Exhibit 4(a)(viii)


The Commissioners of Her Majesty’s Treasury (the “Treasury”) 

1 Horse Guards Road 

London 

SW1A 2HQ 


The Secretary of State, Department for Business, Innovation and Skills
(“BIS“) 

1 Victoria Street 

London 

SW1H 0ET 


The Secretary of State, Department for Communities and Local Government
(“DCLG”) 

Eland House 

Bressenden Place 

London 

SW1E 5DU 


23 March 2010 


Ladies and Gentlemen, 


2010 LENDING COMMITMENTS 


	
  

 	
  

 
	
 1.

 	
 Introduction

 



We refer to the deed poll entitled “Lending Commitments” dated 6 March
2009 executed by Lioyds Banking Group plc (the “Participating Institution”)
in favour of the Treasury, BIS (then known as the Department for Business,
Enterprise and Regulatory Reform) and DCLG (as amended, including pursuant to
the Deed of Withdrawal dated 3 November 2009 between the
Participating Institution and the Treasury) (the Lending Commitments Deed
Poll, “LCDP”). 


The LCDP specified: (i) the lending commitments given by the
Participating Institution for itself and on behalf of its Group, comprising
Business Lending Commitments and a Homeowner Lending Commitment; and (ii)
certain associated undertakings being given by the Participating Institution in
connection with the implementation and operation of the Lending Commitments. 


The LCDP specified commitments for the 12 month period commencing 1 March 2009 (the “2009 commitment
period) and the 12 month period commencing 1 March 2010 (the “2010 commitment
period”). Pursuant to paragraph 6 of
the LCDP, and in consequence of an ongoing dialogue between the Participating
Institution and the Government Departments, the Government Departments consider
that it is appropriate to change the Business Lending Commitments for the
2010 commitment period and to adjust the undertakings given in connection
with the implementation and operation of the Homeowner Lending Commitment for
that period. 





2


The Participating Institution hereby amends the LCDP (pursuant to
paragraph 12.6 of the LCDP) as follows. Such amendments shall take effect upon
confirmation of the consent of the Government Departments to these amendments
by their countersigning below. The remaining provisions of the LCDP shall in
all other respects remain unamended and in full force and effect. 


	
  

 	
  

 
	
 2.

 	
 Adjustment
 of the LCDP in respect of the 2010 commitment period 

 



2.1 Introduction


This paragraph amends the LCDP in so far as it relates to the 2010
commitment period.


2.2 Business Lending Commitments: 2010
commitment


(A) In the heading to paragraph 4.2, at the end add “: 2009 commitment
period”. 


(B) In paragraph 4.2(A), omit “and the 12 month period commencing 1 March 2010 (“the “2010 commitment
period”)” and for “4.8” substitute “4.7”. 


(C) For paragraph 4.8 substitute: 


 “4.8 Aggregate Business Lending Commitment:
2010 commitment 


In respect of the 12 month period commencing 1 March 2010 (the “2010 commitment
period”), the Participating Institution undertakes subject to sufficient
customer demand and the terms of this Deed Poll to provide gross new lending to
Relevant Businesses of, in aggregate, £44.0 billion. In satisfying this
aggregate lending commitment, the Participating Institution shall lend to each
Relevant Business Category the targeted amount specified in paragraphs 4.8B and
4.8C. 


Paragraph 8 imposes obligations on the Participating Institution to
provide monthly reports to the Government Departments in relation to new
lending to Relevant Businesses on both a net and gross basis. 


In determining what is “gross new lending” for the purposes of this
Deed Poll, the Participating Institution shall - 


	
  

 	
  

 
	
  

 	
 (A) include the
 total amount of a facility, including bond and equity underwriting, made
 available to a person who is not a customer of the Participating Institution
 immediately before the facility is made available; 

 
	
  

 	
  

 
	
  

 	
 (B) include the total amount of any
 new facility, including bond and equity underwriting. made available to a
 person who is a customer of the Participating Institution immediately
 before the facility is made available; 

 
	
  

 	
  

 
	
  

 	
 (C) include any
 increase in a facility, including bond and equity underwriting, currently
 made available to a person who is a customer of the Participating
 Institution where that increase takes place by virtue of a decision of the
 Participating Institution and where no material changes to the terms of the
 facility are made; 

 









3


	
  

 	
  

 
	
  

 	
 (D) include the total amount of any
 facility made available to a person who is a customer of the Participating
 Institution immediately before the facility is made available where the facility
 is made available in connection with or in consequence of the termination of
 an existing facility made available by the Participating lnstitution to that
 person; 

 
	
  

 	
  

 
	
  

 	
 (E) not include repayments; 

 
	
  

 	
  

 
	
  

 	
 (F) not include
 any increase or decrease in a facility made available to a person who is a
 customer of the Participating Institution where that increase or decrease
 takes place otherwise than by virtue of a decision of the Participating
 Institution; 

 
	
  

 	
  

 
	
  

 	
 (G) only treat a
 “facility” as being “made available” for the purposes of any of the foregoing
 sub-paragraphs if it constitutes lending (as defined in paragraph 4.9); and 

 
	
  

 	
  

 
	
  

 	
 (H) to the extent
 that paragraph 4.9 conflicts with the provisions in sub-paragraphs (A) to (F) above, not apply that paragraph. 

 



4.8A Aggregate Business Lending Commitment:
general principles for the 2010 commitment period 


Without prejudice to paragraph 3, for the purposes of the 2010
commitments period the Business Lending Commitments are subject to: 


	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 the Participating
 Institution’s commercial terms and conditions, including appropriate risk
 adjusted pricing and satisfaction of risk acceptance criteria, as defined by
 the Participating Institution for its potential or existing customers; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 through the best
 endeavours of the Participating Institution, the availability of the capital,
 liquidity and funding position on acceptable terms necessary to support the
 lending that the Participating Institution has committed to during the 2010
 commitment period; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 sufficient demand
 from customers who meet the above criteria. 

 



4.8B SMEs: 2010 Commitment 


The Participating Institution undertakes that, in respect of the 2010
commitment period, its gross new lending to SMEs will be at least ***1. 


4.8C Mid-Corporates and Large Corporates:
2010 Commitment 


The Participating Institution undertakes that, in respect of the 2010
commitment period, its gross new lending to Mid-Corporates and Large Corporates
will be at least ***1.


2.3 Homeowner Lending Commitments 


(A) In paragraph 5.6:

	 
	 

	

    
	1
	*** Indicates omission of material which has been separately filed pursuant to a request for confidential treatment.



 




4


	
  

 	
  

 
	
  

 	
 (i) after
 “actively participate”, insert “and support eligible borrowers’
 applications”; and 

 
	
  

 	
  

 
	
  

 	
 (ii) omit “(when
 the detail of this scheme is finalised)”. 

 



(B) In paragraph 5.7, at the end of sub-paragraph (C) insert: 


“; and 


(D) help first time buyers by supporting
their participation in Government-supported shared ownership and equity loan
schemes including by: 


	
  

 	
  

 
	
  

 	
 (i) offering
 interest rates to first time buyers participating in such schemes which are
 similar to interest rates offered to other first time buyers; 

 
	
  

 	
  

 
	
  

 	
 (ii) for first
 time buyers participating in Government-supported equity loan schemes,
 seeking to maintain the minimum deposit requirement at 5% of the share
 purchased; 

 
	
  

 	
  

 
	
  

 	
 (iii) providing
 prior notice to the Government Departments of any increase in the minimum
 deposit requirement, combined with an explanation of the rationale behind
 the intended increase; 

 
	
  

 	
  

 
	
  

 	
 (iv) keeping the
 need for a minimum deposit requirement under review; and 

 
	
  

 	
  

 
	
  

 	
 (v) in recognition
 of the reduced risk to lenders offered by the protections built into
 Government-supported shared ownership schemes, the Participating Institution
 will minimise the deposit requirements currently associated with this type
 of lending, subject to appropriate adjustments for the risks presented by the
 property type and shared ownership lease characteristics”. 

 



2.4 Business Lending Commitments:
monitoring of net lending 


In paragraph 8.2, for sub-paragraph (A) substitute: 


“(A) a segmental analysis showing gross new lending divided by both
size of business (corresponding to the Relevant Business Categories) and
industry sector; 


(AB) a segmental analysis showing new lending on a net basis divided by
both size of business (corresponding to the Relevant Business Categories) and
industry sector;”. 


	
  

 	
  

 
	
 3.

 	
 Incorporation
 of terms of this Deed Poll Into the LCDP 

 



This Deed Poll shall form part of and be read together with the LCDP.
References in the LCDP to “this Deed Poll” or any similar references shall be deemed
to refer to the LCDP as amended by this Deed Poll. 


This Deed Poll and any non-contractual obligations arising out of or in
connection with it shall be governed by and construed in accordance with the
laws of England. 





5


IN WITNESS WHEREOF this Deed Poll has been executed and
delivered as a deed on March 2010. 


	
  

 	
  

 	
  

 	
  

 
	
 Executed and
 delivered as a deed by

 LLOYDS BANKING GROUP PLC

 acting by two directors / one director and its

 secretary

 	
 )

 	
  

 	
  

 
	
 )

 	
  

 	
  

 
	
 )

 	
 By:

 	
 

 
	
  

 	
  

 	

 


 
	
 )

 	
  

 	
 Director

 
	
 )

 	
  

 	
  

 
	
 )

 	
  

 	
  

 
	
 )

 	
  

 	
  

 
	
 )

 	
  

 	
  

 
	
 )

 	
 By:

 	
 

 
	
  

 	
  

 	

 


 
	
 )

 	
  

 	
  

 
	
 )

 	
  

 	
 Secretary 

 










6


	
  

 
	
 Consented to by

 
	
  

 
	
 

 
	

 


 
	
 for and on behalf
 of 

 
	
 The Commissioners
 of Her Majesty’s Treasury

 
	
  

 
	
 

 
	

 


 
	
 for and on behalf
 of

 
	
 The Secretary of
 State, Department for Business, Innovation and Skills

 
	
  

 
	
 

 
	

 


 
	
 for and on behalf
 of

 
	
 The Secretary of
 State, Department for Communities and Local Government

 
	
  

 
	
  

 
	
  

 
	
  

 
	
  

 










Conformed
copy (redacted)


The Commissioners of Her Majesty’s Treasury (the
“Treasury”)

1 Horse Guards Road

London

SW1A2HQ 


The Secretary of State,
Department for Business, Enterprise and Regulatory Reform (“BERR”)

1 Victoria Street

London

SW1H 0ET 


The Secretary of State,
Department for Communities and Local Government (“DCLG”)

Eland House

Bressenden Place

London

SW1E 5DU 


6 March 2009


Ladies and Gentlemen,


LENDING COMMITMENTS


	
  

 	
  

 
	
 1.

 	
 Introduction

 
	
  

 	
  

 
	
 Lloyds Banking Group plc (the
 “Participating Institution”) notes that:

 
	
  

 
	
 (A)

 	
 the Asset Protection Scheme
 (the “APS”) and the extension to the Credit Guarantee Scheme (the
 “CGS” and, together with the APS, the “Schemes”) announced by the Government on 19 January 2009 are part of a
 comprehensive package of measures the objective of which is to reinforce the stability of the financial
 system, and together with the Working Capital Scheme announced by the
 Government on 14 January 2009 (the “WCS”),
 to increase confidence and capacity to lend, and in turn to support the recovery of the economy;

 
	
  

 	
  

 
	
 (B)

 	
 participation in either or both
 of the Schemes by an institution having eligible liabilities (as determined by the Bank of England) above a
 threshold to be specified by the
 Treasury is subject to a verifiable commitment to be agreed between each
 participating institution and the Government to support lending to
 creditworthy borrowers in the real
 economy in a commercial manner; and

 
	
  

 	
  

 
	
 (C)

 	
 in determining the requisite
 lending commitments, the Treasury, BERR and DCLG (together, the “Government Departments”) have
 consulted closely with each other in relation
 to sectors of the economy for which they have responsibilities, and will
 continue

 









Conformed copy (redacted)


	
  

 	
  

 
	
  

 	
 to consult closely with each
 other as appropriate in relation to the implementation and operation of the
 lending commitments given or to be given by certain institutions which
 participate in either or both of the Schemes.

 



In connection with the above,
this document is being entered into by the Participating institution by
way of a deed poll in favour of the Government Departments and specifies: (i)
the lending commitments given by the
Participating Institution for itself and on behalf of its Group, in connection
with its proposed participation in the Schemes, comprising Business Lending Commitments and a Homeowner Lending Commitment
(each as defined in paragraph 3(A) and together, the “Lending
Commitments”); and (ii) certain associated undertakings being given by the Participating Institution in connection with
the implementation and operation of the Lending Commitments.


The Participating Institution agrees that the
undertakings given in this Deed Poll (including the Lending Commitments) are
intended to be binding on it and the provision of such undertakings is a pre-requisite to the Participating
Institution’s proposed participation in the Schemes.


References in this Deed Poll to the “Participating
Institution” mean (where appropriate) the Participating Institution and the
members of the Participating Institution’s Group forming part of its UK banking operations.


	
  

 	
  

 
	
 2.

 	
 Commencement
 of Lending Commitments

 



The Participating Institution undertakes (for itself
and on behalf of its Group) to commence the implementation
of the Lending Commitments with effect from 1 March 2009 and in doing so, to act
in good faith, having regard to the purpose of the Lending Commitments to
support lending to creditworthy borrowers in the real economy in a commercial
manner. The implementation of the Lending
Commitments is subject to the terms and conditions of this Deed Poll.


	
  

 	
  

 
	
 3.

 	
 The Lending
 Commitments: General

 



The Participating Institution
undertakes on the terms and subject to the provisions of this Deed Poll:


	
  

 	
  

 
	
 (A)

 	
 to increase the supply of lending by the UK banking
 operations of the Participating Institution
 to UK businesses (as further described in paragraph 4 below) (the “Business Lending Commitments”) and to homeowners
 (including first time buyers) (as further described in paragraph 5 below) (the “Homeowner Lending
 Commitment”); and

 
	
  

 	
  

 
	
 (B)

 	
 to implement the Business
 Lending Commitments and the Homeowner Lending Commitment without distortion
 to its lending activities to other sectors of the real economy (including unsecured consumer lending)
 in the UK and, in doing so, to pay
 due regard to the level of demand and the normal distribution of maturities
 of lending to other sectors of the
 real economy.

 



Notwithstanding the foregoing,
the Participating Institution notes that the Lending Commitments are not intended to require or cause the Participating
Institution to do anything that would constitute a breach by it of the
Financial Services and Markets Act 2000 (“FSMA”), the rules


2





Conformed copy (redacted)


made by the Financial Services
Authority (“FSA”) or the FSA’s supervisory framework (together, the “FSA Requirements”), to lend in excess of its
single name or sectoral risk concentration limits or otherwise to engage in uncommercial practices.


In Implementing the Lending
Commitments, the Participating Institution will adhere to Principle 6 of
the FSA’s Principles for Business (“a firm must pay due regard to the interests
of its customers and treat them fairly”) in
respect of its lending activities.


The Lending Commitments will be
subject to the Participating Institution’s prevailing commercial terms and conditions, including pricing, and risk
assessment; and, additionally, residential mortgage lending will be subject to the applicants meeting the
Participating Institution’s standard credit and other acceptance criteria which
must be reasonable for a prudent banking institution.


	
  

 	
  

 
	
 4.

 	
 The Business Lending Commitments

 
	
  

 	
  

 
	
 4.1

 	
 Scope of
 Business Lending Commitments

 
	
  

 	
  

 
	
 The Business Lending Commitments apply to lending by
 the UK banking operations of the Participating
 Institution to the following UK business categories (each, a “Relevant
 Business Category” and together,
 “Relevant Businesses”):

 
	
  

 
	
 (A)

 	
 small and medium sized
 enterprises (or “SMEs”), which means UK businesses which are categorised by the Participating Institution
 as being small or medium sized
 enterprises by reference to their turnover being £15 million or less;

 
	
  

 	
  

 
	
 (B)

 	
 “Mid-Corporates”, which means UK businesses with a
 turnover of £500 million or less,
 excluding SMEs; and

 
	
  

 	
  

 
	
 (C)

 	
 “Large Corporates”, which means UK businesses with a
 turnover in excess of £500 million.

 



For the purposes of this Deed
Poll: (i) “UK businesses” refers to firms, companies, partnerships, joint
ventures, associations and other undertakings engaged in economic activity in
the UK (including subsidiaries and branches
of overseas entities conducting such economic activities); and (ii) “turnover” refers to the relevant UK
business’s turnover, as stated in its most recent annual accounts or, where the UK business is part
of a group, the consolidated annual turnover of the group.


As stated in paragraph 3, lending
pursuant to the Business Lending Commitments will be subject to the
Participating Institution’s prevailing commercial terms and conditions,
including pricing, and risk assessment.


	
  

 	
  

 
	
 4.2

 	
 Baseline for
 determining compliance with Business Lending Commitments

 



The Participating institution
undertakes:


	
  

 	
  

 
	
 (A)

 	
 in respect of the 12 month
 period commencing 1 March 2009 (the “2009 commitment period”) and the 12
 month period commencing 1 March 2010 (the “2010 commitment

 


3





Conformed copy (redacted)


	
  

 	
  

 
	
  

 	
 period”), to increase lending (as defined in
 paragraph 4.9) above the lending figure specified in the baseline plan by the
 amounts specified in paragraphs 4.3 to 4.8 inclusive;
 and

 
	
  

 	
  

 
	
 (B)

 	
 to implement the Business Lending Commitments in
 line with demand from different industry sectors operating in the real
 economy and, subject to demand, in line with the normal distribution of maturities of loans to each Relevant Business
 Category.

 



For the purposes of this Deed
Poll, the “baseline plan” means the Participating Institution’s forecast as at 31 December 2009 (before the
impact of the Lending Commitments) that the Participating Institution has
shared with the Government Departments.


	
  

 	
  

 
	
 4.3

 	
 Aggregate
 Business Lending Commitment

 



In respect of the 2009 commitment
period, the Participating Institution undertakes to increase its lending to Relevant Businesses by, in aggregate,
an additional £11.0 billion above the amount shown in the baseline plan.
In satisfying this aggregate lending commitment, the Participating Institution shall increase its lending to each
Relevant Business Category by (at a minimum) the amount specified in paragraphs
4.4 to 4.6 inclusive.


	
  

 	
  

 
	
 4.4

 	
 SMEs: 2009 commitment

 



The Participating Institution undertakes that, in
respect of the 2009 commitment period, its lending
to SMEs will be at least ***1 above
the amount shown in the baseline plan.



	
  

 	
  

 
	
 4.5

 	
 Mid-Corporates:
 2009 commitment

 



The Participating institution undertakes that, in
respect of the 2009 commitment period, its lending
to Mid-Corporates will be at least ***1, above the amount shown in
the baseline plan.


	
  

 	
  

 
	
 4.6

 	
 Large
 Corporates: 2009 commitment

 



The Participating institution undertakes that, in
respect of the 2009 commitment period, its lending
to Large Corporates will be at least ***1 above the amount shown in the baseline
plan.


The Participating Institution
will work constructively by: (i) participating in forums established or
supported by the Government or the Bank of England; (ii) working with the
Government and the Bank of England to
develop guidelines for lenders; and (iii) continuing its ordinary course 


	
  

 	
  

 
	

 


 
	
 1

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

 


4





Conformed copy (redacted)


activities and processes (including with respect to
the syndication of facilities), to address or reduce
any risk concentrations arising from this Business Lending Commitment.


	
  

 	
  

 
	
 4.7

 	
 Inter-relationships
 between WCS and Business Lending Commitments

 



The Participating Institution has
agreed to participate in the WCS and undertakes that the capital
released by its participation in the Scheme will be redeployed in support of
lending to SMEs and Mid-Corporates for all
forms of finance. This release of capital will enable the Participating
Institution to provide ***1 of the £11.0 billion increase in lending
referred to in paragraph 4.3 and, as such,
the Participating Institution notes that the commitment given in respect of capital released by its participation
in the WCS: (i) is incorporated within the Business Lending Commitment for the Relevant Business
Categories; and (ii) will be subject to the monitoring, reporting and compliance arrangements described in
paragraphs 8, 9 and 11.


	
  

 	
  

 
	
 4.8

 	
 Lending to
 business: 2010 commitment

 



In respect of the 2010 commitment period, the
Participating Institution undertakes to maintain similar levels of lending to each of the Relevant Business Categories as
in the 2009 commitment period,
subject to adjustment of the commitments (pursuant to paragraph 6) by agreement with the Treasury and BERR to reflect
circumstances at the start of the 2010 commitment
period.


	
  

 	
  

 
	
 4.9

 	
 Application
 of Business Lending Commitments

 



For the purpose of the Business
Lending Commitments “lending” means financing facilities granted
(whether drawn or undrawn), in each case to real economy UK businesses,
including (without limitation) loans, overdrafts, hire purchase and leasing of
business assets, invoice discounting and
export finance, but excluding (without limitation) derivatives and interbank financing
and which are outstanding as at the end of the 2009 commitment period or the
2010 commitment period (as appropriate).


For the purposes of the above: (i) debt which is
exchanged for equity in a restructuring of a borrower,
and impairments and write-offs of outstanding lending (save to the extent such
impairments and write-offs are already reflected in the baseline plan), shall
be treated as if it was still lending,
except to the extent that such adjustments to the quantum of outstanding lending
are recovered or are recoverable through the APS; and (ii) debt which is repaid
by a borrower as a consequence of that
borrower raising capital through other means, including (without
limitation) through disposals, equity issuance and bond issuance, shall be
treated as if it was still lending.


	
  

 	
  

 
	

 


 
	
 1 

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

 



5






Conformed
copy (redacted)


	
  

 	
  

 
	
 4.10

 	
 Marketing relating to Business
 Lending Commitments

 



The Participating Institution
undertakes that it will promptly ensure that its staff are aware of the Business Lending Commitments and actively seek to
implement such commitments through sales and marketing activities which
are targeted at Relevant Businesses, which shall include both existing
borrowers and new potential borrowers. These activities will, where reasonably appropriate, make specific provision for UK
businesses that would be categorised by the Participating Institution as
Mid-Corporates or Large Corporates and whose borrowings were financed, or are
financed, by financial institutions that have reduced, or are in the process
of, reducing their lending activities to UK
businesses.


	
  

 	
  

 
	
 4.11

 	
 General provisions about
 lending to business

 
	
  

 
	
 In relation to lending to
 Relevant Businesses, the Participating Institution will:

 
	
  

 	
  

 
	
 (A)

 	
 commit to its lending
 allocation under the Enterprise Finance Guarantee Scheme, subject to the Participating Institution’s
 ordinary course pricing and other terms;

 
	
  

 	
  

 
	
 (B)

 	
 apply for and, if approved,
 use the European Investment Bank’s intermediated financing schemes aimed specifically at SMEs and
 “Midcaps” (as defined by the European
 Investment Bank);

 
	
  

 	
  

 
	
 (C)

 	
 actively and constructively
 participate in the funding of UK export credits where such funding is subject
 to the Export Credits Guarantee Department guarantee arrangements;

 
	
  

 	
  

 
	
 (D)

 	
 abide by the revised British
 Bankers’ Association statement of principles for small business lending released on 12 December 2008
 (as agreed at the Small Business
 Finance Forum held on 11 November 2008);

 
	
  

 	
  

 
	
 (E)

 	
 not reduce or withdraw, or
 increase its charges on, working capital lines when credit insurance covering
 the borrower’s suppliers has been reduced or withdrawn, without due and careful consideration and unless it is
 satisfied, through the application of its ordinary course commercial and risk assessment, that there has been a
 material adverse change in the
 credit risk associated with the relevant business that justifies such an action;

 
	
  

 	
  

 
	
 (F)

 	
 continue to apply ordinary
 course commercial practices as a prudent banking institution in determining
 whether to call a default against a business to which it has made a loan; and

 
	
  

 	
  

 
	
  

 	
  

 
	
 (G)

 	
 work constructively with other
 lenders and, where appropriate, the Government in exploring the full range of restructuring
 possibilities for corporate borrowers, and to do so in compliance with the International
 Association of Restructuring, Insolvency and Bankruptcy Professionals’ (INSOL) “Statement of Principles for a
 Global Approach to Multi-creditor
 Workouts”.

 
	
  

 	
  

 
			


6





Conformed
copy (redacted)


The Participating Institution
notes that it has already committed to, and is making, funding of £6.25 million
available through the Capital for Enterprise Fund (announced by BERR on 14 January 2009), which is a fund to provide long term
finance for businesses which have exhausted
their normal lending facilities and which is part of Government’s commitment to
support the de-leveraging of
commercially viable over-leveraged businesses.


	
  

 	
  

 
	
 5.

 	
 Homeowner Lending Commitment

 
	
  

 	
  

 
	
 5.1

 	
 Scope of
 Homeowner Lending Commitment

 



The Homeowner Lending Commitment
applies to residential mortgage lending by the UK banking operations of the Participating
Institution to residential homeowners, including first time buyers and
buy-to-let mortgage lending, in respect of properties in the UK. Residential
and buy-to-let mortgage lending
which involves the Participating Institution lending by way of remortgage in circumstances where no property purchase is
involved shall be disregarded for these purposes.


	
  

 	
  

 
	
 5.2

 	
 Homeowner
 Lending Commitment: 2009 commitment

 



The Participating Institution
undertakes that, in respect of the 2009 commitment period, its gross
residential mortgage lending will be at least £3.0 billion above the amount
shown in the baseline plan.


As stated in paragraph 3,
residential mortgage lending will be subject to the Participating Institution’s prevailing commercial terms and
conditions, including pricing, and risk assessment; and, additionally, the
applicants meeting the Participating Institution’s standard credit and other
acceptance criteria which must be reasonable for a prudent banking institution.


	
  

 	
  

 
	
 5.3

 	
 Homeowner
 Lending Commitment: 2010 commitment

 



In the 2010 commitment period,
the Participating Institution undertakes to maintain similar levels of
gross residential mortgage lending as in the 2009 commitment period, subject to
adjustment of the commitment (pursuant to paragraph 6) by agreement with the
Government Departments to reflect
circumstances at the start of the 2010 commitment period.


	
  

 	
  

 
	
 5.4

 	
 Application
 of Homeowner Lending Commitment

 



For the purposes of the Homeowner
Lending Commitment, the Participating Institution will ensure that:


	
  

 	
  

 
	
 (A)

 	
 a range of residential mortgage
 products are available for residential mortgage applicants for residential mortgages across the
 loan-to-value (“LTV”) bands and up to at least 90% LTV;

 
	
  

 	
  

 
	
 (B)

 	
 applications for residential
 mortgage products are promptly processed and granted, subject to applicants meeting the Participating
 Institution’s standard credit and other acceptance criteria which must be
 reasonable for a prudent banking institution and pay due regard to the
 obligation to sell appropriate products to applicants; and

 


7





Conformed
copy (redacted)


	
  

 	
  

 
	
 (C)

 	
 additional residential mortgage
 lending is offered across a normal distribution of LTV bands and in accordance with ordinary course
 commercial practices as a prudent banking
 institution.

 
	
  

 	
  

 
	
 5.5

 	
 Marketing
 relating to Homeowner Lending Commitment

 



The Participating Institution
undertakes that it will promptly ensure that its staff are aware of the Homeowner
Lending Commitment and actively seek to implement such commitment through sales
and marketing activities targeted at residential homeowners (including first
time buyers). The communication of the
Homeowner Lending Commitment to staff, and the marketing of such commitment
to residential homeowners shall, in particular, address the specific
obligations undertaken by the Participating
Institution pursuant to paragraph 5.4.


	
  

 	
  

 
	
 5.6

 	
 General
 provisions about lending to homeowners

 



The Participating Institution
will:


	
  

 	
  

 
	
 (A)

 	
 actively participate in the
 Government’s Homeowners Mortgage Support Scheme (when the detail of this scheme is finalised),
 Mortgage Rescue Scheme and Support for Mortgage Interest and work to ensure that its eligible borrowers
 have the opportunity to benefit from these Schemes (where appropriate) and
 avoid repossession; and

 
	
  

 	
  

 
	
 (B)

 	
 abide by the principles
 established by, and actively and constructively participate in, the Home Finance Forum (including policies for
 supporting individual borrowers in difficulty).

 
	
  

 	
  

 
	
 5.7

 	
 Other
 provisions

 



The Participating Institution
will:


	
  

 	
  

 
	
 (A)

 	
 actively and constructively
 participate in the Consumer Finance Forum;

 
	
  

 	
  

 
	
 (B)

 	
 abide by the principles agreed
 as part of the Credit Card Summit on 28 November 2008; and

 
	
  

 	
  

 
	
 (C)

 	
 work closely with registered
 social landlords with a view to continuing the supply of appropriate finance.

 


8





Conformed
copy (redacted)


	
  

 	
  

 
	
 6. 

 	
 Adjustment of Lending Commitments

 



The Participating Institution acknowledges that, as a
consequence of its ongoing dialogue with the
Government Departments regarding the operation and implementation of the
Lending Commitments, it may be appropriate for the Government
Departments (in their discretion but acting
reasonably and in consultation with the Participating Institution) to: (i)
reduce the quantum of the Homeowner
Lending Commitment and/or one or more of the Business Lending Commitments;
or (ii) allow the Participating Institution to increase its lending to one or
more Relevant Business Categories by the
amount of any shortfall in residential mortgage lending (any such
increase and shortfall being calculated as an equivalent amount on a
risk-weighted asset basis) (a “Commitment
Adjustment”).


The circumstances in which the
Government Departments may make such an adjustment to the Lending Commitments include, but are not confined
to, the following:


	
  

 	
  

 
	
 (A)

 	
 changes to economic conditions,
 the competitive market landscape and/or the economic assumptions of the Participating Institution
 which have been shared with the Government Departments and underlie
 the baseline plan (including, without limitation, the level of demand for business and residential mortgage lending at
 the Participating Institution’s
 ordinary course pricing and terms and the level of availability within the market of other forms of debt and equity finance
 to UK businesses);

 
	
  

 	
  

 
	
 (B)

 	
 significant changes to the
 utilisation and drawdown rates of lending UK businesses assumed in the baseline plan;

 
	
  

 	
  

 
	
 (C)

 	
 changes to the Government
 Departments’ expectations as to the amount of lending needed to maintain economic activity; and

 
	
  

 	
  

 
	
 (D)

 	
 updated assessments of the
 extent to which the Participating Institution has relied on Government support and the nature of the support
 utilised by the Participating Institution.

 



In determining whether to make a
Commitment Adjustment, the Participating Institution understands that
the Government Departments will have regard to (and act reasonably in considering) any submissions made by the
Participating Institution as part of its ongoing dialogue with the Government Departments regarding the operation and
implementation of the Lending Commitments (including (without
limitation) with respect to the Homeowner Lending Commitment and Business Lending Commitments applicable in respect of the
2010 commitment period).


If the Government Departments are satisfied that the
Lending Commitments are no longer necessary to address the Government’s
objectives of reinforcing the stability of the financial system, increasing
confidence and capacity to lend, and in turn supporting the recovery of the economy, they may agree that they should cease to
apply.


The Participating Institution will comply with the Lending Commitments
in accordance with the provisions of this Deed Poll on the understanding that:
(i) the Schemes will be established by the
Government; and (ii) the Participating Institution will participate in either
or both of the


9






Conformed copy (redacted) 


Schemes on terms to be agreed with the Government. It is understood
that the Government will, in consultation with the Participating Institution
and acting reasonably, make an appropriate Commitment Adjustment if the APS is
not implemented within the timeframes anticipated for such implementation; and
that if the APS is not implemented within the timeframes anticipated for such
implementation and the Participating Institution only participates in the CGS,
that the Government will, in consultation with the Participating Institution
and acting reasonably, make an appropriate Commitment Adjustment having regard
to the quantum of financial support being provided by the Government to the
Participating Institution pursuant to the CGS. 


If any preference shares held by the Treasury in the capital of the
Participating Institution are exchanged for ordinary shares, the Participating
institution agrees that it shall increase the lending being made available to
support creditworthy borrowers in the real economy The quantum of such
increased lending shall be determined by reference to the increased lending
capacity of the Participating Institution after taking account of the long term
effects of the exchange of the preference shares. Such increased lending will
take account of demand for business and residential mortgage lending at the
Participating Institution’s prevailing terms and conditions, including pricing,
and risk assessment; and, additionally, any increased residential mortgage
lending will be subject to the applicants meeting the Participating
Institution’s standard credit and other acceptance criteria. 


	
  

 	
  

 
	
 7.

 	
 Interaction
 of Lending Commitments with previous commitments 

 



The Participating Institution notes that the Lending Commitments supersede
the lending commitments given by the Participating Institution in October 2008
in connection with its participation in the Government’s Recapitalisation
Scheme. 


	
  

 	
  

 
	
 8.

 	
 Monitoring
 and Reporting 

 
	
  

 	
  

 
	
 8.1

 	
 General
 requirements 

 



The Participating Institution agrees that:


	
  

 	
  

 	
  

 
	
 (A)

 	
 compliance with
 the Lending Commitments will be subject to a monitoring and reporting process
 between the Participating Institution and the Government Departments which
 will be detailed, transparent and determined by the Government Departments
 (acting reasonably) in consultation with the Participating Institution; 

 
	
  

 	
  

 	
  

 
	
 (B)

 	
 It will report to
 the Government Departments: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 on a monthly basis
 in a format, with content and within timescales, to be determined by the
 Government Departments (acting reasonably) in consultation with the
 Participating Institution (the “monthly reports”) and that: (a) In respect of
 the Business Lending Commitments, the monthly report will include (without
 limitation) the information and data described in paragraph 8.2; and (b) in
 respect of the Homeowner Lending Commitment, each monthly report will include
 (without limitation) the information and data described in paragraph 8.3; and
 

 


10





Conformed copy (redacted) 


	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 on an annual basis
 in a format, with content and within timescales, to be determined by the
 Government Departments (acting reasonably) in consultation with the
 Participating institution (the “annual reports”) to facilitate the reporting
 by the Government Departments envisaged in paragraph 8.5(B) and that each
 annual report will include (without limitation) the information and data
 described in paragraph 8.4; and 

 
	
  

 	
  

 	
  

 
	
 (C)

 	
 the monthly
 reports and annual reports will be submitted to the board of directors of the
 Participating Institution (the “Board”) prior to delivery to the Government
 Departments and, upon delivery to the Government Departments, will be
 accompanied by a certificate from a Board director that, to the best of his
 or her knowledge and belief, having made reasonable enquiries, the report
 fairly presents the relevant data and is not misleading for the purpose of
 assessing compliance with the Lending Commitments or the achievement of their
 purpose. 

 



Without prejudice to the specific requirements set out in this paragraph
8, the Participating institution undertakes to be open and honest in its
dealings with the Government Departments in relation to the implementation and
operation of the Lending Commitments and will promptly provide each Government
Department with such other information as it reasonably requires in connection
with the Lending Commitments. 


	
  

 	
  

 
	
 8.2

 	
 Business
 Lending Commitments: monthly reports 

 



In relation to the Business Lending Commitments, the monthly reports
will include: 


	
  

 	
  

 
	
 (A)

 	
 a segmental
 analysis showing new and outstanding lending and commitments divided by both
 size of business (corresponding to the Relevant Business Categories) and
 industry sector; 

 
	
  

 	
  

 
	
 (B)

 	
 (in respect of
 SMEs) application numbers and acceptance rates by type of financing, together
 with the credit risk rating of businesses; 

 
	
  

 	
  

 
	
 (C)

 	
 a summary of the
 distributions of the pricing and terms on which lending is being made
 available and details of the credit and risk assessment methodology; 

 
	
  

 	
  

 
	
 (D)

 	
 a narrative
 commentary on new lending activities in respect of new and existing
 borrowers; and 

 
	
  

 	
  

 
	
 (E)

 	
 a narrative
 commentary on the data, explaining the reasons for any significant variances
 in the amount of outstanding loans and availability of credit by size of
 business or sector from the baseline plan. 

 
	
  

 	
  

 
	
 8.3

 	
 Homeowner Lending
Commitment: monthly reports  

 



In relation to the Homeowner Lending Commitment, the monthly reports
will include: 


	
  

 	
  

 
	
 (A)

 	
 a segmental
 analysis showing new loans (gross new residential mortgage lending), credit
 availability and end of month stock of loans (net outstanding residential
 mortgage 

 


11





Conformed copy (redacted) 


	
  

 	
  

 
	
  

 	
 lending) divided
 by transaction type (Including LTV and Loan to Disposable Income (“LDI”)
 ratios);

 
	
  

 	
  

 
	
 (B)

 	
 application
 numbers and acceptance rates by product, together with the bureau credit
 rating scores of applicants, against the corresponding numbers for 2008; 

 
	
  

 	
  

 
	
 (C)

 	
 a summary of the
 distributions of the pricing and terms on which lending is being made
 available and of the credit and risk assessment methodology; and 

 
	
  

 	
  

 
	
 (D)

 	
 a narrative
 commentary on the data, explaining the reasons for any significant variances
 in the amount of outstanding loans and availability of credit by transaction
 type from the baseline plan. 

 
	
  

 	
  

 
	
 8.4

 	
 Lending
 Commitments: annual reports

 



The annual reports will include information of a type which is broadly
equivalent to the data and information to be contained in the monthly reports. 


	
  

 	
  

 
	
 8.5

 	
 Public disclosure  

 
	
  

 	
  

 
	
 The Participating
 institution agrees that:

 
	
  

 
	
 (A)

 	
 the Government
 Departments may publicly announce details of the Lending Commitments and the
 associated obligations and undertakings of the Participating institution as
 described in this Deed Poll; and 

 
	
  

 	
  

 
	
 (B)

 	
 each of the
 Government Departments may report to Parliament and Parliamentary committees
 (including the Public Accounts Committee and the House of Commons Treasury
 Select Committee) on implementation of, and compliance with, the Lending
 Commitments, with such reporting expected to be undertaken on an annual
 basis. 

 
	
  

 	
  

 
	
 8.6

 	
 Confidentiality
 

 



Certain data and information to be included within the monthly reports,
or otherwise provided to the Government Departments by the Participating
institution pursuant to this Deed Poll, will be anonymised to preserve customer
confidentiality and will constitute confidential, commercially sensitive data. 


This Deed Poll (including the baseline plan), and
    confidential information provided to Government Departments pursuant to this
    Deed Poll (including the monthly and annual reports), is or will be (without
    prejudice to the rights of the Government Departments described in paragraph
    8.5(A)) subject to confidentiality and freedom of information arrangements
    between the Participating institution and each of the Government Departments
    on the terms set out in the confidentiality agreements between the Particlpating
institution and each of the Government Departments dated 27 February 2009). 


12





Conformed copy (redacted) 


	
  

 	
  

 
	
 9.

 	
 Implementation
 plan 

 



The Participating institution undertakes that, as soon as practicable
after the Lending Commitments take effect, it will prepare and present to the
Government Departments a plan which will address how the Lending Commitments
are to be implemented. Such implementation plan will include the Participating
institution’s proposals regarding the marketing and sales activities to be
undertaken pursuant to paragraphs 4.10 and 5.5. 


	
  

 	
  

 
	
 10.

 	
 lncentivisation
 

 



The Participating institution will, in applying its balanced scorecard
approach to remuneration, ensure that the performance assessment for staff
employed in business units responsible for delivery of the Lending Commitments
will include an assessment of new lending arising from the marketing and sales
activities undertaken pursuant to the Participating institution’s obligations
under paragraphs 4.10 and 5.5. 


	
  

 	
  

 
	
 11.

 	
 Compliance
 

 



Any failure to comply with the Lending Commitments or the other
obligations of, or undertakings given by, the Participating Institution under
this Deed Poll will initially be addressed through the reporting mechanism
which will provide the Government Departments with a framework to discuss with
the Participating institution the background to and reasons for such failure. 


In addition, failure to comply with the Lending Commitments may result
in the withdrawal or restriction of the Participating institution’s eligibility
to roll over coverage under the CGS from three to five years. 


	
  

 	
  

 
	
 12.

 	
Miscellaneous  

 
	
  

 	
  

 
	
 12.1

 	
 Representations
and warranties  

 



The Participating Institution represents and warrants that: 


	
  

 	
  

 
	
 (A)

 	
 it has the
 corporate power and the authority to enter into this Deed Poll and to carry
 out its obligations, and the undertakings given by it, hereunder; 

 
	
  

 	
  

 
	
 (B)

 	
 it is duly
 organised and validly existing under the laws of its jurisdiction of
 organisation, and the execution of this Deed Poll and the consummation of the
 transactions contemplated herein have been duly authorised by all necessary
 action, and no other act or proceeding, corporate or otherwise, on its part
 is necessary to authorise the execution of this Deed Poll or the consummation
 of any of the transactions contemplated hereby; and 

 
	
  

 	
  

 
	
 (C)

 	
 it has duly
 executed and delivered this Deed Poll. 

 


13





Conformed copy (redacted)


	
  

 	
  

 
	
 12.2

 	
 Costs
 

 



The Participating Institution agrees that it shall pay its own costs
and expenses in relation to the negotiation, preparation, execution and
carrying into effect of this Deed Poll. 


	
  

 	
  

 
	
 12.3

 	
Remedies  

 



The Participating Institution agrees that: 


	
  

 	
  

 
	
 (A)

 	
 (without prejudice
 to any other rights or remedies which any Government Department may have)
 damages would not be an adequate remedy for any breach by the Participating
 Institution of the provisions of this Deed Poll and each Government
 Department shall be entitled to seek the remedies of injunction, specific
 performance and other equitable relief for any threatened or actual breach of
 any such provision by the Participating Institution and no proof of special
 damages shall be necessary for the enforcement by any Government Department
 of its rights under this Deed Poll; 

 
	
  

 	
  

 
	
 (B)

 	
 no failure of any
 Government Department to exercise, and no delay by any Government Department
 in exercising, any right, power or remedy in connection with this Deed Poll
 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; and 

 
	
  

 	
  

 
	
 (C)

 	
 the rights
 provided in this Deed Poll are cumulative and not exclusive of any rights
 (whether provided by law or otherwise). 

 
	
  

 	
  

 
	
 12.4

 	
 Invalidity
 

 



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


	
  

 	
  

 
	
 12.5

 	
 Assignment
 

 



The Participating Institution agrees that each of the Government
Departments may assign their respective rights under this Deed Poll to: (i) a
governmental, quasi-governmental or regulatory body; or (ii) a body or entity
established by, or owned by, one or more of the Government Departments
(including any body or entity established to monitor and administer the APS). 


	
  

 	
  

 
	
 12.6

 	
 Variation
 

 



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


14





Conformed copy (redacted) 


	
  

 	
  

 
	
 12.7

 	
 Governing
 law 

 



This Deed Poll and any non-contractual obligations arising out of or in
connection with it shall be governed by and construed in accordance with the
laws of England. 


15





Conformed copy (redacted) 


IN WITNESS WHEREOF this Deed Poll has been executed and delivered as a
deed on 6 March 2009.  


	
  

 	
  

 	
  

 	
  

 
	
 Executed and
 delivered as a deed by

 	
 )

 	
  

 	
  

 
	
 LLOYDS
 BANKING GROUP PLC

 	
 )

 	
  

 	
  

 
	
 acting by two
 directors / one director and its

 	
 )

 	
 By:

 	
 Sir Victor Blank

 
	
 secretary

 	
 )

 	
  

 	
  

 
	
  

 	
 )

 	
  

 	
 Chairman

 
	
  

 	
 )

 	
  

 	
  

 
	
  

 	
 )

 	
  

 	
  

 
	
  

 	
 )

 	
  

 	
  

 
	
  

 	
 )

 	
 By:

 	
 J. Eric Daniels

 
	
  

 	
 )

 	
  

 	
  

 
	
  

 	
 )

 	
  

 	
 Group Chief
 Executive

 


16