Exhibit 4(a)(v)


Conformed copy


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 and 18 May 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”);

 
	
  

 	
  

 
	
 (2)

 	
 CITIGROUP GLOBAL MARKETS U.K. EQUITY
 LIMITED, a company incorporated in England and Wales with registered number
 2019774 and whose registered office is at Citigroup Centre, Canada Square,
 Canary Wharf, London, E14 5LB (“CGMEL”);

 
	
  

 	
  

 
	
 (3)

 	
 UBS LIMITED, a company incorporated in
 England and Wales with registered number 2035362 whose registered office is
 at 1 Finsbury Avenue, London EC2M 2PP (“UBS”); 

 
	
  

 	
  

 
	
 (4)

 	
 J.P. MORGAN CAZENOVE LIMITED, a company incorporated in
 England and Wales with registered number 04153386 and whose registered office
 is 20 Moorgate, London EC2R 6DA (“JPMC”); 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 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 in part by the issue of the New Shares. 

 
	
  

 	
  

 
	
 (B)

 	
 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.

 
	
  

 	
  

 
	
 (C)

 	
 On the terms and
 subject to the provisions of this Agreement (a) each of the Joint Bookrunners
 is willing (severally and not jointly or jointly and severally) as agent of
 the Company to use reasonable endeavours to procure subscriber(s) for the
 Non-Accepted Shares (or, at their discretion, for as many as can be so
 procured) if an amount which is not less than the Minimum Rump Placing Amount
 can be obtained, and (b) if and to the extent that the Joint Bookrunners are
 unable to procure subscriber(s) for Non-Accepted Shares as described in (a)
 above, HM Treasury is willing to subscribe for (or procure that its
 nominee subscribes for) such Non-Accepted Shares itself.

 
	
  

 	
  

 
	
 (D)

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

 
	
  

 	
  

 
	
 (E)

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

 










2


	
  

 	
  

 
	
 (F)

 	
 As at, and
 effective from, 20 March 2009, the parties hereto entered into an agreement
 (the “Amended
 and Restated Placing Agreement”) which amended and restated the
 Original Placing Agreement.

 
	
  

 	
  

 
	
 (G)

 	
 The Joint Sponsors
 shall act as Joint Sponsors in connection with the applications for Accepted
 Shares Admission and Non-Accepted Shares Admission and the Joint Bookrunners
 shall act as joint bookrunners and joint placing agents in connection with
 the Open Offer, 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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Accepted Shares”

 	
  

 	
 has the meaning
 given in clause 7.1(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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Accepted Shares Admission”

 	
  

 	
 means the
 admission of the Accepted 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 Ordinary 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 (or, where applicable, form of direction), in a form
 acceptable to HM Treasury and to the Joint Sponsors and the Joint
 Bookrunners, acting reasonably, to be despatched to Qualifying Shareholders
 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


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Chairmanship Announcement”

 	
  

 	
 means the press
 announcement issued by the Company on 17 May 2009 giving details relating to
 the chairmanship of the Company;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “CGMEL
 Indemnified Person”

 	
  

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (a)

 	
 CGMEL and any subsidiary, branch or affiliate of CGMEL;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (b)

 	
 a person who is,
 on or at any time after the date of this Agreement, a director, officer,
 partner or employee of an undertaking specified in sub paragraph (a) above;
 and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (c)

 	
 CGMEL, their selling agents and each person, if any, who controls CGMEL within the meaning of Section
 15 of the Securities Act or Section 20 of the Exchange Act and CGMEL’s
 respective affiliates, subsidiaries, branches, affiliates, associates and
 holding companies and the subsidiaries of such subsidiaries, branches,
 affiliates, associates and holding companies and each of such person’s
 respective directors, officers and employees;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 and “CGMEL Indemnified Person” shall be
 construed accordingly;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Circular”

 	
  

 	
 means the
 circular, in a form acceptable to HM Treasury to be sent to the
 Qualifying Shareholders (other than the Prohibited Shareholders) giving
 summary details of the 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;

 









5


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Draft Circular”

 	
  

 	
 means the draft of
 the Circular provided to the Joint Bookrunners and HM Treasury immediately
 prior to the release of the Second Press Announcement and dated 18 May 2009,
 in the agreed form;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Draft Prospectus”

 	
  

 	
 means the draft of
 the Prospectus provided to the Joint Bookrunners and HM Treasury immediately
 prior to the release of the Second Press Announcement and dated 18 May 2009,
 in the agreed form;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “DTRs”

 	
  

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

 









6


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Due Diligence Meetings”

 	
  

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (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 20 March 2009 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;

 









7


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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 Company to Euroclear
 confirming that the conditions for admission of the Accepted Shares and the
 Non-Accepted 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 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 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);

 









8


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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 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 18; 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;

 









9


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “IFRS”

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Indemnified Persons”

 	
  

 	
 means each and any
 HMT Indemnified Person, each and any CGMEL Indemnified Person, each and any
 UBS Indemnified Person and each and any JPMC Indemnified Person and “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 Second Press Announcement, the Chairmanship 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 Accepted Shares Admission or,
 if later, Non-Accepted Shares Admission and any other document published or
 issued after the Effective Date by or on behalf of the Company in connection
 with the Open Offer, the placing of the Non-Accepted Shares pursuant to
 clause 3.5 or clause 4.1 or the redemption of the Preference Shares;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Issue Price”

 	
  

 	
 means the price of
 38.43 pence per New Share;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Joint Bookrunners”

 	
  

 	
 means CGMEL, UBS
 and JPMC;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Joint Sponsors”

 	
  

 	
 means JPMC and
 UBS;

 









10


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “JPMC Indemnified Person”

 	
  

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (a)

 	
 JPMC and any
 subsidiary, branch or affiliate of JPMC;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (b)

 	
 a person who is,
 on or at any time after the date of this Agreement, a director, officer,
 partner or employee of an undertaking specified in sub-paragraph (a) above;
 and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (c)

 	
 JPMC, their
 selling agents and each person, if any, who controls JPMC within the meaning
 of Section 15 of the Securities Act or Section 20 of the Exchange Act and
 JPMC’s respective affiliates, subsidiaries, branches, affiliates, associates
 and holding companies together with JPMorgan Chase & Co and Cazenove
 Group Limited and the subsidiaries of such subsidiaries, branches,
 affiliates, associates and holding companies and each of such person’s
 respective directors, officers and employees;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 and “JPMC
 Indemnified Person” shall be construed accordingly;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Listing Rule Resolution”

 	
  

 	
 means the
 resolution, in a form acceptable to HM Treasury, required under Chapter
 11 of the Listing Rules in connection with the 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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “London Stock Exchange”

 	
  

 	
 means London Stock
 Exchange Group plc;

 









11


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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 12 and/or in seeking advice regarding any Claim or in
 any way related to or in connection with the indemnity contained in
 clause 12) 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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Minimum Rump Placing Amount”

 	
  

 	
 means that amount
 that is equal to the sum of (a) the Issue Price multiplied by the number of
 Non-Accepted Shares for which subscriber(s) are procured by the Joint
 Bookrunners pursuant to clause 3.5, and (b) the expenses of procurement
 (including any applicable brokerage, transaction levies, trading fees,
 currency conversion costs, commissions and amounts in respect of VAT thereon
 which are not recoverable);

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “New Shares”

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Non-Accepted Shares”

 	
  

 	
 has the meaning
 given in clause 7.1(B);

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Non-Accepting Shareholders”

 	
  

 	
 means those
 Qualifying Shareholders that are not Open Offer Acceptors and “Non-Accepting
 Shareholder” shall be construed accordingly;

 









12


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Non-Accepted Shares Admission”

 	
  

 	
 means the
 admission of the Non-Accepted 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, which is expected to occur, at a time and date agreed
 by the parties, that is no later than 8.00 a.m. on the date that is three
 Dealing Days after the Time of Sale;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Notifying Sponsor”

 	
  

 	
 has the meaning
 given in clause 14.4;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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;

 









13


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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);

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Placing Schedule”

 	
  

 	
 has the meaning
 given to it in clause 3.7;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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 relevant date of redemption;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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 Open Offer
 (including, for the avoidance of doubt, in connection with the Joint
 Bookrunners’ endeavours, if any, to procure subscriber(s) for Non-Accepted
 Shares pursuant to clauses 3.5 and 4.1) and any other publicity materials
 relating to the 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 Open Offer and the redemption of the Preference Shares;

 









14


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Profit Forecast Report”

 	
  

 	
 means the profit
 forecast report to be prepared by PricewaterhouseCoopers LLP, in the form to
 be agreed, relating to the forecast loss before tax, before the recognition
 of negative goodwill, for the Group for the period ending 31 December 2009
 set out in Part XVII of the Prospectus;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Prohibited Shareholders”

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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 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;

 









15


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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 6.8(C)(i);

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “QIBs”

 	
  

 	
 has the meaning
 given to it in clause 6.2;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Receiving Agent”

 	
  

 	
 means the
 receiving agent to be appointed pursuant to clause 3.10;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Receiving Agent Agreement”

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Record Date”

 	
  

 	
 means the record
 date for the Open Offer, being 13 May 2009 (or such other 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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Regulatory Information Service”

 	
  

 	
 has the meaning
 given in the Listing Rules;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Relevant Cost”

 	
  

 	
 has the meaning
 given in clause 9.10;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Relevant Member State”

 	
  

 	
 has the meaning
 given in clause 6.6;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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 Open Offer;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Residual Shares”

 	
  

 	
 has the meaning
 given to it in clause 7.3;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Resolutions”

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “SDRT”

 	
  

 	
 means stamp duty
 reserve tax;

 










16


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Second Press Announcement”

 	
  

 	
 means the press
 announcement issued by the Company on 18 May 2009 giving further details
 of the Open Offer and the redemption of the Preference Shares;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (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,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 to be proposed at
 the GM;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Solicitors to the Joint Sponsors and Joint
 Bookrunners”

 	
  

 	
 means Freshfields
 Bruckhaus Deringer LLP;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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,
 the Amended and Restated Placing Agreement or this Agreement) untrue,
 inaccurate or misleading in any respect;

 









17


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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.;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Time of Sale”

 	
  

 	
  

 	
 means a time
 falling within the period commencing at 7.00 a.m. on the first Dealing Day
 following the Closing Date and ending on the second Dealing Day after the
 Company has publicly announced the number of Accepted Shares, as is notified
 to the Company and HM Treasury by the Joint Bookrunners as the time of
 sale with respect to any subscriber(s) for Non-Accepted Shares procured by
 the Joint Bookrunners, pursuant to clauses 3.5 and 4.1;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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;

 









18


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Treasury Solicitor”

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “UBS Indemnified Persons”

 	
  

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (a)

 	
 UBS and any
 subsidiary, branch or affiliate of UBS;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (b)

 	
 a person who is,
 on or at any time after the date of this Agreement, a director, officer,
 partner or employee of an undertaking specified in sub paragraph (a) above;
 and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (c)

 	
 UBS, their selling
 agents and each person, if any, who controls UBS within the meaning of
 Section 15 of the Securities Act or Section 20 of the Exchange Act and UBS’s
 respective affiliates, subsidiaries, branches, affiliates, associates and
 holding companies and the subsidiaries of such subsidiaries, branches,
 affiliates, associates and holding companies and each of such person’s
 respective directors, officers and employees;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 and “UBS
 Indemnified Person” shall be construed accordingly;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “United States”

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “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:

 









19


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (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 CGMEL, 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 Resolution”

 	
  

 	
 means the
 resolution 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;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  “Wholly-Owned Entity”

 	
  

 	
 has the meaning
 given in clause 18.1; 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 

 









20


	
  

 	
  

 
	
  

 	
 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 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.

 










21


	
  

 	
  

 	
  

 
	
 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 Open Offer and/or the
 publication of the Circular and/or Accepted Shares Admission and/or
 Non-Accepted Shares 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.

 
	
  

 	
  

 	
  

 
	
 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, 3.5 and 3.6
 and such other obligations hereunder which fall due for performance before
 Accepted Shares Admission) are conditional on:

 









22


	
  

 	
  

 	
  

 
	
  

 	
 (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 Accepted Shares 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 the
 Effective Date and when given under clause 11.1 with respect to
 HM Treasury and when given under clause 11.1A 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 Accepted Shares Admission and immediately prior to Accepted
 Shares 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 Accepted
 Shares Admission and immediately prior to Accepted Shares 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

 









23


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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 Open Offer, redemption of
 the Preference Shares or any subscription for New Shares by HM Treasury,
 Qualifying Shareholders or subscriber(s) procured by the Joint Bookrunners
 pursuant to clause 3.5 or clause 4.1, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 Admission dealings in the Ordinary Shares;

 
	
  

 	
  

 	
  

 
	
  

 	
 (K)

 	
 the delivery to
 HM Treasury and to the Joint Sponsors and CGMEL, 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 issued prior to Accepted Shares Admission, the
 documents (or “bring downs” from such documents) listed in Part III of
 Schedule 2 (as applicable) requested by the Joint Sponsors, CGMEL and by
 HM Treasury in respect of such Supplementary Prospectus and dated as of
 such date;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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 CGMEL, in the context of the Open
 Offer or the applications for Accepted Shares Admission and Non-Accepted
 Shares 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;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (N)

 	
 subject to
 applicable law, the Directors voting all Ordinary Shares held by them in
 favour of the Resolutions;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (O)

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

 









24


	
  

 	
  

 	
  

 
	
  

 	
 (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 Accepted Shares Admission;

 
	
  

 	
  

 	
  

 
	
  

 	
 (R)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (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) 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 Accepted Shares Admission and admission of the Accepted Shares to
 CREST as Participating Securities and all of the conditions to such
 admissions having been satisfied, in each case, on or before Accepted Shares
 Admission; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (V)

 	
 the Company
 allotting, subject only to Accepted Shares Admission, the Accepted Shares to
 Open Offer Acceptors in accordance with clauses 3 and 5;

 
	
  

 	
  

 	
  

 
	
  

 	
 (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;

 
	
  

 	
  

 	
  

 
	
  

 	
 (X)

 	
 no event referred
 to in Section 87G of the FSMA arising between the time of publication of the
 Prospectus and the time of Accepted Shares Admission and no Supplementary
 Prospectus being published by or on behalf of the Company before Accepted
 Shares Admission which, in any of the foregoing cases, HM Treasury or
 the Joint Sponsors or CGMEL 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 Open Offer, the redemption of the Preference Shares,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, Accepted Shares Admission, Non-Accepted Shares Admission or
 post-Accepted Shares Admission or Non-Accepted Shares Admission dealings in
 the Ordinary Shares;

 
	
  

 	
  

 	
  

 
	
  

 	
 (Y)

 	
 Accepted Shares
 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 Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders 

 









25


	
  

 	
  

 	
  

 
	
  

 	
  

 	
 or subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares or Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares Admission or
 Non-Accepted Shares 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 Accepted Shares
 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; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (BB)

 	
 the Company not
 having indicated an intention not to participate in the APS.

 






	
  

 	
  

 
	
 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 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
 Resolution), 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 Open Offer, the subscription of Non-Accepted
 Shares by subscribers procured by the Joint Bookrunners pursuant to clauses
 3.5 and 4.1, the redemption of the Preference Shares, Accepted Shares 

 









26


	
  

 	
  

 	
  

 
	
  

 	
 Admission,
 Non-Accepted Shares Admission or post-Accepted Shares Admission or
 Non-Accepted Shares 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 Accepted Shares 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 Accepted Shares
 Admission and Non-Accepted Shares 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 CGMEL 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 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 9.1 and 9.2; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 the provisions of
 this clause 2.9 and clauses 1, 9, 10.3, 10.4, 10.12, 11, 12, 13,
 14, 16, 17, 18, 19 and 20 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 Accepted Shares Admission, all approvals, authorisations and
 consents as 

 









27


	
  

 	
  

 	
  

 
	
  

 	
 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 Accepted
 Shares 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
 OPEN OFFER AND APPOINTMENTS

 
	
  

 	
  

 
	
 3.1

 	
 The Company
 hereby:

 
	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 appoints (i) each
 of UBS and JPMC as joint sponsors in connection with the applications for
 Accepted Shares Admission and Non-Accepted Shares 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 CGMEL, UBS and JPMC as joint bookrunners
 and joint placing agents in connection with the Open Offer and each of CGMEL,
 UBS and JPMC 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 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 Amended and Restated Placing Agreement. For the
 avoidance of doubt, this Agreement does not affect any accrued rights
 (a) of the Company or HM Treasury under the Original Placing
 Agreement and/or the Amended 

 









28


	
  

 	
  

 	
  

 
	
  

 	
 and Restated
 Placing Agreement, and (b) of the Joint Sponsors and/or the Joint
 Bookrunners under the Amended and Restated Placing Agreement.

 
	
  

 	
  

 
	
 3.3

 	
 The Company hereby
 agrees, subject always to clause 6.1, to invite Qualifying Shareholders
 who are not Prohibited 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 Open Offer, Qualifying
 Shareholders who are not Prohibited Shareholders shall be entitled to
 subscribe for their pre-emptive entitlements.

 
	
  

 	
  

 
	
 3.4

 	
 As soon as
 practicable after 12.00 p.m. on the Closing Date and by not later than 5.00
 p.m. on 8 June 2009, the Company will (or will procure that the Receiving
 Agent will) notify the Joint Bookrunners and HM Treasury in writing of the
 number of Non-Accepted Shares. 

 
	
  

 	
  

 
	
 3.5

 	
 On the terms and
 subject to the provisions of this Agreement and on the basis of the
 information in the Issue Documents and in reliance on the representations,
 warranties and undertakings of the Company set out in this Agreement, each of
 the Joint Bookrunners hereby agrees severally (and not jointly or jointly and
 severally) as agent of the Company to use reasonable endeavours to procure
 subscriber(s) for any Non-Accepted Shares by no later than 4.30 p.m. on the
 second Dealing Day after the date on which the Company publicly announces the
 number of Accepted Shares (or, at their discretion, for as many as can be so
 procured) if an amount which is not less than the Minimum Rump Placing Amount
 can be obtained from such subscriber(s). Any subscriber(s) so procured by the
 Joint Bookrunners shall subscribe the Non-Accepted Shares at the Issue Price
 and any amount in excess of the Issue Price shall be paid by the subscriber(s)
 and received by the Joint Bookrunners on the basis that the same shall be
 applied in meeting the Joint Bookrunners’ expenses of procuring such
 acquisition (including any applicable brokerage, transaction levies, trading
 fees, currency conversion costs, commissions and amounts in respect of VAT
 thereon which are not recoverable) and, other than in relation to New Shares
 representing the aggregate of fractional entitlements for which subscribers
 are procured pursuant to clause 4.1, that, subject to clause 5.4(C), any
 balance remaining shall be received as agent for (and on trust for) and
 payable to Non-Accepting Shareholders (pro rata to the number of New Shares
 each such Non-Accepting Shareholder did not validly apply to subscribe for
 (or was treated as having not validly applied to subscribe for)) in
 accordance with clause 5.4(C). The Joint Bookrunners shall not be
 obliged to endeavour to procure such subscriber(s) and may, at any time on or
 after the date on which the Company publicly announces the number of Accepted
 Shares, cease or decline to endeavour to procure any such subscriber(s) if,
 in their reasonable opinion (and following consultation with the Company), it
 is unlikely that any such subscriber(s) can be so procured by such time and
 on the terms referred to above, or if the procurement of subscriber(s) would
 give rise to a breach of law, whereupon the Joint Bookrunners shall not be
 under any obligation to endeavour to procure any such subscriber(s) pursuant
 to this clause 3.5. The parties hereto acknowledge and understand that,
 if having used such reasonable endeavours, the Joint Bookrunners are unable
 to procure subscriber(s) for such Non-Accepted Shares, or exercise their
 right as described in this clause 3.5 to cease or decline to endeavour to
 procure any such subscriber(s) for any such Non-Accepted Shares, or if any
 subscriber(s) who are so procured fail to meet their payment obligations, for
 all or any of the Non-Accepted 

 









29



	
  

 	
  

 	
  

 
	
  

 	
 Shares, the Joint
 Bookrunners shall not themselves be obliged to subscribe for such
 Non-Accepted Shares which shall be Residual Shares to be taken up solely by
 HM Treasury in accordance with clause 7.3.

 
	
  

 	
  

 
	
 3.6

 	
 The Joint
 Bookrunners agree to consult regularly with HM Treasury and the Company
 whilst performing the procedure set out in clause 3.5 and clause 4.1 in
 relation to the status of their endeavours to procure subscriber(s) for the
 Non-Accepted Shares and to provide updates as to the identity of
 subscriber(s) for the Non-Accepted Shares and the number of Non-Accepted
 Shares for which such subscriber(s) have been procured on at least a daily
 basis. Subject to compliance with this clause 3 and with the
 restrictions in clause 6, each of the Joint Bookrunners shall have
 discretion to procure subscriber(s) for Non-Accepted Shares in the manner and
 otherwise as it thinks fit in compliance with applicable laws as are
 customarily complied with by banks of international reputation. 

 
	
  

 	
  

 
	
 3.6A

 	
 Except with the
 consent of HM Treasury and other than in the ordinary course of business not
 connected to the Open Offer or the procuring of subscribers as contemplated
 by this Agreement, the Company undertakes not to (directly or indirectly)
 agree or pay or offer any fee, commission or other form of consideration to
 the subscriber(s) of Non-Accepted Shares procured pursuant to clause 3.5 or
 clause 4.1 (or for the purposes of procuring them). For the avoidance of
 doubt and subject to the preceding sentence, this clause 3.6A does not apply
 to any fee, commission or other form of consideration agreed with or paid to
 or offered by a Joint Bookrunner to any subscriber of Non-Accepted Shares
 procured by it pursuant to clause 3.5 or clause 4.1 (or for the purposes of
 procuring them).

 
	
  

 	
  

 
	
  

 	
 In addition, the
 Joint Bookrunners shall, not less than two Business Days in advance of the
 Closing Date, inform HM Treasury and the Company as to the basis on which
 they propose to conduct the procedures in clause 3.5 or clause 4.1 (and shall
 consult with HM Treasury and the Company as far as practical before departing
 materially from such basis.

 
	
  

 	
  

 
	
 3.7

 	
 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
 4.30 p.m. on the second Dealing Day following the date on which the Company
 publicly announces the number of Accepted Shares following completion of the
 procedure set out in clause 3.5 showing the names of the subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1
 and 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 7.3 (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 promptly after, and in any
 event within two hours of, its receipt pursuant to this clause 3.7. 

 
	
  

 	
  

 
	
 3.8

 	
 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 

 









30


	
  

 	
  

 	
  

 
	
  

 	
 accuracy,
 completeness or fairness of any information in any of the Issue Documents (or
 any supplement or amendment to any of the foregoing).

 
	
  

 	
  

 
	
 3.9

 	
 The Company
 consents to each Joint Sponsor or CGMEL disclosing to the FSA at any time
 before or after Accepted Shares Admission or Non-Accepted Shares 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 CGMEL
 notifies the Company prior to making, and consults as to the timing and
 manner of, such disclosure.

 
	
  

 	
  

 
	
 3.10

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

 
	
  

 	
  

 
	
  

 	
 (A)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 on and after
 Accepted Shares Admission and up to Non-Accepted Shares Admission, to the
 extent that such amounts are to be used to subscribe for the New Shares
 (which, for the avoidance of doubt, will not include any amounts received
 from subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 which are in excess of the Minimum Rump Placing Amount which will, subject to
 clause 5.4(C), at all times be held as agent for and on trust for
 Non-Accepting Shareholders pro rata to the number of New Shares
 each such Non-Accepting Shareholder did not validly apply to subscribe for
 (or was treated as having not validly applied to subscribe for)), such
 amounts will be held as agent for and 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; 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
 Open Offer (other than any amounts received from subscriber(s) procured by
 the Joint Bookrunners pursuant to clause 3.5 which are in excess of the
 Minimum Rump Placing Amount which will, subject to clause 5.4(C), at all
 times be held as agent for and on trust for Non-Accepting Shareholders pro rata
 to the number of New Shares each such Non-Accepting Shareholder did not
 validly apply to subscribe for (was treated as not having validly applied to
 subscribe for)) are applied to redeem the Preference Shares in accordance
 with the terms of this Agreement.

 










31


	
  

 	
  

 	
  

 	
  

 
	
 3.11

 	
 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 Open Offer, including Accepted Shares
 Admission and Non-Accepted Shares 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.12

 	
 The Company
 undertakes to HM Treasury to do all such acts and things as may be required
 and as HM Treasury may require in connection with, and in order to achieve,
 Non-Accepted Shares Admission, and in order for any Residual Shares which are
 to be subscribed by HM Treasury pursuant to clause 7.3 to be duly authorised,
 validly issued and (upon final allotment) admitted to listing on the Official
 List and to trading on the London Stock Exchange’s main market for listed
 securities, including, without limitation, appointing sponsors, executing
 documents, paying fees, giving undertakings, submitting all application forms
 and documents, engaging with relevant regulatory authorities, publishing any
 supplementary prospectus, giving instructions to third parties, passing board
 resolutions, obtaining and maintaining authorities to allot shares and
 delivery of documents pursuant to clause 3.26. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.13

 	
 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 and the Second Press Announcement to a Regulatory Information
 Service at, or as soon as practicable after, 10.00 a.m. on 18 May 2009. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.14

 	
 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 Resolution; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 apply to the FSA
 and to the London Stock Exchange for Accepted Shares Admission and
 Non-Accepted Shares 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 Accepted Shares Admission and Non-Accepted Shares
 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 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

 









32


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 CREST and (e) by
 the FSA and the London Stock Exchange, in each case to obtain the grant of
 Accepted Shares Admission and Non-Accepted Shares Admission. Subject to the
 fiduciary duties of the Directors, the Company will use all reasonable
 endeavours to obtain the grant of Accepted Shares Admission (subject only to
 the allotment of the relevant 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)
 and, without prejudice to clause 3.12, Non-Accepted Shares Admission (subject
 only to the allotment of the relevant New Shares) by no later than 8.00 a.m.
 on the date that is three Dealing Days after the Time of Sale (or such
 earlier or later date as HM Treasury and the Joint Bookrunners may agree in
 writing).

 
	
  

 	
  

 	
  

 	
  

 
	
 3.15

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

 
	
  

 	
  

 	
  

 	
  

 
	
 3.16

 	
 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
 Resolution, 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.17

 	
 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) in accordance with the Prospectus Rules subject to clause 6; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (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 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (E)

 	
 the Open Offer
 Entitlements of Qualifying CREST Shareholders (other than Prohibited
 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.18

 	
 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 

 









33


	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
 3.19

 	
 On the Posting
 Date, prior to the despatch of the Circular and the Application Form, 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.

 
	
  

 	
  

 	
  

 	
  

 
	
 3.20

 	
 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, CGMEL and to HM Treasury those documents
 listed in Part III of Schedule 2. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.21

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

 
	
  

 	
  

 	
  

 	
  

 
	
 3.22

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

 
	
  

 	
  

 	
  

 	
  

 
	
 3.23

 	
 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 are proposed at it. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.24

 	
 Subject to clause
 3.25, neither the 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.25

 	
 If at any time
 between the Posting Date and Accepted Shares Admission or, if later,
 Non-Accepted Shares Admission: (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 CGMEL under this Agreement) promptly: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (A)

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

 









34


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (B)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 consult with HM
 Treasury, the Joint Sponsors and CGMEL 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.26

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

 
	
  

 	
  

 	
  

 	
  

 
	
 3.27

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

 
	
  

 	
  

 	
  

 	
  

 
	
 3.28

 	
 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 Accepted Shares Admission and Non-Accepted
 Shares Admission, the Open Offer or as may be required to comply with the requirements
 of the FSMA, the FSA or the London Stock Exchange. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.29

 	
 The Company
 confirms to the Joint Sponsors, CGMEL 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 Open Offer,
 the redemption of the Preference Shares and Accepted Shares Admission and
 Non-Accepted Shares Admission, as appropriate; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (D)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (E)

 	
 approved the
 making of the applications for Accepted Shares Admission and Non-Accepted
 Shares Admission; and 

 









35


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.30

 	
 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). 

 
	
  

 	
  

 	
  

 	
  

 
	
 3.31

 	
 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.

 	
 FRACTIONAL
 ENTITLEMENTS

 
	
  

 	
  

 	
  

 	
  

 
	
 4.1

 	
 No later than 5.00
 p.m. on 8 June 2009, the Company shall inform each of the Joint Bookrunners
 and HM Treasury of the number of New Shares representing the aggregate of
 fractional entitlements and the New Shares representing the aggregate of such
 fractional entitlements shall for the purposes of this Agreement, unless
 otherwise stated, be treated as Non-Accepted Shares. Each of the Joint
 Bookrunners hereby agrees severally (and not jointly or jointly and
 severally) as agent of the Company to use reasonable endeavours to procure
 subscriber(s) for any such shares by no later than 4.30 p.m. on the second
 Dealing Day after the date on which the Company publicly announces the number
 of Accepted Shares (or, at their discretion, for as many as can be so
 procured) if an amount which is not less than the Minimum Rump Placing Amount
 can be obtained from such subscriber(s). Any subscriber(s) so procured by the
 Joint Bookrunners shall subscribe such shares at the Issue Price and any
 amount in excess of the Issue Price shall be paid by the subscriber(s) and
 received by the Joint Bookrunners on the basis that the same shall be applied
 in meeting, as so permitted pursuant to this Agreement, the Joint
 Bookrunners’ expenses of procuring such acquisition (including any applicable
 brokerage, transaction levies, trading fees, currency conversion costs, commissions
 and amounts in respect of VAT thereon which are not recoverable). The Joint
 Bookrunners shall not be obliged to endeavour to procure such subscriber(s)
 and may, at any time on or after the date on which the Company publicly
 announces the number of Accepted Shares, cease or decline to endeavour to
 procure any such subscriber(s) if, in their reasonable opinion (and following
 consultation with the Company), it is unlikely that any such subscriber(s)
 can be so procured by such time and on the terms referred to above, or if the
 procurement of subscriber(s) would give rise to a breach of law, whereupon
 the Joint Bookrunners shall not be under any obligation to endeavour to
 procure any such subscriber(s) pursuant to this clause 4.1. The parties
 hereto acknowledge and understand that, if having used such reasonable
 endeavours, the Joint Bookrunners are unable to procure subscriber(s) for
 such shares, or exercise their right as described in this clause 4.1 to cease
 or decline to endeavour to procure any such subscriber(s) for any such
 shares, or if any subscriber(s) who are so procured fail to meet their
 payment obligations, for all or any of the shares, the Joint Bookrunners
 shall not themselves be obliged to subscribe for such shares which shall be
 Residual Shares to be taken up solely by HM Treasury in accordance with
 clause 7.3. 

 









36


	
  

 	
  

 	
  

 	
  

 
	
 4.2

 	
 No later than
 Non-Accepted Shares Admission, and subject to compliance by the Company with
 the provisions of clauses 5.1 and 5.2, subject to clause 4.1, each Joint Bookrunner
 shall pay or procure payment to the Company (or to the Receiving Agent on
 behalf of the Company) of the net proceeds of the placing of the New Shares
 representing fractional entitlements, such amount to be used for the purpose
 of redeeming the Preference Shares in accordance with the terms of this
 Agreement. For the avoidance of doubt, each of the Joint Bookrunners will be
 under no obligation to pay or procure payment to the Company or to the
 Receiving Agent of an amount in excess of the amount received by them from
 subscriber(s) procured by them pursuant to clause 4.1. 

 
	
  

 	
  

 	
  

 	
  

 
	
 5.

 	
 ALLOTMENT
 OF THE NEW SHARES, CONSIDERATION AND REGISTRATION 

 
	
  

 	
  

 	
  

 	
  

 
	
 5.1

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

 
	
  

 	
  

 	
  

 	
  

 
	
 5.2

 	
 The Company shall,
 in relation to Non-Accepted Shares, as soon as reasonably practicable
 following agreement of the Placing Schedule pursuant to clause 3.7 and in any
 event prior to Non-Accepted Shares Admission: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 as regards the
 Non-Accepted Shares which are required by subscriber(s) procured by the Joint
 Bookrunners pursuant to clause 3.5 and clause 4.1 to be certificated shares,
 pursuant to a resolution of the Board, allot, conditional only upon
 Non-Accepted Shares Admission, such Non-Accepted Shares as certificated
 shares, subject to the terms of the Issue Documents, to the subscriber(s) of
 such Non-Accepted Shares in the proportions set out in the Placing Schedule;
 and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 as regards the
 Non-Accepted Shares which are required by subscriber(s) procured by the Joint
 Bookrunners pursuant to clause 3.5 and clause 4.1 to be uncertificated
 shares, pursuant to a resolution of the Board, allot, conditional only upon
 Non-Accepted Shares Admission, such Non-Accepted Shares as uncertificated
 shares, subject to the terms of the Issue Documents: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 in the case of subscriber(s)
 procured by CGMEL pursuant to clause 3.5 or clause 4.1, to such CREST account
 of such entity as will be notified by CGMEL to the Company no later than the
 Business Day prior to Non-Accepted Shares Admission, such person to hold such
 Non-Accepted Shares as nominee for such subscriber(s); 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 in the case of
 subscriber(s) procured by UBS pursuant to clause 3.5 or clause 4.1, to such
 CREST account of such entity as will be notified by UBS to the Company no
 later than the Business Day prior to Non-Accepted Shares Admission, such
 person to hold such Non-Accepted Shares as nominee for such subscriber(s);
 and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 in the case of
 subscriber(s) procured by JPMC pursuant to clause 3.5 or clause 4.1, to such
 CREST account of such entity as will be notified 

 









37


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 by JPMC to the
 Company no later than the Business Day prior to Non-Accepted Shares
 Admission, such person to hold such Non-Accepted Shares as nominee for such
 subscriber(s).

 
	
  

 	
  

 	
  

 	
  

 
	
 5.3

 	
 No later than
 Non-Accepted Shares Admission, and subject to compliance by the Company with
 the provisions of clauses 5.1 and 5.2, subject to clause 3.5, each Joint
 Bookrunner shall: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 pay or procure
 payment to the Company (or to the Receiving Agent on behalf of the Company),
 of an amount equal to the product of (i) the number of Non-Accepted Shares
 subscribed for by (and for which payment in full has been received by it
 from) subscriber(s) procured by it pursuant to clause 3.5, and (ii) the Issue
 Price; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 subject to clause
 5.4(C), pay or procure payment to the Receiving Agent as agent for and on
 behalf of the relevant Non-Accepting Shareholders, of an amount equal to the
 aggregate amount it has received from subscriber(s) procured by it pursuant
 to clause 3.5, less the sum of (i) the amount calculated pursuant to clause
 5.3(A), and (ii) the expenses of procurement (including any applicable
 brokerage, transaction levies, trading fees, currency conversion costs,
 commissions and amounts in respect of VAT thereon which are not recoverable).
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 For the avoidance
 of doubt, each of the Joint Bookrunners will be under no obligation to pay or
 procure payment to the Company or to the Receiving Agent of an amount in
 excess of the amount received by them from subscriber(s) procured by them
 pursuant to clause 3.5 or clause 4.1. If any subscriber(s) who are so
 procured fail to meet their payment obligations, for all or any of the
 Non-Accepted Shares, the Joint Bookrunners shall not themselves by obliged to
 subscribe for such Non-Accepted Shares which shall be Residual Shares to be
 taken up solely by HM Treasury in accordance with clause 7.3.

 
	
  

 	
  

 	
  

 	
  

 
	
 5.4

 	
 Following payment
 of the monies to the Company (or to the Receiving Agent on behalf of the
 Company) in accordance with clause 5.3, the Company shall: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 procure that the
 Receiving Agent will, immediately upon Non-Accepted Shares Admission, effect
 the registration, without registration fee, of the persons referred to in
 clauses 5.1 and 5.2 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)

 	
 procure that the
 Receiving Agent will, immediately upon Non-Accepted Shares Admission, effect the
 registration, without registration fee, of the persons referred to in clause
 5.2(A) in the register of members and to issue definitive certificates; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 procure that the
 Receiving Agent makes payment of the amount received by the Receiving Agent
 pursuant to clause 5.3(B) to the Non-Accepting Shareholders pro rata to the number of New Shares
 each such Non-accepting Shareholder did not validly apply to subscribe for
 (or was treated as having not validly applied to subscribe 

 









38


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 for) as soon as
 practicable after receipt (save that individual amounts of less than £3.00
 will not be so paid but will be paid to the Company for onward transmission
 to charity and will at all times be held for and on behalf of the Company).
 Subject to the terms and conditions of the Open Offer set out in the
 Prospectus, if a Non-Accepting Shareholder’s holding of Ordinary Shares on
 the register of members of the Company at the close of business on the Record
 Date is in certificated form, such payment will be made to the person whose
 name and address appears on page one of the Application Form. Subject to the
 terms and conditions of the Open Offer set out in the Prospectus, if a
 Non-Accepting Shareholder’s holding of Ordinary Shares on the register of
 members of the Company at the close of business on the Record Date is in
 uncertificated form, such payment will be made to the person registered as
 the holder of those Ordinary Shares on the date the Ordinary Shares go “ex”
 the entitlement to apply under the Open Offer; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 procure that the
 Receiving Agent will, immediately upon Non-Accepted Shares Admission, 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 7.3, and issue a definitive certificate. 

 
	
  

 	
  

 	
  

 	
  

 
	
 5.5

 	
 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 6.

 	
 OVERSEAS
 SHAREHOLDERS 

 
	
  

 	
  

 	
  

 	
  

 
	
 6.1

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

 
	
  

 	
  

 	
  

 	
  

 
	
 6.2

 	
 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 6.3

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

 









39


	
  

 	
  

 	
  

 	
  

 
	
 6.4

 	
 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 shall be limited as set out in
 the Prospectus and in this Agreement. 

 
	
  

 	
  

 	
  

 	
  

 
	
 6.5

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

 
	
  

 	
  

 	
  

 	
  

 
	
 6.6

 	
 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 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 6.7

 	
 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 

 









40


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 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.

 
	
  

 	
  

 	
  

 	
  

 
	
 6.8

 	
 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, in
 the case of the Company and HM Treasury only, only if such QIB Purchasers
 have executed and delivered an investor letter in the form of Schedule 5 to
 this Agreement; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (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 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 6.9

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (A)

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

 









41


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (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.

 
	
  

 	
  

 	
  

 	
  

 
	
 6.10

 	
 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 6.11

 	
 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 6.6, 6.7, 6.8 and 6.9. 

 
	
  

 	
  

 	
  

 	
  

 
	
 6.12

 	
 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 6.6, 6.7, and 6.8. 

 
	
  

 	
  

 	
  

 	
  

 
	
 7.

 	
 HM
 TREASURY SUBSCRIPTION 

 
	
  

 	
  

 	
  

 	
  

 
	
 7.1

 	
 For the purposes
 of this clause 7: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 “Accepted Shares” shall mean any New
 Shares in respect of which an Acceptance has been made before 12.00 p.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 clause 7.1(C) and any New Shares
 representing the aggregate of fractional entitlements; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (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 

 









42


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 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 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 9.00 p.m. on 7 June 2009 to treat as
 invalid, in accordance with the terms of the Open Offer. 

 
	
  

 	
  

 	
  

 	
  

 
	
 7.2

 	
 Without prejudice
 to clause 9, if there are no Non-Accepted Shares, the obligations of HM
 Treasury and the Joint Bookrunners with regards to Non-Accepted Shares under
 this clause 7 and clause 3.5 will cease. 

 
	
  

 	
  

 	
  

 	
  

 
	
 7.3

 	
 If, following
 Accepted Shares Admission and compliance by the Company with clause 3.12 and
 subject to Non-Accepted Shares Admission occurring, having used reasonable
 endeavours, the Joint Bookrunners are unable to procure subscriber(s) for all
 or any Non-Accepted Shares at an amount which is not less than the Minimum
 Rump Placing Amount or if the Joint Bookrunners exercise their right as set
 out in clause 3.5 and clause 4.1 to cease or decline to endeavour to procure
 any such subscriber(s) for such Non-Accepted Shares or if any subscriber(s)
 who are so procured fail to meet their payment obligations for all or any
 Non-Accepted Shares (any such Non-Accepted Shares being together “Residual Shares”), 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 11. For the avoidance of doubt, HM
 Treasury shall not be required to subscribe for Residual Shares at a price
 above the Issue price notwithstanding that a subscriber who fails to meet
 their payment obligations had agreed to pay a premium to the Issue Price. If
 HM Treasury is required to subscribe for any Residual Shares pursuant to this
 clause 7.3, on Non-Accepted Shares 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 Non-Accepted Shares Admission. 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 7.4

 	
 HM Treasury (or
 its nominee) shall be deemed, without being required to complete an
 Application Form, to subscribe for its take-up of its pro rata entitlement of
 New Shares at the Issue Price pursuant to the terms of the Open Offer (the “HMT Open Offer Shares”). On Accepted
 Shares Admission HM Treasury will hold the subscription 

 









43


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 monies for such
 HMT Open Offer 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 Accepted Shares Admission. Such application
 shall constitute a complete discharge of HM Treasury’s obligations to make
 payment in respect of the HMT Open Offer Shares.

 
	
  

 	
  

 	
  

 	
  

 
	
 7.5

 	
 If HM Treasury (or
 its nominee) subscribes for New Shares pursuant to this clause 7, 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 7.6

 	
 The Company agrees
 that it shall on the date of Accepted Shares Admission or, if later,
 Non-Accepted Shares Admission: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 7.7

 	
 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 

 









44


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 work in order to
 ensure that the requested materials comply with relevant securities laws.

 
	
  

 	
  

 	
  

 	
  

 
	
 7.8

 	
 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 any
 of the Joint Bookrunners may obtain as to whether or not subscriber(s) have
 been procured to take up any Non-Accepted Shares or, if any such
 subscriber(s) 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 7.9

 	
 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
 7.9) 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 7.10

 	
 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 Open Offer as contemplated by clause 7.9 above. 

 
	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
 CAPACITY
 

 
	
  

 	
  

 	
  

 	
  

 
	
 8.1

 	
 Any transaction
 carried out by the Joint Bookrunners pursuant to clause 3.5 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 8.2

 	
 Notwithstanding
 that the Joint Bookrunners may act as the Company’s agent in connection with
 the 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 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 Open Offer. 

 










45


	
  

 	
  

 	
  

 
	
 8.3

 	
 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 Open Offer or from the timing of any such transaction.

 
	
  

 	
  

 	
  

 
	
 8.4

 	
 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 Open Offer and
 the redemption of the Preference Shares (including in connection with
 determining the terms of the Open Offer) and not, in relation to the 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 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 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 Open Offer
 under the Engagement Letters.

 
	
  

 	
  

 	
  

 
	
 9.

 	
 FEES,
 COMMISSIONS, EXPENSES AND VAT

 
	
  

 	
  

 	
  

 
	
 9.1

 	
 Subject to
 clause 9.2, 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
 Non-Accepted Shares Admission occurring, to HM Treasury a further
 commission of 1 per cent. of the aggregate value of the New Shares subscribed
 for by subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1 at the Issue Price per New Share or by HM
 Treasury (or its nominee); 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 excluding, for the avoidance of doubt,
 the expenses of procuring subscriber(s) pursuant to clause 3.5 and clause 4.1
 (including any applicable brokerage, transaction levies, trading fees,
 currency conversion costs, commissions and amounts in respect of VAT thereon
 which are not recoverable)) and the costs and expenses of HM Treasury’s
 financial

 









46


	
  

 	
  

 	
  

 
	
  

 	
  

 	
 advisers, in each
 case incurred for the purpose of or in connection with the Open Offer, the
 redemption of the Preference Shares or any arrangements referred to in, or
 contemplated by, this Agreement.

 
	
  

 	
  

 	
  

 
	
 9.2

 	
 With respect to
 the fees, commissions and expenses payable pursuant to clause 9.1 above:

 
	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 the commissions
 referred to in clause 9.1(A) shall be payable on the earlier of Accepted
 Shares Admission and the second Business Day after the day on which this
 Agreement is terminated;

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 the commissions
 referred to in clause 9.1(B) shall be payable (i) in respect of New
 Shares subscribed by HM Treasury pursuant to clause 7.4, on the date of
 Accepted Shares Admission, and (ii) otherwise on the date of Non-Accepted
 Shares Admission; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 the expenses
 referred to in clause 9.1(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 Accepted Shares Admission and the second Business
 Day after the day on which this Agreement is terminated.

 
	
  

 	
  

 	
  

 
	
 9.3

 	
 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 9.1(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.

 
	
  

 	
  

 	
  

 
	
 9.4

 	
 HM Treasury
 may deduct the amount of the commissions and expenses payable under
 clause 9.1 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 7.3. 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 9.1(A) and 9.1(B) in
 respect of any New Shares subscribed for by subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1.

 
	
  

 	
  

 	
  

 
	
 9.5

 	
 In consideration
 of the Joint Bookrunners agreeing to use reasonable endeavours to procure
 subscriber(s) for any Non-Accepted Shares, the Joint Bookrunners shall be
 entitled to deduct an amount equal to 0.20 per cent. of the aggregate value
 of the Non-Accepted Shares at the price per Non-Accepted Share at which
 subscribers are procured pursuant to clause 3.5 and clause 4.1, which may be
 taken into account in calculating and deducted from any payment to be made by
 the Joint Bookrunners to the Receiving Agent on behalf of Non-Accepting
 Shareholders pursuant to clause 5.3(B) or to the Company (or to the Receiving
 Agent on behalf of the Company) pursuant to clause 4.2.

 
	
  

 	
  

 	
  

 
	
 9.6

 	
 Without prejudice
 to clause 9.1(C), the Company shall bear all reasonable costs and
 expenses of or incidental to the 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 9.10), such expenses
 including, without

 









47


	
  

 	
  

 	
  

 
	
  

 	
 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 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 9.10) 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 9.6 shall not apply to any Tax
 (provision for which is, for the avoidance of doubt, made in
 clauses 9.7, 9.8, 9.9 and 9.10), except to the extent provided for in
 clauses 9.7, 9.8, 9.9 or 9.10. 

 
	
  

 	
  

 	
  

 
	
 9.7

 	
 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 9.7 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

 
	
  

 	
  

 	
  

 
	
  

 	
 (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 9.7 to New Shares include any interest in or rights to allotment
 of New Shares.

 
	
  

 	
  

 	
  

 
	
 9.8

 	
 If any of the
 Joint Sponsors, CGMEL, 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 9.1, clause 9.2,
 clause 9.3 or 9.5) 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, CGMEL 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, CGMEL, 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.

 
	
  

 	
  

 	
  

 
	
 9.9

 	
 All sums
 (including, for the avoidance of doubt, any fees or commission payable under
 clause 9.1, clause 9.2, clause 9.3 or clause 9.5) payable by
 the Company (the “Payer”) to HM Treasury, to the Joint
 Sponsors (or any of them), to CGMEL 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

 









48


	
  

 	
  

 	
  

 
	
  

 	
 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 or,
 in the case of VAT payable in respect of amounts payable under clause 9.5,
 the Payee may deduct in respect of such VAT.

 
	
  

 	
  

 	
  

 
	
 9.10

 	
 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 CGMEL 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 CGMEL 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
 CGMEL 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), CGMEL 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 CGMEL 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, CGMEL, or any other Indemnified Person as agent on behalf of
 the Company and the relevant supply is made to the Company for VAT 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 CGMEL or by any other Indemnified Person, and HM Treasury, the
 relevant Joint Sponsor, CGMEL 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.

 
	
  

 	
  

 	
  

 
	
 10.

 	
 COVENANTS

 
	
  

 	
  

 	
  

 
	
 10.1

 	
 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 Open Offer (including, for the avoidance of doubt, the
 allotment and issue of the New Shares), the redemption of the Preference
 Shares or Accepted Shares Admission or Non-Accepted Shares Admission.

 
	
  

 	
  

 	
  

 
	
 10.2

 	
 To the extent that
 it is required, at the general meeting of the Company to approve the terms of
 the APS, the Company shall table a resolution, in a form acceptable to HM
 Treasury 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 subscription and holding of
 Class B Shares (including as a result of their

 









49


	
  

 	
  

 	
  

 
	
  

 	
 conversion to
 Ordinary Shares and the voting rights attaching to the Class B Shares
 becoming exercisable).

 
	
  

 	
  

 	
  

 
	
 10.3

 	
 Except for the
 publication of the Issue Documents, the Company undertakes to
 HM Treasury, to the Joint Sponsors and to CGMEL 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 Open Offer, the subscription of Non-Accepted
 Shares by subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, 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 CGMEL (where legally permitted and practicable) and having due
 regard to all reasonable requests which HM Treasury or the Joint
 Sponsors or CGMEL may make; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 in any other case,
 without the prior consent of HM Treasury, the Joint Sponsors and CGMEL
 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).

 
	
  

 	
  

 	
  

 
	
 10.4

 	
 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 CGMEL 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 CGMEL, 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 CGMEL (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 regulation to take any such steps they shall consult with
 HM Treasury, the Joint Sponsors and CGMEL 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 CGMEL 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

 









50


	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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 CGMEL 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 CGMEL 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.

 
	
  

 	
  

 	
  

 
	
 10.5

 	
 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 10.2 and 10.4
 as if they were parties thereto.

 
	
  

 	
  

 	
  

 
	
 10.6

 	
 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
 Accepted Shares Admission or, if later, Non-Accepted Shares 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 10.6 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.

 
	
  

 	
  

 	
  

 
	
 10.7

 	
 The Company
 undertakes to make all such announcements concerning the 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, CGMEL or
 HM Treasury otherwise reasonably considers to be necessary or desirable
 and any of the Joint Sponsors, CGMEL 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 CGMEL acting in good faith)
 promptly to fulfil its obligations under this clause 10.7.

 









51


	
  

 	
  

 	
  

 
	
 10.8

 	
 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.

 
	
  

 	
  

 	
  

 
	
 10.9

 	
 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 Accepted Shares Admission or, if later, Non-Accepted Shares Admission,
 as many copies of the Prospectus, the Circular and any Supplementary
 Prospectus as they may reasonably require.

 
	
  

 	
  

 	
  

 
	
 10.10

 	
 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.

 
	
  

 	
  

 	
  

 
	
 10.11

 	
 The Company
 undertakes to HM Treasury that it shall apply the proceeds of the issue
 of the New Shares (other than, for the avoidance of doubt, any amounts
 received from subscribers procured by the Joint Bookrunners pursuant to
 clause 3.5 which are in excess of the Minimum Rump Placing Amount which
 will, subject to clause 5.4(C), at all times be held as agent for and on
 trust for the Non-Accepting Shareholders pro rata to the number of New Shares
 each such Non-Accepting Shareholder did not validly apply to subscribe for
 (or was treated as having not validly applied to subscribe for)) to effect
 the redemption of the Preference Shares and to pay the commissions due to
 HM Treasury in terms of clauses 9.1(A) and 9.1(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 reserves to enable such redemption to be effected in full. The
 Company and HM Treasury agree that the Preference Shares shall be
 redeemed at the date of Accepted Shares Admission to the extent of the
 proceeds of the Accepted Shares and by no later than Non-Accepted

 









52


	
  

 	
  

 
	
  

 	
 Shares Admission
 to the extent of any outstanding Preference Shares at an aggregate amount
 equal to £4,040,000,000 together with an amount equal to the dividend accrued
 on the relevant Preference Shares from and including 15 January 2009 to but
 excluding the date of redemption. 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).

 
	
  

 	
  

 
	
 10.12

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

 
	
  

 	
  

 
	
 10.13

 	
 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.

 
	
  

 	
  

 
	
 11.

 	
 REPRESENTATIONS,
 WARRANTIES AND UNDERTAKINGS

 
	
  

 	
  

 
	
 11.1

 	
 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 and, save as fairly disclosed in the Draft Circular, the Draft
 Prospectus, any Previous Announcement, the Chairmanship Announcement, the
 Second Press Announcement or in any Due Diligence Meetings, on the date of
 this Agreement.

 
	
  

 	
  

 
	
 11.1A

 	
 The Company
 represents, warrants and undertakes to each of the Joint Sponsors and to each
 of the Joint Bookrunners that (a) 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 Amended and Restated
 Placing Agreement and (b) save as fairly disclosed in the Draft Circular, the
 Draft Prospectus, any Previous Announcement, the Chairmanship Announcement,
 the Second Press Announcement or in any Due Diligence Meetings, on the date
 of this Agreement.

 
	
  

 	
  

 
	
 11.2

 	
 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.

 
	
  

 	
  

 
	
 11.3

 	
 The Company agrees
 with HM Treasury and with each of the Joint Sponsors and each of the
 Joint Bookrunners that subject to clause 11.2, each statement set out in
 Part II of Schedule 3 will be true and accurate and not misleading on the
 Posting Date, at such

 









53


	
  

 	
  

 
	
  

 	
 time as a
 Supplementary Prospectus shall be issued in accordance with this Agreement,
 at the Time of Sale, if any, and immediately prior to each of Accepted Shares
 Admission and Non-Accepted Shares 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
 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.

 
	
  

 	
  

 
	
 11.4

 	
 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, the Amended and Restated 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 Accepted
 Shares Admission or Non-Accepted Shares Admission, if later, 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.

 
	
  

 	
  

 
	
 11.5

 	
 If, at any time
 prior to Accepted Shares Admission or Non-Accepted Shares Admission, if
 later, HM Treasury and the Joint Sponsors and the Joint Bookrunners
 shall receive a notice pursuant to clause 11.4 or otherwise become aware
 of any of the Warranties being or becoming or being likely (if repeated as
 referred to in clause 11.4) 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.

 
	
  

 	
  

 
	
 11.6

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

 
	
  

 	
  

 
	
 11.7

 	
 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 Accepted Shares Admission and Non-Accepted Shares
 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
 the Time of Sale, if any. 

 
	
  

 	
  

 
	
 11.8

 	
 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.

 










54


	
  

 	
  

 	
  

 	
  

 
	
 11.9

 	
 For the purposes
 of this clause 11 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.

 
	
  

 	
  

 	
  

 	
  

 
	
 11.10

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (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 5 and/or 7 (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 5 and/or 7 (as
 appropriate) (whichever is later),

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided that any
 breach of the covenant in this clause 11.10(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 14 as a result of a Specified Event.

 
	
  

 	
  

 	
  

 	
  

 
	
 11.11

 	
 For the purposes
 of clauses 11.10(A) and 11.10(B), each of the Warranties and the
 undertakings contained in this clause 11 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. 

 
	
  

 	
  

 	
  

 	
  

 
	
 11.12

 	
 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.

 
	
  

 	
  

 	
  

 	
  

 
	
 12.

 	
 INDEMNITIES

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 12.1

 	
 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

 









55


	
  

 	
  

 	
  

 
	
  

 	
 done by any person
 (including by the relevant Indemnified Person) in connection with the Open
 Offer, the redemption of the Preference Shares, Accepted Shares Admission or
 Non-Accepted 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 Open Offer or the
 redemption of the Preference Shares, including but not limited to:

 
	
  

 	
  

 	
  

 
	
  

 	
 (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 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 Accepted Shares Admission or
 Non-Accepted Shares 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 applications for Accepted Shares Admission or
 Non-Accepted Shares Admission, the 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 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:

 









56


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (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 Open Offer or the applications for
 Accepted Shares Admission or Non-Accepted Shares Admission for the purpose of
 section 21 of FSMA; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 (in the case of
 each of the Joint Sponsors only) in their capacity as sponsor to the
 Company’s applications for Accepted Shares Admission and Non-Accepted Shares
 Admission,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 PROVIDED THAT, the
 indemnity contained in this clause 12.1 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 12.1(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 CGMEL, UBS and JPMC (otherwise than in connection with the
 matters referred to in clauses 12.1(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 CGMEL Indemnified Person or that UBS
 Indemnified Person or that JPMC
 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 7, 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 12.1 shall not apply to any Loss or Claim in respect of Tax
 which is covered by clauses 9.7, 9.8, 9.9 and 9.10 (or which would have
 been so covered but for any exclusion contained therein).

 
	
  

 	
  

 	
  

 	
  

 
	
 12.2

 	
 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 12; 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

 









57


	
  

 	
  

 	
  

 
	
  

 	
 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 12.

 
	
  

 	
  

 	
  

 
	
 12.3

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

 
	
  

 	
  

 	
  

 
	
 12.4

 	
 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 CGMEL Indemnified Persons, UBS Indemnified Persons and JPMC 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.

 
	
  

 	
  

 	
  

 
	
 12.5

 	
 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 12 or clause 13 (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.

 
	
  

 	
  

 	
  

 
	
 12.6

 	
 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 Open Offer, the redemption of the
 Preference Shares, Accepted Shares Admission or Non-Accepted Shares Admission
 or the subject matter of the obligations or services to be performed under
 this Agreement or in connection with the 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

 









58


	
  

 	
  

 
	
  

 	
 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.

 
	
  

 	
  

 
	
 12.7

 	
 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 12.6) which the Company may have agreed
 with any third party.

 
	
  

 	
  

 
	
 12.8

 	
 The provisions of
 this clause 12 will remain in full force and effect notwithstanding the
 completion of all matters and arrangements referred to in or contemplated by
 this Agreement.

 
	
  

 	
  

 
	
 13.

 	
 CONTRIBUTION

 
	
  

 	
  

 
	
 13.1

 	
 If and to the
 extent that the indemnification provided for in clause 12 is unavailable
 to or insufficient to hold harmless (to the extent specified in
 clause 12) 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 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 clause 9.5, 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.

 
	
  

 	
  

 
	
 13.2

 	
 Notwithstanding
 the provisions of this clause 13, 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 13.1 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 12 been available to the
 extent provided in that clause in respect of the relevant Loss or Claim.

 










59


	
  

 	
  

 	
  

 
	
 13.3

 	
 The parties
 hereto agree that it would not be just and equitable if contribution pursuant
 to this clause 13 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 13.1. The amount paid or payable by an
 Indemnified Person as a result of the Loss or Claim referred to in clause
 13.1 shall be deemed to include, any legal or other expenses incurred by such
 Indemnified Person in connection with investigating or defending any such
 action or claim. 

 
	
  

 	
  

 
	
 13.4

 	
 The
 indemnity and contribution agreements contained in this clause 13 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. 

 
	
  

 	
  

 
	
 14.

 	
 TERMINATION 

 
	
  

 	
  

 
	
 14.1

 	
 If following
 the date of this Agreement but (i) before Accepted Shares Admission it shall
 come to the notice of HM Treasury or any of the Joint Sponsors or CGMEL, or
 (ii) before Non-Accepted Shares Admission it shall come to the notice of either
 of the Joint Sponsors or CGMEL, 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 applications 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 Sponsors’ or CGMEL’s sole
 judgement, as relevant, material in the context of the Group and/or the
 context of the Open Offer, the subscription of Non-Accepted Shares by
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5 or
 clause 4.1, or the redemption of the Preference Shares or Accepted Shares
 Admission or Non-Accepted Shares Admission, HM Treasury or such Joint Sponsor
 or CGMEL may forthwith give notice thereof to the Company, in which case
 clause 14.3 shall apply. 

 









60


	
  

 	
  

 	
  

 	
  

 
	
 14.2

 	
 If following
 the date of this Agreement but before Accepted Shares 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; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 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 Open Offer, the subscription of
 Non-Accepted Shares by subscriber(s) procured by the Joint Bookrunners
 pursuant to clause 3.5 or clause 4.1, redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission 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 14.3 shall apply.

 
	
  

 	
  

 	
  

 
	
 14.3

 	
 Where this
 clause applies and: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 notice has
 been given to the Company pursuant to clause 14.1 or 14.2 by HM Treasury, HM
 Treasury may in its sole discretion: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 allow the
 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 

 










61


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 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 CGMEL at any time prior to Accepted Shares 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 14.1 by any of the Joint
 Sponsors or CGMEL, then clause 14.4 shall apply. 

 
	
  

 	
  

 	
  

 
	
 14.4

 	
 Where this
 clause applies, the Joint Sponsor that gave notice to the Company pursuant to
 clause 14.1 or CGMEL (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 Accepted Shares Admission or Non-Accepted Shares 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 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 CGMEL, all reference to the Joint
 Bookrunners shall be deemed to be references to the Joint Bookrunners other
 than CGMEL; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (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 14.4 and clauses 1, 9, 10.2, 10.3, 11, 12, 13, 15,
 16, 17, 18, 19 and 20 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 clauses 9.1 and 9.2; 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 CGMEL, a further bookrunner) should be appointed in
 relation to the Open Offer and/or the publication of the Circular, as
 appropriate. 

 










62


	
  

 	
  

 	
  

 
	
 14.5

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

 
	
  

 	
  

 
	
 14.6

 	
 In the event
 that this Agreement is terminated by HM Treasury pursuant to the provisions
 of this clause 14, 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; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 the Company
 shall pay the commissions, fees, costs and expenses as are payable in such
 circumstance under and in accordance with clause 9.1 and clause 9.2; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 the
 provisions of this clause 14.6 and clauses 1, 9, 10.2, 10.3, 10.7, 11, 12,
 13, 15, 16, 17, 18, 19 and 20 shall remain in full force and effect. 

 
	
  

 	
  

 	
  

 
	
 15.

 	
 EXCLUSIONS OF LIABILITY 

 
	
  

 	
  

 
	
 15.1

 	
 Without
 prejudice to clause 15.2, 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 Open Offer or the redemption of the Preference Shares, or in
 connection with the Open Offer itself or the redemption of the Preference
 Shares except (otherwise than in connection with the matters referred to in
 clauses 11 or 13 or otherwise than as a result of a payment made or an
 obligation or liability to make payment arising under clauses 12 or 13) 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 CGMEL Indemnified Person, a UBS
 Indemnified Person, or a JPMC Indemnified Person is judicially determined, to
 have resulted from the fraud, bad faith, negligence or wilful default of that
 CGMEL Indemnified Person, UBS Indemnified Person, or JPMC Indemnified Person.
 

 
	
  

 	
  

 
	
 15.2

 	
 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
 CGMEL in connection with this Agreement, the 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 Open Offer, the 

 










63


	
  

 	
  

 
	
  

 	
 redemption
 of the Preference Shares or any of the other arrangements contemplated by the
 Issue Documents, or any of them, or this Agreement.

 
	
  

 	
  

 
	
 16.

 	
 MISCELLANEOUS 

 
	
  

 	
  

 
	
 16.1

 	
 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 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. 

 
	
  

 	
  

 
	
 16.2

 	
 The Company
 agrees that for the purpose of the Open Offer (including for the purposes of
 seeking subscriber(s) for Non-Accepted Shares pursuant to clause 3.5 or
 clause 4.1) and the redemption of the Preference Shares and of obtaining
 Accepted Shares Admission and Non-Accepted Shares 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. 

 
	
  

 	
  

 
	
 16.3

 	
 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 9, 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. 

 
	
  

 	
  

 
	
 17.

 	
 GENERAL 

 
	
  

 	
  

 
	
 17.1

 	
 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 CGMEL 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 CGMEL, except where expressly provided to
 the contrary. 

 
	
  

 	
  

 
	
 17.2

 	
 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. 

 










64


	
  

 	
  

 
	
 17.3

 	
 Each of the
 parties hereto acknowledges that the Warranties given by the Company and the
 indemnity contained in clause 12 are, subject as provided in clause 17.13,
 given to HM Treasury, the Joint Sponsors, CGMEL 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. 

 
	
  

 	
  

 
	
 17.4

 	
 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. 

 
	
  

 	
  

 
	
 17.5

 	
 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. 

 
	
  

 	
  

 
	
 17.6

 	
 Delivery of
 an executed counterpart signature page of this Agreement by e-mail (PDF) or
 telecopy shall be as effective as delivery of a manually executed counterpart
 of this Agreement. In relation to each counterpart, upon confirmation by or
 on behalf of the signatory that the signatory authorises the attachment of
 such counterpart signature page to the final text of this Agreement, such
 counterpart signature page shall take effect together with such final text as
 a complete authoritative counterpart. 

 
	
  

 	
  

 
	
 17.7

 	
 This
 Agreement, together with the Engagement Letters (in the case of the Company,
 the Joint Sponsors and the Joint Bookrunners), the Original Placing Agreement
 and the Amended and Restated Placing Agreement (to the extent contemplated by
 clause 3.2), constitute the whole agreement and understanding between the
 parties in relation to the Open Offer, the redemption of the Preference
 Shares, Accepted Shares Admission, Non-Accepted 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 Open Offer, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted 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. 

 
	
  

 	
  

 
	
 17.8

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

 
	
  

 	
  

 
	
 17.9

 	
 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. 

 










65


	
  

 	
  

 	
  

 
	
 17.10

 	
 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. 

 
	
  

 	
  

 
	
 17.11

 	
 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 CGMEL
 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 

 
	
  

 	
  

 	
  

 
	
  

 	
 (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. 

 
	
  

 	
  

 	
  

 
	
 17.12

 	
 If the Company
 makes an increased payment to HM Treasury, any Joint Sponsor, CGMEL or any
 other Indemnified Person in accordance with clause 9.8 or 17.11 and HM
 Treasury, the relevant Joint Sponsor or CGMEL 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 CGMEL 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 CGMEL 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 CGMEL 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. 

 
	
  

 	
  

 	
  

 
	
 17.13

 	
 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 17.13) to enforce its rights against the Company under clause 12,
 clause 13, this clause 17 or clause 20.3, provided that HM Treasury will have
 the sole conduct of any action to enforce such rights on behalf of the HMT
 Indemnified Persons, CGMEL will 

 









66


	
  

 	
  

 	
  

 
	
  

 	
 have the sole
 conduct of any action to enforce such rights on behalf of the CGMEL
 Indemnified Persons, UBS will have the sole conduct of any action to enforce
 such rights on behalf of the UBS Indemnified Persons and JPMC will have the
 sole conduct of any action to enforce such rights on behalf of the JPMC
 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, CGMEL 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 CGMEL will have any responsibility to any Indemnified
 Person under or as a result of this Agreement. 

 
	
  

 	
  

 	
  

 
	
 18.

 	
 ASSIGNMENT
 OR NOVATION 

 
	
  

 	
  

 	
  

 
	
 18.1

 	
 Subject to clause
 18.2, 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. 

 
	
  

 	
  

 	
  

 
	
 18.2

 	
 In the event that
 HM Treasury novates its rights and obligations under this Agreement pursuant
 to clause 18.1, 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. 

 
	
  

 	
  

 	
  

 
	
 18.3

 	
 Subject to clause
 18.1, 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. 

 
	
  

 	
  

 	
  

 
	
 19.

 	
 NOTICES
 

 
	
  

 	
  

 	
  

 
	
 19.1

 	
 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 CGMEL to: 

 









67


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Citigroup Global
 Markets U.K. Equity Limited 

 
	
  

 	
  

 	
  

 	
 Citigroup Centre 

 
	
  

 	
  

 	
  

 	
 Canada Square 

 
	
  

 	
  

 	
  

 	
 Canary Wharf 

 
	
  

 	
  

 	
  

 	
 London E14 5LB 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Fax: 020 7986 1103
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Attention: ECM
 Syndicate 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 UBS Limited 

 
	
  

 	
  

 	
  

 	
 1 Finsbury Avenue,

 
	
  

 	
  

 	
  

 	
 London, EC2M 2PP 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Fax: 020 7567 4127
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Attention: Equity
 Capital Markets Group 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 With a copy to
 Transactions Legal 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Fax: 020 7567 2364
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 and

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 J.P. Morgan
 Cazenove Limited 

 
	
  

 	
  

 	
  

 	
 20 Moorgate 

 
	
  

 	
  

 	
  

 	
 London EC2R 6FA 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Fax: 020 7155 9000
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 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) 

 
	
  

 	
  

 	
  

 	
  

 
	
 19.2

 	
 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 19.1; (ii) if sent by fax, when confirmation of
 its transmission has 

 









68


	
  

 	
  

 	
  

 
	
  

 	
 been recorded on
 the sender’s fax machine; and (iii) if sent by post, 48 hours from the time
 of posting. 

 
	
  

 	
  

 	
  

 
	
 19.3

 	
 Any notice given
 by HM Treasury or by a Joint Sponsor or Joint Bookrunner under clause 14.1 or
 14.2 may also be given to the Company’s representative referred to in clause
 19.1 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. 

 
	
  

 	
  

 	
  

 
	
 19.4

 	
 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 19.1 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. 

 
	
  

 	
  

 	
  

 
	
 20.

 	
 GOVERNING
 LAW AND SUBMISSION TO JURISDICTION 

 
	
  

 	
  

 	
  

 
	
 20.1

 	
 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. 

 
	
  

 	
  

 	
  

 
	
 20.2

 	
 Subject to clause
 20.3, 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 and the Joint Sponsors and the Joint Bookrunners
 irrevocably submit to the jurisdiction of the courts of England. 

 
	
  

 	
  

 	
  

 
	
 20.3

 	
 Notwithstanding
 the provisions of clause 20.2, 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. 

 
	
  

 	
  

 	
  

 
	
 20.4

 	
 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 20. 

 
	
  

 	
  

 	
  

 
	
 20.5

 	
 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 20 based on any
 matter 

 









69


	
  

 	
  

 
	
  

 	
 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. 

 
	
  

 	
  

 
	
 20.6

 	
 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. 

 
	
  

 	
  

 
	
 20.7

 	
 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. 

 
	
  

 	
  

 
	
 20.8

 	
 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 CGMEL shall be entitled by notice to the Company to
 appoint a replacement 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. 

 
	
  

 	
  

 
	
 20.9

 	
 Process by which
 any Proceedings are begun in England may be served on a party by being
 delivered in accordance with clause 19. 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 11.7 prior to and 

with effect immediately before Accepted Shares Admission and Non-Accepted
Shares

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 Open Offer of 10,408,535,000
Ordinary Shares of 25 pence each (the “Open Offer”) 


Further to the open offer agreement between Lloyds Banking Group plc
and HM Treasury dated 7 March 2009 as amended and restated between Lloyds
Banking Group plc, HM Treasury, Citigroup Global Markets U.K. Equity Limited,
J.P. Morgan, Cazenove Limited and UBS Limited on 20 March 2009 and on 18 May
2009 (the “Agreement”), we confirm
that: 


	
  

 	
  

 
	
 (a)

 	
 the FSA has agreed
 to admit the Accepted Shares/Non-Accepted 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 Accepted Shares/Non-Accepted 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; 

 









71


	
  

 	
  

 
	
 (f)

 	
 the Resolutions
 have been passed without amendment at the GM; 

 
	
  

 	
  

 
	
 (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.]1

 



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 Accepted Shares Admission”/Non-Accepted Shares Admission. 


Yours faithfully 


Director 


for and on behalf of 

Lloyds Banking Group PLC 


	
  

 
	

 


 
	
 1       Only for letter delivered at Accepted Shares Admission. 

 









Part B

Certificate to be delivered pursuant to clause 11.7 prior to and with effect 

immediately before the issue of any Supplementary Prospectus 

and at the 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 Open Offer of up to 10,408,535,000
ordinary shares of 25 pence each (the “Open Offer”) 


Further to the open offer agreement between Lloyds Banking Group plc,
HM Treasury dated 7 March as amended and restated between Lloyds Banking Group
plc, HM Treasury, Citigroup Global Markets U.K. Equity Limited, J.P. Morgan,
Cazenove Limited and UBS Limited on 20 March 2009 and on 18 May 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 





73


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 


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, if the said resolution is of such a
committee, a certified copy of the resolution of the Board appointing such
committee) 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. 





75


PART II
Documents relating to the
Circular and the Application Form to be delivered on the 

Posting Date under clause 3.19


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 3.19: 


	
  

 	
  

 
	
 1.

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

 
	
  

 	
  

 
	
 2.

 	
 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; 

 
	
  

 	
  

 
	
 3.

 	
 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; 

 
	
  

 	
  

 
	
 4.

 	
 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,
 the Form of Proxy, the Application Form and any other documents to be issued
 on the Posting 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); 

 
	
  

 	
  

 
	
 5.

 	
 certified copies
 of a memorandum to the Directors from Linklaters LLP in connection with the
 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; 

 
	
  

 	
  

 
	
 6.

 	
 original copies of
 the letter, in a form acceptable to the Joint Sponsors and CGMEL, 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; and 

 
	
  

 	
  

 
	
 (b)

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

 
	
  

 	
  

 
	
 7.

 	
 original copies of
 the letter, in a form acceptable to the Joint Sponsors and CGMEL, acting
 reasonably, duly signed by the Auditors and dated the Posting Date giving
 consent to the inclusion in the Circular of their name and reports and
 letters in the form and context in which they are respectively included; 

 
	
  

 	
  

 
	
 8.

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

 










76


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 9.

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

 
	
  

 	
  

 
	
 10.

 	
 copies of the Form
 of Proxy; 

 
	
  

 	
  

 
	
 11.

 	
 copies of the
 Application Form;

 
	
  

 	
  

 
	
 12.

 	
 copies of any
 other document(s) issued on the Posting Date; 

 
	
  

 	
  

 
	
 13.

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

 
	
  

 	
  

 
	
 14.

 	
 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 3.20 


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 3.20 and the date of
publication of each Supplementary Prospectus: 


	
  

 	
  

 
	
 1.

 	
 certified copies
 of the signed applications 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 CGMEL, 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 CGMEL, 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 CGMEL, 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 CGMEL, 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 CGMEL, 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; 

 









78


	
  

 	
  

 
	
 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.

 	
 to the extent not
 provided under Part II of Schedule 2, certified copies of the Profit Forecast
 Report; 

 
	
  

 	
  

 
	
 15.

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

 
	
  

 	
  

 
	
 16.

 	
 original copies of
 the letter, in a form acceptable to the Joint Sponsors and CGMEL, 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; and 

 
	
  

 	
  

 
	
 (c)

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

 




	
  

 	
  

 
	
 17.

 	
 original copies of
 the letter, in a form acceptable to the Joint Sponsors and CGMEL, acting
 reasonably, duly signed by the Auditors and dated the Posting Date providing
 comfort on UK taxation information as contained in the Prospectus; 

 
	
  

 	
  

 
	
 18.

 	
 original copies of
 the letter, in a form acceptable to the Joint Sponsors and CGMEL, acting
 reasonably, duly signed by the Auditors and dated the Posting Date giving
 consent to the inclusion in the Prospectus of their name and reports and
 letters in the form and context in which they are respectively included; 

 
	
  

 	
  

 
	
 19.

 	
 original copies of
 letters, in a form acceptable to the Joint Sponsors and CGMEL, 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; 

 
	
  

 	
  

 
	
 20.

 	
 original copies of
 the letter, in a form acceptable to the Joint Sponsors and CGMEL, acting
 reasonably, duly signed by KPMG LLP and dated the Posting Date, providing 

 









79


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 21.

 	
 original copies of
 the letter, in a form acceptable to the Joint Sponsors and CGMEL, acting
 reasonably, duly signed by KPMG LLP and dated the Posting Date, in relation
 to paragraphs 8.4.8R and 8.4.9R of the Listing Rules; 

 
	
  

 	
  

 
	
 22.

 	
 original copies of
 the letter, in a form acceptable to the Joint Sponsors and CGMEL, 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; 

 
	
  

 	
  

 
	
 23.

 	
 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 CGMEL and to HM Treasury, acting reasonably; 

 
	
  

 	
  

 
	
 24.

 	
 certified copies
 of a memorandum to the Directors from Linklaters LLP in connection with the
 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 CGMEL, acting reasonably; 

 
	
  

 	
  

 
	
 25.

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

 
	
  

 	
  

 
	
 26.

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

 
	
  

 	
  

 
	
 27.

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

 
	
  

 	
  

 
	
 28.

 	
 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
 CGMEL, acting reasonably; 

 
	
  

 	
  

 
	
 29.

 	
 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
 CGMEL, acting reasonably, and dated the Posting Date; and 

 
	
  

 	
  

 
	
 30.

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

 









80


PART IV

Documents to be delivered immediately prior to Accepted Shares Admission, at
the Time 

of Sale, if any, and immediately prior to Non-Accepted Shares Admission 


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
Accepted Shares Admission/Non-Accepted Shares Admission and at the Time of
Sale, if any (where indicated): 


	
  

 	
  

 
	
 1.

 	
 certified copies
 of the Resolutions; 

 
	
  

 	
  

 
	
 2.

 	
 certified copies
 of the resolution of the Board (or of the duly authorised committee of the
 Board) provisionally allotting the relevant 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 CGMEL)); 

 
	
  

 	
  

 
	
 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 CGMEL)); 

 
	
  

 	
  

 
	
 4.

 	
 original copies of
 a letter addressed to HM Treasury, to the Joint Sponsors and to CGMEL in the
 form set out in Part A of Schedule 1 dated as of the date of Accepted Shares
 Admission/Non-Accepted Shares Admission and in the form set out in Part B of
 Schedule 1 dated as at the Time of Sale, if any; 

 
	
  

 	
  

 
	
 5.

 	
 original copies of
 updating versions of the letters referred to in paragraphs 6 and 8 of Part II
 of this Schedule 2 and paragraphs 7, 8, 16, 17, 18, 19 and 20 of Part III of
 this Schedule 2 to the extent in each case such letters related to the
 Prospectus as well as written opinions in the form previously provided to HM
 Treasury, the Joint Sponsors and to CGMEL from Linklaters LLP, the Solicitors
 to the Joint Sponsors and Joint Bookrunners and from Maclay Murray &
 Spens LLP, all dated the date of Accepted Shares Admission and Non-Accepted
 Shares Admission (and, in the case of the items referred to in paragraphs 6
 and 8 of Part II of this Schedule 2 and paragraphs 7, 8, 16, 17, 18, 19 and
 20 of Part III of this Schedule 2, also referencing the Time of Sale, if
 any); 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 11.1 and
11.1A


	
  

 	
  

 
	
 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 Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares Admission dealings
 in the Ordinary Shares.

 
	
  

 	
  

 
	
 1.3

 	
 Save as would not
 be (singly or in the aggregate) material in the context of the Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Accepted
 Shares Admission or Non-Accepted Shares 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 Open offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5 or
 clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 

 









82


	
  

 	
  

 
	
  

 	
 subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 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 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 Accepted Shares 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Accepted Shares Admission or Non-Accepted Shares Admission, the 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.

 









83


	
  

 	
  

 
	
 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).

 
	
  

 	
  

 
	
 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 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 CGMEL 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. 

 









84


	
  

 	
  

 	
  

 
	
 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
 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.

 
	
  

 	
  

 	
  

 
	
 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 Open Offer, any subscription
 for New Shares by HM Treasury, Ordinary Shareholders or subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 Admission dealings in the Ordinary Shares.

 









85


	
  

 	
  

 
	
 4.2

 	
 No event has
 occurred nor have any circumstances arisen (and the making and completion of
 the 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 Open Offer, any subscription
 for New Shares by HM Treasury, Ordinary Shareholders or subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 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 Open Offer, any subscription for
 New Shares by HM Treasury, Ordinary Shareholders or subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 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 Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or subscriber(s) procured by the Joint Bookrunners
 pursuant to clause 3.5 or clause 4.1, the redemption of the Preference
 Shares, Accepted Shares Admission, Non-Accepted Shares Admission or
 post-Accepted Shares or Non-Accepted Shares 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 Open Offer or the
 redemption of the Preference Shares, save 

 









86


	
  

 	
  

 
	
  

 	
 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
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares 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 aggregate) be material in the context of the Open
 Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares Admission dealings in the Ordinary Shares.

 
	
  

 	
  

 
	
 6.3

 	
 Save as would not
 (singly or in the aggregate) be material in the context of the Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or 

 









87


	
  

 	
  

 
	
  

 	
 subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 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.

 
	
  

 	
  

 
	
 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 Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted
 Shares 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.

 









88


	
  

 	
  

 
	
 10.2

 	
 Save as otherwise
 as would not (singly or in the aggregate) be material in the context of the
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares 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 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.

 
	
  

 	
  

 
	
 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.

 









89


	
  

 	
  

 
	
 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 except to the extent that HM Treasury has transferred any of
 its registration rights to any person in accordance with the relevant
 provisions of the Registration Rights Agreement in effect from 12 January
 2009.

 
	
  

 	
  

 
	
 11.6

 	
 During the period
 of six months after Accepted Shares Admission or, if later, Non-Accepted
 Shares 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 the Time of Sale, if any, and 
immediately prior to Accepted
Shares Admission and Non-Accepted Shares 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 CGMEL (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
 CGMEL (including in connection with any application for certain information
 to be omitted from the Prospectus and/or the Circular), are (or, when made, 

 









91


	
  

 	
  

 
	
  

 	
 will be) truly and
 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 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 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.

 









92


	
  

 	
  

 
	
 2.7

 	
 The share capital
 of the Company will, upon Accepted Shares Admission and on Non-Accepted
 Shares Admission, be as described in the Prospectus in all material respects;
 all of the New Shares will, upon Accepted Shares Admission and on
 Non-Accepted Shares 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 CGMEL 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 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.

 









93


	
  

 	
  

 
	
 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
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares Admission dealings in the Ordinary Shares.

 
	
  

 	
  

 
	
 5.2

 	
 This Agreement and
 the other agreements to be entered into by the Company in connection with
 Accepted Shares Admission or Non-Accepted Shares Admission, the redemption of
 the Preference Shares and the 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 Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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:

 









94


	
  

 	
  

 	
  

 
	
  

 	
 (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 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 Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, the redemption of the Preference Shares, Accepted
 Shares Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted
 Shares 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
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares 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 Open Offer, any subscription for
 New 

 









95


	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares 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
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares 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 Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares 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 

 









96


	
  

 	
  

 
	
  

 	
 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 Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares 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 Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares 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 Open Offer, any subscription for New
 Shares by HM Treasury, Ordinary Shareholders or subscriber(s) procured
 by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the
 redemption of the Preference Shares, Accepted Shares Admission, Non-Accepted
 Shares Admission or post-Accepted Shares or Non-Accepted Shares 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 

 









97


	
  

 	
  

 	
  

 
	
  

 	
 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 Open Offer,
 any acquisition of New Shares or subscription for Preference Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Open
 Offer, any subscription for New Shares or by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares 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 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.

 










98


	
  

 	
  

 
	
 10.

 	
 Share
 Schemes

 
	
  

 	
  

 
	
  

 	
 Save as otherwise
 would not (singly or in the aggregate) be material in the context of the Open
 Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares 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
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares 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 Open Offer, any subscription for New Shares or by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares 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

 









99


	
  

 	
  

 
	
  

 	
 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 Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares 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 Open
 Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares 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 Open Offer, any subscription for New Shares or by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares 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 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 Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares Admission dealings
 in the Ordinary Shares.

 









100


	
  

 	
  

 
	
 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 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 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 Open Offer, any subscription for New Shares by
 HM Treasury, Ordinary Shareholders or subscriber(s) procured by the
 Joint Bookrunners pursuant to clause 3.5 or clause 4.1, the redemption
 of the Preference Shares, Accepted Shares Admission, Non-Accepted Shares
 Admission or post-Accepted Shares or Non-Accepted Shares Admission dealing in
 the Ordinary Shares.

 
	
  

 	
  

 
	
 15.4

 	
 Save as would not
 be (singly or in the aggregate) material in the context of the Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted
 Shares 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 Accepted Shares
 Admission or Non-Accepted Shares 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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.

 









101


	
  

 	
  

 
	
 15.6

 	
 Save as would not
 be (singly or in the aggregate) material in the context of the Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 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 Accepted Shares Admission
 and, solely in relation to Non-Accepted Shares, Non-Accepted Shares Admission
 (if any), 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Accepted Shares Admission or Non-Accepted Shares Admission (if any), the
 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted 

 










102


	
  

 	
  

 
	
  

 	
 Shares Admission
 or post-Accepted Shares or Non-Accepted Shares 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, 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 Open Offer, any subscription for
 New Shares by HM Treasury, Ordinary Shareholders or subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 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 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 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 CGMEL 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.

 









103


	
  

 	
  

 	
  

 
	
 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.

 
	
  

 	
  

 
	
 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 Prospectus:

 









104


	
  

 	
  

 	
  

 
	
  

 	
 (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.

 
	
  

 	
  

 
	
 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 Open Offer, any subscription
 for New Shares by HM Treasury, Ordinary Shareholders or subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 Admission dealings in the Ordinary Shares.

 









105


	
  

 	
  

 
	
 18.2

 	
 No event has occurred
 nor have any circumstances arisen (and the making and completion of the 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 Open Offer, any subscription
 for New Shares by HM Treasury, Ordinary Shareholders or subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 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 Open Offer, any subscription for
 New Shares by HM Treasury, Ordinary Shareholders or subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5 or
 clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post Accepted Shares or
 Non-Accepted Shares 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 Open Offer or the
 redemption of the Preference Shares, save 

 










106


	
  

 	
  

 
	
  

 	
 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 Open Offer, any subscription for New Shares by HM Treasury,
 Ordinary Shareholders or subscriber(s) procured by the Joint Bookrunners
 pursuant to clause 3.5 or clause 4.1, the redemption of the Preference
 Shares, Accepted Shares Admission, Non-Accepted Shares Admission or
 post-Accepted Shares or Non-Accepted Shares 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares Admission dealings in the Ordinary Shares.

 
	
  

 	
  

 
	
 20.3

 	
 Save as would not
 (singly or in the aggregate) be material in the context of the Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or
 Non-Accepted Shares 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 Open Offer,
 any subscription for New Shares by HM Treasury, Ordinary Shareholders or
 

 










107


	
  

 	
  

 
	
  

 	
 subscriber(s)
 procured by the Joint Bookrunners pursuant to clause 3.5 or clause 4.1,
 the redemption of the Preference Shares, Accepted Shares Admission,
 Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted Shares
 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 Open Offer, any
 subscription for New Shares by HM Treasury, Ordinary Shareholders or
 subscriber(s) procured by the Joint Bookrunners pursuant to clause 3.5
 or clause 4.1, the redemption of the Preference Shares, Accepted Shares
 Admission, Non-Accepted Shares Admission or post-Accepted Shares or Non-Accepted
 Shares 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.

 
	
  

 	
  

 
	
 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.

 









108


	
  

 	
  

 
	
 24.2

 	
 Save as otherwise
 as would not (singly or in the aggregate) be material in the context of the
 Open Offer, any subscription for New Shares by HM Treasury, Ordinary
 Shareholders or subscriber(s) procured by the Joint Bookrunners pursuant to
 clause 3.5 or clause 4.1, the redemption of the Preference Shares,
 Accepted Shares Admission, Non-Accepted Shares Admission or post-Accepted
 Shares or Non-Accepted Shares 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 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.  

 
	
  

 	
  

 
	
 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.

 









109


	
  

 	
  

 
	
 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 except to the extent that HM Treasury has transferred any of
 its registration rights to any person in accordance with the relevant
 provisions of the Registration Rights Agreement in effect from 12 January
 2009.

 
	
  

 	
  

 
	
 25.6

 	
 During the period
 of six months after Accepted Shares Admission or, if later, Non-Accepted
 Shares 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 Resolution, 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.

 
	
  

 	
  

 
	
 27.

 	
 Profit
 forecast

 
	
  

 	
  

 
	
 27.1

 	
 The forecast loss
 before tax, before the recognition of negative goodwill, for the period
 ending 31 December 2009 set out in Part XVII of the Prospectus represents the
 honest belief of the Directors, has been made after due and careful enquiry
 by the Company, presents fairly the information shown therein, has been
 prepared in accordance with applicable guidelines and rules and has been
 properly compiled on the basis set out therein (and the basis of accounting
 used is consistent with the accounting policies of the Group) and the
 assumptions used in the preparation thereof are reasonable.

 
	
  

 	
  

 
	
 27.2

 	
 The Profit
 Forecast Report has been approved by the Directors or a duly authorised
 committee thereof, and takes into account all material matters and
 sensitivities of which 

 









110


	
  

 	
  

 
	
  

 	
 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.
 All assumptions on which such projections are based are set out in the Profit
 Forecast 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.

 










111


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.

 	
 CITIGROUP GLOBAL MARKETS U.K. EQUITY
 LIMITED, a company incorporated in England and Wales with registered number
 2019774 and whose registered office is at Citigroup Centre, Canada Square,
 Canary Wharf, London, E14 5LB (“CGMEL”);

 
	
  

 	
  

 
	
 4.

 	
 UBS LIMITED, a company incorporated in
 England and Wales with registered number 2035362 whose registered office is
 at 1 Finsbury Avenue, London EC2M 2PP (“UBS”); and 

 
	
  

 	
  

 
	
 5.

 	
 J.P. MORGAN CAZENOVE LIMITED, a company incorporated in
 England and Wales with registered number 04153386 and whose registered office
 is 20 Moorgate, London EC2R 6DA (“JPMC”); and

 
	
  

 	
  

 
	
 6.

 	
  [                           ] of [                                                                     ]
 [(registered
 in England No. [                           ])]
 (the “Company”)

 



WHEREAS:


	
  

 	
  

 
	
 (A)

 	
 HMT, Lloyds,
 CGMEL, UBS and JPMC have entered into the Open Offer Agreement (as defined in
 this Agreement).

 
	
  

 	
  

 
	
 (B)

 	
 HMT wishes to be
 released and discharged from the Open Offer Agreement and the Company, CGMEL,
 UBS, and JPMC have agreed to release and discharge HMT from the Open Offer
 Agreement upon the terms of the Company’s undertaking to perform the Open
 Offer 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 Open Offer
 Agreement.

 



NOW IT IS AGREED as follows:-





112


	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
 INTERPRETATION

 
	
  

 	
  

 	
  

 	
  

 
	
 1.1

 	
 In this Agreement:

 
	
  

 	
  

 	
  

 	
  

 
	
  “Open Offer Agreement”

 	
  

 	
 means the
 agreement as amended and restated on 20 March 2009 and on 18 May 2009 between
 HMT and Lloyds, CGMEL, UBS and JPMC relating to, inter alia, the open offer
 of a number of Lloyds ordinary shares; and

 
	
  

 	
  

 	
  

 	
  

 
	
  “Continuing Parties”

 	
  

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

 






	
  

 	
  

 	
  

 
	
 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 Open Offer 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 Open Offer
 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 Open Offer
 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 Open Offer 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 Open Offer Agreement;

 









113


	
  

 	
  

 	
  

 
	
  

 	
 (B)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 agrees to observe,
 perform, discharge and be bound by the Open Offer Agreement as if the Company
 were a party to the Open Offer 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 Open Offer Agreement and
 arising out of matters prior to the date of this Agreement.

 
	
  

 	
  

 	
  

 
	
 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 Open Offer 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 Open Offer 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 Open Offer 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 

 









114


	
  

 	
  

 
	
  

 	
 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 Open Offer 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 Open Offer 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.

 
	
  

 	
  

 
	
 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 Open Offer 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 Open Offer 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.

 
	
  

 	
  

 
	
 8.3

 	
 Delivery of an executed
 counterpart signature page of this Agreement by e-mail (PDF) or telecopy shall be as effective as delivery of a
 manually executed counterpart of
 this Agreement. In relation to each counterpart, upon confirmation by or on
 behalf of the signatory that the signatory authorises the attachment of such counterpart signature page to the final text of
 this Agreement, such counterpart signature page shall take effect
 together with such final text as a complete authoritative counterpart.

 









115


	
  

 	
  

 
	
 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, CGMEL, UBS and JPMC and HMT of the name and
 address of such replacement agent. If the Company fails to appoint another
 agent, Lloyds, having consulted with CGMEL, UBS and JPMC, shall be entitled
 to appoint one on the Company’s behalf and at the Company’s expense.

 



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

 	
  

 
	
 Citigroup Global Markets U.K. Equity
 Limited

 
	
  

 	
  

 
	

 


 	
  

 
	
 For and on behalf
 of 

 	
  

 
	
 UBS Limited

 	
  

 
	
  

 	
  

 
	

 


 	
  

 
	
 For and on behalf
 of 

 	
  

 
	
 J.P. Morgan Cazanove Limited

 	
  

 
	
  

 	
  

 
	

 


 	
  

 
	
 For
 and on behalf of

 	
  

 
	
  [Insert
 name of the Company]

 	
  

 









116


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 an open offer (the “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.

 









117


	
  

 	
  

 
	
 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
 Open Offer, the New Shares or the accuracy, completeness or adequacy of any
 financial or other information concerning the Company, the 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 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.

 
	
  

 	
  

 
	
 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 

 









118


	
  

 	
  

 
	
  

 	
 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 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 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 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 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.

 









119


	
  

 	
  

 
	
 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]

 









120


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 the Amended and
Restated Placing Agreement as of 20 March 2009 and the Amended and
Restated Placing Agreement has been amended and restated by way of this
Agreement as of the date which appears on page 1 of this Agreement.









	
  

 	
  

 	
  

 
	
  

 	
 121

 	
 Project Broom Open Offer Agreement

 






	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by and for
 and on behalf of

 LLOYDS BANKING GROUP PLC



 	
  

 	
 )

 )

 )

 	
 ERIC DANIELS

 
	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by and for
 and on behalf of

 CITIGROUP
 GLOBAL MARKETS U.K. EQUITY LIMITED

 	
  

 	
 )

 )

 )

 	
 ANDREW THOMPSON

 
	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by and for
 and on behalf of

 UBS
 LIMITED 



 	
  

 	
 )

 )

 )

 	
 MICHAEL O’BRIEN

 DANIEL HOLMES

 
	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by and for
 and on behalf of

 J.P.
 MORGAN CAZENOVE LIMITED



 	
  

 	
 )

 )

 )

 	
 TIM WISE

 
	
  

 	
  

 	
  

 	
  

 
	
 SIGNED by two of

 THE
 COMMISSIONERS OF HER MAJESTY’S TREASURY



 	
  

 	
 )

 )

 )

 )

 	
 BOB BLIZZARD

 STEVE McCABE

 









Conformed copy


Dated as of 7 March 2009, 

as Amended and Restated as at 20 March 2009 and as at 18 May 2009


LLOYDS BANKING GROUP PLC


and


CITIGROUP GLOBAL MARKETS U.K. EQUITY LIMITED


and


UBS LIMITED


and


J.P. MORGAN CAZENOVE LIMITED


and


THE COMMISSIONERS OF HER MAJESTY’S TREASURY




OPEN OFFER AGREEMENT




Slaughter and May

One Bunhill Row

London

EC1Y 8YY


(RRO/CPYC)
CD090780056





Contents


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
 INTERPRETATION

 	
  

 	
 2

 
	
  

 	
  

 	
  

 	
  

 
	
 2.

 	
 CONDITIONS

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 
	
 3.

 	
 THE OPEN OFFER AND
 APPOINTMENTS

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 
	
 4.

 	
 FRACTIONAL
 ENTITLEMENTS

 	
  

 	
 35

 
	
  

 	
  

 	
  

 	
  

 
	
 5.

 	
 ALLOTMENT OF THE
 NEW SHARES, CONSIDERATION AND REGISTRATION

 	
  

 	
 36

 
	
  

 	
  

 	
  

 	
  

 
	
 6.

 	
 OVERSEAS
 SHAREHOLDERS

 	
  

 	
 38

 
	
  

 	
  

 	
  

 	
  

 
	
 7.

 	
 HM TREASURY
 SUBSCRIPTION

 	
  

 	
 41

 
	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
 CAPACITY

 	
  

 	
 44

 
	
  

 	
  

 	
  

 	
  

 
	
 9.

 	
 FEES, COMMISSIONS,
 EXPENSES AND VAT

 	
  

 	
 45

 
	
  

 	
  

 	
  

 	
  

 
	
 10.

 	
 COVENANTS

 	
  

 	
 48

 
	
  

 	
  

 	
  

 	
  

 
	
 11.

 	
 REPRESENTATIONS,
 WARRANTIES AND UNDERTAKINGS

 	
  

 	
 52

 
	
  

 	
  

 	
  

 	
  

 
	
 12.

 	
 INDEMNITIES

 	
  

 	
 54

 
	
  

 	
  

 	
  

 	
  

 
	
 13.

 	
 CONTRIBUTION

 	
  

 	
 58

 
	
  

 	
  

 	
  

 	
  

 
	
 14.

 	
 TERMINATION

 	
  

 	
 59

 
	
  

 	
  

 	
  

 	
  

 
	
 15.

 	
 EXCLUSIONS OF
 LIABILITY

 	
  

 	
 62

 
	
  

 	
  

 	
  

 	
  

 
	
 16.

 	
 MISCELLANEOUS

 	
  

 	
 63

 
	
  

 	
  

 	
  

 	
  

 
	
 17.

 	
 GENERAL

 	
  

 	
 63

 
	
  

 	
  

 	
  

 	
  

 
	
 18.

 	
 ASSIGNMENT OR
 NOVATION

 	
  

 	
 66

 
	
  

 	
  

 	
  

 	
  

 
	
 19.

 	
 NOTICES

 	
  

 	
 66

 
	
  

 	
  

 	
  

 	
  

 
	
 20.

 	
 GOVERNING LAW AND
 SUBMISSION TO JURISDICTION

 	
  

 	
 68

 
	
  

 	
  

 	
  

 	
  

 
	
 SCHEDULE 1

 	
  

 	
 70

 
	
  

 	
  

 	
  

 	
  

 
	
 CERTIFICATES TO BE
 DELIVERED

 	
  

 	
 70

 
	
  

 	
  

 	
  

 	
  

 
	
 SCHEDULE 2
 DOCUMENTS TO BE DELIVERED

 	
  

 	
 74

 













	
  

 	
  

 	
  

 	
  

 
	
 SCHEDULE 3
 WARRANTIES

 	
  

 	
 81

 
	
  

 	
  

 	
  

 	
  

 
	
 SCHEDULE 4 PRO
 FORMA NOVATION AGREEMENT

 	
  

 	
 111

 
	
  

 	
  

 	
  

 	
  

 
	
 SCHEDULE 5 US
 INVESTOR LETTER

 	
  

 	
 116