Document:

Exhibit 4.2

 

 

 

 

LLOYDS BANKING GROUP PLC

 

as Company,

 

and

 

THE BANK OF NEW YORK MELLON ACTING THROUGH ITS

LONDON BRANCH

 

as Trustee

 

  

 

FIRST SUPPLEMENTAL INDENTURE

 

dated as of [•], 2014

 

to

 

CAPITAL SECURITIES INDENTURE

 

dated as of March 6, 2014

 

in respect of

 

 

$[       ] 7.5% Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities

 

 

 

 

 

  

  

  

 

TABLE OF CONTENTS

Page

 

	
ARTICLE 1

	
Definitions

	 	 
	
Section 1.01.  Definition of Terms

	
2

	
Section 1.02.  Separability Clause

	
19

	
Section 1.03.  Benefits of Instrument

	
19

	
Section 1.04.  Relation to Capital Securities Indenture

	
19

	 	 
	
ARTICLE 2

	
The Additional Tier 1 Securities

	 	 
	
Section 2.01.  Form, Title, Terms and Payments

	
19

	
Section 2.02.  Interest

	
21

	
Section 2.03.  Interest Payments Discretionary

	
21

	
Section 2.04.  Restriction on Interest Payments

	
22

	
Section 2.05.  Agreement to Interest Cancellation

	
22

	
Section 2.06.  Notice of Interest Cancellation

	
23

	
Section 2.07.  Payment of Principal, Interest and Other Amounts

	
23

	
Section 2.08.  Optional Redemption

	
24

	
Section 2.09.  Optional Tax Redemption

	
24

	
Section 2.10.  Regulatory Event Redemption

	
26

	
Section 2.11.  Notice of Redemption

	
26

	
Section 2.12.  Canceled Interest Not Payable Upon Redemption

	
28

	
Section 2.13.  Condition to Repurchase

	
28

	
Section 2.14.  Automatic Conversion upon Trigger Event

	
28

	
Section 2.15.  Settlement Shares

	
32

	
Section 2.16.  Settlement Shares Offer

	
33

	
Section 2.17.  Settlement Procedure

	
34

	
Section 2.18.  Failure to Deliver a Settlement Notice

	
36

	
Section 2.19.  Delivery of ADSs

	
36

	
Section 2.20.  Agreement with Respect to Exercise of UK Bail-in Power

	
37

	 	 
	
ARTICLE 3

	
Anti-Dilution

	 	 
	
Section 3.01.  Adjustment of Conversion Price

	
39

	
Section 3.02.  Qualifying Relevant Event

	
44

	
Section 3.03.  Agreement in connection with a Non-Qualifying Relevant Event

	
45

	 	 
	
ARTICLE 4

	
Enforcement Events and Remedies

	 	 
	
Section 4.01.  Winding-up or Administration Event

	
46

 

 

 

  

i

  

 

 

 

 

	
Section 4.02.  Non-Payment Event

	
46

	
Section 4.03.  Limited Remedies for Breach of Performance Obligations

	
47

	
Section 4.04.  No Other Remedies and Other Terms

	
47

	
Section 4.05.  Waiver of Past Defaults

	
48

	 	 
	
ARTICLE 5

	
Subordination

	 	 
	
Section 5.01.  Subordination to Claims of Senior Creditors

	
48

	
Section 5.02.  No Set-Off

	
50

	 	 
	
ARTICLE 6

	
Covenants

	 	 
	
Section 6.01.  Undertakings

	
50

	 	 
	
ARTICLE 7

	
Satisfaction and Discharge

	 	 
	
Section 7.01.  Satisfaction and Discharge of Indenture

	
51

	 	 
	
ARTICLE 8

	
Supplemental Indentures

	 	 
	
Section 8.01.  Amendments or Supplements Without Consent of Holders

	
52

	
Section 8.02.  Amendments or Supplements With Consent of Holders

	
52

	
Section 8.03.  Holders Approval of Amendments

	
52

	 	 
	
ARTICLE 9

	
Miscellaneous

	 	 
	
Section 9.01.  Effect of Supplemental Indenture

	
53

	
Section 9.02.  Other Documents to Be Given to the Trustee

	
53

	
Section 9.03.  Notices to, and Consents Required from, the Relevant Regulator to Be Given to the Trustee

	
53

	
Section 9.04.  Survival

	
53

	
Section 9.05.  Confirmation of Indenture

	
54

	
Section 9.06.  Concerning the Trustee

	
54

	
Section 9.07.  Governing Law

	
54

	
Section 9.08.  Counterparts

	
54

	  	  

 

 

 

 

  

ii

  

 

 

This FIRST SUPPLEMENTAL INDENTURE (“First Supplemental Indenture”), dated as of [•], 2014, between, LLOYDS BANKING GROUP PLC, a corporation incorporated in Scotland with registered number 95000, as issuer (the “Company”) and THE BANK OF NEW YORK MELLON, a banking corporation duly organized and existing under the laws of the State of New York acting through its London Branch, as trustee under the Capital Securities Indenture hereinafter referred to (the “Trustee”) having its Corporate Trust Office at One Canada Square, London E14 5AL.

 

WITNESSETH:

 

WHEREAS, the Company and the Trustee have executed and delivered a Capital Securities Indenture, dated as of March 6, 2014 (the “Capital Securities Indenture” and, together with this First Supplemental Indenture, the “Indenture”), to provide for the issuance of the Company’s Capital Securities (the “Securities”);

 

WHEREAS, the Company hereto desires to issue a series of Securities to be known as the $[       ] 7.5% Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (the “Additional Tier 1 Securities”);

 

WHEREAS, the parties hereto desire to establish that the Additional Tier 1 Securities shall be issued in the form of one of more Global Securities substantially in the form of Exhibit A to this First Supplemental Indenture pursuant to Sections 2.01 and 3.01 of the Capital Securities Indenture;

 

WHEREAS, Section 9.01(f) of the Capital Securities Indenture permits the Company and the Trustee to enter into a supplemental indenture to establish the forms or terms of Securities of any series as permitted under Sections 2.01 and 3.01 of the Capital Securities Indenture without the consent of Holders;

 

WHEREAS, Section 9.01(d) of the Capital Securities Indenture permits the Company and the Trustee to add to, change or eliminate any provisions of the Capital Securities Indenture, subject to certain conditions, without the consent of Holders;

 

WHEREAS, this First Supplemental Indenture shall amend and supplement the Capital Securities Indenture but only with respect to the Additional Tier 1 Securities; to the extent the terms of the Capital Securities Indenture are inconsistent with such provisions of this First Supplemental Indenture, the terms of this First Supplemental Indenture shall govern, but only with respect to the Additional Tier 1 Securities;

 

WHEREAS, there are no Outstanding Securities of any series created prior to the execution of this First Supplemental Indenture;

 

WHEREAS, the entry into of this First Supplemental Indenture has been authorized pursuant to a Board Resolution, as required by Section 9.01 of the Capital Securities Indenture; and

 

 

 

  

  

  

 

 

WHEREAS, the Company has requested and does hereby request that the Trustee execute and deliver this First Supplemental Indenture and whereas all actions required by the Company to be taken in order to make this First Supplemental Indenture a valid, binding and enforceable instrument in accordance with its terms, have been taken and performed, and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects,

 

NOW, THEREFORE, the Company and the Trustee mutually covenant and agree as follows:

 

ARTICLE 1

Definitions

 

Section 1.01.  Definition of Terms.  For all purposes of this First Supplemental Indenture:

 

(a)        a term defined anywhere in this First Supplemental Indenture has the same meaning throughout;

 

(b)        capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Capital Securities Indenture;

 

(c)        the singular includes the plural and vice versa;

 

(d)        headings are for convenience of reference only and do not affect interpretation;

 

(e)        for purposes of this First Supplemental Indenture and the Capital Securities Indenture, the term “series” shall mean the series of Securities designated as the Additional Tier 1 Securities;

 

(f)        the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this First Supplemental Indenture, refer to this First Supplemental Indenture as a whole and not to any particular provision of this First Supplemental Indenture;

 

(g)        the terms “dollars” and “$” and mean United States Dollars;

 

(h)        the terms “pounds sterling,” and “£” mean British pounds sterling;

 

(i)        references herein to a specific Section, Article or Exhibit refer to Sections or Articles of, or an Exhibit to, this First Supplemental Indenture;

 

(j)        wherever the words “include”, “includes” or “including” are used in this First Supplemental Indenture, they shall be deemed to be followed by the words “without limitation;”

 

(k)        the use of “or” is not intended to be exclusive unless expressly indicated otherwise;

 

 

 

  

2

  

 

 

(l)        for purposes of Article III of this First Supplemental Indenture, references therein to any act or statute or any provision of any act or statute shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under such modification or re-enactment; and

 

(m)        references to any issue or offer or grant to Shareholders “as a class” or “by way of rights” shall be taken to be references to an issue or offer or grant to all or substantially all Shareholders or Existing Shareholders, as the case may be, other than Shareholders or Existing Shareholders, as the case may be, to whom, by reason of the laws of any territory or requirements of any recognized regulatory body or any other stock exchange or securities market in any territory or in connection with fractional entitlements, it is determined not to make such issue or offer or grant.

 

“Accrued Interest” means any accrued and unpaid interest on the Additional Tier 1 Securities, excluding any interest which has been canceled or deemed to be canceled as described in Section 2.03 and Section 2.04 hereof.

 

“Acquirer” means the person which, following a Relevant Event, controls the Company.

 

“ADS” means the American Depository Shares which are the subject of the ADS Deposit Agreement.

 

“ADS Deposit Agreement” means the Amended and Restated Deposit Agreement among the Company, The Bank of New York Mellon and all holders from time to time of American Depositary Receipts issued thereunder.

 

“ADS Depository” means The Bank of New York Mellon, as the depositary under the Company’s ADS Deposit Agreement.

 

“Alternative Consideration” means in respect of each Additional Tier 1 Security and as determined by the Company (i) if all of the Settlement Shares to be issued and delivered following Automatic Conversion are sold in the Settlement Shares Offer, the pro rata share of the cash proceeds from the sale of such Settlement Shares attributable to such Additional Tier 1 Security translated from sterling into U.S. dollar at a then-prevailing exchange rate as determined by the Settlement Share Depository (less the pro rata share of any foreign exchange transaction costs and an amount equal to the pro rata share of any stamp duty, stamp duty reserve tax, or any other capital, issue, transfer, registration, financial transaction or documentary tax that may arise or be paid in connection with the issue and delivery of the transfer of Settlement Shares to the Settlement Share Depository pursuant to the Settlement Shares Offer), (ii) if some but not all of such Settlement Shares to be issued and delivered upon Automatic Conversion are sold in the Settlement Shares Offer, (x) the pro rata share of the cash proceeds from the sale of such Settlement Shares attributable to such Additional Tier 1 Security translated from sterling into U.S. dollar at a then-prevailing exchange rate as determined by the Settlement Share Depository (less the pro rata share of any foreign exchange transaction costs and an amount equal to the pro rata share of any stamp duty, stamp duty reserve 

 

 

 

  

3

  

 

 

tax, or any other capital, issue, transfer, registration, financial transaction or documentary tax that may arise or be paid in connection with the delivery of the Settlement Shares to the Settlement Share Depository pursuant to the Settlement Shares Offer) and (y) the pro rata share of such Settlement Shares not sold pursuant to the Settlement Shares Offer attributable to such Additional Tier 1 Security rounded down to the nearest whole number of Settlement Shares and (iii) if no Settlement Shares are sold in the Settlement Shares Offer, the relevant number of Settlement Shares that would have been received had the Company not elected that the Settlement Share Depository should carry out a Conversion Shares Offer.

 

“Applicable Regulations” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy (including, without limitation, as to leverage) then in effect in the United Kingdom including, without limitation to the generality of the foregoing, any delegated or implementing acts (such as regulatory technical standards) adopted by the European Commission and any regulations, requirements, guidelines and policies relating to capital adequacy adopted by the Relevant Regulator, from time to time (whether or not such requirements, guidelines or policies are applied generally or specifically to the Company or to the Company and its subsidiaries).

 

“Approved Entity” means a body corporate that is incorporated or established under the laws of an OECD member state and which, on the occurrence of the Relevant Event, has in issue Relevant Shares.

 

“Assets” means the unconsolidated gross assets of the Company, as shown in the latest published audited balance sheet of the Company, adjusted for subsequent events in such manner as the directors of the Company may determine.

 

“Automatic Conversion” means the irrevocable and automatic release of all of the Company’s obligations under the Additional Tier 1 Securities in consideration of the Company’s issuance and delivery of the Settlement Shares at the Conversion Price on the Conversion Date to the Settlement Share Depository (on behalf of the Holders and Beneficial Owners of the Additional Tier 1 Securities) in accordance with the terms of the Additional Tier 1 Securities.

 

“Beneficial Owners” shall mean (a) with respect to Global Securities, the owners of beneficial interests in the Securities prior to the occurrence of the Final Cancellation Date and (b) with respect to definitive Securities, the Holders in whose names the Securities are registered in the Capital Securities Register.

 

“Business Day” means any weekday, other than one on which banking institutions are authorized or obligated by law, regulation or executive order to close in London, England, or in New York City.

 

“Calculation Agent” means The Bank of New York Mellon acting through its London Branch, or its successor appointed by the Company pursuant to the Calculation 

 

 

 

  

4

  

 

 

Agent Agreement between the Company and The Bank of New York Mellon, dated as of the date hereof.

 

“Cancellation Date” means (i) with respect to any Additional Tier 1 Security for which a Settlement Notice is received by the Settlement Share Depository on or before the Notice Cut-off Date, the applicable Settlement Date and (ii) with respect to any Additional Tier 1 Security for which a Settlement Notice is not received by the Settlement Share Depository on or before the Notice Cut-off Date, the Final Cancellation Date.

 

“Cash Component” means that portion, if any, of the Alternative Consideration consisting of cash.

 

“Cash Dividend” means any dividend or distribution in respect of the Ordinary Shares which is to be paid or made to the Shareholders as a class in cash (in whatever currency) and however described and whether payable out of share premium account, profits, retained earnings or any other capital or revenue reserve or account, and including a distribution or payment to the Shareholders upon or in connection with a reduction of capital.

 

“CET1 Capital” means, as at any Quarterly Financial Period End Date or any Extraordinary Calculation Date, as the case may be, the sum, expressed in sterling, of all amounts that constitute Common Equity Tier 1 Capital of the Group as at such date, less any deductions from Common Equity Tier 1 Capital required to be made as at such date, in each case as calculated by the Company on a consolidated and fully loaded basis in accordance with the Applicable Regulations applicable to the Group as at such date (which calculation shall be binding on the Trustee and Holders).

 

“CET1 Ratio” means, in respect of each Quarterly Financial Period End Date or any Extraordinary Calculation Date, the ratio of Group’s CET1 Capital as of such date to Risk Weighted Assets as of the same such date, expressed as a percentage, and on the basis that all measures used in such calculation shall be calculated on a Fully Loaded basis.

 

“Common Equity Tier 1 Capital” shall have the meaning ascribed to such term in CRD IV (as the same may be amended or replaced from time to time) as interpreted and applied in accordance with the Applicable Regulations then applicable to the Group;

 

“control” means, for the purposes of the definition of a Relevant Event:

 

	
  

	
(a)

	
the acquisition or holding of legal or beneficial ownership of more than 50% of the issued Ordinary Shares of the Company; or

 

	
  

	
(b)

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

 

 

 

  

5

  

 

 

“Conversion Date” means the date on which the Automatic Conversion shall take place as specified in the Conversion Trigger Notice, which shall occur without delay upon the occurrence of a Trigger Event.

 

“Conversion Price” means $1.072, subject to the anti-dilution provisions set forth under Article 3.

 

“Conversion Trigger Notice” means the written notice (substantially in the form attached hereto as Exhibit B) to be delivered by the Company to the Trustee directly and to DTC, the Holder of the Global Securities (or, if the Securities are definitive Securities, by the Company to the Trustee directly and to the Holders at their addresses shown on the Capital Securities Register) specifying (i) the CET1 Ratio as at the relevant Quarterly Financial Period End Date or Extraordinary Calculation Date, as applicable, (ii) the Conversion Date, (iii) the then-prevailing Conversion Price (which Conversion Price shall remain subject to any subsequent adjustment pursuant to Article 3 up to the Conversion Date), (iv) the contact details of any Settlement Share Depository, or, if the Company has been unable to appoint a Settlement Share Depository, such other arrangements for the issuance and/or delivery of the Settlement Shares or of any Alternative Consideration to the Holders as it shall consider reasonable in the circumstances, and (v) that the Additional Tier 1 Securities shall remain in existence for the sole purpose of evidencing the Holder’s right to receive Settlement Shares, ADSs or the Alternative Consideration, as applicable, from the Settlement Share Depository and that the Additional Tier 1 Securities may continue to be transferable until the Suspension Date.

 

“CRD IV” means the legislative package consisting of Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (the “Directive”) and Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms of the European Parliament and of the Council of 26 June 2013 (the “Regulation”).

 

“CREST” means the relevant system, as defined in the CREST Regulations, or any successor clearing system.

 

“CREST Regulations” means the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended.

 

“Current Market Price” means, in respect of an Ordinary Share at a particular date, the average of the daily Volume Weighted Average Price of an Ordinary Share on each of the five (5) consecutive Dealing Days (or, for the purposes of Section 3.01(d), ten (10) consecutive Dealing Days) ending on the Dealing Day immediately preceding such date; provided that, if at any time during the said five (5) (or ten (10)) Dealing-Day period the Volume Weighted Average Price shall have been based on a price ex-dividend (or ex-any other entitlement) and during some other part of that period the Volume Weighted Average Price shall have been based on a price cum-dividend (or cum- any other entitlement), then:

 

 

 

  

6

  

 

 

	
  

	
(i)

	
if the Ordinary Shares to be issued and delivered do not rank for the Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Ordinary Shares shall have been based on a price cum-dividend (or cum- any other entitlement) shall, for the purposes of this definition, be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of any such dividend or entitlement per Ordinary Share as at the date of first public announcement relating to such dividend or entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and disregarding any associated tax credit; or

 

	
  

	
 (ii)

	
if the Ordinary Shares to be issued and delivered do rank for the Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Ordinary Shares shall have been based on a price ex-dividend (or ex- any other entitlement) shall, for the purposes of this definition, be deemed to be the amount thereof increased by an amount equal to the Fair Market Value of any such dividend or entitlement per Ordinary Share as at the date of first public announcement relating to such dividend or entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and disregarding any associated tax credit,

 

	
  

	
and provided further that, if on each of the said five (5) Dealing Days (or, for the purposes of Section 3.01(d), the said ten (10) Dealing Days), the Volume Weighted Average Price shall have been based on a price cum-dividend (or cum-any other entitlement) in respect of a dividend (or other entitlement) which has been declared or announced but the Ordinary Shares to be issued and delivered do not rank for that dividend (or other entitlement), the Volume Weighted Average Price on each of such dates shall, for the purposes of this definition, be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of any such dividend or entitlement per Ordinary Share as at the date of first public announcement relating to such dividend or entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and disregarding any associated tax credit,

 

	
  

	
and provided further that, if the Volume Weighted Average Price of an Ordinary Share is not available on one or more of the said five (5) Dealing Days (or, for the purposes of Section 3.01(d), the said ten (10) Dealing Days) (disregarding for this purpose the proviso to the definition of Volume Weighted Average Price), then the average of such Volume Weighted Average Prices which are available in that five (5) (or ten (10)) Dealing-Day period shall be used (subject to a minimum of two such prices) and if only one, or no, such Volume Weighted Average Price is available in the relevant period, the Current Market Price shall be determined in good faith by an Independent Financial Adviser.

 

 

 

  

7

  

 

 

“Dealing Day” means a day on which the Relevant Stock Exchange or relevant stock exchange or securities market is open for business and on which Ordinary Shares, Other Securities, options, warrants or other rights (as the case may be) may be dealt in (other than a day on which the Relevant Stock Exchange or relevant stock exchange or securities market is scheduled to or does close prior to its regular weekday closing time).

 

“Distributable Items” shall have the meaning assigned to such term in CRD IV (as the same may be amended or replaced from time to time), as interpreted and applied in accordance with the Applicable Regulations then applicable to the Company, but amended so that any reference therein to “before distributions to holders of own funds instruments” shall be read as a reference to “before distributions by the Company to holders of Parity Securities, the Additional Tier 1 Securities or any Junior Securities”.

 

“DTC” means The Depository Trust Company, or any successor clearing system.

 

“Equity Share Capital” has the meaning provided in Section 548 of the Companies Act 2006.

 

“EEA Regulated Market” means a market as defined by Article 4.1(14) of Directive 2004/39/EC of the European Parliament and of the Council on markets on financial instruments.

 

“Enforcement Event” means any of (i) a Winding-up or Administration Event, (ii) a Non-payment Event, or (iii) a breach of a Performance Obligation.

 

“Exempt Newco Scheme” means a Newco Scheme where, immediately after completion of the relevant Scheme of Arrangement, the ordinary shares or units or equivalent of Newco (or depositary or other receipts or certificates representing ordinary shares or units or equivalent of Newco) are (i) admitted to trading on the Relevant Stock Exchange or (ii) admitted to listing on such other Regulated Market as the Company or Newco may determine.

 

“Extraordinary Calculation Date” means any day (other than a Quarterly Financial Period End Date) on which the CET1 Ratio is calculated upon the instruction of the Relevant Regulator or at the Company’s discretion.

 

“Extraordinary Dividend” means any Cash Dividend that is expressly declared by the Company to be a capital distribution, extraordinary dividend, extraordinary distribution, special dividend, special distribution or return of value to its Shareholders as a class or any analogous or similar term, in which case the Extraordinary Dividend shall be such Cash Dividend.

 

“Fair Market Value” means, with respect to any property on any date, the fair market value of that property as determined by an Independent Financial Adviser in good faith, provided that (i) the Fair Market Value of a Cash Dividend shall be the amount of such Cash Dividend; (ii) the Fair Market Value of any other cash amount shall be the amount of such cash; (iii) where Other Securities, options, warrants or other rights are publicly traded on a stock exchange or securities market of adequate liquidity (as 

 

 

  

8

  

 

 

 

determined in good faith by an Independent Financial Adviser), the Fair Market Value (a) of such Other Securities shall equal the arithmetic mean of the daily Volume Weighted Average Prices of such Securities and (b) of such options, warrants or other rights shall equal the arithmetic mean of the daily closing prices of such options, warrants or other rights, in the case of (a) and (b), during the period of five (5) Dealing Days on the relevant stock exchange or securities market commencing on such date (or, if later, the first such Dealing Day such Other Securities, options, warrants or other rights are publicly traded) or such shorter period as such Other Securities, options, warrants or other rights are publicly traded; (iv) where Other Securities, options, warrants or other rights are not publicly traded on a stock exchange or securities market of adequate liquidity (as aforesaid), the Fair Market Value of such Other Securities, options, warrants or other rights shall be determined in good faith by an Independent Financial Adviser, on the basis of a commonly accepted market valuation method and taking account of such factors as it considers appropriate, including the market price per Ordinary Share, the dividend yield of an Ordinary Share, the volatility of such market price, prevailing interest rates and the terms of such Other Securities, options, warrants or other rights, including as to the expiry date and exercise price (if any) thereof. Such amounts shall, in the case of (i) above, be translated into the Relevant Currency (if declared, announced, made, paid or payable in a currency other than the Relevant Currency, and if the relevant dividend is payable at the option of the Company or a shareholder in any currency additional to the Relevant Currency, the relevant dividend shall be treated as payable in the Relevant Currency) at the rate of exchange used to determine the amount payable to shareholders who were paid or are to be paid or are entitled to be paid the Cash Dividend in the Relevant Currency; and, in any other case, shall be translated into the Relevant Currency (if expressed in a currency other than the Relevant Currency) at the Prevailing Rate on that date. In addition, in the case of (i) and (ii) above, the Fair Market Value shall be determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and disregarding any associated tax credit.

 

“Final Cancellation Date” means the date, as specified in the Settlement Request Notice, on which the Additional Tier 1 Securities in relation to which no Settlement Notice has been received by the Settlement Share Depository on or before the Notice Cut-off Date shall be canceled, which date may be up to twelve (12) Business Days following the Notice Cut-off Date.

 

“First Call Date” means June 27, 2024.

 

“Fully Loaded” means, in relation to a measure that is presented or described as being on a “Fully Loaded basis”, that such measure is calculated without applying the transitional provisions set out in Part Ten of the Regulation (as may be amended from time to time).

 

“Independent Financial Adviser” means an independent financial institution of international repute appointed by the Company at its own expense.

 

“Interest Payment Date” means March 27, June 27, September 27 and December 27  of each year, commencing on June 27, 2014.

 

 

 

  

9

  

 

 

“Issue Date” means [•], 2014, being the date of the initial issue of the Additional Tier 1 Securities.

 

“Junior Securities” means (i) any Ordinary Share or other securities of the Company ranking, or expressed to rank, junior to the Additional Tier 1 Securities in a Winding-up or Administration Event and/or (ii) any securities issued by any other member of the Group where the terms of such securities benefit from a guarantee or support agreement entered into by the Company which ranks, or is expressed to rank, junior to the Additional Tier 1 Securities in a Winding-up or Administration Event.

 

“Liabilities” means the unconsolidated gross liabilities of the Company, as shown in the latest published audited balance sheet of the Company, adjusted for contingent liabilities and for subsequent events in such manner as the directors of the Company may determine and prospective liabilities.

 

“Mid-Market Swap Rate” means the mid-market U.S. dollar swap rate Libor basis having a 5-year maturity appearing on Bloomberg page “ISDA 01” (or such other page as may replace such page on Bloomberg, or such other page as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) at 11:00 a.m. (New York time) on the Reset Determination Date, as determined by the Calculation Agent. If such swap rate does not appear on such page (or such other page or service), the Mid-Market Swap Rate shall instead be determined by the Calculation Agent on the basis of (i) quotations provided by the principal office of each of four major banks in the U.S. dollar swap rate market (which banks shall be selected by the Calculation Agent in consultation with the Company no less than 20 calendar days prior to the Reset Determination Date) (the “Reference Banks”) of the rates at which swaps in U.S. dollars are offered by it at approximately 11.00 a.m. (New York time) (or thereafter on such date, with the Calculation Agent acting on a best efforts basis) on the Reset Determination Date to participants in the U.S. dollar swap rate market for a five-year period and (ii) the arithmetic mean expressed as a percentage and rounded, if necessary, to the nearest 0.001% (0.0005% being rounded upwards) of such quotations. If the Mid-Market Swap Rate is still not determined on the relevant Reset Determination Date in accordance with the foregoing procedures, the Mid-Market Swap Rate shall be the mid-market U.S. dollar swap rate Libor basis having a 5-year maturity that appeared on the most recent Bloomberg page “ISDA 01” (or such other page as may replace such page on Bloomberg, or such other page as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) that was last available prior to 11.00 a.m. (New York time) on each Reset Determination Date, as determined by the Calculation Agent.

 

“New Conversion Condition” shall be satisfied if by not later than seven calendar days following the occurrence of a Relevant Event where the Acquirer is an Approved Entity, the Company shall have entered into arrangements to the Company’s satisfaction with the Approved Entity pursuant to which the Approved Entity irrevocably undertakes to the Trustee, for the benefit of the Holders and Beneficial Owners, to deliver the Relevant Shares to the Settlement Share Depository upon Automatic Conversion.

 

 

 

  

10

  

 

 

“New Conversion Condition Effective Date” means the date with effect from which the New Conversion Condition shall have been satisfied.

 

“New Conversion Price” means the amount determined by the Company in accordance with the following formula:

 

	NCP = ECP ×  	
VWAPRS

VWAPOS

 

where:

 

	 	
NCP

	
is the New Conversion Price.

 

	 	
ECP

	
is the Conversion Price in effect on the Dealing Day immediately prior to the New Conversion Condition Effective Date.

 

	 	
VWAPRS

	
means the average of the Volume Weighted Average Price of the Relevant Shares (translated, if necessary, into U.S. dollars at the Prevailing Rate on the relevant Dealing Day) on each of the 10 Dealing Days ending on the Dealing Day prior to the date the Relevant Event shall have occurred (and where references in the definition of “Volume Weighted Average Price” to “Ordinary Shares” shall be construed as a reference to the Relevant Shares and in the definition of “Dealing Day”, references to the “Relevant Stock Exchange” shall be to the primary Regulated Market on which the Relevant Shares are then listed, admitted to trading or accepted for dealing).

 

	 	
VWAPOS

	
is the average of the Volume Weighted Average Price of the Ordinary Shares (translated, if necessary, into U.S. dollars at the Prevailing Rate on the relevant Dealing Day) on each of the 10 Dealing Days ending on the Dealing Day prior to the date the Relevant Event shall have occurred.

 

“Newco Scheme” means a scheme of arrangement or analogous proceeding (“Scheme of Arrangement”) which effects the interposition of a limited liability company (“Newco”) between the Shareholders immediately prior to the Scheme of Arrangement (the “Existing Shareholders”) and the Company; provided that (i) only ordinary shares or units or equivalent of Newco or depositary or other receipts or certificates representing ordinary shares or units or equivalent of Newco are issued to Existing Shareholders; (ii) immediately after completion of the Scheme of Arrangement the only holders of ordinary shares, units or equivalent of Newco or, as the case may be, the only holders of depositary or other receipts or certificates representing ordinary shares or units or equivalent of Newco, are Existing Shareholders holding in the same proportions as immediately prior to completion of the Scheme of Arrangement; (iii) immediately after completion of the Scheme of Arrangement, Newco is (or one or more wholly-owned Subsidiaries of Newco are) the only shareholder of the Company; (iv) all 

 

 

 

  

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Subsidiaries of the Company immediately prior to the Scheme of Arrangement (other than Newco, if Newco is then a Subsidiary of the Company) are Subsidiaries of the Company (or of Newco) immediately after completion of the Scheme of Arrangement; and (v) immediately after completion of the Scheme of Arrangement the Company (or Newco) holds, directly or indirectly, the same percentage of the Ordinary Share Capital and Equity Share Capital of those Subsidiaries as was held by the Company immediately prior to the Scheme of Arrangement.

 

“Non-payment Event” has the meaning specified in Section 4.02.

 

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

 

“Notice Cut-Off Date” means the date specified as such in the Settlement Request Notice.

 

“Notional Preference Shares” has the meaning specified in Section 5.01.

 

“Ordinary Share Capital” has the meaning provided in Section 1119 of the Income and Corporation Taxes Act 2010.

 

“Other Securities” means any securities including, without limitation, shares in the capital of the Company, or options, warrants or other rights to subscribe for or purchase or acquire shares in the capital of the Company (and each an “Other Security”);

 

“outstanding”, when used with respect to the Additional Tier 1 Securities means, as of the date of determination, all Securities theretofore authenticated and delivered, except:

 

(i)           Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

 

(ii)           Securities, or portions thereof, for whose payment or redemption money, in the necessary amount, have been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of the Additional Tier 1 Securities; provided, that, if the Additional Tier 1 Securities are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor satisfactory to the Trustee has been made; and

 

(iii)           Securities which have been paid pursuant to Section 11.06 of the Capital Securities Indenture or for which Settlement Shares have been delivered to the Settlement Share Depository, in each case other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

 

 

  

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provided, however, that in determining whether the Holders of the requisite principal amount of the outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities beneficially owned by the Company or any other obligor upon the Additional Tier 1 Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be outstanding except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee has received an Officer’s Certificate stating that such Securities are so beneficially owned shall be so disregarded; provided, further, however, that Securities so beneficially owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Additional Tier 1 Securities or any Affiliate of the Company or of such other obligor.

 

“Parity Securities” means (i) the most senior ranking class or classes of preference shares in the capital of the Company from time to time and any other securities of the Company ranking, or expressed to rank, pari passu with the Additional Tier 1 Securities and/or such preference shares following a Winding-up or Administration Event and/or (ii) any securities issued by any other member of the Group, where the terms of the securities benefit from a guarantee or support agreement entered into by the Company which ranks or is expressed to rank pari passu with the Additional Tier 1 Securities and/or such preference shares following a Winding-up or Administration Event.

 

“Performance Obligation” has the meaning specified in Section 4.03.

 

“Prevailing Rate” means, in respect of any currencies on any day, the spot rate of exchange between the relevant currencies prevailing as at or about 12 noon (London time) on that date as appearing on or derived from the Relevant Page or, if such a rate cannot be determined at such time, the rate prevailing as at or about 12 noon (London time) on the immediately preceding day on which such rate can be so determined or, if such rate cannot be so determined by reference to the Relevant Page, the rate determined in such other manner as an independent financial adviser of international repute appointed by the Company shall in good faith prescribe.

 

“Prospectus” means the prospectus on Form F-4 related to the offering and sale of the Additional Tier 1 Securities dated March 6, 2014, as amended or supplemented.

 

“Prudential Regulation Authority” or “PRA” means the Prudential Regulation Authority of the United Kingdom or such other governmental authority in the United Kingdom (or if the Company becomes domiciled in a jurisdiction other than the United Kingdom, such other jurisdiction) having primary responsibility for the prudential supervision of the Company.

 

“Qualifying Relevant Event” means a Relevant Event where:

 

 

 

  

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(i)

	
the Acquirer is an Approved Entity; and

 

	
  

	
(ii)

	
the New Conversion Condition is satisfied.

 

“Quarterly Financial Period End Date” means the last day of each fiscal quarter of the Company.

 

“Record Date” means the 15th calendar day preceding each Interest Payment Date, whether or not such day is a Business Day.

 

“Reference Banks” has the meaning set forth in the definition of Mid-Market Swap Rate.

 

“Regular Record Date” means, with respect to the payment of interest on the Additional Tier 1 Securities, the 15th calendar day (whether or not a Business Day) preceding an Interest Payment Date.

 

“Regulated Market” means an EEA Regulated Market or another regulated, regularly operating, recognized stock exchange or securities market in an OECD member state.

 

“Relevant Currency” means sterling or, if at the relevant time or for the purposes of the relevant calculation or determination the London Stock Exchange is not the Relevant Stock Exchange, the currency in which the Ordinary Shares or the Relevant Shares (as applicable) are quoted or dealt in on the Relevant Stock Exchange at such time.

 

“Regulatory Event” means has the meaning specified in Section 2.10.

 

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

 

“Relevant Event Notice” has the meaning attributed to such term as set forth in Section 3.02.

 

“Relevant Page” means the relevant page on Bloomberg or such other information service provider that displays the relevant information.

 

“Relevant Regulator Consent” means any necessary permission, following the giving of due notice, from the Relevant Regulator in respect of redemption, payment, repayment, purchase, modification or substitution, as the case may be.

 

“Relevant Shares” means Ordinary Share Capital of the Approved Entity that constitutes Equity Share Capital or the equivalent (or depositary or other receipts representing the same) which is listed and admitted to trading on a Regulated Market.

 

 

 

  

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“Relevant Stock Exchange” means the London Stock Exchange or, if at the relevant time the Ordinary Shares are not at that time listed and admitted to trading on the London Stock Exchange, the principal stock exchange or securities market on which the Ordinary Shares are then listed, admitted to trading or quoted or accepted for dealing.

 

“Relevant UK Resolution Authority” means any authority within the United Kingdom with the ability to exercise a UK Bail-in Power.

 

“Reset Determination Date” means the second Business Day immediately preceding the Reset Date.

 

“Reset Date” means the First Call Date and every fifth anniversary thereafter.

 

“Risk Weighted Assets” means, as reported on each Quarterly Financial Period End Date or Extraordinary Calculation Date, the aggregate amount, expressed in sterling, of the risk weighted assets of the Group as at such date, as calculated by the Company on a consolidated and fully loaded basis in accordance with the Applicable Regulations applicable to the Group on such date (which calculation shall be binding on the Trustee and the Holders) and where the term “risk weighted assets” means the risk weighted assets or total risk exposure amount, as calculated by the Company in accordance with the Applicable Regulations applicable to the Group on the relevant Quarterly Financial Period End Date or Extraordinary Calculation Date, as the case may be.

 

“Senior Creditors” means creditors of the Company (i) who are unsubordinated creditors, (ii) whose claims are, or are expressed to be, subordinated to the claims of unsubordinated creditors of the Company but not further or otherwise, or (iii) whose claims are, or are expressed to be, junior to the claims of other creditors of the Company (whether subordinated or unsubordinated, other than those whose claims rank, or are expressed to rank, pari passu with, or junior to, the claims of Holders or Beneficial Owners) in a Winding-up or Administration Event prior to a Trigger Event.

 

“Settlement Date” means:

 

(i)           with respect to any Additional Tier 1 Security in relation to which a Settlement Notice is received by the Settlement Share Depository on or before the Notice Cut-off Date where the Company has not elected that the Settlement Share Depository will carry out a Settlement Shares Offer in accordance with Section 2.16, the date that is two (2) Business Days after the latest of (i) the Conversion Date, (ii) the date on which the Company announces that it will not elect for the Settlement Share Depository to carry out a Settlement Shares Offer (or, if no such announcement is made, the last date on which the Company is entitled to give a Settlement Shares Offer Notice), and (iii) the date on which the relevant Settlement Notice has been received by the Settlement Share Depository;

 

(ii)           with respect to any Additional Tier 1 Security in relation to which a Settlement Notice is received by the Settlement Share Depository on or before the Notice Cut-off Date where the Company has elected that the Settlement Share Depository will carry out a Settlement Shares Offer in accordance with Section 2.16, the date that is the 

 

 

 

  

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later of ‎(a) two (2) Business Days after the day on which the Settlement Shares Offer Period expires or is terminated and ‎(b) two (2) Business Days after the date on which such Settlement Notice has been so received by the Settlement Share Depository; and

 

(iii)           with respect to any Additional Tier 1 Security in relation to which a Settlement Notice is not so received by the Settlement Share Depository on or before the Notice Cut-off Date, the date on which the Settlement Share Depository delivers the relevant Settlement Shares, ADSs or Alternative Consideration, as applicable, to Holders or Beneficial Owners.

 

“Settlement Notice” means a written notice (substantially in the form attached hereto as Exhibit F) to be delivered by a Holder or Beneficial Owner (or custodian, broker, nominee or other representative thereof) to the Settlement Share Depository, with a copy to the Trustee, on or before the Notice Cut-off Date containing the following information: (i) the name of the Holder or Beneficial Owner (or custodian, broker, nominee or other representative thereof), (ii) the Tradable Amount of the book-entry interests in the Additional Tier 1 Securities held by such Holder or Beneficial Owner (or custodian, broker, nominee or other representative thereof) on the date of such notice, (iii) the name to be entered in the Company’s share register, (iv) whether Settlement Shares are to be delivered to the Holder or Beneficial Owner or ADSs are to be deposited with the ADS Depository on behalf of the Holder or Beneficial Owner into the Company’s ADS facility, (v) the details of the CREST or other clearing system account, the details of the registered account in the Company’s ADS facility or, if the Settlement Shares are not a participating security in CREST or another clearing system, the address to which the Settlement Shares (or the Settlement Share Component, if any, of any Alternative Consideration) and/or cash (if not expected to be delivered through DTC) should be delivered and (vi) such other details as may be required by the Settlement Share Depository.

 

“Settlement Request Notice” means the written notice (substantially in the form attached hereto as Exhibit E) to be delivered by the Company to the Trustee directly and to DTC as the Holder of the Global Securities (or, if the Additional Tier 1 Securities are in definitive form, by the Company to the Trustee directly and to the Holders at their registered addresses as shown on the Capital Securities Register) on the Suspension Date requesting that Holders and Beneficial Owners complete a Settlement Notice and specifying (i) the Notice Cut-off Date and (ii) the Final Cancellation Date.

 

“Settlement Share Component” means that portion, if any, of the Alternative Consideration consisting of Settlement Shares.

 

“Settlement Share Depository” means a reputable financial institution, depository entity, trust company or similar entity (which in each such case is wholly independent of the Company) to be appointed by the Company on or prior to any date when a function ascribed to the Settlement Share Depository in the Indenture is required to be performed, to perform such functions and which will be required to undertake, for the benefit of the Holders and Beneficial Owners, to hold the Settlement Shares (and the Alternate Consideration, if any) on behalf of such Holders and Beneficial Owners in one 

 

 

 

  

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or more segregated accounts, unless otherwise required to be transferred out of such accounts for the purposes of the Settlement Shares Offer on terms consistent with the Indenture.

 

“Settlement Shares” means the Ordinary Shares credited as fully paid to be issued and delivered to the Settlement Share Depository by the Company on the Conversion Date.

 

“Settlement Shares Offer” has the meaning attributed to such term in Section 2.16.

 

“Settlement Shares Offer Notice” means the written notice (substantially in the form attached hereto as Exhibit D) to be delivered by the Company to the Trustee directly and to DTC as the Holder of the Global Securities (or, if the Additional Tier 1 Securities are definitive Securities, by the Company to the Trustee directly and to the Holders at their addresses shown on the Capital Security Register) if the Company has elected that a Settlement Shares Offer be made specifying (i) the Settlement Shares Offer Period, and (ii) the Suspension Date, if the Suspension Date has not previously been specified in the Conversion Trigger Notice.

 

“Settlement Shares Offer Period” means the period during which the Settlement Shares Offer may occur, which period shall end no later than forty (40) Business Days after the delivery of the Settlement Shares Offer Notice.

 

“Shareholders” means the holders of Ordinary Shares.

 

“Solvency Condition” has the meaning set forth in Section 5.01 hereof.

 

“Subsidiary” has the meaning provided in Section 1159 of the Companies Act 2006.

 

“Suspension Date” means the date specified in the Conversion Trigger Notice or Settlement Shares Offer Notice as the date on which DTC shall suspend all clearance and settlement of transactions in the Additional Tier 1 Securities in accordance with its rules and procedures.

 

“Tax Event” has the meaning specified in Section 2.09.

 

“Tax Law Change” has the meaning specified in Section 2.09.

 

“Tier 1 Capital” has the meaning given to it by the Relevant Regulator from time to time.

 

“Tier 2 Capital” has the meaning given to it by the Relevant Regulator from time to time.

 

“Tradable Amount” has the meaning specified in Section 2.01(n) hereof.

 

 

 

  

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“Trigger Event” means the date on which the Company determines that the CET1 Ratio as at any Quarterly Financial Period End Date or Extraordinary Calculation Date, as the case may be, is less than 7.00% on such date.

 

“UK Bail-in Power” means any statutory write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of credit institutions and investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such laws, regulations, rules or requirements that are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a UK resolution regime by way of amendment to the Banking Act 2009 through the Financial Services (Banking Reform) Act 2013 or otherwise pursuant to which obligations of a credit institution or investment firm or any of its affiliates can be canceled and/or converted into shares or other securities or obligations of the obligor or any other person.

 

“Volume Weighted Average Price” means, in respect of an Ordinary Share or Other Security on any Dealing Day, the order book volume-weighted average price of an Ordinary Share or Other Security published by or derived (in the case of an Ordinary Share) from the relevant Bloomberg page or (in the case of Other Securities (other than Ordinary Shares), options, warrants or other rights) from the principal stock exchange or securities market on which such Other Securities, options, warrants or other rights are then listed or quoted or dealt in, if any or, in any such case, such other source as shall be determined in good faith to be appropriate by an Independent Adviser on such Dealing Day, provided that if on any such Dealing Day such price is not available or cannot otherwise be determined as provided above, the Volume Weighted Average Price of an Ordinary Share, Other Security, option, warrant or other right, as the case may be, in respect of such Dealing Day shall be the Volume Weighted Average Price, determined as provided above, on the immediately preceding Dealing Day on which the same can be so determined or determined as an Independent Adviser might otherwise determine in good faith to be appropriate.

 

“Winding-up or Administration Event” means:

 

(i) an order is made, or an effective resolution is passed, for the winding-up of the Company (except in any such case, a solvent winding-up solely for the purposes of a reorganization, reconstruction or amalgamation of the Company or the substitution in place of the Company of a successor in the business of the Company, the terms of which (i) have previously been approved in writing by Holders of not less than 2/3 (two thirds) in aggregate principal amount of the Additional Tier 1 Securities and (ii) do not provide that the Additional Tier 1 Securities shall thereby become redeemable or repayable in accordance with their terms); or

 

(ii) the appointment of an administrator of the Company and such administrator declares, or gives notice that it intends to declare and distribute a dividend.

 

 

 

  

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Section 1.02.  Separability Clause.  In case any provision in this First Supplemental Indenture or the Additional Tier 1 Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 1.03.Benefits of Instrument.  Nothing in this First Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under the Indenture.

 

Section 1.04.Relation to Capital Securities Indenture.  This First Supplemental Indenture constitutes an integral part of the Capital Securities Indenture. Notwithstanding any other provision of this First Supplemental Indenture, all provisions of this First Supplemental Indenture are expressly and solely for the benefit of the Holders and Beneficial Owners of the Additional Tier 1 Securities and any such provisions shall not be deemed to apply to any other Securities issued under the Capital Securities Indenture and shall not be deemed to amend, modify or supplement the Capital Securities Indenture for any purpose other than with respect to the Additional Tier 1 Securities; provided that pursuant to and in accordance with Section 3.08 of the Capital Securities Indenture, the duties of the Trustee under the Indenture shall extend only to the Holders of the Additional Tier 1 Securities.

 

ARTICLE 2

The Additional Tier 1 Securities

 

Section 2.01.Form, Title, Terms and Payments.  The form of any Security that is designated as an Additional Tier 1 Security shall be evidenced by one or more global notes in registered form (each, a “Global Note”) deposited with, or on behalf of, DTC on the Issue Date. The Global Notes shall be registered in the name of Cede & Co. and executed and delivered in substantially the form attached hereto as Exhibit A. The terms of the Global Notes are hereby incorporated herein by reference and made a part hereof as if set forth herein in full.

 

(a)        There is hereby established a new series of Securities designated as the 7.5% Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (the “Additional Tier 1 Securities”).

 

(b)        The Additional Tier 1 Securities shall be issued in denominations of $200,000 principal amount and integral multiples of $1,000 in excess thereof.

 

(c)        The Additional Tier 1 Securities shall be initially limited in aggregate principal amount to $[             ], which amount shall be as set forth in a Company Order for the authentication and delivery of Securities pursuant to Section 3.03 of the Capital Securities Indenture. The Company may from time to time, without the consent of the Holders of the Additional Tier 1 Securities, issue additional Additional Tier 1 Securities 

 

 

 

  

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having the same ranking and same interest rate, interest cancellation terms, redemption terms, Conversion Price and other terms as the Additional Tier 1 Securities described in this First Supplemental Indenture, except for the price to public and Issue Date. Any such additional Additional Tier 1 Securities subsequently issued shall rank equally and ratably with the Additional Tier 1 Securities in all respects, so that such further Additional Tier 1 Securities shall be consolidated and form a single series with the Additional Tier 1 Securities.

 

(d)        The Additional Tier 1 Securities shall be perpetual Securities and shall have no Stated Maturity in respect of principal.

 

(e)        The Securities shall not have a sinking fund.

 

(f)        Any proposed transfer of an interest in Securities held in the form of a Global Note and shall be effected through the book-entry system maintained by DTC.

 

(g)        The interest rate on the Additional Tier 1 Securities is set forth in Section 2.02 hereof.

 

(h)        All references to Foreign Government Securities and U.S. Government Obligations in the Capital Securities Indenture shall be deleted in their entirety and be inapplicable to the Additional Tier 1 Securities, including but not limited to the definition of outstanding in the Capital Securities Indenture and any references to such terms in Sections 4.01, 4.02 and 4.03 of the Capital Securities Indenture.

 

(i)        Payments in respect of the Additional Tier 1 Securities, including payments of principal and interest, shall be subject to the conditions set forth under Section 2.03, 2.04 Section 2.04 and 2.13 hereof.

 

(j)        The Additional Tier 1 Securities shall be subject to Automatic Conversion following the occurrence of a Trigger Event as provided in Section 2.15 hereof and shall be subject to the Enforcement Events as provided in Article 4 hereof.

 

(k)        The Company may redeem, vary or substitute the Additional Tier 1 Securities in accordance with Section 2.11 hereof

 

(l)        No modifications in respect of Additional Amounts, pursuant to Section 10.04 of the Capital Securities Indenture, shall be applicable to the Additional Tier 1 Securities.

 

(m)        The Company shall undertake reasonable efforts to list the Additional Tier 1 Securities on the Global Exchange Market of the Irish Stock Exchange within two months following the Issue Date. The Company shall endeavor to maintain such listing as long as the Additional Tier 1 Securities remain outstanding.

 

(n)        The denomination of each interest in a Global Note shall be the “Tradable Amount” of such book-entry interest. Prior to the Automatic Conversion, the aggregate Tradable Amount of the interests in each Global Note shall equal such Global Note’s 

 

 

 

  

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outstanding principal amount. Following the Automatic Conversion, the principal amount of each Additional Tier 1 Security shall equal zero, but the Tradable Amount of the book-entry interests in each Additional Tier 1 Security shall remain unchanged as a result of the Automatic Conversion.

 

Section 2.02.  Interest.

 

(a)        From (and including) the Issue Date to (but excluding) the First Call Date, the interest rate on the Additional Tier 1 Securities shall be 7.5% per annum. From (and including) each Reset Date to (but excluding) the next following Reset Date, the applicable per annum rate shall be equal to the sum of the applicable Mid-Market Swap Rate on the Reset Determination Date and 4.76%, converted to a quarterly rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down). Subject to Sections 2.03 and 2.04 and the last sentence of this paragraph below, interest, if any, shall be payable in four equal quarterly installments in arrear on each Interest Payment Date, provided that if such Interest Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business Day, and no further interest or other payment shall be owed or made in respect of such delay. If any Reset Date is not a Business Day, the Reset Date shall occur on the next succeeding Business Day. Subject to Sections 2.03 and 2.04 below, interest on the Additional Tier 1 Securities, if any, shall be computed by the Calculation Agent and payable in arrear and on the basis of a year of 360 days consisting of twelve (12) months of thirty (30) days each and, in the case of an incomplete month, the actual number of days elapsed, from (and including) the first day in such period to (but excluding) the last day in such period.

 

(b)        In addition to any other restrictions on payments of principal and interest contained in this First Supplemental Indenture, no payment of the principal amount of the Additional Tier 1 Securities following any proposed redemption or payment of interest on the Additional Tier 1 Securities shall become due and payable after the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company and the Group.

 

Section 2.03.  Interest Payments Discretionary.

 

(a)        Interest on the Additional Tier 1 Securities shall be due and payable only at the sole discretion of the Company, and the Company shall have sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any Interest Payment Date. If the Company does not make an interest payment in respect of the Additional Tier 1 Securities on the relevant Interest Payment Date (or if the Company elects to make a payment of a portion, but not all, of such interest payment), such non-payment shall evidence the Company’s exercise of its discretion to cancel such interest payment, (or the portion of such interest payment not paid), and accordingly such interest payment (or the portion thereof not paid) shall not be or become due and payable. For the avoidance of doubt, if the 

 

 

  

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Company provides notice to cancel a portion, but not all, of an interest payment in respect of the Additional Tier 1 Securities, and the Company subsequently does not make a payment of the remaining portion of such interest payment on the relevant Interest Payment Date, such non-payment shall evidence the Company’s exercise of its discretion to cancel such remaining portion of such interest payment, and accordingly such remaining portion of the interest payment shall also not be due and payable.

 

(b)        Interest shall only be due and payable on an Interest Payment Date to the extent it is not canceled or deemed canceled (in each case, in whole or in part) in accordance with the provisions set forth in Section 2.02(b), Section 2.03(a), Section 2.04, Section 2.14(h) and Section 5.01 hereof, respectively, and any interest canceled or deemed canceled (in each case, in whole or in part) pursuant to such sections shall not be due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners of the Additional Tier 1 Securities shall have no rights thereto or to receive any additional interest or compensation as a result of such cancellation or deemed cancellation.

 

Section 2.04.  Restriction on Interest Payments.

 

(a)        Without limitation on the provisions of Section 2.03 and subject to the extent permitted in paragraph (b) below in respect of partial interest payments in respect of the Additional Tier 1 Securities, the Company shall not make an interest payment in respect of the Additional Tier 1 Securities on any Interest Payment Date (and such interest payment shall therefore be deemed to have been canceled and thus shall not be due and payable on such Interest Payment Date):

 

(i)      to the extent an amount of Distributable Items on any scheduled Interest Payment Date is less than the sum of (i) all payments (other than redemption payments) made or declared by the Company since the end of its last financial year and prior to such Interest Payment Date on or in respect of any Parity Securities, the Additional Tier 1 Securities and any Junior Securities  and (ii) all payments (other than redemption payments) payable by the Company on such Interest Payment Date (x) on the Additional Tier 1 Securities and (y) on or in respect of any Parity Securities or any Junior Securities, in the case of each of (i) and (ii), excluding any payments already accounted for in determining the Distributable Items, or

 

(ii)      the Solvency Condition is not satisfied in respect of such interest payment; or

 

(b)        For purposes of this First Supplemental Indenture, any interest canceled pursuant to Section 2.04(a) shall be “deemed canceled” under the terms of the Additional Tier 1 Securities and the Indenture and shall not be due and payable.

 

Section 2.05.  Agreement to Interest Cancellation.

 

(a)        By its acquisition of the Additional Tier 1 Securities, each Holder and each Beneficial Owner shall be deemed to have contracted and agreed that:

 

 

 

  

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(i)      interest is payable solely at the discretion of the Company, and no amount of interest shall become due and payable in respect of the relevant interest period to the extent that it has been (x) canceled (in whole or in part) by the Company at the Company’s sole discretion and/or (y) deemed canceled (in whole or in part) pursuant to Section 2.04(a); and

 

(ii)      a cancellation or deemed cancellation of interest (in each case, in whole or in part) in accordance with the terms of the Indenture shall not constitute a default in payment or otherwise under the terms of the Additional Tier 1 Securities or the Indenture.

 

(b)        Interest on the Additional Tier 1 Securities shall only be due and payable on an Interest Payment Date to the extent it is not canceled or deemed canceled under Sections 2.03 or 2.04 hereof. Any interest canceled or deemed canceled (in each case, in whole or in part) in the circumstances described in Sections 2.03 or 2.04 above shall not be due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners of the Additional Tier 1 Securities shall have no rights thereto or to receive any additional interest or compensation as a result of such cancellation or deemed cancellation of interest in respect of the Additional Tier 1 Securities.

 

Section 2.06.Notice of Interest Cancellation.  Notwithstanding anything to the contrary in the Indenture (including Section 1.06 of the Capital Securities Indenture), if practicable, the Company shall provide notice of any cancellation or deemed cancellation of interest (in each case, in whole or in part) to the Holders of the Additional Tier 1 Securities through DTC (or, if the Additional Tier 1 Securities are held in definitive form, to the Holders directly at their addresses shown in the Capital Securities Register) and to the Trustee directly on or prior to the relevant Interest Payment Date. Failure to provide such notice shall have no impact on the effectiveness of, or otherwise invalidate, any such cancellation or deemed cancellation of interest, or give the Holders and Beneficial Owners of the Additional Tier 1 Securities any rights as a result of such failure.

 

Section 2.07.  Payment of Principal, Interest and Other Amounts.

 

(a)        Payments of principal of and interest, if any, on the Additional Tier 1 Securities shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts and such payments on Securities represented by a Global Note shall be made through one or more Paying Agents appointed under the Capital Securities Indenture to DTC or its nominee, as the Holder of the Global Note. Initially, the Paying Agent and the Security Registrar for the Additional Tier 1 Securities shall be The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL, United Kingdom. The Company may change the Paying Agent without prior notice to the Holders of the Additional Tier 1 Securities, and in such an event the Company may act as Paying Agent or Capital Securities Registrar.

 

(b)        Payments of principal, interest and other amounts in respect of on the Additional Tier 1 Securities represented by a Global Note shall be made by wire transfer 

 

 

  

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of immediately available funds on the date such payment is scheduled to be paid. The Company shall, on each date on which any payment in respect of the AT1 Securities becomes due, transfer to the Paying Agent such amount as may be required for the purposes of such payment.

 

(c)        Where any interest payment (or relevant portion thereof) is cancelled in accordance with the provisions of this First Supplemental Indenture and the Additional Tier 1 Securities and the Paying Agent has paid any interest payment (or relevant portion thereof) scheduled to be paid in accordance with the provisions of this First Supplemental Indenture and the Additional Tier 1 Securities prior to its receipt of notice of such cancellation of interest in accordance with Section 2.06 and subject to the Paying Agent having first used all reasonable efforts to recover such payment from DTC or its nominee, as the Holder of the Global Note, prior to onward payment of such amounts to the Holders or Beneficial Owners, the Company shall on demand reimburse the Paying Agent in accordance with Section 2.07(d) below.

 

(d)        If the Paying Agent pays any amount due in respect of the Additional Tier 1 Securities in accordance with the provisions of this First Supplemental Indenture and the Additional Tier 1 Securities before receipt of the amount due under Section 2.07(b), the Company shall on demand reimburse the Paying Agent for the relevant amount and pay interest to the Paying Agent on such amount that is outstanding from the date on which it is paid out to the date of reimbursement at the rate per annum equal to the cost to the Paying Agent of funding the amount paid out, as certified by the Paying Agent. Such interest shall be compounded daily.

 

Section 2.08.           Optional Redemption.  Subject to the limitations specified in Sections 2.12 and 2.13 of this First Supplemental Indenture, the Company may, at the Company’s option, redeem the Additional Tier 1 Securities, in whole but not in part, on the First Call Date or on any Reset Date thereafter at a redemption price equal to 100% of the principal amount of the Additional Tier 1 Securities then outstanding, together with any Accrued Interest to (but excluding) the date fixed for redemption.

 

Section 2.09.  Optional Tax Redemption.

 

(a)        Subject to Section 2.11 of this First Supplemental Indenture, the Company may, at the Company’s option, redeem the Additional Tier 1 Securities, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Additional Tier 1 Securities then outstanding, together with any Accrued Interest to (but excluding) the date fixed for redemption, if at any time:

 

(i)      the Company determines that as a result of a change in or proposed change in, or amendment or proposed amendment to, the laws or regulations of the United Kingdom, or any political subdivision or authority therein or thereof, having the power to tax, including any treaty to which the United Kingdom is a party, or any change in any generally published application or interpretation of such laws, including a decision of any court or tribunal, or any change in the generally published application or interpretation of such laws by any relevant tax authority or any generally published pronouncement by any tax 

 

 

 

  

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authority, which change, amendment or pronouncement (x) (subject to (y)) becomes, or would become, effective on or after the Issue Date, or (y) in the case of a change or proposed change in law, if such change is enacted (or, in the case of a proposed change, is expected to be enacted) by United Kingdom Act of Parliament or implemented by statutory instrument, on or after the Issue Date (a “Tax Law Change”), the Company has paid or will or would on the next payment date be required to pay Additional Amounts to any Holder of the Additional Tier 1 Securities; and/or

 

(ii)      a Tax Law Change would:

 

(A)              result in the Company not being entitled to claim a deduction in respect of any payments in computing the Company’s taxation liabilities or materially reducing the amount of such deduction;

 

(B)              prevent the Additional Tier 1 Securities from being treated as loan relationships for United Kingdom tax purposes;

 

(C)              as a result of the Additional Tier 1 Securities being in issue, result in the Company not being able to have losses or deductions set against the profits or gains, or profits or gains offset by the losses or deductions, of companies with which it is or would otherwise be so grouped for applicable United Kingdom tax purposes (whether under the group relief system current as at the date of issue of the Additional Tier 1 Securities or any similar system or systems having like effect as may from time to time exist);

 

(D)              result in a United Kingdom tax liability, or the receipt of income or profit which would be subject to United Kingdom tax, in respect of a write-down of the principal amount of the Additional Tier 1 Securities or the conversion of the Additional Tier 1 Securities into Ordinary Shares; or

 

(E)              result in an Additional Tier 1 Security or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes,

 

(each such change (or deemed change) in tax law or regulation or the official application or interpretation thereof, a “Tax Event”); provided, however, in each case that the Company could not avoid the consequences of the Tax Event by taking measures reasonably available to it.

 

(b)        Prior to the delivery of any such notice of redemption the Company shall deliver to the Trustee an Officer’s Certificate stating that a Tax Event has occurred and is continuing and setting out the details thereof. The Trustee is entitled to conclusively rely on and accept such Officer’s Certificate without any duty whatsoever of further inquiry, 

 

 

 

  

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in which event such Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

 

Section 2.10.Regulatory Event Redemption.

 

(a)        Subject to Section 2.11 of this First Supplemental Indenture, the Company may, at the Company’s option, at any time redeem the Additional Tier 1 Securities, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Additional Tier 1 Securities then outstanding, together with any Accrued Interest to (but excluding) the date fixed for redemption, if, at any time on or after the Issue Date, the Company determines that as a result of a change (or prospective future change which the Relevant Regulator considers to be sufficiently certain) to the regulatory classification of the Additional Tier 1 Securities under the Applicable Regulations, in each such case becoming effective on or after the Issue Date, all of the outstanding aggregate principal amount of the Additional Tier 1 Securities fully ceases (or would fully cease) to be included in, or count towards, the Tier 1 Capital (howsoever defined in the Applicable Regulations) of the Group (a “Regulatory Event”).

 

(b)        Prior to the delivery of any such notice of redemption the Company shall deliver to the Trustee an Officer’s Certificate stating that a Regulatory Event has occurred and is continuing and setting out the details thereof. The Trustee is entitled to conclusively rely on and accept such Officer’s Certificate without any duty whatsoever of further inquiry, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

 

Section 2.11.Notice of Redemption

 

(a)        Before the Company may redeem the Additional Tier 1 Securities pursuant to Sections 2.08, 2.09 or 2.10, the Company shall deliver to DTC as the Holder of the Global Securities (or, if the Additional Tier 1 Securities are in definitive form, to the Holders at their addresses shown on the Capital Securities Register) prior notice of not less than thirty (30) days, nor more than sixty (60) days to the Holders of the Additional Tier 1 Securities. The Company shall deliver written notice of such redemption of the Additional Tier 1 Securities to the Trustee at least five (5) Business Days prior to the date on which the relevant notice of redemption is sent to Holders (unless a shorter notice period shall be satisfactory to the Trustee). Such notice shall specify the Company’s election to redeem the Additional Tier 1 Securities and the date fixed for such redemption and shall be irrevocable except in the limited circumstances described in paragraphs (b), (c), (d), (e) or (f) below.

 

(b)        If the Company has delivered a notice of redemption pursuant to clause (a) of this Section 2.11, but the Solvency Condition is not satisfied immediately prior to, and immediately following, the date specified for redemption in such notice, such redemption notice shall be automatically rescinded and shall be of no force and effect, and no payment in respect of the redemption amount shall be due and payable.

 

 

 

  

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(c)        If the Company has delivered a notice of redemption pursuant to clause (a) of this Section 2.11, but prior to the payment of the redemption amount with respect to such redemption a Conversion Trigger Notice has been delivered pursuant to Section 2.14(b), such notice of redemption shall be automatically rescinded and shall be of no force and effect, no payment in respect of the redemption amount shall be due and payable.

 

(d)        If the Company has delivered a notice of redemption pursuant to clause (a) of this Section 2.11, but prior to the date of any such redemption the Company has not given notice to the Relevant Regulator and/or the Relevant Regulator has not granted permission to the Company to redeem the relevant Additional Tier 1 Securities (in each case to the extent, and in the manner, required by the relevant Applicable Regulations), such notice of redemption shall be automatically rescinded and shall be of no force and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.

 

(e)        If the Company has delivered a notice of redemption pursuant to clause (a) of this Section 2.11, but in respect of any redemption proposed to be made prior to the fifth anniversary of the Issue Date, if and to the extent then required under the Applicable Regulations (A) in the case of redemption following the occurrence of a Tax Event, the Company has not demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by the Company as at the Issue Date, or (B) in the case of redemption following the occurrence of a Regulatory Event, the Company has not demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date; such notice of redemption shall be automatically rescinded and shall be of no force and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.

 

(f)        If the Company has delivered a notice of redemption pursuant to clause (a) of this Section 2.11, but prior to the payment of the redemption amount with respect to such redemption the Company is not in compliance with any alternative or additional pre-conditions set out in the relevant Applicable Regulations for the time being, such notice of redemption shall be automatically rescinded and shall be of no force and effect, no payment in respect of the redemption amount shall be due and payable.

 

If any of the events specified in paragraphs (b), (c), (d), (d) or (f) above occurs, the Company shall promptly deliver notice to DTC, as the Holder of the Global Securities (or, if the Additional Tier 1 Securities are definitive Securities, to the Holders at their addresses shown on the Capital Securities Register) and to the Trustee directly, specifying the occurrence of the relevant event.

 

Any notice of redemption shall state:

 

(i)      the redemption date;

 

 

 

  

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(ii)     that on the redemption date the redemption price will, subject to the satisfaction of the conditions set forth in the Indenture, become due and payable upon each Additional Tier 1 Security being redeemed and that, subject to certain exceptions, interest will cease to accrue on or after that date;

 

(iii)    the place or places where the Additional Tier 1 Securities are to be surrendered for payment of the redemption price; and

 

(iv)    the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to the Additional Tier 1 Securities being redeemed.

 

Section 2.12.Canceled Interest Not Payable Upon Redemption.  Any interest payments that have been canceled or deemed canceled pursuant to Sections 2.03 or 2.04 hereof shall not be payable if the Additional Tier 1 Securities are redeemed pursuant to Sections 2.08, 2.09 or 2.10 hereof.

 

Section 2.13.           Condition to Repurchase.  Any purchase, other than a purchase in the ordinary course of business dealing in securities, of the Additional Tier 1 Securities by or on behalf of the Company or its subsidiaries, is subject to (i) the Company giving notice to, and the Relevant Regulator granting permission to, the Company to purchase the relevant Additional Tier 1 Securities, and (ii) compliance by the Company with any alternative or additional pre-conditions set out in the relevant Applicable Regulations for the time being. Subject to applicable law in force at the relevant time, including the Applicable Regulations and U.S. federal securities law, the Company may at any time and from time to time, directly or indirectly, purchase the Additional Tier 1 Securities at any price in the open market or by tender (available alike to all Holders) or by private agreement. Any Additional Tier 1 Securities purchased beneficially by the Company for its own account (other than in connection with dealing in securities) will be treated as canceled and will no longer be issued and outstanding.

 

Section 2.14.Automatic Conversion upon Trigger Event.

 

(a)        If a Trigger Event has occurred, then the Automatic Conversion shall occur on the Conversion Date and all of the Company’s obligations under the Additional Tier 1 Securities shall be irrevocably and automatically released in consideration of the Company’s issuance and delivery of the Settlement Shares to the Settlement Share Depository, and the principal amount of the Additional Tier 1 Securities shall equal zero at all times thereafter (for the avoidance of doubt, the Tradable Amount shall remain unchanged as a result of the Automatic Conversion). Under no circumstances shall such released obligations be reinstated. If the Company has been unable to appoint a Settlement Share Depository, it shall effect, by means it deems reasonable in the circumstances (including, without limitation, issuance of the Settlement Shares to another independent nominee or to the Holders of the Additional Tier 1 Securities directly), the issuance and delivery of the Settlement Shares or of the Alternative Consideration, as applicable, to the Holders of the Additional Tier 1 Securities, and such issuance and delivery shall irrevocably and automatically release all of the Company’s obligations under the Additional Tier 1 Securities as if the Settlement Shares had been issued and 

 

 

 

  

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delivered to the Settlement Share Depository and, in which case, where the context so admits, references in this First Supplemental Indenture and the Additional Tier 1 Securities to the issue and delivery of Settlement Shares to the Settlement Share Depository shall be construed accordingly and apply mutatis mutandis.

 

(b)        Upon its determination that a Trigger Event has occurred, the Company shall ‎(a) immediately inform the Relevant Regulator of the occurrence of a Trigger Event, ‎(b) prior to the delivery of the Conversion Trigger Notice, deliver to the Trustee an Officer’s Certificate substantially in the form attached hereto as Exhibit C, specifying that a Trigger Event has occurred. The Trustee is entitled to conclusively rely on and accept such Officer’s Certificate without any duty whatsoever of further inquiry as sufficient and conclusive evidence of the occurrence of a Trigger Event, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners, and (c) deliver a Conversion Trigger Notice to the Trustee directly and to DTC as the Holder of the Global Securities:

 

(i)      in the case of a Trigger Event that has occurred as at any Quarterly Financial Period End Date, on or within five (5) Business Days (or such shorter period as the Relevant Regulator may require) after the date on which the information in respect of the Quarterly Financial Period End Date is published by the Company; or

 

(ii)     in the case of a Trigger Event that has occurred as at any Extraordinary Calculation Date on or as soon as practicable after such Extraordinary Calculation Date  (and in any event, within such shorter period as the Relevant Regulator may require).

 

(c)        The date on which the Conversion Trigger Notice shall be deemed to have been given shall be the date on which it is dispatched by the Company to DTC (or, if the Additional Tier 1 Securities are in definitive form, to the Holders and Beneficial Owners directly).

 

(d)        The Company shall request that DTC post the Conversion Trigger Notice on its Reorganization Inquiry for Participants System pursuant to DTC’s procedures then in effect (or such other system as DTC uses for providing notices to holders of securities).

 

(e)        The Settlement Shares to be issued and delivered shall be so issued and delivered on terms permitting a Settlement Shares Offer and shall, except where the Company has been unable to appoint a Settlement Share Depository and/or as otherwise provided herein and by the Additional Tier 1 Securities, initially be registered in the name of the Settlement Share Depository, which, subject to a Settlement Shares Offer, shall hold such Settlement Shares on behalf of the Holders and Beneficial Owners of the Additional Tier 1 Securities. By virtue of its holding of any Additional Tier 1 Securities, each Holder and Beneficial Owner shall be deemed to have irrevocably directed the Company to issue and deliver the Settlement Shares corresponding to the conversion of its holding of Additional Tier 1 Securities to the Settlement Share Depository (or to such other relevant recipient).

 

 

 

  

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(f)        The Settlement Share Depository (or the relevant recipient in accordance with the terms of the Additional Tier 1 Securities, as applicable) shall hold the Settlement Shares (and the Alternative Consideration, if any) on behalf of the Holders and Beneficial Owners of the Additional Tier 1 Securities. For so long as the Settlement Shares are held by the Settlement Share Depository, each Holder and Beneficial Owner shall be entitled to direct the Settlement Share Depository or such other relevant recipient, as applicable, to exercise on its behalf all rights of an ordinary Shareholder (including voting rights and rights to receive dividends); provided, however, that Holders and Beneficial Owners shall not have any rights to sell or otherwise transfer such Settlement Shares unless and until such time as the Settlement Shares have been delivered to the Holders or Beneficial Owners in accordance with the procedures set forth under Section 2.16 hereof.

 

(g)        Provided that the Company issues and delivers the Settlement Shares to the Settlement Share Depository (or the relevant recipient in accordance with the terms of the Additional Tier 1 Securities) in accordance with the terms of the Additional Tier 1 Securities, with effect from and on the Conversion Date, Holders and Beneficial Owners of the Additional Tier 1 Securities shall have recourse only to the Settlement Share Depository (or to such other relevant recipient, as applicable) for the delivery to them of Settlement Shares, ADSs or, if applicable, the Alternative Consideration to which such Holders and Beneficial Owners are entitled. Subject to the occurrence of a Winding-Up or Administration Event on or following a Trigger Event, if the Company fails to issue and deliver the Settlement Shares upon Automatic Conversion to the Settlement Share Depository on the Conversion Date, the only right of Holders and Beneficial Owners shall be to claim to have such Settlement Shares so issued and delivered.

 

(h)        Effective upon, and following, the occurrence of the Automatic Conversion, provided that the Company issues and delivers the Settlement Shares to the Settlement Share Depository (or the relevant recipient in accordance with the terms of the Additional Tier 1 Securities) in accordance with the terms of the Additional Tier 1 Securities, Holders and Beneficial Owners shall not have any rights against the Company with respect to repayment of the principal amount of the Additional Tier 1 Securities or payment of interest or any other amount on or in respect of such Additional Tier 1 Securities, which liabilities of the Company shall be automatically released, and accordingly the principal amount of the Additional Tier 1 Securities shall equal zero at all times thereafter. Any interest in respect of an interest period ending on any Interest Payment Date falling between the date of a Trigger Event and the Conversion Date shall be deemed to have been canceled pursuant to Section 2.03 above upon the occurrence of such Trigger Event and shall not be due and payable.

 

(i)        Notwithstanding any other provision herein, by its acquisition of the Additional Tier 1 Securities, each Holder and each Beneficial Owner shall be deemed to have (i) agreed to all of the terms and conditions of the Additional Tier 1 Securities, including, without limitation, to those related to (x) Automatic Conversion of its Additional Tier 1 Securities following a Trigger Event and (y) the appointment of the Settlement Share Depository, the issuance of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient in accordance with the terms of this First Supplemental Indenture or the Additional Tier 1 Securities) and the potential sale of the 

 

 

 

  

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Settlement Shares pursuant to a Settlement Shares Offer and acknowledged that such events in (x) and (y) may occur without any further action on the part of such Holders or Beneficial Owners or the Trustee, (ii) agreed that effective upon, and following, the occurrence of the Automatic Conversion, no amount shall be due and payable to the Holders or the Beneficial Owners under the Additional Tier 1 Securities and the liability of the Company to pay any such amounts (including the principal amount of, or any interest in respect of, the Additional Tier 1 Securities) shall be automatically released, and the Holders and the Beneficial Owners shall not have the right to give any direction to the Trustee with respect to the Trigger Event and any related Automatic Conversion and (iii) waived, to the extent permitted by the Trust Indenture Act, any claim against the Trustee arising out of its acceptance of its trusteeship under, and the performance of its duties, powers and rights in respect of, the Indenture and in connection with the Additional Tier 1 Securities, including, without limitation, claims related to or arising out of or in connection with a Trigger Event and/or any Automatic Conversion, and (iv) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Additional Tier 1 Securities to take any and all necessary action, if required, to implement the Automatic Conversion without any further action or direction on the part of such Holder or Beneficial Owner or the Trustee.

 

(j)        The procedures set forth in this Section 2.14 are subject to change to reflect changes in DTC practices, and the Company may make changes to the procedures set forth in this Section 2.14 to the extent reasonably necessary, in the opinion of the Company, to reflect such changes in DTC practices. Any such changes shall be subject to the provisions of Section 8.01.

 

(k)        Notwithstanding anything to the contrary contained in the Indenture or the Additional Tier 1 Securities, once the Company has delivered a Conversion Trigger Notice following the occurrence of a Trigger Event, (i) subject to the right of Holders and Beneficial Owners pursuant to Section 4.03 in the event of a failure by the Company to issue and deliver any Settlement Shares to the Settlement Share Depository on the Conversion Date, the Indenture shall impose no duties upon the Trustee whatsoever with regard to an Automatic Conversion upon a Trigger Event and the Holders and Beneficial Owners shall have no rights whatsoever under the Indenture or the Additional Tier 1 Securities to instruct the Trustee to take any action whatsoever, and (ii) as of the date of the Conversion Trigger Notice, except for any indemnity and/or security provided by any Holder or by any Beneficial Owner in such direction or related to such direction, any direction previously given to the Trustee by any Holders or by any Beneficial Owners shall cease automatically and shall be null and void and of no further effect; except in each case of (i) and (ii) of this Section 2.14(k), with respect to any rights of Holders or Beneficial Owners with respect to any payments under the Additional Tier 1 Securities that were unconditionally due and payable prior to the date of the Conversion Trigger Notice or unless the Trustee is instructed in writing by the Company to act otherwise.

 

(l)        All authority conferred or agreed to be conferred by each Holder and Beneficial Owner pursuant to this Section 2.14, including the consents given by such Holder and Beneficial Owner, shall be binding upon the successors, assigns, heirs, 

 

 

  

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executors, administrators, trustees in bankruptcy and legal representatives of such Holder and Beneficial Owner.

 

(m)        The Trustee shall not be liable with respect to (i) the calculation or accuracy of the CET1 Ratio in connection with the occurrence of a Trigger Event and the timing of such Trigger Event, (ii) the failure of the Company to post or deliver the underlying CET1 Ratio calculations of a Trigger Event to DTC, the Holders or the Beneficial Owners, (iii) any aspect of the Company’s decision to deliver a Conversion Trigger Notice or the related Automatic Conversion,  (iv) the adequacy of the disclosure of these provisions in the Prospectus or any other offering material in respect of the Additional Tier 1 Securities or for the direct or indirect consequences thereof or (v) any other requirement of the Company contained herein related to a Trigger Event or the Automatic Conversion.

 

(n)        Following the issuance and delivery of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient in accordance with the terms of the Additional Tier 1 Securities) on the Conversion Date, the Additional Tier 1 Securities shall remain in existence until the applicable Cancellation Date for the sole purpose of evidencing the Holders’ and Beneficial Owners’ right to receive Settlement Shares, ADSs or the Alternative Consideration, as the case may be, from the Settlement Share Depository (or such other relevant recipient, as applicable).

 

(o)        The Holders and Beneficial Owners shall not at any time have the option to convert to the Additional Tier 1 Securities into Settlement Shares.

 

(p)        The occurrence of the Automatic Conversion shall not constitute an Enforcement Event.

 

Section 2.15.Settlement Shares.

 

(a)        The number of Settlement Shares to be issued to the Settlement Share Depository on the Conversion Date shall equal the quotient obtained by dividing the (i) aggregate principal amount of the Additional Tier 1 Securities outstanding immediately prior to the Automatic Conversion on the Conversion Date, by (ii) the Conversion Price prevailing on the Conversion Date. The number of Settlement Shares to be delivered to each Holder shall be rounded down, if necessary, to the nearest whole number of Settlement Shares. Fractions of Settlement Shares will not be delivered to the Settlement Share Depository following the Automatic Conversion and no cash payment shall be made in lieu thereof. The number of Settlement Shares to be held by the Settlement Share Depository for the benefit of each Holder shall equal the quotient obtained by dividing (i) the number of Settlement Shares thus calculated by (ii) the Tradable Amount of the book-entry interests in the Additional Tier 1 Securities held by such Holder on the Conversion Date rounded down, if necessary, to the nearest whole number of Settlement Shares.

 

(b)        The Settlement Shares issued following the Automatic Conversion shall be fully paid and non-assessable and shall in all respects rank pari passu with the fully paid Ordinary Shares of the Company in issue on the Conversion Date, except in any such 

 

 

 

  

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case for any right excluded by mandatory provisions of applicable law, and except that the Settlement Shares so issued shall not rank for (or, as the case may be, the relevant Holder or Beneficial Owner shall not be entitled to receive) any rights, the Record Date for entitlement to which falls prior to the Conversion Date.

 

(c)        The procedures set forth in this Section 2.15 are subject to change to reflect changes in DTC practices, and the Company may make changes to the procedures set forth in this  Section 2.15 to the extent reasonably necessary, in the opinion of the Company, to reflect such changes in DTC practices. Any such changes shall be subject to the provisions of Section 8.01.

 

Section 2.16.  Settlement Shares Offer.

 

(a)        Within ten (10) Business Days following the Conversion Date, the Company may, in its sole and absolute discretion, elect that the Settlement Share Depository (or an agent on its behalf) make an offer of, in the Company’s sole and absolute discretion, all or some of the Settlement Shares to, at the Company’s sole and absolute discretion, all or some of the  Shareholders upon Automatic Conversion, such offer to be at a cash price per Settlement Share that will be no less than the Conversion Price (translated from U.S. dollars into pounds sterling at the then-prevailing rate as determined by the Company in its sole discretion), subject as provided in this Section 2.16 (the “Settlement Shares Offer”).

 

(b)        The Company reserves the right, in its sole and absolute discretion, to elect that the Settlement Share Depository terminate the Settlement Shares Offer at any time during the Settlement Shares Offer Period. If the Company makes such an election, it shall provide at least three (3) Business Days’ notice to the Trustee directly and to DTC as the Holder of the Global Securities (or, if the Additional Tier 1 Securities are definitive Securities, by the Company to the Trustee directly and to the Holders at their addresses shown on the Capital Securities Register). The Settlement Share Depository may then, in its sole and absolute discretion, (including, without limitation, changing the Suspension Date) to deliver to Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) of the Additional Tier 1 Securities the Settlement Shares or ADSs at a time that is earlier than the time at which such Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) would have otherwise received the Alternative Consideration, had the Settlement Shares Offer been completed.

 

(c)        Upon expiry of the Settlement Shares Offer Period, the Settlement Share Depository shall provide notice to the Holders of the Additional Tier 1 Securities of the composition of the Alternative Consideration (and of the deductions to the Cash Component, if any, of the Alternative Consideration (as set out in the definition of “Alternative Consideration” in Section 1.01)) per $1,000 Tradable Amount of the Additional Tier 1 Securities. The Alternative Consideration will be held by the Settlement Share Depository on behalf of the Holders and Beneficial Owners and will be delivered to Holders and Beneficial Owners pursuant to the procedures set forth under Section 2.17.

 

 

 

  

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(d)        The Cash Component of any Alternative Consideration shall be payable by the Settlement Share Depository to the Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) of the Additional Tier 1 Securities whether or not the Solvency Condition is satisfied.

 

(e)        If the Company elects, in its sole and absolute discretion, that a Settlement Shares Offer be conducted by the Settlement Share Depository, each Holder or Beneficial Owner, by its acquisition of the Additional Tier 1 Securities, shall be deemed to have (i) irrevocably consented to any Settlement Shares Offer and, notwithstanding that such Settlement Shares are held by the Settlement Share Depository on behalf of Holders and Beneficial Owners, to the Settlement Share Depository’s using the Settlement Shares delivered to it to settle any Settlement Shares Offer, (ii) irrevocably consented to the transfer of the beneficial interest it holds in the Settlement Shares delivered upon Automatic Conversion to the Settlement Share Depository or to one or more purchasers identified by the  Settlement Share Depository in connection with the Settlement Shares Offer, (iii) irrevocably agreed that the Company and the Settlement Share Depository may take any and all actions necessary to conduct the Settlement Shares Offer in accordance with the terms of the Additional Tier 1 Securities, and (iv) irrevocably agreed that none of the Company, the Trustee or the Settlement Share Depository shall, to the extent permitted by applicable law, incur any liability to the Holders or Beneficial Owners in respect of the Settlement Shares Offer (except for the obligations of the Settlement Share Depository in respect of the Holders’ and Beneficial Owners’ entitlement to, and subsequent delivery of, any Alternative Consideration).

 

Section 2.17.  Settlement Procedure.

 

(a)        Delivery of the Settlement Shares, ADSs or Alternative Consideration, as applicable, to the Holders and Beneficial Owners of the Additional Tier 1 Securities shall be made in accordance with the procedures set forth in this Section 2.17, which remain subject to change to reflect changes in DTC practices.

 

(b)        The Settlement Shares Offer Notice shall specify the Suspension Date, provided that the Suspension Date has not previously been specified in the Conversion Trigger Notice.

 

(c)        On the Suspension Date, the Company shall deliver, to the Trustee directly and to DTC as the Holder of the Global Securities (or, if the Additional Tier 1 Securities are in definitive form, to the Holders at their addresses shown on the Capital Securities Register) a Settlement Request Notice, pursuant to which the Company shall request that Holders and Beneficial Owners complete a Settlement Notice and shall specify the Notice Cut-off Date and the Final Cancellation Date.

 

(d)        Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) shall not receive delivery of the relevant Settlement Shares, ADSs or Alternative Consideration, as applicable, unless such Holders or Beneficial Owners (or the custodian, nominee, broker or other representative thereof) deliver the Settlement Notice to the Settlement Share Depository on or before the Notice Cut-off Date; provided 

 

 

 

  

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that, if such delivery is made after the end of normal business hours at the specified office of the Settlement Share Depository, such delivery shall be deemed for all purposes to have been made or given on the next following Business Day.

 

(e)        If the Additional Tier 1 Securities are held through DTC, the Settlement Notice must be given in accordance with the standard procedures of DTC (which may include, without limitation, delivery of the notice to the Settlement Share Depository by electronic means) and in a form acceptable to DTC and the Settlement Share Depository. With respect to any Additional Tier 1 Securities  held in definitive form, the Settlement Notice must be delivered to the specified office of the Settlement Share Depository together with the relevant Additional Tier 1 Securities.

 

(f)        Subject to satisfaction of the requirements and limitations set forth in this Section 2.17 and provided that the Settlement Notice and the relevant Additional Tier 1 Securities, if applicable, are delivered on or before the Notice Cut-Off Date, the Settlement Share Depository shall deliver the relevant Alternative Consideration or Settlement Shares (rounded down to the nearest whole number of Settlement Shares) to, or shall deposit such relevant Settlement Shares with the ADS Depository on behalf of, the relevant Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) of the relevant Additional Tier 1 Securities completing the relevant Settlement Notice in accordance with the instructions given in such Settlement Notice or its nominee on the applicable Settlement Date.

 

(g)        Each Settlement Notice shall be irrevocable. The Settlement Share Depository shall determine, in its sole and absolute discretion, whether any Settlement Notice has been properly completed and delivered, and such determination shall be conclusive and binding on the relevant Holder or Beneficial Owner. If any Holder or Beneficial Owner fails to properly complete and deliver a Settlement Notice and the relevant Additional Tier 1 Securities, if applicable, the Settlement Share Depository shall be entitled to treat such Settlement Notice as null and void.

 

(h)        Neither the Company nor any member of the Group shall pay any taxes or capital, stamp, issue and registration or transfer taxes or duties arising upon Automatic Conversion or that may arise or be paid as a consequence of the issue and delivery of Settlement Shares to the  Settlement Share Depository. A Holder or Beneficial Owner must pay any taxes and capital, stamp, issue and registration and transfer taxes or duties arising upon Automatic Conversion in connection with the issue and delivery of the Settlement Shares to the Settlement Share Depository  and such Holder or Beneficial Owner must pay all, if any, such taxes or duties  arising by reference to any disposal or deemed disposal of such Holders or Beneficial Owner’s Additional Tier 1 Security or interest therein. Any taxes and capital, stamp, issue and registration and transfer taxes or duties arising on delivery or transfer of Settlement Shares to a purchaser in any Settlement Shares Offer shall be payable by the relevant purchaser of those Settlement Shares.

 

(i)        The Settlement Shares (and the Settlement Share Component, if any, of any Alternative Consideration) and ADSs shall not be available for delivery (i) to, or to a 

 

 

 

  

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nominee for, Euroclear or Clearstream, Luxembourg or any other person providing a clearance service within the meaning of Section 96 of the Finance Act 1986 of the United Kingdom or (ii) to a person, or nominee or agent for a person, whose business is or includes issuing depository receipts within the meaning of Section 93 of the Finance Act 1986 of the United Kingdom, in each case at any time prior to the “abolition day” as defined in Section 111(1) of the Finance Act 1990 of the United Kingdom, or (iii) to the CREST account of such a person described in (i) or (ii).

 

(j)        The Company may make changes to the procedures set forth in this Section 2.17 to the extent such changes are reasonably necessary, in the opinion of the Company, to effect the delivery of the Settlement Shares or ADSs, as applicable, to the Holders and Beneficial Owners of the Additional Tier 1 Securities.

 

Section 2.18.            Failure to Deliver a Settlement Notice.  If any Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) fails to deliver a Settlement Notice and the relevant Additional Tier 1 Securities, if applicable, to the Settlement Share Depository on or before the Notice Cut-off Date, the Settlement Share Depository shall continue to hold the Settlement Shares or Alternative Consideration in respect of such Holder or Beneficial Owner, until a Settlement Notice (and the relevant Additional Tier 1 Securities, if applicable) is so delivered; provided, however, that the relevant Additional Tier 1 Securities shall be canceled on the Final Cancellation Date, and any Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) of Additional Tier 1 Securities delivering a Settlement Notice after the Notice Cut-off Date shall be required provide evidence of its entitlement to the relevant Settlement Shares, ADSs or Alternative Consideration satisfactory to the Settlement Share Depository in its sole and absolute discretion in order to receive delivery of such Settlement Shares, Alternative Consideration or ADSs (to be deposited with the ADS Depository on its behalf). The Company shall have no liability to any Holder or Beneficial Owner of the Additional Tier 1 Securities for any loss resulting from such Holder’s or Beneficial Owner’s failure to receive any Alternative Consideration, Settlement Shares or ADSs, or from any delay in the receipt thereof, in each case as a result of such Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) failing to duly submit a Settlement Notice and the relevant Additional Tier 1 Securities, if applicable, on a timely basis or at all.

 

Section 2.19.Delivery of ADSs.  In respect of Settlement Shares for which Holders or Beneficial Owners elect to be converted into ADSs as specified in the Settlement Notice, subject to the Company’s right to elect that a Settlement Shares Offer be made in accordance with Section 2.16(a), the Settlement Share Depository shall deposit with the ADS Depository, the number of Settlement Shares to be issued upon Automatic Conversion of the Additional Tier 1 Securities, and the ADS Depository shall issue the corresponding number of ADSs to such Holder or Beneficial Owner (per the ADS-to-Ordinary Share ratio in effect on the Conversion Date). Once deposited, the ADS Depository shall be entitled to the economic rights of a holder or beneficial owner of the Settlement Shares for the purposes of any dividend entitlement and otherwise on behalf of the ADS holders, and the Holder or Beneficial Owner will become the record holder of the related ADSs for all purposes under the ADS Deposit Agreement. However, the 

 

 

 

  

36

  

 

 

issuance of the ADSs by the ADS Depository may be delayed until the depositary bank or the custodian receives confirmation that all required approvals have been given and that the Settlement Shares have been duly transferred to the custodian and that all applicable depositary fees and payments have been paid to the ADS Depository.

 

Section 2.20.Agreement with Respect to Exercise of UK Bail-in Power.

 

(a)        By its acquisition of the Additional Tier 1 Securities, each Holder and Beneficial Owner acknowledges, agrees to be bound by and consents to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority that may result in the cancellation of all, or a portion, of the principal amount of, or interest on, the Additional Tier 1 Securities and/or the conversion of all, or a portion of, the principal amount of, or interest on, the Additional Tier 1 Securities into (a) Ordinary Shares or (b) other securities or other obligations of the Company or another person, including by means of a variation to the terms of the Additional Tier 1 Securities, in each case to give effect to the exercise by the Relevant UK Resolution Authority of such UK Bail-in Power. References to principal and interest shall include payments of principal and interest that have become due and payable, but which have not been paid prior to the exercise of any UK Bail-in Power. The rights of Holders and Beneficial Owners of the Additional Tier 1 Securities are subject to, and will be varied, if necessary, solely to give effect to the provisions of any UK Bail-in Power by the Relevant UK Resolution Authority which are expressed to implement such a cancellation or conversion. For the avoidance of doubt, the potential conversion of the Additional Tier 1 Securities into Settlement Shares, other securities or other obligations in connection with the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority is separate and distinct from the Automatic Conversion following a Trigger Event.

 

(b)        By its acquisition of the Additional Tier 1 Securities, each Holder and Beneficial Owner:

 

(i)      acknowledges and agrees that no exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities or cancellation or deemed cancellation of interest on the Additional Tier 1 Securities pursuant to Sections 2.03 or 2.04 shall give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act;

 

(ii)     to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities.

 

(iii)    acknowledges and agrees that, (A) upon the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority, the Trustee shall not be required to take any further directions from Holders or Beneficial Owners of the

 

 

 

  

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 Additional Tier 1 Securities under Section 5.12 of the Capital Securities Indenture and (B) the Indenture shall impose no duties upon the Trustee whatsoever with respect to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority. Notwithstanding the foregoing, if, following the completion of the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority, the Additional Tier 1 Securities remain outstanding (for example, if the exercise of the UK Bail-in Power results in only a partial write-down of the principal of the Additional Tier 1 Securities) then the Trustee’s duties under the Indenture shall remain applicable with respect to the Additional Tier 1 Securities following such completion to the extent that the Company and the Trustee agree pursuant to a supplemental indenture, unless the Company and the Trustee agree that a supplemental indenture is not necessary.

 

(iv)    shall be deemed to have (i) consented to the exercise of any UK Bail-in Power as it may be imposed without any prior notice by the Relevant UK Resolution Authority of its decision to exercise such power with respect to the Additional Tier 1 Securities and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Additional Tier 1 Securities to take any and all necessary action, if required, to implement the exercise of any UK Bail-in Power with respect to the Additional Tier 1 Securities as it may be imposed, without any further action or direction on the part of such Holder and such Beneficial Owner or the Trustee.

 

(c)        Each Holder or Beneficial Owner that acquires its Additional Tier 1 Securities in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Additional Tier 1 Securities that acquire the Additional Tier 1 Securities upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Additional Tier 1 Securities, including in relation to interest cancellation, Automatic Conversion, the UK Bail-in Power, the Settlement Shares Offer, the write-down in the event of a Non-Qualifying Relevant Event and the limitations on remedies specified in Section 4.04 hereof.

 

(d)        No repayment of principal following any proposed redemption of the Additional Tier 1 Securities or payment of interest on the Additional Tier 1 Securities shall be come due and payable after the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority unless, at the time that such repayment or payment, respectively is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company and the Group.

 

(e)        Upon the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the UK Bail-in Power for purposes of notifying Holders and Beneficial Owners of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.

 

 

 

  

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(f)        The Company’s obligations to indemnify the Trustee in accordance with Section 6.07 of the Capital Securities Indenture shall survive any exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities and any Automatic Conversion hereunder.

 

(g)        The exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities shall not constitute an Enforcement Event.

 

ARTICLE 3

Anti-Dilution

 

Section 3.01.Adjustment of Conversion Price.  Upon the occurrence of any of the events described below, the Conversion Price shall be adjusted as follows:

 

(a)        If and whenever there shall be a consolidation, reclassification, redesignation or subdivision in relation to the Ordinary Shares which alters the number of Ordinary Shares in issue, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such consolidation, reclassification, redesignation or subdivision by the following fraction:

 

	  	
A

B

 

where:

 

	
  

	
A

	
is the aggregate number of Ordinary Shares in issue immediately before such consolidation, reclassification, redesignation or subdivision, as the case may be; and

 

	
  

	
B

	
is the aggregate number of Ordinary Shares in issue immediately after, and as a result of, such consolidation, reclassification, redesignation or subdivision, as the case may be.

 

	
  

	
Such adjustment shall become effective on the date the consolidation, reclassification or subdivision, as the case may be, takes effect.

 

(b)        If and whenever the Company shall issue any Ordinary Shares to Shareholders credited as fully paid by way of capitalization of profits or reserves (including any share premium account or capital redemption reserve) other than (1) where any such Ordinary Shares are or are to be issued instead of the whole or part of a Cash Dividend which the Shareholders would or could otherwise have elected to receive, (2) where the Shareholders may elect to receive a Cash Dividend in lieu of such Ordinary Shares or (3) where any such Ordinary Shares are or are expressed to be issued in lieu of a dividend (whether or not a Cash Dividend equivalent or amount is announced or would otherwise be payable to the Shareholders, whether at their election or otherwise), the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue by the following fraction:

 

 

 

  

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A

B

 

where:

 

	
  

	
A

	
is the aggregate number of Ordinary Shares in issue immediately before such issue; and

 

	
  

	
B

	
is the aggregate number of Ordinary Shares in issue immediately after such issue.

 

	
  

	
Such adjustment shall become effective on the date of issue of such Ordinary Shares.

 

(c)        If and whenever the Company shall pay any Extraordinary Dividend to its Shareholders, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

 

	  	
A – B

   A

 

where:

 

	
  

	
A

	
is the Current Market Price of one Ordinary Share on the Effective Date; and

 

	
  

	
B

	
is the portion of the aggregate Extraordinary Dividend attributable to one Ordinary Share, with such portion being determined by dividing the aggregate Extraordinary Dividend by the number of Ordinary Shares entitled to receive the relevant Extraordinary Dividend. If the Extraordinary Dividend shall be expressed in a currency other than the Relevant Currency, it shall be converted into the Relevant Currency at the Prevailing Rate on the relevant Effective Date.

 

	
  

	
Such adjustment shall become effective on the Effective Date.

 

“Effective Date” means, in respect of this Section 3.01(c), the first date on which the Ordinary Shares are traded ex-the Extraordinary Dividend on the Relevant Stock Exchange.

 

(d)        If and whenever the Company shall issue Ordinary Shares to its Shareholders as a class by way of rights or the Company or any member of the Group or (at the direction or request or pursuant to arrangements with the Company or any member of the Group) any other company, person or entity, shall issue or grant to Shareholders as a class by way of rights, any options, warrants or other rights to subscribe for or purchase Ordinary Shares, or any Other Securities which by their terms of issue carry (directly or indirectly) rights of conversion into, or exchange or subscription for, any Ordinary Shares (or shall grant any such rights in respect of existing Other Securities so issued), in each 

 

 

 

  

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case at a price per Ordinary Share which is less than 95% of the Current Market Price per Ordinary Share on the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

 

	  	
A + B

A + C

where:

 

	
  

	
A

	
is the number of Ordinary Shares in issue on the Effective Date;

 

	
  

	
B

	
is the number of Ordinary Shares which the aggregate consideration (if any) receivable for the Ordinary Shares issued by way of rights, or for the Other Securities issued by way of rights, or for the options or warrants or other rights issued by way of rights and for the total number of Ordinary Shares deliverable on the exercise thereof, would purchase at such Current Market Price per Ordinary Share on the Effective Date; and

 

	
  

	
C

	
is the number of Ordinary Shares to be issued or, as the case may be, the maximum number of Ordinary Shares which may be issued upon exercise of such options, warrants or rights calculated as at the date of issue of such options, warrants or rights or upon conversion or exchange or exercise of rights of subscription or purchase in respect thereof at the initial conversion, exchange, subscription or purchase price or rate.

 

provided that if, on the Effective Date, such number of Ordinary Shares is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time, then for the purposes of this Section 3.01(d), “C” shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Effective Date and as if such conversion, exchange, subscription, purchase or acquisition had taken place on the Specified Date.

 

Such adjustment shall become effective on the Effective Date, which means, in respect of this Section 3.01(d), the first date on which the Ordinary Shares are traded ex-rights, ex-options or ex-warrants on the Relevant Stock Exchange.

 

For the purpose of any calculation of the consideration receivable or price pursuant to this Section 3.01(d), the following provisions shall apply:

 

	
  

	
(i)

	
the aggregate consideration receivable or price for Ordinary Shares issued for cash shall be the amount of such cash;

 

	
  

	
(ii)

	
(x) the aggregate consideration receivable or price for Ordinary Shares to be issued or otherwise made available upon the conversion or exchange of 

 

 

 

 

  

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any Other Securities shall be deemed to be the consideration or price received or receivable for any such Other Securities and (y) the aggregate consideration receivable or price for Ordinary Shares to be issued or otherwise made available upon the exercise of rights of subscription attached to any Other Securities or upon the exercise of any options, warrants or rights shall be deemed to be that part (which may be the whole) of the consideration or price received or receivable for such Other Securities or, as the case may be, for such options, warrants or rights which are attributed by the Company to such rights of subscription or, as the case may be, such options, warrants or rights or, if no part of such consideration or price is so attributed, the Fair Market Value of such rights of subscription or, as the case may be, such options, warrants or rights as at the relevant Effective Date, plus in the case of each of (x) and (y) above, the additional minimum consideration receivable or price (if any) upon the conversion or exchange of such Other Securities, or upon the exercise of such rights or subscription attached thereto or, as the case may be, upon exercise of such options, warrants or rights and (z) the consideration receivable or price per Ordinary Share upon the conversion or exchange of, or upon the exercise of such rights of subscription attached to, such Other Securities or, as the case may be, upon the exercise of such options, warrants or rights shall be the aggregate consideration or price referred to in (x) or (y) above (as the case may be) divided by the number of Ordinary Shares to be issued upon such conversion or exchange or exercise at the initial conversion, exchange or subscription price or rate;

 

	
  

	
(ii)

	
if the consideration or price determined pursuant to (i) or (ii) above (or any component thereof) shall be expressed in a currency other than the Relevant Currency, it shall be converted into the Relevant Currency at the Prevailing Rate on the relevant Effective Date (in the case of (i) above) or the relevant date of first public announcement (in the case of (ii) above);

 

	
  

	
(iii)

	
in determining the consideration or price pursuant to the above, no deduction shall be made for any commissions or fees (howsoever described) or any expenses paid or incurred for any underwriting, placing or management of the issue of the relevant Ordinary Shares or Other Securities or options, warrants or rights, or otherwise in connection therewith; and

 

	
  

	
(iv)

	
the consideration or price shall be determined as provided above on the basis of the consideration or price received, receivable, paid or payable, regardless of whether all or part thereof is received, receivable, paid or payable by or to the Issuer or another entity.

 

(e)        Notwithstanding provisions of Sections 3.01(a) – (d) above:

 

(i)      where the events or circumstances giving rise to any adjustment to the Conversion Price have resulted or will result in an adjustment to the 

 

 

 

  

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Conversion Price or where more than one event which gives rise to an adjustment to the Conversion Price occurs within such a short period of time that, in the opinion of the Company, a modification to the adjustment provisions is required to give the intended result, such modification shall be made as may be determined in good faith by an Independent Financial Adviser to be in its opinion appropriate, including to ensure that (i) an adjustment to the Conversion Price or the economic effect thereof shall not be taken into account more than once, (ii) the economic effect of an Extraordinary Dividend is not taken into account more than once, and (iii) to reflect a redenomination of the issued Ordinary Shares for the time being into a new currency;

 

(ii)      if any doubt shall arise as to whether an adjustment falls to be made to the Conversion Price or as to the appropriate adjustment to the Conversion Price, the Company may at its discretion appoint an Independent Financial Adviser and, and following consultation between the Company and such Independent Financial Adviser, a written opinion of such Independent Financial Adviser in respect thereof shall be conclusive and binding on the Company, the Holders and the Beneficial Owners, save in the case of manifest error;

 

(iii)     no adjustment will be made to the Conversion Price where Ordinary Shares or Other Securities (including rights, warrants and options) are issued, offered, exercised, allotted, purchased, appropriated, modified or granted to, or for the benefit of, employees or former employees (including directors holding or formerly holding executive office or the personal service company of any such person) or their spouses or relatives, in each case, of the Company or any of its Subsidiaries or any associated company or to a trustee or trustees to be held for the benefit of any such person, in any such case pursuant to any share or option scheme;

 

(iv)    on any adjustment, if the resultant Conversion Price has more decimal places than the initial Conversion Price, it shall be rounded to the same number of decimal places as the initial Conversion Price. No adjustment shall be made to the Conversion Price where such adjustment (rounded down if applicable) would be less than 1% of the Conversion Price then in effect. Any adjustment not required to be made, and/or any amount by which the Conversion Price has been rounded down, shall be carried forward and taken into account in any subsequent adjustment, and such subsequent adjustment shall be made on the basis that the adjustment not required to be made had been made at the relevant time and/or, as the case may be, that the relevant rounding down had not been made;

 

(v)     Notice of any adjustments to the Conversion Price shall be given by the Company to DTC as the Holder of the Global Securities (or, if the Additional Tier 1 Securities are in definitive form, via the Trustee) promptly after the determination thereof;

 

 

 

 

  

43

  

 

(vi)    any adjustment to the Conversion Price shall be subject to such Conversion Price not being less than the U.S. dollar equivalent of the nominal amount of an Ordinary Share at such time (currently £0.10). The Company undertakes that it shall not take any action, and shall procure that no action is taken, that would otherwise result in an adjustment to the Conversion Price to below such nominal value then in effect; and

 

(vii)   references to the Conversion Price and Ordinary Shares shall be deemed to include any New Conversion Price and any Relevant Shares, such that any New Conversion Price shall be subject to price adjustments upon the occurrence of the events of set forth in Sections 3.01(a) – (d) above, subject to any modifications as an Independent Financial Adviser shall determine to be appropriate.

 

Section 3.02.Qualifying Relevant Event.

 

(a)          Within ten (10) days following the occurrence of a Relevant Event, the Company shall give notice thereof to the Holders and Beneficial Owners of the Additional Tier 1 Securities by means of a “Relevant Event Notice”, with a copy to the Trustee.

 

(b)          The Relevant Event Notice shall specify:

 

	
  

	
(1)

	
the identity of the Acquirer;

 

	
  

	
(2)

	
whether the Relevant Event is a Qualifying Relevant Event or a Non-Qualifying Relevant Event;

 

	
  

	
(3)

	
in the case of a Qualifying Relevant Event, the New Conversion Price; and

 

	
  

	
(4)

	
in the case of a Non-Qualifying Relevant Event, unless the Conversion Date shall have occurred prior to the date of the Non-Qualifying Relevant Event, outstanding Additional Tier 1 Securities shall not be subject to Automatic Conversion at any time notwithstanding that a Trigger Event may occur subsequently but that, instead, upon any subsequent Trigger Event, the principal amount of each Additional Tier 1 Security will automatically be written down to zero, the Additional Tier 1 Securities will be canceled, the Holders and Beneficial Owners will be automatically deemed to have irrevocably waived their right to receive, and no longer have any rights against the Company with respect to repayment of the aggregate principal amount of the Additional Tier 1 Securities so written down and all Accrued Interest and any other amounts payable on the Additional Tier 1 Securities shall be canceled, irrespective of whether such amounts have become due and payable prior to the occurrence of the Trigger Event.

 

(c)          If a Qualifying Relevant Event occurs, the Additional Tier 1 Securities shall, where the Conversion Date (if any) falls on or after the New Conversion Condition 

 

 

 

  

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Effective Date, be converted on such Conversion Date into Relevant Shares of the Approved Entity, mutatis mutandis as provided under Section 2.15 above, at a Conversion Price that shall be the New Conversion Price. Such conversion shall be effected by the delivery by the Company of such number of Settlement Shares as set forth under Section 2.15 above to, or to the order of, the Approved Entity. Such delivery shall irrevocably discharge and satisfy all of the Company’s obligations under the Additional Tier 1 Securities, but shall be without prejudice to the rights of the Trustee and the Holders and Beneficial Owners against the Approved Entity in connection with its undertaking to deliver Relevant Shares as provided in the definition of “New Conversion Condition”. Such delivery shall be in consideration of the Approved Entity irrevocably undertaking for the benefit of the Holders and Beneficial Owners to deliver the Relevant Shares to the Settlement Share Depository. For the avoidance of doubt, the Company may elect that a Settlement Shares Offer be made by the Settlement Share Depository in respect of the Relevant Shares.

 

(d)        The New Conversion Price shall be subject to adjustment in the circumstances provided for under Sections 3.01(a) – 3.01(d)(d) above (if necessary with such modifications and amendments as an Independent Financial Adviser acting in good faith shall determine to be appropriate), and the Company shall give notice to the Holders of the Additional Tier 1 Securities of the New Conversion Price and of any such modifications and amendments thereafter.

 

(e)        In the case of a Qualifying Relevant Event:

 

(i)      the Company shall, on or prior to the New Conversion Condition Effective Date, enter into such agreements and arrangements (including, without limitation supplemental indentures to the Indenture and amendments and modifications to the terms and conditions of the Additional Tier 1 Securities and the Indenture) as may be required to ensure that, effective upon the New Conversion Condition Effective Date, the Additional Tier 1 Securities shall (following the occurrence of a Trigger Event) be convertible into, or exchangeable for, Relevant Shares of the Approved Entity, mutatis mutandis in accordance with, and subject to, the provisions of Sections 2.15 of this First Supplemental Indenture (as may be supplemented or amended), at the New Conversion Price;

 

(ii)      the Company shall, where the Conversion Date falls on or after the New Conversion Condition Effective Date, procure (to the extent within its control) the issue and/or delivery of the relevant number of Relevant Shares mutatis mutandis in the manner provided under Section 2.15 of this First Supplemental Indenture (as may be supplemented or amended).

 

Section 3.03.  Agreement to write-down in connection with a Non-Qualifying Relevant Event.  By acquiring the Additional Tier 1 Securities, Holders and Beneficial Owners acknowledge and agree that unless the Conversion Date shall have occurred prior to the date of any Non-Qualifying Relevant Event, the outstanding Additional Tier 1 Securities shall not be subject to Automatic Conversion but that the outstanding principal 

 

 

  

45

  

 

 

 

amount of each Additional Tier 1 Security shall automatically be written down to zero, the Additional Tier 1 Securities shall be canceled, the Holders and Beneficial Owners shall be automatically deemed to have irrevocably waived their right to receive, and no longer have any rights against the Company with respect to repayment of the aggregate principal amount of the Additional Tier 1 Securities so written down and all Accrued Interest and any other amounts payable on the Additional Tier 1 Securities shall be canceled, irrespective of whether such amounts have become due and payable prior to the occurrence of the Trigger Event.

 

ARTICLE 4

Enforcement Events and Remedies

 

With respect to the Additional Tier 1 Securities only, ‎Section 5.01 of the Capital Securities Indenture shall be amended and restated in its entirety as follows in Section 4.01 hereof, ‎Section 5.02 of the Capital Securities Indenture shall be amended and restated in its entirety as follows in 4.02 and 4.03 hereof, Section 5.03(a) of the Capital Securities Indenture shall be amended and restated in its entirety as follows in Section 4.04 hereof, Section 5.13 of the Capital Securities Indenture shall be amended and restated in its entirety as follows in Section 4.05 hereof, and references in the Capital Securities Indenture to such Sections shall be to such Sections as amended and restated in entirety by this First Supplemental Indenture. Section 5.10 of the Capital Securities Indenture shall apply to the Additional Tier 1 Securities subject to the limitations on remedies specified in this Article 4.

 

Section 4.01.Winding-up or Administration Event.  If a Winding-Up or Administration Event occurs before the occurrence of a Trigger Event, subject to the subordination provisions of Article 5, the principal amount of the Additional Tier 1 Securities shall become immediately due and payable, without the need of any further action on the part of the Trustee, the Holders or any other Person, including the declaration by the Trustee, the Holders or any other Person that the principal amount of the Additional Tier 1 Securities has become immediately due and payable.

 

Section 4.02.  Non-Payment Event.  Subject to Section 2.11, if the Company fails to pay any amount of principal in respect of the Additional Tier 1 Securities and such non-payment is not remedied within a period of seven (7) calendar days or more after the date on which such payment is due (a “Non-Payment Event”), the Trustee may, on behalf of the Holders and Beneficial Owners, at its discretion, or shall at the direction of Holders of 25% of the aggregate principal amount of outstanding Additional Tier 1 Securities, subject to any applicable laws, institute proceedings for the winding up of the Company. In the event of a winding-up or liquidation of the Company (whether or not instituted by the Trustee) the Trustee may prove the claims of the Holders, Beneficial Owners and the Trustee in the winding-up proceeding of the Company and/or claim in the liquidation of the Company, such claims as set out in Section 5.01(c) and Section 5.01(d). For the avoidance of doubt, the Trustee may not declare the principal amount of any outstanding Additional Tier 1 Securities to be due and payable and may not pursue any other legal remedy, including a judicial proceeding for the collection of the sums due and unpaid on the Additional Tier 1 Securities.

 

 

 

  

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Section 4.03.Limited Remedies for Breach of Performance Obligations.  In the event of a breach of any term, obligation or condition binding upon the Company under the Additional Tier 1 Securities or the Indenture (other than any payment obligation of the Company under or arising from the Additional Tier 1 Securities or the Indenture, including payment of any principal or interest) (such obligation, a “Performance Obligation”), the Trustee may without further notice institute such proceedings against the Company as it may deem fit to enforce, provided that the Company shall not by virtue of the institution of any such proceedings be obliged to pay any sum or sums, in cash or otherwise (including damages) earlier than the same would otherwise have been payable under the Additional Tier 1 Securities or the Indenture. For the avoidance of doubt, any breach by the Company of any Performance Obligation shall not confer upon the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Additional Tier 1 Securities any claim for damages and, in the event of such a breach of a Performance Obligation, the sole and exclusive remedy that the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Additional Tier 1 Securities may seek under the Additional Tier 1 Securities and the Indenture is specific performance under the laws of the State of New York. By its acquisition of the Additional Tier 1 Securities, each Holder and Beneficial Owner of the Additional Tier 1 Securities acknowledges and agrees (i) that such Holder and Beneficial Owner shall not seek, and shall not direct the Trustee (acting on their behalf) to seek, any claim for damages against the Company in respect of any breach by the Company of a Performance Obligation, and (ii) that the sole and exclusive remedy that such Holder and Beneficial Owner and/or the Trustee (acting on their behalf) may seek under the Additional Tier 1 Securities and the Indenture for a breach by the Company of a Performance Obligation is specific performance under the laws of the State of New York.

 

Section 4.04.  No Other Remedies and Other Terms.

 

(a)        Other than the limited remedies specified in this Article 4, and subject to paragraph (c) below, no remedy against the Company shall be available to the Trustee (acting on behalf of the Holders) and to the Holders and Beneficial Owners, whether for the recovery of amounts owing in respect of such Additional Tier 1 Securities or under the Indenture, or in respect of any breach by the Company of any of the Company’s obligations under or in respect of the terms of such Additional Tier 1 Securities or under the Indenture in relation thereto; provided, however, that the Company’s obligations to the Trustee under, and the Trustee’s lien provided for in, Section 6.07 of the Capital Securities Indenture and the Trustee’s rights to have money collected applied first to pay amounts due to it under such Section pursuant to Section 5.06 of the Capital Securities Indenture shall not be limited or impaired by this Article 4 or otherwise and expressly survive any Enforcement Event and are not subject to the subordination provisions of Section 5.01 of this First Supplemental Indenture.

 

(b)        For purposes of the Capital Securities Indenture, “Event of Default” shall mean an “Enforcement Event” as defined in this First Supplemental Indenture, except that the term “Event of Default” as used in Article 8 of the Capital Securities Indenture shall mean “Winding-Up or Administration Event.”

 

 

 

  

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(c)        Notwithstanding the limitations on remedies specified under this Article 4, (1) the Trustee shall have such powers as are required to be authorized to it under the Trust Indenture Act in respect of the rights of the Holders and Beneficial Owners of the Additional Tier 1 Securities under the provisions of the Indenture, and (2) nothing shall impair the right of a Holder or Beneficial Owner of the Additional Tier 1 Securities under the Trust Indenture Act, absent such Holder’s or Beneficial Owner’s consent, to sue for any payment due but unpaid with respect to the Additional Tier 1 Securities; provided that, in the case of (1) and (2) above, any payments in respect of, or arising from, the Additional Tier 1 Securities, including any payments or amounts resulting or arising from the enforcement of any rights under the Trust Indenture Act in respect of the Additional Tier 1 Securities, shall be subject to the subordination provisions set forth in Section 5.01 of this First Supplemental Indenture.

 

(d)        In furtherance of Section 6.01 of the Capital Securities Indenture:

 

(i)  For purposes of Sections 315(a) and 315(c) of the Trust Indenture Act, the term “default” is hereby defined to mean an Enforcement Event which has occurred and is continuing.

 

(ii) Notwithstanding anything contained in the Capital Securities Indenture to the contrary, the duties and responsibilities of  the Trustee under this Indenture shall be subject to the protections, exculpations and limitations on liability afforded to an indenture trustee under the provisions of the Trust Indenture Act.

 

Section 4.05.Waiver of Past Defaults.

 

(a)        Holders of not less than a majority in aggregate principal amount of the Outstanding Securities may on behalf of the Holders of all of the Additional Tier 1 Securities waive any past Enforcement Event that results from a breach by the Company of a Performance Obligation. Holders of a majority of the aggregate principal amount of the outstanding Additional Tier 1 Securities shall not be entitled to waive any past default that results from a Winding-Up or Administration Event or a Non-Payment Event.

 

(b)        Upon the occurrence of any waiver permitted by paragraph (a) above, such Enforcement Event shall cease to exist, and any Enforcement Event with respect to any series arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of the Capital Securities Indenture, but no such waiver shall extend to any subsequent or other Enforcement Event or impair any right consequent thereon.

 

ARTICLE 5

Subordination

 

Section 5.01.Subordination to Claims of Senior Creditors.

 

(a)        With respect to the Additional Tier 1 Securities only, Section 12.01(a) of the Capital Securities Indenture shall be amended and restated in its entirety as follows in this Section 5.01.  References in the Capital Securities Indenture to Section 12.01(a) 

 

 

 

  

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thereof shall be to Section 5.01 hereof.  For the avoidance of doubt, no provision of Article 12 of the Capital Securities Indenture other than Section 12.01(a) shall be amended by this First Supplemental Indenture.

 

(b)        The Additional Tier 1 Securities shall constitute the Company’s direct, unsecured and subordinated obligations, ranking equally without any preference among themselves. The rights and claims of the Holders and Beneficial Owners of the Additional Tier 1 Securities in respect of or arising from the Additional Tier 1 Securities shall be subordinated to the claims of Senior Creditors.

 

(c)        If a Winding-up or Administration Event occurs prior to the date on which a Trigger Event occurs, there shall be payable by the Company in respect of each Additional Tier 1 Security (in lieu of any other payment by the Company) such amount, if any, as would have been payable to the Holder or Beneficial Owner if, throughout such Winding-up or Administration Event, such Holder or Beneficial Owner were the holder of one of a class of preference shares (“Notional Preference Shares”) in the capital of the Company having an equal right to a return of assets in the Winding-up or Administration Event to, and so ranking pari passu with, the holders of the most senior class or classes of issued preference shares in the capital of the Company from time to time (if any) and which have a preferential right to a return of assets in the Winding-up or Administration Event over, and so rank ahead of, the holders of all other classes of issued shares for the time being in the capital of the Company but ranking junior to the claims of Senior Creditors and on the assumption that the amount that such holder was entitled to receive in respect of each Notional Preference Share is an amount equal to the principal amount of, the Additional Tier 1 Securities together with, to the extent not otherwise included within the foregoing, any other amounts attributable to the Additional Tier 1 Securities, including any Accrued Interest and any damages awarded for breach of any obligations, regardless of whether the Solvency Condition is satisfied on the date upon which the same would otherwise be due and payable.

 

(d)        If a Winding-up or Administration Event occurs at any time on or following the date on which a Trigger Event occurs but the Settlement Shares to be issued and delivered to the Settlement Share Depository on the Conversion Date have not been so delivered, there shall be payable by the Company in respect of each Additional Tier 1 Security (in lieu of any other payment by the Company) such amount, if any, as would have been payable to the Holder or Beneficial Owner of such Additional Tier 1 Security in a Winding-Up or Administration Event if the Conversion Date in respect of the Automatic Conversion had occurred immediately before the occurrence of a Winding-up or Administration Event (ignoring for this purpose the Company’s right to make an election for a Settlement Shares Offer to be effected pursuant to Section 2.16), regardless of whether the Solvency Condition is satisfied on such date.

 

(e)        Other than in the event of a Winding-up or Administration Event of the Company as described in paragraph (c) and (d) above, or in relation to the Cash Component of any Alternative Consideration in any Settlement Shares Offer, payments in respect of or arising under the Additional Tier 1 Securities (including any damages for breach of any obligations thereunder) shall, in addition to the cancellation of any interest 

 

 

 

  

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payment pursuant to Section 2.03 or 2.04 hereof, be conditional (i) upon the Company’s being solvent at the time of payment by the Company, and (ii) in that no principal, interest or other amount payable shall be due and payable in respect of or arising from the Additional Tier 1 Securities except to the extent that the Company could make such payment and still be solvent immediately thereafter (such condition referred to herein as the “Solvency Condition”). For purposes of determining whether the Solvency Condition is met, the Company shall be considered to be solvent at a particular point in time if (i) it is able to pay its debts owed to Senior Creditors as they fall due and (ii) its Assets are at least equal to its Liabilities. An Officer’s Certificate shall, unless there is manifest error, be treated and accepted by us, the Trustee, the Holders and the Beneficial Owners as correct and sufficient evidence that the Solvency Condition is or is not satisfied. If the Company fails to make a payment because the Solvency Condition is not satisfied, such payment shall not be or become due and payable.

 

Section 5.02.No Set-Off.  Subject to applicable law, no Holder of Additional Tier 1 Securities may exercise, claim or plead any right of set-off, compensation or retention in respect of any amount owed to it by the Company arising under, or in respect of, or in connection with, the Additional Tier 1 Securities and each Holder of Additional Tier 1 Securities shall, by virtue of its holding of any Additional Tier 1 Securities, be deemed to have waived all such rights of set-off, compensation or retention.

 

ARTICLE 6

Covenants

 

Section 6.01.Undertakings.  While any Additional Tier 1 Security remains outstanding, the Company shall (if and to the extent permitted by the Applicable Regulations from time to time and only to the extent that such undertaking would not cause a Regulatory Event to occur), save with the approval of an extraordinary Shareholder resolution:

 

(a)        not make any issue, grant or distribution or take or omit to take any other action if the effect thereof would be that, upon Automatic Conversion of the Additional Tier 1 Securities, Ordinary Shares could not, under any applicable law then in effect, be legally issued as fully paid;

 

(b)        in the event of a Newco Scheme, take (or shall procure that there is taken) all necessary action to ensure that the Newco Scheme is an Exempt Newco Scheme and that immediately after completion of the Scheme of Arrangement, any amendments to the Indenture as may be necessary to ensure that the Additional Tier 1 Securities may be converted into or exchanged for ordinary shares or units or the equivalent in Newco in accordance with the Indenture;

 

(c)        use all reasonable endeavors to ensure that the Settlement Shares issued upon Automatic Conversion of the Additional Tier 1 Securities following a Trigger Event shall be admitted to listing and trading on the Relevant Stock Exchange;

 

 

 

  

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(d)        following the Automatic Conversion of the Additional Tier 1 Securities, take all reasonable actions as may be necessary to ‎(a) register any additional ADSs, ‎(b) deposit a sufficient number of ADSs with the ADS Depository, and (c) ensure that such ADSs shall continue to be listed on the New York Stock Exchange or, if the ADSs cease to be listed on such exchange, to be admitted to trading on a national securities exchange in the United States;

 

(e)        notwithstanding any Settlement Shares Offer, at all times keep available for issue, free from pre-emptive or other preferential rights, sufficient Ordinary Shares to enable Automatic Conversion of the Additional Tier 1 Securities to be satisfied in full;

 

(f)        in circumstances where the provisions of this First Supplemental Indenture or the Additional Tier 1 Securities contemplate the appointment of a Settlement Share Depository, the Company shall use all reasonable endeavors to promptly appoint such Settlement Share Depository; and

 

(g)        where the provisions of the Indenture require or provide for a determination by an Independent Financial Adviser, the Company shall use all reasonable endeavors promptly to appoint an Independent Financial Adviser for such purpose.

 

ARTICLE 7

Satisfaction and Discharge

 

Section 7.01.Satisfaction and Discharge of Indenture.  For purposes of the Additional Tier 1 Securities, ‎Section 4.01 of the Capital Securities Indenture shall be amended and restated in its entirety and shall read as follows:

 

This Indenture shall upon Company Request, subject to ‎Section 4.04 of the Capital Securities Indenture, cease to be of further effect with respect to the Additional Tier 1 Securities (except as to any surviving rights of registration of transfer or exchange of the Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of the Indenture with respect to the Additional Tier 1 Securities when:

 

(a)        all Additional Tier 1 Securities theretofore authenticated and delivered (other than Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 of the Capital Securities Indenture) have been delivered to the Trustee for cancellation;

 

(b)        the Company has paid or caused to be paid all other sums payable hereunder (including Accrued Interest, if any) by the Company with respect to the Additional Tier 1 Securities; and

 

(c)        the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating 

 

 

  

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to the satisfaction and discharge of the Indenture with respect to the Additional Tier 1 Securities have been complied with.

 

(d)        Notwithstanding any satisfaction and discharge of the Indenture, the obligations of the Company to the Trustee under Section 6.07 of the Capital Securities Indenture, the obligations of the Trustee to any Authenticating Agent under Section 6.15 of the Capital Securities Indenture and the obligations of the Trustee under ‎Section 4.02 of the Capital Securities Indenture and the last paragraph of Section 10.03 of the Capital Securities Indenture shall survive such satisfaction and discharge.

 

ARTICLE 8

Supplemental Indentures

 

Section 8.01.Amendments or Supplements Without Consent of Holders.  In addition to any permitted amendment or supplement to the Capital Securities Indenture pursuant to ‎Section 9.01 of the Capital Securities Indenture, the Company and the Trustee may amend or supplement the Indenture or the Additional Tier 1 Securities without notice to or the consent of any Holder of the Additional Tier 1 Securities (i) to conform this First Supplemental Indenture and the form or terms of the Additional Tier 1 Securities to the section entitled “Description of the Additional Tier 1 Securities” as set forth in the Prospectus, (ii) to reflect changes to the procedures set forth in Section 2.14 or Section 2.15 above, (iii) to ensure that in the event of a Newco Scheme, the Additional Tier 1 Securities may be converted into or exchanged for ordinary shares or units or the equivalent in accordance with Section 6.01(b) and/or procure that Newco is substituted under the Additional Tier 1 Securities as the issuer or (iv) pursuant to Section 2.20(b)(iii).

 

Section 8.02.  Amendments or Supplements With Consent of Holders.  The Company and the Trustee may amend the Additional Tier 1 Securities and the Indenture with respect to the Additional Tier 1 Securities as provided in ‎Section 9.02 of the Capital Securities Indenture.  Notwithstanding the foregoing provision and in addition to the provisions of ‎Section 9.02 of the Capital Securities Indenture, without the consent of each Holder of an outstanding Security affected thereby, no amendment or waiver may make any change that adversely affects the conversion rights of any of the Additional Tier 1 Securities.

 

Section 8.03.Holders Approval of Amendments.  The consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment, supplement or waiver, but it will be sufficient if such consent approves the substance of such proposed amendment, supplement or waiver. After an amendment, supplement or waiver becomes effective, the Company shall give to the Holders affected by such amendment, supplement or waiver a notice in accordance with the Indenture briefly describing such amendment, supplement or waiver. The Company shall mail supplemental indentures to Holders upon request. Any failure of the Company to mail such notice, or any defect in such notice, will not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

 

 

 

 

  

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Section 8.04.Relevant Regulator Consent.  No modification shall be effected to this First Supplemental Indenture or in relation to the Additional Tier 1 Securities, unless the Company has received any Relevant Regulator Consent as may be required under the Applicable Regulations. The Trustee is entitled to request and rely on an Officer’s Certificate as to the satisfaction of this condition precedent to any modification without further enquiry.

 

ARTICLE 9

Miscellaneous

 

Section 9.01.Effect of Supplemental Indenture.  Upon the execution and delivery of this First Supplemental Indenture by each of the Company and the Trustee, the Capital Securities Indenture shall be supplemented and amended in accordance herewith, and this First Supplemental Indenture shall form a part of the Capital Securities Indenture for all purposes in respect of any Additional Tier 1 Securities.

 

Section 9.02.Other Documents to Be Given to the Trustee.  As specified in ‎Section 9.03 of the Capital Securities Indenture and subject to the provisions of Section 6.03 of the Capital Securities Indenture, the Trustee shall be entitled to receive an Officer’s Certificate stating the recitals contained in ‎Section 1.02 of the Capital Securities Indenture have been complied with and an Opinion of Counsel stating that this First Supplemental Indenture is permitted by the Capital Securities Indenture, conforms to the requirements of the Trust Indenture Act, and (subject to ‎Section 1.03 of the Capital Securities Indenture) constitutes valid and binding obligations of the Company enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability. The Trustee shall be entitled to rely on such Officer’s Certificate and Opinion of Counsel as conclusive evidence that this First Supplemental Indenture complies with the applicable provisions of the Capital Securities Indenture.

 

Section 9.03.Notices to, and Consents Required from, the Relevant Regulator to Be Given to the Trustee.  The Trustee shall be entitled to receive, and shall be fully protected in relying upon without any investigation, a copy of all notifications provided to, and prior consents required from, the Relevant Regulator pursuant to the Indenture.

 

Section 9.04.  Survival.  Anything herein to the contrary notwithstanding, for purposes of the Additional Tier 1 Securities, Section 6.08 of the Capital Securities Indenture is hereby amended in its entirety as follows: The Trustee’s right to payment of its fees, reimbursement and indemnity under, and in its lien provided for in, Sections 5.06 and 6.07 of the Capital Securities Indenture shall survive the payment in full of the Additional Tier 1 Securities, the satisfaction and discharge of the Indenture, the Automatic Conversion upon a Trigger Event, the resignation or removal of the Trustee, the termination for any reason of the Indenture and any exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities.

 

 

 

  

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Section 9.05.  Confirmation of Indenture.  The Capital Securities Indenture, as supplemented and amended by this First Supplemental Indenture, is in all respects ratified and confirmed, and the Capital Securities Indenture and this First Supplemental Indenture shall, in respect of any Additional Tier 1 Securities, be read, taken and construed as one and the same instrument. This First Supplemental Indenture constitutes an integral part of the Capital Securities Indenture with respect to the Additional Tier 1 Securities. In the event of a conflict between the terms and conditions of the Capital Securities Indenture and the terms and conditions of this First Supplemental Indenture, the terms and conditions of this First Supplemental Indenture shall prevail with respect to the Additional Tier 1 Securities.

 

Section 9.06.  Concerning the Trustee.  The Trustee does not make any representations as to the validity or sufficiency of this First Supplemental Indenture. The recitals and statements herein are deemed to be those of the Company and not the Trustee. In entering into this First Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Capital Securities Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.

 

Section 9.07.  Governing Law.  This First Supplemental Indenture and the Additional Tier 1 Securities shall be governed by and construed in accordance with the laws of the State of New York, except that (i) Section 5.01 of this First Supplemental Indenture (other than the Trustee’s own rights, duties or immunities thereunder) shall be governed by and construed in accordance with the laws of Scotland and (ii) the authorization and execution by the Company of this First Supplemental Indenture and the Additional Tier 1 Securities shall be governed by (in addition to the laws of the State of New York relevant to execution) the jurisdiction of the Company.

 

Section 9.08.  Counterparts.  This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

[Signature Pages Follow]

 

 

 

 

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first written above.

 

	
LLOYDS BANKING GROUP PLC, as Company

 

	
By:

	  
	  	
Name:

	  	
Title:

 

	
THE BANK OF NEW YORK MELLON, as Trustee

 

	
By:

	  
	  	
Name:

	  	
Title:

 

[Signature Page to First Supplemental Indenture]

 

 

 

 

  

 

  

 

EXHIBIT A

 

FORM OF GLOBAL NOTE

 

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

This Security is one of a duly authorized issue of securities of the Company (as defined below) (herein called the “Securities” and each, a “Security”) issued and to be issued in one or more series under and governed by the Capital Securities Indenture, dated as of March 6, 2014 (the “Capital Securities Indenture”), as supplemented by the First Supplemental Indenture, dated as of April [     ], 2014 (the “First Supplemental Indenture” and, together with the Capital Securities Indenture, the “Indenture”). Capitalized terms used herein but not otherwise defined shall have the meaning ascribed to them in the First Supplemental Indenture.

 

The rights of the Holder and Beneficial Owners of this Security are, to the extent and in the manner set forth in Section 5.01 of the First Supplemental Indenture (which amends in its entirety Section 12.01(a) of the Capital Securities Indenture), subordinated to the claims of other creditors of the Company, and this Security is issued subject to the provisions of that Section 5.01, and the Holder of this Security, by accepting the same, agrees to, and shall be bound by, such provisions. The provisions of Section 5.01 of the First Supplemental Indenture and the terms of this paragraph are governed by, and shall be construed in accordance with, Scots law.

 

The rights of the Holder of this Security are subject to Section 2.14 of the First Supplemental Indenture. Effective upon, and following, the occurrence of the Automatic Conversion, provided that the Company issues and delivers the Settlement Shares to the Settlement Share Depository (or the relevant recipient in accordance with this Security or the First Supplemental Indenture), Holders and Beneficial Owners shall not have any rights against the Company with respect to repayment of the principal amount of this Security or payment of interest or any other amount on or in respect of this Security, which liabilities of the Company shall be irrevocably and automatically released, and accordingly the principal amount of this Security shall equal zero at all times thereafter.

 

The exercise of any UK Bail-in Power by the Relevant UK Resolution Authority may result in the (i) cancellation of all, or a portion, of the principal amount of, or interest on, the Additional Tier 1 Securities and/or (ii) the conversion of all, or a portion of, the principal amount of, or interest on, the Additional Tier 1 Securities into (a) Ordinary Shares or (b) other securities or obligations of the Company or another person, including by means of a variation to the terms of the Additional Tier 1 Securities, in each case to 

 

 

 

  

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give effect to the exercise by the Relevant UK Resolution Authority of such UK Bail-in Power. The rights of Holders and Beneficial Owners of the Additional Tier 1 Securities are subject to, and will be varied, if necessary, solely to give effect to the provisions of any UK Bail-in Power which are expressed to implement such a cancellation or conversion.

 

LLOYDS BANKING GROUP PLC

 

$[     ]7.5% Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities

 

(Callable June 27, 2024 and Every Five Years Thereafter)

 

	
No. [    ] 

	
$[                  ]

 

 CUSIP NO. [          ]

 ISIN NO. [          ]

 

LLOYDS BANKING GROUP PLC, a company incorporated in Scotland with registered number 095000 herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of $[500,000,000] (five hundred million Dollars), if and to the extent due, and to pay interest thereon, if any, in accordance with the terms hereof and the Indenture. The Additional Tier 1 Securities shall have no fixed maturity or fixed redemption date. From (and including) the Issue Date to (but excluding) June 27, 2024 (the “First Call Date”), the interest rate on the Additional Tier 1 Securities shall be 7.5% per annum. From and including the First Call Date and each fifth anniversary date thereafter (each such date, a “Reset Date”), to (but excluding) the next following Reset Date, the applicable per annum rate shall be equal to the sum of the applicable Mid-Market Swap Rate on the Reset Determination Date and 4.76% converted to a quarterly rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down). Subject to the provisions on the reverse of this Security relating to cancellation and deemed cancellation of interest and to Sections 2.03, 2.04, 2.14(h) and 5.01 of the First Supplemental Indenture and to the last sentence of this paragraph, interest, if any, shall be payable in four equal quarterly installments in arrear on March 27, June 27, September 27 and December 27 of each year (each, an “Interest Payment Date”). The first date on which interest may be paid will be June 27, 2014 for the period commencing on (and including)           , 2014 and ending (but excluding) June 27, 2014 (short first coupon).

 

The “Mid-Market Swap Rate” is the mid-market U.S. dollar swap rate Libor basis having a 5-year maturity appearing on Bloomberg page “ISDA 01” (or such other page as may replace such page on Bloomberg, or such other page as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) at 11:00 a.m. (New York time) on the Reset Determination Date, as determined by the Calculation Agent. If such swap rate does not appear on such page (or such other page or service), the Mid-Market Swap Rate shall instead be determined by the Calculation Agent on the basis of (i) quotations provided by the principal office of each of four major banks in the U.S. dollar swap rate market (which

 

 

 

  

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 banks shall be selected by the Calculation Agent in consultation with the Company no less than 20 calendar days prior to the Reset Determination Date) (the “Reference Banks”) of the rates at which swaps in U.S. dollars are offered by it at approximately 11.00 a.m. (New York time) (or thereafter on such date, with the Calculation Agent acting on a best efforts basis) on the Reset Determination Date to participants in the U.S. dollar swap rate market for a five-year period and (ii) the arithmetic mean expressed as a percentage and rounded, if necessary, to the nearest 0.001% (0.0005% being rounded upwards) of such quotations. If the Mid-Market Swap Rate is still not determined on the relevant Reset Determination Date in accordance with the foregoing procedures, the Mid-Market Swap Rate shall be the mid-market U.S. dollar swap rate Libor basis having a 5-year maturity that appeared on the most recent Bloomberg page “ISDA 01” (or such other page as may replace such page on Bloomberg, or such other page as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) that was last available prior to 11.00 a.m. (New York time) on each Reset Determination Date, as determined by the Calculation Agent. The “Reset Determination Date” shall be the second Business Day immediately preceding the Reset Date.

 

If any Interest Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business Day, and no further interest or other payment shall be owed or made in respect of such delay.

 

If any scheduled Interest Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business Day, but interest on that payment will not accrue during the period from and after the scheduled Interest Payment Date. If any scheduled redemption date is not a Business Day, payment of interest, if any, and principal shall be postponed to the next Business Day, but interest on that payment will not accrue during the period from and after any scheduled redemption date. If any Reset Date is not a Business Day, the Reset Date shall occur on the next Business Day.

 

Subject to the limitations specified on the reverse of this Security, if any interest payment is to be made in respect of the Additional Tier 1 Securities on any other date, including on any scheduled redemption date, it shall be calculated by the Calculation Agent by applying the interest rate as described above and multiplying the product by 30/360 and rounding the resulting figure to the nearest cent (half a cent being rounded upwards). For this purpose “30/360” means, in respect of any period, the number of days in the relevant period, from and including the first day in such period to but excluding the last day in such period, such number of days being calculated on the basis of a 360 day year consisting of 12 months of 30 days each, divided by 360.

 

The interest, if any, so payable, and paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such interest which shall be the 15th calendar day preceding each Interest Payment Date, whether or not such day is a Business Day.

 

In addition to any other restrictions on payments of principal and interest contained in this First Supplemental Indenture, no payment, of the principal amount of 

 

 

 

  

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this Security or payment of interest on this Security shall become due and payable after the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company and the Group.

 

Interest on the Additional Tier 1 Securities shall be due and payable only at the sole discretion of the Company, and the Company shall have absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any Interest Payment Date. If the Company elects not to make interest payment in respect of the Additional Tier 1 Securities on the relevant Interest Payment Date (or if the Company elects to make a payment of a portion, but not all, of such interest payment), such non-payment shall evidence the Company’s exercise of its discretion to cancel such interest payment (or the portion of such interest payment not paid), and accordingly such interest payment (or the portion thereof not paid) shall not be or become due and payable.

 

Any interest cancelled or deemed cancelled (in each case, in whole or in part) pursuant to this Security shall not be due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners of the Additional Tier 1 Securities shall have no right to or claim against the Company with respect to such interest amount. In addition, any such cancellation or deemed cancellation shall not constitute a default under this Security and Holders and Beneficial Owners of this Security shall have no rights thereto or to receive any additional interest or compensation as a result of such cancellation or deemed cancellation.

 

Without limitation on the foregoing paragraph, the Company shall cancel any interest in respect of the Additional Tier 1 Securities (or, as appropriate, any part thereof) on any Interest Payment Date (and such interest payment shall therefore be deemed to have been cancelled and thus shall not be due and payable on such Interest Payment Date) if in respect of such Interest Payment Date (a) to the extent an amount of Distributable Items on any Interest Payment Date that is less than the sum of (i) all payments (other than redemption payments) made or declared by the Company since the end of the Company’s last financial year and prior to such Interest Payment Date on or in respect of any Parity Securities, the Additional Tier 1 Securities and any Junior Securities and (ii) all payments (other than redemption payments) payable by the Company on such Interest Payment Date (x) on the Additional Tier 1 Securities and (y) on or in respect of any Parity Securities or any Junior Securities, in the case of each of (i) and (ii), excluding any payments already accounted for in determining the Distributable Items, or (b) if the Solvency Condition is not satisfied in respect of such interest payment.

 

By its acquisition of the Additional Tier 1 Securities, each Holder and each Beneficial Owner shall be deemed to have acknowledged and agreed that (i) interest is payable solely at the discretion of the Company, and no amount of interest shall become due and payable in respect of the relevant interest period to the extent that it has been (x) canceled (in whole or in part) by the Company at the Company’s sole discretion and/or 

 

 

 

  

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(y) deemed canceled pursuant to Section 2.04(a) of the First Supplemental Indenture, and (ii) a cancellation or deemed cancellation of interest (in each case, in whole or in part) in accordance with the terms of the Indenture shall not constitute a default in payment or otherwise under the terms of the Additional Tier 1 Securities or the Indenture.

 

Interest on the Additional Tier 1 Securities shall only be due and payable on an Interest Payment Date to the extent it is not cancelled or deemed cancelled under the terms of this Security and Sections 2.02(b), 2.03(a), 2.04, 2.14(h) and Section 5.01 of the First Supplemental Indenture. Any interest cancelled or deemed cancelled (in each case, in whole or in part) in the circumstances described in this Security shall not be due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners of the Additional Tier 1 Securities shall have no rights thereto or to receive any additional interest or compensation as a result of such cancellation or deemed cancellation of interest in respect of the Additional Tier 1 Securities.

 

Payments of principal of and interest, if any, on the Additional Tier 1 Securities shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts and such payments shall be made through one or more Paying Agents appointed under the Capital Securities Indenture to the Holder of this Security. Initially, the Paying Agent and the Security Registrar for the Additional Tier 1 Securities shall be The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL, United Kingdom. The Company may change the Paying Agent or the Security Registrar without prior notice to the Holders of the Additional Tier 1 Securities, and in such an event the Company may act as Paying Agent or Security Registrar. Payments of principal of and interest on the Additional Tier 1 Securities shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal, this Security is first surrendered to the Paying Agent.

 

This Security shall be governed by and construed in accordance with the laws of the State of New York, irrespective of conflicts of laws principles, except as stated in Section 1.12 of the Capital Securities Indenture, and except that the authorization and execution of this Security shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of the Company and the Trustee, as the case may be.

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture, as defined herein.

 

THIS SECURITY IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OF THE UNITED STATES OR THE UNITED KINGDOM.

 

 

 

  

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Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

Date: [        ]

 

	
LLOYDS BANKING GROUP PLC

 

	
By:

	  
	  	
Name:

	  	
Title:

 

Trustee’s Certificate of Authentication

 

This is one of the Additional Tier 1 Securities of the series designated herein referred to in the Indenture.

 

Date: [        ]

 

	
THE BANK OF NEW YORK MELLON,

as Trustee

 

	
By:

	  
	  	
Authorized Signatory

 

Signature Page to Global Note

(Reverse of Security)

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities” and each, a “Security”) issued and to be issued in one or more series under and governed by the Capital Securities Indenture, dated as of March 6, 2014 (herein called the “Capital Securities Indenture”), between the Company and The Bank of New York Mellon, London Branch, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Capital Securities Indenture), as supplemented and amended by the First Supplemental Indenture, dated as of [        ], 2014 (the “First Supplemental Indenture” and, together with the Capital Securities Indenture, the “Indenture”), and reference is hereby made to the Indenture, the terms of which are incorporated herein by reference, for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders of the Additional Tier 1 Securities and of the terms upon which the Additional Tier 1 Securities are, and are to be, authenticated and delivered. Insofar as the provisions of the Indenture may conflict with the provisions set forth in this Security, the former shall control for purposes of this Security.

 

 

 

 

  

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This Security is one of the series designated on the face hereof, limited to a principal amount of $[aggregate principal amount of offering], which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Securities of this series. References herein to “this series” mean the series designated on the face hereof.

 

All payments of principal and/or interest to Holders by or on behalf of the Company in respect of the Additional Tier 1 Securities shall be made without withholding or deduction for or on account of any present or future tax, duty, assessment or governmental charge of whatsoever nature imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In that event, the Company shall pay such additional amounts (“Additional Amounts”) as will result (after such withholding or deduction) in receipt by the Holders of the sums which would have been receivable (in the absence of such withholding or deduction) from it in respect of their Additional Tier 1 Securities; except that no such Additional Amounts shall be payable with respect to any Additional Tier 1 Security in accordance with Section 10.04 of the Capital Securities Indenture.

 

Payments under the Additional Tier 1 Securities will be subject in all cases to any applicable fiscal or other laws and regulations in the place of payment or other laws and regulations to which the Company or its Paying Agents agree to be subject and the Company will not, save as provided under Section 10.04 of the Capital Securities Indenture, be liable for any taxes or duties of whatever nature imposed or levied by such laws, regulations or agreements. No commission or expenses shall be charged to the Holders in respect of such payments.

 

Subject to the limitations specified below, the Company may, at the Company’s option, redeem the Additional Tier 1 Securities, in whole but not in part, on the First Call Date or on any Reset Date thereafter at a redemption price equal to 100% of the principal amount of the Additional Tier 1 Securities then Outstanding, together with any Accrued Interest to (but excluding) the date fixed for redemption.

 

Subject to the limitations specified below, the Company may, at the Company’s option, redeem the Additional Tier 1 Securities, in whole but not in part at a redemption price equal to 100% of the principal amount of the Additional Tier 1 Securities then Outstanding, together with any Accrued Interest to (but excluding) the date fixed for redemption, if at any time the Company determines that as a result of a change (or prospective future change which the Relevant Regulator considers to be sufficiently certain) to the regulatory classification of the Additional Tier 1 Securities under the Applicable Regulations, in any such case becoming effective on or after the Issue Date, all of the Outstanding Additional Tier 1 Securities fully ceases (or would fully cease) to be included in, or count towards, the Tier 1 Capital (howsoever defined in the Applicable Regulations) of the Group (a “Regulatory Event”).

 

Subject to the limitations specified below, the Company may, at the Company’s option, redeem the Additional Tier 1 Securities, in whole but not in part at a redemption 

 

 

 

  

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price equal to 100% of the principal amount of the Additional Tier 1 Securities then Outstanding, together with any Accrued Interest to (but excluding) the date fixed for redemption, if at any time (i) as a result of a Tax Law Change, in making any payments on the Additional Tier 1 Securities, the Company has paid or will or would on the next payment date be required to pay any Additional Amounts to any Holder and/or (ii) a Tax Law Change would (a) result in the Company not being entitled to claim a deduction in respect of any payments in respect of the Additional Tier 1 Securities in computing its taxation liabilities or materially reduce the amount of such deduction, (b) prevent the Additional Tier 1 Securities from being treated as loan relationships for United Kingdom tax purposes, (c) as a result of the Additional Tier 1 Securities being in issue, result in the Company not being able to have losses or deductions set against the profits or gains, or profits or gains offset by the losses or deductions, of companies with which it is or would otherwise be so grouped for applicable United Kingdom tax purposes (whether under the group relief system current as at the date of issue of the Additional Tier 1 Securities or any similar system or systems having like effect as may from time to time exist), (d) result in a United Kingdom tax liability, or the receipt of income or profit which would be subject to United Kingdom tax, in respect of a write-down of the principal amount of the Additional Tier 1 Securities or the conversion of the Additional Tier 1 Securities into Settlement Shares, or (e) result in an Additional Tier 1 Security or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes, (each, a “Tax Event”) in each case, provided that in each such case the Company could not avoid the foregoing in connection with the Additional Tier 1 Securities by taking measures reasonably available to it.

 

Any interest payments that have been cancelled or deemed cancelled pursuant to the terms of this Security and the Indenture shall not be payable if the Additional Tier 1 Securities are redeemed pursuant to any of the three preceding paragraphs.

 

Before the Company may redeem the Additional Tier 1 Securities pursuant to any of the preceding paragraphs relating to the Company’s rights of redemption, the Company shall deliver to DTC as the Holder of the Global Securities (or, if the Additional Tier 1 Securities are in definitive form, to the Holders at their addresses shown on the Capital Securities Register) prior notice of not less than thirty (30) days, nor more than sixty (60) days to the Holders of the Additional Tier 1 Securities. The Company shall deliver written notice of such redemption of the Additional Tier 1 Securities to the Trustee at least five (5) Business Days prior to the date on which the relevant notice of redemption is sent to Holders (unless a shorter notice period shall be satisfactory to the Trustee).

 

Such notice shall specify the Company’s election to redeem the Additional Tier 1 Securities and the date fixed for such redemption and shall be irrevocable except in the limited circumstances described below.

 

Any notice of redemption shall state (i) that on the redemption date the redemption price will, subject to the satisfaction of the conditions set forth in the Indenture, become due and payable upon each Additional Tier 1 Security being redeemed and that, subject to certain exceptions, interest will cease to accrue on or after that date, 

 

 

 

  

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(ii) the place or places where the Additional Tier 1 Securities are to be surrendered for payment of the redemption price, and (iii) the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to the Additional Tier 1 Securities being redeemed.

 

If the Company has delivered a notice of redemption, but as of the date specified for redemption in such notice, the Solvency Condition is not satisfied immediately prior to, and immediately following, the date specified for redemption in such notice, such redemption notice shall be automatically rescinded and shall be of no force and effect, and no payment in respect of the redemption amount shall be due and payable.

 

If the Company has delivered a notice of redemption, but prior to the payment of the redemption amount with respect to such redemption a Conversion Trigger Notice has been delivered, such redemption notice shall be automatically rescinded and shall be of no force and effect, no payment in respect of the redemption amount shall be due and payable, and, pursuant to the terms of this Security and the Indenture, the Automatic Conversion shall occur after such Trigger Event.

 

If the Company has delivered a notice of redemption, but prior to the date of any such redemption the Company has not given notice to the Relevant Regulator and the Relevant Regulator has not granted permission to the Company to redeem the relevant Additional Tier 1 Securities (in each case to the extent, and in the manner, required by the relevant Applicable Regulations), such notice of redemption shall be automatically rescinded and shall be of no force and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.

 

If the Company has delivered a notice of redemption but in respect of any redemption proposed to be made prior to the fifth anniversary of the Issue Date, if and to the extent then required under the Applicable Regulations (A) in the case of redemption following the occurrence of a Tax Event, the Company has not demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by the Company as at the Issue Date, or (B) in the case of redemption following the occurrence of a Regulatory Event, the Company has not demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date; such notice of redemption shall be automatically rescinded and shall be of no force and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.

 

If the Company has delivered a notice of redemption but prior to the payment of the redemption amount with respect to such redemption the Company is not in compliance with any alternative or additional pre-conditions set out in the relevant Applicable Regulations for the time being, such notice of redemption shall be automatically rescinded and shall be of no force and effect, no payment in respect of the redemption amount shall be due and payable.

 

If any of the events specified in each of the preceding five paragraphs occurs, the Company shall promptly deliver notice to DTC as the Holder of the Global Securities (or, 

 

 

 

  

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if the Additional Tier 1 Securities are definitive Securities, to the Holders at their addresses shown on the Capital Securities Register) and to the Trustee directly, specifying the occurrence of the relevant event.

 

Prior to the delivery of any notice of redemption in connection with a Tax Event or a Regulatory Event, the Company shall deliver to the Trustee an Officer’s Certificate stating that a Tax Event or a Regulatory Event, as applicable, has occurred and is continuing and setting out the details thereof. The Trustee is entitled to conclusively rely on and accept such Officer’s Certificate without any duty whatsoever of further inquiry, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

 

Any purchase, other than a purchase in the ordinary course of business dealing in securities, of the Additional Tier 1 Securities by or on behalf of the Company or its subsidiaries, is subject to (i) the Company giving notice to, and the Relevant Regulator granting permission to, the Company to purchase the relevant Additional Tier 1 Securities, and (ii) compliance by the Company with any alternative or additional pre-conditions set out in the relevant Applicable Regulations for the time being. Subject to applicable law in force at the relevant time, including the Applicable Regulations and U.S. federal securities law, the Company may at any time and from time to time, directly or indirectly, purchase the Additional Tier 1 Securities at any price in the open market or by tender (available alike to all Holders of the Additional Tier 1 Securities) or by private agreement. Any Additional Tier 1 Securities purchased beneficially by the Company for its own account (other than in connection with dealing in securities) will be treated as canceled and will no longer be issued and outstanding.

 

If a Trigger Event has occurred, then the Automatic Conversion shall occur on the Conversion Date and all of the Company’s obligations under the Additional Tier 1 Securities shall be irrevocably and automatically released in consideration of the Company’s issuance and delivery of the Settlement Shares to the Settlement Share Depository, and the principal amount of the Additional Tier 1 Securities shall equal zero at all times thereafter (for the avoidance of doubt, the Tradable Amount shall remain unchanged as a result of the Automatic Conversion). Under no circumstances shall such released obligations be reinstated. If the Company has been unable to appoint a Settlement Share Depository, it shall effect, by means it deems reasonable in the circumstances (including, without limitation, issuance of the Settlement Shares to another independent nominee or to the Holders of the Additional Tier 1 Securities directly), the issuance and delivery of the Settlement Shares, ADSs or of the Alternative Consideration, as applicable, to the Holders of the Additional Tier 1 Securities, and such issuance and delivery shall irrevocably and automatically release all of the Company’s obligations under the Additional Tier 1 Securities as if the Settlement Shares had been issued and delivered to the Settlement Share Depository and, in which case, where the context so admits, references in the First Supplemental Indenture and in this Security to the issue and delivery of Settlement Shares to the Settlement Share Depository shall be construed accordingly and apply mutatis mutandis.

 

 

 

  

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The procedures set forth in this Security and Section 2.14 of the First Supplemental Indenture are subject to change to reflect changes in DTC practices, and the Company may make changes to the procedures set forth in this Section 2.14 to the extent reasonably necessary, in the opinion of the Company, to reflect such changes in DTC practices. Any such changes shall be subject to the provisions of Section 8.01 of the First Supplemental Indenture.

 

Notwithstanding anything to the contrary contained in the Indenture or this Security, once the Company has delivered a Conversion Trigger Notice following the occurrence of a Trigger Event, (i) subject to the right of Holders and Beneficial Owners pursuant to Section 4.03 in the event of a failure by the Company to issue and deliver any Settlement Shares to the Settlement Share Depository on the Conversion Date, the Indenture shall impose no duties upon the Trustee whatsoever with regard to an Automatic Conversion upon a Trigger Event and the Holders and Beneficial Owners shall have no rights whatsoever under the Indenture or the Additional Tier 1 Securities to instruct the Trustee to take any action whatsoever, and (ii) as of the date of the Conversion Trigger Notice, except for any indemnity and/or security provided by any Holder or by any Beneficial Owner in such direction or related to such direction, any direction previously given to the Trustee by any Holders or by any Beneficial Owners shall cease automatically and shall be null and void and of no further effect; except in each case of (i) and (ii) of this paragraph, with respect to any rights of Holders or Beneficial Owners with respect to any payments under the Additional Tier 1 Securities that were unconditionally due and payable prior to the date of the Conversion Trigger Notice or unless the Trustee is instructed in writing by the Company to act otherwise.

 

All authority conferred or agreed to be conferred by each Holder and Beneficial Owner pursuant to this Security, including the consents given by such Holder and Beneficial Owner, shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of such Holder and Beneficial Owner.

 

The Trustee shall not be liable with respect to (i) the calculation or accuracy of the CET1 Ratio in connection with the occurrence of a Trigger Event and the timing of such Trigger Event, (ii) the failure of the Company to post or deliver the underlying CET1 Ratio calculations of a Trigger Event to DTC, the Holders or the Beneficial Owners, (iii) any aspect of the Company’s decision to deliver a Conversion Trigger Notice or the related Automatic Conversion or (iv) the adequacy of the disclosure of these provisions in the Prospectus or any other offering material in respect of the Additional Tier 1 Securities or for the direct or indirect consequences thereof, or (v) any other requirement of the Company contained herein related to a Trigger Event or the Automatic Conversion.

 

Following the issuance of the Settlement Shares to the  Settlement Share Depository (or to the relevant recipient in accordance with the terms of the Additional Tier 1 Securities, as applicable) on the Conversion Date, this Security shall remain in existence until the applicable Cancellation Date for the sole purpose of evidencing the Holders’ and Beneficial Owners’ right to receive Settlement Shares, ADSs or Alternative 

 

 

  

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Consideration, as the case may be, from the  Settlement Share Depository (or such other relevant recipient, as applicable).

 

The Holders and the Beneficial Owners shall not at any time have the option to convert the Additional Tier 1 Securities into Settlement Shares.

 

The occurrence of the Automatic Conversion shall not constitute an Enforcement Event.

 

Notwithstanding any other provision herein, by its acquisition of the Additional Tier 1 Securities, each Holder and each Beneficial Owner shall be deemed to have (i) agreed to all of the terms and conditions of the Additional Tier 1 Securities, including, without limitation, to those related to (x) Automatic Conversion of its Additional Tier 1 Securities following a Trigger Event and (y) the appointment of the Settlement Share Depository, the issuance of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient in accordance with the terms of this First Supplemental Indenture or the Additional Tier 1 Securities) and the potential sale of the Settlement Shares pursuant to a Settlement Shares Offer and acknowledged that such events in (x) and (y) may occur without any further action on the part of such Holders or Beneficial Owners or the Trustee, (ii) agreed that effective upon, and following, the occurrence of the Automatic Conversion, no amount shall be due and payable to the Holders or the Beneficial Owners under the Additional Tier 1 Securities and the liability of the Company to pay any such amounts (including the principal amount of, or any interest in respect of, the Additional Tier 1 Securities) shall be automatically released, and the Holders and the Beneficial Owners shall not have the right to give any direction to the Trustee with respect to the Trigger Event and any related Automatic Conversion and (iii) waived, to the extent permitted by the Trust Indenture Act, any claim against the Trustee arising out of its acceptance of its trusteeship under, and the performance of its duties, powers and rights in respect of, the Indenture and in connection with the Additional Tier 1 Securities, including, without limitation, claims related to or arising out of or in connection with a Trigger Event and/or any Automatic Conversion, and (iv) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Additional Tier 1 Securities to take any and all necessary action, if required, to implement the Automatic Conversion without any further action or direction on the part of such Holder or Beneficial Owner or the Trustee.

 

The Conversion Price shall be subject to adjustment as provided in Article III of the First Supplemental Indenture.

 

Within ten (10) Business Days following the Conversion Date, the Company may, in its sole and absolute discretion, elect that the Settlement Share Depository (or an agent on its behalf) make an offer of, in the Company’s sole and absolute discretion, all or some of the Settlement Shares to, at the Company’s sole and absolute discretion, all or some of the Shareholders upon Automatic Conversion, such offer to be at a cash price per Settlement Share that will be no less than the Conversion Price (translated from U.S. dollars into pounds sterling at the then-prevailing rate as determined by the Company in 

 

 

 

  

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its sole discretion), subject as provided in Section 16 of the First Supplemental Indenture (the “Settlement Shares Offer”).

 

If the Company elects, in its sole and absolute discretion, that a Settlement Shares Offer be conducted by the Settlement Share Depository, each Holder or Beneficial Owner, by its acquisition of the Additional Tier 1 Securities, shall be deemed to have: (i) irrevocably consented to any Settlement Shares Offer and, notwithstanding that such Settlement Shares are held by the Settlement Share Depository on behalf of Holders and Beneficial Owners, to the Settlement Share Depository’s using the Settlement Shares delivered to it to settle any Settlement Shares Offer in accordance with the terms of the Additional Tier 1 Securities, (ii) irrevocably consented to the transfer of the beneficial interest it holds in the Settlement Shares delivered upon Automatic Conversion to the Settlement Share Depository or to one or more purchasers identified by the Settlement Share Depository in connection with the Settlement Shares Offer in accordance with the terms of the Additional Tier 1 Securities, (iii) irrevocably agreed that the Company and the Settlement Share Depository may take any and all actions necessary to conduct the Settlement Shares Offer in accordance with the terms of the Additional Tier 1 Securities, and (iv) irrevocably agreed that none of the Company, the Trustee or the Settlement Share Depository shall, to the extent permitted by applicable law, incur any liability to the Holders or Beneficial Owners in respect of the Settlement Shares Offer (except for the obligations of the Settlement Share Depository in respect of the Holders’ and Beneficial Owners’ entitlement to, and subsequent delivery of, any Alternative Consideration).

 

Each Holder and Beneficial Owner of the Additional Tier 1 Securities acknowledges, agrees to be bound by and consents to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority that may result in the cancellation of all, or a portion, of the principal amount of, or interest on, the Additional Tier 1 Securities and/or the conversion of all, or a portion of, the principal amount of, or interest on, the Additional Tier 1 Securities into (a) Ordinary Shares or (b) other securities or obligations of the Company or another person, including by means of a variation to the terms of the Additional Tier 1 Securities, in each case to give effect to the exercise by the Relevant UK Resolution Authority of such UK Bail-in Power. References to principal and interest shall include payments of principal and interest that have become due and payable, but which have not been paid prior to the exercise of any UK Bail-in Power. Each Holder and Beneficial Owner further acknowledges and agrees that the rights of Holders and Beneficial Owners of the Additional Tier 1 Securities are subject to, and will be varied, if necessary, solely so as to give effect to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority.

 

By its acquisition of the Additional Tier 1 Securities, each Holder and Beneficial Owner (i) acknowledges and agrees that no exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities or any cancellation or deemed cancellation of interest pursuant to the First Supplemental Indenture and the terms of this Security shall give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the U.S. Trust Indenture Act of 1939, as amended, (ii) to the extent permitted by the 

 

 

 

  

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Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities, (iii) acknowledges and agrees that, (a) upon the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority, the Trustee shall not be required to take any further directions from Holders or Beneficial Owners of the Additional Tier 1 Securities under Section 5.12 of the Capital Securities Indenture and (b) the Indenture shall impose no duties upon the Trustee whatsoever with respect to the exercise of any UK Bail-in Power by the Relevant UK Resolution Authority. Notwithstanding the foregoing in (iii), if, following the completion of the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority, the Additional Tier 1 Securities remain outstanding, (for example, if the exercise of the UK Bail-in Power results in only a partial write-down of the principal of the Additional Tier 1 Securities) then the Trustee’s duties under the Indenture shall remain applicable with respect to the Additional Tier 1 Securities following such completion to the extent that the Company and the Trustee agree pursuant to a supplemental indenture, unless the Company and the Trustee agree that a supplemental indenture is not necessary, and (iv) shall be deemed to have (a) consented to the exercise of any UK Bail-in Power as it may be imposed without any prior notice by the Relevant UK Resolution Authority of its decision to exercise such power with respect to the Additional Tier 1 Securities and (b) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Securities to take any and all necessary action, if required, to implement the exercise of any UK Bail-in Power with respect to the Additional Tier 1 Securities as it may be imposed, without any further action or direction on the part of such Holder and such Beneficial Owner or the Trustee.

 

Each Holder and Beneficial Owner that acquires its Securities in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Additional Tier 1 Securities that acquire the Additional Tier 1 Securities upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Additional Tier 1 Securities, including in relation to interest cancellation, Automatic Conversion, the Settlement Shares Offer, the UK Bail-in Power, the write-down in the event of a Non-Qualifying Relevant Event and the limitations on remedies specified in this Security and Section 4.04 of the First Supplemental Indenture.

 

Upon the exercise of the UK Bail-in Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the UK Bail-in Power for purposes of notifying Holders and Beneficial Owners of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.

 

The Company’s obligations to indemnify the Trustee in accordance with Section 6.07 of the Capital Securities Indenture shall survive any exercise of the UK Bail-in 

 

 

 

  

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Power by the Relevant UK Resolution Authority with respect to the Additional Tier 1 Securities and any Automatic Conversion.

 

The exercise of the UK Bail-in Power by the Relevant U. K. Resolution Authority with respect to the Additional Tier 1 Securities shall not constitute an Enforcement Event.

 

A “Winding-up or Administration Event” shall result if (i) an order is made, or an effective resolution is passed, for the winding-up of the Company  (except in each such case, a solvent winding-up solely for the purposes of a reorganization, reconstruction or amalgamation of the Company or the substitution in place of the Company of a successor in business of the Company, the terms of which (i) have previously been approved in writing by Holders of not less than 2/3 (two thirds) in aggregate principal amount of the Additional Tier 1 Securities and (ii) do not provide that the Additional Tier 1 Securities shall thereby become redeemable or repayable in accordance with their terms); or (ii) an administrator of the Company is appointed and such administrator declares, or gives notice that it intends to declare and distribute a dividend.

 

If a Winding-Up or Administration Event occurs before the occurrence of a Trigger Event, subject to the subordination provisions of Article 5 of the First Supplemental Indenture, the principal amount of the Additional Tier 1 Securities shall become immediately due and payable, without the need of any further action on the part of the Trustee, the Holders or any other Person, including the declaration by the Trustee, the Holders or any other Person that the principal amount of the Additional Tier 1 Securities has become immediately due and payable.

 

Subject to Section 2.11 of the First Supplemental Indenture, if the Company fails to pay any amount of principal due in respect of the Additional Tier 1 Securities and such non-payment is not remedied within a period of seven (7) calendar days or more after the date on which such payment is due, (a “Non-Payment Event”), the Trustee may, on behalf of the Holders and Beneficial Owners, at its discretion, or shall at the direction of Holders of 25% of the aggregate principal amount of outstanding Additional Tier 1 Securities, subject to any applicable laws, institute proceedings for the winding-up of the Company. In the event of a winding-up or liquidation of the Company (whether or not instituted by the Trustee) the Trustee may prove the claims of the Holders, Beneficial Owners and the Trustee in the winding-up proceeding of the Company and/or claim in the liquidation of the Company, such claims as set out in Sections 5.01(c) and 5.01(d) of the First Supplemental Indenture. For the avoidance of doubt, the Trustee may not declare the principal amount of any outstanding Additional Tier 1 Securities to be due and payable and may not pursue any other legal remedy, including a judicial proceeding for the collection of the sums due and unpaid on the Additional Tier 1 Securities.

 

In the event of a breach of any term, obligation or condition binding upon the Company under the Additional Tier 1 Securities or the Indenture (other than any payment obligation of the Company under or arising from the Additional Tier 1 Securities or the Indenture, including payment of any principal or interest) (such obligation, a “Performance Obligation”), the Trustee may without further notice institute such proceedings against the Company as it may deem fit, provided that the Company shall 

 

 

 

  

15

  

 

 

not by virtue of the institution of any such proceedings be obliged to pay any sum or sums, in cash or otherwise (including damages) earlier than the same would otherwise have been payable. For the avoidance of doubt, any breach by the Company of any Performance Obligation shall not confer upon the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Additional Tier 1 Securities any claim for damages and, in the event of such a breach of a Performance Obligation, the sole and exclusive remedy that the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Additional Tier 1 Securities may seek under the Additional Tier 1 Securities and the Indenture is specific performance under the laws of the State of New York. By its acquisition of the Additional Tier 1 Securities, each Holder and Beneficial Owner of the Additional Tier 1 Securities acknowledges and agrees (i) that such Holder and Beneficial Owner shall not seek, and shall not direct the Trustee (acting on their behalf) to seek, any claim for damages against the Company in respect of any breach by the Company of a Performance Obligation, and (ii) that the sole and exclusive remedy that such Holder and Beneficial Owner and/or the Trustee (acting on their behalf) may seek under the Additional Tier 1 Securities and the Indenture for a breach by the Company of a Performance Obligation is specific performance under the laws of the State of New York.

 

Other than the limited remedies specified in this Security and Article IV of the First Supplemental Indenture, and subject to the second paragraph below, no remedy against the Company shall be available to the Trustee (acting on behalf of the Holders) and to the Holders and Beneficial Owners, whether for the recovery of amounts owing in respect of such Securities or under the Indenture, or in respect of any breach by the Company of any of the Company’s obligations under or in respect of the terms of such Securities or under the Indenture in relation thereto; provided, however, that the Company’s obligations to the Trustee under, and the Trustee’s lien provided for in, Section 6.07 of the Capital Securities Indenture and the Trustee’s rights to have money collected applied first to pay amounts due to it under such Section pursuant to Section 5.06 of the Capital Securities Indenture expressly survive any Enforcement Event and are not subject to the subordination provisions of Section 5.01 of the First Supplemental Indenture.

 

For purposes of the Capital Securities Indenture, “Event of Default” shall mean an “Enforcement Event” as defined in this First Supplemental Indenture, except that the term “Event of Default” as used in Article 8 of the Capital Securities Indenture shall mean “Winding-Up or Administration Event.”

 

Notwithstanding the limitations on remedies specified in this Security and under Article IV of the First Supplemental Indenture, (1) the Trustee shall have such powers as are required to be authorized to it under the Trust Indenture Act in respect of the rights of the Holders and Beneficial Owners of the Additional Tier 1 Securities under the provisions of the Indenture, and (2) nothing shall impair the right of a Holder or Beneficial Owner of the Additional Tier 1 Securities under the Trust Indenture Act, absent such Holder’s or Beneficial Owner’s consent, to sue for any payment due but unpaid with respect to the Additional Tier 1 Securities; provided that, in the case of (1) and (2) above, any payments in respect of, or arising from, the Additional Tier 1

 

 

 

  

16

  

 

 

 Securities, including any payments or amounts resulting or arising from the enforcement of any rights under the Trust Indenture Act in respect of the Additional Tier 1 Securities, shall be subject to the subordination provisions set forth in Section 5.01 of the First Supplemental Indenture.

 

In furtherance of Section 6.01 of the Capital Securities Indenture:

 

(i)  For purposes of Sections 315(a) and 315(c) of the Trust Indenture Act, the term “default” is hereby defined to mean an Enforcement Event which has occurred and is continuing.

 

(ii) Notwithstanding anything contained in the Capital Securities Indenture to the contrary, the duties and responsibilities of the Trustee under this Indenture shall be subject to the protections, exculpations and limitations on liability afforded to an indenture trustee under the provisions of the Trust Indenture Act.

 

With respect to the Additional Tier 1 Securities only, Section 12.01(a) of the Capital Securities Indenture shall be amended and restated in its entirety by Section 5.01 of the Capital Securities Indenture. References in the Capital Securities Indenture to Section 12.01(a) thereof shall be to Section 5.01 of the Capital Securities Indenture.  For the avoidance of doubt, no provision of Article 12 of the Capital Securities Indenture other than Section 12.01(a) shall be amended by this First Supplemental Indenture.

 

The Additional Tier 1 Securities shall constitute the Company’s direct, unsecured and subordinated obligations, ranking equally without any preference among themselves. The rights and claims of the Holders and Beneficial Owners of the Additional Tier 1 Securities in respect of or arising from the Additional Tier 1 Securities shall be subordinated to the claims of Senior Creditors.

 

If a Winding-up or Administration Event occurs prior to the date on which a Trigger Event occurs, there shall be payable by the Company in respect of each Additional Tier 1 Security (in lieu of any other payment by the Company) such amount, if any, as would have been payable to the Holder or Beneficial Owner if, throughout such Winding-up or Administration Event, such Holder or Beneficial Owner were the holder of one of a class of preference shares (“Notional Preference Shares”) in the capital of the Company having an equal right to a return of assets in the Winding-up or Administration Event to, and so ranking pari passu with, the holders of the most senior class or classes of issued preference shares in the capital of LBG from time to time (if any) and which have a preferential right to a return of assets in the Winding-up or Administration Event over, and so rank ahead of, the holders of all other classes of issued shares for the time being in the capital of the Company but ranking junior to the claims of Senior Creditors and on the assumption that the amount that such holder was entitled to receive in respect of each Notional Preference Share is an amount equal to the principal amount of, the Additional Tier 1 Securities together with, to the extent not otherwise included within the foregoing, any other amounts attributable to the Additional Tier 1 Securities, including any Accrued Interest and any damages awarded for breach of any 

 

 

 

  

17

  

 

 

obligations, regardless of whether the Solvency Condition is satisfied on the date upon which the same would otherwise be due and payable.

 

If a Winding-up or Administration Event occurs at any time on or following the date on which a Trigger Event occurs but the Settlement Shares to be issued and delivered to the Settlement Share Depository on the Conversion Date have not been so delivered, there shall be payable by the Company in respect of each Additional Tier 1 Security (in lieu of any other payment by the Company) such amount, if any, as would have been payable to the Holder or Beneficial Owner of such Additional Tier 1 Security in a Winding-Up or Administration Event if the Conversion Date in respect of the Automatic Conversion had occurred immediately before the occurrence of a Winding-up or Administration Event (ignoring for this purpose the Company’s right to make an election for a Settlement Shares Offer to be effected pursuant to Section 2.16 of the First Supplemental Indenture, regardless of whether the Solvency Condition is satisfied on such date.

 

Other than in the event of a Winding-up or Administration Event of the Company, payments in respect of or arising under the Additional Tier 1 Securities (including any damages for breach of any obligations thereunder) shall, in addition to the cancellation of any interest payment pursuant to the terms of the First Supplemental Indenture or this Security, be conditional (i) upon the Company’s being solvent at the time of payment by the Company, and (ii) in that no principal, interest or other amount payable shall be due and payable in respect of or arising from the Additional Tier 1 Securities except to the extent that the Company could make such payment and still be solvent immediately thereafter (such condition referred to herein as the “Solvency Condition”).

 

For purposes of determining whether the Solvency Condition is met, the Company shall be considered to be solvent at a particular point in time if (i) it is able to pay its debts owed to Senior Creditors as they fall due and (ii) its Assets are at least equal to its Liabilities.

 

Subject to applicable law, no Holder of Securities may exercise, claim or plead any right of set-off, compensation or retention in respect of any amount owed to it by the Company arising under, or in respect of, or in connection with, the Additional Tier 1 Securities and each Holder of Securities shall, by virtue of its holding of any Securities, be deemed to have waived all such rights of set-off, compensation or retention.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Additional Tier 1 Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than 2/3 (two thirds) in aggregate majority in principal amount of the Additional Tier 1 Securities then outstanding of each series to be affected.

 

Holders of not less than a majority in aggregate principal amount of the Outstanding Securities may on behalf of the Holders of all of the Additional Tier 1 

 

 

 

  

18

  

 

 

Securities waive any past Enforcement Event that results from a breach by the Company of a Performance Obligation. Holders of a majority of the aggregate principal amount of the outstanding Additional Tier 1 Securities shall not be entitled to waive any past default that results from a Winding-Up or Administration Event or a Non-Payment Event.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Enforcement Event with respect to the Additional Tier 1 Securities of this series specifying such Enforcement Event, the Holders of not less than 25% in aggregate principal amount of the Additional Tier 1 Securities of this series then outstanding shall have made written request to the Trustee to institute proceedings in respect of such Enforcement Event as Trustee and offered to the Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request, the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding, and no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the outstanding aggregate principal amount of Additional Tier 1 Securities of this series.

 

This Security, and any other Securities of this series and of like tenor, are issuable only in registered form without coupons in initial denominations of $200,000 and increments of $1,000 thereafter. The denominations cannot be changed without the consent of the Trustee. The denomination of each interest in this Security shall be the “Tradable Amount” of such book-entry interest. Prior to the Automatic Conversion, the aggregate Tradable Amount of the interests in this Security shall equal this Security’s outstanding principal amount. Following the Automatic Conversion, the principal amount of this Security shall equal zero, but the Tradable Amount of the book-entry interests in this Security shall remain unchanged as a result of the Automatic Conversion.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

This Security shall be governed by and construed in accordance with the laws of the State of New York, except as otherwise provided for (i) pursuant to Section 1.12 of the Capital Securities Indenture and Section 9.07 of the First Supplemental Indenture, the subordination provisions referred to herein and in Section 5.01 of the First Supplemental Indenture (which amends in its entirety Section 12.01(a) of the Capital Securities Indenture), which are governed by, and construed in accordance with, Scots law (other than the Trustee’s own rights, duties or immunities under Article 12 of the Capital Securities Indenture, as amended by Section 5.01 of the First Supplemental Indenture, or otherwise), and (ii) the authorization and execution by the Company of this Security shall be governed by (in addition to the 

 

 

 

  

19

  

 

 

laws of the State of New York relevant to execution) the jurisdiction of the Company.

 

 

 

 

 

  

20

  

 

Exhibit B

 

Form of Conversion Trigger Notice1

 

NOTICE TO DTC AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

 

[Lloyds Letterhead]

 

	 	
To:

	The Depository Trust Company 

55 Water Street, 25th Floor 

New York, NY 10041-0099 

Attn: Mandatory Reorganization Department 

Fax: +1 (212) 855-5488 

Email: mandatoryreorgannouncements@dtcc.com

 

	 	
Cc:

	
The Bank of New York Mellon

One Canada Square

London E14 5AL

United Kingdom

	
The Bank of New York Mellon

One Wall Street

New York, NY 10286

United States of America

	 	 	Attn: 

Email:

Fax:

Tel:

	
[        ]

[        ]

[        ]

[        ]

	Attn: 

Email:

Fax:

Tel:

	
[        ]

[        ]

[        ]

[        ]

 

Re: Lloyds Banking Group plc $[    ] Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities  (CUSIP: [        ], ISIN: [       ]) – Notice to DTC, Holders and Beneficial Owners of the Occurrence of a Trigger Event

 

This notice is in relation to Lloyds Banking Group plc’s (the “Company”) $[    ] Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2014 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March 6, 2014, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated [  ], 2014, between the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus dated March 6, 2014. Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

The Company hereby notifies The Depository Trust Company (“DTC”), the Holders and Beneficial Owners of the Additional Tier 1 Securities that a Trigger Event has occurred with respect to the Additional Tier 1 Securities. Such Trigger Event has occurred because the Group’s CET1 Ratio as of [Date], as published by the Company was less than 7.00%.

 

 

 

1 Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes in DTC (or successor clearing system) policies and procedures.

 

 

 

  

21

  

 

 

Upon the occurrence of the Trigger Event, the terms of the Additional Tier 1 Securities provide for the Automatic Conversion of the Additional Tier 1 Securities on the Conversion Date, which is expected to be [date], at the Conversion Price. Upon the Automatic Conversion, all of the Company’s obligations under the Additional Tier 1 Securities shall be irrevocably and automatically released in consideration of the Company’s issuance and delivery of Settlement Shares to the Settlement Share Depository (or other relevant recipient). However, the terms of the Additional Tier 1 Securities provide that the Additional Tier 1 Securities shall remain in existence until the applicable Settlement Date for the sole purpose of evidencing a right to receive Settlement Shares, ADSs or Alternative Consideration, as applicable, from the Settlement Share Depository.

 

Accordingly, the Company hereby instructs DTC to indicate to all participants that payments of principal and interest are no longer payable under the Additional Tier 1 Securities as of the Conversion Date and that the Additional Tier 1 Securities will have no further entitlement to interest or principal as of such date by making a note to that effect in its systems.

 

The Company further requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing notices to holders of securities).

 

Should DTC, any Holder or any Beneficial Owner of the Additional Tier 1 Securities have any inquiries, please contact either the Company at [Telephone, Fax, Email] or [Name], the Settlement Share Depository, at [Telephone, Fax, Email] 2

 

 

 

 

2 Insert contact details of any Settlement Share Depository, or, if LBG has been unable to appoint a Settlement Share Depository, any other details required to set out the issuance and/or delivery procedures in respect of the Settlement Shares, ADSs or any Alternative Consideration as to Holders and Beneficial Owners as LBG shall consider reasonable in the circumstances.

 

 

  

22

  

 

Exhibit C

 

Form of Trigger Event Officer’s Certificate

 

LLOYDS BANKING GROUP PLC

 

Trigger Event Officer’s Certificate

 

This Officer’s Certificate is being delivered in relation to Lloyds Banking Group plc’s (the “Company”) $[    ] Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2014 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March 6, 2014, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as amended and supplemented by the First Supplemental Indenture, dated [  ], 2014, between the Company and the Trustee (together, the “Indenture”).

 

Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

Pursuant to ‎Section 1.02 of the Capital Securities Indenture and ‎Section 2.14(b) of the First Supplemental Indenture, the undersigned, being authorized signatory of the Company and authorized by the Company to give this certificate, hereby certifies as follows:

 

(a)      I have read all of the covenants and conditions in the Indenture, setting forth certain provisions in respect of the occurrence of a Trigger Event, including ‎Section 2.14(b) of the First Supplemental Indenture, and the definitions relating thereto;

 

(b)      [Include a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based][I have reviewed such other documents as I have deemed necessary as a basis for the opinion hereinafter expressed];

 

(c)      I have made such other examinations and investigations as I have deemed necessary to enable me to express an informed opinion as to (i) whether or not such covenants and conditions have been complied with, and (ii) the matters set forth in (d) below; and

 

(d)      In my opinion, such conditions (including all conditions precedent) and covenants have been complied with; and

 

(e)      a Trigger Event has occurred with respect to the Additional Tier 1 Securities. Such Trigger Event has occurred because the Group’s CET1 Ratio as of [Date], as published by the Company, was less than 7.00%.

 

[Concurrently with][Immediately following] the delivery of this Trigger Event Officer’s Certificate, the Company is delivering to The Depository Trust Company (“DTC”) the Conversion Trigger Notice attached hereto as Exhibit A as a notice to DTC 

 

 

 

  

23

  

 

 

and for publication as a notice to Holders and Beneficial Owners in the form set forth in Exhibit B to the First Supplemental Indenture.

 

The Trustee is entitled to conclusively rely on and accept this Trigger Event Officer’s Certificate without any duty whatsoever of further inquiry as sufficient and conclusive evidence of the occurrence of a Trigger Event, and this Trigger Event Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

 

Dated: [•]

 

	  
	  	  
	  	
Name:

	  	
Title:

 

 

 

  

24

  

 

Exhibit D

 

Form of Settlement Shares Offer Notice3

 

NOTICE TO DTC AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

 

[LBG Letterhead]

 

	
To:

	
The Depository Trust Company

55 Water Street, 25th Floor

New York, NY 10041-0099

Attn: Mandatory Reorganization Department

Fax: +1 (212) 855-5488

Email: mandatoryreorgannouncements@dtcc.com

	  

 

	
Cc:

	
The Bank of New York Mellon

One Canada Square

London E14 5AL

United Kingdom

	
The Bank of New York Mellon

One Wall Street

New York, NY 10286

United States of America

	 	Attn: 

Email:

Fax:

Tel:

	
[        ]

[        ]

[        ]

[        ]

	Attn: 

Email:

Fax:

Tel:

	
[        ]

[        ]

[        ]

[        ]

 

Re: Lloyds Banking Group plc $[    ] Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities  (CUSIP: [        ], ISIN: [       ]) – Notice to DTC, Holders and Beneficial Owners –Election to Conduct a Settlement Shares Offer

 

This notice is in relation to Lloyds Banking Group plc’s (the “Company”) $[    ] Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2014 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March 6, 2014, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated [  ], 2014, between the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus dated March 6, 2014 (the “Prospectus”). Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

The Company hereby notifies The Depository Trust Company (“DTC”), the Holders and the Beneficial Owners of the Additional Tier 1 Securities that it has elected 

 

 

 

3 Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes in DTC (or successor clearing system) policies and procedures.

 

 

 

  

25

  

 

 

that the Settlement Share Depository conduct a Settlement Shares Offer. The Settlement Shares Offer Period will extend from the date of this notice until [Date]4.

 

[In addition, the Company hereby notifies DTC, the Holders and the Beneficial Owners of the Additional Tier 1 Securities that the Suspension Date shall be [Date]5. Accordingly, the Company hereby instructs DTC to implement a “chill” on the clearance and settlement of the Additional Tier 1 Securities on the Suspension Date. As described in the Prospectus, Holders and Beneficial Owners will not be able to settle the transfer of any Additional Tier 1 Securities following the Suspension Date, and any sale or other transfer of the Additional Tier 1 Securities that a Holder or Beneficial Owner may have initiated prior to the commencement to the Suspension Date that is scheduled to settle after the Suspension Date will be rejected by DTC and will not be settled within DTC.]6

 

Lloyds Banking Group plc further requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing notices to holders of securities).

 

Should DTC, any Holder or any Beneficial Owner of the Additional Tier 1 Securities have any inquiries, please contact either the Company at [Telephone, Fax, Email] or [Name], the Settlement Share Depository, at [Telephone, Fax, Email] 7

 

 

 

 

 

4 Note: Insert the date that the Settlement Shares Offer expires, which shall be no later than forty (40) business days after the delivery of this Settlement Shares Offer Notice.

 

5 Note: Insert the Suspension Date, which is the date on which DTC shall suspend all clearance and settlement of the Additional Tier 1 Securities.

 

6 Insert information concerning the Suspension Date if such information has not previously been included in the Conversion Trigger Notice.

 

7 Insert contact details of any Settlement Share Depository, or, if LBG has been unable to appoint a Settlement Share Depository, any other details required to set out the issuance and/or delivery procedures in respect of the Settlement Shares, ADSs or any Alternative Consideration as to Holders and Beneficial Owners as LBG shall consider reasonable in the circumstances.

 

 

 

  

26

  

 

Exhibit E

 

Form of Settlement Request Notice8

 

NOTICE TO DTC AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

 

[LBG Letterhead]

 

	
To:

	
The Depository Trust Company

55 Water Street, 25th Floor

New York, NY 10041-0099

Attn: Mandatory Reorganization Department

Fax: +1 (212) 855-5488

Email: mandatoryreorgannouncements@dtcc.com

	  
	 	 	 
	
Cc:

	
The Bank of New York Mellon

One Canada Square

London E14 5AL

United Kingdom

	
The Bank of New York Mellon

One Wall Street

New York, NY 10286

United States of America

	 	Attn: 

Email:

Fax:

Tel:

	
[        ]

[        ]

[        ]

[        ]

	Attn: 

Email:

Fax:

Tel:

	
[        ]

[        ]

[        ]

[        ]

 

Re: Lloyds Banking Group plc $[    ] Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities  (CUSIP: [        ], ISIN: [       ]) – Notice to DTC, Holders and Beneficial Owners –Election to Conduct a Settlement Shares Offer

 

This notice is in relation to Lloyds Banking Group plc’s (the “Company”) $[    ] Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2014 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March 6, 2014, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated [  ], 2014, between the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus dated March 6, 2014 (the “Prospectus”). Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

The Company hereby requests that Holders and Beneficial Owners of the Additional Tier 1 Securities provide notice to [Name of Settlement Share Depository (or other nominee)], as [Settlement Share Depository ]9, with a copy to the Trustee, in the 

 

 

 

8 Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes in DTC (or successor clearing system) policies and procedures.

 

9 Note: If LBG has been unable to appoint a Settlement Share Depository, this should refer to the entity undertaking its functions.

 

 

 

  

27

  

 

 

form provided in Exhibit F to the First Supplemental Indenture before [Date] (the “Notice Cut-off Date”).

 

If a Holder or Beneficial Owner of the Additional Tier 1 Securities properly completes and delivers a Settlement Notice on or before the Notice Cut-off Date, the Settlement Share Depository  shall, in accordance with the terms of the First Supplemental Indenture, deliver to such Holder or Beneficial Owner the relevant Settlement Shares (rounded down to the nearest whole number of Settlement Shares), ADSs or Alternative Consideration, as applicable, two (2) Business Days after the date on which the Settlement Notice is received by the Settlement Share Depository.

 

If a Holder or Beneficial Owner of the Additional Tier 1 Securities fails to properly complete and deliver a Settlement Notice before the Notice Cut-off Date, the Settlement Share Depository shall continue to hold the relevant Settlement Shares or Alternative Consideration.  However, the relevant Securities shall be cancelled on the Final Cancellation Date, which shall be [Date],10 and any Holder or Beneficial Owner delivering a Settlement Notice after the Notice Cut-off Date will have to provide evidence of its entitlement to the relevant Settlement Shares, ADSs or Alternative Consideration, as applicable, satisfactory to the Settlement Share Depository in its sole and absolute discretion in order to receive delivery of such Settlement Shares, ADSs or Alternative Consideration.

 

The Company further requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing notices to holders of securities).

 

Should DTC, any Holder or any Beneficial Owner of the Additional Tier 1 Securities have any inquiries, please contact either the Company at [Telephone, Fax, Email] or [Name], the [Settlement Share Depository], at [Telephone, Fax, Email].

 

 

 

 

10 Note: The Final Cancellation Date may be up to twelve (12) business days following the Notice Cut-Off Date.

 

 

  

28

  

 

Exhibit F

 

Form of Settlement Notice11

NOTICE TO THE [SETTLEMENT SHARES DEPOSITORY AND] DTC

 

	
To:

	
The Depository Trust Company

55 Water Street, 25th Floor

New York, NY 10041-0099

Attn: Mandatory Reorganization Department

Fax: +1 (212) 855-5488

Email: mandatoryreorgannouncements@dtcc.com

	  
	 	 	 
	
Cc:

	
The Bank of New York Mellon

One Canada Square

London E14 5AL

United Kingdom

	
The Bank of New York Mellon

One Wall Street

New York, NY 10286

United States of America

	 	Attn: 

Email:

Fax:

Tel:

	
[        ]

[        ]

[        ]

[        ]

	Attn: 

Email:

Fax:

Tel:

	
[        ]

[        ]

[        ]

[        ]

 

Re: Lloyds Banking Group plc $[    ] Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities  (CUSIP: [        ], ISIN: [       ]) – Notice to DTC, Holders and Beneficial Owners –Election to Conduct a Settlement Shares Offer

 

This notice is in relation to Lloyds Banking Group plc’s (the “Company”) $[    ] Fixed Rate Reset Additional Tier 1 Perpetual Subordinated Contingent Convertible Securities (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2014 (the “Securities”) pursuant to the Base Capital Securities Indenture, dated March 6, 2014, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated [  ], 2014, between the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus dated March 6, 2014 (the “Prospectus”). Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

 

 

 

 

11 Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes in DTC and CREST (or successor clearing system) policies and procedures.

 

 

  

29

  

 

 

INFORMATION OF THE HOLDER OR BENEFICIAL OWNER FOR DELIVERY OF SETTLEMENT SHARES OR ALTERNATIVE CONSIDERATION

 

Surname/Company Name:

 

First name:

 

Name to be entered in the share register of Lloyds Banking Group plc:

 

Tradable Amount of the Additional Tier 1 Securities held on the date hereof:

 

Securities to be delivered:

 

□   Settlement Shares

 

CREST participant ID:

 

CREST member account (if applicable):

 

[Account details of clearing system account]12

 

[Address to which any Settlement Shares should be delivered]13

 

□   American Depositary Shares

 

Registered account in the Company’s American Depositary Share facility:

 

Cash account details (if applicable):

 

YOU MUST DELIVER THE SETTLEMENT NOTICE TO THE SETTLEMENT SHARE DEPOSITORY AND THE TRUSTEE VIA DTC BEFORE [DATE].

 

If you fail to properly complete and deliver the Settlement Notice on or before the Notice Cut-off Date, the Settlement Share Depository shall continue to hold your Settlement Shares or Alternative Consideration. However, your Additional Tier 1 Securities shall be cancelled on the Final Cancellation Date, which shall be [Date],14 and you will have to provide evidence of your entitlement to the relevant Settlement Shares, ADSs or Alternative Consideration, as applicable, satisfactory to the Settlement Share 

 

 

12 Note: To be included if the Settlement Shares will be delivered through a clearing system account other than CREST.

 

13 Note: To be included if the Settlement Shares are not a participating security in CREST or any another clearing system.

 

14 Note: The Final Cancellation Date may be up to twelve (12) Business Days following the Notice Cut-off Date.

 

 

 

  

30

  

 

 

 

Depository in its sole and absolute discretion in order to receive delivery of such Settlement Shares, ADSs or Alternative Consideration.

 

 

 

 

 

 

 

 

 

31Exhibit 10.1

	  
	
Dated 1 December 2009

	
 

 

 

LBG CAPITAL NO. 1 plc

 

and

 

LBG CAPITAL NO. 2 plc

as Issuers

 

LLOYDS BANKING GROUP plc

 

and

 

LLOYDS TSB BANK plc

as Guarantors

 

and

 

BNY CORPORATE TRUSTEE SERVICES LIMITED

as Trustee

 

 

 

 

TRUST DEED

 

 

 

 

constituting the

Dated ECNs issued by LBG Capital No. 1 plc unconditionally and irrevocably guaranteed by Lloyds Banking Group plc

Dated ECNs issued by LBG Capital No. 2 plc unconditionally and irrevocably guaranteed by Lloyds TSB Bank plc

Dated ECNs issued by LBG Capital No. 2 plc unconditionally and irrevocably guaranteed by Lloyds Banking Group plc and Lloyds TSB Bank plc

	
 

	
  

 

 

 

 

 

	
Ref: KJT/APG/MPT

	  
	
Linklaters LLP

 

 

 

 

  

  

  

 

Table of Contents

 

 

	Contents 	
Page

	 	 	 
	
1

	
Interpretation

	
1

	 	 	 
	
2

	
Issue of ECNs and Covenant to pay

	
6

	 	 	 
	
3

	
Form of the ECNs

	
9

	 	 	 
	
4

	
Stamp Duties and Taxes

	
11

	 	 	 
	
5

	
Guarantee and Indemnity

	
12

	 	 	 
	
6

	
Set-Off

	
15

	 	 	 
	
7

	
Application of moneys received by the Trustee

	
16

	 	 	 
	
8

	
Conversion

	
17

	 	 	 
	
9

	
Covenant of Compliance

	
17

	 	 	 
	
10

	
Covenants

	
17

	 	 	 
	
11

	
Remuneration and Indemnification of the Trustee

	
19

	 	 	 
	
12

	
Provisions supplemental to the Trustee Act 1925 and the Trustee Act 2000

	
21

	 	 	 
	
13

	
Trustee Liability

	
25

	 	 	 
	
14

	
Waiver

	
25

	 	 	 
	
15

	
Trustee not precluded from entering into contracts

	
25

	 	 	 
	
16

	
Modification and Substitution

	
25

	 	 	 
	
17

	
Appointment, Retirement and Removal of the Trustee

	
27

	 	 	 
	
18

	
ECNs held in Clearing Systems and Couponholders

	
28

	 	 	 
	
19

	
Currency Indemnity

	
28

	 	 	 
	
20

	
Communications

	
29

	 	 	 
	
21

	
Further Issues

	
30

	 	 	 
	
22

	
Governing Law

	
31

 

	
Schedule 1 Part A Form of Temporary Global Note

	
34

	 	 
	
Schedule 1 Part B Form of Permanent Global Note

	
41

	 	 
	
Schedule 1 Part C Form of Regulation S Global Certificate

	
47

	 	 
	
Schedule 1 Part D Form of Unrestricted Global Certificate

	
53

	 	 

 

 

  

  

  

 

	
Schedule 1 Part E Form of Restricted Global Certificate

	
60

	 	 
	
Schedule 2 Part A Form of Bearer ECN

	
68

	 	 
	
Schedule 2 Part B Form of Certificate

	
71

	 	 
	
Schedule 2 Part C Form of Coupon

	
76

	 	 
	
Schedule 2 Part D Form of Talon

	
78

	 	 
	
Schedule 3 Provisions for Meetings of ECN Securityholders

	
80

	 	 
	
Schedule 4 Terms and Conditions of the ECNs

	
87

	 	 
	
Schedule 5 Pricing Schedules

	
111

 

 

 

 

 

 

 

 

 

 

  

  

  

 

This Trust Deed is made on 1 December 2009 between:

 

	
(1)

	
LBG CAPITAL NO. 1 plc (“LBG Capital No. 1”) and LBG CAPITAL NO. 2 plc (“LBG Capital No. 2”) (each an “Issuer” and together, the “Issuers”);

 

	
(2)

	
LLOYDS BANKING GROUP plc (“LBG”) and LLOYDS TSB BANK plc (“LTSB”) (each, when specified as a guarantor in the relevant Pricing Schedule, a “Guarantor” and together, the “Guarantors”); and

 

	
(3)

	
BNY CORPORATE TRUSTEE SERVICES LIMITED (the “Trustee”, which expression, where the context so admits, includes any other trustee for the time being of this Trust Deed).

 

Whereas:

 

	
(A)

	
Each of LBG Capital No. 1 and LBG Capital No. 2 proposes to issue dated enhanced capital notes to be constituted by this Trust Deed (“ECNs”). Either or both of LBG and/or LTSB, as is specified as the relevant Guarantor in the relevant Pricing Schedule has authorised the giving of a subordinated Guarantee in respect of the ECNs. In connection with Conversion of the ECNs, LBG has entered into a deed poll (the “Deed Poll”) dated the date hereof. The ECNs are to be constituted under this Trust Deed.

 

	
(B)

	
The Trustee has agreed to act as trustee of this Trust Deed on the following terms and conditions.

 

This deed witnesses and it is declared as follows:

 

	
1

	
Interpretation

 

	
1.1

	
Definitions: Unless otherwise defined in this Trust Deed and unless the context otherwise requires, terms used in this Trust Deed shall have the meanings given to them in the Conditions or the Deed Poll, as applicable, and the following terms shall have the following meanings:

 

“Agency Agreement” means the agency agreement relating to the issue of ECNs dated the date of this Trust Deed, between the Issuers, the Guarantors, BNY Corporate Trustee Services Limited, as Trustee, The Bank of New York Mellon, London Branch as initial Principal Paying and Conversion Agent and the other agents mentioned in it as shall be amended and/or supplemented from time to time

 

“Agents” means the Principal Paying and Conversion Agent, the other Paying and Conversion Agents, the Calculation Agent, the Registrar, the other Transfer Agents or any of them as the context requires

 

“Appointee” means any agent, delegate, nominee or custodian appointed by the Trustee under this Trust Deed

 

“Auditors” means the independent auditors for the time being of the relevant Issuer or Guarantor, as the case may be, or, in the event of their being unable or unwilling promptly to carry out any action requested of them pursuant to the provisions of this Trust Deed, such other firm of accountants or such financial advisers of recognised standing as may be nominated by the relevant Issuer or Guarantor, as the case may be, and approved by the Trustee or, failing such nomination and/or approval, nominated by the Trustee for the purposes of this Trust Deed

 

 

 

  

1

  

 

 

“Bearer ECN” means an ECN in bearer form, and includes any replacement Bearer ECN issued pursuant to the Conditions and any temporary Global Note or permanent Global Note

 

“Calculation Agent” means any person named as such in the Conditions or any Successor Calculation Agent

 

“Certificate” means a registered certificate representing one or more Registered ECNs of the same Series and, save as provided in the Conditions, comprising the entire holding by an ECN Securityholder of his Registered ECNs of that Series and, save in the case of Global Certificates, being substantially in the form set out in Schedule 2

 

“Clearstream, Luxembourg” means Clearstream Banking, société anonyme

 

“Conditions” means in respect of the ECNs of each Series, the terms and conditions applicable thereto which shall be substantially in the form set out in Schedule 4 as modified, with respect to any ECNs represented by a Global Certificate or a Global Note, by the provisions of such Global Certificate or Global Note, shall incorporate any additional provisions forming part of such terms and conditions set out in the relevant Pricing Schedule relating to the ECNs of that Series and shall be endorsed on the Definitive Notes subject to amendment and completion as referred to in the first paragraph of Schedule 4 and any reference to a particularly numbered Condition shall be construed accordingly

 

“Contractual Currency” means, in relation to any payment obligation in respect of any ECN, the currency in which that payment obligation is expressed and, in relation to Clause 11, pounds sterling or such other currency as may be agreed between the relevant Issuer and the Trustee from time to time

 

“Coupons” means the bearer coupons relating to interest bearing Bearer ECNs or, as the context may require, a specific number of them and includes any replacement Coupons issued pursuant to the Conditions

 

“Definitive Note” means a Bearer ECN in definitive form having, where appropriate, Coupons, and/or a Talon attached on issue and, unless the context requires otherwise, means a Certificate (other than a Global Certificate) and includes any replacement ECN or Certificate issued pursuant to the Conditions

 

“EEA Regulated Market” means a market which complies with the requirements set out in Article 4.1(14) of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments

 

“Euroclear” means Euroclear Bank S.A./N.V.

 

“Event of Default” means any of the conditions, events or acts provided in Condition 12(a) to be events upon the happening of which the ECNs would, subject only to notice by the Trustee as therein provided, become immediately due and repayable

 

“Exchange Act” means the United States Securities Exchange Act of 1934

 

“Extraordinary Resolution” has the meaning set out in Schedule 3

 

“FSMA” means the Financial Services and Markets Act 2000

 

“Global Certificate” means either a Regulation S Global Certificate, an Unrestricted Global Certificate or a Restricted Global Certificate, or both an Unrestricted Global Certificate and a Restricted Global Certificate, as the context may require

 

  

2

  

 

“Global Note” means a temporary Global Note and/or, as the context may require, a permanent Global Note

 

“Guarantee” means the guarantee and indemnity of each of the Guarantors in Clause 5

 

“Guarantor” means either or both of LBG and/or LTSB, as is specified as the Guarantor or the Guarantors in the relevant Pricing Schedule

 

“Guarantor Senior Creditors” has the meaning set out in Condition 19

 

“holder” in relation to an ECN, Coupon or Talon, and “Couponholder” and “ECN Securityholder” have the meanings given to them in the Conditions

 

“Issuer Senior Creditors” has the meaning set out in Condition 19

 

“Liability” means any loss, damage, cost, charge, claim, demand, expense, judgment, action, proceeding or other liability whatsoever (including, without limitation, in respect of taxes, duties, levies, imposts and other charges) and including any irrecoverable value added tax or similar tax charged or chargeable in respect thereof and legal fees and expenses on a full indemnity basis

 

“Market” means the EEA Regulated Market of the London Stock Exchange

 

“outstanding” means, in relation to the ECNs, all the ECNs issued except (a) those that have been converted or redeemed in accordance with the Conditions, (b) those in respect of which the date for conversion or redemption has occurred and the Ordinary Share Sale Proceeds or redemption moneys (including all interest accrued on such ECNs to the date for such conversion or redemption and any interest payable after such date) have been duly paid to the Trustee or to the Principal Paying and Conversion Agent and remain available for payment against presentation and surrender of ECNs, Certificates, and/or Coupons, as the case may be, (c) those that have become void or in respect of which claims have become prescribed, (d) those that have been purchased and cancelled as provided in the Conditions, (e) those mutilated or defaced Bearer ECNs that have been surrendered in exchange for replacement Bearer ECNs, (f) (for the purpose only of determining how many ECNs are outstanding and without prejudice to their status for any other purpose) those Bearer ECNs alleged to have been lost, stolen or destroyed and in respect of which replacement ECNs have been issued, and (g) any temporary Global Note to the extent that it shall have been exchanged for a permanent Global Note and any Global Note to the extent that it shall have been exchanged for one or more Definitive Notes, in either case pursuant to its provisions provided that for the purposes of (1) ascertaining the right to attend and vote at any meeting of the ECN Securityholders, (2) the determination of how many ECNs are outstanding for the purposes of Conditions 12 and 13 and Schedule 3 and (3) the exercise of any discretion, power or authority that the Trustee is required, expressly or impliedly, to exercise in or by reference to the interests of the ECN Securityholders, those ECNs that are beneficially held by or on behalf of the relevant Issuer, LBG or any of LBG’s subsidiaries and not cancelled shall (unless no longer so held) be deemed not to remain outstanding

 

“Paying and Conversion Agents” means the persons (including the Principal Paying and Conversion Agent) referred to as such in the Conditions or any Successor Paying and Conversion Agents in each case at their respective specified offices

 

  

3

  

 

“permanent Global Note” means a Global Note representing Bearer ECNs of the same Series, either on issue or upon exchange of a temporary Global Note, or part of it, and which shall be substantially in the form set out in Schedule 1 Part B

 

“Potential Event of Default” means an event or circumstance that would with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 12 become an Event of Default

 

“Pricing Schedule” means, in relation to a Series, the Pricing Schedule specifying the relevant issue details of such Series, as provided in Schedule 5

 

“Principal Paying and Conversion Agent” means the person named as such in the Conditions or any Successor Principal Paying and Conversion Agent in each case at its specified office

 

“Register” means the register maintained by the Registrar

 

“Registered ECN” means an ECN in registered form

 

“Registrar” means the person named as such in the Conditions or any Successor Registrar in each case at its specified office

 

“Regulation S Global Certificate” means the global certificate representing Registered ECNs of the same Series, which are issued to persons that are not U.S. persons in an “offshore transaction” within the meaning of Regulation S under the Securities Act, substantially in the form set out in Schedule 1 Part C

 

“relevant Issuer” means the entity specified as the Issuer in the applicable Pricing Schedule

 

“Restricted Global Certificate” means the global certificate which will represent that portion of the series of ECNs which are issued in the United States to “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act in a private transaction in reliance upon an exemption from the registration requirements of the Securities Act for transactions by an issuer not involving a public offering in or substantially in the form set out in Schedule 1 Part E

 

“Rule 144A” means Rule 144A under the Securities Act

 

“Securities Act” means the United States Securities Act of 1933

 

“Series” means a series of ECNs, that have identical terms on issue and are expressed to have the same series number as set out in the relevant Pricing Schedule

 

“specified office” means, in relation to a Paying and Conversion Agent, the Registrar or a Transfer Agent, the office identified with its name at the end of the Conditions or any other office approved by the Trustee and notified to ECN Securityholders pursuant to Clause 10.10

 

“Successor” means, in relation to an Agent such other or further person as may from time to time be appointed by the Issuers and the Guarantors as such Agent with the written approval of, and on terms approved in writing by, the Trustee and notice of whose appointment is given to ECN Securityholders pursuant to Clause 10.10

 

“successor in business” means:

 

  

4

  

 

	
  

	
(i)

	
a company or other entity to whom the relevant Issuer validly and effectually, in accordance with all enactments, orders and regulations in force for the time being and from time to time, transfers the whole or substantially the whole of its business, undertaking and assets for the purpose of assuming and conducting the business of the relevant Issuer in its place; or

 

	
  

	
(ii)

	
any other entity which acquires in any other manner the whole or substantially the whole of the undertaking, property and assets of the relevant Issuer and carries on as a successor to the relevant Issuer or the Guarantor, as the case may be, the whole or substantially the whole of the business carried on by the relevant Issuer prior thereto

 

“Talons” mean talons for further Coupons or, as the context may require, a specific number of them and includes any replacement Talons issued pursuant to the Conditions

 

“TARGET System” means the Trans-European Automated Real-Time Gross Settlement Express Transfer (known as TARGET 2) System which was launched on 19 November 2007 or any successor thereto

 

“temporary Global Note” means a Global Note representing Bearer ECNs of the same Series on issue and which shall be substantially in the form set out in Schedule 1 Part A

 

“Transfer Agents” means the persons (including the Registrar) referred to as such in the Conditions or any Successor Transfer Agents in each case at their specified offices

 

“trust corporation” means a trust corporation (as defined in the Law of Property Act 1925) or a corporation entitled to act as a trustee pursuant to applicable foreign legislation relating to trustees

 

“Unrestricted Global Certificate” means the global certificate which will represent that portion of the series of ECNs which are issued to persons that are not U.S. persons in an “offshore transaction” within the meaning of Regulation S under the Securities Act in or substantially in the form set out in Schedule 1 Part D and

 

“U.S. Exchange Offer Memorandum” means the exchange offer memorandum dated 3 November 2009 offered to persons that were (i) “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act, or (ii) “non-U.S. persons” within the meaning of Rule 902 under the Securities Act.

 

	
1.2

	
Construction of Certain References: References to:

 

	
  

	
1.2.1

	
costs, charges, remuneration or expenses include any value added, turnover or similar tax charged in respect thereof

 

	
  

	
1.2.2

	
an action, remedy or method of judicial proceedings for the enforcement of creditors’ rights include references to the action, remedy or method of judicial proceedings in jurisdictions other than England as shall most nearly approximate thereto

 

	
  

	
1.2.3

	
“reasonable” or “reasonably” and similar expressions relating to the Trustee and any exercise of any power, opinion, determination or other similar matter shall be construed as meaning reasonable or reasonably (as the case may be) having regard to, and taking into account the interests of, the ECN Securityholders only

 

  

5

  

 

	
  

	
1.2.4

	
any statutory, other legislative or regulatory provisions shall be deemed also to refer to any modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under such modification or re-enactment.

 

	
  

	
1.2.5

	
“principal”, unless the context otherwise requires, shall be deemed to include any premium payable in respect of the ECNs and all other amounts in the nature of principal payable pursuant to the Conditions or any amendment or supplement to the Conditions

 

	
  

	
1.2.6

	
“interest”, unless the context otherwise requires, shall be deemed to include any Accrued Conversion Interest and in any such case shall be deemed to include any Additional Amounts that may be payable under Condition 10 or any undertaking given in addition to or in substitution for it under this Trust Deed in respect of any such amount.

 

	
1.3

	
Headings: Headings shall be ignored in construing this Trust Deed.

 

	
1.4

	
Contracts: References in this Trust Deed to this Trust Deed or any other document are to this Trust Deed or those documents as amended, supplemented or replaced from time to time and include any document that amends, supplements or replaces them.

 

	
1.5

	
Schedules: The Schedules are part of this Trust Deed and have effect accordingly.

 

	
1.6

	
Alternative Clearing System: References in this Trust Deed to Euroclear or Clearstream, Luxembourg shall, wherever the context so permits, be deemed to include reference to any additional or alternative clearing system approved by the Issuers, the Guarantor, the Trustee and the Principal Paying and Conversion Agent.

 

	
1.7

	
Contracts (Rights of Third Parties) Act 1999: A person who is not a party to this Trust Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Trust Deed except and to the extent (if any) that this Trust Deed expressly provides for such Act to apply to any of its terms.

 

	
2

	
Issue of ECNs and Covenant to pay

 

	
2.1

	
Issue of ECNs: Upon the issue by the relevant Issuer of any ECNs expressed to be constituted by this Trust Deed, such ECNs shall forthwith be constituted by this Trust Deed without any further formality and irrespective of whether or not the issue of such ECNs contravenes any covenant or other restriction in this Trust Deed.

 

	
2.2

	
Separate Series: The provisions of Clauses 2.3, 2.4, 2.5, 2.6 and 2.7 and of Clauses 3 to 19 and Schedule 3 (all inclusive) shall apply mutatis mutandis separately and independently to the ECNs of each Series and in such Clauses and Schedule the expressions “ECN Securityholders”, “Certificates”, “Coupons”, “Couponholders” and “Talons”, together with all other terms that relate to ECNs or their Conditions, shall be construed as referring to those of the particular Series in question and not of all Series unless expressly so provided, so that each Series shall be constituted by a separate trust pursuant to Clause 2.3 and that, unless expressly provided, events affecting one Series shall not affect any other.

 

	
2.3

	
Covenant to Pay: The relevant Issuer shall (a) on any date when any ECNs become due to be converted agree to pay the Conversion Settlement Sum and pay any Accrued Conversion Interest and any other cash sums payable in accordance with the Conditions, and (b) on any date when any ECNs become due to be redeemed (other than upon a 

 

  

6

  

 

	
 

	
Conversion Trigger), unconditionally pay to or to the order of the Trustee in the Contractual Currency, in the case of any Contractual Currency other than euro, in the principal financial centre for the Contractual Currency and in the case of euro, in a city in which banks have access to the TARGET System, in same day funds the principal amount of the ECNs becoming due for redemption on that date together with any applicable premium and shall (subject to the Conditions) until such payment or conversion (both before and after judgment) unconditionally so pay to or to the order of the Trustee interest in respect of the principal amount of the ECNs outstanding as set out in the Conditions (subject to Clause 2.7) provided that (1) subject to the provisions of Clause 2.6, payment of any sum due in respect of the ECNs made to the Principal Paying and Conversion Agent as provided in the Agency Agreement shall, to that extent, satisfy such obligation except to the extent that there is failure in its subsequent payment to the relevant ECN Securityholders or Couponholders under the Conditions and (2) a payment made after the due date or as a result of the ECN becoming repayable following an Event of Default shall be deemed to have been made when the full amount due has been received by the Principal Paying and Conversion Agent or the Trustee and notice to that effect has been given to the ECN Securityholders (if required under Clause 10.8), except to the extent that there is failure in its subsequent payment to the relevant ECN Securityholders or Couponholders under the Conditions. This covenant shall only have effect each time ECNs are issued and outstanding, when the Trustee shall hold the benefit of this covenant on trust for the ECN Securityholders and Couponholders of the relevant Series.

 

	
2.4

	
Subordination:

 

	
  

	
2.4.1

	
Notwithstanding the covenant of the relevant Issuer given in Clause 2.3, the rights and claims of the Trustee, the ECN Securityholders and Couponholders against the relevant Issuer under the ECNs in respect of principal, premium, interest and other amounts payable in respect of or arising under the ECNs and this Trust Deed are subject to Condition 3(a) and subordinated on a winding-up or administration of the relevant Issuer as provided in Condition 3(b).

 

	
  

	
2.4.2

	
In the event of the occurrence of any event described in Condition 3(b)(i) or (ii), any amounts payable to and received by the Trustee pursuant to the provisions of this Trust Deed by or from the relevant Issuer or its liquidator or administrator after any such event will be received by it on trust to apply the same:

 

	
  

	
(i)

	
first, in payment or satisfaction of all amounts then due and unpaid under Clause 11 to the Trustee and/or any Appointee and in retention of an amount which the Trustee acting reasonably, considers necessary to pay any amounts that it considers will thereafter become due to be paid under Clause 11 to it or any Appointee, to the extent it considers that moneys received by it thereafter under this Trust Deed will be insufficient and/or will not be received in time to pay such amounts;

 

	
  

	
(ii)

	
second in payment of claims of the relevant Issuer Senior Creditors (not being creditors who are or are trustees of the ECN Securityholders) to the extent that such claims are admitted to proof in the winding-up or administration (or having been satisfied out of the other resources of the relevant Issuer) and excluding any sum in respect of interest which is payable contingently upon the relevant Issuer being or being proved to be able to pay admitted claims in full;

 

  

7

  

 

	
  

	
(iii)

	
third (without prejudice to the provisions of Clause 7.2), unless and to the extent attributable, in the opinion of the Trustee, to a particular Series of ECNs by apportioning the same pari passu and rateably between each Series of ECNs, and to the extent attributable in the opinion of the Trustee to a particular Series of ECNs or which are apportioned to such Series as aforesaid in or towards any amounts owing in respect of such Series of ECNs and Coupons; and

 

	
  

	
(iv)

	
as to the balance (if any) to the administrator or liquidator for the time being of the relevant Issuer.

 

	
  

	
2.4.3

	
The trust secondly mentioned in Clause 2.4.2 may be performed by the Trustee’s paying over to such administrator or liquidator for the time being of the relevant Issuer the amounts received by the Trustee as aforesaid (less any amounts thereof applied in the implementation of the trust first mentioned in Clause 2.4.2) on terms that such administrator or liquidator shall distribute the same accordingly and the receipt of such administrator or liquidator for the same shall be a good discharge to the Trustee for the performance by it of the trust secondly mentioned in Clause 2.4.2.

 

	
  

	
2.4.4

	
The Trustee shall be entitled and it is hereby authorised to call for and to accept as conclusive evidence thereof a certificate from the administrator or liquidator for the time being of the relevant Issuer as to:

 

	
  

	
(i)

	
the amount of the claims of the creditors referred to in Clause 2.4.2(ii) (except as therein mentioned); and

 

	
  

	
(ii)

	
the persons entitled thereto and their respective entitlements.

 

	
  

	
2.4.5

	
Nothing contained in this Trust Deed shall in any way restrict the right of the relevant Issuer to issue obligations or give guarantees in each case ranking in priority to or pari passu with or junior to the obligations of the relevant Issuer in respect of the ECNs and if in the opinion of the Trustee any modification to the provisions of this Clause to permit such ranking is necessary or expedient, the Trustee is hereby authorised to concur with the relevant Issuer in executing a supplemental deed effecting such modification provided that the Trustee shall be entitled to assume that no such modification is required unless and until notified to the contrary by the relevant Issuer.

 

For the avoidance of doubt, the provisions of this Clause 2.4 and Condition 3(b) apply only to the principal, premium and interest and any other amounts payable in respect of the ECNs and Coupons and nothing in this Clause 2.4 or Condition 3(b) or in Condition 12 shall affect or prejudice the payment of the costs, charges, expenses, liabilities or remuneration of the Trustee or the rights and remedies of the Trustee in respect thereof.

 

	
2.5

	
Discharge: Subject to Clause 2.6, any payment to be made in respect of the ECNs or the Coupons by the relevant Issuer, the Guarantor or the Trustee may be made as provided in the Conditions and any payment so made shall (subject to Clause 2.6) to that extent be a good discharge to the relevant Issuer, the Guarantor or the Trustee, as the case may be.

 

  

8

  

 

	
2.6

	
Payment after a Default: At any time after an Event of Default or a Potential Event of Default has occurred, the Trustee may:

 

	 	
2.6.1

	
by notice in writing to the relevant Issuer, the Guarantor and the Agents, require the Agents, until notified by the Trustee to the contrary, so far as permitted by applicable law:

 

	 	
(i)

	
to act as Agents of the Trustee under this Trust Deed and the ECNs on the terms of the Agency Agreement (with consequential amendments as necessary and except that the Trustee’s liability for the indemnification, remuneration and expenses of the Agents shall be limited to the amounts for the time being held by the Trustee in respect of the ECNs on the terms of this Trust Deed and available for this purpose) and thereafter to hold all ECNs, Certificates, Coupons and Talons and all moneys, documents and records held by them in respect of ECNs, Certificates, Coupons and Talons to the order of the Trustee or

 

	 	
(ii)

	
to deliver all ECNs, Certificates, Coupons and Talons and all moneys, documents and records held by them in respect of the ECNs, Certificates, Coupons and Talons to the Trustee or as the Trustee directs in such notice and

 

	 	
2.6.2

	
by notice in writing to the relevant Issuer and the Guarantor require them to make all subsequent payments in respect of the ECNs, Coupons and Talons to or to the order of the Trustee and not to the Principal Paying and Conversion Agent with effect from the issue of any such notice to the relevant Issuer, and from then until such notice is withdrawn, proviso (1) to Clause 2.3 above shall cease to have effect.

 

	
2.7

	
Rate of Interest After a Default: If the ECNs bear interest at a floating or other variable rate and they become immediately payable under the Conditions, the rate of interest payable in respect of them shall continue to be calculated by the Calculation Agent in accordance with the Conditions (with consequential amendments as necessary) except that the rates of interest need not be published unless the Trustee otherwise requires. The first period in respect of which interest shall be so calculable shall commence on the expiry of the Interest Period during which the ECNs become so repayable.

 

	
3

	
Form of the ECNs

 

	
3.1

	
The Global Notes: The ECNs shall initially be represented by a temporary Global Note, a permanent Global Note, one or more Global Certificates or one or more Certificates, subject to Condition 2(b) representing the entire holding of Registered ECNs by the same holder. Interests in temporary Global Notes shall be exchangeable for Definitive Notes or interests in permanent Global Notes as set out in each temporary Global Note. Interests in permanent Global Notes shall be exchangeable for Definitive Notes as set out in each permanent Global Note. Interests in the Global Certificates may be exchangeable for Certificates in definitive form as set out in the relevant Global Certificate, as applicable.

 

	
3.2

	
The Definitive Notes: The Definitive Notes, the Coupons and the Talons shall be security printed and the Certificates shall be printed, in each case in accordance with applicable legal and stock exchange requirements substantially in the forms set out in Schedule 2. The ECNs and Certificates (other than Global Certificates) shall be endorsed with the Conditions.

 

  

9

  

 

	
3.3

	
Signature: The Definitive Notes, the Global Notes, the Certificates, the Coupons and the Talons shall be signed manually or in facsimile by a director of the relevant Issuer, the Definitive Notes in bearer form and the Global Notes shall be authenticated by or on behalf of the Principal Paying and Conversion Agent and the Certificates shall be authenticated by or on behalf of the Registrar. The relevant Issuer may use the facsimile signature of a person who at the date of this Trust Deed is such a director even if at the time of issue of any Definitive Notes, Global Notes, Certificates, Coupons or Talons he no longer holds that office. Definitive Notes, Global Notes, Certificates, Coupons and Talons so executed and authenticated shall be or, in the case of Certificates, represent binding and valid obligations of the relevant Issuer.

 

	
3.4

	
Restricted Global Certificate:

 

	 	
3.4.1

	
Minimum Denomination: Interests in, or into, a Restricted Global Certificate may be transferred only in blocks having an aggregate principal amount of U.S.$100,000 and integral increments of U.S.$1,000 in excess thereof.

 

	 	
3.4.2

	
Forced Sale or Transfer:

 

	 	
(i)

	
If an ECN represented by an interest in the Restricted Global Certificate is held by a person who the relevant Issuer or LBG, as the case may be, believes is a U.S. person that is not a qualified institutional buyer (as defined in Rule 144A) who, in the judgement of LBG, has purchased its ECNs in a transaction that is not exempt from the registration requirements of the Securities Act, the relevant Issuer or LBG, as the case may be, may give notice to such ECN Securityholder and require such ECN Securityholder either:

 

	 	
(a)

	
to provide the relevant Issuer or LBG, as the case may be, within 30 days of receipt of such notice with sufficient documentary evidence to satisfy the relevant Issuer or LBG that such person is a U.S. person who is a qualified institutional buyer who has purchased its ECNs in a transaction that is exempt from the registration requirements of the Securities Act; or

 

	 	
(b)

	
to sell its beneficial interest in such ECNs, so that, following such sale, such ECN is held by a qualified institutional buyer who has purchased its ECNs in a transaction that is exempt from the registration requirements of the Securities Act, and who has agreed to the transfer restrictions set forth in the U.S. Exchange Offer Memorandum, and to provide the relevant Issuer or LBG, as the case may be, with documentary evidence of such sale satisfactory to the relevant Issuer or LBG, as the case may be.

 

Where condition (a) or (b) is not satisfied within 30 days after the serving of the notice, the ECN Securityholder will be deemed, upon the expiration of such 30 days, to have forfeited its interest in such ECNs and the relevant Issuer or LBG, as the case may be, may sell such forfeited interest as it sees fit, subject always to the provisions of applicable law and so that it is held by a qualified institutional buyer who has purchased ECNs in a transaction that is exempt from registration under the Securities Act and who has agreed to the transfer restrictions set forth in the U.S. Exchange Offer Memorandum.

 

  

10

  

 

	 	
(ii)

	
Notice of forfeiture shall forthwith be given to the former ECN Securityholder and an entry of such notice and forfeiture shall forthwith be made and dated in the Register opposite the entry of such ECN and notified by LBG to the Trustee; but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make such entry.

 

	 	
(iii)

	
A forfeited interest in an ECN shall be deemed to be the property of LBG and may be sold, re-allotted or otherwise disposed of on such terms as LBG shall think fit, subject to this Clause 3.4. In the event of such sale, re-allotment or other disposition, the relevant Issuer or LBG, as the case may be, will arrange for the net proceeds thereof (after deduction in respect of any expenses and any taxes) to the relevant ECN Securityholder at such time as the relevant Issuer or LBG, as the case may be, may determine. In any such case, none of the relevant Issuer, LBG or the Trustee shall have any liability or responsibility for the timing of any such sale or for the price at which any such ECNs are sold.

 

	 	
(iv)

	
A person whose interest in the ECNs have been forfeited shall cease to be an ECN Securityholder in respect of the forfeited ECNs and shall surrender to the relevant Issuer or LBG, as the case may be, if applicable, any certificates in respect of the ECNs.

 

	
3.5

	
Clearing Systems:

 

	 	
3.5.1

	
If an Issuer intends to issue any ECNs that are intended to be cleared through a clearing system other than Euroclear or Clearstream, Luxembourg and notifies such intention to the Trustee, the relevant Issuer, the Guarantor(s) and the Trustee shall (at the expense of the relevant Issuer failing whom the Guarantor) use their reasonable endeavours to agree such amendments or modifications to this Trust Deed, the Agency Agreement and the Global Notes or Global Certificates (as the case may be) as the Trustee in its opinion deems necessary to enable the ECNs to be cleared through such clearing system.

 

	 	
3.5.2

	
If an Issuer intends to transfer ECNs cleared through Euroclear or Clearstream, Luxembourg to a clearing system other than Euroclear or Clearstream, Luxembourg and notifies such intention to the Trustee, the relevant Issuer, the Guarantor(s) and the Trustee shall (at the expense of the relevant Issuer failing whom the Guarantor) use their reasonable endeavours to agree such amendments or modifications to this Trust Deed, the Agency Agreement and the Global Notes or Global Certificates (as the case may be) as the Trustee in its opinion deems necessary to enable the ECNs to be cleared through such clearing system.

 

	 	
3.5.3

	
The Trustee shall not be obliged to act under this Clause 3.5 if to do so would or may in the opinion of the Trustee expose it to liability, reduce its protections or place more onerous obligations upon it.

 

	
4

	
Stamp Duties and Taxes

 

	
4.1

	
Stamp Duties: The relevant Issuer shall pay any stamp, issue, documentary or other taxes and duties, including interest and penalties, payable in Belgium, Luxembourg and the United Kingdom and the country of each Contractual Currency in respect of the creation, issue and offering of the ECNs, Certificates, Coupons and Talons and the execution or 

 

  

11

  

 

	
 

	
delivery of this Trust Deed. The relevant Issuer shall also indemnify the Trustee, the ECN Securityholders and the Couponholders, on an after-tax basis, from and against all stamp, issue, documentary or other taxes paid by any of them in any jurisdiction in connection with any action taken by or on behalf of the Trustee or, as the case may be, the ECN Securityholders or the Couponholders to enforce the relevant Issuer’s or the Guarantor’s obligations under this Trust Deed or the ECNs, Certificates, Coupons or Talons.

 

	
4.2

	
Change of Taxing Jurisdiction: If the relevant Issuer or the Guarantor becomes subject generally to the taxing jurisdiction of a territory or a taxing authority of or in that territory with power to tax other than or in addition to the United Kingdom or any such authority of or in such territory then the relevant Issuer or, as the case may be, the Guarantor shall (unless the Trustee otherwise agrees) give the Trustee an undertaking satisfactory to the Trustee in terms corresponding to the terms of Condition 10 with the substitution for, or (as the case may require) the addition to, the references in that Condition to the United Kingdom of references to that other or additional territory or authority to whose taxing jurisdiction the relevant Issuer or the Guarantor have become so subject. In such event this Trust Deed and the ECNs, Certificates, Coupons and Talons shall be read accordingly.

 

	
5

	
Guarantee and Indemnity

 

	
5.1

	
Guarantee: Subject to Clause 5.2 and Condition 4(b), the Guarantor unconditionally, irrevocably and, if both Guarantors are specified in the relevant Pricing Schedule, jointly and severally, guarantees that if the relevant Issuer does not pay any sum payable by it under this Trust Deed, the ECNs or the Coupons by the time and on the date specified for such payment (whether on the normal due date, on acceleration or otherwise), the Guarantor (or each Guarantor, jointly and severally, if both Guarantors are so specified in the relevant Pricing Schedule) shall pay that sum (ignoring for this purpose, for the avoidance of doubt, the effect of Clause 2.4 above) to or to the order of the Trustee, in the manner provided in Clause 2.3 (or if in respect of sums due under Clause 11, in pounds sterling in London in immediately available funds) before close of business on that date in the city to which payment is so to be made. Clause 2.3 shall apply (with consequential amendments as necessary) to such payments other than those in respect of sums due under Clause 11. All payments under the Guarantee by the Guarantor shall be made subject to Condition 10 and Clause 4.2.

 

	
5.2

	
Subordination:

 

	 	
5.2.1

	
Notwithstanding the guarantee of the Guarantor given in Clause 5.1 and its indemnity given in Clauses 5.7 and 5.9, the rights and claims of the Trustee, the ECN Securityholders, and the Couponholders against the Guarantor under the Guarantee are subject to Condition 4(a) and subordinated on a winding-up or administration of the Guarantor as provided in Condition 4(b).

 

	 	
5.2.2

	
In the event of the occurrence of any event described in Condition 4(b)(i) or (ii), any amounts payable to and received by the Trustee pursuant to the provisions of this Trust Deed by or from the Guarantor or its liquidator or administrator after any such event will be received by it on trust to apply the same:

 

	 	
(i)

	
first, in payment or satisfaction of all amounts then due and unpaid under Clause 11 to the Trustee and/or any Appointee and in retention of an amount which the Trustee acting reasonably, considers necessary to pay any amounts that it considers will thereafter become due to be paid under 

 

  

12

  

 

Clause 11 to it or any Appointee, to the extent it considers that moneys received by it thereafter under this Trust Deed will be insufficient and/or will not be received in time to pay such amounts;

 

	 	
(ii)

	
second in payment of claims of the Guarantor Senior Creditors (not being creditors who are or are trustees of the ECN Securityholders) to the extent that such claims are admitted to proof in the winding-up (or having been satisfied out of the other resources of the Guarantor) and excluding any sum in respect of interest which is payable contingently upon the Guarantor being or being proved to be able to pay admitted claims in full;

 

	 	
(iii)

	
third (without prejudice to the provisions of Clause 7.2), unless and to the extent attributable, in the opinion of the Trustee, to a particular Series of ECNs by apportioning the same pari passu and rateably between each Series of ECNs, and to the extent attributable in the opinion of the Trustee to a particular Series of ECNs or which are apportioned to such Series as aforesaid, in or towards any amounts owing in respect of such Series of ECNs and Coupons; and

 

	 	
(iv)

	
as to the balance (if any) to the administrator or liquidator for the time being of the Guarantor.

 

	
  

	
5.2.3

	
The trust secondly mentioned in Clause 5.2.2 may be performed by the Trustee’s paying over to such administrator or liquidator for the time being of the Guarantor the amounts received by the Trustee as aforesaid (less any amounts thereof applied in the implementation of the trust first mentioned in Clause 5.2.2) on terms that such administrator or liquidator shall distribute the same accordingly and the receipt of such administrator or liquidator for the same shall be a good discharge to the Trustee for the performance by it of the trust secondly mentioned in Clause 5.2.2.

 

	
  

	
5.2.4

	
The Trustee shall be entitled and it is hereby authorised to call for and to accept as conclusive evidence thereof a certificate from the administrator or liquidator for the time being of the Guarantor as to:

 

	 	
(i)

	
the amount of the claims of the creditors referred to in Clause 5.2.2(ii) (except as therein mentioned); and

 

	 	
(ii)

	
the persons entitled thereto and their respective entitlements.

 

	
  

	
5.2.5

	
Nothing contained in this Trust Deed shall in any way restrict the right of the Guarantor to issue obligations or give guarantees in each case ranking in priority to or pari passu with or junior to the obligations of the Guarantor in respect of the ECNs and if in the opinion of the Trustee any modification to the provisions of this Clause to permit such ranking is necessary or expedient, the Trustee is hereby authorised to concur with the Guarantor in executing a supplemental deed effecting such modification provided that the Trustee shall be entitled to assume that no such modification is required unless and until notified to the contrary by the Guarantor.

 

The provisions of this Clause 5.2 and Condition 4(b) apply only to the principal, premium and interest and any other amounts payable in respect of the ECNs and Coupons and nothing in this Clause 5.2 or Condition 4(b) or in Condition 12 shall affect or prejudice the 

 

  

13

  

 

payment of the costs, charges, expenses, liabilities or remuneration of the Trustee or the rights and remedies of the Trustee in respect thereof.

 

	
5.3

	
Guarantor as Principal Debtor: As between the Guarantor and the Trustee, the ECN Securityholders and the Couponholders but without affecting the relevant Issuer’s obligations, and subject to Condition 4, the Guarantor (or, each Guarantor jointly and severally, if both Guarantors are so specified in the relevant Pricing Schedule,) shall be liable under this Clause as if it were the sole principal debtor and not merely surety. Accordingly, it shall not be discharged, nor shall its liability be affected, by anything that would not discharge it or affect its liability if it were the sole principal debtor (including (1) any time, indulgence, waiver or consent at any time given to the relevant Issuer or any other person, (2) any amendment to any other provisions of this Trust Deed or to the Conditions or to any security or other guarantee or indemnity, (3) the making or absence of any demand on the relevant Issuer or any other person for payment, (4) the enforcement or absence of enforcement of this Trust Deed, the ECNs or the Coupons or of any security or other guarantee or indemnity, (5) the taking, existence or release of any security, guarantee or indemnity, (6) the dissolution, amalgamation, reconstruction or reorganisation of the relevant Issuer or any other person or (7) the illegality, invalidity or unenforceability of or any defect in any provision of this Trust Deed, the ECNs or the Coupons or any of the relevant Issuer’s obligations under any of them).

 

	
5.4

	
Guarantor’s Obligations Continuing: Each Guarantor’s obligations under this Trust Deed are and shall remain in full force and effect by way of continuing security until no sum remains payable under this Trust Deed, the ECNs or the Coupons. Furthermore, those obligations of each relevant Guarantor are additional to, and not instead of, any security or other guarantee or indemnity at any time existing in favour of any person, whether from the Guarantor or otherwise and may be enforced without first having recourse to the relevant Issuer, any other person, any security or any other guarantee or indemnity. Each Guarantor irrevocably waives all notices and demands of any kind.

 

	
5.5

	
Exercise of Guarantor’s Rights: So long as any sum remains payable under this Trust Deed, the ECNs or the Coupons:

 

	 	
5.5.1

	
any right of the Guarantor, by reason of the performance of any of its obligations under this Clause, to be indemnified by the relevant Issuer or to take the benefit of or to enforce any security or other guarantee or indemnity shall be exercised and enforced by such Guarantor only in such manner and on such terms as the Trustee may require or approve and

 

	 	
5.5.2

	
any amount received or recovered by the Guarantor (a) as a result of any exercise of any such right or (b) in the dissolution, amalgamation, reconstruction or reorganisation of the relevant Issuer shall be held in trust for the Trustee and immediately paid to the Trustee and the Trustee shall hold it on the trusts set out in Clause 7.1.

 

Notwithstanding any other provisions of this Trust Deed, any of the Guarantor’s rights of indemnity, subrogation or contribution against the relevant Issuer will be subject to the provisions of Conditions 3(b) and 5, mutatis mutandis, as if they were claims of the ECN Securityholders, Couponholders or the Trustee against the relevant Issuer in respect of the ECNs.

 

	
5.6

	
Suspense Accounts: Any amount received or recovered by the Trustee (otherwise than as a result of a payment by the relevant Issuer to the Trustee in accordance with Clause 2) 

 

  

14

  

 

	
 

	
in respect of any sum payable by the relevant Issuer under this Trust Deed, the ECNs, or the Coupons may be placed in a suspense account and kept there for so long as the Trustee thinks fit.

 

	
5.7

	
Avoidance of Payments: The Guarantor shall on demand indemnify the Trustee, each ECN Securityholder and each Couponholder, on an after tax basis, against any cost, loss, expense or liability sustained or incurred by them as a result of them being required for any reason (including any bankruptcy, insolvency, winding-up, dissolution, or similar law of any jurisdiction) to refund all or part of any amount received or recovered by them in respect of any sum payable by the relevant Issuer under this Trust Deed, any ECN or Coupons relating to that ECN and shall in any event pay to it on demand the amount as refunded by it.

 

	
5.8

	
Debts of Issuers: If any moneys become payable by the Guarantor under this Guarantee, the relevant Issuer shall not (except in the event of the liquidation of that Issuer) so long as any such moneys remain unpaid, pay any moneys for the time being due from the relevant Issuer to such Guarantor.

 

	
5.9

	
Indemnity: As separate, independent and alternative stipulations, each Guarantor unconditionally and irrevocably agrees (1) that any sum that, although expressed to be payable by the relevant Issuer under this Trust Deed, the ECNs or Coupons, is for any reason (whether or not now existing and whether or not now known or becoming known to the relevant Issuer, the Guarantor, the Trustee or any ECN Securityholder or Couponholder) not recoverable from the Guarantor on the basis of a guarantee shall nevertheless be recoverable from the Guarantor as if it were the sole principal debtor and shall be paid by it to the Trustee on demand and (2) as a primary obligation to indemnify the Trustee, each ECN Securityholder and each Couponholder against any loss suffered by it as a result of any sum expressed to be payable by the relevant Issuer under this Trust Deed, the ECNs or Coupons not being paid on the date and otherwise in the manner specified in this Trust Deed or any payment obligation of the relevant Issuer under this Trust Deed, the ECNs, or the Coupons being or becoming void, voidable or unenforceable for any reason (whether or not now existing and whether or not now known or becoming known to the Trustee, any ECN Securityholder or any Couponholder), the amount of that loss being the amount expressed to be payable by the relevant Issuer in respect of the relevant sum.

 

	
6

	
Set-Off

 

Subject to applicable law, no ECN Securityholder or Couponholder may exercise, claim or plead any right of set-off, compensation or retention in respect of any amount owed to it by the relevant Issuer or the Guarantor in respect of, or arising under or in connection with the ECNs or the Coupons and the Trustee shall, on behalf of such ECN Securityholders and Couponholders be deemed to have waived all such rights of set-off, compensation or retention. Notwithstanding the preceding sentence, if any of the amounts owing to any ECN Securityholder or Couponholder by the Issuer or the Guarantor in respect of, or arising under or in connection with the ECNs is discharged by set-off, compensation or retention, such ECN Securityholder or Couponholder shall, subject to applicable law, immediately pay an amount equal to the amount of such discharge to the relevant Issuer or the Guarantor, as the case may be, (or, in the event of its winding-up or administration, the liquidator or, as appropriate, administrator of such Issuer or the Guarantor, as the case may be) and, until such time as payment is made, shall hold an amount equal to such 

 

  

15

  

 

amount in trust for such Issuer or the Guarantor, as the case may be, (or the liquidator or, as appropriate, administrator of such Issuer or the Guarantor (as the case may be)) and accordingly any such discharge shall be deemed not to have taken place.

 

	
7

	
Application of moneys received by the Trustee

 

	
7.1

	
Declaration of Trust: All moneys received by the Trustee in respect of the ECNs or amounts payable under this Trust Deed shall, despite any appropriation of all or part of them by the relevant Issuer or the Guarantor, be held by the Trustee (subject always to the provisions of Clauses 2.4 or 5.2 above, as applicable) on trust to apply them (subject to Clauses 5.6 and 7.2):

 

	 	
·

	
first, in payment or satisfaction of all amounts then due and unpaid under Clause 11 to the Trustee and/or any Appointee and in retention of an amount which the Trustee acting reasonably, considers necessary to pay any amounts that it considers will thereafter become due to be paid under Clause 11 to it or any Appointee, to the extent it considers that moneys received by it thereafter under this Trust Deed will be insufficient and/or will not be received in time to pay such amounts;

 

	 	
·

	
second, unless and to the extent attributable, in the opinion of the Trustee, to a particular Series of ECNs by apportioning the same pari passu and rateably between each Series of ECNs, and to the extent attributable in the opinion of the Trustee to a particular Series of ECNs or which are apportioned to such Series as aforesaid, in or towards any amounts owing in respect of such Series of ECNs and Coupons; and

 

	 	
·

	
thirdly, in payment of any balance to the relevant Issuer for itself or, if any moneys were received from the Guarantor and to the extent of such moneys, the Guarantor.

 

If the Trustee holds any moneys in respect of ECNs or Coupons that have become void or in respect of which claims have become prescribed, the Trustee shall hold them on these trusts.

 

	
7.2

	
Accumulation: If the amount of the moneys at any time available for payment in respect of the ECNs under Clause 7.1 is less than 10 per cent. of the nominal amount of the ECNs then outstanding, the Trustee may, at its discretion, invest such moneys. The Trustee may retain such investments and accumulate the resulting income until the investments and the accumulations, together with any other funds for the time being under its control and available for such payment, amount to at least 10 per cent. of the nominal amount of the ECNs then outstanding and then such accumulated investments shall be applied as specified in Clause 7.1. All interest and other income deriving from such investments shall be applied first in payment or satisfaction of all amounts then due and unpaid under Clause 11 to the Trustee and/or any Appointee and otherwise held for the benefit of and paid to the ECN Securityholders or the holders of related Coupons, as the case may be.

 

	
7.3

	
Investment: Moneys held by the Trustee may be invested in its name or under its control in any investments or other assets anywhere whether or not they produce income or deposited in its name or under its control at such bank or other financial institution in such currency as the Trustee may, in its absolute discretion, think fit. If that bank or institution is the Trustee or a subsidiary, holding or associated company of the Trustee, it need only account for an amount of interest equal to the standard amount of interest payable by it on 

 

  

16

  

 

	
 

	
such a deposit to an independent customer. The Trustee may at any time vary or transpose any such investments or assets or convert any moneys so deposited into any other currency, and shall not be responsible for any resulting loss, whether by depreciation in value, change in exchange rates or otherwise.

 

	
8

	
Conversion

 

	
8.1

	
Adjustment to the Conversion Price: LBG hereby undertakes to and covenants with the Trustee that, so long as any ECN remains outstanding, it will whenever the Conversion Price is required to be adjusted, as soon as practicable thereafter, deliver to the Trustee a certificate signed by any two Authorised Signatories of LBG (which the Trustee shall be entitled to accept without further enquiry as sufficient evidence of the correctness of the matters therein referred to) setting forth brief particulars of the event giving rise to the adjustment, the adjusted Conversion Price, the date on which the adjustment takes effect and such other particulars and information as the Trustee may reasonably require.

 

	
8.2

	
Notice of Adjustment to the Conversion Price: As soon as practicable after a certificate has been delivered to the Trustee pursuant to Clause 8.1 above, and in any event within 14 days thereafter, the relevant Issuer shall give notice to the ECN Securityholders in accordance with Condition 17 of the adjustment to the Conversion Price and, simultaneously with such announcement, the relevant Issuer will give notice thereof to the ECN Securityholders in accordance with Condition 17 advising ECN Securityholders of the date on which the relevant adjustment of the Conversion Price is likely to become effective.

 

	
9

	
Covenant of Compliance

 

Each Issuer and each Guarantor hereby undertakes to and covenants with the Trustee that so long as any ECN remains outstanding, it will, save with the approval of an Extraordinary Resolution or with the approval of the Trustee where, in the Trustee's opinion, it is not materially prejudicial to the interests of the ECN Securityholders to give such approval, observe all its obligations under the Conditions and this Trust Deed (including but not limited to those undertakings and covenants set out in Clause 8 above). The Conditions shall be binding on the relevant Issuer, the Guarantor, the ECN Securityholders and the Couponholders. The Trustee shall be entitled to enforce the obligations of the relevant Issuer and the Guarantor under the ECNs and the Coupons as if the same were set out and contained in the trust deeds constituting the same, which shall be read and construed as one document with the ECNs and the Coupons. The Trustee will hold the benefit of this covenant upon trust for itself and the ECN Securityholders and the Couponholders according to its and their respective interests.

 

	
10

	
Covenants

 

So long as any ECN is outstanding, each of the relevant Issuer and the Guarantor shall:

 

	
10.1

	
Books of Account: keep, and procure that each of its respective subsidiaries keeps, proper books of account and, at any time after an Event of Default or Potential Event of Default has occurred or if the Trustee has reasonable grounds to believe that such an event has occurred or may be about to occur, so far as permitted by applicable law, allow, and procure that each such subsidiary shall allow, the Trustee and anyone appointed by it to whom the relevant Issuer, the Guarantor and/or the relevant subsidiary has no reasonable objection, access to its books of account at all reasonable times during normal business hours.

 

  

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10.2

	
Notice of Events of Default: notify the Trustee in writing promptly on becoming aware of the occurrence of any Event of Default or Potential Event of Default or Conversion Trigger or Relevant Event or breach by the Issuer or the Guarantor of any provision of this Trust Deed.

 

	
10.3

	
Information: so far as permitted by applicable law, give the Trustee such information as it reasonably requires to perform its functions.

 

	
10.4

	
Financial Statements etc.: send to the Trustee at the time of their issue and in the case of annual financial statements in any event within 180 days of the end of each financial year, and in the case of interim financial statements in any event within 90 days of the end of the relevant financial period, three copies in English of every balance sheet, profit and loss account, report or other notice, statement or circular issued, or that legally or contractually should be issued, to the shareholders, stockholders or creditors of the relevant Issuer or the Guarantor or any holding company thereof generally in their capacity as such.

 

	
10.5

	
Certificate of Authorised Signatories: send to the Trustee, within 14 days of its annual audited financial statements being made available to its members, and also within 14 days of any request by the Trustee a certificate of the relevant Issuer or, as the case may be, the Guarantor signed by any two of its Authorised Signatories that, having made all reasonable enquiries, to the best of the knowledge, information and belief of the relevant Issuer or, as the case may be, the Guarantor as at a date (the “Certification Date”) not more than five days before the date of the certificate no Event of Default or Potential Event of Default or other breach of this Trust Deed had occurred since the Certification Date of the last such certificate or (if none) the date of this Trust Deed or, if such an event had occurred, giving details of it.

 

	
10.6

	
Notices to ECN Securityholders: send to the Trustee the form of each notice to be given to ECN Securityholders and, once given, two copies of each such notice, such notice to be in a form approved by the Trustee (such approval, unless so expressed, not to constitute approval for the purposes of Section 21 of the FSMA of any such notice which is a communication within the meaning of Section 21 of the FSMA).

 

	
10.7

	
Further Acts: so far as permitted by applicable law, do such further things as may be necessary in the opinion of the Trustee to give effect to this Trust Deed.

 

	
10.8

	
Notice of Late Payment: forthwith upon request by the Trustee give notice to the ECN Securityholders of any unconditional payment to the Principal Paying and Conversion Agent or the Trustee of any sum due in respect of the ECNs or Coupons made after the due date for such payment.

 

	
10.9

	
Listing and Trading: use all reasonable endeavours to maintain the listing of the ECNs on the official list of the Financial Services Authority in its capacity as competent authority under the FSMA and the trading of such ECNs on the Market but, if it is unable to do so, having used such endeavours, or if the maintenance of such listing and trading is agreed by the Trustee to be unduly onerous and the Trustee is satisfied that the interests of the ECN Securityholders would not be thereby materially prejudiced, instead use all reasonable endeavours to obtain and maintain a listing of the ECNs on another stock exchange and/or admission to trading on another market, in each case approved in writing by the Trustee and in each case enter into a trust deed supplemental to this Trust Deed to effect such consequential amendments to this Trust Deed as the Trustee may require or as shall be requisite to comply with the requirements of any such stock exchange or securities market.

 

  

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10.10

	
Change in Agents: give at least 14 days’ prior notice to the ECN Securityholders of any future appointment, resignation or removal of an Agent or of any change by an Agent of its specified office and not make any such appointment or removal without the Trustee’s written approval.

 

	
10.11

	
ECNs Held by Issuer etc.: send to the Trustee as soon as practicable after being so requested by the Trustee a certificate of the relevant Issuer or, as the case may be, LBG signed by any two of its Authorised Signatories stating the number of ECNs held at the date of such certificate by or on behalf of the relevant Issuer or, as the case may be, LBG or any of LBG’s Subsidiaries.

 

	
10.12

	
FSA notification: where confirmation from the FSA that it has no objection to the making of any payment or the taking of any other action under the Conditions or this Trust Deed is required to be obtained before such payment is made or such other action is taken, give the requisite period of notice as provided for in the Conditions or this Trust Deed or, if such notice requirement is not so provided for in the Conditions or this Trust Deed, one month’s prior written notice to the FSA (in each case with a copy to the Trustee) before making such payment or taking such action (or such shorter period of notice as the FSA may accept and as long as such notice is required to be given). The relevant Issuer shall, in the event that it has received confirmation from the FSA of no objection, or consent from the FSA pursuant to Condition 8(b), confirm in writing to the Trustee that such Issuer has received no objection and/or received consent from the FSA, as applicable. Such Issuer shall, having received an objection to the making of any payment or taking of any action pursuant to the Conditions or this Trust Deed from the FSA following notification thereof to the FSA pursuant to this Clause 10.12, promptly provide a copy thereof to the Trustee.

 

	
10.13

	
Legal Opinion: if so required by the Trustee acting reasonably, prior to making any modification or amendment or supplement to this Trust Deed, procure the delivery of legal opinion(s) as to English and any other relevant law, addressed to the Trustee, dated the date of such modification or amendment or supplement, as the case may be, and in a form acceptable to the Trustee from legal advisers acceptable to the Trustee.

 

	
11

	
Remuneration and Indemnification of the Trustee

 

	
11.1

	
Normal Remuneration: So long as any ECN is outstanding the Issuers shall pay the Trustee as remuneration for its services as Trustee such sum on such dates in each case as they may from time to time agree. Such remuneration shall accrue from day to day from the date of this Trust Deed up to the date on which no ECN remains outstanding. However, if any payment to an ECN Securityholder or Couponholder of moneys due in respect of any ECN or Coupon is improperly withheld or refused, such remuneration shall again accrue as from the date of such withholding or refusal until payment to such ECN Securityholder or Couponholder is duly made.

 

	
11.2

	
Extra Remuneration: If an Event of Default or Potential Event of Default shall have occurred the relevant Issuer hereby agrees that the Trustee shall be entitled to be paid additional remuneration calculated at its normal hourly rates in force from time to time. In any other case, if the Trustee finds it expedient or necessary or is requested by any Issuer to undertake duties that they both agree to be of an exceptional nature or otherwise outside the scope of the Trustee’s normal duties under this Trust Deed, the relevant Issuer shall pay such additional remuneration as they may agree (and which may be calculated by reference to the Trustee’s normal hourly rates in force from time to time) or, failing agreement as to any of the matters in this Clause 11 (or as to such sums referred to in 

 

  

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Clause 11.1), as determined by a financial institution or person (acting as an expert) selected by the Trustee and approved by the relevant Issuer or, failing such approval, nominated by the President for the time being of The Law Society of England and Wales. The expenses involved in such nomination and such financial institution’s fee shall be borne by the relevant Issuer. The determination of such financial institution or person shall, in the absence of manifest error, be conclusive and binding on the relevant Issuer, the Guarantor, the Trustee, the ECN Securityholders and the Couponholders.

 

	
11.3

	
Expenses: The relevant Issuer shall also on demand by the Trustee pay or discharge all Liabilities properly incurred by the Trustee in the preparation and execution of this Trust Deed and the performance of its functions under this Trust Deed including, but not limited to, legal and travelling expenses and any irrecoverable stamp, documentary or other similar taxes or duties paid by the Trustee in connection with any permissible proceedings brought by the Trustee against any Issuer or Guarantor to enforce any provision of this Trust Deed, the ECNs, the Coupons or the Talons. Such Liabilities shall be payable or reimbursable by the Issuer within seven days of demand by the Trustee and:

 

	
  

	
(i)

	
in the case of payments made by the Trustee prior to such demand will (if not paid within seven days of (a) such demand or (b) such later date as specified in the demand) carry interest from the date on which the demand is made at the base rate of National Westminster Bank plc on the date on which such payments were made by the Trustee or, if the Trustee has incurred a borrowing to make any such payment, at the rate of interest payable by the Trustee in respect of such borrowing; and

 

	
  

	
(ii)

	
in all other cases will carry interest at such rate from 30 days after the date on which the demand is made or (where the demand properly specifies that payment is to be made on an earlier or later date) from such earlier or later date as specified in the demand.

 

	
11.4

	
Indemnity: Each Issuer, failing whom each Guarantor, will indemnify the Trustee in respect of all Liabilities incurred by it pursuant to this Trust Deed (including any Liabilities it may incur as a result of the acts of omissions of any Appointee) or by any Appointee in the carrying out of its functions and in either case against any Liability (including, but not limited to, all Liabilities paid or incurred in disputing or defending any of the foregoing) which the Trustee or any Appointee may incur or which may be made against any of them arising out of or in relation to or in connection with, its appointment or the exercise of its trusts, powers, authorities, discretions or functions under this Trust Deed and the Agency Agreement. The Contracts (Rights of Third Parties) Act 1999 applies to this Clause 11.4.

 

	
11.5

	
Continuing Effect: Clauses 11.3 and 11.4 shall continue in full force and effect as regards the Trustee even if it no longer is Trustee.

 

	
11.6

	
Subordination: Payments under this Clause 11 are not subordinated to any other obligation of the relevant Issuer or the Guarantor.

 

	
11.7

	
Gross-up: Each Issuer and each Guarantor hereby further undertakes to the Trustee that all monies payable by the relevant Issuer or such Guarantor to the Trustee under this clause shall be made without set-off, counterclaim, deduction or withholding unless compelled by law in which event the relevant Issuer or, as the case may be, such Guarantor will pay such additional amounts as will result in the receipt by the Trustee of the amounts which would otherwise have been payable by the relevant Issuer or, as the case may be, such Guarantor to the Trustee under this clause in the absence of any such set-

 

  

20

  

 

	
 

	
off, counterclaim, deduction or withholding (after taking into account any tax credit or other relief from tax which is available to the Trustee and which arises from such set off, counterclaim, deduction or withholding).

 

	
12

	
Provisions supplemental to the Trustee Act 1925 and the Trustee Act 2000

 

	
12.1

	
Advice: The Trustee may act on the opinion or advice of, or information obtained from, any expert and shall not be responsible to anyone for any loss occasioned by so acting whether such advice is obtained by or addressed to the relevant Issuer, the Trustee or any other person. Any such opinion, advice or information may be sent or obtained by letter or fax or electronic mail and the Trustee shall not be liable to anyone for acting in good faith on any opinion, advice or information purporting to be conveyed by such means even if it contains some error or is not authentic. The Trustee may rely without liability to ECN Securityholders and Couponholders on any report, confirmation or certificate or any advice of any accountants, financial advisers, financial institution or any other expert, whether or not addressed to the Trustee and whether or not liability in relation thereto is limited by reference to a monetary cap, methodology or otherwise.

 

	
12.2

	
Trustee to Assume Performance: The Trustee need not notify anyone of the execution of this Trust Deed or do anything to find out if an Event of Default or Potential Event of Default or breach of this Trust Deed or Conversion Trigger or Capital Disqualification Event or Relevant Event or Tax Event has occurred. Until it has actual knowledge or express notice to the contrary pursuant to this Trust Deed, the Trustee may assume that no such event has occurred and that the relevant Issuer and the Guarantor are performing all their obligations under this Trust Deed, the ECNs, the Coupons and the Talons.

 

	
12.3

	
Resolutions of ECN Securityholders: The Trustee shall not be liable to any person by reason of having acted in good faith upon any Extraordinary Resolution in writing or any Extraordinary Resolution or other resolution purporting to have been passed at any meeting of ECN Securityholders in respect whereof minutes have been made and signed or any direction or request of ECN Securityholders even though subsequent to its acting it may be found that there was some defect in the constitution of the meeting or the passing of the resolution or (in the case of an Extraordinary Resolution in writing or a direction or a request) it was not signed by the requisite number of ECN Securityholders that for any reason the resolution, direction or request was not valid or binding upon such ECN Securityholders and the relative Couponholders.

 

	
12.4

	
Certificate Signed by Authorised Signatories: If the Trustee, in the exercise of its functions, requires to be satisfied or to have information as to any fact or the expediency of any act, it may call for and accept as sufficient evidence of that fact or the expediency of that act a certificate signed by any two Authorised Signatories of the relevant Issuer or Guarantor as to that fact or to the effect that, in their opinion, that act is expedient and the Trustee need not call for further evidence and shall not be responsible for any loss occasioned by acting on such a certificate.

 

	
12.5

	
Deposit of Documents: The Trustee may appoint as custodian, on any terms, any bank or entity whose business includes the safe custody of documents or any lawyer or firm of lawyers believed by it to be of good repute and may deposit this Trust Deed and any other documents with such custodian and pay all sums due in respect thereof. The Trustee is not obliged to appoint a custodian of securities payable to bearer.

 

  

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12.6

	
Discretion: The Trustee shall have absolute and uncontrolled discretion as to the exercise of its functions, duties, powers or discretions and shall not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience that may result from their exercise or non-exercise.

 

	
12.7

	
Agents: Whenever it considers it expedient in the interests of the ECN Securityholders, the Trustee may, in the conduct of its trust business, instead of acting personally, employ and pay an agent selected by it, whether or not a lawyer or other professional person, to transact or conduct, or concur in transacting or conducting, any business and to do or concur in doing all acts required to be done by the Trustee (including the receipt and payment of money).

 

	
12.8

	
Delegation: Whenever it considers it expedient in the interests of the ECN Securityholders, the Trustee may delegate to any person on any terms (including power to sub-delegate) all or any of its functions.

 

	
12.9

	
Nominees: In relation to any asset held by it under this Trust Deed, the Trustee may appoint any person to act as its nominee on any terms.

 

	
12.10

	
Forged ECNs: The Trustee shall not be liable to either Issuer or the Guarantor or any ECN Securityholder or Couponholder by reason of having accepted as valid or not having rejected any ECN, Certificate, Coupon or Talon purporting to be such and later found to be forged or not authentic.

 

	
12.11

	
Confidentiality: Unless ordered to do so by a court of competent jurisdiction, the Trustee shall not be required to disclose to any ECN Securityholder or Couponholder any confidential financial or other information made available to the Trustee by either Issuer or the Guarantor or any other person in connection with this Trust Deed.

 

	
12.12

	
Determinations Conclusive: As between itself and the ECN Securityholders and Couponholders, the Trustee may determine all questions and doubts arising in relation to any of the provisions of this Trust Deed. Such determinations, whether made upon such a question actually raised or implied in the acts or proceedings of the Trustee, shall be conclusive and shall bind the Trustee, the ECN Securityholders and the Couponholders.

 

	
12.13

	
Currency Conversion: Where it is necessary or desirable to convert any sum from one currency to another, it shall (unless otherwise provided hereby or required by law) be converted at such rate or rates, in accordance with such method and as at such date as may reasonably be specified by the Trustee but having regard to current rates of exchange, if available. Any rate, method and date so specified shall be binding on the relevant Issuer, the Guarantor, the ECN Securityholders and the Couponholders.

 

	
12.14

	
Payment for and Delivery of ECNs: The Trustee shall not be responsible for the receipt or application by the relevant Issuer of the proceeds of the issue of the ECNs, any exchange of ECNs or the delivery of ECNs to the persons entitled to them.

 

	
12.15

	
ECNs Held by the Issuer etc.: In the absence of knowledge or express notice to the contrary, the Trustee may assume without enquiry (other than requesting a certificate under Clause 10.11) that no ECNs are for the time being held by or on behalf of the Issuers, LBG or LBG’s subsidiaries.

 

	
12.16

	
Enforcement: The Trustee shall not be bound to take any action to enforce the terms of the ECNs or the provisions of this Trust Deed or to take any other action under this Trust Deed until (a) directed to do so by an Extraordinary Resolution of ECN Securityholders or 

 

  

22

  

 

	
 

	
so requested in writing by ECN Securityholders holding at least one-quarter in principal amount of ECNs outstanding and (b) it shall have been indemnified and/or secured and/or prefunded to its satisfaction.

 

	
12.17

	
Consent of Trustee: Any consent or approval given by the Trustee for the purposes of the Trust Deed may be given on such terms and subject to such conditions (if any) as the Trustee thinks fit and notwithstanding anything to the contrary in this Trust Deed may be given retrospectively. The Trustee may give any consent or approval, exercise any power, authority or discretion or take any similar action (whether or not such consent, approval, power, authority, discretion or action is specifically referred to in this Trust Deed) if it is satisfied that the interests of the ECN Securityholders will not be materially prejudiced thereby. For the avoidance of doubt, the Trustee shall not have any duty to the ECN Securityholders in relation to such matters other than that which is contained in the preceding sentence.

 

	
12.18

	
Auditor’s reports: The Trustee may rely on reports and certificates addressed to and/or delivered to it by the Auditors of the relevant Issuer or Guarantor whether or not the same are addressed to it and whether or not they are subject to a limitation on the liability of the Auditors, whether by reference to a monetary cap or otherwise.

 

	
12.19

	
Legal Opinions: The Trustee shall not be responsible to any person for failing to request, require or receive any legal opinion relating to any ECNs or for checking or commenting upon the content of any such legal opinion.

 

	
12.20

	
Responsibility for agents etc.: If the Trustee exercises reasonable care in selecting any Appointee, it will not have any obligation to supervise the Appointee or be responsible for any loss, liability, cost, claim, action, demand or expense incurred by reason of the Appointee’s misconduct or default or the misconduct or default of any substitute appointed by the Appointee.

 

	
12.21

	
Adequate Indemnity or Repayment: No provision of this Trust Deed shall require the Trustee to do anything which may (i) be illegal or contrary to applicable law or regulation; or (ii) cause it to expend or risk its own funds or otherwise incur any loss, damage, cost, charge, claim, demand, expense, judgment, action, proceeding or other liability whatsoever incurred thereby in the performance of any of its duties or in the exercise of any of its rights, powers or discretions, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity, security or prefunding against such risk or loss, damage, cost, charge, claim, demand, expense, judgment, action, proceeding or other liability whatsoever is not assured to it.

 

	
12.22

	
No Responsibility for Ordinary Share Value: The Trustee shall not at any time be under any duty or responsibility to any ECN Securityholder or Couponholder to determine whether any facts exist which may require any adjustment of the Conversion Price or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, or in this Trust Deed or the Deed Poll provided to be employed, in making the same. The Trustee shall not at any time be under any duty or responsibility in respect of the validity or value (or the kind or amount) of any Ordinary Shares or any other securities, property or cash, which may at any time be made available or delivered upon the conversion of any ECNs; and it makes no representation with respect thereto. The Trustee shall not be responsible for any failure of LBG or any other entity to make available or deliver any Ordinary Shares or Relevant Shares or to make any payment upon the occurrence of Conversion in respect of any ECN or of the relevant Issuer or the Guarantor 

 

  

23

  

 

	
 

	
to comply with any of its covenants contained in this Trust Deed or of LBG or any other entity to comply with its obligations contained in the Deed Poll.

 

	
12.23

	
Interests of ECN Securityholders: In connection with the exercise by it of any of its trusts, powers, authorities and discretions under this Trust Deed (including, without limitation, any modification, waiver, authorisation, determination or substitution), the Trustee shall have regard to the general interests of the ECN Securityholders as a class and shall not have regard to any interests arising from circumstances particular to individual ECN Securityholders or Couponholders (whatever their number) and, in particular but without limitation, shall not have regard to the consequences of any such exercise for individual ECN Securityholders or Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Trustee shall not be entitled to require, nor shall any ECN Securityholder or Couponholder be entitled to claim, from the relevant Issuer, the Guarantor, the Trustee or any other person any indemnification or payment in respect of any tax consequence of any such exercise upon individual ECN Securityholders or Couponholders except to the extent already provided for in Condition 10 and/or any undertaking given in addition thereto or in substitution therefor under this Trust Deed.

 

	
12.24

	
Usual professional charges: Any trustee of these presents being a lawyer, accountant, broker or other person engaged in any profession or business shall be entitled to charge and be paid all usual professional and other charges for business transacted and acts done by him or his firm in connection with the trusts of this Trust Deed and also his proper charges in addition to disbursements for all other work and business done and all time spent by him or his firm in connection with matters arising in connection with this Trust Deed.

 

	
12.25

	
Trustee responsibility for this Trust Deed: The Trustee shall not be responsible for the execution, delivery, legality, effectiveness, adequacy, genuineness, validity, performance, enforceability or admissibility in evidence of this Trust Deed or any other document relating or expressed to be supplemental thereto and shall not be liable for any failure to obtain any licence, consent or other authority for the execution, delivery, legality, effectiveness, adequacy, genuineness, validity, performance, enforceability or admissibility in evidence of this Trust Deed or any other document relating or expressed to be supplemental thereto.

 

	
12.26

	
Merged Corporation: Any corporation into which the Trustee shall be merged or with which it shall be consolidated or any company resulting from any such merger or consolidation shall be a party hereto and shall be the Trustee under this Trust Deed without executing or filing any paper or document or any further act on the part of the parties thereto.

 

	
12.27

	
Action by the Trustee: The Trustee shall not be bound to take any action in connection with this Trust Deed or any obligations arising pursuant thereto, including, without prejudice to the generality of the foregoing, forming any opinion or employing any financial adviser, where it is not reasonably satisfied that it will be indemnified and/or secured and/or pre-funded against all Liabilities which may be incurred in connection with such action and may demand prior to taking any such action that there be paid to it in advance such sums as it reasonably considers (without prejudice to any further demand) shall be sufficient so to indemnify it.

 

  

24

  

 

	
12.28

	
Rating Agency: The Trustee shall have no responsibility whatsoever to the relevant Issuer, the Guarantor, any ECN Securityholder or Couponholder or any other person for the maintenance of or failure to maintain any rating of any of the ECNs by any rating agency.

 

	
12.29

	
Transfers of Restricted Global Certificate: The Trustee shall have no responsibility whatsoever to any person for monitoring any of the matters referred to in Clause 3.4 and shall incur no liability by reason of any action taken by the Trustee in respect of or in reliance upon or at the direction or request of any ECN Holder who holds any interest in a Restricted Global Certificate otherwise than in compliance with the provisions of such Clause.

 

	
13

	
Trustee Liability

 

Section 1 of the Trustee Act 2000 shall not apply to any function of the Trustee, provided that if the Trustee fails to show the degree of care and diligence required of it as trustee, nothing in this Trust Deed shall relieve or indemnify it from or against any liability that would otherwise attach to it in respect of any negligence, wilful default or breach of trust of which it may be guilty.

 

	
14

	
Waiver

 

The Trustee may, without the consent of the ECN Securityholders or Couponholders and without prejudice to its rights in respect of any subsequent breach, from time to time and at any time, if in its opinion the interests of the ECN Securityholders will not be materially prejudiced thereby, on such terms as seem expedient to it, waive or authorise, any breach or proposed breach by an Issuer or a Guarantor of this Trust Deed, the Conditions or the Agency Agreement or determine that an Event of Default or Potential Event of Default shall not be treated as such provided that the Trustee shall not do so in contravention of an express direction given by an Extraordinary Resolution or a request made pursuant to Condition 12. No such direction or request shall affect a previous waiver, authorisation or determination. Any such waiver, authorisation or determination shall be binding on the ECN Securityholders and the Couponholders and, if the Trustee so requires, shall be notified to the ECN Securityholders as soon as practicable.

 

	
15

	
Trustee not precluded from entering into contracts

 

The Trustee and any other person, whether or not acting for itself, may acquire, hold or dispose of any ECN, Coupon, Talon or other security (or any interest therein) of an Issuer, a Guarantor or any other person, may enter into or be interested in any contract or transaction with any such person and may act on, or as depositary or agent for, any committee or body of holders of any securities of any such person in each case with the same rights as it would have had if the Trustee were not acting as Trustee and need not account for any profit.

 

	
16

	
Modification and Substitution

 

	
16.1

	
Modification: The Trustee may agree without the consent of the ECN Securityholders or Couponholders to any modification to this Trust Deed or the Agency Agreement which is, in its opinion of a formal, minor or technical nature or to correct a manifest error. The Trustee may also so agree to any other modification, of any of the provisions of this Trust Deed or 

 

  

25

  

 

	
 

	
the Agency Agreement that is in its opinion not materially prejudicial to the interests of the ECN Securityholders, but such power does not extend to any such modification as is mentioned in the proviso to paragraph 2 of Schedule 3. Any such modification may be made on such terms and subject to such conditions (if any) as the Trustee may determine, shall be binding on ECN Securityholders and the Couponholders and, unless the Trustee agrees otherwise, shall be notified by the relevant Issuer to the ECN Securityholders in accordance with Condition 17 as soon as practicable thereafter. The Trustee will have no power to agree to any modification of the Deed Poll on behalf of the ECN Securityholders.

 

	
16.2

	
Substitution:

 

Subject to the Issuer giving at least one month’s notice to, and receiving no objection from, the FSA (or such shorter period of notice as the FSA may from time to time require or accept and so long as there is a requirement to give such notice), the Trustee, (in the case of (A) below) shall, and (in the case of (B) below) may, without the consent of the ECN Securityholders or Couponholders, agree to the substitution of (A) in the event of an Exempt Newco Scheme, Newco as provided in and for the purposes of Condition 13(c), in place of LBG as Guarantor or (B) an Issuer’s successor in business in place of the Issuer (or of any previously substituted company under this Clause) (each, a “Substituted Obligor”) as the principal debtor or guarantor, as applicable, under this Trust Deed and the ECNs, subject to (in the case of (B) only) the Trustee being of the opinion that such substitution will not be materially prejudicial to the interests of the ECN Securityholders and (in the case of (A) and (B)), provided that:

 

	 	
16.2.1

	
a deed is executed or undertaking given by the Substituted Obligor to the Trustee, in form and manner satisfactory to the Trustee, agreeing to be bound by this Trust Deed, the ECNs, the Coupons and the Talons (with consequential amendments as the Trustee may deem appropriate) as if the Substituted Obligor had been named in this Trust Deed, the ECNs, the Certificates, the Coupons and the Talons as the principal debtor in place of the relevant Issuer(s) or as the relevant guarantor in place of the Guarantor, as the case may be

 

	 	
16.2.2

	
if the Substituted Obligor is subject generally to the taxing jurisdiction of a territory or any authority of or in that territory with power to tax (the “Substituted Territory”) other than the territory to the taxing jurisdiction of which (or to any such authority of or in which) the relevant Issuer is subject generally (the “Issuer’s Territory”), or to which the Guarantor is subject generally (the “Guarantor’s Territory”) the Substituted Obligor shall (unless the Trustee otherwise agrees) give to the Trustee an undertaking satisfactory to the Trustee in terms corresponding to Condition 10 with the substitution for the references in that Condition to the relevant Issuer’s Territory or the Guarantor’s Territory as the case may be of references to the Substituted Territory whereupon the Trust Deed, the ECNs, the Certificates, the Coupons and the Talons shall be read accordingly

 

	 	
16.2.3

	
two directors of the Substituted Obligor certify that it will be solvent immediately after such substitution, (in which case the Trustee need not have regard to the Substituted Obligor’s financial condition, profits or prospects or compare them with those of the relevant Issuer or the Guarantor)

 

	 	
16.2.4

	
(in the case of (B) above only) the relevant Issuer, the Guarantor and the Substituted Obligor comply with such other requirements as the Trustee may direct in the interests of the ECN Securityholders

 

  

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16.2.5

	
(in the case of (B) above only) the obligations of the Substituted Obligor under this Trust Deed, the ECNs, and the Coupons are guaranteed by the Guarantor in the same terms (with consequential amendments as necessary) as the Guarantee, to the Trustee’s satisfaction

 

	 	
16.2.6

	
(in the case of (A) above only) confirmation that the ratings of the ECNs from each of Standard and Poor’s, Moody’s and Fitch will not be adversely affected by such substitution

 

	 	
16.2.7

	
(in the case of (A) above only) the ECNs will continue to be listed on the official list or the Financial Services Authority and traded on the Market or on another stock exchange and/or on another market, in either case as approved by the Trustee

 

	 	
16.2.8

	
(in the case of (A) above only) the Trustee is provided with legal opinions (in a form satisfactory to the Trustee) as to the enforceability of the obligations of the Substituted Obligor as to English and any other applicable law and

 

	 	
16.2.9

	
the Trustee shall not be obliged to act under this Clause if to do so would or may in the opinion of the Trustee expose it to liability, reduce its protections or place more onerous obligations upon it.

 

	
16.3

	
Release of Substituted Issuer: An agreement by the Trustee pursuant to Clause 16.2 shall, if so expressed, release the relevant Issuer or, as the case may be, LBG (or a previous substitute) from any or all of its obligations under this Trust Deed, the ECNs, the Coupons and the Talons. Notice of the substitution shall be given to the ECN Securityholders within 14 days of the execution of such documents and compliance with such requirements.

 

	
16.4

	
Completion of Substitution: On completion of the formalities set out in Clause 16.2, the Substituted Obligor shall be deemed to be named in this Trust Deed, the ECNs, the Certificates, the Coupons and the Talons as the principal debtor in place of the relevant Issuer (or of any previous substitute) or guarantor in place of the relevant Guarantor and this Trust Deed, the ECNs, the Certificates, the Coupons and the Talons shall be deemed to be amended as necessary to give effect to the substitution.

 

	
17

	
Appointment, Retirement and Removal of the Trustee

 

	
17.1

	
Appointment: Subject as provided in Clause 17.2, the Issuers have the power of appointing new trustees but no-one may be so appointed unless previously approved by an Extraordinary Resolution. A trust corporation shall at all times be a Trustee and may be the sole Trustee. Any appointment of a new Trustee shall be notified by each Issuer to the ECN Securityholders as soon as practicable.

 

	
17.2

	
Retirement and Removal: Any Trustee may retire at any time on giving at least 60 days’ written notice to the Issuers and the Guarantor without giving any reason or being responsible for any costs occasioned by such retirement and the ECN Securityholders may by Extraordinary Resolution remove any Trustee provided that the retirement or removal of a sole trust corporation shall not be effective until a trust corporation is appointed as successor Trustee. If a sole trust corporation gives notice of retirement or an Extraordinary Resolution is passed for its removal, the Issuers shall use all reasonable endeavours to procure that another trust corporation be appointed as Trustee but if it fails to do so before the expiry of such 60 day notice period or within 30 days after the passing of any such Extraordinary Resolution, the Trustee shall have the power to appoint a new Trustee.

 

  

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17.3

	
Co-Trustees: The Trustee may, despite Clause 17.1, by written notice to each Issuer and each Guarantor appoint anyone to act as an additional Trustee jointly with the Trustee:

 

	 	
17.3.1

	
if the Trustee considers the appointment to be in the interests of the ECN Securityholders and/or the Couponholders

 

	 	
17.3.2

	
to conform with a legal requirement, restriction or condition in a jurisdiction in which a particular act is to be performed or

 

	 	
17.3.3

	
to obtain a judgment or to enforce a judgment or any provision of this Trust Deed in any jurisdiction.

 

Subject to the provisions of this Trust Deed the Trustee may confer on any person so appointed such functions as it thinks fit. The Trustee may by written notice to each Issuer, each Guarantor and that person remove that person. At the Trustee’s request, the Issuers and the Guarantors shall forthwith do all things as may be required to perfect such appointment or removal and each of them irrevocably appoints the Trustee as their attorney in their name and on its behalf to do so.

 

	
17.4

	
Competence of a Majority of Trustees: If there are more than two Trustees the majority of them shall be competent to perform the Trustee’s functions provided the majority includes a trust corporation.

 

	
18

	
ECNs held in Clearing Systems and Couponholders

 

	
18.1

	
ECNs Held in Clearing Systems: So long as any Global Note is, or any ECNs represented by a Global Certificate are, held on behalf of a clearing system, in considering the interests of ECN Securityholders, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders or participants with entitlements to any such Global Note or the Registered ECNs and may consider such interests on the basis that such accountholders or participants were the holder(s) thereof.

 

	
18.2

	
Couponholders: No notices need be given to Couponholders. They shall be deemed to have notice of the contents of any notice given to ECN Securityholders. Even if it has express notice to the contrary, in exercising any of its functions by reference to the interests of the ECN Securityholders, the Trustee shall assume that the holder of each ECN is the holder of all Coupons and Talons relating to it.

 

	
19

	
Currency Indemnity

 

	
19.1

	
Currency of Account and Payment: The Contractual Currency is the sole currency of account and payment for all sums payable by the relevant Issuer or the Guarantor under or in connection with this Trust Deed, the ECNs and the Coupons, including damages.

 

	
19.2

	
Extent of Discharge: An amount received or recovered in a currency other than the Contractual Currency (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the insolvency, winding-up or dissolution of the relevant Issuer or the Guarantor or otherwise), by the Trustee or any ECN Securityholder or Couponholder in respect of any sum expressed to be due to it from the relevant Issuer or Guarantor shall only discharge the relevant Issuer and Guarantor to the extent of the Contractual Currency amount that the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it 

 

  

28

  

 

	
 

	
is not practicable to make that purchase on that date, on the first date on which it is practicable to do so).

 

	
19.3

	
Indemnity: If that Contractual Currency amount is less than the Contractual Currency amount expressed to be due to the recipient under this Trust Deed, the ECNs or the Coupons, the relevant Issuer, failing whom the Guarantor, shall indemnify it against any loss sustained by it as a result. In any event, the relevant Issuer, failing whom the Guarantor, shall indemnify the recipient against the cost of making any such purchase.

 

	
19.4

	
Indemnity Separate: The indemnities in this Clause 19 and in Clause 11.4 constitute separate and independent obligations from the other obligations in this Trust Deed, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by the Trustee and/or any ECN Securityholder or Couponholder and shall continue in full force and effect despite any judgment, order, claim or proof for a liquidated amount in respect of any sum due under this Trust Deed, the ECNs and/or the Coupons or any other judgment or order.

 

	
20

	
Communications

 

	
20.1

	
Method: Each communication under this Trust Deed shall be made by electronic communication, fax or otherwise in writing. Each communication or document to be delivered to any party under this Trust Deed shall be sent to that party at the fax number, postal address or electronic address, and marked for the attention of the person (if any), from time to time designated by that party to each other party for the purpose of this Trust Deed. The initial telephone number, fax number, postal address, electronic address and person so designated by the parties under this Trust Deed are:

 

in the case of LBG Capital No. 1 plc, to it at:

 

10 Gresham Street

London EC2V 7AE

United Kingdom

 

	
Fax No.:

	
020 7158 3277

 

	
Attention:

	
Group Funding and Capital Markets Issuance Director, Group Corporate Treasury

 

in the case of LBG Capital No. 2 plc, to it at:

 

10 Gresham Street

London EC2V 7AE

United Kingdom

 

	
Fax No.:

	
020 7158 3277

 

	
Attention:

	
Group Funding and Capital Markets Issuance Director, Group Corporate Treasury

 

in the case of Lloyds Banking Group plc, to it at:

 

10 Gresham Street

London EC2V 7AE

United Kingdom

 

	
Fax no.:

 

	
020 7158 3277

 

 

  

29

  

 

	
Attention:

	
Group Funding and Capital Markets Issuance Director, Group Corporate Treasury

 

in the case of Lloyds TSB Bank plc, to it at:

 

10 Gresham Street

London EC2V 7AE

United Kingdom

 

	
Fax no.:

 

	
020 7158 3277

 

	
Attention:

	
Group Funding and Capital Markets Issuance Director, Group Corporate Treasury

 

in the case of the Trustee, to it at:

 

BNY Corporate Trustee Services Limited

One Canada Square

London E14 5AL

United Kingdom

 

	
Fax no.:

 

	
020 7964 2536

 

	
Attention:

	
Trustee Administration Manager

 

	
20.2

	
Deemed Receipt: Any communication from any party to any other under this Trust Deed shall be effective, (if by fax) when good receipt is confirmed by the recipient following enquiry by the sender, (if in writing) when delivered and (if by electronic communication) when the relevant receipt of such communication being read is given, or where no read receipt is requested by the sender, at the time of sending, provided that no delivery failure notification is received by the sender within 24 hours of sending such communication; provided that any, communication which is received (or deemed to take effect in accordance with the foregoing) outside business hours or on a non-business day in the place of receipt shall be deemed to take effect at the opening of business on the next following business day in such place. Any communication delivered to any party under this Trust Deed which is to be sent by electronic communication will be written legal evidence.

 

	
21

	
Further Issues

 

	
21.1

	
Supplemental Trust Deed: If either Issuer issues further securities to be constituted by a trust deed supplemental to this Trust Deed as provided in the Conditions, such Issuer shall, before their issue, execute and deliver to the Trustee a deed supplemental to this Trust Deed containing such provisions (whether or not corresponding to any of the provisions of this Trust Deed) as the Trustee may require.

 

	
21.2

	
Meetings of ECN Securityholders: If the Trustee so directs, Schedule 3 shall apply equally to ECN Securityholders and to holders of any other securities issued pursuant to the Conditions as if references in it to “ECNs” and “ECN Securityholders” were also to such securities and their holders respectively.

 

  

30

  

 

	
22

	
Governing Law

 

	
22.1

	
Governing Law: This Trust Deed and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law, save that where the Guarantor is LBG the provisions of Clause 5.2.1 relating to the subordination of the Guarantee are governed by, and shall be construed in accordance with, Scots law.

 

	
22.2

	
Jurisdiction: The courts of England are to have jurisdiction to settle any disputes that may arise out of or in connection with this Trust Deed, the ECNs, the Coupons or the Talons or the Guarantee and accordingly any legal action or proceedings arising out of or in connection with this Trust Deed, the ECNs, the Coupons or the Talons or the Guarantee (“Proceedings”) may be brought in such courts. The Issuers and the Guarantors irrevocably submit to the jurisdiction of the courts of England and waives any objections to Proceedings in such courts on the ground of venue or on the ground that the Proceedings have been brought in an inconvenient forum. These submissions are for the benefit of each of the Trustee, the ECN Securityholders and the Couponholders and shall not limit the right of any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in any one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).

 

  

31

  

 

	
22.3

	
Service of Process: LBG irrevocably appoints the London office of LBG at 25 Gresham Street, London EC2V 7HN to receive, for it and on its behalf, service of process in any Proceedings in England. Such service shall be deemed completed on delivery to such process agent (whether or not it is forwarded to and received by LBG). If for any reason such process agent ceases to be able to act as such or no longer has an address in England, LBG irrevocably agrees to appoint a substitute process agent acceptable to the Trustee and shall immediately notify the Trustee of such appointment. Nothing shall affect the right to serve process in any other manner permitted by law.

 

 

 

 

In witness whereof this deed consisting of this and the preceding 31 pages together with 5 Schedules has been executed and delivered on the date stated at the beginning and as follows:

 

 

LBG CAPITAL NO. 1 plc

as Issuer

 

By its duly authorised attorney:

 

 

 

LBG CAPITAL NO. 2 plc

as Issuer

 

By its duly authorised attorney:

 

 

 

LLOYDS BANKING GROUP plc

as Guarantor

 

By its duly authorised attorney:

 

 

 

LLOYDS TSB BANK plc

as Guarantor

 

By its duly authorised attorney:

 

  

32

  

 

	
Executed as a Deed by

BNY CORPORATE TRUSTEE SERVICES LIMITED

acting by two of its lawful attorneys:

 

 

 

Attorney:

 

 

 

Attorney:

 

 

 

in the presence of:

Witness name:

 

 

 

Signature:

 

 

 

Address:

 

 

 

 

  

33

  

 

This is the Schedule 1 referred to in the foregoing Trust Deed dated 1 December 2009 entered into among LBG Capital No. 1 plc, LBG Capital No. 2 plc, Lloyds Banking Group plc, Lloyds TSB Bank plc and BNY Corporate Trustee Services Limited

Schedule 1

Part A

Form of Temporary Global Note

 

ISIN: [●]

COMMON CODE: [●]

 

 

THIS TEMPORARY GLOBAL NOTE AND THE GUARANTEES IN RESPECT HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT"). NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO ANY U.S. PERSON UNLESS AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

(Incorporated with limited liability in England and Wales)

 

ENHANCED CAPITAL NOTE

 

irrevocably and unconditionally guaranteed by

[Lloyds Banking Group plc

(incorporated as a public company limited by shares in Scotland)]

[and]

[Lloyds TSB Bank plc

(Incorporated with limited liability in England and Wales)]*

 

[DESCRIPTION OF ISSUE]

 

TEMPORARY GLOBAL NOTE

 

 

This is to certify that the bearer is entitled to the principal sum of

 

[●] ([●])

 

[together with any applicable premium] on such date as such principal sum may become repayable in accordance with the Trust Deed (as defined below) and with the terms and conditions of the ECNs designated above (the “ECNs”) set out in Schedule 4 to the trust deed dated 1 December 2009 as amended and/or supplemented from time to time (the “Trust Deed”) between the Issuer, [LBG Capital No. 1 plc/LBG Capital No. 2 plc]*, Lloyds Banking Group plc, Lloyds TSB Bank plc and BNY Corporate Trustee Services Limited as trustee, as supplemented by the Pricing Schedule set out in Schedule 5 Part [●] of the Trust Deed (together, the “Conditions”), upon presentation and surrender of this temporary Global Note and to interest on such principal sum at rates and on the dates determined in accordance with the Conditions together with any other amounts, including any applicable premium, as may be payable under the Conditions, all subject to and in accordance with the Conditions.

 

Promise to Pay

 

Subject as provided herein, the Issuer, for value received, hereby promises to pay to the bearer of this temporary Global Note, upon presentation and (when no further payment is due in respect of this temporary Global Note) surrender of this temporary Global Note, on the Maturity Date (or on 

 

 

 

	
*

	
Delete as applicable

 

  

34

  

 

such earlier date as the amount payable upon redemption under the Conditions may become repayable in accordance with the Conditions) the amount payable upon redemption under the Conditions in respect of the aggregate principal amount of ECNs represented by this temporary Global Note and (unless this temporary Global Note does not bear interest) to pay interest in respect of the ECNs from the Interest Commencement Date in arrear at the rates, on the dates for payment, and in accordance with the methods of calculation provided for in the Conditions, save that the calculation is made in respect of the total aggregate amount of the ECNs, together with such other sums and additional amounts (if any) as may be payable under the Conditions, in accordance with the Conditions.

 

For so long as any of the ECNs are represented by this temporary Global Note, the bearer of this temporary Global Note may, except as ordered by a court of competent jurisdiction or as required by law, be treated by the Issuer, the Trustee and the Paying and Conversion Agents as the owner hereof and of all rights hereunder free from all encumbrances (in accordance with and subject to its terms and the Trust Deed) and the expression “ECN Securityholder” and related expressions shall be construed accordingly.

 

On or after [●] 20● (the “Exchange Date”) this temporary Global Note may be exchanged in whole or in part (free of charge to the holder) by its presentation and, on exchange in full, surrender to or to the order of the Principal Paying Agent for interests in a permanent Global Note (the “permanent Global Note”) in bearer form in an aggregate principal amount equal to the principal amount of this temporary Global Note submitted for exchange with respect to which there shall be presented to the Principal Paying and Conversion Agent a certificate dated no earlier than the Exchange Date from Euroclear Bank S.A./N.V. (“Euroclear”) or Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) substantially to the following effect:

 

CERTIFICATE

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

 

[DESCRIPTION OF ISSUE]

Common Code [●] ISIN [●] (the “ECNs”)

 

This is to certify that, based solely on certificates we have received in writing, by tested telex or by electronic transmission from member organisations appearing in our records as persons being entitled to a portion of the principal amount set out below (our “Member Organisations”) substantially to the effect set out in the temporary Global Note in respect of the ECNs, as of the date hereof, [amount] principal amount of the ECNs (1) is owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States federal income taxation regardless of its source (“United States persons”), (2) is owned by United States persons that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv) (“financial institutions”)) purchasing for their own account or for resale, or (b) acquired the ECNs through foreign branches of United States financial institutions and who hold the ECNs through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the Issuer or the Issuer’s agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (3) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign financial institutions described in clause (3) above (whether or not also described in clause (1) or (2)) have certified 

 

  

35

  

 

that they have not acquired the ECNs for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.

 

We further certify (1) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of such temporary Global Note excepted in such certificates and (2) that as of the date hereof we have not received any notification from any of our Member Organisations to the effect that the statements made by such Member Organisation with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as of the date hereof.

 

We understand that this certificate is required in connection with certain tax laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorise you to produce this certificate to any interested party in such proceedings.

 

Yours faithfully

 

[EUROCLEAR BANK S.A./N.V./CLEARSTREAM BANKING, SOCIÉTÉ ANONYME]

 

By:                                           Dated: [date]

 

Any person appearing in the records of Euroclear or Clearstream, Luxembourg as entitled to an interest in this temporary Global Note may require the exchange of an appropriate part of this temporary Global Note for an equivalent interest in the permanent Global Note by delivering or causing to be delivered to Euroclear or Clearstream, Luxembourg a certificate dated not more than 15 days before the Exchange Date in substantially the following form (copies of which will be available at the office of Euroclear in Brussels and Clearstream, Luxembourg in Luxembourg):

 

CERTIFICATE

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

 

[DESCRIPTION OF ISSUE]

Common Code: [●] ISIN: [●] (the “ECNs”)

 

To:           Euroclear Bank S.A./N.V./Clearstream Banking, société anonyme

 

This is to certify that as of the date hereof, and except as set out below, the ECNs held by you for our account (1) are owned by person(s) that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States federal income taxation regardless of its source (“United States person(s)”), (2) are owned by United States person(s) that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(iv) (“financial institutions”)) purchasing for their own account or for resale, or (b) acquired the ECNs through foreign branches of United States financial institutions and who hold the ECNs through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the Issuer or the Issuer’s agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (3) are owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the ECNs is a United States or foreign financial institution described in clause (3) above (whether or not also described in clause (1) or (2)) this is to further certify that such financial institution has not acquired the ECNs for purposes of resale 

 

  

36

  

 

directly or indirectly to a United States person or to a person within the United States or its possessions.

 

As used herein, “United States” means the United States of America (including the States and the District of Columbia) and its “possessions” include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.

 

We undertake to advise you promptly by tested telex on or prior to that date on which you intend to submit your certificate relating to the ECNs held by you for our account in accordance with your documented procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certificate applies as of such date.

 

This certificate excepts and does not relate to [amount] principal amount of such interest in the ECNs in respect of which we are not able to certify and as to which we understand exchange for an equivalent interest in the permanent Global Note (or, if relevant, exercise of any rights or collection of any interest) cannot be made until we do so certify.

 

We understand that this certificate is required in connection with certain tax laws of the United States. In connection therewith, of administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorise you to produce this certificate to any interested party in such proceeding.

 

Dated:

 

By:

 

[Name of person giving certificate]

 

As, or as agent for the beneficial owner(s) of the above ECNs to which this certificate relates.”

 

Upon any exchange of a part of this temporary Global Note for an equivalent interest in the permanent Global Note, the portion of the principal amount hereof so exchanged shall be endorsed by or on behalf of the Principal Paying and Conversion Agent in Schedule 1 hereto, whereupon the principal amount hereof shall be reduced for all purposes by the amount so exchanged and endorsed.

 

The permanent Global Note will be exchangeable in accordance with its terms for definitive ECNs in bearer form with Coupons [and a Talon] attached.

 

This temporary Global Note is subject to the Conditions and the Trust Deed and until the whole of this temporary Global Note shall have been exchanged for equivalent interests in the permanent Global Note its holder shall be entitled to the same benefits as if he were the holder of the permanent Global Note for interests in which it may be exchanged (or the relevant part of it as the case may be) except that (unless exchange of this temporary Global Note for the relevant interest in the permanent Global Note shall be improperly withheld or refused by or on behalf of the Issuer) no person shall be entitled to receive any payment on this temporary Global Note where such payment falls due on or after the Exchange Date.

 

No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this temporary Global Note, but this does not affect any right or remedy of any person which exists or is available apart from that Act.

 

This temporary Global Note shall not be valid or become obligatory for any purpose until authenticated by or on behalf of the Principal Paying and Conversion Agent.

 

  

37

  

 

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

 

In witness whereof the Issuer has caused this temporary Global Note to be signed manually or in facsimile on its behalf.

 

Dated [●] 2009

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

 

 

	
By:

	
....................................

	
  

	
 Director

 

  

38

  

This temporary Global Note is authenticated (without liability or recourse) by or on behalf of the Principal Paying and Conversion Agent.

 

 

	
By:

	
....................................

	
  

	
 Authorised Signatory

 

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

 

 

 

 

  

39

  

 

 

The First Schedule

Exchanges for Interests in the permanent Global Note

 

The following exchanges of an interest in this temporary Global Note for an interest in the permanent Global Note have been made:

 

	
Date of Exchange

	  	
Amount of decrease in principal amount of this temporary Global Note

	  	
Principal amount of this temporary Global Note following such decrease

	  	
Notation made by or on behalf of the Principal Paying and Conversion Agent

 

 

 

 

 

 

 

 

 

  

40

  

 

Schedule 1

Part B

 

Form of Permanent Global Note

 

ISIN: [●]

 

COMMON CODE: [●]

 

THIS PERMANENT GLOBAL NOTE AND THE GUARANTEES IN RESPECT HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT"). NEITHER THIS PERMANENT GLOBAL NOTE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO ANY U.S. PERSON UNLESS AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

(Incorporated with limited liability in England and Wales)

 

ENHANCED CAPITAL NOTE

 

unconditionally and irrevocably guaranteed by

[[Lloyds Banking Group plc

(incorporated as a public company limited by shares in Scotland)]

[and]

[Lloyds TSB Bank plc

(Incorporated with limited liability in England and Wales)]*

 

[DESCRIPTION OF ISSUE]

 

PERMANENT GLOBAL NOTE

 

 

This is to certify that the bearer is entitled to a principal sum not exceeding

 

[●] ([●])

 

[together with any applicable premium] on such date as such principal sum may become repayable in accordance with the trust deed (as defined below) and with the terms and conditions of the ECNs designated above (the “ECN”) set out in Schedule 4 to the trust deed, dated 1 December 2009 as amended and/or supplemented from time to time (the “Trust Deed”) between the Issuer, [LBG Capital No. 1 plc/LBG Capital No. 2 plc]*, Lloyds Banking Group plc, Lloyds TSB Bank plc and BNY Corporate Trustee Services Limited as trustee, as supplemented by the Pricing Schedule set out in Schedule 5 Part [●] of the Trust Deed (together, the “Conditions”), upon presentation and surrender of this permanent Global Note and to interest on such principal sum at the rates and on the dates determined in accordance with the Trust Deed together with any other amounts, including any applicable premium, as may be payable under the Conditions, all subject to and in accordance with the Conditions.

 

The aggregate principal amount from time to time of this permanent Global Note shall be that amount not exceeding [●] as shall be shown by the latest entry in the fourth column of Schedule 1 hereto, which shall be completed by or on behalf of the Principal Paying and Conversion Agent upon exchange of the whole or a part of the temporary Global Note initially representing the ECNs for a corresponding interest herein or upon the redemption, conversion or purchase and cancellation of ECNs represented hereby.

 

 

	
*

	
Delete as appropriate

 

  

41

  

 

Promise to Pay

 

Subject as provided herein, the Issuer, for value received, hereby promises to pay to the bearer of this permanent Global Note, upon presentation and (when no further payment is due in respect of this permanent Global Note) surrender of this permanent Global Note, on the Maturity Date (or on such earlier date as the amount payable upon redemption under the Conditions may become repayable in accordance with the Conditions) the amount payable upon redemption under the Conditions in respect of the aggregate principal amount of ECNs represented by this permanent Global Note and (unless this permanent Global Note does not bear interest) to pay interest in respect of the ECNs from the Interest Commencement Date in arrear at the rates, on the dates for payment, and in accordance with the methods of calculation provided for in the Conditions, save that the calculation is made in respect of the total aggregate amount of the ECNs, together with such other sums and additional amounts (if any) as may be payable under the Conditions, in accordance with the Conditions.

 

Exchange

 

This permanent Global Note is exchangeable (free of charge to the holder) on or after the Exchange Date in whole but not in part for the Definitive Notes if Euroclear or Clearstream, Luxembourg or any other clearing system (an “Alternative Clearing System”) is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so and no Alternative Clearance System satisfactory to the Trustee is available.

 

“Exchange Date” means a day falling not less than 60 days after that on which the notice requiring exchange is given and on which banks are open for business in the city in which the specified office of the Principal Paying and Conversion Agent is located and in the city in which the relevant clearing system is located.

 

Any such exchange may be effected on or after an Exchange Date by the holder of this permanent Global Note surrendering this permanent Global Note or, in the case of a partial exchange, presenting it for endorsement to or to the order of the Principal Paying and Conversion Agent. In exchange for this permanent Global Note, or part thereof to be exchanged, the Issuer shall deliver, or procure the delivery of, duly executed and authenticated Definitive Notes in an aggregate principal amount equal to the principal amount of this permanent Global Note submitted for exchange, security printed and substantially in the form set out in Schedule 2 to the Trust Deed as supplemented and/or modified and/or superseded by the terms of the Third Schedule hereto.

 

On any exchange of a part of this permanent Global Note the portion of the principal amount hereof so exchanged shall be endorsed by or on behalf of the Principal Paying and Conversion Agent in the First Schedule hereto, whereupon the principal amount hereof shall be reduced for all purposes by the amount so exchanged and endorsed.

 

On exchange in full of each permanent Global Note, the relevant Issuer will, if the holder so requests, procure that it is cancelled and returned to the holder together with the relevant Definitive Notes.

 

Benefit of Conditions

 

Except as otherwise specified herein, this permanent Global Note is subject to the Conditions and the Trust Deed and, until it is exchanged for Definitive Notes, the holder of this permanent Global Note shall in all respects be entitled to the same benefits as if it were the holder of the Definitive Notes for which it may be exchanged and as if such Definitive Notes had been issued on the date of this permanent Global Note and shall have the benefit of and be bound by all applicable provisions of the Deed Poll.

 

  

42

  

 

Payments

 

No payment falling due after the Exchange Date will be made on this permanent Global Note unless, upon due presentation of this permanent Global Note for exchange, delivery of Definitive Notes is improperly withheld or refused. Payments in respect of this permanent Global Note shall be made against presentation for endorsement and, if no further payment falls to be made in respect of the ECNs, surrender of this permanent Global Note to or to the order of the Principal Paying and Conversion Agent or such other paying and conversion agent as shall have been notified to the Holders for such purpose. A record of each payment so made will be endorsed on this permanent Global Note, which endorsement will be prima facie evidence that such payment has been made in respect of the ECNs represented hereby. Condition 9(e) and Condition 10(f) will apply to Definitive Notes only.

 

Prescription

 

Claims in respect of principal and interest in respect of this permanent Global Note shall become void unless it is presented for payment within a period of 12 years (in the case of principal) and five years (in the case of interest) from the appropriate Relevant Date (as defined in Condition 19).

 

Meetings

 

For the purposes of any meeting of ECN Securityholders, the holder of this permanent Global Note shall (unless this permanent Global Note represents only one ECN) be treated as two persons for the purposes of any quorum requirements of a meeting of ECN Securityholders and, at any such meeting, as having one vote in respect of each integral currency unit of the Specified Currency of the ECNs.

 

Cancellation

 

Cancellation of any ECN represented by this permanent Global Note that is required by the Conditions to be cancelled (other than upon its redemption) shall be effected by reduction in the principal amount of this permanent Global Note.

 

Purchase

 

ECNs may only be purchased by the Issuer, the Guarantors or any of their respective subsidiaries or any holding company of the Issuer or any subsidiary of any such holding company if they are purchased together with the right to receive all future payments of interest thereon.

 

Trustee’s Powers

 

In considering the interests of Holders while this permanent Global Note is held on behalf of a clearing system, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to such permanent Global Note and may consider such interests as if such accountholders were the holders of the ECNs represented by this permanent Global Note.

 

Notices

 

So long as any ECNs are represented by this permanent Global Note and such permanent Global Note is held on behalf of a clearing system, notices to the holders of ECNs may be given by delivery of the relevant notice to that clearing system for communication by it to the relative accountholders in substitution for publication as required by the Conditions

 

Conversion

 

As soon as reasonably practicable following the occurrence of a Conversion Trigger, the Issuer shall give notice thereof to the relevant clearing system for communication by it to entitled accountholders (subject to the provisions of paragraph headed “Notices” above) within the time 

 

  

43

  

 

limits set out in and containing the information required by Condition 7(a). In order to obtain any Ordinary Shares upon Conversion Holders must give notice to the Principal Paying and Conversion Agent in accordance with the standard procedures of Euroclear and Clearstream, Luxembourg prior to the date specified in the Deed Poll (which may include notice being given on instruction by Euroclear or Clearstream, Luxembourg or any common depositary for them to the Principal Paying and Conversion Agent by electronic means) in a form acceptable to Euroclear and Clearstream, Luxembourg.

 

No provisions of this permanent Global Note shall alter or impair the obligation of the Issuer and the Guarantors to pay the principal and premium of and interest on the ECNs when due in accordance with the Conditions and the Guarantee.

 

This permanent Global Note shall not be valid or become obligatory for any purpose until authenticated by or on behalf of the Principal Paying and Conversion Agent.

 

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

 

In witness whereof the Issuer has caused this permanent Global Note to be duly signed on its behalf.

 

Dated as of the Issue Date.

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

 

By:           .......................

    Director

 

 

CERTIFICATE OF AUTHENTICATION

 

This permanent Global Note is authenticated

by or on behalf of the Principal Paying and Conversion Agent.

 

The Bank of New York Mellon, London Branch

as Principal Paying and Conversion Agent

 

By:

 

Authorised Signatory

For the purposes of authentication only.

 

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

 

	
*

	
Delete as appropriate

 

  

44

  

 

 

The First Schedule

Principal amount of ECNs represented by this permanent Global Note

 

The following (i) issues of ECNs initially represented by this permanent Global Note, (ii) exchanges of interests in a temporary Global Note for interests in this permanent Global Note, (iii) exchanges of the whole or a part of this permanent Global Note for Definitive Notes, (iv) cancellations, forfeitures or conversion of interests in this permanent Global Note and/or (v) payments of amounts payable upon redemption in respect of this permanent Global Note have been made, resulting in the principal amount of this permanent Global Note specified in the latest entry in the fourth column:

 

	
Date

 

	 	
Amount of increase/decrease in principal amount of this permanent Global Note

 

	 	
Reason for increase/decrease in principal amount of this permanent Global Note (initial issue, exchange, cancellation, conversion, forfeiture or payment, stating amount of payment made)

 

	 	
Principal amount of this permanent Global Note following such increase/decrease

 

	 	
Notation made by or on behalf of the Principal Paying and Conversion Agent

 

 

 

 

 

 

 

 

  

45

  

 

 

The Second Schedule

Payments of Interest

 

The following payments of interest or Interest Amount in respect of this permanent Global Note have been made:

 

	
Due date of payment

 

	 	
Date of payment

 

	
Amount of interest

 

	
Notation made by or on behalf of the Principal Paying and Conversion Agent

 

 

 

 

 

 

 

  

46

  

 

Schedule 1

Part C

Form of Regulation S Global Certificate

 

ISIN: [●]

Common Code: [●]

 

THE NOTES IN RESPECT OF WHICH THIS REGULATION S GLOBAL CERTIFICATE IS ISSUED AND THE GUARANTEES IN RESPECT THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD (A) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (B) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OF THE OFFERING OR THE CLOSING DATE, WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON UNLESS AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

(Incorporated with limited liability in England and Wales)

 

ENHANCED CAPITAL NOTE

 

unconditionally and irrevocably guaranteed by

[Lloyds Banking Group plc

(incorporated as a public company limited by shares in Scotland)]

[and]

[Lloyds TSB Bank plc

(Incorporated with limited liability in England and Wales)]*

 

REGULATION S GLOBAL CERTIFICATE

 

 

	
Registered Holder:

 

	
[●]

 

Principal amount of ECNs represented by this Regulation S Global Certificate:

 

[●] ([●])

 

This Regulation S Global Certificate is issued in respect of the principal amount specified above of the ECNs (the “ECNs”) of the Series specified above of [LBG Capital No. 1 plc/LBG Capital No. 2 plc]* (the “Issuer”) and guaranteed by [Lloyds Banking Group plc] and [Lloyds TSB Bank plc] (the “Guarantor[s]*”). This Regulation S Global Certificate certifies that the Registered Holder (as defined above) is registered as the holder of such principal amount of the ECNs at the date hereof or such other amount as is shown on the register of ECN Securityholders as being represented by this Regulation S Global Certificate and is duly endorsed (for informational purposes only) in the third column of Schedule A to this Regulation S Global Certificate.

 

Interpretation and Definitions

 

References in this Regulation S Global Certificate to the “Conditions” are to the Terms and Conditions applicable to the ECNs (which are in the form set out in Schedule 4 to the Trust Deed 

 

 

 

	
*

	
Delete as appropriate

 

  

47

  

 

as amended and/or supplemented from time to time, (the “Trust Deed”), dated 1 December 2009 between [LBG Capital No. 1 plc/LBG Capital No. 2 plc]*, Lloyds Banking Group plc, Lloyds TSB Bank plc and BNY Corporate Trustee Services Limited as trustee, as supplemented by the Pricing Schedule set out in Schedule 5 Part [●] to the Trust Deed (together, the “Conditions”), as such form is supplemented and/or modified and/or superseded by the provisions of this Regulation S Global Certificate, which in the event of any conflict shall prevail). Other capitalised terms used in this Regulation S Global Certificate shall have the meanings given to them in the Conditions or the Trust Deed.

 

Promise to Pay

 

The Issuer, for value received, promises to pay to the Registered Holder of the ECNs represented by this Regulation S Global Certificate upon presentation and (when no further payment is due in respect of the ECNs represented by this Regulation S Global Certificate) surrender of this Regulation S Global Certificate on the Maturity Date (or on such earlier date as the amount payable upon redemption under the Conditions may become repayable in accordance with the Conditions) the amount payable upon redemption under the Conditions in respect of the ECNs represented by this Regulation S Global Certificate and (unless the ECNs represented by this Regulation S Global Certificate do not bear interest) to pay interest in respect of such ECNs from the Interest Commencement Date in arrear at the rates, and on the dates for payment, and in accordance with the methods of calculation provided for in the Conditions, save that the calculation is made in respect of the total aggregate amount of the ECNs represented by this Regulation S Global Certificate, together with such other sums and additional amounts (if any) as may be payable under the Conditions, in accordance with the Conditions.

 

For the purposes of this Regulation S Global Certificate, (a) the Registered Holder of the ECNs represented by this Regulation S Global Certificate is bound by the provisions of the Trust Deed and the Agency Agreement and shall be bound by and have the benefit of the applicable provisions of the Deed Poll, (b) the Issuer certifies that the Registered Holder is, at the date hereof, entered in the Register as the holder of the ECNs represented by this Regulation S Global Certificate, (c) this Regulation S Global Certificate is evidence of entitlement only, (d) title to the ECNs represented by this Regulation S Global Certificate passes only on due registration on the Register, and (e) only the Registered Holder of the ECNs represented by this Regulation S Global Certificate is entitled to payments in respect of the ECNs represented by this Regulation S Global Certificate.

 

Exchange for Interests in Definitive Certificates

 

This Regulation S Global Certificate is exchangeable (free of charge to the Registered Holder) on or after the Exchange Date in whole, but not in part for Definitive Certificates if (i) Euroclear or Clearstream, Luxembourg or any other clearing system (an “Alternative Clearing System”) is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so and no Alternative Clearance System satisfactory to the Trustee is available, or (ii) with the consent of the Issuer, by the Registered Holder giving not less than 30 days’ notice to the Registrar at its specified office of the Registered Holder’s intention to effect such exchange.

 

On or after the Exchange Date the Registered Holder may surrender this Regulation S Global Certificate to or to the order of the Registrar. In exchange for this Regulation S Global Certificate, as provided in the Agency Agreement, the Registrar will deliver or procure the delivery of, an equal aggregate principal amount of duly executed and authenticated Definitive Certificates in or substantially in the form set out in Schedule 2 Part B.

 

  

48

  

 

“Exchange Date” means a day falling not less than 60 days after that on which the notice requiring exchange is given and on which banks are open for business in the city in which the specified office of the Principal Paying and Conversion Agent is located and in the city in which the relevant clearing system is located.

 

Meetings

 

For the purposes of any meeting of ECN Securityholders, the Registered Holder of the ECNs represented by this Regulation S Global Certificate shall (unless this Regulation S Global Certificate represents only one ECN) be treated as two persons for the purposes of any quorum requirements of a meeting of ECN Securityholders and as being entitled to one vote in respect of each integral currency unit of the Specified Currency of the ECNs.

 

Redemption or Purchase and Cancellation

 

Cancellation of any ECN represented by this Regulation S Global Certificate that is required by the Conditions to be cancelled following its redemption or purchase shall be effected by reduction in the principal amount as recorded in the Register.

 

Conversion

 

As soon as reasonably practicable following the occurrence of a Conversion Trigger, the Issuer shall give notice thereof to the relevant clearing system for communication by it to entitled accountholders (subject to the provisions of paragraph headed “Notices” below) within the time limits set out in and containing the information required by Condition 7(a). In order to obtain any Ordinary Shares upon Conversion Holders must give notice to the Principal Paying and Conversion Agent in accordance with the standard procedures of Euroclear and Clearstream, Luxembourg prior to the date specified in the Deed Poll (which may include notice being given on instruction by Euroclear or Clearstream, Luxembourg or any common depositary for them to the Principal Paying and Conversion Agent by electronic means) in a form acceptable to Euroclear and Clearstream, Luxembourg.

 

Payments

 

Payments of principal in respect of ECNs represented by this Regulation S Global Certificate will be made against presentation and, if no further payment falls to be made in respect of the ECNs, surrender of this Regulation S Global Certificate to or to the order of the Principal Paying and Conversion Agent or such other Agent as shall have been notified to the Registered Holder of this Regulation S Global Certificate for such purpose. Condition 9(e) and Condition 10(f) will apply to Definitive Certificates only.

 

Trustee’s Powers

 

In considering the interests of Registered Holders while this Regulation S Global Certificate is registered in the name of any nominee for a clearing system, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to this Regulation S Global Certificate and may consider such interests as if such accountholders were the holders of this Regulation S Global Certificate.

 

Benefit of the Conditions

 

Unless this Regulation S Global Certificate has been exchanged or cancelled, the Registered Holder hereof shall, except as herein provided be entitled to the same rights and benefits and subject to the Conditions as if such Registered Holder were the holder of the Definitive Certificates for which this Regulation S Global Certificate may be exchanged.

 

  

49

  

 

Notices

 

So long as this Regulation S Global Certificate is held on behalf of a clearing system, notices to the Registered Holders of ECNs represented by this Regulation S Global Certificate may be given by delivery of the relevant notice to that clearing system for communication by it to the relative accountholders in substitution for publication as required by the Conditions.

 

This Regulation S Global Certificate and any non-contractual obligations arising out of or in connection with it shall not become valid for any purpose until authenticated by or on behalf of the Registrar.

 

In witness whereof the Issuer has caused this Regulation S Global Certificate to be signed on its behalf.

 

Dated as of the Issue Date.

 

[LBG CAPITAL NO. 1 plc/LBG CAPITAL NO. 2 plc]*

 

By:           ......................

    Director

 

 

 

CERTIFICATE OF AUTHENTICATION

 

This Regulation S Global Certificate is authenticated

by or on behalf of the Registrar.

 

THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A.

as Registrar

 

By:

 

 

Authorised Signatory

For the purposes of authentication only.

 

 

 

	
*

	
Delete as appropriate

 

  

50

  

 

Schedule A

Principal Amount of this Regulation S Global Certificate

 

Reductions in the principal amount of this Regulation S Global Certificate following transfer, redemption, conversion or the purchase and cancellation of ECNs are entered in the second and third columns below.

 

	
Date

	 	
Reason for increase/decrease in the principal amount of this Regulation S Global Certificate (initial issue, exchange, cancellation, conversion, transfer or payment, stating amount of payment made)

	 	
Amount of such increase/decrease

	 	
Principal amount of this Regulation S Global Certificate following such increase/decrease

	 	
Notation made by or on behalf of the Principal Paying and Conversion Agent

	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  

 

  

51

  

 

Schedule B

Form of Transfer

 

 

For value received the undersigned transfers to

 

....................................................................

 

....................................................................

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)

 

[●] nominal amount of the ECNs represented by this Regulation S Global Certificate, and all rights under them.

 

 

	
Dated

 

	
........................................................

 

	
Signed .............................................

 

	
Certifying Signature

 

 

Notes:

 

	
1

	
The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the Registered Holder of the ECNs represented by this Regulation S Global Certificate or (if such signature corresponds with the name as it appears on the face of this Regulation S Global Certificate) be certified by a notary public or a recognised bank or be supported by such other evidence as a Transfer Agent or the Registrar may reasonably require.

 

	
2

	
A representative of the ECN Securityholder should state the capacity in which he signs e.g. executor.

 

  

52

  

 

Schedule 1

Part D

Form of Unrestricted Global Certificate

 

ISIN: [●]

 

COMMON CODE: [●]

 

 

 

THE NOTES IN RESPECT OF WHICH THIS UNRESTRICTED GLOBAL CERTIFICATE IS ISSUED AND THE GUARANTEES IN RESPECT THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD (A) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (B) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OF THE OFFERING OR THE CLOSING DATE, WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON UNLESS AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

(Incorporated with limited liability in England and Wales)

 

ENHANCED CAPITAL NOTE

 

unconditionally and irrevocably guaranteed by

[Lloyds Banking Group plc

(incorporated as a public company limited by shares in Scotland)]

[and]

[Lloyds TSB Bank plc

(Incorporated with limited liability in England and Wales)]*

 

UNRESTRICTED GLOBAL CERTIFICATE

 

 

	
Registered Holder:

 

	
[●]

 

Principal amount of ECNs represented by this Unrestricted Global Certificate:

 

[●] ([●])

 

This Unrestricted Global Certificate is issued in respect of the principal amount specified above of the Enhanced Capital Notes (the “ECNs”) of the Series specified above of [LBG Capital No. 1 plc/LBG Capital No. 2 plc]* (the “Issuer”) and guaranteed by [Lloyds Banking Group plc] and [Lloyds TSB Bank plc] (the “Guarantor[s]*”). This Unrestricted Global Certificate certifies that the Registered Holder (as defined above) is registered as the holder of such principal amount of the ECNs at the date hereof or such other amount as is shown on the register of ECN Securityholders as being represented by this Unrestricted Global Certificate and is duly endorsed (for informational purposes only) in the third column of Schedule A to this Unrestricted Global Certificate.

 

Interpretation and Definitions

 

References in this Unrestricted Global Certificate to the “Conditions” are to the Terms and Conditions applicable to the ECNs (which are in the form set out in Schedule 4 to the Trust Deed 

 

 

	
*

	
Delete as appropriate

 

  

53

  

 

as amended and/or supplemented from time to time (the “Trust Deed”), dated 1 December 2009 between [LBG Capital No. 1 plc/LBG Capital No. 2 plc]*, Lloyds Banking Group plc, Lloyds TSB Bank plc and BNY Corporate Trustee Services Limited as trustee, as supplemented by the Pricing Schedule set out in Schedule 5 Part [●] to the Trust Deed (together, the “Conditions”), as such form is supplemented and/or modified and/or superseded by the provisions of this Unrestricted Global Certificate, which in the event of any conflict shall prevail). Other capitalised terms used in this Unrestricted Global Certificate shall have the meanings given to them in the Conditions or the Trust Deed.

 

Promise to Pay

 

The Issuer, for value received, promises to pay to the Registered Holder of the ECNs represented by this Unrestricted Global Certificate upon presentation and (when no further payment is due in respect of the ECNs represented by this Unrestricted Global Certificate) surrender of this Unrestricted Global Certificate on the Maturity Date (or on such earlier date as the amount payable upon redemption under the Conditions may become repayable in accordance with the Conditions) the amount payable upon redemption under the Conditions in respect of the ECNs represented by this Unrestricted Global Certificate and (unless the ECNs represented by this Unrestricted Global Certificate do not bear interest) to pay interest in respect of such ECNs from the Interest Commencement Date in arrear at the rates, and on the dates for payment, and in accordance with the methods of calculation provided for in the Conditions, save that the calculation is made in respect of the total aggregate amount of the ECNs represented by this Unrestricted Global Certificate, together with such other sums and additional amounts (if any) as may be payable under the Conditions, in accordance with the Conditions.

 

For the purposes of this Unrestricted Global Certificate, (a) the Registered Holder of the ECNs represented by this Unrestricted Global Certificate is bound by the provisions of the Trust Deed and the Agency Agreement and shall be bound by and have the benefit of the applicable provisions of the Deed Poll, (b) the Issuer certifies that the Registered Holder is, at the date hereof, entered in the Register as the holder of the ECNs represented by this Unrestricted Global Certificate, (c) this Unrestricted Global Certificate is evidence of entitlement only, (d) title to the ECNs represented by this Unrestricted Global Certificate passes only on due registration on the Register, and (e) only the holder of the ECNs represented by this Unrestricted Global Certificate is entitled to payments in respect of the ECNs represented by this Unrestricted Global Certificate.

 

Exchange for Interests in Definitive Certificates

 

This Unrestricted Global Certificate is exchangeable (free of charge to the Registered Holder) on or after the Exchange Date in whole, but not in part for Definitive Certificates if (i) Euroclear or Clearstream, Luxembourg or any other clearing system (an “Alternative Clearing System”) is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so and no Alternative Clearance System satisfactory to the Trustee is available, or (ii) with the consent of the Issuer, by the Registered Holder giving not less than 30 days’ notice to the Registrar at its specified office of the Registered Holders’ intention to effect such exchange.

 

On or after the Exchange Date the Registered Holder may surrender this Unrestricted Global Certificate to or to the order of the Registrar. In exchange for this Unrestricted Global Certificate, as provided in the Agency Agreement, the Registrar will deliver or procure the delivery of, an equal aggregate principal amount of duly executed and authenticated Definitive Certificates in or substantially in the form set out in Schedule 2 Part B.

 

  

54

  

 

“Exchange Date” means a day falling not less than 60 days after that on which the notice requiring exchange is given and on which banks are open for business in the city in which the specified office of the Principal Paying and Conversion Agent is located and in the city in which the relevant clearing system is located.

 

Exchange for Interests in the Restricted Global Certificate

 

If a holder of a beneficial interest in this Unrestricted Global Certificate wishes at any time to transfer such beneficial interest to a person who wishes to take delivery thereof in the form of a beneficial interest in the Restricted Global Certificate, such Registered Holder may transfer such beneficial interest in accordance with the rules and operating procedures of Euroclear and Clearstream, Luxembourg in a principal amount of not less than U.S.$100,000; provided that no such transfer may take place during the period of 15 days ending on the due date for any payment of principal or interest in respect of the Unrestricted Global Certificates; and provided further that any such transfer shall be in accordance with the provisions of the Agency Agreement. Upon notification to the Registrar by the Common Depositary that the appropriate debit and credit entries have been made in the accounts of the relevant participants of Euroclear and Clearstream, Luxembourg, the Issuer shall procure that the Registrar will decrease the aggregate principal amount of the Unrestricted Global Certificates registered in the name of the holder of, and represented by, this Unrestricted Global Certificates, and increase the aggregate principal amount of Restricted Global Certificates registered in the name of the Registered Holder for the time being of, and represented by, the Restricted Global Certificate. Such beneficial interest will, upon transfer, cease to be an interest in such Unrestricted Global Certificate and become an interest in such Restricted Global Certificate and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to interests in a Restricted Global Certificate for as long as it remains such an interest.

 

Meetings

 

For the purposes of any meeting of ECN Securityholders, the Registered Holder of the ECNs represented by this Unrestricted Global Certificate shall (unless this Unrestricted Global Certificate represents only one ECN) be treated as two persons for the purposes of any quorum requirements of a meeting of ECN Securityholders and as being entitled to one vote in respect of each integral currency unit of the Specified Currency of the ECNs.

 

Redemption or Purchase and Cancellation

 

Cancellation of any ECN represented by this Unrestricted Global Certificate that is required by the Conditions to be cancelled following its redemption or purchase shall be effected by reduction in the principal amount as recorded in the Register.

 

Conversion

 

As soon as reasonably practicable following the occurrence of a Conversion Trigger, the Issuer shall give notice thereof to the relevant clearing system for communication by it to entitled accountholders (subject to the provisions of paragraph headed “Notices” below) within the time limits set out in and containing the information required by Condition 7(a). In order to obtain any Ordinary Shares upon Conversion Holders must give notice to the Principal Paying and Conversion Agent in accordance with the standard procedures of Euroclear and Clearstream, Luxembourg prior to the date specified in the Deed Poll (which may include notice being given on instruction by Euroclear or Clearstream, Luxembourg or any common depositary for them to the Principal Paying and Conversion Agent by electronic means) in a form acceptable to Euroclear and Clearstream, Luxembourg.

 

  

55

  

 

Payments

 

Payments of principal in respect of ECNs represented by this Unrestricted Global Certificate will be made against presentation and, if no further payment falls to be made in respect of the ECNs, surrender of this Unrestricted Global Certificate to or to the order of the Principal Paying and Conversion Agent or such other Agent as shall have been notified to the Registered Holder of this Unrestricted Global Certificate for such purpose. Condition 9(e) and Condition 10(f) will apply to Definitive Certificates only.

 

Trustee’s Powers

 

In considering the interests of Registered Holders while this Unrestricted Global Certificate is are registered in the name of any nominee for a clearing system, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to this Unrestricted Global Certificate and may consider such interests as if such accountholders were the Registered Holders of this Unrestricted Global Certificate.

 

Benefit of the Conditions

 

Unless this Unrestricted Global Certificate has been exchanged or cancelled, the Registered Holder hereof shall, except as herein provided, be entitled to the same rights and benefits and subject to the Conditions as if such Registered Holder were the holder of the Definitive Certificates for which this Unrestricted Global Certificate may be exchanged.

 

Notices

 

So long as this Unrestricted Global Certificate is held on behalf of a clearing system, notices to the Registered Holders of ECNs represented by this Unrestricted Global Certificate may be given by delivery of the relevant notice to that clearing system for communication by it to the relative accountholders in substitution for publication as required by the Conditions.

 

Each of Euroclear and Clearstream, Luxembourg will periodically disseminate notices to its participant accounts setting forth restrictions on transferability and resale applicable to the ECNs. Holders and any future transferee or purchaser of ECNs will be subject to such restrictions on transferability and resale.

 

This Unrestricted Global Certificate and any non-contractual obligations arising out of or in connection with it shall not become valid for any purpose until authenticated by or on behalf of the Registrar.

 

 

In witness whereof the Issuer has caused this Unrestricted Global Certificate to be signed on its behalf.

 

Dated as of the Issue Date.

 

[LBG CAPITAL NO. 1 plc/LBG CAPITAL NO. 2 plc]*

 

By:           ..................

    Director

 

 

 

 

	
*

	
Delete as appropriate

 

  

56

  

 

CERTIFICATE OF AUTHENTICATION

 

This Unrestricted Global Certificate is authenticated

by or on behalf of the Registrar.

 

THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A.

as Registrar

 

By:

 

 

Authorised Signatory

For the purposes of authentication only.

 

  

57

  

 

Schedule A

Principal Amount of this Unrestricted Global Certificate

 

Reductions in the principal amount of this Unrestricted Global Certificate following transfer, redemption, conversion or the purchase and cancellation of ECNs are entered in the second and third columns below.

 

	
Date

	
Reason for increase/decrease in the principal amount of this Unrestricted Global Certificate (initial issue, exchange, cancellation, conversion, transfer or payment, stating amount of payment made)

	 	
Amount of such increase/decrease

	 	
Principal amount of this Unrestricted Global Certificate following such increase/decrease

	 	
Notation made by or on behalf of the Principal Paying and Conversion Agent

	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  

 

  

58

  

 

Schedule B

Form of Transfer

 

 

For value received the undersigned transfers to

 

....................................................................

 

....................................................................

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)

 

[●] nominal amount of the ECNs represented by this Unrestricted Global Certificate, and all rights under them.

 

 

	
Dated

 

	
........................................................

 

	
Signed .............................................

 

	
Certifying Signature

 

 

Notes:

 

	
1

	
The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the Registered Holder of the ECNs represented by this Unrestricted Global Certificate or (if such signature corresponds with the name as it appears on the face of this Unrestricted Global Certificate) be certified by a notary public or a recognised bank or be supported by such other evidence as a Transfer Agent or the Registrar may reasonably require.

 

	
2

	
A representative of the ECN Securityholder should state the capacity in which he signs e.g. executor.

 

  

59

  

Schedule 1

Part E

Form of Restricted Global Certificate

 

COMMON CODE: [●]

ISIN: [●]

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, FOR SO LONG AS THE SECURITIES ARE “RESTRICTED SECURITIES” WITHIN THE MEANING OF RULE 144(A)(3) UNDER THE SECURITIES ACT, THE SECURITIES MAY NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (I) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (RECOGNISING THAT THE ECNs ARE NOT ELIGIBLE FOR RESALE PURSUANT TO RULE 144A), OR (II) TO ANOTHER QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. ALL HOLDERS OF ECNs ARE REQUIRED TO NOTIFY TRANSFEREES OF THE RESTRICTIONS ON TRANSFER AND OTHER LIMITATIONS AND REQUIREMENTS OF HOLDING AN INTEREST IN THE ECNs AND EACH ECN HOLDER IS REQUIRED TO NOTIFY ANY TRANSFEREE TO WHOM IT SUBSEQUENTLY REOFFERS, RESELLS, PLEDGES OR OTHERWISE TRANSFERS THE ECNs OF THE RESTRICTIONS ON TRANSFER AND OTHER LIMITATIONS AND REQUIREMENTS OF HOLDING AN INTEREST IN THE ECNs, ANY SUCH RESTRICTIONS ON TRANSFER AND RESALE CONTAINED IN ANY CLEARING SYSTEM NOTICE OR INSTRUCTION, AND THE TRANSFEREE WILL BE BOUND BY SUCH RESTRICTIONS AND REQUIREMENTS AND WILL NOTIFY ANY SUBSEQUENT TRANSFEREES OF SUCH RESTRICTIONS. THE COMPANY SHALL HAVE THE RIGHT TO FORCE THE SALE OR TRANSFER OF ANY ECNs OTHER THAN IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER AND RESALE OF SECURITIES.

 

BY ACCEPTING OF THIS CERTIFICATE BEARING THE ABOVE LEGEND, WHETHER UPON ORIGINAL ISSUANCE OR SUBSEQUENT TRANSFER, EACH HOLDER OF THIS CERTIFICATE ACKNOWLEDGES THE RESTRICTIONS ON THE TRANSFER OF THIS CERTIFICATE SET FORTH ABOVE AND AGREES THAT IT SHALL TRANSFER THIS CERTIFICATE ONLY AS PROVIDED HEREIN AND IN THIS TRUST DEED (AS DEFINED BELOW).

 

[FOR PURPOSES OF SECTIONS 1271 ET. SEQ. OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS RESTRICTED GLOBAL CERTIFICATE HAS ORIGINAL ISSUE DISCOUNT OF [currency][amount] PER EACH [currency][amount] OF NOMINAL AMOUNT OF THIS RESTRICTED GLOBAL CERTIFICATE; THE ISSUE PRICE OF THIS RESTRICTED GLOBAL CERTIFICATE IS [currency][amount]; THE ISSUE DATE IS [date]; AND THE YIELD TO MATURITY (COMPOUNDED [semi-annually]) IS [yield].]1

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

(Incorporated with limited liability in England and Wales)

 

ENHANCED CAPITAL NOTE

 

unconditionally and irrevocably guaranteed by

[Lloyds Banking Group plc

(incorporated as a public company limited by shares in Scotland)]

[and]

[Lloyds TSB Bank plc

(Incorporated with limited liability in England and Wales)]*

 

 

 

 

 

	
1

	
Legend to be borne by any Restricted Global Certificate issued with an “original issue document” for U.S. federal income tax purpose.

	
*

	
Delete as appropriate

 

  

60

  

 

RESTRICTED GLOBAL CERTIFICATE

 

 

	
Registered Holder:

 

	
[●]

 

 

Principal amount of ECNs represented by this Restricted Global Certificate:

 

[●] ([●])

 

This Restricted Global Certificate is issued in respect of the principal amount specified above of the Enhanced Capital Notes (the “ECNs”) of the Series specified above of [LBG Capital No. 1 plc]/[LBG Capital No. 2 plc]* (the “Issuer”) and guaranteed by [Lloyds Banking Group plc] [and] [Lloyds TSB Bank plc]* (the “Guarantor[s]*”). This Restricted Global Certificate certifies that the Registered Holder (as defined above) is registered as the holder of such principal amount of the ECNs at the date hereof or such other amount as is shown on the register of ECN Securityholders as being represented by this Restricted Global Certificate and is duly endorsed (for informational purposes only) in the third column of Schedule A to this Restricted Global Certificate.

 

Interpretation and Definitions

 

References in this Restricted Global Certificate to the “Conditions” are to the Terms and Conditions applicable to the ECNs (which are in the form set out in Schedule 4 to the Trust Deed as amended and/or supplemented from time to time (the “Trust Deed”) dated 1 December 2009 between LBG Capital No. 1 plc, LBG Capital No.2 plc, Lloyds Banking Group plc, Lloyds TSB Bank plc and BNY Corporate Trustee Services Limited as trustee, as supplemented by the Pricing Schedule set out in Schedule 5 Part [●] to the Trust Deed (together, the “Conditions”), as such form is supplemented and/or modified and/or superseded by the provisions of this Restricted Global Certificate, which in the event of any conflict shall prevail). Other capitalised terms used in this Restricted Global Certificate shall have the meanings given to them in the Conditions or the Trust Deed.

 

Promise to Pay

 

The Issuer, for value received, promises to pay to the Registered Holder of the ECNs represented by this Restricted Global Certificate upon presentation and (when no further payment is due in respect of the ECNs represented by this Restricted Global Certificate) surrender of this Restricted Global Certificate on the Maturity Date (or on such earlier date as the amount payable upon redemption under the Conditions may become repayable in accordance with the Conditions), the amount payable upon redemption under the Conditions in respect of the ECNs represented by this Restricted Global Certificate, and (unless the ECNs represented by this Restricted Global Certificate do not bear interest) to pay interest in respect of such ECNs from the Interest Commencement Date in arrear at the rates, on the dates for payment, and in accordance with the methods of calculation provided for in the Conditions, save that the calculation is made in respect of the total aggregate amount of the ECNs represented by this Restricted Global Certificate, together with such other sums and additional amounts (if any) as may be payable under the Conditions, in accordance with the Conditions.

 

For the purposes of this Restricted Global Certificate, (a) the Registered Holder of the ECNs represented by this Restricted Global Certificate is bound by the provisions of the Trust Deed and the Agency Agreement and shall be bound by and have the benefit of the applicable provisions of the Deed Poll, (b) the Issuer certifies that the Registered Holder is, at the date hereof, entered in the Register as the Registered Holder of the ECNs represented by this Restricted Global Certificate, (c) this Restricted Global Certificate is evidence of entitlement only, (d) title to the ECNs represented by this Restricted Global Certificate passes only on due registration on the Register, and (e) only the Registered Holder of the ECNs represented by this Restricted Global 

 

  

61

  

 

Certificate is entitled to payments in respect of the ECNs represented by this Restricted Global Certificate.

 

Exchange for Interests in Definitive Certificates

 

This Restricted Global Certificate is exchangeable (free of charge to the Registered Holder) on or after the Exchange Date in whole, but not in part for Definitive Certificates if (i) Euroclear or Clearstream, Luxembourg or any other clearing system (an “Alternative Clearing System”) is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so and no Alternative Clearance System satisfactory to the Trustee is available, or (ii) with the consent of the Issuer, by the Registered Holder giving not less than 30 days’ notice to the Registrar at its specified office of the Registered Holders’ intention to effect such exchange.

 

On or after the Exchange Date the Registered Holder may surrender this Restricted Global Certificate to or to the order of the Registrar or the Transfer Agent. In exchange for this Restricted Global Certificate, as provided in the Agency Agreement, the Registrar will deliver or procure the delivery of, an equal aggregate principal amount of duly executed and authenticated Definitive Certificates in or substantially in the form set out in Schedule 2 Part B.

 

“Exchange Date” means a day falling not less than 60 days after that on which the notice requiring exchange is given and on which banks are open for business in the city in which the specified office of the Principal Paying and Conversion Agent is located and in the city in which the relevant clearing system is located.

 

Exchange for Interests in the Unrestricted Global Certificate

 

If a Registered Holder of a beneficial interest in this Restricted Global Certificate wishes at any time to transfer such beneficial interest to a person who wishes to take delivery thereof in the form of a beneficial interest in the Unrestricted Global Certificate, such Registered Holder may transfer such beneficial interest in accordance with the rules and operating procedures of Euroclear and Clearstream, Luxembourg; provided that no such transfer may take place during the period of 15 days ending on the due date for any payment of principal or interest in respect of the Restricted Global Certificates; and provided further that any such transfer shall be in accordance with the provisions of the Agency Agreement. Upon notification to the Registrar by the Common Depositary that the appropriate debit and credit entries have been made in the accounts of the relevant participants of Euroclear and Clearstream, Luxembourg, the Issuer shall procure that the Registrar will decrease the aggregate principal amount of the Restricted Global Certificates registered in the name of the holder of, and represented by, this Restricted Global Certificate, and increase the aggregate principal amount of Unrestricted Global Certificates registered in the name of the Registered Holder for the time being of, and represented by, the Unrestricted Global Certificate. Such beneficial interest will, upon transfer, cease to be an interest in such Restricted Global Certificate and become an interest in such Unrestricted Global Certificate and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to interests in a Unrestricted Global Certificate for as long as it remains such an interest.

 

Meetings

 

For the purposes of any meeting of ECN Securityholders, the Registered Holders of the ECNs represented by this Restricted Global Certificate shall (unless this Restricted Global Certificate represents only one ECN) be treated as two persons for the purposes of any quorum requirements of a meeting of ECN Securityholders and as being entitled to one vote in respect of each integral currency unit of the Specified Currency of the ECNs.

 

  

62

  

 

Redemption or Purchase and Cancellation

 

Cancellation of any ECN represented by this Restricted Global Certificate that is required by the Conditions to be cancelled following its redemption or purchase shall be effected by reduction in the principal amount as recorded in the Register.

 

Conversion

 

As soon as reasonably practicable following the occurrence of a Conversion Trigger, the Issuer shall give notice thereof to the relevant clearing system for communication by it to entitled accountholders (subject to the provisions of paragraph headed “Notices” below) within the time limits set out in and containing the information required by Condition 7(a). In order to obtain any Ordinary Shares upon Conversion Holders must give notice to the Principal Paying and Conversion Agent in accordance with the standard procedures of Euroclear and Clearstream, Luxembourg prior to the date specified in the Deed Poll (which may include notice being given on instruction by Euroclear or Clearstream, Luxembourg or any common depositary for them to the Principal Paying and Conversion Agent by electronic means) in a form acceptable to Euroclear and Clearstream, Luxembourg.

 

Payments

 

Payments of principal in respect of ECNs represented by this Restricted Global Certificate will be made against presentation and, if no further payment falls to be made in respect of the ECNs, surrender of this Restricted Global Certificate to or to the order of the Principal Paying and Conversion Agent or such other Agent as shall have been notified to the Registered Holder of this Restricted Global Certificate for such purpose. Condition 9(e) and Condition 10(f) will apply to Definitive Certificates only.

 

Trustee’s Powers

 

In considering the interests of Registered Holders while this Unrestricted Global Certificate is registered in the name of any nominee for a clearing system, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to this Restricted Global Certificate such registered ECNs and may consider such interests as if such accountholders were the holders of this Restricted Global Certificate.

 

Benefit of the Conditions

 

Unless this Restricted Global Certificate has been exchanged or cancelled, the Registered Holder hereof shall, except as herein provided, be entitled to the same rights and benefits and subject to the Conditions as if such Registered Holder were the holder of the Definitive Certificates for which this Restricted Global Certificate may be exchanged.

 

Notices

 

So long as this Restricted Global Certificate represented by this Restricted Global Certificate is held on behalf of a clearing system, notices to the Registered Holders of ECNs may be given by delivery of the relevant notice to that clearing system for communication by it to the relative accountholders in substitution for publication as required by the Conditions.

 

Each of Euroclear and Clearstream, Luxembourg will periodically disseminate notices to its participant accounts setting forth restrictions on transferability and resale applicable to the ECNs. Holders and any future transferee or purchaser of ECNs will be subject to such restrictions on transferability and resale.

 

  

63

  

 

Issuer Right to Compel Sale or Transfer

 

[LBG Capital No. 1 plc]/[LBG Capital No. 2 plc] or Lloyds Banking Group plc may require an ECN Securityholder or beneficial owner of ECNs represented by an interest in this Restricted Global Certificate to sell its interest in such ECNs or to arrange for such interest to be sold on behalf of the relevant holder, if such holder is a U.S. person that is not a qualified institutional buyer (as defined in Rule 144A under the Securities Act) who, in the judgement of Lloyds Banking Group plc, has purchased its ECNs in a transaction that is not exempt from the registration requirements of the Securities Act. In any such case, neither [LBG Capital No. 1 plc]/[LBG Capital No. 2 plc] nor Lloyds Banking Group plc nor the Trustee shall have any liability or responsibility for the timing of any such sale or for the price at which any such ECNs are sold. If any such sale is effected pursuant to arrangements made by [LBG Capital No. 1 plc]/[LBG Capital No. 2 plc] or Lloyds Banking Group plc, [LBG Capital No. 1 plc]/[LBG Capital No. 2 plc] or Lloyds Banking Group plc will arrange for the net proceeds of any such sale (after deduction in respect of expenses and any taxes) to the relevant holder of the ECNs at such time as [LBG Capital No. 1 plc]/[LBG Capital No. 2 plc] or Lloyds Banking Group plc may determine.

 

Minimum Denomination

 

Interests in, or into, a Restricted Global Certificate may be transferred only in blocks having an aggregate principal amount of U.S.$100,000 and integral increments of U.S.$1,000 in excess thereof.

 

 

This Restricted Global Certificate shall not become valid for any purpose until authenticated by or on behalf of the Registrar.

 

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

 

In witness whereof the Issuer has caused this Restricted Global Certificate to be signed on its behalf.

 

Dated as of the Issue Date.

 

[LBG CAPITAL NO. 1 plc/LBG CAPITAL NO. 2 plc]*

 

By:

 

 

............................................

Director

 

 

 

 

CERTIFICATE OF AUTHENTICATION

 

This Restricted Global Certificate is authenticated

by or on behalf of the Registrar.

 

 

 

	
*

	
Delete as appropriate

 

  

64

  

 

THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A.

 

as Registrar

 

By:

 

 

 

Authorised Signatory

For the purposes of authentication only.

 

  

65

  

 

Schedule A

Principal Amount of this Restricted Global Certificate

 

Reductions in the principal amount of this Restricted Global Certificate following transfer, redemption, conversion or the purchase and cancellation of ECNs are entered in the second and third columns below.

 

	
Date

	
Reason for increase/decrease in the principal amount of this Restricted Global Certificate (initial issue, exchange, cancellation, conversion, transfer or payment, stating amount of payment made)

	 	
Amount of such increase/decrease

	 	
Principal amount of this Restricted Global Certificate following such increase/decrease

	 	
Notation made by or on behalf of the Principal Paying and Conversion Agent

	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  
	  	  	 	  	 	  	 	  

 

  

66

  

 

Schedule B

Form of Transfer

 

 

For value received the undersigned transfers to

 

 

....................................................................

 

....................................................................

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)

 

[●] nominal amount of the ECNs represented by this Restricted Global Certificate, and all rights under them.

 

 

 

	
Dated

	
......................................................

	 	 
	
Signed .............................................    

	
Certifying Signature

 

 

 

Notes:

 

	
(1)

	
The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the Registered Holder of the ECNs represented by this Restricted Global Certificate or (if such signature corresponds with the name as it appears on the face of this Restricted Global Certificate) be certified by a notary public or a recognised bank or be supported by such other evidence as a Transfer Agent or the Registrar may reasonably require.

 

	
(2)

	
A representative of the ECN Securityholder should state the capacity in which he signs e.g. executor.

 

  

67

  

This is the Schedule 2 referred to in the foregoing Trust Deed dated 1 December 2009 entered into among LBG Capital No. 1 plc, LBG Capital No. 2 plc, Lloyds Banking Group plc, Lloyds TSB Bank plc and BNY Corporate Trustee Services Limited

 

Schedule 2

Part A

Form of Bearer ECN

 

On the front:

 

 

	
[Denomination]

	
[ISIN]

	
[Series]

	
[Certif. No.]

 

[Currency and denomination]

 

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

(Incorporated with limited liability in England and Wales)

 

ENHANCED CAPITAL NOTE

 

unconditionally and irrevocably guaranteed by

[Lloyds Banking Group plc

(incorporated as a public company limited by shares in Scotland)]

[and]

[Lloyds TSB Bank plc

(Incorporated with limited liability in England and Wales)] *

 

 [Title of issue]

 

This Enhanced Capital Note forms one of the Series of Enhanced Capital Notes referred to above (the “ECNs”) of [LBG Capital No. 1 plc/LBG Capital No. 2 plc]* (the “Issuer”) guaranteed by [Lloyds Banking Group plc] [and] [Lloyds TSB Bank plc]* (the “Guarantor[s]*”) designated as specified in the title hereof. The ECNs are subject to the Terms and Conditions as supplemented by the Pricing Schedule (the “Conditions”) endorsed hereon and are issued subject to, and with the benefit of, the Trust Deed and Deed Poll referred to in the Conditions. Expressions defined in the Conditions have the same meanings in this ECN.

 

The Issuer for value received promises to pay to the bearer of this ECN, on presentation and (when no further payment is due in respect of this ECN) surrender of this ECN on the Maturity Date (or on such earlier date as the amount payable upon redemption under the Conditions may become repayable in accordance with the Conditions) the amount payable upon redemption under the Conditions and (unless this ECN does not bear interest) to pay interest from the Interest Commencement Date in arrear at the rates, in the amounts and on the dates for payment provided for in the Conditions together with such other sums and additional amounts (if any) as may be payable under the Conditions, in accordance with the Conditions.

 

This is to certify that the bearer of this ECN is entitled on [●], or on such earlier date as the principal amount mentioned below may become repayable in accordance with the Conditions, to the principal sum of:

 

[●] ([●])

 

together with interest, if applicable, and any other amounts all subject to and in accordance with the Trust Deed and the Conditions.

 

This ECN shall not become valid or obligatory for any purpose until authenticated by or on behalf of the Principal Paying and Conversion Agent.

 

 

	
*

	
Delete as appropriate

 

  

68

  

 

In witness whereof the Issuer has caused this ECN to be signed on its behalf.

 

 

Dated as of the Issue Date.

 

[LBG CAPITAL NO. 1 plc/LBG CAPITAL NO. 2 plc]*

 

By:           ......................

    Director

 

 

CERTIFICATE OF AUTHENTICATION

 

This ECN is authenticated

by or on behalf of the Principal Paying and Conversion Agent.

 

THE BANK OF NEW YORK MELLON

as Principal Paying and Conversion Agent

 

By:

 

 

 

Authorised Signatory

For the purposes of authentication only.

 

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

 

 

 

 

	
*

	
Delete as appropriate

 

  

69

  

 

On the back:

 

 

Terms and Conditions of the ECNs

 

[The Terms and Conditions that are set out in Schedule 4 to the Trust Deed as amended by and incorporating any additional provisions forming part of such Terms and Conditions and set out in the relevant Pricing Schedule shall be set out here.]

 

 

 

 

 

 

 

PRINCIPAL PAYING AND CONVERSION AGENT, TRANSFER AGENT AND CALCULATION AGENT

 

The Bank of New York Mellon

One Canada Square

London E14 5AL

United Kingdom

 

 

  

70

  

 

Schedule 2

Part B

Form of Certificate

 

On the front:

 

ISIN: [●]

 

[THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, FOR SO LONG AS THE SECURITIES ARE “RESTRICTED SECURITIES” WITHIN THE MEANING OF RULE 144(A)(3) UNDER THE SECURITIES ACT, THE SECURITIES MAY NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (I) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (RECOGNISING THAT THE ECNs ARE NOT ELIGIBLE FOR RESALE PURSUANT TO RULE 144A), OR (II) TO ANOTHER QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. ALL HOLDERS OF ECNs ARE REQUIRED TO NOTIFY TRANSFEREES OF THE RESTRICTIONS ON TRANSFER AND OTHER LIMITATIONS AND REQUIREMENTS OF HOLDING AN INTEREST IN THE ECNs AND EACH ECN HOLDER IS REQUIRED TO NOTIFY ANY TRANSFEREE TO WHOM IT SUBSEQUENTLY REOFFERS, RESELLS, PLEDGES OR OTHERWISE TRANSFERS THE ECNs OF THE RESTRICTIONS ON TRANSFER AND OTHER LIMITATIONS AND REQUIREMENTS OF HOLDING AN INTEREST IN THE ECNs, ANY SUCH RESTRICTIONS ON TRANSFER AND RESALE CONTAINED IN ANY CLEARING SYSTEM NOTICE OR INSTRUCTION, AND THE TRANSFEREE WILL BE BOUND BY SUCH RESTRICTIONS AND REQUIREMENTS AND WILL NOTIFY ANY SUBSEQUENT TRANSFEREES OF SUCH RESTRICTIONS. THE COMPANY SHALL HAVE THE RIGHT TO FORCE THE SALE OR TRANSFER OF ANY ECNs OTHER THAN IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER AND RESALE OF SECURITIES.]2

 

[FOR PURPOSES OF SECTIONS 1271 ET. SEQ. OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS NOTE HAS ORIGINAL ISSUE DISCOUNT OF [currency][amount] PER EACH [currency][amount] OF NOMINAL AMOUNT OF THIS NOTE; THE ISSUE PRICE OF THIS NOTE IS [currency][amount]; THE ISSUE DATE IS [date]; AND THE YIELD TO MATURITY (COMPOUNDED [semi-annually]) IS [yield].]3

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

(Incorporated with limited liability in England and Wales)

 

ENHANCED CAPITAL NOTE

 

unconditionally and irrevocably guaranteed by

[Lloyds Banking Group plc

(incorporated as a public company limited by shares in Scotland)]

[and]

[Lloyds TSB Bank plc

(Incorporated with limited liability in England and Wales)]*

 

Series No. [●]

 

[Title of issue]

 

This Certificate certifies that [●] of [●] (the “Registered Holder”) is, as at the date hereof, registered as the holder of the principal amount of Enhanced Capital Notes of the Series of Enhanced Capital Notes referred to above (the “ECNs”) of [LBG Capital No. 1 plc/LBG Capital No. 2 plc]* (the “Issuer”) guaranteed by [Lloyds Banking Group plc] [and] [Lloyds TSB Bank plc]*, (the “Guarantor[s]*”), designated as specified in the title hereof. The ECNs are subject to the Terms and Conditions as supplemented by the Pricing Schedule set out in Schedule 5 Part [●] to the Trust Deed (the 

 

 

 

	
2

	
Legend to be borne by any Certificate issued in exchange for a Restricted Global Certificate.

  

	
3

	
Legend to be borne by any Certificate issued with “original issue discount” for U.S. federal income tax purposes.

  

	
*

	
Delete as appropriate

 

  

71

  

 

“Conditions”) endorsed hereon and are issued subject to, and with the benefit of, the Trust Deed and the Deed Poll referred to in the Conditions. Expressions defined in the Conditions have the same meanings in this Certificate.

 

The Issuer, for value received, promises to pay to the holder of the ECN(s) represented by this Certificate upon presentation and (when no further payment is due in respect of the ECN(s) represented by this Certificate) surrender of this Certificate on the Maturity Date (or on such earlier date as the amount payable upon redemption under the Conditions may become repayable in accordance with the Conditions) the amount payable upon redemption under the Conditions in respect of the ECNs represented by this Certificate and (unless the Security(ies) represented by this Certificate do not bear interest) to pay interest in respect of such ECNs from the Interest Commencement Date in arrear at the rates, in the amounts and on the dates for payment provided for in the Conditions together with such other sums and additional amounts (if any) as may be payable under the Conditions, in accordance with the Conditions.

 

For the purposes of this Certificate, (a) the holder of the ECN(s) represented by this Certificate is bound by the provisions of the Trust Deed and the Agency Agreement and shall be bound by and have the benefit of the applicable terms of the Deed Poll, (b) the Issuer certifies that the Registered Holder is, at the date hereof, entered in the Register as the holder of the ECN(s) represented by this Certificate, (c) this Certificate is evidence of entitlement only, (d) title to the ECN(s) represented by this Certificate passes only on due registration on the Register, and (e) only the holder of the ECN(s) represented by this Certificate is entitled to payments in respect of the ECN(s) represented by this Certificate.

 

This Certificate shall not become valid for any purpose until authenticated by or on behalf of the Registrar.

 

 

In witness whereof the Issuer has caused this Certificate to be signed on its behalf.

 

Dated as of the Issue Date.

 

[LBG CAPITAL NO. 1 plc/LBG CAPITAL NO. 2 plc]*

 

By:           .................

    Director

 

 

 

 

	
*

	
Delete as appropriate

 

  

72

  

CERTIFICATE OF AUTHENTICATION

 

This Certificate is authenticated

by or on behalf of the Registrar.

 

THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A.

as Registrar

 

By:

 

 

Authorised Signatory

For the purposes of authentication only.

 

 

 

 

 

  

73

  

 

On the back:

 

Terms and Conditions of the ECNs

 

[The Terms and Conditions that are set out in Schedule 4 to the Trust Deed as amended by and incorporating any additional provisions forming part of such Terms and Conditions and set out in the relevant Pricing Schedule shall be set out here.]

 

 

 

 

 

  

74

  

 

Form of Transfer

 

For value received the undersigned transfers to

 

....................................................................

 

....................................................................

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)

 

[●] nominal amount of the ECNs represented by this Certificate, and all rights under them.

 

 

	
Dated

 

	
........................................................

 

	
Signed .............................................

 

	
Certifying Signature

 

 

Notes:

 

	
  

	
(i)

	
The signature of the person effecting a transfer shall conform to a list of duly authorised specimen signatures supplied by the holder of the ECNs represented by this Certificate or (if such signature corresponds with the name as it appears on the face of this Certificate) be certified by a notary public or a recognised bank or be supported by such other evidence as a Transfer Agent or the Registrar may reasonably require.

 

	
  

	
(ii)

	
A representative of the ECN Securityholder should state the capacity in which he signs.

 

 

 

PRINCIPAL PAYING AND CONVERSION AGENT, TRANSFER AGENT AND CALCULATION AGENT

 

The Bank of New York Mellon

One Canada Square

London E14 5AL

United Kingdom

 

 

 

 

  

75

  

 

Schedule 2

Part C

Form of Coupon

 

On the front:

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

 

ENHANCED CAPITAL NOTE

 

Series No [●]

 

[Title of issue]

 

Coupon for [[set out amount due, if known]/the amount] due on [the Interest Payment Date falling in]** [●],[●].

 

[Coupon relating to ECN in the nominal amount of [●]]***

 

This Coupon is payable to bearer (subject to the Conditions endorsed on the ECN to which this Coupon relates, which shall be binding upon the holder of this Coupon whether or not it is for the time being attached to such ECN) at the specified offices of the Principal Paying and Conversion Agent and the Paying and Conversion Agents set out on the reverse hereof (or any other Principal Paying and Conversion Agent or further or other Paying and Conversion Agents or specified offices duly appointed or nominated and notified to the ECN Securityholders).

 

[If the ECN to which this Coupon relates shall have become due and payable before the maturity date of this Coupon, this Coupon shall become void and no payment shall be made in respect of it.]****

 

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

 

[LBG CAPITAL NO. 1 plc/LBG CAPITAL NO. 2 plc]*

 

By:           .....................

    Director

 

 

 

	
[Cp. No ]

	
[Denomination]

	
[ISIN]

	
[Series]

	
[Certif. No.]

 

 

 

 

 

	
*

	
Delete as appropriate

 

  

76

  

 

On the back:

 

PRINCIPAL PAYING AND CONVERSION AGENT

 

The Bank of New York Mellon

One Canada Square

London E14 5AL

United Kingdom

 

 

[**Only necessary where Interest Payment Dates are subject to adjustment in accordance with a Business Day Convention otherwise the particular Interest Payment Date should be specified.]

 

[***Only required for Coupons relating to Floating Rate ECNs that are issued in more than one denomination.]

 

[****Delete if Coupons are not to become void upon early redemption of ECN.]

 

 

 

 

  

77

  

 

Schedule 2

Part D

Form of Talon

 

On the front:

 

[LBG Capital No. 1 plc/LBG Capital No. 2 plc]*

 

ENHANCED CAPITAL NOTE

 

Series No. [●]

 

[Title of issue]

 

Talon for further Coupons falling due on [the Interest Payment Dates falling in]** [●][●].

 

[Talon relating to ECN in the nominal amount of [●]]***

 

After all the Coupons relating to the ECN to which this Talon relates have matured, further Coupons (including if appropriate a Talon for further Coupons) shall be issued at the specified office of the Principal Paying and Conversion Agent set out on the reverse hereof (or any other Principal Paying and Conversion Agent or specified office duly appointed or nominated and notified to the ECN Securityholders) upon production and surrender of this Talon.

 

If the ECN to which this Talon relates shall have become due and payable before the original due date for exchange of this Talon, this Talon shall become void and no exchange shall be made in respect of it.

 

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

 

[LBG CAPITAL NO. 1 plc/LBG CAPITAL NO. 2 plc]*

 

By:           ......................

    Director

 

 

	
[Talon No.]

	
[ISIN]

	
[Series]

	
[Certif. No.]

	  	  	  	  

 

 

	
*

	
Delete as appropriate

 

	
**

	
[The maturity dates of the relevant Coupons should be set out if known, otherwise reference should be made to the months and years in which the Interest Payment Dates fall due.]

 

	
***

	
[Only required where the Series comprises ECNs of more than one denomination.]

 

  

78

  

 

On the back:

 

PRINCIPAL PAYING AND CONVERSION AGENT

 

The Bank of New York Mellon

One Canada Square

London E14 5AL

United Kingdom

 

 

 

 

 

  

79

  

 

This is the Schedule 3 referred to in the foregoing Trust Deed dated 1 December 2009 entered into among LBG Capital No. 1 plc, LBG Capital No. 2 plc, Lloyds Banking Group plc, Lloyds TSB Bank plc and BNY Corporate Trustee Services Limited

Schedule 3

Provisions for Meetings of ECN Securityholders

 

 

Interpretation

 

	
1

	
In this Schedule:

 

	
1.1

	
references to a meeting are to a meeting of ECN Securityholders of a single series of ECNs and include, unless the context otherwise requires, any adjournment

 

	
1.2

	
references to “ECNs” and “ECN Securityholders” are only to the ECNs of the Series in respect of which a meeting has been, or is to be, called, and to the holders of these ECNs, respectively

 

	
1.3

	
“agent” means a holder of a voting certificate or a proxy for, or representative of, an ECN Securityholder

 

	
1.4

	
“block voting instruction” means an instruction issued in accordance with paragraphs 8 to 14

 

	
1.5

	
“Extraordinary Resolution” means a resolution passed at a meeting duly convened and held in accordance with this Trust Deed by a majority of at least 75 per cent. of the votes cast

 

	
1.6

	
“voting certificate” means a certificate issued in accordance with paragraphs 5, 6, 7 and 14 and

 

	
1.7

	
references to persons representing a proportion of the ECNs are to ECN Securityholders or agents holding or representing in the aggregate at least that proportion in principal amount of the ECNs for the time being outstanding.

 

Powers of meetings

 

	
2

	
A meeting shall, subject to the Conditions and without prejudice to any powers conferred on other persons by this Trust Deed, have power by Extraordinary Resolution:

 

	
2.1

	
to sanction any proposal by the Issuer, the Guarantor or the Trustee for any modification, abrogation, variation or compromise of, or arrangement in respect of, the rights of the ECN Securityholders and/or the Couponholders against the Issuer or the Guarantor, whether or not those rights arise under this Trust Deed

 

	
2.2

	
to sanction the exchange or substitution for the ECNs of, or the conversion of the ECNs into, shares, bonds or other obligations or securities of the Issuer, the Guarantor or any other entity

 

	
2.3

	
to assent to any modification of this Trust Deed, the Agency Agreement, the ECNs, the Talons or the Coupons or the Deed Poll proposed by the Issuer, the Guarantor or the Trustee

 

	
2.4

	
to authorise anyone to concur in and do anything necessary to carry out and give effect to an Extraordinary Resolution

 

	
2.5

	
to give any authority, direction or sanction required to be given by Extraordinary Resolution

 

	
2.6

	
to appoint any persons (whether ECN Securityholders or not) as a committee or committees to represent the ECN Securityholders’ interests and to confer on them any 

 

  

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powers or discretions which the ECN Securityholders could themselves exercise by Extraordinary Resolution

 

	
2.7

	
to approve a proposed new Trustee and to remove a Trustee

 

	
2.8

	
to approve the substitution of any entity for the Issuer or the Guarantor (or any previous substitute) as principal debtor or a guarantor under this Trust Deed and

 

	
2.9

	
to discharge or exonerate the Trustee from any liability in respect of any act or omission for which it may become responsible under this Trust Deed, the ECNs, the Talons or the Coupons

 

provided that the special quorum provisions in paragraph 19 shall apply to any Extraordinary Resolution (a “special quorum resolution”) for the purpose of sub-paragraph 2.2 or 2.8 or for the purpose of making a modification to this Trust Deed, the ECNs or the Coupons which would have the effect of:

 

	
  

	
(i)

	
amending the dates of maturity or redemption of the ECNs or any date for payment of interest on the ECNs

 

	
  

	
(ii)

	
reducing or cancelling the principal amount of, or any premium payable on redemption of, the ECNs

 

	
  

	
(iii)

	
reducing the rate or rates of interest in respect of the ECNs or varying the method or basis of calculating the rate or rates or amount of interest or the basis for calculating the amounts of any interest in respect of the ECNs

 

	
  

	
(iv)

	
varying any method of, or basis for, calculating the amounts payable on redemption of the ECNs

 

	
  

	
(v)

	
varying the currency or currencies of payment or denomination of the ECNs

 

	
  

	
(vi)

	
modifying the provisions concerning the quorum required at any meeting of ECN Securityholders or the majority required to pass an Extraordinary Resolution

 

	
  

	
(vii)

	
modifying or cancelling the Guarantee in respect of either Guarantor

 

	
  

	
(viii)

	
amending or modifying the Deed Poll (but without prejudice to the power of LBG to modify or amend the Deed Poll as set out therein) or

 

	
  

	
(ix)

	
amending this proviso.

 

Convening a meeting

 

	
3

	
The Issuer, the Guarantor or the Trustee may at any time convene a meeting. If it receives a written request by ECN Securityholders holding at least 10 per cent. in principal amount of the ECNs of any Series for the time being outstanding and is indemnified and/or secured and/or prefunded to its satisfaction against all costs and expenses, the Trustee shall convene a meeting of the ECN Securityholders of that Series. Every meeting shall be held at a time and place approved by the Trustee.

 

	
4

	
At least 21 days’ notice (exclusive of the day on which the notice is given and of the day of the meeting) shall be given to the ECN Securityholders. A copy of the notice shall be given by the party convening the meeting to the other parties. The notice shall specify the day, time and place of meeting and, unless the Trustee otherwise agrees, the nature of the resolutions to be proposed and shall explain how ECN Securityholders may appoint 

 

  

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proxies or representatives, obtain voting certificates and use block voting instructions and the details of the time limits applicable.

 

Arrangements for voting

 

	
5

	
If a holder of a Bearer ECN wishes to obtain a voting certificate in respect of it for a meeting, he must deposit it for that purpose at least 48 hours before the time fixed for the meeting with a Paying and Conversion Agent or to the order of a Paying and Conversion Agent with a bank or other depositary nominated by the Paying and Conversion Agent for the purpose. The Paying and Conversion Agent shall then issue a voting certificate in respect of it.

 

	
6

	
A voting certificate shall:

 

	
6.1

	
be a document in the English language

 

	
6.2

	
be dated

 

	
6.3

	
specify the meeting concerned and, if applicable, the serial numbers of the ECNs deposited and

 

	
6.4

	
entitle, and state that it entitles, its bearer to attend and vote at that meeting in respect of those ECNs.

 

	
7

	
Once a Paying and Conversion Agent has issued a voting certificate for a meeting in respect of an ECN, it shall not release the ECN until either:

 

	
7.1

	
the meeting has been concluded or

 

	
7.2

	
the voting certificate has been surrendered to the Paying and Conversion Agent.

 

	
8

	
If a holder of a Bearer ECN wishes the votes attributable to it to be included in a block voting instruction for a meeting, then, at least 48 hours before the time fixed for the meeting, (i) he must deposit the ECN for that purpose with a Paying and Conversion Agent or to the order of a Paying and Conversion Agent with a bank or other depositary nominated by the Paying and Conversion Agent for the purpose and (ii) he or a duly authorised person on his behalf must direct the Paying and Conversion Agent how those votes are to be cast. The Paying and Conversion Agent shall issue a block voting instruction in respect of the votes attributable to all ECNs so deposited.

 

	
9

	
A block voting instruction shall:

 

	
9.1

	
be a document in the English language

 

	
9.2

	
be dated

 

	
9.3

	
specify the meeting concerned

 

	
9.4

	
list the total number or aggregate principal amount and, if applicable, serial numbers of the ECNs deposited, distinguishing with regard to each resolution between those voting for and those voting against it

 

	
9.5

	
certify that such list is in accordance with ECNs deposited and directions received as provided in paragraphs 8, 11 and 14 and

 

	
9.6

	
appoint a named person (a “proxy”) to vote at that meeting in respect of those ECNs and in accordance with that list.

 

  

82

  

 

A proxy need not be an ECN Securityholder.

 

	
10

	
Once a Paying and Conversion Agent has issued a block voting instruction for a meeting in respect of the votes attributable to any ECNs:

 

	
10.1

	
it shall not release the ECNs, except as provided in paragraph 11, until the meeting has been concluded and

 

	
10.2

	
the directions to which it gives effect may not be revoked or altered during the 48 hours before the time fixed for the meeting.

 

	
11

	
If the receipt for an ECN deposited with a Paying and Conversion Agent in accordance with paragraph 8 is surrendered to the Paying and Conversion Agent at least 48 hours before the time fixed for the meeting, the Paying and Conversion Agent shall release the ECN and exclude the votes attributable to it from the block voting instruction.

 

	
12

	
Each block voting instruction shall be deposited at least 24 hours before the time fixed for the meeting at such place as the Trustee shall designate or approve, and in default it shall not be valid unless the chairman of the meeting decides otherwise before the meeting proceeds to business. If the Trustee requires, a certified copy of each block voting instruction shall be produced by the proxy at the meeting but the Trustee need not investigate or be concerned with the validity of the proxy’s appointment.

 

	
13

	
A vote cast in accordance with a block voting instruction shall be valid even if it or any of the ECN Securityholders’ instructions pursuant to which it was executed has previously been revoked or amended, unless written intimation of such revocation or amendment is received from the relevant Paying and Conversion Agent by the Issuer or the Trustee at its registered office or by the chairman of the meeting in each case at least 24 hours before the time fixed for the meeting.

 

	
14

	
No ECN may be deposited with or to the order of a Paying and Conversion Agent at the same time for the purposes of both paragraph 5 and paragraph 8 for the same meeting.

 

15

 

	
15.1

	
A holder of a Registered ECN may, by an instrument in writing in the form available from the specified office of a Transfer Agent in the English language executed by or on behalf of the holder and delivered to the Transfer Agent at least 24 hours before the time fixed for a meeting, appoint any person (a “proxy”) to act on his behalf in connection with that meeting. A proxy need not be an ECN Securityholder.

 

	
15.2

	
A corporation which holds a Registered ECN may by delivering to a Transfer Agent at least 24 hours before the time fixed for a meeting a certified copy of a resolution of its directors or other governing body (with, if it is not in English, a certified translation into English) authorise any person to act as its representative (a “representative”) in connection with that meeting.

 

Chairman

 

	
16

	
The chairman of a meeting shall be such person as the Trustee may nominate in writing, but if no such nomination is made or if the person nominated is not present within 15 minutes after the time fixed for the meeting the ECN Securityholders or agents present shall choose one of their number to be chairman, failing which the Issuer may appoint a chairman. The chairman need not be an ECN Securityholder or agent. The chairman of an adjourned meeting need not be the same person as the chairman of the original meeting.

 

  

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Attendance

 

	
17

	
The following may attend and speak at a meeting:

 

	
17.1

	
ECN Securityholders and agents

 

	
17.2

	
the chairman

 

	
17.3

	
the Issuer, the Guarantor and the Trustee (through their respective representatives) and their respective financial and legal advisers

 

	
17.4

	
any other person authorised by the Trustee.

 

No-one else may attend or speak.

 

Quorum and Adjournment

 

	
18

	
No business (except choosing a chairman) shall be transacted at a meeting unless a quorum is present at the commencement of business. If a quorum is not present within 15 minutes from the time initially fixed for the meeting, it shall, if convened on the requisition of ECN Securityholders or if the Issuer and the Trustee agree, be dissolved. In any other case it shall be adjourned until such date, not less than 14 nor more than 42 days later, and time and place as the chairman may decide. If a quorum is not present within 15 minutes from the time fixed for a meeting so adjourned, the meeting shall be dissolved.

 

	
19

	
Two or more ECN Securityholders or agents present in person shall be a quorum:

 

	
19.1

	
in the cases marked “No minimum proportion” in the table below, whatever the proportion of the ECNs which they represent

 

	
19.2

	
in any other case, only if they represent the proportion of the ECNs shown by the table below.

 

	
COLUMN 1

	
COLUMN 2

	 	
COLUMN 3

	
Purpose of meeting

 

	
Any meeting except one referred to in column 3

 

 

___________________

 

Required proportion

	 	
Meeting previously adjourned through want of a quorum

 

___________________

 

Required proportion

	
To pass a special quorum resolution

 

	
75 per cent

 

	 	
25 per cent

 

	
To pass any other Extraordinary Resolution

	
A clear majority

	 	
No minimum proportion

	 	 	 	 
	
Any other purpose

	
10 per cent

	 	
No minimum proportion

 

	
20

	
The chairman may with the consent of (and shall if directed by) a meeting adjourn the meeting from time to time and from place to place. Only business which could have been transacted at the original meeting may be transacted at a meeting adjourned in accordance with this paragraph or paragraph 18.

 

  

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21

	
At least 10 days’ notice of a meeting adjourned through want of a quorum shall be given in the same manner as for an original meeting and that notice shall state the quorum required at the adjourned meeting. No notice need, however, otherwise be given of an adjourned meeting.

 

Voting

 

	
22

	
Each question submitted to a meeting shall be decided by a show of hands unless a poll is (before, or on the declaration of the result of, the show of hands) demanded by the chairman, the Issuer, the Guarantor, the Trustee or one or more persons representing two per cent. of the ECNs.

 

	
23

	
Unless a poll is demanded a declaration by the chairman that a resolution has or has not been passed shall be conclusive evidence of the fact without proof of the number or proportion of the votes cast in favour of or against it.

 

	
24

	
If a poll is demanded, it shall be taken in such manner and (subject as provided below) either at once or after such adjournment as the chairman directs. The result of the poll shall be deemed to be the resolution of the meeting at which it was demanded as at the date it was taken. A demand for a poll shall not prevent the meeting continuing for the transaction of business other than the question on which it has been demanded.

 

	
25

	
A poll demanded on the election of a chairman or on a question of adjournment shall be taken at once.

 

	
26

	
On a show of hands every person who is present in person and who produces a Bearer ECN, a Certificate of which he is the registered holder or a voting certificate or is a proxy or representative has one vote. On a poll every such person has one vote in respect of each integral currency unit of the Specified Currency of such Series of ECNs so produced or represented by the voting certificate so produced or for which he is a proxy or representative. Without prejudice to the obligations of proxies, a person entitled to more than one vote need not use them all or cast them all in the same way.

 

	
27

	
In case of equality of votes the chairman shall both on a show of hands and on a poll have a casting vote in addition to any other votes which he may have.

 

Effect and Publication of an Extraordinary Resolution

 

	
28

	
An Extraordinary Resolution shall be binding on all the ECN Securityholders, whether or not present at the meeting, and on all the Couponholders and each of them shall be bound to give effect to it accordingly. The passing of such a resolution shall be conclusive evidence that the circumstances justify its being passed. The Issuer shall give notice of the passing of an Extraordinary Resolution to ECN Securityholders within 14 days but failure to do so shall not invalidate the resolution.

 

Minutes

 

	
29

	
Minutes shall be made of all resolutions and proceedings at every meeting and, if purporting to be signed by the chairman of that meeting or of the next succeeding meeting, shall be conclusive evidence of the matters in them. Until the contrary is proved every meeting for which minutes have been so made and signed shall be deemed to have been duly convened and held and all resolutions passed or proceedings transacted at it to have been duly passed and transacted.

 

  

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Written Resolutions

 

	
30

	
A written resolution signed by the holders of not less than 75 per cent. in aggregate principal amount of the ECNs outstanding shall take effect as if it were an Extraordinary Resolution passed at a meeting of ECN Securityholders duly convened and held. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more ECN Securityholders.

 

Trustee’s Power to Prescribe Regulations

 

	
31

	
Subject to all other provisions in this Trust Deed the Trustee may without the consent of the ECN Securityholders prescribe such further regulations regarding the holding of meetings and attendance and voting at them as it in its sole discretion determines including (without limitation) such requirements as the Trustee thinks reasonable to satisfy itself that the persons who purport to make any requisition in accordance with this Trust Deed are entitled to do so and as to the form of voting certificates or block voting instructions so as to satisfy itself that persons who purport to attend or vote at a meeting are entitled to do so.

 

	
32

	
The holder of a Global Note or Global Certificate shall (unless such Global Note or Global Certificate represents only one ECN) be treated as two persons for the purposes of any quorum requirements of a meeting of ECN Securityholders.

 

	
33

	
The foregoing provisions of this Schedule shall have effect subject to the following provisions:

 

	
33.1

	
Meetings of ECN Securityholders of separate Series will normally be held separately. However, the Trustee may from time to time determine that meetings of ECN Securityholders of separate Series shall be held together

 

	
33.2

	
A resolution that in the opinion of the Trustee affects one Series alone shall be deemed to have been duly passed if passed at a separate meeting of the ECN Securityholders of the Series concerned

 

	
33.3

	
A resolution that in the opinion of the Trustee affects the ECN Securityholders of more than one Series but does not give rise to a conflict of interest between the ECN Securityholders of the different Series concerned shall be deemed to have been duly passed if passed at a single meeting of the ECN Securityholders of the relevant Series provided that for the purposes of determining the votes an ECN Securityholder is entitled to cast pursuant to paragraph 26, each ECN Securityholder shall have one vote in respect of each £1,000 nominal amount of ECNs held, converted, if such ECNs are not denominated in sterling, in accordance with Clause 12.13

 

	
33.4

	
A resolution that in the opinion of the Trustee affects the ECN Securityholders of more than one Series and gives or may give rise to a conflict of interest between the ECN Securityholders of the different Series concerned shall be deemed to have been duly passed only if it shall be duly passed at separate meetings of the ECN Securityholders of the relevant Series

 

	
33.5

	
To all such meetings as aforesaid all the preceding provisions of this Schedule shall mutatis mutandis apply as though references therein to ECNs and to ECN Securityholders were references to the ECNs and ECN Securityholders of the Series concerned.

 

  

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This is the Schedule 4 referred to in the foregoing Trust Deed dated 1 December 2009 entered into among LBG Capital No. 1 plc, LBG Capital No. 2 plc, Lloyds Banking Group plc, Lloyds TSB Bank plc and BNY Corporate Trustee Services Limited

Schedule 4

Terms and Conditions of the ECNs

 

 

 

 

TERMS AND CONDITIONS OF THE ECNS

 

 

The Enhanced Capital Notes (“ECNs”) are constituted by a principal trust deed (the “Principal Trust Deed”) dated 1 December 2009 or a deed supplemental to the Principal Trust Deed (any such supplemental trust deed together with the Principal Trust Deed being referred to as the “Trust Deed” in each case entered into between LBG Capital No.1 plc, LBG Capital No.2 plc (each an “Issuer” and together, the “Issuers”), Lloyds Banking Group plc (“LBG”), Lloyds TSB Bank plc (“LTSB”) and BNY Corporate Trustee Services Limited (the “Trustee”, which expression shall include all persons for the time being the trustee or trustees under the Trust Deed) as trustee for the ECN Securityholders. These terms and conditions (the “Conditions”) include summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the pricing schedule relating to the ECNs (the “Pricing Schedule”) and the form of the Bearer ECNs, Certificates, Coupons and Talons referred to below. In connection with Conversion of the ECNs, LBG has entered into a deed poll dated 1 December 2009 (the “Deed Poll”). An agency agreement (the “Agency Agreement”) dated 1 December 2009 has been entered into in relation to the ECNs between the Issuers, LBG, LTSB, the Trustee, The Bank of New York Mellon (Luxembourg) S.A. as registrar, The Bank of New York Mellon (Luxembourg) S.A. as transfer agent, The Bank of New York Mellon as principal paying and conversion agent and calculation agent and the other paying and conversion agents named in it. The principal paying and conversion agent, the other paying and conversion agents, the registrar, the transfer agents and the calculation agent(s) for the time being (if any) are referred to below respectively as the “Principal Paying and Conversion Agent”, the “Paying and Conversion Agents” (which expression shall include the Principal Paying and Conversion Agent), the “Registrar”, the “Transfer Agents” (which expression shall include the Registrar) and the “Calculation Agent(s)”. Copies of the Trust Deed, the Deed Poll and the Agency Agreement are available for inspection during usual business hours at the principal office of the Trustee (presently at One Canada Square, London E14 5AL) and at the specified offices of the Paying and Conversion Agents and the Transfer Agents.

 

The ECN Securityholders, the holders of the interest coupons (the “Couponholders” and the “Coupons” respectively) relating to Bearer ECNs and, where applicable in the case of Bearer ECNs, talons for further Coupons (the “Talons”) are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and are deemed to have notice of those provisions applicable to them of the Agency Agreement and the Deed Poll.

 

In these Conditions, references to “the Issuer” are to the entity specified as the Issuer in the relevant Pricing Schedule.

 

	
1

	
Form, Denomination and Title

 

The ECNs are issued in bearer form (“Bearer ECNs”) or in registered form (“Registered ECNs”) as specified in the relevant Pricing Schedule. Each ECN will be issued in the Specified Denomination(s) specified in the relevant Pricing Schedule.

 

This ECN is a Fixed Rate ECN, a Floating Rate ECN or a Fixed/Floating Rate ECN, depending upon the Interest Basis shown in the relevant Pricing Schedule.

 

Bearer ECNs are serially numbered and are issued with Coupons (and, where appropriate, a Talon) attached.

 

Registered ECNs are represented by registered certificates (“Certificates”) and, save as provided in Condition 2(b), each Certificate shall represent the entire holding of Registered ECNs by the same holder.

 

  

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Title to the Bearer ECNs, Coupons and Talons shall pass by delivery. Title to the Registered ECNs shall pass by registration in the register that the Issuer shall procure to be kept by the Registrar in accordance with the provisions of the Agency Agreement (the “Register”). Except as ordered by a court of competent jurisdiction or as required by law, the holder of any ECN, Coupon or Talon shall be deemed to be and may be treated as its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it, any writing on it (or on the Certificate representing it) or its theft or loss (or that of the related Certificate) and no person shall be liable for so treating the holder.

 

	
2 

	
No Exchange of ECNs and Transfers of Registered ECNs

 

	
(a) 

	
No Exchange of ECNs

 

Registered ECNs may not be exchanged for Bearer ECNs. Bearer ECNs may not be exchanged for Registered ECNs. Bearer ECNs of one Specified Denomination may not be exchanged for Bearer ECNs of another Specified Denomination.

 

	
(b) 

	
Transfer of Registered ECNs

 

One or more Registered ECNs may be transferred upon the surrender (at the specified office of the Registrar or any Transfer Agent) of the Certificate representing such Registered ECNs to be transferred, together with the form of transfer endorsed on such Certificate (or another form of transfer substantially in the same form and containing the same representations and certifications (if any), unless otherwise agreed by the Issuer), duly completed and executed and any other evidence as the Registrar or Transfer Agent may reasonably require. A new Certificate shall be issued to the transferee in respect of the Registered ECNs the subject of the relevant transfer and, in the case of a transfer of part only of a holding of Registered ECNs represented by one Certificate, a new Certificate in respect of the balance of the Registered ECNs not transferred shall be issued to the transferor. In the case of a transfer of Registered ECNs to a person who is already a holder of Registered ECNs, a new Certificate representing the enlarged holding may be issued but only against surrender of the Certificate representing the existing holding of such person. All transfers of Registered ECNs and entries on the Register will be made subject to the detailed regulations concerning transfers of Registered ECNs scheduled to the Agency Agreement. The regulations may be changed by the Issuer, with the prior written approval of the Registrar and the Trustee. A copy of the current regulations will be made available by the Registrar to any ECN Securityholder upon request.

 

	
(c) 

	
Delivery of New Certificates

 

Each new Certificate to be issued pursuant to Condition 2(b) shall be available for delivery within three business days of receipt of the form of transfer and surrender of the relevant Certificate. Delivery of new Certificate(s) shall be made at the specified office of the Transfer Agent or of the Registrar (as the case may be) to whom delivery and surrender of such form of transfer and Certificate or, as the case may be, surrender of such Certificate, shall have been made or, at the option of the relevant holder and as specified in the relevant form of transfer or otherwise in writing, be mailed by uninsured post at the risk of the holder entitled to the new Certificate to such address as may be so specified, unless such holder requests otherwise and pays in advance to the relevant Transfer Agent the costs of such other method of delivery and/or such insurance as it may specify. In this Condition 2(c), “business day” means a day, other than a Saturday or Sunday, on which banks are open for business in the place of the specified office of the relevant Transfer Agent or the Registrar (as the case may be).

 

	
(d) 

	
Transfers Free of Charge

 

Transfers of Registered ECNs and issue of new Certificates on transfer shall be effected without charge by or on behalf of the Issuer, the Registrar or the Transfer Agents, but upon payment of any tax or other governmental charges that may be imposed in relation to it (or the giving of such indemnity as the Registrar or the relevant Transfer Agent may require).

 

  

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(e) 

	
Closed Periods

 

No ECN Securityholder may require the transfer of a Registered ECN to be registered (i) during the period of 15 days ending on the due date for redemption of the ECNs pursuant to Condition 8, (ii) during the period of 15 days prior to any Conversion Date in respect of a Conversion pursuant to Condition 7(a) or (iii) during the period of seven days ending on (and including) any Record Date.

 

	
3 

	
Status and Subordination of the ECNs

 

	
(a) 

	
Status

 

The ECNs and Coupons constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passu and without any preference among themselves. The rights and claims of the ECN Securityholders and Couponholders are subordinated as described in Condition 3(b).

 

	
(b) 

	
Subordination

 

In the event of:

 

	 	
(i)

	
an order being made, or an effective resolution being passed, for the winding-up of the Issuer (except a solvent winding-up solely for the purposes of a reorganisation, reconstruction or amalgamation of the Issuer or the substitution in place of the Issuer of a successor in business of the Issuer, the terms of which reorganisation, reconstruction, amalgamation or substitution (x) have previously been approved in writing by the Trustee or by an Extraordinary Resolution and (y) do not provide that the ECNs shall thereby become redeemable or repayable in accordance with these Conditions); or

 

	 	
(ii)

	
an administrator of the Issuer being appointed and such administrator declaring, or giving notice that it intends to declare and distribute, a dividend,

 

the rights and claims of the ECN Securityholders and the Couponholders against the Issuer in respect of or arising under (including any damages awarded for breach of any obligations under) the ECNs, the Coupons and the Trust Deed relating to them will be subordinated, in the manner provided in this Condition 3(b) and in the Trust Deed, to the claims of all Issuer Senior Creditors but shall rank (A) at least pari passu with the claims of holders of all other subordinated obligations of the Issuer and (B) in priority to the claims of holders of all undated or perpetual subordinated obligations of the Issuer and to the claims of holders of all classes of share capital of the Issuer.

 

The provisions of this Condition 3(b) apply only to the principal, premium and interest and any other amounts payable in respect of the ECNs and Coupons and nothing in this Condition 3(b) or in Condition 12 shall affect or prejudice the payment of the costs, charges, expenses, liabilities or remuneration of the Trustee or the rights and remedies of the Trustee in respect thereof.

 

	
4 

	
Guarantee; Status and Subordination of the Guarantee

 

  In these Conditions, references to “the Guarantor” are to either or both of LBG or LTSB, as is specified as the Guarantor in the relevant Pricing Schedule.

 

  In relation to references in these Conditions to “Guarantor”, where the relevant Pricing Schedule specifies one of LBG or LTSB as the Guarantor, the wording appearing in the first set of brackets marked with an * shall apply to the ECNs and where both of LBG and LTSB are specified as Guarantors in the relevant Pricing Schedule, the wording appearing in the second set of brackets marked with a ** shall apply to the ECNs.

 

	
(a) 

	
Guarantee and Status

 

The [Guarantor has]*/[the Guarantors have, jointly and severally]** irrevocably and unconditionally guaranteed the due and punctual payment of all principal, premium and interest and any other sums from time to time expressed to be payable by the Issuer in respect of the ECNs and the Coupons and under the Trust Deed in respect thereof. 

 

  

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[Its]*/[Their]** obligations in that respect (the “Guarantee”) are contained in the Trust Deed. The obligations of [the]*/[each]** Guarantor under the Guarantee constitute direct and unsecured obligations of [the]*/[that]** Guarantor, subordinated as described in Condition 4(b).

 

	
(b) 

	
Subordination

 

In the event of:

 

	 	
(i)

	
an order being made, or an effective resolution being passed, for the winding-up of [the]*/[a]** Guarantor (except, in any such case, a solvent winding-up solely for the purposes of a reorganisation, reconstruction or amalgamation of [the]*/[such]** Guarantor or the substitution in place of [the]*/[such]** Guarantor of a successor in business of [the]*/[such]** Guarantor, the terms of which reorganisation, reconstruction, amalgamation or substitution (x) have previously been approved in writing by the Trustee or by an Extraordinary Resolution and (y) do not provide that the ECNs shall thereby become redeemable or repayable in accordance with these Conditions); or

 

	 	
(ii)

	
an administrator of [the]*/[a]** Guarantor being appointed and such administrator declaring, or giving notice that it intends to declare and distribute, a dividend, the rights and claims of the ECN Securityholders and the Couponholders against [the]*/[such]** Guarantor in respect of or arising under (including any damages awarded for breach of any obligations under) the ECNs, the Coupons and the Trust Deed relating to them will be subordinated, in the manner provided in this Condition 4(b) and in the Trust Deed, to the claims of all Guarantor Senior Creditors but shall rank (a) at least pari passu with the claims of holders of all obligations of [the]*/[such]** Guarantor which constitute, or would but for any applicable limitation on the amount of such capital constitute, Lower Tier 2 Capital of [the]*/[such]** Guarantor on a solo and/or consolidated basis; and (b) in priority to (01) the claims of holders of all obligations of [the]*/[such]** Guarantor which constitute, or would but for any applicable limitation on the amount of such capital constitute, Upper Tier 2 Capital or Tier 1 Capital of [the]*/[such]** Guarantor on a solo and/or consolidated basis, (02) the claims of holders of all other undated or perpetual subordinated obligations of [the]*/[such]** Guarantor, and (03) the claims of holders of all classes of share capital of [the]*/[such]** Guarantor. 

 

The provisions of this Condition 4(b) apply only to the principal, premium and interest and any other amounts payable in respect of the ECNs and Coupons and nothing in this Condition 4(b) or in Condition 12 shall affect or prejudice the payment of the costs, charges, expenses, liabilities or remuneration of the Trustee or the rights and remedies of the Trustee in respect thereof.

 

	
5 

	
Set-off

 

Subject to applicable law, no ECN Securityholder or Couponholder may exercise, claim or plead any right of set-off, compensation or retention in respect of any amount owed to it by the Issuer or [the]*/[a]** Guarantor in respect of, or arising under or in connection with the ECNs or the Coupons and each ECN Securityholder and Couponholder shall, by virtue of his holding of any ECN or Coupon, be deemed to have waived all such rights of set-off, compensation or retention. Notwithstanding the preceding sentence, if any of the amounts owing to any ECN Securityholder or Couponholder by the Issuer or [the]*/[a]** Guarantor in respect of, or arising under or in connection with the ECNs is discharged by set-off, such ECN Securityholder or Couponholder shall, subject to applicable law, immediately pay an amount equal to the amount of such discharge to the Issuer or [the]*/[the relevant]** Guarantor, as the case may be, (or, in the event of its winding-up or administration, the liquidator or, as appropriate, administrator of the Issuer or [the]*/[the relevant]** Guarantor, as the case may be) and, until such time as payment is made, shall hold an amount equal to such amount in trust for the Issuer or [the]*/[such]** Guarantor, as the case may be, (or the liquidator or, as appropriate, administrator of the Issuer or [the]*/[such]** Guarantor (as the case may be)) and accordingly any such discharge shall be deemed not to have taken place.

 

  

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6 

	
Interest Calculations

 

	
(a) 

	
Interest on Fixed Rate ECNs

 

	
  

	
Each Fixed Rate ECN bears interest on its principal amount from time to time from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Fixed Rate of Interest, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 6(f).

 

	
(b) 

	
Interest on Floating Rate ECNs

 

	 	
(i) 

	
Interest Payment Dates

 

Each Floating Rate ECN bears interest on its principal amount from time to time from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Floating Rate of Interest, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 6(f).

 

	 	
(ii) 

	
Business Day Convention

 

If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified in the relevant Pricing Schedule is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day.

 

	 	
(iii) 

	
Floating Rate of Interest for Floating Rate ECNs

 

The Floating Rate of Interest in respect of Floating Rate ECNs for each Interest Accrual Period shall be determined as provided herein:

 

(x) The Floating Rate of Interest for each Interest Accrual Period will, subject as provided below, be either:

 

	 	
(1)

	
the offered quotation; or

 

	 	
(2)

	
the arithmetic mean of the offered quotations,

 

	
 

	

(expressed as a percentage rate per annum) for the Reference Rate which appears or appear, as the case may be, on the Relevant Screen Page as at 11.00 a.m. (London time if the Reference Rate is LIBOR or Brussels time if the Reference Rate is EURIBOR) on the Interest Determination Date in question as determined by the Calculation Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Calculation Agent for the purpose of determining the arithmetic mean of such offered quotations. 

 

If the Reference Rate from time to time in respect of Floating Rate ECNs is specified in the relevant Pricing Schedule as being other than LIBOR or EURIBOR, the Floating Rate of Interest in respect of such ECNs will be determined as provided in the relevant Pricing Schedule.

 

(y) If the Relevant Screen Page is not available or if sub-paragraph (x)(1) above applies and no such offered quotation appears on the Relevant Screen Page or if sub-

 

  

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paragraph (x)(2) above applies and fewer than three such offered quotations appear on the Relevant Screen Page, in each case as at the time specified above, subject as provided below, the Calculation Agent shall request, if the Reference Rate is LIBOR, the principal London office of each of the Reference Banks or, if the Reference Rate is EURIBOR, the principal Euro-zone office of each of the Reference Banks, to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on the Interest Determination Date in question. If two or more of the Reference Banks provide the Calculation Agent with such offered quotations, the Floating Rate of Interest for such Interest Accrual Period shall be the arithmetic mean of such offered quotations as determined by the Calculation Agent.

 

	
(z)

	
If paragraph (y) above applies and the Calculation Agent determines that fewer than two Reference Banks are providing offered quotations, subject as provided below, the Floating Rate of Interest shall be the arithmetic mean of the rates per annum (expressed as a percentage) as communicated to (and at the request of) the Calculation Agent by the Reference Banks, or any two or more of them, at which such banks were offered, if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market, as the case may be, or, if fewer than two of the Reference Banks provide the Calculation Agent with such offered rates, the offered rate for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at which, if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Trustee and the Issuer suitable for such purpose) informs the Calculation Agent it is quoting to leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market, as the case may be, provided that, if the Rate of Interest cannot be determined in accordance with the foregoing provisions of this paragraph, the Floating Rate of Interest shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin or Maximum or Minimum Rate of Interest is to be applied to the relevant Interest Accrual Period from that which applied to the last preceding Interest Accrual Period, the Margin or Maximum or Minimum Rate of Interest relating to the relevant Interest Accrual Period, in place of the Margin or Maximum or Minimum Rate of Interest relating to that last preceding Interest Accrual Period).

 

	
(c) 

	
Interest on Fixed/Floating Rate ECNs

 

Each Fixed/Floating Rate ECN bears interest on its principal amount from time to time from the Interest Commencement Date and during the Fixed Interest Rate Period at the rate per annum (expressed as a percentage) equal to the Fixed Rate of Interest, such interest being paid in arrear on each Interest Payment Date falling in the Fixed Interest Rate Period, and during the Floating Interest Rate Period at the rate per annum (expressed as a percentage) equal to the Floating Rate of Interest, such interest being paid in arrear on each Interest Payment Date falling in the Floating Rate Interest Period. The amount of interest payable shall be determined in accordance with Condition 6(f).

 

	
(d) 

	
Accrual of Interest

 

	
 

	
(i)    Where an ECN is to be redeemed pursuant to Condition 8(a), 8(d) or 8(e) interest shall accrue up to (but excluding) the due date for redemption, and shall cease to accrue on such ECN on the due date for redemption unless, upon due presentation, payment is improperly withheld or refused, in which event interest shall continue to accrue (both before and after judgment) at the relevant Rate of Interest from time to time in the manner provided in this Condition 6 to the Relevant Date.

 

  

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(ii)   In the case of a Conversion in respect of the ECNs, interest shall accrue on the principal amount of each ECN up to (but excluding) the relevant Conversion Date and interest shall cease to accrue on each ECN with effect from the relevant Conversion Date. In the case of a Conversion in respect of Bearer ECNs, all Coupons relating to Interest Payment Dates falling after the Conversion Date shall be void and no payment shall be made in respect of them.

 

	
(e) 

	
Margin, Maximum/Minimum Rates of Interest and Rounding

 

	
 

	

(i)   If any Margin is specified in the relevant Pricing Schedule (either (x) generally or (y) in relation to one or more Interest Accrual Periods), an adjustment shall be made to all Rates of Interest, in the case of (x), or the Rates of Interest for the specified Interest Accrual Periods, in the case of (y), calculated in accordance with Condition 6(b) above by adding (if a positive number) or subtracting the absolute value (if a negative number) of such Margin, subject always to the next paragraph.

 

	
 

	

(ii)   If any Maximum or Minimum Rate of Interest is specified in the relevant Pricing Schedule, then any Rate of Interest shall be subject to such maximum or minimum, as the case may be.

 

	
 

	

(iii)   For the purposes of any calculations required pursuant to these Conditions (unless otherwise specified), (x) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with halves being rounded up), (y) all figures shall be rounded to seven significant figures (with halves being rounded up) and (z) all currency amounts that fall due and payable shall be rounded to the nearest unit of such currency (with halves being rounded up), save in the case of yen, which shall be rounded down to the nearest yen. For these purposes “unit” means the lowest amount of such currency that is legal tender.

 

	
(f) 

	
Calculations

 

	
  

	
The amount of interest payable per Calculation Amount in respect of any ECN for any Interest Accrual Period shall be calculated by reference to the Rate of Interest, the Calculation Amount specified in the relevant Pricing Schedule and the Day Count Fraction for such Interest Accrual Period, unless (as specified in the relevant Pricing Schedule) an Interest Amount (or a formula for its calculation) is applicable to such Interest Accrual Period, in which case the amount of interest payable per Calculation Amount in respect of such ECN for such Interest Accrual Period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable per Calculation Amount in respect of such Interest Period shall be the sum of the Interest Amounts payable in respect of each of those Interest Accrual Periods. In respect of any other period for which interest is required to be calculated, the provisions above shall apply save that the Day Count Fraction shall be applied to the period for which interest is required to be calculated.

 

	
(g) 

	
Determination and Publication of Rates of Interest and Interest Amounts

 

	
  

	
The Calculation Agent shall, as soon as practicable on each Interest Determination Date, or such other time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation under the Conditions, calculate such rate and calculate the Interest Amounts for the relevant Interest Accrual Period, obtain such quotation or make such determination or calculation, as the case may be, and cause the Rate of Interest and the Interest Amounts for each Interest Accrual Period and the relevant Interest Payment Date to be notified to the Trustee, the Issuer, [the Guarantor]*/[the Guarantors]**, each of the Paying and Conversion Agents, the ECN Securityholders, any other Calculation Agent appointed in respect of the ECNs that is to make a further calculation upon receipt of such information and, if the ECNs are listed on a stock exchange and the rules of such exchange or other relevant authority so require, such exchange or other relevant authority as soon as possible after their determination but in no event later than (i) the commencement of the relevant Interest Period, if determined prior to such time, in the case of notification to such exchange of a Rate of Interest and Interest Amount, or (ii) in all other cases, the fourth Business Day after such determination. Where any Interest Payment Date or Interest Period Date is subject to adjustment pursuant 

 

  

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to Condition 6(b)(ii), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made with the consent of the Trustee by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. If there is a default in payment in respect of the ECNs as provided in Condition 12(a), the accrued interest and the Rate of Interest payable in respect of the ECNs shall nevertheless continue to be calculated as previously in accordance with this Condition but no publication of the Rate of Interest or the Interest Amount so calculated need be made unless the Trustee otherwise requires. The determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be final and binding upon all parties.

 

	
(h) 

	
Determination or Calculation by Trustee

 

If the Calculation Agent does not at any time for any reason determine or calculate the Rate of Interest for an Interest Accrual Period or any Interest Amount, as the case may be, the Trustee shall do so (or shall at the expense of the Issuer, appoint an agent on its behalf to do so) and such determination or calculation shall be deemed to have been made by the Calculation Agent. In doing so, the Trustee shall apply the foregoing provisions of this Condition, with any necessary consequential amendments, to the extent that, in its opinion, it can do so, and in all other respects it shall do so in such manner as it shall deem fair and reasonable in all the circumstances.

 

	
(i) 

	
Definitions

 

In these Conditions, unless the context otherwise requires, the following defined terms shall have the meanings set out below:

 

“Business Day” means:

 

(i)   in the case of a currency other than euro, a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments in the principal financial centre for such currency; and/or

 

(ii)   in the case of euro, a day on which the TARGET system is operating (a “TARGET Business Day”); and/or

 

(iii)   in the case of a currency and/or one or more Business Centres specified in the relevant Pricing Schedule a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in such currency in the Business Centre(s) or, if no currency is indicated, generally in each of the Business Centres.

 

“Day Count Fraction” means, in respect of the calculation of an amount of interest on any ECN for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period or an Interest Accrual Period, the “Calculation Period”):

 

(i)   if “Actual/Actual” or “Actual/Actual - ISDA” is specified in the relevant Pricing Schedule, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365);

 

(ii)   if “Actual/365 (Fixed)” is specified in the relevant Pricing Schedule, the actual number of days in the Calculation Period divided by 365;

 

(iii)   if “Actual/360” is specified in the relevant Pricing Schedule, the actual number of days in the Calculation Period divided by 360;

 

(iv)   if “Actual/Actual-ICMA” is specified in the relevant Pricing Schedule,

 

(a)      if the Calculation Period is equal to or shorter than the Determination Period during which it falls, the number of days in the Calculation Period divided by the product of 

 

  

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(x)

	
the number of days in such Determination Period and (y) the number of Determination Periods normally ending in any year; and

 

(b)     if the Calculation Period is longer than one Determination Period, the sum of:

 

	 	
(x)

	
the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and

 

	 	
(y)

	
the number of days in such Calculation Period falling in the next Determination Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year,

 

where:

 

“Determination Date” means the date(s) specified as such in the relevant Pricing Schedule or, if none is so specified, the Interest Payment Date(s); and

 

“Determination Period” means the period from and including a Determination Date in any year to but excluding the next Determination Date; and

 

(v)   if “30/360”, “360/360” or “Bond Basis” is specified in the relevant Pricing Schedule, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:

 

	
Day Count Fraction =

	
[360 × (Y2 – Y1)] + [30 × (M2 – M1)] + (D2 – D1)

 

360

	  

where:

 

“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;

 

“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;

 

“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;

 

“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;

 

“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and

 

“D2” is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30.

 

“Euro-zone” means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended.

 

“Fixed Interest Rate Period” means the period specified as such in the relevant Pricing Schedule.

 

“Fixed Rate of Interest” means the rate of interest payable from time to time in respect of a Fixed Rate ECN or during the Fixed Interest Rate Period in respect of a Fixed/Floating Rate ECN and that is either specified in the relevant Pricing Schedule or calculated in accordance with the provisions in the relevant Pricing Schedule.

 

“Floating Interest Rate Period” means the period specified as such in the relevant Pricing Schedule.

 

  

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“Floating Rate of Interest” means the rate of interest payable from time to time in respect of a Floating Rate ECN or during the Floating Interest Rate Period in respect of a Fixed/Floating Rate ECN and that is either specified in the relevant Pricing Schedule or calculated in accordance with the provisions in the relevant Pricing Schedule.

 

“Interest Accrual Period” means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Period Date and each successive period beginning on (and including) an Interest Period Date and ending on (but excluding) the next succeeding Interest Period Date.

 

“Interest Amount” means:

 

(i)   in respect of an Interest Accrual Period, the amount of interest payable per Calculation Amount for that Interest Accrual Period and which, in the case of Fixed Rate ECNs, and unless otherwise specified in the relevant Pricing Schedule, shall mean the Fixed Coupon Amount or Broken Amount specified in the relevant Pricing Schedule as being payable on the Interest Payment Date ending in the Interest Period of which such Interest Accrual Period forms part; and

 

(ii)   in respect of any other period, the amount of interest payable per Calculation Amount for that period.

 

“Interest Commencement Date” means the Issue Date specified in the relevant Pricing Schedule or such other date as may be specified in the relevant Pricing Schedule.

 

“Interest Determination Date” means, with respect to a Rate of Interest and Interest Accrual Period, the date specified as such in the relevant Pricing Schedule or, if none is so specified, (i) the first day of such Interest Accrual Period if the Specified Currency is Sterling or (ii) the day falling two Business Days in London for the Specified Currency prior to the first day of such Interest Accrual Period if the Specified Currency is neither Sterling nor euro or (iii) the day falling two TARGET Business Days prior to the first day of such Interest Accrual Period if the Specified Currency is euro.

 

“Interest Payment Date” means, in respect of the ECNs, the date or dates specified as such, or determined as provided, in the relevant Pricing Schedule.

 

“Interest Period” means the period beginning on (and including) the Interest Commencement Date and ending on but excluding the first Interest Payment Date and each successive period beginning on and including an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date.

 

“Interest Period Date” means each Interest Payment Date unless otherwise specified in the relevant Pricing Schedule.

 

“Rate of Interest” means the Fixed Rate of Interest and/or Floating Rate of Interest, as the case may be.

 

“Reference Banks” means, in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market and, in the case of a determination of EURIBOR, the principal Euro-zone office of four major banks in the Euro-zone inter-bank market, in each case selected by the Calculation Agent or as specified in the relevant Pricing Schedule.

 

“Reference Rate” means the rate specified as such in the relevant Pricing Schedule.

 

“Relevant Screen Page” means such page, section, caption, column or other part of a particular information service as may be specified in the relevant Pricing Schedule.

 

“Specified Currency” means the currency in which the ECNs are denominated.

 

“TARGET System” means the Trans-European Automated Real-Time Gross Settlement Express Transfer (known as TARGET2) System which was launched on 19 November 2007 or any successor thereto.

 

  

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(j) 

	
Calculation Agent

 

The Issuer shall procure that there shall at all times be one or more Calculation Agents if provision is made for them in the relevant Pricing Schedule and for so long as any ECN is outstanding. Where more than one Calculation Agent is appointed in respect of the ECNs, references in these Conditions to the Calculation Agent shall be construed as each Calculation Agent performing its respective duties under the Conditions. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Accrual Period or to calculate any Interest Amount, as the case may be, or to comply with any other requirement, the Issuer shall (with the prior written approval of the Trustee) appoint a leading bank or financial institution engaged in the inter-bank market (or, if appropriate, money, swap or over-the-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal London office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid.

 

	
(k) 

	
No Deferral

 

Neither the Issuer nor [the]* [either]** Guarantor shall be entitled to defer or cancel any payments of interest or any other amounts payable in respect of the ECNs.

 

	
7 

	
Conversion

 

	
(a) 

	
Conversion upon Conversion Trigger

 

(i) If the Conversion Trigger occurs at any time, each ECN shall, subject to and as provided in this Condition 7(a) and in the Deed Poll, be converted on the relevant Conversion Date into new and/or existing (as determined by LBG) Ordinary Shares credited as fully paid in the manner and in the circumstances described below and in the Deed Poll.

 

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

 

The “Conversion Trigger” shall occur if at any time, as disclosed in the latest published annual or semi-annual consolidated financial statements of LBG or as otherwise publicly disclosed by LBG at any time, LBG's Consolidated Core Tier 1 Ratio is less than 5 per cent. As used herein, “Consolidated Core Tier 1 Ratio” means the ratio of the Core Tier 1 Capital of LBG to the risk weighted assets of LBG, in each case, calculated on a consolidated basis.

 

As soon as reasonably practicable following the occurrence of the Conversion Trigger, the Issuer shall give notice thereof to holders of the ECNs (the “Conversion Trigger Notice”) in accordance with Condition 17. The Conversion Trigger Notice shall specify the Consolidated Core Tier 1 Ratio, the prevailing Conversion Price and the Conversion Date, which shall be not earlier than 20 London business days nor later than 30 London business days following the giving of the Conversion Trigger Notice.

 

(ii) If the Conversion Trigger occurs, the ECNs will be converted in whole and not in part as provided below and in the Deed Poll.

 

(iii) Prior to giving the Conversion Trigger Notice, the Issuer shall deliver to the Trustee a certificate signed by two Authorised Signatories of LBG stating that the Conversion Trigger has occurred and the Trustee shall accept such certificate without any further enquiry as sufficient evidence of such matters, and such certificate will be conclusive and binding on the Trustee and the ECN Securityholders.

 

(iv) If a Relevant Event shall occur that is a Qualifying Relevant Event, then, where the Conversion Date falls on or after the New Conversion Condition Effective Date, each ECN shall, upon the occurrence of the Conversion Trigger, subject to and as provided in this Condition 7(a) and the Deed Poll, be converted into Relevant Shares of the Approved Entity.

 

(v) If a Relevant Event shall occur that is a Non-Qualifying Relevant Event and where the Acquiror is an Approved Entity, then with effect from the date falling eight days following the occurrence of such Relevant Event and unless the Conversion Trigger shall have occurred 

 

  

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prior to such date, outstanding ECNs shall not be subject to Conversion at any time notwithstanding that a Conversion Trigger may occur subsequently.

 

(vi) If a Relevant Event shall occur that is a Non-Qualifying Relevant Event and where the Acquiror is not an Approved Entity, then with effect from the occurrence of such Relevant Event and unless the Conversion Trigger shall have occurred prior to such date, outstanding ECNs shall not be subject to Conversion at any time notwithstanding that a Conversion Trigger may occur subsequently.

 

	
(b) 

	
Payment of Conversion Settlement Sum

 

(i)   Upon Conversion, the Issuer shall redeem the ECNs at a price (the “Conversion Settlement Sum”) equal to their principal amount. ECN Securityholders shall be deemed irrevocably to have directed and authorised the Issuer to pay the Conversion Settlement Sum to LBG as consideration for LBG's agreement to issue Ordinary Shares pursuant to the Deed Poll and the obligations of the Issuer and [the]*/[each]** Guarantor to pay principal on the relevant ECNs to holders of the ECNs shall be discharged by the Issuer's obligation to pay the Conversion Settlement Sum to LBG.

 

(ii)   In order to obtain delivery of Ordinary Shares on a Conversion, ECN Securityholders will be required to comply with the provisions of the Deed Poll which require, amongst other things, the delivery of a Conversion Notice and the relevant ECNs or the Certificate representing the same (in the case of Registered ECNs) on or before the Notice Cut-off Date. If ECN Securityholders fail to make such delivery on or before the Notice Cut-off Date or otherwise the relevant Conversion Notice shall have been determined to be null and void pursuant to the Deed Poll, the Deed Poll contains provisions relating to the sale of the relevant Ordinary Shares and the payment of the net proceeds of such sale (the “Ordinary Share Sale Proceeds”) to such ECN Securityholders.

 

(iii)   LBG has agreed in the Deed Poll that, in consideration of the Issuer's agreement to pay the Conversion Settlement Sum, it will issue or deliver Ordinary Shares as provided therein and, in the circumstances provided therein, pay the Ordinary Share Sale Proceeds to the relevant ECN Securityholders. ECN Securityholders shall have recourse only to LBG under the Deed Poll for the issue or delivery of such Ordinary Shares pursuant to the Deed Poll or, as the case may be, the payment of any Ordinary Share Sale Proceeds and in particular will have no recourse in respect thereof to the Issuer or (but without prejudice to the foregoing) [the]*/[either]** Guarantor.

 

(iv)   The Trustee shall have no responsibility in respect of LBG's obligations under the Deed Poll upon Conversion, shall have no powers of enforcement under or in respect of the Deed Poll and shall incur no liability in respect of any failure by LBG to comply with its obligations under the Deed Poll. The ECN Securityholders alone shall have power to enforce the terms of the Deed Poll against LBG.

 

	
(c) 

	
Accrued Conversion Interest

 

(i)   Upon Conversion, the Issuer shall pay to the ECN Securityholders the Accrued Conversion Interest (if any) in respect of the ECNs on the Conversion Date.

 

(ii)   Payment of any Accrued Conversion Interest will be made by transfer to an account with a bank in the principal financial centre of the Specified Currency or, in the case of a payment in euro, to an account with a bank in a city in which banks have access to the TARGET System, as specified in the relevant Conversion Notice or, as the case may be, as provided below.

 

(iii)   If, in the case of a Conversion, a Conversion Notice and the relevant ECNs or the Certificate representing the same (in the case of Registered ECNs) are not delivered to a Paying and Conversion Agent on or before the Notice Cut-off Date or otherwise the relevant Conversion Notice shall have been determined or treated as null and void pursuant to the Deed Poll, any Accrued Conversion Interest in respect of the relevant ECNs which is to be paid on the Conversion Date shall be paid on the relevant Conversion Date to the Principal Paying and Conversion Agent for distribution to the relevant ECN Securityholders in 

 

  

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accordance with Condition 9 or in such other manner and at such time as the Trustee shall determine and notify to the ECN Securityholders pursuant to Condition 17.

 

	
8 

	
Redemption and Purchase

 

	
(a) 

	
Final Redemption

 

Unless previously converted, redeemed or purchased and cancelled as provided in these Conditions, each ECN shall be redeemed on the Maturity Date specified in the relevant Pricing Schedule at its principal amount (or at such other amount as may be specified in the relevant Pricing Schedule).

 

	
(b) 

	
Conditions to Redemption and Purchase

 

Any redemption or purchase of the ECNs in accordance with Condition 8(d), (e) or (g) is subject to (i) LBG giving at least one month's prior written notice to, and receiving no objection from or, in the case of any redemption of the ECNs prior to the fifth anniversary of the Issue Date, receiving the consent of, the FSA (or such other period of notice as the FSA may from time to time require or accept and, in any event, provided that any such notice is required to be given) and (ii) LBG (both at the time of, and immediately following, the redemption or purchase) being in compliance with the Regulatory Capital Requirements applicable to it from time to time (and a certificate from any two Authorised Signatories of LBG confirming such compliance shall be conclusive evidence of such compliance).

 

Prior to the publication of any notice of redemption pursuant to Condition 8(d) or (e), the Issuer shall deliver to the Trustee a certificate signed by two Authorised Signatories of the Issuer stating that the relevant requirement or circumstance giving rise to the right to redeem is satisfied and the reasons therefor and the Trustee shall accept such certificate without any further inquiry as sufficient evidence of the satisfaction of the relevant conditions precedent, and such certificate shall be conclusive and binding on the Trustee and the ECN Securityholders.

 

	
(c) 

	
Early Redemption

 

Save as provided in Conditions 8(d) and (e) (and subject to Condition 7(b)) the Issuer shall not be entitled to redeem the ECNs prior to the Maturity Date.

 

	
(d) 

	
Redemption Due to Taxation

 

If, immediately prior to the giving of the notice referred to below, a Tax Event has occurred and is continuing, then the Issuer may, subject to Condition 8(b) and having given not less than 10 nor more than 21 days' notice to the Trustee, the Principal Paying and Conversion Agent, the Registrar and, in accordance with Condition 17, the ECN Securityholders (which notice shall, subject as provided in Condition 8(f), be irrevocable), redeem in accordance with these Conditions at any time (in the case of a Fixed Rate ECN or in the Fixed Interest Rate Period in the case of a Fixed/Floating Rate ECN) or on any Interest Payment Date (in the case of a Floating Rate ECN or in the Floating Interest Rate Period in the case of a Fixed/Floating Rate ECN) all, but not some only, of the ECNs at their principal amount, together with any accrued but unpaid interest to (but excluding) the relevant redemption date. Upon the expiry of such notice, the Issuer shall redeem the ECNs as aforesaid.

 

	
(e) 

	
Redemption for Regulatory Purposes

 

If, immediately prior to the giving of the notice referred to below, a Capital Disqualification Event has occurred and is continuing, then the Issuer may, subject to Condition 8(b) and having given not less than 10 nor more than 21 days' notice to the ECN Securityholders in accordance with Condition 17, the Trustee, the Principal Paying and Conversion Agent and the Registrar (which notice shall, subject as provided in Condition 8(f), be irrevocable), redeem in accordance with these Conditions at any time (in the case of a Fixed Rate ECN or in the Fixed Interest Rate Period in the case of a Fixed/Floating Rate ECN) or on any Interest Payment Date (in the case of a Floating Rate ECN or in the Floating Interest Rate Period in the case of a Fixed/Floating Rate ECN) all, but not some only, of the ECNs at their principal amount (or at such other amount as may be specified in the relevant Pricing Schedule), together with any accrued but unpaid interest to but excluding the relevant 

 

  

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redemption date. Upon the expiry of such notice, the Issuer shall redeem the ECNs as aforesaid.

 

	
(f) 

	
Conversion Trigger

 

The Issuer may not give a notice of redemption of the ECNs pursuant to this Condition 8 if a Conversion Trigger Notice shall have been given. If a Conversion Trigger Notice shall be given after a notice of redemption shall have been given by the Issuer but before the relevant redemption date, such notice of redemption shall automatically be revoked and be null and void and the relevant redemption shall not be made.

 

	
(g) 

	
Purchases

 

The Issuer or LBG (or any Subsidiary of LBG) may, subject to Condition 8(b), at any time purchase or procure others to purchase beneficially for its account ECNs in any manner and at any price. In any such case, purchases of Bearer ECNs will be made together with all unmatured Coupons and unexchanged Talons (if appropriate) appertaining thereto.

 

	
(h) 

	
Cancellation

 

All ECNs redeemed by the Issuer pursuant to this Condition 8 together, in the case of Bearer ECNs, with all unmatured Coupons and unexchanged Talons relating thereto (if appropriate) will forthwith be cancelled. All ECNs purchased by or on behalf of the Issuer or LBG or any Subsidiary of LBG may be held, reissued, resold or, at the option of LBG or the Issuer or any such Subsidiary, surrendered for cancellation (together, where applicable, with all unmatured Coupons and all unexchanged Talons) to the Principal Paying and Conversion Agent. ECNs so surrendered shall be cancelled forthwith (together, where applicable, with all unmatured Coupons and unexchanged Talons attached). Any ECNs so surrendered for cancellation may not be reissued or resold and the obligations of the Issuer and [the]*/[each]** Guarantor in respect of any such ECNs shall be discharged.

 

	
(i) 

	
Trustee Not Obliged to Monitor

 

The Trustee shall not be under any duty to monitor whether any event or circumstance has happened or exists within this Condition 8 and will not be responsible to ECN Securityholders for any loss arising from any failure by it to do so. Unless and until the Trustee has actual knowledge of the occurrence of any event or circumstance within this Condition 8, it shall be entitled to assume that no such event or circumstance exists.

 

	
9 

	
Payments and Talons

 

	
(a) 

	
Bearer ECNs

 

(i)    Payment of principal and premium (if any) in respect of the Bearer ECNs to be made to holders of the Bearer ECNs and payment of accrued interest payable on a redemption of the Bearer ECNs (other than on an Interest Payment Date) and payment of any Accrued Conversion Interest that is to be paid in accordance with this Condition 9 shall, in each case, be made against presentation and surrender of the relevant Bearer ECNs at the specified office of any Paying and Conversion Agent outside the United States.

 

(ii)   Payment of interest to be made to holders of the Bearer ECNs on an Interest Payment Date will be made against presentation and surrender of the relevant Coupons at the specified office of any Paying and Conversion Agent outside the United States.

 

(iii)   All such payments referred to in (i) and (ii) shall be made by cheque payable in the relevant currency drawn on or, at the option of the holder, by transfer to an account denominated in such currency with, a Bank. “Bank” means a bank in the principal financial centre for such currency or, in the case of euro, in a city in which banks have access to the TARGET System.

 

(iv)   Payments of all amounts other than as referred to in (i) and (ii) will be made as provided in these Conditions.

 

  

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(b) 

	
Registered ECNs

 

(i)    Payments of principal and premium (if any) to be made to holders in respect of Registered ECNs and payments of accrued interest payable on a redemption of Registered ECNs (other than on an Interest Payment Date) and payment of any Accrued Conversion Interest that is to be paid in accordance with this Condition 9 shall, in each case, be made against presentation and surrender of the relevant Certificates at the specified office of any of the Transfer Agents or of the Registrar and in the manner provided in (ii) below.

 

(ii)    Payments of interest to be made to holders in respect of Registered ECNs due on an Interest Payment Date shall be paid to the person shown on the Register at the close of business on the fifteenth day before the due date for payment thereof (the “Record Date”).

 

(iii)    All such payments shall be made in the relevant currency by cheque drawn on a Bank and mailed to the holder (or to the first named of joint holders) of such ECN at its address appearing in the Register. Upon application by the holder to the specified office of the Registrar or any Transfer Agent before the Record Date, such payment of interest may be made by transfer to an account in the relevant currency maintained by the payee with a Bank.

 

(iv)   Payments of all other amounts other than as referred to in (i) and (ii) will be made as provided in these Conditions.

 

	
(c) 

	
Payments in the United States

 

Notwithstanding the foregoing, if any Bearer ECNs are denominated in U.S. dollars, payments in respect thereof may be made at the specified office of any Paying and Conversion Agent in New York City in the same manner as aforesaid if (i) the Issuer shall have appointed Paying and Conversion Agents with specified offices outside the United States with the reasonable expectation that such Paying and Conversion Agents would be able to make payment of the amounts on the ECNs in the manner provided above when due, (ii) payment in full of such amounts at all such offices is illegal or effectively precluded by exchange controls or other similar restrictions on payment or receipt of such amounts and (iii) such payment is then permitted by United States law, without involving, in the opinion of the Issuer, any adverse tax consequence to the Issuer.

 

	
(d) 

	
Payments subject to Fiscal Laws

 

All payments are subject in all cases to any applicable fiscal or other laws, regulations and directives in the place of payment, but without prejudice to the provisions of Condition 10. No commission or expenses shall be charged to the ECN Securityholders or Couponholders in respect of such payments.

 

	
(e) 

	
Appointment of Agents

 

The initial Principal Paying and Conversion Agent, the other Paying and Conversion Agents, Registrar, Transfer Agents and Calculation Agent and their respective specified offices are listed below. The Principal Paying and Conversion Agent, the Paying and Conversion Agents, the Registrar, the Transfer Agents and the Calculation Agent act solely as agents of the Issuer and [the]*/[each]** Guarantor and do not assume any obligation or relationship of agency or trust for or with any ECN Securityholder or Couponholder. The Issuer reserves the right at any time with the approval of the Trustee to vary or terminate the appointment of the Principal Paying and Conversion Agent, any other Paying and Conversion Agent, the Registrar, any Transfer Agent or the Calculation Agent(s) and to appoint additional or other Paying and Conversion Agents, Calculation Agents or Transfer Agents, provided that there shall at all times be (i) a Principal Paying and Conversion Agent, (ii) a Registrar in relation to Registered ECNs, (iii) a Transfer Agent in relation to Registered ECNs, (iv) one or more Calculation Agent(s) where the Conditions so require, (v) such other agents as may be required by any other stock exchange on which the ECNs may be listed, in each case as approved by the Trustee and (vi) a Paying and Conversion Agent with a specified office in a European Union member state that will not be obliged to withhold or deduct tax pursuant to any law implementing European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000.

 

  

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In addition, the Issuer shall:

 

(i)   forthwith appoint a Paying and Conversion Agent in New York City in respect of any Bearer ECNs denominated in U.S. dollars in the circumstances described in paragraph (c) above; and

 

(ii)   in the event that it or [the]*/[either]** Guarantor would be obliged to pay additional amounts on or in respect of any ECN or Coupon pursuant to Condition 10 by virtue of such ECN or Coupon being presented for payment in the United Kingdom, it will appoint and at all times thereafter maintain a Paying and Conversion Agent in a jurisdiction within Europe (other than the United Kingdom) and which otherwise complies with the foregoing provisions of this Condition 9(e).

 

Notice of any such change or any change of any specified office shall promptly be given to the Trustee and to the ECN Securityholders in accordance with Condition 17.

 

	
(f) 

	
Unmatured Coupons and unexchanged Talons

 

(i)    Upon Conversion of Bearer ECNs, all Coupons in respect thereof relating to Interest Payment Dates falling after the relevant Conversion Date shall become void and no payment shall be made in respect of them.

 

(ii)    Upon the due date for redemption of any Bearer ECN, all unmatured Coupons relating to such ECN (whether or not attached) shall become void and no payment shall be made in respect of them.

 

(iii)    Upon the due date for redemption of any Bearer ECN, any unexchanged Talon relating to such ECN (whether or not attached) shall become void and no Coupons shall be delivered in respect of such Talon.

 

(iv)   Where any Bearer ECNs are presented for redemption without all such unmatured Coupons, and where any Bearer ECN is presented for redemption without any unexchanged Talon relating to it, redemption shall be made only against the provision of such indemnity as the Issuer may require.

 

	
(g) 

	
Talons

 

On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued in respect of any Bearer ECN, the Talon forming part of such Coupon sheet may be surrendered at the specified office of the Principal Paying and Conversion Agent in exchange for a further Coupon sheet (and if necessary another Talon for a further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Condition 11).

 

	
(h) 

	
Non-Business Days

 

If any date for payment in respect of any ECN or Coupon is not a business day, the holder shall not be entitled to payment until the next following business day nor to any interest or other sum in respect of such postponed payment. In this paragraph, “business day” means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets are open for business in the relevant place of presentation (where presentation and surrender is required pursuant to these Conditions), in such jurisdictions (if any) as shall be specified as “Financial Centres” in the relevant Pricing Schedule and:

 

(i)   (in the case of a payment in a currency other than euro) where payment is to be made by transfer to an account maintained with a Bank (as defined in Condition 9(a)(iii)) in the relevant currency on which foreign exchange transactions may be carried on in the relevant currency in the principal financial centre of the country of such currency; or

 

(ii)   (in the case of a payment in euro) which is a TARGET Business Day.

 

	
10 

	
Taxation

 

All payments of principal, premium (if any) and/or interest to ECN Securityholders and Couponholders by or on behalf of the Issuer in respect of the ECNs and the Coupons or by or on behalf of [the]*/[a]** Guarantor under the Guarantee shall be made without withholding or deduction for or on account of any present or future tax, duty, assessment or 

 

  

102

  

 

	
  

	
governmental charge of whatsoever nature imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In that event, the Issuer or, as the case may be, [the]*/[the relevant]** Guarantor shall pay such additional amounts (“Additional Amounts”) as will result (after such withholding or deduction) in receipt by the ECN Securityholders and the Couponholders of the sums which would have been receivable (in the absence of such withholding or deduction) from it in respect of their ECNs and/or Coupons, as the case may be; except that no such Additional Amounts shall be payable with respect to any ECN or Coupon:

 

	
(a)

	
(where presentation and surrender is required pursuant to these Conditions) presented for payment by or on behalf of any holder who is liable to such tax, duty, assessment or governmental charge in respect of such ECN or Coupon by reason of such holder having some connection with the United Kingdom other than the mere holding of such ECN or Coupon; or

 

	
(b)

	
to, or to a third party on behalf of, a holder if such withholding or deduction may be avoided by complying with any statutory requirement or by making a declaration of non-residence or other similar claim for exemption to any authority of or in the United Kingdom, unless such holder proves that he is not entitled so to comply or to make such declaration or claim; or

 

	
(c)

	
to, or to a third party on behalf of, a holder that is a partnership, or a holder that is not the sole beneficial owner of the ECN or Coupon, or which holds the ECN or Coupon in a fiduciary capacity, to the extent that any of the members of the partnership, the beneficial owner or the settlor or beneficiary with respect to the fiduciary would not have been entitled to the payment of an additional amount had each of the members of the partnership, the beneficial owner, settlor or beneficiary (as the case may be) received directly his beneficial or distributive share of the payment; or

 

	
(d)

	
(where presentation and surrender is required pursuant to these Conditions) presented for payment more than 30 days after the Relevant Date except to the extent that the holder thereof would have been entitled to such additional amounts on presenting the same for payment at the expiry of such period of 30 days; or

 

	
(e)

	
where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directive; or

 

	
(f)

	
(where presentation and surrender is required pursuant to these Conditions) in respect of any ECN or Coupon presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant ECN or Coupon to another Paying and Conversion Agent in a member state of the European Union.

 

	
11 

	
Prescription

 

	
  

	
Claims against the Issuer and/or [the]*/[either]** Guarantor for payment in respect of the ECNs, and Coupons (which, for this purpose, shall not include Talons) shall be prescribed and become void unless made within 10 years (in the case of principal) or five years (in the case of interest) from the appropriate Relevant Date in respect of them.

 

	
12 

	
Events of Default

 

	
(a) 

	
Events of Default

 

	
  

	
If any of the following events (“Events of Default”) occurs, the Trustee at its discretion may, and if so requested by ECN Securityholders of at least one-quarter in principal amount of the ECNs then outstanding or if so directed by an Extraordinary Resolution shall (but in each case subject to Condition 12(d) below), give notice to the Issuer that the ECNs are, and they shall immediately become, due and payable at their principal amount together with accrued interest:

 

  

103

  

 

(i)   default is made for a period of seven days or more in the payment of any principal or premium (if any) or 14 days or more in the payment of any interest due in respect of the ECNs or any of them; or

 

(ii)   an order is made or a resolution is passed for the winding-up of the Issuer or [the]*/[either]** Guarantor (other than a winding-up which has been approved previously in writing by the Trustee or by an Extraordinary Resolution of the ECN Securityholders).

 

	
(b) 

	
Proceedings for Winding-up

 

	
  

	
If the ECNs become due and payable (whether pursuant to Condition 12(a) above or Condition 8) and are not paid when so due and payable or any other payment obligation of the Issuer or [the Guarantor]*/[the Guarantors]** under or arising in respect of the ECNs, the Coupons or the Trust Deed is not duly met, satisfied or performed (including pursuant to Condition 7(c)), the Trustee may, at its discretion, institute proceedings for the winding-up of the Issuer and/or [the Guarantor]*/[the relevant Guarantor or Guarantors]** and/or prove in the winding-up of the Issuer and/or [the Guarantor]*/[the relevant Guarantor or Guarantors]** and/or claim in the liquidation of the Issuer and/or [the Guarantor]*/[the relevant Guarantor or Guarantors]** for such payment, provided, however, that the Trustee may only take any such action on or after the failure by the Issuer and/or [the Guarantor]*/[the relevant Guarantor or Guarantors]** to make payments as described in this Condition 12(b), but may take no further or other action to enforce, prove or claim for any such payment. No payment in respect of the ECNs, the Coupons or the Trust Deed may be made by the Issuer or [the]*/[such]** Guarantor pursuant to Condition 12(a) above, nor will the Trustee accept the same, otherwise than during or after a winding-up or liquidation of the Issuer or, as appropriate, [[the Guarantor]*/[the relevant Guarantor or Guarantors]**, unless the Issuer or, as appropriate, [the Guarantor]*/[the relevant Guarantor]** has given prior written notice (with a copy to the Trustee) to, and received no objection from, the FSA which the Issuer or, as appropriate, [the Guarantor]*/[the relevant Guarantor]** shall confirm in writing to the Trustee.

 

	
(c) 

	
Enforcement

 

	
  

	
Without prejudice to Condition 12(a), the Trustee may, at its discretion, and without notice institute such proceedings against the Issuer and/or [the]*/[a]** Guarantor as it may think fit to enforce any term or condition binding on the Issuer or, as appropriate, [the]*/[such]** Guarantor under the Trust Deed, the ECNs or the Coupons (other than any payment obligation of the Issuer or [the]*/[such]** Guarantor under or arising from the ECNs, the Coupons or the Trust Deed, including, without limitation, payment of any principal or premium or interest in respect of the ECNs or the Coupons, including any damages awarded for breach of any obligations) and in no event shall the Issuer or [the]*/[such]** Guarantor, by virtue of the institution of any such proceedings, be obliged to pay any sum or sums, in cash or otherwise, sooner than the same would otherwise have been payable by it pursuant to these Conditions and the Trust Deed. Nothing in this Condition 12(c) shall, however, prevent the Trustee instituting proceedings for the winding-up of the Issuer and/or [the]*/[a]** Guarantor, proving in any winding-up of the Issuer and/or [the]*/[a]** Guarantor and/or claiming in any liquidation of the Issuer and/or [the]*/[a]** Guarantor in respect of any payment obligations of the Issuer or [the]*/[the relevant]** Guarantor arising from or in respect of the ECNs, the Coupons or the Trust Deed (including any damages awarded for breach of any obligations).

 

	
(d) 

	
Entitlement of Trustee

 

	
  

	
The Trustee shall not be bound to take any of the actions referred to in Condition 12(a), (b) or (c) above against the Issuer or [the]*/[a]** Guarantor to enforce the terms of the Trust Deed, the ECNs or the Coupons or any other action under or pursuant to the Trust Deed unless (i) it shall have been so requested by an Extraordinary Resolution of the ECN Securityholders or in writing by the holders of at least one-quarter in principal amount of the ECNs then outstanding and (ii) it shall have been indemnified and/or secured and/or prefunded to its satisfaction.

 

  

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(e) 

	
Right of ECN Securityholders

 

No ECN Securityholder or Couponholder shall be entitled to proceed directly against the Issuer or [the]*/[a]** Guarantor or to institute proceedings for the winding-up or claim in the liquidation of the Issuer or [the]*/[a]** Guarantor or to prove in such winding-up unless the Trustee, having become bound so to do, fails to do so within a reasonable period and such failure shall be continuing, in which case the ECN Securityholder or Couponholder shall have only such rights against the Issuer and [the]*/[the relevant]** Guarantor as those which the Trustee is entitled to exercise as set out in this Condition 12.

 

	
(f) 

	
Extent of ECN Securityholder's remedy

 

No remedy against the Issuer or [the]*/[a]** Guarantor, other than as referred to in this Condition 12, shall be available to the Trustee or the ECN Securityholders or Couponholders, whether for the recovery of amounts owing in respect of the ECNs or under the Trust Deed or in respect of any breach by the Issuer or [the]*/[a]** Guarantor of any of its other obligations under or in respect of the ECNs, Coupons or under the Trust Deed.

 

	
(g) 

	
Deed Poll

 

Nothing in this Condition shall affect the rights of any ECN Securityholder to enforce its rights under the Deed Poll, subject to and as provided in the Deed Poll.

 

	
13 

	
Meetings of ECN Securityholders, Modification, Waiver and Substitution

 

	
(a) 

	
Meetings of ECN Securityholders

 

The Trust Deed contains provisions for convening meetings of ECN Securityholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of any of these Conditions or any provisions of the Trust Deed or the Deed Poll. Such a meeting may be convened by ECN Securityholders holding not less than 10 per cent. in aggregate principal amount of the ECNs for the time being outstanding. The quorum for any meeting convened to consider an Extraordinary Resolution shall be two or more persons holding or representing a clear majority in aggregate principal amount of the ECNs for the time being outstanding, or at any adjourned meeting two or more persons being or representing ECN Securityholders whatever the aggregate principal amount of the ECNs held or represented, unless the business of such meeting includes consideration of proposals, inter alia, (i) to amend the dates of maturity or redemption of the ECNs or any date for payment of interest on the ECNs, (ii) to reduce or cancel the principal amount of, or any premium payable on redemption of, the ECNs, (iii) to reduce the rate or rates of interest in respect of the ECNs or to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating the amounts of any interest in respect of the ECNs, (iv) to vary any method of, or basis for, calculating the amounts payable on redemption of the ECNs, (v) to vary the currency or currencies of payment or denomination of the ECNs, (vi) to modify the provisions concerning the quorum required at any meeting of ECN Securityholders or the majority required to pass the Extraordinary Resolution, (vii) to modify or cancel the Guarantee [in respect of either Guarantor]**, or (viii) to amend or modify the Deed Poll (but without prejudice to the power of LBG to modify or amend the Deed Poll as set out therein), in which case the necessary quorum shall be two or more persons holding or representing not less than 75 per cent., or at any adjourned meeting not less than 25 per cent., in aggregate principal amount of the ECNs for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on ECN Securityholders (whether or not they were present at the meeting at which such resolution was passed) and on all Couponholders.

 

The Trust Deed provides that a resolution in writing signed by or on behalf of the holders of not less than 75 per cent. in aggregate principal amount of the ECNs outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of ECN Securityholders duly convened and held. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more ECN Securityholders.

 

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No modification to these Conditions or any other provisions of the Trust Deed (whether pursuant to this Condition 13 or otherwise) shall become effective unless the Issuer shall have given at least one month's prior written notice to, and received no objection from, the FSA (or such other period of notice as the FSA may from time to time require or accept and, in any event, provided that there is a requirement to give such notice).

 

	
(b) 

	
Modification of the Trust Deed

 

	
  

	
The Trustee may agree, without the consent of the ECN Securityholders or Couponholders, to (i) any modification of any of the provisions of the Trust Deed that is of a formal, minor or technical nature or is made to correct a manifest error, and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of the provisions of the Trust Deed that is in the opinion of the Trustee not materially prejudicial to the interests of the ECN Securityholders. Any such modification, authorisation or waiver shall be binding on the ECN Securityholders and the Couponholders and, if the Trustee so requires, shall be notified to the ECN Securityholders as soon as practicable.

 

	
  

	
The Trustee will have no power to agree to any modification of the Deed Poll on behalf of the ECN Securityholders.

 

	
(c) 

	
Newco Scheme

 

	
  

	
In the event of a Newco Scheme, the Issuer may, in relation to ECNs in respect of which LBG is the Guarantor or a Guarantor, but subject as provided in Condition 13(d) and the Trust Deed, without the consent of ECN Securityholders or the Couponholders, at its option, procure that Newco is substituted under such ECNs as Guarantor (jointly and severally with LTSB if LTSB is also a Guarantor in respect of such ECNs) in place of LBG.

 

	
(d) 

	
Substitution

 

	
  

	
The Trust Deed contains provisions (in the case of (i) below) requiring the Trustee and (in the case of (ii) and (iii) below) permitting the Trustee, subject to the Issuer giving at least one month's notice to, and receiving no objection from, the FSA (or such shorter period of notice as the FSA may from time to time require or accept and so long as there is a requirement to give such notice), to agree, without the consent of the ECN Securityholders or the Couponholders, to (i) any substitution as provided in and for the purposes of Condition 13(c); (ii) the substitution of the Issuer's successor in business in place of the Issuer, or of any previously substituted company, as principal debtor under the Trust Deed and the ECNs; or (iii) the substitution of the successor in business of [the]*/[either]** Guarantor in place of [the]*/[such]** Guarantor, or of any previously substituted company, as guarantor under the Trust Deed and the ECNs subject to (in the case of (ii) and (iii) only) the Trustee being of the opinion that such substitution will not be materially prejudicial to the interests of the ECN Securityholders and subject to (in the case of (i), (ii) and (iii)) certain other conditions set out in the Trust Deed being complied with. In the case of such a substitution, the Trustee may agree, without the consent of the ECN Securityholders or the Couponholders, to a change of the law governing the ECNs, the Coupons, the Talons and/or the Trust Deed, provided that such change would not in the opinion of the Trustee be materially prejudicial to the interests of the ECN Securityholders.

 

	
(e) 

	
Entitlement of the Trustee

 

	
  

	
In connection with the exercise of its functions (including but not limited to those referred to in this Condition) the Trustee shall have regard to the interests of the ECN Securityholders as a class and shall not have regard to the consequences of such exercise for individual ECN Securityholders or Couponholders and the Trustee shall not be entitled to require, nor shall any ECN Securityholder or Couponholder be entitled to claim, from the Issuer or [the]*/[either]** Guarantor any indemnification or payment in respect of any tax consequence of any such exercise upon individual ECN Securityholders or Couponholders.

 

  

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14 

	
Indemnification of the Trustee

 

The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility. The Trustee is entitled to enter into business transactions with the Issuer, [the]*/[either]** Guarantor and any entity related to the Issuer or [the]*/[either]** Guarantor without accounting for any profit.

 

The Trustee may rely without liability to ECN Securityholders or Couponholders on a report, confirmation or certificate or any advice of any accountants, financial advisers, financial institution or any other expert, whether or not addressed to it and whether their liability in relation thereto is limited (by its terms or by any engagement letter relating thereto entered into by the Trustee or in any other manner) by reference to a monetary cap, methodology or otherwise. The Trustee may accept and shall be entitled to rely on any such report, confirmation or certificate or advice and such report, confirmation or certificate or advice shall be binding on the Issuer, [the]*/[each]** Guarantor, the Trustee and the ECN Securityholders.

 

	
15 

	
Replacement of ECNs, Certificates, Coupons and Talons

 

If an ECN, Certificate, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may be replaced, subject to applicable laws, regulations and stock exchange or other relevant authority regulations, at the specified office of the Principal Paying and Conversion Agent (in the case of Bearer ECNs, Coupons or Talons) or of the Registrar (in the case of Certificates), or, in any such case such other Paying and Conversion Agent or Transfer Agent, as the case may be, as may from time to time be designated by the Issuer for the purpose and notice of whose designation is given to ECN Securityholders, in each case on payment by the claimant of the fees and costs incurred in connection therewith and on such terms as to evidence, security and indemnity (which may provide, inter alia, that if the allegedly lost, stolen or destroyed ECN, Certificate, Coupon or Talon is subsequently presented for payment or, as the case may be, for exchange for further Coupons, there shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such ECNs, Certificates, Coupons or further Coupons) and otherwise as the Issuer may reasonably require. Mutilated or defaced ECNs, Certificates, Coupons or Talons must be surrendered before replacements will be issued.

 

	
16 

	
Further Issues

 

The Issuer may, from time to time, without the consent of the ECN Securityholders or Couponholders, create and issue further securities either having the same terms and conditions as the ECNs in all respects (or in all respects except for the first payment of interest on them) and so that such further issue shall be consolidated and form a single series with the outstanding securities of any series (including the ECNs) or upon such terms as the Issuer may determine at the time of their issue. References in these Conditions to the ECNs include (unless the context requires otherwise) any other securities issued pursuant to this Condition and forming a single series with the ECNs. Any further securities forming a single series with the outstanding securities of any series (including the ECNs) constituted by the Trust Deed or any deed supplemental to it shall, and any other securities may (with the consent of the Trustee), be constituted by the Trust Deed. The Trust Deed contains provisions for convening a single meeting of the ECN Securityholders and the holders of securities of other series where the Trustee so decides.

 

	
17 

	
Notices

 

Notices to ECN Securityholders shall be valid if published in a daily newspaper of general circulation in London (which is expected to be the Financial Times). If, in the opinion of the Trustee, any such publication is not practicable, notice shall be validly given if published in another leading daily English language newspaper with general circulation in Europe. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once or on different dates, on the first date on which publication is made, as provided above.

 

Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the holders of ECNs in accordance with this Condition 17.

 

	
18 

	
Contracts (Rights of Third Parties) Act 1999

 

No person shall have any right to enforce any term or condition of the ECNs under the Contracts (Rights of Third Parties) Act 1999.

 

  

107

  

 

	
19 

	
Definitions

 

“Accrued Conversion Interest” means, in the case of the Conversion of the ECNs, interest accrued on the ECNs from (and including) the Interest Payment Date immediately preceding the Conversion Date (or, if none, from the Issue Date) to (but excluding) the Conversion Date;

 

“Authorised Signatory” means a director or the company secretary of the Issuer or LBG, as the case may be;

 

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

 

“Conversion” means the conversion of the ECNs into Ordinary Shares pursuant to these Conditions and the Deed Poll, and “convert” and “converted” shall be construed accordingly;

 

“Conversion Notice” means a notice in the form for the time being currently available from the specified office of any Paying and Conversion Agent and which is required to be delivered in connection with a Conversion of the ECNs;

 

“Core Tier 1 Capital” means core tier one capital as defined by the FSA as in effect and applied (as supplemented by any published statement or guidance given by the FSA) as at 1 May 2009;

 

“ECN Securityholder” means the bearer of any Bearer ECN or the person in whose name a Registered ECN is registered (as the case may be) and “holder” (in relation to an ECN, Coupon or Talon) means the bearer of any Bearer ECN, Coupon or Talon or the person in whose name a Registered ECN is registered (as the case may be);

 

“Extraordinary Resolution” has the meaning given to it in the Trust Deed;

 

“Guarantor Senior Creditors” means, in respect of [the]*/[a]** Guarantor, (a) creditors of [the]*/[such]** Guarantor whose claims are admitted to proof in the winding-up or administration of [the]*/[such]** Guarantor and who are unsubordinated creditors of [the]*/[such]** Guarantor; and (b) creditors of [the]*/[such]** Guarantor whose claims are or are expressed to be subordinated to the claims of other creditors of [the]*/[such]** Guarantor (other than those whose claims relate to obligations which constitute, or would, but for any applicable limitation on the amount of such capital, constitute, Tier 1 Capital or Upper Tier 2 Capital or Lower Tier 2 Capital of [the]*/[such]** Guarantor on a solo and/or consolidated basis, or whose claims rank or are expressed to rank pari passu with, or junior to, the claims of ECN Securityholders);

 

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

 

“Lower Tier 2 Capital” has the meaning given to it by the FSA from time to time;

 

“outstanding” has the meaning given to it in the Trust Deed;

 

“Regulatory Capital Requirements” means any applicable requirement specified by the FSA in relation to minimum margin of solvency or minimum capital resources or capital;

 

“Relevant Date” in respect of any payment on any ECN or Coupon, means the date on which such payment first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount required to be paid is made or, in the case of a Bearer ECN or otherwise where presentation is required pursuant to the Conditions, (if earlier) the date seven days after that on which notice is duly given to the ECN Securityholders that, upon further presentation of the ECN (or relative Certificate) or Coupon being made in accordance with the Conditions, such payment will be made, provided that payment is in fact made upon such presentation;

 

  

108

  

 

“successor in business” has the meaning given to it in the Trust Deed;

 

a “Tax Event” is deemed to have occurred if:

 

	
(i)

	
as a result of a Tax Law Change, in making any payments on the ECNs, the Issuer (or, if the Guarantee were called, [the]*/[either]** Guarantor) has paid or will or would on the next payment date be required to pay Additional Amounts and the Issuer (or the [relevant]** Guarantor, as the case may be) cannot avoid the foregoing by taking measures reasonably available to it; or

 

	
(ii)

	
as a result of a Tax Law Change (x) the Issuer (or, if the Guarantee were called, the [relevant]** Guarantor, as the case may be) would not or there is more than an insubstantial risk that the Issuer or, as the case may be, [the]*/[such]** Guarantor would not be entitled to a deduction in computing its taxation liabilities in the United Kingdom in respect of all or any part of its financing expense as recognised for accounting purposes in relation to the ECNs or Guarantee, as the case may be, or (y) the Issuer (or the [relevant]** Guarantor, as the case may be) would not be entitled to have all or any part of any loss resulting from such deduction being taken into account in computing its taxation liabilities set against the profits of companies with which it is grouped for applicable United Kingdom tax purposes (whether under the group relief system current as at the Issue Date or any similar system or systems having like effect as may from time to time exist), and in each such case the Issuer (or the [relevant]** Guarantor, as the case may be) could not avoid the foregoing in connection with the ECNs by taking measures reasonably available to it;

 

“Tax Law Change” means a change in or proposed change in, or amendment or proposed amendment to, the laws or regulations of the United Kingdom, or any political subdivision or authority therein or thereof, having the power to tax, including any treaty to which the United Kingdom is a party, or any change in any generally published application or interpretation of such laws, including a decision of any court or tribunal, or any change in the generally published application or interpretation of such laws by any relevant tax authority or any generally published pronouncement by any tax authority, which change, amendment or pronouncement (x) (subject to (y)) becomes, or would become, effective on or after the Issue Date, or (y) in the case of a change or proposed change in law, if such change is enacted (or, in the case of a proposed change, is expected to be enacted) by United Kingdom Act of Parliament or by Statutory Instrument, on or after the Issue Date;

 

“Tier 1 Capital” has the meaning given to it by the FSA from time to time; and

 

“Upper Tier 2 Capital” has the meaning given to it by the FSA from time to time.

 

In these Conditions and the Trust Deed, capitalised terms have the meaning given to them in the relevant Pricing Schedule, the absence of any such meaning indicating that such term is not applicable to the ECNs.

 

References to any act or statute or any provision of any act or statute shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under such statutory modification or re-enactment.

 

Unless the context otherwise requires, references to (i) “principal” shall be deemed to include any premium payable in respect of the ECNs and all other amounts in the nature of principal payable pursuant to these Conditions or any amendment or supplement to it, (ii) “interest” shall be deemed to include any Accrued Conversion Interest and in any such case shall be deemed to include any Additional Amounts that may be payable under Condition 10 or any undertaking given in addition to or in substitution for it under the Trust Deed in respect of any such amount.

 

Unless otherwise provided in these Conditions, terms defined and references construed in the Deed Poll shall have the same meaning and construction in these Conditions.

 

	
20 

	
Governing Law and Jurisdiction

 

	
(a) 

	
Governing Law

 

The Trust Deed, the ECNs, the Coupons and the Talons and any non-contractual obligations arising out of or in connection with them are governed by, and shall be construed 

 

  

109

  

 

	
  

	
in accordance with, English law save that, where the Guarantor is LBG, the provisions of Condition 4 (and related provisions of the Trust Deed) relating to the status and subordination of the Guarantee are governed by, and shall be construed in accordance with, Scots law.

 

	
(b) 

	
Jurisdiction

 

	
  

	
The courts of England are to have jurisdiction to settle any disputes that may arise out of or in connection with the Trust Deed, any ECNs, Coupons or Talons or the Guarantee (other than Condition 4 (and related provisions of the Trust Deed) relating to the status and subordination of the Guarantee (“Excluded Matters”) in relation to LBG where LBG is a Guarantor, in respect of which the Court of Session in Scotland shall have jurisdiction) and accordingly any legal action or proceedings arising out of or in connection with the Trust Deed or any ECNs, Coupons or Talons or the Guarantee (“Proceedings”) may be brought in such courts. [Each of the Issuer and the Guarantor have]*/[The Issuer and each Guarantor has]** in the Trust Deed irrevocably submitted to the jurisdiction of the courts of England in respect of any such Proceedings (other than in respect of Excluded Matters in relation to LBG where LBG is a Guarantor). Where LBG is a Guarantor, LBG has irrevocably submitted to the jurisdiction of the Court of Session in Scotland in respect of any Proceedings relating to Excluded Matters.

 

	
(c) 

	
Service of Process

 

	
  

	
LBG has in the Trust Deed irrevocably appointed an agent in England to receive, for it and on its behalf, service of process in any Proceedings in England.

 

  

110

  

 

Schedule 5

Pricing Schedules

 

 

 

 

 

 

 

 

 

[Intentionally Omitted]

 

 

 

 

 

 

 

 

 

 

111

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