 


	
 

	
(B)

	
matters have arisen or
 have been discovered which would, if any of the Issue Documents (or any
 amendment or supplement thereto) were to be issued at that time, constitute
 an omission therefrom and which would render any such Issue Documents (or any
 amendment or supplement thereto) to be misleading; or


	
 

	
 

	
 


	
 

	
(C)

	
there has been a breach
 of any of the Warranties or of any other provision of this Agreement; or


	
 

	
 

	
 


	
 

	
(D)

	
a Specified Event has
 occurred; or 


	
 

	
 

	
 


	
 

	
(E)

	
the Company’s
 application to the UK Listing Authority for admission of the New Shares to
 the Official List and/or the Company’s application to the London Stock
 Exchange for admission to trading of the New Shares on the London Stock
 Exchange’s market for listed securities is withdrawn by the Company and/or
 refused by the UK Listing Authority or London Stock Exchange (as
 appropriate),


	
 

	
 

	
 


	
 

	
which, in each case, is
 in HM Treasury’s or any of the Joint Sponsor’s or  ’s  sole judgement, material
 in the context of the Group and/or the context of the Placing and Open Offer,
 or the redemption of the Preference Shares or Admission, HM Treasury or such
 Joint Sponsor or may forthwith give notice thereof to the Company, in which
 case clause 13.3 shall apply. 


	
 

	
 


	
13.2

	
If following the date
 of this Agreement but before Admission:


	
 

	
 


	
 

	
(A)

	
in the sole opinion of
 HM Treasury (acting in good faith) there shall have been any Material Adverse
 Effect, whether or not foreseeable at the date of this Agreement; 


	
 

	
 

	
 


	
 

	
(B)

	
any matter has arisen
 which would require the publication of a Supplementary Prospectus; 


	
 

	
 

	
 


	
 

	
(C)

	
the condition set out
 in clause 2.1(BB) is not fulfilled; 












53


	
 

	
 

	
 

	
 


	
 

	
(D)

	
the condition set out
 in clause 2.1(CC) is not fulfilled; or


	
 

	
 

	
 


	
 

	
(E)

	
there has been:


	
 

	
 

	
 


	
 

	
 

	
(i)

	
a change in national or
 international financial, political, economic or stock market conditions
 (primary or secondary);


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
an incident of
 terrorism, outbreak or escalation of hostilities, war, declaration of martial
 law or any other calamity or crisis;


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
a suspension or
 material limitation in trading of the securities of the Company by the London
 Stock Exchange or on any exchange or over-the-counter market, or if trading
 generally on the New York Stock Exchange, the NASDAQ National Market or the
 London Stock Exchange has been suspended or limited, or minimum or maximum
 prices for trading have been fixed, or maximum ranges for prices have been
 required, by any of such exchanges or by such system or by order of the SEC,
 the National Association of Securities Dealers, Inc. or any governmental
 authority, or a material disruption has occurred in commercial banking or
 securities settlement or clearance services in the United States or in the
 EEA; or


	
 

	
 

	
 

	
 


	
 

	
 

	
(iv)

	
a moratorium in
 commercial banking has been declared by the United States, the United Kingdom
 or a member state of the EEA, 


	
 

	
 

	
 

	
 


	
 

	
 

	
as would in the sole
 opinion of HM Treasury, acting in good faith, be likely to materially
 prejudice the success of the Placing and Open Offer or dealings in the New
 Shares in the secondary market, then HM Treasury may give notice of any such
 matter to the Company, in which case clause 13.3 shall apply.


	
 

	
 

	
 


	
13.3

	
Where this clause
 applies and:


	
 

	
 


	
 

	
(A)

	
notice has been given
 to the Company pursuant to clause 13.1 or 13.2 by HM Treasury, HM Treasury
 may in its sole discretion:


	
 

	
 

	
 


	
 

	
 

	
(i)

	
allow the Placing and
 Open Offer to proceed on the basis of the Issue Documents subject, if HM
 Treasury so requests, to (i) the publication of a Supplementary Prospectus
 pursuant to section 87G of FSMA (ii) the publication of a supplementary
 Circular and (iii) to any additional requirements of the Prospectus Rules or
 the FSA; or


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
if it does not consider
 it to be necessary that the arrangements contemplated by this Agreement
 proceed to completion in order to maintain the financial stability of the
 United Kingdom, give notice to the Company and to the Joint Sponsors and at
 any time prior to Admission to the effect that this Agreement shall terminate
 and cease to have effect; and/or


	
 

	
 

	
 

	
 


	
 

	
(B)

	
notice has been given
 to the Company pursuant to clause 13.1 by any of the Joint Sponsors or , then
 clause 13.4 shall apply.












54


	
 

	
 

	
 

	
 


	
13.4

	
Where this clause
 applies, the Joint Sponsor that gave notice to the Company pursuant to clause
 13.1 or (the “Notifying Sponsor”) may, having consulted with HM Treasury
 and the UK Listing Authority, give notice to the Company and to HM Treasury
 terminating its appointment under this Agreement and all obligations of the
 Notifying Sponsor under this Agreement shall thereupon terminate and:


	
 

	
 


	
 

	
(A)

	
if an application for
 Admission and/or a declaration on production of a circular has been submitted
 to the FSA, the Notifying Sponsor shall, if relevant notify the FSA of the
 termination of its appointment as sponsor in respect of the Placing and Open
 Offer and/or the publication of the Circular;


	
 

	
 

	
 


	
 

	
(B)

	
all references in this
 Agreement to the Joint Sponsors shall be deemed to be references to any Joint
 Sponsor that is not the Notifying Sponsor (if any) and, if the Notifying
 Sponsor is , all reference to the Joint Bookrunners shall be deemed to be
 references to the Joint Bookrunners other than ; 


	
 

	
 

	
 


	
 

	
(C)

	
in respect of the
 Notifying Sponsor, the Notifying Sponsor shall have no claim against any
 other party to this Agreement and no other party to this Agreement shall have
 any claim against the Notifying Sponsor, in each case for fees, costs,
 damages, compensation or otherwise in respect of such resignation except
 that:


	
 

	
 

	
 


	
 

	
 

	
(i)

	
such termination shall
 be without prejudice to any accrued rights or obligations under this
 Agreement;


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
the provisions of this
 clause 13.4 and clauses 1, 8, 9.2, 9.3,10, 11, 12, 14, 15, 16, 17, 18 and 19
 shall remain in full force and effect,


	
 

	
 

	
 

	
 


	
 

	
 

	
and in particular the
 Company shall pay the commission and fees (to HM Treasury) and the costs and
 expenses as are payable in such circumstances under and in accordance with
 clause 8.1 and 8.2; and 


	
 

	
 

	
 


	
 

	
(D)

	
the Company shall
 consult with HM Treasury and with any Joint Sponsor that is not the Notifying
 Sponsor to determine whether a further sponsor (and where the Notifying
 Sponsor is , a further bookrunner) should be appointed in relation to the
 Placing and Open Offer and/or the publication of the Circular, as
 appropriate.


	
 

	
 

	
 


	
13.5

	
HM Treasury, the Joint
 Sponsors and shall have no right to terminate this Agreement on or after
 Admission, without prejudice to any of the rights and remedies of HM
 Treasury, the Joint Sponsors and in respect of any breach by the Company of
 its obligations under this Agreement.


	
 

	
 


	
13.6

	
In the event that this
 Agreement is terminated by HM Treasury pursuant to the provisions of this
 clause 13, no party to this Agreement will have any claim against any other
 party to this Agreement for fees, costs, damages, compensation or otherwise
 except that:


	
 

	
 


	
 

	
(A)

	
such termination shall
 be without prejudice to any accrued rights or obligations under this
 Agreement;












55


	
 

	
 

	
 

	
 


	
 

	
(B)

	
the Company shall pay
 the commissions, fees, costs and expenses as are payable in such circumstance
 under and in accordance with clause 8.1 and clause 8.2; and


	
 

	
 

	
 


	
 

	
(C)

	
the provisions of this
 clause 13.6 and clauses 1, 8, 9.2, 9.3, 9.6, 9.11, 10,11, 12, 14, 15, 16, 17,
 18 and 19 shall remain in full force and effect.


	
 

	
 

	
 


	
14.

	
EXCLUSIONS
 OF LIABILITY


	
 

	
 


	
14.1

	
Without prejudice to
 clause 14.2, no claim shall be made by the Company or any of its subsidiary
 undertakings, affiliates or associates or by HM Treasury, or any of the
 directors, officers or employees of any of them in any jurisdiction against
 any Indemnified Person to recover any Loss or Claim suffered or incurred by
 any person and which arises out of the carrying out by any Indemnified Person
 of obligations or services in connection with this Agreement, or the
 redemption of the Preference Shares or any other agreements relating to the
 Placing and Open Offer or the redemption of the Preference Shares, or in
 connection with the Placing and Open Offer itself or the redemption of the
 Preference Shares except (otherwise than in connection with the matters
 referred to in clauses 11 or 12 or otherwise than as a result of a payment
 made or an obligation or liability to make payment arising under clauses 11
 or 12) to the extent only that the Loss or Claim is determined in a final
 judgement by a court of competent jurisdiction, in the case of a HMT
 Indemnified Person, to have resulted from the fraud, bad faith or wilful
 default of such HMT Indemnified Person and, in the case of a Indemnified
 Person, a Indemnified Person, or a Indemnified Person is judicially
 determined, to have resulted from the fraud, bad faith, negligence or wilful
 default of that Indemnified Person, Indemnified Person, or Indemnified
 Person.


	
 

	
 


	
14.2

	
Notwithstanding any
 rights or claims which the Company or any of its respective subsidiary
 undertakings, affiliates or associates or any of the directors, officers or
 employees of any of them may have or assert against the Joint Sponsors or in
 connection with this Agreement, the Placing and Open Offer, the redemption of
 the Preference Shares, or any of the other arrangements contemplated by the Issue Documents, or any of them, or
 this Agreement, no claim will be brought by the Company or by any of its
 respective subsidiary undertakings, affiliates or associates or any of the
 directors, officers or employees of any of them against any director or any
 other officer and/or employee of any Indemnified Person in respect of any
 conduct, action or omission by the individual concerned in connection with
 this Agreement, the Placing and Open Offer, the redemption of the Preference
 Shares or any of the other arrangements contemplated by the Issue Documents, or any of them, or
 this Agreement.


	
 

	
 


	
15.

	
MISCELLANEOUS


	
 

	
 


	
15.1

	
For the avoidance of
 doubt, the Company acknowledges and agrees that it is responsible for its own
 due diligence carried out in relation to the Placing and Open Offer and the
 redemption of the Preference Shares and that neither HM Treasury nor any of
 the Joint Sponsors nor the Joint Bookrunners shall be responsible to the
 Company or any Director for any due diligence of the Company in relation
 thereto unless it or they have agreed in writing to take specific
 responsibility for such due diligence.












56


	
 

	
 

	
 

	
 


	
15.2

	
The Company agrees that
 for the purpose of the Placing and Open Offer (including for the purposes of
 seeking Placees for the New Shares) and the redemption of the Preference
 Shares and of obtaining Admission, neither HM Treasury nor any of the Joint
 Sponsors or the Joint Bookrunners shall be responsible for the provision of
 or obtaining advice as to the requirements of any applicable laws or
 regulations of any jurisdictions nor shall any such person be responsible
 where it or the Company has acted in the absence of such advice or in
 reliance on any advice obtained by the Company in respect thereof.


	
 

	
 


	
15.3

	
For the avoidance of
 doubt, and without prejudice to the provisions of clauses 11, 12 and 14, any
 costs and expenses incurred by the Joint Bookrunners or Joint Sponsors in
 connection with the arrangements contemplated by this Agreement that do not
 fall to be paid by the Company pursuant to clause 8, shall be payable by the
 Joint Bookrunners and Joint Sponsors in such proportions as they may agree,
 failing which shall be payable in equal proportions by each Joint Bookrunner.


	
 

	
 


	
16.

	
GENERAL


	
 

	
 


	
16.1

	
Any liability to any
 party under this Agreement may in whole or in part be released, compounded or
 compromised and time or indulgence may be given by any party in its absolute
 discretion as regards any other person under such liability without in any
 way prejudicing or affecting the first party’s rights against such other
 person under the same or a similar liability, whether joint and several or
 otherwise. For the avoidance of doubt, any reference in this Agreement to the
 agreement or consent of, or any notice or waiver by, HM Treasury or the Joint
 Sponsors or shall be construed as the agreement or consent of, or any notice
 or waiver by (as the case may be), HM Treasury and each of the Joint Sponsors
 and , except where expressly provided to the contrary.


	
 

	
 


	
16.2

	
No failure of any party
 to exercise, and no delay by it in exercising, any right, power or remedy in
 connection with this Agreement will operate as a waiver thereof, nor will any
 single or partial exercise of any such right preclude any other or further
 exercise of such right or the exercise of any other right. The rights
 provided in this Agreement are cumulative and not exclusive of any other
 rights (whether provided by law or otherwise). Any express waiver of any
 breach of this Agreement shall not be deemed a waiver of any subsequent
 breach.


	
 

	
 


	
16.3

	
Each of the parties
 hereto acknowledges that the Warranties given by the Company and the
 indemnity contained in clause 11 are, subject as provided in clause 16.12,
 given to HM Treasury, the Joint Sponsors, and the Indemnified Persons (as the
 case may be) for themselves and not to them as agent of, trustee for or
 otherwise for the benefit of any other person including (without limitation)
 any person who may subscribe or purchase any of the New Shares.


	
 

	
 


	
16.4

	
Time shall be of the
 essence of this Agreement, both as regards any dates, times or periods
 mentioned and as regards any dates, times or periods which may be substituted
 for them in accordance with this Agreement or by agreement in writing between
 the parties.












57


	
 

	
 

	
 

	
 


	
16.5

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


	
 

	
 


	
16.6

	
This Agreement,
 together with the Engagement Letters (in the case of the Company, the Joint
 Sponsors and the Joint Bookrunners), the Original Placing Agreement (in the
 case of the Company and HM Treasury to the extent contemplated by clause
 3.2), constitute the whole agreement and understanding between the parties in
 relation to the Placing and Open Offer, the redemption of the Preference
 Shares, Admission and the publication of the Circular. Subject thereto, all
 previous agreements, understandings, undertakings, representations,
 warranties and arrangements of any nature whatsoever between the parties or
 any of them with any bearing on the Placing and Open Offer, the redemption of
 the Preference Shares, Admission or the publication of the Circular are
 superseded and extinguished (and all rights and liabilities arising by reason
 of them, whether accrued or not at the date of this Agreement, are cancelled)
 to the extent they have such a bearing. In the event of any conflict between
 the terms of the Engagement Letters and this Agreement, this Agreement shall
 (as between the parties to the Engagement Letters) prevail. For the avoidance
 of doubt, the foregoing is without prejudice to the placing and open offer
 agreement dated 13 October 2008.


	
 

	
 


	
16.7

	
No variation of this
 Agreement shall be effective unless in writing and signed by or on behalf of
 each of the parties.


	
 

	
 


	
16.8

	
At any time after the
 date of this Agreement, the Company and the Joint Sponsors and the Joint
 Bookrunners shall, and shall use all reasonable endeavours to procure that
 any necessary third party shall, at the cost of that party execute such
 documents and do such acts and things as the party may reasonably require for
 the purpose of giving full effect to all the provisions of this Agreement by
 which it is bound.


	
 

	
 


	
16.9

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


	
 

	
 


	
16.10

	
All payments by the
 Company under this Agreement shall be paid without set-off or counterclaim,
 and free and clear of and without deduction or withholding for or on account
 of Tax, unless required by law. If any Tax is required by law to be deducted
 or withheld from or in connection with any such payment, the Company will:


	
 

	
 


	
 

	
(A)

	
promptly upon becoming
 aware thereof, notify HM Treasury, the Joint Sponsors and thereof;


	
 

	
 

	
 


	
 

	
(B)

	
make that deduction or
 withholding and any payment of Tax required in connection with that deduction
 or withholding within the time allowed and in the minimum amount required by
 law;


	
 

	
 

	
 


	
 

	
(C)

	
deliver to the payee
 such receipts, statements or other documents as the payee may reasonably
 request by way of evidence that the deduction or withholding has been made
 and any appropriate payment of Tax made to the relevant Tax Authority; and












58


	
 

	
 

	
 

	
 


	
 

	
(D)

	
increase the amount
 payable so that the amount received by the payee (after such deduction or
 withholding, including for the avoidance of doubt any additional deduction or
 withholding required as a result of such increase) is equal to the amount which
 the payee would have received if no such deduction or withholding had been
 made.


	
 

	
 

	
 


	
16.11

	
If the Company makes an
 increased payment to HM Treasury, any Joint Sponsor, or any other Indemnified
 Person in accordance with clause 8.7 or 16.10 and HM Treasury, the relevant
 Joint Sponsor or or such other Indemnified Person (as the case may be)
 determines in good faith that it has obtained, utilised and retained a relief
 from Tax or a refund of Tax which is attributable to such increased payment
 made by the Company, then HM Treasury, the relevant Joint Sponsor or or such
 other Indemnified Person (as the case may be) shall reimburse to the Company
 as soon as reasonably practicable an amount equal to such proportion of the
 Tax so saved or refunded as will leave HM Treasury, the relevant Joint
 Sponsor or or the relevant other Indemnified Person (as the case may be),
 after such reimbursement, in the same after-Tax position (having regard to
 the time value of money) that it would have been in if the circumstances giving
 rise to such additional payment had not arisen. For the avoidance of doubt,
 nothing in this Agreement shall require HM Treasury, a Joint Sponsor or or
 such other Indemnified Person to disclose any information in relation to its
 Tax affairs to the Company or any person acting for or on behalf of the
 Company.


	
 

	
 


	
16.12

	
Each Indemnified Person
 shall have the right under the Contracts (Rights of Third Parties) Act 1999
 (which shall apply to this Agreement only to the extent provided in this
 clause 16.12) to enforce its rights against the Company under clause 11,
 clause 12, this clause 16 or clause 19.3, provided that HM Treasury will have
 the sole conduct of any action to enforce such rights on behalf of the HMT
 Indemnified Persons, will have the sole conduct of any action to enforce such
 rights on behalf of the Indemnified Persons, will have the sole conduct of
 any action to enforce such rights on behalf of the Indemnified Persons and
 will have the sole conduct of any action to enforce such rights on behalf of
 the Indemnified Persons. Except as provided above and as provided in clause
 5.10, a person who is not a party to this Agreement has no right under the
 Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
 Agreement. HM Treasury, the Joint Sponsors, and the Company may agree to
 terminate this Agreement or vary any of its terms without the consent of any
 Indemnified Person or any other third party. Neither HM Treasury nor the
 Joint Sponsors nor will have any responsibility to any Indemnified Person
 under or as a result of this Agreement.


	
 

	
 


	
17.

	
ASSIGNMENT
 OR NOVATION


	
 

	
 


	
17.1

	
Subject to clause 17.2,
 HM Treasury shall be permitted to novate its rights and obligations under
 this Agreement (including any obligation to subscribe for New Shares) to any
 entity which is wholly owned, directly or indirectly, by HM Treasury (a “Wholly
 Owned Entity”) and each of the Company, the Joint Bookrunners and the Joint Sponsors agrees to consent
 to, and to execute and deliver all such documentation as may be necessary to
 effect, any such novation provided that such novation is effected on
 substantially the same terms as are contained in the pro forma novation
 agreement set out in Schedule 4 to this Agreement.












59


	
 

	
 

	
 

	
 


	
17.2

	
In the event that HM
 Treasury novates its rights and obligations under this Agreement pursuant to
 clause 17.1, HM Treasury shall procure that, immediately prior to any such
 Wholly Owned Entity ceasing to be wholly-owned directly or indirectly by HM
 Treasury, such rights and obligations under this Agreement shall be novated
 to HM Treasury or any other Wholly Owned Entity.


	
 

	
 


	
17.3

	
Subject to clause 17.1,
 no party to this Agreement shall be permitted to assign or novate, or purport
 to assign or novate, all or any part of the benefit of, or its rights or
 benefits under, this Agreement to any other person without the prior written
 consent of each other party.


	
 

	
 


	
18.

	
NOTICES


	
 

	
 


	
18.1

	
Any notice, claim,
 demand or other communication in connection with this Agreement shall be in
 writing and shall be sufficiently given or served if delivered or sent:


	
 

	
 


	
 

	
(A)

	
in the case of the
 Company to:


	
 

	
 

	
 


	
 

	
 

	
Lloyds Banking Group
 plc


	
 

	
 

	
Henry Duncan House


	
 

	
 

	
129 George St


	
 

	
 

	
Edinburgh


	
 

	
 

	
Scotland EH2 4LH


	
 

	
 

	
 

	
 


	
 

	
 

	
Attention: Company
 Secretary


	
 

	
 

	
 

	
 


	
 

	
(B)

	
in the case of the
 Joint Sponsors and to:


	
 

	
 

	
 


	
 

	
 

	
(i)

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Fax: 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Attention: ECM
 Syndicate


	
 

	
 

	
 

	
 


	
 

	
 

	
and

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Fax: 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Attention: Equity
 Capital Markets Group


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
With a copy to
 Transactions Legal


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Fax: 


	
 

	
 

	
 

	
 


	
 

	
 

	
and 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
 












60


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Fax: 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Attention: Legal
 Department


	
 

	
 

	
 

	
 


	
 

	
 

	
and

	
 


	
 

	
 

	
 

	
 


	
 

	
(C)

	
in the case of HM
 Treasury to:


	
 

	
 

	
 


	
 

	
 

	
Treasury Solicitor


	
 

	
 

	
1 Horse Guards Road


	
 

	
 

	
London SW1A 2HQ


	
 

	
 

	
 


	
 

	
 

	
Fax: 0207 270 4844


	
 

	
 

	
 


	
 

	
 

	
Attention: Nikhil Rathi
 (team leader, financial stability)


	
 

	
 

	
 


	
18.2

	
Any such notice or
 other communication shall be delivered by hand or sent by fax or pre-paid
 first class post. In the absence of evidence of earlier receipt, a notice or
 other communication is deemed given: (i) if delivered by hand, when left at
 the address referred to in clause 18.1; (ii) if sent by fax, when
 confirmation of its transmission has been recorded on the sender’s fax
 machine; and (iii) if sent by post, 48 hours from the time of posting.


	
 

	
 


	
18.3

	
Any notice given by HM
 Treasury or by a Joint Sponsor or Joint Bookrunner under clause 13.1 or 13.2
 may also be given to the Company’s representative referred to in clause 18.1
 or to any Director by any director or other authorised representative of HM
 Treasury or the Joint Sponsors or the Joint Bookrunners either personally or
 by telephone (to be confirmed immediately in writing) and shall have
 immediate effect.


	
 

	
 


	
18.4

	
Any party may notify
 the other party to this Agreement of a change of its name, relevant addressee,
 address or fax number for the purposes of clause 18.1 provided that such
 notification shall only be effective on:


	
 

	
 


	
 

	
(A)

	
the date specified in
 the notification as the date on which the change is to take place; or


	
 

	
 

	
 


	
 

	
(B)

	
if no date is specified
 or the date specified is less than five Business Days after the date on which
 notice is given, the date falling five Business Days after notice of any such
 change has been given.


	
 

	
 

	
 


	
19.

	
GOVERNING
 LAW AND SUBMISSION TO JURISDICTION


	
 

	
 


	
19.1

	
This Agreement and any
 non-contractual obligations arising out of or in connection with to it shall
 be governed by and construed in accordance with English Law.


	
 

	
 


	
19.2

	
Subject to clause 19.3,
 the courts of England have exclusive jurisdiction to hear and decide any suit,
 action or proceedings, and to settle any disputes (including claims for
 set-off and counterclaims), which may arise out of or in connection with this
 Agreement (respectively, “Proceedings” and “Disputes”) and, for these
 purposes, the Company 












61


	
 

	
 

	
 

	
 


	
 

	
and the Joint Sponsors
 and the Joint Bookrunners irrevocably submit to the jurisdiction of the
 courts of England.


	
 

	
 


	
19.3

	
Notwithstanding the
 provisions of clause 19.2, in the event that any Indemnified Person becomes
 subject to proceedings brought by a third party (the “Foreign Proceedings”) in
 the courts of any country other than England (including, without prejudice to
 the generality of the foregoing, in any court of competent jurisdiction in
 the United States) (the “Foreign Jurisdiction”), such Indemnified
 Person shall be entitled, without objection by the Company, to take such
 steps as are available in the Foreign Jurisdiction, in the circumstances of
 the Foreign Proceedings, including (if reasonably necessary) the issuing of
 separate proceedings, to ensure that any issues between any such Indemnified
 Person and the Company are determined in the Foreign Jurisdiction as part of,
 or as closely connected (as the procedure of the Foreign Jurisdiction will
 permit) with, the Foreign Proceedings and the Company hereby submits to the
 jurisdiction of the Foreign Jurisdiction for this purpose.


	
 

	
 


	
19.4

	
The Company and the
 Joint Sponsors and the Joint Bookrunners irrevocably waive any objection to
 the jurisdiction of any courts referred to in this clause 19.


	
 

	
 


	
19.5

	
The Company and the
 Joint Sponsors and the Joint Bookrunners irrevocably agree that a judgment
 and/or order of any court referred to in this clause 19 based on any matter
 arising out of or in connection with this Agreement (including but not
 limited to the enforcement of any indemnity) shall be conclusive and binding
 on it and may be enforced against it in any other jurisdiction, whether or
 not (subject to due process having been served on it) it participates in the
 relevant proceedings.


	
 

	
 


	
19.6

	
The Company agrees to
 appoint an agent for service of process in any Foreign Jurisdiction other
 than England in which any other party is subject to legal suit, action or
 proceedings based on or arising under this Agreement within 14 days of
 receiving written notice of such legal suit, action or proceedings and the
 request to appoint such agent for service. In the event that the Company does
 not appoint such an agent within 14 days of the notice requesting it to so,
 such other party may appoint a commercial agent for service for the Company
 on the Company’s behalf and at the Company’s expense and the Company agrees
 that subject to being notified of such appointment in writing, service upon
 such commercial agent will constitute service upon the Company.


	
 

	
 


	
19.7

	
The Company irrevocably
 appoints Lloyds TSB Bank plc of 25 Gresham Street, London EC2V 7HN to be its
 agent for the receipt of Service Documents. It agrees that any Service
 Document may be effectively served on it in connection with Proceedings in
 England and Wales by service on its agent effected in any manner permitted by
 the Civil Procedure Rules.


	
 

	
 


	
 

	
“Service Document” means a
 claim form, application notice, order, judgment or other document relating to
 any Proceedings.


	
 

	
 


	
19.8

	
If the agent at any
 time ceases for any reason to act as such, the Company shall appoint a
 replacement agent having an address for service in England or Wales and shall
 notify HM Treasury and the Joint Sponsors of the name and address of the
 replacement agent. Failing such appointment and notification, HM Treasury,
 the Joint Sponsors and shall be entitled by notice to the Company to appoint
 a replacement 












62


	
 

	
 

	
 

	
 


	
 

	
agent to act on behalf
 of the Company. The provisions of this clause applying to service on an agent
 apply equally to service on a replacement agent.


	
 

	
 


	
19.9

	
Process by which any
 Proceedings are begun in England may be served on a party by being delivered
 in accordance with clause 18. Nothing contained in this clause 19.9 affects
 the right to serve process in another manner permitted by law.












SCHEDULE 1


CERTIFICATES TO BE DELIVERED


Part A

Certificate to be delivered pursuant to clause 10.7 prior to and 

with effect immediately before Admission


[Company
Letterhead]


	
 

	
 


	
To:

	
The Commissioners of
 Her Majesty’s Treasury


	
 

	
1 Horse Guards Road


	
 

	
London SW1A 2HQ


	
 

	
 


	
 

	
Attention of: Nikhil
 Rathi


	
 

	
 


	
 

	
[Joint Sponsors]


	
 

	
 


	
 

	
[Joint Bookrunners]


	
 

	
 


	
 

	
[date]





Dear Sirs


Proposed Placing and Open Offer of [●]
Ordinary Shares of 25 pence each (the “Placing and Open Offer”)


Further to the placing
and open offer agreement between us dated 7 March 2009 as amended and restated
on [●]
2009 (the “Agreement”), we confirm that:


	
 

	
 


	
(a)

	
the FSA has agreed to
 admit the New Shares to the Official List subject only to the making of an
 announcement in accordance with paragraph 3.2.7G of the Listing Rules;


	
 

	
 


	
(b)

	
the LSE has agreed to
 admit the New Shares to trading on the LSE subject only to the making of an
 announcement in accordance with paragraph 2.1 of the Admission and Disclosure
 Standards;


	
 

	
 


	
(c)

	
it has not come to the
 notice of any Director that there is any fact or circumstance which
 constitutes a breach of any of the Warranties given under the Agreement or
 which has caused or would or might cause any of the Warranties given pursuant
 to the Agreement to become untrue, inaccurate or misleading by reference to
 the facts or circumstances existing at 8.00 a.m. on [●];


	
 

	
 


	
(d)

	
it has not come to the
 notice of any Director that a Material Adverse Effect has occurred;


	
 

	
 


	
(e)

	
it has not come to the
 notice of any Director that any other event has occurred that would entitle
 HM Treasury to terminate the Agreement;


	
 

	
 


	
(f)

	
the Resolutions, and
 the resolutions contemplated in clause 2.1(CC) have been passed without
 amendment at the GM;












64


	
 

	
 


	
(g)

	
it has not come to the
 notice of any Director that the Company is in breach of any of its
 obligations under the Agreement; and


	
 

	
 


	
(h)

	
insofar as the
 Directors are aware (subject only to the giving of this letter and excluding
 any conditions set out in clause 2.1 of the Agreement, the satisfaction of
 which has been waived by HM Treasury pursuant to clause 2.4 of the Agreement
 or by the Company pursuant to clause 2.5 of the Agreement, or which is
 treated as waived pursuant to clause 2.6 of the Agreement) the conditions set
 out in clause 2.1 of the Agreement have all been fulfilled.





For the purposes of this
letter, where in a representation, warranty or undertaking there is an express
or implied reference to the “date of this Agreement”, that reference is to be
construed as a reference to “immediately prior to Admission”.


Yours faithfully


Director


for and on behalf of

Lloyds Banking Group PLC






Part B

Certificate to be delivered pursuant to clause 10.7 prior to and with effect 

immediately before the issue of any Supplementary Prospectus 

and at each Time of Sale, if any


	
 

	
 


	
To:

	
The Commissioners of
 Her Majesty’s Treasury


	
 

	
1 Horse Guards Road


	
 

	
London SW1A 2HQ


	
 

	
 


	
 

	
Attention of: Nikhil
 Rathi


	
 

	
 


	
 

	
[Joint Sponsors]


	
 

	
 


	
 

	
[Joint Bookrunners]


	
 

	
 


	
 

	
[date]





Dear Sirs


Proposed Placing and Open Offer of up to [●]
ordinary shares of 25 pence each (the “Placing and Open Offer”)


Further to the placing
and open offer agreement between us dated 7 March as amended and restated on
[●] 2009 (the “Agreement”), we confirm that:


	
 

	
 


	
(a)

	
it has not come to the
 notice of any Directors that there is any fact or circumstance which
 constitutes a breach of any of the Warranties given under the Agreement or
 which has caused or would or might cause a Warranty to become untrue,
 inaccurate or misleading by reference to the facts or circumstances existing
 at 8.00 a.m. on [●]; and


	
 

	
 


	
(b)

	
it has not come to the
 notice of any Director that the Company is in breach of any of its
 obligations under the Agreement;


	
 

	
 


	
(c)

	
it has not come to the
 notice of any Director that a Material Adverse Effect has occurred; and


	
 

	
 


	
(d)

	
it has not come to the
 notice of any Director that any other event has occurred that would entitle
 HM Treasury to terminate the Agreement.





For the purposes of this
letter, where in a representation, warranty or undertaking there is an express
or implied reference to the “date of this Agreement”, that reference is to be
construed as a reference to “immediately prior to [●]”.


Yours faithfully



Director

for and on behalf of

Lloyds Banking Group PLC






SCHEDULE 2

DOCUMENTS TO BE DELIVERED


References in this
Schedule 2 to copies or certified copies of documents, accounts, minutes,
reports or other information shall be deemed to refer to one copy for each
party to this Agreement other than the Company.


PART I

Documents to be delivered prior to, on or as soon as practical after execution
of this Agreement


The following documents
are to be delivered by the Company to the Joint Sponsors, HM Treasury and the
Joint Bookrunners prior to, on or as soon as practical after execution of this
Agreement:


	
 

	
 


	
1.

	
certified copies of an
 extract of the minutes of a meeting of the Board (or of the duly authorised
 committee of such Board) approving and authorising, the execution of this
 Agreement and, the issue of the Press Announcement (and, if the said
 resolution is of such a committee, a certified copy of the resolution of the
 Board appointing such committee); and 


	
 

	
 


	
2.

	
certified copies of the
 Press Announcement.












67


PART II


Documents relating to the Circular to be
delivered on the Posting Date under clause ‎3.17


The following documents
are to be delivered by the Company to the Joint Sponsors, HM Treasury and,
where agreed between the Company and the Joint Bookrunners, the Joint
Bookrunners on the Posting Date, to the extent such documents are applicable
under the Listing Rules and/or Prospectus Rules, as referred to in clause 3.17:


	
 

	
 


	
1.

	
copies of the Circular
 bearing evidence of the formal approval of the FSA pursuant to the Listing
 Rules;


	
 

	
 


	
2.

	
original letters, in a
 form acceptable to the Joint Sponsors, acting reasonably, duly signed by the
 Company’s counsel in relation to paragraphs 8.4.12R and 8.4.13R of the UK
 Listing Rules and dated the Posting Date;


	
 

	
 


	
3.

	
original letters, in a
 form acceptable to the Joint Sponsors, acting reasonably, duly signed by the
 Company in relation to paragraphs 8.4.12R and 8.4.13R of the UK Listing Rules
 and dated the Posting Date;


	
 

	
 


	
4.

	
original letters, in a
 form acceptable to the Joint Sponsors, acting reasonably, duly signed by the
 Auditors in relation to paragraphs 8.4.12R(1) and 8.4.13R(3) of the UK
 Listing Rules and dated the Posting Date;


	
 

	
 


	
5.

	
certified copies of
 letters in a form acceptable to the Joint Sponsors, acting reasonably, signed
 by each of the Directors authorising the publication of the Circular and
 accepting responsibility for the Circular and including a power of attorney
 in favour of each of the other Directors;


	
 

	
 


	
6.

	
certified copies of the
 Verification Materials prepared in connection with the Circular signed by or
 on behalf of each person to whom responsibility is therein assigned and
 copies of all evidence supporting answers in the notes;


	
 

	
 


	
7.

	
certified copies of the
 resolution of the Board of Directors (or of the duly authorised Committee of
 such Board) approving and authorising the issue of the Circular and the Form
 of Proxy (and if the said resolution is of such a Committee, a certified copy
 of the resolution of the Board of Directors appointing such Committee);


	
 

	
 


	
8.

	
original copies of the
 Working Capital Report relating to the Group duly signed by
 PricewaterhouseCoopers LLP, in a form acceptable to the Joint Sponsors and ,
 acting reasonably, and dated the Posting Date;


	
 

	
 


	
9.

	
certified copies of a
 memorandum to the Directors from Linklaters LLP in connection with the
 Placing and Open Offer explaining the nature of their responsibilities and
 obligations as directors of a listed company under the Listing Rules and
 DTRs, in a form acceptable to the Joint Sponsors, acting reasonably;


	
 

	
 


	
10.

	
original copies of the
 letter, in a form acceptable to the Joint Sponsors and , acting reasonably,
 duly signed by the Auditors and dated the Posting Date:












68


	
 

	
 


	
(a)

	
providing comfort on
 there being no significant change in the financial and trading position
 (including indebtedness) of the Group since 31 December 2008;


	
 

	
 


	
(b)

	
providing comfort on
 the proper and accurate extraction of financial information relating to the
 Group contained in the Circular;


	
 

	
 


	
(c)

	
giving consent to the
 inclusion in the Circular of their respective reports and letters in the form
 and context in which they are respectively included;


	
 

	
 


	
11.

	
original copies of the
 letter, in a form acceptable to the Joint Sponsors and , acting reasonably,
 duly signed by the Company and dated the Posting Date providing comfort on
 there being no significant change in the financial and trading position
 (including indebtedness) of the Group since 31 December 2008;


	
 

	
 


	
12.

	
certified copies of any
 press release relating to the posting of the Circular;


	
 

	
 


	
13.

	
copies of the Form of
 Proxy;


	
 

	
 


	
14.

	
a certified copy of
 each of the other documents stated in the Prospectus and the Circular as
 being available for inspection; and


	
 

	
 


	
15.

	
such other documents as
 may be reasonably required by HM Treasury and/or the Joint Sponsors.












PART III

Documents relating to the Prospectus to be delivered on the Posting Date under
clause 3.18


The following documents
are to be delivered by the Company to the Joint Sponsors, HM Treasury and,
(other than where the document is solely for the purposes of the Joint Sponsors
in their capacity as sponsors), the Joint Bookrunners on the Posting Date as
referred to in clause 3.18 and the date of publication of each Supplementary
Prospectus:


	
 

	
 


	
1.

	
certified copies of the
 signed application for admission to the Official List of the New Shares;


	
 

	
 


	
2.

	
certified copies of the
 signed application for admission to trading of the New Shares on the London
 Stock Exchange; 


	
 

	
 


	
3.

	
certified copies of the
 passporting confirmation for the Prospectus issued by the competent authority
 in the Relevant Member State into which the Prospectus is being passported;


	
 

	
 


	
4.

	
certified copies of the
 completed ‘Form A’, to be submitted to the FSA in accordance with paragraph
 3.1.1(1) of the Prospectus Rules for approval of a prospectus in accordance with
 Part VI of the FSMA;


	
 

	
 


	
5.

	
certified copies of the
 Prospectus bearing evidence of the formal approval of the FSA pursuant to the
 Listing Rules;


	
 

	
 


	
6.

	
original letters, in a
 form acceptable to the Joint Sponsors and , acting reasonably, duly signed by
 the Company’s counsel in relation to paragraph 8.3.4R of the UK Listing Rules
 and dated the Posting Date;


	
 

	
 


	
7.

	
original letters, in a
 form acceptable to the Joint Sponsors and , acting reasonably, duly signed by
 the Company’s counsel in relation to paragraphs, 8.4.8R and 8.4.9R of the UK
 Listing Rules and dated the Posting Date;


	
 

	
 


	
8.

	
original letters, in a
 form acceptable to the Joint Sponsors and , acting reasonably, duly signed by
 the Company in relation to paragraphs 8.3.4R, 8.4.8R and 8.4.9R of the UK
 Listing Rules and dated the Posting Date;


	
 

	
 


	
9.

	
original letters, in a
 form acceptable to the Joint Sponsors and , acting reasonably, duly signed by
 the Auditors in relation to paragraphs 8.4.8(1), 8.4.8(2) and 8.4.9(3) of the
 UK Listing Rules and dated the Posting Date;


	
 

	
 


	
10.

	
original letters, in a
 form acceptable to the Joint Sponsors and , acting reasonably, signed by each
 of the Directors authorising the publication of the Prospectus, accepting
 responsibility for information contained in the Prospectus and any
 Supplementary Prospectus and acknowledging their understanding of their
 responsibilities under the UK Listing Rules and the Disclosure Rules in
 accordance with paragraph 8.3.4R of the UK Listing Rules and dated the
 Posting Date;












70


	
 

	
 

	
 


	
11.

	
certified copies of the
 Verification Materials prepared in connection with the Prospectus signed by
 or on behalf of each person to whom responsibility is therein assigned and
 copies of all evidence supporting answers in the notes;


	
 

	
 


	
12.

	
certified copies of the
 resolution of the Board of Directors (or of the duly authorised Committee of
 such Board) approving and authorising the issue of the Prospectus (and if the
 said resolution is of such a Committee, a certified copy of the resolution of
 the Board of Directors appointing such Committee);


	
 

	
 


	
13.

	
to the extent not
 provided under Part II of Schedule 2, original copies of any pro forma
 financial information report incorporated in the Prospectus, duly signed by
 the Auditors and dated the Posting Date;


	
 

	
 


	
14.

	
certified copies of
 each of the documents stated in the Prospectus as being available for
 inspection and incorporated by reference into the Prospectus;


	
 

	
 


	
15.

	
original copies of the
 letter, in a form acceptable to the Joint Sponsors and , acting reasonably,
 duly signed by the Auditors and dated the Posting Date:


	
 

	
 


	
 

	
(a)

	
providing comfort on
 there being no significant change in the financial and trading position
 (including indebtedness) of the Group since 31 December 2008;


	
 

	
 

	
 


	
 

	
(b)

	
providing comfort on
 the proper and accurate extraction of financial information relating to the
 Group contained in the Prospectus;


	
 

	
 

	
 


	
 

	
(c)

	
providing comfort on
 the financial reporting procedures of the Company and the Group;


	
 

	
 

	
 


	
 

	
(d)

	
providing comfort on UK
 taxation information as contained in the Prospectus;


	
 

	
 

	
 


	
 

	
(e)

	
providing comfort on
 the capitalisation and indebtedness statement included in the Prospectus;


	
 

	
 

	
 


	
 

	
(f)

	
providing comfort on
 omission of information from the Prospectus; and


	
 

	
 

	
 


	
 

	
(g)

	
giving consent to the inclusion
 in the Prospectus of their respective reports and letters in the form and
 context in which they are respectively included;


	
 

	
 

	
 


	
16.

	
original copies of
 letters, in a form acceptable to the Joint Sponsors and , acting reasonably,
 duly signed by the Auditors and dated the same date as the Prospectus on the
 matters contemplated in the U.S. Statement of Auditing Standards No. 72 (and
 including four original copies of a “SAS 72 look-a-like” letter) with respect
 to the financial statements and certain financial information relating to the
 Group contained, or incorporated by reference, in the Prospectus;


	
 

	
 


	
17.

	
original copies of the
 letter, in a form acceptable to the Joint Sponsors and , acting reasonably,
 duly signed by the Company and dated the Posting Date providing comfort on
 there being no significant change in the financial and trading position
 (including indebtedness) of the Group since 31 December 2008;












71


	
 

	
 


	
18.

	
original copies of a
 rule 10b-5 disclosure letter and no-registration, tax disclosure and
 “investment company” opinions from Linklaters LLP (as U.S. counsel for the
 Company), and a rule 10b-5 disclosure letter and no-registration opinion from
 US Counsel for the Joint Bookrunners, in each case, in a form acceptable to
 the Joint Sponsors and and to HM
 Treasury, acting reasonably;


	
 

	
 


	
19.

	
certified copies of a
 memorandum to the Directors from Linklaters LLP in connection with the
 Placing and Open Offer explaining the nature of their responsibilities and
 obligations as directors of a listed company under the Listing Rules and
 DTRs, in a form acceptable to the Joint Sponsors and , acting reasonably;


	
 

	
 


	
20.

	
certified copies of the
 registrar’s agreement entered into by the Company with the Registrar in
 relation to the Placing and Open Offer; 


	
 

	
 


	
21.

	
certified copies of the
 press release relating to the posting of the Prospectus; 


	
 

	
 


	
22.

	
certified copies of the
 Memorandum and Articles of Association of the Company;


	
 

	
 


	
23.

	
certified copies of any
 power of attorney pursuant to which any Director signed any of the documents
 mentioned above in a form acceptable to the Joint Sponsors and , acting
 reasonably; 


	
 

	
 


	
24.

	
a written English
 opinion in a form acceptable to the Joint Bookrunners and to HM Treasury,
 acting reasonably, from Linklaters LLP (as English counsel for the Company);


	
 

	
 


	
25.

	
a written Scottish
 opinion in a form acceptable to the Joint Bookrunners and to HM Treasury,
 acting reasonably, from Dundas & Wilson CS LLP (as Scottish counsel for
 the Company) to the extent reasonably required;


	
 

	
 


	
26.

	
a letter to the Joint
 Bookrunners dated the Posting Date from the Auditors relating to the Working
 Capital Report, the financial information contained in the Prospectus and any
 current trading statements in the Prospectus, in a form acceptable to the
 Joint Sponsors and , acting reasonably;


	
 

	
 


	
27.

	
original copies of the
 Working Capital Report relating to the Group duly signed by
 PricewaterhouseCoopers LLP, in a form acceptable to the Joint Sponsors and ,
 acting reasonably, and dated the Posting Date; and


	
 

	
 


	
28.

	
such other documents as
 may be reasonably required by HM Treasury, the Joint Bookrunners and/or the
 Joint Sponsors.












72


PART IV

Documents to be delivered immediately prior to Admission and at each Time of
Sale, if any


The following documents
are to be delivered by the Company to the Joint Sponsors, HM Treasury and,
where agreed between the Company and the Joint Bookrunners, the Joint
Bookrunners (other than where the document is solely for the purposes of the
Joint Sponsors in their capacity as sponsors) not later than 5.00 p.m. on the
Dealing Day immediately preceding the proposed date of Admission or Time of
Sale, if any (where indicated):


	
 

	
 


	
1.

	
certified copies of the
 Resolutions, and the resolutions contemplated in clause 2.1(CC);


	
 

	
 


	
2.

	
certified copies of the
 resolution of the Board (or of the duly authorised committee of the Board)
 provisionally allotting the New Shares (and, if the said resolution is of
 such a committee, a certified copy of the resolution of the Board appointing
 such committee (if not previously delivered to the HM Treasury, the Joint
 Sponsors and));


	
 

	
 


	
3.

	
certified copies of the
 resolution of the Board of Directors (or of the duly authorised committee of
 the Board) approving the redemption of the Preference Shares (and, if the
 said resolution is of such a committee, a certified copy of the resolution of
 the Board appointing such committee (if not previously delivered to HM
 Treasury, to the Joint Sponsors and));


	
 

	
 


	
4.

	
original copies of a
 letter addressed to HM Treasury, to
 the Joint Sponsors and to in the form
 set out in Part A of Schedule 1 dated as of the date of Admission (such
 letter also to be delivered at each Time of Sale, if any); 


	
 

	
 


	
5.

	
original copies of
 updating versions of the letters referred to in paragraphs 4 and 12 of Part
 II of this Schedule 2 and paragraphs 7, 8, 15, 16, 17 and 18 of Part III of
 this Schedule 2 to the extent in each case such letters related to the
 Prospectus and written opinions in the form previously provided to HM
 Treasury, the Joint Sponsors and to
 from Linklaters LLP and from Solicitors to the Joint Sponsors and
 Joint Bookrunners, all dated the date of Admission (and, in the case of the
 items referred to in paragraph 18, also referencing each Time of Sale, if
 any); 


	
 

	
 


	
6.

	
as of each Time of
 Sale, if any, four original copies of “bring down” letters with respect to
 the matters referred to in paragraph 12 of Part II of this Schedule 2 and
 paragraphs 15, and 16 of Part III of this Schedule 2; and


	
 

	
 


	
7.

	
such other documents as
 may be reasonably required by HM Treasury, the Joint Bookrunners and/or the
 Joint Sponsors.


	
 

	
 


	
 

	
Note: It is agreed that, other than in respect
 of the Linklaters LLP and Solicitors to the Joint Sponsors and Joint
 Bookrunners opinions, the parties will discuss (acting reasonably) the
 extent, to which it is necessary and customary to update all of the documents
 referred to in paragraph 5.












SCHEDULE 3

WARRANTIES


PART I

Representations, warranties and undertakings given under clauses 10.1 and 10.1A


	
 

	
 


	
1.

	
Compliance


	
 

	
 


	
1.1

	
Each member of the
 Group, other than those undertakings in which the Company holds a proportion
 of the capital that is not likely to have a significant effect on the
 assessment of its own assets and liabilities, financial position or profits
 and losses, has been duly incorporated and is validly existing as a company
 with limited liability under the laws of the country of its incorporation
 with full corporate power and authority to own, lease and operate the
 properties which it owns, leases and operates and to own its other assets and
 carry on its business as presently carried on and as intended to be carried
 on in all material respects as described in the Prospectus, when published.


	
 

	
 


	
1.2

	
All licences,
 permissions, authorisations and consents which are material for carrying on
 the business of the Group have been obtained and are in full force and effect
 and, so far as the Company is aware, there are no circumstances which might
 lead to any of such licences, permissions, authorisations and consents being
 revoked, suspended, varied or refused renewal to an extent which would, or
 would be reasonably likely to, be (singly or in the aggregate) material in
 the context of the Placing and Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or Placees, the redemption of the
 Preference Shares, Admission or post-Admission dealing in the Ordinary
 Shares.


	
 

	
 


	
1.3

	
Save as would not be
 (singly or in the aggregate) material in the context of the Placing and Open
 Offer, any subscription for New Shares by HM Treasury, Ordinary Shareholders
 or Placees, the redemption of the Preference Shares, Admission or
 post-Admission dealings in the Ordinary Shares, all sums due in respect of
 the issued share capital of the Company at the date of this Agreement have
 been paid to and received by the Company. No owner or holder of any of the
 share capital of the Company shall, with effect from Admission, have any
 right, in his capacity as such, in relation to the Group other than as set
 out in the memorandum and articles of association of the Company.


	
 

	
 


	
1.4

	
Save as would not be
 (singly or in the aggregate) material in the context of the Placing and Open
 offer, any subscription for New Shares by HM Treasury, Ordinary Shareholders
 or Placees, the redemption of the Preference Shares, Admission or
 post-Admission dealings in the Ordinary Shares, the Company is the beneficial
 owner free from all Adverse Interests of the shares it holds in each of its
 subsidiary undertakings.


	
 

	
 


	
1.5

	
Save as would not be
 (singly or in the aggregate) material in the context of the Placing and Open
 Offer, any subscription for New Shares by HM Treasury, Ordinary Shareholders
 or Placees, the redemption of the Preference Shares, Admission or
 post-Admission dealings in the Ordinary Shares, the Company and the Directors
 have at all times complied with the provisions of the Company’s memorandum
 and articles of association and the Companies Acts and, subject to the
 passing of the Resolutions, have or will have the right, power and authority
 under the memorandum and articles of association of the Company, or pursuant
 to resolution passed in general meeting, to enter into and perform this
 Agreement (including, without limitation, the power to pay 












74


	
 

	
 


	
 

	
commissions, fees,
 costs and expenses provided for in this Agreement), to make the Placing and
 Open Offer, to allot and issue the New Shares in certificated and uncertificated
 form, to redeem the Preference Shares, to issue the Issue Documents in the
 manner proposed without any sanction or consent by members of the Company or
 any class of them and, subject to Admission, there are no other consents,
 authorisations or approvals required by the Company in connection with the
 entering into and the performance of this Agreement and the actions referred
 to in this paragraph 1.5 which have not been irrevocably and unconditionally
 obtained. The Company’s existing Ordinary Shares are participating securities
 in, and have not been suspended from, CREST.


	
 

	
 


	
1.6

	
Save as would not be
 (singly or in the aggregate) material in the context of the Placing and Open
 Offer, any subscription for New Shares by HM Treasury, Ordinary Shareholders
 or Placees, the redemption of the Preference Shares, Admission or
 post-Admission dealings in the Ordinary Shares, the allotment and issue of
 the New Shares, the issue and distribution of the Issue Documents and any
 other document by or on behalf of the Company in connection with Admission,
 the Placing and Open Offer or the redemption of the Preference Shares will
 comply in all material respects with all agreements to which any Group
 Company is a party or by which any such Group Company is bound and will comply
 with: (a) all applicable laws and regulations of the United Kingdom
 (including, without limitation, the Companies Acts, FSMA, the Listing Rules,
 the Prospectus Rules, the DTRs and the Admission and Disclosure Standards)
 and all applicable United States laws and regulations and (in all material
 respects) with all applicable laws and regulations of any relevant
 jurisdiction; (b) the memorandum and articles of association of the Company;
 and (c) when published, the Working Capital Report; and will not exceed or
 infringe any restrictions or the terms of any contract, indenture, security,
 obligation, commitment or arrangement by or binding upon the board of
 directors of any Group Company or their respective properties, revenues or
 assets or result in the implementation of any right of pre emption or any
 other material provision thereof, or result in the imposition or variation of
 any material rights or obligations of any Group Company.


	
 

	
 


	
1.7

	
The statement set out
 in clause 2.1(J) is true and accurate and not misleading.


	
 

	
 


	
1.8

	
The New Shares will,
 upon allotment, be free from all Adverse Interests and will rank pari passu
 in all respects with the existing issued shares in the issued share capital
 of the Company.


	
 

	
 


	
1.9

	
The Company has
 complied in all material respects with the requirements of Euroclear and the
 Regulations.


	
 

	
 


	
1.10

	
No member of the Group
 or any person acting on its behalf has taken, directly or indirectly, any
 action designed to or which has constituted or which might reasonably be
 expected to cause or result in stabilisation or manipulation of the price of
 any security of the Company.


	
 

	
 


	
1.11

	
The Company has not
 paid or agreed to pay to any person any compensation for soliciting another
 to purchase any New Shares (except as contemplated in this Agreement).












75


	
 

	
 

	
 


	
1.12

	
All information
 provided by the Company, and any of its subsidiary undertakings or any of its
 or their officers or employees in connection with the Placing, Open Offer,
 the APS, the Class B Shares and at the Due Diligence Meetings to HM Treasury
 and/or to the Joint Sponsors and/or and/or the Auditors in connection with
 its or their due diligence enquiries or similar requests for information has
 been supplied in good faith and such information was when supplied, and
 remains, true and accurate in all material respects and no further
 information requested has been withheld, the absence of which might
 reasonably be considered to be material to such due diligence enquiries or
 requests for information.


	
 

	
 


	
2.

	
Announcements


	
 

	
 


	
2.1

	
The Press Announcement
 does not contain any untrue statement of a material fact or omit to state a
 material fact necessary in order to make the statements therein, in light of
 the circumstances under which they were made, not misleading, provided that
 this warranty shall not cover information contained in the Press Announcement
 which was furnished in writing to the Company by the Joint Sponsors expressly
 for use therein; and all expressions of opinion, intention, belief or
 expectation of the Company or the Directors contained in the Press
 Announcement are truly and honestly held and made on reasonable grounds after
 due and careful enquiry.


	
 

	
 


	
2.2

	
With respect to all
 Previous Announcements, all statements of fact contained therein were at the
 date of the relevant Previous Announcement and, save to the extent corrected,
 amended or supplemented in any document or announcement issued or made by or
 on behalf of the Company or any member of the Group subsequent thereto,
 remain true and accurate in all material respects and not misleading in any
 material respect and all estimates, expressions of opinion or intention or
 expectation of the Directors contained therein were made on reasonable
 grounds and were honestly held by the Directors and were fairly based and there
 were no facts known (or which could on reasonable enquiry have been known by
 the Directors) the omission of which would make (i) any material statement of
 fact, or (ii) any estimate or statement or expression of opinion, intention
 or expectation in any of the Previous Announcements misleading and all
 Previous Announcements complied in all material respects with the memorandum
 and articles of association of the Company, the Listing Rules, the DTRs, the
 Prospectus Rules, the Companies Acts, FSMA, all applicable rules and
 requirements of the London Stock Exchange and the FSA, all applicable US laws
 and regulations and (in all material respects) all other applicable
 requirements of statute, statutory regulation or any regulatory body. There
 is no existing profit forecast outstanding in respect of the Company, the
 Group taken as a whole, or any member thereof.


	
 

	
 


	
3.

	
Accounts


	
 

	
 


	
3.1

	
The Accounts:


	
 

	
 

	
 


	
 

	
(A)

	
have been prepared and
 audited in accordance and comply with IFRS, the Companies Acts and all
 applicable laws and regulations;


	
 

	
 

	
 


	
 

	
(B)

	
give a true and fair
 view of the financial condition and of the state of affairs of the Group as
 at the end of each of the relevant financial periods (including the 












76


	
 

	
 

	
 


	
 

	
 

	
Accounts Date) and of
 the profit, loss, cash flow and changes in equity of the the Group for such
 periods; and


	
 

	
 

	
 


	
 

	
(C)

	
either made proper
 provision for, or, where appropriate, in accordance with IFRS, include a note
 in respect of all material liabilities or commitments, whether actual,
 deferred or contingent, of the Group.


	
 

	
 

	
 


	
3.2

	
The Directors have
 established procedures which provide a reasonable basis for them to make
 proper judgements on an ongoing basis as to the financial position and
 prospects of the Company and the Group.


	
 

	
 

	
 


	
3.3

	
There are no, and
 during the past four years have been no: (i) material weaknesses in the
 internal controls over financial reporting (whether or not remediated) of the
 Company or the Group; (ii) changes in the internal controls over financial
 reporting of the Company or the Group that have materially adversely
 affected, or would be reasonably likely to materially adversely affect, the
 internal controls over financial reporting of the Company or the Group; or
 (iii) material fraud that involves any current member of management of the
 Company or (so far as the Company is aware) of any other member of the Group
 and no material fraud that involves any employee of the Company or (so far as
 the Company is aware) of any other member of the Group.


	
 

	
 

	
 


	
4.

	
Guarantees, indemnities, borrowings and
 default


	
 

	
 

	
 


	
4.1

	
Save for: 


	
 

	
 

	
 


	
 

	
(A)

	
guarantees or
 indemnities given by any member of the Group in the ordinary course of
 business; and 


	
 

	
 

	
 


	
 

	
(B)

	
any guarantees,
 indemnities or other similar arrangements given by the Company or any Group
 Company to HM Treasury or any other UK government department and/or the Joint
 Sponsors, 


	
 

	
 

	
 


	
 

	
no member of the Group
 has given or has agreed to give any guarantee or indemnity or similar
 obligation in favour of a third party and no member of the Group has any
 current or known future liability, howsoever arising which, in any of the
 foregoing cases, would, or would be reasonably likely to, be (singly or in
 the aggregate) material in the context of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or Placees,
 the redemption of the Preference Shares, Admission or post-Admission dealings
 in the Ordinary Shares.


	
 

	
 

	
 


	
4.2

	
No event has occurred
 nor have any circumstances arisen (and the making and completion of the
 Placing and Open Offer itself, the redemption of the Preference Shares and
 the allotment and issue of the New Shares will not give rise to any such
 event or circumstance) so that any person is or would be entitled, or could,
 with the giving of notice or lapse of time or the fulfilment of any condition
 or the making of any determination, become entitled, to require repayment
 before its stated maturity of, or to take any step to enforce any security
 for, any indebtedness of any member of the Group and no person to whom any
 indebtedness, of any member of the Group which is payable on demand is owed
 has demanded or threatened to demand repayment of, or taken or threatened to
 take any step to enforce any guarantee, indemnity or other 












77


	
 

	
 

	
 


	
 

	
security for, the same,
 which, in any of the foregoing cases, would, or would be reasonably likely
 to, be (singly or in the aggregate) material or have material consequences in
 each case in the context of the Placing and Open Offer, any subscription for
 New Shares by HM Treasury, Ordinary Shareholders or Placees, the redemption
 of the Preference Shares, Admission or post-Admission dealings in the
 Ordinary Shares or the business of the Group.


	
 

	
 


	
4.3

	
There are no companies,
 undertakings, partnerships or joint ventures in existence in which any member
 of the Group has an ownership interest but whose results are not consolidated
 with the results of the Group, but whose default would affect the
 indebtedness or increase the contingent liabilities of the Group to an extent
 which would, or would be reasonably likely to, be (singly or in the
 aggregate) material in the context of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or Placees,
 the redemption of the Preference Shares, Admission or post-Admission dealings
 in the Ordinary Shares.


	
 

	
 

	
 


	
4.4

	
No event or
 circumstance exists, has occurred or arisen or, so far as the Company is
 aware, is about to occur which constitutes or results in, or would with the
 giving of notice and/or lapse of time and/or the making of a relevant
 determination, constitute, or result in, termination of or a default or the
 acceleration or breach of any obligation under any agreement, instrument or
 arrangement to which any member of the Group is a party or by which any such
 member of the Group or any of its properties, revenues or assets are bound,
 in any of the foregoing cases to an extent which would, or would be
 reasonably likely to, be (singly or in the aggregate) material in the context
 of the Placing and Open Offer, any subscription for New Shares by HM
 Treasury, Ordinary Shareholders or Placees, the redemption of the Preference
 Shares, Admission or post-Admission dealings in the Ordinary Shares.


	
 

	
 

	
 


	
5.

	
Taxation


	
 

	
 

	
 


	
 

	
No stamp duty, SDRT or
 other issuance or transfer taxes or similar duties are payable in connection
 with the allotment, issue and delivery of the New Shares by the Company in
 accordance with the terms of this Agreement or otherwise in connection with
 the making or implementation of the Placing and Open Offer or the redemption
 of the Preference Shares, save for any stamp duty or SDRT payable under
 sections 67, 70, 93 or 96 of the Finance Act 1986 in relation to the issue of
 the New Shares.


	
 

	
 

	
 


	
6.

	
Intellectual property


	
 

	
 

	
 


	
6.1

	
Except to an extent
 that would not (singly or in the aggregate) be material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or Placees, the redemption of the Preference Shares,
 Admission or post-Admission dealings in the Ordinary Shares, and so far as
 the Company is aware, the Group does not infringe the Intellectual Property
 Rights of any third party nor so far as the Company is aware does any third
 party infringe the Intellectual Property Rights owned or used by the Group.


	
 

	
 

	
 


	
6.2

	
All material
 Intellectual Property Rights used by the Group are either legally or
 beneficially owned by the Group in all material respects or are used under a
 licence and are not subject to any Adverse Interests to an extent that would
 or might (singly or in the 












78


	
 

	
 

	
 


	
 

	
aggregate) be material
 in the context of the Placing and Open Offer, any subscription for New Shares
 by HM Treasury, Ordinary Shareholders or Placees, the redemption of the
 Preference Shares, Admission or post-Admission dealings in the Ordinary
 Shares.


	
 

	
 

	
 


	
6.3

	
Save as would not
 (singly or in the aggregate) be material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares, (i) all Intellectual
 Property Rights registered in the name of a member of the Group (if any) are
 beneficially owned by it and subsisting and if granted not subject to revocation
 and (ii) all requisite registration and renewal fees in respect thereof have
 been duly and timeously paid.


	
 

	
 

	
 


	
6.4

	
Save as would not
 (singly or in the aggregate) be material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares, (i) all Intellectual
 Property Rights owned and used or reasonably likely to be used by the Group and
 capable of legal protection are subject to appropriate and enforceable
 protection (including, where reasonably appropriate, by registration), and
 (ii) so far as the Company is aware there is no restriction of the rights of
 the Group to use any Intellectual Property Rights owned by or licensed to the
 Company to engage in any of the activities presently or proposed to be
 undertaken by it.


	
 

	
 


	
7.

	
Insurance


	
 

	
 

	
 


	
 

	
Save would not be
 (singly or in the aggregate) material in the context of the Placing and Open
 Offer, any subscription for New Shares by HM Treasury, Ordinary Shareholders
 or Placees, the redemption of the Preference Shares, Admission or
 post-Admission dealings in the Ordinary Shares, the Group is insured to
 adequate levels against all risks which the Company reasonably believes to be
 commonly insured against by persons carrying on the same or similar
 businesses as those carried on by the Group and against all risks against
 which the Group might reasonably be expected to insure in the particular circumstances
 of the businesses carried on by each member of the Group, all such insurances
 are in full force and effect and to the best knowledge, information and
 belief of the Company, there are no circumstances which could render any such
 insurances void or voidable and there is no material insurance claim,
 pending, threatened or outstanding against any member of the Group and all
 premiums due in respect of all insurances have been duly paid.


	
 

	
 

	
 


	
8.

	
Rating


	
 

	
 

	
 


	
 

	
Except as publicly
 announced the Company has not received notice of any intended or potential
 downgrading of the rating assigned to the Company’s (or any other member of
 its Group) credit or debt by a ratings agency.


	
 

	
 

	
 


	
9.

	
Insolvency


	
 

	
 

	
 


	
9.1

	
No member of the Group
 is unable to pay its debts within the meaning of section 123 of the
 Insolvency Act 1986 or is otherwise insolvent.












79


	
 

	
 

	
 


	
9.2

	
Save in the context of
 a solvent voluntary winding up or otherwise as would not (singly or in the
 aggregate) be material in the content of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, the redemption of the Preference
 Shares, Admission or post-Admission dealings in the Ordinary Shares, no order
 has been made, petition presented or resolutions passed for the winding up of
 any member of the Group and no meeting has been convened for the purpose of
 winding up any member of the Group. No member of the Group has been a party
 to any transaction which could be avoided in a winding up.


	
 

	
 

	
 


	
9.3

	
No steps have been
 taken for the appointment of an administrator or receiver (including an
 administrative receiver) of all or any part of the assets of any member of
 the Group.


	
 

	
 

	
 


	
9.4

	
By reason of actual or
 anticipated financial difficulties, no member of the Group has commenced
 negotiations with its creditors or any class of its creditors with a view to
 rescheduling any of its indebtedness or has made or proposed any arrangement
 or composition with its creditors or any class of its creditors.


	
 

	
 

	
 


	
10.

	
Regulatory


	
 

	
 

	
 


	
10.1

	
Each member of the
 Group required to be licensed (as a bank or otherwise) is duly licensed in
 its jurisdiction of incorporation and domicile and, except as would not
 reasonably be expected to be material, is duly licensed or authorised in each
 other jurisdiction where it is required to be licensed or authorised to
 conduct its business.


	
 

	
 

	
 


	
10.2

	
Save as otherwise as
 would not (singly or in the aggregate) be material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or Placees, the redemption of the Preference Shares,
 Admission or post-Admission dealings in the Ordinary Shares, the Company is
 not subject to any special or additional surveillance or supervision by the
 FSA or to any special or additional reporting requirements in relation to its
 assets, liquidity position, funding position or otherwise and the Company has
 not been subject to any visits, beyond customary visits, by the FSA.


	
 

	
 

	
 


	
10.3

	
The operations of each
 member of the Group are and have been conducted at all times in material
 compliance with the money laundering statutes of all jurisdictions, the rules
 and regulations thereunder and any related or similar rules, regulations or
 guidelines, issued, administered or enforced by any governmental agency
 (collectively, the “Money Laundering Laws”) and no material
 action, suit or proceeding by or before any court or governmental agency,
 authority or body or any arbitrator involving any member of the Group with
 respect to the Money Laundering Laws is pending or, to the best knowledge of
 the Company, threatened.


	
 

	
 

	
 


	
10.4

	
Except as previously
 disclosed by the Company, none of the Company, any other member of the Group
 or, to the knowledge of the Company, any director, officer, agent, employee
 or Affiliate of the Company is currently subject to any sanctions
 administered by the U.S. Department of the Treasury (“OFAC”) or any similar
 sanctions imposed by the European Union, the United Nations or any other
 body, governmental or other, to which the Company or ay of its Affiliates is
 subject (collectively, “other economic sanctions”); and the
 Company will not directly or indirectly use the proceeds of the Placing and
 Open Offer, or lend, contribute or otherwise make available such proceeds 












80


	
 

	
 

	
 


	
 

	
to any other member of
 the Group, joint venture partner or other person or entity, for the purpose
 of financing the activities of any person currently subject to any sanctions
 administered by OFAC or any other economic sanctions.


	
 

	
 

	
 


	
10.5

	
None of the Company,
 any other member of the Group or, to the knowledge of the Company, any
 director, officer, agent, employee or Affiliate of the Company, is aware of
 or has taken any action, directly or indirectly, that could result in a
 violation by such persons of the U.S. Foreign Corrupt Practices Act of 1977,
 as amended, or the rules and regulations thereunder (the FCPA) (including,
 without limitation, making use of the mail or any means or instrument of
 interstate commerce corruptly in furtherance of an offer, payment, promise to
 pay or authorisation of the payment of any money, or other property, gift,
 promise to give, or authorisation of the giving of anything of value to any
 “foreign official” (as such term is defined in the FCPA) or any foreign
 political office, in contravention of the FCPA), the OECD Convention on
 Bribery of Foreign Public Officials in International Business Transactions
 (the OECD Convention) or any similar law or regulation, to which the Company,
 any other member of the Group, any director, officer, agent, employee of any member
 of the Group or, to the knowledge of the Company, any Affiliate is subject;
 and the Company, each member of the Group and, to the knowledge of the
 Company, its Affiliates have conducted their businesses in compliance with
 the FCPA, the OECD Convention and any applicable similar law or regulation
 and have instituted and maintain policies and procedures designed to ensure,
 and which are reasonably expected to continue to ensure, continued compliance
 therewith.


	
 

	
 

	
 


	
11.

	
United States Securities Regulations


	
 

	
 

	
 


	
11.1

	
The Company is a
 “foreign issuer” (as defined in Regulation S under the Securities Act). 


	
 

	
 

	
 


	
11.2

	
The Company reasonably
 believes that there is no “substantial US market interest” (as defined in
 Rule 902(j) of Regulation S under the Securities Act) in any of the New
 Shares.


	
 

	
 

	
 


	
11.3

	
The Company does not
 believe that it is and does not expect to become (whether as a result of the
 receipt and application of the proceeds of the sale of the New Shares or
 otherwise) a “passive foreign investment company” within the meaning of
 section 1297 of the US Internal Revenue Code of 1986.


	
 

	
 

	
 


	
11.4

	
The Company is not,
 and, immediately after giving effect to the offering and sale of the New
 Shares and the application of the proceeds thereof as set forth in the Draft
 Prospectus and, when published, the Prospectus, will not be, an “investment
 company” as such term is defined in the US Investment Company Act of 1940.


	
 

	
 

	
 


	
11.5

	
Other than HM Treasury,
 there are no persons with registration rights or other similar rights to have
 any shares registered by the Company under the Securities Act.


	
 

	
 

	
 


	
11.6

	
During the period of
 six months after Admission, the Company will not, and will not permit any of
 its Affiliates to, resell any New Shares which constitute “restricted
 securities” under Rule 144 that have been reacquired by any of them other
 than in transactions that meet the applicable requirements of Regulation S.












PART II


Representations,
warranties and undertakings given on the Posting Date, on the date of

publication of each Supplementary Prospectus, at each Time of Sale, if any, and

immediately prior to Admission


	
 

	
 


	
1.

	
The Issue Documents


	
 

	
 


	
1.1

	
The Issue Documents
 contain all particulars and information required by, and comply in all
 respects with the memorandum and articles of association of the Company, the
 Companies Acts, FSMA, the Listing Rules (including, without limitation,
 Chapters 10, 11 and 13 of the Listing Rules (as applicable)), the DTRs, the
 Prospectus Rules, the City Code on Takeovers and Mergers, all applicable
 rules and requirements of the London Stock Exchange, the FSA and all
 applicable US laws and regulations and all other applicable requirements of
 statute, statutory regulation or any regulatory body.


	
 

	
 


	
1.2

	
The Issue Documents
 (and any amendments or supplements thereto) do not and will not contain any
 untrue statement of a material fact or omit to state any material fact
 necessary to make the statements therein, in the light of the circumstances
 under which they were made, not misleading.


	
 

	
 


	
1.3

	
All expressions of
 opinion, intention or expectation contained in any Issue Document are, and
 were on the respective dates of such Issue Document, honestly held by the
 Directors and are fairly based and have been made on reasonable grounds after
 due and careful consideration and enquiry.


	
 

	
 


	
1.4

	
There are no facts or
 matters known, or which could on reasonable enquiry have been known, to the
 Company or any of the Directors and which are omitted from any Issue
 Document, the omission of which would make any statement of fact or
 expression of opinion, intention or expectation contained in a Issue Document
 misleading.


	
 

	
 


	
1.5

	
Having regard to the
 particular nature of the Company, the Group and the Company’s share capital
 and the other matters referred to in section 87A of the FSMA, the Issue
 Documents contain all information about the Group, which is or might be
 material for disclosure to potential investors and their professional
 advisers and which they would reasonably require and reasonably expect to find
 there for the purpose of making an informed assessment of the matters
 specified in section 87A(2) of the FSMA.


	
 

	
 


	
1.6

	
All statements made or
 information provided by or on behalf of and with the knowledge of the Company
 to the FSA or to any of the Joint Sponsors or to (including in connection
 with any application for certain information to be omitted from the
 Prospectus and/or the Circular), are (or, when made, will be) true and
 accurate in all material respects and are not (or, when made, will not be) misleading
 and there are no facts which have not been disclosed to the FSA in connection
 therewith which by their omission make any such statements misleading or
 which are material for disclosure to the FSA. All expressions of opinion,
 intention, belief or expectation made by or on behalf of and with the
 knowledge of the Company to the FSA or to any of the Joint Sponsors or to
 (including in connection with any application for certain information to be
 omitted from the Prospectus and/or the Circular), are (or, when made, will
 be) truly and 












82


	
 

	
 


	
 

	
honestly held and have
 been (or, when made, will be) made on reasonable grounds after due and
 careful consideration and enquiry.


	
 

	
 


	
1.7

	
There is no fact or
 circumstance which is not disclosed with sufficient prominence in the Issue
 Documents which ought to be taken into account by the UK Listing Authority in
 considering the application for listing of the New Shares.


	
 

	
 


	
1.8

	
The Placing and Open
 Offer (including without limitation, the creation, allotment and issue of the
 New Shares and the publication and distribution of the Issue Documents) has
 been and will be conducted in all material respects in accordance with the
 terms and conditions of the Issue Documents and the Company has complied and
 will comply with all laws, rules and regulations applicable to the Placing
 and Open Offer in each jurisdiction in which the New Shares are offered.


	
 

	
 


	
1.9

	
The Verification
 Materials have been prepared with due care and attention by persons who,
 collectively, have appropriate knowledge and responsibility to enable them to
 provide appropriate supporting materials for the statements in the Issue
 Documents in respect of which they are compiled. 


	
 

	
 


	
2.

	
Provision of Information


	
 

	
 


	
2.1

	
The pro forma financial
 information on the Group incorporated by reference in the Prospectus has been
 duly and carefully prepared on the bases incorporated by reference in the
 Prospectus, in accordance with the Prospectus Rules and is presented on a
 basis consistent with the accounting principles, standards and practices
 normally applied by the Company. 


	
 

	
 


	
2.2

	
The summary and
 selected financial information on the Group set out in the Prospectus has
 been duly and carefully extracted from the Accounts and has been properly
 compiled on a basis consistent with the accounting policies applied in the
 Accounts.


	
 

	
 


	
2.3

	
The capitalisation and
 indebtedness table in relation to the Group set out in the Prospectus has
 been properly compiled on a basis that is consistent with the accounting
 policies applied in the Accounts. 


	
 

	
 


	
2.4

	
No member of the Group
 has any off balance sheet financing, investment or liability material for
 disclosure in the Prospectus that is not so fairly disclosed.


	
 

	
 


	
2.5

	
There are no facts or
 circumstances, which have not been included the Prospectus or any other
 information provided to the UK Listing Authority, which would cause the UK
 Listing Authority not to be satisfied that the Company’s capital adequacy is
 regulated by the FSA or suitably regulated by another regulatory body.


	
 

	
 


	
2.6

	
The particulars of the
 employees schemes contained in the Prospectus or, when published, any
 Supplementary Prospectus and, in particular, the information as to the dates
 on which options or other rights may be exercised and the number of options
 or other rights granted (conditionally or otherwise) on or before the date of
 this Agreement are accurate in all material respects and not misleading.












83


	
 

	
 


	
2.7

	
The share capital of
 the Company will, upon Admission, be as described in the Prospectus in all
 material respects; all of the New Shares will, upon Admission, be duly and
 validly allotted, authorised and issued and fully paid or credited as fully
 paid; and, except as disclosed in any previous announcements made by or on
 behalf of the Company or any other member of the Group in respect of public
 debt or preference share issuance, no person has the right (whether
 exercisable now or in the future and whether contingent or not) to call for
 the allotment, conversion, issue, sale or transfer of any share or loan
 capital or any other security giving rise to a right over the capital of the
 Company or any member of the Group under any option or other agreement
 (including conversion rights and rights of pre emption); all of the issued
 share capital of each other member of the Group has been duly and validly
 authorised and issued and fully paid or credited as fully paid and is owned
 by the Company or one or more wholly owned subsidiaries of the Company and is
 free of all encumbrances.


	
 

	
 


	
3.

	
Reports 


	
 

	
 


	
3.1

	
All information
 supplied by the Company or any member of the Group to the Joint Sponsors
 and/or and/or the Auditors for the purposes of the Working Capital Report
 and/or any other report or letter prepared by the Auditors in connection with
 the Placing and Open Offer and in respect of any updates thereto, has been
 supplied to them in good faith; and such information was when supplied and
 remains true and accurate in all material respects and not misleading, and no
 information has been withheld the absence of which might reasonably have
 affected the contents of the Working Capital Report and/or any other such
 report or letter.


	
 

	
 


	
3.2

	
The Reports are fairly
 presented and all information contained in the Reports is true and accurate
 in all material respects and is not misleading and no fact or matter has been
 omitted from the Reports which would be necessary to make the information
 therein not misleading; and the Company has read and does not disagree with
 the statements of opinion contained in, or the contents of, the Reports and
 (where relevant) the statements of opinion, intention or expectation
 attributed to the Group in the Reports are accurate statements of the
 opinions, intentions or expectations held by the Group, which are fairly
 based upon facts within the knowledge of the Company, and have been made
 after due and careful consideration and enquiry.


	
 

	
 


	
3.3

	
The Working Capital
 Report has been approved by the Directors or a duly authorised committee
 thereof, the cashflow and working capital projections contained in the
 Working Capital Report have been prepared after due and careful consideration
 and enquiry, all assumptions on which such projections are based are set out
 in the Working Capital Report and are reasonable and such projections take
 into account all material matters of which the Company is aware concerning
 the Company, the other members of the Group or the markets in which any of
 them is carrying on, or is expecting to carry on, business and all factual
 information supplied to the Auditors by the Company or any other member of
 the Group or any of such person’s officers for the purpose of enabling the
 Auditors to identify or evaluate the assumptions underlying the relevant
 projections is true, accurate and not misleading and all other information
 (including any forecast or projection) supplied for that purpose was
 carefully prepared and given in good faith.


	
 

	
 












84


	
 

	
 

	
 


	
4.

	
Derogation 


	
 

	
 


	
 

	
Each statement made by
 or on behalf of the Company (and of which the Company is aware) in connection
 with any application to the London Stock Exchange or the UK Listing Authority
 for information to be omitted from the Prospectus is true, complete and
 accurate and not misleading. There is no information which has not been
 disclosed in writing to the London Stock Exchange or the UK Listing Authority
 in connection with such an application which by its omission makes such a
 statement untrue, inaccurate or misleading.


	
 

	
 


	
5.

	
Compliance


	
 

	
 


	
5.1

	
Each member of the
 Group has conducted its business in all material respects in accordance with
 all applicable laws and regulations of the United Kingdom and all relevant
 foreign countries or authorities, and there is no order, decree or judgment
 of any court or any governmental or other competent authority or agency of
 the United Kingdom or any foreign country outstanding against any member of
 the Group or any person for whose acts any member of the Group is vicariously
 liable which in any of the foregoing cases would, or would be reasonably
 likely to, be (singly or in the aggregate) material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or Placees, the redemption of the Preference Shares,
 Admission or post-Admission dealings in the Ordinary Shares.


	
 

	
 


	
5.2

	
This Agreement and the
 other agreements to be entered into by the Company in connection with
 Admission, the redemption of the Preference Shares and the Placing and Open
 Offer have been or will be duly authorised, executed and delivered on behalf
 of the Company and assuming due authorisation, execution and delivery by the
 other parties thereto, do or will constitute valid and binding obligations of
 the Company enforceable against it in accordance with their terms (subject to
 mandatory rules of law relating to insolvency). 


	
 

	
 


	
5.3

	
Other than pursuant to
 options or other rights granted under the Group’s share option schemes and
 save as otherwise would not (singly or in the aggregate) be material in the
 context of the Placing and Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or Placees, Admission or post-Admission dealings in the
 Ordinary Shares, there are no rights (conditional or otherwise) (i) to
 require the issue of any shares or other securities (including without
 limitation, any loan capital) or securities convertible into or exchangeable
 for, or warrants, rights or options to purchase, or obligations, commitments
 or intentions to create the same or (ii) to sell or otherwise dispose of any
 shares or other securities of a Group Company (other than to another Group
 Company, as the case may be) which are outstanding and in force. 


	
 

	
 


	
6.

	
Position since Accounts Date 


	
 

	
 


	
6.1

	
Since the Accounts Date
 and save as disclosed in the Press Announcement or via a Regulatory
 Information Service:


	
 

	
 

	
 


	
 

	
(A)

	
each Group Company has
 carried on its respective business in the ordinary course in all material
 respects, and there has been no Material Adverse Effect;


	
 

	
 

	
 


	
 

	
(B)

	
there has been no
 material impairment to charges in respect of any assets of the Company or of
 any Group Company, and there has been no increase in the 












85


	
 

	
 

	
 


	
 

	
 

	
provisions in respect
 of losses in relation to any mortgage, loans or other assets of the Company
 or of any Group Company that, in any of the foregoing cases, would, or would
 be reasonably likely to, be (singly or in the aggregate) material in the
 context of the Placing and Open Offer, any subscription for New Shares by HM
 Treasury, Ordinary Shareholders or Placees, the redemption of the Preference
 Shares, the redemption of the Preference Shares, Admission or post- Admission
 dealings in the Ordinary Shares;


	
 

	
 

	
 


	
 

	
(C)

	
save for any
 utilisation by the Company of the short-term liquidity measures being made
 available by the Bank of England (in the form notified by HM Government to
 the European Commission on 12 October 2008) or of the HM Treasury 2008 Credit
 Guarantee Scheme, no Group Company has, otherwise than in the ordinary course
 of business, entered into or assumed or incurred any contract, commitment
 (whether in respect of capital expenditure or otherwise), borrowing,
 indebtedness in the nature of borrowing, guarantee, liability (including
 contingent liability) or any other agreement or obligation that, in any of
 the foregoing cases, would, or would be reasonably likely to, be (singly or
 in the aggregate) material in the context of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or Placees,
 the redemption of the Preference Shares, Admission or post-Admission dealings
 in the Ordinary Shares;


	
 

	
 

	
 


	
 

	
(D)

	
other than in the
 ordinary course of business, no debtor has been released by the Company to an
 extent which (singly or in the aggregate) is material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares on terms that he pays less
 than the book value of his debt and no debt of such material amount owing to
 the Company or any Group Company has been deferred, subordinated or written
 off or has proven irrecoverable to any material extent;


	
 

	
 

	
 


	
 

	
(E)

	
no Group Company has
 been involved in any transaction (other than any transaction provided for in
 this Agreement or a previous placing and open offer agreement between the
 parties entered into as of 13 October 2008) which has resulted or would be
 reasonably likely to result (singly or in the aggregate) in any liability for
 Tax on the Company or any Group Company, which, in any of the foregoing
 cases, would, or would be reasonably likely to, be (singly or in the
 aggregate) material in the context of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or Placees,
 the redemption of the Preference Shares, Admission or post- Admission
 dealings in the Ordinary Shares other than a transaction in the ordinary
 course of business; and


	
 

	
 

	
 


	
 

	
(F)

	
no Group Company has
 been in default in any material respect under any agreement or arrangement to
 which any Group Company is a party and which is or is reasonably likely to be
 material and there are no circumstances likely to give rise to such default,
 to an extent which (singly or in the aggregate) would, or would be reasonably
 likely to, be material in the context of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary 












86


	
 

	
 

	
 


	
 

	
 

	
Shareholders or
 Placees, the redemption of the Preference Shares, Admission or post-Admission
 dealings in the Ordinary Shares.


	
 

	
 

	
 


	
7.

	
Litigation


	
 

	
 

	
 


	
7.1

	
No member of the Group
 or any of its officers or agents or employees is involved, or has during the
 recent past (being not less than 12 months ending on the date of this
 Agreement) been involved in any civil, criminal, arbitration, administrative,
 governmental or other proceedings or governmental regulatory or similar
 investigation or enquiry, whether as plaintiff, defendant or otherwise which,
 by itself or with other proceedings, which would be, or is reasonably likely
 to be, material in the context of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or Placees,
 the redemption of the Preference Shares, Admission or post-Admission dealings
 in the Ordinary Shares.


	
 

	
 

	
 


	
7.2

	
No litigation or
 arbitration, administrative, governmental, civil, criminal or other
 proceedings nor governmental, regulatory or similar investigation or enquiry
 are pending or have been threatened by or against any Group Company or any of
 its officers, agents or employees in relation to the affairs of any Group
 Company and, to the best of the knowledge, information and belief of the
 Company and the Directors, there are no facts or circumstances likely to give
 rise to any such litigation or arbitration, administrative, criminal,
 governmental, civil, or other proceedings or governmental, regulatory or
 similar investigation or enquiry, in each case, to an extent which, by itself
 or with other proceedings, would be, or is reasonably likely to be, material
 in the context of the Placing and Open Offer, any subscription for New Shares
 by HM Treasury, Ordinary Shareholders or Placees, the redemption of the
 Preference Shares, Admission or post-Admission dealings in the Ordinary
 Shares.


	
 

	
 

	
 


	
7.3

	
No member of the Group
 or any of their respective officers or agents or employees in relation to the
 affairs of any Group Company has been a party to any undertaking or assurance
 given to any court or governmental agency or the subject of any injunction
 which in any of the foregoing cases is still in force and which, by itself or
 with other proceedings, which would be, or is reasonably likely to be,
 material in the context of the Placing and Open Offer, any subscription for
 New Shares by HM Treasury, Ordinary Shareholders or Placees, the redemption
 of the Preference Shares, Admission or post-Admission dealings in the
 Ordinary Shares.


	
 

	
 

	
 


	
7.4

	
For the purpose of this
 paragraph 7, proceedings includes any action by any governmental, public or
 regulatory authority (including any investment exchange or any authority or
 body which regulates investment business or takeovers or which is concerned
 with regulatory, licensing, competition, taxation matters or matters
 concerning Intellectual Property Rights).


	
 

	
 

	
 


	
8.

	
Arrangements with directors, shareholders
 and advisors


	
 

	
 

	
 


	
8.1

	
Save for the articles
 of association of the Company, any service agreement with a Director and any
 contracts entered into in the ordinary course of business, there are no
 existing contracts or engagements or other arrangements to which any Group
 Company is a party and in which any of the directors of any Group Company
 and/or any associate of any of them is interested which would be material in
 the context of the Placing and 












87


	
 

	
 

	
 


	
 

	
Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or Placees,
 the redemption of the Preference Shares, Admission or post-Admission dealings
 in the Ordinary Shares; and to the extent that any such contracts, engagements
 or other arrangements exist they comply with the related party requirements
 of the Listing Rules of the UK Listing Authority (or other relevant
 regulator). 


	
 

	
 

	
 


	
8.2

	
Other than HM
 Treasury, no Shareholder has any rights, in his capacity as such, in relation
 to any Group Company other than as set out in the articles of association of
 the Company. 


	
 

	
 

	
 


	
8.3

	
The Company is not
 aware of any claim, demand or right of action against any member of the Group
 otherwise than for accrued remuneration in accordance with their contracts of
 employment by any officer or employee (or former officer or employee) of the
 Group and/or any associate of them in any of the foregoing cases, to an
 extent that (singly or in the aggregate) would, or would be reasonably likely
 to, be material in the context of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or Placees,
 the redemption of the Preference Shares, Admission or post-Admission dealings
 in the Ordinary Shares. 


	
 

	
 

	
 


	
8.4

	
So far as the
 Company is aware, no Director nor any person connected with such Director nor
 any of the employees of the Group nor any person connected with any such
 employee is in breach of any restrictive covenant, employment agreement or
 contract for services which would, or would be reasonably likely to, affect
 the Company, any other member of the Group and so far as the Company is
 aware, there are no circumstances which might give rise to any claim of such
 a breach or any other dispute with any employer, former employer or other
 person for whom any Director or employee of the Group provides or has
 provided services, in any of the foregoing cases to an extent that (singly or
 in the aggregate) would, or would be reasonably likely to, be material in the
 context of the Placing and Open Offer, any acquisition of New Shares or
 subscription for Preference Shares by HM Treasury, Ordinary Shareholders or
 Placees, Admission, or post- Admission dealings in the Ordinary Shares. 


	
 

	
 

	
 


	
8.5

	
For the purpose of
 this paragraph 8, associate has the meaning: 


	
 

	
 

	
 


	
 

	
(A)

	
in the case of an
 individual, given to “connected person” under section 96B(2) of FSMA; and 


	
 

	
 

	
 


	
 

	
(B)

	
in the case of a
 body corporate, given to “associated company” in sections 416 et seq. of the Income and Corporation
 Taxes Act 1988. 


	
 

	
 

	
 


	
9.

	
Information
 technology 


	
 

	
 

	
 


	
 

	
Save as otherwise
 would not (singly or in the aggregate) be material in the context of the
 Placing and Open Offer, any subscription for New Shares or by HM Treasury,
 Ordinary Shareholders or Placees, the redemption of the Preference Shares,
 Admission or post-Admission dealings in the Ordinary Shares:


	
 

	
 

	
 


	
 

	
(A)

	
systems used or
 planned to be used in connection with the businesses of the Group are all the
 systems required for the present needs of the business of the 












88


	
 

	
 

	
 


	
 

	
 

	
Group, including,
 without limitation, as to system capacity and ability to process current peak
 volumes and anticipated volumes in a timely manner;


	
 

	
 

	
 


	
 

	
(B)

	
in the 12 months
 prior to the date of this Agreement, the Group has not suffered any failures
 or bugs in or breakdowns of any systems used in connection with the
 businesses of the Group which have caused any substantial disruption or
 interruption in or to its use and the Company is not aware of any fact or
 matter which may so disrupt or interrupt or affect the use of such equipment
 following the date of this Agreement on the same basis as it is presently
 used; 


	
 

	
 

	
 


	
 

	
(C)

	
all hardware
 comprised in any systems, excluding any software and any external
 communications lines, used in the businesses of the Group are owned (except
 those items which are subject to finance leases) and operated by and are
 under the control of a member of the Group and are not wholly or partly
 dependent on any facilities which are not under the ownership, operation or
 control of the Group or (where governed by outsourcing or other similar
 arrangements) are otherwise openly accessible to the Group; and


	
 

	
 

	
 


	
 

	
(D)

	
each member of the
 Group is validly licensed to use the software used in its business.


	
 

	
 

	
 


	
10.

	
Share
 Schemes


	
 

	
 

	
 


	
 

	
Save as otherwise
 would not (singly or in the aggregate) be material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury, the
 redemption of the Preference Shares, Admission or post-Admission dealings in
 the Ordinary Shares, and except for options or other rights granted under the
 Company’s approved share option schemes or other employee incentive
 arrangements in accordance with normal practice, there are no arrangements
 which (contingently or otherwise) may give rise to an obligation on the
 Company or any Group Company to allot, issue or grant any relevant securities
 as defined in section 80 of the CA 1985. 


	
 

	
 

	
 


	
11.

	
Pension
 schemes 


	
 

	
 

	
 


	
 

	
Save as would
 otherwise not (singly or in the aggregate) be material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury, the
 redemption of the Preference Shares, Admission or post-Admission dealings in
 the Ordinary Shares, the Group is not paying, and is not under any liability
 (actual or contingent) to pay or secure (other than by payment of employers’
 contributions under national insurance or social security legislation), any
 pension or other benefit on retirement, death or disability or on the
 attainment of a specified age or on the completion of a specified number of
 years of service. 


	
 

	
 

	
 


	
12.

	
Agreements
 


	
 

	
 

	
 


	
 

	
Save as otherwise
 disclosed in any previous announcements made by or on behalf of the Company
 or any member of the Group in respect of public debt or preference share
 issuance and otherwise as would not (singly or in the aggregate) be material
 in the context of the Placing and Open Offer, any subscription for New Shares
 or by HM Treasury, Ordinary Shareholders or Placees, the redemption of the
 Preference Shares, 












89


	
 

	
 


	
 

	
Admission or post
 -Admission dealings in the Ordinary Shares, there is no agreement,
 undertaking, instrument or arrangement requiring the creation, allotment,
 issue, redemption or repayment, or the grant to any person of the right
 (whether conditional or not) to require the allotment, issue, redemption or
 repayment, of any shares in the capital of the Company or any subsidiary
 undertaking of the Company (including, without limitation, an option or right
 of pre-emption or conversion). 


	
 

	
 


	
13.

	
Regulatory
 


	
 

	
 


	
13.1

	
No member of the
 Group or any of its officers has failed to comply with any statutory
 provision or any rules, regulations, directions, requirements, notices and
 provisions of the FSA or any other regulatory body applying to such member of
 the Group in relation to its business including (without limitation) in
 respect of the maintenance of its Capital Resources Requirement and
 satisfaction of the Overall Financial Resources Rule and any equivalent
 capital requirements in any other jurisdiction that are applicable to any
 member of the Group; no obligation has arisen in respect of the general
 notification requirements under Chapter 15.3 of SUP, save in any of the
 foregoing cases to an extent which would not (singly or in the aggregate) be
 material in the context of the Placing and Open Offer, any subscription for
 New Shares by HM Treasury, Ordinary Shareholders or Placees, the redemption
 of the Preference Shares, Admission or post-Admission dealings in the
 Ordinary Shares. 


	
 

	
 


	
13.2

	
Save as otherwise
 would not (singly or in the aggregate) be material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or Placees, the redemption of the Preference Shares,
 Admission or post-Admission dealings in the Ordinary Shares, no member of the
 Group is the subject of any investigation, enforcement action (including,
 without limitation to vary the terms of any permission of licence) or
 disciplinary proceeding by the FSA or any other regulatory body having
 jurisdiction over such member of the Group, and no such investigation,
 enforcement action or disciplinary proceeding is threatened or pending. 


	
 

	
 


	
14.

	
Competition
 


	
 

	
 


	
14.1

	
No member of the
 Group is a party to (or is concerned in) any agreement, arrangement,
 concerted practice or course of conduct which infringes, or of which
 particulars have or should have been delivered to any relevant governmental
 or other authority in any jurisdiction under any relevant legislation in any
 territory regarding anti-competitive or restrictive trade or business
 practices or which falls within Articles 81 and/or 82 of the EC Treaty, or
 otherwise, in any of the foregoing cases to an extent that (singly or in the
 aggregate) would, or would be reasonably likely to, be material in the
 context of the Placing and Open Offer, any subscription for New Shares or by
 HM Treasury, Ordinary Shareholders or Placees, the redemption of the
 Preference Shares, Admission or post-Admission dealings in the Ordinary
 Shares. 


	
 

	
 


	
14.2

	
No member of the
 Group is, or has been, in connection with its business or that of any other
 member of the Group, engaged in any practice which contravenes any such
 legislation as is referred to in the preceding paragraph or which is under
 investigation by any authority referred to in the preceding paragraph or
 which is the subject of undertakings to any such authority and, so far as the
 Company is aware, none of the practices carried on by any member of the Group
 contravenes or may contravene any 












90


	
 

	
 


	
 

	
such legislation
 or is reasonably likely to be subject to such investigation, in any of the
 foregoing cases to an extent that would, or would be reasonably likely to, be
 (singly or in the aggregate) material in the context of the Placing and Open
 Offer, any subscription for New Shares by HM Treasury, Ordinary Shareholders
 or Placees, the redemption of the Preference Shares, Admission or
 post-Admission dealings in the Ordinary Shares. 


	
 

	
 


	
15.

	
Compliance
 


	
 

	
 


	
15.1

	
Each member of the
 Group, other than those undertakings in which the Company holds a proportion
 of the capital that is not likely to have a significant effect on the
 assessment of its own assets and liabilities, financial position or profits
 and losses, has been duly incorporated and is validly existing as a company
 with limited liability under the laws of the country of its incorporation
 with full corporate power and authority to own, lease and operate the
 properties which it owns, leases and operates and to own its other assets and
 carry on its business as presently carried on and as intended to be carried
 on in all material respects as described in the Circular and the Prospectus
 and, in relation to each member of the Group, to enter into and perform its
 obligations pursuant to the Placing and Open Offer itself and the redemption
 of the Preference Shares and to enter into and consummate all transactions in
 connection therewith. 


	
 

	
 


	
15.2

	
The Company has
 duly authorised, executed and delivered this Agreement and the other
 agreements to be entered into by it in connection with the Placing and Open
 Offer itself and the redemption of the Preference Shares and each of them
 constitute valid and binding obligations enforceable against it in accordance
 with their respective terms. 


	
 

	
 


	
15.3

	
All licences,
 permissions, authorisations and consents which are material for carrying on
 the business of the Group have been obtained and are in full force and effect
 and, so far as the Company is aware, there are no circumstances which might
 lead to any of such licences, permissions, authorisations and consents being
 revoked, suspended, varied or refused renewal to an extent which would, or
 would be reasonably likely to, be (singly or in the aggregate) material in
 the context of the Placing and Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or Placees, the redemption of the
 Preference Shares, Admission or post- Admission dealing in the Ordinary
 Shares. 


	
 

	
 


	
15.4

	
Save as would not
 be (singly or in the aggregate) material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares, all sums due in respect of
 the issued share capital of the Company at the date of this Agreement have
 been paid to and received by the Company. No owner or holder of any of the
 share capital of the Company shall, with effect from Admission, have any
 right, in his capacity as such, in relation to the Group other than as set
 out in the memorandum and articles of association of the Company. 


	
 

	
 


	
15.5

	
Save as would not
 be (singly or in the aggregate) material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares, the Company is the
 beneficial owner free from all Adverse Interests of the shares it holds in
 each of its subsidiary undertakings. 












91


	
 

	
 


	
15.6

	
Save as would not
 be (singly or in the aggregate) material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares, the Company and the
 Directors have at all times complied with the provisions of the Company’s
 memorandum and articles of association and the Companies Acts and, subject to
 the passing of the Resolutions, have or will have the right, power and
 authority under the memorandum and articles of association of the Company, or
 pursuant to resolution passed in general meeting, to enter into and perform
 this Agreement (including, without limitation, the power to pay commissions,
 fees, costs and expenses provided for in this Agreement), to make the Placing
 and Open Offer, to allot and issue the New Shares in certificated and
 uncertificated form to redeem the Preference Shares, to issue the Issue
 Documents in the manner proposed without any sanction or consent by members
 of the Company or any class of them and, subject to Admission, there are no
 other consents, authorisations or approvals required by the Company in
 connection with the entering into and the performance of this Agreement and
 the actions referred to in this paragraph 15.6 which have not been
 irrevocably and unconditionally obtained. The Company’s existing Ordinary
 Shares are participating securities in, and have not been suspended from,
 CREST. 


	
 

	
 


	
15.7

	
Save as would not
 be (singly or in the aggregate) material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares, the allotment and issue of
 the New Shares, the issue and distribution of the Issue Documents and any
 other document by or on behalf of the Company in connection with Admission,
 the Placing and Open Offer or the redemption of the Preference Shares will
 comply with all agreements to which any Group Company is a party or by which
 any such Group Company is bound and will comply with: (a) all applicable laws
 and regulations of the United Kingdom (including, without limitation, the
 Companies Acts, FSMA, the Listing Rules, the Prospectus Rules, the DTRs and
 the Admission and Disclosure Standards) and all applicable United States laws
 and regulations and with all applicable laws and regulations of any relevant
 jurisdiction; (b) the memorandum and articles of association of the Company;
 and (c) when published, the Working Capital Report; and will not exceed or
 infringe any restrictions or the terms of any contract, indenture, security,
 obligation, commitment or arrangement by or binding upon the board of
 directors of any Group Company or their respective properties, revenues or
 assets or result in the implementation of any right of pre emption or any
 other material provision thereof, or result in the imposition or variation of
 any material rights or obligations of any Group Company. 


	
 

	
 


	
15.8

	
Save as would not
 be (singly or in the aggregate) material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares, none of the Company or any
 other member of the Group is and, so far as the Company is aware, no event is
 about to occur which would result in the Company or any other member of the
 Group being (a) in violation of its memorandum or articles of association or
 other governing or constitutional documents or (b) in breach or default in
 the performance or observance of any obligation, agreement, covenant or
 condition contained in any Agreement or Instruments, or (c) in violation of
 any applicable law, statute, rule, regulation, judgment, 












92


	
 

	
 


	
 

	
order, writ, claim
 form or decree of any government, government instrumentality or court,
 domestic or foreign, having jurisdiction over the Company or any other member
 of the Group or any of their respective assets, revenues or properties. Save
 as would not be (singly or in the aggregate) material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or Placees, the redemption of the Preference Shares,
 Admission or post-Admission dealings in the Ordinary Shares, the Company and
 each other member of the Group has complied and will comply with applicable
 securities laws and regulations in relation to the Placing and Open Offer
 itself and the redemption of the Preference Shares. 


	
 

	
 


	
15.9

	
The statement set
 out in clause 2.1(J) is true and accurate and not misleading. 


	
 

	
 


	
15.10

	
The New Shares
 will, upon allotment, be free from all Adverse Interests and will rank pari
 passu in all respects with the existing issued shares in the issued share
 capital of the Company. 


	
 

	
 


	
15.11

	
The Company has
 complied in all material respects with the requirements of Euroclear and the
 Regulations. 


	
 

	
 


	
15.12

	
No member of the
 Group or any person acting on its behalf has taken, directly or indirectly,
 any action designed to or which has constituted or which might reasonably be
 expected to cause or result in stabilisation or manipulation of the price of
 any security of the Company. 


	
 

	
 


	
15.13

	
The Company has
 not paid or agreed to pay to any person any compensation for soliciting
 another to purchase any New Shares (except as contemplated in this
 Agreement). 


	
 

	
 


	
15.14

	
All information
 provided by the Company, and any of its subsidiary undertakings or any of its
 or their officers or employees in connection with the Placing, Open Offer,
 the APS, the Class B Shares and at the Due Diligence Meetings to HM Treasury
 and/or to the Joint Sponsors and/or and/or the Auditors in connection with
 its or their due diligence enquiries or similar requests for information has
 been supplied in good faith and such information was when supplied, and
 remains, true and accurate in all material respects and no further information
 requested has been withheld, the absence of which might reasonably be
 considered to be material to such due diligence enquiries or requests for
 information. 


	
 

	
 


	
16.

	
Announcements
 


	
 

	
 


	
16.1

	
The Press
 Announcement does not contain any untrue statement of a material fact or omit
 to state a material fact necessary in order to make the statements therein,
 in light of the circumstances under which they were made, not misleading,
 provided that this warranty shall not cover information contained in the
 Press Announcement which was furnished in writing to the Company by the Joint
 Sponsors expressly for use therein; and all expressions of opinion,
 intention, belief or expectation of the Company or the Directors contained in
 the Press Announcement are truly and honestly held and made on reasonable
 grounds after due and careful enquiry. 












93


	
 

	
 

	
 


	
16.2

	
With respect to
 all Previous Announcements, all statements of fact contained therein were at
 the date of the relevant Previous Announcement and, save to the extent corrected,
 amended or supplemented in any document or announcement issued or made by or
 on behalf of the Company or any member of the Group subsequent thereto,
 remain true and accurate in all material respects and not misleading in any
 material respect and all estimates, expressions of opinion or intention or
 expectation of the Directors contained therein were made on reasonable
 grounds and were honestly held by the Directors and were fairly based and
 there were no facts known (or which could on reasonable enquiry have been
 known by the Directors) the omission of which would make (i) any material
 statement of fact, or (ii) any estimate or statement or expression of
 opinion, intention or expectation in any of the Previous Announcements
 misleading and all Previous Announcements complied in all material respects
 with the memorandum and articles of association of the Company, the Listing
 Rules, the DTRs, the Prospectus Rules, the Companies Acts, FSMA, all
 applicable rules and requirements of the London Stock Exchange and the FSA,
 all applicable US laws and regulations and (in all material respects) all
 other applicable requirements of statute, statutory regulation or any
 regulatory body. There is no existing profit forecast outstanding in respect
 of the Company, the Group taken as a whole, or any member thereof.


	
 

	
 

	
 


	
17.

	
Accounts
 


	
 

	
 

	
 


	
17.1

	
The Accounts
 incorporated by reference into the Circular and the Prospectus: 


	
 

	
 

	
 


	
 

	
(A)

	
have been prepared
 and audited in accordance and comply with IFRS, the Companies Acts and all
 applicable laws and regulations; 


	
 

	
 

	
 


	
 

	
(B)

	
give a true and
 fair view of the financial condition and of the state of affairs of the Group
 as at the end of each of the relevant financial periods (including the
 Accounts Date) and of the profit, loss, cash flow and changes in equity of
 the Group for such periods; and 


	
 

	
 

	
 


	
 

	
(C)

	
either made proper
 provision for, or, where appropriate, in accordance with IFRS, include a note
 in respect of all material liabilities or commitments, whether actual,
 deferred, or contingent of the Group.


	
 

	
 

	
 


	
17.2

	
The HBOS Accounts
 incorporated by reference into the Circular and the Prospectus:


	
 

	
 

	
 


	
 

	
(A)

	
have been prepared
 and audited in accordance and comply with IFRS, the Companies Acts and all
 applicable laws and regulations; 


	
 

	
 

	
 


	
 

	
(B)

	
give a true and
 fair view of the financial condition and of the state of affairs of HBOS and
 the HBOS Group as at the end of each of the relevant financial periods
 (including the HBOS Accounts Date) and of the profit, loss, cash flow and
 changes in equity of HBOS and the HBOS Group for such periods; and 


	
 

	
 

	
 


	
 

	
(C)

	
either made proper
 provision for, or, where appropriate, in accordance with IFRS, include a note
 in respect of all liabilities or commitments, whether actual, deferred,
 contingent or disputed, of the HBOS Group.












94


	
 

	
 

	
 


	
17.3

	
The Directors have
 established procedures which provide a reasonable basis for them to make
 proper judgements on an ongoing basis as to the financial position and
 prospects of the Company and the Group. 


	
 

	
 

	
 


	
17.4

	
The Directors have
 established procedures which provide a reasonable basis for them to make
 proper judgements on an ongoing basis as to the financial position and
 prospects of the Company and the Group.


	
 

	
 

	
 


	
17.5

	
There are no, and
 during the past four years have been no: (i) material weaknesses in the
 internal controls over financial reporting (whether or not remediated) of the
 Company or the Group; (ii) changes in the internal controls over financial
 reporting of the Company or the Group that have materially adversely
 affected, or would be reasonably likely to materially adversely affect, the
 internal controls over financial reporting of the Company or the Group; or
 (iii) material fraud that involves any current member of management of the
 Company or (so far as the Company is aware) of any other member of the Group
 and no material fraud that involves any employee of the Company or (so far as
 the Company is aware) of any other member of the Group. 


	
 

	
 

	
 


	
18.

	
Guarantees,
 indemnities, borrowings and default 


	
 

	
 

	
 


	
18.1

	
Save for: 


	
 

	
 

	
 


	
 

	
(A)

	
guarantees or
 indemnities given by any member of the Group in the ordinary course of
 business; and 


	
 

	
 

	
 


	
 

	
(B)

	
any guarantees,
 indemnities or other similar arrangements given by the Company or any Group
 Company to HM Treasury or any other UK government department and/or the Joint
 Sponsors, 


	
 

	
 

	
 


	
 

	
no member of the
 Group has given or has agreed to give any guarantee or indemnity or similar
 obligation in favour of a third party and no member of the Group has any
 current or known future liability, howsoever arising which, in any of the
 foregoing cases, would, or would be reasonably likely to, be (singly or in
 the aggregate) material in the context of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or Placees,
 the redemption of the Preference Shares, Admission or post-Admission dealings
 in the Ordinary Shares. 


	
 

	
 

	
 


	
18.2

	
No event has
 occurred nor have any circumstances arisen (and the making and completion of
 the Placing and Open Offer itself, the redemption of the Preference Shares
 and the allotment and issue of the New Shares will not give rise to any such
 event or circumstance) so that any person is or would be entitled, or could,
 with the giving of notice or lapse of time or the fulfilment of any condition
 or the making of any determination, become entitled, to require repayment
 before its stated maturity of, or to take any step to enforce any security
 for, any indebtedness of any member of the Group and no person to whom any
 indebtedness, of any member of the Group which is payable on demand is owed
 has demanded or threatened to demand repayment of, or taken or threatened to
 take any step to enforce any guarantee, indemnity or other security for, the
 same, which, in any of the foregoing cases, would, or would be reasonably
 likely to, be (singly or in the aggregate) material or have material
 consequences in each case in the context of the Placing and Open Offer, any 












95


	
 

	
 


	
 

	
subscription for
 New Shares by HM Treasury, Ordinary Shareholders or Placees, the redemption
 of the Preference Shares, Admission or post-Admission dealings in the
 Ordinary Shares or the business of the Group. 


	
 

	
 


	
18.3

	
There are no
 companies, undertakings, partnerships or joint ventures in existence in which
 any member of the Group has an ownership interest but whose results are not
 consolidated with the results of the Group, but whose default would affect
 the indebtedness or increase the contingent liabilities of the Group to an
 extent which would, or would be reasonably likely to, be (singly or in the
 aggregate) material in the context of the Placing and Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or Placees,
 the redemption of the Preference Shares, Admission or post-Admission dealings
 in the Ordinary Shares. 


	
 

	
 


	
18.4

	
No event or
 circumstance exists, has occurred or arisen or, so far as the Company is
 aware, is about to occur which constitutes or results in, or would with the
 giving of notice and/or lapse of time and/or the making of a relevant
 determination, constitute, or result in, termination of or a default or the
 acceleration or breach of any obligation under any agreement, instrument or
 arrangement to which any member of the Group is a party or by which any such
 member of the Group or any of its properties, revenues or assets are bound,
 in any of the foregoing cases to an extent which would, or would be
 reasonably likely to, be (singly or in the aggregate) material in the context
 of the Placing and Open Offer, any subscription for New Shares by HM
 Treasury, Ordinary Shareholders or Placees, the redemption of the Preference
 Shares, Admission or post-Admission dealings in the Ordinary Shares. 


	
 

	
 


	
19.

	
Taxation
 


	
 

	
 


	
 

	
No stamp duty,
 SDRT or other issuance or transfer taxes or similar duties are payable in
 connection with the allotment, issue and delivery of the New Shares by the
 Company in accordance with the terms of this Agreement or otherwise in
 connection with the making or implementation of the Placing and Open Offer or
 the redemption of the Preference Shares, save for any stamp duty or SDRT
 payable under sections 67, 70, 93 or 96 of the Finance Act 1986 in relation
 to the issue of the New Shares. 


	
 

	
 


	
20.

	
Intellectual
 property


	
 

	
 


	
20.1

	
Except to an
 extent that would not (singly or in the aggregate) be material in the context
 of the Placing and Open Offer, any subscription for New Shares by HM
 Treasury, Ordinary Shareholders or Placees, the redemption of the Preference
 Shares, Admission or post-Admission dealings in the Ordinary Shares, and so
 far as the Company is aware, the Group does not infringe the Intellectual
 Property Rights of any third party nor so far as the Company is aware does
 any third party infringe the Intellectual Property Rights owned or used by
 the Group. 


	
 

	
 


	
20.2

	
All material
 Intellectual Property Rights used by the Group are either legally or
 beneficially owned by the Group in all material respects or are used under a
 licence and are not subject to any Adverse Interests to an extent that would
 or might (singly or in the aggregate) be material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or Placees, the redemption of the Preference Shares,
 Admission or post-Admission dealings in the Ordinary Shares. 












96


	
 

	
 


	
20.3

	
Save as would not
 (singly or in the aggregate) be material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares, (i) all Intellectual
 Property Rights registered in the name of a member of the Group (if any) are
 beneficially owned by it and subsisting and if granted not subject to
 revocation and (ii) all requisite registration and renewal fees in respect
 thereof have been duly and timeously paid. 


	
 

	
 


	
20.4

	
Save as would not
 (singly or in the aggregate) be material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary Shareholders
 or Placees, the redemption of the Preference Shares, Admission or
 post-Admission dealings in the Ordinary Shares, (i) all Intellectual Property
 Rights owned and used or reasonably likely to be used by the Group and
 capable of legal protection are subject to appropriate and enforceable
 protection (including, where reasonably appropriate, by registration), and
 (ii) so far as the Company is aware there is no restriction of the rights of
 the Group to use any Intellectual Property Rights owned by or licensed to the
 Company to engage in any of the activities presently or proposed to be
 undertaken by it. 


	
 

	
 


	
21.

	
Insurance
 


	
 

	
 


	
 

	
Save as would not
 be (singly or in the aggregate) material in the context of the Placing and
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or Placees, the redemption of the Preference Shares, Admission
 or post-Admission dealings in the Ordinary Shares, the Group is insured to
 adequate levels against all risks which the Company reasonably believes to be
 commonly insured against by persons carrying on the same or similar
 businesses as those carried on by the Group and against all risks against
 which the Group might reasonably be expected to insure in the particular
 circumstances of the businesses carried on by each member of the Group, all
 such insurances are in full force and effect and to the best knowledge,
 information and belief of the Company, there are no circumstances which could
 render any such insurances void or voidable and there is no material
 insurance claim, pending, threatened or outstanding against any member of the
 Group and all premiums due in respect of all insurances have been duly paid. 


	
 

	
 


	
22.

	
Rating
 


	
 

	
 


	
 

	
Except as publicly
 announced the Company has not received notice of any intended or potential
 downgrading of the rating assigned to the Company’s (or any other member of
 its Group’s) credit or debt by a ratings agency. 


	
 

	
 


	
23.

	
Insolvency
 


	
 

	
 


	
23.1

	
No member of the
 Group is unable to pay its debts within the meaning of section 123 of the
 Insolvency Act 1986 or is otherwise insolvent. 


	
 

	
 


	
23.2

	
Save in the
 context of a solvent voluntary winding up or otherwise as would not (singly
 or in the aggregate) be material in the content of the Placing and Open
 Offer, any subscription for New Shares by HM Treasury, the redemption of the
 Preference Shares, Admission or post-Admission dealings in the Ordinary
 Shares, no order has been made, 












97


	
 

	
 


	
 

	
petition presented
 or resolutions passed for the winding up of any member of the Group and no
 meeting has been convened for the purpose of winding up any member of the
 Group. No member of the Group has been a party to any transaction which could
 be avoided in a winding up. 


	
 

	
 


	
23.3

	
No steps have been
 taken for the appointment of an administrator or receiver (including an
 administrative receiver) of all or any part of the assets of any member of
 the Group. 


	
 

	
 


	
23.4

	
By reason of
 actual or anticipated financial difficulties, no member of the Group has
 commenced negotiations with its creditors or any class of its creditors with
 a view to rescheduling any of its indebtedness or has made or proposed any
 arrangement or composition with its creditors or any class of its creditors. 


	
 

	
 


	
24.

	
Regulatory
 


	
 

	
 


	
24.1

	
Each member of the
 Group required to be licensed (as a bank or otherwise) is duly licensed in
 its jurisdiction of incorporation and domicile and, except as would not
 reasonably be expected to be material, is duly licensed or authorised in each
 other jurisdiction where it is required to be licensed or authorised to
 conduct its business. 


	
 

	
 


	
24.2

	
Save as otherwise
 as would not (singly or in the aggregate) be material in the context of the
 Placing and Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or Placees, the redemption of the Preference Shares,
 Admission or post-Admission dealings in the Ordinary Shares, the Company is
 not subject to any special or additional surveillance or supervision by the
 FSA or to any special or additional reporting requirements in relation to its
 assets, liquidity position, funding position or otherwise and the Company has
 not been subject to any visits, beyond customary visits, by the FSA. 


	
 

	
 


	
24.3

	
The operations of
 each member of the Group are and have been conducted at all times in material
 compliance with the money laundering statutes of all jurisdictions, the rules
 and regulations thereunder and any related or similar rules, regulations or
 guidelines, issued, administered or enforced by any governmental agency
 (collectively, the “Money Laundering Laws”)
 and no material action, suit or proceeding by or before any court or
 governmental agency, authority or body or any arbitrator involving any member
 of the Group with respect to the Money Laundering Laws is pending or, to the
 best knowledge of the Company, threatened. 


	
 

	
 


	
24.4

	
Except as
 previously disclosed by the Company, none of the Company, any other member of
 the Group or, to the knowledge of the Company, any director, officer, agent,
 employee or Affiliate of the Company is currently subject to any sanctions
 administered by the U.S. Department of the Treasury (“OFAC”) or any similar sanctions imposed
 by the European Union, the United Nations or any other body, governmental or
 other, to which the Company or ay of its Affiliates is subject (collectively,
 “other economic sanctions”); and
 the Company will not directly or indirectly use the proceeds of the Placing
 and Open Offer, or lend, contribute or otherwise make available such proceeds
 to any other member of the Group, joint venture partner or other person or
 entity, for the purpose of financing the activities of any person currently
 subject to any sanctions administered by OFAC or any other economic
 sanctions. 












98


	
 
	
 

	
24.5
	
None of the
 Company, any other member of the Group or, to the knowledge of the Company,
 any director, officer, agent, employee or Affiliate of the Company, is aware
 of or has taken any action, directly or indirectly, that could result in a
 violation by such persons of the U.S. Foreign Corrupt Practices Act of 1977, as
 amended, or the rules and regulations thereunder (the FCPA) (including,
 without limitation, making use of the mail or any means or instrument of
 interstate commerce corruptly in furtherance of an offer, payment, promise to
 pay or authorisation of the payment of any money, or other property, gift,
 promise to give, or authorisation of the giving of anything of value to any
 “foreign official” (as such term is defined in the FCPA) or any foreign
 political office, in contravention of the FCPA), the OECD Convention on
 Bribery of Foreign Public Officials in International Business Transactions
 (the OECD Convention) or any similar law or regulation, to which the Company,
 any other member of the Group, any director, officer, agent, employee of any
 member of the Group or, to the knowledge of the Company, any Affiliate is
 subject; and the Company, each member of the Group and, to the knowledge of
 the Company, its Affiliates have conducted their businesses in compliance
 with the FCPA, the OECD Convention and any applicable similar law or
 regulation and have instituted and maintain policies and procedures designed
 to ensure, and which are reasonably expected to continue to ensure, continued
 compliance therewith. 

	
 
	
 

	
25.
	
United
 States Securities Regulations 

	
 
	
 

	
25.1
	
The Company is a
 “foreign issuer” (as defined in Regulation S under the Securities Act). 

	
 
	
 

	
25.2
	
The Company
 reasonably believes that there is no “substantial US market interest” (as
 defined in Rule 902(j) of Regulation S under the Securities Act) in any of the
 New Shares. 

	
 
	
 

	
25.3
	
The Company does
 not believe that it is and does not expect to become (whether as a result of
 the receipt and application of the proceeds of the sale of the New Shares or
 otherwise) a “passive foreign investment company” within the meaning of
 section 1297 of the US Internal Revenue Code of 1986. 

	
 
	
 

	
25.4
	
The Company is
 not, and, immediately after giving effect to the offering and sale of the New
 Shares and the application of the proceeds thereof as set forth in the Draft
 Prospectus and, when published, the Prospectus, will not be, an “investment
 company” as such term is defined in the US Investment Company Act of 1940. 

	
 
	
 

	
25.5
	
Other than HM
 Treasury, there are no persons with registration rights or other similar
 rights to have any shares registered by the Company under the Securities Act.
 

	
 
	
 

	
25.6
	
During the period
 of six months after Admission, the Company will not, and will not permit any
 of its Affiliates to, resell any New Shares which constitute “restricted
 securities” under Rule 144 that have been reacquired by any of them other
 than in transactions that meet the applicable requirements of Regulation S. 

	
 
	
 

	
26.
	
Panel
 Confirmation

	
 
	
 

	
 
	
The Panel has
 confirmed that subject to the independent shareholders of the Company voting in
 favour of the Whitewash Resolutions, the Panel will disapply the requirement
 to make a general offer under the terms of Rule 9 of the City Code on
 Takeovers and Mergers which would otherwise be
 required by the subscription by HM Treasury (or its nominee) for the New Shares.













SCHEDULE 4

PRO FORMA NOVATION AGREEMENT


THIS NOVATION AGREEMENT is made the [●] day of [●],
20[●]


BETWEEN:


	
 

	
 


	
1.

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


	
 

	
 


	
2.

	
LLOYDS BANKING GROUP PLC, a company incorporated in
 Scotland with registered number 095000 and whose registered office is at
 Henry Duncan House, 120 George St, Edinburgh, Scotland EH2 4LH (the “Lloyds”);


	
 

	
 


	
3.

	
;


	
 

	
 


	
4.

	
; and 


	
 

	
 


	
5.

	
; and


	
 

	
 


	
6.

	
[                    
       ] of [          
                         
                         
                         
                   ] [(registered in

England No. [                    
            ])] (the “Company”)





WHEREAS:


	
 

	
 


	
(A)

	
HMT, Lloyds, , and
 have entered into the Placing Agreement (as defined in this Agreement).


	
 

	
 


	
(B)

	
HMT wishes to be
 released and discharged from the Placing Agreement and the Company, , , and
 have agreed to release and discharge HMT from the Placing Agreement upon the
 terms of the Company’s undertaking to perform the Placing Agreement and be
 bound by its terms in the place of HMT and HMT agreeing to guarantee the
 Company’s obligations in respect of the Placing Agreement.


	
 

	
 


	
NOW IT IS AGREED
 as follows:-


	
 

	
 


	
1.

	
INTERPRETATION


	
 

	
 


	
1.1

	
In this Agreement:








	
 

	
 


	
 “Placing Agreement”

	
means the
 agreement as amended and restated on [●] between HMT and Lloyds, ,
 relating to, inter alia, the placing and open offer of a number of Lloyds
 ordinary shares; and


	
 

	
 


	
“Continuing Parties”

	
means, Lloyds, ,
 and “Continuing
 Party” shall be construed accordingly.












100


	
 

	
 

	
 


	
1.2

	
In this Agreement,
 unless otherwise specified:


	
 

	
 

	
 


	
 

	
(A)

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


	
 

	
 

	
 


	
 

	
(B)

	
headings to
 clauses and schedules are for convenience only and do not affect the
 interpretation of this Agreement.


	
 

	
 

	
 


	
2.

	
COMPANY’S UNDERTAKING


	
 

	
 

	
 


	
 

	
With effect from
 the date of this Agreement and in consideration of the undertakings given by
 the Continuing Parties in clause 3, the Company hereby undertakes to
 observe, perform, discharge and be bound by the Placing Agreement as if the
 Company were a party to that agreement in the place of HMT. Notwithstanding
 this undertaking, nothing in this Agreement shall:


	
 

	
 

	
 


	
 

	
(A)

	
require the
 Company to perform any obligation created by or arising under the Placing
 Agreement falling due for performance, or which should have been performed,
 before the date of this Agreement;


	
 

	
 

	
 


	
 

	
(B)

	
make the Company
 liable for any act, neglect, default or omission in respect of the Placing
 Agreement committed by HMT or occurring before the date of this Agreement; or


	
 

	
 

	
 


	
 

	
(C)

	
impose any
 obligation on the Company for or in respect of any obligation performed by
 HMT under the Placing Agreement before the date of this Agreement.


	
 

	
 

	
 


	
3.

	
CONTINUING PARTIES’ UNDERTAKING AND RELEASE
 OF HMT


	
 

	
 

	
 


	
3.1

	
With effect from
 the date of this Agreement and in consideration of the undertakings given by
 the Company in clause 2 and the undertakings and guarantee given by
 HMT in clauses 4 and 5 respectively, each of the Continuing Parties
 hereby:


	
 

	
 

	
 


	
 

	
(A)

	
releases and
 discharges HMT from all obligations to observe, perform, discharge and be
 bound by the Placing Agreement;


	
 

	
 

	
 


	
 

	
(B)

	
accepts the
 Company’s undertaking to observe, perform, discharge and be bound by the
 Placing Agreement (such undertaking being set out in clause 2); and


	
 

	
 

	
 


	
 

	
(C)

	
agrees to observe,
 perform, discharge and be bound by the Placing Agreement as if the Company
 were a party to the Placing Agreement in the place of HMT.


	
 

	
 

	
 


	
3.2

	
Notwithstanding
 the provisions of sub-clause 3.1(A), nothing in this Agreement shall
 affect or prejudice any claim or demand whatsoever which any Continuing Party
 may have against HMT in relation to the Placing Agreement and arising out of
 matters prior to the date of this Agreement.


	
 

	
 

	
 












101


	
 

	
 


	
4.

	
HMT’S UNDERTAKING AND RELEASE OF THE
 CONTINUING PARTIES


	
 

	
 


	
 

	
With effect from
 the date of this Agreement and in consideration of the undertakings given by
 the Continuing Parties in clause 3, HMT hereby releases and discharges
 each of the Continuing Parties from all obligations to observe, perform,
 discharge and be bound by the Placing Agreement. Notwithstanding this
 undertaking and release, nothing in this Agreement shall affect or prejudice
 any claim or demand whatsoever which HMT may have against any Continuing
 Party in relation to the Placing Agreement and arising out of matters prior
 to the date of this Agreement.


	
 

	
 


	
5.

	
GUARANTEE AND INDEMNITY


	
 

	
 


	
5.1

	
In consideration
 of the undertakings given by the Continuing Parties in clause 3, HMT
 hereby unconditionally and irrevocably guarantees to each Continuing Party
 the due and punctual performance and observance by the Company of all its
 obligations, commitments and undertakings under or pursuant to this Agreement
 and agrees to indemnify each Continuing Party on an after-tax basis against
 all loss, damage, costs and breach by the Company of its obligations,
 commitments or undertakings under or pursuant to this Agreement. The
 liability of HMT under this Agreement shall not be released or diminished by
 any variation of the terms of this Agreement or the Placing Agreement as
 novated by this Agreement (whether or not agreed by HMT), any forbearance,
 neglect or delay in seeking performance of the obligations hereby imposed or
 any granting of time for such performance.


	
 

	
 


	
5.2

	
If and whenever the
 Company defaults for any reason whatsoever in the performance of any
 obligation or liability undertaken or expressed to be undertaken by the
 Company under or pursuant to this Agreement, HMT shall forthwith upon demand
 unconditionally perform (or procure performance of) and satisfy (or procure
 the satisfaction of) the obligation or liability in regard to which such
 default has been made and so that the same benefits shall be conferred on
 each Continuing Party as such party would have received if such obligation or
 liability had been duly performed and satisfied by the Company.


	
 

	
 


	
5.3

	
This guarantee is
 to be a continuing guarantee and accordingly is to remain in force until all
 the obligations, commitments and undertakings of the Company referred to in sub-clause
 5.1 shall have been performed or satisfied. This guarantee is in addition
 to and without prejudice to and not in substitution for any rights or
 security which any Continuing Party may now or hereafter have or hold for the
 performance and observance of the obligations, commitments and undertakings
 of the Company under or in connection with this Agreement.


	
 

	
 


	
5.4

	
As a separate and
 independent stipulation HMT agrees that any obligation expressed to be
 undertaken by the Company (including, without limitation, any moneys
 expressed to be payable under this Agreement or the Placing Agreement as
 novated by this Agreement) which may not be enforceable against or
 recoverable from the Company by reason of any legal limitation, disability or
 incapacity on or of the Company or any other fact or circumstance (other than
 any limitation imposed by this Agreement or the Placing Agreement as novated
 by this Agreement) shall nevertheless be enforceable against and recoverable
 from HMT as though the same had been incurred by HMT and HMT were the sole or
 principal obligor in respect thereof.


	
 

	
 












102


	
 

	
 


	
6.

	
COMPANY CEASES TO BE WHOLLY OWNED BY HMT


	
 

	
 


	
 

	
In the event that
 the Company at any time after the date of this Agreement ceases to be
 directly or indirectly wholly-owned by HMT, the Company shall, and HMT will
 procure that the Company shall, enter into a novation agreement upon
 substantially the same terms as this Agreement such that the rights and
 obligations assumed by the Company under this Agreement are novated either to
 HMT or to an entity which is, directly or indirectly, wholly owned by HMT.
 The Continuing Parties agree to consent to, and to execute and deliver all
 such documentation as may be necessary to effect, such novation.


	
 

	
 


	
7.

	
NOTICES


	
 

	
 


	
 

	
For the purposes of
 all provisions in the Placing Agreement concerning the service of notices,
 the address of the Company is its registered office as shown above from time
 to time and its fax number is [●]. All notices served on the Company
 under the Placing Agreement should be marked for the attention of [●].


	
 

	
 


	
8.

	
COUNTERPARTS


	
 

	
 


	
8.1

	
This agreement may
 be executed in any number of counterparts, and by the parties on separate
 counterparts, but shall not be effective until each party has executed at
 least one counterpart.


	
 

	
 


	
8.2

	
Each counterpart
 shall constitute an original of this Agreement, but all the counterparts
 shall together constitute but one and the same instrument.


	
 

	
 


	
9.

	
GOVERNING LAW


	
 

	
 


	
 

	
The Continuing
 Parties and the Company hereby agree that this Agreement and any
 non-contractual obligations arising out of or in connection with it shall be
 governed by and construed in accordance with English law and that the courts
 of England and Wales are to have exclusive jurisdiction to settle any matter,
 claim or dispute arising hereunder and submits to the jurisdiction of the
 English Courts.


	
 

	
 


	
10.

	
AGENT FOR SERVICE OF PROCESS


	
 

	
 


	
 

	
The Company shall
 at all times maintain an agent for service of process and for service of any
 other documents and proceedings in England, or any other proceedings in
 connection with this Agreement. Such agent shall be [agent with address in
 England] and any writ, judgment or other notice of legal process shall be
 sufficiently served on the Company if delivered to such agent at its address
 for the time being. The Company irrevocably undertakes not to revoke the
 authority of the above agent and if, for any reason, the agent ceases to act
 as such, the Company shall appoint a replacement agent having an address for
 service in England and shall notify Lloyds, and HMT of the name and address
 of such replacement agent. If the Company fails to appoint another agent,
 Lloyds, having consulted with , shall be entitled to appoint one on the
 Company’s behalf and at the Company’s expense.












103


IN WITNESS of which this Agreement has been executed on the date which
first appears on page 1 of this Agreement.


	
 


	



	
For and on behalf
 of 


	
The
 Commissioners of Her Majesty’s Treasury


	
 


	



	
For and on behalf
 of 


	
[Insert name of the Company]












104


SCHEDULE 5

US INVESTOR LETTER


	
 

	
 


	
[Name,
 address, fax number and attention details for the Company]

	
 


	
 

	
 


	
[Names,
 addresses, fax numbers and attention details for the Placing Agents]

	
 


	
 

	
 


	
cc: [You must fax a copy of this
 letter to the financial intermediary through which your existing ordinary
 shares are held. Accordingly please insert here name, address and contact
 details of the relevant financial intermediary.]

	
 


	
 

	
 


	
 

	
_________________, 2009





Ladies and Gentlemen


In connection with our proposed subscription for new shares (the “New Shares”)
of [insert
name of
company] (the “Company”), which are being offered by way
of a placing and open offer (the “Placing and Open Offer”), we represent,
warrant, agree and confirm that: 


	
 

	
 


	
1.

	
To the extent we
 are an existing shareholder of the Company, we are the beneficial holder of
 and/or exercise full investment discretion with respect to our ordinary
 shares of the Company. 


	
 

	
 


	
2.

	
We are an
 institution which (a) has such knowledge and experience in financial and
 business matters that we are capable of evaluating the merits and risks of
 our investments in the New Shares, and (b) we, and any accounts for which we
 are acting, are able to bear the economic risk, and sustain a complete loss,
 of such investment in the New Shares. 


	
 

	
 


	
3.

	
We are a
 “qualified institutional buyer” (a “QIB”) as defined in Rule 144A (“Rule 144A”)
 under the US Securities Act of 1933, as amended (the “Securities Act”).
 Further, if we are subscribing for the New Shares as a fiduciary or agent for
 one or more investor accounts, (a) each such account is a QIB, (b) we have
 investment discretion with respect to each account, and (c) we have full
 power and authority to make the representations, warranties, agreements and
 acknowledgements herein on behalf of each such account.












105


	
 

	
 


	
4.

	
We will base our
 investment decision on a copy of the Company’s prospectus dated [●],
 2009, including the documents incorporated by reference therein (the “Prospectus”).
 We acknowledge that neither the Company nor any of its affiliates nor any
 other person (including [insert names of placing agents]
 (together, the “Placing Agents”)) has made any
 representations, express or implied, to us with respect to the Company, the
 Placing and Open Offer, the New Shares or the accuracy, completeness or
 adequacy of any financial or other information concerning the Company, the
 Placing and Open Offer or the New Shares, other than (in the case of the
 Company and its affiliates only) the information contained or incorporated by
 reference in the Prospectus. We acknowledge that we have not relied on any
 information contained in any research reports prepared by the Placing Agents
 or any of their respective affiliates. We understand that the Prospectus has
 been prepared in accordance with UK format, style and content, which differs
 from US format, style and content. In particular, but without limitation, the
 financial information contained in the Prospectus have been prepared in
 accordance with International Financial Reporting Standards, and thus may not
 be comparable to financial statements of US companies prepared in accordance
 with US generally accepted accounting principles. We will not distribute,
 forward, transfer or otherwise transmit the Prospectus, or any other
 presentational or other materials concerning the Placing and Open Offer
 (including electronic copies thereof) to any person within the United States
 (other than a QIB on behalf of which we act). We acknowledge that we have
 read and agreed to the matters set forth under the heading “[insert
 name of relevant section of Prospectus containing notices to oversees
 investors, including US investors]” in the Prospectus.


	
 

	
 


	
5.

	
We will make our
 own independent investigation and appraisal of the business, results,
 financial condition, prospects, creditworthiness, status and affairs of the
 Company and we will make our own investment decision to subscribe for the New
 Shares. We understand that there may be certain consequences under US and
 other tax laws resulting from an investment in the New Shares, including that
 we must bear the economic risk of an investment in the New Shares for an
 indefinite period of time, and we will make such investigation and consult
 such tax and other advisors with respect thereto as we deem appropriate.


	
 

	
 


	
6.

	
Any New Shares we
 subscribe for will be for our own account (or for the account of a QIB as to
 which we exercise sole investment discretion and have authority to make the
 statements contained in this letter) for investment purposes, and not with a
 view to resale or distribution within the meaning of the US securities laws,
 subject to the understanding that the disposition of our property shall at
 all times be and remain within our control.


	
 

	
 


	
7.

	
We understand that
 the New Shares are being offered in a transaction not involving any public
 offering in the United States within the meaning of the Securities Act and
 that the New Shares are not being and will not be registered under the
 Securities Act or with any State or other jurisdiction of the United States.
 We acknowledge and agree that we are not taking up the New Shares as a result
 of any general solicitation or general advertising (as those terms are
 defined in Regulation D under the Securities Act). We understand and agree
 that, although offers and sales of the New Shares are being made in the
 United States to QIBs, they are not being made under Rule 144A, and that the
 New Shares are not eligible for resale pursuant to Rule 144A.












106


	
 

	
 


	
8.

	
We understand that
 the New Shares will be “restricted securities” within the meaning of Rule
 144(a)(3) under the Securities Act and we agree that for so long as such
 securities are “restricted securities” (as so defined), they may not be
 deposited into any unrestricted depositary facility established or maintained
 by any depositary bank, including the current American Depositary Receipt (“ADR”)
 facility maintained by The Bank of New York Mellon, as depositary for the
 Company’s ADR facility (the “Depositary”).


	
 

	
 


	
9.

	
As long as the New
 Shares are “restricted securities” within the meaning of Rule 144(a)(3) under
 the Securities Act, we will not reoffer, resell, pledge or otherwise transfer
 the New Shares, except in an offshore transaction in accordance with Rule 903
 or Rule 904 of Regulation S under the Securities Act (which, for the
 avoidance of doubt, includes a sale over the London Stock Exchange) and in
 accordance with any applicable securities laws of any state or other
 jurisdiction of the United States.


	
 

	
 


	
10.

	
We understand
 that, to the extent the New Shares are delivered in certificated form, the
 certificate delivered in respect of the New Shares will bear a legend
 substantially to the following effect for so long as the securities are
 “restricted securities” within the meaning of Rule 144(a)(3) under the
 Securities Act: 


	
 

	
 


	
 

	
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN
 AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
 AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY
 OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE
 OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN AN OFFSHORE
 TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
 SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
 STATE OR OTHER JURISDICTION OF THE UNITED STATES. NOTWITHSTANDING ANYTHING TO
 THE CONTRARY IN THE FOREGOING, THE SHARES MAY NOT BE DEPOSITED INTO ANY
 UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF SHARES ESTABLISHED OR
 MAINTAINED BY A DEPOSITARY BANK. EACH HOLDER, BY ITS ACCEPTANCE OF THESE
 SHARES, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING
 RESTRICTIONS.


	
 

	
 


	
11.

	
We acknowledge
 that, whether or not we currently hold the Company’s ADRs, we will receive
 the New Shares in the form of ordinary shares and not in the form of ADRs.


	
 

	
 


	
12.

	
We acknowledge
 that until six months after the latest date on which the New Shares are
 delivered in the Placing and Open Offer (which is currently expected to be
 [●] 2009), the Depositary will not accept deposits of the New Shares in the
 ADR facility, or permit pre-releases of the Company’s American Depositary
 Shares from the ADR facility, unless we (or a broker on behalf of us)
 certify, among other things, that the shares to be deposited were not
 subscribed or purchased pursuant to the Placing and Open Offer, and that we
 have not borrowed shares to be deposited with the intention of replacing them
 with New Shares subscribed or purchased pursuant to the Placing and Open Offer.


	
 

	
 


	
13.

	
We understand and
 acknowledge that the Company shall have no obligation to recognize any offer,
 sale, pledge or other transfer made other than in compliance with the
 restrictions on transfer set forth and described herein and that the Company may
 












107


	
 

	
 


	
 

	
make notation on
 its records or give instructions to [insert name of registrar] and any
 transfer agent of the New Shares and to the Depositary under its ADR facility
 in order to implement such restrictions.


	
 

	
 


	
14.

	
We understand that
 the foregoing representations, warranties, agreements and acknowledgements
 are required in connection with United States and other securities laws and
 that the Company, its affiliates, the Placing Agents and their respective
 affiliates, and others are entitled to rely upon the truth and accuracy of
 the representations, warranties, agreements and acknowledgements contained
 herein. We agree that if any of the representations, warranties, agreements
 and acknowledgements made herein are no longer accurate, we shall promptly
 notify the Company and the Placing Agents. All representations, warranties,
 agreements and acknowledgements we have made in this letter shall survive the
 execution and delivery hereof.


	
 

	
 


	
15.

	
We confirm that,
 to the extent we are purchasing the New Shares for the account of one or more
 other persons, (a) we have been duly authorized to sign this letter and make
 the confirmations, acknowledgements and agreements set forth herein on their
 behalf and (b) the provisions of this letter constitute legal, valid and
 binding obligations of us and any other person for whose account we are
 acting.


	
 

	
 


	
16.

	
We irrevocably
 authorize the Company, its affiliates, the Placing Agents and their
 respective affiliates and any person acting on their behalf to produce this
 letter or a copy hereof to any interested party in any administrative or
 legal proceedings, dispute or official inquiry with respect to the matters
 covered hereby.


	
 

	
 


	
17.

	
This letter shall
 be governed by, and construed in accordance with, the laws of the State of
 New York. 


	
 

	
 


	
18.

	
We agree to
 promptly notify you if, at any time prior to [insert relevant date], any
 of the foregoing ceases to be true.





Yours truly,


[Signature of authorized signatory]


ON BEHALF OF [Institution]


	
 

	
 


	
By:

	
[Name of
 authorized signatory]


	
 

	
 


	
 

	
[Title of
 authorized signatory] 


	
 

	
 


	
 

	
[Institution]


	
 

	
 


	
 

	
[Address] 


	
 

	
 


	
   [Name
 of nominee, if applicable]








IN WITNESS WHEREOF the Original Placing Agreement has been
entered into as of 7 March 2009 and has been amended and restated by way of this
Agreement as of the date which first appears on page 1 of this Agreement.



	
 

	
 

	
 


	
SIGNED by and for
 and on behalf of

	
)

	
TRUETT TATE


	
LLOYDS
 BANKING GROUP PLC

	
)

	
 


	
 

	
)

	
 


	
 

	
 

	
 


	
SIGNED by two of

	
)

	
TONY CUNNINGHAM


	
THE COMMISSIONERS OF HER

	
)

	
 


	
MAJESTY’S TREASURY

	
)

	
STEVE MCCABE


	
 

	
)