Document:

Exhibit 4(a) (iv) 

DATED AS OF 13 OCTOBER 2008

THE COMMISSIONERS OF HER
MAJESTY’S TREASURY

and

HBOS PLC

	
 

	

	
 

	
PREFERENCE SHARE SUBSCRIPTION AGREEMENT 

	
 

	

	
 

Slaughter and May

One Bunhill Row

London

EC1Y 8YY

(NV/JAYP/ACZE)

THIS IS AGREEMENT IS EFFECTIVE AS OF 13
OCTOBER 2008 BETWEEN: 

	
 

	
 

	
(1)

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

	
 

	
 

	
AND
 

	
 

	
 

	
 

	
(2)

	
HBOS
 PLC
 incorporated in Scotland under the Companies Acts 1948 to 1967 with
 registered number SC218813 and registered address The Mound, Edinburgh EH1
 1YZ (“HBOS”) 

	
 

	
 

	
WHEREAS: 

	
 

	
 

	
HMT has agreed to
 subscribe for, and HBOS has agreed to allot and issue to HMT, the Preference
 Shares (as defined in this Agreement) in each case on the terms and subject
 to the conditions set out in this Agreement. 

	
 

	
 

	
NOW IT IS HEREBY
 AGREED AS FOLLOWS: 

	
 

	
 

	
1.

	
Interpretation
 

	
 

	
 

	
1.1

	
In this Agreement:
 

	
 

	
 

	
“Admission”

	
has the meaning
 given to it in the Placing Agreement;

	
 

	
 

	
“Acquisition”

	
has the meaning
 given to it in the Placing Agreement;

	
 

	
 

	
“Business
 Day”

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

	
 

	
 

	
“FSA”

	
has the meaning
 given to it in the Placing Agreement;

	
 

	
 

	
“Group”

	
has the meaning
 given to it in the Placing Agreement;

	
 

	
 

	
“HBOS
 Account”

	
means the bank
 account of HBOS, the details of which shall be notified to HMT by HBOS at
 least five Business Days prior to the Subscription Date;

	
 

	
 

	
“Placing
 Agreement”

	
means the
 agreement effective as of 13 October 2008 entered into by HMT, HBOS, Morgan
 Stanley & Co International PLC and Dresdner Kleinwort Limited relating to
 the placing and open offer of a number of HBOS’s ordinary shares;

	
 

	
 

	
“Posting
 Date”

	
has the meaning
 given to it in the Placing Agreement;

	
 

	
 

	
“Preference
 Shares”

	
means preferred
 shares issued by HBOS with an aggregate liquidation preference of
 £3,000,000,000, having the rights and subject to the restrictions set out in
 Schedule 1 to this

2

	
 

	
 

	
 

	
Agreement;

	
 

	
 

	
“Proceedings”

	
means any
 proceeding, suit or actions arising out of or in connection with this
 Agreement;

	
 

	
 

	
“Subscription
 Amount”

	
means
 £3,000,000,000;

	
 

	
 

	
“Subscription
 Date”

	
means the date on
 which Admission occurs;

	
 

	
 

	
“Supplementary

 Prospectus”

	
has the meaning
 given to it in the Placing Agreement; and

	
 

	
 

	
“Warranties”

	
means the
 representations, warranties and undertakings set out in Schedule 3 of the
 Placing Agreement.

	
 

	
 

	
 

	
1.2

	
In this Agreement,
 unless otherwise specified: 

	
 

	
 

	
 

	
 

	
(A)

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

	
 

	
 

	
 

	
 

	
(B)

	
any reference to
 an enactment or statutory provision is a reference to it as it may have been,
 or may from time to time be, amended, modified, consolidated or re-enacted (and
 includes all instruments or orders made under the enactment); 

	
 

	
 

	
 

	
 

	
(C)

	
references to
 Clauses and the Schedules are to Clauses of, and the Schedules to, this
 Agreement; 

	
 

	
 

	
 

	
 

	
(D)

	
references to “pounds” and “£” are references to the currency of
the United Kingdom; and
 

	
 

	
 

	
 

	
 

	
(E)

	
Schedule 1 shall
 take effect as if set out in this Agreement and references to this Agreement
 shall be deemed to include Schedule 1. 

	
 

	
 

	
 

	
1.3

	
The parties agree
 that applications will be made to the UK Listing Authority for the Preference
 Shares to be admitted to the Official List of the UK Listing Authority and to
 the London Stock Exchange for the Preference Shares to be admitted to trading
 on the London Stock Exchange’s Regulated Market, and that for the purposes of
 such admission to trading the Preference Shares will be cleared through CREST
 (as defined in the Placing Agreement). 

	
 

	
 

	
 

	
2.

	
Agreement
 to Subscribe for Preference Shares 

	
 

	
 

	
 

	
2.1

	
Upon the terms and
 subject to the condition set out in Clause 3 of this Agreement and in
 reliance on the Warranties, HMT agrees to subscribe for, and HBOS agrees to
 allot and issue to HMT, the Preference Shares. 

3

	
 

	
 

	
 

	
2.2

	
In consideration
 of the agreement to allot and issue the Preference Shares, and subject to
 Clause 3, HMT hereby undertakes to pay to HBOS, or to procure the payment to
 HBOS, of an amount equal to the Subscription Amount. 

	
 

	
 

	
3.

	
Condition
 

	
 

	
 

	
 

	
The obligations of
 HMT set out in Clause 2 to subscribe for the Preference Shares and to pay the
 Subscription Amount shall be conditional upon the Placing Agreement becoming
 wholly unconditional in accordance with its terms and this Agreement not
 having been terminated in accordance with Clause 7. 

	
 

	
 

	
4.

	
Warranties
 

	
 

	
 

	
4.1

	
HBOS hereby
 represents, warrants and undertakes to HMT that: 

	
 

	
 

	
 

	
(A)

	
each Warranty in
 Part I of Schedule 3 of the Placing Agreement is true and accurate and not
 misleading as at the date of this Agreement; and 

	
 

	
 

	
 

	
 

	
(B)

	
each Warranty in
 Parts I and II of Schedule 3 of the Placing Agreement will be true and
 accurate and not misleading on the Posting Date, at such time as a
 Supplementary Prospectus shall be issued in accordance with the Placing
 Agreement (whether before or after Admission), and immediately prior to
 Admission, in each case by reference to the facts and circumstances then
 existing and will be treated as Warranties given and/or repeated on such
 dates. Warranties shall be deemed repeated under this clause in relation to
 the relevant document, announcement or event on the basis that any reference
 in any such Warranty to something being done or something being the case in
 relation to such document, announcement or event which is expressed in the
 future tense shall be regarded as being expressed in the present tense. 

	
 

	
 

	
 

	
4.2

	
Each of the
 Warranties shall be construed as a separate and independent warranty and
 (except where expressly provided to the contrary in the Placing Agreement)
 shall not be limited or restricted by reference to, or inference from, the
 terms of any other Warranty. 

	
 

	
 

	
5.

	
Subscription
 

	
 

	
 

	
5.1

	
On the
 Subscription Date, HBOS shall: 

	
 

	
 

	
 

	
(A)

	
allot and issue
 the Preference Shares to HMT credited as fully paid; 

	
 

	
 

	
 

	
 

	
(B)

	
enter HMT, or its
 nominee, in its register of members as a shareholder of HBOS in respect of
 the Preference Shares; and 

	
 

	
 

	
 

	
 

	
(C)

	
deliver share
 certificate(s) to HMT or its nominee in respect of the Preference Shares.

	
 

	
 

	
5.2

	
On the
 Subscription Date, HMT shall pay an amount equal to the Subscription Amount
 by CHAPS transfer for same day value to the HBOS Account. 

4

	
 

	
 

	
5.3

	
HBOS shall use
 reasonable endeavours to ensure that the Preference Shares remain admitted to
 the Official List of the UK Listing Authority and admitted to trading on the
 London Stock Exchange’s Regulated Market for so long as HMT holds any Preference
 Shares. 

	
 

	
 

	
6.

	
Use
 of Subscription Proceeds 

	
 

	
 

	
 

	
HBOS agrees that
 it shall, promptly after the Subscription Date, apply the proceeds of the
 issue of the Preference Shares in such manner, in such form and for such
 regulatory capital purpose as may be agreed with HM Treasury, the Bank of
 England and the FSA. 

	
 

	
 

	
7.

	
Termination
 

	
 

	
 

	
 

	
In the event of
 the Placing Agreement terminating in accordance with its terms, this
 Agreement shall terminate and have no further force or effect and no party
 shall have any claim against any other under this Agreement except: (i) in
 respect of any accrued rights arising from any prior breach of this
 Agreement; and (ii) in respect of this clause 7 and clauses 1.1, 1.2, 8, 9
 and 11 to 18 (inclusive), which shall remain in full force and effect
 notwithstanding such termination. 

	
 

	
 

	
8.

	
Assignment
 and Novation 

	
 

	
 

	
8.1

	
Subject to clause
 8.2, HMT shall be permitted to novate its rights and obligations under this
 Agreement to any entity which is wholly-owned directly or indirectly by HMT
 (a Wholly Owned Entity) and HBOS
 agrees to consent to, and to execute and deliver all such documentation as
 may be necessary to effect, any such novation provided that such novation is
 effected upon substantially the same terms as are contained in the pro forma
 novation agreement set out in Schedule 2 to this Agreement. 

	
 

	
 

	
8.2

	
In the event that
 HMT novates its rights and obligations under this Agreement pursuant to
 clause 8.1, HMT shall procure that, immediately prior to any such Wholly
 Owned Entity ceasing to be wholly-owned directly or indirectly by HMT, such
 rights and obligations under this Agreement shall be novated to HMT or any
 other Wholly Owned Entity. 

	
 

	
 

	
8.3

	
Subject to Clause
 8.1, neither HMT nor HBOS shall be permitted to assign or novate, or purport
 to assign or novate, all or any part of the benefit of, or its rights or
 benefits under, this Agreement to any other person without the prior written
 consent of the other party. 

	
 

	
 

	
9.

	
Costs
 and Expenses 

	
 

	
 

	
 

	
HBOS shall bear
 the costs and expenses of both parties in relation to the negotiation of this
 Agreement and the subscription for, and allotment and issue of, the
 Preference Shares (including, without limitation, any stamp duty or stamp
 duty reserve tax). 

5

	
 

	
 

	
10.

	
US
 Securities Laws 

	
 

	
 

	
 

	
Each of HMT and
 HBOS acknowledge and agree that the Preference Shares have not been and will
 not be registered under the US Securities Act of 1933 (the “Securities Act”)
 and may not be offered or sold except in accordance with Rule 903 of Regulation
 S under the Securities Act or pursuant to an exemption from, or in a
 transaction not subject to, the registration requirements of the Securities
 Act. 

	
 

	
 

	
11.

	
Entire
 Agreement 

	
 

	
 

	
11.1

	
This Agreement and
 the Placing Agreement constitute the whole and only agreement and
 understanding between the parties relating to the subject matter of this
 Agreement. All previous agreements, understandings, undertakings,
 representations, warranties and arrangements of any nature whatsoever between
 the parties or any of them with any bearing on the subscription of the
 Preference Shares are superseded and extinguished (and all rights and
 liabilities arising by reason of them, whether accrued or not at the date of
 this Agreement, are cancelled) to the extent they have such a bearing. 

	
 

	
 

	
11.2

	
This Agreement may
 only be varied by agreement in writing signed by each of the parties. 

	
 

	
 

	
12.

	
Notices
 

	
 

	
 

	
12.1

	
A notice under
 this Agreement shall only be effective if it is in writing. Faxes are
 permitted. 

	
 

	
 

	
12.2

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

	
 

	
 

	
 

	
 

	
 

	
Party

	
 

	
Address

	
 

	
Facsimile no.

	

	
 

	

	
 

	

	
 

	
 

	
 

	
 

	
 

	
HBOS

	
 

	
Its registered
 office from time to time, which at the date of this agreement is The Mound,
 Edinburgh EH1 1YZ

	
 

	
0131 243 5546

	
 

	
 

	
 

	
 

	
fao: Company

	
 

	
 

	
 

	
Secretary

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
HMT

	
 

	
1 Horse Guards
 Road,

 London SW1A 2HQ

	
 

	
0207 270 7562

	
fao: Jeremy

	
 

	
 

	
 

	
Pocklington

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
provided that a
 party may change its notice details on giving notice to the other party of
 the change in accordance with this clause. 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. 

	
 

	
 

	
12.3

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

6

	
 

	
 

	
 

	
 

	
(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. 

	
 

	
 

	
 

	
13.

	
Counterparts
 

	
 

	
 

	
 

	
13.1

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

	
 

	
 

	
 

	
13.2

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

	
 

	
 

	
 

	
14.

	
Invalidity
 

	
 

	
 

	
 

	
 

	
If at any time any
 provision of this Agreement is or becomes illegal, invalid or unenforceable
 in any respect under the law of any jurisdiction, that shall not affect or
 impair: 

	
 

	
 

	
 

	
 

	
(A)

	
the legality,
 validity or enforceability in that jurisdiction of any other provision of
 this Agreement; or 

	
 

	
 

	
 

	
 

	
(B)

	
the legality,
 validity or enforceability under the law of any other jurisdiction of that or
 any other provision of this Agreement. 

	
 

	
 

	
 

	
15.

	
Contracts
 (Rights of Third Parties) Act 1999 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
16.

	
Choice
 of governing law 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
17.

	
Jurisdiction
 

	
 

	
 

	
 

	
17.1

	
The courts of
 England are to have exclusive jurisdiction to settle any dispute arising out
 of or in connection with this Agreement. Any Proceedings shall be brought in
 the English courts. 

	
 

	
 

	
 

	
17.2

	
HBOS 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 in the English courts. HBOS also agrees
 that a judgment against it in Proceedings brought in England shall be
 conclusive and binding upon it and may be enforced in any other jurisdiction.
 

7

	
 

	
 

	
17.3

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

	
 

	
 

	
18.

	
Agent
 for Service of Process 

	
 

	
 

	
 

	
HBOS shall at all
 times maintain an agent for service of process and for service of any other
 documents and proceedings in England, or any other proceedings in connection
 with this Agreement. Such agent shall be the London office of HBOS, at 33 Old
 Broad Street London EC2N 1HZ and any writ, judgment or other notice of legal
 process shall be sufficiently served on HBOS if delivered to such agent at
 its address for the time being. HBOS irrevocably undertakes not to revoke the
 authority of the above agent and if, for any reason, the agent ceases to act
 as such, HBOS shall appoint a replacement agent having an address for service
 in England and shall notify HMT of the name and address of such replacement
 agent. If HBOS fails to appoint another agent, HMT shall be entitled to
 appoint one on HBOS’s behalf and at HBOS’s expense. 

8

Schedule 1

Terms of the Preference Shares

DESCRIPTION OF THE PREFERENCE
SHARES

General 

The Preference
Shares will have a nominal value of £1 each and will be issued at a premium of
£[999] fully paid for cash (so that the total paid up amount of each Preference
Share will be £[1,000]). The Preference Shares will be issued in registered
form and will rank pari passu inter se
and pari passu with the Existing
Preference Shares and in priority to the Ordinary Shares. 

Dividends 

	
 

	
 

	
 

	
(i)

	
Subject to
 the limitations, discretions and qualifications set out herein, each
 Preference Share shall entitle the holder thereof to receive out of the
 profits of the Company available for distribution and permitted by law to be
 distributed, in priority to the payment of any dividend to the holders of
 Ordinary Shares but pari passu inter se and pari passu with the holders of
 the Existing Preference Shares, a non-cumulative preferential dividend, which
 will accrue from the Issue Date and will be payable (A) semi-annually in
 arrear in equal instalments on [●] and [●] of each year until [●] 20● (each a
 “Semi-Annual Dividend Payment Date”), provided that if any Semi-Annual
 Dividend Payment Date is not a business day, payment shall be postponed to
 the next business day without penalty or interest accruing in respect of such
 delay and thereafter (B) quarterly in arrear on [●], [●], [●] and [●] of each
 year subject to adjustment in accordance with the Modified Following Business
 Day Convention (each a “Quarterly Dividend Payment Date” and together with
 the Semi-Annual Dividend Payment Dates, the “Dividend Payment Dates”) to
 those holders of Preference Shares whose names appear on the register of
 members of the Company on the fifteenth calendar day preceding such Dividend
 Payment Date. Dividends will accrue and will be payable when, as, and if,
 declared by the Board on the paid up amount of £[1,000] per Preference Share.
 Subject to paragraph (ii) below, dividends shall only be paid to the extent
 that payment can be made out of the profits of the Company available for
 distribution and permitted by law to be distributed. Any right to receive a
 dividend on the Preference Shares will be non-cumulative. 

	
 

	
 

	
 

	
Payments in
 respect of dividends on Preference Shares will be made by cheque drawn on a
 bank in London or, upon the request of the holder or joint holders, by
 transfer to an account maintained by the payee with a bank in London. All
 payments in respect of dividends will be made after complying in all respects
 with any applicable fiscal or other laws. 

	
 

	
 

	
(ii)

	
(a)

	
If on any
 Dividend Payment Date the profits of the Company available for distribution
 are, in the opinion of the Board, insufficient to enable payment in full to
 be made of the dividend which would otherwise fall to be payable on such
 Dividend Payment Date and also the payment in full of all other dividends and
 other amounts stated to be payable on such date on any other shares and other
 instruments of the Company in issue that are expressed to rank equally with the
 Preferences Shares with regard to participation in profits (including any
 arrears of dividends and other amounts on any such shares and other
 instruments which have rights to cumulative dividends and other amounts),
 then, 

9

	
 

	
 

	
 

	
 

	
 

	
subject to
 the restrictions in this paragraph (ii), either a reduced dividend or none of
 such dividend shall be payable. 

	
 

	
 

	
 

	
 

	
(b)

	
If, in the
 opinion of the Board, the payment of any dividend on the Preference Shares
 would breach or cause a breach of the capital adequacy requirements then
 applicable under Applicable Banking Regulations to the Company, the Group or
 any subsidiary or associated undertaking of the Company, then none of such
 dividend shall be payable. 

	
 

	
 

	
 

	
 

	
(c)

	
Without
 prejudice to paragraphs (ii)(a) and (b) above (but subject to sub-paragraph
 (viii) below), if on any Dividend Payment Date the Board determines that the
 dividend which would otherwise be payable on such Dividend Payment Date (the
 “Relevant Dividend”) should not be paid, then none of the Relevant Dividend
 shall be payable or that the Relevant Dividend should be declared and paid in
 part, then the Relevant Dividend shall be payable in part. If the Directors
 consider that the distributable profits of the Company are insufficient to
 cover the payment in full of dividends on the Preference Shares and also the
 payment in full of all other dividends or other amounts stated to be payable
 on such Dividend Payment Date on any other shares and other instruments of
 the Company that are expressed to rank equally with the Preference Shares as
 regards participation in profits (including any arrears of dividends and
 other amounts on any such shares and other instruments which have rights to
 cumulative dividends or other amounts), then, subject always to the restrictions
 relating to the Company’s capital adequacy requirements and subject always to
 sub-paragraph (c) above, the Directors may declare a reduced dividend on the
 Preference Shares and any other shares and other instruments of the Company
 in respect of which dividends or other amounts are stated to be payable on
 such Dividend Payment Date and which are expressed to rank equally with the
 Preference Shares as regards participation in profits (including any arrears
 of dividends or other amounts on any such shares and other instruments which
 have rights to cumulative dividends or other amounts) on such Dividend
 Payment Date; provided however that, in the case of the Preference Shares,
 the Directors may in their sole and absolute discretion resolve that no
 reduced dividend shall be declared and paid on the Preference Shares or that
 such reduced dividend shall be declared and paid only in part. The reduced
 dividend (if any) declared on the Preference Shares shall bear the same
 proportion to the full dividend which was due for payment on the relevant
 Dividend Payment Date, as the reduced dividends or other amounts declared on
 such other shares and instruments bear to the full dividends or other amounts
 due for payment on that date.

	
 

	
 

	
 

	
(iii)

	
If it shall
 subsequently appear that any dividend on the Preference Shares which has been
 paid should not have been paid, then, provided the Board shall have acted in
 good faith, it shall not incur any liability for any loss which any holder of
 Preference Shares may suffer in consequence of such payment having been made.
 

	
 

	
 

	
(iv)

	
If a
 dividend on the Preference Shares is not paid for the reasons specified in
 sub-paragraph (ii) above, the holders of such shares shall have no claim in
 respect of such non-payment. 

	
 

	
 

	
(v)

	
Any dividend
 unclaimed after a period of 12 years from the date when it became due for
 payment shall be forfeited and shall revert to the Company and the payment by
 the Board of any 

10

	
 

	
 

	
 

	
 

	
unclaimed
 dividend or other sum payable on or in respect of a share into a separate
 account shall not constitute the Company a trustee in respect of it. 

	
 

	
 

	
(vi)

	
If any
 dividend on the Preference Shares is not paid on a Dividend Payment Date (the
 “Relevant Dividend Payment Date”) (or a sum is not set aside to provide for
 its payment), the Dividend Restriction and Redemption Restriction shall
 apply. 

	
 

	
 

	
(vii)

	
Except as
 described in this document, holders of Preference Shares will have no right
 to participate in the profits of the Company. 

	
 

	
 

	
(viii)

	
Until the
 date on which the Preference Shares are redeemed or repurchased in full, the
 Company shall not: 

	
 

	
 

	
 

	
(a)

	
declare or
 pay any dividend or make any distribution (whether in cash or otherwise) on
 or in respect of the Ordinary Shares of the Company or set aside any sum to
 provide for payment of any such dividend or distribution; or 

	
 

	
 

	
 

	
 

	
(b)

	
redeem,
 purchase, cancel or otherwise acquire in any way any Ordinary Shares of the
 Company or effect a reduction of the Ordinary Share capital of the Company
 which involves a distribution to holders of Ordinary Shares. 

	
 

	
 

	
 

	
(ix)

	
If, on any
 Dividend Payment Date, (i) a Capital Disqualification Event (as defined
 below) has occurred and is continuing, and (ii) the Company and the Group are
 in compliance with Applicable Banking Regulations, dividends on the
 Preference Shares will be mandatorily payable on such Dividend Payment Date,
 to the extent that payment can be made out of the profits of the Company
 available for distribution and permitted by law to be distributed at such
 time after the setting aside of a sum required for payment in full of all
 dividends payable on or before the relevant Dividend Payment Date on any
 Existing Preference Shares. 

A “Capital Disqualification Event” shall be
deemed to have occurred if: (a) the Preference Shares would not be eligible to
qualify (save, where such non-qualification is only as a result of any
applicable limitation on the amount of such capital) as regulatory capital
resources for the Company or the Group under Applicable Banking Regulations; and
(b) the FSA has confirmed to the Company that the Preference Shares would not
be eligible to qualify as regulatory capital resources for the Company or the
Group. 

Payment of Dividends 

Subject to the
limitations, discretions, and qualifications set out herein, the Company will
pay dividends on the Preference Shares out of its distributable profits in
sterling: 

	
 

	
 

	
(a)

	
at the rate
 of 12 per cent. per annum on the paid up amount of £[1,000] per Preference
 Share in respect of the Dividend Periods from, and including, the Issue Date
 to, but excluding, [●] 20● (the “Fixed Rate Dividend Period”). During the
 Fixed Rate Dividend Period, dividends will be payable semi-annually in equal
 instalments in arrear on the Semi-Annual Dividend Payment Dates, commencing
 on [●] 2009 and ending on [●] 20● (being the date five years from the date of
 issue). If at any time during the Fixed Rate Dividend Period, dividends are
 required to be determined for a period shorter than a semi-annual instalment,
 they should be calculated on the 

11

	
 

	
 

	
 

	
basis of the
 actual number of days in the period from (and including) the most recent
 Semi-Annual Dividend Payment Date to (but excluding) the date on which the
 relevant dividend is payable, divided by two times the number of days in the
 Dividend Period in which the relevant period falls (including the first such
 day but excluding the last). The dividend on each Preference Share during any
 such full semi-annual Dividend Period will therefore amount to £[●]; and 

	
 

	
 

	
(b)

	
at the rate
 per annum equal to 7 per cent. plus Three Month LIBOR on the paid up amount
 of £[1,000] per Preference Share in respect of the Dividend Periods from, and
 including, [●], 20● (being the date five years from the date of issue to, but
 excluding, the date on which the Preference Shares are redeemed (the
 “Floating Rate Dividend Period”). During the Floating Rate Dividend Period,
 dividends will be payable quarterly in arrear on the Quarterly Dividend
 Payment Dates. In respect of the Floating Rate Dividend Period, the amount of
 dividend accruing in respect of any Dividend Period will be calculated on the
 basis that the actual number of days in the Dividend Period in respect of
 which payment is being made is divided by 365 or, if a leap year, 366. 

In respect of
any dividend payable upon a winding up of the Company during the Fixed Rate
Dividend Period, where the number of days in the period in respect of which
such dividend is to be paid is fewer than or greater than a full Dividend
Period, the amount of dividend accruing in respect of any such period will be
calculated on the basis that the actual number of days in the period from (and
including) the most recent Semi-Annual Dividend Payment Date to (but excluding)
the date on which the relevant dividend is payable, divided by two times the
number of days in the Dividend Period in which the relevant period falls
(including the first such day but excluding the last). In respect of any
dividend payable upon a winding up of the Company during the Floating Rate
Dividend Period, where the number of days in the period in respect of which
such dividend is to be paid is fewer than or greater than a full Dividend
Period, the amount of dividend accruing in respect of any such period will be
calculated on the basis that the actual number of days in such period is
divided by 365 or, if a leap year, 366. 

Capital 

On a
winding-up or other return of capital (other than a redemption, reduction or
purchase by the Company of any of its issued shares), the assets of the Company
available to shareholders shall be applied, in priority to any payment to the
holders of Ordinary Shares, pari passu inter
se and pari passu with
the holders of the Existing Preference Shares and in priority to or pari passu with the holders of any other
class of shares in issue (other than shares which may be issued by the Company
and which may by their terms rank in priority to the Preference Shares in a
winding-up or other return of capital), in payment to the holders of the
Preference Shares of a sum equal to the aggregate of: 

	
 

	
 

	
(i)

	
an amount
 equal to dividends accrued thereon for the then current Dividend Period to
 the date of the commencement of the winding-up or other return of capital,
 but only to the extent that any such amount was, or would have been, payable
 as a cash dividend; 

	
 

	
 

	
(ii)

	
an amount
 equal to any dividend thereon which has been resolved to be paid on or after
 the date of commencement of the winding-up or other return of capital but
 which is payable in respect of a Dividend Period ending on or before such
 date; and 

	
 

	
 

	
(iii)

	
the amount
 paid up on such Preference Shares. 

12

If, upon any
return of capital or distribution of assets, the amounts available for payment
are insufficient to cover the amounts payable in full on the Preference Shares
and any other class of shares in issue or which may be issued by the Company
which are expressed to rank equally with the Preference Shares as regards
participation in assets, the holders of the Preference Shares and the holders
of those other shares will share rateably in the distribution of surplus assets
(if any) of the Company in proportion to the full amounts to which they are
respectively entitled. The Preference Shares confer no rights to participate in
the surplus assets of the Company other than as described in this document. 

Redemption 

The Company
may, subject to the Companies Act and all other laws and regulations applying
to the Company, to the Articles, to the Company giving at least one month’s
prior written notice to, and receiving no objection from, the FSA (or such
other period of notice the FSA may from time to time require or accept and in
any event provided that such notice is required to be given) and to the Company
(both at the time of, and immediately following, the redemption) being in
compliance with its capital requirements as provided in Applicable Banking Regulations
from time to time, upon not less than 30 nor more than 60 days’ notice, redeem
the Preference Shares in whole, or in part, on [●] 20● or on any Quarterly
Dividend Payment Date thereafter (each such date on which a Preference Share
may be redeemed being a “Redemption Date”). Redemption will be effected in the
manner provided in the Articles. There shall be paid on each Preference Share
so redeemed the aggregate of: 

	
 

	
 

	
(i)

	
an amount
 paid up on such share; and 

	
 

	
 

	
(ii)

	
the dividend
 accrued for the period from, and including, the Dividend Payment Date last
 preceding the Redemption Date to, but excluding, the Redemption Date, but
 only to the extent that any such amount was, or would have been, payable as a
 cash dividend. 

Voting 

	
 

	
 

	
 

	
(i)

	
The holders
 of Preference Shares shall not be entitled to attend or vote at any general
 meeting of the Company except: 

	
 

	
 

	
 

	
(a)

	
where the
 dividend which is (or, but for the provisions described in subparagraph (ii)
 under the heading “Dividends” above, would be) most recently payable on such
 shares shall not have been paid in full; or 

	
 

	
 

	
 

	
 

	
(b)

	
where a
 resolution is to be proposed at the meeting varying or abrogating any of the
 rights, preferences, privileges, limitations or restrictions attached to any
 class of shares of which the Preference Shares form part (and then only to
 speak and vote upon any such resolution). 

	
 

	
 

	
 

	
(ii)

	
Whenever
 holders of Preference Shares are entitled to vote on a resolution, on a show
 of hands every such holder who is present in person shall have one vote and
 every proxy present who has been duly appointed by a holder shall have one
 vote and on a poll every such holder who is present in person or by proxy
 shall have one vote in respect of each Preference Share held by him. 

13

Other provisions
in the Articles relating to voting rights and procedures also apply to the
Preference Shares. 

Purchases 

Subject to the
provisions of the Companies Act and all other laws and regulations applying to
the Company, the Company may purchase or may enter into a contract under which
it will or may purchase all or any of its shares of any class, including any
redeemable shares. Neither the Company nor the Board shall be required to
select the shares to be purchased rateably or in any other particular manner as
between the holders of shares of the same class or as between them, and the
holders of shares of any other class or in accordance with the rights as to
dividends or capital conferred by any class of shares. No repurchase of
Preference Shares will be made without the Company giving at least one month’s
prior written notice to, and receiving no objection from, the FSA (or such
other period of notice the FSA may from time to time require or accept and in
any event provided that such notice is required to be given) and any such
Preference Shares repurchased would be cancelled by the Company. 

Transfer 

Title to the
Preference Shares, which are in registered and certificated form, will pass by
transfer and registration on the register of members of the Company in
accordance with the Articles. The Articles provide, among other matters, that
transfers of the Preference Shares in certificated form must be effected by an
instrument of transfer in the usual standard form or in any other form approved
by the Directors. Instruments of transfer of the Preference Shares must be
signed by or on behalf of the transferor. 

The Directors
may refuse to register a transfer of Preference Shares in certificated form
unless the instrument of transfer is duly stamped and: 

	
 

	
 

	
(a)

	
is in
 respect of Preference Shares only; 

	
 

	
 

	
(b)

	
is in favour
 of not more than four joint transferees; and 

	
 

	
 

	
(c)

	
is deposited
 at the registered office of the Company, or such other place as the Board may
 from time to time determine, accompanied by the relevant share certificate(s)
 and any other evidence the Directors may reasonably require to show the right
 of the person executing the transfer to make the transfer. 

No fee is
payable to the Company for transferring shares and any registration of a transfer
is subject in all respects to the Articles. 

Variation of Rights and Further Issues 

	
 

	
 

	
(i)

	
Except with
 the written consent of the holders of three-quarters in nominal value of the
 Preference Shares then in issue, or with the sanction of an extraordinary
 resolution passed at a separate general meeting of the holders of Preference
 Shares then in issue, the special rights attached to the Preference Shares
 may not be varied or abrogated. 

	
 

	
 

	
 

	
The special
 rights attached to the Preference Shares will be regarded as being varied or
 abrogated if: 

14

	
 

	
 

	
 

	
 

	
(a)

	
the Board
 seeks to authorise, create or increase the amount of any shares of any class
 or any security convertible into shares of any class ranking as regards
 rights to participate in the profits or assets of the Company in priority to
 the Preference Shares; 

	
 

	
 

	
 

	
 

	
(b)

	
following a
 capitalisation of any reserves which are capable of being distributed to
 shareholders, the Company’s distributable reserves, when aggregated with the
 distributable reserves of all its subsidiaries, would amount in aggregate to
 less than ten times the total annual amount of any dividends payable in
 respect of all preference shares of the Company in issue at the time of
 capitalisation (except if such capitalisation of distributable reserves is
 for the purposes of allotting and issuing ordinary shares of the Company in
 lieu of a dividend or allotting and issuing additional preference shares to
 holders of preference shares in lieu of a dividend); 

	
 

	
 

	
 

	
 

	
(c)

	
any other
 class of shares of the Company that is expressed to rank as regards
 participation in the profits or assets of the Company equally in some or all
 respects with the Preference Shares or any securities convertible into any
 such shares are created or issued, if the dividend payable on the Preference
 Shares on the Dividend Payment Date immediately preceding such creation or
 issue has not been paid in full; or 

	
 

	
 

	
 

	
 

	
(d)

	
any
 resolution is passed for the reduction of the amount of capital paid up on
 the Preference Shares. 

	
 

	
 

	
 

	
(ii)

	
The Company
 shall be entitled at any time and from time to time and without any consent
 or sanction of the holders of the Preference Shares to create and issue
 further preference share capital ranking as regards participation in the
 profits and assets of the Company after or pari
 passu with the Preference Shares. Such creation and issue shall be
 deemed not to alter, vary, affect, modify or abrogate any of the rights
 attaching to the Preference Shares and for the avoidance of doubt such rights
 shall not be deemed to be varied by the alteration of any of the provisions,
 other than provisions as to pari passu
 ranking, set out in the Articles in respect of any unissued preference
 shares. Any further series of preference shares ranking, as regards
 participation in profits or assets, pari
 passu with the Preference Shares may, without their creation or
 issue being deemed to vary the special rights attaching to the Preference
 Shares, either carry identical rights in all respects with the Preference
 Shares or carry rights differing therefrom in any respect including, but
 without prejudice to the foregoing, in that: 

	
 

	
 

	
 

	
 

	
(a)

	
the rate
 and/or basis of calculating dividends may differ and the dividend may be
 cumulative or non-cumulative; 

	
 

	
 

	
 

	
 

	
(b)

	
such shares
 may rank for dividends as from such date as may be provided by the terms of
 issue thereof and the dates for payment of dividends may differ; 

	
 

	
 

	
 

	
 

	
(c)

	
such shares
 may be denominated in any currency or, if permitted by law, any basket of
 currencies; 

	
 

	
 

	
 

	
 

	
(d)

	
a premium
 may be payable on return of capital or there may be no such premium; 

	
 

	
 

	
 

	
 

	
(e)

	
such shares
 may be redeemable at the option of the Company or may be non-redeemable; 

15

	
 

	
 

	
 

	
 

	
(f)

	
such shares
 may carry a right to additional shares by way of capitalisation of profits or
 reserves; and 

	
 

	
 

	
 

	
 

	
(g)

	
such shares
 may be convertible into Ordinary Shares or any other class of shares ranking
 as regards participation in the profits and assets of the Company pari passu with or after the Preference
 Shares, in each case on such terms and conditions as may be prescribed by the
 terms of issue thereof. 

Governing Law 

The creation
and issue of the Preference Shares and the rights attached to them are governed
by, and shall be construed in accordance with, English law. 

Definitions 

“Applicable Banking Regulations” means at
any time the capital adequacy regulations, guidelines and policies then in
effect of the FSA. 

“Articles” means the Articles of
Association of the Company, as in effect from time to time. 

“Board” means the Board of Directors from
time to time or any authorised committee thereof. 

“business day” means a day (other than a
Saturday or Sunday) on which banks in London are open for business and on which
foreign exchange dealings may be conducted. 

“Capital Disqualification Event” has the
meaning set forth under “Description of the Preference Shares – Dividends”. 

 “Companies
Act” means Companies Act 1985 or, where applicable, Companies Act
2006, as such acts may be amended, modified or re-enacted from time to time. 

“Directors” means the directors of the
Company from time to time. 

“Dividend Determination Date” means, in
relation to each Dividend Period commencing on or after [●] 20●, the first day
of the relevant Dividend Period. 

“Dividend Period” means the period from,
and including, a Dividend Payment Date (or the Issue Date) to, but excluding,
the next succeeding Dividend Payment Date. 

“Dividend Restriction” means that: 

	
 

	
 

	
 

	
(a)

	
the Company
 shall not declare or pay a dividend on its Ordinary Shares for a one year
 period commencing on the Relevant Dividend Payment Date; and 

	
 

	
 

	
(b)

	
(i)

	
the Company
 shall not, and shall procure that [relevant HBOS group authorised
 institutions currently issuing regulatory capital] shall not, declare, pay or
 distribute interest, any dividend or other payment (other than interest or a
 dividend or other payment declared, paid or distributed by [relevant HBOS
 group institutions currently 

16

	
 

	
 

	
 

	
 

	
 

	
issuing
 regulatory capital] to the Company, any holding company of the Company or to
 another wholly owned subsidiary of the Company) on any of its then issued
 Tier 1 Capital or make any payment on a Tier 1 Guarantee; and

	
 

	
 

	
 

	
 

	
(ii)

	
the Company
 shall procure that no payment is made by any subsidiary of the Company on any
 security (howsoever named or designated) benefiting from a Tier 1 Guarantee; 

	
 

	
 

	
 

	
 

	
in each
 case, for the following periods: 

	
 

	
 

	
 

	
(x)

	
where the
 relevant Tier 1 Capital (or, in the case of a payment on a Tier 1 Guarantee,
 the Tier 1 Capital to which that Tier 1 Guarantee relates) pays interest,
 dividends or other payments quarterly or more frequently, for a period of six
 calendar months commencing on the Relevant Dividend Payment Date if the
 Relevant Dividend Payment Date is on or before the Dividend Payment Date on
 [●] 20●, and thereafter for a period of three calendar months commencing on
 the Relevant Dividend Payment Date; 

	
 

	
 

	
 

	
 

	
(y)

	
where the
 relevant Tier 1 Capital (or, in the case of a payment on a Tier 1 Guarantee,
 the Tier 1 Capital to which that Tier 1 Guarantee relates) pays interest,
 dividends or other payments semi-annually, for a period of six calendar
 months commencing on the Relevant Dividend Payment Date; and 

	
 

	
 

	
 

	
 

	
(z)

	
in any other
 case, for a period of one year commencing on the Relevant Dividend Payment
 Date, 

	
 

	
 

	
 

	
 

	
provided
 that the foregoing shall not prevent the Company, [relevant HBOS group
 authorised institutions currently issuing regulatory capital] or any
 subsidiary of the Company, nor oblige the Company to procure that any of them
 are so prevented, from: 

	
 

	
 

	
 

	
(1)

	
satisfying
 any mandatory obligation to make an interest, dividend or other payment
 through an allotment and issue of shares; or 

	
 

	
 

	
 

	
 

	
(2)

	
declaring,
 paying or distributing any interest, dividend or other payment which is
 mandatorily required to be funded by the proceeds of an issue of shares for
 such purpose; or 

	
 

	
 

	
 

	
 

	
(3)

	
declaring,
 paying or distributing any interest, dividend or other payment in respect of
 any Tier 1 Capital or Tier 1 Guarantee the terms of which do not provide for
 the ability of the relevant issuer or guarantor (as the case may be) to defer
 or cancel any such payment at its discretion. 

“Existing Preference Shares” means the
non-cumulative irredeemable preference shares with a dividend rate of 9 1/4%
each year issued or to be issued by the Company, the non-cumulative
irredeemable preference shares with a dividend rate of 9 3/4% each year issued
or to be issued by the Company and any other shares and instruments which have
been issued or may be issued which, in either case, are expressed to rank
equally with them. 

17

“FSA” means the Financial Services
Authority of the United Kingdom and, if any successor governmental authority
succeeds to the bank regulatory functions of the Financial Services Authority
in the United Kingdom, such successor governmental authority. 

“Group” means HBOS PLC and its
subsidiaries. 

 “Issue
Date” means the date on which the Preference Shares are issued. 

“Modified Following Business Day Convention”
means if a Quarterly Dividend Payment Date falls on a day which is not a
business day, such Quarterly Dividend Payment Date shall be postponed to the
next day which is a business day unless it would fall into the next calendar
month in which event such Quarterly Dividend Payment Date shall be brought
forward to the immediately preceding day which is a business day. 

 “Redemption
Date” has the meaning set forth under “Description of Preference
Shares – Redemption”. 

“Redemption Restriction” means that
(without the written consent of a majority in nominal value of, or the sanction
of a special resolution passed at a separate general meeting of, the holders of
the Preference Shares) for a one year period commencing on the Relevant
Dividend Payment Date: 

	
 

	
 

	
(a)

	
the Company
 shall not redeem, reduce, purchase or otherwise acquire for any consideration
 any of its Ordinary Shares; 

	
 

	
 

	
(b)

	
the Company
 shall not, and shall procure that [relevant HBOS group institutions currently
 issuing regulatory capital] shall not, redeem, purchase or otherwise acquire
 for consideration any of its Tier 1 Capital; and 

	
 

	
 

	
(c)

	
the Company
 shall procure that no subsidiary of the Company redeems, purchases or
 otherwise acquires for consideration any security benefiting from a Tier 1
 Guarantee, 

provided that
the foregoing shall not prevent the Company or any subsidiary or associate of
the Company, (nor oblige the Company to procure that any of them are so
prevented) from redeeming, reducing, purchasing or otherwise acquiring, for any
consideration any of its Tier 1 Capital or any security benefiting from a Tier
1 Guarantee the terms of which in each case do not provide for the ability of
the relevant issuer or guarantor (as the case may be) to defer or cancel any
such payment at its discretion 

“Registrar” means the registrar for the
time being of the Preference Shares. 

“Relevant Dividend” has the meaning set
forth under “Description of Preference Shares – Dividends”. 

“Relevant Dividend Payment Date” has the
meaning set forth under “Description of Preference Shares – Dividends”. 

“Three Month LIBOR” means, in relation to a
Dividend Period, the offered rate for three month deposits in sterling as at
11.00 a.m. London time on the related Dividend Determination Date appearing on
the display designated as page “LIBOR01” on the Reuters Service (or such other
page or service as may replace it for the purpose of displaying such
information) as determined by the Company. 

18

 “Tier 1
Capital” has the meaning assigned to such term (i) in Section 2.2 of
Chapter 2 of The General Prudential Sourcebook published by the FSA, as
amended, supplemented or replaced from time to time, or (ii) in any successor
Applicable Banking Regulations. 

“Tier 1 Guarantee” means any guarantee,
indemnity or other contractual support arrangement entered into by [relevant
HBOS group institutions currently issuing regulatory capital] or the Company in
respect of the securities (regardless of name or designation) issued by a
subsidiary of the Company which create Tier 1 Capital of [relevant HBOS group
institutions currently issuing regulatory capital] or the Company. 

19

Schedule 2

Pro-forma Novation Agreement

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

BETWEEN: 

	
 

	
 

	
1.

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

	
 

	
 

	
2.

	
HBOS
 PLC
 incorporated in Scotland under the Companies Acts 1948 to 1967 with
 registered number SC218813 and registered address The Mound, Edinburgh EH1
 1YZ (“HBOS”)

	
 

	
 

	
AND 

	
 

	
 

	
 

	
3.

	
[                
         ]
 of

[                                                                      ]
 (registered in England No.

[                
         ])
 (the “Company”) 

	
 

	
 

	
WHEREAS: 

	
 

	
 

	
(A)

	
HMT has agreed to
 subscribe for, and HBOS has agreed to allot and issue to HMT, the Preference
 Shares (as defined in this Agreement) pursuant to the Preference Share
 Subscription Agreement (as defined in this agreement). 

	
 

	
 

	
(B)

	
HMT wishes to be
 released and discharged from the Preference Share Subscription Agreement and
 HBOS has agreed to release and discharge HMT from the Preference Share
 Subscription Agreement upon the terms of the Company’s undertaking to perform
 the Preference Share Subscription Agreement and be bound by its terms in the
 place of HMT and HMT agreeing to guarantee the Company’s obligations in respect
 of the Preference Share Subscription Agreement. 

	
 

	
 

	
NOW IT IS AGREED
 as follows:- 

	
 

	
 

	
1.

	
INTERPRETATION
 

	
 

	
 

	
1.1

	
In this agreement:
 

	
 

	
 

	
“Preference
 Shares”

	
means [insert relevant number] of preferred
 shares of [£●] each, having the rights and subject to the restrictions
 set out in Schedule 1 to the Preference Share Subscription Agreement;

	
 

	
 

	
“Preference
 Share

 Subscription Agreement”

	
means the
 agreement effective as of 13 October 2008 between HMT and HBOS pursuant to
 which HMT agreed to subscribe for, and HBOS agree to allot and issue to HMT,
 the Preference Shares; and

20

	
 

	
 

	
“Proceedings”

	
means any
 proceeding, suit or actions arising out of or in connection with this
 Agreement.

	
 

	
 

	
 

	
1.2

	
In this agreement,
 unless otherwise specified: 

	
 

	
 

	
 

	
(A)

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

	
 

	
 

	
 

	
 

	
(B)

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

	
 

	
 

	
 

	
2.

	
COMPANY’S
 UNDERTAKING 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
(A)

	
require the
 Company to perform any obligation created by or arising under the Preference
 Share Subscription Agreement falling due for performance in its entirety, or
 which should have been performed in its entirety, before the date of this
 agreement; 

	
 

	
 

	
 

	
 

	
(B)

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

	
 

	
 

	
 

	
 

	
(C)

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

	
 

	
 

	
3.

	
HBOS’S
 UNDERTAKING AND RELEASE OF HMT 

	
 

	
 

	
3.1

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

	
 

	
 

	
 

	
(A)

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

	
 

	
 

	
 

	
 

	
(B)

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

	
 

	
 

	
 

	
 

	
(C)

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

21

	
 

	
 

	
3.2

	
Notwithstanding
 the provisions of sub-clause 3.1(A), nothing in this agreement shall
 affect or prejudice any claim or demand whatsoever which HBOS may have
 against HMT in relation to the Preference Share Subscription Agreement and
 (i) arising out of matters prior to the date of this agreement and/or (ii)
 arising in connection with those matters contemplated in clause 2(A), (B) or
 (C). 

	
 

	
 

	
4.

	
HMT’S
 UNDERTAKING AND RELEASE OF HBOS 

	
 

	
 

	
 

	
With effect from
 the date of this agreement and in consideration of the undertakings given by
 HBOS in clause 3, HMT hereby releases and discharges HBOS from all
 obligations to observe, perform, discharge and be bound by the Preference
 Share Subscription Agreement. Notwithstanding this undertaking and release,
 nothing in this agreement shall affect or prejudice any claim or demand
 whatsoever which HMT may have against HBOS in relation to the Preference
 Share Subscription Agreement and (i) arising out of matters prior to the date
 of this agreement and/or (ii) arising in connection with those matters
 contemplated in clause 2(A), (B) or (C). 

	
 

	
 

	
5.

	
GUARANTEE
 AND INDEMNITY 

	
 

	
 

	
5.1

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

	
 

	
 

	
5.2

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

	
 

	
 

	
5.3

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

22

	
 

	
 

	
5.4

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

	
 

	
 

	
6.

	
COMPANY
 CEASING TO BE WHOLLY OWNED BY HMT 

	
 

	
 

	
 

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

	
 

	
 

	
7.

	
NOTICES
 

	
 

	
 

	
 

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

	
 

	
 

	
8.

	
COUNTERPARTS
 

	
 

	
 

	
8.1

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

	
 

	
 

	
8.2

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

	
 

	
 

	
9.

	
GOVERNING
 LAW AND JURISDICTION 

	
 

	
 

	
9.1

	
This agreement and
 all non-contractual obligations arising out of or in connection with it shall
 be governed by and construed in accordance with English law. 

	
 

	
 

	
9.2

	
The courts of
 England are to have exclusive jurisdiction to settle any dispute arising out
 of or in connection with this agreement. Any Proceedings shall be brought in
 the English courts. 

23

	
 

	
 

	
10.

	
[AGENT
 FOR SERVICE OF PROCESS] 

	
 

	
 

	
 

	
[To
 be included if the Company is not a company incorporated in England: 

	
 

	
 

	
 

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

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

	
 

	

	
 

	

	
For and on behalf
 of 

	
THE
 COMMISSIONERS OF HER MAJESTY’S TREASURY 

	
 

	

	
For and on behalf
 of 

	
HBOS
 PLC 

	
 

	

	
For and on behalf
 of [insert name of the Company]
 

24

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

	
 

	
 

	
Signed by:

	
 

	
for and on behalf
 of

	
 

	
THE
 COMMISSIONERS

	
TONY
 CUNNINGHAM

	
OF
 HER MAJESTY’S TREASURY

	
BOB
 BLIZZARD

	
 

	
Date:3/11/2008

	
 

	
 

	
Signed by:

	
 

	
for and on behalf
 of

	
 

	
HBOS
 PLC

	
HARRY
 BAINES

	
 

	
Date:21/10/2008Exhibit 4(a) (v)

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT,
dated January 12, 2009 (this “Agreement”)
between Lloyds TSB Group plc, a company incorporated in Scotland (the “Company”) and The Commissioners of Her
Majesty’s
Treasury (the “Investor”).

RECITALS

          A.
The Placing and Open Offer Agreement. The Company and the Investor are parties
to a Placing and Open Offer Agreement, effective as of October 13, 2008, as
amended by an amendment agreement dated January 12, 2009 (as so amended, the “Placing and
Open Offer Agreement”),
pursuant to which the Investor has undertaken to purchase Ordinary Shares (as
defined below) from the Company.

          B.
Registration Rights. In connection with the consummation of the
transactions contemplated by the Placing and Open Offer Agreement, and pursuant
to the terms of the Placing and Open Offer Agreement, the parties desire to
enter into this Agreement in order to grant certain registration rights to the
Investor as set forth below.

          NOW, THEREFORE, in consideration of the
premises and of the representations, warranties, covenants and agreements set
forth herein, the parties agree as follows:

ARTICLE I

GENERAL

1.1. Definitions.
As used in this Agreement, the following terms shall have the following respective
meanings:

          “Amended
Shelf Registration Statement” has the meaning ascribed to it in
Section 2.1(d). 

          “Approved
Underwriter” has the meaning ascribed to it in Section 2.1(b).

          “ADSs”
means American Depositary Shares of the Company, each representing 20 Ordinary
Shares.

          “Board of
Directors” has the meaning ascribed to it in Section 2.2(b).

          “Close Period”
means any close period as defined in Annex I to Chapter 9 of the Listing Rules
made by the UK Financial Services Authority pursuant to Part VI of the
Financial Services and Markets Act 2000 in relation to the Company.

          “Earliest
Demand Registration Date” means July 22, 2009.

          “Exchange Act” means the Securities
Exchange
Act of 1934, as amended, or similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.

          “Holder” means the Investor and any other
holder of Registrable Securities to whom the registration rights conferred by
this Agreement have been transferred in compliance with Section 2.10 hereof.

          “Holders’ Counsel” means one
counsel for the
Investor or selling Holders chosen by (i) Holders holding a majority interest
in the Registrable Securities being registered, or (ii) agreement between them.

          “Initiating
Holder” has the meaning ascribed to it in Section 2.1(a).

          “Notice of
Demand” has the meaning ascribed to it in Section 2.1(a).

          “Other
Shareholder” has the meaning ascribed to it in Section 2.2(c).

          “Ordinary Shares” has the meaning
ascribed
to it in the Placing and Open Offer Agreement, and includes ADSs.

          “Person” means any individual,
corporation,
partnership, joint venture, wholly owned (whether directly or indirectly)
entity, limited liability company, business trust, joint stock company, trust
or unincorporated organization or any government or any agency or political
subdivision thereof.

          “Permitted
Registration Rights” has the meaning ascribed to it in Section
2.13(a).

          “Piggyback
Registration” has the meaning ascribed to it in Section 2.2(a).

          “Placing and
Open Offer Agreement” has the meaning ascribed to it in Recital A.

          “Register,”
“registered,”
and “registration” shall refer to
a registration effected by preparing and (a) filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of effectiveness of such registration
statement or (b) filing a prospectus and/or prospectus supplement in respect of
an appropriate effective registration statement on Form F-3 (or any successor
form).

          “Registrable Securities” means (a) the
Ordinary Shares acquired by the Investor pursuant to the terms of the Placing
and Open Offer Agreement including, for the avoidance of doubt, any Ordinary
Shares issued to the Investor upon exchange for HBOS Ordinary Shares (as
defined in the Placing and Open Offer Agreement) and (b) any other securities
of the Company issued or issuable as distribution with respect to or in
exchange or replacement for or on exercise of any shares referred to in clause
(a); provided that the Ordinary Shares shall cease to be Registrable
Securities when (i) they are sold pursuant to an effective registration
statement under the Securities Act, (ii) they are sold pursuant to Rule 144
under the Securities Act, (iii) they shall have ceased to be outstanding or
(iv) they have been sold, distributed or otherwise transferred in a transaction
(including a sale over the London Stock Exchange or any other stock exchange on
which the Company’s Ordinary Shares are listed) in which the transferor’s
rights under this Agreement are not assigned, transferred or novated to the
transferee of the Ordinary Shares. No Registrable Securities may be registered
under more than one registration statement at any one time.

2

          “Registration Expenses” means all
expenses
incurred by the Company or any Holder in effecting any registration pursuant to
this Agreement, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company,
blue sky fees and expenses, fees and disbursements of Holders’ Counsel, and
expenses of the Company’s independent accountants in connection with any
regular or special reviews or audits incident to or required by any such
registration, but shall not include (a) Selling Expenses and (b) the
compensation of regular employees of the Company, which shall be paid in any
event by the Company.

          “SEC” or “Commission” means
the U.S.
Securities and Exchange Commission and any successor agency.

          “Securities Act” shall mean the
Securities
Act of 1933, as amended, or similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.

          “Selling Expenses” means all underwriting
discounts, selling commissions and stock transfer taxes applicable to the sale
of Registrable Securities and fees and disbursements of counsel for any Holder
(other than the fees and disbursements of counsel included in Registration
Expenses).

          “Wholly Owned
Entity” has the meaning ascribed to it in Section 2.10(a). 

ARTICLE II

REGISTRATION

2.1. Demand
Registration.

          (a)
Subject to the conditions of this Section 2.1, if at any time the Company shall
receive a written request from a Holder (the “Initiating Holder”) that the
Company register under the Securities Act Registrable Securities, which request
shall include the amount of Registrable Securities proposed to be sold and the
intended method of distribution thereof (a “Notice of Demand”), then the
Company shall, subject to the limitations of this Section 2.1, effect, as promptly
as reasonably practicable, the registration under the Securities Act of all
Registrable Securities that the Initiating Holder requests to be registered.

          (b)
If the Initiating Holder intends to distribute the Registrable Securities
covered by its Notice of Demand by means of an underwritten offering, (1) it
shall so advise the Company as a part of its Notice of Demand made pursuant to
this Section 2.1 and (2) it shall have the right to appoint a managing
underwriter or underwriters of recognized international standing, which
appointment shall be subject to the approval of the Company, which approval
shall not be unreasonably withheld or delayed (the “Approved Underwriter”), provided
that to the extent appropriate and permitted under applicable law, such
Initiating Holder shall consider the qualifications of any broker-dealer
affiliate of the Company in selecting the managing underwriters in any such
distribution.

3

          (c)
The Company shall not be required to effect a registration pursuant to this
Section 2.1: (i) prior to the Earliest Demand Registration Date, (ii) unless
the anticipated aggregate offering price to the public exceeds $100,000,000 (provided
that if the anticipated aggregate offering price to the public of all Registrable
Securities that remain outstanding at the time is less than $100,000,000, the
Company shall be required to effect the registration for all of the remaining
outstanding Registrable Securities), (iii) more than two (2) times in any
twelve (12) month period and after each of such registrations has been declared
or ordered effective and kept effective by the Company as required by Section
2.5(a) of this Agreement; (iv) with respect to a registration of Registrable
Securities during the period starting with the date thirty (30) calendar days
prior to the Company’s good faith estimate of the launch date of, and ending on
a date ninety (90) calendar days after the closing date of, a Company-initiated
registered offering of equity securities or securities convertible into or
exchangeable for equity securities; provided that the Company is
actively employing in good faith all reasonable best efforts to launch such
registered offering; (v) during any Close Period; or (vi) if the Company has
notified the Holders that in the good faith judgment of the Company, it would
be materially detrimental to the Company or its securityholders for such
registration to be effected at such time, in which event the Company shall have
the right to defer such filing (but not the preparation of any registration
statement) for a period of not more than ninety (90) calendar days after
receipt of Notice of Demand; provided that such
right to delay a request shall be exercised by the Company not more than two
(2) times in any twelve (12) month period and in any case for not more than
ninety (90) calendar days in the aggregate in any twelve (12) month period. For
the avoidance of doubt, if in any twelve (12) month period, the Company effects
a registration or underwritten offering of Registrable Securities in accordance
with the requirements of this Section 2.1 two (2) times, it will not be
required to effect a further registration or underwritten offering of
Registrable Securities in such twelve (12) month period, and any Notice of
Demand communicated to the Company during such period, from any Holder, shall
be of no force and effect.

          (d)
One registration pursuant to this Section 2.1 may be required by a Holder to be
effected by means of a shelf registration statement (a “Shelf Registration Statement”)
relating to any or all of the Registrable Securities in accordance with the
methods and distribution set forth in the Shelf Registration Statement and Rule
415 under the Securities Act. The Company shall use its reasonable best efforts
to cause any Shelf Registration Statement to remain effective, except during
the periods described in Section 2.6, including by filing extensions of the
Shelf Registration Statement; provided that (i) no provision of this
Agreement shall prevent the Company from fulfilling its obligations under this
Section 2.1(d) by amending the Company’s shelf registration statement on Form
F-3 to allow the offer and sale of Ordinary Shares (an “Amended Shelf Registration Statement”)
and (ii) during any time when a Shelf Registration Statement (including an
Amended Shelf Registration Statement) is effective, the Company’s obligations
to effect the registration of Registrable Securities pursuant to Section 2.1(a)
shall be deemed satisfied, and any underwritten offering of securities carried
out pursuant to this Section 2.1 shall be effected by way of an offering under
the Shelf Registration Statement (including an Amended Shelf Registration
Statement) and otherwise in accordance with the terms, requirements and
limitations set forth in this Agreement. 

2.2. Right
to Piggyback.

4

          (a)
Whenever the Company proposes to register any of its equity securities under
the Securities Act (except (a) for any registration of securities for
offering and sale to employees or directors of the Company pursuant to any
employee stock plan or other employee benefit plan arrangement, including
pursuant to a registration statement on Form S-8 or any successor thereto,
(b) pursuant to a demand registration effected in accordance with Section
2.1 or (c) for any registration of securities on Form F-4 or any successor
thereto and other than solely pursuant to a registration statement on Form
F-6), the Company shall (i) as soon as practicable (but in no event less
than thirty (30) calendar days prior to the proposed date of filing of the
related registration statement), give written notice to the Holders of
its intention to effect such a registration; and (ii) shall register under
such registration statement all Registrable Securities (in accordance with the
priorities set forth in subsections (b) and (c) below) with respect to which
the Company shall have received written requests therefor within fifteen
(15) calendar days after delivery of the Company’s notice (each such
registration, a “Piggyback Registration”). 

          (b)
If a Piggyback Registration is an underwritten primary registration on behalf
of the Company and the managing underwriters advise the Board of Directors of
the Company (“the Board of Directors”) in writing that in
their opinion the total number of shares of equity securities (including the
Registrable Securities) requested to be included in the registration would
prevent the underwriters from completing such offering, then the Company shall
promptly provide the Holders with a copy of such advice and consult with the
Holders with respect to such advice, and after such consultation shall include
in such registration only such number of shares of equity securities (including
the Registrable Securities), if any, which the managing underwriters determine
can be sold in such offering without preventing the underwriters from
completing such offering. The Company shall include in such Piggyback
Registration (i) first, 100% of the equity securities that the Company
proposes to sell as part of its initial registration and (ii) second, if
the Holders participate in such registration, 100% of the Registrable
Securities that the Holders propose to sell, or such lesser amount determined
by the managing underwriters pursuant to the preceding sentence.

          (c)
If a Piggyback Registration is an underwritten secondary registration on behalf
of any Person other than a Holder (the “Other Shareholder”) who has Permitted
Registration Rights and the managing underwriters advise the Board of Directors
in writing that in their opinion the total number of shares of equity
securities (including the Registrable Securities) requested to be included in
the registration would prevent the underwriters from completing such offering,
then the Company shall promptly provide the Holders with a copy of such advice
and consult with the Holders with respect to such advice, and after such
consultation shall include in such registration only such number of shares of
equity securities (including the Registrable Securities) which the managing
underwriters determine can be sold in such offering without preventing the
underwriters from completing such offering. The Company shall include in such
registration (i) first, 100% of the Registrable Securities that the Holders
propose to sell and, 100% of the equity securities that such Other Shareholder
proposes to sell, allocated, if necessary, pro rata between the Holders and
such Other Shareholder on the basis of the number of Ordinary Shares owned by
each such person; and (ii) second, only if all the equity securities
referred to in clause (i) have been included, any other securities
requested to be included therein that the managing underwriters have determined
can be included pursuant to the preceding sentence.

5

          (d)
If a Piggyback Registration involves an underwritten primary registration on
behalf of the Company or any Other Shareholder with Permitted Registration
Rights, the managing underwriter or underwriters thereof shall be selected by
the Company, provided, however, that (i) such managing
underwriter or underwriters shall be of recognized international standing, (ii)
the Company shall consult with the Investor prior to agreeing upon any fees,
discounts or other amounts payable to such managing underwriter or underwriters
and (iii) if the aggregate amount of Registrable Securities included by Holders
in the underwritten offering for such Piggyback Registration exceeds 15% of the
total amount of Ordinary Shares to be included in such underwritten primary offering
by the Company or such Other Shareholder, as applicable, such Holders shall be
entitled to select an additional Approved Underwriter to act as a joint
bookrunner. 

          (e)
The Company will use its reasonable best efforts not to register any of its
securities for sale for its own account (other than securities issued to
employees of the Company under an employee benefit plan or securities issued to
effect a business combination pursuant to Rule 145 promulgated under the
Securities Act) except as a firm commitment underwriting. 

          (f)
 No registration or designation of Registrable Securities effected
pursuant to a request under this Section 2.2 shall be deemed to have been
effected pursuant to Section 2.1 or shall relieve the Company of its
obligations under Section 2.1. 

2.3. Piggyback
Rights in Respect of a Demand Registration.

          (a)
If an Initiating Holder has made a Notice of Demand pursuant to Section 2.1,
the Company shall give written notice to each Holder (other than the Initiating
Holder) at least thirty (30) calendar days prior to the initial filing of a
demand registration statement filed pursuant to Section 2.1 informing such
Holder of its intent to file such demand registration statement and of such
Holder’s rights under this Section 2.3 to request, as part of such demand
registration, the registration of the Registrable Securities held by such
Holder. Upon written request of any Holder made within fifteen (15) calendar
days after any such notice is given (which request must include the amount of
Registrable Securities proposed to be sold by such Holder), then the Company
shall effect, as promptly as reasonably practicable, the registration under the
Securities Act of all Registrable Securities that such Holder requests to be
registered (in accordance with the priorities set forth in subsection (b)
below).

          (b)
If a demand registration made pursuant to Section 2.1 is (i) an underwritten
registration initiated by the Investor as an Initiating Holder or is an underwritten
registration in which the Investor shall participate by exercise of its rights
under Section. 2.3(a) and (ii) other Holders shall have given notice of the
exercise of their rights pursuant to Section 2.3(a) in respect of such
underwritten registration, and the managing underwriters advise representatives
of the Investor that in their opinion the total number of shares of Registrable
Securities requested to be included in the registration would prevent the
underwriters from completing such offering, then the Investor shall promptly
provide the other Holders with a copy of such advice and consult with the other
Holders with respect to such advice, and after such consultation shall
communicate such advice to the Company. The Company shall include in such
registration (i) first, 100% of the Registrable Securities that the
Investor proposes to sell as part of its initial registration and
(ii) second, if any other Holders participate in such registration, and
only if all 

6

equity
securities referred to in clause (i) have been included, 100% of the
Registrable Securities that such other Holders propose to sell, or such lesser
amount determined by the managing underwriters pursuant to the preceding
sentence.

2.4. Expenses
of Registration.

          (a)
Except as specifically provided herein, all Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder
shall be borne by the Company. All Selling Expenses incurred in connection with
any underwritten offering made in accordance with the terms set forth herein
shall be borne by the Company and the Holders pro rata on the basis of the
number of Registrable Securities of each party to be registered and sold under
the applicable registration statement. 

          (b)
The Company shall not, however, be required to pay for expenses of any
registration proceeding begun pursuant to Section 2.1, the request of which has
been subsequently withdrawn by the Investor or requesting Holder(s) unless (i)
the withdrawal is based upon (a) any fact, circumstance, event, change, effect
or occurrence that individually or in the aggregate with all other facts or
circumstances, events, changes, effects or occurrences has a material adverse
effect on the Company, or (b) material adverse information concerning the
Company that the Company had not publicly revealed at least forty-eight (48)
hours prior to the request or that the Company had not otherwise notified the
Investor or requesting Holders of at the time of such request or (ii) the Investor
or the Holders of a majority of Registrable Securities, as the case may be,
agree to forfeit their right to one requested registration pursuant to Section
2.1, as applicable, in which event such right shall be forfeited by all
Holders. 

          (c)
If the Investor and/or the Holders are required to pay Registration Expenses,
such expenses shall be borne by the Investor or the Holders of Registrable
Securities requesting such registration in proportion to the number of Ordinary
Shares for which registration was requested. If the Company is required to pay
the Registration Expenses of a withdrawn offering pursuant to clause (b)(i)
above, then the Investor or the Holders, as the case may be, shall not forfeit
their rights pursuant to Section 2.1.

2.5. Obligations
of the Company. Whenever required to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
practicable:

          (a)
Prepare and file with the SEC not later than forty-five (45) calendar days after
the request a registration statement with respect to such Registrable
Securities and use its reasonable best efforts to cause such registration
statement to become effective, or prepare and file with the SEC a prospectus
supplement with respect to such Registrable Securities pursuant to an effective
registration statement and, upon the request of Holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement
effective or such prospectus supplement current, for up to one hundred and
twenty (120) calendar days other than a registration statement required by a
Holder to be effected by means of a Shelf Registration Statement or Amended
Shelf Registration Statement pursuant to Section 2.1(d) or, if earlier, until the
Holder or Holders have completed the distribution related thereto; provided
that before filing a registration statement or prospectus, or filing any
amendment thereof or supplement thereto, the Company shall furnish copies of
all such documents proposed to be filed to Holders’ Counsel. 

7

          (b)
Prepare and file with the SEC such amendments and supplements to the applicable
registration statement and the prospectus or prospectus supplement used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement for the period set forth in
paragraph (a) above.

          (c)
Furnish to the Holders such number of copies of the applicable registration
statement and each such amendment and supplement thereto (including in each
case all exhibits) and of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them.

          (d)
Use its reasonable best efforts to register and qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders, to keep
such registration or qualification in effect for so long as such registration
statement remains in effect, and to take any other action which may be
reasonably necessary to enable such seller to consummate the disposition in
such jurisdictions of the securities owned by such Holder; provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.

          (e)
Enter into customary agreements (including if the method of distribution is by
means of an underwriting, a customary underwriting agreement in form and
substance reasonably satisfactory to the Holders with the managing underwriter
or underwriters of such offering, provided that the Company shall consult with
the Investor prior to agreeing upon any fees, discounts or other amounts payable
to such managing underwriter or underwriters), take such other actions
(including participating in and making documents available for the due
diligence review of underwriters if the method of distribution is by means of
an underwriting) and make available members of management of the Company for
assistance reasonably required in the selling effort relating to the
Registrable Securities, including, but not limited to, the customary
participation, which shall not be unduly burdensome, of such members of the Company’s
management in “road shows”, as are reasonably required in order to facilitate
the disposition of such Registrable Securities. Each Holder participating in
such underwriting shall also enter into and perform its obligations under such
underwriting agreement; provided, however, that no Holder shall
be required to make any representations or warranties to or agreements with the
Company or any underwriters in connection with any registration statement other
than such customary representations, warranties or agreements of a selling
shareholder regarding such Holder, such Holder’s title to the Registrable
Securities, such Holder’s intended method or methods of distribution and any
other representation, warranty or agreement required by law.

          (f)
Notify each Holder of Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the applicable prospectus, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.

8

          (g)
Furnish, on the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through underwriters,
(i) an opinion, dated as of such date, of outside legal counsel representing
the Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, (ii) a letter dated as of such date, from the independent
registered public accountants of the Company, in form and substance as is customarily
given by independent registered public accountants to underwriters in an
underwritten public offering addressed to the underwriters and (iii) such other
customary documents, certificates, resolutions or agreements as may reasonably
be required by the underwriters.

          (h)
Give written notice to the Holders:

	
 

	
 

	
 

	
 

	
(i)

	
when any
 registration statement filed at the request of a Holder pursuant to Section
 2.1 or any amendment thereto has been filed with the SEC (except any
 amendment effected by the filing of a document with the SEC pursuant to the
 Exchange Act) and when such registration statement or any post-effective
 amendment thereto has become effective; 

	
 

	

	
 

	
 

	
(ii)

	
of any
 request by the SEC for amendments or supplements to any registration statement
 filed at the request of the Investor pursuant to Section 2 or the prospectus
 included therein or for additional information; 

	
 

	

	
 

	
 

	
(iii)

	
of the
 issuance by the SEC of any stop order suspending the effectiveness of any
 registration statement filed at the request of the Investor pursuant to
 Section 2 or the initiation of any proceedings for that purpose; 

	
 

	

	
 

	
 

	
(iv)

	
of the
 receipt by the Company or its legal counsel of any notification with respect
 to the suspension of the qualification of the Ordinary Shares for sale in any
 jurisdiction or the initiation or threatening of any proceeding for such
 purpose; and 

	
 

	

	
 

	
 

	
(v)

	
of the
 happening of any event that requires the Company to make changes in any
 effective registration statement filed at the request of a Holder pursuant to
 Section 2 or the prospectus related to the registration statement in order to
 make the statements therein not misleading (which notice shall be accompanied
 by an instruction to suspend the use of the prospectus until the requisite changes
 have been made). 

          (i)
Use its reasonable best efforts to prevent the issuance or obtain the
withdrawal of any order suspending the effectiveness of any registration
statement referred to in Section 2.5(h)(iii) at the earliest practicable time.

9

          (j)
Upon the occurrence of any event contemplated by Section 2.5(h)(v) above,
promptly prepare a post-effective amendment to such registration statement or a
supplement to the related prospectus or file any other required document so that,
as thereafter delivered to the Holders, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Company notifies the Holders in
accordance with Section 2.5(h)(v) above to suspend the use of the prospectus
until the requisite changes to the prospectus have been made, then the Holders
shall suspend use of such prospectus and use their reasonable best efforts to
return to the Company all copies of such prospectus (at the Company’s expense)
other than permanent file copies then in such Holder’s possession, and the
period of effectiveness of such registration statement provided for above shall
be extended by the number of days from and including the date of the giving of
such notice to the date Holders shall have received such amended or
supplemented prospectus pursuant to this Section 2.5(j).

          (k)
Provide a transfer agent and registrar for purposes of settling any offering or
sale of Registrable Securities, including with respect to the transfer of
physical stock certificates into book-entry form in accordance with any
procedures reasonably requested by the Holders or the underwriters.

          (l)
Use its reasonable best efforts to cause all Registrable Securities to be
listed, on or prior to the effective date of any registration statement, on
each securities exchange or national market on which similar securities issued
by the Company are then listed.

          (m)
On or prior to the effective date of any registration statement, to take all
steps reasonably necessary to permit the deposit of all Registrable Securities
that are not then held in the form of ADSs into such depositary receipt
facility as the Company may then sponsor, and to prepare and file with the SEC
any amendment to an existing registration statement on Form F-6, if necessary,
to cover any ADSs held by any Holder or that will be held by any purchaser of
Registrable Securities to be sold under any registration statement, it being
understood that any customary fees, charges and taxes payable in connection
with any deposit of Registrable Securities into a deposit agreement then
sponsored by the Company shall be borne by the Holders pro rata on the basis of
the number of Registrable Securities of each Holder to be deposited in
accordance with this Section 2.5(m).

          (n)
Cooperate as reasonably required with each Holder and each underwriter and
their counsel, if Registrable Securities are being sold through underwriters,
in connection with any filings required to made with the Financial Industry
Regulatory Authority. 

2.6. Suspension
of Sales; Effectiveness of Registration Statements.

          (a)
During any Close Period and upon receipt of written notice from the Company
that a registration statement, prospectus or prospectus supplement contains or
may contain an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that circumstances exist that make inadvisable use of such
registration statement, prospectus or prospectus supplement, each Holder of
Registrable Securities shall forthwith discontinue disposition of Registrable
Securities until termination of such Close Period or until such Holder has
received copies of a supplemented or 

10

amended
prospectus or prospectus supplement, or until such Holder is advised in writing
by the Company that the use of the prospectus and, if applicable, prospectus
supplement may be resumed, and, if so directed by the Company, such Holder
shall deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies then in such Holder’s possession, of the prospectus and,
if applicable, prospectus supplement covering such Registrable Securities
current at the time of receipt of such notice. The total number of days that
any such suspension (other than a suspension due to a Close Period) may be in
effect in any twelve (12) month period shall not exceed the excess of ninety
(90) calendar days over the number of days in such twelve-month period that the
Company has delayed effecting a registration in reliance on Section 2.1(c)(vi).

          (b)
A registration statement filed pursuant to this Section 2 shall be deemed not
to have become effective (and the related registration shall be deemed not to
have been effected) unless it has been declared effective by the SEC; provided,
however, that if, after it has been declared effective, the offering of
any Registrable Securities pursuant to such registration statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court (other than any such stop
order or injunction issued as a result of the inclusion in such registration
statement of any information supplied to the Company for inclusion therein by
the Investor and/or the Holders) that is not subsequently remedied, such
registration statement shall be deemed not to have become effective; provided, further, however,
if any such stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court is subsequently remedied, such
registration statement shall be deemed not to have been effective during the
period of such interference.

2.7. Termination
of Registration Rights. The registration rights granted under this Article
II shall terminate with respect to any Holder as of the last day of the first
calendar month in which the sum of the Ordinary Shares held by such Holder
(including any Ordinary Shares issuable upon exchange of other securities held
by such Holder) may be sold in a single transaction without registration
pursuant to Rule 144 under the Securities Act without volume limitation or
other restrictions on transfer thereunder.

2.8. Furnishing
Information. 

          (a)
Neither the Investor nor any Holder shall use any “free writing prospectus” (as
defined in Rule 405 under the Securities Act) in connection with the sale of
Registrable Securities without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed.

          (b)
The Investor and/or Holders agree to furnish to the Company such customary
information regarding themselves, the Registrable Securities held by them and
the intended method of disposition of such securities as shall be required to
effect the registration of their Registrable Securities.

2.9. Indemnification.

          (a)
The Company agrees to indemnify and hold harmless each Holder and, if a Holder
is a person other than an individual, such Holder’s officers, directors,
employees, agents, 

11

representatives
and affiliates (which in the case of the Investor, means any governmental or
quasi-governmental entity or Wholly Owned Entity), and each person or entity,
if any, that controls a Holder within the meaning of the Securities Act (each,
an “Indemnitee”),
against any and all losses, claims, penalties, damages, actions, liabilities, costs
and expenses (including without limitation reasonable fees, expenses and
disbursements of attorneys and other professionals), joint or several, arising
out of or based upon any untrue or alleged untrue statement of material fact
contained in any registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto
or contained in any “free writing prospectus” (as such term is defined in Rule
405 under the Securities Act) prepared by the Company or authorized by it in
writing for use by such Holder (or any amendment or supplement thereto); or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, that
the Company shall not be liable to such Indemnitee in any such case to the
extent that any such loss, claim, penalty, damage, liability (or action or
proceeding in respect thereof), cost or expense arises out of or is based upon
(i) an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, including any such preliminary
prospectus or final prospectus contained therein or any such amendments or
supplements thereto or contained in any “free writing prospectus” (as such term
is defined in Rule 405 under the Securities Act) prepared by the Company or
authorized by it in writing for use by such Holder (or any amendment or
supplement thereto), in reliance upon and in conformity with information
regarding such Indemnitee or its plan of distribution or ownership interests
which was furnished in writing to the Company for use in connection with such
registration statement, including any such preliminary prospectus or final
prospectus contained therein or any such amendments or supplements thereto or
(ii) offers or sales effected by or on behalf such Indemnitee “by means of” (as
defined in Securities Act Rule 159A) a “free writing prospectus” (as defined in
Securities Act Rule 405) that was not authorized in writing by the Company. 

          (b)
If the indemnification provided for in Section 2.9(a) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities,
costs or expenses referred to therein or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the Company, in lieu of indemnifying
such Indemnitee, shall contribute to the amount paid or payable by such
Indemnitee as a result of such losses, claims, damages, actions, liabilities,
costs or expenses in such proportion as is appropriate to reflect the relative
fault of the Indemnitee, on the one hand, and the Company, on the other hand,
in connection with the statements or omissions which resulted in such losses,
claims, damages, actions, liabilities, costs or expenses as well as any other
relevant equitable considerations. The relative fault of the Company, on the
one hand, and of the Indemnitee, on the other hand, shall be determined by
reference to, among other factors, whether the untrue or alleged untrue
statement of a material fact or omission to state a material fact relates to
information supplied by the Company or by the Indemnitee and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; the Company and each Holder agree that it
would not be just and equitable if contribution pursuant to this Section 2.9(b)
were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 2.9(a). Notwithstanding the provisions of this Section 2.9, in
connection with any registration statement filed by the Company, no Indemnitee
shall be required to contribute any amount in excess of the net proceeds
received by such Indemnitee 

12

from the sale
of Registrable Securities registered under such registration statement. No
Indemnitee guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from the
Company if the Company was not guilty of such fraudulent misrepresentation.

          (c)
Each Indemnitee shall:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
give notice
 as promptly as reasonably practicable to the Company of any action commenced
 against it after receipt of a written notice of any claim or the commencement
 of any action, claim, suit, investigation or proceeding in respect of which a
 claim for indemnification may be sought under this Section 2.9; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

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

	
 

	
 

	
 

	
 

	
 

	
and shall
 keep the Company informed of, and, to the extent reasonably practicable,
 consult with the Company in relation to, all material developments in respect
 thereof, but in each case, only insofar as may be consistent with the terms
 of any relevant insurance policy and provided (in each case) that to do so
 would not, in such Indemnitee’s view (acting in good faith), be prejudicial
 to it (or to any Indemnitee connected to it) or to any obligation of
 confidentiality or other legal or regulatory obligation which that Indemnitee
 owes to any third party or to any regulatory request that has been made of
 it. However, the failure to so notify the Company and keep the Company
 informed shall not relieve the Company from any liability hereunder to the
 extent it is not materially prejudiced as a result thereof and in any event
 shall not relieve the Company from any liability which it may have otherwise
 than on account of the indemnity set out in this Section 2.9.

          (d)
Legal advisers for Indemnitees shall be selected by the Investor in respect of
the Investor’s Indemnitees, and each Holder in respect of its Indemnitees. The
Company may participate at its own expense in the defense of any action
commenced against it provided that legal advisers for the Company shall not
(except with the consent of the relevant Indemnitee) also be legal advisers for
the Indemnitee.

          (e)
In no event shall the Company be liable for fees and expenses of more than one
legal adviser (in addition to any local legal advisers) separate from its own
legal advisers for all Holders in connection with any one action or separate
but similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.

          (f)
The Company shall not, without the prior written consent of the relevant
Indemnitees (acting in good faith), settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 2.9 (whether or not the Indemnitees are actual or
potential parties thereto), unless such settlement, compromise or consent: (i)
includes an unconditional release of each Indemnitee from all liability arising
out of such litigation, 

13

investigation,
proceeding or claim; and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
Indemnitee.

2.10. Assignment
or Novation of Registration Rights. 

          (a)
The Investor (or a Holder to whom the Investor has transferred, assigned or
novated rights pursuant to this Section 2.10) shall be permitted to transfer,
assign or novate its rights and obligations under this Agreement to (i) any
Person to which the Investor or such Holder transfers or sells not less than
$500,000,000 of Registrable Securities and (ii) subject to 2.10(b), any entity
which is wholly owned, directly or indirectly, by the Investor (a “Wholly Owned
Entity”); provided that the Investor (or a Holder to whom the
Investor has transferred, assigned or novated rights pursuant to this Section
2.10) shall consult with the Company prior to transferring, assigning or
novating its rights and obligations to a Person pursuant to Section 2.10(a)(i);
provided, further, that any such consultation or its outcome
shall not be binding on the Investor or such Holder and shall in no way limit
the Investor or such Holder’s right and ability to effect a transfer,
assignment or novation in accordance with Section 2.10(a)(i).

          (b)
In the event of an assignment, transfer or novation made pursuant to Section
2.10(a)(ii), the Investor shall procure that, immediately prior to any such
Wholly Owned Entity ceasing to be wholly owned directly or indirectly by the
Investor, such rights and obligations under this Agreement shall be novated to
the Investor or any other Wholly Owned Entity.

          (c)
Subject to Section 2.10(a), no party to this Agreement shall be permitted to
assign or novate, or purport to assign or novate, all or any part of the
benefit of, or its rights or benefits under, this Agreement to any other person
without the prior written consent of the other party.

2.11. “Market
Stand-Off’. In connection with any registered sale of Ordinary Shares by
the Company in which the Investor and/or the Holders shall participate by
exercise of the rights provided hereunder, the Investor and/or such Holders hereby
agree to discuss with the managing underwriter or underwriters of such
registered sale entry by the Investor and/or such Holders into market stand-off
or similar agreements in connection with the Investor and/or such Holders’
participation in such registered sale; provided that (i) no provision of
this Agreement shall in any way be construed so at to require the Investor
and/or such Holders to enter into any such market stand-off or similar
agreement and (ii) the Investor and/or such Holders shall in any case not enter
into any such market stand-off or similar agreement unless all executive
officers and directors of the Company enter into similar agreements and only if
such Persons remain subject thereto (and are not released from such agreements)
for the same period as may be applicable to the Investor and/or such Holders. 

2.12. Rule
144 Reporting. With a view to making available to Holders the benefits of
certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees
to use its reasonable best efforts to:

          (a)
make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
this Agreement;

14

          (b)
file with the SEC, in a timely manner, all reports and other documents required
of the Company under the Exchange Act; and

          (c)
so long as a Holder owns any Registrable Securities, furnish to such Holder
forthwith upon request: a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 under the Securities Act, and of
the Exchange Act; a copy of the most recent annual report of the Company; and
such other reports and documents as the Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing it to sell any
such Ordinary Shares without registration.

2.13. Other
Registration Rights. The Company shall not: 

          (a)
grant to any Other Shareholder any rights to request the Company to register
any Ordinary Shares, unless (i) such rights are set forth in a written
agreement with the Other Shareholder and such rights and the terms of such
agreement are no more favorable to such Other Shareholder than the rights and
terms set forth in this Agreement and (ii) such agreement stipulates that (A)
in any demand registration made by the Investor or any Holder as the Initiating
Holder (and pursuant to which any Holder may participate in accordance with
Section 2.3 hereof), the Investor and/or any Holder participating therein shall
(subject to the relative priorities between the Investor and other Holders set
forth in Section 2.3 hereof) always have a first priority right over such Other
Shareholder (or any Other Shareholder) to register and sell any Registerable
Securities the Investor or such Holders propose to register and sell in any
such registration ahead of any Registerable Securities any such Other
Shareholder may propose to register or sell in connection therewith, (B) in any
piggyback registration effected in connection with an underwritten primary
registration by the Company which is not a demand registration by the Investor
and/or the Holders, the Investor and/or the Holders shall always have a first
priority right over such Other Shareholder (or any Other Shareholder) to
register and sell any Registerable Securities the Investor or such Holders
propose to register and sell in any such piggyback registration ahead of any
Registerable Securities any such Other Shareholder may propose to register and
sell in connection therewith and (C) in any piggyback registration effected in
connection with an underwritten secondary registration by the Company on behalf
of and/or in response to a demand from such Other Shareholder, the Investor
and/or the Holders shall have the right to register and sell any Registrable
Securities they propose to register and sell in any such piggyback
registration, allocated, if necessary, pro rata between the Investor and/or
the Holders and such Other Shareholder on the basis of the number of Ordinary
Shares owned by such Person ((i) and (ii) together, the “Permitted Registration Rights”);
and

          (b)
effect any registration of its Ordinary Shares for or on behalf of or in
response to any demand from any Other Shareholder, except such Other
Shareholder who has been granted Permitted Registration Rights in accordance
with this Agreement.

15

ARTICLE III

MISCELLANEOUS

3.1. No
Inconsistent Agreements. The Company shall not hereafter enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Investor and/or the Holders in this Agreement or otherwise
conflicts with the provisions hereof.

3.2. Authority; Enforceability. Each
entity that is a party hereto has the corporate power and each has the
authority to enter into this Agreement and to carry out its obligations
hereunder. Each entity that is a party hereto is duly organized and validly
existing under the laws of its jurisdiction of organization, and the execution
of this Agreement and the consummation of the transactions contemplated herein
have been duly authorized by all necessary action, and no other act or
proceeding, corporate or otherwise, on its part is necessary to authorize the
execution of this Agreement or the consummation of any of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
each party.

3.3. Adjustments
Affecting Registrable Securities. The Company shall not amend, or permit
any amendment of, its articles of association, by-laws or similar
organizational documents which would reasonably be expected to adversely affect
the ability of Holders to include Registrable Securities in a registration
undertaken pursuant to this Agreement or which would reasonably be expected to
adversely affect the marketability of such Registrable Securities in any such
registration.

3.4. Successors
and Assigns. Except as otherwise provided herein, the terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties (including transferees of any
shares of Registrable Securities to the extent set forth herein), and subject
to the restrictions on assignments and novation set forth in Section 2.10.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. 

3.5. Applicable
Law and Submission to Jurisdiction. 

          (a)
This Agreement will be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed within
the State of New York, regardless of the law that might be applied under
principles of conflicts of laws.

          (b)
The Investor irrevocably submits to the nonexclusive jurisdiction of any New
York State or United States Federal court sitting in the State of New York over
any suit, action or proceeding arising out of or relating to this Agreement or
the transactions contemplated thereby. The Investor irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any such suit, action or proceeding brought in
such a court and any claim that any such suit, action or proceeding brought in
such a court has been brought in an inconvenient forum. EACH PARTY ACKNOWLEDGES
AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT 

16

IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY,
AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 3.6(b).

3.6. Counterparts
and Facsimile. For the convenience of the parties hereto, this Agreement
may be executed in any number of separate counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts will
together constitute the same agreement. Executed signature pages to this
Agreement may be delivered by facsimile and such facsimiles will be deemed as
sufficient as if actual signature pages had been delivered.

3.7. Titles
and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting
this Agreement.

3.8. Notices.
Except as otherwise provided in this Agreement, all notices, requests, claims,
demands, waivers and other communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered by hand or overnight
courier service, or when received by facsimile transmission if promptly
confirmed, as follows:

	
 

	
 

	
 

	
 

	
(a) 

	
if to the
 Company, to:

	
 

	
 

	
 

	
 

	
 

	
Lloyds TSB
 Group plc

	
 

	
 

	
Henry Duncan
 House

	
 

	
 

	
129 George
 St

	
 

	
 

	
Edinburgh
 EH2 4LH

	
 

	
 

	
Attention:
 Company Secretary

	
 

	
 

	
 

	
 

	
 

	
with copies
 to: 

	
 

	
 

	
 

	
 

	
 

	
Linklaters
 LLP

	
 

	
 

	
One Silk
 Street

	
 

	
 

	
London EC2Y
 8HQ

	
 

	
 

	
Attention:
 Thomas N. O’Neill III

	
 

	
 

	
Fax: +44 (0)
 20 7456 2222

	
 

	
 

	
 

	
 

	
(b)

	
if to the
 Investor, to: 

	
 

	
 

	
 

	
 

	
 

	
The
 Commissioners of Her Majesty’s Treasury

17

	
 

	
 

	
 

	
 

	
 

	
 

	
1 Horse
 Guards Road

	
 

	
 

	
London SW1A
 2HQ

	
 

	
 

	
Attention:
 Nikhil Rathi (Team Leader, Financial Stability)

	
 

	
 

	
Fax: + 44
 (0) 20 7270 4844

	
 

	
 

	
 

	
 

	
 

	
with copies to:
 

	
 

	
 

	
 

	
 

	
 

	
Slaughter
 and May 

	
 

	
 

	
One Bunhill
 Row

	
 

	
 

	
London EC1Y
 8YY 

	
 

	
 

	
Attention: 

	
Tim Pharoah

	
 

	
 

	
 

	
Paul Dickson

	
 

	
 

	
Fax: +44 (0)
 20 7090 5000

	
 

	
 

	
 

	
 

	
 

	
Cravath,
 Swaine & Moore LLP 

	
 

	
 

	
One
 Ropemaker Street 

	
 

	
 

	
London EC2Y
 9HR 

	
 

	
 

	
Attention:
 Philip J. Boeckman, Esq.

	
 

	
 

	
Fax: +44 (0)
 20 7860 1150 

 or to such other address, facsimile number or
telephone as either party may, from time to time, designate in a written notice
given in a like manner. 

3.9. Amendments
and Waivers. Any term of this Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each Holder of any Registrable
Securities then outstanding, each future Holder of all such Registrable
Securities, and the Company.

3.10. Severability.
If any provision of this Agreement or the application thereof to any person or
circumstance is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof, or the application of
such provision to persons or circumstances other than those as to which it has
been held invalid or unenforceable, will remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby, so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original
intent of the parties

3.11. Aggregation
of Securities. All Registrable Securities held or acquired by any
wholly-owned subsidiary or parent of, or any corporation or entity that is
controlling, controlled by, or under common control with, the Investor shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.

18

3.12. Entire
Agreement, Etc. This Agreement constitutes the entire agreement, and
supersedes all other prior agreements, understandings, representations and
warranties, both written and oral, between the parties, with respect to the
subject matter hereof.

3.13. Remedies.
Any Person having rights under any provision of this Agreement shall be
entitled to enforce such rights specifically, to recover damages caused by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law. 

3.14. Interpretation
of Placing and Open Offer Agreement. The parties agree that if the Investor
transfers any Registrable Securities to an affiliate or nominee of the
Investor, such affiliate or nominee shall have all the rights and be bound by
the obligations of the Investor under the Placing and Open Offer Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

19

          IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date set forth in the first paragraph hereof.

	
 

	
 

	
 

	
 

	
LLOYDS TSB GROUP PLC

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
     Name:
 

	
 

	
 

	
     Title:
 

	
 

	
 

	
 

	
 

	
THE COMMISSIONERS OF HER MAJESTY’S TREASURY

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
     Name:
 

	
 

	
 

	
     Title:
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
     Name:
 

	
 

	
 

	
     Title:
 

20

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