Document:

Conformed Copy 
 
	
  
 
	
 TOP UP ISSUES
 UNDERWRITING AGREEMENT
 
	
  
 
	
 3 November 2009
 
	
  
 
	
 LBG CAPITAL NO. 2 PLC
 
	
  
 
	
 LLOYDS TSB BANK PLC
 
	
  
 
	
 LLOYDS BANKING GROUP PLC
 
	
  
 
	
 MERRILL LYNCH INTERNATIONAL
 
	
  
 
	
 UBS LIMITED
 
	
  
 
	
 CITIGROUP GLOBAL MARKETS LIMITED
 
	
  
 
	
 GOLDMAN SACHS INTERNATIONAL
 
	
  
 
	
 HSBC BANK PLC
 
	
  
 
	
 J.P. MORGAN SECURITIES LTD.
 
	
  
 
	

 
	
 
Allen & Overy LLP
 

1

	
  

 	
  

 	
  

 	
  

 
	
 CONTENTS

 
	
  

 	
  

 	
  

 	
  

 
	
 Clause

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
 Definitions

 	
  

 	
 3

 
	
 2.

 	
 Terms and
 Conditions

 	
  

 	
 14

 
	
 3.

 	
 Application
 for Listing and Admission to Trading

 	
  

 	
 18

 
	
 4.

 	
 Approval,
 Release and Delivery of Documents

 	
  

 	
 19

 
	
 5.

 	
 Appointments

 	
  

 	
 20

 
	
 6.

 	
 Closing

 	
  

 	
 20

 
	
 7.

 	
 Underwriting
 and Settlement

 	
  

 	
 20

 
	
 8.

 	
 Commissions
 and Expenses

 	
  

 	
 22

 
	
 9.

 	
 Restrictions
 on Actions and Announcements

 	
  

 	
 25

 
	
 10.

 	
 Representations,
 Warranties and Undertakings

 	
  

 	
 27

 
	
 11.

 	
 Exclusions
 of Liability

 	
  

 	
 30

 
	
 12.

 	
 Indemnities

 	
  

 	
 31

 
	
 13.

 	
 Contribution

 	
  

 	
 34

 
	
 14.

 	
 Termination

 	
  

 	
 35

 
	
 15.

 	
 Miscellaneous

 	
  

 	
 37

 
	
 16.

 	
 Time of the
 Essence

 	
  

 	
 39

 
	
 17.

 	
 Waiver

 	
  

 	
 39

 
	
 18.

 	
 Third Party
 Rights

 	
  

 	
 39

 
	
 19.

 	
 Severability

 	
  

 	
 40

 
	
 20.

 	
 Notices

 	
  

 	
 40

 
	
 21.

 	
 Further Assurances

 	
  

 	
 41

 
	
 22.

 	
 Assignment

 	
  

 	
 41

 
	
 23.

 	
 Entire
 Agreement

 	
  

 	
 41

 
	
 24.

 	
 Counterparts

 	
  

 	
 41

 
	
 25.

 	
 Governing
 Law

 	
  

 	
 41

 
	
  

 	
  

 	
  

 	
  

 
	
 Schedule

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 1.

 	
 Book Value
 of Target Securities

 	
  

 	
 44

 
	
 2.

 	
 Basic Terms
 of the Top Up Securities

 	
  

 	
 47

 
	
 3.

 	
 Delivery of
 Documents

 	
  

 	
 55

 
	
  

 	
 Part A
           Settlement Date

 	
  

 	
 55

 
	
  

 	
 Part B
           Prospectus
 Publication Date

 	
  

 	
 56

 
	
 4.

 	
 Representations,
 Warranties and Undertakings of the Company

 	
  

 	
 58

 
	
 5.

 	
 Representations,
 Warranties and Undertakings of the Issuer and the Guarantor

 	
  

 	
 73

 
	
 6.

 	
 Letter of
 Confirmation

 	
  

 	
 75

 
	
 7.

 	
 Selling
 Restrictions

 	
  

 	
 77

 
	
 8.

 	
 Form of
 Investor Certification for Top Up Issues

 	
  

 	
 82

 
	
 9.

 	
 The Joint
 Bookrunners

 	
  

 	
 84

 
	
  

 	
  

 	
  

 	
  

 
	
 Signatories

 	
  

 	
 86

 

2

	
  

 	
  

 
	
 THIS AGREEMENT is made on 3 November 2009

 
	
  

 	
  

 
	
 BETWEEN:

 
	
  

 	
  

 
	
 (1)

 	
 LBG CAPITAL NO. 2 PLC, a company registered
in England and Wales with number 07045669 and whose registered office is at
10 Gresham Street, London EC2V 7AE (the Issuer); 

 
	
  

 	
  

 
	
 (2)

 	
 LLOYDS TSB BANK PLC, a company registered in
England and Wales with number 00002065 and whose registered office is at 25
Gresham Street, London, EC2V 7HN (the Guarantor); 

 
	
  

 	
  

 
	
 (3)

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

 
	
  

 	
  

 
	
 (4)

 	
 MERRILL LYNCH INTERNATIONAL, a company
 registered in England and Wales with number 02312079 and whose registered
 office is at Merrill Lynch Financial Centre, 2 King Edward Street, London
 EC1A 1HQ;

 
	
  

 	
  

 
	
 (5)

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

 
	
  

 	
  

 
	
 (6)

 	
 CITIGROUP GLOBAL MARKETS LIMITED, a company
 registered in England and Wales with number 01763297 and whose registered office is at Citigroup Centre,
 Canada Square, Canary Wharf, London E14 5LB;

 
	
  

 	
  

 
	
 (7)

 	
 GOLDMAN SACHS INTERNATIONAL, a company
 registered in England and Wales with number 02263951 and whose registered
 office is at Peterborough Court, 133 Fleet Street, London EC4A 2BB;

 
	
  

 	
  

 
	
 (8)

 	
 HSBC BANK PLC, a company registered in
 England and Wales with number 00014259 and whose registered office is at 8
 Canada Square, London E14 5HQ; and

 
	
  

 	
  

 
	
 (9)

 	
 J.P. MORGAN SECURITIES LTD., a company
 registered in England and Wales with number 02711006 and whose registered
 office is at 125 London Wall, London EC2Y 5AJ.

 
	
  

 	
  

 
	
 WHEREAS:

 
	
  

 	
  

 
	
 (A)

 	
 The Company
 and other members of the Group (as defined below) propose on the date of this
 Agreement to launch the First Tranche of the LME (as defined below).

 
	
  

 	
  

 
	
 (B)

 	
 To the
 extent that the LME does, or is expected to, result in a Shortfall (as
 defined herein) this Agreement records the agreement between the parties
 hereto whereby the Joint Bookrunners have agreed, on a several basis, on the
 terms and subject to the conditions referred to in this Agreement, to
 underwrite any Top up Issues (as defined herein) in such aggregate amounts as
 are required to reduce the Shortfall to zero.

 
	
  

 	
  

 
	
 NOW IT IS AGREED as follows:

 
	
  

 	
  

 
	
 1.

 	
 DEFINITIONS

 
	
  

 	
  

 
	
 1.1

 	
 In this Agreement:

 
	
  

 	
  

 
	
  

 	
 Accounts means the audited consolidated
 accounts of the Group, excluding the HBOS Accounts, for the three financial
 years ended on the Company Current Year End Date (including, without 

 

3

	
  

 	
  

 
	
  

 	
 limitation,
 the related directors’ and auditors’ reports, the consolidated income
 statement, the balance sheets, the consolidated cashflow statement, the
 consolidated statement of total recognised gains and losses, the
 reconciliation of movements in shareholders’ funds and all related notes);

 
	
  

 	
  

 
	
  

 	
 Accounts Date means 31 December 2008;

 
	
  

 	
  

 
	
  

 	
 Admission means, in relation to each Top up
 Issue, the admission of the Top up Securities to the Official List becoming
 effective (and where such admission does not become effective, references to
 Admission in this Agreement shall mean the date on which Admission was
 proposed to take place) in accordance with the Listing Rules and the
 admission of such Top up Securities to trading on the London Stock Exchange’s
 regulated market becoming effective in accordance with the Admission and
 Disclosure Standards;

 
	
  

 	
  

 
	
  

 	
 Admission and Disclosure Standards means, at
 any time, the then-current Admission and Disclosure Standards published by
 the London Stock Exchange;

 
	
  

 	
  

 
	
  

 	
 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 has the meaning given in Rule
 501(b) of Regulation D or Rule 405 under the Securities Act, as applicable;

 
	
  

 	
  

 
	
  

 	
 Agency Agreement means in relation to any
 Top up Issue, any agency agreement entered into by the Issuer, the Guarantor
 and other parties to such Top up Issue for the appointment of any paying
 agent, conversion agent, registrar, FX agent, transfer agent, agent bank or
 calculation agent in relation to such Top up Issue, such agreement to be
 dated the Settlement Date for such Top up Issue;

 
	
  

 	
  

 
	
  

 	
 associate has the meaning ascribed to it by
 section 256 of the Companies Act 2006;

 
	
  

 	
  

 
	
  

 	
 Auditors means PricewaterhouseCoopers LLP;

 
	
  

 	
  

 
	
  

 	
 Board means the board of directors of the
 relevant company or a duly constituted and authorised committee thereof;

 
	
  

 	
  

 
	
  

 	
 Book Value in relation to any Target
 Security means the aggregate nominal amount of such Target Security
 multiplied by the percentage relating to such Target Security as specified in
 Schedule 1 of this Agreement;

 
	
  

 	
  

 
	
  

 	
 Business Day means any day which is not a
 Saturday, a Sunday or a bank or public holiday in England and Wales;

 
	
  

 	
  

 
	
  

 	
 Cap means 18 per cent.;

 
	
  

 	
  

 
	
  

 	
 Capital Resources Requirement has the
 meaning given in the FSA Rules;

 
	
  

 	
  

 
	
  

 	
 Circular means the shareholder circular to
 be published in connection with the Rights Issue, the Share Capital
 Subdivision, the Top up Issues and the LME, including the notice convening
 the GM;

 
	
  

 	
  

 
	
  

 	
 Claims means any and all claims, actions,
liabilities, demands, proceedings, regulatory or governmental investigations,
judgements 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 or otherwise involving any person and Claim
shall be construed accordingly; 

 

4

	
  

 	
  

 
	
  

 	
 Commission Decision means any decision of
 the European Commission under Article 87 of the EC Treaty regarding the
 restructuring plan for the Company submitted pursuant to the Company’s
 participation in the Financial Support Measures to the Banking Industry in
 the UK approved by the European Commission on 13 October 2008 (Case
 N507/2008) and on 22 December 2008 (Case N650/2009) as modified and, if
 applicable, regarding the Company’s proposed participation in the UK asset
 protection scheme, or any other financial support or investment in the
 Company by the government of the UK, or any public announcement or statement
 by or attributable to the European Commission or any of its commissioners or
 staff in relation to these matters;

 
	
  

 	
  

 
	
  

 	
 Companies Act means the Companies Act 1985
 or the Companies Act 2006, as the context requires;

 
	
  

 	
  

 
	
  

 	
 Companies’ Counsel means Linklaters LLP;

 
	
  

 	
  

 
	
  

 	
 Company Current Interim End Date means at
 any time the date to which the latest published interim consolidated accounts
 of the Company have been prepared;

 
	
  

 	
  

 
	
  

 	
 Company Current Year End Date means at any
 time the date to which the latest published audited annual consolidated
 accounts of the Company have been prepared;

 
	
  

 	
  

 
	
  

 	
 Dealing Day means a day on which dealings in
 domestic equity market securities may take place on the London Stock
 Exchange;

 
	
  

 	
  

 
	
  

 	
 Deed Poll means, in relation to any Top up
 Issue, any deed poll entered into by the Company as further described in the
 terms and conditions of such Top up Issue;

 
	
  

 	
  

 
	
  

 	
 Defaulted Top up Securities shall have the
 meaning set out in Clause 7.2;

 
	
  

 	
  

 
	
  

 	
 Directors means, at any time, the directors
 of the Company;

 
	
  

 	
  

 
	
  

 	
 Disclosure Rules and Transparency Rules means the Disclosure
 Rules and Transparency Rules of the FSA made under section 73A of FSMA, as
 amended from time to time;

 
	
  

 	
  

 
	
  

 	
 Disclosure Package means, in relation to any
 Unlisted Top up Issue, the relevant term sheet for such Top up Issue, the
 Presentation Materials, the announcement of the proposed Top up Issue and any
 offering documentation for the Top up Issue issued or approved by the Issuer;

 
	
  

 	
  

 
	
  

 	
 Disclosure Package Publication Date means
 the first date on which the relevant Disclosure Package is provided to
 potential investors in the relevant Top up Issue;

 
	
  

 	
  

 
	
  

 	
 Documents of Title means in relation to any
 Top up Issue each Global Security or Global Certificate defined in (and
 delivered in accordance with) clause 7;

 
	
  

 	
  

 
	
  

 	
 ECNs means Enhanced Capital Notes with terms
 as described in Schedule 2;

 
	
  

 	
  

 
	
  

 	
 European Dealer Manager Agreement means the
 Dealer Manager Agreement entered into on the date hereof in relation to the
 European Exchange Offer;

 
	
  

 	
  

 
	
  

 	
 European Exchange Offer means the part of
 the First Tranche of the LME which is not targeted at holders of securities
 in the United States;

 
	
  

 	
  

 
	
  

 	
 European Exchange Offer Memorandum means the
 Exchange Offer Memorandum prepared in respect of the European Exchange Offer;

 
	
  

 	
  

 
	
  

 	
 Exchange Act means the US Securities
 Exchange Act of 1934, as amended;

 

5

	
  

 	
  

 
	
  

 	
 Exchange Offer Memoranda means the two
 exchange offer memoranda published as at the date hereof relating to the
 First Tranche of the LME;

 
	
  

 	
  

 
	
  

 	
 Expiration Date means the date on which any
 offer by any member of the Group pursuant to an LME expires;

 
	
  

 	
  

 
	
  

 	
 FCPA has the meaning given to it in Schedule
 4, paragraph 20.11;

 
	
  

 	
  

 
	
  

 	
 Final Terms means any final terms completed
 in connection with a Top up Issue issued pursuant to a Programme;

 
	
  

 	
  

 
	
  

 	
 First Tranche has the meaning given within
 the term LME;

 
	
  

 	
  

 
	
  

 	
 FSA means the Financial Services Authority
 and, if any successor governmental authority succeeds to the regulatory
 functions of the Financial Services Authority, such successor governmental
 authority;

 
	
  

 	
  

 
	
  

 	
 FSA Rules means the FSA Handbook of Rules
 and Guidance as amended from time to time;

 
	
  

 	
  

 
	
  

 	
 FSMA means the Financial Services and
 Markets Act 2000, as amended;

 
	
  

 	
  

 
	
  

 	
 GM means the general meeting of the
 Company convened for the GM Date at which, inter alia, the
 Resolutions and the Share Capital Reorganisation Resolutions will be
 proposed;

 
	
  

 	
  

 
	
  

 	
 GM Date means 26 November 2009;

 
	
  

 	
  

 
	
  

 	
 Group means the Company and its subsidiary
undertakings from time to time (and for the avoidance of doubt, references in
this Agreement to the Group, Group company and members of the Group include,
without limitation, HBOS and the HBOS Group, except where otherwise stated);  

 
	
  

 	
  

 
	
  

 	
 Group company means any company that is a
 member of the Group;

 
	
  

 	
  

 
	
  

 	
 HBOS means HBOS plc;

 
	
  

 	
  

 
	
  

 	
 HBOS Accounts means the audited consolidated
 accounts of the HBOS Group for the three financial years ended the HBOS
 Current Year End Date (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 Current Year End Date means at any time
 the date to which the latest published audited annual consolidated accounts
 of HBOS have been prepared;

 
	
  

 	
  

 
	
  

 	
 HBOS Group means HBOS and its subsidiaries
 and subsidiary undertakings;

 
	
  

 	
  

 
	
  

 	
 Heads of Terms means the document entitled
 “Term sheet for UK state aid commitments in respect of LBG” submitted by the
 Company to Commissioner Kroes on 2 November 2009;

 
	
  

 	
  

 
	
  

 	
 HMRC means the United Kingdom HM Revenue
 & Customs;

 
	
  

 	
  

 
	
  

 	
 HM Treasury means the Commissioners of Her
 Majesty’s Treasury;

 
	
  

 	
  

 
	
  

 	
 HMT Resolution means resolution 4, as set
 out in the notice of GM contained in the Circular, regarding certain
 transactions involving HM Treasury;

 

6

	
  

 	
  

 
	
  

 	
 HMT Transactions has the meaning given in
 the Circular;

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 Indemnified Persons means, in relation to
 any Joint Bookrunner:

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 such Joint
 Bookrunner and any subsidiary, branch or affiliate of such Joint Bookrunner;

 
	
  

 	
  

 	
  

 
	
  

 	
 (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)

 	
 such Joint
 Bookrunner’s respective selling agents and each person, if any, who controls
 such Joint Bookrunner within the meaning of Section 15 of the Securities Act
 or Section 20 of the Exchange Act and such Joint Bookrunner’s respective
 affiliates, subsidiaries, branches, 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,
 employees and agents,

 
	
  

 	
  

 	
  

 
	
  

 	
 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;

 
	
  

 	
  

 	
  

 
	
  

 	
 Interim Accounts means the unaudited
 financial information relating to the Group for the period ended the Company
 Current Interim End Date;

 
	
  

 	
  

 	
  

 
	
  

 	
 Interim Assessment Date means 21 November 2009;

 
	
  

 	
  

 	
  

 
	
  

 	
 Issue Price means (subject to the Joint
 Bookrunners’ obligations under Clause 2.4) the issue price for each Top up
 Issue (which shall not be below par, except with the consent of the Company),
 as agreed between the Company and the Joint Bookrunners to be determined by
 reference to the following:

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 the
 observable market yield on ECNs of comparable maturity (issued pursuant to
 the LME or issued as Top up Issues), provided there is sufficient liquidity
 in the ECNs, plus a margin of 1.5 per cent., such aggregate amount being
 subject to the Cap (provided that if the Shortfall at such time is greater
 than £1,500,000,000 there shall be deemed not to be sufficient liquidity in
 the ECNs and this (i) shall not apply); or

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 if there is
 no observable market yield on ECNs of comparable maturity (issued pursuant to
 the LME or issued as Top up Issues), or if there is (or there is deemed to
 be) not sufficient liquidity in the ECNs of comparable maturity (issued
 pursuant to the LME or issued as Top up Issues), the new issue yield of such
 ECNs, subject to the Cap.

 
	
  

 	
  

 	
  

 
	
  

 	
 For the
 purposes of the definition of Issue Price:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 a security
 shall be deemed to have sufficient
 liquidity for the purposes of the definition of “Issue Price” if
 it has an outstanding nominal amount of at least 300,000,000 of the relevant
 currency unit in which such security is denominated (or, in the case of a
 security denominated in Japanese Yen, an outstanding nominal amount
 equivalent to £300,000,000) 

 

7

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 or as
 otherwise agreed between the Company and the Joint Bookrunners (each acting
 reasonably); and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the new issue yield means the yield
 determined as the best available market clearing price for such ECNs through
 a bookbuild process conducted by the Joint Bookrunners in consultation with
 the Company and taking account of the Company’s reasonable requirements so as
 to seek to establish the best available market clearing price for such ECNs;

 
	
  

 	
  

 
	
  

 	
 Joint Bookrunners means Merrill Lynch
International, UBS Limited, Citigroup Global Markets Limited, Goldman Sachs
International, HSBC Bank plc and J.P. Morgan Securities Ltd. and shall
include each of their respective affiliates (including, for the avoidance of
doubt, in the case of an issue of Top up Securities to QIBs, their respective
United States broker-dealer affiliates) and Joint Bookrunner shall mean any
one of them and its affiliates; 

 
	
  

 	
  

 
	
  

 	
 Joint Bookrunners’ Counsel means Allen &
 Overy LLP;

 
	
  

 	
  

 
	
  

 	
 Joint Global Co-ordinators means Merrill
Lynch International and UBS Limited and Joint Global Co-ordinator shall mean
either one of them. The Joint Global Co-ordinators shall also be named as the
Joint Structuring Advisers in the Disclosure Package and Prospectus in
relation to any Top up Issue; 

 
	
  

 	
  

 
	
  

 	
 KPMG means KPMG Audit plc of 8 Salisbury
 Square, London EC4Y 8BB;

 
	
  

 	
  

 
	
  

 	
 Limitation has the meaning given in Clause
 12.7;

 
	
  

 	
  

 
	
  

 	
 Limited Voting Shares means limited voting
 shares of 25 pence each in the capital of the Company;

 
	
  

 	
  

 
	
  

 	
 Listing Rules means the Listing Rules of the
 FSA made under section 73A of the FSMA;

 
	
  

 	
  

 
	
  

 	
 Listed Top up Issue means (i) any Top up
 Issue in respect of which Admission is to take place not later than one
 Business Day following Settlement or (ii) any Top up Issue which it is
 intended will be offered on a basis which is not exempt from the requirements
 of the Prospectus Directive;

 
	
  

 	
  

 
	
  

 	
 LME means the liability management exercise
launched on the date hereof (the First Tranche of the LME) by the Offeror and
described in the Exchange Offer Memoranda pursuant to which the Joint Global
Co-ordinators have been appointed as lead dealer managers and the Joint
Bookrunners have been appointed as dealer managers and any subsequent
liability management exercise(s) (which may include, without limitation, US
LMEs and bilaterally negotiated transactions between the Company and other
members of the Group and individual holders of securities) (involving either
the same or different tier 1 or upper tier 2 capital securities as those
which were targeted in the First Tranche) undertaken by the Company or other
members of the Group, acting reasonably in consultation with the Joint Global
Co-ordinators (the Company acknowledging that the Joint Global Co-ordinators
may make requests or proposals in such regard from time to time and the Joint
Global Co-ordinators acknowledging that the decision to undertake any such
liability management exercise or enter into any such bilaterally negotiated
transactions shall be at the sole discretion of the Company); 

 
	
  

 	
  

 
	
  

 	
 London Stock Exchange means London Stock
 Exchange Group plc;

 
	
  

 	
  

 
	
  

 	
 Longstop Date means 30 April 2010 or such
 other date as the Company and the Joint Bookrunners may agree pursuant to an
 amendment to this Agreement;

 

8

	
  

 	
  

 
	
  

 	
 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 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 or to receive
 a contribution pursuant to Clause 13 and/or in seeking advice regarding any
 Claim or in any way related to or in connection with the indemnity contained
 in Clause 12 or the provisions of Clause 13) and Loss shall be construed
 accordingly;

 
	
  

 	
  

 
	
  

 	
 MAC Event means the occurrence of any of the
 following events: (i) any material adverse change, or any development
 reasonably likely to result in a material adverse change, in the condition of
 the financial markets in the United Kingdom, the United States, any member
 state of the EEA or the international financial markets, any outbreak of
 hostilities or escalation thereof, any act of terrorism or war or other
 calamity or crisis or any change or development involving a prospective
 change in national or international political, financial or economic
 conditions, exchange rates or exchange controls; or (ii) trading in any
 securities of the Company being suspended or materially limited by the London
 Stock Exchange or the New York Stock Exchange on any exchange or over the
 counter market or any development reasonably likely to result in trading in
 any securities of the Company being suspended or materially limited by the
 London Stock Exchange or the New York Stock Exchange on any exchange or other
 the counter market, or trading generally on the American Stock Exchange, the
 New York Stock Exchange, the NASDAQ National Market or the London Stock
 Exchange being suspended or materially limited or any development reasonably
 likely to result in trading generally on the American Stock Exchange, the New
 York Stock Exchange, the NASDAQ National Market or the London Stock Exchange
 being suspended or materially limited, or minimum or maximum prices for
 trading being fixed or any development reasonably likely to result in minimum
 or maximum prices for trading being fixed, or maximum ranges for prices being
 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 occurring in commercial banking or
 securities settlement or clearance services in the United States or in the
 EEA or any development reasonably likely to result in a material disruption
 occurring in commercial banking or securities settlement or clearance
 services in the United States or in the EEA; or (iii) a banking moratorium
 being declared by the United States, the United Kingdom, a member state of
 the EEA, or New York authorities; or (iv) an adverse change or the official
 announcement by any governmental authority of a prospective adverse change in
 United States or United Kingdom taxation materially affecting the Top up
 Securities or the transfer thereof or exchange controls being imposed by the
 United States, the United Kingdom or a member state of the EEA; or (v) any
 adverse Commission Decision having been publicly announced or publicly
 communicated;

 
	
  

 	
  

 
	
  

 	
 Material Adverse Effect means a material
 adverse change (whether individually or in the aggregate) in, or any
 development reasonably likely to result in a material adverse change (whether
 individually or in the aggregate) in or effect on (including, for the
 avoidance of doubt, any development reasonably likely to result in a material
 adverse change arising as a result of a Commission Decision having been
 publicly announced or publicly communicated subsequent to the publication of
 the Press Announcement) the condition (financial, operational, legal or
 otherwise) or in the earnings, business affairs, business prospects or
 financial prospects of any of (i) the Company, (ii) any member of the Group
 or (iii) the Group taken as a whole, in any such case whether or not arising
 in the ordinary course of business (including, without limitation, any rating
 downgrade, notice of prospective downgrade or any indication by rating
 agencies that such downgrade will take place);

 
	
  

 	
  

 
	
  

 	
 Money Laundering Laws has the meaning given
 to it in paragraph 20.8 of Schedule 4;

 
	
  

 	
  

 
	
  

 	
 OECD Convention has the meaning given to it
 in paragraph 20.11 of Schedule 4;

 

9

	
  

 	
  

 
	
  

 	
 Offeror means, in relation to the First
 Tranche of the LME, LBG Capital No.1 plc and in relation to any subsequent
 LME, the member of the Group who makes the relevant offer;

 
	
  

 	
  

 
	
  

 	
 Official List means the Official List of the
 UK Listing Authority;

 
	
  

 	
  

 
	
  

 	
 Overall Financial Adequacy Rule has
 the meaning given in the FSA Rules;

 
	
  

 	
  

 
	
  

 	
 Passporting Jurisdiction means each
 jurisdiction (if any) in the European Economic Area as may be agreed between
 the Company and the Joint Bookrunners, each acting reasonably into which it
 is intended that Top up Securities will be offered on a basis which is not
 exempt from the requirements of the Prospectus Directive;

 
	
  

 	
  

 
	
  

 	
 Presentation Materials means any written
 materials to be used by the Issuer, the Guarantor or the Company in
 presentations to institutional investors in connection with any Top up Issue;

 
	
  

 	
  

 
	
  

 	
 Press Announcement means the press
 announcement dated 3 November 2009 giving details of, inter alia, the Rights
 Issue, the HMT Transactions and the Share Capital Subdivision, as published
 through a Regulatory Information Service;

 
	
  

 	
  

 
	
  

 	
 Previous Announcements means all documents
 issued and announcements (other than the Press Announcement) made by or on
 behalf of the Company or any member of the Group to the public or the press
 since the Accounts Date and before the date of this Agreement;

 
	
  

 	
  

 
	
  

 	
 Profit Forecast Report means any profit (or
 loss) forecast report prepared by the Auditors relating to any forecast loss
 before tax, before the recognition of negative goodwill or any other forecast
 of loss or profit, for the Group which appears in the Prospectus;

 
	
  

 	
  

 
	
  

 	
 Programme means any programme for the
 issuance of ECNs which is set up by the Company in consultation with the
 Joint Bookrunners;

 
	
  

 	
  

 
	
  

 	
 Proportionate Share means, in relation to
 each Joint Bookrunner, the percentage set against its name in column 3 of the
 table at Schedule 9;

 
	
  

 	
  

 
	
  

 	
 Prospectus means in relation to every Top up
 Issue the relevant prospectus for such Top up Issue (constituting a
 prospectus for the purposes of the FSMA, the Listing Rules and the Prospectus
 Rules) as to be agreed between the Company and the Joint Bookrunners and to
 be published by the Issuer and shall, in the case of Top up Issues issued
 pursuant to a Programme, include the relevant Final Terms. In the case of Top
 up Issues issued pursuant to a Programme, any references in this Agreement to
 the date of publication of any Prospectus shall be deemed to be a reference
 to the date of publication of any Final Terms;

 
	
  

 	
  

 
	
  

 	
 Prospectus Directive means Prospectus
 Directive 2003/71/EC;

 
	
  

 	
  

 
	
  

 	
 Prospectus Publication Date means, in
 relation to each Top up Issue, the date of approval of the relevant
 Prospectus by the UK Listing Authority or (in the case of Top up Issues issued
 pursuant to a Programme) the date on which the relevant Final Terms are
 submitted to the UK Listing Authority;

 
	
  

 	
  

 
	
  

 	
 Prospectus Rules means the Prospectus Rules
 of the FSA made under section 73A of the FSMA;

 
	
  

 	
  

 
	
  

 	
 QIB or qualified institutional buyer has the
 meaning given in Rule 144A promulgated under the Securities Act;

 
	
  

 	
  

 
	
  

 	
 Regulatory Information Service means any of
 the services set out in Appendix 3 to the Listing Rules;

 

10

	
  

 	
  

 
	
  

 	
 Relevant Documents means, in relation to any
 Top up Issue, the Prospectus, any Supplementary Prospectus, any translation
 of the summary contained in the Prospectus, the Presentation Materials and
 any other documents, announcements or communications issued in connection
 with such Top up Issue (including, for the avoidance of doubt, any
 preliminary Prospectus and, in the case of an Unlisted Top up Issue only, the
 Disclosure Package and any supplement to the Disclosure Package); provided
 that references to Relevant Documents in Schedule 4 shall be
 references only to those Relevant Documents that have been issued, published
 or provided prior to or at the time at which the relevant Warranty is given
 or repeated, as the case may be;

 
	
  

 	
  

 
	
  

 	
 Relevant Person means HM Treasury, the
 Solicitor for the Affairs of Her Majesty’s Treasury, any of Her Majesty’s
 Secretaries of State (and any other Minister of the Crown), UK Financial
 Investments Limited, the Asset Protection Agency, and any and all directors,
 officers, officials, employees and agents of the foregoing;

 
	
  

 	
  

 
	
  

 	
 Resolutions means the resolutions set out in
 the notice of GM contained in the Circular to authorise the Directors to
 allot shares of the Company, to authorise the Directors pursuant to section
 571 of the Companies Act to allot such number of ordinary shares in the
 Company as if section 561 of the Companies Act did not apply to any such
 allotment and to disapply rights of pre-emption in each case, so as to enable
 compliance with the requirements of the Trust Deed or Deed Poll relating to
 any such Top up Issue and of Schedule 2 in relation to the terms of the
 relevant Top up Securities to be implemented;

 
	
  

 	
  

 
	
  

 	
 Restriction Date means the earliest of:

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the Longstop
 Date or, if later, in the event of any LME being launched by the Company
 prior to the Longstop Date and subsequent to the First Tranche, two calendar
 months following the settlement of such LME; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the date on
 which the Shortfall has been reduced to zero; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the date on
 which the Joint Bookrunner’ obligations under this Agreement are terminated
 pursuant to the terms of this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 Rights Issue means the rights issue launched
 by the Company simultaneously with the launch of the LME;

 
	
  

 	
  

 	
  

 
	
  

 	
 Rights Issue Prospectus means the prospectus
 prepared by the Company relating to the Rights Issue;

 
	
  

 	
  

 	
  

 
	
  

 	
 Rights Issue Resolutions means the
 resolutions relating to the Rights Issue set out in the notice of GM
 contained in the Circular;

 
	
  

 	
  

 	
  

 
	
  

 	
 Rights Issue Underwriting Agreement means
 the underwriting agreement dated the date hereof executed by the Company and
 the other parties thereto relating to the Rights Issue;

 
	
  

 	
  

 	
  

 
	
  

 	
 Securities Act means the US Securities Act
 of 1933, as amended, and the rules promulgated thereunder;

 
	
  

 	
  

 	
  

 
	
  

 	
 Selling Restrictions means the selling
 restrictions set out in Schedule 7;

 
	
  

 	
  

 	
  

 
	
  

 	
 Senior Manager means each of Tom Murphy,
 Alex Pietruska, Andrew Geczy and Ian Smith;

 
	
  

 	
  

 	
  

 
	
  

 	
 Settlement means, in relation to a Top up
 Issue, the settlement of the Joint Bookrunners’ payment obligations to the
 Issuer;

 

11

	
  

 	
  

 
	
  

 	
 Settlement Date means in relation to a Top
 up Issue, the date for Settlement as provided for under the terms of this
 Agreement;

 
	
  

 	
  

 
	
  

 	
 Share Capital Reorganisation Resolutions
 means the resolutions set out in the notice of GM contained in the Circular
 relating to the Share Capital Subdivision;

 
	
  

 	
  

 
	
  

 	
 Share Capital Subdivision means the proposed
 subdivision and conversion of the Company’s ordinary share capital described
 in the Circular and the Rights Issue Prospectus;

 
	
  

 	
  

 
	
  

 	
 Shortfall means, at any time, any difference
 between £7,500,000,000 and the sum of (i) the aggregate principal amount
 (being, in the case of any amounts not in sterling, the sterling equivalent
 as at the settlement date of the relevant ECN) of the ECNs due for delivery
 (based on the number of Target Securities notified by the Offeror as having
 been accepted for exchange immediately following the Expiration Date)
 pursuant to the LME, plus (ii) the aggregate Book Value (being, in the case
 of any amounts not in sterling, the sterling equivalent as at the Expiration
 Date of the relevant LME) of Target Securities due for delivery (other than
 in the exchange referred to in (i)) based on the number of Target Securities
 notified as having been accepted for exchange by the Offeror immediately
 following the Expiration Date, plus (iii) (if at the time of calculation of
 the Shortfall any Top up Securities have been issued) the aggregate net
 proceeds (being, in the case of any amounts not in sterling, the sterling
 equivalent as at the relevant Settlement Date) of any Top up Securities issued
 pursuant to the terms of this Agreement at the time of the calculation of
 such Shortfall;

 
	
  

 	
  

 
	
  

 	
 Specified Circumstance means (a) fraud,
 wilful misconduct or dishonest concealment on the part of the Company, any
 Group company, any Director or any Senior Manager, or (b) any breach by the
 Company of its undertakings in Clauses 9.3, 10.6 or 10.7 of this Agreement at
 any time prior to the relevant Settlement Date;

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 sterling equivalent shall be calculated by
 reference to FX fixings appearing at 1.15 p.m. on Bloomberg page BFIX;

 
	
  

 	
  

 
	
  

 	
 Target Securities means any securities at
 which the LME is targeted;

 
	
  

 	
  

 
	
  

 	
 tax or taxes means all taxes, levies,
 imposts, duties, charges or withholdings of any nature whatsoever, together
 with all penalties, charges and interest relating to any of the foregoing and
 regardless of whether the person concerned is primarily liable or not,
 including (without limitation) corporation tax, advance corporation tax,
 income tax, capital gains tax, VAT, duties of customs and excise, national
 insurance contributions, capital duty, stamp duty, stamp duty reserve tax,
 stamp duty land tax and any other transfer tax or duty, all taxes, duties or
 charges replaced by or replacing any of them, and all other taxes on gross or
 net income, profits or gains, distributions, receipts, importations, sales,
 use, occupation, franchise, value added, and personal property imposed by a
 tax authority of any jurisdiction;

 
	
  

 	
  

 
	
  

 	
 Time of Sale means a time as is notified to
 the Issuer by the Joint Bookrunners as the time of sale with respect to their
 endeavours to procure subscribers for any Top up Issue;

 
	
  

 	
  

 
	
  

 	
 Top up Issue means any issue of Top up Securities
 underwritten pursuant to this Agreement;

 
	
  

 	
  

 
	
  

 	
 Top up Securities means each security
 forming part of a Top up Issue, such security to have terms complying with
 the requirements set out in Schedule 2;

 

12

	
  

 	
  

 
	
  

 	
 Trust Deed means in relation to any Top up
 Issue, any trust deed, indenture or supplemental trust deed or indenture
 entered into by the Issuer, the Guarantor and other parties to such Top up
 Issue for the appointment of any trustee in relation to such Top up Issue,
 such deed to take effect on the Settlement Date for such Top up Issue;

 
	
  

 	
  

 
	
  

 	
 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 Kingdom means Great Britain and
 Northern Ireland;

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 Unlisted Top up Issue means any Top up Issue
 other than a Listed Top up Issue;

 
	
  

 	
  

 
	
  

 	
 US LMEs means any subsequent liability
 management exercise(s) targeted at the following preference shares issued by
 members of the Group and sold into the United States: ISIN:
 US539439AB54/US539439AA71; ISIN: USG5533WAB30/US539439AD11; ISIN:
 US539439AE93/US539439AF68; and ISIN: USG5533WAA56/US539439AC38;

 
	
  

 	
  

 
	
  

 	
 VAT means value added tax or any similar
 sales or turnover tax or levy imposed in any jurisdiction; and

 
	
  

 	
  

 
	
  

 	
 Warranties means the representations,
warranties and undertakings set out in Clause 10.1, 10.2, 10.3 and/or 10.4
and Schedule 4 and Schedule 5 and Warranty shall be construed accordingly. 

 

	
  

 	
  

 	
  

 
	
 1.2

 	
 In this
 Agreement unless the context otherwise requires:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 words and
 expressions defined in the Companies Act shall bear the same meaning;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 headings are
 for convenience only and shall not affect the construction of this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any
 reference to an enactment is a reference to it as from time to time amended,
 consolidated or re-enacted (with or without modification) (but, in relation
 to each Top up Issue, in the case of any amendment, consolidation or
 re-enactment effected after the relevant date of Admission, only insofar as
 it applies in relation to a period before such Admission and provided that no
 such amendment, consolidation or re-enactment shall increase or extend the
 liability of any party to this Agreement) and includes all instruments or
 orders made under the enactment;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 any
reference in this Agreement to any document expressed to be in the agreed form or to be agreed means a
document in the form initialled, for the purpose of identification only, by
Companies’ Counsel and Joint Bookrunners’ Counsel or (in the case of
documents to be agreed) in such form as may be initialled for the purpose of
identification only, in due course with the agreement of the Company and the
Joint Bookrunners, in each case subject to any changes which the Company and
the Joint Bookrunners may agree, such agreement not to be unreasonably
withheld or delayed; 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; 

 

13

	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 any
 reference to recitals, clauses and schedules are to recitals, clauses and
 schedules to this Agreement, and references to paragraphs are to paragraphs
 in the schedule in which such references appear, and the schedules to this
 Agreement form part of the Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 each
 reference in this Agreement to the Joint Bookrunners 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 any Top up Issue;

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 any
 reference herein to any matter being contained or disclosed in the Prospectus
 or Disclosure Package for any Top up Issue shall include any such matter as
 is incorporated by reference in such Prospectus or Disclosure Package; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 any
 reference to the Joint Bookrunners approving or agreeing the form of a
 Relevant Document, shall be a reference to such approval or agreement being
 given solely for the purposes of this Agreement.

 
	
  

 	
  

 	
  

 
	
 1.3

 	
 Unless
 otherwise stated, references to time are references to London time.

 
	
  

 	
  

 	
  

 
	
 1.4

 	
 The expressions holding company, subsidiary undertaking and subsidiary shall have the meaning in this Agreement as in the Companies Act.

 
	
  

 	
  

 	
  

 
	
 2.

 	
 TERMS AND CONDITIONS

 
	
  

 	
  

 	
  

 
	
 2.1

 	
 To the
 extent (as reasonably determined by the Company following consultation with
 the Joint Global Co-ordinators) at any time the LME has resulted, or is
 expected to result, in a Shortfall which has not been, or is not expected to
 be, reduced to zero as at the Longstop Date, the Joint Bookrunners agree, on
 a several basis, as described herein on the terms and subject to the
 conditions referred to in this Agreement, to underwrite Top up Issues in an
 aggregate amount equating to the Shortfall, (subject as provided in Clause
 2.2) such Top up Issues to be issued prior to the Longstop Date. The
 underwriting commitments of the Joint Bookrunners will amortise such that the
 aggregate outstanding commitment of the Joint Bookrunners at any given time
 will be equal to the Shortfall at such time and the underwriting commitment
 of each Joint Bookrunner at such time shall amount to its Proportionate Share
 of such Shortfall. Without prejudice to the other provisions of this Agreement,
 the Joint Bookrunners’ underwriting commitments pursuant to this Agreement
 will cease earlier than the Longstop Date if at such time the Shortfall has
 been reduced to zero.

 
	
  

 	
  

 
	
 2.2

 	
 Top up Issues (each being
 underwritten by the Joint Bookrunners) may be issued in one or
 more series at such times (following the Interim Assessment Date and prior to
 the Longstop Date) and on such terms as are reasonably determined by the
 Joint Bookrunners after consultation with the Company (subject to any
 applicable legal or regulatory constraints) and otherwise on such terms as
 comply with the requirements set out in Schedule 2. If
 at the Longstop Date there is a Shortfall, the Joint Bookrunners severally
 agree, if and to the extent that the Joint Bookrunners are unable to procure
 subscribers, to subscribe such amount of Top up Securities at such times (provided such time is no later than 2
 Business Days after the Longstop Date) and on such terms as may be
 reasonably determined by the Joint Global Co-ordinators after consultation
 with the Company (such terms to be subject always to the terms of this
 Agreement and to any legal or regulatory constraints applicable to the
 Company) so as to discharge the Shortfall provided that for any such issue, the
 definition of “Issue Price” shall be deemed to be amended to mean the issue
 price for such Top up Issue (which shall not be below par, except with the
 consent of the Company), as agreed between the Company and the Joint
 Bookrunners to be determined by reference to a yield equal to, or (pursuant
 to the Joint Bookrunner’s obligations under Clause 2.4) less than, the Cap.

 

14

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.3

 	
 Any Top up Issues that are
 proposed to be offered or sold to QIBs in the United States shall be subject
 to the agreement of the Company, such agreement not to be unreasonably
 withheld or delayed, taking into account the requirements of the Securities
 Act and the documentary requirements of this Agreement in respect of any such
 Top up Issues. The parties shall consult with each other and, acting
 reasonably and practicably, shall seek to agree whether or not a Top up Issue
 shall be a Listed Top up Issue or not. Subject to any agreement to the
 contrary, the Issuer agrees that Top up Issues in an amount in excess of
 £300,000,000 (or its equivalent in any other currency) shall be Listed Top up
 Issues. In the case of an Unlisted Top up Issue, the Issuer agrees to use all
 reasonable endeavours to procure Admission for the relevant Top up Securities
 on or prior to the earlier of (i) the first interest payment date in respect
 of the relevant Top up Securities and (ii) the Longstop Date.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.4

 	
 The Joint Bookrunners,
 as co-ordinated by the Joint Global Co-ordinators, agree to use all
 reasonable endeavours (including, where practicable in the circumstances and
 having regard to the intended Settlement Date of such Top up Securities,
 taking account of alternative identifiable methods of achieving more
 efficient pricing which may be proposed by the Company) in order to obtain
 the best market clearing prices for the Top up Issues and for the avoidance
 of doubt, the provisions of this Clause 2.4 shall apply at all times to Top
 up Issues under the terms of this Agreement, including as to Top up Issues
 contemplated under Clause 2.2.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.5

 	
 Without
 prejudice to their obligations to underwrite or subscribe any subsequent Top
 up Issue, in relation to each Top up Issue, the Joint Bookrunners’
 obligations under this Agreement are conditional on:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 in the case
 of a Listed Top up Issue, approval of a Prospectus for such Top up Issue as a
 prospectus by the UK Listing Authority and such Prospectus being filed with the
 FSA in accordance with the Prospectus Rules and the FSMA and made available
 to the public. on the Prospectus Publication Date for that Top up Issue (or
 such later time and/or date as the Joint Bookrunners may agree in writing);

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 in the case
 of a Listed Top up Issue, the UK Listing Authority having granted permission
 for the relevant Top up Securities to be admitted to the Official List and
 the London Stock Exchange having granted permission for the Top up Securities
 to be admitted to trading on its regulated market;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 execution of
 the Trust Deed, Deed Poll and Agency Agreement by all the parties thereto;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 in the case
 of a Listed Top up Issue, no event referred to in section 87G(1) of the FSMA
 arising between the time of publication of the relevant Prospectus and
 Admission and no Supplementary Prospectus being published by or on behalf of
 the Issuer before Admission and (in the case of an Unlisted Top up Issue) no
 supplement to the Disclosure Package being published by or on behalf of the
 Issuer before the relevant Settlement Date:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 other than
 where such event or the publication of the Supplementary Prospectus or
 supplement to the Disclosure Package is:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (A)

 	
 directly or
 indirectly, as a result of a MAC Event or a Material Adverse Effect having
 occurred subsequent to the publication of the Press Announcement; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (B)

 	
 directly or
 indirectly, as a result of a Commission Decision having been publicly
 announced or publicly communicated subsequent to the publication of the Press
 Announcement, 

 

15

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided that Clause
 2.5(d)(i)(A) shall not apply in circumstances where the MAC Event or Material
 Adverse Effect occurred as a direct or indirect consequence of a Specified
 Circumstance; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 save to an
 extent which the Joint Global Co-ordinators do not consider, in their sole
 judgement, acting in good faith, to be (singly or in the aggregate) material
 in the context of such Top up Issue or the underwriting of such Top up Issue
 or the issue of the relevant Top up Securities or dealings post the issue of
 the relevant Top up Securities;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 no
 termination right having arisen pursuant to Clause 14 of this Agreement;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 (if
 applicable) the competent authority of each Passporting Jurisdiction having
 been notified in accordance with the procedures set out in Articles 17 and 18
 of the Prospectus Directive and all requirements under those Articles having
 been satisfied;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 the Top up
 Securities receiving a rating from at least one internationally recognised
 credit rating agency:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 other than a
 failure to receive such a rating, directly or indirectly, as a result of a
 MAC Event or a Material Adverse Effect having occurred subsequent to the
 publication of the Press Announcement; and/or

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 other than a
 failure to receive such a rating, directly or indirectly, as a result of a
 Commission Decision having been publicly announced or publicly communicated
 subsequent to the publication of the Press Announcement, 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 provided that Clause
 2.5(g)(i) shall not apply in circumstances where the MAC Event or Material
 Adverse Effect occurred as a direct or indirect consequence of a Specified
 Circumstance;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 the Company
 having used reasonable endeavours to procure that the ratings assigned to the
 Top up Securities are at least equal to those then applicable to the ECNs
 issued in the LME; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 the
 fulfilment by the Issuer, the Guarantor and the Company of their respective
 obligations under Clauses 3.1, 3.3, 4.3 and 4.4 by the times (if any)
 specified therein.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.6

 	
 The Joint
 Global Co-ordinators may, in their absolute discretion:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 extend the
 time or date for satisfaction of any condition set out in Clause 2.5 or 2.9
 below, in which case a reference in this Agreement to the satisfaction of
 such condition shall be to its satisfaction by the time or date as so
 extended; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 waive the
 satisfaction of any such condition other than Clause 2.5(a) or Clause 2.9
 below, in whole or in part, 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 by giving
 written notice to the Company. For the avoidance of doubt, the rights of the
 Joint Global Co-ordinators under this Clause 2.6:

 

16

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 may be
 exercised by the Joint Global Co-ordinators, acting jointly for whatever
 reason or on whatever basis that they consider to be practicable, appropriate
 or advisable to them; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 are
 conferred on the Joint Global Co-ordinators, and may be exercised by the
 Joint Global Co-ordinators, acting jointly, in their respective capacities as
 such, and not in any representative or fiduciary capacity.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.7

 	
 If, in
 relation to any Top up Issue, any condition set out in Clause 2.5 is not
 satisfied (or waived by the Joint Global Co-ordinators in their absolute
 discretion in accordance with Clause 2.6), or becomes incapable of being
 satisfied, by the required time and date therefor then:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the Joint
 Bookrunners’ obligations under this Agreement shall cease and determine in
 relation to such Top up Issue (but, for the avoidance of doubt, no other Top
 up Issues), without prejudice to any liability for any prior breach of this
 Agreement (including, without limitation, breach of any of the
 representations, warranties and undertakings contained herein); and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the
 Issuer’s, the Guarantor’s and the Company’s respective obligations and
 agreements under Clauses 8, 9, 10, 11, 12, 13 and 16 to 25 inclusive shall
 remain in full force and effect in relation to such Top up Issue and the
 Issuer’s, the Guarantor’s and the Company’s other respective obligations
 under this Agreement shall cease and determine in relation to such Top up
 Issue (but, for the avoidance of doubt, no other Top up Issues), without
 prejudice to any liability for any prior breach of this Agreement (including,
 without limitation, breach of any of the representations, warranties and
 undertakings contained herein), 

 
	
  

 	
  

 	
  

 
	
  

 	
 provided
 that, for the avoidance of doubt, the Joint Bookrunners’ obligations in
 relation to such Top up Issue under this Agreement shall not be capable of
 termination at any time after the issue of the relevant Top up Securities and
 such obligations shall be deemed to have become unconditional upon the issue
 of the relevant Top up Securities (but, for the avoidance of doubt, without
 prejudice to any of the rights and remedies of the Joint Bookrunners in
 respect of any breach by the Issuer, the Guarantor or the Company of their
 respective obligations under this Agreement (including without limitation
 under this Clause 2)).

 
	
  

 	
  

 	
  

 	
  

 
	
 2.8

 	
 Each of the
 Issuer, the Guarantor and the Company shall use all reasonable endeavours to
 procure that each of the conditions set out in Clause 2.5 and Clause 2.9
 below is satisfied within the relevant time.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.9

 	
 The Joint
 Bookrunners’ obligations under this Agreement are conditional on the passing
 of the Resolutions, the Share Capital Reorganisation Resolutions, the HMT
 Resolution and the Rights Issue Resolutions (in each case, without amendment,
 save as may be made by the Company with the consent of the Joint Global
 Co-ordinators, acting in good faith) at the GM on the GM Date (and not,
 except with the written agreement of the Joint Global Co-ordinators (not to
 be unreasonably withheld or delayed), at any adjournment of such meeting)
 (such condition, the Pre-Condition). In the event that the
 Pre-Condition is not satisfied, or becomes incapable of being satisfied, by
 the required time and date therefore then the Joint Bookrunners’ obligations
 under this Agreement shall cease and determine, without prejudice to any liability
 for any prior breach of this Agreement (including, without limitation, breach
 of any of the representations, warranties and undertakings contained herein).

 
	
  

 	
  

 	
  

 	
  

 
	
 2.10

 	
 The Joint
 Bookrunners hereby agree to work together in a co-ordinated manner in connection
 with any Top up Issue acknowledging their common (but several) obligations in
 respect of any Shortfall.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.11

 	
 The Joint
 Bookrunners hereby agree amongst themselves that the section headed “2. Top
 up Underwriting - Authorities” of the document headed “Memorandum of
 Understanding in relation to 

 

17

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 the proposed
 LME and Top up Underwriting” dated 29 October 2009 is deemed to be included
 herein.

 
	
  

 	
  

 
	
 2.12

 	
 Each of the
 Joint Bookrunners hereby agree severally (and not jointly or jointly and
 severally) that they shall not enter into sub-underwriting commitments.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.13

 	
 Subject to
 clause 8.9 hereof, the Company hereby agrees that the Joint Bookrunners shall
 be appointed as sole dealer managers in connection with any LME (other than bilaterally
 negotiated transactions, in respect of which the Joint Bookrunners shall act
 as advisors to the Company) until the earlier of the Longstop Date or the
 Shortfall is reduced to zero.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.14

 	
 The Joint
 Bookrunners shall consult with the Company: (i) from the Interim Assessment
 Date and on an on-going basis thereafter with respect to their strategy for
 the issuance of Top up Securities from time to time (such strategy to be
 consistent with the Joint Bookrunners’ obligations under Clause 2.1 and 2.4);
 and (ii) following feedback from investors in connection with any proposed
 Top up Issue. The Joint Bookrunners shall allow the Company, on its request,
 the opportunity to establish if better terms can be obtained in the market in
 connection with any proposed Top up Issue and any further Top up Issues
 required to reduce the Shortfall to zero (including, for the avoidance of
 doubt, any further Top up Issues required to be issued in the event that
 there is a Shortfall on the Longstop Date) (together the Remaining Issues).
 To the extent, in the good faith opinion of the Company, that better terms
 can be obtained on an underwritten basis in the market, the Company may give
 notice to the Joint Bookrunners that it wishes to proceed with the
 alternative proposal for such Remaining Issues. Following such notice, the
 Shortfall shall be reduced to zero and each such Remaining Issue shall not be
 a Top up Issue under the terms of this Agreement. In the event of such notice
 being given by the Company to the Joint Bookrunners, this Agreement shall
 cease to have any further effect (including as to the appointment of the
 Joint Bookrunners under Clause 2.13) in each case except to the extent
 specified in Clause 14.2.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.15

 	
 In the event
 that the Group’s published core tier 1 capital ratio falls to less than 5 per
 cent. and Top up Securities automatically convert into ordinary shares
 of the Company in accordance with their requirements as set out in Schedule
 2, the Joint Bookrunners severally agree, if and to the extent that the Joint
 Bookrunners are unable to procure subscribers, to subscribe such number of
 ordinary shares of the Company as is equal to (i) the aggregate amount of
 ECNs that would otherwise have been required to be issued to reduce the
 Shortfall to zero, divided by (ii) the conversion price at such time (as
 described in Schedule 2). In such event, the terms and conditions in
 this Agreement shall apply mutatis mutandis, and
 the conditions to such issue and the representations and warranties
 given by the Company shall be on such terms as are reasonably
 agreed between the Company and the Joint Global Co-ordinators (acting on
 behalf of the Joint Bookrunners) as at such time (provided that any offering
 of ordinary shares of the Company in the United States shall only be to QIBs
 in transactions exempt from the registration requirements of the Securities
 Act for transactions not involving a public offering under section 4(2)
 thereof), by reference to the terms of the Rights Issue Underwriting
 Agreement.

 

	
  

 	
  

 
	
 3.

 	
 APPLICATION FOR LISTING AND ADMISSION TO TRADING

 
	
  

 	
  

 
	
 3.1

 	
 Pursuant to
 the Issuer’s obligations under Clause 2.2, the Issuer undertakes to apply,
 before any Prospectus Publication Date, to:

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the UK
 Listing Authority for admission of the relevant Top up Securities to the
 Official List;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the London
 Stock Exchange for admission to trading of the relevant Top up Securities on
 the London Stock Exchange’s regulated market.

 

18

	
  

 	
  

 	
  

 
	
  

 	
 In relation
 to each Top up Issue the Issuer shall use all reasonable endeavours to obtain
 permission (a) for the admission of the relevant Top up Securities to the
 Official List, and (b) for admission to trading of the relevant Top up
 Securities on the London Stock Exchange’s regulated market (subject only to
 the delivery of Documents of Title in respect of the relevant Top up
 Securities).

 
	
  

 	
  

 
	
 3.2

 	
 In relation
 to each Top up Issue the Issuer undertakes to apply for formal approval of
 the relevant Prospectus for the purposes of, and in accordance with, the
 Listing Rules and the Prospectus Rules and shall use all reasonable
 endeavours to obtain such approval and passporting as soon as practicable and
 in any event in relation to approval, before publication of the relevant
 Prospectus.

 
	
  

 	
  

 	
  

 
	
 3.3

 	
 Each of the
 Issuer, the Guarantor and the Company shall supply all information, give all
 undertakings, execute all documents, pay all fees and do or procure to be
 done all things in each case as may be necessary or required (a) by the UK
 Listing Authority and the London Stock Exchange for the purposes of obtaining
 formal approval of the Prospectus and obtaining Admission, and (b) to comply
 with the Listing Rules, the Prospectus Rules, the Admission and Disclosure
 Standards, the FSMA and the Companies Act.

 
	
  

 	
  

 	
  

 
	
 3.4

 	
 Each of the
 Issuer, the Guarantor and the Company shall notify the Joint Bookrunners
 immediately of any matter referred to in section 87G(1) of the FSMA which
 arises between the time that the Prospectus is formally approved by the UK
 Listing Authority and 11.00 a.m. on the relevant Settlement Date. Each of the
 Issuer, the Guarantor and the Company shall deal with every such matter in
 accordance with section 87G of the FSMA, the Listing Rules and the Prospectus
 Rules.

 
	
  

 	
  

 	
  

 
	
 3.5

 	
 In relation
 to any Top up Issue the Issuer shall use all reasonable endeavours to procure
 the delivery of a certificate of approval by the Financial Services Authority
 to the competent authority in each Passporting Jurisdiction (if applicable)
 and will promptly notify the Joint Bookrunners, following receipt of
 confirmation that such certificate of approval has been so delivered

 
	
  

 	
  

 	
  

 
	
 3.6

 	
 Each of the
 Joint Bookrunners irrevocably waives any statutory right to withdraw
 acceptances which may arise pursuant to Section 87Q(4) of the FSMA on the
 publication of a Supplementary Prospectus and the Joint Bookrunners undertake
 not to rely on Section 87Q(4) of the FSMA in such circumstances to avoid
 their obligations under Clauses 7.1, 7.2, 7.3 and 7.4 other than where the
 Supplementary Prospectus has been published as a direct or indirect
 consequence of a Specified Circumstance. For the avoidance of doubt, this
 Clause 3.6 does not affect the conditions set out under Clause 2.5, Clause
 2.9 or the termination rights of the Joint Bookrunners under Clause 14. 

 
	
  

 	
  

 	
  

 
	
 4.

 	
 APPROVAL, RELEASE AND DELIVERY OF DOCUMENTS

 
	
  

 	
  

 
	
 4.1

 	
 Each of the
 Issuer, the Guarantor and the Company confirms to the Joint Bookrunners that
 a meeting or meetings of the Board or a duly authorised committee of the
 Board has been held (and/or, in the case of (b), (c), (d) and (e) below,
 undertakes to hold such a meeting) which has (or will have, as the case may
 be):

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 authorised
 the Issuer, the Guarantor and the Company (as applicable) to enter into and
 perform their respective obligations under this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 in relation
 to each Top up Issue approved the form of the Prospectus and authorised and
 approved the publication of the Prospectus, each of the other Relevant
 Documents and all other documents connected with the applicable Top up Issue
 and Admission, as appropriate;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 approved the
 making of the relevant Top up Issue;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 approved the
 making of the applications for Admission; and

 

19

	
  

 	
  

 	
  

 
	
  

 	
 (e)

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

 
	
  

 	
  

 	
  

 
	
 4.2

 	
 In relation
 to each Top up Issue, subject to the UK Listing Authority having formally
 approved the Prospectus for the purpose of the Listing Rules and the
 Prospectus Rules, the Issuer shall make such Prospectus available in
 accordance with paragraph 3.2 of the Prospectus Rules and make available to
 the Joint Bookrunners such number of copies of the Prospectus as they may
 reasonably require.

 
	
  

 	
  

 
	
 4.3

 	
 On each
 Settlement Date, the Issuer, the Guarantor and the Company will deliver the
 documents referred to in Part A of Schedule 3 to the Joint Bookrunners (in
 each case in form and substance satisfactory to the Joint Global
 Co-ordinators acting reasonably).

 
	
  

 	
  

 
	
 4.4

 	
 Before
 publishing any Prospectus, the Issuer, the Guarantor and the Company shall
 deliver the documents referred to in Part B of Schedule 3 to the Joint
 Bookrunners (in each case in form and substance satisfactory to the Joint
 Global Co-ordinators acting reasonably).

 
	
  

 	
  

 
	
 5.

 	
 APPOINTMENTS

 
	
  

 	
  

 
	
 5.1

 	
 Each of the
 Issuer, the Guarantor and the Company acknowledges and agrees that none of
 the Joint Bookrunners are responsible for and have not authorised and will
 not authorise the contents of any Disclosure Package or Prospectus and that
 the Joint Bookrunners have not been requested to verify, nor are, nor shall
 be, responsible for verifying, the accuracy, completeness or fairness of any
 information in any of the Relevant Documents (or any supplement or amendment
 to any of the foregoing).

 
	
  

 	
  

 	
  

 
	
 5.2

 	
 Each of the
 Issuer, the Guarantor and the Company confirms the appointment of the Joint
 Bookrunners as joint bookrunners for the purposes of each Top up Issue on the
 terms and in the manner described in the Relevant Documents and upon and
 subject to the terms and conditions set out in this Agreement.

 
	
  

 	
  

 	
  

 
	
 5.3

 	
 Each of the
 Issuer, the Guarantor and the Company confirms that the appointment in Clause
 5.2 confers on each of the Joint Bookrunners all powers, authorities and discretions
 which are necessary for, or incidental to, the performance of its functions
 as joint bookrunner to the Top up Issues (including the appointment of such
 agents and affiliates as it deems appropriate) in accordance with the terms
 of this Agreement. Each of the Issuer, the Guarantor and the Company will
 ratify and confirm all actions which each of the Joint Bookrunners properly
 and lawfully takes pursuant to this appointment.

 
	
  

 	
  

 
	
 6.

 	
 CLOSING

 
	
  

 	
  

 	
  

 
	
 6.1

 	
 In relation
 to each Top up Issue, subject to the provisions of Clause 2, the Issuer shall
 arrange for delivery of the Top up Securities in accordance with Clause 7.

 
	
  

 	
  

 	
  

 
	
 6.2

 	
 Each Joint
 Bookrunner severally agrees to comply with the terms of the Selling
 Restrictions in seeking to procure subscribers for the Top up Securities.
 Subject to compliance with the Selling Restrictions, each Joint Bookrunner
 shall have absolute discretion to use its reasonable endeavours to procure
 such subscribers in the manner and otherwise as it thinks fit. The Joint
 Bookrunners shall, by agreement between themselves, determine the number of
 Top up Securities which each such subscriber subscribes.

 
	
  

 	
  

 
	
 7.

 	
 UNDERWRITING AND SETTLEMENT

 
	
  

 	
  

 
	
 7.1

 	
 In relation
 to each Top up Issue if and to the extent that the Joint Bookrunners are
 unable to procure subscribers, the Joint Bookrunners shall subscribe for the
 Top up Securities at the Issue Price for the 

 

20

	
  

 	
  

 	
  

 
	
  

 	
 Top up
 Issue. The obligations of the Joint Bookrunners in this Clause 7.1 are
 several (and not joint or joint and several) and (save as provided in Clause
 7.2) each Joint Bookrunner shall be responsible only for its Proportionate
 Share of the Top up Securities not otherwise taken up and for the avoidance
 of doubt no Joint Bookrunner shall have any liability or obligation in
 respect of any default by another Joint Bookrunner.

 
	
  

 	
  

 	
  

 
	
 7.2

 	
 In the event
 that one of the Joint Bookrunners defaults or, in the reasonable opinion of
 the Joint Global Co-ordinators, is likely to default in the performance of
 its obligations to subscribe for Top up Securities (the Defaulted Top up Securities)
 on the Settlement Date as required pursuant to Clause 7.1, then each of the
 non-defaulting Joint Bookrunners shall be obliged, severally and not jointly
 or jointly and severally, to procure subscribers for or to subscribe for
 themselves the Defaulted Top up Securities in the proportions that their
 respective underwriting obligations bear to the underwriting obligations of
 all non-defaulting Joint Bookrunners, provided, in each case, that the
 aggregate number of Defaulted Top up Securities for which any Joint
 Bookrunner subscribes pursuant to this Clause 7.2 shall not exceed 10 per
 cent. of the Shortfall as at the time that any such default or likely default
 first occurs. 

 
	
  

 	
  

 	
  

 
	
 7.3

 	
 The net
 subscription money in respect of any issue of Top up Securities denominated
 in sterling or US dollars which is not to be consolidated with a previously
 issued series of ECNs, (representing the agreed Issue Price, less the amount
 of the commissions and/or expenses as separately agreed in the agreement
 referred to in Clause 8 or any other agreement between the parties hereto
 applied toward discharge of the agreed Issue Price) will be paid by a Joint
 Bookrunner identified to the Issuer before the relevant Settlement Date for
 such Top up Issue as handling “billing and delivery” on behalf of the Joint
 Bookrunners to the Issuer at 10.00 a.m. (London time in the case of a Top up
 Issue denominated in sterling or New York City time in the case of Top
 Securities denominated in US dollars) on the relevant Settlement Date against
 delivery of:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 in the case
 of a Top up Issue in bearer form denominated in sterling or US dollars to be
 settled in Euroclear Bank S.A./N.V. and for Clearstream Banking, société
 anonyme, and not to be offered in whole or in part in the United States to
 QIBs, a duly executed temporary global security (the Temporary Global Security)
 initially representing the Top up Securities and a duly executed permanent
 global security (the Permanent Global Security and, together
 with the Temporary Global Security, the Global Securities), each in or
 substantially in the form provided in the Trust Deed, to a common depositary
 or as agreed before the relevant Settlement Date for such Top up Issue a
 common safekeeper for Euroclear Bank S.A./N.V. and for Clearstream Banking,
 société anonyme to be held, in the case of the Permanent Global Security, on
 terms agreed between the Joint Bookrunners, the Issuer and such common
 depositary or common safekeeper; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 in the case
 of a Top up Issue denominated in US dollars to be sold in whole or in part in
 the United States to QIBs, a global certificate (the Unrestricted Global Certificate)
 and a global certificate (the Restricted Global Certificate and,
 together with the Unrestricted Global Certificate, the Global Certificates), duly
 executed and registered in the name of a nominee of a common depositary and
 in or substantially in the form provided in the Trust Deed, to a common
 depositary for Euroclear Bank S.A./N.V. and for Clearstream Banking, société
 anonyme, and the registration of the holdings of the Top up Securities
 represented by the Global Certificates in the register maintained by the
 registrar for the Top up Securities.

 
	
  

 	
  

 	
  

 
	
 7.4

 	
 In the case
 of a Top up Issue denominated in euro which is not to be consolidated with a
 previously issued series of ECNs, not later than 3.00 p.m. (London time) (or
 such other time as may be agreed) on the date (the Payment Instruction Date)
 that is the Business Day prior to the relevant Settlement Date, the Issuer
 will deliver duly executed Global Securities, each in or substantially in the
 form provided in the Trust Deed, to a common depositary or, if agreed before
 the relevant Settlement Date to a common safekeeper for Euroclear Bank
 S.A./N.V. and for Clearstream Banking, société 

 

21

	
  

 	
  

 	
  

 
	
  

 	
 anonyme, to
 be held on terms agreed between the Issuer and the common depositary or
 common safekeeper. Against delivery and effectuation of the Global
 Securities, the Joint Bookrunner identified to the Issuer before the relevant
 Settlement Date for such Top up Issue as handling “billing and delivery”
 will, on the Payment Instruction Date, give instructions to the common
 depositary or a common service provider to arrange for the payment to the
 Issuer on the relevant Settlement Date of the net subscription money for the
 Top up Issue, (representing the agreed Issue Price, less the amount of the
 commissions and/or expenses as separately agreed in the agreement referred to
 in Clause 8 or any other agreement between the parties hereto applied toward
 discharge of the agreed Issue Price).

 
	
  

 	
  

 
	
 7.5

 	
 In any other
 case, the settlement arrangements shall be those agreed prior to the relevant
 Settlement Date for the relevant Top up Issue.

 
	
  

 	
  

 
	
 8.

 	
 COMMISSIONS AND EXPENSES

 
	
  

 	
  

 
	
 8.1

 	
 In respect of Joint Bookrunners’ role as joint bookrunners, subject
 to the satisfaction of the Pre-Condition and the performance by each of them
 of their obligations under this Agreement, the Joint Bookrunners shall be
 entitled to: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 an aggregate underwriting fee of 1 per cent. of £7,500,000,000, to be
 paid to the Joint Bookrunners pro rata to their respective underwriting
 commitments;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 an aggregate participation fee of 0.20 per cent. of the notional
 amount of the securities submitted and accepted by the Company in exchange
 for an issue of securities on terms no less advantageous to the Company than
 (or for exchange consideration with a value no greater than) the initially
 offered securities or other exchange consideration (unless otherwise agreed
 by the Issuer at its sole discretion) in the LME, to be paid to the Joint
 Bookrunners pro rata to their respective underwriting commitments;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 a discretionary success fee (to be paid at the sole discretion of the
 Company, as to payment and allocation) of an aggregate amount for allocation
 amongst all Joint Bookrunners of 0.15 per cent. of the notional amount of the
 securities submitted and accepted by the Company in exchange for an issue of
 securities on terms no less advantageous to the Company than (or for exchange
 consideration with a value no greater than) the initially offered securities
 or other exchange consideration (unless otherwise agreed by the Issuer at its
 sole discretion) in the LME; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 on each Top up Issue and subject to the satisfaction or waiver of any
 conditions precedent to such issue and such issue completing in accordance
 with its terms, a placement fee of 0.75 per cent. of the gross proceeds
 raised by the Company or a member of the Group (if any) and underwritten by the
 Joint Bookrunners, to be paid to the Joint Bookrunners pro rata to their
 respective underwriting commitments.

 
	
  

 	
  

 	
  

 
	
  

 	
 The Company shall procure that it or an
 appropriate member of the Group shall make payment of the fees set out in
 paragraph (a) to (d) above, where and when payable. A portion of the fees set
 out in paragraph (a) above shall be payable on the settlement date for each
 LME or Top up Issue, as the case may be, such portion being is equal to 1 per
 cent. of the amount of the underwriting commitment of the Joint Bookrunners
 that is discharged as at each such settlement date (up to an aggregate of
 such discharged commitment of £7,500,000,000), the fees set out in paragraph
 (b) above shall be payable at settlement of each LME by reference to the amount
 of securities which settle and on which such fees are payable; the fees set
 out in paragraph (c) above shall be payable on the earlier of 

 

22

	
  

 	
  

 	
  

 
	
  

 	
 the Longstop Date and the date on which the
 underwriting commitment of the Joint Bookrunners is discharged in full under
 this Agreement; and the fees set out in paragraph (d) above shall be payable
 at the time of settlement of each Top up Issue.

 
	
  

 	
  

 	
  

 
	
  

 	
 On any termination of this Agreement under
 Clause 2.9 or Clause 14, no fees under this Clause 8 shall be payable save
 that the Joint Bookrunners shall be entitled to fees under Clause 8.1 (a),
 (b) and (d) to the extent that the settlement under the relevant LME or Top
 up Issue has taken place or to the extent that the relevant LME or Top up
 Issue has been launched prior to such termination and settlement takes place
 after such termination. This Clause 8 shall survive any termination of this
 Agreement under Clause 2.14 and any unpaid portion of the fee provided under
 Clause 8.1(a) shall be payable immediately on such termination but, for the
 avoidance of doubt, no fee shall be payable pursuant to Clause 8.1(d) in such
 circumstances.

 
	
  

 	
  

 
	
 8.2

 	
 The
 Guarantor shall, or shall procure that an appropriate member of the Group
 shall, bear and pay all out of pocket costs and expenses properly incurred in
 connection with the structuring, making and completion of the Top up Issues
 (including but not limited to filing, printing, pre-marketing, marketing and
 roadshow costs and expenses) and the consummation of the transactions contemplated
 herein including but not limited to all legal fees and expenses properly
 incurred by the Joint Bookrunners in connection with the performance of their
 obligations hereunder except that to the extent a Joint Bookrunner’s expenses
 constitute amounts in respect of Transfer Duties these shall be dealt with in
 accordance with Clause 8.8 below.

 
	
  

 	
  

 
	
 8.3

 	
 The amounts
 referred to in Clauses 8.1 and 8.2 shall be paid together with an additional
 amount in respect of any applicable VAT in accordance with Clause 8.7 (such
 VAT to be paid within 10 Business Days after the issue by any Joint
 Bookrunner of a valid VAT invoice).

 
	
  

 	
  

 
	
 8.4

 	
 All payments
 by the Issuer, the Guarantor or the Company (as applicable) 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, any present or
 future taxes, levies, imports, duties, fees, assessments or other charges of
 whatever nature, imposed by the United Kingdom or by any department, agency
 or other political subdivision or taxing authority thereof or therein, and
 all interest, penalties or similar liabilities with respect thereto (Taxes).
 If any Taxes are required by law to be deducted or withheld in connection
 with any such payment, the Issuer (failing whom the Guarantor), the Guarantor
 or the Company (as applicable) will increase the amount paid so that the
 amount of such payment received by the payee will equal the full amount which
 would have been received by the payee if no such deduction or withholding had
 been made.

 
	
  

 	
  

 
	
 8.5

 	
 If the
 Issuer, the Guarantor or the Company (as applicable) makes such an increased
 payment under Clause 8.4 and the payee subsequently obtains a refund of tax
 or credit against tax by reason of the Issuer, the Guarantor or the Company
 (as applicable) making such a deduction or withholding, the payee shall
 reimburse the Issuer, the Guarantor or the Company (as applicable) as soon as
 reasonably practicable with an amount such as the payee shall determine (with
 such determination in good faith being final and conclusive) to be such
 proportion of the said refund or credit as shall leave the payee after such
 reimbursement in no better or worse position (having regard to the time value
 of money) than it would have been in had no deduction or withholding been
 required. Nothing in this Clause 8.5 shall oblige a payee to disclose any
 information it reasonably considers confidential.

 
	
  

 	
  

 	
  

 
	
 8.6

 	
 If any sum
 payable by the Issuer, the Guarantor or the Company (as applicable) under
 this Agreement (other than any commissions or fees payable) shall be subject
 to Taxes in the hands of a Joint Bookrunner, the sum payable shall be
 increased so as to ensure that after payment of any Taxes which would not
 have arisen but for that sum, the relevant Joint Bookrunner (after giving
 credit for any tax relief obtained by such Joint Bookrunner in respect of the
 losses, costs, expenses or other 

 

23

	
  

 	
  

 	
  

 
	
  

 	
 items giving
 rise to such payment) shall be left with a sum equal to the sum that it would
 have received in the absence of such Taxes.

 
	
  

 	
  

 	
  

 
	
 8.7

 	
 Where,
 pursuant to this Agreement, a sum is paid or reimbursed to a Joint Bookrunner
 or an Indemnified Person, the relevant payor shall pay to that Joint
 Bookrunner or Indemnified Person in respect of VAT:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 where the payment or reimbursement constitutes the consideration or
 part of it for any supply of services by that Joint Bookrunner to the
 relevant payor, such amount as equals any VAT properly payable thereon and on
 such irrecoverable VAT, if any, as is referred to in (b) below (which shall
 be payable upon receipt of a valid VAT invoice); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 such amount as equals any VAT charged to that Joint Bookrunner in
 respect of any cost, charge or expense which gives rise to or is reflected in
 the payment or reimbursement and which that Joint Bookrunner certifies is not
 recoverable by it, or the representative member of the VAT group which it is
 a member of, by repayment or credit, that certificate to be conclusive save
 in the case of manifest error; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 on any payment or reimbursement in respect of or indemnification for
 costs, charges or expenses incurred by that Joint Bookrunner as agent for the
 Issuer, the Guarantor or the Company and except where section 47(2A) or
 section 47(3) of the Value Added Tax Act 1994 applies, such amounts as equals
 the amount included in the costs, charges or expenses in respect of VAT,
 provided that in such case the Joint Bookrunner will use reasonable
 endeavours to procure that the actual supplier of the goods or services which
 the Joint Bookrunner received as agent issues its own VAT invoice directly to
 the Issuer, the Guarantor or the Company, as applicable.

 
	
  

 	
  

 	
  

 
	
 8.8

 	
 Each of the
 Issuer, the Guarantor and the Company agrees with the Joint Bookrunners and
 each of them that it will bear and pay any documentary, stamp, issue or other
 similar issuance or transfer duties or taxes (including any interest or
 penalties) (each a Transfer Duty) (if any) imposed by any
 government department or other tax authority in the United Kingdom, Belgium
 or Luxembourg on or in connection with the Top up Issues as contemplated by
 this Agreement, the creation, allotment, issue and delivery of the Top up
 Securities and the execution and delivery of this Agreement and any Trust
 Deed, Agency Agreement and Deed Poll relating to any Top up Issue, in all
 cases other than any and all duties and taxes for which subscribers for Top
 up Securities are liable, as set out in the terms and conditions of the Top
 up Securities and/or as described or set out in the Exchange Offer Memoranda,
 provided that (aa) (for the avoidance of doubt) it will not be liable under
 this Clause 8.8 for any Transfer Duties arising as a result of any transfer
 of, or agreement to transfer, Top up Securities by any Joint Bookrunner or
 any subscriber for Top up Securities); (bb) (for the avoidance of doubt) it
 shall not be liable under this Clause 8.8 for any Transfer Duty arising on or
 in connection with any conversion of Top up Securities (except as otherwise
 provided in the terms and conditions of the Top up Securities and/or in the
 Exchange Offer Memoranda); and (cc) it shall not be liable for Transfer Duty
 imposed in Belgium or Luxembourg except to the extent that such Transfer Duty
 arises solely as a result of any Top up Securities being held, traded or
 delivered in or through Euroclear N.V./S.A. or Clearstream, Luxembourg.

 
	
  

 	
  

 
	
 8.9

 	
 For the
 avoidance of doubt, the Joint Bookrunners are not acting under this Agreement
 as bookrunners or dealer managers for any US LME. No compensation is being
 paid or given under this Agreement, directly or indirectly, for soliciting
 exchange in any such US LME.

 

24

	
  

 	
  

 	
  

 
	
 9.

 	
 RESTRICTIONS ON ACTIONS AND ANNOUNCEMENTS

 
	
  

 	
  

 
	
 9.1

 	
 Each of the
 Issuer, the Guarantor and the Company undertakes that it will not (and the
 Company will use all reasonable endeavours to procure that no member of the
 Group will) (i) in the case of paragraphs (a) and (c) below, without the
 Joint Global Co-ordinators’ prior written consent (such consent not to be
 unreasonably withheld or delayed) prior to the date 60 Dealing Days after, as
 appropriate, the Acceptance Date (as defined in the Rights Issue Underwriting
 Agreement) or the date that the Banks’ (as defined in the Rights Issue
 Underwriting Agreement) obligations under the Rights Issue Underwriting
 Agreement cease in accordance with its terms (the Consent Period), and (ii)
 without prior consultation with the Joint Bookrunners for the period from the
 final day of the Consent Period up to and including the Restriction Date (the
 Consultation
 Period); and (ii) in the case of paragraph (b) below, without the
 Joint Global Co-ordinators’ prior written consent (such consent not to be
 unreasonably withheld or delayed) prior to the Restriction Date:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 enter into
 any commitment or agreement, or put itself in a position where it is obliged
 to announce that any commitment or agreement may be entered into, which is or
 is reasonably likely to be material in the context of the Top up Issue or the
 underwriting of the Top up Securities or Admission or post-Admission dealings
 in the Top up Securities, save in each case for any commitment or agreement
 referred to in or contemplated by the Press Announcement or the Rights Issue
 Prospectus or the Exchange Offer Memoranda; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 allot, issue
 (or contract to allot or issue) or grant any rights in respect of any shares
 or other subordinated securities or equity linked securities (including for
 the avoidance of doubt any ECNs) of the Company or of a Group company, except
 for (i) the issue by the Company of shares under the Rights Issue or other
 subordinated or contingent capital securities referred to in or contemplated
 by the Press Announcement, the Rights Issue Prospectus or the Exchange Offer
 Memoranda, (ii) the issue by the Company (or any Group company) of any
 ordinary shares upon the exercise of an option or warrant or the conversion
 of a security outstanding on the date of this Agreement and disclosed in the
 Press Announcement, the Rights Issue Prospectus or the Exchange Offer Memoranda,
 (iii) the grant of options or rights under, and the allotment and issue of
 ordinary shares pursuant to options or grants granted under, the Company’s
 existing share schemes, in each case in accordance with normal practice, (iv)
 any other issue of ordinary shares pursuant to an obligation entered into
 prior to the date hereof and disclosed in the Rights Issue Prospectus), (v)
 any intra-group issues between wholly-owned subsidiaries, (vi) any issues
 required by relevant regulatory authorities where such requirement could not be met by the issue of ECNs pursuant
 to this Agreement, (vii) any issue to holders of Limited Voting Shares
 of: (A) Limited Voting Shares in respect of the Company’s capitalisation
 issue of May 2009; and (B) ordinary shares of the Company in respect of the
 Company’s placing and open offer of November 2008 and compensatory open offer
 of May 2009, or (viii) the issue by the Company or any Group company of such
 instruments constituting core tier 1, tier 1, lower tier 2 or upper tier 2
 capital as are expressly referred to in the Press Announcement, the Rights
 Issue Prospectus or the Exchange Offer Memoranda or the issue by the Company
 of any ordinary shares upon the conversion of such securities; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 circulate,
 distribute, publish, issue or make (nor authorise any other person to
 circulate, distribute, publish, issue or make) any press or other public
 announcement or any advertisement, statement or public communication
 concerning the Issuer, the Guarantor, the Company and their respective
 subsidiary undertakings which is or is reasonably likely to be material in
 the context of the Top up Issue or the underwriting of the Top up Securities
 or Admission or post-Admission dealings in the Top up Securities (other than
 (i) an announcement, advertisement, statement or communication required by
 law or any regulatory body (provided that in that event (1) the Issuer, the
 Guarantor or the Company (as the case may be) will consult, to the extent
 practicable, with the Joint Bookrunners before 

 

25

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 making any
 such release; and (2) will obtain the prior consent of any Joint Bookrunner
 whose name is included in the announcement, advertisement, statement or
 public communication in question for such inclusion); and (ii) in respect of
 any public announcement, advertisement, statement or public communication in
 connection with any matter arising in the ordinary course of business of the
 Group that is not material in the context of a Top up Issue or the
 underwriting of Top up Securities or Admission or post-Admission dealings in
 the Top up Securities, but subject always to Clause 9.2).

 
	
  

 	
  

 
	
 9.2

 	
 Each of the
 Issuer, the Guarantor and the Company undertakes that it will not at any time
 during the period ending on the Restriction Date make any public announcement,
 advertisement, statement or communication as is referred to in Clause 9.1 or
 relating to any matters, events or circumstances which may be necessary to be
 made known to the public in order to enable the shareholders or other
 securityholders of the Issuer, the Guarantor or the Company (as the case may
 be) and the public to appraise the position of the Issuer, the Guarantor or
 the Company or to avoid the establishment of a false market in its
 securities, either individually or jointly with any other person (including,
 without limitation, any matter whatsoever which would require notification by
 the Issuer, the Guarantor or the Company to a Regulatory Information Service
 in accordance with the provisions of the Listing Rules), without first, where
 reasonably practicable (a) notifying the Joint Bookrunners as to the content,
 form and manner of publication of such announcement, advertisement, statement
 or communication, (b) making available drafts of any such announcement,
 advertisement, statement or communication to the Joint Bookrunners in
 sufficient time prior to its publication to allow the Joint Bookrunners an
 opportunity to consider and comment on the same, and (c) consulting with the
 Joint Bookrunners as to the content, form and manner of publication of such
 announcement, advertisement, statement or communication.

 
	
  

 	
  

 	
  

 
	
 9.3

 	
 Each of the
 Issuer, the Guarantor and the Company shall use reasonable endeavours not to,
 and the Company shall use reasonable endeavours to procure that no member of
 the Group will (a) in the Consent Period, without the prior written consent
 of the Joint Global Co-ordinators (such consent not to be unreasonably
 withheld or delayed); and (b) in the Consultation Period, without having
 first consulted with the Joint Bookrunners (and taken into account any of
 their requests which are reasonable in the context of the Top up Issue or the
 Joint Bookrunners’ obligations under this Agreement), enter into any
 commitment, agreement or arrangement which is or is reasonably likely to be
 material and adverse to the condition of the Issuer, the Guarantor, the
 Company or the Group taken as a whole or which is materially inconsistent
 with, or represents a material departure from or new development in, any
 disclosure or expression of policy or intention or statement contained in the
 Rights Issue Prospectus, subject in each case to applicable law and
 regulation (including the Directors’ fiduciary duties) but provided that
 where the Issuer, the Guarantor, the Company or any Group company considers
 itself bound by applicable law or regulation to enter into any such
 commitment, agreement or arrangement, it shall not do so without having first
 consulted with the Joint Global Co-ordinators to the extent that it is
 practicable to do so.

 
	
  

 	
  

 
	
 9.4

 	
 If it shall
 be necessary, in the reasonable opinion of the Issuer, the Guarantor, the
 Company and their advisers or the Joint Bookrunners or their legal advisers,
 at any such time, until the Restriction Date to amend or supplement any
 Relevant Documents in order to comply with the requirements of the FSMA, the
 Listing Rules and/or the Prospectus Rules (as the case may be) and/or ensure
 that the Relevant Documents remain true and accurate in all respects and not
 misleading up to the Restriction Date, the Issuer will promptly prepare and
 file with the FSA (or procure the filing with the FSA of) such amendment or
 supplement as may be necessary to correct such statement or omission or to
 make such Relevant Documents comply with such requirements. Before amending
 or supplementing any Relevant Documents, the Issuer, the Guarantor or the
 Company will furnish the Joint Bookrunners with a copy of each such proposed
 amendment or supplement, and will not make any such proposed amendment or
 supplement without the prior written consent of the Joint Global
 Co-ordinators, provided always that, subject to the terms of Clause 3.4, (i)
 nothing in this paragraph 

 

26

	
  

 	
  

 	
  

 
	
  

 	
 shall
 prevent the Issuer, the Guarantor, the Company or the Directors from
 complying with their obligations at law or under the Prospectus Rules, the
 Listing Rules or the FSMA having taken into account any requests of the Joint
 Bookrunners acting in good faith; and (ii) this paragraph shall be without
 prejudice to the rights of the Joint Global Co-ordinators and the Joint Bookrunners
 pursuant to Clauses 2.7 and 14.

 
	
  

 	
  

 
	
 9.5

 	
 Each of the
 Issuer, the Guarantor and the Company undertakes to make all such
 announcements concerning a Top up Issue as shall be necessary to comply with
 the Listing Rules, the Disclosure Rules and Transparency Rules, 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 Bookrunners otherwise reasonably considers to be necessary or
 desirable (including, without limitation, for the purposes of procuring any
 potential subscribers for any Top up Securities in accordance with this
 Agreement) and any of the Joint Bookrunners shall be entitled to make any
 such announcement if the Issuer, the Guarantor or the Company fails (in the
 opinion of such Joint Bookrunner acting in good faith) promptly to fulfil
 their respective obligations under this Clause 9.5

 
	
  

 	
  

 
	
 9.6

 	
 For the
 avoidance of doubt, the restrictions on actions or announcements contained in
 this Clause 9 shall not operate to restrict or limit any action which the
 Issuer, the Guarantor, the Company or the Group takes in accordance with the
 terms of this Agreement, the Rights Issue Underwriting Agreement or in
 furtherance of the proposals described in the Press Announcement, the Rights
 Issue Prospectus, the Circular or the Exchange Offer Memoranda or as is
 required in order to give effect to the proposals described in such documents
 or limit any action which the Issuer, the Guarantor, the Company or the Group
 takes in the ordinary course of the business or banking operations of the
 Group, as described in the Rights Issue Prospectus, provided that, to the
 extent reasonably practicable, the Company shall have consulted with the
 Joint Bookrunners prior to any such action or announcement and given the
 Joint Bookrunners a reasonable period of time to consider such proposed
 action or announcement.

 
	
  

 	
  

 
	
 10.

 	
 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

 
	
  

 	
  

 	
  

 
	
 10.1

 	
 Subject to
 matters fairly disclosed in the European Exchange Offer Memorandum, the
 Company represents, warrants and undertakes to each Joint Bookrunner that
 each statement set out in Schedule 3 to the European Dealer Manager Agreement
 is true and accurate and not misleading immediately prior to the publication
 of the Press Announcement on the basis that defined terms used in such
 Schedule 3 to the European Dealer Manager Agreement will have the meanings
 ascribed to such terms in the European Dealer Manager Agreement save that any
 reference in such Schedule 3 or such definitions to “this Agreement” shall be
 construed as a reference to this Agreement

 
	
  

 	
  

 	
  

 
	
 10.2

 	
 Subject to
 matters fairly disclosed in the European Exchange Offer Memorandum, each of
 the Issuer (in respect of itself), the Guarantor (in respect of itself and
 the Issuer) and the Company (in respect of itself) represents, warrants and
 undertakes to each Joint Bookrunner that each statement set out in clause 6.3
 to the European Dealer Manager Agreement is true and accurate and not
 misleading immediately prior to the publication of the Press Announcement on
 the basis that (i) defined terms used in such clause 6.3 will have the
 meanings ascribed to such terms in the European Dealer Manager Agreement save
 that any reference in clause 6.3 or such definitions to “this Agreement”
 shall be construed as a reference to this Agreement; and (ii) references to
 LBG Capital No. 1 and the LBG Capital No. 1 ECNs shall be deemed removed for
 the purposes of this Clause 10.

 
	
  

 	
  

 	
  

 
	
 10.3

 	
 The Company
 represents, warrants and undertakes to each Joint Bookrunner that:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 (in the case
 of a Listed Top up Issue) each statement set out in Schedule 4 is true and
 accurate and not misleading in relation to any Top up Securities, on the date
 of publication of any Prospectus and shall be repeated on the date of
 publication of any Supplementary Prospectus, at Admission, at any Time of
 Sale and at the relevant Settlement Date, and

 

27

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 (in the case
 of an Unlisted Top up Issue) each statement set out in Schedule 4 is true and
 accurate and not misleading in relation to any Top up Securities:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 on the
 Disclosure Package Publication Date and shall be repeated at the date of
 publication of any supplement to the Disclosure Package, at any Time of Sale
 and at the relevant Settlement Date provided that for the purposes of this
 Clause 10.3(b)(i): (x) the statements set out in each of paragraphs 2.4, 2.5,
 4, 5.5 and 20.3 shall be disregarded; (y) references to the “Prospectus” in
 Schedule 4 shall be deemed to be references to the “Disclosure Package”; and
 (z) references to information having been “incorporated by reference into” in
 Schedule 4 shall be deemed to be references to information having been
 “provided as part of”; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 on the
 Prospectus Publication Date and shall be repeated at Admission, 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 in each case
 by reference to the facts and circumstances then existing (subject to any such matters and facts fairly
 disclosed in any Supplementary
 Prospectus (in the case of a Listed Top up Issue) or supplement to the Disclosure
 Package (in the case of an Unlisted Top up Issue) published prior to the relevant date)
 on the basis that references to the “Top up Issue” and the “Top up
 Securities” in Schedule 4 shall be to the relevant Top up Issue and Top up
 Securities.

 
	
  

 	
  

 	
  

 	
  

 
	
 10.4

 	
 Each of the
 Issuer (in respect of itself) and the Guarantor (in respect of the Issuer and
 the Guarantor) represents, warrants and undertakes to each Joint Bookrunner
 that:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 (in the case
 of a Listed Top up Issue) each statement set out in Schedule 5 is true and
 accurate and not misleading in relation to any Top up Securities, on the date
 of publication of any Prospectus and shall be repeated on the date of
 publication of any Supplementary Prospectus, at Admission, at any Time of
 Sale and at the relevant Settlement Date; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 (in the case
 of an Unlisted Top up Issue) each statement set out in Schedule 5 is true and
 accurate and not misleading in relation to any Top up Securities: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 on the
 Disclosure Package Publication Date and shall be repeated at the date of
 publication of any supplement to the Disclosure Package, at any Time of Sale
 and at the relevant Settlement Date provided that for the purposes of this
 Clause 10.4(b)(i): (y) the statements set out in paragraph 2 shall be
 disregarded; and (z) references to the “Prospectus” in Schedule 4 shall be
 deemed to be references to the “Disclosure Package”; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 on the
 Prospectus Publication Date and shall be repeated at Admission,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 in each case
 by reference to the facts and circumstances then existing (subject to any such matters and facts fairly
 disclosed in any Supplementary
 Prospectus (in the case of a Listed Top up Issue) or supplement to the
 Disclosure Package (in the case of an Unlisted Top up Issue) published prior to the relevant date)
 on the basis that references to the “Top up Issue” and the “Top up
 Securities” in Schedule 5 shall be to the relevant Top up Issue and Top up
 Securities.

 
	
  

 	
  

 	
  

 	
  

 
	
 10.5

 	
 Each of the
 Issuer, the Guarantor and the Company acknowledges that each of the Joint
 Bookrunners is entering into this Agreement in reliance on such
 representations, warranties and undertakings. Each representation, warranty
 and undertaking shall be construed separately and shall not be limited or
 restricted by reference to or inference from the terms of any other
 representation, warranty and undertaking or any other term of this Agreement.
 Warranties shall be deemed to be given under this Clause 10 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 

 

28

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 such
 document, announcement or event which is expressed in the future tense shall
 be regarded, to the extent the context requires, as being expressed in the
 present tense.

 
	
  

 	
  

 	
  

 	
  

 
	
 10.6

 	
 Each of the Issuer, the Guarantor or the Company shall use reasonable
 endeavours not to cause or permit and to procure that no other member
 of the Group nor any of its or their respective directors, officers,
 employees or agents shall cause or permit, without the prior consent of the
 Joint Global Co-ordinators, such consent not to be unreasonably withheld or
 delayed, any event to occur or omit to do anything in each period between any
 Prospectus Publication Date (in the case of a Listed Top up Issue) or the
 Disclosure Package Publication Date (in the case of an Unlisted Top up Issue)
 and the relevant Admission Date or (if earlier) the date on which the Joint
 Bookrunners’ obligations under this Agreement cease in accordance with
 Clauses 2.7 and/or Clause 14.1, as relevant, and shall consult with the Joint
 Global Co-ordinators from the relevant Admission Date up to and including the
 date which falls 60 days after the relevant Admission Date before taking any
 actions (a) which would make any statement in Schedule 4 or Schedule 5
 untrue, inaccurate or misleading if, in such case, such statement were
 repeated at such date by reference to the facts and circumstances then
 existing, or (b) which would result in a breach by the Issuer, the Guarantor
 or the Company of any of their respective obligations or undertakings under
 this Agreement, which in any such case would be material in the context of
 the relevant Top up Issue.

 
	
  

 	
  

 	
  

 	
  

 
	
 10.7

 	
 In relation
 to any Top up Issue each of the Issuer, the Guarantor and the Company shall
 promptly notify the Joint Bookrunners (giving reasonable details) if it comes
 to the knowledge of the Issuer, the Guarantor, the Company or any Director
 that (and the Issuer, the Guarantor and the Company undertakes to make all
 reasonable enquiries to ascertain whether (a) any of the Warranties was (or
 the Issuer, the Guarantor, the Company or the relevant Director reasonably
 believes it may have been) breached or untrue, inaccurate or misleading in any
 respect when given, or (b) any of the Warranties referred to in Clauses 10.3
 and Clause 10.4 hereof has ceased (or the Issuer, the Guarantor, the Company
 or the relevant Director reasonably believes it may have ceased) to be true
 and accurate or has become (or the Issuer, the Guarantor, the Company or the
 relevant Director reasonably believes it may have become) misleading in any
 respect, or if it becomes aware of any circumstance which would or is
 reasonably likely to cause any of the Warranties referred to in Clauses 10.3
 and Clause 10.4 hereof to be breached or become untrue, inaccurate or
 misleading in any respect if repeated by reference to the facts and
 circumstances existing at any time during the period between the date of this
 Agreement and the date which is 60 days after Admission or, if earlier, the
 date on which the Joint Bookrunners’ obligations under the Agreement cease in
 accordance with this Agreement, or if the Issuer, the Guarantor or the
 Company is in breach of any of their respective obligations under this
 Agreement, which, in any such case, would be material in the context of the
 relevant Top up Issue.

 
	
  

 	
  

 	
  

 	
  

 
	
 10.8

 	
 Subject
 always to Clause 15.10, each of the Issuer, the Guarantor and the Company
 agrees that the Joint Bookrunners shall be entitled to the same remedies and
 rights of action against the Issuer, the Guarantor and the Company, and to
 the same extent, as any person who subscribes for any Top up Securities on
 the basis of a Disclosure Package or Prospectus.

 
	
  

 	
  

 	
  

 	
  

 
	
 10.9

 	
 References
 in this Agreement to a representation, warranty or undertaking being (or not
 being) true and accurate or not being (or being) misleading “in any
 material respect” or “in all material respects” (or similar
 expressions) shall mean material in the context of a Top up Issue and/or the
 underwriting of any Top up Securities and/or Admission and/or post-Admission
 dealings in any Top up Securities. In that connection and otherwise in this
 Agreement (including, without limitation, the statements set out in Schedule
 4 and Schedule 5) in relation to references to a matter which would or might
 be “material
 in the context of the Top up Issue or the underwriting of the Top up
 Securities or Admission or post-Admission dealings in the Top up Securities” (or
 similar expressions) a matter shall, without limitation, be deemed to be so
 material if (i) it would have been material for disclosure to potential
 subscribers of such Top up Securities had such matter existed

 

29

	
  

 	
  

 	
  

 
	
  

 	
 when such
 subscribers for such Top up Securities were sought for such Top up Securities
 and/or (ii) it would be reasonably likely to have a Material Adverse Effect. 

 
	
  

 	
  

 
	
 10.10

 	
 The
 representations, warranties and undertakings referred to in this Clause 10
 shall remain in full force and effect notwithstanding completion of all
 matters and arrangements referred to in, or contemplated by, this Agreement. 

 
	
  

 	
  

 
	
 10.11

 	
 Where any of
 the representations, warranties and undertakings are qualified by reference
 to awareness and/or knowledge and/or information and/or belief, that
 reference shall be deemed to include a statement to the effect that it has
 been given after making due and careful enquiries within the Group. 

 
	
  

 	
  

 
	
 11.

 	
 EXCLUSIONS OF LIABILITY 

 
	
  

 	
  

 
	
 11.1

 	
 Without
 prejudice to Clause 11.2, no claim shall be made by the Issuer, the
 Guarantor, the Company or any of their respective subsidiary undertakings,
 affiliates or associates, 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 any other agreements relating to any Top up
 Issue, or in connection with any Top up Issue itself except (otherwise than
 in connection with the matters referred to in Clauses 12.1(a), (b), (c) and
 (d) and otherwise than as a result of a payment made or an obligation or
 liability to make payment arising under Clause 12.1) to the extent only that
 the Loss or Claim is determined by a court of competent jurisdiction to have
 resulted from the fraud, gross negligence or wilful default of the relevant
 Indemnified Person. 

 
	
  

 	
  

 
	
 11.2

 	
 Each of the
 Issuer, the Guarantor and the Company agrees that no Indemnified Person is
 acting as a financial adviser or fiduciary to the Issuer, the Guarantor, the
 Company or any other person in providing the services contemplated in this
 Agreement (including, without limitation, in respect of the timing, terms,
 structure or price of the Top up Issue), irrespective of whether any such
 Indemnified Person has provided input to the Issuer, the Guarantor or the
 Company with respect thereto. Subject to the Joint Bookrunners’ obligations
 under Clause 2.4, no claim shall be made under this Agreement by the Issuer,
 the Guarantor, the Company or any of their respective subsidiary
 undertakings, affiliates or associates or any of the directors, officers or
 employees of any of them against any Indemnified Person in respect of the
 timing, terms or structure of the Top up Issue, including the setting of an
 Issue Price for any Top up Issue at a level that is too high or too low.
 Nothing in this Clause shall exclude or restrict any duty or liability of any
 Indemnified Person which it has under the FSMA or arrangements for regulating
 any such Indemnified Person thereunder to any extent prohibited by those
 arrangements. It is acknowledged by all parties that: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 subject to
 compliance by the relevant Indemnified Persons with the rules of the FSA, the
 Indemnified Persons may be engaged in a broad range of transactions that
 involve interests that differ from those of the Issuer, the Guarantor, the
 Company or any other person; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 no
 Indemnified Person has advised the Issuer, the Guarantor, the Company or any
 other person as to any general financial or strategic advice or any legal,
 tax, investment, accounting or regulatory matters in any jurisdiction; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Issuer,
 the Guarantor, the Company and any other person have consulted its own legal,
 tax, investment, accounting or regulatory advisers to the extent they deem
 appropriate, and no Indemnified Person shall have any responsibility to the
 Issuer, the Guarantor, the Company or any other person with respect thereto. 

 

30

	
  

 	
  

 	
  

 
	
 11.3

 	
 Without
 prejudice to any rights or claims which the Issuer, the Guarantor, the
 Company or any of their respective subsidiary undertakings, affiliates or
 associates or any of the directors, officers or employees of any of them may
 have or assert against any of the Joint Bookrunners in connection with this
 Agreement, any Top up Issue, or any of the other arrangements contemplated by
 the Relevant Documents, or any of them, or this Agreement, no claim will be
 brought by the Issuer, the Guarantor or the Company or by any of their
 respective subsidiary undertakings, affiliates or associates or any of the
 directors, officers, partners or employees of any of them against any
 director or any other officer and/or partner and/or employee of any
 Indemnified Person in respect of any conduct, action or omission by the
 individual concerned in connection with this Agreement or any Top up Issue,
 or any of the other arrangements contemplated by the Relevant Documents, or
 any of them, or this Agreement. 

 
	
  

 	
  

 
	
 12.

 	
 INDEMNITIES 

 
	
  

 	
  

 
	
 12.1

 	
 Each of the
 Issuer, the Guarantor and the Company jointly and severally agrees to fully
 and effectively indemnify and hold harmless each Indemnified Person (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 date of this Agreement and regardless of the jurisdiction in which
 such Loss or Claim is suffered or incurred) from and against any and all
 Losses or Claims, whatsoever, as incurred, if such Losses or Claims, arise,
 directly or indirectly, out of, or are attributable to, or connected with,
 anything done or omitted to be done by any person (including by the relevant
 Indemnified Person) in connection with any Top up Issue, Admission or the
 arrangements contemplated by the Relevant Documents, or any of them (or any
 amendment or supplement to any of them), or this Agreement or any other
 agreement relating to any Top up Issue, to which the Issuer, the Guarantor or
 the Company is a party including but not limited to: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 any and all
 Losses or Claims whatsoever, as incurred, arising out of the Relevant
 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 Relevant 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 Issuer, the Guarantor or the, Company of any of their
 respective obligations under this Agreement, including any of the Warranties,
 covenants and undertakings set out in this Agreement or out of the
 arrangements contemplated by the Relevant Documents, or any of them (or any
 amendment or supplement to any of them) or this Agreement or any other
 agreement relating to any Top up Issue to which the Issuer, the Guarantor or
 the Company is a party; 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 Relevant Documents, or any
 of them (or any amendment or supplement to any of them) and/or any other
 documents or materials relating to the application for Admission; and/or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 any and all
 Losses or Claims whatsoever, as incurred, in connection with or arising out
 of any failure or alleged failure by the Issuer, the Guarantor, the Company
 or any of the Directors or any of their or his agents, employees or advisers
 to comply with the Companies Act, the FSMA, the Listing Rules, the Prospectus
 Rules, the Disclosure Rules and 

 

31

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Transparency
 Rules, the rules and regulations of the London Stock Exchange and the
 Admission and Disclosure Standards, or any other requirement or statute or
 regulation in any jurisdiction in relation to the application for Admission,
 any Top up Issue, or the arrangements contemplated by the Relevant Documents,
 or any of them (or any amendment or supplement to any of them), or this
 Agreement or any other agreement relating to any Top up Issue to which the
 Issuer, the Guarantor or the Company is a party; and/or

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 any and all
 Losses or Claims whatsoever, as incurred or suffered by such Indemnified
 Person as a person who has communicated or approved the contents of any
 financial promotion (other than the Relevant Documents, or any of them, or
 any amendment or supplement to any of them) made in connection with any Top
 up Issue or the application for Admission for the purpose of section 21 of
 the FSMA,

 
	
  

 	
  

 	
  

 
	
  

 	
 PROVIDED THAT, the indemnity contained in
 this Clause 12.1 shall not apply to any Losses or Claims (i) (otherwise than
 in connection with the matters referred to in Clauses 12.1(a), (b), (c) and
 (d)) to the extent determined by a court of competent jurisdiction to have
 arisen as a result of the fraud, gross negligence or wilful default of that
 Indemnified Person, (ii) if and to the extent arising out of a decline in
 market value of the relevant Top up Securities suffered or incurred by any
 Indemnified Person as a result of it having been required to subscribe for
 Top up Securities pursuant to Clause 2 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) (aa) the neglect or default of the
 Issuer, the Guarantor or the Company in relation to the content, publication,
 issue or distribution of the Relevant Documents or any breach by the Issuer,
 the Guarantor or the Company of any of their respective obligations under
 this Agreement, including any of the Warranties, undertakings or covenants,
 or (bb) any of the matters referred to in Clause 12.1(a), or (iii) to the
 extent they include any tax liability of an Indemnified Person in respect of
 its actual net income, profits or gains, recoverable VAT or any Transfer Duty
 of the type which is not recoverable under Clause 8. This Clause 12.1 shall
 not apply to any Loss or Claim in respect of tax which is recoverable
 pursuant to Clause 8. 

 
	
  

 	
  

 
	
 12.2

 	
 Each Joint
 Bookrunner shall and shall use reasonable endeavours to procure that its
 Indemnified Persons shall (i) give notice as promptly as reasonably
 practicable to the Issuer, the Guarantor and 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 (ii) as promptly as reasonably practicable notify the Issuer, the
 Guarantor and 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 Issuer, the Guarantor and
 the Company informed of, and, to the extent reasonably practicable, consult
 with the Issuer, the Guarantor and 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 Issuer, the Guarantor or the Company and keep the Issuer, the
 Guarantor or the Company informed shall not relieve the Issuer, the Guarantor
 or 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 Issuer, the Guarantor or the Company from any liability which it may have
 otherwise than on account of the indemnity set out in this Clause 12,
 provided that non-disclosure by reason of a legal or regulatory restriction
 shall not constitute a failure to notify by an Indemnified Person. 

 
	
  

 	
  

 
	
 12.3

 	
 Legal
 advisers for Indemnified Persons shall be selected by the relevant Joint
 Bookrunner(s) connected with such Indemnified Persons. Each of the Issuer,
 the Guarantor and/or the Company 

 

32

	
  

 	
  

 	
  

 
	
  

 	
 may
 participate at its own expense in the defence of any action commenced against
 the Issuer, the Guarantor or the Company provided however that legal advisers
 for the Issuer, the Guarantor or 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 Issuer, the Guarantor or the Company be liable for fees and
 expenses of more than one legal adviser (in addition to any local legal
 advisers) separate from its own legal advisers for all Indemnified Persons 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

 	
 Each of the
 Issuer, the Guarantor and the Company agrees that if it becomes aware of any
 Claim relevant for the purposes of this Clause 12 or any matters which may
 give rise to a Claim, it shall (i) promptly notify the Joint Bookrunners
 thereof and (ii) subject to, and to the extent of, any duties of
 confidentiality and any requirements of the Issuer’s, the Guarantor’s or the
 Company’s insurers or any legal or regulatory obligations which the Group
 owes to any third party or any regulatory request that has been made of it,
 promptly provide the Joint Bookrunners with such information and copies of
 such documents relating to the claim as the Joint Bookrunners may reasonably
 request. 

 
	
  

 	
  

 
	
 12.6

 	
 None of the
 Issuer, the Guarantor or the Company shall, 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. 

 
	
  

 	
  

 	
  

 
	
 12.7

 	
 Each of the
 Issuer, the Guarantor and the Company will promptly notify each of the Joint
 Bookrunners of any limitation (whenever arising) on the extent to which the
 Issuer, the Guarantor, the Company and/or any of their 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 Issuer, the
 Guarantor or 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 any Top up
 Issue, Admission or the subject matter of the obligations or services to be
 performed under this Agreement, or in connection with any Top up Issue, by
 any of the Joint Bookrunners or on its or their behalf. Where any damage or
 loss is suffered by the Issuer, the Guarantor or the Company for which any
 Indemnified Person would otherwise be jointly and severally liable with any
 third party or third parties to the Issuer, the Guarantor or the Company, or
 any of their respective relevant subsidiary undertakings, affiliates, or
 associates, the extent to which such damage or loss will be recoverable from
 the Indemnified Person shall be limited so as to be in proportion to the
 contribution of the Indemnified Person to the overall fault for such damage
 or loss, as agreed between the parties, or, in the absence of agreement, as
 determined by a court of competent jurisdiction, but in any event, the
 Indemnified Person shall have no greater liability than if the Limitation did
 not apply. 

 
	
  

 	
  

 
	
 12.8

 	
 The degree
 to which any Indemnified Person shall be entitled to rely on the work of any
 adviser to the Issuer, the Guarantor, the Company or any other third party
 will be unaffected by any Limitation which the Issuer, the Guarantor or the
 Company may have agreed with any third party. 

 

33

	
  

 	
  

 	
  

 
	
 12.9

 	
 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 the
 indemnification provided for in Clause 12 is for any reason (including
 because such indemnification would be contrary to public policy), unavailable
 to or insufficient to hold harmless an Indemnified Person in respect of any
 Losses, liabilities, Claims, damages or expenses referred to therein, then
 the Issuer, the Guarantor and the Company, in lieu of indemnifying such
 Indemnified Person hereunder, shall jointly and severally contribute to the
 aggregate amount of such Losses, liabilities, Claims, damages or expenses
 incurred by such Indemnified Person, as incurred: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 in such
 proportion as is appropriate to reflect the relative benefits received by the
 Issuer, the Guarantor and the Company on the one hand and the Joint
 Bookrunners on the other hand from any Top up Issue and offering of Top up
 Securities pursuant to this Agreement; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 if the
 allocation provided by Clause 13.1(a) is not permitted by applicable law, in
 such proportion as is appropriate to reflect not only the relative benefits
 referred to in Clause 13.1(a) above but also the relative fault of the
 Issuer, the Guarantor and the Company on the one hand and of the Joint
 Bookrunners on the other hand in connection with the acts or statements or
 omissions which resulted in such Losses, liabilities, Claims, damages or
 expenses, as well as any other relevant equitable considerations. 

 
	
  

 	
  

 	
  

 
	
 13.2

 	
 The relative
 benefits received by the Issuer, the Guarantor and the Company on the one
 hand and the Joint Bookrunners on the other hand in connection with any Top
 up Issue and the offering of such Top up Securities pursuant to this
 Agreement shall be deemed to be in the same respective proportions as the
 total net proceeds from the offering of such Top up Securities pursuant to
 this Agreement (before deducting commissions or expenses) received by the
 Issuer and the total fees and commissions received by the Joint Bookrunners
 bear to the total gross proceeds from the offering of such Top up Securities.
 

 
	
  

 	
  

 
	
 13.3

 	
 The relative
 fault of the Issuer, the Guarantor and the Company on the one hand and the
 Joint Bookrunners on the other hand will be determined by reference to, among
 other things, whether any such act or alleged act or untrue or alleged untrue
 statement of a material fact or omission or alleged omission to state a
 material fact relates to information supplied by the Issuer, the Guarantor or
 the Company or by the Joint Bookrunners and the parties’ relative intent,
 knowledge, access to information and opportunity to correct or prevent such
 act, statement or omission. 

 
	
  

 	
  

 
	
 13.4

 	
 Each of the
 Issuer, the Guarantor, the Company and the Joint Bookrunners agree that it
 would not be just and equitable if contribution pursuant to this Clause 13
 were determined by pro rata allocation (even if the Joint Bookrunners were
 treated as one entity for such purpose) or by any other method of allocation
 which does not take account of the equitable considerations referred to above
 in this Clause 13. The aggregate amount of Losses, liabilities, Claims,
 damages and expenses incurred by an Indemnified Person and referred to above
 in this Clause 13 will be deemed to include any legal or other expenses
 reasonably incurred by such Indemnified Person in investigating, preparing or
 defending against any litigation, or any investigation or proceeding by any
 governmental agency or body, commenced or threatened, or any claim whatsoever
 based upon any such act or alleged act or untrue or inaccurate or alleged
 untrue or inaccurate statement or omission or alleged omission. 

 
	
  

 	
  

 
	
 13.5

 	
 Notwithstanding
 the provisions of this Clause 13, none of the Joint Bookrunners will be
 required to contribute any amount in excess of the underwriting commission
 received by it (and which it is not liable to pay to any other Joint
 Bookrunner or intermediary under this Agreement or otherwise) in relation to
 any Top up Securities underwritten or subscribe for (by direct issue) by such
 Joint Bookrunner pursuant to this Agreement. 

 

34

	
  

 	
  

 	
  

 
	
 13.6

 	
 No person
 guilty of negligence, wilful default, fraud or fraudulent misrepresentation
 (whether within the meaning of Section 11(f) of the Securities Act or
 otherwise) will be entitled to contribution from any person who was not
 guilty of such negligence, wilful default, fraud or fraudulent
 misrepresentation. 

 
	
  

 	
  

 
	
 13.7

 	
 For the
 purposes of this Clause 13, each Indemnified Person shall have the same
 rights to contribution as the Joint Bookrunners’ respective obligations to
 contribute pursuant to this Clause 13 are several (and are not joint or joint
 and several), in proportion to their respective Proportionate Shares. 

 
	
  

 	
  

 
	
 13.8

 	
 Notwithstanding
 the provisions of this Clause 13, no Indemnified Person will be entitled to
 recover from the Issuer, the Guarantor or the Company by way of contribution
 under Clause 13 any amount in excess of the amount that the Issuer, the
 Guarantor or the Company (as applicable) would have been liable to pay such
 Indemnified Person 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. 

 
	
  

 	
  

 
	
 14.

 	
 TERMINATION 

 
	
  

 	
  

 
	
 14.1

 	
 Subject to
 Clause 14.2, 14.3, 14.4 and 14.5, if: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 immediately
 prior to the publication of the Press Announcement, the Warranties on the
 part of the Issuer, the Guarantor or the Company contained in or given
 pursuant to Clause 10.1 and 10.2 are not true and accurate in all respects or
 are misleading in any respect which, in any such case, the Joint Global
 Co-ordinators consider, in their sole judgement, acting in good faith, to be
 (singly or in the aggregate) material in the context of the Top up Issues or
 the underwriting of the Top up Securities or Admission or post-Admission
 dealings in the Top up Securities; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 following
 the publication of the Press Announcement, the Warranties on the part of the
 Issuer, the Guarantor or the Company contained in or given pursuant to Clause
 10.3 and 10.4 are not on the respective dates on which they are given true
 and accurate in all respects or are misleading in any respect which, in any
 such case, the Joint Global Co-ordinators consider, in their sole judgement,
 acting in good faith, to be (singly or in the aggregate) material in the
 context of the Top up Issues or the underwriting of the Top up Securities or
 Admission or post-Admission dealings in the Top up Securities; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Issuer,
 the Guarantor or the Company does not comply with those respective
 conditions, undertakings or covenants under this Agreement which fall to be
 performed on or after the publication of the Press Announcement which, in any
 such case, the Joint Global Coordinators consider, in their sole judgement,
 acting in good faith, to be (singly or in the aggregate) material in the
 context of the Top up Issues or the underwriting of the Top up Securities or
 Admission or post-Admission dealings in the Top up Securities, 

 
	
  

 	
  

 	
  

 
	
  

 	
 the Joint
 Global Co-ordinators (acting together on behalf of the Joint Bookrunners)
 may, in their absolute discretion (after consultation with the Company to the
 extent reasonably practicable; provided that a failure to do so will not
 invalidate any notice given under this Clause 14), by notice in writing given
 to the Company, terminate this Agreement in its entirety and, in the event of
 such termination, this Agreement shall cease to have any further effect in
 each case except to the extent specified in Clause 14.2. For the avoidance of
 doubt, the rights of the Joint Global Co-ordinators (acting jointly) under
 this Clause 14.1: 

 
	
  

 	
  

 
	
  

 	
 (i)

 	
 may be
 exercised by the Joint Global Co-ordinators, acting jointly only on behalf of
 the Joint Bookrunners, for whatever reason or on whatever basis that they
 reasonably consider to be practicable, appropriate or advisable to them; and 

 

35

	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 are
 conferred on the Joint Global Co-ordinators, acting jointly only, and may be
 exercised by the Joint Global Co-ordinators, acting jointly only, on behalf
 of the Joint Bookrunners, in their capacities as such, and not in any
 representative or fiduciary capacity. 

 
	
  

 	
  

 	
  

 
	
 14.2

 	
 The termination
 of this Agreement pursuant to Clause 14.1 (save to the extent specified in
 this Clause 14.2) shall be without prejudice to: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 any claim in
 respect of a breach of this Agreement prior to the termination; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any
 obligation of the Issuer, the Guarantor or the Company in respect of Top up
 Securities which have already been issued, subscribed for and paid for, at
 the time of such termination; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the
 provisions of Clauses 1, 8, 9, 10, 11, 12, 13, this 14.2 and Clauses 16 to 25
 (inclusive), which will continue to apply. 

 
	
  

 	
  

 	
  

 
	
 14.3

 	
 Notwithstanding
 any other provision of this Agreement: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 a MAC Event
 or a Material Adverse Effect occurring subsequent to the publication of the
 Press Announcement (or any direct or indirect result thereof); or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 a Commission
 Decision having been publicly announced or publicly communicated subsequent
 to the publication of the Press Announcement (or any direct or indirect
 result thereof), 

 
	
  

 	
  

 	
  

 
	
  

 	
 shall not
 entitle any of the Joint Bookrunners, at any time, to terminate any or all of
 their obligations under this Agreement pursuant to Clauses 14.1(b) or (c)
 (other than in the case of a breach of Clause 14.1(b) due to a breach of
 Warranties made by the Issuer, the Guarantor or the Company on the date of
 publication of any Prospectus, Disclosure Package, Supplementary Prospectus
 or supplement to any Disclosure Package provided that any such breach of
 Warranty specifically relates to the content of such document not being true
 and accurate in all respects or being misleading in any respect as at the
 date of publication of such document), unless such matter, event or
 circumstance arose, directly or indirectly, as a result of a MAC Event or a
 Material Adverse Effect that occurred as a direct or indirect consequence of
 a Specified Circumstance. 

 
	
  

 	
  

 
	
 14.4

 	
 To the
 extent that any right to terminate this Agreement pursuant to Clause 14.1
 would have otherwise arisen, directly or indirectly, as a result of: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 the
 occurrence of a MAC Event and/or a Material Adverse Effect having occurred
 subsequent to the publication of the Press Announcement; and/or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 a Commission
 Decision having been publicly announced or publicly communicated subsequent
 to the publication of the Press Announcement; and/or 

 
	
  

 	
  

 	
  

 
	
  

 	
 then such
 right to terminate this Agreement pursuant to Clauses 14.1(b) or (c) (other
 than in the case of a breach of Clause 14.1(b) due to a breach of Warranties
 made by the Issuer, the Guarantor or the Company on the date of publication
 of any Prospectus, Disclosure Package, Supplementary Prospectus or supplement
 to any Disclosure Package provided that any such breach of Warranty
 specifically relates to the content of such document not being true and
 accurate in all respects or being misleading in any respect as at the date of
 publication of such document), (but for no other purpose and without
 prejudice to any other rights that the Joint Bookrunners may have under this
 Agreement) shall, unless, in any of the cases referred to in Clause 14.4(a)
 or (b) such matter, event or circumstance arose, directly or indirectly, as a
 result of a MAC Event or a Material Adverse Effect 

 

36

	
  

 	
  

 	
  

 
	
  

 	
 that
 occurred as a direct or indirect consequence of a Specified Circumstance, be
 deemed not to have arisen for the purposes of this Agreement.

 
	
  

 	
  

 
	
 14.5

 	
 The Joint
 Bookrunners, the Issuer, the Guarantor and the Company shall have no right to
 terminate this Agreement except as provided in this Clause 14 and any right
 of recission is hereby expressly waived and excluded by the Joint
 Bookrunners. 

 
	
  

 	
  

 
	
 15.

 	
 MISCELLANEOUS 

 
	
  

 	
  

 
	
 15.1

 	
 For the
 avoidance of doubt, each of the Issuer, the Guarantor and the Company
 acknowledges and agrees that it is responsible for any due diligence carried
 out in relation to any Top up Issue and that neither the Joint Bookrunners
 nor any of their advisers shall be responsible to the Issuer, the Guarantor
 or the Company or any Director for any due diligence in relation thereto or
 for verifying the accuracy or fairness of any information published by or on behalf
 of the Issuer, the Guarantor or the Company in connection with any Top up
 Issue unless it or they have agreed in writing to take specific
 responsibility for such due diligence or verification. 

 
	
  

 	
  

 
	
 15.2

 	
 Each of the
 Issuer, the Guarantor and the Company agrees that for the purpose of any Top
 up Issue and of obtaining Admission, none of 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 Issuer, the Guarantor or the Company
 has acted in the absence of such advice or in reliance on any advice obtained
 by the Issuer, the Guarantor or the Company in respect thereof. 

 
	
  

 	
  

 
	
 15.3

 	
 Each of the Issuer,
 the Guarantor and the Company acknowledges that the representations,
 warranties, undertakings and indemnities contained in this Agreement are
 given to the Joint Bookrunners in connection with each Top up Issue in their
 capacities as Joint Bookrunners. 

 
	
  

 	
  

 
	
 15.4

 	
 Notwithstanding
 that each of the Joint Bookrunners may act as the Issuer’s, the Guarantor’s
 or the Company’s agent in connection with any Top up Issue, each of such
 persons and its agents may: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 receive and
 keep for its own benefit any commissions, fees, brokerage or other benefits
 paid to or received by it in connection with such Top up Issue, and shall not
 be liable to account to the Issuer, the Guarantor or the Company for any such
 commissions, fees, brokerage or other benefits; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 keep or deal
 in any Top up Securities for which it may subscribe for its own use and
 benefit. 

 
	
  

 	
  

 	
  

 
	
 15.5

 	
 For the
 avoidance of doubt, the obligations of each of the Joint Bookrunners under
 this Agreement are several, not joint or joint and several. Each of the Joint
 Bookrunners shall (except as otherwise agreed among them) have the right to
 protect and enforce its rights under this Agreement by whatever lawful means
 it deems fit, including, without limitation, commencing any legal proceeding,
 without joining any of the others in any proceedings. 

 
	
  

 	
  

 	
  

 
	
 15.6

 	
 Each of the
 Issuer, the Guarantor and the Company acknowledges and agrees that (i) each
 of the Joint Bookrunners are acting solely pursuant to a contractual
 relationship with the Issuer, the Guarantor and the Company on an arm’s
 length basis with respect to any Top up Issue (including in connection with
 determining the terms of the Top up Issue) and not, in relation to the Top up
 Issue, as a financial adviser or a fiduciary to the Issuer, the Guarantor,
 the Company or any other person, and (ii) none of the Joint Bookrunners owes
 any duties or obligations to the Issuer, the Guarantor or the Company of any
 nature whatsoever, save as expressly set out in this Agreement, provided
 however in each case that this shall not exclude or restrict any duty or
 liability that any of them have under FSMA or arrangements for regulating any
 of them thereunder to any extent prohibited thereby. 

 

37

	
  

 	
  

 	
  

 
	
 15.7

 	
 Each of the
 Issuer, the Guarantor and the Company understands (i) that Bank of America
 Corporation (BAC)
 is the parent company of Merrill Lynch & Co., Inc, of which Merrill Lynch
 International is a wholly-owned subsidiary and that BAC and its subsidiaries
 and affiliates are a financial services group, and (ii) that each of the
 other Joint Bookrunners is part of its own financial services group (for the
 purposes of this Clause 15.7, each referred to as a group). Each of the Joint
 Bookrunners and BAC is a full service securities firm and commercial bank
 engaged in activities and businesses, including among others, securities,
 commodities and derivatives trading, foreign exchange and other brokerage
 activities, research publication, and principal investing, as well as
 providing investment, corporate and private banking, asset and investment
 management, financing and financial advisory services and other commercial
 services and products to a wide range of corporations, governments and
 individuals from which conflicting interests or duties, or a perception
 thereof, may arise. Accordingly, in no circumstance shall any Joint Global
 Co-ordinator or Joint Bookrunner or any other member of their respective
 groups have any liability by reason of members of the group conducting such
 other businesses or activities, acting in their own interests or in the
 interests of other clients in respect of matters affecting the Issuer, the
 Guarantor, the Company, their respective affiliates or any other company,
 including where in so acting members of the group act in a manner which is
 adverse to the interests of the Issuer, the Guarantor, the Company or their
 respective affiliates. In addition, as a result of duties of confidentiality,
 each of the Joint Bookrunners and the other members of their respective
 groups may be prohibited from disclosing information to the Issuer, the
 Guarantor or the Company or such disclosure may be inappropriate and the
 Issuer, the Guarantor and the Company agrees that no member of the respective
 groups will be under a duty to use or to disclose any non-public information
 acquired from, or during the course of carrying on business for, any other
 person. Each of the Issuer, the Guarantor and the Company expressly
 acknowledges and agrees that, in the ordinary course of business, each of the
 Joint Bookrunners and other parts of their respective groups at any time (i)
 may invest on a principal basis or manage funds that invest, make or hold
 long or short positions, finance positions or trade or otherwise effect
 transactions, for their own accounts or the accounts of customers, in equity,
 debt or other securities or financial instruments (including derivatives,
 bank loans or other obligations) of the Issuer, the Guarantor, the Company or
 any other company that may be involved in any proposed transaction, and (ii)
 may provide or arrange financing and other financial services to other
 companies that may be involved in any proposed transaction or a competing
 transaction, in each case whose interests may conflict with those of the
 Issuer, the Guarantor or the Company. 

 
	
  

 	
  

 
	
 15.8

 	
 None of the
 Joint Bookrunners shall be restricted pursuant to any term of this Agreement
 in carrying out transactions for the account of their customers, in customer
 facilitation transactions or in buying and selling securities of the Issuer,
 the Guarantor or the Company or derivatives related to the Issuer’s, the
 Guarantor’s or the Company’s securities for the Joint Bookrunner’s own
 account, provided that those transactions are carried out in the ordinary
 course of their businesses. 

 
	
  

 	
  

 
	
 15.9

 	
 No variation
 of this Agreement shall be valid unless it is in writing and signed by or on
 behalf of each of the Joint Bookrunners, the Issuer, the Guarantor and the
 Company. 

 
	
  

 	
  

 
	
 15.10

 	
 Notwithstanding
 any other provision of this Agreement but save as provided below, each of the
 Joint Bookrunners acknowledges, agrees and accepts (for itself and for and on
 behalf of each Indemnified Person with whom such Joint Bookrunners is
 connected) that (a) none of the Issuer, the Guarantor or the Company shall
 have any liability of any kind, whether in contract, tort or otherwise or for
 misrepresentation in respect of any Loss, and (b) none of the Joint
 Bookrunners shall have a claim for breach of Warranty in respect of any Loss,
 in either case suffered by any Joint Bookrunner which has subscribed for Top
 up Securities pursuant to Clause 7 as a result of any decline in the market
 value of any such Top up Securities which was caused by or resulted from or
 is attributable to or would not have arisen but for (in each case, directly
 or indirectly): 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 a MAC Event
 and/or a Material Adverse Effect having occurred subsequent to the
 publication of the Press Announcement; and/or 

 

38

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 a Commission
 Decision having been publicly announced or publicly communicated subsequent
 to the Press Announcement, 

 
	
  

 	
  

 	
  

 
	
  

 	
 (other than
 in the case of a Loss which arises as a result of the content of the
 Prospectus, Disclosure Package, Supplementary Prospectus or supplement to any
 Disclosure Package not being true and accurate in all respects or being
 misleading in any respect as at the date of publication of such document)
 provided that the Issuer, the Guarantor and the Company (as applicable) shall
 be liable if and to the extent that (i) any 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) a MAC Event or a Material Adverse Effect having
 occurred as a direct or indirect consequence of a Specified Circumstance, or
 (ii) such Loss arises, directly or indirectly, out of a Loss or Claim of a
 person who is not acting in the capacity of a Joint Bookrunner (and for the
 purposes of this sub paragraph (ii) only, “Joint Bookrunner” includes any
 Indemnified Person to that extent that it acquires any Top up Securities from
 a Joint Bookrunner with whom it is connected solely for the purposes of
 enabling such Joint Bookrunner to satisfy its obligations under Clause 7 but
 solely in relation to any Loss or Claim that such Indemnified Person may have
 arising out of, directly or indirectly, the acquisition of those Top up
 Securities from that Joint Bookrunner). 

 
	
  

 	
  

 
	
 16.11

 	
 The parties
 to this Agreement acknowledge and agree that: (i) no Relevant Person accepts
 any responsibility for the contents of, or makes any representation or warranty
 (express or implied) as to the accuracy, completeness or fairness of any
 information in, the Rights Issue Prospectus, the Circular, either of the
 Exchange Offer Memoranda, the Disclosure Package, the Final Terms, the
 Presentation Materials, any Previous Announcement or any Relevant Document
 (or any supplement or amendment to any of them); and (ii) no Relevant Person
 has authorised or will authorise the contents of any of the foregoing. 

 
	
  

 	
  

 
	
 16.

 	
 TIME OF THE ESSENCE 

 
	
  

 	
  

 
	
  

 	
 Any time,
 date or period mentioned in this Agreement may be extended by mutual
 agreement between the Issuer, the Guarantor, the Company and the Joint
 Bookrunners but as regards any time, date or period originally fixed, or any
 time, date or period so extended, time shall be of the essence. 

 
	
  

 	
  

 
	
 17.

 	
 WAIVER 

 
	
  

 	
  

 
	
 17.1

 	
 Any right or
 remedy of the Issuer, the Guarantor, the Company and the Joint Bookrunners
 under this Agreement shall only be waived or varied by an express waiver or
 variation in writing. 

 
	
  

 	
  

 
	
 17.2

 	
 No failure
 or delay by the Issuer, the Guarantor, the Company or the Joint Bookrunners
 in exercising any right or remedy under this Agreement shall impair such
 right or remedy or operate or be construed as a waiver or variation of the
 right or remedy or preclude its exercise at any subsequent time. No single or
 partial exercise of any such right or remedy shall preclude any other or
 further exercise of such right or remedy or the exercise of any other right
 or remedy. The rights, powers and remedies of the Issuer, the Guarantor, the
 Company and the Joint Bookrunners provided in this Agreement are cumulative
 and not exclusive of any rights, powers and remedies provided by law. 

 
	
  

 	
  

 
	
 18.

 	
 THIRD PARTY RIGHTS 

 
	
  

 	
  

 
	
 18.1

 	
 Each
 Indemnified Person shall have the right under the Contracts (Rights of Third
 Parties) Act 1999 to enforce its rights against the Issuer, the Guarantor or
 the Company under Clause 12 and Clause 13 provided that each Joint Bookrunner
 (without obligation) will have the sole conduct of any action to enforce such
 rights on behalf of that Joint Bookrunner’s Indemnified Persons. 

 
	
  

 	
  

 
	
 18.2

 	
 For so long
 as any Top up Issues are “restricted securities” within the meaning of Rule
 144(a)(3) under the Securities Act, the Issuer, the Guarantor and the Company
 will, during any period in which 

 

39

	
  

 	
  

 	
  

 
	
  

 	
 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 Top up Issue or to any prospective purchaser of such
 Top up Issue 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.

 
	
  

 	
  

 
	
 18.3

 	
 Each
 Relevant Person shall have the right under the Contracts (Rights of Third
 Parties) Act 1999 to enforce its rights under Clause 15.11, provided that HM
 Treasury will have the sole conduct of any action to enforce such rights on
 behalf of each Relevant Person. 

 
	
  

 	
  

 
	
 18.4

 	
 Except as
 provided in Clause 18.1, 18.2 and 18.3, a person who is not a party to this
 Agreement has no rights under the Contracts (Rights of Third Parties) Act
 1999 to enforce any term of this Agreement. The Joint Bookrunners and the
 Company may agree to terminate this Agreement or vary any of its terms, other
 than Clause 15.11 and Clause 18.3, without the consent of any Indemnified
 Person which is not party to this Agreement or any other third party. The
 Joint Bookrunners will have no responsibility to any Indemnified Person which
 is not party to this Agreement or any other third party under or as a result
 of this Agreement, except pursuant to Clause 15.11 and Clause 18.3. 

 
	
  

 	
  

 
	
 19.

 	
 SEVERABILITY 

 
	
  

 	
  

 
	
  

 	
 If any
 provision of this Agreement is or is held to be invalid or unenforceable,
 then so far as it is invalid or unenforceable it has no effect and is deemed
 not to be included in this Agreement. This shall not invalidate any of the
 remaining provisions of this Agreement. The parties shall use all reasonable
 endeavours to replace any invalid or unenforceable provision by a valid
 provision the effect of which is as close as possible to the intended effect
 of the invalid or unenforceable provision. 

 
	
  

 	
  

 
	
 20.

 	
 NOTICES 

 
	
  

 	
  

 
	
 20.1

 	
 Subject to
 Clause 20.2, any notice to be given under, or in connection with, this
 Agreement shall be in writing and be signed by or on behalf of the party
 giving it. It shall be served by sending it by fax to the number set out in
 Clause 20.3 or by delivering it by hand, or sending it by pre-paid recorded
 delivery, special delivery or registered post, to the address set out in
 Clause 20.3 marked for the attention of the relevant party (or as otherwise
 notified from time to time under this Agreement). 

 
	
  

 	
  

 
	
  

 	
 Any notice
 so served shall be deemed to have been duly received: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 in the case
 of delivery by hand, when delivered; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 in the case
 of fax, at the time of transmission; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 in the case
 of pre paid recorded delivery, special delivery or registered post, on the
 Dealing Day following the date of posting; 

 
	
  

 	
  

 	
  

 
	
  

 	
 provided
 that if delivery by hand or fax occurs on a day which is not a Dealing Day or
 after 6.00 p.m. on a Dealing Day, service shall be deemed to occur at 9.00
 a.m. on the following Dealing Day. 

 
	
  

 	
  

 
	
 20.2

 	
 Any notice
 given by the Joint Bookrunners under, or in connection with, this Agreement
 may also be given by any director or other authorised representative of the
 Joint Bookrunners to any Director either personally or by telephone (to be
 confirmed as soon as reasonably practicable in writing) and shall have
 immediate effect. 

 

40

	
  

 	
  

 	
  

 
	
 20.3

 	
 For the
 purposes of Clause 20.1, the fax numbers and addresses of each of the Joint
 Bookrunners are set out in Schedule 9 and the fax number and address of the
 Company (which shall also be used for provision of notices pursuant to this
 Agreement to the Issuer and the Guarantor) is: 

 
	
  

 	
  

 
	
  

 	
 Lloyds
 Banking Group plc 

 Henry Duncan House 

 129 George Street 

 Edinburgh 

 Scotland EH2 4LH 

 

	
  

 	
  

 	
  

 
	
  

 	
 Fax number:

 	
 +44 (0) 20
 7356 2168

 
	
  

 	
 For the
 attention of:

 	
 Company Secretary

 
	
  

 	
 With a copy
 to:

 	
 Jeremy Parr

 
	
  

 	
 Fax number:

 	
 +44 (0) 20
 7456 2000

 

	
  

 	
  

 	
  

 
	
 21.

 	
 FURTHER ASSURANCES 

 
	
  

 	
  

 
	
  

 	
 The Company
 shall procure that the Directors shall provide, all information and
 assistance that the Joint Bookrunners may reasonably require for the purposes
 of this Agreement and execute (or procure to be executed) each document and
 do (or procure to be done) each act and thing that a Joint Global
 Co-ordinator or a Joint Bookrunner may reasonably request in order to give
 effect to the Top up Issue or Admission. 

 
	
  

 	
  

 
	
 22.

 	
 ASSIGNMENT 

 
	
  

 	
  

 
	
  

 	
 No party may
 assign, or purport to assign: (i) this Agreement; (ii) all or any of their
 respective rights or obligations arising under or out of this Agreement; or
 (iii) the benefit of all or any of the other parties’ obligations under this
 Agreement. 

 
	
  

 	
  

 
	
 23.

 	
 ENTIRE AGREEMENT 

 
	
  

 	
  

 
	
  

 	
 This
 Agreement constitutes the entire agreement between the parties relating to
 the subject matter of this Agreement and supersedes and replaces all
 agreements, understandings, undertakings, representations, warranties and
 arrangements of any nature whatsoever between the parties relating to the
 subject matter of this Agreement. In the event of any inconsistency between
 this Agreement or any other agreement referred to in, or entered into in connection
 with, this Agreement, the terms of this Agreement shall prevail. 

 
	
  

 	
  

 
	
 24.

 	
 COUNTERPARTS 

 
	
  

 	
  

 
	
  

 	
 This
 Agreement may be executed by any one or more of the parties hereto in any
 number of counterparts, each of which shall be deemed to be an original, but
 all such counterparts shall together constitute one and the same instrument.
 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. 

 
	
  

 	
  

 
	
 25.

 	
 GOVERNING LAW 

 
	
  

 	
  

 
	
 25.1

 	
 This
 Agreement and the relationship among the parties to it, and any
 non-contractual obligations which may arise out of or in connection with this
 Agreement, shall be governed by and interpreted in accordance with English
 law. 

 

41

	
  

 	
  

 	
  

 
	
 25.2

 	
 All parties
 to this Agreement agree that the courts of England are (subject to Clause
 25.3(a)) to have exclusive jurisdiction to settle any dispute (including claims
 for set-off and counterclaims) which may arise out of or is in connection
 with (i) the creation, validity, effect, interpretation or performance of, or
 of the legal relationships established by, this Agreement or otherwise
 arising out of or in connection with this Agreement, and (ii) any
 non-contractual obligations which may arise out of or in connection with this
 Agreement, and for such purposes all parties irrevocably submit to the
 exclusive jurisdiction of the English courts. 

 
	
  

 	
  

 
	
 25.3

 	
 Notwithstanding
 the provisions of Clause 25.2, in the event that any Joint Bookrunner or any
 of such Joint Bookrunner’s Indemnified Persons 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 Joint
 Bookrunner shall be entitled, without objection by the Issuer, the Guarantor
 or the Company, either: 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 to join the
 Issuer, the Guarantor, the Company and/or any other person to the Foreign
 Proceedings; and/or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 to bring
 separate proceedings for any breach of this Agreement and/or for a
 contribution or an indemnity against the Issuer, the Guarantor, the Company
 and/or any other person in the Foreign Jurisdiction, provided that such
 separate proceedings arise out of or are in connection with the subject
 matter of the Foreign Proceedings. 

 
	
  

 	
  

 	
  

 
	
 25.4

 	
 Each of the
 parties to this Agreement irrevocably waives any objection to the
 jurisdiction of any courts referred to in this Clause 25. 

 
	
  

 	
  

 
	
 25.5

 	
 Each party
 to this Agreement irrevocably agrees that a judgment and/or order of any
 court referred to in this Clause 25 based on any matter arising out of or in
 connection with this Agreement (including but not limited to the enforcement
 of any indemnity) shall be conclusive and binding on it and may be enforced
 against it in any other jurisdiction, whether or not (subject to due process
 having been served on it) it participates in the relevant proceedings. 

 
	
  

 	
  

 
	
 25.6

 	
 Each of the
 parties with an address outside England shall at all times maintain an agent
 for service of process and any other documents and proceedings in England or
 any other proceedings in connection with this Agreement. For the Company,
 such agent shall be the London office of the Company at 25 Gresham Street,
 London EC2V 7HN. Any writ, judgment or other notice of legal process shall be
 sufficiently served on the relevant party if delivered to such agent at its
 address for the time being. Each of the parties with an address outside
 England irrevocably undertakes not to revoke the authority of the above agent
 and if, for any reason, the Joint Bookrunners (for themselves or on behalf of
 the Indemnified Persons) request such party to do so it shall promptly
 appoint another such agent with an address in England and advise each of
 them. If, following such request, the relevant party fails to appoint another
 agent, the Joint Bookrunners shall be entitled to appoint one on the relevant
 party’s behalf and at such party’s expense. 

 
	
  

 	
  

 
	
 25.7

 	
 Each of the
 Issuer, the Guarantor and 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 Issuer, the Guarantor or the Company (as the
 case may be) does not appoint such an agent within 14 days of the notice
 requesting it to do so, such other party may appoint a commercial agent for
 service for the Issuer, the Guarantor or the Company (as the case may be) on
 the Issuer’s, the Guarantor’s or the Company’s (as the case may be) behalf
 and at the Issuer’s (failing whom the Guarantor’s), the Guarantor’s or the
 Company’s (as the case may be) expense and the Issuer, the Guarantor and the
 Company agrees that, subject to being notified of such appointment in
 writing, 

 

42

	
  

 	
  

 
	
  

 	
 service upon
 such commercial agent will constitute service upon the Issuer, the Guarantor
 or the Company (as the case may be).

 

IN
WITNESS WHEREOF this Agreement has been duly executed
under hand by the Issuer, the Guarantor, the Company, each Joint Bookrunner or
its duly authorised attorneys the day and year first above written. 

43

SCHEDULE 1

BOOK VALUE OF TARGET SECURITIES

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Currency

 Amount

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Book
 Value 

 	
  

 
	
 ISIN

 	
  

 	
 Issuer

 	
  

 	
 Currency

 	
  

 	
 (outstanding)

 	
  

 	
 Coupon

 	
  

 	
 Maturity

 	
  

 	
  (%)

 	
  

 
	
  

 
	
 XS0406095637

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 EUR

 	
  

 	
 500,000,000

 	
  

 	
 7.875

 	
  

 	
 29-Nov-13

 	
  

 	
 100.00

 	
  

 
	
 XS0406095041 

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 USD

 	
  

 	
 1,250,000,000

 	
  

 	
 7.875

 	
  

 	
 29-Nov-13

 	
  

 	
 100.00

 	
  

 
	
 XS0408828803 / GB00B3KSB675

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 GBP

 	
  

 	
 745,431,000

 	
  

 	
 6.0884

 	
  

 	
 12-May-15

 	
  

 	
   86.51

 	
  

 
	
 XS0265483064

 	
  

 	
 Saphir Finance plc

 	
  

 	
 GBP

 	
  

 	
 600,000,000

 	
  

 	
 6.369

 	
  

 	
 25-Aug-15

 	
  

 	
 100.00

 	
  

 
	
 USG5533WAB30 (Reg S)
 US539439AD11 (144a)

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 USD

 	
  

 	
 750,000,000

 	
  

 	
 5.920

 	
  

 	
 01-Oct-15

 	
  

 	
   80.80

 	
  

 
	
 US539439AB54 (Reg S)
 US539439AA71 (144a) 

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 USD

 	
  

 	
 1,000,000,000

 	
  

 	
 6.267

 	
  

 	
 14-Nov-16

 	
  

 	
 100.00

 	
  

 
	
 XS0408826427

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 GBP

 	
  

 	
 334,951,000

 	
  

 	
 6.3673

 	
  

 	
 17-Jun-19

 	
  

 	
   56.66

 	
  

 
	
 GB00B3KSB568

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 GBP

 	
  

 	
 186,190,532

 	
  

 	
 6.475

 	
  

 	
 15-Sep-24

 	
  

 	
   64.94

 	
  

 
	
 USG5533WAA56 (Reg S)
 US539439AC38 (144a)

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 USD

 	
  

 	
 750,000,000

 	
  

 	
 6.413

 	
  

 	
 01-Oct-35

 	
  

 	
   46.93

 	
  

 
	
 US539439AE93 (Reg S)
 US539439AF68 (144a)

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 USD

 	
  

 	
 750,000,000

 	
  

 	
 6.657

 	
  

 	
 21-May-37

 	
  

 	
   48.10

 	
  

 
	
 GB00B3KS9W93

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 GBP

 	
  

 	
 299,987,729

 	
  

 	
 9.250

 	
  

 	
 Perpetual

 	
  

 	
   85.50

 	
  

 
	
 GB00B3KSB238

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 GBP

 	
  

 	
 99,999,942

 	
  

 	
 9.750

 	
  

 	
 Perpetual

 	
  

 	
   93.50

 	
  

 
	
 XS0156372343

 	
  

 	
 LTSB Bank plc

 	
  

 	
 USD

 	
  

 	
 1,000,000,000

 	
  

 	
 6.900

 	
  

 	
 Perpetual

 	
  

 	
 100.00

 	
  

 
	
 XS0109138536 (Reg S) /
 XS0109138882 (144a)

 	
  

 	
 Bank of Scotland Capital
 Funding LP (CLASS A)

 	
  

 	
 GBP

 	
  

 	
 250,000,000

 	
  

 	
 8.117

 	
  

 	
 31-May-10

 	
  

 	
   88.43

 	
  

 
	
 GB0058322420

 	
  

 	
 HBOS Euro Finance (Jersey) LP

 	
  

 	
 EUR

 	
  

 	
 415,000,000

 	
  

 	
 7.627

 	
  

 	
 09-Dec-11

 	
  

 	
   64.85

 	
  

 
	
 XS0107222258

 	
  

 	
 LTSB Capital 1 LP

 	
  

 	
 EUR

 	
  

 	
 430,000,000

 	
  

 	
 7.375

 	
  

 	
 07-Feb-12

 	
  

 	
 100.00

 	
  

 
	
 XS0156923913

 	
  

 	
 LTSB Bank plc

 	
  

 	
 EUR

 	
  

 	
 500,000,000

 	
  

 	
 6.350

 	
  

 	
 25-Feb-13

 	
  

 	
 100.00

 	
  

 
	
 USG43648AA57 (Reg S)
 US40411CAA09 (144a)

 	
  

 	
 HBOS Capital Funding No.2 LP

 	
  

 	
 USD

 	
  

 	
 750,000,000

 	
  

 	
 6.071

 	
  

 	
 30-Jun-14

 	
  

 	
   54.48

 	
  

 
	
 XS0107228024

 	
  

 	
 LTSB Capital 2 LP

 	
  

 	
 GBP

 	
  

 	
 250,000,000

 	
  

 	
 7.834

 	
  

 	
 07-Feb-15

 	
  

 	
 100.00

 	
  

 

44

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Currency

 Amount

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Book
 Value 

 	
  

 
	
 ISIN

 	
  

 	
 Issuer

 	
  

 	
 Currency

 	
  

 	
 (outstanding)

 	
  

 	
 Coupon

 	
  

 	
 Maturity

 	
  

 	
  (%)

 	
  

 
	
  

 
	
 XS0255242769

 	
  

 	
 HBOS Capital Funding No.3 LP

 	
  

 	
 EUR

 	
  

 	
 750,000,000

 	
  

 	
 4.939

 	
  

 	
 23-May-16

 	
  

 	
   59.77

 	
  

 
	
 XS0125681345

 	
  

 	
 Bank of Scotland (PROS Series
 A)

 	
  

 	
 GBP

 	
  

 	
 150,000,000

 	
  

 	
 7.286

 	
  

 	
 31-May-16

 	
  

 	
   74.78

 	
  

 
	
 XS0218638236

 	
  

 	
 LTSB Bank plc

 	
  

 	
 EUR

 	
  

 	
 750,000,000

 	
  

 	
 4.385

 	
  

 	
 12-May-17

 	
  

 	
 100.00

 	
  

 
	
 XS0353590366

 	
  

 	
 HBOS Capital Funding No.4 LP

 	
  

 	
 GBP

 	
  

 	
 750,000,000

 	
  

 	
 9.540

 	
  

 	
 19-Mar-18

 	
  

 	
 100.00

 	
  

 
	
 XS0139175821

 	
  

 	
 HBOS Capital Funding LP

 	
  

 	
 GBP

 	
  

 	
 600,000,000

 	
  

 	
 6.461

 	
  

 	
 30-Nov-18

 	
  

 	
   64.92

 	
  

 
	
 XS0408620135

 	
  

 	
 LTSB Bank plc

 	
  

 	
 GBP

 	
  

 	
 784,611,000

 	
  

 	
 13.000

 	
  

 	
 22-Jan-19

 	
  

 	
 100.00

 	
  

 
	
 XS0408623311

 	
  

 	
 LTSB Bank plc

 	
  

 	
 EUR

 	
  

 	
 532,111,000

 	
  

 	
 13.000

 	
  

 	
 22-Jan-19

 	
  

 	
 100.00

 	
  

 
	
 XS0109139344 (Reg S)
 XS0109139427 (144a)

 	
  

 	
 Bank of Scotland Capital
 Funding LP (CLASS B)

 	
  

 	
 GBP

 	
  

 	
 150,000,000

 	
  

 	
 7.754

 	
  

 	
 31-May-21

 	
  

 	
   60.62

 	
  

 
	
 XS0125686229

 	
  

 	
 Bank of Scotland (PROS Series
 B)

 	
  

 	
 GBP

 	
  

 	
 150,000,000

 	
  

 	
 7.281

 	
  

 	
 31-May-26

 	
  

 	
   60.84

 	
  

 
	
 XS0408620721

 	
  

 	
 LTSB Bank plc

 	
  

 	
 GBP

 	
  

 	
 700,022,000

 	
  

 	
 13.000

 	
  

 	
 22-Jan-29

 	
  

 	
 100.00

 	
  

 
	
 GB0058327924

 	
  

 	
 HBOS Sterling Finance (Jersey)
 LP

 	
  

 	
 GBP

 	
  

 	
 245,000,000

 	
  

 	
 7.881

 	
  

 	
 09-Dec-31

 	
  

 	
   69.60

 	
  

 
	
 XS0165483164

 	
  

 	
 HBOS Capital Funding No.1 LP

 	
  

 	
 USD

 	
  

 	
 1,000,000,000

 	
  

 	
 6.850

 	
  

 	
 Perpetual

 	
  

 	
 100.00

 	
  

 
	
 XS0099508698

 	
  

 	
 LTSB Bank plc

 	
  

 	
 GBP

 	
  

 	
 153,033,000

 	
  

 	
 6.625

 	
  

 	
 15-Jul-10

 	
  

 	
 100.00

 	
  

 
	
 XS0111627112

 	
  

 	
 HBOS Plc

 	
  

 	
 EUR

 	
  

 	
 72,598,000

 	
  

 	
 3Mnth
 Euribor + 120

 	
  

 	
 26-Aug-10

 	
  

 	
   86.49

 	
  

 
	
 XS0138988042

 	
  

 	
 HBOS Plc

 	
  

 	
 EUR

 	
  

 	
 75,380,000

 	
  

 	
 6.050

 	
  

 	
 23-Nov-11

 	
  

 	
   69.72

 	
  

 
	
 US4041A3AF96 (Reg S) /
 US4041A2AG96 (144a) 

 	
  

 	
 HBOS Plc

 	
  

 	
 USD

 	
  

 	
 1,000,000,000

 	
  

 	
 5.375

 	
  

 	
 01-Nov-13

 	
  

 	
   53.99

 	
  

 
	
 XS0125599687

 	
  

 	
 HBOS Plc

 	
  

 	
 JPY

 	
  

 	
 42,500,000,000

 	
  

 	
 3.500

 	
  

 	
 Perpetual

 	
  

 	
   91.60

 	
  

 
	
 XS0063730203

 	
  

 	
 Bank of Scotland

 	
  

 	
 JPY

 	
  

 	
 17,000,000,000

 	
  

 	
 4.250

 	
  

 	
 Perpetual

 	
  

 	
 101.77

 	
  

 
	
 XS0056390007

 	
  

 	
 LTSB Bank plc

 	
  

 	
 JPY

 	
  

 	
 20,000,000,000

 	
  

 	
 5.570

 	
  

 	
 Perpetual

 	
  

 	
 100.00

 	
  

 
	
 XS0046690961

 	
  

 	
 Bank of Scotland

 	
  

 	
 GBP

 	
  

 	
 61,026,000

 	
  

 	
 8.625

 	
  

 	
 04-Nov-13

 	
  

 	
   80.03

 	
  

 
	
 XS0188201536

 	
  

 	
 HBOS Plc

 	
  

 	
 EUR

 	
  

 	
 187,049,000

 	
  

 	
 4.875

 	
  

 	
 13-Mar-14

 	
  

 	
   67.45

 	
  

 
	
 XS0188201619

 	
  

 	
 HBOS Plc

 	
  

 	
 EUR

 	
  

 	
 113,415,000

 	
  

 	
 3Mnth
 Euribor + 60

 	
  

 	
 13-Mar-14

 	
  

 	
   70.65

 	
  

 
	
 XS0059171230

 	
  

 	
 Bank of Scotland

 	
  

 	
 GBP

 	
  

 	
 58,170,000

 	
  

 	
 10.250

 	
  

 	
 10-Aug-15

 	
  

 	
   94.36

 	
  

 
	
 XS0177955381

 	
  

 	
 HBOS Plc

 	
  

 	
 EUR

 	
  

 	
 293,781,000

 	
  

 	
 5.125

 	
  

 	
 14-Oct-15

 	
  

 	
   65.61

 	
  

 
	
 XS0111599311

 	
  

 	
 HBOS Plc

 	
  

 	
 GBP

 	
  

 	
 4,478,000

 	
  

 	
 7.500

 	
  

 	
 26-May-16

 	
  

 	
   79.33

 	
  

 
	
 XS0169667119

 	
  

 	
 LTSB Bank plc

 	
  

 	
 GBP

 	
  

 	
 153,103,000

 	
  

 	
 5.125

 	
  

 	
 09-Dec-16

 	
  

 	
 100.00

 	
  

 
	
 XS0099507534

 	
  

 	
 LTSB Bank plc

 	
  

 	
 GBP

 	
  

 	
 97,457,000

 	
  

 	
 6.500

 	
  

 	
 15-Jul-19

 	
  

 	
 100.00

 	
  

 

45

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Currency

 Amount

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Book
 Value 

 	
  

 
	
 ISIN

 	
  

 	
 Issuer

 	
  

 	
 Currency

 	
  

 	
 (outstanding)

 	
  

 	
 Coupon

 	
  

 	
 Maturity

 	
  

 	
  (%)

 	
  

 
	
  

 
	
 XS0205326290

 	
  

 	
 HBOS Plc

 	
  

 	
 GBP

 	
  

 	
 4,080,000

 	
  

 	
 5.625

 	
  

 	
 15-Nov-19

 	
  

 	
   53.26

 	
  

 
	
 GB0000395094

 	
  

 	
 Bank of Scotland

 	
  

 	
 GBP

 	
  

 	
 100,000,000

 	
  

 	
 12.000

 	
  

 	
 30-Jan-22

 	
  

 	
   95.27

 	
  

 
	
 XS0166717388

 	
  

 	
 HBOS Plc

 	
  

 	
 GBP

 	
  

 	
 3,509,000

 	
  

 	
 5.750

 	
  

 	
 14-Apr-22

 	
  

 	
   49.57

 	
  

 
	
 XS0083932144

 	
  

 	
 Bank of Scotland

 	
  

 	
 GBP

 	
  

 	
 57,815,000

 	
  

 	
 7.375

 	
  

 	
 10-Feb-23

 	
  

 	
   69.41

 	
  

 
	
 GB0000395102

 	
  

 	
 Bank of Scotland

 	
  

 	
 GBP

 	
  

 	
 100,000,000

 	
  

 	
 8.750

 	
  

 	
 14-Sep-23

 	
  

 	
   87.38

 	
  

 
	
 XS0079927850

 	
  

 	
 LTSB Bank plc

 	
  

 	
 GBP

 	
  

 	
 68,869,000

 	
  

 	
 8.000

 	
  

 	
 29-Sep-23

 	
  

 	
 100.00

 	
  

 
	
 GB0005242879

 	
  

 	
 Bank of Scotland

 	
  

 	
 GBP

 	
  

 	
 50,000,000

 	
  

 	
 9.375

 	
  

 	
 19-Apr-24

 	
  

 	
   91.89

 	
  

 
	
 XS0158313758

 	
  

 	
 HBOS Plc

 	
  

 	
 GBP

 	
  

 	
 8,530,000

 	
  

 	
 5.750

 	
  

 	
 28-Nov-25

 	
  

 	
   58.75

 	
  

 
	
 XS0099507963

 	
  

 	
 LTSB Bank plc

 	
  

 	
 GBP

 	
  

 	
 107,506,000

 	
  

 	
 6.500

 	
  

 	
 15-Jul-29

 	
  

 	
 100.00

 	
  

 
	
 XS0145407507

 	
  

 	
 Lloyds Banking Group plc

 	
  

 	
 GBP

 	
  

 	
 113,965,000

 	
  

 	
 6.000

 	
  

 	
 07-Jun-32

 	
  

 	
 100.00

 	
  

 
	
 GB0000765403

 	
  

 	
 Bank of Scotland

 	
  

 	
 USD

 	
  

 	
 237,200,000

 	
  

 	
 Limean
 + 25

 	
  

 	
 Perpetual

 	
  

 	
   89.65

 	
  

 
	
 GB0001905362

 	
  

 	
 LTSB Bank plc

 	
  

 	
 GBP

 	
  

 	
 100,000,000

 	
  

 	
 11.750

 	
  

 	
 Perpetual

 	
  

 	
 100.00

 	
  

 
	
 GB0005205751

 	
  

 	
 LTSB Bank plc

 	
  

 	
 USD

 	
  

 	
 423,810,000

 	
  

 	
 L3
 + 0.1875%

 	
  

 	
 Perpetual

 	
  

 	
 100.00

 	
  

 
	
 GB0005224307

 	
  

 	
 LTSB Bank plc

 	
  

 	
 USD

 	
  

 	
 659,850,000

 	
  

 	
 L6
 + 0.25%

 	
  

 	
 Perpetual

 	
  

 	
 100.00

 	
  

 
	
 GB0005232391

 	
  

 	
 LTSB Bank plc

 	
  

 	
 USD

 	
  

 	
 526,150,000

 	
  

 	
 L6
 + 0.10%

 	
  

 	
 Perpetual

 	
  

 	
 100.00

 	
  

 
	
 GB0000394915

 	
  

 	
 Bank of Scotland

 	
  

 	
 GBP

 	
  

 	
 75,000,000

 	
  

 	
 13.625

 	
  

 	
 Perpetual

 	
  

 	
 136.98

 	
  

 

46

SCHEDULE 2

BASIC TERMS OF THE TOP UP SECURITIES

Unless
otherwise agreed between the Company and the Joint Bookrunners, Top up
Securities shall have the features set out below. Capitalised terms used but
not otherwise defined herein shall have the same meanings as set out in the
European Exchange Offer Memorandum.

	
  

 	
  

 	
  

 
	
 Issuer

 	
  

 	
 LBG Capital
 No.2, an indirect wholly owned subsidiary of Lloyds Banking Group,
 incorporated and tax resident in the United Kingdom. 

 
	
  

 	
  

 	
  

 
	
 Guarantor

 	
  

 	
 The ECNs
 will be unconditionally and irrevocably guaranteed by Lloyds TSB Bank
 provided that any series of ECNs sold in whole or in part to QIBs will be
 unconditionally and irrevocably jointly and severally guaranteed by Lloyds
 TSB Bank and Lloyds Banking Group. 

 
	
  

 	
  

 	
  

 
	
 Currency

 	
  

 	
 The currency
 of each series of ECNs will be determined pursuant to the provisions of this
 Agreement.

 
	
  

 	
  

 	
  

 
	
 Final Maturity

 	
  

 	
 Each series
 of ECNs will mature on the date determined pursuant to the provisions of this
 Agreement which shall be between five and ten years from the relevant
 Settlement Date.

 
	
  

 	
  

 	
  

 
	
 Interest Rate

 	
  

 	
 The rate of
 interest of each series of ECNs to their Final Maturity (or, in the case of
 ECNs with an Optional Call Date, to their Optional Call Date) will be the
 rate determined by reference to the same provisions as are referred to in the
 definition of “Issue Price” in this Agreement. From and including the
 Optional Call Date such rate of interest will be subject to the maximum
 step-up as permitted under the FSA Rules.

 
	
  

 	
  

 	
  

 
	
 Interest Payment Dates

 	
  

 	
 The Interest
 Payment Dates of each series of ECNs will be the dates determined pursuant to
 the provisions of this Agreement.

 
	
  

 	
  

 	
  

 
	
 Status of the ECNs

 	
  

 	
 The ECNs and
 related Coupons will constitute direct, unsecured and subordinated
 obligations of the Issuer and rank pari passu and without any preference
 among themselves. The rights and claims of the ECN Securityholders and
 Couponholders are subordinated. 

 
	
  

 	
  

 	
  

 
	
 Subordination of the ECNs

 	
  

 	
 In the event
 of: (i) an order being made, or an effective resolution being passed, for the
 winding-up of the Issuer (except a solvent winding-up solely for the purposes
 of a reorganisation, reconstruction or amalgamation of the Issuer or the
 substitution in place of the Issuer of a successor in business of the Issuer,
 the terms of which reorganisation, reconstruction, amalgamation or
 substitution (x) have previously been approved in writing by the ECN Trustee
 or by an Extraordinary Resolution and (y) do not provide that the ECNs shall
 thereby become redeemable or repayable in accordance with the relevant
 Conditions); or (ii) an administrator of the Issuer being appointed and such
 administrator declaring, or giving notice that it intends to declare and
 distribute, a dividend, the rights and claims of the ECN Securityholders and
 the Couponholders against the Issuer in respect of or arising under (including
 any damages awarded for breach of any obligations under) the ECNs, the
 relevant Coupons and the relevant Trust Deed relating to them will be
 subordinated to the claims of all Issuer 

 

47

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Senior
 Creditors but shall rank (A) at least pari passu with the claims of holders of
 all other subordinated obligations of the Issuer and (B) in priority to the
 claims of holders of all undated or perpetual subordinated obligations of the
 Issuer and to the claims of holders of all classes of share capital of the
 Issuer.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Issuer Senior Creditors means creditors of
 the Issuer whose claims are admitted to proof in the winding-up or
 administration of the Issuer and who are unsubordinated creditors of the
 Issuer.

 
	
  

 	
  

 	
  

 
	
 Status of the Guarantee

 	
  

 	
 The
 Guarantor (or Guarantors, jointly and severally, as the case may be) will
 irrevocably and unconditionally guarantee the due and punctual payment of all
 principal, premium and interest and any other sums from time to time
 expressed to be payable by the Issuer in respect of the ECNs and the Coupons
 under the relevant Trust Deed in respect thereof. The obligations of a
 Guarantor under the Guarantee will constitute direct, unsecured and
 subordinated obligations of that Guarantor.

 
	
  

 	
  

 	
  

 
	
 Subordination of the relevant

 Guarantee

 	
  

 	
 In the event
 of: (i) an order being made, or an effective resolution being passed, for the
 winding-up of a Guarantor (except, in any such case, a solvent winding-up
 solely for the purposes of a reorganisation, reconstruction or amalgamation
 of such Guarantor or the substitution in place of such Guarantor of a
 successor in business of such Guarantor, the terms of which reorganisation,
 reconstruction, amalgamation or substitution (x) have previously been
 approved in writing by the ECN Trustee or by an Extraordinary Resolution and
 (y) do not provide that the relevant ECNs shall thereby become redeemable or
 repayable in accordance with their Conditions); or (ii) an administrator of
 such Guarantor being appointed and such administrator declaring, or giving notice
 that it intends to declare and distribute, a dividend, the rights and claims
 of the ECN Securityholders and the Couponholders against such Guarantor in
 respect of or arising under (including any damages awarded for breach of any
 obligations under) the relevant ECNs, the relevant Coupons and relevant Trust
 Deed relating to them will be subordinated to the claims of all Guarantor
 Senior Creditors, as the case may be, but shall rank (a) at least pari passu
 with all claims of all holders of obligations of such Guarantor which
 constitute, or would but for any applicable limitation on the amount of such
 capital constitute, Lower Tier 2 Capital of such Guarantor on a solo and/or
 consolidated basis; and (b) in priority to (01) the claims of holders of all
 obligations to such Guarantor which constitute, or would but for any
 applicable limitation on the amount of such capital constitute, Upper Tier 2
 Capital or Tier 1 Capital of such Guarantor on a solo and/or consolidated
 basis, (02) the claims of all other undated or perpetual subordinated
 obligations of such Guarantor, and (03) the claims of holders of all classes
 of share capital of such Guarantor.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Guarantor Senior Creditors means, in respect
 of a Guarantor (a) creditors of such Guarantor whose claims are admitted to
 proof in the winding-up or administration of such Guarantor and who are
 unsubordinated creditors of such Guarantor; and (b) creditors of such
 Guarantor whose claims are or are expressed to be subordinated to the claims
 of other creditors of such Guarantor (other than those whose claims relate to
 obligations which constitute, or would but for any applicable 

 

48

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 limitation
 on the amount of such capital constitute, Tier 1 Capital or Upper Tier 2
 Capital or Lower Tier 2 Capital of the relevant Guarantor on a solo and/or
 consolidated basis, or whose claims rank or are expressed to rank pari passu
 with, or junior to, the claims of ECN Securityholders).

 
	
  

 	
  

 	
  

 
	
 Optional Redemption

 	
  

 	
 In the case
 of ECNs with a Final Maturity which will occur 10 years following the
 Settlement Date, the Issuer may (if such feature is so agreed between the
 Company and the Joint Bookrunners pursuant to the provisions of this
 Agreement) by giving not less than 10 nor more than 21 days’ notice to the
 Trustee, the Principal Paying Agent and Conversion Agent, the Registrar and
 the ECN Securityholders (which notice shall, subject to the same provisos as
 set out in the ECNs issued in the European Exchange Offer, be irrevocable),
 elect to redeem in accordance with the relevant Conditions at any time (in
 the case of a Fixed Rate ECN or in the fixed interest rate period in the case
 of a Fixed/Floating Rate ECN) or on any Interest Payment Date (in the case of
 a Floating Rate ECN or in the floating rate interest period of a Fixed/Floating
 Rate ECN), in each case from and including the Optional Call Date, all, but
 not some only, of the relevant series of ECNs at their principal amount,
 together with accrued but unpaid interest to (but excluding) the relevant
 redemption date. The Optional Call Date shall be the fifth anniversary of the
 Settlement Date.

 
	
  

 	
  

 	
  

 
	
 Early Redemption Due to

 Taxation

 	
  

 	
 If,
 immediately prior to the giving of the notice referred to below, a Tax Event
 has occurred and is continuing, then the Issuer may, subject to the same
 provisos as set out in the ECNs issued in the European Exchange Offer, having
 given not less than 10 nor more than 21 days’ notice to the relevant Trustee,
 the Principal Paying Agent and Conversion Agent, the Registrar and ECN
 Securityholders (which notice shall, subject to the same provisos as set out
 in the ECNs issued in the European Exchange Offer, be irrevocable), redeem in
 accordance with the relevant Conditions at any time (in the case of a Fixed
 Rate ECN or in the fixed interest rate period in the case of a Fixed/Floating
 Rate ECN) or on any Interest Payment Date (in the case of a Floating Rate ECN
 or in the floating rate interest period of a Fixed/Floating Rate ECN) all,
 but not some only, of the relevant series of ECNs at their principal amount,
 together with accrued but unpaid interest to (but excluding) the relevant
 redemption date.

 
	
  

 	
  

 	
  

 
	
 Early Redemption for

 Regulatory Purposes

 	
  

 	
 If,
 immediately prior to the giving of the notice referred to below, a Capital
 Disqualification Event has occurred and is continuing, then the Issuer may,
 subject to the same provisos as set out in the ECNs issued in the European
 Exchange Offer, and having given not less than 10 nor more than 21 days’
 notice to the relevant Trustee, the Principal Paying Agent and Conversion
 Agent, the Registrar and the ECN Securityholders (which notice shall, subject
 to the same provisos as set out in the ECNs issued in the European Exchange
 Offer, be irrevocable), redeem in accordance with the relevant Conditions at
 any time (in the case of a Fixed Rate ECN or in the fixed interest rate
 period in the case of a Fixed/Floating Rate ECN) or on any Interest Payment
 Date (in the case of a Floating Rate ECN or in the floating rate interest
 period of a Fixed/Floating Rate ECN) all, but not some only, of the relevant
 series of ECNs at the make whole redemption price (to be determined pursuant
 to the provisions of this Agreement), together with any accrued but unpaid
 interest to (but excluding) the relevant redemption date.

 

49

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 A Capital Disqualification Event is deemed
 to have occurred (1) if, at any time LBG or LTSB is required under Regulatory
 Capital Requirements to have regulatory capital, the ECNs would no longer be
 eligible to qualify in whole or in part (save where such non-qualification is
 only as a result of any applicable limitation on the amount of such capital)
 for inclusion in the Lower Tier 2 Capital of LBG or, as the case may be, LTSB
 on a consolidated basis; or (2) if as a result of any changes to the
 Regulatory Capital Requirements or any change in the interpretation or
 application thereof by the FSA, the ECNs shall cease to be taken into account
 in whole or in part (save where this is only as a result of any applicable
 limitation on the amount that may be so taken into account) for the purposes
 of any ‘‘stress test’’ applied by the FSA in respect of the Consolidated Core
 Tier 1 Ratio.

 
	
  

 	
  

 	
  

 
	
 Mandatory Conversion

 	
  

 	
 If the
 Conversion Trigger occurs at any time before the occurrence of a Relevant
 Event, each ECN shall be converted on the relevant Conversion Date into new
 and/or existing Ordinary Shares credited as fully paid.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The ECNs are
 not convertible at the option of ECN Securityholders at any time.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The
Conversion Trigger shall occur if at any time, as disclosed in the latest
published annual or semi-annual consolidated financial statements of Lloyds
Banking Group or as otherwise publicly disclosed by Lloyds Banking Group at
any time, Lloyds Banking Group’s Consolidated Core Tier 1 Ratio is less than
5 per cent. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Consolidated
Core Tier 1 Ratio means the ratio of the Core Tier 1 capital of Lloyds
Banking Group to the risk weighted assets of Lloyds Banking Group, in each
case, calculated on a consolidated basis. 

 
	
  

 	
  

 	
  

 
	
 Conversion
Price 

 	
  

 	
 The initial
 Conversion Price will be the same as the ECNs issued in the European Exchange
 Offer and such conversion price will be subject to adjustment from time to
 time in the same manner as the ECNs issued in the European Exchange Offer.
 The number of Ordinary Shares to be delivered on Conversion of the ECNs will
 be determined by dividing the principal amount of such ECNs (where
 applicable, translated into pounds sterling at the Prevailing Rate on the
 second London business day prior to Conversion) by the Conversion Price
 prevailing on the relevant Conversion Date.

 
	
  

 	
  

 	
  

 
	
 Conversion 

 	
  

 	
 In order to
 obtain delivery of the relevant Ordinary Shares on a Conversion of the ECNs
 (or, in certain circumstances as provided under “Relevant Event” below,
 Relevant Shares), an ECN Securityholders must give a notice to the Principal
 Paying and Conversion Agent in accordance with the standard procedures of
 Euroclear and Clearstream, Luxembourg prior to the Notice Cut-off Date (which
 may include notice being given on his instruction by Euroclear or Clearstream,
 Luxembourg or any common depositary for them to the Principal Paying and
 Conversion Agent by electronic means) in a form acceptable to Euroclear and
 Clearstream, Luxembourg from time to time with the following details: (1) the
 name of the ECN Securityholder; (2) the principal amount of ECNs held by it
 and the subject of the Conversion; (3) the CREST account details or, if on 

 

50

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Conversion
 the Ordinary Shares are not a participating security in CREST, the address to
 which the Ordinary Shares should be delivered; and (4) such other details as
 Euroclear or Clearstream, Luxembourg may require.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Subject to
the same provisos as the ECNs issued in the European Exchange Offer, the
relevant Ordinary Shares (or, in circumstances as provided under the
“Relevant Event”, Relevant Shares) will be issued and delivered in accordance
with the instructions given in the relevant Conversion Notice, provided the
Conversion Notice and the relevant ECNs are delivered not later than the
Notice Cut-off Date. If the Conversion Notice and relevant ECNs or the
Certificate representing the same (in the case of a Registered ECN) are not
delivered to the specified office of a Paying and Conversion Agent on or
before the Notice Cut-off Date, then on the relevant settlement date, the
relevant Ordinary Shares (or, as the case may be, Relevant Shares) will be
issued or transferred and delivered to a person (the Relevant Person)
selected by LBG. LBG shall procure that all of such Ordinary Shares (or, as
the case may be, Relevant Shares) shall be sold by or on behalf of the
Relevant Person as soon as reasonably practicable based on advice from a
reputable financial institution, investment or commercial bank or broker
selected by LBG, and subject to any necessary consents being obtained and the
deduction by the Relevant Person of any amount payable by it in respect of
its liability to taxation and the payment of applicable capital, stamp,
issue, registration and/or transfer taxes and duties (if any) and any fees or
costs incurred by or on behalf of the Relevant Person in connection with the
issue, allotment and sale thereof, and the net proceeds of sale shall as soon
as reasonably practicable be distributed rateably to the relevant ECN
Securityholders in the same manner as in the ECNs issued in the European
Exchange Offer or in such other manner and at such time as LBG shall
determine and notify to the ECN Securityholders. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Relevant Event

 	
  

 	
 If a
 Qualifying Relevant Event occurs, the ECNs shall, where the Conversion Date falls
 on or after the New Conversion Condition Effective Date, be converted into
 Relevant Shares of the Approved Entity at a Conversion Price that shall be
 initially the New Conversion Price and where the principal amount of the ECNs
 (if not denominated in pounds sterling) shall be translated into pounds
 sterling at the Prevailing Rate on the second London business day prior to
 Conversion. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 If a
 Relevant Event occurs that is a Non-Qualifying Relevant Event, then with
 effect from the date falling eight days following the occurrence of such
 Relevant Event (if the Acquiror is an Approved Entity) or with effect from
 the occurrence of such Relevant Event (if the Acquiror is not an Approved
 Entity) and, in each case, unless the Conversion Trigger shall have occurred
 prior to such date, outstanding ECNs will not be subject to Conversion at any
 time notwithstanding that a Conversion Trigger may occur subsequently.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Approved Entity means a body corporate that
 is incorporated or established under the laws of an OECD member state (other
 than an Excepted Person) and which, on the occurrence of the Relevant Event,
 has in issue Relevant Shares.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Excepted Person means any of:

 

51

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the United
 Kingdom Government;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 any agency
 of the United Kingdom Government;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 any person
 or entity (other than a body corporate) controlled by the United Kingdom
 Government or any such agency referred to in (ii) above; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 a body
 corporate in which the United Kingdom Government and/or any agency of the
 United Kingdom Government and/or any person or entity referred to in (iii) is
 (directly or indirectly) the legal or beneficial owner of more than 75 per
 cent. of the issued Ordinary Shares (or equivalent) or of the votes that may
 ordinarily be cast at a general meeting of shareholders (or the like) of such
 body corporate.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The New
Conversion Condition shall be satisfied if by not later than seven days
following the occurrence of a Relevant Event where the Acquiror is an
Approved Entity, Lloyds Banking Group shall have entered into arrangements to
its satisfaction with the Approved Entity for delivery of Relevant Shares
upon a Conversion of the ECNs. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Non-Qualifying Relevant Event means a
 Relevant Event that is not a Qualifying Relevant Event.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Qualifying Relevant Event means a Relevant
 Event where:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.

 	
 the Acquiror
 is an Approved Entity; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 2.

 	
 the New
 Conversion Condition is satisfied.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 A Relevant Event shall occur if any person
 or persons acting in concert (as defined in the Takeover Code of the United
 Kingdom Panel on Takeovers and Mergers), acquires control of Lloyds Banking
 Group (other than as a result of an Exempt Newco Scheme).

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 For the purposes of the definition of Relevant Event, control means: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 where the Acquiror is not an Excepted Person:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (a)

 	
 the acquisition or holding of legal or beneficial ownership of more
 than 50 per cent. of the issued Ordinary Shares of LBG; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (b)

 	
 the right to appoint and/or remove all or the majority of the members
 of the Board of Directors of LBG, whether obtained directly or indirectly and
 whether obtained by ownership of share capital, contract or otherwise; or 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 where the Acquiror is an Excepted Person, the acquisition or holding
 of legal or beneficial ownership of 75 per cent. or more of the issued
 Ordinary Shares of LBG.

 

52

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Relevant Shares means ordinary share capital
 of the Approved Entity that constitutes equity share capital or the
 equivalent (or depositary or other receipts representing the same) which is
 listed and admitted to trading on a Recognised Stock Exchange.

 
	
  

 	
  

 	
  

 
	
 Additional Amounts

 	
  

 	
 All payments
 in respect of the ECNs will be made without withholding or deduction for, or
 on account of, taxes of the United Kingdom, unless the withholding or
 deduction is required by law. In such event, the Issuer or the relevant
 Guarantor will, subject to the same provisos as set out in the ECNs issued in
 the European Exchange Offer, pay such additional amounts as will be necessary
 to ensure that the net amount received by ECN Securityholders, after the
 withholding or deduction, will equal the amount which would have been
 receivable in the absence of the withholding or deduction.

 
	
  

 	
  

 	
  

 
	
 Form

 	
  

 	
 Each Series
 of ECNs will be issued in bearer or registered form. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each tranche
 of ECNs issued in bearer form will be represented initially by a Temporary
 Global Note which will be deposited with a common depositary for Clearstream,
 Luxembourg and Euroclear on or about the relevant Settlement Date. Each
 Temporary Global Note will be exchangeable for interests in a Permanent
 Global Note without interest coupons or talons on or after a date which is
 expected to be 40 days after the relevant Settlement Date upon certification
 as to non-U.S. beneficial ownership as required by U.S. Treasury regulations
 and as described in the relevant Temporary Global Note.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Each tranche
 of ECNs issued in registered form will be represented by one or more Global
 Certificates which will be deposited with a common depositary for the
 Clearing Systems on or about the relevant Settlement Date.

 
	
  

 	
  

 	
  

 
	
 Denomination

 	
  

 	
 The
 denomination of each series of ECNs will be determined pursuant to the
 provisions of this Agreement provided that any series of ECNs sold in whole
 or in part to QIBs will have a minimum denomination of U.S.$100,000.

 
	
  

 	
  

 	
  

 
	
 Ordinary Shares

 	
  

 	
 The Ordinary
 Shares to be delivered following conversion will be delivered credited as
 fully paid and will rank pari passu in all respects with all
 fully paid Ordinary Shares in issue on the relevant Conversion Date, subject
 to the same provisos as set out in the ECNs issued in the European Exchange
 Offer.

 
	
  

 	
  

 	
  

 
	
 ECN Trustee

 	
  

 	
 BNY
 Corporate Trustee Services Limited.

 
	
  

 	
  

 	
  

 
	
 Principal Paying and

 Conversion Agent

 	
  

 	
 The Bank of
 New York Mellon.

 

53

	
  

 	
  

 	
  

 
	
 Governing Law

 	
  

 	
 The relevant
 Trust Deed, the ECNs, any related Coupons and any non-contractual obligations
 arising out of or in connection with them will be governed by, and construed
 in accordance with, English law, save that where Lloyds Banking Group is a
 Guarantor the provisions in the relevant Trust Deed relating to the status
 and subordination of its guarantee will be governed by, and shall be
 construed in accordance with, Scots law.

 
	
  

 	
  

 	
  

 
	
 Listing and Trading

 	
  

 	
 Applications
 will be made for the ECNs to be admitted to the Official List of the UK
 Listing Authority and to trading on the Regulated Market of the London Stock
 Exchange as further described in this Agreement. 

 
	
  

 	
  

 	
  

 
	
 Clearing

 	
  

 	
 The ECNs
 will be accepted for clearing by Euroclear and Clearstream, Luxembourg.

 

54

SCHEDULE 3

DELIVERY OF DOCUMENTS

PART A

SETTLEMENT DATE

On or prior
each Settlement Date the Issuer, the Guarantor and/or the Company shall deliver
to each Joint Bookrunner:

	
  

 	
  

 
	
 (a)

 	
 A certified
 copy of an extract from the minutes of the meetings of the Board of the
 Issuer, the Guarantor and the Company, or a duly authorised committee
 thereof, approving the Relevant Documents, this Agreement, the Trust Deed,
 the Deed Poll, the Agency Agreement and (where appropriate) the other
 documents referred to in this Agreement and authorising the steps to be taken
 by the Issuer, the Guarantor and the Company in connection with the Top up
 Issue, including the execution, delivery and performance of this Agreement,
 in the agreed form.

 
	
  

 	
  

 
	
 (b)

 	
 An original
 of signed bring down UK ICMA comfort letters from the Auditors relating to
 the Issuer, the Guarantor and the Company dated the Settlement Date.

 
	
  

 	
  

 
	
 (c)

 	
 With respect
 to a Top up Issue offered and sold into the United States only, an original
 of signed bring down SAS 72 letters from the Auditors relating to the Issuer,
 the Guarantor and the Company dated the Settlement Date.

 
	
  

 	
  

 
	
 (d)

 	
 With respect
 to a Top up Issue offered and sold into the United States only, an original
 of signed bring down SAS 72 “look-a-like” letters from the Auditors relating
 to the Issuer, the Guarantor and the Company dated the Settlement Date.

 
	
  

 	
  

 
	
 (e)

 	
 With respect
 to a Top up Issue offered and sold into the United States only, an original
 of signed Rule 10b-5 disclosure letters of each United States legal advisers
 to the Issuer, the Guarantor and the Company and United States legal advisers
 to the Joint Bookrunners dated as of the Settlement Date and referring to the
 Time of Sale and the Settlement Date.

 
	
  

 	
  

 
	
 (f)

 	
 With respect
 to a Top up Issue offered and sold into the United States only, an original
 of a signed “no registration” opinion, an “investment company” opinion and an
 opinion in relation to United States taxation of United States legal advisers
 to the Issuer, the Guarantor and the Company dated as of the Settlement Date.

 
	
  

 	
  

 
	
 (g)

 	
 With respect
 to a Top up Issue offered and sold into the United States only, an original
 of a signed “no registration” opinion of United States legal advisers to the
 Joint Bookrunners dated as of the Settlement Date.

 
	
  

 	
  

 
	
 (h)

 	
 An original
 of a letter in the form of Schedule 6 signed by a director or secretary of
 each of the Issuer, the Guarantor and the Company authorised to do so.

 
	
  

 	
  

 
	
 (i)

 	
 A copy of an
 opinion of Scottish legal advisers to the Company in the agreed form.

 
	
  

 	
  

 
	
 (j)

 	
 A copy of an
 opinion of English legal advisers to the Joint Bookrunners, in the agreed
 form.

 
	
  

 	
  

 
	
 (k)

 	
 Conformed
 copies of the executed Trust Deed, the Deed Poll and Agency Agreement.

 

Each
of the Guarantor and/or the Company is entitled to request that the Joint
Global Co-ordinators agree 

55

(such
agreement not to be unreasonably withheld or delayed) that the delivery of any
of the documents referred to in this Part A of Schedule 3 may be deferred
and/or substituted with another document in a form reasonably satisfactory to
the Joint Global Co-ordinators, it being understood that the form of any such
deferred and/or substituted document will, if applicable, take account of the
effect of any MAC Event or Material Adverse Effect that may have occurred on or
prior to the date on which the relevant document is to be delivered.

PART B

PROSPECTUS PUBLICATION DATE

On each
Prospectus Publication Date, the Issuer, the Guarantor and the Company shall
deliver to each Joint Bookrunner:

	
  

 	
  

 	
  

 
	
 (a)

 	
 A copy of
 the Prospectus bearing evidence of the formal approval of the UK Listing
 Authority, pursuant to the Listing Rules and the Prospectus Rules.

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 A 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.

 
	
  

 	
  

 	
  

 
	
 (c)

 	
 In the event
 that the Prospectus contains pro forma financial information, an original
 copy of the pro forma financial information report in the form to be agreed
 duly signed by the Auditors and dated the date of the Prospectus.

 
	
  

 	
  

 	
  

 
	
 (d)

 	
 An original
 copy of any Profit Forecast Report duly signed by the Auditors and dated the
 date of the Prospectus.

 
	
  

 	
  

 	
  

 
	
 (e)

 	
 An original
 of letters in the form to be agreed duly signed by the Auditors relating to
 the Issuer, the Guarantor and the Company and dated the same date as the
 Prospectus:

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 in relation
 to any capital resources table and capital and indebtedness statement
 included in the Prospectus;

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 confirming
 the correct extraction of financial information contained in the Prospectus;

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 relating to
 the statement in the Prospectus that there has been no significant change in
 the financial and trading position (including indebtedness) of the Issuer,
 the Guarantor, the Company or the Group; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 in relation
 to the accuracy of the tax information included in the Prospectus.

 
	
  

 	
  

 	
  

 
	
 (f)

 	
 An original
 letter in the form to be agreed duly signed by the Auditors and dated the
 same date as the Prospectus in relation to the accuracy of the tax
 information included in the Prospectus.

 
	
  

 	
  

 	
  

 
	
 (g)

 	
 An original
 letter in the form to be agreed duly signed by KPMG dated the same date as
 the Prospectus regarding the accuracy of extraction of financial information
 in respect of the HBOS Group.

 
	
  

 	
  

 	
  

 
	
 (h)

 	
 An original
 letter in the form to be agreed duly signed by the Auditors dated the same
 date as the Prospectus consenting to the inclusion of any pro forma financial
 information report and of references thereto in the form and context in which
 they appear in the Prospectus.

 

56

	
  

 	
  

 	
  

 
	
 (i)

 	
 A certified
 copy of each of the other documents stated in the Prospectus as being
 available for inspection.

 
	
  

 	
  

 	
  

 
	
 (j)

 	
 An original
 letter in the form of Schedule 6 of the Underwriting Agreement signed by a
 director or secretary of each of the Issuer, the Guarantor and the Company
 authorised to do so.

 
	
  

 	
  

 	
  

 
	
 (k)

 	
 A copy of
 the signed application for admission of the Top up Securities to the Official
 List certified by a Director or the Secretary of the Issuer.

 
	
  

 	
  

 	
  

 
	
 (l)

 	
 A copy of
 the signed application for admission to trading issued by the London Stock
 Exchange certified by a Director or the Secretary of the Issuer (Form 1 of
 the Admission and Disclosure Standards).

 

Each
of the Guarantor and/or the Company is entitled to request that the Joint
Global Co-ordinators agree (such agreement not to be unreasonably withheld or
delayed) that the delivery of any of the documents referred to in this Part B
of Schedule 3 may be deferred and/or substituted with another document in a form
reasonably satisfactory to the Joint Global Co-ordinators, it being understood
that the form of any such deferred and/or substituted document will, if
applicable, take account of the effect of any MAC Event or Material Adverse
Effect that may have occurred on or prior to the date on which the relevant
document is to be delivered.

57

SCHEDULE 4

REPRESENTATIONS,
WARRANTIES AND UNDERTAKINGS OF THE COMPANY

	
  

 	
  

 
	
 1.

 	
 COMPLIANCE

 
	
  

 	
  

 
	
 1.1

 	
 Except as
 fairly disclosed in the Prospectus, each Group company, 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 in all material respects and as intended to be carried
 on as described in the Prospectus.

 
	
  

 	
  

 
	
 1.2

 	
 Except as
 fairly disclosed in the Prospectus, each Group company 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 Group company or any person for
 whose acts any Group company is vicariously liable, except for such orders,
 decrees or judgments that, either singly or in the aggregate, would not
 result in a Material Adverse Effect.

 
	
  

 	
  

 
	
 1.3

 	
 Except as
 fairly disclosed in the Prospectus, 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.

 
	
  

 	
  

 
	
 1.4

 	
 Except as
 fairly disclosed in the Prospectus, 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. None of the owners or holders of any of the
 share capital of the Company shall, with effect from Admission, have any
 pre-emptive or other rights, 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.

 
	
  

 	
  

 
	
 1.5

 	
 Except as
 fairly disclosed in the Prospectus, the Company is the beneficial owner free
 from all Adverse Interests of the shares it holds in each Group company.

 
	
  

 	
  

 
	
 1.6

 	
 The Company
 and the Directors have at all times complied with the provisions of the
 Company’s memorandum and articles of association (save in relation to the
 offer of ordinary shares in the Company to certain holders of Limited Voting
 Shares pursuant to the placing and open offer agreement dated 13 October 2008
 and the open offer agreement dated as of 7 March 2009, as amended and
 restated as at 20 March 2009 and as at 18 May 2009) and the Companies Act and
 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 Top up Issue, to issue the Top up
 Securities, to issue the Relevant Documents in the manner proposed without
 any sanction or consent by members of the Company or any class of them and to
 enter into any other agreement in connection with the Top up Issue to which
 it is, or is to be, a party. Subject to Admission, there are no other
 consents, authorisations or approvals required by the Company in connection
 with the entering into and the performance of this Agreement, and the actions
 referred to in this paragraph 1.6 which have not been irrevocably and
 unconditionally obtained.

 

58

	
  

 	
  

 
	
 1.7

 	
 The giving
 of any guarantee in relation to the Top up Securities (if applicable), the
 issue and distribution of the Relevant Documents and (to the extent required)
 the execution and performance of this Agreement, the Trust Deed (if
 applicable), the Deed Poll, the Agency Agreement (if applicable) and any
 other document by or on behalf of the Company in connection with Admission or
 the Top up Issue complies with all agreements to which any Group company is a
 party or by which any such Group company is bound and, except where
 non-compliance would not either singly or in the aggregate result in a
 Material Adverse Effect, complies with (a) all applicable laws and
 regulations of the United Kingdom (including, without limitation, the
 Companies Act, the FSMA, Listing Rules, the Prospectus Rules, the Disclosure
 Rules and Transparency Rules, the Admission and Disclosure Standards) and (in
 all material respects) with, all applicable laws and regulations of any
 relevant jurisdiction; and (b) the memorandum and articles of association of
 the Company; and does 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.

 
	
  

 	
  

 
	
 1.8

 	
 The Relevant
 Documents contain all particulars and information required by, and comply in
 all material respects with the memorandum and articles of association of the
 Company, the Companies Act, the FSMA, the Listing Rules, the Disclosure Rules
 and Transparency Rules, the Prospectus Rules, all applicable rules and
 requirements of the London Stock Exchange and the FSA (in all material
 respects) and all other applicable requirements of statute, statutory
 regulation or any regulatory body.

 
	
  

 	
  

 
	
 1.9

 	
 The Top up
 Securities will, upon issue, be free from all Adverse Interests and will rank
 as described in the Prospectus.

 
	
  

 	
  

 
	
 1.10

 	
 This
 Agreement, the Trust Deed (if applicable), the Deed Poll, the Agency
 Agreement (if applicable) and any other agreements to be entered into, or as
 entered into (as the case may be) by the Company in connection with Admission
 and the Top up Issue 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, 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 and section
 117 of the Stamp Act 1891).

 
	
  

 	
  

 
	
 1.11

 	
 The Top up
 Issue will be conducted in all material respects in accordance with the terms
 and conditions of this Agreement and the Relevant Documents and the Company
 has complied and will comply with all laws, rules and regulations applicable
 to the Top up Issue in each jurisdiction in which the Top up Securities are
 offered, except where non-compliance would not either singly or in the
 aggregate result in a Material Adverse Effect.

 
	
  

 	
  

 
	
 1.12

 	
 Except as
 fairly disclosed in the Prospectus and other than those undertakings in which
 the Company holds a proportion of the capital that is not (either singly or in
 the aggregate) likely to have a significant effect on the assessment of its
 own assets and liabilities, financial position or profits and losses, there
 are no rights (conditional or otherwise) (i) to require the issue of any
 shares or other securities of a Group company (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) other than: (a) in accordance the
 registration rights agreement entered into between HM Treasury and the
 Company on 12 January 2009 and as amended and restated on 11 June
 2009 and the resale rights agreement entered into between HM Treasury and the
 Company on 11 June 2009; (b) in accordance with alternative cash
 settlement mechanisms or principal stock settlement features on capital
 instruments issued by members of the Group; or (c) other than in respect
 of the Group’s obligations to the holders of Limited Voting 

 

59

	
  

 	
  

 
	
  

 	
 Shares, 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.

 
	
  

 	
  

 
	
 1.13

 	
 Except as
 fairly disclosed in the Prospectus, 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.

 
	
  

 	
  

 
	
 1.14

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

 
	
  

 	
  

 
	
 2.

 	
 RELEVANT DOCUMENTS

 
	
  

 	
  

 
	
 2.1

 	
 None of the
 Relevant Documents contains 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 in any
 material respect.

 
	
  

 	
  

 
	
 2.2

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

 
	
  

 	
  

 
	
 2.3

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

 
	
  

 	
  

 
	
 2.4

 	
 Having
 regard to the particular nature of the Company and the Group and the
 Company’s share capital and the other matters referred to in section 87A of
 the FSMA, the Prospectus contains all information about the Group which is or
 would be reasonably likely to 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.

 
	
  

 	
  

 
	
 2.5

 	
 There is no
 fact or circumstance which is not disclosed with sufficient prominence in the
 Prospectus which ought to be taken into account by the UK Listing Authority
 in considering the application for listing of the Top up Securities.

 
	
  

 	
  

 
	
 2.6

 	
 All
 information provided by the Company, its subsidiary undertakings or any of
 its or their officers or employees to the Joint Bookrunners and/or the
 Auditors in connection with its organised 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
 would be reasonably likely to be considered to be material to such due
 diligence enquiries or requests for information.

 
	
  

 	
  

 
	
 3.

 	
 PREVIOUS ANNOUNCEMENTS

 
	
  

 	
  

 
	
  

 	
 Except as
 fairly disclosed in the Prospectus, 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 or amended 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 

 

60

	
  

 	
  

 	
  

 
	
  

 	
 which would
 make any statement of fact or estimate or statement or expression of opinion,
 intention or expectation in any of the Previous Announcements misleading in
 any material respect and all Previous Announcements complied with the
 memorandum and articles of association of the Company in all material
 respects, the Listing Rules, the Disclosure Rules and Transparency Rules, the
 Prospectus Rules, the Companies Act, the FSMA, all applicable rules and
 requirements of the London Stock Exchange and the FSA and (in all material
 respects) all other applicable requirements of statute, statutory regulation
 or any regulatory body.

 
	
  

 	
  

 	
  

 
	
 4.

 	
 DEROGATION

 
	
  

 	
  

 
	
  

 	
 Each
 statement, if any, 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 in any material
 respect. 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 in any material respect.

 
	
  

 	
  

 	
  

 
	
 5.

 	
 ACCOUNTS

 
	
  

 	
  

 	
  

 
	
 5.1

 	
 The Accounts
 incorporated by reference into the Prospectus:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 have been
 prepared and audited in accordance and comply with IFRS, the Companies Act
 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
 Company and 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 Company and the Group; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

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

 
	
  

 	
  

 	
  

 
	
 5.2

 	
 The HBOS
 Accounts incorporated by reference into the Prospectus:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 have been
 prepared and audited in accordance and comply with IFRS, the Companies Act
 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 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 make
 proper provision for, or, where appropriate, in accordance with IFRS, include
 a note in respect of all material liabilities or commitments, whether actual,
 deferred, contingent or disputed of the HBOS Group.

 
	
  

 	
  

 	
  

 
	
 5.3

 	
 The Interim
 Accounts present fairly the information shown therein and are presented on a
 basis consistent with the accounting policies of the Group (subject to the
 qualification that they are unaudited) and the consolidated balance sheet,
 cash flow statement and income statement for the Group for the six month
 period for which they have been prepared have been prepared in accordance
 with the Disclosure and Transparency Rules and with IAS 34, Interim Financial
 Reporting, as adopted by the European Union and includes a fair review of the
 information as required by DTR 4.2.7 and DTR 4.2.8, namely an indication of
 important events that have occurred during the six 

 

61

	
  

 	
  

 	
  

 
	
  

 	
 months
 period to which they have been prepared and their impact on the condensed
 interim financial statements, and a description of the principal risks and
 uncertainties for the remaining six months of the financial year, and
 material related party transactions in the six month period for which they
 have been prepared and any material changes in the related party transactions
 described in the Company’s annual report for the financial year prior to the
 period for which the Interim Accounts have been prepared.

 
	
  

 	
  

 	
  

 
	
 5.4

 	
 Any pro
 forma financial information on the Group set out in the Prospectus has been
 duly and carefully prepared on the bases set out in (or incorporated by
 reference in) the Prospectus in accordance with the Prospectus Rules and is
 presented on a basis consistent with the accounting policies normally applied
 by the Company at the relevant time.

 
	
  

 	
  

 	
  

 
	
 5.5

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

 
	
  

 	
  

 	
  

 
	
 5.6

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

 
	
  

 	
  

 	
  

 
	
 5.7

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

 
	
  

 	
  

 	
  

 
	
 5.8

 	
 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.

 
	
  

 	
  

 	
  

 
	
 5.9

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

 
	
  

 	
  

 	
  

 
	
 6.

 	
 POSITION SINCE ACCOUNTS DATE

 
	
  

 	
  

 	
  

 
	
  

 	
 Except as
 fairly disclosed in the Prospectus, so far as the Company is aware, since the
 Accounts Date:

 
	
  

 	
  

 	
  

 
	
  

 	
 (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 impairment or charges in respect of any assets of the Company or the
 Group, 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, except in any such case as would not result in a Material
 Adverse Effect;

 
	
  

 	
  

 	
  

 
	
  

 	
 (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 13 October 2008 and on 22 December 2008) or of the
 HM Treasury 2008 Credit Guarantee Scheme, no Group company has, otherwise
 than in the ordinary course of 

 

62

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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, except in any such case as would not
 result in a Material Adverse Effect;

 
	
  

 	
  

 	
  

 
	
  

 	
 (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 Top up Issue, underwriting of the Top up Securities, Admission
 or post-Admission dealings in the Top up Securities 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 the compensatory
 open offer agreement entered into by the Company on 20 March 2009), which has
 resulted or would be reasonably likely to result (singly or in the aggregate)
 in any material liability for tax on the Company or any Group company other
 than a transaction in the ordinary course of business or a transaction in
 respect of which the liability for tax is provided for or taken into account
 in any provision for tax contained in the Accounts or the Interim Accounts
 incorporated by reference in the Prospectus; 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, so far as the Company is aware, there
 are no circumstances likely to give rise to such default.

 

	
  

 	
  

 
	
 7.

 	
 GUARANTEES, INDEMNITIES, BORROWINGS AND DEFAULT

 
	
  

 	
  

 
	
 7.1

 	
 Except as
 fairly disclosed in the Prospectus, and save for (i) guarantees or
 indemnities given by any Group company in the ordinary course of business and
 (ii) any indemnities given by the Company to the Joint Bookrunners, no Group
 company has given or has agreed to give any guarantee or indemnity or similar
 obligation in favour of a third party and no Group company has any current or
 known future liability, howsoever arising except, for any guarantees,
 indemnities, similar obligations or liabilities that, either singly or in the
 aggregate, would not result in a Material Adverse Effect. 

 
	
  

 	
  

 
	
 7.2

 	
 Except as
 fairly disclosed in the Prospectus, no event has occurred nor have any
 circumstances arisen (and the making and completion of the Top up Issue and
 the allotment and issue of the Top up Securities 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 which is material
 in the context of the Group’s borrowings or working capital projections and
 no person to whom any indebtedness, which is material in the context of the
 Group’s borrowings, is payable on demand 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.

 
	
  

 	
  

 
	
 7.3

 	
 Except as
 fairly disclosed in the Prospectus, there are no companies, undertakings,
 partnerships or joint ventures in existence in which any Group company 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 in any material respect.

 
	
  

 	
  

 
	
 7.4

 	
 Except as
 fairly disclosed in the Prospectus, 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 

 

63

	
  

 	
  

 
	
  

 	
 agreement,
 instrument or arrangement to which any Group company is a party or by which
 any such Group company or any of its properties, revenues or assets are
 bound, which event or circumstance would, either singly or in the aggregate,
 result in a Material Adverse Effect.

 
	
  

 	
  

 
	
 8.

 	
 TAXATION

 
	
  

 	
  

 
	
 8.1

 	
 Except as
 fairly disclosed in the Prospectus, all material information, returns,
 computations and notices of the Group for tax purposes have been made for all
 purposes within the requisite period and on a proper basis and all such
 information, returns, computations and notices are up-to-date and correct in
 all material respects and, so far as the Directors of the Company are aware,
 are not the subject of any dispute between the Group, or claim against the
 Group, by HMRC or any other taxation authority which is or would reasonably
 be likely to be considered material in the context of the Top up Issue or the
 underwriting of the Top up Issue or Admission or post-Admission dealings in
 the Top up Securities and, so far as the Directors of the Company are aware,
 no enquiry has been raised by HMRC or any other taxation authority in respect
 of any member of the Group which is or would reasonably be likely to be
 material in the context of the Group.

 
	
  

 	
  

 
	
 8.2

 	
 Except as
 fairly disclosed in the Prospectus, no stamp duty or stamp duty reserve tax
 imposed under the law of the United Kingdom is payable in connection with the
 allotment, issue and delivery of the Top up Securities by the Company in
 accordance with the terms of this Agreement.

 
	
  

 	
  

 
	
 8.3

 	
 Except as
 fairly disclosed in the Prospectus, under United Kingdom law, current as at
 the date of this Agreement, for so long as the Top up Securities are listed
 on a qualifying stock exchange, payments of interest on the Top up Securities
 will be payable without withholding or deduction for or on account of any tax
 levied or imposed by the United Kingdom or any taxing authority thereof or
 therein.

 
	
  

 	
  

 
	
 9.

 	
 LITIGATION

 
	
  

 	
  

 
	
 9.1

 	
 Except as
 fairly disclosed in the Prospectus, as far as the Company is aware, no Group
 company nor any of its officers or agents or employees is involved in
 relation to the affairs of any Group company, or has during the recent past
 (being not less than 12 months ending on the date of the Prospectus) been
 involved in any civil, criminal, arbitration, administrative, governmental or
 other proceedings or governmental regulatory or similar investigation or
 enquiry in relation to the affairs of any Group company, whether as
 plaintiff, defendant or otherwise which, by itself or with other proceedings,
 would be, or is reasonably likely to be, material in the context of the Top
 up Issue, the underwriting of the Top up Securities, Admission or
 post-Admission dealings in the Top up Securities.

 
	
  

 	
  

 
	
 9.2

 	
 Except as
 fairly disclosed in the Prospectus, as far as the Company is aware, 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 their respective 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, which would be, or
 is reasonably likely to be, material in the context of the Top up Issue,
 underwriting of the Top up Securities, Admission or post-Admission dealings
 in the Top up Securities.

 
	
  

 	
  

 
	
 9.3

 	
 Except as
 fairly disclosed in the Prospectus, as far as the Company is aware, no Group
 company nor any of its 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 

 

64

	
  

 	
  

 	
  

 
	
  

 	
 any
 injunction which in any of the foregoing cases is still in force and which,
 by itself or with other proceedings, which would be, or is reasonably likely
 to be, material in the context of the Top up Issue, underwriting of the Top
 up Securities, Admission or post-Admission dealings in the Top up Securities.

 
	
  

 	
  

 	
  

 
	
 9.4

 	
 For the
purpose of this paragraph 9, 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). 

 
	
  

 	
  

 	
  

 
	
 10.

 	
 INTELLECTUAL PROPERTY

 
	
  

 	
  

 	
  

 
	
 10.1

 	
 Except as
 fairly disclosed in the Prospectus and except to an extent that would not
 (singly or in the aggregate) be material in the context of the Top up Issue,
 the underwriting of the Top up Securities, Admission or post-Admission
 dealings in the Top up Securities, 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.

 
	
  

 	
  

 	
  

 
	
 10.2

 	
 Except as
 fairly disclosed in the Prospectus, 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 Top up Issue, the underwriting
 of the Top up Securities, Admission or post-Admission dealings in the Top up
 Securities.

 
	
  

 	
  

 	
  

 
	
 10.3

 	
 Except as
 fairly disclosed in the Prospectus and save as would not (singly or in the
 aggregate) be material in the context of the Top up Issue, the underwriting
 of the Top up Securities, Admission or post-Admission dealings in the Top up
 Securities, (i) all Intellectual Property Rights registered in the name of a
 Group company (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.

 
	
  

 	
  

 	
  

 
	
 10.4

 	
 Except as
 fairly disclosed in the Prospectus and save as would not (singly or in the
 aggregate) be material in the context of the Top up Issue, the underwriting
 of the Top up Securities, Admission or post-Admission dealings in the Top up
 Securities, (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 Group’s rights 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.

 
	
  

 	
  

 	
  

 
	
 11.

 	
 ARRANGEMENTS WITH DIRECTORS AND SHAREHOLDERS

 
	
  

 	
  

 	
  

 
	
 11.1

 	
 Save as
 fairly disclosed in the Prospectus:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 other than
 the articles of association of the Company and any service agreement with a
 Director, the deeds of indemnity entered into between the Company and its
 directors 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; 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);

 

65

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 other than
 HM Treasury, no shareholder has any rights, in his capacity as such, in
 relation to the Company other than as set out in the articles of association
 of the Company;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Company
 is not aware of any claim, demand or right of action against any Group
 company (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) other than any such claims, demands or rights of action which would
 not, either singly or in the aggregate, result in a Material Adverse Effect;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 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 or any other Group company and so far as the Company is aware,
 there are no circumstances which would be reasonably likely to 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, except for any such breach or dispute
 which, either singly or in the aggregate, would not result in a Material
 Adverse Effect; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 (i) no
 Director nor any director of any Group company has given notice of
 termination of his contract of employment, and (ii) no Director nor any
 director of any Group company has indicated an intention to resign except, in
 respect of (i) and (ii) above, where such notice of termination or notice of
 intention to resign would not result in a Material Adverse Effect.

 
	
  

 	
  

 	
  

 
	
 11.2

 	
 For the
purpose of this paragraph 11, associate has the meaning: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 in the case
 of an individual, given to “connected person” under section 256 of the Companies
 Act; 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.

 
	
  

 	
  

 	
  

 
	
 12.

 	
 COMPETITION

 
	
  

 	
  

 	
  

 
	
 12.1

 	
 Except as
 fairly disclosed in the Prospectus, no Group company 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 Top up Issue, the underwriting of the
 Top up Securities, Admission or post-Admission dealings in the Top up
 Securities.

 
	
  

 	
  

 	
  

 
	
 12.2

 	
 Except as
 fairly disclosed in the Prospectus, no Group company is, or has been, in
 connection with its business or that of any other Group company, 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 Group company 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 Top
 up Issue, the underwriting of the Top up Securities, Admission or
 post-Admission dealings in the Top up Securities.

 

66

	
  

 	
  

 	
  

 
	
 13.

 	
 INSURANCE

 
	
  

 	
  

 	
  

 
	
  

 	
 Except as
 fairly disclosed in the Prospectus, 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 could
 reasonably be expected to insure in the particular circumstances of the
 businesses carried on by each Group company, 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 Group company and all premiums due in
 respect of such insurances have been duly paid.

 
	
  

 	
  

 	
  

 
	
 14.

 	
 INFORMATION TECHNOLOGY

 
	
  

 	
  

 	
  

 
	
  

 	
 Except as
 fairly disclosed in the Prospectus and save as otherwise would not (singly or
 in the aggregate) be material in the context of the Top up Issue, the
 underwriting of the Top up Securities, Admission or post-Admission dealings
 in the Top up Securities:

 
	
  

 	
  

 	
  

 
	
  

 	
 (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 the Prospectus, the Group 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 the Prospectus 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 Group company 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 Group
 company is validly licensed to use the software used in its business.

 
	
  

 	
  

 	
  

 
	
 15.

 	
 RATING

 
	
  

 	
  

 	
  

 
	
  

 	
 Except as
 fairly disclosed in the Prospectus, so far as the Company is aware, it has
 not received notice of any intended or potential downgrading of the rating
 assigned to any of the Company’s (or any other member of its Group’s) credit
 or debt by a ratings agency and (other than awareness of publicly known
 general market conditions and speculation) is not aware of a specific fact,
 circumstance or condition in respect of itself or any Group company from which
 or a combination of any of which, when considered in the context of current
 market conditions and speculation in the financial services sector, it could
 reasonably expect such a downgrade to be threatened or to occur. Except as
 fairly disclosed in the Prospectus, so far as the Company is aware, no
 ratings agency has placed the Company or any Group company or any of the
 Company’s or any Group company’s debt on credit watch.

 

67

	
  

 	
  

 
	
 16.

 	
 SHARE SCHEMES

 
	
  

 	
  

 
	
 16.1

 	
 Any
 particulars of the employee schemes contained in the 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 the Prospectus are
 accurate in all material respects and not misleading in any material respect.

 
	
  

 	
  

 
	
 16.2

 	
 Except as
 fairly disclosed in the Prospectus and save as otherwise would not (singly or
 in the aggregate) be material in the context of the Top up Issue, the
 underwriting of the Top up Securities, Admission or post-Admission dealings
 in the Top up Securities, except for options or other rights granted under
 the Company’s approved share option schemes 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 contemplated by section 549 of the
 Companies Act.

 
	
  

 	
  

 
	
 17.

 	
 PENSION SCHEMES

 
	
  

 	
  

 
	
  

 	
 Except as
 fairly disclosed in the Prospectus, and save as otherwise would not (singly
 or in the aggregate) be material in the context of the Top up Issue, the
 underwriting of the Top up Securities, Admission or post-Admission dealings
 in the Top up Securities, 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.

 
	
  

 	
  

 
	
 18.

 	
 AGREEMENTS

 
	
  

 	
  

 
	
  

 	
 Except as
 fairly disclosed in the Prospectus and otherwise than arising as a result of
 ordinary course financing arrangements entered into by the Group and save
 otherwise as would not (singly or in the aggregate) be material in the
 context of the Top up Issue, the underwriting of the Top up Securities,
 Admission or post-Admission dealings in the Top up Securities, other than:
 (i) in accordance the registration rights agreement entered into between HM
 Treasury and the Company on 12 January 2009 and as amended and restated on 11
 June 2009 and the resale rights agreement entered into between HM Treasury
 and the Company on 11 June 2009; (ii) in accordance with alternative
 cash settlement mechanisms or principal stock settlement features on capital
 instruments issued by members of the Group; or (iii) other than in respect of
 the Group’s obligations to the holders of Limited Voting 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 a Group company
 (including, without limitation, an option or right of pre-emption or
 conversion).

 
	
  

 	
  

 
	
 19.

 	
 INSOLVENCY

 
	
  

 	
  

 
	
 19.1

 	
 Except as
 fairly disclosed in the Prospectus, no Group company is unable to pay its
 debts within the meaning of section 123 of the Insolvency Act 1986 or is
 otherwise insolvent except where the inability to pay any such debt, or such
 insolvency, would not result in a Material Adverse Effect.

 
	
  

 	
  

 
	
 19.2

 	
 Except as
 fairly disclosed in the Prospectus, no order has been made, petition
 presented or resolutions passed for the winding up of any Group company and
 no meeting has been convened for the purpose of winding up any such Group
 company that, in any such case would, either singly or in the aggregate,
 result in a Material Adverse Effect. No such Group company has been a party
 to any transaction which could be avoided in a winding up where such
 avoidance would result in a Material Adverse Effect.

 

68

	
  

 	
  

 
	
 19.3

 	
 Except as
 fairly disclosed in the Prospectus, 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 Group company that, either
 singly or in the aggregate, would result in a Material Adverse Effect

 
	
  

 	
  

 
	
 19.4

 	
 Except as
 fairly disclosed in the Prospectus, by reason of actual or anticipated
 financial difficulties, no Group company has commenced discussions with the
 FSA, the Bank of England, the European Central Bank or any other regulatory
 authority to obtain stand-by or emergency funding (whether by way of repo
 transactions or otherwise) or 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.

 
	
  

 	
  

 
	
 20.

 	
 REGULATORY

 
	
  

 	
  

 
	
 20.1

 	
 Except as
 fairly disclosed in the Prospectus, each Group company 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 as
 described in the Prospectus.

 
	
  

 	
  

 
	
 20.2

 	
 Save as
 fairly disclosed in the Prospectus, no Group company nor any of its officers,
 in relation to a Group company, 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 Group
 company in relation to its business including (without limitation) in respect
 of the maintenance of its Capital Resources Requirement and satisfaction of
 the Overall Financial Adequacy Rule and any equivalent capital requirements
 in any other jurisdiction that are applicable to any Group company; no
 obligation has arisen, in relation to a Group company, 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 Top up Issue, the underwriting of the Top
 up Securities, Admission or post-Admission dealings in the Top up Securities.

 
	
  

 	
  

 
	
 20.3

 	
 There are no
 facts or circumstances, which have not been included in 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.

 
	
  

 	
  

 
	
 20.4

 	
 Save as
 fairly disclosed in the Prospectus or otherwise as would not (singly or in
 the aggregate) be material in the context of the Top up Issue, the
 underwriting of the Top up Securities, Admission or post-Admission dealings
 in the Top up Securities, no Group company 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 Group company, and no
 such investigation, enforcement action or disciplinary proceeding is
 threatened or pending.

 
	
  

 	
  

 
	
 20.5

 	
 Save as
 fairly disclosed in the Prospectus or otherwise as would not (singly or in
 the aggregate) be material in the context of the Top up Issue, the
 underwriting of the Top up Securities, Admission or post-Admission dealings
 in the Top up Securities, the Company is not subject to any special or
 additional surveillance 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 is not subject to any visits, beyond customary
 visits, by the FSA.

 
	
  

 	
  

 
	
 20.6

 	
 Save as
 fairly disclosed in the Prospectus, no Group company is, or has been, in receipt
 of aid within the meaning of Article 87(1) of the EC Treaty which has not
 been notified or which, having been notified, has been put into effect prior
 to clearance or which has been found not to be compatible 

 

69

	
  

 	
  

 
	
  

 	
 with the
 common market. Save as fairly disclosed in the Prospectus, no Group company
 is aware of any procedure initiated by the European Commission which is
 reasonably likely to lead to a decision addressed to any EU member state that
 could result in a decision ordering the recovery of aid from any Group
 company.

 
	
  

 	
  

 
	
 20.7

 	
 Save as
 fairly disclosed in the Prospectus, no Group company is aware of any
 investigation, formal or informal, having been initiated by the Office of
 Fair Trading, the European Commission or any agency responsible for the
 enforcement of competition law in any territory or jurisdiction concerning a
 violation of Section 2 or Section 18 of the Competition Act 1998, as amended,
 or Article 81 or Article 82 of the EC Treaty or any similar or related
 provision in English or EU law or the law of any other territory or
 jurisdiction, except where any such investigation, either singly or in the
 aggregate, would not result in a Material Adverse Effect.

 
	
  

 	
  

 
	
 20.8

 	
 All
 information supplied by the Company to the European Commission in relation to
 the matters addressed by the Heads of Terms was when supplied and remains
 true and accurate in all material respects and not misleading in any material
 respect, and no information has been withheld the absence of which could be
 reasonably likely to have affected the contents of such Heads of Terms.

 
	
  

 	
  

 
	
 20.9

 	
 The
operations of each Group company are and have been conducted at all times in
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 action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving any Group company with respect to the Money Laundering
Laws is pending or, to the best knowledge of the Company, threatened except
in any such case for any action, suit or proceeding which would not, either
singly or in the aggregate, result in a Material Adverse Effect. 

 
	
  

 	
  

 
	
 20.10

 	
 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 or any similar sanctions imposed by the European Union, the United
 Nations or any other body, governmental or other, to which the Company or any
 of its affiliates is subject; and the Top up Securities are not being issued
 for the purpose of funding any operations in, financing any investment or
 activities in or making any payments to any country or to any person targeted
 by any U.S. sanctions administered by the Office of Foreign Assets Control of
 the U.S. Department of the Treasury.

 
	
  

 	
  

 
	
 20.11

 	
 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.  

 

70

	
  

 	
  

 
	
 20.12

 	
 There are no
 facts or circumstances, which are not included in 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.

 
	
  

 	
  

 
	
 21.

 	
 UNITED STATES SECURITIES REGULATIONS

 
	
  

 	
  

 
	
 21.1

 	
 None of the
Company, its affiliates (as defined in Rule 405 under the Securities Act), or
any person acting on its or their behalf (provided that the Company does not
make any representation or warranty with respect to the Joint Bookrunners)
has engaged or will engage in any “directed selling efforts” (within the
meaning of Rule 902(c) of Regulation S under the Securities Act) with respect
to the Top up Securities or any shares into which the Top up Securities are
or will be exchangeable (Exchange Shares). 

 
	
  

 	
  

 
	
 21.2

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

 
	
  

 	
  

 
	
 21.3

 	
 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 Top up Securities or Exchange Shares or any security of the same class or
 series as the Top up Securities or Exchange Shares.

 
	
  

 	
  

 
	
 21.4

 	
 None of the
 Company, its affiliates (as defined under Rule 501(b) under Regulation D
 under the Securities Act) or any person acting on its or their behalf
 (provided that the Company does not make any representation or warranty with
 respect to the Joint Bookrunners) has engaged or will engage in any form of
 general solicitation or general advertising (within the meaning of Rule
 502(c) of Regulation D under the Securities Act) in the United States in connection
 with any offer or sale of the Top up Securities or Exchange Shares, or has
 offered or will offer to sell or solicited or will solicit offers to by any
 Top up Securities or Exchange Shares in any manner involving a public
 offering in the United States within the meaning of Section 4(2) of the
 Securities Act.

 
	
  

 	
  

 
	
 21.5

 	
 None of the
 Company, its affiliates or any person acting on behalf (provided that the
 Company does not make any representation or warranty with respect to the
 Joint Bookrunners) of any of them has, directly or indirectly, (a) made or
 will make offers or sales of any security, (b) solicited or will solicit
 offers or sales by any security, (c) otherwise negotiated or will negotiate
 in respect of any security, in any of the foregoing cases under circumstances
 that would require the registration of the Top up Securities or Exchange
 Shares under the Securities Act or (d) taken or will take any other action
 that would require the registration of the Top up Securities or Exchange
 Shares under the Securities Act.

 
	
  

 	
  

 
	
 21.6

 	
 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 Top
 up Securities or otherwise) a “passive foreign investment company” within the
 meaning of section 1297 of the US Internal Revenue Code of 1986.

 
	
  

 	
  

 
	
 21.7

 	
 The Company
is not, and, immediately after giving effect to the offering and sale of the
Top up Securities and the application of the proceeds thereof as set forth in
the Prospectus will not be, an “investment company” as such term is defined
in the US Investment Company Act of 1940 (the Investment Company Act). 

 
	
  

 	
  

 
	
 21.8

 	
 For so long
 as any Top up Securities or Exchange Shares are “restricted securities”
 within the meaning of Rule 144(a)(3) under the Securities Act, the Company
 will not become an “open-end company”, “unit investment trust” or
 “face-amount certificate company”, as such terms are defined in, and that is
 or is required to be registered under Section 8 of, the Investment Company
 Act.

 
	
  

 	
  

 
	
 21.9

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

 

71

	
  

 	
  

 
	
  

 	
 extent that
 HM Treasury has transferred any of its registration rights to any persons in
 accordance with any provisions of the registration rights agreement entered
 into between HM Treasury and the Company in effect from 12 January 2009 and
 as amended and restated on 11 June 2009 and the resale rights agreement
 entered into between HM Treasury and the Company on 11 June 2009.

 
	
  

 	
  

 
	
 21.10

 	
 During the
 period of six months after the Settlement Date, the Company will not, and
 will not permit any of its affiliates to, resell any Top up Securities or
 Exchange 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 under the Securities Act.

 

72

SCHEDULE 5

REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
OF THE ISSUER AND THE

GUARANTOR

	
  

 	
  

 
	
 1.

 	
 Prospectus in the case of Top up Securities
 offered and sold in the United States to a QIB, the Prospectus does not
 contain an untrue statement of material fact or omit to state a material fact
 necessary in order to make the statements therein, in the light of the
 circumstances under which they were made, not misleading. 

 
	
  

 	
  

 
	
 2.

 	
 Listing: all information relating to such
 matters required by Section 87A(2) of the FSMA and the Listing Rules to be
 included in the Prospectus in relation to the Top up Securities and the
 giving of the guarantee in relation to the Top up Securities and the Issuer
 and the Guarantor (save insofar as a derogation therefore has been obtained)
 is included in the Prospectus and the Prospectus has been published in
 accordance with the Prospectus Rules 

 
	
  

 	
  

 
	
 3.

 	
 Relevant Documents: the information in the
 Relevant Documents is in accordance with the facts and does not omit anything
 likely to affect the import of such information; 

 
	
  

 	
  

 
	
 4.

 	
 Due Incorporation: each of the Issuer and
 the Guarantor is a company duly incorporated under the laws of England with
 power and authority to conduct its business as presently conducted and is
 lawfully qualified to do business as a foreign corporation in all other
 jurisdictions in which business is conducted by it. 

 
	
  

 	
  

 
	
 5.

 	
 Authorisation: the creation and issue of the
 Top up Securities and the execution and delivery of the this Agreement, the
 Trust Deed (if applicable) and the Agency Agreement (if applicable), the
 consummation of the transactions contemplated therein and herein and the
 compliance with the terms thereof and hereof and the subscription and sale of
 the Top up Securities on the terms and conditions of this Agreement have been
 duly authorised by all necessary corporate action of the Issuer and the
 Guarantor and do not conflict with, or result in a breach of, any of the
 terms or provisions of, or constitute a default under, the Memorandum and
 Articles of Association of the Issuer or the Guarantor or any deed, mortgage
 or other agreement or instrument to which the Issuer or the Guarantor is
 party or by which it is (or its properties are) bound or any existing English
 or (to the best of the knowledge and belief of the Issuer and the Guarantor)
 other applicable law, rule, regulation, judgment, order or decree of any
 government, instrumentality, authority or court, domestic or foreign, having
 jurisdiction over the Issuer, the Guarantor or their respective properties. 

 
	
  

 	
  

 
	
 6.

 	
 Consents: all necessary authorisations,
 consents and approvals for and in connection with the issue of the Top up
 Securities by the Issuer have been obtained and are in force and this
 Agreement, the Trust Deed (if applicable) and the Agency Agreement (if
 applicable) constitute valid and binding obligations of the Issuer and the
 Guarantor and the Top up Securities, when executed, authenticated, issued and
 delivered in accordance with this Agreement, the Trust Deed (if applicable)
 and the Agency Agreement (if applicable), will constitute valid and binding
 obligations of the Issuer and the due performance by the Issuer of the terms
 and conditions of such Top up Securities will not infringe the terms of any
 such authorisation, consent or approval or the provisions of any existing
 laws of England. 

 
	
  

 	
  

 
	
 7.

 	
 Litigation: save as fairly disclosed in the
 Prospectus, none of the Issuer, the Guarantor nor any of their respective
 subsidiaries is involved in any governmental, legal or arbitration
 proceedings, nor has the Issuer or the Guarantor knowledge of any threatened
 governmental, legal or arbitration proceedings or claim against the Issuer or
 the Guarantor or any of their respective subsidiaries, which is material in
 the context of the issue of the Top up Securities. 

 

73

	
  

 	
  

 
	
 8.

 	
 Directed Selling Efforts: none of the
 Issuer, the Guarantor or any of their respective affiliates (including any
 person acting on behalf of the Issuer, the Guarantor or any of their
 respective affiliates, provided that the Company is not making a
 representation or warranty with respect to the Joint Bookrunners) has engaged
 or will engage in any directed selling efforts (as defined in Rule 902(b) of
 Regulation S under the Securities Act) with respect to the Top up Securities,
 and the Issuer, the Guarantor and their respective affiliates have complied
 and will comply with the offering restrictions requirement of Regulation S
 under the Securities Act. 

 
	
  

 	
  

 
	
 9.

 	
 General Solicitation: none of the Issuer,
 the Guarantor or any of their respective affiliates (as defined in Rule
 501(b) of Regulation D under the Securities Act), or any person acting on
 behalf of any of them (provided that the Company does not make any
 representation or warranty with respect to the Joint Bookrunners), (i) has
 made or will make offers or sales of any security, or solicited or will
 solicit offers to buy, or otherwise negotiated in respect of, any security,
 under circumstances that would require the registration of the Top up
 Securities under the Securities Act; or (ii) has engaged or will engage in
 any form of general solicitation or general advertising (within the meaning
 of Regulation D under the Securities Act) in connection with any offer or
 sale of the Top up Securities in the United States. 

 
	
  

 	
  

 
	
 10.

 	
 Investment Company: neither the Issuer nor
 the Guarantor is, and as a result of the offer and sale of the Top up
 Securities contemplated herein will be, an “investment company” under, and as
 such term is defined in, the Investment Company Act. 

 
	
  

 	
  

 
	
 11.

 	
 Registration: none of the Issuer, the
 Guarantor or their respective affiliates, nor any persons acting on any of
 their behalf has made or will make offers or sales of any securities under
 circumstances that would require the registration of any of the Top up
 Securities under the Securities Act. 

 
	
  

 	
  

 
	
 12.

 	
 Sanctions: none of the Issuer or the
 Guarantor or, to the knowledge of the Issuer or the Guarantor, any director,
 officer, agent, employee or affiliate of the Issuer or the Guarantor is
 currently subject to any sanctions administered by the U.S. Department of the
 Treasury or any similar sanctions imposed by the European Union, the United
 Nations or any other body, governmental or other, to which the Issuer, the
 Guarantor or any of their respective affiliates is subject; and Top up
 Securities are not being issued for the purpose of funding any operations in,
 financing any investment or activities in or making any payments to any
 country or to any person targeted by any U.S. sanctions administered by the
 Office of Foreign Assets Control of the U.S. Department of the Treasury. 

 

74

SCHEDULE 6

LETTER OF CONFIRMATION

[On the letterhead of the
Issuer/Guarantor/Company]

	
  

 	
  

 	
  

 
	
 To:

 	
 Merrill
 Lynch International

 	
  

 
	
  

 	
 Merrill
 Lynch Financial Centre

 	
  

 
	
  

 	
 2 King
 Edward Street

 	
  

 
	
  

 	
 London EC1A
 1HQ

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 UBS Limited

 	
  

 
	
  

 	
 1 Finsbury
 Avenue

 	
  

 
	
  

 	
 London EC2M
 2PP

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 (on behalf
 of themselves and the other Joint Bookrunners)

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 [      ] 2009

 

Dear Sirs 

We refer to
the underwriting agreement relating to the issue of Top up Securities between
us dated 3 November 2009 (the Underwriting Agreement) and to the conditions set
out in Clause 2.5 of the Underwriting Agreement (the Conditions). References in
this letter to Clauses are to Clauses of the Underwriting Agreement and words
and expressions defined in the Underwriting Agreement have the same meaning
herein.  

We hereby
confirm that: 

	
  

 	
  

 
	
 (a)

 	
 each of the
 Conditions is satisfied as at the delivery of this letter; 

 
	
  

 	
  

 
	
 (b)

 	
 we are not
 aware of any reason why the Conditions will not continue to be satisfied
 until Admission; 

 
	
  

 	
  

 
	
 (c)

 	
 it has not
 come to the knowledge of the [Issuer/Guarantor/Company or any Director] that
 the [Issuer/Guarantor/Company] is in breach of any of its obligations under
 the Underwriting Agreement which fall to be performed following the date of
 publication of the Press Announcement (such confirmation excluding any breach
 of the [Issuer’s/Guarantor’s/Company’s] obligations which fall to be
 performed to date that has arisen, directly or indirectly, as a result of (a)
 a MAC Event or a Material Adverse Effect that has occurred subsequent to the
 publication of the Press Announcement, or (b) a Commission Decision that has
 been publicly announced or publicly communicated subsequent to the
 publication of the Press Announcement, other than where the MAC Event or
 Material Adverse Effect occurred as a direct or indirect consequence of a
 Specified Circumstance); and 

 
	
  

 	
  

 
	
 (d)

 	
 with
 reference to our obligation in Clause 10.7 of the Underwriting Agreement, it
 has not come to the knowledge of the [Issuer/Guarantor/Company or any
 Director] that (i) any of the Warranties made by the
 [Issuer/Guarantor/Company] was breached or untrue, inaccurate or misleading
 in any respect when given on the date of the Underwriting Agreement or (b)
 any of the Warranties referred to in [Clause 10.3/Clause 10.4] of the
 Underwriting Agreement made by the [Issuer/Guarantor/Company] has ceased to
 be true and accurate or has become misleading in any respect; or that there
 is any circumstance which would or is reasonably likely to cause any of the
 Warranties referred to in [Clause 10.3/Clause 10.4] to be breached or become
 untrue, inaccurate or misleading in any respect if repeated by reference to
 the facts and circumstances existing at the date 

 

75

	
  

 	
  

 
	
  

 	
 hereof (such
 confirmation (other than in the case of a breach of Warranties made by the
 [Issuer/the Guarantor/the Company] on the date of publication of any
 Prospectus, Disclosure Package, Supplementary Prospectus or supplement to any
 Disclosure Package provided that any such breach of Warranty specifically
 relates to the content of such document not being true and accurate in all
 respects or being misleading in any respect as at the date of publication of
 such document) excluding any breach of the Warranties that has arisen,
 directly or indirectly, as a result of (A) a MAC Event or a Material Adverse
 Effect having occurred subsequent to the publication of the Press
 Announcement, or (B) a Commission Decision having been publicly announced or
 publicly communicated subsequent to the publication of the Press
 Announcement, other than where the MAC Event or Material Adverse Effect
 occurred as a direct or indirect consequence of a Specified Circumstance). 

 

We undertake
to notify you immediately if the confirmations contained in this letter could
not continue to be given by us at any time prior to Admission (in each case by
reference to the facts and circumstances then existing). 

	
  

 	
  

 
	
 Yours
 faithfully 

 	
  

 
	
  

 	
  

 
	

 

 	
  

 
	
 Director/Secretary
 

 	
  

 

76

SCHEDULE 7

SELLING RESTRICTIONS

	
  

 	
  

 
	
 1.

 	
 General 

 
	
  

 	
  

 
	
  

 	
 Other than in
 the United Kingdom, none of the Issuer, the Guarantor, the Company or any
 Joint Bookrunner makes any representation that any action has been or will be
 taken in any jurisdiction that would permit a public offering of any of the
 Top up Securities, or possession or distribution of the Prospectus,
 Disclosure Package or any other offering material, in any country or
 jurisdiction where action for that purpose is required. 

 
	
  

 	
  

 
	
  

 	
 None of the
 Issuer, the Guarantor, the Company or the Joint Bookrunners represent that
 Top up Securities may at any time lawfully be sold in compliance with any
 appropriate registration or other requirements in any jurisdiction, or
 pursuant to any exemption available thereunder, or assumes any responsibility
 for facilitating such sale. 

 
	
  

 	
  

 
	
  

 	
 Each Joint
 Bookrunner agrees that it will to the best of its knowledge and belief,
 comply with all relevant laws, regulations and directives in each
 jurisdiction in which it purchases, offers, sells or delivers Top up
 Securities or has in its possession or distributes the Prospectus, Disclosure
 Package or any other offering material and, that it will, obtain any consent,
 approval or permission required by it for the purchase, offer, sale or
 delivery by it of Top up Securities under the laws, regulations and
 directives in force in any jurisdiction to which it is subject or in which it
 makes such purchases, offers, sale or deliveries, in all cases at its own
 expense, and none of the Issuer, the Guarantor, the Company or any other
 Joint Bookrunner shall have responsibility therefor. No Joint Bookrunner is
 authorised to make any representation or use any information in connection
 with the issue, offering and sale of the Top up Securities other than as
 contained in, or which is consistent with, the Relevant Documents. 

 
	
  

 	
  

 
	
 2.

 	
 United States of America 

 
	
  

 	
  

 
	
 1.1

 	
 The Top up
 Securities and any Exchange Shares have not been and will not be registered
 under the Securities Act and may not be offered or sold within the United
 States or to, or for the account or benefit of, U.S. persons except in
 accordance with Regulation S or pursuant to an exemption from the
 registration requirements of the Securities Act. Each Joint Bookrunner
 represents and agrees that it has offered and sold the Top up Securities and
 Exchange Shares of any identifiable tranche, and shall offer and sell the Top
 up Securities and Exchange Shares of any identifiable tranche (1) as part of
 their distribution at any time and (2) otherwise until 40 days after
 completion of the distribution of such tranche as determined, and certified
 to the Issuer and each Joint Bookrunner, by the Joint Global Co-ordinators,
 only to persons that are not U.S. persons in accordance with Rule 903 of
 Regulation S under the Securities Act or to QIBs in a transaction that does not
 require registration under the Securities Act. Accordingly, neither it, its
 affiliates nor any persons acting on its or their behalf have engaged or will
 engage in any directed selling efforts with respect to the Top up Securities,
 and it and they have complied and shall comply with the offering restrictions
 requirements of Regulation S. Each Joint Bookrunner agrees to notify the
 Joint Global Co-ordinators when it has completed the distribution of its
 portion of the Top up Securities of any identifiable tranche so that the
 Joint Global 

 

77

	
  

 	
  

 	
  

 
	
  

 	
 Co-ordinators
 may determine the completion of the distribution of all Top up Securities of
 that tranche and notify the other Joint Bookrunners of the end of the
 distribution compliance period. Each Joint Bookrunner agrees that, at or
 prior to confirmation of sale of Top up Securities (other than a sale of Top
 up Securities to a QIB), it will have sent to each distributor, dealer or
 person receiving a selling concession, fee or other remuneration that
 purchases Top up Securities from it during the distribution compliance period
 a confirmation or notice to substantially the following effect: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 “The
 Securities covered hereby have not been registered under the U.S. Securities
 Act of 1933 (the “Securities Act”) and may not be offered and sold within the
 United States or to, or for the account or benefit of, U.S. persons (i) as
 part of their distribution at any time or (ii) otherwise until 40 days after
 completion of the distribution of such tranche as determined, and certified
 to the Issuer and Joint Bookrunners, by the Joint Global Co-ordinators,
 except in either case in accordance with Regulation S under the Securities
 Act or pursuant to another applicable exemption. Terms used above have the
 meanings given to them by Regulation S under the Securities Act.” 

 
	
  

 	
  

 	
  

 
	
  

 	
 Terms used
 in this paragraph have the meanings given to them by Regulation S. 

 
	
  

 	
  

 	
  

 
	
  

 	
 Each Joint
Bookrunner represents and agrees that neither it nor any of its affiliates
(as defined in Rule 501(b) of Regulation D under the Securities Act
(Regulation D), nor any person acting on its or their behalf has engaged or
will engage in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer and sale of
the Top Securities and Exchange Shares in the United States.  

 
	
  

 	
  

 	
  

 
	
  

 	
 The Joint
 Bookrunners may arrange for the offer and sale of the Top up Securities or
 Exchange Shares in the United States only to persons reasonably believed to
 be qualified institutional buyers who have provided representations,
 warranties and undertakings substantially in the form attached hereto as
 Schedule 8. 

 
	
  

 	
  

 	
  

 
	
  

 	
 Each Top up
 Issue in registered form issued by the Issuer to be sold to qualified
 institutional buyers in the United States shall contain a legend stating
 substantially to the effect that such Top up Issue in registered form has not
 been and will not be registered under the Securities Act or with any
 securities regulatory authority of any state or other jurisdiction of the
 United States and may not be offered, resold, pledged or otherwise
 transferred except (1) another qualified institutional buyer purchasing for
 its own account or a person acting for the account of a qualified
 institutional buyer in a transaction that does not require registration under
 the Securities Act, (2) in an offshore transaction in accordance with Rule
 903 or Rule 904 under Regulation S or (3) pursuant to an exemption from
 registration under the Securities Act provided by Rule 144 thereunder (if available),
 in each case in accordance with any applicable securities laws of any state
 of the United States, and that no representation can be made as to the
 availability of the exemption provided by Rule 144 under the Securities Act
 for resales of the Top up Securities in registered form. 

 

78

	
  

 	
  

 	
  

 	
  

 
	
 1.2

 	
 In addition,
 unless the Prospectus or Disclosure Package specifies that the applicable
 TEFRA exemption is either “C Rules” or “not applicable”, each Joint
 Bookrunner represents, warrants and agrees in relation to the relevant Top up
 Securities (if such Top up Securities are in bearer form) that:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.2.1 

 	
 except to
 the extent permitted under U.S. Treas. Reg. §1.163-5(c)(2)(i)(D) (the “D
 Rules”), 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 it has not
 offered or sold, and during the restricted period shall not offer or sell,
 Top up Securities in bearer form to a person who is within the United States
 or its possessions or to a United States person; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 it has not
 delivered and shall not deliver within the United States or its possessions
 definitive Top up Securities in bearer form that are sold during the
 restricted period; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.2.2 

 	
 it has and
 throughout the restricted period shall have in effect procedures reasonably
 designed to ensure that its employees or agents who are directly engaged in
 selling Top up Securities in bearer form are aware that such Top up
 Securities may not be offered or sold during the restricted period to a
 person who is within the United States or its possessions or to a United
 States person, except as permitted by the D Rules; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.2.3 

 	
 if it is a
 United States person, it is acquiring the Top up Securities in bearer form
 for purposes of resale in connection with their original issuance and if it
 retains Top up Securities in bearer form for its own account, it shall only
 do so in accordance with the requirements of U.S. Treas. Reg.
 §1.163-5(c)(2)(i)(D)(6); 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.2.4 

 	
 with respect
 to each affiliate that acquires from it Top up Securities in bearer form for
 the purpose of offering or selling such Top up Securities during the
 restricted period, it either (a) repeats and confirms the representations
 contained in Paragraphs 2.2.1, 2.2.2 and 2.2.3 on behalf of such affiliate or
 (b) agrees that it shall obtain from such affiliate for the benefit of the
 Issuer the representations contained in Paragraphs 2.2.1, 2.2.2 and 2.2.3;
 and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.2.5 

 	
 it will not
 enter into a written contract (apart from a confirmation or other notice of
 the transaction) for the offer or sale during the restricted period of Top up
 Securities in bearer form with any person other than its affiliate(s) unless
 it obtains the representations and agreements contained in this paragraph 2.2
 from the person with whom it enters into such written contract. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Terms used
 in this paragraph have the meanings given to them by the U.S. Internal
 Revenue Code of 1986 and regulations thereunder, including the D Rules. 

 
	
  

 	
  

 	
  

 	
  

 
	
 1.3

 	
 In addition,
 to the extent that the Prospectus or Disclosure Package relating to the
 relevant Top up Securities (if such Top up Securities are in bearer form)
 specifies that the applicable TEFRA exemption is “C Rules”, under U.S. Treas.
 Reg. §1.163-5(c)(2)(i)(C) (the “C Rules”), Top up Securities in bearer form
 must be issued and delivered outside the United States and its possessions in
 connection with their original issuance. In relation to each such Top up
 Issue, each Joint Bookrunner represents, warrants and agrees that it has not
 offered, sold or delivered, and shall not offer, sell or deliver, directly or
 indirectly, Top up Securities in bearer form within the United States or its
 possessions in connection with their original issuance. Further, in
 connection with their original issuance of Top up Securities in bearer form,
 it has not communicated, and shall not communicate, directly or indirectly,
 with a prospective purchaser if either such purchaser or it is within the
 United States or its possessions or otherwise involve its U.S. office in the
 offer or sale of Top up Securities 

 

79

	
  

 	
  

 	
  

 
	
  

 	
 in bearer
 form. Terms used in this paragraph have the meanings given to them by the
 U.S. Internal Revenue Code of 1986, as amended, and regulations thereunder,
 including the C Rules. 

 
	
  

 	
  

 	
  

 
	
 1.4

 	
 Each Joint
 Bookrunner represents and agrees that neither it nor any of its affiliates (as
 defined in Rule 501(b) of Regulation D), nor any person acting on its or
 their behalf has engaged or will engage in any form of general solicitation
 or general advertising (within the meaning of Regulation D) in connection
 with any offer and sale of the Top up Securities in the United States. 

 
	
  

 	
  

 	
  

 
	
  

 	
 The Joint
 Bookrunners may directly or through their respective U.S. broker-dealer
 affiliates arrange for the offer and resale of Top up Securities issued by
 the Issuer in the United States only to qualified institutional buyers. For
 the avoidance of doubt, any Top up Issues that are proposed to be offered or
 sold to QIBs in the United States shall be subject to the agreement of the
 Company, such agreement not to be unreasonably withheld or delayed, taking into
 account the requirements of the Securities Act and the documentary
 requirements of this Agreement in respect of any such Top up Securities. 

 
	
  

 	
  

 	
  

 
	
 3.

 	
 Public Offer Selling Restriction Under the Prospectus Directive 

 
	
  

 	
  

 	
  

 
	
 1.5

 	
 In relation
 to each Member State of the European Economic Area which has implemented the
 Prospectus Directive (each, a “Relevant Member State”), each Joint Bookrunner
 represents and agrees that with effect from and including the date on which
 the Prospectus Directive is implemented in that Relevant Member State (the
 “Relevant Implementation Date”) it has not made and will not make an offer of
 Top up Securities which are the subject of the offering contemplated by the
 Prospectus or the Disclosure Package to the public in that Relevant Member
 State except that it may, with effect from and including the Relevant
 Implementation Date, make an offer of such Top up Securities to the public in
 that Relevant Member State: 

 
	
  

 	
  

 	
  

 
	
  

 	
 1.5.1 

 	
 if the
 Prospectus in relation to the Top up Securities specify that an offer of
 those Top up Securities may be made other than pursuant to Article 3(2) of
 the Prospectus Directive in that Relevant Member State (a “Non-exempt
 Offer”), following the date of publication of a prospectus in relation to
 such Top up Securities 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, in accordance with the Prospectus Directive, in the
 period beginning and ending on the dates specified in such prospectus; 

 
	
  

 	
  

 	
  

 
	
  

 	
 1.5.2 

 	
 at any time
 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; 

 
	
  

 	
  

 	
  

 
	
  

 	
 1.5.3 

 	
 at any time
 to any legal entity which has two or more of (1) an average of at least 250
 employees during the last financial year; (2) a total balance sheet of more
 than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as
 shown in its last annual or consolidated accounts; 

 
	
  

 	
  

 	
  

 
	
  

 	
 1.5.4 

 	
 at any time
 to fewer than 100 natural or legal persons (other than qualified investors as
 defined in the Prospectus Directive) subject to obtaining the prior consent
 of the relevant Joint Bookrunners nominated by the Issuer for any such offer;
 or 

 

80

	
  

 	
  

 	
  

 
	
  

 	
 1.5.5 

 	
 at any time
 in any other circumstances falling within Article 3(2) of the Prospectus
 Directive,

 
	
  

 	
  

 	
  

 
	
  

 	
 provided that no such offer of Top up Securities referred to in
 paragraph 3.1.2 to 3.1.5 above shall require the Issuer or any Joint
 Bookrunner to publish a prospectus pursuant to Article 3 of the Prospectus
 Directive or supplement a prospectus pursuant to Article 16 of the Prospectus
 Directive. 

 
	
  

 	
  

 	
  

 
	
  

 	
 For the
 purposes of this provision, the expression an “offer of Top up Securities to
 the public” in relation to any Top up Securities 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 Top up Securities to be offered
 so as to enable an investor to decide to purchase or subscribe the Top up
 Securities, as the same may be varied in that Member State by any measure
 implementing the Prospectus Directive in that Member State and the expression
 “Prospectus Directive” means Directive 2003/71/EC and includes any relevant
 implementing measure in each Relevant Member State. 

 
	
  

 	
  

 	
  

 
	
 4.

 	
 United Kingdom 

 
	
  

 	
  

 	
  

 
	
  

 	
 Each Joint
 Bookrunner represents and agrees that: 

 
	
  

 	
  

 	
  

 
	
 1.6

 	
 it has only
 communicated or caused to be communicated and will only communicate or cause
 to be communicated an invitation or inducement to engage in investment
 activity (within the meaning of Section 21 of FSMA) received by it in
 connection with the issue or sale of any Top up Securities in circumstances
 in which Section 21(1) of the FSMA does not or, in the case of the Guarantor,
 would not, if it was not an authorised person, apply to the Issuer, the
 Guarantor and the Company; and 

 
	
  

 	
  

 	
  

 
	
 1.7

 	
 it has
 complied and will comply with all applicable provisions of the FSMA with
 respect to anything done by it in relation to any Top up Securities in, from
 or otherwise involving the United Kingdom.

 

81

SCHEDULE 8

FORM OF INVESTOR CERTIFICATION FOR TOP UP
ISSUES

	
  

 	
  

 
	
 1.

 	
 We are (a) a
 “qualified institutional buyer” (“QIB”) as defined in Rule 144A under the
 U.S. Securities Act of 1933, as amended (the “Securities Act”) or (b) a
 non-U.S. person outside the United States. 

 
	
  

 	
  

 
	
 2.

 	
 We are an
 institution that (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 ECNs, and (b) are, and any accounts for which we are
 acting are, able to bear the economic risk, and sustain complete loss, of
 such investment in the ECNs. 

 
	
  

 	
  

 
	
 3.

 	
 We will base
 our investment decision on a copy of the Issuer’s prospectus dated [     ] (the
 “Prospectus”), including the documents incorporated by reference therein. We
 acknowledge that the Joint Bookrunners have not made any representations,
 express or implied, to us with respect to the Issuer or the Guarantors, the
 offer, the ECNs or the accuracy, completeness or adequacy of any financial or
 other information contained in or incorporated by reference in the
 Prospectus. We have had access to all information necessary to allow us to
 make an informed investment decision. 

 
	
  

 	
  

 
	
 4.

 	
 We are
 acquiring the ECNs for our own account (or for accounts as to which we
 exercise sole investment discretion and have authority to make, and do make, the
 statements contained in this letter) and not with a view to any distribution
 of the ECNs, subject, nevertheless, to the understanding that the disposition
 of our property will at all times be and remain within our control. 

 
	
  

 	
  

 
	
 5.

 	
 We
 understand that the ECNs have not been, and are not expected to be,
 registered with the US Securities and Exchange Commission and will be
 “restricted securities” within the meaning of Rule 144(a)(3) under the
 Securities Act and we agree that for so long as such securities are
 “restricted securities” (as so defined), we will not reoffer, resell, pledge
 or otherwise transfer the ECNs, except (a) to another QIB in a transaction
 that does not require registration under the Securities Act (we recognize
 that the ECN’s are not eligible for resale under Rule 144A) or (b) 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), in each case in accordance with any
 applicable securities laws of any state of the United States or any other
 jurisdiction. We understand and acknowledge that the Issuer shall have the
 right to force the sale or transfer of any ECNs other than in compliance with
 the foregoing restrictions on transfer. 

 
	
  

 	
  

 
	
 6.

 	
 As long as
 the underlying ordinary shares of the Company are “restricted securities”
 within the meaning of Rule 144(a)(3) under the Securities Act, we agree that
 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 LBG’s ADR facility. 

 
	
  

 	
  

 
	
 7.

 	
 We
 understand that the ECNs will be in global registered form only and will
 settle through the facilities of Euroclear/Clearstream but not through the
 facilities of The Depository Trust Company and that no definitive
 certificates are expected to be made available. In the limited circumstances in
 which definitive certificates will be made available, any certificates
 delivered to us in respect of the ECNs will bear a legend substantially to
 the following effect: 

 
	
  

 	
  

 
	
  

 	
 “THE
 SECURITIES EVIDENCED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
 UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND
 THE SECURITIES 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

 

82

	
  

 	
  

 
	
  

 	
 SECURITIES
 ACT OR TO ANOTHER QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION THAT DOES
 NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE
 WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
 OTHER JURISDICTION.” 

 
	
  

 	
  

 
	
 8.

 	
 We
 irrevocably authorize the Issuer, its affiliates, the Joint Bookrunners and
 their respective affiliates and any person acting on their behalf to produce
 this certification or a copy hereof to any interested party in any
 administrative or legal proceedings, dispute or official inquiry with respect
 to matters covered hereby. 

 
	
  

 	
  

 
	
 9.

 	
 All holders
 of ECNs are required to notify transferees of the restrictions on transfer
 and other limitations and requirements of holding an interest in the ECNs. We
 hereby agree to notify any transferee to whom we subsequently reoffer,
 resell, pledge or otherwise transfer the ECNs of the restrictions on transfer
 and other limitations and requirements of holding an interest in the ECNs,
 including those set forth in paragraphs 5 and 6 above and this paragraph 9,
 and the transferee will be bound by such restrictions and requirements and
 will notify any subsequent transferees of such restrictions. 

 
	
  

 	
  

 
	
 10.

 	
 We
 understand and acknowledge that the foregoing representations, warranties,
 agreements and acknowledgements are requirements in connection with United
 States and other securities laws and that the Issuer, its affiliates, the
 Joint Bookrunners and their affiliates, and others are entitled to rely on
 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 Issuer and the Joint
 Bookrunners. 

 

83

SCHEDULE 9

THE JOINT BOOKRUNNERS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  (1)

 	
  

 	
  (2)

 	
  

 	
  (3)

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name

 	
  

 	
 Address
 and fax number

 	
  

 	
 Proportionate

 Share

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Merrill
 Lynch International

 	
  

 	
 Merrill
 Lynch Financial Centre

 	
  

 	
 25%

 
	
  

 	
 2 King
 Edward Street

 	
  

 
	
  

 	
 London EC1A
 1HQ

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Fax number:
 +44 (0) 20 7995 2968

 	
  

 	
  

 
	
  

 	
  

 	
 For the
 attention of: Fixed Income Syndicate

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 UBS Limited

 	
  

 	
 1 Finsbury
 Avenue

 	
  

 	
 25%

 
	
  

 	
 London EC2M
 2PP

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Fax number:
 +44 (0) 20 7567 4146

 	
  

 	
  

 
	
  

 	
  

 	
 For the
 attention of: Fixed Income Syndicate

 	
  

 	
  

 
	
  

 	
  

 	
 With a copy
 to: Transactions Legal

 	
  

 	
  

 
	
  

 	
  

 	
 Fax number:
 +44 (0) 20 7567 2364

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Citigroup
 Global Markets Limited

 	
  

 	
 Citigroup
 Centre

 	
  

 	
 12.5 %

 
	
  

 	
 Canada
 Square

 	
  

 	
  

 
	
  

 	
 Canary Wharf

 	
  

 	
  

 
	
  

 	
 London E14
 5LB

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Fax number:
 +44 (0) 20 7986 7627

 	
  

 	
  

 
	
  

 	
  

 	
 For the
 attention of: Fixed Income Syndicate

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Goldman
 Sachs International

 	
  

 	
 Peterborough
 Court

 	
  

 	
 12.5%

 
	
  

 	
 133 Fleet
 Street

 	
  

 	
  

 
	
  

 	
 London EC4A
 2BB

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Fax number:
 +44 207 774 4477

 	
  

 	
  

 
	
  

 	
  

 	
 For the
 attention of: Fixed Income Syndicate

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 HSBC Bank
 plc

 	
  

 	
 8 Canada
 Square

 	
  

 	
 12.5%

 
	
  

 	
 London E14
 5HQ

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Fax number:
 + +44 20 7992 4853

 	
  

 	
  

 
	
  

 	
  

 	
 For the
 attention of: Andrew Montgomery

 	
  

 	
  

 
	
  

 	
  

 	
 /Adam
 Bothamley

 	
  

 	
  

 

84

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  (1)

 	
  

 	
  (2)

 	
  

 	
  (3)

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name

 	
  

 	
 Address
 and fax number

 	
  

 	
 Proportionate

 Share

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 J.P. Morgan
 Securities Ltd.

 	
  

 	
 125 London
 Wall

 	
  

 	
 12.5%

 
	
  

 	
 London EC2Y
 5AJ

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Fax number:
 +44 20 7 325 8240

 	
  

 	
  

 
	
  

 	
  

 	
 For the
 attention of: Head of Debt Capital Markets

 	
  

 	
  

 
	
  

 	
  

 	
 Syndicate
 Desk and Head of EMEA Debt Capital

 	
  

 	
  

 
	
  

 	
  

 	
 Markets
 Group Legal

 	
  

 	
  

 

85

SIGNATORIES

	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 ANDREI
 MAGASINER

 
	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 LBG CAPITAL
NO. 2 PLC 

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 ARCHIE KANE

 
	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 LLOYDS TSB BANK PLC

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 ARCHIE KANE

 
	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 LLOYDS BANKING GROUP PLC

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 ALVARO
 CAMARA

 
	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 MERRILL LYNCH INTERNATIONAL

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 ROBERT CLARK

 
	
  

 	
  

 	
  

 
	
 and

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 KARIN MELSON

 
	
  

 	
  

 	
  

 
	
 for and on
 behalf of

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 UBS LIMITED

 	
  

 	
  

 

86

	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 TOM PAUK

 
	
  

 	
  

 	
  

 
	
 for an on
 behalf of

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 CITIGROUP GLOBAL MARKETS LIMITED

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 RICHARD
 BUCKINGHAM

 
	
  

 	
  

 	
  

 
	
 for an on
 behalf of

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 GOLDMAN SACHS INTERNATIONAL

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 DANIEL SHORE

 
	
  

 	
  

 	
  

 
	
 for an on
 behalf of

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 HSBC BANK PLC

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 SIGNED by

 	
  

 	
 MICHAEL
 RIDLEY

 
	
  

 	
  

 	
  

 
	
 for an on
 behalf of

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 J.P. MORGAN SECURITIES LTD.

 	
  

 	
  

 

87c61230_ex4.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 4(b)(xi)

27 July 2009

Sir Winfried Bischoff

[                    ]

[                    ]

[                    ]

Dear Sir Win

LLOYDS BANKING GROUP (“the Company”) 

I am delighted that the directors have confirmed your appointment to the board of the Company as Chairman. The appointment will be effective from 15 September 2009 on the terms set out below. 

All directors of the Company also serve on the Board of Lloyds TSB Bank plc, HBOS plc and Bank of Scotland plc (together “the principal subsidiaries”). You will therefore also be appointed to the board of
each of the principal subsidiaries in the capacity of Chairman. The boards generally meet simultaneously. 

Appointment

Your appointment is subject to the articles of association of the Company from time to time in force and the provisions of the Companies Act 2006. 

Continuation of your appointment is contingent upon satisfactory performance, election by shareholders at the Company’s Annual General Meeting in 2010 and re-election as a director at subsequent Annual General
Meetings as required by the Company’s articles of association and codes to which the Company subscribes, in particular, the Combined Code on Corporate Governance issued by the Financial Reporting Council. If you are not elected or re-elected by
the shareholders your appointment shall terminate automatically with immediate effect and without compensation. 

The Company may terminate your appointment and this agreement at any time without compensation, subject to six month’s written notice.  If you wish to terminate your appointment and this agreement, you must give
the Company six months’ written notice.  If, following termination of your appointment, you do not resign from the board of the Company, and the boards of the principal subsidiaries, having been requested to do so, the Company will be appointed
s your attorney to effect your resignation. By countersigning this letter, you irrevocably appoint the Company as your attorney to act on your behalf to execute any document or to do anything in your name necessary to effect your resignation in
accordance with this letter.  If there is any doubt as to whether such a document (or other thing) has been carried out within the authority conferred by this paragraph, a certificate in writing (signed by any director or the Secretary of the
Company) will be sufficient to prove that the act (or thing) falls within that authority. 

Board Committees

As Chairman you will chair the Company’s Chairman’s Committee and Nominations Committee.  You will also be a member of the Remuneration Committee. You will not be a member of any other committees of the board
unless the board resolves otherwise. 

Time Commitment

It is a condition of your appointment that the role of Chairman of the Company is your primary role. The agreement of the board should be sought before accepting additional commitments that might materially affect the
time you are able to devote to your role. 

On appointment you will be required to relinquish any other roles that compete or conflict with the Company’s business, e.g. Prudential, or which will affect your ability to meet the time commitment indicated
below.  You should discuss and agree with the Deputy Chairman your proposals in this regard prior to taking up the appointment. 

As Chairman you will be required to devote such time as is necessary to ensure the effective execution of your role and responsibilities. This is expected to be 3-4 days a week but may be full time on occasion. By
accepting this appointment, you confirm that you are able to allocate sufficient time to meet the expectations of your role to the satisfaction of the board. 

Role and duties

Your duties will be those normally required of a non-executive director.  Non-executive directors have the same legal responsibilities as any other director. The board as a whole is collectively responsible for
promoting the success of the Company by directing and supervising the Company’s affairs.  The key responsibilities of the Chairman are set out in schedule 1 to this letter. 

As you are aware, the Financial Services Authority (FSA) has cleared you application for approved person/directorship status. Directors must inform the FSA of any significant changes in their personal circumstances
which may have an impact on their status as approved persons/directors. 

Status of Appointment

Upon appointment as Chairman you will become an employee of the Company. This letter sets out the only consideration you will receive for performing your duties.  Accordingly, no other remuneration or benefits will be
provided and, in particular, you will not participate in any of the Company’s senior executive incentive plans or pension schemes.  For the avoidance of doubt if there is any conflict between this letter and the terms of any staff handbook or
staff manual issued to you, the terms of this letter will prevail. 

Fees and Expenses

In consideration of your appointment as Chairman the Company will pay you a fee at the rate of £700,000 per annum (“annual fees”) and provide the following benefits: 

	
Life cover providing for a payment equal to four times your annual fees in the event of your death during the term of this agreement provided you comply with any eligibility requirements or other conditions from time to time set by the Company.

	
A cash allowance of £1,000 payable each month (£12,000) per annum) in lieu of a company car.

	
Membership of the Company’s medical plan subject to the rules of the plan from time to time, including eligibility rules. You will also be entitled to receive an executive confidential annual medical screening.

	
Secretarial services and the services of a Company driver.

You will be responsible for the payment of any tax in relation to the provisions of these benefits. 

Your fees are inclusive of all services performed by you for any member of the Lloyds Banking Group. In this letter “Lloyds Banking Group” means the Company and its subsidiaries (as defined by section 1159
Companies Act 2006). 

You will also be expected to maintain a bank account with a subsidiary of Lloyds Banking Group into which your fees shall be paid. 

These fees will accrue on a daily basis and be payable monthly in arrears less any tax and national insurance contributions the Company is obliged to pay.  These fees will be subject to an annual review by the
Remuneration Committee of the Company. 

If for any reason related to illness, disability or injury, you are unable to carry out your duties, payment of any fees during the period of incapacity will be at the discretion of the Remuneration Committee, after
the first 3 months of incapacity. 

Outside Interests

It is accepted and acknowledged that you have business interests other than those of the Company. As a condition of your appointment commencing you are required to declare any such directorships, appointments and
interests to the board in writing. If you take on any additional business interests or become aware of any potential conflicts of interest, these must be disclosed to the board as soon as they arise or become known to you. If at any time you are
considering acquiring any new interest which might give rise to a conflict of interest with the Company you must first discuss the matter with the Deputy Chairman and obtain a resolution of the board authorising such acquisition.  Regardless of any
approval given in relation to outside interests, it is your responsibility to ensure that you can meet the time commitment required by the role. 

Confidentiality

You will not use or disclose to any person, firm or organisation (except as required by law or to carry out your duties under this letter) any trade secrets, know-how, business information or other private or
confidential information relating to the business, finances or affairs of the Company, or any customer of the Company or any information provided on the basis that it is confidential. You will use your best endeavours to prevent the unauthorised use
or disclosure of any such information. This restriction will continue to apply after your appointment ends without limit in time but will not apply to information which becomes public, unless through

unauthorised disclosure by you.  After your appointment ends you will return all documents and information (whether written, visual or electronic) under your control which belong to the Company or any member of the
Lloyds Banking Group. Your attention is also drawn to the requirements under both legislation and regulation as to the disclosure of price sensitive information.  Consequently you should avoid making any statements that might risk a breach of these
requirements. The Company Secretary can provide or obtain advice in relation to these matters. 

Induction

Following appointment, the Company will provide a tailored induction programme.

Review Process

The performance of individual directors and the whole board and its committees is evaluated annually. If, at any time, there are any matters which cause you concern about your role you should discuss them with the
Deputy Chairman as soon as is appropriate. 

Directors’ Liability Indemnity and Insurance 

You will have the benefit of any indemnity for directors contained in the articles of association of the Company and of any directors’ and officers’ insurance cover maintained from time to time by the Company
(but this shall not oblige the Company to maintain any such cover either at all, or on current terms. 

Independent Professional Advice

Occasions may arise when you consider that you need professional advice in the furtherance of your duties as a director and it will be appropriate for you to consult independent advisers at the Company’s expense.
A copy of the board’s procedure under which directors may obtain such independent advice is set out in schedule 2 to this letter. The Company will reimburse the full cost of the expenditure incurred in accordance with the Company’s policy.

Disclosure and Dealings in Shares

The Company may be required by a rule of law or regulation of a competent authority or provisions of a code to include in its annual accounts a note of any material interest that a director may have in a transaction or
arrangement that the Company has entered into. You must disclose such interest no later than when the transaction or arrangement comes up at a board meeting so that the minutes may record your interest appropriately and our records are updated. A
general notice that you are interested in any contracts with a particular person, firm or Company is acceptable. 

During the continuation of your appointment you will be expected to comply (and to procure that your spouse and connected persons comply) where relevant with any rule of law or regulation of any competent authority or
of the Company from time to time in force in relation to dealings in shares, debentures and other securities of the Company and the unpublished price sensitive information affecting the shares, debentures and other securities of the Company.

Details of the procedure for dealing in shares, together with explanatory notes on the code of market conduct/model code, will be sent to you by our Group Compliance Director. 

Shareholdings

Directors are encouraged to hold shares in the Company.  Unless you already have a shareholding, you may wish to buy some, so that the shareholding appears in the report and accounts at the end of the year, confirming
that you have a stake in the Company.  You may elect to receive all or part of your monthly fees in shares.  in the event that you wish to do so, you should advise the Head of Executive Remuneration who will make the necessary arrangements. Any
shares purchased for you in this way will be subject to a share purchase agreement providing for purchase on a set date each month at the prevailing market price at the time. 

Any tax arsing from the increase in value of these shares will be for your own account. 

I hope that you will not hesitate to contact me if I can be of assistance with respect to any matters that arise during the term of your appointment. 

Please acknowledge receipt and acceptance of the above terms by signing and returning the enclosed copy of this letter. 

Harry Baines 

Company Secretary and General Counsel 

Lloyds Banking Group plc 

I refer to the letter dated 27 July 2009, of which is a copy and agree its terms

Countersigned

Date

Schedule 1: Responsibilities of Chairman 

As Chairman, you will be responsible for leadership of the board, and ensuring the board’s effectiveness in all aspects of the role. This will include: 

	
Running the board and setting its agenda. The agenda should take full account of the issues and the concerns of all the board members. The agenda should be forward looking and concentrate on strategic matters rather than formulaic approvals of proposals which can be the subject of appropriate delegated powers to management;

	
Ensuring that members of the board receive accurate, timely and clear information, in particular about the Company’s performance, to enable the board to take sound decisions, monitor effectively and provide advice to promote the success of the Company;

	
Ensuring effective communication with, and chairing meetings of shareholders and ensuring that the members of the board develop an understanding of the views of the major investors;

	
Managing the board to ensure that sufficient time is allowed for discussion of complex or contentious issues, where appropriate, arranging for informal meetings beforehand to enable thorough preparation for the board discussion. It is particularly important that directors have sufficient time to consider critical issues and are not faced with unrealistic deadlines for decision-making;

	
Taking the lead in providing properly constructed recruitment and orientation for new directors that is comprehensive, formal and tailored, facilitated by the Company Secretary and Group HR Director; and ensuring that arrangements are put in place thereafter to enable directors thereafter to update the skills and knowledge they require in order to fulfil their role;

	
Taking the lead in identifying and meeting the development needs of individual directors, with support provided by the Company Secretary. It is the responsibility of the Chairman to address the development needs of the board as a whole with a view to enhancing its overall effectiveness;

	
Arranging for, and acting on the result of, the performance evaluation of the board, its committees and individual directors;

	
Evaluating and appraising the performance of the Chief Executive regularly and conduct a formal review at least annually.

	
Encouraging active engagement by all the members of the board.

Schedule 2: Obtaining professional advice

Subject to obtaining the prior agreement of: 

	(1)	either the Chairman or the Group Chief
    Executive; failing which
	 	 
	(2)	any two independent non-executive directors,

the directors of the Company may at any time, individually or collectively, consult the Company’s or other independent professional advisers at the Company’s expense in the furtherance of their duties as
directors of the Company. 

A record is kept of such agreement, including the names of the directors concerned, the names of the independent professional advisers whose advice was proposed to be sought, a brief summary of the subject matter and
an estimate of the cost of obtaining such advice. 

If the Group Chief Executive or two independent non-executive directors agree to the taking of such advice, they should forthwith notify the Chairman, unless it appeared to them that the particular circumstances made
it inappropriate to do so. 

  

INVESTOR IN PEOPLE

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