Document:

Exhibit 4(a)(ix) 

	
  

 	
  

 	
  

 
	
 DATED 3 November
 2009

 
	
  

 
	
 THE LORDS COMMISSIONERS OF HER MAJESTY’S TREASURY

 
	
  

 
	
 and

 
	
  

 
	
 LLOYDS BANKING GROUP PLC

 
	
  

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 DEED OF WITHDRAWAL

 	
  

 
	
  

 	
 relating to the UK Asset

 	
  

 
	
  

 	
 Protection Scheme

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Slaughter and May

 	
  

 
	
  

 	
 One Bunhill Row

 	
  

 
	
  

 	
 London - EC1Y 8YY

 	
  

 
	
  

 	
 (TP/JGZW)

 	
  

 
	
  

 	
 CA093050005

 	
  

 

CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
  

 	
 DEFINITIONS
 AND INTERPRETATION

 	
  

 	
 5 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.

 	
  

 	
 CONDITIONS
 AND EFFECTIVENESS

 	
  

 	
 7 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.

 	
  

 	
 WITHDRAWAL;
 WITHDRAWAL FEE

 	
  

 	
 7 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.

 	
  

 	
 STATE AID
 COMMITMENTS; CO-OPERATION

 	
  

 	
 8 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.

 	
  

 	
 REMUNERATION

 	
  

 	
 9 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.

 	
  

 	
 LENDING
 COMMITMENTS

 	
  

 	
 9 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.

 	
  

 	
 NATIONAL
 INVESTMENT CORPORATION

 	
  

 	
 10 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
  

 	
 PRE-ACCESSION
 COMMITMENTS

 	
  

 	
 10 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 9.

 	
  

 	
 PUBLIC
 DISCLOSURE

 	
  

 	
 10 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.

 	
  

 	
 FUNDING
 ACTIONS

 	
  

 	
 11 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 11.

 	
  

 	
 BANK CHARGES

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 12.

 	
  

 	
 WARRANTIES

 	
  

 	
 12 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 13.

 	
  

 	
 RECOVERY OF
 STATE AID

 	
  

 	
 12 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 14.

 	
  

 	
 PAYMENTS

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 15.

 	
  

 	
 TAX MATTERS

 	
  

 	
 13 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.

 	
  

 	
 ANNOUNCEMENTS
 AND PUBLICITY

 	
  

 	
 14 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 17.

 	
  

 	
 CONFIDENTIALITY;
 FREEDOM OF INFORMATION

 	
  

 	
 15 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 18.

 	
  

 	
 ASSIGNMENT

 	
  

 	
 18 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 19.

 	
  

 	
 REMEDIES

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 20.

 	
  

 	
 FURTHER
 ASSURANCE

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 21.

 	
  

 	
 INVALIDITY

 	
  

 	
 20 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 22.

 	
  

 	
 NOTICES

 	
  

 	
 20

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 23.

 	
  

 	
 CONTRACTS
 (RIGHTS OF THIRD PARTIES) ACT 1999

 	
  

 	
 21 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 24.

 	
  

 	
 COUNTERPARTS

 	
  

 	
 21 

 
	
  

 	
  

 	
  

 	
  

 	
  

 

3

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 25.

 	
  

 	
 VARIATION

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 26.

 	
  

 	
 AGENT FOR SERVICE OF PROCESS

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 27.

 	
  

 	
 GOVERNING LAW

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 28.

 	
  

 	
 JURISDICTION

 	
  

 	
 22
 

 

THIS DEED OF WITHDRAWAL
is made on 3 November 2009 

BETWEEN: 

	
  

 	
  

 
	
 (1)

 	
 THE LORDS COMMISSIONERS OF HER MAJESTY’S TREASURY
 of 1 Horse Guards Road, London SW1A 2HQ (the “Treasury”); and 

 
	
  

 	
  

 
	
 (2)

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

 
	
  

 	
  

 
	
 WHEREAS: 

 
	
  

 
	
 (A)

 	
 On 19
 January 2009, Her Majesty’s Government of the United Kingdom (the “Government”) announced its intention to
 offer the Asset Protection Scheme (the “Scheme”)
 to protect certain eligible financial institutions against exceptional future
 credit losses on certain portfolios of assets and exposures. 

 
	
  

 	
  

 
	
 (B)

 	
 On 7 March
 2009, LBG announced its intention to participate in the Scheme and entered
 into discussions with the Treasury regarding the terms of the Scheme and the
 accession of Bank of Scotland plc to it. 

 
	
  

 	
  

 
	
 (C)

 	
 LBG entered into:
 (i) a Pre-Accession Commitments Deed Poll on 7 March 2009 in which it made
 certain undertakings to the Treasury in connection with its proposed
 participation in the Scheme; and (ii) a Lending Commitments Deed Poll on 6
 March 2009 in which it made certain undertakings to the Treasury, the
 Department for Business, Enterprise and Regulatory Reform (now the Department
 for Business, Innovation and Skills) and the Department for Communities and
 Local Government in
 connection with its participation in the credit guarantee scheme
 announced by the Government on 8 October 2008 and its proposed participation
 in the Scheme. 

 
	
  

 	
  

 
	
 (D)

 	
 On 3
 November 2009, LBG announced its intention not to participate in the Scheme. 

 
	
  

 	
  

 
	
 (E)

 	
 LBG intends
 to effect the Rights Issue in lieu of its proposed participation in
 the Scheme and wishes to withdraw from its proposed participation in the
 Scheme. The implementation of the Rights Issue is to be conditional on the
 approval by LBG’s shareholders of the Withdrawal Resolution. 

 
	
  

 	
  

 
	
 (F)

 	
 The
 commitments and undertakings contained in this Deed (including with respect
 to the Withdrawal Fee) incorporate commitments from LBG to the Treasury that
 are designed to ensure that the Treasury is able to comply with the
 commitments or conditions (the “State Aid
 Conditions”) subject to which the European Commission has approved
 (or it is anticipated will approve) the aid provided by the Treasury to LBG:
 (i) under the recapitalisation scheme announced by the Government on 8
 October 2008; (ii) in connection with LBG’s (or a member of the Group’s)
 proposed participation in the Scheme; and (iii) in connection with the Rights
 Issue (together, the “State Aid”)
 as aid compatible with article 87 of the EC Treaty. 

 

5

NOW THIS DEED WITNESSES AS FOLLOWS: 

	
  

 	
  

 
	
 1.

 	
 DEFINITIONS
 AND INTERPRETATION 

 
	
  

 	
  

 
	
 1.1

 	
 In this Deed (including the
 Recitals): 

 
	
  

 	
  

 
	
  

 	
  “Authority” means: (i) any government; (ii) any
 governmental or quasi-governmental authority, body, agency or association;
 (iii) any supranational, federal, state or local government; (iv) any
 statutory or regulatory body, agency or association; (v) any body, agency or
 association having the power to impose, collect or administer any Tax; and
 (vi) any court, tribunal or other judicial body;

 
	
  

 	
  

 
	
  

 	
  “Business
 Day” means a day (other
 than a Saturday or a Sunday) on which banks are open for business in London;

 
	
  

 	
  

 
	
  

 	
  “Circular”
 means the
 shareholder circular to be published in connection with, amongst other
 things, the Rights Issue in accordance with the Listing Rules;

 
	
  

 	
  

 
	
  

 	
  “Conditions” has the meaning given in clause 2.2;

 
	
  

 	
  

 
	
  

 	
  “EC
 Treaty” means the
 consolidated version of the Treaty establishing the European Community;

 
	
  

 	
  

 
	
  

 	
  “FSA” means the Financial Services Authority
 including when acting in its capacity as the competent authority for the
 purposes of Part VI of the FSMA (and any successor authority);

 
	
  

 	
  

 
	
  

 	
  “FSMA” means the Financial Services and Markets
 Act 2000;

 
	
  

 	
  

 
	
  

 	
  “Group” means LBG and all of its group undertakings
 (as defined in section 1161(5) of the Companies Act 2006);

 
	
  

 	
  

 
	
  

 	
  “Lending
 Commitments Deed Poll”
 means the document entitled “Lending Commitments” referred to in Recital
 (C)(ii) above;

 
	
  

 	
  

 
	
  

 	
  “Listing
 Rules” means the
 listing rules made by the FSA under Part VI of the FSMA;

 
	
  

 	
  

 
	
  

 	
  “OFT” means the Office of Fair Trading (and any
 successor authority);

 
	
  

 	
  

 
	
  

 	
  “Pre-Accession
 Commitments Deed Poll”
 means the document entitled “Asset Protection Scheme: Pre-Accession
 Commitments” referred to in Recital (C) (i) above;

 
	
  

 	
  

 
	
  

 	
  “Proceedings” means any proceeding, suit or action
 arising out of or in connection with this Deed, whether contractual or
 non-contractual;

 
	
  

 	
  

 
	
  

 	
  “Representatives” means: (i) in the context of the Treasury,
 the Treasury Solicitor, 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,

 

6

	
  

 	
  

 	
  

 
	
  

 	
 officers,
 officials, employees, agents, professional advisers and contractors of the
 foregoing; and (ii)
 in the context of LBG and the Group, directors, officers, employees,
 agents, professional advisers and contractors;

 
	
  

 	
  

 
	
  

 	
 “Rights Issue” means the rights issue of up
 to 90,000,000,000 new ordinary shares in LBG expected to be announced on or
 about the date of this Deed;

 
	
  

 	
  

 
	
  

 	
  “Scheme” has the meaning given to it in Recital
 (A);

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  “State Aid” has the meaning given to it in
 Recital (F);

 
	
  

 	
  

 
	
  

 	
  “State Aid Approval” means any state aid
 approval for the State Aid in its original terms, as supplemented, modified
 or replaced subject to and in accordance with this Deed;

 
	
  

 	
  

 
	
  

 	
  “State Aid Commitments” means: (i) the
 commitments set out in the paper entitled “State Aid Commitments” as
 initialled by or on behalf of both the Treasury and LBG on or before the date
 of this Deed; and (ii) such
 other commitments given by LBG to the European Commission in connection with
 the State Aid Approval, each as supplemented, modified or replaced from time
 to time subject to and in accordance with this Deed;

 
	
  

 	
  

 
	
  

 	
  “State Aid Conditions” has the meaning given
 to it in Recital (F);

 
	
  

 	
  

 
	
  

 	
  “Tax” means any tax and any levy, impost,
 duty or other charge in the nature of taxation (whether of the United Kingdom
 or elsewhere in the world) and any fine, penalty, charge, cost or interest
 relating to any of the foregoing;

 
	
  

 	
  

 
	
  

 	
  “Treasury Solicitor” means the Solicitor for
 the Affairs of Her Majesty’s Treasury;

 
	
  

 	
  

 
	
  

 	
  “Withdrawal Fee” has the meaning given to it
 in clause 3;

 
	
  

 	
  

 
	
  

 	
  “Withdrawal Resolution” means resolution 4,
 as set out in the notice of general meeting of LBG contained in the Circular,
 to approve (amongst other things) the payment of the Withdrawal Fee to the
 Treasury; and

 
	
  

 	
  

 
	
  

 	
  “Working Hours” means 9.30 a.m. to 5.30 p.m.
 on a Business Day.

 
	
  

 	
  

 
	
 1.2

 	
 In this
 Deed, unless otherwise specified: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 references
 to clauses and paragraphs are to clauses and paragraphs of this Deed; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 the State
 Aid Commitments, the Remuneration Commitments (as defined in clause 5.1) and
 the Customer Charter (as defined in clause 6.3) form part of this 

 

7

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Deed and
 shall have the same force and effect as if expressly set out in the body of
 this Deed, and references to this Deed shall include those documents;

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 the words “include” and “including” shall be deemed to be followed by the phrase
 “without limitation”; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 headings and
 sub-headings in this Deed are included for ease of reference only and shall
 not affect the interpretation of this Deed; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (E)

 	
 any
 reference to a “person” shall be
 construed so as to include any individual, firm, company, corporation, body
 corporate, government, state or agency of a state, local or municipal
 authority or governmental body or any joint venture, association or
 partnership (whether or not having separate legal personality); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (F)

 	
 any
 reference to any statute, statutory provision or rules or regulations made
 thereunder shall be construed as a reference to the same as it may have been,
 or may from time to time be, amended, modified, re-enacted or replaced; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (G)

 	
 a reference
 to any other document is a reference to that other document as amended,
 varied or supplemented at any time. 

 
	
  

 	
  

 	
  

 
	
 1.3

 	
 This Deed is
 being entered into, amongst other things, in order to implement the State Aid
 Conditions. If there is: (i) any ambiguity or inconsistency in the provisions
 of this Deed; or (ii) any dispute as to the interpretation or intended effect
 of this Deed or any provision contained in it, such ambiguity, inconsistency
 or dispute shall be resolved, to the extent possible, by reference to the
 terms of the State Aid Approval. 

 
	
  

 	
  

 
	
 2.

 	
 CONDITIONS AND EFFECTIVENESS 

 
	
  

 	
  

 
	
 2.1

 	
 Subject to
 clause 2.2, all provisions of this Deed shall have full force and effect upon
 execution and delivery of this Deed by the parties to it. 

 
	
  

 	
  

 
	
 2.2

 	
 Clauses 3.2,
 3. 3 and 4.2 are in all respects conditional on the satisfaction of the
 following conditions: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 approval by
 the shareholders of LBG of the Withdrawal Resolution (the “Shareholder Approval CP”); and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 the State
 Aid Approval having been obtained (the “State Aid CP” and, together with the Shareholder
 Approval CP, the “Conditions”). 

 
	
  

 	
  

 	
  

 
	
 3.

 	
 WITHDRAWAL; WITHDRAWAL FEE 

 
	
  

 	
  

 
	
 3.1

 	
 LBG
 acknowledges and agrees that the Treasury shall have no responsibilities,
 duties, obligations or liabilities to LBG (or any member of the Group) under
 or in connection with: (i) the Scheme; or (ii) the withdrawal of LBG (or any
 member of the Group) from its proposed participation in the Scheme, in either
 case whether in contract, tort (including negligence or breach of statutory
 duty) or otherwise. 

 

8

	
  

 	
  

 	
  

 	
  

 
	
 3.2

 	
 LBG
 undertakes to pay (or procure that a member of the Group pays) a fee to the
 Treasury of £2.5 billion (the “Withdrawal Fee”) for the benefits to the
 Group’s trading operations arising as a result of the Treasury proposing to
 make the Scheme available to LBG (or a member of the Group). 

 
	
  

 	
  

 
	
 3.3

 	
 The
 Withdrawal Fee shall be payable within five Business Days of the date on
 which the last of the Conditions is satisfied. 

 
	
  

 	
  

 
	
 4.

 	
 STATE AID COMMITMENTS; CO-OPERATION 

 
	
  

 	
  

 
	
 4.1

 	
 The
 Treasury: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 confirms
 that it has not submitted to the European Commission a restructuring plan or
 any commitments in relation to the State Aid that are significantly more
 onerous for LBG than the State Aid Commitments (as contained in the paper
 referred to in the definition of that expression) or in any other
 restructuring plan or submission prepared by or on behalf of LBG that the
 Treasury has forwarded to the European Commission; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 undertakes
 that it will not submit any such restructuring plan or commitments without
 first discussing the corresponding submission in good faith with LBG. 

 
	
  

 	
  

 	
  

 	
  

 
	
 4.2

 	
 Save to the
 extent that the State Aid Approval has been annulled or suspended by the
 Court of First Instance or the European Court of Justice, LBG undertakes to
 do all acts and things necessary to ensure that the Treasury is able to
 comply with the State Aid Approval, including: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 complying
 (or procuring compliance) with the State Aid Commitments; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 complying
 with (or procuring compliance with) the terms of any restructuring plan
 submitted to and accepted by the European Commission in connection with the
 State Aid Approval and the State Aid Commitments; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 promptly
 complying with (or procuring compliance with) any and all requests from the
 Treasury for information, documentation or explanations, and doing all such
 other acts and things requested in writing by the Treasury, which are in the
 Treasury’s opinion (acting reasonably): 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 required in
 order to enable the Treasury or the European Commission to monitor compliance
 with the State Aid Approval or this Deed; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 required to
 respond to requests for information, documentation or explanations from the
 European Commission in relation to the State Aid Approval or monitoring
 compliance with the State Aid Approval. 

 

9

	
  

 	
  

 
	
 5.

 	
 REMUNERATION 

 
	
  

 	
  

 
	
 5.1

 	
 LBG
 undertakes to comply (or procure compliance) with the remuneration
 constraints and requirements (for 2009)***1 (the “Remuneration Commitments”).
 

 
	
  

 	
  

 
	
 5.2

 	
 LBG acknowledges
 its commitment to the principle that, from 2010, it should be at the leading
 edge of implementing the G20 principles, the FSA Remuneration Code and any
 remuneration provisions accepted by the Government from the Walker Review,
 and that UK Financial Investments Limited, on the Government’s behalf, will
 engage in proactive consultations with LBG’s board of directors to ensure
 that these future remuneration arrangements reflect a rigorous assessment of
 LBG’s performance and support the creation of sustainable value for
 shareholders (including UK Financial Investments Limited), provided that this
 principle shall always be applied in such a way as to allow LBG to operate on
 a level playing field with its competitors. 

 
	
  

 	
  

 
	
 5.3

 	
 For the
 purpose of clause 5.2, “FSA Remuneration
 Code” means the Remuneration Code of the FSA as published and
 defined in the FSA’s Senior Management Arrangements, Systems and Controls
 (Remuneration Code) Instrument 2009 (FSA 2009/48), or
 any supplementary, replacement or successor code for remuneration policies
 and practices relating to banking institutions as may be published by the FSA
 from time to time, whether constituted by rules, guidance or other regulatory
 provisions made by the FSA or otherwise, provided such supplementary,
 replacement or successor code applies to both LBG and its competitors. 

 
	
  

 	
  

 
	
 6.

 	
 LENDING COMMITMENTS 

 
	
  

 	
  

 
	
 6.1

 	
 In
 accordance with paragraph 12.6 of the Lending Commitments Deed Poll the
 following sub-paragraphs of paragraph 6 of the Lending Commitments Deed Poll
 are hereby deleted: 

 
	
  

 	
  

 
	
  

 	
 “The
 Participating Institution will comply with the Lending Commitments in
 accordance with the provisions of this Deed Poll on the understanding that:
 (i) the Schemes will be established by the Government; and (ii) the Participating
 Institution will participate in either or both of the Schemes on terms to be
 agreed with the Government. It is understood that the Government will, in
 consultation with the Participating Institution and acting reasonably, make
 an appropriate Commitment Adjustment if the APS is not implemented within the
 timeframes anticipated for such implementation; and that if the APS is not
 implemented within the timeframes anticipated for such implementation and the
 Participating Institution only participates in the CGS, that the Government
 will, in consultation with the Participating Institution and acting
 reasonably, make an appropriate Commitment Adjustment having regard to the
 quantum of financial support being provided by the Government to the
 Participating Institution pursuant to the CGS.

 
	
  

 	
  

 
	
  

 	
 If any
 preference shares held by the Treasury in the capital of the Participating
 Institution are exchanged for ordinary shares, the Participating Institution
 agrees that it shall increase the lending being made available to support
 creditworthy borrowers in the

 

 

	 
	 

	

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

10

	
  

 	
  

 
	
  

 	
 real
 economy. The quantum of such increased lending shall be determined by
 reference to the increased lending capacity of the Participating Institution
 after taking account of the long term effects of the exchange of the preference shares. Such increased lending
 will take account of demand for business and residential mortgage lending at
 the Participating Institution’s prevailing terms and conditions, including
 pricing, and risk assessment; and, additionally, any increased residential
 mortgage lending will be subject to the applicants meeting the Participating
 Institution’s standard credit and other acceptance criteria.”.

 
	
  

 	
  

 
	
 6.2

 	
 Subject to
 clause 6.1, the provisions of the Lending Commitments Deed Poll shall in all
 other respects remain unamended and in full force and effect, notwithstanding LBG’s withdrawal
 from the Scheme. 

 
	
  

 	
  

 
	
 6.3

 	
 LBG
 undertakes to implement (by no later than 27 November 2009) the customer
 charter for lending to businesses in the United Kingdom in the form agreed
 with the Treasury. The customer charter is set out in the paper entitled
 “Customer Charter for Lending to Businesses” as initialled by or on behalf of
 both the Treasury and LBG on or before the date of this Deed (the “Customer Charter”). 

 
	
  

 	
  

 
	
 7.

 	
 NATIONAL INVESTMENT CORPORATION 

 
	
  

 	
  

 
	
 7.1

 	
 LBG
 undertakes to contribute to a fund managed by the National Investment
 Corporation (“NIC”) the lower
 of: (i) £100mn (one hundred million pounds); and (ii) such amount as equals
 10% of the total sums invested in such fund.

 
	
  

 	
  

 
	
 7.2

 	
 Any amount
 contributed by LBG to NIC in the “2009 commitment period” or the “2010
 commitment period” (each as defined in the Lending Commitments Deed Poll)
 shall be deemed to constitute “lending” for the purposes of the Business
 Lending Commitments (as defined in the Lending Commitments Deed Poll). 

 
	
  

 	
  

 
	
 8.

 	
 PRE-ACCESSION COMMITMENTS 

 
	
  

 	
  

 
	
  

 	
 The
 Pre-Accession Commitments Deed Poll is hereby terminated, with the exception
 of paragraph 9 thereof (and any interpretation provisions necessary for its
 construction).

 
	
  

 	
  

 
	
 9.

 	
 PUBLIC DISCLOSURE 

 
	
  

 	
  

 
	
 9.1

 	
 LBG shall
 ensure that any public financial statements published by it or any other bank
 in the Group shall: (i) comply with Best Industry Practice in relation to the
 public financial statements of banking institutions; and (ii) implement and
 be consistent with any code or statement of best practice on public
 disclosure for authorised deposit-takers and other banking institutions that
 may be published by the FSA from time to time. 

 
	
  

 	
  

 
	
 9.2

 	
 LBG shall
 enter into discussions with the Treasury, each acting in good faith, for the
 purposes of establishing whether and in what way processes and procedures can
 be developed in relation to the public financial statements of banking
 institutions to ensure that such public financial statements, so far as
 possible: 

 

11

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 enable
 investors to assess: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 the quality
 of the assets and liabilities of banking institutions and their groups; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the
 financial position and performance of banking institutions and their groups;
 and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 the nature
 and extent of risks arising from financial instruments to which banking
 institutions and their groups are exposed and the manner in which such risks
 are managed; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 are
 comparable as between similar banking institutions. 

 
	
  

 	
  

 	
  

 
	
 9.3

 	
 For the
 purpose of clause 9.1, “Best Industry Practice” means
 the level of skill, care, diligence, prudence, foresight, expertise and
 experience consistent with the standards which would ordinarily be adhered to
 by a prudent banking institution in the ordinary course of its business,
 taking account of: (A) applicable corporate governance and corporate
 responsibility principles; (B) any published guidance or recommendations
 (including guidance or recommendations from any Authority in the United
 Kingdom) relating to good industry practice in the banking and financial
 sectors as may be published from time to time; and (C) other guidelines,
 recommendations, methods, practices or procedures which would be adopted or
 complied with from time to time by a prudent banking institution in the
 ordinary course of its business. 

 
	
  

 	
  

 
	
 10.

 	
 FUNDING ACTIONS 

 
	
  

 	
  

 
	
 10.1

 	
 LBG
 undertakes to implement, and give effect to, a detailed medium term funding
 plan agreed, or to be agreed, with the FSA (the “Funding Plan”) and acknowledges that the Funding Plan shall
 reflect funding actions agreed with the FSA on or prior to the date of this
 Deed.

 
	
  

 	
  

 
	
 10.2

 	
 LBG
 acknowledges and agrees that compliance with the Funding Plan will be
 monitored by the FSA through its close and continuous supervisory
 relationship with the Group and through regular regulatory reporting
 requirements to be determined by the FSA in consultation with LBG.

 
	
  

 	
  

 
	
 11.

 	
 BANK CHARGES 

 
	
  

 	
  

 
	
  

 	
 LBG
 undertakes, in relation to personal current accounts (“PCAs”) provided by LBG or any member of
 the Group to: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 implement in
 full any agreements that the OFT may make with the banking industry as
 detailed in the OFT’s report – “Personal current accounts in the UK  – A follow
 up report, October 2009”, relating to the transparency of costs to consumers
 and the process of switching accounts to another bank and, subject to
 conflicting demands of integration, LBG commits to adhere to the
 implementation dates agreed between the OFT and the banking industry and

 

12

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 will
 endeavour to effect such implementation as quickly as practicalities and
 systems allow;

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 implement in
 full any agreements that the OFT may make with the banking industry (within
 the scope of the current negotiations with respect thereto) relating to fees
 and charges, and the terms and conditions of PCAs and, subject to conflicting
 demands of integration, LBG commits to adhere to the implementation dates
 agreed between the OFT and the banking industry and will endeavour to effect
 such implementation as quickly as practicalities and systems allow; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 play a
 constructive role in any discussions between the banking industry and the OFT
 about fees and charges, and the terms and conditions of PCAs; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 take
 reasonable steps to provide such information as is necessary to enable the
 Treasury or the OFT to monitor LBG’s compliance with paragraphs (A) and (B)
 above. 

 
	
  

 	
  

 	
  

 
	
 12. 

 	
 WARRANTIES 

 
	
  

 	
  

 
	
  

 	
 LBG
 represents and warrants to the Treasury on the date of this Deed that: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 it is duly
 organised and validly existing under the laws of its jurisdiction of
 organisation; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 it has the
 corporate power and the authority to execute and deliver this Deed and to
 perform its obligations under this Deed, and no additional act or proceeding,
 corporate or otherwise, on its part is necessary to authorise the execution
 and delivery of this Deed or the performance of any of its obligations under
 this Deed; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 subject to
 any principles of law affecting the rights of creditors generally and the
 provisions of section 117 of the Stamp Act 1891, the obligations expressed to
 be assumed by LBG under this Deed are legal, valid, binding and enforceable
 obligations; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 it has duly
 executed and delivered this Deed. 

 
	
  

 	
  

 	
  

 
	
 13. 

 	
 RECOVERY OF STATE AID  

 
	
  

 	
  

 
	
 13.1

 	
 If the
 European Commission adopts a decision that the United Kingdom must recover
 any State Aid (a “Repayment Decision”)
 and the recovery order of the Repayment Decision has not been annulled or
 suspended by the Court of First Instance or the European Court of Justice,
 then LBG shall repay to the Treasury any aid ordered to be recovered under
 the Repayment Decision. 

 
	
  

 	
  

 
	
 13.2

 	
 The amount
 which LBG is obliged to repay to the Treasury under clause 13.1 shall be
 calculated by the Treasury and shall be calculated in accordance with Council
 

 

13

	
  

 	
  

 	
  

 
	
  

 	
 Regulation
 No 659/1999 and Commission Regulation 794/2004 (including with respect to the
 calculation of payable interest).

 
	
  

 	
  

 
	
 14.

 	
 PAYMENTS 

 
	
  

 	
  

 
	
 14.1

 	
 Any payment
 due to the Treasury under this Deed shall be made in pounds sterling to such
 account as may be notified to LBG in writing by the Treasury from time to
 time. 

 
	
  

 	
  

 
	
 14.2

 	
 All payments
 required to be made by LBG (or any member of the Group) under this Deed shall
 be made in full. They will be free and clear of any right of set-off and
 from any restriction, condition or deduction because of any counterclaim. 

 
	
  

 	
  

 
	
 15.

 	
 TAX MATTERS 

 
	
  

 	
  

 
	
 15.1

 	
 All payments
 by LBG (or any member of the Group) pursuant to this Deed shall be paid
 without any deduction or withholding, unless required by law. If any Tax is
 required by law to be deducted or withheld from or in connection with any
 such payment, the amount payable shall be increased so as to ensure that the
 amount received by the Treasury after such deduction or withholding
 (including any additional deduction or withholding required as a result of
 such increase) is equal to the amount which the Treasury would have received
 if no such deduction or withholding had been required. 

 
	
  

 	
  

 
	
 15.2

 	
 If the
 Treasury is subject to Tax in respect of any sum payable pursuant to this
 Deed, or if any such sum is taken into account in computing the profits,
 income or gains of the Treasury for Tax purposes, the sum payable shall be
 increased so as to ensure that the amount retained by the Treasury after the
 payment of such Tax (including any additional Tax payable as a result of such
 increase) is equal to the amount which the Treasury would have retained in
 the absence of such Tax. This clause 15.2 shall not apply to the Withdrawal
 Fee. 

 
	
  

 	
  

 
	
 15.3

 	
 Each sum
 payable by LBG (or any member of the Group) pursuant to this Deed is
 expressed exclusive of any amount in respect of VAT which is chargeable on
 any supply or supplies for which such sum (or any part thereof) is the whole
 or part of the consideration for VAT purposes. If the Treasury makes (or is
 deemed to make) any supply for VAT purposes in consideration for such sum (or
 any part thereof) and VAT is or becomes chargeable in respect of such supply,
 LBG shall pay (or shall procure that a member of the Group pays) to the
 Treasury (within 14 days of the receipt of a valid VAT invoice) an additional
 sum equal to the amount of such VAT. 

 
	
  

 	
  

 
	
 15.4

 	
 If LBG (or
any member of the Group) is obliged to pay any sum under or in connection
with this Deed by way of indemnity, reimbursement, damages or compensation
for or in respect of any liability, damage, cost, demand, charge or expense
(the “Relevant Cost”), the calculation of such sum shall include an amount
determined as follows:  

 
	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 If the
 Relevant Cost is, for VAT purposes, the consideration for a supply of goods
 or services made to the Treasury (including where such supply is made to the
 Treasury as agent for LBG (or a member of the Group) within the terms of
 section 47 of the Value Added Tax Act 1994), such additional amount shall be 

 

14

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 equal to any
 input VAT which was incurred by the Treasury in respect of that supply and
 which it is not able to recover from the relevant Tax authority; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 if the
 Relevant Cost is, for VAT purposes, a disbursement incurred by the Treasury
 as agent on behalf of LBG (or a member of the Group) and the relevant supply
 is made to LBG (or a member of the Group) for VAT purposes, such additional
 amount shall be equal to any amount in respect of VAT which was paid in
 respect of the Relevant Cost by the Treasury, and the Treasury shall use
 reasonable endeavours to procure that the relevant third party issues a valid
 VAT invoice in respect of the Relevant Cost to LBG (or the relevant member of
 the Group).

 

	
  

 	
  

 	
  

 
	
 15.5

 	
 LBG shall
 pay and bear, and shall indemnify the Treasury on demand against, any Stamp
 Duty which is payable or paid in connection with the execution, delivery,
 performance or enforcement of this Deed. 

 
	
  

 	
  

 
	
 15.6

 	
 The Treasury
 shall co-operate in completing any treaty forms or other procedural
 formalities reasonably requested by LBG for the purpose of enabling LBG (or
 the relevant member of the Group) to make any payment pursuant to this Deed
 without any deduction or withholding in respect of Tax. 

 
	
  

 	
  

 
	
 15.7

 	
 For the
 purposes of this clause 15: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 “Stamp
 Duty” means any stamp, documentary, registration or capital
 duty (including stamp duty, stamp duty reserve tax and any other similar duty
 or similar tax) and any fine, penalty, charge, cost or interest relating
 thereto; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 “VAT” means
(i) any Tax imposed in conformity with the council directive of 28 November
2006 on the common system of value added tax (EC Directive 2006/112)
(including, in relation to the United Kingdom, any value added tax imposed by
the Value Added Tax Act 1994 and/or any legislation or regulations
supplemental thereto); and (ii) any other Tax of a similar nature (whether imposed in a
member state of the European Union in substitution for or in addition to the
Tax mentioned above or imposed elsewhere).  

 
	
  

 	
  

 	
  

 
	
 16.

 	
 ANNOUNCEMENTS AND PUBLICITY 

 
	
  

 	
  

 
	
 16.1

 	
 Subject to
 this clause 16, LBG shall ensure that no member of the Group nor any of their
 respective Representatives, shall make, publish, issue or release any
 announcement or public statement in relation to, or which refers to (i) the
 Scheme (including LBG’s proposed withdrawal from the Scheme), (ii) this Deed
 (or any ancillary matter), (iii) the Treasury in connection with the Scheme
 or this Deed, or (iv) the State Aid Approval, the State Aid or the State Aid
 Commitments (each, a “Restricted Statement”). 

 
	
  

 	
  

 	
  

 
	
 16.2

 	
 Notwithstanding
 clause 16.1, each member of the Group may (and each such member’s
 Representatives may on its behalf) make, publish, issue or release a
 Restricted Statement provided that such Restricted Statement is made,
 published, issued or 

 

15

	
  

 	
  

 	
  

 
	
  

 	
 released
 only after giving as much prior notification as is reasonably practicable to,
 and consulting in good faith to the fullest extent reasonably practicable
 with, the Treasury with a view to giving the Treasury as much time as is
 reasonably practicable, in all the circumstances, to review and comment on
 such Restricted Statement.

 
	
  

 	
  

 
	
 16.3

 	
 If, in
 respect of any Restricted Statement, any member of the Group (or any of its
 Representatives) proposes not to adopt, or does not adopt, any amendment
 proposed by the Treasury pursuant to clause 16.2, LBG shall procure that such
 member of the Group or Representative shall (to the extent reasonably
 practicable, prior to the making, publication, issuance or release of the relevant
 Restricted Statement or, if not reasonably practicable, promptly thereafter)
 provide to the Treasury reasons explaining why such amendments are not
 proposed to be, or were not, adopted. 

 
	
  

 	
  

 
	
 16.4

 	
 If any
 member of the Group (or any of its Representatives) proposes to make,
 publish, issue or release a Restricted Statement and either: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 notification
 to, and consultation with, the Treasury prior to the making, publication,
 issuance or release of such Restricted Statement is not permissible under:
 (i) applicable law; or (ii) the rules of the Bank of England or of any
 securities exchange, clearing system or Authority (including the FSA) to
 which it is subject or submits; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 the
 Restricted Statement must be made urgently such that prior notification to or
 consultation with the Treasury is not reasonably practicable, 

 
	
  

 	
  

 
	
  

 	
 then LBG
 shall ensure that the relevant member of the Group or Representative shall,
 as soon as permissible and reasonably practicable, provide a copy of such
 Restricted Statement to the Treasury, together with a notification providing
 reasonable details of the circumstances giving rise to the Restricted
 Statement.

 
	
  

 	
  

 
	
 16.5

 	
 Notwithstanding
 clause 16.1, the Representatives of each member of the Group may make on
 behalf of such member Restricted Statements which are unscripted oral public
 statements, provided that LBG shall use all reasonable endeavours to ensure
 that processes are in place with a view to ensuring that any such unscripted
 oral public statements are consistent with any other Restricted Statements
 made in accordance with this clause 16 by or on behalf of any member of the
 Group. 

 
	
  

 	
  

 
	
 17. 

 	
 CONFIDENTIALITY;
FREEDOM OF INFORMATION  

 
	
  

 	
  

 
	
 17.1

 	
 Each party
(the “first party”) shall treat as confidential any information that: (i) the
Treasury has indicated to the European Commission is covered by the
obligation of professional secrecy pursuant to articles 24 and 25 of Council
Regulation No 659/1999; and (ii) the other party (or its
Representatives) has provided to the first party (or its Representatives)
with respect to the matters referred to in this Deed and which each party has
agreed should be designated as being confidential (“Confidential
Information”).  

 
	
  

 	
  

 
	
 17.2

 	
 Each party
 shall: 

 

16

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 not disclose
 any Confidential Information to any person other than to its respective
 Representatives: 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 in the case
 of disclosure by the Treasury, to enable or assist the Treasury to fulfil any
 of the Treasury Permitted Purposes; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 in the case
 of disclosure by LBG, to the extent that such Representatives
 require the Confidential Information to enable or assist LBG to comply with
 its responsibilities and obligations, or exercise its rights, under this
 Deed; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 procure that
 any person to whom any Confidential Information is so disclosed by it complies with the restrictions
 contained in this clause 17 as if such person were a party to this Deed; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 have in
 place and maintain security measures and procedures to protect the confidentiality
 of Confidential Information. 

 
	
  

 	
  

 
	
 17.3

 	
 The Treasury
 shall use (and shall ensure that its Representatives will use) Confidential
 Information only for the Treasury Permitted Purposes (or, in the case of any
 person referred to in clause 17.5(B), for the purposes of enabling or
 assisting such person to fulfil its functions). 

 
	
  

 	
  

 
	
 17.4

 	
 LBG shall
 use (and shall ensure that its Representatives will use) Confidential
 Information only to enable or assist LBG to comply with its responsibilities
 and obligations, and exercise its rights, under this Deed. 

 
	
  

 	
  

 
	
 17.5

 	
 The
 restrictions in clauses 17.1 and 17.2 shall not prevent the Treasury from
 disclosing Confidential Information: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 to the
 European Commission, if and to the extent that the Treasury
 considers such disclosure is necessary in connection with (i) the application
 of the state aid rules of the EC Treaty, (ii) any European Commission
 decision relating to those rules or (iii) compliance with any of the United
 Kingdom’s reporting requirements under the State Aid Approval; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 to the FSA,
 the Bank of England, the National Audit Office, the Cabinet Office or any
 successor organisation of any of the foregoing to the extent that the
 Treasury considers that such disclosure is required to enable or assist: (i)
 the Treasury to fulfil any of the Treasury Permitted Purposes; or (ii) the
 FSA, the Bank of England, the National Audit Office and the Cabinet Office
 (or any of their respective successors) to fulfil their respective functions;
 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 to Parliament
 or to any Parliamentary committee (including the Public Accounts Committee,
 the House of Commons Treasury Select Committee and any Select Committee of
 the Parliament of the United Kingdom), in each case if and to the extent that
 the Treasury considers it appropriate to do so, provided that (where lawful
 and considered reasonably practicable by the Treasury (but excluding 

 

17

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 any
 disclosure comprised in any unscripted oral statement)) the Treasury shall use
 reasonable endeavours to notify LBG of the Confidential Information to be
 disclosed; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 in order to
 comply with the Treasury’s responsibilities and obligations, and exercising
 the Treasury’s rights, powers and discretions, under or in connection with
 the State Aid Approval; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (E)

 	
 to assist
 with providing or enabling the provision of financial support to LBG or
 protecting or enhancing the stability of the financial system of the United
 Kingdom; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (F)

 	
 discharging
 the Treasury’s responsibilities and functions. 

 
	
  

 	
  

 	
  

 
	
 17.6

 	
 The
 restrictions in clauses 17.1 and 17.2 shall not prevent the Treasury or LBG
 from disclosing Confidential Information:

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 which is
 required by: (i) applicable law; (ii) the rules of the Bank of England or of
 any securities exchange, clearing system or Authority (including the FSA) to
 which it is subject or submits; (iii) the FSA with respect to the matters
 described in clause 10; or (iv) the OFT with respect to the matters described
 in clause 11; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 if and to
 the extent required for the purpose of any judicial proceedings; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 if and to
 the extent the information has come into the public domain through no fault
 of that party. 

 
	
  

 	
  

 	
  

 
	
 17.7 

 	
 If the
Treasury is requested to disclose any Confidential Information pursuant to
the provisions of the Freedom of Information Act (the “FOI Act”, and such a
request, an “FOI Request”), the Treasury shall (to the extent practicable and
permissible under the FOI Act and consistent with the Code of Practice of the
Secretary of State for Constitutional Affairs on discharge of public
authorities’ functions under Part 1 of the FOI Act):  

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 notify LBG
 in writing of the nature and content of such FOI Request as soon as
 practicable; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 prior to the
 making of a disclosure pursuant to an FOI Request, for a period of no less
 than 5 Business Days consult with LBG as to: (i) whether such FOI Request is
 valid; (ii) whether or not disclosure pursuant to the FOI Act is required;
 and (iii) (if the Treasury determines that disclosure pursuant to the FOI Act
 is required) the scope and content of any proposed disclosure; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 (if the
 Treasury determines that disclosure pursuant to the FOI Act is required and
 LBG has objected to such disclosure or the extent of the proposed disclosure)
 give LBG as much prior notice as is reasonably practicable prior to such
 disclosure being made. 

 

18

	
  

 	
  

 	
  

 
	
 17.8

 	
 LBG acknowledges that the
 provision of information to the Treasury as provided for in this Deed is
 important, amongst other things, to enable the Treasury to monitor the
 performance by LBG of its responsibilities, duties and obligations under this
 Deed (including, in particular, with respect to compliance with the State Aid
 Approval). If LBG considers (having taken appropriate external legal advice)
 that applicable law, or pre-existing contractual restrictions, prevent or
 restrict the disclosure of any such information to the Treasury, it shall: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 notify the Treasury of the
 information to which such restrictions relate together with reasonable details
 of the legal or contractual restrictions which prevent or restrict such
 disclosure; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 in determining whether to
 disclose such information, consider in good faith whether: (i) the balance of
 public interest; (ii) the nature of its responsibilities, duties and
 obligations under this Deed; and (iii) any duties of confidentiality owed by
 the Treasury to it, are such that the information should nevertheless be
 disclosed to the Treasury. 

 
	
  

 	
  

 
	
 17.9

 	
 No provision in this Deed
 shall require LBG (or any member of the Group) to provide any information
 protected by legal professional privilege or litigation privilege. 

 
	
  

 	
  

 
	
 17.10

 	
 For the purposes of this
clause 17, “Treasury Permitted Purposes” means: (i) complying with the
Treasury’s responsibilities and obligations, and exercising its rights,
powers and discretions, under or in connection with this Deed (including with
respect to the State Aid Approval); (ii) providing or enabling the provision
of financial support to LBG or protecting or enhancing the stability of the
financial system of the United Kingdom; (iii) reporting on compliance with
this Deed by LBG (including with respect to the State Aid Approval); and (iv)
discharging the Treasury’s responsibilities and functions.  

 
	
  

 	
  

 
	
 18.

 	
 ASSIGNMENT
 

 
	
  

 	
  

 
	
 18.1

 	
 The Treasury may effect a
 Transfer to any Government Entity on such terms as it considers appropriate. 

 
	
  

 	
  

 
	
 18.2

 	
 The Treasury shall effect a
Transfer by giving not less than 10 Business Days prior written notice to LBG
specifying the identity of the transferee and the rights, powers, discretions
or obligations under this Deed that are to be the subject of the Transfer
(the “Substituted Rights and Obligations”).  

 
	
  

 	
  

 
	
 18.3

 	
 If a notification is given
 by the Treasury pursuant to clause 18.2, LBG shall enter into such further
 agreements as are necessary in order to substitute the relevant transferee
 for the Treasury in respect of the Substituted Rights and Obligations. 

 
	
  

 	
  

 
	
 18.4

 	
 For the purpose of this
 clause 18: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 “Transfer” means: (i) the
assignment of all or any part of the Treasury’s rights and benefits of or
under this Deed; (ii) the declaration of a trust in respect of or  

 

19

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the entry
 into of any arrangement whereby the Treasury agrees to hold in trust for any
 person all or any part of the benefit of, or its rights or benefits under,
 this Deed; or (iii) the transfer (whether by way of novation, sub-contract,
 delegation or otherwise), or the entry into an arrangement whereby any person
 is to perform, any or all of the Treasury’s obligations under this Deed; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 “Government Entity” means: (i) any
 department, non-departmental public body, authority or agency of Her
 Majesty’s Government of the United Kingdom or the Crown; (ii) any of Her
 Majesty’s Secretaries of State and any other Minister of the Crown; (iii) the
 Treasury Solicitor; (iv) any body corporate established by statute some or
 all of the members of which are appointed by a Secretary of State or Minister
 of the Crown; (v) UK Financial Investments Limited; (vi) any quasi-governmental
 or regulatory body; and (vii) any other entity or person directly or
 indirectly owned or established by, or held on trust for, any of the
 foregoing. 

 
	
  

 	
  

 
	
 19.

 	
 REMEDIES 

 
	
  

 	
  

 
	
 19.1

 	
 No delay or
 omission by the Treasury or LBG (as the case may be) in exercising any right,
 power or remedy provided by law or under or pursuant to the Deed shall: (i)
 affect that right, power or remedy; or (ii) operate as a waiver of it. 

 
	
  

 	
  

 
	
 19.2

 	
 The single
 or partial exercise by the Treasury of any right, power or remedy provided by
 law or under or pursuant to this Deed shall not, unless otherwise expressly
 stated, preclude any other or further exercise of it or the exercise of any
 other right, power or remedy. 

 
	
  

 	
  

 
	
 19.3

 	
 Any right of
 the Treasury is cumulative and not exclusive of any other right (whether
 provided by law or otherwise). 

 
	
  

 	
  

 
	
 19.4

 	
 LBG
 acknowledges and agrees that: (i) breaches by it of this Deed may result in
 injury to the public and/or third parties rather than injury specific to the
 Treasury; and/or (ii) damages may not be an adequate remedy for any breach of
 any of this Deed, and further acknowledges and agrees that, without prejudice
 to any other rights or remedies which the Treasury may have, whether pursuant
 to a provision of this Deed or otherwise equitable relief (including specific
 performance and injunction) for any such breach (or potential breach) will
 normally be appropriate. LBG agrees not to raise any objection to any
 application by the Treasury for any such remedies. 

 
	
  

 	
  

 
	
 20.

 	
 FURTHER ASSURANCE 

 
	
  

 	
  

 
	
  

 	
 LBG shall,
 at its own cost, from time to time on request, do or procure the doing of all
 acts and/or execute or procure the execution of all documents in a form
 satisfactory to the Treasury for giving full effect to this Deed and securing
 the full benefit of the rights, powers and remedies conferred upon the
 Treasury in this Deed. 

 

20

	
  

 	
  

 
	
 21.

 	
 INVALIDITY 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
 22. 

 	
 NOTICES 

 
	
  

 	
  

 
	
 22.1

 	
 Except as
 otherwise provided in this Deed, a notice under this Deed shall only be
 effective if it is in writing. Facsimile transmissions are permitted but
 email is not. 

 
	
  

 	
  

 
	
 22.2

 	
 Notices
 under this Deed shall be sent to a party to this Deed at its address or
 number and for the attention of the individual set out below: 

 

	
  

 	
  

 	
  

 
	
 Party and title of
individual  

 	
Address  

 	
Facsimile no.  

 
	
 

 	
 

 	
 

 
	
  

 
	
 LBG

 	
 Henry Duncan
 House

 	
  

 
	
  

 	
 120 George
 St

 	
  

 
	
  

 	
 Edinburgh

 	
  

 
	
  

 	
 Scotland EH2
 4LH

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Attention:
 Company Secretary

 	
  

 
	
  

 	
  

 	
  

 
	
 Treasury

 	
 1 Horse
 Guards Road

 	
 0207 270
 4844

 
	
  

 	
 London SW1A
 2HQ

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Attention:
 Nikhil Rathi (team leader,

 	
  

 
	
  

 	
 financial
 stability)

 	
  

 

	
  

 	
  

 
	
  

 	
 provided
 that a party may change its notice details on giving notice to the other
 party of the change in accordance with this clause 22. That notice shall only
 be effective on the day falling five clear Business Days after the
 notification has been received or such later date as may be specified in the
 notice. 

 
	
  

 	
  

 
	
 22.3

 	
 Any notice
 given under this Deed shall, in the absence of earlier receipt, be deemed to
 have been duly given as follows: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 if delivered
 personally, on delivery; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 if sent by
 first class post, two clear Business Days after the date of posting; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 if sent by
 facsimile, when despatched. 

 
	
  

 	
  

 
	
 22.4

 	
 Any notice
 given under this Deed outside Working Hours in the place to which it is
 addressed shall be deemed not to have been given until the start of the next
 period of Working Hours in such place. 

 

21

	
  

 	
  

 
	
 22.5

 	
 The
 provisions of this clause 22 shall not apply in relation to the service of
 Service Documents. 

 
	
  

 	
  

 
	
 23. 

 	
 CONTRACTS
(RIGHTS OF THIRD PARTIES) ACT 1999  

 
	
  

 	
  

 
	
 23.1

 	
 Clauses 10
and 11 (the “Third Party Provisions”) confer a benefit on certain persons
named therein who are not a party to this Deed (each, a “Third Party”). The
Third Party Provisions are intended to be enforceable by each Third Party by
virtue of the Contract (Rights of Third Parties) Act 1999.  

 
	
  

 	
  

 
	
 23.2

 	
 Other than
 the Third Party Provisions, the parties to this Deed do not intend that any
 term of this Deed should be enforceable, by virtue of the Contracts (Rights
 of Third Parties) Act 1999, by any person who is not a party to this Deed. 

 
	
  

 	
  

 
	
 23.3

 	
 Notwithstanding
 clause 23.1, any amendment to this Deed may be effected without the consent
 of any Third Party. 

 
	
  

 	
  

 
	
 24.

 	
 COUNTERPARTS 

 
	
  

 	
  

 
	
  

 	
 This Deed
 may be executed in any number of counterparts, and by the parties on separate
 counterparts, but shall not be effective until each party has executed at
 least one counterpart. Each counterpart shall constitute an original of this
 Deed, but all the counterparts together shall constitute one and the same
 instrument. 

 
	
  

 	
  

 
	
 25.

 	
 VARIATION 

 
	
  

 	
  

 
	
 25.1 

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

 
	
  

 	
  

 
	
 25.2

 	
 Subject to
 clause 25.3, and except where a State Aid Approval has been annulled or
 suspended by the Court of First Instance or the European Court of Justice, if
 the Treasury considers at any time that it is necessary to modify the State
 Aid Commitments: (i) in order to reflect that the conditions subject to which
 it was anticipated the European Commission would give the State Aid Approval
 are different from the conditions subject to which the European Commission
 ultimately does give the State Aid Approval; or (ii) to reflect a change to
 the State Aid Approval, then, in either case, the Treasury may by notice (but
 subject to its obligation to consult in good faith with LBG pursuant to
 clause 4.1) supplement, modify, replace or delete any part of the State Aid
 Commitments in such a manner as the Treasury considers necessary (acting
 reasonably). 

 
	
  

 	
  

 
	
 25.3

 	
 If, at any
 time following receipt of State Aid Approval, the Treasury or the European
 Commission seeks to supplement, modify or replace any part of the State Aid
 Conditions or a State Aid Approval, then LBG and the Treasury will each
 cooperate in good faith with a view to agreeing an appropriate response to
 such proposals. However, the Treasury will not, without the consent of LBG
 (acting reasonably) agree to any such supplement, modification or replacement
 that would have the effect of making 

 

22

	
  

 	
  

 
	
  

 	
 any of the
 State Aid Conditions or a State Aid Approval significantly more onerous to
 LBG. 

 
	
  

 	
  

 
	
 26.

 	
 AGENT FOR SERVICE OF PROCESS 

 
	
  

 	
  

 
	
 26.1 

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

 
	
  

 	
  

 
	
 26.2

 	
 If the agent
 at any time ceases for any reason to act as such, LBG shall appoint a
 replacement agent having an address for service in England or Wales and shall
 notify the Treasury of the name and address of the replacement agent. Failing
 such appointment and notification, the Treasury shall be entitled by notice
 to LBG to appoint a replacement agent to act on behalf of LBG. The provisions
 of this clause 26 applying to service on an agent apply equally to service on
 a replacement agent. 

 
	
  

 	
  

 
	
 26.3

 	
 A copy of
 any Service Document served on an agent shall be sent by post to LBG. Failure
 or delay in so doing shall not prejudice the effectiveness of service of the
 Service Document. 

 
	
  

 	
  

 
	
 27. 

 	
 GOVERNING LAW 

 
	
  

 	
  

 
	
  

 	
 This Deed
 shall be governed by and construed in accordance with the laws of England. 

 
	
  

 	
  

 
	
 28.

 	
 JURISDICTION 

 
	
  

 	
  

 
	
 28.1

 	
 The courts
 of England are to have exclusive jurisdiction to settle any Proceedings
 arising out of or in connection with this Deed. 

 
	
  

 	
  

 
	
 28.2

 	
 Each party
 waives (and agrees not to raise) any objection, on the ground of forum non
 conveniens or on any other ground, to the taking of Proceedings by another
 party in the courts of England. Each party to this Deed also agrees that a
 judgment against it in Proceedings brought in England in accordance with this
 clause 28 shall be conclusive and binding upon it and may be enforced in any
 other jurisdiction. 

 
	
  

 	
  

 
	
 28.3

 	
 Each party
 irrevocably submits and agrees to submit to the jurisdiction of the English
 courts. 

 

IN WITNESS WHEREOF this
document has been executed and delivered as a deed the day and year first
before written. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Executed as
 a deed by two of

 	
 )

 	
  

 	
 

 
	
 THE LORDS COMMISSIONERS OF HER

 	
 )

 	
  

 
	
 MAJESTY’S TREASURY

 	
 )

 	
 By:

 
	
  

 	
 )

 	
  

 	
 

 	
  

 
	
  

 	
 )
)
)

 	
  

 	
 

 
	
  

 	
 By:

 
	
  

 	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Executed as
 a deed by

 	
 )

 	
  

 	
  

 
	
 LLOYDS BANKING GROUP PLC

 	
 )

 	
  

 	
  

 
	
 acting by a
 director and its secretary/two

 	
 )

 	
 By:

 	

  

 	
  

 
	
 directors:

 	
 )

 	
  

 	
 

 	
  

 
	
  

 	
 )

 	
  

 	
  

 
	
  

 	
 )

 	
  

 	
 Director

 
	
  

 	
 )

 	
  

 	
  

 
	
  

 	
 )

 	
 By:

 	

  

 	
  

 
	
  

 	
 )

 	
  

 	
 

 	
  

 
	
  

 	
 )

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Director/Secretary

 

 CA093050005

IN WITNESS WHEREOF this
document has been executed and delivered as a deed the day and year first
before written. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Executed as
 a deed by two of

 	
 )

 	
  

 	
  

 
	
 THE LORDS COMMISSIONERS OF HER

 	
 )

 	
  

 
	
 MAJESTY’S TREASURY

 	
 )

 	
 By:

 
	
  

 	
 )

 	
  

 	
 

 	
  

 
	
  

 	
 )
)
)

 	
  

 	
  

 
	
  

 	
 By:

 
	
  

 	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Executed as a deed by
LLOYDS BANKING GROUP PLC
acting by a
 director and its secretary/two
directors:

 	
 )

 	
  

 	
  

 
	
 )

 	
  

 	
 

 
	
 )
)
)

 	
 By:

 	
  

 
	
  

 	
 

 	
  

 
	
 )

 	
  

 	
  

 	
  

 
	
  

 	
 )

 	
  

 	
 Director

 
	
  

 	
 )
)
)

 	
  

 	
 

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	

 	
 

 
	
  

 	
  

 	
  

 	
 

 	
  

 
	
  

 
	
  

 	
  

 	
  

 	
 Director/Secretary

 

 CA093050005Exhibit 4(a)(x) 

Dated: 3 November 2009

THE LORDS COMMISSIONERS OF HER
MAJESTY’S TREASURY

and 

LLOYDS BANKING GROUP PLC

UNDERTAKING TO SUBSCRIBE
and related matters

Slaughter and May

One Bunhill Row

London EC1Y 8YY

(JAYP/MDSC)

CD093010014

CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
1.

	
DEFINITIONS AND
INTERPRETATION

	
1

	
 

	
 

	
 

	
 

	
 

	
2.

	
EFFECTIVENESS

	
7

	
 

	
 

	
 

	
 

	
 

	
3.

	
UNDERTAKING TO
SUBSCRIBE

	
7

	
 

	
 

	
 

	
 

	
 

	
4.

	
WARRANTIES

	
11

	
 

	
 

	
 

	
 

	
 

	
5.

	
TAX MATTERS

	
11

	
 

	
 

	
 

	
 

	
 

	
6.

	
ANNOUNCEMENTS AND
PUBLICITY

	
14

	
 

	
 

	
 

	
 

	
 

	
7.

	
CONFIDENTIALITY;
FREEDOM OF INFORMATION

	
15

	
 

	
 

	
 

	
 

	
 

	
8.

	
ASSIGNMENT

	
17

	
 

	
 

	
 

	
 

	
 

	
9.

	
REMEDIES

	
18

	
 

	
 

	
 

	
 

	
 

	
10.

	
INVALIDITY

	
18

	
 

	
 

	
 

	
 

	
 

	
11.

	
NOTICES

	
19

	
 

	
 

	
 

	
 

	
 

	
12.

	
CONTRACTS (RIGHTS
OF THIRD PARTIES) ACT 1999

	
20

	
 

	
 

	
 

	
 

	
 

	
13.

	
COUNTERPARTS

	
20

	
 

	
 

	
 

	
 

	
 

	
14.

	
VARIATION

	
20

	
 

	
 

	
 

	
 

	
 

	
15.

	
TERMINATION

	
20

	
 

	
 

	
 

	
 

	
 

	
16.

	
AGENT FOR SERVICE
OF PROCESS

	
20

	
 

	
 

	
 

	
 

	
 

	
17.

	
GOVERNING LAW

	
21

	
 

	
 

	
 

	
 

	
 

	
18.

	
JURISDICTION

	
21

	
 

	
 

	
 

	
THIS
DEED is
made on 3 November 2009 

	
 

	
 

	
BETWEEN:

	
 

	
 

	
(1)

	
THE
LORDS COMMISSIONERS OF HER MAJESTY’S TREASURY of 1 Horse Guards Road, London
SW1A 2HQ (the “Treasury”); and 

	
 

	
 

	
(2)

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

	
 

	
 

	
WHEREAS:

	
 

	
 

	
(A)

	
LBG intends to
effect the Rights Issue (as defined below). 

	
 

	
 

	
(B)

	
The Treasury
Solicitor (as nominee of the Treasury) is, at the date of this Deed, the
registered owner of 11,798,531,471 Ordinary Shares (each as defined below). 

	
 

	
 

	
(C)

	
Subject to the
terms and conditions set out in this Deed, the Treasury has agreed to procure
that the Treasury Solicitor (i) votes in favour of all of the Resolutions in
accordance with the recommendation of the board of LBG (except for the HMT
Resolution); and (ii) takes up (as nominee of the Treasury) the Treasury’s
rights to subscribe for all of the HMT Rights Issue Shares to be issued under
the Rights Issue, in consideration, inter
alia, for which LBG has agreed to pay to the Treasury the HMT Commitment
Commission (each as defined below). 

	
 

	
 

	
NOW THIS DEED
WITNESSES AS FOLLOWS: 

	
 

	
 

	
1.

	
DEFINITIONS
AND INTERPRETATION 

	
 

	
 

	
1.1

	
In this Deed
(including the Recitals): 

	
 

	
 

	
 

	
“Acceptance” has the meaning given in
clause 3.2(A); 

	
 

	
 

	
 

	
“Acceptance Date” has the meaning given in
clause 3.2(A); 

	
 

	
 

	
 

	
“Admission” means the admission of the HMT
Rights Issue Shares (nil paid) to the Official List of the UK Listing
Authority becoming effective and the admission of such shares (nil paid) to
trading on the main market for listed securities of the London Stock Exchange
plc becoming effective; 

	
 

	
 

	
 

	
“Authority” means: (i) any government;
(ii) any governmental or quasi-governmental authority, body, agency or
association; (iii) any supranational, federal, state or local government;
(iv) any statutory or regulatory body, agency or association; (v) any body,
agency or association having the power to impose, collect or administer any
Tax; and (vi) any court, tribunal or other judicial body; 

	
 

	
 

	
 

	
“Base Fee” means 2.25 per cent. of the
Issue Price; 

2

	
 

	
 

	
 

	
“Business Day” means a day (other than a Saturday or a
Sunday) on which banks are open for business in London; 

	
 

	
 

	
 

	
“Circular” means the shareholder circular to be published in
connection with, amongst other things, the Rights Issue in accordance with
the Listing Rules; 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Confidential Information” has the meaning given in clause
7.1; 

	
 

	
 

	
 

	
“EC Treaty” means the consolidated version of the Treaty
establishing the European Community; 

	
 

	
 

	
 

	
“Exchange Offer Memoranda” has the meaning given in the
Underwriting Agreement; 

	
 

	
 

	
 

	
“HMT Commitment Commission” has the meaning given in clause
3.3;

	
 

	
 

	
 

	
“FOI Act” has the meaning given in clause 7.7; 

	
 

	
 

	
 

	
“FOI Request” has the meaning given in clause 7.7;

	
 

	
 

	
 

	
“FSA” means the Financial Services Authority including when
acting in its capacity as the competent authority for the purposes of Part VI
of the FSMA (and any successor authority); 

	
 

	
 

	
 

	
“FSMA” means the Financial Services and Markets Act 2000; 

	
 

	
 

	
 

	
“GM” means the general meeting of LBG at which the
Resolutions are proposed; 

	
 

	
 

	
 

	
“Government Entity” has the meaning given in clause 8.4(B); 

	
 

	
 

	
 

	
“Group” means LBG and all of its group undertakings (as
defined in section 1161(5) of the Companies Act 2006); 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“HMT Rights Issue Shares” means the new Ordinary Shares which
are to be offered in respect of the Relevant Shares pursuant to the Rights
Issue; 

	
 

	
 

	
 

	
“Issue Price” means the higher of (i) 15 pence per HMT Rights
Issue Share; and (ii) such other issue price per HMT Rights Issue Share as
shall be determined in accordance with clause 2.5 of the Underwriting
Agreement, in which case this term shall mean such revised price; 

3

	
 

	
 

	
 

	
“Joint Global Co-ordinators” means Citigroup Global Markets
U.K. Equity Limited, Merrill Lynch International and UBS Limited, as
appointed by LBG pursuant to the terms of the Underwriting Agreement in
relation to the Rights Issue; 

	
 

	
 

	
 

	
“Listing Rules” means the listing rules made by the FSA under
Part VI of the FSMA; 

	
 

	
 

	
 

	
“Losses” means any and all loss, damage, cost, liability,
demand, charge or expense (including legal fees) 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 3.6
and/or in seeking advice regarding any Claim or in any way related to or in
connection with the indemnity contained in clause 3.6), and “Loss” shall be
construed accordingly; 

	
 

	
 

	
 

	
“Ordinary Shares” means the ordinary shares of 25 pence each
in the capital of LBG, or following the Share Capital Subdivision becoming
effective, ordinary shares of 10 pence each in the capital of LBG; 

	
 

	
 

	
 

	
“PALs” means the renounceable provisional allotment letters
expected to be sent to certain shareholders of LBG in connection with the
Rights Issue; 

	
 

	
 

	
 

	
“Per Share Discretionary Fee” means the aggregate pounds
sterling amount (if any) paid by LBG to any and all of the Joint Bookrunners
as a discretionary fee, pursuant to and in accordance with clauses 10.2 and
10.6 of the Underwriting Agreement, divided by the aggregate number of
Underwritten Shares (each as defined in the Underwriting Agreement); 

	
 

	
 

	
 

	
“Pre-Marketing” means any and all contacts, presentations,
discussions, road-shows, conversations and other marketing or
investor-education activities effected by or on behalf of LBG in relation to
the Rights Issue or other associated transactions prior to the release of the
Press Announcement, including the disclosure of information in respect of
(amongst other things) the Scheme, the “stress test” analysis performed by
the FSA in relation to the capital of LBG, the State Aid Approval, the
prospective terms of the Rights Issue and other transactions contemplated by
the Prospectus, and the possible intentions of the Treasury, the European
Commission and the FSA in relation to those and other associated matters; 

	
 

	
 

	
 

	
“Press Announcement” means the press announcement to be
released by LBG giving details of, amongst other things, the Rights Issue; 

	
 

	
 

	
 

	
“Proceedings” means any proceeding, suit or action arising
out of or in connection with this Deed, whether contractual or
non-contractual; 

	
 

	
 

	
 

	
“Proposals Resolutions” means Resolutions 1, 2, 4, 6, 7, 8, 9
and 11 as set out in the notice of general meeting of LBG contained in the
Circular; 

	
 

	
 

	
 

	
“Prospectus” means the prospectus to be issued by LBG in
respect of the Rights Issue in accordance with the Prospectus Rules; 

4

	
 

	
 

	
 

	
“Prospectus Rules” means the prospectus
rules made by the FSA under Part VI of the FSMA; 

	
 

	
 

	
 

	
“Relevant Cost” has the meaning given in
clause 5.4; 

	
 

	
 

	
 

	
“Relevant Documents” has the meaning given
in the Underwriting Agreement; 

	
 

	
 

	
 

	
“Relevant Person” means the Treasury, the
Treasury Solicitor, 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; 

	
 

	
 

	
 

	
“Relevant Shares” means the Ordinary
Shares which are held by the Treasury Solicitor (as nominee of the Treasury)
from time to time; 

	
 

	
 

	
 

	
“Representatives” means: (i) in the
context of the Treasury, the Treasury Solicitor, 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, agents, professional advisers and contractors
of the foregoing; and (ii) in the context of LBG and the Group, directors,
officers, employees, agents, professional advisers and contractors; 

	
 

	
 

	
 

	
“Resolutions” means all of the resolutions
set out in the notice of general meeting of LBG contained in the Circular, to
approve (amongst other things): (i) the payment of the HMT Commitment
Commission by LBG to the Treasury; and (ii) the Rights Issue; 

	
 

	
 

	
 

	
“Restricted Statement” has the meaning
given In clause 6.1; 

	
 

	
 

	
 

	
“Rights Issue” means the rights issue of
up to 90,000,000,000 new Ordinary Shares expected to be announced on or about
the date of this Deed; 

	
 

	
 

	
 

	
“Scheme” means the Asset Protection
Scheme, announced by the Government of the United Kingdom on 19 January 2009;

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Stamp Tax” means any stamp, documentary,
registration or capital duty or tax (including stamp duty, stamp duty reserve
tax and any other similar duty or similar tax) and any fine, penalty, charge,
cost or interest relating thereto; 

5

	
 

	
 

	
 

	
“State Aid Approval” means the approval or anticipated
approval, subject to certain conditions, by the European Commission of the
aid provided by the Treasury to LBG: (i) under the recapitalisation scheme,
announced by the Government on 8 October 2008; (ii) in
connection with LBG’s (or a member of the Group’s) proposed participation in
the Scheme; and (iii) in connection with any aspect of the Rights Issue as
aid compatible with article 87 of the EC Treaty; 

	
 

	
 

	
 

	
“Subscription Proceeds” has the meaning given in clause
3.2(B); 

	
 

	
 

	
 

	
“Substituted Rights and Obligations” has the meaning given in
clause 8.2; 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
“Transfer” has the meaning given in clause 8.4(A); 

	
 

	
 

	
 

	
“Treasury Permitted Purposes” means: (i) complying with the
Treasury’s responsibilities and obligations, and exercising its rights,
powers and discretions, under or in connection with this Deed; (ii) providing
or enabling the provision of financial support to LBG or protecting or
enhancing the stability of the financial system of the United Kingdom; and
(iii) discharging the Treasury’s responsibilities and functions; 

	
 

	
 

	
 

	
“Treasury Solicitor” means the Solicitor for the Affairs of
Her Majesty’s Treasury; 

	
 

	
 

	
 

	
“Undertakings” means the undertakings given by the Treasury
provided for in clauses 3.1 and 3.2; 

	
 

	
 

	
 

	
“Underwriting Agreement” means the underwriting agreement
between, inter alia, LBG,
Merrill Lynch International, UBS Limited, Citigroup Global Markets U.K.
Equity Limited, Goldman Sachs International, HSBC Bank plc, J.P. Morgan
Securities Ltd and J.P. Morgan Cazenove Limited, of even date hereof, in
relation to the proposed Rights Issue; 

	
 

	
 

	
 

	
“Underwriting Warranties” has the meaning given in clause
3.5; 

	
 

	
 

	
 

	
“VAT” means (i) any Tax imposed in conformity with the
council directive of 28 November 2006 on the common system of value added tax
(EC Directive 2006/112) (including, in relation to the United Kingdom, any
value added tax imposed by the Value Added Tax Act 1994 and/or any
legislation or regulations supplemental thereto); and (ii) any
other Tax of a similar nature (whether imposed in a member state of the
European Union in substitution for or in addition to the Tax mentioned above
or imposed elsewhere); and 

6

	
 

	
 

	
 

	
 

	
“Working Hours” means 9.30 a.m. to 5.30 p.m. on a Business
Day. 

	
 

	
 

	
 

	
1.2

	
In this Deed, unless otherwise
specified: 

	
 

	
 

	
 

	
 

	
(A)

	
references to clauses and
paragraphs are to clauses and paragraphs of this Deed; 

	
 

	
 

	
 

	
 

	
(B)

	
the words “include” and “including” shall be deemed
to be followed by the phrase “without limitation”; 

	
 

	
 

	
 

	
 

	
(C)

	
headings and sub-headings in
this Deed are included for ease of reference only and shall not affect the
interpretation of this Deed; 

	
 

	
 

	
 

	
 

	
(D)

	
any reference to a “person” shall be construed so as to
include any individual, firm, company, corporation, body corporate,
government, state or agency of a state, local or municipal authority or
governmental body or any joint venture, association or partnership (whether
or not having separate legal personality); 

	
 

	
 

	
 

	
 

	
(E)

	
any reference to any statute,
statutory provision or rules or regulations made thereunder shall be
construed as a reference to the same as it may have been, or may from time to
time be, amended, modified, re-enacted or replaced; and 

	
 

	
 

	
 

	
 

	
(F)

	
a reference to any other
document to which both the Treasury and LBG are party is a reference to that
other document as amended, varied or supplemented at any time. 

	
 

	
 

	
 

	
1.3

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

	
 

	
 

	
 

	
 

	
(A)

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

	
 

	
 

	
 

	
 

	
(B)

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

	
 

	
 

	
 

	
 

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

7

	
  

 	
  

 	
  

 
	
 2.

 	
 EFFECTIVENESS 

 
	
  

 	
  

 
	
 2.1

 	
 All provisions of this Deed
 shall have full force and effect upon execution and delivery of this Deed by
 the parties to it. 

 
	
  

 	
  

 
	
 2.2

 	
 The Treasury shall cease to be
 bound by the Undertakings if: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 the Press Announcement is not
 released through a regulatory information service at or before 7.00 a.m. on
 the date of this Deed, or such later time and/or date as LBG and the Joint
 Global Co-ordinators may agree in writing pursuant to, and in accordance
 with, the Underwriting Agreement; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 the Prospectus is not published
 in accordance with the Prospectus Rules at or before 7.00 a.m. on the date of
 this Deed, or such later time and/or date as LBG and the Joint Global
 Co-ordinators may agree in writing pursuant to, and in accordance with, the
 Underwriting Agreement; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 a new Issue Price in excess of
 15 pence is determined in accordance with clause 2.5 of the Underwriting
 Agreement, and the press announcement and pricing statement giving details of
 the revised Issue Price is not released through a regulatory information
 service at or before 7.00 a.m. on 24 November 2009; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 any of the Proposal Resolutions
 is not passed at the GM on the date for which it has been convened (or, to
 the extent as LBG and the Joint Global Co-ordinators may agree in writing
 pursuant to, and in accordance with, the Underwriting Agreement, any
 adjournment thereof); or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (E)

 	
 Admission does not occur at or
 before 8.00 a.m. on 27 November 2009, or such later time and/or date as LBG
 and the Joint Global Co-ordinators may agree in writing pursuant to, and in
 accordance with, the Underwriting Agreement. 

 
	
  

 	
  

 	
  

 
	
 3.

 	
 UNDERTAKING TO
 SUBSCRIBE 

 
	
  

 	
  

 
	
 3.1

 	
 Subject to clauses 2.2(A), (B)
 and (C), the Treasury hereby irrevocably undertakes to LBG to procure that
 the Treasury Solicitor shall exercise, or procure the exercise of, all voting
 rights attaching to the Relevant Shares on all of the Resolutions in
 accordance with the recommendation of the board of LBG (except for Resolution
 4, as set out in the notice of general meeting of LBG contained in the
 Circular). 

 
	
  

 	
  

 
	
 3.2

 	
 Subject to clause 2.2, the
 Treasury hereby irrevocably undertakes to LBG to procure that the Treasury
 Solicitor shall: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 prior to the latest time and
date for acceptance under the Rights Issue (the “Acceptance Date”), apply and
subscribe (as nominee for the Treasury) (unless otherwise agreed in this
Deed, on the terms set out in the Prospectus, any pricing statement published
by LBG and, where relevant, the terms of the PALs)  

 

8

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 for all of the HMT Rights Issue
 Shares under the Rights Issue each at the Issue Price (the “Acceptance”);

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 ensure that payment in cash
 consideration (within the meaning given by section 583 of the Companies Act
 2006), in pounds sterling and in a manner which is not prohibited by section
 587 of the Companies Act 2006, is made to LBG (or as otherwise directed by
 LBG) in respect of the aggregate subscription price for the HMT Rights Issue
 Shares subscribed by the Treasury, being the Issue Price multiplied by the
 number of HMT Rights Issue Shares, (the “Subscription
 Proceeds”) at or prior to 11.00 a.m. on the Acceptance Date; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 unless otherwise agreed with
 LBG, not dispose of the Relevant Shares, any other Ordinary Shares or any
 interest (as such term is defined in Section 820 of the Companies Act 2006)
 therein or any right relating to the HMT Rights Issue Shares prior to the
 earliest to occur of: (i) the Rights Issue closing; (ii) the Rights Issue
 lapsing or being terminated in accordance with its terms; (iii) LBG
 confirming in writing that it has no further intention to proceed with the
 Rights Issue; and (iv) 31 December 2009. 

 
	
  

 	
  

 	
  

 
	
 3.3

 	
 Conditional upon the Acceptance
 and the receipt by LBG of the Subscription Proceeds, LBG shall pay, or
 procure that one of its subsidiaries shall pay, to the Treasury (or to such
 other person as the Treasury may direct) in cash, in pounds sterling, a fee
 equal to: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 the Base Fee multiplied by the
 aggregate number of HMT Rights Issue Shares (the “Base Fee Amount”); plus 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 the Per Share Discretionary Fee
 multiplied by the aggregate number of HMT Rights Issue Shares, 

 
	
  

 	
  

 	
  

 
	
  

 	
 in consideration, inter alia, for the Treasury giving the
 Undertakings (the “HMT Commitment
 Commission”).

 
	
  

 	
  

 
	
 3.4

 	
 LBG shall pay, or procure that
 one of its subsidiaries shall pay, the HMT Commitment Commission to the
 Treasury not later than the fifth Business Days following the Acceptance Date
 (provided that payment of the Subscription Proceeds has been made in accordance
 with clause 3.2(B)). Without prejudice to its right to receive payment of the
 HMT Commitment Commission directly from LBG, or one of its subsidiaries,
 pursuant to this Clause 3.4, the Treasury shall be entitled and is authorised
 to set-off the Base Fee Amount (or any portion thereof) against its
 obligation to pay the Subscription Proceeds. In the event that the Base Fee
 Amount (or any portion thereof) is set-off against the Treasury’s obligation
 to pay the Subscription Proceeds, then such Base Fee Amount (or such portion
 thereof) shall be deducted from the Subscription Proceeds in full
 satisfaction of LBG’s obligation to pay the Base Fee Amount (or such portion
 thereof) pursuant to this Deed and in full satisfaction of the Treasury’s
 obligation to pay that portion of the Subscription Proceeds. 

 

	
  

 	
  

 	
  

 
	
 9

 
	
  

 
	
 3.5

 	
 Without prejudice to the
 provisions of clause 4, LBG represents, warrants and undertakes to the
 Treasury that each statement set out in Schedule 3 to the Underwriting
 Agreement (together, the “Underwriting Warranties”) is true
 and accurate and not misleading on the date of this Deed and shall remain
 true and accurate and not misleading and shall be repeated at any Re-Pricing
 Date (as defined in the Underwriting Agreement), at Admission, at the Acceptance
 Date, at any Time of Sale (as defined in the Underwriting Agreement), at the
 Settlement Date (as defined in the Underwriting Agreement) and on the date of
 publication of any supplementary prospectus, 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 published prior to the
 relevant date). The provisions of clauses 12.2, 12.4, 12.5, 12.6, 12.7, 12.8
 and 12.14 of the Underwriting Agreement shall apply, mutatis mutandis, to this clause 3.5 as
 if such provisions were repeated herein (and all references in such
 provisions to: (i) the “Banks”, the “Underwriters” or “Joint Global
 Co-ordinators” shall be deemed to be references to the Treasury; and (ii) the
 “Underwritten Shares” shall be deemed to be references to the HMT Rights
 Issue Shares). 

 
	
  

 	
  

 
	
 3.6

 	
 Without restricting the rights
 of the Treasury or its ability to claim damages on any basis, LBG agrees to
 fully and effectively indemnify and hold harmless each Relevant Person on an
 after-Tax basis (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 Deed 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 applicable Relevant Person) in connection with the Pre-Marketing, the
 Share Capital Subdivision, the Rights Issue, Admission, or the arrangements
 contemplated by the Prospectus, the Circular, the PALs, the Press
 Announcement, any other Relevant Document and/or either of the Exchange Offer
 Memoranda (or any amendment or supplement to any of them), or this Deed or
 any other agreement relating to the Rights Issue, including any and all
 Losses or Claims whatsoever, as incurred, in connection with or arising out
 of: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 the Prospectus, the Circular,
 the PALs, the Press Announcement, any other Relevant Document, either of the
 Exchange Offer Memoranda and/or any materials used for the purposes of the
 Pre-Marketing (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 any such documents or materials (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 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 breach or alleged breach by
 LBG of any of the Underwriting Warranties, 

 

	
  

 	
  

 	
  

 
	
 10

 
	
  

 
	
  

 	
 PROVIDED THAT, the
 indemnity contained in this clause 3.6 shall not apply to any Losses or
 Claims: (i) if and to the extent arising out of a decline in market value of
 the HMT Rights Issue Shares suffered or incurred by any Relevant Person as a
 result of HM Treasury having subscribed for the HMT Rights Issue Shares
 pursuant to this Deed 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 LBG in relation to the
 content, publication, issue or distribution of the Prospectus, the Circular,
 the PALs, the Press Announcement, any other Relevant Document, either of the
 Exchange Offer Memoranda and/or any materials used for the purposes of the
 Pre-Marketing or (bb) any of the matters referred to in clause 3.6(A); and/or
 (ii) if and to the extent that they are Losses or Claims in respect of Tax
 which are covered by clause 5 (or which would have been so covered but for
 any exclusion contained in clause 5). 

 
	
  

 	
  

 
	
 3.7

 	
 The provisions of clause 18.10
 of the Underwriting Agreement shall apply, mutatis
 mutandis, to clause 3.6 as if such provisions were repeated
 therein (and all references in such provisions to: (i) the “Banks” or any
 “Underwriter” shall be deemed to be references to the Treasury; (ii) any
 “Indemnified Person” shall be deemed to be references to any Relevant Person;
 and (iii) the “Underwritten Shares” shall be deemed to be references to the
 HMT Rights Issue Shares). 

 
	
  

 	
  

 
	
 3.8

 	
 The provisions of clause 15 of
 the Underwriting Agreement (Contribution), except clause 15.7 of the
 Underwriting Agreement, shall apply, mutatis
 mutandis, to this Deed as if such provisions were repeated therein
 (and all references in such provisions to: (i) Clause 14 shall be deemed to
 be references to clause 3.6, above; (ii) the “Company” shall be deemed to be
 references to LBG; (iii) the “Joint Bookrunners”, “Banks” or any
 “Underwriter” shall be deemed to be references to the Treasury; (iv) any
 “Indemnified Person” shall be deemed to be references to any Relevant Person;
 (v) the “Rights Issue (excluding the HMT Shares)” shall be deemed to be
 references to the subscription by the Treasury of the HMT Rights Issue Shares;
 and (vi) the “Underwritten Shares” shall be deemed to be references to the
 HMT Rights Issue Shares). For the purposes of this clause 3.8, each Relevant
 Person shall have the same rights to contribution as the Treasury. 

 
	
  

 	
  

 
	
 3.9

 	
 LBG acknowledges and agrees
 that: (i) no Relevant Person accepts any responsibility for the contents of,
 or makes any representation or warranty as to the accuracy, completeness or
 fairness of any information in, the Prospectus, either of the Exchange Offer
 Memoranda or the Circular (or any supplement or amendment to either of them);
 and (ii) no Relevant Person has authorised or will authorise the contents of
 the Prospectus, either of the Exchange Offer Memoranda or the Circular. LBG
 shall include a disclaimer to the above effect in the Prospectus, both of the
 Exchange Offer Memoranda and the Circular. 

 
	
  

 	
  

 
	
 3.10

 	
 Each of the Treasury and the
 Treasury Solicitor hereby irrevocably waives any statutory right to withdraw
 any acceptance which may arise pursuant to section 87Q(4) of the FSMA on the
 publication of a supplementary prospectus in connection with the Rights
 Issue. For the avoidance of doubt, this clause 3.10 shall be without
 prejudice to the Treasury’s rights under clause 2.2 and 15. 

 

	
  

 	
  

 	
  

 
	
 11

 
	
  

 
	
 4.

 	
 WARRANTIES 

 
	
  

 	
  

 
	
 4.1

 	
 LBG represents and warrants to
 the Treasury on the date of this Deed that: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 it is duly organised and validly
 existing under the laws of its jurisdiction of organisation; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 it has the corporate power and
 the authority to execute and deliver this Deed and to perform its obligations
 under this Deed, and no additional act or proceeding, corporate or otherwise,
 on its part is necessary to authorise the execution and delivery of this Deed
 or the performance of any of its obligations under this Deed; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 subject to any principles of law
 affecting the rights of creditors generally and the provisions of section 117
 of the Stamp Act 1891, the obligations expressed to be assumed by LBG under
 this Deed are legal, valid, binding and enforceable obligations; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 it has duly executed and
 delivered this Deed. 

 
	
  

 	
  

 	
  

 
	
 4.2

 	
 The Treasury represents and
 warrants to LBG on the date of this Deed that: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 neither the Treasury, UK
 Financial Investments Limited nor any person acting on its or their behalf
 (other than any party to the Underwriting Agreement or any of their
 respective affiliates, as to whom the Treasury gives no undertaking) 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
 HMT Rights Issue Shares, the PALs, the nil paid rights or the fully paid
 rights to the HMT Rights Issue Shares; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 neither the Treasury, UK
 Financial Investments Limited nor any person acting on its or their behalf
 (other than any party to the Underwriting Agreement or any of their
 respective affiliates, as to whom the Treasury gives no undertaking) 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 HMT Rights Issue Shares, the PALs, the nil paid rights or the fully paid
 rights to the HMT Rights Issue Shares or has offered or will offer to sell or
 solicited or will solicit offers to buy any of the HMT Rights Issue Shares,
 the PALs, the nil paid rights or the fully paid rights to the HMT Rights
 Issue Shares in any manner involving a public offering in the United States
 within the meaning of Section 4(2) of the Securities Act. 

 
	
  

 	
  

 	
  

 
	
 5.

 	
 TAX MATTERS 

 
	
  

 	
  

 
	
 5.1

 	
 All payments by LBG (or any
 member of the Group) pursuant to this Deed shall be paid without any
 deduction or withholding, unless required by law. If any Tax is required by
 law to be deducted or withheld from or in connection with any such payment,
 the 

 

	
  

 	
  

 	
  

 
	
 12

 
	
  

 
	
  

 	
 amount payable shall be
 increased so as to ensure that the amount received by the Treasury (or any
 other Relevant Person) after such deduction or withholding (including, for
 the avoidance of doubt, any additional deduction or withholding required as a
 result of such increase) is equal to the amount which the Treasury (or such
 Relevant Person) would have received if no such deduction or withholding had
 been required. 

 
	
  

 	
  

 
	
 5.2

 	
 If the Treasury (or any other
 Relevant Person) is subject to Tax in respect of any sum
 payable pursuant to this Deed, or if any such sum is taken into account in computing the profits,
 income or gains of the Treasury (or any other Relevant Person) for Tax
 purposes, the sum payable shall be increased so as to ensure that the amount
 retained by the Treasury (or such other Relevant Person) after the payment of
 such Tax (including, for the avoidance of doubt, any additional Tax payable
 as a result of such increase) is equal to the amount which the Treasury (or
 such other Relevant Person) would have retained in the absence of such Tax.
 This clause 5.2 shall not apply to the HMT Commitment Commission or to the
 extent that any such Tax has been taken into account as a result of the
 application of clause 1.3. 

 
	
  

 	
  

 
	
 5.3

 	
 Each sum payable by LBG (or any
 member of the Group) pursuant to this Deed is expressed exclusive of any
 amount in respect
 of VAT which is chargeable on any supply or supplies for which such sum (or
 any part thereof) is the whole or part of the consideration for VAT purposes.
 If the Treasury (or any other Relevant Person) makes (or is deemed to make)
 any supply for VAT purposes in consideration for such sum (or any part
 thereof) and VAT is or becomes chargeable in respect of such supply, LBG
 shall pay (or shall procure that a member of the Group pays) to the Treasury
 (or such other Relevant Person), within 14 days of the receipt of a valid VAT
 invoice, an additional sum equal to the amount of such VAT. 

 
	
  

 	
  

 
	
 5,4

 	
 If LBG (or any member of the
 Group) is obliged to pay any sum under or in connection with this Deed by way
 of indemnity (including under clause 3.6), reimbursement, damages or
 compensation for or in respect of any liability, damage, cost, demand,
 charge or expense (the “Relevant Cost”),
 the calculation of such sum shall include an amount determined as follows: 

 
	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 if the Relevant Cost is, for VAT
 purposes, the consideration for a supply of goods or services made to the
 Treasury (or any other Relevant Person) (including where such supply is made
 to the Treasury as agent for LBG (or a member of the Group) within the terms
 of section 47 of the Value Added Tax Act 1994), such additional amount shall
 be equal to any input VAT which was incurred by the Treasury (or such other
 Relevant Person) in respect of that supply and which it is not able to
 recover from the relevant Tax authority; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 if the Relevant Cost is, for VAT
 purposes, a disbursement incurred by the Treasury (or any other Relevant
 Person) as agent on behalf of LBG (or a member of the Group) and the relevant
 supply is made to LBG (or a member of the Group) for VAT purposes, such
 additional amount shall be equal to any amount in respect of VAT which was
 paid in respect of the Relevant
 Cost by the Treasury (or such other Relevant Person), and the Treasury shall
 use reasonable endeavours to procure that the relevant third party issues a
 valid 

 

	
  

 	
  

 	
  

 
	
 13

 
	
  

 
	
  

 	
  

 	
 VAT invoice in respect of the
 Relevant Cost to LBG (or the relevant member of the Group).

 
	
  

 	
  

 	
  

 
	
 5.5

 	
 LBG shall pay and bear any Stamp
 Tax which is payable or paid (whether by the Treasury, any other Relevant
 Person or otherwise) in connection with the allotment and issue of the HMT
 Rights Issue Shares, the delivery of the HMT Rights Issue Shares and/or the
 acquisition of the HMT Rights Issue Shares in the manner contemplated by this
 Deed or the Underwriting Agreement or the execution, delivery, performance or
 enforcement of this Deed, and LBG shall indemnify the Treasury and each other
 Relevant Person on demand on an after-Tax basis in respect of such Stamp Tax,
 provided that this clause 5.5 shall not apply to: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 any Stamp Tax payable in respect
 of transfers of, or agreements to transfer, HMT Rights Issue Shares subsequent
 to any such HMT Rights Issue Shares having been acquired by the Treasury in
 the manner contemplated by this Deed; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 References in this clause 5.5 to
 HMT Rights Issue Shares include any interest in or rights to allotment of HMT
 Rights Issue Shares. 

 
	
  

 	
  

 
	
 5.6

 	
 If LBG (or any member of the
 Group) makes an increased payment to the Treasury or any other Relevant
 Person in accordance with clause 5.1 or 5.2 and the Treasury or such other
 Relevant Person (as the case may be) determines in good faith that it has
 obtained, utilised and retained a relief from Tax or a refund of Tax which is
 attributable to such increased payment made by LBG (or any member of the
 Group), then the Treasury or such other Relevant Person (as the case may be)
 shall reimburse to LBG (for itself or on behalf of the relevant member of the
 Group) as soon as reasonably practicable an amount equal to such proportion
 of the Tax so saved or refunded as will leave the Treasury or such other
 Relevant Person (as the case may be), after such reimbursement, in the same
 after-Tax position (having regard to the time value of money) that it would
 have been in if the circumstances giving rise to such additional payment had
 not arisen. For the avoidance of doubt, nothing in this Deed shall require
 the Treasury or any other Relevant Person to disclose any information in
 relation to its Tax affairs to LBG (or any other member of the Group) or any
 person acting for or on behalf of LBG (or any other member of the Group). 

 
	
  

 	
  

 
	
 5.7

 	
 The Treasury shall co-operate in
 completing any treaty forms or other procedural formalities reasonably
 requested by LBG for the purpose of enabling LBG (or the relevant member of
 the Group) to make any payment pursuant to this Deed without any deduction or
 withholding in respect of Tax. 

 

	
  

 	
  

 	
  

 
	
 14

 
	
  

 
	
 6.

 	
 ANNOUNCEMENTS
 AND PUBLICITY 

 
	
  

 	
  

 
	
 6.1

 	
 Subject to the other provisions
 of this clause 6, LBG shall ensure that no member of the Group nor any of
 their respective Representatives, shall make, publish, issue or release any
 announcement or public statement in relation to, or which refers to: (i) this
 Deed (or any ancillary matter); or (ii) the
 Treasury in connection with this Deed (each, a “Restricted Statement”), save for such Restricted Statements
 as are contained in the Press Announcement, the Prospectus or any supplement
 thereto. 

 
	
  

 	
  

 
	
 6.2

 	
 Notwithstanding clause 6.1, each
 member of the Group may (and each such member’s Representatives may on its
 behalf) make, publish, issue or release a Restricted Statement provided that
 such Restricted Statement is made, published, issued or released only after
 giving as much prior notification as is reasonably practicable to, and
 consulting in good faith to the fullest extent reasonably practicable with,
 the Treasury with a view to giving the Treasury as much time as is reasonably
 practicable, in all the circumstances, to review and comment on such
 Restricted Statement. 

 
	
  

 	
  

 
	
 6.3

 	
 If, in respect of any Restricted
 Statement, any member of the Group (or any of its Representatives) proposes
 not to adopt, or does not adopt, any amendment proposed by the Treasury
 pursuant to clause 6.2, LBG shall procure that such member of the Group or
 Representative shall (to the extent reasonably practicable, prior to the
 making, publication, issuance or release of the relevant Restricted Statement
 or, if not reasonably practicable, promptly thereafter) provide to the
 Treasury reasons explaining why such amendments are not proposed to be, or
 were not, adopted. 

 
	
  

 	
  

 
	
 6.4

 	
 If any member of the Group (or
 any of its Representatives) proposes to make, publish, issue or release a
 Restricted Statement and either: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 notification to, and
 consultation with, the Treasury prior to the making, publication, issuance or
 release of such Restricted Statement is not permissible under: (i) applicable
 law; or (ii) the rules of the Bank of
 England or of any securities exchange, clearing system or Authority
 (including the FSA) to which it is subject or submits; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 the Restricted Statement must be
 made urgently such that prior notification to or consultation with the
 Treasury is not reasonably practicable, 

 
	
  

 	
  

 	
  

 
	
  

 	
 then LBG shall ensure that the
 relevant member of the Group or Representative shall, as soon as permissible
 and reasonably practicable, provide a copy of such Restricted Statement to
 the Treasury, together with a notification providing reasonable details of
 the circumstances giving rise to the Restricted Statement. 

 
	
  

 	
  

 	
  

 
	
 6.5

 	
 Notwithstanding clause 6.1, the
 Representatives of each member of the Group may make on behalf of such member
 Restricted Statements which are unscripted oral public statements, provided
 that LBG shall use all reasonable endeavours to ensure that processes are in
 place with a view to ensuring that any such unscripted oral public statements
 are consistent with any other Restricted Statements made in accordance with
 this clause 6 by or on behalf of any member of the Group. 

 

	
  

 	
  

 	
  

 	
  

 
	
 15

 
	
  

 
	
 7.

 	
 CONFIDENTIALITY;
 FREEDOM OF INFORMATION 

 
	
  

 	
  

 
	
 7.1

 	
 Each party (the  “firstparty”) shall
 treat as confidential any information that the other party (or its
 Representatives) has provided to the first party (or its Representatives)
 with respect to the matters referred to in this Deed and which each party has
 agreed should be designated as being confidential  (“Confidential Information”). 

 
	
  

 	
  

 
	
 7.2

 	
 Each party shall: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 not disclose any Confidential
 Information to any person other than to its respective Representatives: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 in the case of disclosure by the
 Treasury, to enable or assist the Treasury to fulfil any of the Treasury
 Permitted Purposes; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 in the case of disclosure by
 LBG, to the extent that such Representatives require the Confidential
 Information to enable or assist LBG to effect the
 Rights Issue or to comply with its responsibilities and obligations, or
 exercise its rights, under this Deed; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 procure that any person to whom
 any Confidential Information is so disclosed by it complies with the
 restrictions contained in this clause 7 as if such person were a party to
 this Deed; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 have in place and maintain
 security measures and procedures to protect the confidentiality of
 Confidential Information. 

 
	
  

 	
  

 	
  

 
	
 7.3

 	
 The Treasury shall use (and
 shall ensure that its Representatives will use) Confidential Information only
 for the Treasury Permitted Purposes (or, in the case of any person referred
 to in clause 7.5(B), for the purposes of enabling or assisting such person to
 fulfil its functions). 

 
	
  

 	
  

 
	
 7.4

 	
 LBG shall use (and shall ensure
 that its Representatives will use) Confidential Information only to effect the Rights Issue or to
 enable or assist LBG to comply with its responsibilities and obligations, and
 exercise its rights, under this Deed. 

 
	
  

 	
  

 
	
 7.5

 	
 The restrictions in clauses 7.1
 and 7.2 shall not prevent the Treasury from disclosing Confidential
 Information: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 to the European Commission, if
 and to the extent that the Treasury considers such disclosure is necessary in
 connection with (i) the application of the state aid rules of the EC Treaty,
 (ii) any European Commission decision relating to those rules or (iii)
 compliance with any of the United Kingdom’s reporting requirements under the
 State Aid Approval; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 to the FSA, the Bank of England,
 the National Audit Office, the Cabinet Office or any successor organisation
 of any of the foregoing to the extent that the Treasury considers that such
 disclosure is required to enable or assist: (i) the 

 

	
  

 	
  

 	
  

 
	
 16

 
	
  

 
	
  

 	
  

 	
 Treasury to fulfil any of the
 Treasury Permitted Purposes; or (ii) the FSA, the Bank Of England, the
 National Audit Office and the Cabinet Office (or any of their respective successors)
 to fulfil their respective functions;

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 to Parliament or to any
 Parliamentary committee (including the Public Accounts Committee, the House
 of Commons Treasury Select Committee and any Select Committee of the
 Parliament of the United Kingdom), in each case if and to the extent that the
 Treasury considers it appropriate to do so, provided that (where lawful and
 considered reasonably practicable by the Treasury (but excluding any
 disclosure comprised in any unscripted oral statement)) the Treasury shall
 use reasonable endeavours to notify LBG of the Confidential Information to be
 disclosed; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 in order to comply with the
 Treasury’s responsibilities and obligations, and exercising the Treasury’s
 rights, powers and discretions, under or in connection with the State Aid
 Approval; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (E)

 	
 to assist with providing or
 enabling the provision of financial support to LBG or protecting or enhancing
 the stability of the financial system of the United Kingdom; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (F)

 	
 discharging the Treasury’s
 responsibilities and functions. 

 
	
  

 	
  

 	
  

 
	
 7.6

 	
 The restrictions in clauses 7.1
 and 7.2 shall not prevent the Treasury or LBG from disclosing Confidential
 Information: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 which is required by: (i) applicable
 law; or (ii) the rules of the Bank of England or of any securities exchange,
 clearing system or Authority (including the FSA) to which it is subject or
 submits; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 if and to the extent required
 for the purpose of any judicial proceedings; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 if and to the extent the
 information has come into the public domain through no fault of that party. 

 
	
  

 	
  

 	
  

 
	
 7.7

 	
 If the Treasury is requested to
disclose any Confidential Information pursuant to the provisions of the
Freedom of Information Act (the “FOI Act”, and such a request, an “FOI Request”),
the Treasury shall (to the extent practicable and permissible under the FOI
Act and consistent with the Code of Practice of the Secretary of State for
Constitutional Affairs on discharge of public authorities’ functions under
Part 1 of the FOI Act):  

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 notify LBG in writing of the
 nature and content of such FOI Request as soon as practicable; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 prior to the making of a
 disclosure pursuant to an FOI Request, for a period of no less than five
 Business Days consult with LBG as to: (i) whether such FOI Request is valid; (ii) whether
 or not disclosure pursuant to the FOI Act is 

 

	
  

 	
  

 	
  

 
	
 17

 
	
  

 
	
  

 	
  

 	
 required; and (iii) (if the
 Treasury determines that disclosure pursuant to the FOI Act is required) the
 scope and content of any proposed disclosure; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 (if the Treasury determines that
 disclosure pursuant to the FOI Act is required and LBG has objected to such
 disclosure or the extent of the proposed disclosure) give LBG as much prior
 notice as is reasonably practicable prior to such disclosure being made. 

 
	
  

 	
  

 	
  

 
	
 7.8

 	
 LBG acknowledges that the
 provision of information to the Treasury as provided for in this Deed is
 important, amongst other things, to enable the Treasury to monitor the
 performance by LBG of its responsibilities, duties and obligations under this
 Deed (including, in particular, with respect to compliance with the State Aid
 Approval). If LBG considers (having taken appropriate external legal advice)
 that applicable law, or pre-existing contractual restrictions, prevent or
 restrict the disclosure of any such information to the Treasury, it shall: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 notify the Treasury of the
 information to which such restrictions relate together with reasonable
 details of the legal or contractual restrictions which prevent or restrict
 such disclosure; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 in determining whether to
 disclose such information, consider in good faith whether: (i) the balance of
 public interest, (ii) the nature of its responsibilities, duties and
 obligations under this Deed; and (iii) any duties of confidentiality owed by
 the Treasury to it, are such that the information should nevertheless be
 disclosed to the Treasury. 

 
	
  

 	
  

 	
  

 
	
 7.9

 	
 No provision in this Deed shall
 require LBG (or any member of the Group) to provide any information protected
 by legal professional privilege or litigation privilege. 

 
	
  

 	
  

 
	
 8.

 	
 ASSIGNMENT 

 
	
  

 	
  

 
	
 8.1

 	
 Following the Acceptance Date,
 the Treasury may effect a Transfer to any Government Entity on such terms as
 it considers appropriate. 

 
	
  

 	
  

 
	
 8.2

 	
 The Treasury shall effect a
 Transfer by giving not less than 10 Business Days’ prior written notice to
 LBG specifying the identity of the transferee and the rights, powers,
 discretions or obligations under this Deed that are to be the subject of the
 Transfer (the “Substituted Rights and
 Obligations”). 

 
	
  

 	
  

 
	
 8.3

 	
 If a notification is given by
 the Treasury pursuant to clause 8.2, LBG shall enter into such further
 agreements as are necessary in order to substitute the relevant transferee
 for the Treasury in respect of the Substituted Rights and Obligations. 

 
	
  

 	
  

 
	
 8.4

 	
 For the purpose of this clause
 8: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
  “Transfer” means:
 (i) the assignment of all or any part of the Treasury’s rights and benefits
 of or under this Deed; (ii) the declaration of a trust in respect of or the
 entry into of any arrangement whereby the Treasury agrees to hold in trust 

 

	
  

 	
  

 	
  

 
	
 18

 
	
  

 
	
  

 	
  

 	
 for any person all or any part
 of the benefit of, or its rights or benefits under, this Deed; or (iii) the
 transfer (whether by way of novation, sub-contract, delegation or otherwise),
 or the entry into an arrangement whereby any person is to perform, any or all
 of the Treasury’s obligations under this Deed; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
  “Government
 Entity” means: (i) any department, non-departmental public
 body, authority or agency of Her Majesty’s Government of the United Kingdom
 or the Crown; (ii) any of Her Majesty’s Secretaries of State and any other
 Minister of the Crown; (iii) the Treasury Solicitor; (iv) any body corporate
 established by statute some or all of the members of which are appointed by a
 Secretary of State or Minister of the Crown; (v) UK Financial Investments
 Limited; (vi) any quasi-governmental or regulatory body; and (vi) any other
 entity or person directly or indirectly owned or established by, or held on
 trust for, any of the foregoing. 

 
	
  

 	
  

 	
  

 
	
 9.

 	
 REMEDIES 

 
	
  

 	
  

 
	
 9.1

 	
 No delay or omission by the
 Treasury or LBG (as the case may be) in exercising any right, power or remedy
 provided by law or under or pursuant to the Deed shall: (i) affect that
 right, power or remedy; or (ii) operate as a waiver of it. 

 
	
  

 	
  

 
	
 9.2

 	
 The single or partial exercise
 by the Treasury of any right, power or remedy provided by law or under or
 pursuant to this Deed shall not, unless otherwise expressly stated, preclude
 any other or further exercise of it or the exercise of any other right, power
 or remedy. 

 
	
  

 	
  

 
	
 9.3

 	
 Any right of the Treasury is
 cumulative and not exclusive of any other right (whether provided by law or
 otherwise). 

 
	
  

 	
  

 
	
 9.4

 	
 LBG acknowledges and agrees
 that: (i) breaches by it of this Deed may result in injury to the public
 and/or third parties rather than injury specific to the Treasury; and/or (ii)
 damages may not be an adequate remedy for any breach of any of this Deed, and
 further acknowledges and agrees that, without prejudice to any other rights
 or remedies which the Treasury may have, whether pursuant to a provision of
 this Deed or otherwise, equitable relief (including specific performance and
 injunction) for any such breach (or potential breach) will normally be
 appropriate. LBG agrees not to raise any objection to any application by the
 Treasury for any such remedies. 

 
	
  

 	
  

 
	
 10.

 	
 INVALIDITY 

 
	
  

 	
  

 
	
  

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

 

	
  

 	
  

 
	
 19

 
	
  

 
	
 11.

 	
 NOTICES 

 
	
  

 	
  

 
	
 11.1

 	
 Except as otherwise provided in
 this Deed, a notice under this Deed shall only be effective if it is in
 writing. Facsimile transmissions are permitted but email is not. 

 
	
  

 	
  

 
	
 11.2

 	
 Notices under this Deed shall be
 sent to a party to this Deed at its address or number and for the attention
 of the individual set out below: 

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Party and title
 of

 individual

 	
  

 	
 Address

 	
  

 	
 Facsimile no.

 	
  

 
	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 LBG

 	
 Henry Duncan House

 	
 020 7356 2168

 
	
  

 	
  

 	
 120 George St

 	
  

 
	
  

 	
  

 	
 Edinburgh

 	
  

 
	
  

 	
  

 	
 Scotland EH2 4LH

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Attention: Company Secretary

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Treasury

 	
 1 Horse Guards Road

 	
 020 7270 4844

 
	
  

 	
  

 	
 London SW1A 2HQ

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Attention: Nikhil Rathi (team

 	
  

 
	
  

 	
  

 	
 leader, financial stability)

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 provided
 that a party may change its notice details on giving notice to the other
 party of the change in accordance with this clause 11. That notice shall only
 be effective on the day falling five clear Business Days after the
 notification has been received or such later date as may be specified
 in the notice.

 
	
  

 	
  

 
	
 11.3

 	
 Any notice
 given under this Deed shall, in the absence of earlier receipt, be deemed to
 have been duly given as follows: 

 
	
  

 	
  

 
	
  

 	
 (A)

 	
 if delivered
 personally, on delivery; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 if sent by
 first class post, two clear Business Days after the date of posting; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 if sent by
 facsimile, when despatched. 

 
	
  

 	
  

 	
  

 
	
 11.4

 	
 Any notice given
 under this Deed outside Working Hours in the place to which it is addressed
 shall be deemed not to have been given until the start of the next period of
 Working Hours in such place. 

 
	
  

 	
  

 
	
 11.5

 	
 The
 provisions of this clause 11 shall not apply in relation to the service of
 Service Documents.

 

	
  

 	
  

 
	
 20

 
	
  

 
	
 12.

 	
 CONTRACTS
 (RIGHTS OF THIRD PARTIES) ACT 1999 

 
	
  

 	
  

 
	
 12.1

 	
 Clauses 3.6, 3.8 and 3.9 confer
benefits on certain persons named therein who are not a party to this Deed
(each, a “Third Party”). Clauses 3.6, 3.8 and 3.9 are intended to be
enforceable by each Third Party by virtue of the Contract (Rights of Third
Parties) Act 1999.  

 
	
  

 	
  

 	
  

 
	
 12.2

 	
 Other than in respect of clauses
 3.6, 3.8 and 3.9, the parties to this Deed do not intend that any term of
 this Deed should be enforceable, by virtue of the Contracts (Rights of Third
 Parties) Act 1999, by any person who is not a party to this Deed. 

 
	
  

 	
  

 	
  

 
	
 12.3

 	
 No Third Party may enforce, or
 take any step to enforce, the provisions of clauses 3.6, 3.8 or 3.9 without
 the prior written consent of the Treasury, which may, if given, be given on
 and subject to such terms as the Treasury may determine. 

 
	
  

 	
  

 
	
 12.4

 	
 Notwithstanding clause 12.1, any
 amendment to this Deed may be effected without the consent of any Third
 Party. 

 
	
  

 	
  

 
	
 13.

 	
 COUNTERPARTS 

 
	
  

 	
  

 
	
  

 	
 This Deed may be executed in any
 number of counterparts, and by the parties on separate counterparts, but
 shall not be effective until each party has executed at least one
 counterpart. Each counterpart shall constitute an original of this Deed, but
 all the counterparts together shall constitute one and the same instrument. 

 
	
  

 	
  

 
	
 14.

 	
 VARIATION 

 
	
  

 	
  

 
	
 14.1

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

 
	
  

 	
  

 
	
 14.2

 	
 LBG agrees with HM Treasury that
 it shall not amend, vary or supplement any term of the Underwriting Agreement
 at any time (except with regard to execution of any Re-Pricing Memorandum as
 contemplated by clause 2.5 of the Underwriting Agreement), without the prior
 written consent of the Treasury. 

 
	
  

 	
  

 
	
 15.

 	
 TERMINATION 

 
	
  

 	
  

 
	
 15.1

 	
 The Treasury shall be entitled
 to terminate this Deed if any of the conditions in clause 2 have not been
 satisfied by 31 December 2009. 

 
	
  

 	
  

 
	
 15.2

 	
 Any right of rescission is
 hereby expressly waived and excluded by the Treasury. 

 
	
  

 	
  

 
	
 16.

 	
 AGENT FOR
 SERVICE OF PROCESS 

 
	
  

 	
  

 
	
 16.1

 	
 LBG irrevocably appoints Lloyds
 TSB Bank plc of 25 Gresham Street, London EC2V 7HN to be its agent for the
 receipt of Service Documents. It agrees that any Service Document may be
 effectively served on it in connection with Proceedings in England 

 

	
  

 	
  

 	
  

 
	
 21

 
	
  

 
	
  

 	
 and Wales by service on its
 agent effected in any manner permitted by the Civil Procedure Rules. 

 
	
  

 	
  

 
	
 16.2

 	
 If the agent at any time ceases
 for any reason to act as such, LBG shall appoint a replacement agent having
 an address for service in England or Wales and shall notify the Treasury of
 the name and address of the replacement agent. Failing such appointment and
 notification, the Treasury shall be entitled by notice to LBG to appoint a
 replacement agent to act on behalf of LBG. The provisions of this clause 16
 applying to service on an agent apply equally to service on a replacement
 agent. 

 
	
  

 	
  

 
	
 16.3

 	
 A copy of any Service Document
 served on an agent shall be sent by post to LBG. Failure or delay in so doing
 shall not prejudice the effectiveness of service of the Service Document. 

 
	
  

 	
  

 
	
 17.

 	
 GOVERNING LAW 

 
	
  

 	
  

 
	
  

 	
 This Deed shall be governed by
 and construed in accordance with the laws of England. 

 
	
  

 	
  

 
	
 18.

 	
 JURISDICTION 

 
	
  

 	
  

 
	
 18.1

 	
 The courts of England are to
 have exclusive jurisdiction to settle any Proceedings arising out of or in
 connection with this Deed. 

 
	
  

 	
  

 
	
 18.2

 	
 Each party waives (and agrees
 not to raise) any objection, on the ground of forum non conveniens or on any
 other ground, to the taking of Proceedings by another party in the courts of
 England. Each party to this Deed also agrees that a judgment against it in
 Proceedings brought in England in accordance with this clause 18 shall be
 conclusive and binding upon it and may be enforced in any other jurisdiction.
 

 
	
  

 	
  

 
	
 18.3

 	
 Each party irrevocably submits
 and agrees to submit to the jurisdiction of the English courts. 

 

22

IN WITNESS WHEREOF this
document has been executed and delivered as a deed the day and year first
before written.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Executed as
 a deed by two of

 	
 )

 	
  

 	
 

 
	
 THE LORDS COMMISSIONERS OF HER

 	
 )

 	
  

 
	
 MAJESTY’S TREASURY

 	
 )

 	
 By:

 
	
  

 	
 )

 	
  

 	
 

 	
  

 
	
  

 	
 )
)

 	
  

 	
 

 
	
  

 	
 By:

 
	
  

 	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Executed as
 a deed by two of

 	
 )

 	
  

 	
  

 
	
 LLOYDS BANKING GROUP PLC

 	
 )

 	
  

 	
  

 
	
 acting by a
 director and its secretary/two

 	
 )

 	
 By:

 	

  

 	
  

 
	
 directors

 	
 )

 	
  

 	
 

 	
  

 
	
  

 	
 )

 	
  

 	
 Director

 
	
  

 	
 )

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	

  

 	
  

 
	
  

 	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
 Director/Secretary

 

22

IN WITNESS WHEREOF this
document has been executed and delivered as a deed the day and year first
before written.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Executed as
 a deed by two of

 	
 )

 	
  

 	
  

 
	
 THE LORDS COMMISSIONERS OF HER

 	
 )

 	
  

 
	
 MAJESTY’S TREASURY

 	
 )

 	
 By:

 
	
  

 	
 )

 	
  

 	
 

 	
  

 
	
  

 	
 )
)

 	
  

 	
  

 
	
  

 	
 By:

 
	
  

 	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Executed as a deed by two of
LLOYDS BANKING GROUP PLC
acting by a
 director and its secretary/two
directors

 	
 )

 	
  

 	
  

 
	
 )

 	
  

 	
 

 
	
 )
)
)

 	
 By:

 	
  

 
	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 )

 	
  

 	
 Director

 
	
  

 	
  

 	
  

 	
 

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	

 	
 

 
	
  

 	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
  

 	
 Director/Secretary

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