F-4

As filed with the Securities and Exchange Commission on November 10, 2021

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Lloyds Banking Group plc

(Exact Name of Registrant as Specified in Its Charter)

Scotland

(State or Other Jurisdiction of Incorporation or Organization)

6029

(Primary Standard Industrial Classification Code Number)

Not Applicable

(I.R.S. Employer Identification No.)

25 Gresham Street

London  EC2V 7HN

United Kingdom

Tel. No.: 011-44-207-626-1500

(Address and Telephone Number of Registrant’s Principal Executive Offices)

Adriana Maestas

Chief Legal Officer

North America

Lloyds Bank Corporate Markets

1095 Avenue of the Americas

New York, New York 10036

United States

Tel. No.: 212-930-5007

(Name, Address and Telephone Number of Agent for Service)

Please send copies of all communications to:

John W. Banes DAVIS POLK & WARDWELL LLP 450 Lexington Avenue New York, New York 10017 United States Tel. No.: 212-450-4000 Diana Billik ALLEN & OVERY LLP 52 avenue Hoche CS 90005 75379 Paris Cedex 08, France Tel. No.: +33 (0)1 40 06 5400

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its

Accounting Standards Codification after April 5, 2012.

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price per Unit(1)	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee(2)
Fixed Rate Reset Subordinated Debt Securities due 2046 with a call date in 2041 (the “New Notes”)	$750,000,000	100%	$750,000,000	$ 69,525.00

(1) The securities being registered hereby are offered in exchange for the securities described in this prospectus. The registration fee has been computed based on the face value of the securities pursuant to Rule 457 under the Securities Act.

(2) Calculated using a registration fee rate of $92.70 per million.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus may change. We may not complete the exchange offer and issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer is not permitted.

PRELIMINARY PROSPECTUS, DATED NOVEMBER 10, 2021

Lloyds Banking Group plc

Offer to Exchange

Fixed Rate Reset Subordinated Debt Securities due 2046 with a call date in 2041 (“New Notes”)

plus (if applicable) the relevant Cash Consideration Amount (as defined herein), plus a cash payment for any accrued and unpaid dividends or interest (as the case may be), plus (if applicable) cash amounts in lieu of any fractional New Notes

for

certain Existing Securities listed in the table below

THE EXCHANGE OFFER (as defined below) will expire AT 11:59 P.M., NEW YORK CITY TIME, ON december 9, 2021 (such  time and date, as the same may be extended, THE “EXPIRATION DEADLINE”).  EXISTING SECURITIES (AS DEFINED BELOW) TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DEADLINE (such time and date, as the same may be extended, the “Withdrawal deadline”), BUT NOT thereafter.  IN ADDITION, IF NOT PREVIOUSLY RETURNED, YOU MAY WITHDRAW EXISTING SECURITIES THAT YOU TENDER THAT ARE NOT ACCEPTED BY US FOR EXCHANGE AFTER THE EXPIRATION OF 40 BUSINESS DAYS FOLLOWING COMMENCEMENT OF THE EXCHANGE OFFER.

Lloyds Banking Group plc (“LBG”) is offering to exchange, on the terms and conditions described in this prospectus, Fixed Rate Reset Subordinated Debt Securities due 2046 with a call date in 2041 (the “New Notes”), to be issued by LBG plus (if applicable) the relevant Cash Consideration Amount, plus accrued and unpaid dividends or interest (as the case may be) in cash, plus (if applicable) cash amounts in lieu of any fractional New Notes, for:

(1) any and all of the outstanding American Depositary Shares (“ADSs”) representing LBG’s 6.413%  Non-Cumulative Fixed to Floating Rate Preference Shares (the “Series 1 Preference Shares”), ADSs representing LBG’s 6.657% Non-Cumulative Fixed to Floating Rate Preference Shares (the “Series 2 Preference Shares” and, collectively with the Series 1 Preference Shares, the “Preference Shares”) and 6.00% Subordinated Notes due 2033 issued by HBOS plc (the “Series 1 Existing Subordinated Notes”) (the “Any and All Offer”), and

(2) up to the Cap Amount (as defined below) of LBG’s 4.582% Subordinated Debt Securities due 2025 (the “Series 3 Existing Subordinated Notes”) and LBG’s 4.500% Fixed Rate Subordinated Debt Securities due 2024 (the “Series 2 Existing Subordinated Notes” and, collectively with the Series 1 Existing Subordinated Notes and Series 3 Existing Subordinated Notes, the “Existing Subordinated Notes”) (the “Capped Offer” and, together with the Any and All Offer, the “Exchange Offer”).

The Series 1 Existing Subordinated Notes and the Preference Shares are collectively referred to as the “Any and All Offer Securities” and the Series 2 Existing Subordinated Notes and the Series 3 Existing Subordinated Notes are collectively referred to herein as the “Capped Offer Notes”. The Preference Shares and the Existing Subordinated Notes are collectively referred to herein as the “Existing Securities”. The Exchange Offer is being made upon the terms and subject to the conditions set forth in this prospectus (as it may be amended or supplemented from time to time, the “prospectus”).

The following table sets forth certain terms of the Exchange Offer:

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Title of Security

Issuer

ISIN/CUSIP

Principal Amount Outstanding

Call Date

Exchange Priority(1)

Reference UST Security

Maturity Date

Minimum Denominations / Integral multiples

Bloomberg Reference Page(2)

Fixed Spread (basis points)

Cash Consideration Amount(3)

Hypothetical Total Exchange Consideration(4)

Any and All Offer

ADSs representing 6.413% Non-Cumulative Fixed to Floating Rate Preference Shares

LBG

144A: US539439AC38 / 539439AC3 Reg S: USG5533WAA56 / G5533WAA5

$374,810,000

October 1, 2035

N/A

1.250% U.S. Treasury Notes due August

N/A

$100,000/ $1,000

FIT1

+107

$146.00

$1,449.81

ADSs representing 6.657% Non-Cumulative Fixed to Floating Rate Preference Shares

LBG

144A: US539439AF68 / 539439AF6 Reg S: US539439AE93 / 539439AE9

$434,350,000

May 21, 2037

N/A

1.750% U.S. Treasury Notes due August 15, 2041

N/A

$100,000/ $1,000

FIT1

+83

$110.00

$1,496.46

6.00% Subordinated Notes due 2033

HBOS plc

144A: US4041A2AF14 / 4041A2AF1 Reg S: US4041A3AG79 / 4041A3AG7

$466,113,000

N/A

N/A

1.250% U.S. Treasury Notes due August 15, 2031

November 1, 2033

$1,000/ $1,000

FIT1

+100

$145.00

$1,362.74

Capped Offer

4.500% Fixed Rate Subordinated Debt Securities due 2024

LBG

US53944YAA10 / 53944YAA1

$1,000,000,000

N/A

1

0.750% U.S. Treasury Notes due November 15, 2024

November 4, 2024

$200,000/ $1,000

FIT1

+50

$0.00

$1,092.88

4.582% Subordinated Debt Securities due 2025

LBG

US539439AM10 / 539439AM1

$1,327,685,000

N/A

2

1.125% U.S. Treasury Notes due October 31, 2026

December 10, 2025

$200,000/ $1,000

FIT1

+50

$0.00

$1,115.48

(1) The aggregate principal amount of the Capped Offer Notes of each series that are accepted for exchange pursuant to the Capped Offer will be based on the order of Exchange Priority for such series as set forth in the table above, subject to the Cap Amount and proration arrangements applicable to the Capped Offer. See “The Exchange Offer – Terms of the Exchange Offer – Capped Offer – Acceptance of Existing Securities; Exchange Priority; Proration” for more details.

(2) The applicable page on Bloomberg from which the Dealer Managers (as defined below) will quote the bid-side prices of the applicable Reference UST Security for the purposes of determining the Reference UST Yield.

(3) Per $1,000 principal amount of Existing Securities accepted for exchange pursuant to the Exchange Offer. The Cash Consideration Amount is already included in the Total Exchange Consideration calculated from the applicable Fixed Spread.

(4) Hypothetical Total Exchange Consideration per $1,000 principal amount of Existing Securities as of 6:00 a.m., New York City time, on November 9, 2021 assuming a Settlement Date on December 14, 2021. See Annex C for a hypothetical pricing example for calculation of the Total Exchange Consideration. The Total Exchange Consideration includes both the Cash Consideration Amount and the New Notes Exchange Consideration. (as defined below).

The following table sets forth certain terms of the New Notes:

Title of Series	Benchmark Security		Bloomberg Reference Page	Spread to Benchmark Security	Optional Redemption Date	Maturity Date	Reset Coupon	Reset Date	Issue Price
Fixed Rate Reset Subordinated Debt Securities due 2046 with a call date in 2041		1.750% U.S. Treasury Notes due August 15, 2041	FIT1	+150 bps	From (and including)  September 14, 2041 to (and including) December 14, 2041	December 14, 2046	5-year US Treasury Rate +1.50%	December 14, 2041	100%

The aggregate principal amount of the Capped Offer Notes of each series that are accepted for exchange will be based on the order of Exchange Priority for such series as set forth in the table above, subject to the Cap Amount and proration arrangements applicable to the Capped Offer. The Cap Amount is a principal amount of Capped Offer Notes that would result in a principal amount of $750,000,000 of the New Notes (the “Maximum Capped Offer New Notes Size”) being issued pursuant to the Exchange Offer (after taking into account the principal amount of the New Notes to be issued pursuant to the Any and All Offer). In case the principal amount of the Any and All Offer Securities accepted pursuant to the Any and All Offer is such that the principal amount of the New Notes to be issued pursuant to the Any and All Offer is equal to or exceeds $750,000,000, all

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validly tendered Any and All Offer Securities will be accepted in full and no Capped Offer Notes will be accepted pursuant to the Capped Offer. See also “The Exchange Offer – Terms of the Exchange Offer – Capped Offer – Acceptance of Existing Securities; Exchange Priority; Proration”.

The Exchange Offer is subject to a minimum new issue size of at least $500,000,000 in aggregate principal amount of New Notes being issued in exchange for Existing Securities validly tendered pursuant to the Exchange Offer (the “Minimum New Issue Size”). The Exchange Offer is also subject to certain other conditions set out under “The Exchange Offer—Terms of the Exchange Offer—Exchange Offer Conditions”.

The New Notes will be delivered on the Settlement Date, expected to be on or around December 14, 2021, unless the Expiration Deadline is extended. We will not deliver fractional New Notes pursuant to the Exchange Offer. Instead, each tendering holder of Existing Securities that are accepted for exchange will receive a cash amount in lieu of any fractional New Notes that a tendering holder of Existing Securities would have otherwise been entitled to receive. Any cash amounts payable pursuant to the Exchange Offer will be rounded to the nearest U.S.$0.01, with U.S.$0.005, being rounded upwards.

The Offeror may extend, re-open, amend, limit, waive any condition of, or terminate the Exchange Offer at any time (subject to applicable law and as provided in this prospectus). Details of any such extension, re-opening, amendment, limitation, waiver (if permitted) or termination will be announced wherever applicable as provided in this prospectus as soon as reasonably practicable after the relevant decision is made. For more information, see “The Exchange Offer”.

Questions and requests for assistance in connection with (i) the Exchange Offer may be directed to the Dealer Managers and (ii) the delivery of Exchange Instructions (as defined herein) may be directed to Lucid Issuer Services Limited (the “Exchange Agent”), as applicable, the contact details for whom are on the back cover page of this prospectus.

We expect to apply to list the New Notes on the New York Stock Exchange in accordance with its rules.

Before deciding whether to exchange your Existing Securities for New Notes, you are encouraged to read and carefully consider this prospectus (including the documents incorporated by reference herein) in its entirety.  See “Risk Factors” beginning on page 12 for a discussion of risk factors that you should consider prior to deciding whether to tender your Existing Securities in the Exchange Offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Exchange Offer or the securities to be issued in the Exchange Offer or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Global Coordinators and Joint Lead Dealer Managers

BofA Securities Credit Suisse Lloyds Securities

The date of this prospectus is              , 2021

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Page

Prospectus

About this Prospectus	vi
Important Notices	vii
Incorporation of Information by Reference	ix
Forward-Looking Statements	ix
Important Information	x
Enforceability of Civil Liabilities	x
Prospectus Summary	1
Risk Factors	12
Use of Proceeds and Rationale of the Exchange Offer	23
Capitalization of the Group	24
Market Information and Dividend Policy	25
The Exchange Offer	28
Description of the New Notes	44
Comparison of Certain Material Terms of the Preference Shares and the New Notes	59
Comparison of Certain Material Terms of the Series 1 Existing Subordinated Notes and the New Notes	82
Comparison of Certain Material Terms of the Capped Offer Notes and the New Notes	102
Taxation Considerations	126
Certain Benefit Plan Investor Considerations	135
Validity of the New Notes	137
Experts	137
Index to Financial Statements	137
Annex A—Formula to Determine the Total Exchange Consideration and New Notes Exchange Consideration	138
Annex B—Formula to Determine the Interest Rate on New Notes	139
Annex C—Hypothetical Calculation of Total Exchange Consideration and New Notes Exchange Consideration	140
Annex D—Hypothetical Calculation of the Interest Rate Applicable to the New Notes	142

You should rely only on the information contained or incorporated by reference in this prospectus (including any free writing prospectus issued or authorized by us). Neither we nor the Dealer Managers have authorized anyone to provide you with additional, different or inconsistent information. We are not, and the Dealer Managers are not, making an offer of these securities in any state or jurisdiction where the offer is not permitted. You should assume that the information contained in this prospectus and the documents incorporated by reference herein is accurate only as of their respective dates.

About this Prospectus

In this prospectus, we use the following terms:

· “we”, “us”, “our”, “the Issuer”, “LBG” and “Lloyds Banking Group” mean Lloyds Banking Group plc;

· “Group” means Lloyds Banking Group plc together with its subsidiaries and associated undertakings;

· “SEC” refers to the Securities and Exchange Commission;

· “pound sterling”, “pence”, “£” and “p” refer to the currency of the United Kingdom;

· “U.S. dollars”, “$” and “cents” refer to the currency of the United States;

· “euro”, “€” and “euro cents” refer to the currency of the member states of the European Union (the “EU”) that have adopted the single currency in accordance with the treaty establishing the European Community, as amended; and

· “U.K.” means the United Kingdom.

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Important Notices

If a holder decides to tender Existing Securities pursuant to the Exchange Offer, the holder must arrange for a Direct Participant (as defined below) to electronically transmit an electronic tender instruction (each a “Tender Instruction”) through DTC’s Automated Tender Offer Program (“ATOP”), for which the transaction will be eligible (holders are not required to submit a letter of transmittal to tender their Existing Securities pursuant to the Exchange Offer). If a holder holds Existing Securities through either Euroclear Bank S.A./N.V. (“Euroclear”) or Clearstream Banking, société anonyme (“Clearstream” and, together with DTC and Euroclear, the “Clearing Systems” and each a “Clearing System”) and decides to tender Existing Securities pursuant to the Exchange Offer, the holder must arrange for the relevant accountholder to submit an electronic tender and blocking instruction in the form specified in the form of notice to be sent to accountholders by each of Euroclear and Clearstream on or about the date of this prospectus informing accountholders of the procedures to be followed in order to participate in the Exchange Offer. Euroclear and Clearstream will arrange for the relevant instructions to be submitted through ATOP. See “The Exchange Offer—Procedures for Participating in the Exchange Offer”.

If you are a beneficial owner of Existing Securities that are held by or registered in the name of a bank, broker, custodian or other nominee, and you wish to participate in the Exchange Offer, you must promptly contact your bank, broker, custodian or other nominee to instruct it to tender your Existing Securities, to agree to the terms of the Exchange Offer and to cause the timely transmission of an Exchange Instruction on your behalf to the Exchange Agent.  You are urged to instruct your bank, broker, custodian or other nominee at least five Business Days prior to the Expiration Deadline in order to allow adequate processing time for your instruction.

The Exchange Offer is subject to certain jurisdictional restrictions. See “The Exchange Offer—Certain Matters Relating to Non-U.S. Jurisdictions”. This document does not constitute a “prospectus” for the purposes of Regulation (EU) 2017/1129 (the “Prospectus Regulation”) or the U.K. Prospectus Regulation (as defined herein) and no such prospectus is required for the issue of the New Notes.

Existing Securities can be tendered in the Exchange Offer only in accordance with the procedures described in “The Exchange Offer—Procedures for Participating in the Exchange Offer”. Holders who do not participate in the Exchange Offer, or whose Existing Securities are not accepted for purchase, will continue to hold their Existing Securities.

Holders must comply with all laws that apply to them in any place in which they possess this prospectus. Holders must also obtain any consents or approvals that they need in order to tender their Existing Securities. None of LBG, the Dealer Managers or the Exchange Agent (or any of their respective directors, employees or affiliates) is responsible for holders’ compliance with these legal requirements. See “The Exchange Offer—Certain Matters Relating to Non-U.S. Jurisdictions”. The applicable provisions of the U.K. Financial Services and Markets Act 2000 must be complied with in respect of anything done in relation to the Exchange Offer in, from or otherwise involving the United Kingdom.

See “Taxation Considerations” for a description of material United Kingdom tax and United States federal income tax considerations that should be considered carefully in evaluating the Exchange Offer.

Unless the context otherwise requires, all references in this prospectus to a “holder” or “holder of the Existing Securities” include:

(a) each person who is shown in the records of DTC as a holder of the Existing Securities (also referred to as “Direct Participants” and each a “Direct Participant”);

(b) any broker, dealer, commercial bank, trust company or other nominee or custodian who holds Existing Securities; and

(c) each beneficial owner of Existing Securities holding such Existing Securities, directly or indirectly, in accounts in the name of a Direct Participant acting on the beneficial owner’s behalf,

except that for the purposes of the exchange of Existing Securities pursuant to the Exchange Offer and the payment of any cash payments, to the extent the beneficial owner of the relevant Existing Securities is not a Direct Participant, the relevant New Notes and any cash payments will only be delivered and paid to the relevant Direct

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Participant and the delivery of such New Notes and payment of cash payments to such Direct Participant will satisfy any obligations of LBG, the Exchange Agent and DTC in respect of the exchange of such Existing Securities.

The Offeror is not providing for guaranteed delivery procedures and therefore you must allow sufficient time for the necessary tender procedures to be completed during normal business hours of the Clearing Systems prior to the Expiration Deadline.  Tenders received by the Exchange Agent after the Expiration Deadline will be disregarded and of no effect.

LBG is incorporating by reference into this document important business and financial information that is not included in or delivered with this document.  This information is available without charge to security holders upon written or oral request.  Requests should be directed to:

Lloyds Banking Group
25 Gresham Street
London EC2V 7HN
United Kingdom
Telephone Number: +44 207 626 1500

In order to ensure timely delivery of such documents, holders must request this information no later than five Business Days before the date they must make their investment decision.  Accordingly, any request for information should be made by 11:59 p.m., New York City time, on December 1, 2021 to ensure timely delivery of the documents prior to the Expiration Deadline.

See “Risk Factors”, beginning on page 12 for a description of certain factors relating to a decision to tender your Existing Securities in the Exchange Offer, including information about our business.

The terms of the New Notes will be substantially different from those of the Existing Securities.  In addition to differences in financial terms, which include, among others, the interest rate and payment dates, the terms of the New Notes differ in respect of maturity, optional redemption dates, ranking (in the case of Preference Shares) and the issuer (in the case of the Series 1 Existing Subordinated Notes). Investors should carefully consider these differences in addition to those described under “Comparison of Certain Material Terms of the Preference Shares and the New Notes”, “Comparison of Certain Material Terms of the Series 1 Existing Subordinated Notes and the New Notes” and “Comparison of Certain Material Terms of the Capped Offer Notes and the New Notes” in deciding whether to tender Existing Securities for exchange in connection with the Exchange Offer.

None of the Offeror, the Dealer Managers or any of their respective representatives are making any representation to you regarding the legality of participation in the Exchange Offer by you under applicable investment or similar laws. You should consult with your own advisors as to legal, tax, business, financial and related aspects of a decision whether to tender your Existing Securities in the Exchange Offer.

All references in this prospectus to a “cash payment” or “cash payments” payable on the Settlement Date of the Exchange Offer with respect to a series of Existing Securities include (i) if applicable, the Cash Consideration Amount, (ii) all accrued and unpaid interest payments or dividend payments, as the case may be, on such series of Existing Securities from and including the latest interest payment date or dividend payment date, as the case may be, for such series of Existing Securities through, but not including, the Settlement Date, and (iii) if applicable, any cash amounts in lieu of any fractional New Notes that a tendering holder of Existing Securities would have otherwise been entitled to receive. Any cash amounts payable pursuant to the Exchange Offer will be rounded to the nearest U.S.$0.01, with U.S.$0.005, being rounded upwards.

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to the exchange of Existing Securities for New Notes include all cash payments made in connection with the exchange of such Existing Securities for New Notes.  

The New Notes will be available initially only in book-entry form, represented in one or more global securities registered in the name of a nominee of The Depository Trust Company (“DTC”). You will hold beneficial interests in the New Notes through DTC and its direct and indirect participants, including Euroclear and Clearstream, and DTC and its direct and indirect participants will record your beneficial interest on their books.

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We intend to apply to list the New Notes on the New York Stock Exchange in accordance with its rules.

Incorporation of Information by Reference

We file annual, semi-annual and special reports and other information with the Securities and Exchange Commission. The SEC’s website, at http://www.sec.gov, contains, free of charge, reports and other information in electronic form that we have filed. You may also request a copy of any filings referred to below (excluding exhibits) at no cost, by contacting us at 25 Gresham Street, London EC2V 7HN, United Kingdom, telephone +44 207 626 1500.

The SEC allows us to incorporate by reference much of the information that we file with them. This means:

· incorporated documents are considered part of this prospectus;

· we can disclose important information to you by referring you to these documents; and

· information that we file with the SEC will automatically update and supersede this prospectus.

We incorporate by reference (i) LBG’s Annual Report on Form 20-F for the fiscal year ended December 31, 2020 filed with the SEC on February 26, 2021, (ii) LBG’s report on Form 6-K filed with the SEC on July 29, 2021 announcing its interim report, which includes the unaudited consolidated half-year results for the half-year ended 30 June 2021; (iii) LBG’s report on Form 6-K filed with the SEC on October 28, 2021 announcing its interim results for the nine months ended September 30, 2021; and (iv) LBG’s report on Form 6-K filed with the SEC on October 28, 2021 disclosing the Group’s capitalization and indebtedness on a consolidated basis as at September 30, 2021.

We have also filed with the SEC a Tender Offer Statement on Schedule TO (the “Schedule TO”), pursuant to Section 13(e) of the Exchange Act and Rule 13e-4 thereunder, furnishing certain information with respect to the Offer. The Schedule TO, together with any exhibits and any amendments thereto, may be examined and copies may be obtained at the same places and in the same manner as set forth above.

Forward-Looking Statements

From time to time, we may make statements, both written and oral, regarding assumptions, projections, expectations, intentions or beliefs about future events. Words such as ‘believes’, ‘anticipates’, ‘estimates’, ‘expects’, ‘intends’, ‘aims’, ‘potential’, ‘will’, ‘would’, ‘could’, ‘considered’, ‘likely’, ‘estimate’ and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future. We caution that these statements may and often do vary materially from actual results. Accordingly, we cannot assure you that actual results will not differ materially from those expressed or implied by the forward-looking statements. You should read the sections entitled “Risk Factors” in this prospectus and “Forward-Looking Statements” in our Annual Report on Form 20-F for the year ended December 31, 2020, which is incorporated by reference herein.

In light of these risks, uncertainties and assumptions, forward-looking events discussed in this prospectus or any information incorporated by reference, might not occur. The forward-looking statements contained in this prospectus speak only as of the date of this prospectus. We undertake to publicly update, to the extent required by U.S. federal securities laws, any forward-looking statement to reflect certain events or circumstances after such dates or to reflect the occurrence of unanticipated events.

Important Information

MiFID II product governance / Professional investors and eligible counterparties only target market – Solely for the purposes of the manufacturer’s product approval process, the target market assessment in respect of the New Notes, taking into account the five categories referred to in item 18 of the Guidelines published by ESMA on 5 February 2018 has led to the conclusion that: (i) the target market for the New Notes is eligible counterparties

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and professional clients only, each as defined in Directive 2014/65/EU (as amended, “MiFID II”); and (ii) all channels for distribution of the New Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the New Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the New Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.

U.K. MiFIR product governance – Solely for the purposes of the manufacturer’s product approval process, the target market assessment in respect of the New Notes has led to the conclusion that: (i) the target market for the New Notes is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (“U.K. MiFIR”); and (ii) all channels for distribution of the New Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the New Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to the FCA Handbook Product Intervention and Product Governance Sourcebook is responsible for undertaking its own target market assessment in respect of the New Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.

EU PRIIPs Regulation / Prohibition of sales to EEA retail investors – The New Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within the meaning of the Insurance Distribution Directive (EU) 2016/97 (as amended or superseded, the “Insurance Distribution Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended the “EU PRIIPs Regulation”) for offering or selling the New Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the New Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the EU PRIIPs Regulation.

U.K. PRIIPs Regulation / Prohibition of sales to U.K. retail investors – The New Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the U.K. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended (“EUWA”) (the “U.K. Prospectus Regulation”); or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000, as amended (“FSMA”) and any rules or regulations made under the FSMA to implement the Insurance Distribution Directive, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA. Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the “U.K. PRIIPs Regulation”) for offering or selling the New Notes or otherwise making them available to retail investors in the U.K. has been prepared and therefore offering or selling the New Notes or otherwise making them available to any retail investor in the U.K. may be unlawful under the U.K. PRIIPs Regulation.

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Enforceability of Civil Liabilities

LBG is a public limited company incorporated and registered in Scotland. All of LBG’s directors and executive officers, and certain experts named in this prospectus, reside outside the United States. All or a substantial portion of LBG’s assets and the assets of those non-resident persons are located outside the United States. As a result, it may not be possible for investors (i) to effect service of process within the United States upon LBG or those persons or (ii) to enforce against LBG or those persons judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of the United States. We have been advised by our Scottish counsel, CMS Cameron McKenna Nabarro Olswang LLP (as to Scots law) that, both in original actions and in actions for the enforcement of judgments of U.S. courts, there is doubt as to whether civil liabilities predicated solely upon the U.S. federal securities laws are enforceable in Scotland.

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Prospectus Summary

The following is a summary of this prospectus and should be read as an introduction to, and in conjunction with, the remainder of this prospectus and any documents incorporated by reference therein. You should base your investment decision on a consideration of this prospectus and any documents incorporated by reference therein, as a whole. Words and expressions defined in “Description of the New Notes” below shall have the same meanings in this summary.

The Issuer

Lloyds Banking Group plc was incorporated as a public limited company and registered in Scotland under the U.K. Companies Act 1985 on October 21, 1985 (registration number 95000). Lloyds Banking Group plc’s registered office is at The Mound, Edinburgh EH1 1YZ, Scotland, U.K. and its principal executive offices in England, U.K. are located at 25 Gresham Street, London EC2V 7HN, United Kingdom, telephone number +44 (0) 20 7626 1500. LBG maintains a website at www.lloydsbankinggroup.com.  The reference to our website is an inactive textual reference only, and information contained therein or connected thereto is not incorporated into this prospectus or the registration statement of which it forms a part.

The following summary contains selected information about the Exchange Offer. It is provided solely for your convenience. This summary is not intended to be complete. You should read the full text and more specific details contained elsewhere in this prospectus. For a more detailed description of the Exchange Offer, see “The Exchange Offer”.

The Offeror

Lloyds Banking Group plc

Purpose of the Exchange Offer

From January 1, 2022, LBG will update the regulatory classification of its preference shares to classify any remaining outstanding preference shares as ineligible for regulatory capital purposes. The legal ranking of the U.S. dollar preference shares will remain unchanged. This update to the future regulatory classification follows the ‘Dear CFO’ letter sent by the Prudential Regulation Authority to all major U.K. deposit takers dated November 16, 2020 requesting all firms to take steps to remediate the prudential treatment of legacy instruments. The Group’s updated capital instruments report as at December 31, 2021 will be published in February 2022 together with the Group’s full year results for 2021. The Group reserves the right to review such classification in the future, to the extent permitted by applicable law and regulation. LBG is also undertaking the Exchange Offer in order to provide the holders of the Existing Securities with an opportunity to exchange their Existing Securities for the relevant Total Exchange Consideration consisting of New Notes and, where applicable, a Cash Consideration Amount. The voluntary Exchange Offer is part of the Group’s continuous review and management of its outstanding capital base, maintaining a prudent approach to the management of the Group’s capital position. Preference Shares which are not validly exchanged and accepted for purchase pursuant to the Exchange Offer will remain outstanding after completion of the Exchange Offer and shall remain subject to their existing terms and conditions. LBG has launched, separately and concurrently with the launch of the Exchange Offer, a liability management exercise in respect of three series of sterling preference shares issued by LBG.

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The Exchange Offer	LBG is offering to exchange, on the terms and conditions described in this prospectus, New Notes, plus (i) (if applicable) the Cash Consideration Amount, (ii) accrued and unpaid dividends or interest (as the case may be) in cash, and (iii) (if applicable) cash amounts in lieu of any fractional New Notes for (1) any and all of the Any and All Offer Securities and (2) up to the Cap Amount of the Capped Offer Notes.
Securities Offered	Fixed Rate Reset Subordinated Debt Securities due 2046 with a call date in 2041 (the “New Notes”) to be issued by LBG, which will be registered under the Securities Act.  See “Description of the New Notes”.
Existing Securities	Preference Shares and Existing Subordinated Notes
Preference Shares	·     American Depositary Shares representing 6.413% Non-Cumulative Fixed to Floating Rate Preference Shares (ISIN 144A US539439AC38 and Reg S USG5533WAA56); and ·     American Depositary Shares representing 6.657% Non-Cumulative Fixed to Floating Rate Preference Shares (ISIN 144A US539439AF68 and Reg S US539439AE93).
Existing Subordinated Notes	·     6.00% Subordinated Notes due 2033 (ISIN 144A US4041A2AF14 and Reg S US4041A3AG79) issued by HBOS plc; ·     4.500% Fixed Rate Subordinated Debt Securities due 2024 (ISIN US53944YAA10) issued by LBG; and ·     4.582% Subordinated Debt Securities due 2025 (ISIN US539439AM10) issued by LBG.
Cap Amount	The Cap Amount is a principal amount of Capped Offer Notes that would result in a principal amount of $750,000,000 of the New Notes being issued pursuant to the Exchange Offer (after taking into account the principal amount of the New Notes to be issued pursuant to the Any and All Offer). In case the principal amount of the Any and All Offer Securities accepted pursuant to the Any and All Offer is such that the principal amount of the New Notes to be issued pursuant to the Any and All Offer is equal to or exceeds $750,000,000, all validly tendered Any and All Offer Securities will be accepted in full and no Capped Offer Notes will be accepted pursuant to the Capped Offer.

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Exchange Priority	There will be no priority of acceptance in the Any and All Offer. The order, on a series by series basis, in which tenders of Capped Offer Notes will be accepted in the Capped Offer, is set out in the table on the front cover page of this prospectus.
Exchange Offer Period	From the commencement of the Exchange Offer on November 10, 2021 to the Expiration Deadline, which is expected to be 11:59 p.m., New York City time, on December 9, 2021, subject to extension.
Withdrawal Rights	If you decide to tender your Existing Securities in the Exchange Offer, you may withdraw them at any time prior to 11:59 p.m. New York City time on December 9, 2021. Holders may not rescind their withdrawal of tenders of Existing Securities, and any Existing Securities properly withdrawn will thereafter be deemed not validly tendered for purposes of the Exchange Offer. Properly withdrawn Existing Securities may, however, be re-tendered again by following the procedures described herein at any time prior to the Expiration Deadline. In addition, if not previously returned, you may withdraw Existing Securities that you tender that are not accepted by us for exchange after the expiration of 40 Business Days following the commencement of the Exchange Offer.
Total Exchange Consideration	The Total Exchange Consideration for each Series of Existing Securities will be calculated as set out herein with reference to the sum of (i) the rate on the relevant Reference UST Security at the Pricing Time plus (ii) the relevant Fixed Spread. The Total Exchange Consideration will consist of the Cash Consideration Amount (if applicable) and the New Notes Exchange Consideration. The New Notes Exchange Consideration will be equal to the Total Exchange Consideration minus the Cash Consideration Amount (if applicable).
Accrued Interest / Accrued Dividends	Holders whose Existing Securities are accepted in the Exchange Offer will receive payment in cash of an amount equal to the accrued and unpaid interest or dividends, as applicable, if any, in respect of such Existing Securities, as applicable, from the last interest or dividend payment date, as applicable, for such securities to, but not including, the applicable Settlement Date.
Fractional Entitlements	No fractional New Notes will be delivered pursuant to the Exchange Offer. Instead, each tendering holder of Existing Securities that are accepted for exchange will receive a cash amount in lieu of any fractional New Notes that a tendering holder of Existing Securities would have otherwise been entitled to receive. Any cash amounts payable pursuant to the Exchange Offer will be rounded to the nearest U.S.$0.01, with U.S.$0.005, being rounded upwards.

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Conditions of the Exchange Offer	The Exchange Offer is subject to a Minimum New Issue Size of at least $500,000,000 in aggregate principal amount of New Notes being issued in exchange for Existing Securities validly tendered pursuant to the Exchange Offer. The Exchange Offer is also subject to the satisfaction or waiver of certain other conditions, which are set forth in “The Exchange Offer—Terms of the Exchange Offer—Exchange Offer Conditions”.
Amendment of Terms of the Exchange Offer	Subject to applicable laws and as provided herein, the Offeror may extend, re-open, amend, limit, waive any condition of, or terminate the Exchange Offer at any time. Details of any such extension, re-opening, amendment, limitation, waiver (if permitted) or termination will be announced wherever applicable as provided in this prospectus as soon as reasonably practicable after the relevant decision is made.
Settlement Date	The New Notes plus the cash payment for any accrued and unpaid interest, (including, if applicable, cash amounts in lieu of any fractional New Notes) and the Cash Consideration Amount (if applicable) will be delivered on the Settlement Date, which is expected to be on or around December 14, 2021. Any cash amounts payable pursuant to the Exchange Offer will be rounded to the nearest U.S.$0.01, with U.S.$0.005, being rounded upwards.
Offer Restrictions	The Exchange Offer is subject to certain offer restrictions. See “The Exchange Offer—Certain Matters Relating to Non-U.S. Jurisdictions”.
Use of Proceeds	LBG will not receive any proceeds from the issuance of the New Notes in the Exchange Offer.
Dealer Managers	The Global Coordinators and Joint Lead Dealer Managers for the Exchange Offer are BofA Securities, Inc., Credit Suisse Securities (USA) LLC and Lloyds Securities Inc. Lloyds Securities Inc. is an affiliate of LBG. Any participation in the Exchange Offer by Lloyds Securities Inc. will be made in compliance with applicable provisions of Rule 5121 of the Financial Industry Regulatory Authority, Inc.
Exchange Agent	Lucid Issuer Services Limited.
Brokerage Commission	No brokerage commissions are payable by the holders to the Offeror, the Dealer Managers or the Exchange Agent. If your Existing Securities are held through a broker or other nominee that tenders the Existing Securities on your behalf, such broker or other nominee may charge you a commission for doing so. You should consult with your broker or nominee to determine whether any charges will apply.

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No Recommendation	None of the Offeror, the Dealer Managers or the Exchange Agent (or any of their respective directors, employees or affiliates) is providing holders of Existing Securities with any legal, business, tax or other advice in the prospectus, nor is making any recommendation as to whether or not holders should tender any Existing Securities in the Exchange Offer or refrain from tendering any Existing Securities, and none of them has authorized any person to make any such recommendation. Holders should consult their own advisers as needed to assist them in making an investment decision.
Further Information	If you have questions about the terms of the Exchange Offer, please contact your bank, broker or professional investment advisor, or you may contact the Dealer Managers.  If you have questions regarding the procedures for tendering your Existing Securities, please contact the Exchange Agent.  The Exchange Agent’s and Dealer Managers’ contact details are set forth on the back cover page of this prospectus. As required by the Securities Act, we have filed a registration statement relating to the Exchange Offer with the SEC.  This document is a part of that registration statement, which includes additional information.
U.S. Federal Income Tax Considerations	The exchange of Existing Securities of any series for New Notes will be a taxable transaction for U.S. federal income tax purposes. For a discussion of material U.S. federal income tax considerations of the Exchange Offer applicable to holders of Existing Securities, see “Taxation Considerations—Material U.S. Federal Income Tax Considerations”.

The New Notes

Issuer	Lloyds Banking Group plc
Securities	Fixed Rate Reset Subordinated Debt Securities due 2046 with a call date in 2041
Issue Date	December 14, 2021
Maturity	We will pay the New Notes at 100% of their principal amount plus accrued interest (and additional amounts, if any) on December 14, 2046, subject to any early redemption as described in “Description of the New Notes—Optional Redemption”, “Description of the New Notes—Tax Redemption” and “Description of the Notes Notes—Capital Disqualification Event Redemption”.

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Interest Rate	Interest will accrue on the New Notes from (and including) the Issue Date to (but excluding) the Reset Date, at a rate per annum equal to (a) the yield, rounded to three decimal places when expressed as a percentage and calculated by the Dealer Managers in accordance with standard market practice, that corresponds to the bid-side price of 1.750% U.S. Treasury Notes due August 15, 2041 as of the Pricing Time as displayed on the Bloomberg Government Pricing Monitor page FIT1 (or any recognized quotation source selected by LBG in its sole discretion if such quotation report is not available or is manifestly erroneous) plus (b) a fixed spread of 150 basis points, and (2) from (and including) the Reset Date to (but excluding) the Maturity Date, at a rate per annum calculated by the Calculation Agent on the Reset Determination Date as being equal to the sum of the applicable U.S. Treasury Rate and 1.50%, such sum being converted to a semi-annual rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down).
Reset Date	December 14, 2041
Interest Payment Dates	June 14 and December 14 in each year, commencing on June 14, 2022 to (and including) the Maturity Date.
Regular Record Dates	15 calendar days immediately preceding the related Interest Payment Date, as applicable, whether or not a Business Day.

Business Day Convention	Following, unadjusted
Day Count Basis	30/360 (in case of an incomplete month, based on actual number of days elapsed in such period)
Ranking	The New Notes will constitute our direct, unconditional, unsecured, unguaranteed and subordinated obligations ranking pari passu without any preference among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness of LBG. In a winding up or in the event that an administrator has been appointed in respect of us and notice has been given that it intends to declare and distribute a dividend, all amounts due in respect of or arising under (including any damages awarded for breach of any obligations under) the New Notes will be subordinated to, and subject in right of payment to the prior payment in full of, all claims of all Senior Creditors. The rights and claims of the holders of the New Notes shall rank at least pari passu with the claims of holders of all obligations of LBG which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital of LBG and in priority to (1) the claims of holders of all obligations of LBG which constitute Tier 1 Capital of LBG, (2) the claims of holders of all undated or perpetual subordinated obligations of LBG and (3) the claims of holders of all share capital of LBG. In addition, because we are a holding company, our rights to participate in the assets of any subsidiary if it is liquidated will be subject to the prior claims of its creditors, including in the case of bank subsidiaries, their depositors, except to the extent that we may be a creditor with recognized claims against the subsidiary. See also “Risk Factors— The New Notes are obligations exclusively of LBG and LBG is structurally subordinated to the creditors of its subsidiaries.”

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Agreement with Respect to the Exercise of U.K. Bail-in Power Notwithstanding any other agreements, arrangements, or understandings between us and any holder or beneficial owner of the New Notes by acquiring or holding the New Notes, each holder (including each beneficial owner) of the New Notes acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the New Notes; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the New Notes into shares or other securities or other obligations of LBG or another person (and the issue to or conferral on the holder of such shares, securities or obligations), including by means of amendment, modification or variation of the terms of the New Notes; and/or (iii) the amendment or alteration of the maturity of the New Notes, or amendment of the amount of interest due on the New Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; any U.K. bail-in power may be exercised by means of variation of the terms of the New Notes solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the maturity date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each holder and each beneficial owner of the New Notes further acknowledges and agrees that the rights of the holders and/or beneficial owners under the New Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.   For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the

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United Kingdom in effect and applicable in the United Kingdom to us and the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United Kingdom within the context of the U.K. resolution regime under the Banking Act as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which any right in a contract governing such obligations may be deemed to have been exercised (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

According to the principles contained in the Banking Act, we expect that the relevant U.K. resolution authority would exercise its U.K. bail-in power in respect of the New Notes having regard to the hierarchy of creditor claims and that the holder or beneficial owner of the New Notes would be treated equally in respect of the exercise of the U.K. bail-in power with all other claims that would rank pari passu with the New Notes upon an insolvency of LBG.

No repayment of the principal amount of the New Notes or payment of interest on the New Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 us under the laws and regulations of the United Kingdom applicable to us or other members of the Group. See also “Risk Factors—Under the terms of the New Notes, you will agree to be bound by and consent to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.”

Neither a reduction or cancellation, in part or in full, of the principal amount of, or interest on, the New Notes or the conversion thereof into another security or obligation of LBG or another person, as a result of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to LBG, nor the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes will be a default or an event of default for any purpose.

LBG’s obligations to indemnify the Trustee in accordance with the Section 6.07 of the Subordinated Indenture shall survive the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes.

For a discussion of certain risk factors relating to the U.K. bail-in power, see “Risk Factors—Risks relating to the New Notes”.

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Repayment of Principal and Payment of Interest After Exercise of U.K. Bail-in Power	No repayment of the principal amount of the New Notes or payment of interest on the New Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 us under the laws and regulations of the United Kingdom applicable to us or other members of the Group.
Additional Issuances	We may, without the consent of the holders of the New Notes, issue additional notes having the same ranking and same interest rate, maturity date, redemption terms and other terms as the New Notes described in this prospectus except for the price to the public, issue date and first Interest Payment Date, provided however that such additional notes that form part of the same series as the New Notes must be fungible with the outstanding New Notes for U.S. federal income tax purposes. Any such additional notes, together with the New Notes offered by this prospectus, will constitute a single series of securities under the Indenture.  There is no limitation on the amount of New Notes or other debt securities that we may issue under the Indenture.
Tax Redemption	If certain changes in certain tax laws or regulations of the United Kingdom has occurred that, among other things, impose certain withholding taxes or other deductions on the payments in respect of the New Notes, results in certain tax liability or results in certain other consequences including in treatment of the New Notes, LBG may, subject to the satisfaction of the conditions described under “Description of the New Notes—Conditions to Redemption, Purchase, Substitution or Variation”, redeem the New Notes, in whole but not in part, at any time, at 100% of their principal amount, together with any Accrued Interest to, but excluding, the date fixed for redemption. See “Description of the New Notes—Tax Redemption” for more information.

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Capital Disqualification Event Redemption	We may redeem the New Notes, in whole but not in part, at any time, upon not less than 30 calendar days’ nor more than 60 calendar days’ notice to the holders of the New Notes, if, at any time immediately prior to the giving of the notice, a Capital Disqualification Event has occurred.  “Capital Disqualification Event” shall be deemed to have occurred if at any time LBG determines that there is a change (which has occurred or which the Relevant Regulator considers to be sufficiently certain) in the regulatory classification of the New Notes which becomes effective after the Issue Date and that results, or would be likely to result, in the entire principal amount of the New Notes being excluded from the Tier 2 Capital of LBG and/or the Group (other than as a result of any applicable limitation on the amount of such capital). In the event of such a redemption, the redemption price of the New Notes will be 100% of their principal amount together with any accrued but unpaid interest to, but excluding, the date fixed for redemption. See “Description of the New Notes—Capital Disqualification of Event Redemption” for more information.  Any right of redemption will be subject to the conditions set forth under “Description of the New Notes—Conditions to Redemption, Purchase, Substitution or Variation”.
Substitution or Variation	If a Capital Disqualification Event (described above) has occurred and is continuing, then LBG may, subject to “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, but without any requirement for the consent or approval of the holders of the New Notes, at any time (whether before, on or following the Reset Date) either substitute all (but not some only) of the New Notes for, or vary the terms of the New Notes so that they remain or, as appropriate, become, Compliant Securities (as defined below), and the Trustee shall (subject to the below) agree to such substitution or variation. Upon the expiry of such notice, LBG shall either vary the terms of or substitute the New Notes, as the case may be.
Purchases of the New Notes	We may at any time, and from time to time, purchase New Notes in the open market or by tender or by private agreement in any manner and at any price or at differing prices. New Notes purchased or otherwise acquired by us may be (i) held, (ii) resold or (iii) at our sole discretion, surrendered to the Trustee for cancellation (in which case all New Notes so surrendered will forthwith be cancelled in accordance with applicable law and thereafter may not be re-issued or resold). Any such purchases will be subject to the conditions set forth under “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”.

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Book-Entry Issuance, Settlement and Clearance	Book-entry interests in the New Notes will be issued in minimum denominations of $200,000 and in integral multiples of $1,000 in excess thereof. The New Notes shall initially be represented by one or more global securities in registered form, without coupons attached, and will be deposited with DTC, and will be registered in the name of such depositary or its nominee. Beneficial interests in the global debt securities will be shown on, and transfers thereof will be effected only through, the book-entry records maintained by DTC and its direct and indirect participants, including, as applicable, Euroclear and Clearstream, Luxembourg.
Listing and Trading	We intend to apply to list the New Notes on the New York Stock Exchange.
Trustee, Paying Agent and Calculation Agent	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, having its corporate trust office at One Canada Square, London E14 5AL, United Kingdom, will act as the Trustee and will act as initial Paying Agent, and The Bank of New York Mellon, acting through its London branch, will act as Calculation Agent for the New Notes.
Subordinated Debt Security Registrar	The Bank of New York Mellon SA/NV, Dublin Branch.
Governing Law	The Subordinated Indenture (as defined below), the Ninth Supplemental Indenture (as defined below) and the New Notes are governed by, and construed in accordance with, the laws of the State of New York, except for the subordination and waiver of set-off provisions relating to the New Notes which are governed by and construed in accordance with the laws of Scotland.

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Risk Factors

Prospective investors should consider carefully the risk factors incorporated by reference into this prospectus and as set out below as well as the other information set out elsewhere in this prospectus (including any other documents incorporated by reference herein) and reach their own views prior to making any investment decision with respect to the New Notes.

Set out below and incorporated by reference herein are certain risk factors that could have a material adverse effect on our business, operations, financial condition or prospects, and cause our future results to be materially different from expected results. Our results could also be affected by competition and other factors. These factors should not be regarded as a complete and comprehensive statement of all potential risks and uncertainties we face. We have described only those risks relating to our operations or an investment in the New Notes that we consider to be material. There may be additional risks that we currently consider not to be material or of which we are not currently aware, and any of these risks could have the effects set forth below. All of these factors are contingencies that may or may not occur and we are not in a position to express a view on the likelihood of any such contingency occurring. Investors should note that they bear our solvency risk. Each of the risks highlighted below could have a material adverse effect on the amount of principal and interest that investors will receive in respect of the New Notes. In addition, each of the highlighted risks could adversely affect the trading price of the New Notes or the rights of investors under the New Notes and, as a result, investors could lose some or all of their investment. You should consult your own financial, tax and legal advisers regarding the risks of an investment in the New Notes.

We believe that the factors described below as relating to the New Notes represent the principal risks inherent in investing in New Notes, but we may be unable to pay interest, principal or other amounts on or in connection with the New Notes for other reasons and we do not represent that the statements below regarding the risks of holding the New Notes are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this prospectus (including any documents deemed to be incorporated by reference herein) and reach their own views prior to making any investment decision.

Risks relating to LBG and the Group

For a description of the risks associated with LBG and the Group, see the section entitled “Risk Factors” of LBG’s Annual Report on Form 20-F for the fiscal year ended December 31, 2020, which is incorporated by reference herein.

Risks relating to the Exchange Offer

The trading markets for the Existing Securities may be adversely affected by the Exchange Offer.

The trading markets for the Existing Securities that remain outstanding following the completion of the Exchange Offer may be characterized by significantly lower levels of liquidity than before the Exchange Offer. Such outstanding Existing Securities may command a lower price than a comparable issue of securities with greater market liquidity. A reduced market value may also make the trading price of the remaining Existing Securities more volatile. As a result, the market price for the Existing Securities that remain outstanding after the completion of the Exchange Offer may be materially and adversely affected as a result of the Exchange Offer.

Some or all series of Existing Securities may not be actively traded. Quotations for securities that are not widely traded, such as the Existing Securities, may differ from actual trading prices and should be viewed as approximations. Investors are urged to contact their brokers with respect to current market prices for the Existing Securities.

There are significant differences between the Existing Securities and the New Notes.

The terms of the New Notes will be substantially different from those of the Existing Securities.  In addition to differences in financial terms which include, among others, the coupon and payment dates, the terms of the New Notes differ in respect of maturity, redemption dates, redemption prices, interest rate reset and, in the case of Preference Shares, ranking. In addition, the issuer of the Series 1 Existing Subordinated Notes was HBOS plc, not LBG.

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Investors should carefully consider the differences described under “Comparison of Certain Material Terms of the Preference Shares and the New Notes”, “Comparison of Certain Material Terms of the Series 1 Existing Subordinated Notes and the New Notes” and “Comparison of Certain Material Terms of the Capped Offer Notes and the New Notes” in deciding whether to tender Existing Securities for exchange in connection with the Exchange Offer.

Existing Securities may be acquired by the Offeror or its affiliates other than through the Exchange Offer in the future.

From time to time in the future, to the extent permitted by applicable law, the Offeror or its affiliates may acquire Existing Securities that remain outstanding, whether or not the Exchange Offer is consummated, through tender offers, exchange offers or otherwise, upon such terms and at such prices as it may determine, which may be more or less than the price to be paid pursuant to the Exchange Offer and could be for cash or other consideration.  There can be no assurance as to which, if any, of these alternatives (or combinations thereof) LBG or its affiliates may pursue.

Legality of purchase.

None of LBG, the Dealer Managers or any of their respective affiliates has or assumes responsibility for the lawfulness of the acquisition of the New Notes by a prospective investor of the New Notes, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates (if different), or for compliance by that prospective investor with any law, regulation or regulatory policy applicable to it.

Failure by a holder to comply with the procedures for participating in the Exchange Offer may result in the holder being excluded from participation.

Holders are responsible for complying with all of the procedures for submitting Exchange Instructions pursuant to the terms of this prospectus. In particular, holders should note that only one Exchange Instruction may be submitted by or on behalf of a beneficial owner in respect of a particular series of Existing Securities. Multiple Exchange Instructions submitted by or on behalf of a beneficial owner in respect of any one series of Existing Securities will be invalid and may be rejected by the relevant Offeror. None of LBG, the Dealer Managers or the Exchange Agent assumes any responsibility for informing holders of irregularities with respect to Exchange Instructions from such holders.

LBG may not accept all Existing Securities validly tendered for exchange in the Capped Offer.

In the case of the Capped Offer, LBG will, if it accepts any tenders, accept tenders of Capped Offer Notes (subject to the Exchange Priority) in an aggregate principal amount that will result in LBG issuing New Notes (after taking into account the New Notes to be issued pursuant to the Any and All Offer) in an aggregate principal amount that is no greater than the Maximum Capped Offer New Notes Size, unless such limit is increased, decreased or waived, subject to applicable law. Depending on the aggregate principal amount of Existing Securities validly tendered in the Exchange Offer, LBG may have to accept Existing Securities in accordance with the Exchange Priority and may have to prorate or reject certain of the Capped Offer Notes tendered in the Capped Offer. See “The Exchange Offer—Terms of the Exchange Offer—Acceptance of Existing Securities; Exchange Priority; Proration”. If the acceptances in the Any and All Offer would lead to issuing New Notes in an amount that is greater than the Maximum Capped Offer New Notes Size, all validly tendered Any and All Offer Securities will be accepted in full and no Capped Offer Notes will be accepted by the LBG. The Offeror reserves the right at its absolute discretion, but is under no obligation, to increase, decrease or waive the Cap Amount at any time, subject to compliance with applicable law.

Subject to applicable law, tenders of Existing Securities may be rejected by LBG, and LBG is not under any obligation to holders to furnish any reason or justification for refusing to accept a tender of Existing Securities. For example, Existing Securities may be rejected if the Exchange Offer is terminated, if the Exchange Offer does not comply with the relevant requirements of a particular jurisdiction, if any of the conditions to the Exchange Offer are not met, or for other reasons.

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The consummation of the Exchange Offer is subject to certain conditions, including a Minimum New Issue Size Condition, and may not occur or may be delayed. Failure to complete any Exchange Offer could negatively affect the price of the Existing Securities subject to the Exchange Offer.

LBG is not obligated to complete the Exchange Offer. Several conditions must be satisfied or waived in order to complete the Exchange Offer, including among others, that there has been no change or development that, in the reasonable judgment of LBG, may materially reduce the anticipated benefits of the Exchange Offer or that has had or could reasonably be expected to have, an adverse effect on LBG, its business, condition (financial or otherwise) or prospects, or the market for the New Notes. See “The Exchange Offer—Exchange Offer Conditions.” In addition, the Exchange Offer is subject to the condition that the Minimum New Issue Size is satisfied, meaning that a sufficient number of Existing Securities are validly tendered pursuant to the Exchange Offer, such that at least $500,000,000 aggregate principal amount of the New Notes will be issued by LBG.

The foregoing conditions may not be satisfied, and if not satisfied or waived, the Exchange Offer may not occur or may be delayed. LBG may also extend or otherwise amend the Exchange Offer at its sole discretion. Even if the Exchange Offer is completed, it may not be completed on the schedule described in this prospectus or any subsequent notices of extension. Accordingly, holders of Existing Securities participating in the Exchange Offer may have to wait longer than expected to receive their New Notes, during which time those holders of Existing Securities will not be able to effect transfers of their Existing Securities tendered in the Exchange Offer. In addition, if an Exchange Offer is not completed or is delayed, the market price of the applicable Existing Securities may decline to the extent that the current market price of the Existing Securities reflects a market assumption that the Exchange Offer has been or will be completed.

The Exchange Offer may be extended, reopened, amended, limited, terminated or withdrawn at any time, subject to applicable law, and any such action may adversely affect any perceived benefits of the Exchange Offer.

Completion of the Exchange Offer is conditioned upon the satisfaction or waiver of the conditions to the Exchange Offer set out herein. In addition, subject as provided herein, the Offeror may, subject to applicable law, extend, re-open, amend, terminate or withdraw the Exchange Offer at any time prior to the announcement of whether it accepts valid tenders of Existing Securities. For details, see “The Exchange Offer—Amendment and Termination”.

Submitting an Exchange Instruction will restrict a holder’s ability to transfer its Existing Securities.

When considering whether to participate in the Exchange Offer, holders should take into account that restrictions on the transfer of Existing Securities by holders will apply from the time of submission of an Exchange Instruction to DTC. A holder will, on submitting an Exchange Instruction to DTC, agree that its Existing Securities will be blocked in the relevant account in DTC from the date the Exchange Instruction is submitted to DTC until the earlier of (i) the time of settlement on the Settlement Date and (ii) the date of any termination of the Exchange Offer (including where such Existing Securities are not accepted by the Offeror for exchange) or on which the Exchange Instruction is withdrawn, in the circumstances in which such withdrawal is permitted.

A failure of a holder or beneficial owner to consult its own advisors may result in it suffering adverse tax, accounting, financial or legal consequences.

Holders and beneficial owners should consult their own tax, accounting, financial and legal advisers as they may deem appropriate regarding the suitability to themselves of the tax, accounting, financial and legal consequences of participating or declining to participate in the Exchange Offer and an investment in the New Notes. In particular, due to the number of different jurisdictions where tax laws may apply to a holder or beneficial owner and save as set out under “Taxation Considerations”, this prospectus does not discuss the tax consequences for holders arising from the exchange of their Existing Securities in the Exchange Offer and the receipt of New Notes. Holders are urged to consult their own professional advisers regarding the possible tax consequences under the laws of the jurisdictions that apply to them. Holders are liable for their own taxes and have no recourse to LBG, the Dealer Managers or the Exchange Agent with respect to taxes arising in connection with the Exchange Offer.

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The exchange of Existing Securities for New Notes will be a taxable transaction and the New Notes may be issued with original issue discount (“OID”) for U.S. federal income tax purposes.

An exchange of Existing Securities of any series for New Noes will be a taxable transaction for U.S. federal income tax purposes and accordingly could result in tax liabilities for exchanging U.S. owners. In addition, the treatment of the New Notes for U.S. federal income tax purposes is not entirely clear, and the New Notes may be issued with OID for U.S. federal income purposes. For further information, see “Taxation Considerations—Material U.S. Federal Income Tax Considerations”.

The Offeror has not obtained a third-party determination that the Exchange Offer is fair to the holders.

No one is making a recommendation as to whether holders should exchange Existing Securities in the Exchange Offer.  The Offeror has not retained, and does not intend to retain, any unaffiliated representative to act on behalf of the holders for purposes of negotiating the Exchange Offer or preparing a report concerning the fairness of the Exchange Offer.  Holders must make their own independent decision regarding participation in the Exchange Offer.

Risks relating to the New Notes

There are limitations on the remedies available to you and the Trustee should we fail to pay principal or interest on the New Notes.

The sole remedy in the event of any non-payment of principal or interest on the New Notes is that the Trustee may, on your behalf, subject to applicable laws, institute proceedings for the winding up of LBG. In the event of a winding up of LBG, whether or not instituted by the Trustee, the Trustee may file proofs of claim with respect to any of our obligations arising under the New Notes in any such winding up.

The Trustee may not, however, declare the principal amount of any outstanding New Note to be due and payable in the event of such non-payment of principal or interest.

See “Description of the New Notes—Events of Default; Default; Limitation of Remedies” for further details.

LBG’s obligations under the New Notes are subordinated.

The obligations of LBG under the New Notes will be unsecured and subordinated and will, in the event of the winding-up of LBG, rank junior in priority of payment to the current and future claims of LBG’s creditors, other than claims in respect of any liability that is, or is expressed to be, subordinated. In a winding up, all payments on the New Notes will be subordinated to, and subject in right of payment to the prior payment in full of, all claims of all Senior Creditors. We expect from time to time to incur additional indebtedness or other obligations that will constitute senior indebtedness, and the Indenture does not contain any provisions restricting our ability to incur senior indebtedness. Although the New Notes may pay a higher rate of interest than comparable notes that are not so subordinated, there is a real risk that an investor in such New Notes will lose all or some of its investment should LBG become insolvent since the assets of LBG would be available to pay such amounts only after all the Senior Creditors of LBG have been paid in full. See also “—Holders of the New Notes may be required to absorb losses in the event we become subject to recovery and resolution action”.

An active trading market may not develop for the New Notes.

Prior to the exchange offer, there was no existing trading market for the New Notes. We intend to apply for listing of the New Notes on the New York Stock Exchange. If, however, an active trading market does not develop or is not maintained, the market price and liquidity of the New Notes may be adversely affected. In that case, holders of the New Notes may not be able to sell New Notes at a particular time or may not be able to sell New Notes at a favorable price. The liquidity of any market for the New Notes will depend on a number of factors including:

· the number of holders of the New Notes;

· LBG’s credit ratings published by major credit rating agencies;

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· our financial performance;

· the market for similar securities;

· the interest of securities dealers in making a market in the New Notes;

· prevailing interest rates; and

· the introduction of any financial transaction tax.

We cannot assure you that an active market for the New Notes will develop or, if developed, that it will continue.  Further, unlike certain bank deposits, holders of the New Notes have no ability to require repayment of their investment unless a Default or Event of Default occurs and then only in the limited circumstances described in “Description of the New Notes—Events of Default; Default; Limitation of Remedies”.

LBG’s credit ratings may not reflect all risks of an investment in the New Notes and a downgrade in credit ratings, including as a result of changes in rating agencies’ views of the level of implicit sovereign support for European banks, could adversely affect the trading prices of the New Notes.

LBG’s credit ratings may not reflect the potential impact of all risks relating to the market values of the New Notes. However, real or anticipated changes in LBG’s credit ratings will generally affect the market values of the New Notes. Credit rating agencies continually revise their ratings for companies that they follow, including LBG, and as such, the credit rating of LBG may be revised, suspended or withdrawn at any time by the assigning rating organization at its sole discretion. Any ratings downgrade could adversely affect the trading prices of the New Notes or the trading markets for the New Notes to the extent trading markets for the New Notes develop, and any ratings improvement will not necessarily increase the value of the New Notes and will not reduce market risk and other investment risks related to the New Notes. Credit ratings (i) do not reflect the risk that interest rates may rise, which may affect the values of the New Notes, which accrue interest at a fixed rate, (ii) do not address the price, if any, at which the New Notes may be resold prior to maturity (which may be substantially less than the original offering price of the New Notes), and (iii) are not recommendations to buy, sell or hold the New Notes.

The New Notes have early redemption risk.

We retain the option (subject to, if and to the extent then required by the Relevant Regulator or the relevant Applicable Regulations (as defined in “Description of the New Notes”), our giving notice to the Relevant Regulator and the Relevant Regulator granting us permission) to redeem the New Notes, in whole, but not in part, on the applicable redemption date on at least 15 calendar days’ but no more than 30 calendar days’ prior written notice. It is more likely that we will redeem the New Notes prior to their maturity date to the extent that the interest payable on the New Notes is greater than the interest that would be payable on other instruments of ours of a comparable maturity, of comparable terms and of a comparable credit rating trading in the market. If the New Notes are redeemed prior to their maturity date, you may have to re-invest the proceeds in a lower interest rate environment.

We may redeem the New Notes at any time for certain tax reasons.

We may (subject to, if and to the extent then required by the Relevant Regulator or the relevant Applicable Regulations, our giving notice to the Relevant Regulator and the Relevant Regulator granting us permission) redeem the New Notes at any time in whole (but not in part) upon the occurrence of certain tax changes as described in this prospectus.

We may redeem the New Notes at any time following a Capital Disqualification Event.

We may (subject to, if and to the extent then required by the Relevant Regulator or the relevant Applicable Regulations, our giving notice to the Relevant Regulator and the Relevant Regulator granting us permission) redeem the New Notes at any time in whole (but not in part) upon the occurrence of a Capital Disqualification Event as described in this prospectus.

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We may substitute the New Notes or vary their terms without holder consent.

If a Capital Disqualification Event has occurred, then LBG may, subject to the conditions described in “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, but without any requirement for the consent or approval of the holders of the New Notes, at any time (whether before or following the Reset Date) either substitute all (but not some only) of the New Notes for, or vary the terms of the New Notes so that they remain or, as appropriate, become, Compliant Securities, and the Trustee shall agree to such substitution or variation, as provided in “Description of the New Notes —Substitution or Variation”. In the case of a substitution or variation of the terms of the New Notes, while the new substituted or modified securities must have terms that are not materially less favorable to an investor than the New Notes, there can be no assurance that, whether due to the particular circumstances of each holder of New Notes or otherwise, such substituted or modified securities will be as favorable to each holder of New Notes in all respects.

Holders cannot require us to redeem the New Notes early.

Holders have no right to require us to redeem the New Notes prior to the maturity date thereof.

Limitation on our gross-up obligation under the New Notes.

Our obligation to pay additional amounts in respect of certain withholding taxes under the terms of the New Notes applies only to payments of interest due and paid under New Notes and not to payments of principal. We will not be required to pay any additional amounts under the terms of the New Notes to the extent any withholding or deduction applied to payments of principal. Accordingly, if any such withholding or deduction were to apply to any payments of principal under the New Notes, you may receive less than the full amount due under the New Notes, and the market value of the New Notes may be adversely affected.

Because the New Notes accrue interest at a fixed rate, the amount of interest payable on the New Notes on each interest payment date may be below market interest rates.

Because interest payable on the New Notes accrues at a fixed rate, there can be no guarantee that the interest you will receive on each interest payment date will be equal to or greater than the market interest rate on that date. LBG does not have any control over a number of factors that may affect market interest rates, including economic, financial, and political events, such as the tightening of monetary policy, that are important in determining the existence, magnitude, and longevity of these risks and their results. See also “—The interest rate on the New Notes will reset on the Reset Date”. You should have a view as to the fixed interest rate on the New Notes and its level relative to market interest rates before investing.

The interest rate on the New Notes will reset on the Reset Date.

The interest rate on the New Notes will initially be a fixed rate per annum from, and including, the Settlement Date to, but excluding, the Reset Date. From, and including, the Reset Date to, but excluding, December 14, 2046, the interest rate on the New Notes will be a rate per annum calculated by the Calculation Agent on the Reset Determination Date as being equal to the sum of the applicable U.S. Treasury Rate and 1.50%.

As a result, the interest rate on the New Notes following the Reset Date may be less than the initial interest rate, which would affect the amount of any interest payments and, by extension, could affect their market value.

The historical U.S. Treasury Rates are not an indication of future U.S. Treasury Rates.

In the past, U.S. Treasury Rates have experienced significant fluctuations. You should note that historical levels, fluctuations and trends of U.S. Treasury Rates are not necessarily indicative of future levels. Any historical upward or downward trend in U.S. Treasury Rates is not an indication that U.S. Treasury Rates are more or less likely to increase or decrease at any time, and you should not take the historical U.S. Treasury Rates as an indication of future rates.

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Under the terms of the New Notes, you will agree to be bound by and consent to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. See “—Holders of the New Notes may be required to absorb losses in the event we become subject to recovery and resolution action”.

Notwithstanding any other agreements, arrangements, or understandings between us and any holder or beneficial owner of the New Notes, by acquiring or holding the New Notes, each holder (including each beneficial owner) of the New Notes acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the New Notes; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the New Notes into shares or other securities or other obligations of LBG or another person; and/or (iii) the amendment or alteration of the maturity of the New Notes, or amendment of the amount of interest due on the New Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; any U.K. bail-in power may be exercised by means of variation of the terms of the New Notes solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power.  With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the maturity date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each holder and each beneficial owner of the New Notes will further be required to acknowledge and agree that the rights of the holders and/or beneficial owners under the New Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. See “—Holders of the New Notes may be required to absorb losses in the event we become subject to recovery and resolution action”.

For these purposes, a “U.K. bail-in power” is any write-down, conversion, transfer, modification or suspension power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to us and the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of the U.K. resolution regime under the Banking Act as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which any right in a contract governing such obligations may be deemed to have been exercised (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power). For more information, see “Description of the New Notes—Agreement with Respect to the Exercise of the U.K. Bail-in Power”.

Holders of the New Notes may be required to absorb losses in the event we become subject to recovery and resolution action.

The stated aim of the Bank Recovery and Resolution Directive (the “BRRD”) is to provide authorities designated by Member States to apply the resolution tools and exercise the resolution powers set forth in the BRRD (the “resolution authorities”) with common tools and powers to address banking crises pre-emptively in order to safeguard financial stability and minimize taxpayers’ exposure to losses. The BRRD was implemented in the United Kingdom under the Banking Act (as amended) before the U.K.’s withdrawal from the EU. The powers granted to the U.K. resolution authorities under the Banking Act include (but are not limited to) (i) a “write-down and conversion power” relating to Tier 1 and Tier 2 capital instruments (including the New Notes) and (ii) a “bail-in” power relating to eligible liabilities (including the New Notes). Such powers give resolution authorities the ability to write down or write off all or a portion of the claims of certain unsecured creditors of a failing institution or group and/or to convert certain debt claims into another security, including ordinary shares of the surviving Group entity, if any, which ordinary shares may also be subject to write-down or write-off.

The write-down and conversion power may be used prior to resolution and for these purposes the point of nonviability will be the point at which the relevant U.K. resolution authority determines that LBG or a member of its group meets the conditions for resolution (but no resolution action has yet been taken) or that the relevant entity will no longer be viable unless the relevant capital instruments are written down or converted or the relevant entity requires extraordinary public support, without which the relevant U.K. resolution authority determines that the

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relevant entity would no longer be viable. The conditions for use of the bail-in power are, in summary, that (i) the regulator determines that the bank is failing or likely to fail, (ii) having regard to timing and other relevant circumstances, it is not reasonably likely that (ignoring the stabilization powers) action will be taken by or in respect of the bank to avoid the failure of the bank, (iii) the relevant U.K. resolution authority determines that it is necessary having regard to the public interest to exercise the bail-in power in the advancement of one of the statutory objectives of resolution and (iv) that one or more of those objectives would not be met to the same extent by the winding up of the bank. The Banking Act contains certain other limited safeguards for creditors in specific circumstances which (a) in the case of the write-down and conversion power, may provide compensation to holders of the relevant capital instruments via the issue or transfer of ordinary shares or other equity securities of the bank or its parent undertaking in certain circumstances and (b) in the case of senior creditors, aim to ensure that they do not incur greater losses than they would have incurred had the relevant financial institution been wound up under normal insolvency proceedings.

As the parent company of U.K. banks, we are subject to the “Special Resolution Regime” under the Banking Act, that gives wide powers in respect of U.K. banks and their parent and other group companies to HM Treasury, the Bank of England (including the Prudential Regulation Authority (the “PRA”)), and the Financial Conduct Authority (the “FCA”) in circumstances where a U.K. bank has encountered or is likely to encounter financial difficulties.

It is possible that the exercise of other powers under the Banking Act, to resolve failing banks in the United Kingdom and give the authorities powers to override events of default or termination rights that might be invoked as a result of the exercise of the resolution powers, could have a material adverse effect on the rights of holders of the New Notes and/or a material adverse effect on the price of the New Notes. The Banking Act also gives the Bank of England the power to override, vary or impose contractual obligations between a U.K. bank, its holding company and its group undertakings for reasonable consideration, in order to enable any transferee or successor bank to operate effectively. There is also power for the U.K. Treasury to amend the law (excluding provisions made by or under the Banking Act) for the purpose of enabling it to use the regime powers effectively, potentially with retrospective effect.

In addition, the Banking Act may be further amended and/or other legislation may be introduced in the United Kingdom to amend the resolution regime that would apply in the event of a bank failure or to provide regulators with other resolution powers.

Finally, the determination that all or part of the principal amount of the New Notes will be subject to bail-in is likely to be inherently unpredictable and may depend on a number of factors which may be outside of our control. This determination will also be made by the relevant U.K. resolution authority and there may be many factors, including factors not directly related to us or the Group, which could result in such a determination. Because of this inherent uncertainty, it will be difficult to predict when, if at all, the exercise of a U.K. bail-in power may occur which would result in a principal write-off or conversion to other securities, including equity. Moreover, as the criteria that the relevant U.K. resolution authority will be obliged to consider in exercising any U.K. bail-in power provide it with considerable discretion, holders of the New Notes may not be able to refer to publicly available criteria in order to anticipate a potential exercise of any such power and consequently its potential effect on us, the Group and the New Notes. Potential investors in the New Notes should consider the risk that a holder may lose all of its investment, including the principal amount plus any accrued interest, if such statutory loss absorption measures are acted upon.

Holders of New Notes may have limited rights or no rights to challenge any decision of the relevant U.K. resolution authority to exercise the U.K. bail-in power or to have that decision reviewed by a judicial or administrative process or otherwise.

Accordingly, trading behavior in respect of the New Notes is not necessarily expected to follow the trading behavior associated with other types of securities that are not subject to such recovery and resolution powers. Potential investors in the New Notes should consider the risk that a holder of the New Notes may lose all of its investment, including the principal amount plus any accrued and unpaid interest, if such statutory loss absorption measures are acted upon or that the New Notes may be converted into ordinary shares. Further, the introduction or amendment of such recovery and resolution powers, and/or any implication or anticipation that they may be used, may have a significant adverse effect on the market price of the New Notes, even if such powers are not used.

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Your rights may be limited in respect of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority.

There may be limited protections, if any, that will be available to holders of securities subject to the U.K. bail-in power (including the New Notes) and to the broader resolution powers of the relevant U.K. resolution authority. For example, although under the Banking Act the Bank of England’s resolution instrument with respect to the exercise of the bail-in tool must set out the provisions allowing for securities to be transferred, cancelled or modified (or any combination of these), the resolution instrument may make any other provision that the Bank of England considers to be appropriate in exercising its specific powers. Such other provisions are expected to be specific and tailored to the circumstances that have led to the exercise of the bail-in tool under the Banking Act and there is uncertainty as to the extent to which usual processes or procedures under English law will be available to holders of securities (including the New Notes). Accordingly, you may have limited or circumscribed rights to challenge any decision of the Bank of England or other relevant U.K. resolution authority to exercise its U.K. bail-in power.

Other powers contemplated by the Banking Act may affect your rights under, and the value of your investment in, the New Notes.

In addition to the capital instruments write-down and conversion power and the bail-in tool, the Banking Act includes powers to (a) transfer all or some of the securities issued by a U.K. bank or its parent, or all or some of the property, rights and liabilities of a U.K. bank or its parent (which would include the New Notes), to a commercial purchaser or, in the case of securities, into temporary public ownership (to HM Treasury or an HM Treasury nominee), or, in the case of property, rights or liabilities, to a bridge bank (an entity owned by the Bank of England); (b) together with another resolution tool only, transfer impaired or problem assets to one or more publicly owned asset management vehicles to allow them to be managed with a view to maximizing their value through eventual sale or orderly wind-down; (c) override any default provisions, contracts or other agreements, including provisions that would otherwise allow a party to terminate a contract or accelerate the payment of an obligation; (d) commence certain insolvency procedures in relation to a U.K. bank; and (e) override, vary or impose contractual obligations, for reasonable consideration, between a U.K. bank or its parent and its group undertakings (including undertakings which have ceased to be members of the group), in order to enable any transferee or successor bank of the U.K. bank to operate effectively.

The Banking Act also gives power to HM Treasury to make further amendments to the law for the purpose of enabling it to use these powers effectively, potentially with retrospective effect.

The powers set out in the Banking Act could affect how credit institutions (and their parent companies) and investment firms are managed as well as, in certain circumstances, the rights of creditors. Accordingly, the taking of any actions contemplated by the Banking Act may affect your rights under the New Notes, and the value of your New Notes may be affected by the exercise of any such powers or threat thereof.

The circumstances under which the relevant U.K. resolution authority would exercise its U.K. bail-in power or other resolution tools under the Banking Act or future legislative or regulatory proposals are uncertain, which may affect the value of your New Notes.

There remains significant uncertainty regarding the ultimate nature and scope of the resolution powers under the Banking Act (and such significant uncertainty may exist with respect to any other resolution powers or tools enacted under future legislative or regulatory proposals), as well as the manner in which such powers would affect us and our securities (including the New Notes) if such powers were exercised. For example, although the exercise of the capital instruments write-down and conversion power and certain other resolution tools under the Banking Act are subject to certain pre-conditions thereunder, there remains uncertainty regarding the specific factors (including, but not limited to, factors outside our control or not directly related to us) which the Bank of England would consider in deciding whether to exercise such powers with respect to us or our securities. In particular, because the Banking Act allows for the Bank of England to exercise its discretion in choosing which resolution tool or tools to apply, it will be difficult to predict whether the exercise of the Bank of England’s resolution powers will result in a principal write-off or conversion to equity. You may not be able to refer to publicly available criteria in order to anticipate a potential exercise of any such resolution powers and consequently its potential effect on us or the New Notes.

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Accordingly, it is not yet possible to assess the full impact of the exercise of the U.K. bail-in power pursuant to the Banking Act or otherwise on us, and there can be no assurance that the taking of any actions contemplated therein would not adversely affect your rights, the price or value of your investment in the New Notes and/or our ability to satisfy our obligations under the New Notes.

The New Notes may not be a suitable investment for investors.

An investor should reach a decision to invest in the New Notes after carefully considering, in conjunction with his or her advisors, the suitability of the New Notes in light of his or her investment objectives and the other information set out in this prospectus. The issue price, interest rate and yield to maturity of the New Notes are expected to reflect the additional risks borne by investors in the New Notes when compared to those of Senior Creditors and bank depositors. Neither LBG nor the Dealer Managers make any recommendation as to whether the New Notes are a suitable investment for any person. See “Important Information—MiFID II product governance / Professional investors and ECPs only target market,” “Important Information—PRIIPS Regulation / Prohibition of sales to EEA retail investors” and “Important Information— U.K. PRIIPs Regulation / Prohibition of sales to U.K. retail investors.”

There is no limit on the amount or type of further securities or indebtedness that LBG may issue or incur.

There is no restriction on the amount of securities or other liabilities that LBG may issue or incur and which rank senior to, or pari passu with, the New Notes. The issue of any such securities or the incurrence of any such other liabilities may reduce the amount (if any) recoverable by holders of the New Notes on a winding up of LBG and may limit LBG’s ability to meet its obligations under the New Notes. In addition, the New Notes do not contain any restriction on LBG’s ability to issue securities that may have preferential rights similar to those of the New Notes or securities having similar or different provisions.

The New Notes are obligations exclusively of LBG and LBG is structurally subordinated to the creditors of its subsidiaries.

The New Notes are obligations exclusively of LBG. LBG is a holding company and conducts substantially all of its operations through its subsidiaries. LBG’s subsidiaries are separate and distinct legal entities, and have no obligation to pay any amounts due or to provide LBG with funds to meet any of LBG’s payment obligations. LBG’s rights to participate in the assets of any subsidiary if such subsidiary is liquidated will be subject to the prior claims of such subsidiary’s creditors and any preference shareholders, except in the limited circumstance where LBG is a creditor with claims that are recognized to be ranked ahead of or pari passu with such claims. Accordingly, if one of LBG’s subsidiaries were to be wound up, liquidated or dissolved, (i) the holders of the New Notes would have no right to proceed against the assets of such subsidiary, and (ii) the liquidator of such subsidiary would first apply the assets of such subsidiary to settle the claims of the creditors of such subsidiary, including holders (which may include LBG) of any preference shares and other tier 1 capital instruments of such other subsidiary, before LBG, to the extent LBG is an ordinary shareholder of such other subsidiary and would be entitled to receive any distributions from such other subsidiary.

The New Notes are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation, the Deposit Insurance Fund, or any other government agency.

The New Notes are our obligations but are not bank deposits. In the event of our insolvency, the New Notes will rank equally with our other unsecured, subordinated obligations and will not have the benefit of any insurance or guarantee of the Federal Deposit Insurance Corporation, The Deposit Insurance Fund, the U.K. Financial Services Compensation Scheme or any other government agency. Moreover, the Issuer is not a member institution of the Canada Deposit Insurance Corporation, and the liability incurred by the Issuer through the issuance of the New Notes is not a deposit in Canada. The Issuer is not regulated as a financial institution in Canada.

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Changes in law may adversely affect the rights of holders of the New Notes or may adversely affect the Group’s business, financial performance and capital plans.

Any changes in law or regulations after the date hereof that trigger a Capital Disqualification Event or a Tax Event would entitle LBG, at its option, to redeem the New Notes, in whole but not in part, as described in more detail under “Description of the New Notes—Redemption due to a Capital Disqualification Event” and “Description of the New Notes—Tax Redemption”. See also “—We may redeem the New Notes at any time for certain tax reasons” and “—We may redeem the New Notes at any time following a Capital Disqualification Event”.

Holders of the New Notes may find it difficult to enforce civil liabilities against LBG or LBG’s directors or officers.

LBG is incorporated as a public limited company and is registered in Scotland and LBG’s directors and officers reside outside of the United States. In addition, all or a substantial portion of LBG’s assets are located outside of the United States. As a result, it may be difficult for holders of the New Notes to effect service of process within the United States on such persons or to enforce judgments against them, including in any action based on civil liabilities under the U.S. federal securities laws.

Investors should be aware that the materialization of any of the above risks (including those risks incorporated herein by reference) may adversely affect the value of the New Notes.

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Use of Proceeds and Rationale of the Exchange Offer

LBG will not receive any cash proceeds from the issuance of the New Notes.  

From January 1, 2022, LBG will update the regulatory classification of its preference shares to classify any remaining outstanding preference shares as ineligible for regulatory capital purposes. The legal ranking of the U.S. dollar preference shares will remain unchanged.

This update to the future regulatory classification follows the ‘Dear CFO’ letter sent by the Prudential Regulation Authority to all major U.K. deposit takers dated November 16, 2020 requesting all firms to take steps to remediate the prudential treatment of legacy instruments. The Group’s updated capital instruments report as at December 31, 2021 will be published in February 2022 together with the Group’s full year results for 2021. The Group reserves the right to review such classification in the future, to the extent permitted by applicable law and regulation.

LBG is also undertaking the Exchange Offer in order to provide the holders of the Existing Securities with an opportunity to exchange their Existing Securities for the relevant Total Exchange Consideration consisting of New Notes and, where applicable, a Cash Consideration Amount. The voluntary Exchange Offer is part of the Group’s continuous review and management of its outstanding capital base, maintaining a prudent approach to the management of the Group’s capital position. Preference Shares which are not validly exchanged and accepted for purchase pursuant to the Exchange Offer will remain outstanding after completion of the Exchange Offer and shall remain subject to their existing terms and conditions.

LBG has launched, separately and concurrently with the launch of the Exchange Offer, a liability management exercise in respect of three series of sterling preference shares issued by LBG.

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Capitalization of the Group

The Group’s capitalization and indebtedness as at September 30, 2021 is set out in the report on Form 6-K filed with the SEC on October 28, 2021, which is incorporated by reference herein.

The New Notes will be exchanged for Existing Securities as described in this prospectus. Accordingly, the completion of the Exchange Offer will not generate any proceeds to LBG. In accordance with IFRS, the Existing Securities (including the Preference Shares), are classified as debt and are included as subordinated liabilities in LBG’s capitalization and indebtedness table as at September 30, 2021, which is incorporated by reference herein. The New Notes will also be classified as debt and included as subordinated liabilities.

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Market Information and Dividend Policy

The Ordinary Shares of LBG are listed and traded on the London Stock Exchange under the symbol “LLOY.L”. The prices for shares as quoted in the official list of the London Stock Exchange are in sterling. The following table shows the reported high and low closing prices for the ordinary shares on the London Stock Exchange. This information has been extracted from publicly available documents from various sources, including officially prepared materials from the London Stock Exchange, and has not been prepared or independently verified by LBG.

	Price per Ordinary Share
	High	Low
	(in pence)
Annual prices:
2020	63.71	23.98
2019	67.25	48.58
2018	72.12	50.03
2017	73.10	62.20
2016	73.74	47.55
Quarterly prices:
2021
Third quarter	47.71	42.41
Second quarter	50.00	41.62
First quarter	43.10	33.00
2020
Fourth quarter	39.50	26.53
Third quarter	31.85	23.98
Second quarter	36.88	27.73
First quarter	63.71	30.57
2019
Fourth quarter	67.25	50.70
Third quarter	58.26	48.58
Monthly prices:
October 2021	50.22	44.80
September 2021	46.57	42.41
August 2021	47.31	43.76
July 2021	47.71	43.50
June 2021	50.00	46.43
May 2021	49.91	45.05

On November 8, 2021, the closing price of Ordinary Shares on the London Stock Exchange was 49.16 pence, equivalent to $0.67 per Ordinary Share translated at the Bloomberg Generic Composite Rate of £1.00 = $1.356.

Since November 27, 2001, LBG’s American Depositary Shares representing LBG’s Ordinary Shares (“LBG ADSs”) have been listed on the New York Stock Exchange under the symbol “LYG”. Each such LBG ADS represents four Ordinary Shares.

The following table shows the reported high and low closing prices for LBG ADSs on the New York Stock Exchange.

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	Price per LBG ADS
	High	Low
	(in U.S. dollars)
Annual prices:
2020	3.34	1.18
2019	3.57	2.31
2018	4.19	2.48
2017	3.86	3.17
2016	4.40	2.55
Quarterly prices:
2021
Third quarter	2.60	2.27
Second quarter	2.83	2.28
First quarter	2.33	1.76
2020
Fourth quarter	2.09	1.31
Third quarter	1.54	1.18
Second quarter	1.85	1.29
First quarter	3.34	1.34
2020
Fourth quarter	3.57	2.44
Third quarter	2.89	2.31
Monthly prices:
October 2021	2.72	2.40
September 2021	2.48	2.27
August 2021	2.60	2.35
July 2021	2.59	2.33
June 2021	2.83	2.53
May 2021	2.83	2.49

On November 8, 2021, the closing price of LBG ADSs on the New York Stock Exchange was $2.61.

Dividend Policy

For information on the LBG’s ability to pay dividends, see our Annual Report on Form 20-F for the fiscal year ended December 31, 2020 under the heading “Dividends”.

Existing Securities

The ADSs, the Preference Shares and the Series 1 Existing Subordinated Notes are admitted to the Official List of the U.K. Financial Conduct Authority and are traded on the London Stock Exchange’s Regulated Market. The Series 2 Existing Subordinated Notes and the Series 3 Existing Subordinated Notes are traded on the New York Stock Exchange.

The high and low quoted sales prices for the Existing Securities for each quarter during the past two years are as follows:

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	Trading Price(1)
	Q3 2019				Q4 2019				Q1 2020				Q2 2020				Q3 2020				Q4 2020				Q1 2021				Q2 2021				Q3 2021
	Max		Min		Max		Min		Max		Min		Max		Min		Max		Min		Max		Min		Max		Min		Max		Min		Max		Min
Series 1 Preference Shares		105.635		103.838		117.000		105.155		121.139		102.744		109.179		103.160		116.173		108.600		124.343		115.649		125.899		123.823		136.167		125.000		141.097		135.887
Series 2 Preference Shares		107.432		105.409		120.055		106.883		124.990		107.624		113.060		107.958		119.042		112.659		127.344		118.668		128.932		126.984		139.341		128.585		144.958		138.909
Series 1 Existing Subordinated Notes		124.497		116.914		127.744		120.452		146.394		102.871		134.423		114.108		138.384		132.683		137.860		131.116		137.352		128.625		133.944		129.488		137.537		131.978
Series 2 Existing Subordinated Notes		105.593		103.589		107.050		104.483		110.592		94.846		110.212		96.262		110.542		108.477		112.000		108.735		112.458		110.683		111.413		110.479		111.010		109.752
Series 3 Existing Subordinated Notes		105.758		103.429		108.520		104.768		111.894		91.723		111.879		95.863		113.285		109.319		114.502		110.018		114.653		111.417		112.866		111.310		113.159		111.570

(1) Reflects, for the periods indicated, the high and low sales prices per security as reported by Composite Bloomberg Bond Trader (CBBT) in relation to the Series 1 Preference Shares and Series 2 Preference Shares, Bloomberg Valuation Service (BVAL) in relation to the Series 1 Existing Subordinated Notes and Benchmark (BMRK) in relation to the Series 2 Existing Subordinated Notes and Series 3 Existing Subordinated Notes.

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The Exchange Offer

Timetable for the Exchange Offer

Holders should confirm with any bank, securities broker or other intermediary through which they hold Existing Securities whether such intermediary needs to receive instructions from a holder before the deadlines specified in this prospectus in order for that holder to be able to participate in, or (in the circumstances in which withdrawal is permitted) withdraw their instruction to participate in, the Exchange Offer.

The times and dates below are subject, where applicable, to the right of the Offeror to extend, re-open, amend, limit, terminate or withdraw the Exchange Offer, subject to applicable law. Accordingly, the actual timetable may differ significantly from the expected timetable set out below. If any of the above times and/or dates change, the revised time and/or date will be notified by announcement as soon as reasonably practicable.

Events	Dates and Times
Commencement of the Exchange Offer
Exchange Offer announced. Prospectus made available to holders of Existing Securities.	November 10, 2021
Price Determination Date / Pricing Time
The date and time when the Total Exchange Consideration applicable to each Series of Existing Securities and the interest rate on the New Notes will be determined.	10:00 a.m., New York City time, on December 7, 2021
Announcement of Pricing
Announcement of the Total Exchange Consideration applicable to each Series of Existing Securities and the interest rate on the New Notes.	Promptly after the Pricing Time
Withdrawal Deadline
The deadline for holders to validly withdraw tenders of Existing Securities.	11:59 p.m., New York City time, on December 9, 2021
Expiration Deadline
The deadline for receipt of all Exchange Instructions.	11:59 p.m., New York City time, on December 9, 2021
Announcement of Exchange Offer Results
Announcement of (i) the aggregate principal amounts of each series of Existing Securities which LBG will be accepting for exchange; (ii) in the case of the Capped Offer, whether tenders of each series of Existing Securities are to be accepted in full (if at all) or on a pro rata basis and, where accepted on a pro rata basis, the extent to which such tenders will be scaled; (iii) the aggregate principal amount of New Notes to be issued in the Exchange Offer; and (iv) the Settlement Date.	December 10, 2021

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Events Dates and Times

Settlement Date

Settlement Date of the Exchange Offer, including delivery of the New Notes plus the cash payment for any Cash Consideration Amount (where applicable), any accrued and unpaid dividend (in the case of the Preference Shares) or interest (in the case of the Existing Subordinated Notes), and including, if applicable, cash amounts in lieu of any fractional New Notes in exchange for Existing Securities accepted in the Exchange Offer.

Expected on December 14, 2021

Unless stated otherwise, announcements in connection with the Exchange Offer will be made (i) by the issuance of a press release to a recognized financial news service or services (e.g. Reuters/Bloomberg) as selected by the Issuer (“Notifying News Service”), (ii) by the delivery of notices to the relevant Clearing System for communication to Direct Participants and (iii) through The Regulatory News Service provided by the London Stock Exchange plc (being a Regulated Information Service that is on the list of Regulated Information Services maintained by the Financial Conduct Authority) (“RNS”), and may also be found on the relevant Reuters International Insider Screen. Copies of all such announcements, press releases and notices can also be obtained from the Exchange Agent, the contact details for which are at the end of this prospectus.

Purpose of the Exchange Offer

See “Use of Proceeds and Rationale of the Exchange Offer” for an explanation of the rationale of the Exchange Offer.

Terms of the Exchange Offer

Any And All Offer

LBG is offering to exchange, on the terms and conditions described in this prospectus, the New Notes, plus the Cash Consideration Amount (if applicable), plus accrued and unpaid dividends (in the case of the Preference Shares) or interest (in the case of Series 1 Existing Subordinated Notes), in each case in cash, plus (if applicable) cash amounts in lieu of any fractional New Notes, for any and all of the outstanding Any and All Offer Securities.

Capped Offer

LBG is offering to exchange, on the terms and conditions described in this prospectus, New Notes, plus the Cash Consideration Amount (if applicable), plus accrued and unpaid interest in cash, plus (if applicable) cash amounts in lieu of any fractional New Notes, for up to the Cap Amount of the outstanding Capped Offer Notes (subject to the Exchange Priority).

The Cap Amount is a principal amount of Capped Offer Notes that would result in a principal amount of $750,000,000 of the New Notes being issued pursuant to the Exchange Offer (after taking into account the principal amount of the New Notes to be issued pursuant to the Any and All Offer). In case the principal amount of the Any and All Offer Securities accepted pursuant to the Any and All Offer is such that the principal amount of the New Notes to be issued pursuant to the Any and All Offer is equal to or exceeds $750,000,000, all validly tendered Any and All Offer Securities will be accepted in full and no Capped Offer Notes will be accepted pursuant to the Capped Offer. See also “The Exchange Offer – Terms of the Exchange Offer – Capped Offer – Acceptance of Existing Securities; Exchange Priority; Proration” and “Risk Factors – Risks relating to LBG and the Group – LBG may not accept all Existing Securities validly tendered for exchange in the Capped Offer.”

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Exchange Offer Period

The Exchange Offer commences on November 10, 2021 and will end at 11:59 p.m., New York City time, on December 9, 2021, as such date may be extended (the “Expiration Deadline”). If the Expiration Deadline is extended by the Offeror, an announcement to that effect will be made by the Offeror as described below in “—Announcements” no later than 9:00 a.m., New York City time, on the next Business Day after the previously scheduled Expiration Deadline.

Total Exchange Consideration, Cash Consideration Amount and New Notes Exchange Consideration

Upon the terms and subject to the conditions set forth in this prospectus, if you validly tender Existing Securities prior to the Expiration Deadline and do not validly withdraw such tendered Existing Securities prior to the Expiration Deadline, and such Existing Securities are accepted by us, you will receive, for each $1,000 principal amount of Existing Securities tendered and accepted, the relevant Total Exchange Consideration, consisting of a principal amount of New Notes equal to the applicable New Notes Exchange Consideration plus an amount in cash equal to the relevant Cash Consideration Amount (where applicable). The principal amount of New Notes issued to a holder in exchange for validly tendered Existing Securities (on a per series basis) will be rounded down to the nearest $1,000 (being the minimum integral multiple of the New Notes) and subject to the minimum denomination of the New Notes of $200,000.

In addition to the applicable Total Exchange Consideration, holders with Existing Securities that are accepted for exchange will receive a cash payment representing (i) all or a portion of the accrued and unpaid dividends (in the case of the Preference Shares) or interest (in the case of Existing Subordinated Notes) to, but not including, the Settlement Date, and (ii) amounts due in lieu of any fractional amounts of New Notes, in each case, as described under this section and “—Cash Instead of Fractional New Notes”. As DTC is the record holder of the Existing Securities, all holders of any Existing Securities will also receive any applicable accrued and unpaid dividend or interest, as the case may be, on those Existing Securities in accordance with DTC procedures, regardless of the record dates with respect to each series of Existing Securities.

The “Pricing Time” will be 10:00 a.m., New York City time, on December 7, 2021, unless the Expiration Deadline is extended, in which case a new Pricing Time may be established with respect to the Exchange Offer.

The “Total Exchange Consideration” (calculated at the Pricing Time and in accordance with the formula set forth in Annex A to this prospectus, as illustrated by the hypothetical pricing example included in Annex C to this prospectus) for the Existing Securities validly tendered and not validly withdrawn prior to the Expiration Deadline is equal to the discounted value on the Settlement Date of the remaining payments of principal and interest or dividends (calculated assuming all scheduled interest or dividends are paid in full on the relevant payment date) per $1,000 principal amount of the Existing Securities through the applicable maturity date or (in the case of the Preference Shares) the first call date of the Existing Securities (assuming the relevant Existing Securities were redeemed on such maturity date or first call date, as applicable), using a yield equal to the sum of: (i) the bid-side yield, as calculated by the Dealer Managers in accordance with standard market practice, that corresponds to the bid-side price on the Reference UST Security set forth with respect to each series of Existing Securities on the front cover of this prospectus plus (ii) the applicable Fixed Spread set forth with respect to each series of Existing Securities on the front cover of this prospectus, minus accrued and unpaid dividends or interest, as applicable, on such series of Existing Securities up to but not including the Settlement Date.

The bid-side price for the relevant Reference UST Security will be the relevant bid-side price appearing at the Pricing Time on the Bloomberg Reference Page appearing on the front cover of this prospectus for such series of Existing Securities (or any other recognized quotation source selected by LBG in consultation with the Dealer Managers if such quotation report is not available or manifestly erroneous).

The “Cash Consideration Amount”, where payable, is stated on the front cover of this prospectus and is included in the Total Exchange Consideration.

The “New Notes Exchange Consideration” will be equal to the Total Exchange Consideration minus the Cash Consideration Amount. Where no Cash Consideration Amount applies, the Total Exchange Consideration will equal the New Notes Exchange Consideration.

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Interest Rate and Issue Price of the New Notes

The interest rate applicable to the New Notes from the Settlement Date to the Reset Date will be calculated at the Pricing Time in accordance with the formula set forth in Annex B to this prospectus, as illustrated by the hypothetical pricing example included in Annex D to this prospectus, and shall equal the sum of the (i) the bid-side yield, as calculated by the Dealer Managers in accordance with standard market practice, that corresponds to the bid-side price on the Benchmark Security set forth with respect to the New Notes on the front cover of this prospectus plus (ii) the Spread to Benchmark Security set forth with respect to the New Notes on the front cover of this prospectus.

The bid-side price for the Benchmark Security will be the bid-side price appearing at the Pricing Time on the Bloomberg Reference Page appearing on the front cover of this prospectus (or any other recognized quotation source selected by LBG in consultation with the Dealer Managers if such quotation report is not available or manifestly erroneous).

Each New Note will be issued at a price (the “Issue Price”) equal to 100% of the nominal principal amount of such New Note.

The Dealer Managers will calculate the interest rate of the New Notes, the Total Exchange Consideration, New Notes Exchange Consideration, accrued dividend or interest, as applicable, and cash amounts in lieu of any fractional New Notes, as applicable, for each of the Existing Securities, and their calculations will be final and binding absent manifest error. We will announce the interest rate of the New Notes and each Total Exchange Consideration and New Notes Exchange Consideration promptly after they are determined by the Dealer Managers. The formula that will be used by the Dealer Managers in making the calculations of the Total Exchange Consideration is attached hereto as Annex A. A hypothetical pricing example for the calculation of the Total Exchange Consideration is set forth in Annex C attached hereto.

You can obtain recently calculated hypothetical quotes of the yield for each Reference UST Security set forth with respect to each series of Existing Securities on the front cover of this prospectus, the hypothetical interest rate of the New Notes, the hypothetical Total Exchange Consideration and the hypothetical New Notes Exchange Consideration prior to the Pricing Time, and can obtain the actual yield for any Reference UST Security set forth with respect to each series of Existing Securities on the front cover of this prospectus, the interest rate of the New Notes and the Total Exchange Consideration for the Existing Securities after the Pricing Time, by contacting the Dealer Managers at the addresses and telephone numbers set forth on the back cover of this prospectus as well as at https://deals.lucid-is.com/lbg-us. Although the Dealer Managers will calculate the Total Exchange Consideration for the Existing Securities based solely on the yield on the applicable Reference UST Security set forth with respect to each series of Existing Securities on the front cover of this prospectus, you can also find information regarding the closing yield to maturity for each Reference UST Security on any trading day in the online versions of The Wall Street Journal and The New York Times.

Capped Offer – Acceptance of Existing Securities; Exchange Priority; Proration

In the case of the Capped Offer, LBG will accept tenders in accordance with the Exchange Priority set out in the table on the front cover page of this prospectus, until either (i) all of the Capped Offer Notes validly offered for exchange have been accepted or (ii) the maximum principal amount of Existing Securities have been accepted without exceeding the Cap Amount, being a principal amount of Capped Offer Notes that would result in a principal amount of $750,000,000 of the New Notes being issued pursuant to the Exchange Offer (after taking into account the principal amount of the New Notes to be issued pursuant to the Any and All Offer). Where the acceptance in accordance with the Exchange Priority of all valid tenders of a series of Capped Offer Notes would result in the Cap Amount being exceeded, Capped Offer Notes validly tendered and not validly withdrawn prior to the Expiration Deadline will be accepted in accordance with the Exchange Priority and, in the case of that particular series, on a pro rata basis up to the Cap Amount. Tenders of a series of Capped Offer Notes with a lower Exchange Priority than the lowest ranking series of Capped Offer Notes with respect to which any tenders are accepted, will not be accepted. The Offeror reserves the right at its absolute discretion, but is under no obligation, to increase or waive the Cap Amount at any time, subject to compliance with applicable law.

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If acceptance of all validly tendered Capped Offer Notes of a particular Exchange Priority (together with all validly tendered Capped Offer Notes with a higher Exchange Priority and the Any and All Offer Securities) would cause the Offeror to issue a principal amount of New Notes greater than the Maximum Capped Offer New Notes Size, then the Exchange Offer will be oversubscribed and (unless the Cap Amount is increased) if the Offeror accepts any Capped Offer Notes with that Exchange Priority in the Exchange Offer, the Offeror will accept for exchange tendered Capped Offer Notes with that Exchange Priority on a prorated basis, with the aggregate principal amount of each holder’s validly tendered Capped Offer Notes with that Exchange Priority accepted for exchange determined by multiplying each holder’s tender by the applicable proration factor, and rounding the product down to the nearest $1,000 principal amount for such holder’s Capped Offer Notes with that Exchange Priority. In that event, no Capped Offer Notes with an Exchange Priority lower than the Exchange Priority of the Capped Offer Notes being prorated will be accepted for exchange. Depending on the amount tendered and the proration factor applied, if the principal amount of Capped Offer Notes returned to a holder as a result of proration would result in less than the minimum denomination of $200,000 being returned to such holder or would result in less than the minimum denomination of $200,000 being accepted, the Offeror will either accept or reject all of such holder’s validly tendered Capped Offer Notes in its sole discretion.

Holders whose Capped Offer Notes tendered in the Exchange Offer are not accepted, who validly withdraw their tenders prior to the Expiration Deadline or who do not participate in the Exchange Offer, will not be eligible to receive New Notes and any Cash Consideration Amount, if applicable, in exchange for such Capped Offer Notes and shall continue to hold such Capped Offer Notes subject to their terms and conditions.

A holder whose Capped Offer Notes are accepted for exchange in the Exchange Offer and who, following the exchange of such Capped Offer Notes on the Settlement Date, will continue to hold in its account with the relevant Clearing System a principal amount of Capped Offer Notes which is less than the minimum denomination for such series, will need to purchase a principal amount of Capped Offer Notes of such series such that its holding amounts to at least the amount of such minimum denomination. Otherwise such residual holding may not be tradeable in the Clearing Systems.

For the avoidance of doubt, the Any and All Offer is not subject to any limit on Any and All Offer Securities that may be accepted in the Any and All Offer.

Minimum Denominations

The New Notes will only be issued in minimum denominations of $200,000 and integral multiples of $1,000 in excess thereof. To be eligible to receive New Notes, holders will be required to submit Existing Securities (on a per series basis) in a principal amount or liquidation preference amount, as applicable, to receive $200,000 in principal amount of New Notes.

Cash Instead of Fractional New Notes

No fractional New Notes will be delivered pursuant to the Exchange Offer. Instead, each tendering holder of Existing Securities that are accepted for exchange will receive a cash amount in lieu of any fractional New Notes that a tendering holder of Existing Securities would have otherwise been entitled to receive. Any cash amounts payable pursuant to the Exchange Offer will be rounded to the nearest U.S.$0.01, with U.S.$0.005, being rounded upwards.

Results

Unless the Exchange Offer is extended, the Offeror will announce (1) promptly after the Pricing Time, each Total Exchange Consideration and the interest rate of the New Notes, and (2) on December 10, 2021, (i) the aggregate principal amounts of each series of Existing Securities which LBG will be accepting for exchange; (ii) whether tenders of each series of Capped Offer Notes are to be accepted in full (if at all) or on a pro rata basis and, where accepted on a pro rata basis, the extent to which such tenders will be scaled; (iii) the aggregate principal amount of New Notes to be issued in the Exchange Offer; and (iv) the Settlement Date. Such information will be notified to holders as described below in “—Announcements” and shall, absent manifest error, be final and binding on LBG and the holders.

32 

Once the Offeror has announced the results of the Exchange Offer in accordance with applicable law, LBG’s acceptance of Exchange Instructions in accordance with the terms of the Exchange Offer will be irrevocable. Exchange Instructions which are so accepted will constitute binding obligations of the submitting holders and the Offeror to settle the Exchange Offer.

Existing Securities which have not been validly tendered and accepted for exchange pursuant to the Exchange Offer will remain outstanding after the Settlement Date.

Settlement

The New Notes will be delivered on the Settlement Date, expected to be on or around December 14, 2021.

Costs and Expenses

Any charges, costs and expenses incurred by the holders or any intermediary in connection with the Exchange Offer shall be borne by such holder. No brokerage costs are being levied by the Dealer Managers or the Exchange Agent. Holders should check whether their brokers or custodians will charge any fees.

Announcements

Unless stated otherwise, announcements in connection with the Exchange Offer will be made by the Offeror (i) by the issuance of a press release to a Notifying News Service, (ii) by the delivery of notices to the relevant Clearing System for communication to Direct Participants and (iii) through RNS, and may also be found on the relevant Reuters International Insider Screen. Copies of all such announcements, press releases and notices can also be obtained from the Exchange Agent, the contact details for whom are on the last page of this prospectus. Any announcement of an extension of the Exchange Offer will be made prior to 9:00 a.m., New York City time, on the Business Day immediately following the previously scheduled Expiration Deadline.

U.K. Companies Act

In the case of the ADSs representing Preference Shares, each holder whose ADSs are accepted for exchange by the Offeror acknowledges and agrees with the Offeror that, for the purposes of U.K. company law, the Exchange Offer is deemed to comprise of the following transactions: (1) the agreement by each such holder to subscribe for the relevant New Notes and (2) the purchase by the Offeror of the Preference Shares represented by such ADSs for cash pursuant to Section 701 of the U.K. Companies Act 2006, pursuant to which the issuance of the relevant New Notes, the payment of the relevant Cash Consideration Amount (if applicable), the relevant amount of accrued and unpaid dividends and the payment of any applicable cash sum due in respect of any fractional entitlement to New Notes are conditions to the purchase of the relevant Preference Shares.

Accordingly, by tendering its ADSs for exchange in the Exchange Offer, each holder whose ADSs are accepted for exchange by the Offeror agrees to (i) subscribe the relevant New Notes on the Settlement Date for a cash purchase price equal to the relevant New Notes Exchange Consideration and (ii) transfer the Preference Shares represented by such ADSs to the Offeror, free of all encumbrances and with full title guarantee, on the Settlement Date, for a cash purchase price equal to the relevant Total Exchange Consideration plus the relevant amount of accrued and unpaid dividends, it being agreed that the Offeror will waive each such holder’s obligation to pay the cash purchase price referred to in (i) in consideration for the transfer to the Offeror of the relevant Preference Shares represented by such ADSs, and that each such holder will waive the Offeror’s obligation to pay the cash purchase price described in (ii) in consideration for the issuance to that holder of the relevant New Notes, the payment of the relevant Cash Consideration Amount (if applicable), the relevant amount of accrued and unpaid dividends and the payment of any applicable cash sum due in respect of any fractional entitlement to New Notes. Each such holder also acknowledges and agrees that in the event that, as at the Settlement Date, an order has been made, or a resolution has been passed, for the winding-up of the Offeror, or an administrator of the Offeror has been appointed or a resolution instrument has been made in respect of the Offeror, no such holder shall have any claim to any cash sum in respect of the Exchange Offer, without prejudice to any other rights which such holder may be entitled to exercise.

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No Recommendation

None of the Offeror, the Dealer Managers or the Exchange Agent (or any of their respective directors, employees or affiliates) is providing holders of Existing Securities with any legal, business, tax or other advice in the prospectus, nor is making any recommendation as to whether or not holders should tender any Existing Securities in the Exchange Offer or refrain from tendering any Existing Securities, and none of them has authorized any person to make any such recommendation. Holders should consult their own advisers as needed to assist them in making an investment decision.

Exchange Offer Conditions

Minimum New Issue Denomination

Upon the terms and subject to the conditions set forth in this prospectus, tenders of the Preference Shares that would result in the tendering holder receiving less than the minimum denomination of $200,000 in principal amount of the New Notes, will be accepted. Tenders of the Series 1 Existing Subordinated Notes that would result in the tendering holder receiving less than the minimum denomination of $200,000 in principal amount of the New Notes, will not be accepted. In addition, tenders of a series of Capped Offer Notes that would result in the tendering holder receiving less than the minimum denomination of $200,000 in principal amount of the New Notes, will not be accepted. Holders should note that only one Exchange Instruction may be submitted by or on behalf of a beneficial owner in respect of a particular series of Existing Securities.

Minimum New Issue Size

The Exchange Offer is subject to a Minimum New Issue Size of at least $500,000,000 in aggregate principal amount of New Notes being issued in exchange for Existing Securities validly tendered pursuant to the Exchange Offer. The Offeror reserves the right at its absolute discretion, but is under no obligation, to waive the Minimum New Issue Size condition at any time, subject to compliance with applicable law.

General Conditions

Subject to applicable law, LBG will not be required to (i) accept for exchange any Existing Securities tendered pursuant to the Exchange Offer or (ii) issue any New Notes in exchange for validly tendered Existing Securities, and LBG may terminate, extend or amend the Exchange Offer, unless the conditions listed below have been satisfied or, if permissible under applicable law, waived. All of the conditions shall be deemed to have been satisfied on the Expiration Deadline, unless any of the following conditions shall have occurred on or after the date of this prospectus and be continuing at the time of the Expiration Deadline with respect to any series of the Existing Securities:

(a) there is any change or development that, in the reasonable judgment of LBG, may materially reduce the anticipated benefits to the Group of the Exchange Offer or that has had, or could reasonably be expected to have, an adverse effect on the Group, its businesses, condition (financial or otherwise) or prospects, or the market for the New Notes;

(b) there has been instituted or threatened any action, proceeding or investigation by or before any governmental authority, including any court, governmental, regulatory or administrative branch or agency, tribunal or instrumentality, that relates in any manner to the Exchange Offer and that in the reasonable judgment of LBG makes it advisable to terminate the Exchange Offer; or

(c) there has occurred: (i) any general suspension of or limitation on prices for trading in securities in the United Kingdom or the U.S. securities or financial markets; (ii) any disruption in the trading of the ordinary shares of LBG; (iii) any disruption in securities settlement, payment or clearing services in the United Kingdom or the United States; (iv) a declaration of a banking moratorium or any suspension of payments with respect to banks in the United Kingdom or the United States; or (v) a commencement or significant worsening of a war or armed hostilities or other national or international calamity, including but not limited to, catastrophic terrorist attacks against the United Kingdom or its citizens or the United States or its citizens.

The Offeror expressly reserves the right to amend or terminate the Exchange Offer and to reject for exchange any Existing Securities not previously accepted for exchange, if any of the conditions to the Exchange Offer specified above are not satisfied. In addition, the Offeror expressly reserves the right, at any time or at various times, to waive any conditions to the Exchange Offer, in whole or in part. All conditions to the Exchange Offer must be satisfied or waived prior to the Expiration Deadline.  

These conditions are (except as set out below) for the sole benefit of the Offeror, and it may assert them regardless of the circumstances that may give rise to them, or waive them in whole or in part, at any or at various times. If the Offeror fails at any time to exercise any of the foregoing rights, that failure will not constitute a waiver of such right. Each such right will be deemed an ongoing right that the Offeror may assert at any time or at various times.

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Procedures for Participating in the Exchange Offer

If you wish to participate in the Exchange Offer and your Existing Securities are held by a custodial entity such as a bank, broker, dealer, trust company or other nominee, you must instruct that custodial entity to tender your Existing Securities on your behalf pursuant to the procedures of that custodial entity. Please ensure you contact your custodial entity as soon as possible to give them sufficient time to meet your requested deadline. Beneficial owners are urged to appropriately instruct their bank, broker, custodian or other nominee at least five Business Days prior to the Expiration Deadline, as the case may be, in order to allow adequate processing time for their instruction.

To participate in the Exchange Offer, you must comply with the ATOP procedures for book-entry transfer described below prior to the Expiration Deadline. We have not provided guaranteed delivery procedures in conjunction with the Exchange Offer. No letter of transmittal will be used in connection with the Exchange Offer. The valid electronic transmission of acceptance through ATOP shall constitute delivery of your Existing Securities in connection with the Exchange Offer.

If you wish to tender Existing Securities held on your behalf by a nominee with DTC, you must:

· inform your nominee of your interest in tendering your Existing Securities pursuant to the applicable Exchange Offer; and

· instruct your nominee to tender all Existing Securities you wish to be tendered in the Exchange Offer in accordance with the procedures described below.

For a holder to validly tender Existing Securities pursuant to the Exchange Offer, an Agent’s Message transmitted through DTC must be received by the Exchange Agent at or prior to the Expiration Deadline, and the Existing Securities must be transferred pursuant to the procedures for book-entry transfer described below and a Book-Entry Confirmation (as defined below) must be received by the Exchange Agent, in each case at or prior to the Expiration Deadline. In all cases, the exchange of Existing Securities tendered and accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of:

· a Book-Entry Confirmation with respect to such Existing Securities; and

· an Agent’s Message transmitted through DTC.

Any acceptance of an Agent’s Message transmitted through ATOP is at the election and risk of the person transmitting such Agent’s Message and delivery will be deemed made only when actually received by the Exchange Agent. No documents should be sent to us, the trustee or the Dealer Managers.

The Exchange Agent will establish an account with respect to each series of Existing Securities at DTC for purposes of the Exchange Offer, and any financial institution that is a nominee in DTC, including Euroclear and Clearstream, may make book-entry delivery of Existing Securities by causing DTC to transfer such Existing Securities into the Exchange Agent’s account in accordance with the ATOP procedures for transfer. DTC will then verify the acceptance, execute a book-entry delivery to the Exchange Agent’s account at DTC and send an Agent’s Message to the Exchange Agent. The Agent’s Message, and any other required documents, must, in any case, be transmitted to and received by the Exchange Agent at or prior to the Expiration Deadline in order to be eligible to receive the Total Exchange Consideration, as applicable. The confirmation of a book-entry transfer into the Exchange Agent’s account at DTC as described above is referred to herein as a “Book-Entry Confirmation.” Delivery of documents to DTC does not constitute delivery to the Exchange Agent.

The term “Agent’s Message” means a message transmitted by DTC to, and received by, the Exchange Agent and forming a part of the Book-Entry Confirmation, which states that DTC has received an express and unconditional acknowledgment from the participant in DTC described in such Agent’s Message, stating (i) the aggregate principal amount of Existing Securities that have been tendered by such participant pursuant to the Exchange Offer, (ii) that such participant has received the prospectus and agrees to be bound by the terms of the Exchange Offer as described in this prospectus and (iii) that we may enforce such agreement against such participant.

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If you are a beneficial owner that holds Existing Securities through Euroclear or Clearstream and wish to tender your Existing Securities, you are encouraged to contact Euroclear and Clearstream directly to ascertain their procedure for tendering Existing Securities.

All questions as to the validity, form, eligibility, including time of receipt, and acceptance and withdrawal of tendered Existing Securities will be determined by us in our absolute discretion, which determination will be final and binding, subject to holders of Existing Securities disputing such determination in a court of competent jurisdiction. We reserve the absolute right to reject Any and All Offer Securities determined by us not to be in proper form or not to be tendered properly or any tendered Existing Securities our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive, in our absolute discretion, any defects, irregularities or conditions of tender as to particular Existing Securities, whether or not waived in the case of other Existing Securities. Our interpretation of the terms and conditions of the Exchange Offer, including the terms and instructions in this prospectus, will be final and binding on all parties, subject to holders of Existing Securities disputing such determination in a court of competent jurisdiction. Unless waived, any defects or irregularities in connection with tenders of Existing Securities must be cured within the time we determine. Although we intend to notify holders of defects or irregularities with respect to tenders of Existing Securities, neither we, nor the Exchange Agent, the Dealer Managers or any other person will be under any duty to give that notification or shall incur any liability for failure to give that notification. Tenders of Existing Securities will not be deemed to have been made until any defects or irregularities therein have been cured or waived.

Any holder whose Existing Securities have been mutilated, lost, stolen or destroyed will be responsible for obtaining replacement securities or for arranging for indemnification with the trustee (in the case of the Existing Subordinated Notes) or the registrar (in the case of the Preference Shares). Holders may contact the Exchange Agent for assistance with these matters.

Withdrawal Rights

Validly tendered Existing Securities and any Exchange Instruction relating thereto, may be withdrawn at any time prior to the Expiration Deadline but not thereafter.

For a withdrawal of a tender to be effective, a written or facsimile transmission notice of withdrawal or a properly transmitted “Request Message” through ATOP must be received by the Exchange Agent prior to the Expiration Deadline. The withdrawal notice must:

1. specify the name of the tendering holder of Existing Securities (or, if tendered by book-entry transfer, the name of the participant in the book-entry transfer facility whose name appears on the security position listing as the owner of such Existing Securities);

2. bear a description, including the series, of the Existing Securities to be withdrawn;

3. specify, in the case of Existing Securities tendered by delivery of certificates for those Existing Securities, the certificate numbers shown on the particular certificates evidencing those Existing Securities;

4. specify the aggregate principal amount represented by those Existing Securities; and

5. specify, in the case of Existing Securities tendered by delivery of certificates for those Existing Securities, the name of the registered holder, if different from that of the tendering holder, or specify, in the case of Existing Securities tendered by book-entry transfer, the name and number of the account at DTC to be credited with the withdrawn Existing Securities.

Withdrawal of tenders of Existing Securities may not be rescinded, and any Existing Securities validly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Exchange Offer. Validly withdrawn Existing Securities may, however, be re-tendered by again following the procedures described in “—Procedures for Participating in the Exchange Offer” on or before the Expiration Deadline.

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Acknowledgements, Representations, Warranties and Undertakings

By submitting an Exchange Instruction each holder and the relevant Direct Participant (on behalf of the relevant holder and beneficial owner), represents, warrants and undertakes that:

(a) it has received, reviewed, acknowledged, accepted and agreed to the terms of this prospectus (including, without limitation, the offering restrictions set forth in this prospectus);

(b) by blocking Existing Securities in the relevant Clearing System it will be deemed to consent to the relevant Clearing System providing details concerning its identity to the Offeror, the Dealer Managers, the Exchange Agent and their respective legal advisers;

(c) upon the terms and subject to the conditions of the Exchange Offer, it offers to exchange the principal amount of Existing Securities in its account in the relevant Clearing System that is the subject of the relevant Exchange Instruction for the relevant number of New Notes;

(d) it will only submit (or arrange to have submitted on its behalf) a separate Exchange Instruction on behalf of each beneficial owner and one Exchange Instruction in respect of any one series of the Existing Securities tendered by it in the Exchange Offer;

(e) it agrees to ratify and confirm each and every act or thing that may be done or effected by LBG, any of its directors or any person nominated by LBG in the proper exercise of his or her powers and/or authority hereunder;

(f) it agrees to do all such acts and things as shall be necessary and execute any additional documents deemed by LBG to be desirable, in each case to complete the transfer of the Existing Securities to LBG, as the case may be, or its nominee in exchange for the New Notes and/or to perfect any of the authorities expressed to be given hereunder;

(g) it has observed the laws of all relevant jurisdictions; obtained all requisite governmental, exchange control or other required consents; complied with all requisite formalities; and paid any issue, transfer or other taxes or requisite payments due from it in each respect in connection with any offer or acceptance in any jurisdiction and that it has not taken or omitted to take any action in breach of the terms of the Exchange Offer, or which will or may result in the Offeror, the Dealer Managers, the Exchange Agent, or any other person acting in breach of the legal or regulatory requirements of any such jurisdiction in connection with the Exchange Offer;

(h) all authority conferred or agreed to be conferred pursuant to its representations, warranties and undertakings and all of its obligations shall be binding upon its successors, assigns, heirs, executors, trustees in bankruptcy, insolvency practitioners and legal representatives and shall not be affected by, and shall survive, its death, incapacity, bankruptcy, insolvency, or any other similar proceedings;

(i) except to the extent of the information set forth under “Taxation Considerations”, no information has been provided to it by the Offeror, the Dealer Managers or the Exchange Agent with regard to the tax consequences to holders, beneficial owners or Direct Participants arising from the exchange of Existing Securities in the Exchange Offer or the receipt of New Notes. It hereby acknowledges that it is solely liable for any taxes and similar or related payments imposed on it under the laws of any applicable jurisdiction as a result of its participation in the Exchange Offer, and agrees that it will not and does not have any right of recourse (whether by way of reimbursement, indemnity or otherwise) against the Offeror, the Dealer Managers, the Exchange Agent or any other person in respect of such taxes and payments;

(j) it is not a person to whom it is unlawful to make an invitation pursuant to the Exchange Offer under applicable laws and has (before submitting, or arranging for the submission on its behalf, as the case may be, of the Exchange Instruction in respect of the Existing Securities which it is offering for exchange) complied with all laws and regulations applicable to it for the purposes of its participation in the Exchange Offer;

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(k) it is not resident and/or located in a  member state of the EEA to which the Prospectus Regulation is applicable (“Relevant Member State”) or, if it is resident and/or located in a Relevant Member State, (a) it is a qualified investor within the meaning of Article 2(e) of the Prospectus Regulation;

(l) it is not resident and/or located in the United Kingdom or, if it is resident and/or located in the United Kingdom, it is an existing member or creditor of a Group Company or a person within Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or any other person to whom these documents and/or materials may lawfully be communicated;

(m) it is outside Belgium or, if it is located in Belgium, it is a person which is a “qualified investor” in the sense of Article 2(e) of the Prospectus Regulation, acting on its own account, which does not qualify as a consumer (consommateur/consument) within the meaning of the Belgian Code of Economic Law (Code de droit économique/Wetboek van economisch recht), as amended;

(n) it is not located or resident in France or, if it is located or resident in France, it is a qualified investor (investisseur qualifié) as defined and in accordance Article 2(e) of the Prospectus Regulation;

(o) it is not a person or entity resident and/or located in the Republic of Italy;

(p) it is not a person or entity resident and/or located in any province or territory of Canada.

(q) it has full power and authority to submit for exchange and transfer the Existing Securities hereby submitted for exchange and if such Existing Securities are accepted for exchange, such Existing Securities will be transferred to, or to the order of, LBG, with full title free from all liens, charges and encumbrances, not subject to any adverse claim and together with all rights attached thereto;

(r) it holds and will hold, until the time of settlement on the Settlement Date, the Existing Securities blocked in DTC and, in accordance with the requirements of DTC and by the deadline required by DTC, it has submitted, or has caused to be submitted, an Exchange Instruction to the DTC to authorize the blocking of the submitted Existing Securities with effect on and from the date thereof so that, at any time pending the transfer of such Existing Securities on the Settlement Date to LBG, as the case may be, or their agents on its behalf, no transfers of such Existing Securities may be effected;

(s) the terms and conditions of the Exchange Offer shall be deemed to be incorporated in, and form a part of, the Exchange Instruction which shall be read and construed accordingly and that the information given by or on behalf of such existing Holder in the Exchange Instruction is true and will be true in all respects at the time of the exchange; and

(t) it understands and agrees that the Offeror, the Dealer Managers and the Exchange Agent will rely upon the truth and accuracy of the foregoing representations, warranties and undertakings.

The receipt from a holder or from a Direct Participant on behalf of a beneficial owner of an Exchange Instruction by the relevant Clearing System will constitute instructions to debit from such holder’s or Direct Participant’s account on the Settlement Date the principal amount of Existing Securities that such holder or Direct Participant has tendered for exchange and which have been accepted, upon receipt by the relevant Clearing System of an instruction from the Exchange Agent to receive those Existing Securities for the account of LBG, as the case may be, and (where applicable) against delivery of New Notes subject to the automatic withdrawal of those instructions in the event that the Exchange Offer is terminated by the Offeror or the withdrawal of such Exchange

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Instruction (in the circumstances in which such withdrawal is permitted) in accordance with the procedure set out in this prospectus.

Responsibility for Delivery of Exchange Instructions

None of the Offeror, the Dealer Managers or the Exchange Agent, as the case may be, will be responsible for the communication of tenders and corresponding Exchange Instructions by (i) beneficial owners to the Direct Participant through which they hold Existing Securities or (ii) the Direct Participant to the relevant Clearing System.

If a beneficial owner holds its Existing Securities through a Direct Participant, such beneficial owner should contact that Direct Participant to discuss the manner in which exchange acceptances and transmission of the corresponding Exchange Instruction and, as the case may be, transfer instructions may be made on its behalf.

In the event that the Direct Participant through which a beneficial owner holds its Existing Securities is unable to submit an Exchange Instruction, such beneficial owner should telephone the Exchange Agent, as applicable, for assistance on the numbers provided in this prospectus.

Holders, Direct Participants and beneficial owners are solely responsible for arranging the timely delivery of their Exchange Instructions.

If a beneficial owner offers its Existing Securities through a Direct Participant, such beneficial owner should consult with that Direct Participant as to whether it will charge any service fees in connection with the participation in the Exchange Offer.

Amendment and Termination

Notwithstanding any other provision of the Exchange Offer, the Offeror may, subject to applicable laws, at its option, at any time before it announces whether it accepts valid tenders of Existing Securities pursuant to the Exchange Offer:

(a) extend the Expiration Deadline or re-open the Exchange Offer, as applicable (in which case all references in this prospectus to “Expiration Deadline” shall, unless the context otherwise requires, be to the latest date and time to which the Expiration Deadline has been so extended or the Exchange Offer re-opened);

(b) otherwise extend, re-open or amend the Exchange Offer in any respect (including, but not limited to, any extension, re-opening, increase, decrease or other amendment, as applicable, in relation to the Expiration Deadline and/or the Settlement Date);

(c) waive, decrease or increase the Cap Amount (in which case all references in this prospectus to the “Cap Amount” shall be to the Cap Amount as so modified);

(d) delay acceptance or, subject to applicable law, exchange of Existing Securities validly tendered for exchange in the Exchange Offer until satisfaction or waiver (if permitted) of the conditions to the Exchange Offer;

(e) terminate the Exchange Offer in respect of any one or more or all series of Existing Securities, including with respect to Exchange Instructions submitted before the time of such termination; or

(f) in respect of any series of Existing Securities, choose not to accept all valid tenders received by the Exchange Agent prior to the Expiration Deadline.

The Offeror also reserves the right at any time to waive, where permissible, any or all of the conditions of the Exchange Offer as set out in this prospectus.

The Offeror will ensure holders are notified of any such extension, re-opening, amendment or termination as soon as is reasonably practicable after the relevant decision is made (i) by the issuance of a press release to a Notifying News Service, (ii) by the delivery of notices to the relevant Clearing System for communication to Direct Participants and (iii) through RNS, and such announcements may also be found on the relevant Reuters International

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Insider Screen. Copies of all such announcements, press releases and notices can also be obtained from the Exchange Agent, the contact details for whom are on the last page of this prospectus. Any announcement of an extension of the Exchange Offer will be made prior to 9:00 a.m., New York City time, on the Business Day immediately following the previously scheduled Expiration Deadline.

Notwithstanding the irrevocability of all Exchange Instructions, on the termination of the Exchange Offer, all Exchange Instructions will be deemed to be withdrawn automatically.

Compliance with “Short Tendering” Rule

It is a violation of Rule 14e-4 under the Exchange Act (“Rule 14e-4”) for a person, directly or indirectly, to tender securities in a partial tender offer for his own account unless the person so tendering its securities (a) has a net long position equal to or greater than the aggregate principal amount of the securities being tendered and (b) will cause such securities to be delivered in accordance with the terms of the tender offer. Rule 14e-4 provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person.

A tender of Capped Offer Notes in the Capped Offer under any of the procedures described above will constitute a binding agreement between the tendering holder and the Offeror with respect to the Capped Offer upon the terms and subject to the conditions of the Capped Offer, including the tendering holder’s acceptance of the terms and conditions of the Capped Offer, as well as the tendering holder’s representation and warranty that (a) such holder has a net long position in the Capped Offer Notes being tendered pursuant to the Capped Offer within the meaning of Rule 14e-4 and (b) the tender of such Capped Offer Notes complies with Rule 14e-4.

Irregularities

All questions as to the validity, form and eligibility (including the time of receipt) of any Exchange Instruction, tenders of Existing Securities or revocation or revision thereof or delivery of Existing Securities will be determined by the Offeror in its sole discretion, which determination will be final and binding. The Offeror reserves the absolute right to reject any and all Exchange Instructions not in proper form or for which any corresponding agreement would, in its opinion, be unlawful. The Offeror also reserves the absolute right to waive any of the conditions to the Exchange Offer or defects in Exchange Instructions with regard to any Existing Securities. A waiver with respect to any conditions to the Exchange Offer or defects in Exchange Instructions with regard to one tender of Existing Securities shall not constitute a waiver with respect to any other tender of Existing Securities unless the Offeror expressly provides otherwise. None of the Offeror, the Dealer Managers or the Exchange Agent shall be under any duty to give notice to holders, Direct Participants or beneficial owners of any irregularities in Exchange Instructions; nor shall any of them incur any liability for failure to give notification of any material amendments to the terms and conditions of the Exchange Offer.

Dealer Managers and Exchange Agent

The Offeror has retained BofA Securities, Inc., Credit Suisse Securities (USA) LLC and Lloyds Securities Inc., to act as Global Coordinators and Joint Lead Dealer Managers (the “Dealer Managers”), and Lucid Issuer Services Limited to act as Exchange Agent in connection with the Exchange Offer. The services of the Dealer Managers may be provided through their affiliates in certain jurisdictions.  The Offeror has agreed to pay the Dealer Managers customary fees for their services in connection with the Exchange Offer and has also agreed to reimburse the Dealer Managers for their reasonable out-of-pocket expenses and to indemnify them against specific liabilities, including liabilities under U.S. federal securities laws.

The Dealer Managers and their affiliates have provided in the past, are currently providing and may provide in the future, other investment banking, commercial banking and financial advisory services to the Offeror and its affiliates for customary fees and expenses in the ordinary course of business.

At any given time, the Dealer Managers or affiliates of the Dealer Managers may trade the Existing Securities, the New Notes and other securities issued by the Offeror or its subsidiaries for their own accounts, or for the accounts of their customers, and accordingly may hold a long or short position in the Existing Securities, the New Notes or other securities.  The Dealer Managers are not obligated to make a market in the New Notes. The Dealer Managers may also tender into the Exchange Offer the Existing Securities they may hold or acquire, but are under no obligation to do so.

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None of the Dealer Managers or the Exchange Agent assumes any responsibility for the accuracy or completeness of the information concerning the Exchange Offer, the Offeror, any of its affiliates, the Existing Securities or the New Notes contained in this prospectus or in the documents incorporated by reference herein, or for any failure by the Offeror to disclose events that may have occurred and may affect the significance or accuracy of that information.

The Exchange Agent is an agent of the Offeror and owes no duty to any holders of Existing Securities.

Certain Matters Relating to Non-U.S. Jurisdictions

This prospectus does not constitute an offer or an invitation to participate in the Exchange Offer in any jurisdiction in or from which, or to any person to whom, it is unlawful to make the relevant offer or invitation under applicable laws. The distribution of the prospectus in certain jurisdictions may be restricted by law. Persons into whose possession the prospectus comes are required by each of the Offeror, the Dealer Managers and the Exchange Agent to inform themselves about, and to observe, any such restrictions.

United Kingdom

The communication of this prospectus and any other documents or materials relating to the Exchange Offer is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the FSMA. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is only directed at and may be communicated to (1) those persons who are existing members or creditors of the Group or other persons within Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and (2) any other persons to whom these documents and/or materials may lawfully be communicated.

Belgium

Neither this prospectus nor any other documents or materials relating to the Exchange Offer have been submitted to or will be submitted for approval or recognition to the Financial Services and Markets Authority (Autorité des services et marchés financiers / Autoriteit voor financiële diensten en markten) and, accordingly, the Exchange Offer may not be made in Belgium by way of a public offering, as defined in Articles 3 and 6 of the Belgian Law of April 1, 2007 on public takeover bids as amended or replaced from time to time. Accordingly, the Exchange Offer may not be advertised, and neither this prospectus nor any other documents or materials relating to the Exchange Offer (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium unless such person is (i) a “qualified investor” in the sense of Article 2(e) of the Prospectus Regulation, acting on its own account, which (ii) is not a consumer (consommateur/consument) within the meaning of the Belgian Code of Economic Law (Code de droit économique/Wetboek van economisch recht), as amended. This prospectus has been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Exchange Offer. Accordingly, the information contained in this prospectus may not be used for any other purpose or disclosed to any other person in Belgium.

France

This prospectus and any other documents or offering materials relating to the Exchange Offer may not be distributed in the Republic of France except to qualified investors (investisseurs qualifiés) as defined in Article 2(e) of the Prospectus Regulation. This prospectus has not been and will not be submitted for clearance to the Autorité des marchés financiers.

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Republic of Italy

The Exchange Offer and any solicitation in respect thereof are not being made, directly or indirectly, in or into the Republic of Italy and have not received clearance from the Commissione Nazionale per le Societa e la Borsa (CONSOB) pursuant to Italian securities laws and implementing regulations. Accordingly, Italian holders of the Existing Securities are hereby notified that, to the extent such holders of Existing Securities are persons or entities resident and/or located in the Republic of Italy, the Exchange Offer is not available to them and they may not accept the Exchange Offer and, as such, any tenders of Existing Securities received from such persons or entities shall be ineffective and void.  None of the Exchange Offer, the Prospectus or any other documents or materials relating to the Exchange Offer has been registered pursuant to Italian securities legislation and, accordingly, no New Notes may be offered, sold, delivered or exchanged, nor may copies of the Prospectus or of any other document relating to the New Notes and the Exchange Offer be distributed or made available in the Republic of Italy.

Canada

The Exchange Offer and any solicitation in respect thereof, and the sale of the New Notes, are not being made, directly or indirectly, in Canada or to holders of the Existing Securities who are resident and/or located in any province or territory of Canada. This prospectus has not been filed with any securities commission or similar regulatory authority in Canada in connection with the Exchange Offer, and the New Notes have not been, and will not be, qualified for sale under the securities laws of Canada or any province or territory thereof and no securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon this prospectus, any other documents or materials relating to the Exchange Offer or the merits of the New Notes and any representation to the contrary is an offence. Accordingly, Canadian holders of the Existing Securities are hereby notified that, to the extent such holders of Existing Securities are persons or entities resident and/or located in Canada, the Exchange Offer is not available to them and they may not accept the Exchange Offer. As such, any tenders of Existing Securities received from such persons or entities shall be ineffective and void. No New Notes may be offered, sold, delivered or exchanged, nor may copies of this Prospectus or of any other document relating to the New Notes and the Exchange Offer be distributed or made available in Canada. This prospectus and any other documents or offering materials relating to the Exchange Offer or the New Notes may not be distributed in Canada and this prospectus does not constitute an offer or an invitation to participate in the Exchange Offer to any person resident in Canada.

General

The Exchange Offer does not constitute an offer to buy or the solicitation of an offer to sell Existing Securities and/or New Notes in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities or other laws require the Exchange Offer to be made by a licensed broker or dealer or registered dealer and the Dealer Manager or, where the context so requires, any of its affiliates is such a licensed broker or dealer or registered dealer in that jurisdiction, the Exchange Offer shall be deemed to be made on behalf of LBG by such Dealer Manager or affiliate (as the case may be) in such jurisdiction.

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Governing Law

The terms of the Exchange Offer, including without limitation each Exchange Instruction, and any non-contractual obligations arising out of or in connection with the Exchange Offer shall be governed by, and construed in accordance with, New York law. By submitting an Exchange Instruction, a holder or Direct Participant irrevocably and unconditionally agrees for the benefit of the Offeror, the Dealer Managers and the Exchange Agent that the courts of New York are to have non-exclusive jurisdiction to settle any disputes which may arise out of or in connection with the Exchange Offer or any of the documents referred to above and that, accordingly, any suit, action or proceedings arising out of or in connection with the foregoing may be brought in such courts.

Miscellaneous

Holders who need assistance with respect to the procedure relating to tendering their Securities should contact the Exchange Agent, the contact details for whom appear on the back cover of this prospectus.

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Description of the New Notes

The following is a summary of certain terms of the New Notes. It does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Subordinated Debt Securities Indenture dated as of November 4, 2014 (the “Subordinated Indenture”), between LBG as Issuer and The Bank of New York Mellon acting through its London Branch as Trustee, as supplemented by a Ninth Supplemental Indenture which we expect to be dated as of the Settlement Date (the “Ninth Supplemental Indenture”). The Subordinated Indenture, together with the Ninth Supplemental Indenture are together referred to herein as the “Indenture”.

The New Notes will mature on December 14, 2046 (the “Maturity Date”). Interest will accrue on the New Notes (1) from (and including) the Issue Date (as defined herein) to (but excluding) December 14, 2041 (the “Reset Date”), at a rate per annum equal to (a) the yield, rounded to three decimal places when expressed as a percentage and calculated by the Dealer Managers in accordance with standard market practice, that corresponds to the bid-side price of 1.750% U.S. Treasury Notes due August 15, 2041 as of the Pricing Time as displayed on the Bloomberg Government Pricing Monitor page FIT1 (or any recognized quotation source selected by Lloyds Banking Group (“LBG”) in its sole discretion if such quotation report is not available or is manifestly erroneous) plus (b) a fixed spread of 150 basis points (the “Initial Interest Rate”), and (2) from (and including) the Reset Date to (but excluding) the Maturity Date (the “Reset Period”), at a rate per annum calculated by the Calculation Agent on the Reset Determination Date (as defined below) as being equal to the sum of the applicable U.S. Treasury Rate (as defined below) and 1.50% (the “Margin”), such sum being converted to a semi-annual rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down) (the “Reset Rate of Interest”). Interest will be payable semi-annually in arrears on June 14 and December 14 of each year (each, an “Interest Payment Date”), commencing on June 14, 2022 to (and including) maturity. Interest will be paid to holders of record of the New Notes as of 15 calendar days immediately preceding the related Interest Payment Date, as applicable, whether or not a Business Day.

Interest on the New Notes will be calculated on the basis of a 360-day year consisting of twelve 30-day months and, in the case of an incomplete month, on the basis of the actual number of days elapsed in such period. If any scheduled Interest Payment Date is not a Business Day, we will pay interest on the next Business Day, but interest on that payment will not accrue during the period from and after the scheduled Interest Payment Date.  If the scheduled maturity date or date of redemption or repayment is not a Business Day, we may pay interest and principal on the next succeeding Business Day, but interest on that payment will not accrue during the period from and after the scheduled maturity date or date of redemption or repayment.

All calculations of the Calculation Agent, in the absence of manifest error, will be conclusive for all purposes and binding on LBG, the Calculation Agent, the Trustee, the Paying Agent and on the holders of the New Notes.

All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards) unless otherwise specified herein.

The Reset Rate of Interest will in no event be higher than the maximum rate permitted by law or lower than 0% per annum.

In this description of the New Notes, the following expressions have the following meanings:

“Applicable Regulations” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy and prudential supervision (including, without limitation, as to leverage) then in effect in the United Kingdom including, without limitation to the generality of the foregoing (and for so long as the same are applicable in the United Kingdom), 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 LBG or the Group (as defined below)).

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“Business Day” means any day, other than Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in the City of New York or in the City of London.

“Capital Disqualification Event” shall be deemed to have occurred if at any time LBG determines that there is a change (which has occurred or which the Relevant Regulator considers to be sufficiently certain) in the regulatory classification of the New Notes which becomes effective after December 14, 2021 (the “Issue Date”) and that results, or would be likely to result, in the entire principal amount of the New Notes being excluded from the Tier 2 Capital of LBG and/or the Group (other than as a result of any applicable limitation on the amount of such capital).

“Group” means LBG and its subsidiaries and subsidiary undertakings from time to time.

“Relevant Regulator” means the Bank of England acting as the Prudential Regulation Authority through its Prudential Regulation Committee or such other governmental authority in the United Kingdom (or if LBG becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary supervisory authority with respect to LBG and/or the Group in such circumstances.

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

“Senior Creditors” means in respect of LBG (i) creditors of LBG whose claims are admitted to proof in the winding-up or administration of LBG and who are unsubordinated creditors of LBG and (ii) creditors of LBG whose claims are or are expressed to be subordinated to the claims of other creditors of LBG (other than those whose claims constitute, or would, but for any applicable limitation on the amount of such capital, constitute Tier 1 Capital or Tier 2 Capital of LBG, or whose claims rank or are expressed to rank pari passu with, or junior to, the claims of holders of the New Notes).

“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.

Determination of U.S. Treasury Rate 

“U.S. Treasury Rate” means, with respect to the Reset Date, the rate per annum equal to: (1) the yield on actively traded U.S. Treasury securities adjusted to constant maturity on the Reset Determination Date and appearing under the caption “Treasury constant maturities” on the Reset Determination Date in the applicable most recently published statistical release designated “H.15 Daily Update”, or any successor publication that is published by the Board of Governors of the Federal Reserve System that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity, under the caption “Treasury Constant Maturities”, for the maturity of five years; or (2) if such release (or any successor release) is not published on the Reset Determination Date, or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the Reset Date.

The U.S. Treasury Rate shall be calculated by the Calculation Agent (as defined below).

If the U.S. Treasury Rate cannot be determined, for whatever reason, as described under (1) or (2) above, “U.S. Treasury Rate” means the rate in percentage per annum as notified by the Calculation Agent to LBG equal to the yield on U.S. Treasury securities having a maturity of five years as set forth in the most recently published statistical release designated “H.15 Daily Update” under the caption “Treasury constant maturities” (or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities” for the maturity of five years) on the Reset Determination Date.

“Calculation Agent” means The Bank of New York Mellon, London Branch, or its successor appointed by LBG from time to time in accordance with the Calculation Agent Agreement between the Company and The Bank of New York Mellon, London Branch, dated as of the Issue Date.

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“Comparable Treasury Issue” means, with respect to the Reset Period, the U.S. Treasury security or securities selected by LBG with a maturity date on or about the last day of the Reset Period and that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities denominated in U.S. dollars and having a maturity of five years.

“Comparable Treasury Price” means, with respect to the Reset Date, (i) the arithmetic average of the Reference Treasury Dealer Quotations for the Reset Date received by LBG (calculated on the Reset Determination Date), after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if fewer than five such Reference Treasury Dealer Quotations are received by LBG, the arithmetic average of all such quotations, or (iii) if fewer than two such Reference Treasury Dealer Quotations are received by LBG, then such Reference Treasury Dealer Quotation as quoted in writing to LBG by a Reference Treasury Dealer.

“Reference Treasury Dealer” means each of up to five banks selected by LBG, or the affiliates of such banks, which are (i) primary U.S. Treasury securities dealers, and their respective successors (as long as such successors are also primary U.S. Treasury securities dealers), or (ii) market makers in pricing comparable corporate bond issues denominated in U.S. dollars.

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and the Reset Date, the arithmetic average, as determined by the Calculation Agent, of the bid and offered prices for the applicable Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, at 11:00 a.m. (New York City time), on the Reset Determination Date.

General

The New Notes will constitute our direct, unconditional, unsecured, unguaranteed and subordinated obligations ranking pari passu without any preference among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness of LBG. In a winding up or in the event that an administrator has been appointed in respect of us and notice has been given that it intends to declare and distribute a dividend, all amounts due in respect of or arising under (including any damages awarded for breach of any obligations under) the New Notes will be subordinated to, and subject in right of payment to the prior payment in full of, all claims of all Senior Creditors.

The rights and claims of the holders of the New Notes shall rank at least pari passu with the claims of holders of all obligations of LBG which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital of LBG and in priority to (1) the claims of holders of all obligations of LBG which constitute Tier 1 Capital of LBG, (2) the claims of holders of all undated or perpetual subordinated obligations of LBG and (3) the claims of holders of all share capital of LBG.

In addition, because we are a holding company, our rights to participate in the assets of any subsidiary if it is liquidated will be subject to the prior claims of its creditors, including in the case of bank subsidiaries, their depositors, except to the extent that we may be a creditor with recognized claims against the subsidiary.

The New Notes will constitute a separate series of subordinated debt securities issued under the indenture dated as of November 4, 2014 (the “Subordinated Indenture”) between us and The Bank of New York Mellon acting through its London Branch, as trustee (the “Trustee”), as amended by a ninth supplemental indenture to be dated as of the Issue Date (the “Ninth Supplemental Indenture” and, together with the Subordinated Indenture, the “Indenture”) between us and the Trustee.  Book-entry interests in the New Notes will be issued in minimum denominations of $200,000 and in integral multiples of $1,000 in excess thereof.  

The principal corporate trust office of the Trustee in London, United Kingdom, is designated as the paying agent.  We may at any time designate additional paying agents or rescind the designation of paying agents or approve a change in the office through which any paying agent acts.

We will issue the New Notes in fully registered form.  The New Notes will be represented by one or more global securities in the name of a nominee of The Depository Trust Company (“DTC”). You will hold beneficial interest in the New Notes through DTC and its participants.  We expect the New Notes to be delivered through the

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facilities of DTC on the Issue Date.  For a more detailed summary of the form of the New Notes and settlement and clearance arrangements, you should read “—Form of New Notes; Book-Entry System”.  Indirect holders trading their beneficial interests in the New Notes through DTC must trade in DTC’s same-day funds settlement system and pay in immediately available funds.  Secondary market trading will occur in the ordinary way following the applicable rules and clearing system and operating procedures of DTC, including those of its indirect participants, Euroclear and Clearstream, Luxembourg.  

Definitive debt securities will only be issued in limited circumstances described under “—Form of New Notes; Book-Entry System”.

Payment of principal of and interest on the New Notes, so long as the New Notes are represented by global securities, will be made in immediately available funds.  Beneficial interests in the global securities will trade in the same-day funds settlement system of DTC, and secondary market trading activity in such interests will therefore settle in same-day funds.

All payments in respect of the New Notes by us or our paying agent will be made subject to any deduction or withholding that may be imposed or levied by any jurisdiction. Except as provided under “—Payment of Additional Amounts”, no additional amounts will be paid on the New Notes with respect to any such amounts withheld.  For the avoidance of doubt, notwithstanding anything to the contrary herein, if by reason of any agreement with the U.S. Internal Revenue Service in connection with Sections 1471-1474 of the U.S. Internal Revenue Code and the U.S. Treasury regulations thereunder (“FATCA”), any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA, or any law, regulation or other official guidance enacted or issued in any jurisdiction implementing, or relating to, FATCA or any intergovernmental agreement, any of us, the Trustee, our paying agent or another withholding agent deducts and withholds from any amount payable on, or in respect of, the New Notes, the amounts so deducted or withheld shall be treated as having been paid to the holder of the New Notes, and no additional amounts will be paid on account of any such deduction or withholding. Neither we, the Trustee nor our paying agent shall have any liability in connection with our compliance with any such withholding obligation under applicable law.

Agreement with Respect to the Exercise of U.K. Bail-in Power

Notwithstanding any other agreements, arrangements, or understandings between us and any holder or beneficial owner of the New Notes by acquiring or holding the New Notes, each holder (including each beneficial owner) of the New Notes acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the New Notes; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the New Notes into shares or other securities or other obligations of LBG or another person (and the issue to or conferral on the holder of such shares, securities or obligations), including by means of amendment, modification or variation of the terms of the New Notes; and/or (iii) the amendment or alteration of the maturity of the New Notes, or amendment of the amount of interest due on the New Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; any U.K. bail-in power may be exercised by means of variation of the terms of the New Notes solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the maturity date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each holder and each beneficial owner of the New Notes further acknowledges and agrees that the rights of the holders and/or beneficial owners under the New Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to us and the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United Kingdom within the context of the U.K. resolution regime under the Banking Act as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a

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bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which any right in a contract governing such obligations may be deemed to have been exercised (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

According to the principles contained in the Banking Act, we expect that the relevant U.K. resolution authority would exercise its U.K. bail-in power in respect of the New Notes having regard to the hierarchy of creditor claims and that the holder or beneficial owner of the New Notes would be treated equally in respect of the exercise of the U.K. bail-in power with all other claims that would rank pari passu with the New Notes upon an insolvency of LBG.

No repayment of the principal amount of the New Notes or payment of interest on the New Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 us under the laws and regulations of the United Kingdom applicable to us or other members of the Group. See also “Risk Factors—Under the terms of the New Notes, you will agree to be bound by and consent to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.”

Neither a reduction or cancellation, in part or in full, of the principal amount of, or interest on, the New Notes or the conversion thereof into another security or obligation of LBG or another person, as a result of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to LBG, nor the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes will be a default or an event of default for any purpose.

LBG’s obligations to indemnify the Trustee in accordance with the Section 6.07 of the Subordinated Indenture shall survive the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes.

By its acquisition of the New Notes, each holder and each beneficial owner of the New Notes to the extent permitted by the Trust Indenture Act of 1939, as amended (the “TIA”), 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 U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes.

By its acquisition of the New Notes, each holder and each beneficial owner of the New Notes acknowledges and agrees that:

(i) the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes shall not 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 TIA, as amended;

(ii) upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, the Trustee shall not be required to take any further directions from holders of the New Notes under Section 5.12 (Control by Holders) of the Subordinated Indenture, which section authorizes holders of a majority in aggregate outstanding principal amount of the New Notes to direct certain actions relating to the New Notes. The Indenture shall impose no duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the New Notes remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the New Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the New Notes following such completion to the extent that LBG and the Trustee agree pursuant to a supplemental indenture, unless LBG and the Trustee agree that a supplemental indenture is not necessary; and  

(iii) it shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the New Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such New Notes to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the New Notes as it may be imposed, without any further action or direction on the part of such holder or beneficial owner or the Trustee.

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Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes, we shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying holders and beneficial owners of such occurrence. We shall also deliver a copy of such notice to the Trustee for information purposes only.

For a discussion of certain risk factors relating to the U.K. bail-in power, see “Risk Factors—Risks relating to the New Notes”.

Events of Default; Default; Limitation of Remedies

Events of Default

An “Event of Default” with respect to the New Notes shall result if either:

· a court of competent jurisdiction makes an order which is not successfully appealed within 30 days; or

· an effective shareholders’ resolution is validly adopted for the winding-up of LBG other than under or in connection with a scheme of amalgamation or reconstruction not involving a bankruptcy or insolvency.

The exercise of any U.K. bail-in power by the relevant U.K. resolution authority shall not constitute an Event of Default.

If an Event of Default occurs and is continuing, the Trustee or the holder or holders of at least 25% in aggregate principal amount of the New Notes may declare to be due and payable immediately in accordance with the terms of the Indenture the principal amount of, any accrued but unpaid payments. However, after such declaration but before the Trustee obtains a judgment or decree for payment of money due, the holder or holders of a majority in aggregate principal amount of the New Notes may rescind or annul the declaration of acceleration and its consequences, but only if all Events of Default have been cured or waived and all payments due, other than those due as a result of acceleration, have been made.

Defaults

In addition to Events of Default, the Indenture also separately provides for Defaults. It shall be a “Default” with respect to the New Notes if:

· any installment of interest upon any New Notes is not paid on or before the date specified for its payment in the Indenture and such failure continues for 14 days; or

· all or any part of the principal of the New Notes is not paid when it becomes due and payable, whether upon redemption or otherwise, and such failure continues for seven days.

If a Default occurs and is continuing, the Trustee may commence a proceeding in Scotland (but not elsewhere) for the winding-up of LBG.

However, a failure to make any payment on the New Notes shall not be a Default if it is withheld or refused in order to comply with any applicable fiscal or other law or regulation or order of any court of competent jurisdiction and LBG delivers an opinion of counsel to the Trustee with that conclusion, at any time before the expiry of the applicable 14 day or seven day period by independent legal advisers.

Notwithstanding any contrary provisions, nothing shall impair the right of a holder, absent the holder’s consent, to sue for any payments due but unpaid with respect to the New Notes.

By accepting the New Notes, each holder and the Trustee will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to the New Notes or the Indenture (or between obligations which LBG may have under or in respect of any New Notes and any liability owed by a holder or the Trustee to LBG) that they might otherwise have against LBG, whether before or during the winding-up or liquidation of LBG.

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Events of Default and Defaults–General

The holder or holders of not less than a majority in aggregate principal amount of the New Notes may waive any past Event of Default or Default with respect to the New Notes, except an Event of Default or Default in respect of the payment of interest, if any, or principal of (or premium, if any) or payments on any New Notes or a covenant or provision of the Indenture which cannot be modified or amended without the consent of each holder of New Notes.

Subject to the provisions of the Indenture relating to the duties of the Trustee, if an Event of Default or a Default occurs and is continuing with respect to the New Notes, the Trustee will be under no obligation to take direction from any holder or holders of the New Notes, unless they have offered reasonable indemnity to the Trustee. Subject to the Indenture provisions for the indemnification of the Trustee, the holder or holders of a majority in aggregate principal amount of the outstanding New Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the New Notes, if the direction is not in conflict with any rule of law or with the Indenture and does not expose the Trustee to undue risk and the action would not be unjustly prejudicial to the holder or holders of the New Notes of such series not taking part in that direction. The Trustee may take any other action that it deems proper which is not inconsistent with that direction.

The Indenture provides that the Trustee will, within 90 days after the occurrence of an Event of Default or a Default with respect to the New Notes, give to each holder of the New Notes notice of the Event of Default or Default known to it, unless the Event of Default or Default, has been cured or waived; provided that the Trustee shall be protected in withholding notice (except for a payment default) if it determines in good faith that withholding notice is in the interest of the holders of the New Notes.

We are required to furnish to the Trustee a statement as to our compliance with all conditions and covenants under the Indenture (i) annually, and (ii) within five Business Days of a written request from the Trustee.

Additional Issuances

We may, without the consent of the holders of the New Notes, issue additional notes having the same ranking and same interest rate, maturity date, redemption terms and other terms as the New Notes described in this prospectus except for the price to the public, issue date and first Interest Payment Date, provided however that such additional notes that form part of the same series as the New Notes must be fungible with the outstanding New Notes for U.S. federal income tax purposes. Any such additional notes, together with the New Notes offered by this prospectus, will constitute a single series of securities under the Indenture.  There is no limitation on the amount of New Notes or other debt securities that we may issue under the Indenture.

Optional Redemption

The New Notes will, subject to the satisfaction of the conditions described under “—Conditions to Redemption, Purchase, Substitution or Variation” below, be redeemable in whole, but not in part, at the option of LBG on any day falling in the period commencing on (and including) September 14, 2041 and ending on (and including) the Reset Date at 100% of their principal amount, together with any accrued and unpaid interest on the New Notes (“Accrued Interest”) to, but excluding, the date fixed for redemption.

Notice of any optional redemption of the New Notes will be given to holders not less than 15 nor more than 30 calendar days prior to the date fixed for redemption in accordance with “—Conditions to Redemption, Purchase, Substitution or Variation” below, and to the Trustee at least five (5) Business Days prior to the date notice is sent to holders, unless a shorter notice period shall be satisfactory to the Trustee.

Tax Redemption

If at any time a Tax Event has occurred, LBG may, subject to the satisfaction of the conditions described under “—Conditions to Redemption, Purchase, Substitution or Variation” below, redeem the New Notes, in whole but not in part, at any time, at 100% of their principal amount, together with any Accrued Interest to, but excluding, the date fixed for redemption.

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A “Tax Event” will be deemed to have occurred if LBG determines that:

(1) as a result of a Tax Law Change, in making any payments on the New Notes, LBG has paid or will or would on the next payment date be required to pay any Additional Amounts to any holder pursuant to “—Payment of Additional Amounts” below and/or

(2) a Tax Law Change would:

· result in LBG not being entitled to claim a deduction in respect of any payments (or its corresponding funding costs as recognized in its financial statements) in respect of the New Notes in computing its taxation liabilities or the amount or value of such deduction to LBG would be materially reduced;

· prevent the New Notes from being treated as loan relationships for United Kingdom tax purposes;

· as a result of the New Notes being in issue, result in LBG 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 of the Issue Date or any similar system or systems having like effect as may from time to time exist);

· 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 New Notes or the conversion of the New Notes into shares or other obligations of LBG (including, pursuant to the terms and conditions of the New Notes or as a result of the exercise of any regulatory powers under the Banking Act 2009); or

· result in a New Note or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes,

in each case, provided that, LBG could not avoid the foregoing in connection with the New Notes by taking measures reasonably available to it.

“Tax Law Change” means a change in, or 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 effective on or after the Issue Date, or (y) in the case of a change in law, if such change is enacted by United Kingdom Act of Parliament or implemented by statutory instrument, on or after the Issue Date.

Notice of any redemption of the New Notes due to the occurrence of a Tax Event will be given to holders not less than 30 nor more than 60 calendar days prior to the relevant redemption date in accordance with “—Conditions to Redemption, Purchase, Substitution or Variation” below, and to the Trustee at least five (5) Business Days prior to the date notice is sent to holders, unless a shorter notice period shall be satisfactory to the Trustee.

Prior to the giving of any notice of redemption, LBG must deliver to the Trustee (i) a legal opinion, in a form satisfactory to the Trustee, to the effect that a Tax Event has occurred, and (ii) an officer’s certificate confirming that (1) all the conditions necessary for redemption have occurred and that LBG could not avoid the consequences of the Tax Event by taking measures reasonably available to it, and (2) that LBG has demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by LBG on the Issue Date. The Trustee shall be entitled to accept such opinion and officer’s certificate without any further inquiry and without liability to any person, in which event such opinion and officer’s certificate shall be conclusive and binding on the Trustee and the holders of the New Notes.

Capital Disqualification Event Redemption

We may redeem the New Notes, in whole but not in part, at any time, upon not less than 30 calendar days’ nor more than 60 calendar days’ notice to the holders of the New Notes, if at any time immediately prior to the giving of

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the notice referred to above a Capital Disqualification Event has occurred. In the event of such a redemption, the redemption price of the New Notes will be 100% of their principal amount together with any accrued but unpaid interest to, but excluding, the date fixed for redemption. Any right of redemption will be subject to the conditions set forth under “—Conditions to Redemption, Purchase, Substitution or Variation” below.

Prior to the giving of any notice of redemption, LBG must deliver to the Trustee an officer’s certificate stating that (1) a Capital Disqualification Event has occurred, and (2) LBG has demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by LBG as at the Issue Date. The Trustee shall be entitled to accept such officer’s certificate without any further inquiry, in which event such officer’s certificate shall be conclusive and binding on the Trustee and the holders of the New Notes.

Substitution or Variation

If a Capital Disqualification Event has occurred and is continuing, then LBG may, subject to “—Conditions to Redemption, Purchase, Substitution or Variation” below, but without any requirement for the consent or approval of the holders of the New Notes, at any time (whether before, on or following the Reset Date) either substitute all (but not some only) of the New Notes for, or vary the terms of the New Notes so that they remain or, as appropriate, become, Compliant Securities, and the Trustee shall (subject to the below) agree to such substitution or variation. Upon the expiry of such notice, LBG shall either vary the terms of or substitute the New Notes, as the case may be.

Notice of any substitution or variation of the New Notes due to the occurrence of a Capital Disqualification Event will be given to holders not less than 30 nor more than 60 calendar days prior to the date of substitution or variation (as applicable), and to the Trustee at least five (5) Business Days prior to the date of such notice to holders, unless a shorter notice period shall be satisfactory to the Trustee. Such notice shall specify the date fixed for substitution or, as the case may be, variation of the New Notes and shall, except as otherwise provided herein, be irrevocable.

Prior to the giving of any notice of substitution or variation, LBG must deliver to the Trustee an officer’s certificate stating that a Capital Disqualification Event has occurred, setting out the details thereof, and stating that the terms of the relevant Compliant Securities comply with the definition thereof. The Trustee shall be entitled to accept such officer’s certificate without any further inquiry and without liability to any person, in which event such officer’s certificate shall be conclusive and binding on the Trustee and the holders and beneficial owners of the New Notes.

“Compliant Securities” means securities issued directly by LBG that:

(a) have terms not materially less favorable to an investor than the terms of the New Notes (as reasonably determined by LBG in consultation with an investment bank or financial adviser of international standing (which in either case is independent of LBG)) and provided that LBG has delivered an officer’s certificate to such effect (including as to such consultation) to the Trustee (upon which the Trustee shall be entitled to rely without further inquiry and without liability to any person) prior to the issue or variation of the relevant securities);

(b) subject to (a) above (1) contain terms which comply with the then current requirements of the Relevant Regulator in relation to Tier 2 capital; (2) provide for the same interest rate and Interest Payment Dates from time to time applying to the New Notes; (3) rank pari passu with the ranking of the New Notes; (4) preserve any existing rights under the Indenture to any accrued interest or other amounts which have not been either paid or canceled; and (5) preserve the obligations of LBG as to payments of principal in respect of the New Notes, including (without limitation) as to the timing and amount of such payments;

(c) are (1) listed on the New York Stock Exchange or (2) listed on such other stock exchange as is a Recognized Stock Exchange at that time as selected by LBG; and

(d) where the New Notes which have been substituted or varied had a published rating (solicited by, or assigned with the cooperation of, LBG) from a Rating Agency immediately prior to their substitution or variation, each such Rating Agency has ascribed, or announced its intention to ascribe, an equal or higher published rating to the relevant Compliant Securities.

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“Recognized Stock Exchange” means a recognized stock exchange as defined in section 1005 of the U.K. Income Tax Act 2007 as the same may be amended from time to time and any provision, statute or statutory instrument replacing the same from time to time.

Purchases

We may at any time, and from time to time, purchase New Notes in the open market or by tender or by private agreement in any manner and at any price or at differing prices. New Notes purchased or otherwise acquired by us may be (i) held, (ii) resold or (iii) at our sole discretion, surrendered to the Trustee for cancellation (in which case all New Notes so surrendered will forthwith be cancelled in accordance with applicable law and thereafter may not be re-issued or resold). Any such purchases will be subject to the conditions set forth under “—Conditions to Redemption, Purchase, Substitution or Variation” below.

Conditions to Redemption, Purchase, Substitution or Variation

Any redemption, purchase, substitution or variation of the New Notes prior to the maturity date is subject to:

(a) LBG giving notice to the Relevant Regulator and the Relevant Regulator granting permission to LBG to redeem, purchase, substitute or vary the New Notes, as the case may be (in each case to the extent, and in the manner, required by the relevant Applicable Regulations); and

(b) in respect of any redemption of the New Notes proposed to be made prior to the fifth anniversary of the date of issuance of the New Notes, if and to the extent then required under the Applicable Regulations:  (A) in the case of an optional redemption due to a Tax Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by LBG as at the Issue Date; or (B) in the case of redemption following the occurrence of a Capital Disqualification Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by LBG as at the Issue Date;

(c) if and to the extent then required under the Applicable Regulations, either: (A) LBG having replaced the New Notes with instruments qualifying as own funds of equal or higher quality on terms that are sustainable for the income capacity of LBG; or (B) (save in the case of sub-paragraph (d)(A) below) LBG demonstrating to the satisfaction of the Relevant Regulator that the own funds and eligible liabilities of LBG would, following such redemption, purchase, substitution or variation exceed its minimum applicable capital requirements (including any applicable buffer requirements) by a margin that the Relevant Regulator considers necessary at such time; and

(d) in the case of any purchase prior to the fifth anniversary of the date of issuance of the New Notes, in addition to satisfying either of the conditions specified in paragraph (c) above, either: (A) LBG having, before or at the same time as such purchase, replaced the New Notes with own funds instruments of equal or higher quality at terms that are sustainable for the income capacity of LBG, and the Relevant Regulator having permitted such action on the basis of the determination that it would be beneficial from a prudential point of view and justified by exceptional circumstances; or (B) the relevant New Notes being purchased for market-making purposes in accordance with the Applicable Regulations.

Notwithstanding the above conditions, if, at the time of any redemption, purchase, substitution or variation, the then-prevailing Applicable Regulations permit the repayment or purchase only after compliance with one or more alternative or additional preconditions to those set out above, LBG shall comply with such other and/or, as appropriate, additional pre-condition(s).

Modification and Waiver

We and the Trustee may make certain modifications and amendments to the Indenture without the consent of the holders of the New Notes. Other modifications and amendments may be made to the Indenture with the consent of the holder or holders of not less than two-thirds in aggregate outstanding principal amount of the New Notes outstanding that are affected by the modification or amendment. However, no modifications or amendments may be made without the consent of the holder of each New Note affected that would:

· change the stated maturity of the principal amount of any New Note;

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· reduce the principal amount of, or the interest rates on, any New Note;

· change any obligation to pay Additional Amounts;

· change the currency of payment;

· impair the right to institute suit for the enforcement of any payment due and payable;

· reduce the percentage in aggregate principal amount of outstanding New Notes necessary to modify or amend the Indenture or to waive compliance with certain provisions of the Indenture and any Event of Default or Default (as such terms are defined herein);

· modify the subordination provisions or change the terms of our obligations in respect of the due and punctual payment of the amounts due and payable on the New Notes in a manner adverse to the holders; or

· modify any of the above requirements.

In addition, variations in the terms and conditions of the New Notes, including modifications relating to subordination, redemption, an Event of Default or Default (as such terms are defined herein) require the permission of, or consent from, the PRA.

Payment of Additional Amounts

Amounts to be paid on New Notes will be made without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges or fees imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision thereof or authority thereof that has the power to tax (a “U.K. taxing jurisdiction”), unless such deduction or withholding is required by law. If at any time a U.K. taxing jurisdiction requires us to make such deduction or withholding, we will pay additional amounts with respect to withholding or deduction on payments of interest (but not principal or any other payments) on the New Notes (“Additional Amounts”) that are necessary in order that the net amounts paid to the holders of the New Notes, after the deduction or withholding, shall equal the amounts which would have been payable on the New Notes if the deduction or withholding had not been required. However, this will not apply to any such tax, levy, impost, duty, charge or fee which would not have been deducted or withheld but for the fact that:

· the holder or the beneficial owner of the New Notes is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, a U.K. taxing jurisdiction or otherwise having some connection with the U.K. taxing jurisdiction other than the holding or ownership of the New Notes or the collection of any payment of, or in respect of, principal of, or any interest or other payment on, any New Notes;

· except in the case of a winding-up in the United Kingdom, the New Notes are presented (where presentation is required) for payment in the United Kingdom;

· the New Notes are presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the holder would have been entitled to the Additional Amounts on presenting the New Notes for payment at the close of that 30 day period;

· the holder or the beneficial owner of the New Notes or the beneficial owner of any payment of or in respect of principal of, or any interest or other payment on, the New Notes failed to comply with a request by us or our liquidator or other authorized person addressed to the holder to provide information concerning the nationality, residence or identity of the holder or the beneficial owner or to make any declaration or other similar claim to satisfy any requirement, which is required or imposed by a statute, treaty, regulation or administrative practice of a U.K. taxing jurisdiction as a precondition to exemption from all or part of the tax, levy, impost, duty, charge or fee;

· the deduction or withholding is imposed by reason of any agreement with the U.S. Internal Revenue Service in connection with Sections 1471-1474 of the U.S. Internal Revenue Code and the U.S. Treasury regulations thereunder (“FATCA”), any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA, or any law, regulation or other official guidance enacted or issued in any jurisdiction implementing, or relating to, FATCA or any intergovernmental agreement; or

· any combination of the above items,

nor shall Additional Amounts be paid with respect to any payment on the New Notes to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any taxing jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.

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Whenever we refer in this prospectus, in any context, to the payment of interest payments on the New Notes, we mean to include the payment of Additional Amounts to the extent that, in the context, Additional Amounts are, were or would be payable.

Waiver of Right to Set-Off

Subject to applicable law, no holder or beneficial owner of the New Notes may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation or retention in respect of any amount owed to it by LBG arising under, or in respect of, or in connection with the New Notes and each holder and beneficial owner of the New Notes shall, by virtue of its holding of any New Notes, be deemed to have waived any right of set-off, counterclaim, or combination of accounts, compensation and retention with respect to such New Note or the Indenture (or between our obligations under or in respect of any New Note and any liability owed by a holder or the Trustee to us) that they might otherwise have against us, whether before or during our winding up. Notwithstanding the provisions of the foregoing sentence, if any of the said rights and claims of any holder of any New Note against LBG is discharged by set-off, compensation or retention, such holder will immediately pay an amount equal to the amount of such discharge to LBG (or, in the event of winding-up or administration of LBG, the liquidator or, as applicable, the administrator of LBG) and accordingly such discharge will be deemed not to have taken place.

Trustee; Direction of Trustee

LBG’s obligations to reimburse and indemnify the Trustee in accordance with Section 6.07 of the Subordinated Indenture (as amended by the Ninth Supplemental Indenture) shall survive the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes and the Indenture.

By accepting the New Notes, each holder (including each beneficial owner) of the New Notes acknowledges and agrees that, upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee shall not be required to take any further directions from holders of the New Notes under Section 5.12 (Control by Holders) of the Subordinated Indenture, and (b) neither the Subordinated Indenture nor the Ninth Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, any of the New Notes remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of such New Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the New Notes following such completion to the extent that LBG and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Indenture.

In addition to the foregoing, the Trustee may decline to act or accept direction from holders unless it receives written direction from holders representing a majority in aggregate principal amount of the New Notes and security and/or indemnity satisfactory to the Trustee in its sole discretion. The Indenture shall not be deemed to require the Trustee to take any action which may conflict with applicable law, or which may be unjustly prejudicial to the holders not taking part in the direction, or which could subject the Trustee to risk or for which it is not indemnified to its satisfaction in its sole discretion.

The Trustee makes no representations regarding, and shall not be liable with respect to, the information set forth in this prospectus.

Subsequent Holders’ Agreement

Holders and beneficial owners of the New Notes that acquire the New Notes in the secondary market shall be deemed to acknowledge, agree to be bound by and consent to the same provisions specified herein to the same extent as the holders and beneficial owners of the New Notes that acquire the New Notes 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 New Notes related to the U.K. bail-in power.

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Listing

We intend to apply for the listing of the New Notes on the New York Stock Exchange in accordance with its rules.  

Governing Law

The Subordinated Indenture, the Ninth Supplemental Indenture and the New Notes are governed by, and construed in accordance with, the laws of the State of New York, except for the subordination and waiver of set-off provisions relating to the New Notes, which are governed by, and construed in accordance with, the laws of Scotland.

Form of New Notes; Book-Entry System

General

The New Notes shall initially be represented by one or more global securities in registered form, without coupons attached, and will be deposited with DTC, and will be registered in the name of such depositary or its nominee. Unless and until the New Notes are exchanged in whole or in part for other securities under the terms of the Indenture or the global securities are exchanged for definitive securities, the global securities may not be transferred except as a whole by DTC to a nominee or a successor of DTC.

Beneficial interests in the global debt securities will be shown on, and transfers thereof will be effected only through, the book-entry records maintained by DTC and its direct and indirect participants, including, as applicable, Euroclear and Clearstream, Luxembourg.

The laws of some states may require that certain investors in securities take physical delivery of their securities in definitive form. Those laws may impair the ability of investors to own interests in book-entry securities.

So long as DTC, or its nominee, is the holder of a global debt security, DTC or its nominee will be considered the sole holder of such global debt security for all purposes under the Indenture. Except as described below under “—Issuance of Definitive Securities”, no participant, indirect participant or other person will be entitled to have New Notes registered in its name, receive or be entitled to receive physical delivery of New Notes in definitive form or be considered the owner or holder of the New Notes under the Indenture. Each person having an ownership or other interest in the New Notes must rely on the procedures of DTC, and, if a person is not a participant in DTC, must rely on the procedures of the participant or other securities intermediary through which that person owns its interest to exercise any rights and obligations of a holder under the Indenture or the New Notes.

Payments on Global Securities

Payments of any amounts in respect of the New Notes will be made by the Paying Agent upon receipt to DTC. Payments will be made to beneficial owners of the New Notes in accordance with the rules and procedures of DTC or its direct and indirect participants, as applicable. Neither we nor the Trustee nor any of our agents will have any responsibility or liability for any aspect of the records of any securities intermediary in the chain of intermediaries between DTC and any beneficial owner of an interest in the New Notes, or the failure of DTC or any intermediary to pass through to any beneficial owner any payments that we make to DTC.

The Clearing Systems

DTC has advised us as follows: DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement

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of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly. DTC has a Standard & Poor’s rating of AA+. DTC rules applicable to its participants are on file with the SEC. More information about DTC can be found at www.dtcc.com.

Issuance of Definitive Securities

So long as DTC holds global securities in respect of the New Notes, such global securities will not be exchangeable for definitive securities unless:

· DTC notifies the Trustee that it is unwilling or unable to continue to act as depositary for the New Notes or DTC ceases to be a clearing agency registered under the Exchange Act;

· we are wound up and we fail to make a payment on the New Notes when due; or

· at any time we determine at our option and in our sole discretion, that the global securities of the New Notes should be exchanged for definitive securities in registered form.

Each person having an ownership or other interest in the New Notes must rely exclusively on the rules or procedures of DTC and any agreement with any direct or indirect participant of DTC or any other securities intermediary through which that person holds its interest, to receive or direct the delivery of possession of any definitive security. The Indenture permits us to determine at any time and in our sole discretion that the New Notes shall no longer be represented by global securities. DTC has advised us that under its current practices, it would notify its participants of our request, but will only withdraw beneficial interests from the global securities at the request of each DTC participant. We would issue definitive certificates in exchange for any such beneficial interests withdrawn.

Definitive New Notes will be issued in registered form only. To the extent permitted by law, we, the Trustee and any paying agent shall be entitled to treat the person in whose name any definitive security is registered as its absolute owner.

Payments in respect of definitive securities will be made to the person in whose name the definitive securities are registered as it appears in the register. Payments will be made in respect of the New Notes by check drawn on a bank in New York or, if the holder requests, by transfer to the holder’s account in New York. Definitive securities should be presented to the paying agent for redemption.

If we issue definitive New Notes in exchange for a particular global security, DTC, as holder of that global security, will surrender it against receipt of the definitive securities, cancel the book-entry securities, and distribute the definitive securities to the persons and in the amounts that DTC specifies pursuant to its internal procedures.

If definitive securities are issued in the limited circumstances described above, those securities (i) will be transferable only on the register for the New Notes, and (ii) may be transferred in whole or in part in denominations of any whole number of securities upon surrender of the definitive securities certificates together with the form of transfer endorsed on it, duly completed and executed at the specified office of a paying agent. If only part of a securities certificate is transferred, a new securities certificate representing the balance not transferred will be issued to the transferor within three Business Days after the paying agent receives the certificate. The new certificate representing the balance will be delivered to the transferor by uninsured post at the risk of the transferor, to the address of the transferor appearing in the subordinated debt security register. The new certificate representing the securities that were transferred will be sent to the transferee within three Business Days after the paying agent receives the certificate transferred, by uninsured post at the risk of the holder entitled to the securities represented by the certificate, to the address specified in the form of transfer.

Notices

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All notices to holders of registered New Notes shall be validly given if in writing and mailed, first-class postage prepaid, to them at their respective addresses in the subordinated debt security register maintained by the Subordinated Debt Security Registrar.

Consent to Service of Process

Under the Indenture, we irrevocably designated our Chief Legal Officer, currently at 1095 Avenue of the Americas, 34th Floor, New York, NY 10036, as the authorized agent for service of process in any legal action or proceeding arising out of or relating to the Indenture or any New Note brought in any federal or state court in the Borough of Manhattan, in The City of New York, New York and we and irrevocably submitted to the jurisdiction of those courts.

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Comparison of Certain Material Terms of the Preference Shares and the New Notes

The following is a summary comparison of the material terms of the Preference Shares and the New Notes. This summary does not purport to be complete and is subject to, and qualified by reference to, the “Description of the New Notes” section above, all of the definitions and provisions of the Indenture.

	Preference Shares	New Notes
Issuer	Lloyds Banking Group plc (formerly Lloyds TSB Group plc)	Lloyds Banking Group plc
Securities	Series 1 Preference Shares: American Depositary Shares representing 6.413% Non-Cumulative Fixed to Floating Rate Preference Shares; and Series 2 Preference Shares: American Depositary Shares representing 6.657% Non-Cumulative Fixed to Floating Rate Preference Shares	Fixed Rate Reset Subordinated Debt Securities
Maturity Date	The Preference Shares are perpetual securities and have no fixed maturity or fixed redemption date.	December 14, 2046
Dividend or Interest Payments	Series 1 Preference Shares: from (and including) the date of issuance to (but excluding) October 1, 2035 (the “Series 1 First Call Date”), the dividends on the Series 1 Preference Shares will accrue at a rate of 6.413% per annum. From (and including) Series 1 First Call Date, the Series 1 Preference Shares will accrue dividends at the rate, reset quarterly, of 1.495% per annum above the London interbank offered rate for three-month U.S. dollar deposits. Series 2 Preference Shares: from (and including) the date of issuance to (but excluding) May 21, 2037 (the “Series 2 First Call Date”), the dividends on the Series 2 Preference Shares will accrue at a rate of 6.657% per annum. From (and including) Series 2 First Call Date, the Series 2 Preference Shares will accrue dividends at the rate, reset quarterly, of 1.27% per annum above the London interbank offered rate for three-month U.S. dollar deposits.	Interest will accrue on the New Notes from (and including) the Issue Date to (but excluding) the Reset Date, at a rate per annum equal to (a) the yield, rounded to three decimal places when expressed as a percentage and calculated by the Dealer Managers in accordance with standard market practice, that corresponds to the bid-side price of 1.750% U.S. Treasury Notes due August 15, 2041 as of the Pricing Time as displayed on the Bloomberg Government Pricing Monitor page FIT1 (or any recognized quotation source selected by LBG in its sole discretion if such quotation report is not available or is manifestly erroneous) plus (b) a fixed spread of 150 basis points, and (2) from (and including) the Reset Date to (but excluding) the Maturity Date, at a rate per annum calculated by the Calculation Agent on the Reset Determination Date as being equal to the sum of the applicable U.S. Treasury Rate and 1.50%, such sum being converted to a semi-annual rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down).

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Preference Shares New Notes

Reset Dates for Dividend or Interest Rate	Series 1 Preference Shares: Series 1 First Call Date and thereafter each dividend payment date. Series 2 Preference Shares: Series 2 First Call Date and thereafter each dividend payment date.	December 14, 2041
Dividend/Interest Payment Dates	Series 1 Preference Shares: in respect of the period from the issue date to the Series 1 First Call Date, payable April 1 and October 1 in each year, and thereafter January 1, April 1, July 1 and October 1 in each year. Series 2 Preference Shares: in respect of the period from the issue date to the Series 2 First Call Date, payable May 21 and November 21 in each year, and thereafter February 21, May 21, August 21 and November 21 in each year.	June 14 and December 14 in each year from (and including) June 14, 2022 to (and including) the Maturity Date.
Issuer’s Discretion With Respect to Dividend or Interest Payments; Agreement to Interest/ Dividend Cancellation (if any)	Dividends are payable at the discretion of the Board of Directors or the Committee. Dividends will be paid only to the extent that payment of the same can be made out of profits of LBG available for distribution and permitted by law to be distributed as at each dividend payment date. The Board of Directors or the Committee may in its discretion decide that a dividend will not be declared at all or will be declared only in part even when distributable profits are available for distribution. If the Board of Directors or the Committee decides not to declare a dividend payable on a dividend payment date or declares that it shall be payable only in part, then the rights of holders of the Preference Shares to receive the dividend in respect of the preceding dividend period will be lost either entirely or as to the part not declared, as applicable, and LBG will have no obligation in respect of the amount of dividend not declared either to pay the dividend accrued for such period or to pay interest thereon, whether or not dividends on the Preference Shares are declared for any future dividend period.	Not applicable.

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Preference Shares New Notes

Restrictions on Dividend or Interest Payments If LBG has not declared or paid in full a dividend stated to be payable on the Preference Shares as a result only of the exercise of the discretion of the Board of Directors or the Committee, then LBG shall not during the Stopper Period: (a) redeem, purchase, cancel, reduce or otherwise acquire in any other way any Junior Share Capital or the 2004 Preference Shares, or (b) declare, or pay or set aside any sum for payment of any distribution or dividend or make any other payment on, and will procure that no distribution, dividend or other payment is made, on any Junior Share Capital or the 2004 Preference Shares.   “Board of Directors” means the board of directors of LBG   “Committee” means a duly authorized committee of the Board of Directors.   “Junior Share Capital” means the ordinary shares, or any other shares ranking, or expressed to rank junior to the Preference Shares, (either issued directly by LBG or by a subsidiary undertaking and the terms of which securities benefit from a guarantee or support agreement ranking or expressed to rank junior to the Preference Shares).   “Parity Securities” means the most senior ranking class or classes of non-cumulative preference shares in the capital of LBG from time to time and any other obligations ranking or expressed to rank pari passu with the Preference Shares other than the 2004 Preference Shares.   “Stopper Period” means with respect to any Dividend Payment Date or the equivalent term in respect of any Parity Security, one calendar year from and including the earlier of the date (i) on which a full Dividend is not paid on the Preference Shares or (ii) on which a full scheduled dividend or distribution on Not applicable.

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Preference Shares New Notes

	any Parity Security has not been paid. “2004 Preference Shares” means the 400 6% Non-Cumulative Redeemable Preference Shares of £0.25 par value each issued in 2004.
Ranking/Subordination	Holders of the Preference Shares will rank as regards participation in the profits of LBG in priority to the payment of any dividend to the holders of any class of shares in the capital of LBG ranking junior to the Preference Shares and in such regard pari passu with the holders of any class of shares in issue or which may be issued which are expressed to rank equally with the Preference Shares in the capital of LBG and other Parity Securities.	The New Notes will constitute our direct, unconditional, unsecured, unguaranteed and subordinated obligations ranking pari passu without any preference among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness of LBG. In a winding up or in the event that an administrator has been appointed in respect of us and notice has been given that it intends to declare and distribute a dividend, all amounts due in respect of or arising under (including any damages awarded for breach of any obligations under) the New Notes will be subordinated to, and subject in right of payment to the prior payment in full of, all claims of all Senior Creditors. The rights and claims of the holders of the New Notes shall rank at least pari passu with the claims of holders of all obligations of LBG which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital of LBG and in priority to (1) the claims of holders of all obligations of LBG which constitute Tier 1 Capital of LBG, (2) the claims of holders of all undated or perpetual subordinated obligations of LBG and (3) the claims of holders of all share capital of LBG. In addition, because we are a holding company, our rights to

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		participate in the assets of any subsidiary if it is liquidated will be subject to the prior claims of its creditors, including in the case of bank subsidiaries, their depositors, except to the extent that we may be a creditor with recognized claims against the subsidiary.
No Set-off	Not applicable	Subject to applicable law, no holder or beneficial owner of the New Notes may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation or retention in respect of any amount owed to it by LBG arising under, or in respect of, or in connection with the New Notes and each holder and beneficial owner of the New Notes shall, by virtue of its holding of any New Notes, be deemed to have waived any right of set-off, counterclaim, or combination of accounts, compensation and retention with respect to such New Note or the Indenture (or between our obligations under or in respect of any New Note and any liability owed by a holder or the Trustee to us) that they might otherwise have against us, whether before or during our winding up. Notwithstanding the provisions of the foregoing sentence, if any of the said rights and claims of any holder of any New Note against LBG is discharged by set-off, compensation or retention, such holder will immediately pay an amount equal to the amount of such discharge to LBG (or, in the event of winding-up or administration of LBG, the liquidator or, as applicable, the administrator of LBG) and accordingly such discharge will be deemed not to have taken place.

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Rights upon Liquidation	On a return of capital or distribution of assets, whether or not on a winding-up (but other than a redemption or purchase by LBG of any of its share capital permitted by its articles of association and under applicable law), holders of Preference Shares will rank in the application of the assets of LBG available to shareholders; (1) equally in all respects with holders of the most senior class of preference shares and any other class of shares of LBG in issue or which may be issued by LBG which are expressed to rank equally with the Preference Shares and (2) in priority to the holders of any other share capital of LBG (including the Junior Share Capital). Subject to such ranking, in such event holders of the Preference Shares will be entitled to receive out of the surplus assets of LBG remaining after payment of LBG’s prior-ranking liabilities a sum equal to the aggregate of; (1) U.S.$1,000 per Preference Share, (2) the amount of any dividend which is due for payment on the Preference Shares on or after the date of commencement of the winding-up or other return of capital but which is payable in respect of a period ending on or before such date and (3) the proportion of any dividend (whether or not declared or earned) that would otherwise be payable and is not otherwise paid in respect of any period that begins before, but ends after, the date of commencement of the winding-up or other return of capital and which is attributable to the part of the period that ends on such date.	Not applicable.
Optional Redemption	The Preference Shares are perpetual securities and have no maturity date. However, all or some only of the Preference Shares are redeemable, at the option of LBG, subject to confirmation from the FSA that it has no objection to the redemption (if required), on the Series 1 First Call Date for the Series 1 Preference Shares or First Call Date for the Series 2 Preference Shares or any dividend payment date thereafter at the redemption price per Preference Share.	The New Notes will, subject to the satisfaction of the conditions described under “Description of the New Notes—Conditions to Redemption, Purchase, Substitution or Variation”, be redeemable in whole, but not in part, at the option of LBG on any day falling in the period commencing on (and including) September 14, 2041 and ending on (and including) the Reset Date at 100% of their principal amount,

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	“FSA” means the Financial Services Authority or such other governmental authority in the United Kingdom (or if LBG becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary bank supervisory authority.	together with any Accrued Interest to, but excluding, the date fixed for redemption. Notice of any optional redemption of the New Notes will be given to holders not less than 15 nor more than 30 calendar days prior to the date fixed for redemption in accordance with “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, and to the Trustee at least five (5) Business Days prior to the date notice is sent to holders, unless a shorter notice period shall be satisfactory to the Trustee.
Capital Disqualification Event Redemption	“Capital Disqualification Event” shall be deemed to have occurred if (a) the Preference Shares would cease to be eligible to qualify (save where such non-qualification is only as a result of any applicable limitation on the amount of such capital) as regulatory capital for LBG under Applicable Regulatory Capital Requirements and (b) the FSA has confirmed to LBG that the Preference Shares would cease to be eligible to qualify as regulatory capital for LBG. Notwithstanding the Board of Directors’ discretion to forego dividends as described above, dividends on the Preference Shares will be mandatorily payable on each dividend payment date upon which (i) a Capital Disqualification Event has occurred and (ii) LBG is in compliance with its Applicable Regulatory Capital Requirements, subject always to the existence of sufficient distributable profits. “Applicable Regulatory Capital Requirements” means any requirements contained in Capital Regulations for the maintenance of capital from time to time applicable to LBG on a solo and/or consolidated basis, including transitional rules and waivers.	We may redeem the New Notes, in whole but not in part, at any time, upon not less than 30 calendar days’ nor more than 60 calendar days’ notice to the holders of the New Notes, if at any time immediately prior to the giving of the notice referred to above a Capital Disqualification Event (as defined under “Description of the New Notes”) has occurred. In the event of such a redemption, the redemption price of the New Notes will be 100% of their principal amount together with any accrued but unpaid interest to, but excluding, the date fixed for redemption. Any right of redemption will be subject to the conditions set forth under “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”. Prior to the giving of any notice of redemption, LBG must deliver to the Trustee an officer’s certificate stating that (1) a Capital Disqualification Event has occurred, and (2) LBG has demonstrated to the satisfaction of the Relevant Regulator that the relevant

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		change was not reasonably foreseeable by LBG as at the Issue Date. The Trustee shall be entitled to accept such officer’s certificate without any further inquiry, in which event such officer’s certificate shall be conclusive and binding on the Trustee and the holders of the New Notes.
Tax Redemption	Not applicable	If at any time a Tax Event (as defined under “Description of the New Notes”) has occurred, LBG may, subject to the satisfaction of the conditions described under “Description of the New Notes—Conditions to Redemption, Purchase, Substitution or Variation”, redeem the New Notes, in whole but not in part, at any time, at 100% of their principal amount, together with any Accrued Interest to, but excluding, the date fixed for redemption. A “Tax Event” will be deemed to have occurred if LBG determines that: (1) as a result of a Tax Law Change, in making any payments on the New Notes, LBG has paid or will or would on the next payment date be required to pay any Additional Amounts to any holder pursuant to “Description of the New Notes —Payment of Additional Amounts” and/or (2) a Tax Law Change would: ·    result in LBG not being entitled to claim a deduction in respect of any payments (or its corresponding funding costs as recognized in its financial statements) in respect of the New Notes in computing its taxation liabilities or the amount or value of such deduction to LBG would be materially reduced;

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·    prevent the New Notes from being treated as loan relationships for United Kingdom tax purposes;

·    as a result of the New Notes being in issue, result in LBG 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 of the Issue Date or any similar system or systems having like effect as may from time to time exist);

·    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 New Notes or the conversion of the New Notes into shares or other obligations of LBG (including, pursuant to the terms and conditions of the New Notes or as a result of the exercise of any regulatory powers under the Banking Act 2009); or

·    result in a New Note or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes, in each case, provided that, LBG could not avoid the foregoing in connection with the New Notes by taking measures reasonably available to it.

“Tax Law Change” means a change in, or amendment to, the laws or regulations of the

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		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 effective on or after the Issue Date, or (y) in the case of a change in law, if such change is enacted by United Kingdom Act of Parliament or implemented by statutory instrument, on or after the Issue Date. Notice of any redemption of the New Notes due to the occurrence of a Tax Event will be given to holders not less than 30 nor more than 60 calendar days prior to the relevant redemption date in accordance with “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, and to the Trustee at least five (5) Business Days prior to the date notice is sent to holders, unless a shorter notice period shall be satisfactory to the Trustee.
Substitution or Variation	Subject to the articles of association of LBG, the provisions of the Companies Act and all other laws and regulations applying to LBG and to confirmation from the FSA that it has no objection, LBG may substitute the Preference Shares in whole, but not in part, with Qualifying Non-Innovative Tier 1 Securities, at any time without any requirement for consent or approval of	If a Capital Disqualification Event has occurred and is continuing, then LBG may, subject to “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, but without any requirement for the consent or approval of the holders of the New Notes, at

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the holders of the Preference Shares. Upon such substitution, the Preference Shares shall be exchanged for, or redeemed by, the relevant Qualifying Non-Innovative Tier 1 Securities or the proceeds of redemption of the Preference Shares shall be mandatorily applied to the subscription or purchase of the Qualifying Non-Innovative Tier 1 Securities so issued.   “Qualifying Non-Innovative Tier 1 Securities” means securities whether debt, equity or otherwise, issued directly or indirectly by LBG that:   (a) have terms not materially less favourable to a holder of Preference Shares, as reasonably determined by an independent investment bank appointed by LBG, than the terms of the Preference Shares, provided that they shall (1) include a ranking at least equal to that of the Preference Shares, (2) have the same dividend or distribution rate or rate of return and Dividend Payment Dates from time to time applying to the Preference Shares, (3) be issued in an amount at least equal to the total number of Preference Shares multiplied by £1, (4) comply with the then current requirements of the FSA in relation to Non-Innovative Tier 1 Capital, and (5) preserve any existing rights under the Preference Shares to any accrued dividend which has not been paid in respect of the period from (and including) the Dividend Payment Date last preceding the Substitution Date to (but excluding) the Substitution Date; and   (b) are listed on the London Stock Exchange, the Luxembourg Stock Exchange or such other stock exchange as is a recognised stock exchange.   If applicable law permits, the rights, preferences and privileges attached to the Preference Shares may be varied or abrogated only with the written consent of the holders of 75 per cent. in nominal value of the outstanding Preference Shares or with the sanction of an extraordinary resolution passed at a separate class meeting of the holders of any time (whether before, on or following the Reset Date) either substitute all (but not some only) of the New Notes for, or vary the terms of the New Notes so that they remain or, as appropriate, become, Compliant Securities (as defined under “Description of the New Notes—Substitution or Variation”), and the Trustee shall (subject to “Description of the New Notes—Substitution or Variation”) agree to such substitution or variation. Upon the expiry of such notice, LBG shall either vary the terms of or substitute the New Notes, as the case may be.

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	the outstanding Preference Shares. An extraordinary resolution will be adopted if passed by a majority of 75 per cent. of those holders voting in person or by proxy at the meeting. The quorum required for any such class meeting will be two persons at least holding or representing by proxy one-third in nominal amount of the outstanding Preference Shares affected, except at any adjourned meeting where this quorum requirement is not met, where any two holders present in person or by proxy will constitute a quorum. The written consent of the holders of 75 per cent. in nominal value of the outstanding Preference Shares or the sanction of an extraordinary resolution passed at a separate class meeting of holders of the outstanding Preference Shares will be required if the Board of Directors proposes to authorise, create or increase the amount of any shares of any class or any security convertible into shares of any class ranking as regards rights to participate in LBG’s profits or assets, in priority to the Preference Shares. If LBG has paid the most recent dividend payable on the Preference Shares in full, the rights attached to the Preference Shares will not be deemed to be varied by the creation or issue of any further non-cumulative preference shares or of any other further shares ranking equally as regards participation in LBG’s profits or assets with, or junior to, the Preference Shares, whether carrying identical rights or different rights in any respect, including as to dividend, premium on a return of capital, redemption or conversion whether denominated in U.S. dollars or any other currency.
Voting Rights	Holders of Preference Shares will only be entitled to receive notice of and to attend any general meeting of shareholders of LBG and to speak or vote upon any resolution proposed at such meeting if a resolution is proposed either varying or abrogating any of the rights and restrictions attached to the Preference Shares or to wind-up, or in	Not applicable.

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	relation to the winding-up of, LBG (and then in each case only to speak and vote upon any such resolution) subject to the terms and conditions (including where dividends have not been paid on the previous dividend payment date).
Conditions to Redemption, Purchase, Substitution or Variation	Redemption is subject to confirmation from the FSA that it has no objection to the redemption (if required). Substitution is subject to the articles of association of LBG, the provisions of the Companies Act and all other laws and regulations applying to LBG and to confirmation from the FSA that it has no objection.	Any redemption, purchase, substitution or variation of the New Notes prior to the maturity date is subject to: (a) LBG giving notice to the Relevant Regulator and the Relevant Regulator granting permission to LBG to redeem, purchase, substitute or vary the New Notes, as the case may be (in each case to the extent, and in the manner, required by the relevant Applicable Regulations); and (b) in respect of any redemption of the New Notes proposed to be made prior to the fifth anniversary of the date of issuance of the New Notes, if and to the extent then required under the Applicable Regulations:  (A) in the case of an optional redemption due to a Tax Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by LBG as at the Issue Date; or (B) in the case of redemption following the occurrence of a Capital Disqualification Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by LBG as at the Issue Date; (c) if and to the extent then required under the Applicable Regulations, either: (A) LBG having replaced the New Notes with instruments qualifying as own funds of equal or higher quality on terms that are

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sustainable for the income capacity of LBG; or (B) (save in the case of sub-paragraph (d)(A) below) LBG demonstrating to the satisfaction of the Relevant Regulator that the own funds and eligible liabilities of LBG would, following such redemption, purchase, substitution or variation exceed its minimum applicable capital requirements (including any applicable buffer requirements) by a margin that the Relevant Regulator considers necessary at such time; and

(d) in the case of any purchase prior to the fifth anniversary of the date of issuance of the New Notes, in addition to satisfying either of the conditions specified in paragraph (c) above, either: (A) LBG having, before or at the same time as such purchase, replaced the New Notes with own funds instruments of equal or higher quality at terms that are sustainable for the income capacity of LBG, and the Relevant Regulator having permitted such action on the basis of the determination that it would be beneficial from a prudential point of view and justified by exceptional circumstances; or (B) the relevant New Notes being purchased for market-making purposes in accordance with the Applicable Regulations.

Notwithstanding the above conditions, if, at the time of any redemption, purchase, substitution or variation, the then-prevailing Applicable Regulations permit the repayment or purchase only after compliance with one or more alternative or additional preconditions to those set out above, LBG shall comply with such other and/or, as appropriate, additional pre-condition(s).

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Agreement with Respect to the Exercise of U.K. Bail-in Power No contractual provision; however, the Preference Shares could be subject to the exercise of the U.K. Bail-in Power by the relevant U.K. resolution authority. Notwithstanding any other agreements, arrangements, or understandings between us and any holder or beneficial owner of the New Notes by acquiring or holding the New Notes, each holder (including each beneficial owner) of the New Notes acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined under “Description of the New Notes—Agreement with Respect to the Exercise of the U.K. Bail-in Power”) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the New Notes; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the New Notes into shares or other securities or other obligations of LBG or another person (and the issue to or conferral on the holder of such shares, securities or obligations), including by means of amendment, modification or variation of the terms of the New Notes; and/or (iii) the amendment or alteration of the maturity of the New Notes, or amendment of the amount of interest due on the New Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; any U.K. bail-in power may be exercised by means of variation of the terms of the New Notes solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and

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interest that have become due and payable (including principal that has become due and payable at the maturity date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each holder and each beneficial owner of the New Notes further acknowledges and agrees that the rights of the holders and/or beneficial owners under the New Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to us and the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United Kingdom within the context of the U.K. resolution regime under the Banking Act as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant

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to which any right in a contract governing such obligations may be deemed to have been exercised (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

According to the principles contained in the Banking Act, we expect that the relevant U.K. resolution authority would exercise its U.K. bail-in power in respect of the New Notes having regard to the hierarchy of creditor claims and that the holder or beneficial owner of the New Notes would be treated equally in respect of the exercise of the U.K. bail-in power with all other claims that would rank pari passu with the New Notes upon an insolvency of LBG.

No repayment of the principal amount of the New Notes or payment of interest on the New Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 us under the laws and regulations of the United Kingdom applicable to us or other members of the Group. See also “Risk Factors—Under the terms of the New Notes, you will agree to be bound by and consent to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.”

Neither a reduction or cancellation, in part or in full, of the principal amount of, or interest on, the New Notes or the conversion thereof into another security or obligation of

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		LBG or another person, as a result of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to LBG, nor the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes will be a default or an event of default for any purpose. LBG’s obligations to indemnify the Trustee in accordance with the Section 6.07 of the Subordinated Indenture shall survive the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes.
Repayment of Principal and Payment of Interest After Exercise of U.K. Bail-In Power	No contractual provision.	No repayment of the principal amount of the New Notes or payment of interest on the New Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 us under the laws and regulations of the United Kingdom applicable to us or other members of the Group. See also “Risk Factors—Under the terms of the New Notes, you will agree to be bound by and consent to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.”
Non-payment of Dividends / Interest	If the Board of Directors or the Committee decides not to declare a dividend payable on a dividend payment date or declares that it shall be payable only in part, then the rights of holders of the Preference Shares to receive the dividend in respect of the preceding dividend period will be lost either entirely or as to the part not declared, as applicable, and LBG will have no obligation in respect of the	See “Events of Default; Default; Limitation of Remedies” below

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	amount of dividend not declared either to pay the dividend accrued for such period or to pay interest thereon, whether or not dividends on the Preference Shares are declared for any future dividend period.
Events of Default; Default; Limitation of Remedies	Not applicable.	An “Event of Default” with respect to the New Notes shall result if either: ·    a court of competent jurisdiction makes an order which is not successfully appealed within 30 days; or ·    an effective shareholders’ resolution is validly adopted for the winding-up of LBG other than under or in connection with a scheme of amalgamation or reconstruction not involving a bankruptcy or insolvency. The exercise of any U.K. bail-in power by the relevant U.K. resolution authority shall not constitute an Event of Default. If an Event of Default occurs and is continuing, the Trustee or the holder or holders of at least 25% in aggregate principal amount of the New Notes may declare to be due and payable immediately in accordance with the terms of the Indenture the principal amount of, any accrued but unpaid payments. However, after such declaration but before the Trustee obtains a judgment or decree for payment of money due, the holder or holders of a majority in aggregate principal amount of the New Notes may rescind or annul the declaration of acceleration and its consequences, but only if all Events of Default have been cured or waived and all payments due, other than those due as a result of acceleration, have been made.

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In addition to Events of Default, the Indenture also separately provides for Defaults. It shall be a “Default” with respect to the New Notes if:

·    any installment of interest upon any New Notes is not paid on or before the date specified for its payment in the Indenture and such failure continues for 14 days; or

·    all or any part of the principal of the New Notes is not paid when it becomes due and payable, whether upon redemption or otherwise, and such failure continues for seven days.

If a Default occurs and is continuing, the Trustee may commence a proceeding in Scotland (but not elsewhere) for the winding-up of LBG.

However, a failure to make any payment on the New Notes shall not be a Default if it is withheld or refused in order to comply with any applicable fiscal or other law or regulation or order of any court of competent jurisdiction and LBG delivers an opinion of counsel to the Trustee with that conclusion, at any time before the expiry of the applicable 14 day or seven day period by independent legal advisers.

Notwithstanding any contrary provisions, nothing shall impair the right of a holder, absent the holder’s consent, to sue for any payments due but unpaid with respect to the New Notes.

By accepting the New Notes, each holder and the Trustee will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to the New Notes or the

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Indenture (or between obligations which LBG may have under or in respect of any New Notes and any liability owed by a holder or the Trustee to LBG) that they might otherwise have against LBG, whether before or during the winding-up or liquidation of LBG.

The holder or holders of not less than a majority in aggregate principal amount of the New Notes may waive any past Event of Default or Default with respect to the New Notes, except an Event of Default or Default in respect of the payment of interest, if any, or principal of (or premium, if any) or payments on any New Notes or a covenant or provision of the Indenture which cannot be modified or amended without the consent of each holder of New Notes.

Subject to the provisions of the Indenture relating to the duties of the Trustee, if an Event of Default or a Default occurs and is continuing with respect to the New Notes, the Trustee will be under no obligation to take direction from any holder or holders of the New Notes, unless they have offered reasonable indemnity to the Trustee. Subject to the Indenture provisions for the indemnification of the Trustee, the holder or holders of a majority in aggregate principal amount of the outstanding New Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the New Notes, if the direction is not in conflict with any rule of law or with the

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		Indenture and does not expose the Trustee to undue risk and the action would not be unjustly prejudicial to the holder or holders of the New Notes of such series not taking part in that direction. The Trustee may take any other action that it deems proper which is not inconsistent with that direction. The Indenture provides that the Trustee will, within 90 days after the occurrence of an Event of Default or a Default with respect to the New Notes, give to each holder of the New Notes notice of the Event of Default or Default known to it, unless the Event of Default or Default, has been cured or waived; provided that the Trustee shall be protected in withholding notice (except for a payment default) if it determines in good faith that withholding notice is in the interest of the holders of the New Notes. We are required to furnish to the Trustee a statement as to our compliance with all conditions and covenants under the Indenture (i) annually, and (ii) within five Business Days of a written request from the Trustee.
Denomination	The Preference Shares have a liquidation preference of U.S.$1,000 per share. Since each ADR represents 100 Preference Shares, each ADR may, solely for trading and settlement purposes, be considered to have a “denomination” or “principal amount” of U.S.$100,000	Book-entry interests in the New Notes will be issued in minimum denominations of $200,000 and in integral multiples of $1,000 in excess thereof.
Governing Law	Laws of Scotland.	The Subordinated Indenture, the Ninth Supplemental Indenture and the New Notes are governed by, and construed in accordance with, the laws of the State of New York, except for the subordination and waiver of set-off provisions relating to the New Notes, which are governed by, and construed in accordance with, the laws of Scotland.

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Listing and Trading	London Stock Exchange.	New York Stock Exchange.
Form and Depositary	The Preference Shares will be represented by a share warrant to bearer in the form of a single global share warrant to bearer which will be deposited with the Depositary under the Deposit Agreements. “Depositary” means The Bank of New York Mellon. “Deposit Agreements” means the Rule 144A deposit agreement and the Regulation S deposit agreement, in each case originally dated 29 September 2005, as amended, supplemented or restated on or around the issue date, between the Company and the Depositary (as amended, supplemented or restated, from time to time).	The New Notes shall initially be represented by one or more global securities in registered form, without coupons attached, and will be deposited with DTC, and will be registered in the name of such depositary or its nominee. Beneficial interests in the global debt securities will be shown on, and transfers thereof will be effected only through, the book-entry records maintained by DTC and its direct and indirect participants, including, as applicable, Euroclear and Clearstream, Luxembourg.
Registrar/Trustee and Principal Paying Agent	LBG’s company secretarial department will maintain the register and LBG will act as Registrar and Paying Agent.	The Bank of New York Mellon, acting through its London Branch, will act as Trustee and Paying Agent. The Bank of New York Mellon SA/NV, Dublin Branch, will act as Subordinated Debt Security Registrar.

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Comparison of Certain Material Terms of the Series 1 Existing Subordinated Notes and the New Notes

The following is a summary comparison of the material terms of the Series 1 Existing Subordinated Notes and the New Notes. This summary does not purport to be complete and is subject to, and qualified by reference to, the “Description of the New Notes” section above, all of the definitions and provisions of the Indenture.

	Series 1 Existing Subordinated Notes	New Notes
Issuer	HBOS plc (“HBOS”)	Lloyds Banking Group plc
Securities	6.00% Subordinated Notes due 2033	Fixed Rate Reset Subordinated Debt Securities
Maturity Date	November 1, 2033	December 14, 2046
Interest Payments	Interest will accrue on the Series 1 Existing Subordinated Notes from October 30, 2003, at a rate of 6.00% per annum.	Interest will accrue on the New Notes from (and including) the Issue Date to (but excluding) the Reset Date, at a rate per annum equal to (a) the yield, rounded to three decimal places when expressed as a percentage and calculated by the Dealer Managers in accordance with standard market practice, that corresponds to the bid-side price of 1.750% U.S. Treasury Notes due August 15, 2041 as of the Pricing Time as displayed on the Bloomberg Government Pricing Monitor page FIT1 (or any recognized quotation source selected by LBG in its sole discretion if such quotation report is not available or is manifestly erroneous) plus (b) a fixed spread of 150 basis points, and (2) from (and including) the Reset Date to (but excluding) the Maturity Date, at a rate per annum calculated by the Calculation Agent on the Reset Determination Date as being equal to the sum of the applicable U.S. Treasury Rate and 1.50%, such sum being converted to a semi-annual rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down).
Reset Dates for Interest Rate	Not applicable.	December 14, 2041
Interest Payment Dates	May 1 and November 1 of each year, commencing on May 1, 2004.	June 14 and December 14 in each year from (and including) June 14, 2022 to (and including) the Maturity Date.

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Ranking/Subordination The Series 1 Existing Subordinated Notes are unsecured subordinated obligations of HBOS and rank pari passu among themselves. The Series 1 Existing Subordinated Notes are intended to constitute Tier 2 Capital in accordance with the requirements of the U.K. Financial Services Authority.   The rights and claims of the trustee and the holders of the Series 1 Existing Subordinated Notes against the HBOS are subordinated to the claims of Senior Creditors (as defined below), so that amounts due and payable under the Subordinated Indenture and any such Series 1 Existing Subordinated Note issued by HBOS shall be due and payable by HBOS in such bankruptcy, winding up or liquidation only if and to the extent that such Issuer could make payment thereof rateably with the claims of other Subordinated Creditors of the Issuer (as defined below) and still be solvent immediately thereafter. For this purpose, HBOS shall be considered to be solvent if it is able to pay its debts to its Senior Creditors of HBOS in full.   For purposes of the foregoing description: (a) “Senior Creditors” means all creditors of HBOS who are unsubordinated creditors of such Issuer; and (b) “Subordinated Creditors”' means creditors of HBOS (including, without limitation, holders of the Series 1 Existing Subordinated Notes) whose claims against HBOS are subordinated in the event of the bankruptcy, winding up or liquidation of HBOS in any manner to the claims of any unsecured and unsubordinated creditors of HBOS but excluding those subordinated creditors of HBOS (if any) whose claims rank or are expressed to rank junior to (i) the claims of the trustee and holders of the Series 1   The New Notes will constitute our direct, unconditional, unsecured, unguaranteed and subordinated obligations ranking pari passu without any preference among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness of LBG. In a winding up or in the event that an administrator has been appointed in respect of us and notice has been given that it intends to declare and distribute a dividend, all amounts due in respect of or arising under (including any damages awarded for breach of any obligations under) the New Notes will be subordinated to, and subject in right of payment to the prior payment in full of, all claims of all Senior Creditors.   The rights and claims of the holders of the New Notes shall rank at least pari passu with the claims of holders of all obligations of LBG which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital of LBG and in priority to (1) the claims of holders of all obligations of LBG which constitute Tier 1 Capital of LBG, (2) the claims of holders of all undated or perpetual subordinated obligations of LBG and (3) the claims of holders of all share capital of LBG.   In addition, because we are a holding company, our rights to participate in the assets of any subsidiary if it is liquidated will be subject to the prior claims of its creditors, including in the case of bank subsidiaries, their depositors, except to the extent that we may be a creditor with recognized claims against the subsidiary.

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Subordinated Notes New Notes

	Existing Subordinated Notes and/or (ii) the claims of any other creditors of HBOS whose claims rank or are expressed to rank pari passu with the claims of the trustee and holders of the Series 1 Existing Subordinated Notes. “Subordinated Indenture” means the Amended and Restated Indenture dated as of April 30, 2003 (as amended, supplemented or otherwise modified and in effect from time to time) among HBOS, Bank of Scotland, SIF No. 2 and The Bank of New York, as Trustee, in connection with the Series 1 Existing Subordinated Notes.
Additional Issuances	Additional notes may be issued with the same terms as the Series 1 Existing Subordinated Notes without the consent of any holder, which will be consolidated and form one series with the Series 1 Existing Subordinated Notes.	We may, without the consent of the holders of the New Notes, issue additional notes having the same ranking and same interest rate, maturity date, redemption terms and other terms as the New Notes described in this prospectus except for the price to the public, issue date and first Interest Payment Date, provided however that such additional notes that form part of the same series as the New Notes must be fungible with the outstanding New Notes for U.S. federal income tax purposes. Any such additional notes, together with the New Notes offered by this prospectus, will constitute a single series of securities under the Indenture.  There is no limitation on the amount of New Notes or other debt securities that we may issue under the Indenture.
No Set-off	See “Events of Default; Default; Limitation of Remedies” below.	Subject to applicable law, no holder or beneficial owner of the New Notes may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation or retention in respect of any amount owed to it by LBG arising under, or in respect of, or in connection with the New Notes and each holder and beneficial owner of the New

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		Notes shall, by virtue of its holding of any New Notes, be deemed to have waived any right of set-off, counterclaim, or combination of accounts, compensation and retention with respect to such New Note or the Indenture (or between our obligations under or in respect of any New Note and any liability owed by a holder or the Trustee to us) that they might otherwise have against us, whether before or during our winding up. Notwithstanding the provisions of the foregoing sentence, if any of the said rights and claims of any holder of any New Note against LBG is discharged by set-off, compensation or retention, such holder will immediately pay an amount equal to the amount of such discharge to LBG (or, in the event of winding-up or administration of LBG, the liquidator or, as applicable, the administrator of LBG) and accordingly such discharge will be deemed not to have taken place.
Optional Redemption	Series 1 Existing Subordinated Notes are not redeemable at the option of the Issuer thereof, except for the reasons set forth in “Tax Redemption” below. In the event that Series 1 Existing Subordinated are so redeemable, notice of redemption will be provided by mailing a notice of such redemption to each holder of such Notes by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to the respective address of each such holder as that address appears upon the books maintained by the Paying Agent. The Series 1 Existing Subordinated Notes will not be subject to any sinking fund. Optional redemption, or redemption pursuant to a sinking fund or analogous provision, of the	The New Notes will, subject to the satisfaction of the conditions described under “Description of the New Notes—Conditions to Redemption, Purchase, Substitution or Variation”, be redeemable in whole, but not in part, at the option of LBG on any day falling in the period commencing on (and including) September 14, 2041 and ending on (and including) the Reset Date at 100% of their principal amount, together with Accrued Interest to, but excluding, the date fixed for redemption. Notice of any optional redemption of the New Notes will be given to holders not less than 15 nor more than 30 calendar days prior to the date fixed for redemption in accordance with “Description of the New Notes —Conditions to

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Subordinated Notes New Notes

	Series 1 Existing Subordinated Notes by HBOS under the requirements of the Financial Services Authority at the date of their issuance relating to Tier 2 Capital, shall not be permitted in whole or in part prior to the date falling five years and one day after the original issue date of the Series 1 Existing Subordinated Notes. Under the requirements of the Financial Services Authority at the date of their issuance relating to Tier 2 Capital, any optional redemption, or redemption pursuant to a sinking fund or analogous provision, of the Series 1 Existing Subordinated Notes would require the prior consent of the Financial Services Authority.	Redemption, Purchase, Substitution or Variation”, and to the Trustee at least five (5) Business Days prior to the date notice is sent to holders, unless a shorter notice period shall be satisfactory to the Trustee.
Capital Disqualification Event Redemption	Not applicable.	We may redeem the New Notes, in whole but not in part, at any time, upon not less than 30 calendar days’ nor more than 60 calendar days’ notice to the holders of the New Notes, if at any time immediately prior to the giving of the notice referred to above a Capital Disqualification Event (as defined under “Description of the New Notes”) has occurred. In the event of such a redemption, the redemption price of the New Notes will be 100% of their principal amount together with any accrued but unpaid interest to, but excluding, the date fixed for redemption. Any right of redemption will be subject to the conditions set forth under “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”. Prior to the giving of any notice of redemption, LBG must deliver to the Trustee an officer’s certificate stating that (1) a Capital Disqualification Event has occurred, and (2) LBG has demonstrated to the satisfaction of the Relevant Regulator that the

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Subordinated Notes New Notes

		relevant change was not reasonably foreseeable by LBG as at the Issue Date. The Trustee shall be entitled to accept such officer’s certificate without any further inquiry, in which event such officer’s certificate shall be conclusive and binding on the Trustee and the holders of the New Notes.
Tax Redemption	If at any time HBOS shall determine that as a result of a change in or amendment to the laws of its taxing jurisdiction affecting taxation, or any change in an application or interpretation of such laws, which change, amendment, application or interpretation becomes effective on or after the original issue date of the Series 1 Existing Subordinated Notes (i) in making any payment under a Subordinated Guarantee or the Subordinated Indenture HBOS  would be required to pay additional amounts with respect thereto as a result of any taxes, levies, imposts or other governmental charges imposed (whether by way of withholding or deduction or otherwise) by or for the account of the taxing jurisdiction, (ii) any tax would be imposed (whether by way of deduction or withholding or otherwise) or relief from tax would be withdrawn by the taxing jurisdiction, upon or with respect to any interest payments received or receivable by HBOS laws of, the United Kingdom, or  (iii) based upon an opinion of legal advisors to HBOS, as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in, the taxing jurisdiction (whether or not such action was taken or brought with respect to HBOS), which action is taken or brought on or after the relevant date, there is a substantial probability that the	If at any time a Tax Event (as defined below) has occurred, LBG may, subject to the satisfaction of the conditions described under “Description of the New Notes—Conditions to Redemption, Purchase, Substitution or Variation”, redeem the New Notes, in whole but not in part, at any time, at 100% of their principal amount, together with any Accrued Interest to, but excluding, the date fixed for redemption. A “Tax Event” will be deemed to have occurred if LBG determines that: (1) as a result of a Tax Law Change, in making any payments on the New Notes, LBG has paid or will or would on the next payment date be required to pay any Additional Amounts to any holder pursuant to “Description of the New Notes—Payment of Additional Amounts” and/or (2) a Tax Law Change would: ·      result in LBG not being entitled to claim a deduction in respect of any payments (or its corresponding funding costs as recognized in its financial statements) in respect of the New Notes in computing its taxation liabilities or the amount or value of such deduction to LBG would be materially reduced;

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Subordinated Notes New Notes

circumstances described in clause (i) or (ii) would exist, the Series 1 Existing Subordinated Notes will be redeemable as a whole at the option of HBOS upon not less than 30 nor more than 60 days’ notice given as provided in the indenture at any time, at a redemption price equal to 100% of the principal amount thereof, together with any accrued interest to the date fixed for redemption.   Under the requirements of the Financial Services Authority at the date of the applicable offering memorandum relating to Tier 2 Capital, any optional tax redemption of the Series 1 Existing Subordinated Notes would require the prior consent of the Financial Services Authority.   “Subordinated Guarantees” mean the guarantees contained in the Subordinated Indenture. ·      prevent the New Notes from being treated as loan relationships for United Kingdom tax purposes;   ·      as a result of the New Notes being in issue, result in LBG 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 of the Issue Date or any similar system or systems having like effect as may from time to time exist);   ·      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 New Notes or the conversion of the New Notes into shares or other obligations of LBG (including, pursuant to the terms and conditions of the New Notes or as a result of the exercise of any regulatory powers under the Banking Act 2009); or   ·      result in a New Note or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes, in each case, provided that, LBG could not avoid the foregoing in connection with the New Notes by taking measures reasonably available to it.

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Subordinated Notes New Notes

		“Tax Law Change” means a change in, or 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 effective on or after the Issue Date, or (y) in the case of a change in law, if such change is enacted by United Kingdom Act of Parliament or implemented by statutory instrument, on or after the Issue Date. Notice of any redemption of the New Notes due to the occurrence of a Tax Event will be given to holders not less than 30 nor more than 60 calendar days prior to the relevant redemption date in accordance with “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, and to the Trustee at least five (5) Business Days prior to the date notice is sent to holders, unless a shorter notice period shall be satisfactory to the Trustee.
Substitution or Variation	Not applicable.	If a Capital Disqualification Event has occurred and is continuing, then LBG may, subject to “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, but without any requirement for the consent or approval of the holders of the New Notes, at any time (whether before, on or following the Reset Date) either substitute all (but not

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Subordinated Notes New Notes

		some only) of the New Notes for, or vary the terms of the New Notes so that they remain or, as appropriate, become, Compliant Securities (as defined under “Description of the New Notes—Substitution or Variation”), and the Trustee shall (subject to “Description of the New Notes—Substitution or Variation”) agree to such substitution or variation. Upon the expiry of such notice, LBG shall either vary the terms of or substitute the New Notes, as the case may be.
Purchases	Under the requirements of the Financial Services Authority at the date of the applicable offering memorandum relating to Tier 2 Capital, the Series 1 Existing Subordinated Notes intended to constitute Tier 2 Capital may not at any time be repaid at the option of the Holder thereof. HBOS may purchase Notes at any price in the open market or otherwise. Notes so purchased by HBOS may, at the discretion of HBOS be held or resold or surrendered to the Trustee for cancellation. The Series 1 Existing Subordinated Notes may not be purchased in whole or in part by HBOS prior to the date falling five years and one day from their original issue date. Under the requirements of the Financial Services Authority at the date of the applicable offering memorandum relating to Tier 2 Capital, any purchase of the Series 1 Existing Subordinated Notes by HBOS would require the prior consent of the Financial Services Authority.	We may at any time, and from time to time, purchase New Notes in the open market or by tender or by private agreement in any manner and at any price or at differing prices. New Notes purchased or otherwise acquired by us may be (i) held, (ii) resold or (iii) at our sole discretion, surrendered to the Trustee for cancellation (in which case all New Notes so surrendered will forthwith be cancelled in accordance with applicable law and thereafter may not be re-issued or resold). Any such purchases will be subject to the conditions set forth under “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”.

Conditions to Redemption, Purchase, Substitution or Variation Optional redemption of the Series 1 Existing Subordinated Notes by HBOS under the requirements of the Financial Services Authority at the date of their issuance relating to Tier 2 Capital, shall not be permitted prior to five years and one day after the original issue date Any redemption, purchase, substitution or variation of the New Notes prior to the maturity date is subject to:   (a) LBG giving notice to the Relevant Regulator and the Relevant Regulator granting permission to LBG to redeem,

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Subordinated Notes New Notes

of the Series 1 Existing Subordinated Notes. The Series 1 Existing Subordinated Notes may not at any time be repaid at the option of the holder thereof. The Series 1 Existing Subordinated Notes intended to constitute Tier 2 Capital in accordance with the requirements of the Financial Services Authority may not be issued on terms that they are redeemable at the option of the holder thereof. Under the requirements of the Financial Services Authority at the date of their issuance relating to Tier 2 Capital, any optional tax redemption of Subordinated Notes would require the prior consent of the Financial Services Authority. purchase, substitute or vary the New Notes, as the case may be (in each case to the extent, and in the manner, required by the relevant Applicable Regulations); and   (b) in respect of any redemption of the New Notes proposed to be made prior to the fifth anniversary of the date of issuance of the New Notes, if and to the extent then required under the Applicable Regulations:  (A) in the case of an optional redemption due to a Tax Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by LBG as at the Issue Date; or (B) in the case of redemption following the occurrence of a Capital Disqualification Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by LBG as at the Issue Date;   (c) if and to the extent then required under the Applicable Regulations, either: (A) LBG having replaced the New Notes with instruments qualifying as own funds of equal or higher quality on terms that are sustainable for the income capacity of LBG; or (B) (save in the case of sub-paragraph (d)(A) below) LBG demonstrating to the satisfaction of the Relevant Regulator that the own funds and eligible liabilities of LBG would, following such redemption, purchase, substitution or variation exceed its minimum applicable capital requirements (including any applicable buffer requirements) by a margin that the Relevant Regulator considers necessary at such time; and   (d) in the case of any purchase prior to the fifth anniversary of the date of issuance of the New Notes,

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Subordinated Notes New Notes

		in addition to satisfying either of the conditions specified in paragraph (c) above, either: (A) LBG having, before or at the same time as such purchase, replaced the New Notes with own funds instruments of equal or higher quality at terms that are sustainable for the income capacity of LBG, and the Relevant Regulator having permitted such action on the basis of the determination that it would be beneficial from a prudential point of view and justified by exceptional circumstances; or (B) the relevant New Notes being purchased for market-making purposes in accordance with the Applicable Regulations. Notwithstanding the above conditions, if, at the time of any redemption, purchase, substitution or variation, the then-prevailing Applicable Regulations permit the repayment or purchase only after compliance with one or more alternative or additional preconditions to those set out above, LBG shall comply with such other and/or, as appropriate, additional pre-condition(s).
Agreement with Respect to the Exercise of U.K. Bail-in Power	No contractual provision; however, the Series 1 Existing Subordinated Notes could be subject to the exercise of the U.K. Ball-in Power by the relevant U.K. resolution authority.	Notwithstanding any other agreements, arrangements, or understandings between us and any holder or beneficial owner of the New Notes by acquiring or holding the New Notes, each holder (including each beneficial owner) of the New Notes acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined under “Description of the New Notes—Agreement with Respect to the Exercise of the U.K. Bail-in Power”) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the New Notes; (ii) the

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Series 1 Existing
Subordinated Notes New Notes

conversion of all, or a portion, of the principal amount of, or interest on, the New Notes into shares or other securities or other obligations of LBG or another person (and the issue to or conferral on the holder of such shares, securities or obligations), including by means of amendment, modification or variation of the terms of the New Notes; and/or (iii) the amendment or alteration of the maturity of the New Notes, or amendment of the amount of interest due on the New Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; any U.K. bail-in power may be exercised by means of variation of the terms of the New Notes solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the maturity date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each holder and each beneficial owner of the New Notes further acknowledges and agrees that the rights of the holders and/or beneficial owners under the New Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment

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Subordinated Notes New Notes

firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to us and the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United Kingdom within the context of the U.K. resolution regime under the Banking Act as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which any right in a contract governing such obligations may be deemed to have been exercised (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

According to the principles contained in the Banking Act, we expect that the relevant U.K. resolution authority would exercise its U.K. bail-in power in respect of the New Notes having regard to the hierarchy of creditor claims and that the holder or beneficial owner of the New Notes would be treated equally in respect of the exercise of the U.K. bail-in power with all other claims that would rank pari passu with the New Notes upon an insolvency of LBG.

No repayment of the principal amount of the New Notes or payment of interest on the New Notes shall become due and

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Subordinated Notes New Notes

		payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 us under the laws and regulations of the United Kingdom applicable to us or other members of the Group. See also “Risk Factors—Under the terms of the New Notes, you will agree to be bound by and consent to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.” Neither a reduction or cancellation, in part or in full, of the principal amount of, or interest on, the New Notes or the conversion thereof into another security or obligation of LBG or another person, as a result of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to LBG, nor the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes will be a default or an event of default for any purpose. LBG’s obligations to indemnify the Trustee in accordance with the Section 6.07 of the Subordinated Indenture shall survive the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes.
Repayment of Principal and Payment of Interest After Exercise of U.K. Bail-In Power	No contractual provision.	No repayment of the principal amount of the New Notes or payment of interest on the New Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. resolution authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be

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Subordinated Notes New Notes

		permitted to be made by us under the laws and regulations of the United Kingdom applicable to us or other members of the Group. See also “Risk Factors—Under the terms of the New Notes, you will agree to be bound by and consent to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.”
Events of Default; Default; Limitation of Remedies	An Event of Default shall occur only in the case of the winding up, liquidation or sequestration of HBOS (other than in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency). If an Event of Default shall occur, the principal amount of the Series 1 Existing Subordinated Notes shall, without any act by the trustee or the holders of the Series 1 Existing Subordinated Notes, become immediately due and payable without presentment, demand, protest or other notice of any kind. There will be no other right of acceleration of the maturity of the outstanding Series 1 Existing Subordinated Notes, whether upon a default in the making of any payment of principal or interest with respect to the Series 1 Existing Subordinated Notes or in the performance of any covenant of HBOS or otherwise. The trustee may, however, petition for the winding up, liquidation or sequestration of HBOS upon the occurrence of a Default, as described below. The following shall be a Default with respect to the Series 1 Existing Subordinated Notes: (a) failure by the HBOS to pay any interest on any Series 1 Existing Subordinated Notes when due, continued for 30 days, or (b) failure by HBOS to pay principal or the redemption price of any Series 1 Existing Subordinated Note when due. If a Default occurs, HBOS shall, upon demand of the	An “Event of Default” with respect to the New Notes shall result if either: ·      a court of competent jurisdiction makes an order which is not successfully appealed within 30 days; or ·      an effective shareholders’ resolution is validly adopted for the winding-up of LBG other than under or in connection with a scheme of amalgamation or reconstruction not involving a bankruptcy or insolvency. The exercise of any U.K. bail-in power by the relevant U.K. resolution authority shall not constitute an Event of Default. If an Event of Default occurs and is continuing, the Trustee or the holder or holders of at least 25% in aggregate principal amount of the New Notes may declare to be due and payable immediately in accordance with the terms of the Indenture the principal amount of, any accrued but unpaid payments. However, after such declaration but before the Trustee obtains a judgment or decree for payment of money due, the holder or holders of a majority in aggregate principal amount of the New Notes may rescind or annul the declaration of acceleration and its consequences, but only if all Events of Default have been cured or waived and all payments due, other than those due as a result of

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Subordinated Notes New Notes

trustee, pay to the trustee for the benefit of the holders the amount then due and payable on such Series 1 Existing Subordinated Notes, and if HBOS fails to pay such amounts forthwith upon such demand, the remedies of the trustee shall be limited to petitioning for the winding up, liquidation or sequestration of HBOS and proving the amounts due and payable and claiming in such winding up, liquidation or sequestration; provided that the trustee or any holder may not, by virtue of a Default, accelerate the maturity of any of the outstanding Series 1 Existing Subordinated Notes. Upon the occurrence of a Default with respect to the Series 1 Existing Subordinated Notes, the holders shall not at any time be entitled to exercise any right of set-off or counterclaim which may be available to a Holder against amounts owing by the Issuer in respect of the Series 1 Existing Subordinated Notes. If, notwithstanding the provisions of the preceding sentence, any of the rights and claims of any holder is discharged by set-off, such holder will immediately pay an amount equal to the amount of such discharge to HBOS or, if applicable, the liquidator or trustee or receiver in bankruptcy of HBOS to be held on trust for the unsubordinated creditors of the Issuer and until such time as payment is made will hold a sum equal to such amount in trust for HBOS or, if applicable, the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not to have taken place. acceleration, have been made.   In addition to Events of Default, the Indenture also separately provides for Defaults. It shall be a “Default” with respect to the New Notes if:   ·      any installment of interest upon any New Notes is not paid on or before the date specified for its payment in the Indenture and such failure continues for 14 days; or   ·      all or any part of the principal of the New Notes is not paid when it becomes due and payable, whether upon redemption or otherwise, and such failure continues for seven days.   If a Default occurs and is continuing, the Trustee may commence a proceeding in Scotland (but not elsewhere) for the winding-up of LBG.   However, a failure to make any payment on the New Notes shall not be a Default if it is withheld or refused in order to comply with any applicable fiscal or other law or regulation or order of any court of competent jurisdiction and LBG delivers an opinion of counsel to the Trustee with that conclusion, at any time before the expiry of the applicable 14 day or seven day period by independent legal advisers.   Notwithstanding any contrary provisions, nothing shall impair the right of a holder, absent the holder’s consent, to sue for any payments due but unpaid with respect to the New Notes.   By accepting the New Notes, each holder and the Trustee will be deemed to have waived any right of set-off, counterclaim or

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Subordinated Notes New Notes

combination of accounts with respect to the New Notes or the Indenture (or between obligations which LBG may have under or in respect of any New Notes and any liability owed by a holder or the Trustee to LBG) that they might otherwise have against LBG, whether before or during the winding-up or liquidation of LBG.

The holder or holders of not less than a majority in aggregate principal amount of the New Notes may waive any past Event of Default or Default with respect to the New Notes, except an Event of Default or Default in respect of the payment of interest, if any, or principal of (or premium, if any) or payments on any New Notes or a covenant or provision of the Indenture which cannot be modified or amended without the consent of each holder of New Notes.

Subject to the provisions of the Indenture relating to the duties of the Trustee, if an Event of Default or a Default occurs and is continuing with respect to the New Notes, the Trustee will be under no obligation to take direction from any holder or holders of the New Notes, unless they have offered reasonable indemnity to the Trustee. Subject to the Indenture provisions for the indemnification of the Trustee, the holder or holders of a majority in aggregate principal amount of the outstanding New Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the New Notes, if the direction is not in conflict with any rule of law or with the Indenture and does not expose the Trustee to undue risk and the

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Series 1 Existing
Subordinated Notes New Notes

		action would not be unjustly prejudicial to the holder or holders of the New Notes of such series not taking part in that direction. The Trustee may take any other action that it deems proper which is not inconsistent with that direction. The Indenture provides that the Trustee will, within 90 days after the occurrence of an Event of Default or a Default with respect to the New Notes, give to each holder of the New Notes notice of the Event of Default or Default known to it, unless the Event of Default or Default, has been cured or waived; provided that the Trustee shall be protected in withholding notice (except for a payment default) if it determines in good faith that withholding notice is in the interest of the holders of the New Notes. We are required to furnish to the Trustee a statement as to our compliance with all conditions and covenants under the Indenture (i) annually, and (ii) within five Business Days of a written request from the Trustee.
Denomination	The Series 1 Existing Subordinated Notes will be sold in denominations of $1,000 and integral multiples of $l,000 in excess thereof (or, in the case of any sale to an “accredited investor” as defined in Regulation D promulgated under the Securities Act, in minimum amounts of $250,000 and integral multiples of $1,000 in excess thereof).	Book-entry interests in the New Notes will be issued in minimum denominations of $200,000 and in integral multiples of $1,000 in excess thereof.
Governing Law	The indenture governing the Series 1 Existing Subordinated Notes is governed by, and construed in accordance with, the laws of the State of New York, except for the subordination provisions relating to the Series 1 Existing Subordinated Notes, which are governed by the laws of England.	The Subordinated Indenture, the Ninth Supplemental Indenture and the New Notes are governed by, and construed in accordance with, the laws of the State of New York, except for the subordination and waiver of set-off provisions relating to the New Notes, which are governed by, and construed in accordance with, the laws of Scotland.

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Listing and Trading	London Stock Exchange	New York Stock Exchange
Form and Depositary	The Series 1 Existing Subordinated Notes sold to qualified institutional buyers in reliance on Rule 144A, were initially be represented by interests in one or more global notes in registered form. The Series 1 Existing Subordinated Notes sold to investors in reliance on Regulation S under the Securities Act were initially be represented by interests in one or more global notes in registered form. On the closing date, the global notes were deposited with the Trustee as custodian for DTC, in New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC. Beneficial interests in the Rule 144A global notes may not be exchanged for beneficial interests in the Regulation S global notes at any time, except in limited circumstances.	The New Notes shall initially be represented by one or more global securities in registered form, without coupons attached, and will be deposited with DTC, and will be registered in the name of such depositary or its nominee. Beneficial interests in the global debt securities will be shown on, and transfers thereof will be effected only through, the book-entry records maintained by DTC and its direct and indirect participants, including, as applicable, Euroclear and Clearstream, Luxembourg.
Trustee and Principal Paying Agent	Trustee: The Bank of New York. Principal Paying Agent: Citibank N.A., acting through its London Branch.	The Bank of New York Mellon, acting through its London Branch will act as Trustee and Paying Agent.
Business Day Convention	Following, unadjusted	Following, unadjusted
Day Count Basis	30/360 (in case of an incomplete month, based on actual number of days elapsed in such period)	30/360 (in case of an incomplete month, based on actual number of days elapsed in such period)

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Comparison of Certain Material Terms of the Capped Offer Notes and the New Notes

The following is a summary comparison of the material terms of the Capped Offer Notes and the New Notes. This summary does not purport to be complete and is subject to, and qualified by reference to, the “Description of the New Notes” section above, all of the definitions and provisions of the Indenture.

	Capped Offer Notes	New Notes
Issuer	Lloyds Banking Group plc	Lloyds Banking Group plc
Securities	Series 2 Existing Subordinated Notes: 4.500% Fixed Rate Subordinated Debt Securities due 2024; and Series 3 Existing Subordinated Notes: 4.582% Subordinated Debt Securities due 2025.	Fixed Rate Reset Subordinated Debt Securities
Maturity Date	Series 2 Existing Subordinated Notes: November 4, 2024 Series 3 Existing Subordinated Notes: December 10, 2025	December 14, 2046
Interest Payments	Series 2 Existing Subordinated Notes: Interest will accrue on the Series 2 Existing Subordinated Notes at a rate of 4.500% per annum. Series 3 Existing Subordinated Notes: Interest will accrue on the Series 3 Existing Subordinated Notes at a rate of 4.582% per annum.	Interest will accrue on the New Notes from (and including) the Issue Date to (but excluding) the Reset Date, at a rate per annum equal to (a) the yield, rounded to three decimal places when expressed as a percentage and calculated in accordance with standard market practice, that corresponds to the bid-side price of 1.750% U.S. Treasury Notes due August 15, 2041 as of the Pricing Time as displayed on the Bloomberg Government Pricing Monitor page FIT1 (or any recognized quotation source selected by LBG in its sole discretion if such quotation report is not available or is manifestly erroneous) plus (b) a fixed spread of 150 basis points, and (2) from (and including) the Reset Date to (but excluding) the Maturity Date, at a rate per annum calculated by the Calculation Agent on the Reset Determination Date as being equal to the sum of the applicable U.S. Treasury Rate and 1.50%, such sum being converted to a semi-annual rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down).

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Reset Dates for Interest Rate	Not applicable.	December 14, 2041
Interest Payment Dates	Series 2 Existing Subordinated Notes: May 4 and November 4 of each year, commencing on May 4, 2015. Series 3 Existing Subordinated Notes: June 10 and December 10 of each year. Interest has accrued from the most recent Interest Payment Date for which interest has been paid with respect to the relevant series of Old Notes. “Old Notes” are the 4.582% Subordinated Debt Securities due 2025 and the 5.300% Subordinated Debt Securities due 2045 which were outstanding at the moment of the issuance of the Series 3 Existing Subordinated Notes and which were offered for exchange with the Series 3 Existing Subordinated Notes.	June 14 and December 14 in each year from (and including) June 14, 2022 to (and including) the Maturity Date.
Ranking/Subordination	The Capped Offer Notes constitute our direct, unconditional, unsecured and subordinated obligations ranking pari passu without any preference among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness. In a winding up or in the event that an administrator has been appointed in respect of us and notice has been given that it intends to declare and distribute a dividend, all amounts due in respect of or arising under (including any damages awarded for breach of any obligations under) the Capped	The New Notes will constitute our direct, unconditional, unsecured, unguaranteed and subordinated obligations ranking pari passu without any preference among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness of LBG. In a winding up or in the event that an administrator has been appointed in respect of us and notice has been given that it intends to declare and distribute a dividend, all amounts due in respect of or arising under (including any damages awarded for breach of any obligations under) the New

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Offer Notes will be subordinated to, and subject in right of payment to the prior payment in full of, all claims of all Senior Creditors.   “Senior Creditors” means in respect of LBG (i) creditors of LBG whose claims are admitted to proof in the winding-up or administration of LBG and who are unsubordinated creditors of LBG and (ii) creditors of LBG whose claims are or are expressed to be subordinated to the claims of other creditors of LBG (other than those whose claims constitute, or would, but for any applicable limitation on the amount of such capital, constitute Tier 1 Capital or Tier 2 Capital of LBG, or whose claims rank or are expressed to rank pari passu with, or junior to, the claims of holders of the Capped Offer Notes).   In relation to the Series 3 Existing Subordinated Notes, the rights and claims of the holders of the Capped Offer Notes shall rank at least pari passu with the claims of holders of all obligations of LBG which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital of LBG and in priority to (1) the claims of holders of all obligations of LBG which constitute Tier 1 Capital of LBG, (2) the claims of holders of all undated or perpetual subordinated obligations of LBG and (3) the claims of holders of all share capital of the LBG.   In addition, because we are a holding company, our rights to participate in the assets of any subsidiary if it is liquidated will be subject to the prior claims of its creditors, including in the case of bank subsidiaries, their depositors, except to the extent that we may be a creditor with recognized claims against the subsidiary. Notes will be subordinated to, and subject in right of payment to the prior payment in full of, all claims of all Senior Creditors.   The rights and claims of the holders of the New Notes shall rank at least pari passu with the claims of holders of all obligations of LBG which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital of LBG and in priority to (1) the claims of holders of all obligations of LBG which constitute Tier 1 Capital of LBG, (2) the claims of holders of all undated or perpetual subordinated obligations of LBG and (3) the claims of holders of all share capital of LBG.   In addition, because we are a holding company, our rights to participate in the assets of any subsidiary if it is liquidated will be subject to the prior claims of its creditors, including in the case of bank subsidiaries, their depositors, except to the extent that we may be a creditor with recognized claims against the subsidiary.  

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Additional Issuances	Substantially the same as for the New Notes.	We may, without the consent of the holders of the New Notes, issue additional notes having the same ranking and same interest rate, maturity date, redemption terms and other terms as the New Notes described in this prospectus except for the price to the public, issue date and first Interest Payment Date, provided however that such additional notes that form part of the same series as the New Notes must be fungible with the outstanding New Notes for U.S. federal income tax purposes. Any such additional notes, together with the New Notes offered by this prospectus, will constitute a single series of securities under the Indenture.  There is no limitation on the amount of New Notes or other debt securities that we may issue under the Indenture.
No Set-off	Series 2 Existing Subordinated Notes: Each holder of the Series 2 Existing Subordinated Notes will be deemed to have waived any right of set-off, counterclaim, combination of accounts, with respect to such Series 2 Existing Subordinated Notes or the relevant Indenture (or between our obligations under or in respect of the Series 2 Existing Subordinated Notes and any liability owed by a holder or the Trustee to LBG) that they might otherwise have against LBG, whether before or during LBG’s winding up. Series 3 Existing Subordinated Notes: Subject to applicable law, no holder of Series 3 Existing Subordinated Notes may exercise or claim any right of set-off, counterclaim,	Subject to applicable law, no holder or beneficial owner of the New Notes may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation or retention in respect of any amount owed to it by LBG arising under, or in respect of, or in connection with the New Notes and each holder and beneficial owner of the New Notes shall, by virtue of its holding of any New Notes, be deemed to have waived any right of set-off, counterclaim, or combination of accounts, compensation and retention with respect to such New Note or the Indenture (or between our obligations under or in respect of any New Note and any liability owed by a holder

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	combination of accounts, compensation or retention in respect of any amount owed to it by LBG arising under or in connection with the Series 3 Existing Subordinated Notes. By accepting a Series 3 Existing Subordinated Note, each holder will be deemed to have waived any right of set-off, counterclaim, combination of accounts, compensation and retention with respect to such Series 3 Existing Subordinated Note or the relevant indenture (or between LBG’s obligations under or in respect of the Series 3 Existing Subordinated Note and any liability owed by a holder or the Trustee to LBG) that they might otherwise have against LBG, whether before or during LBG’s winding up.	or the Trustee to us) that they might otherwise have against us, whether before or during our winding up. Notwithstanding the provisions of the foregoing sentence, if any of the said rights and claims of any holder of any New Note against LBG is discharged by set-off, compensation or retention, such holder will immediately pay an amount equal to the amount of such discharge to LBG (or, in the event of winding-up or administration of LBG, the liquidator or, as applicable, the administrator of LBG) and accordingly such discharge will be deemed not to have taken place.
Optional Redemption	Not applicable.	The New Notes will, subject to the satisfaction of the conditions described under “Description of the New Notes—Conditions to Redemption, Purchase, Substitution or Variation”, be redeemable in whole, but not in part, at the option of LBG on any day falling in the period commencing on (and including) September 14, 2041 and ending on (and including) the Reset Date at 100% of their principal amount, together with any Accrued Interest to, but excluding, the date fixed for redemption. Notice of any optional redemption of the New Notes will be given to holders not less than 15 nor more than 30 calendar days prior to the date fixed for redemption in accordance with “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, and to the Trustee at least five (5) Business Days prior to the date notice is sent to holders, unless a shorter notice period shall be satisfactory to the Trustee.

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Capital Disqualification Event Redemption Substantially the same as for the New Notes. We may redeem the New Notes, in whole but not in part, at any time, upon not less than 30 calendar days’ nor more than 60 calendar days’ notice to the holders of the New Notes, if at any time immediately prior to the giving of the notice referred to above a Capital Disqualification Event (as defined under “Description of the New Notes”) has occurred. In the event of such a redemption, the redemption price of the New Notes will be 100% of their principal amount together with any accrued but unpaid interest to, but excluding, the date fixed for redemption. Any right of redemption will be subject to the conditions set forth under “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”.   Prior to the giving of any notice of redemption, LBG must deliver to the Trustee an officer’s certificate stating that (1) a Capital Disqualification Event has occurred, and (2) LBG has demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by LBG as at the Issue Date. The Trustee shall be entitled to accept such officer’s certificate without any further inquiry, in which event such officer’s certificate shall be conclusive and binding on the Trustee and the holders of the New Notes.

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Tax Redemption Substantially the same as for the New Notes, except that notice of any redemption of the Capped Offer Notes due to the occurrence of a Tax Event will be given to the trustee at least ten (10) Business Days prior to the date notice is sent to holders, unless a shorter notice period shall be satisfactory to the trustee.    If at any time a Tax Event (as defined below) has occurred, LBG may, subject to the satisfaction of the conditions described under “Description of the New Notes—Conditions to Redemption, Purchase, Substitution or Variation”, redeem the New Notes, in whole but not in part, at any time, at 100% of their principal amount, together with any Accrued Interest to, but excluding, the date fixed for redemption.   A “Tax Event” will be deemed to have occurred if LBG determines that:   (1) as a result of a Tax Law Change, in making any payments on the New Notes, LBG has paid or will or would on the next payment date be required to pay any Additional Amounts to any holder pursuant to “Description of the New Notes—Payment of Additional Amounts” and/or   (2) a Tax Law Change would:   ·     result in LBG not being entitled to claim a deduction in respect of any payments (or its corresponding funding costs as recognized in its financial statements) in respect of the New Notes in computing its taxation liabilities or the amount or value of such deduction to LBG would be materially reduced;   ·     prevent the New Notes from being treated as loan relationships for United Kingdom tax purposes;   ·     as a result of the New Notes being in issue, result in LBG 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

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·     for applicable United Kingdom tax purposes (whether under the group relief system current as of the Issue Date or any similar system or systems having like effect as may from time to time exist);

·     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 New Notes or the conversion of the New Notes into shares or other obligations of LBG (including, pursuant to the terms and conditions of the New Notes or as a result of the exercise of any regulatory powers under the Banking Act 2009); or

·     result in a New Note or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes, in each case, provided that, LBG could not avoid the foregoing in connection with the New Notes by taking measures reasonably available to it.

“Tax Law Change” means a change in, or 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

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		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 effective on or after the Issue Date, or (y) in the case of a change in law, if such change is enacted by United Kingdom Act of Parliament or implemented by statutory instrument, on or after the Issue Date. Notice of any redemption of the New Notes due to the occurrence of a Tax Event will be given to holders not less than 30 nor more than 60 calendar days prior to the relevant redemption date in accordance with “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, and to the Trustee at least five (5) Business Days prior to the date notice is sent to holders, unless a shorter notice period shall be satisfactory to the Trustee.
Substitution or Variation	Not applicable.	If a Capital Disqualification Event has occurred and is continuing, then LBG may, subject to “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”, but without any requirement for the consent or approval of the holders of the New Notes, at any time (whether before, on or following the Reset Date) either substitute all (but not some only) of the New Notes for, or vary the terms of the New Notes so that they remain or, as appropriate, become, Compliant Securities (as defined under “Description of the New Notes—Substitution or Variation”), and the Trustee shall (subject to the “Description of the New

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		Notes—Substitution or Variation”) agree to such substitution or variation. Upon the expiry of such notice, LBG shall either vary the terms of or substitute the New Notes, as the case may be.
Purchases	Substantially the same as for the New Notes.	We may at any time, and from time to time, purchase New Notes in the open market or by tender or by private agreement in any manner and at any price or at differing prices. New Notes purchased or otherwise acquired by us may be (i) held, (ii) resold or (iii) at our sole discretion, surrendered to the Trustee for cancellation (in which case all New Notes so surrendered will forthwith be cancelled in accordance with applicable law and thereafter may not be re-issued or resold). Any such purchases will be subject to the conditions set forth under “Description of the New Notes —Conditions to Redemption, Purchase, Substitution or Variation”.
Conditions to Redemption, Purchase, Substitution or Variation	Series 2 Existing Subordinated Notes: Any redemption or repurchase of the Series 2 Existing Subordinated Notes prior to the maturity date is subject to: (A)  LBG giving notice to the Relevant Regulator (as defined below) and the Relevant Regulator granting permission to LBG to redeem or purchase the Series 2 Existing Subordinated Notes (in each case to the extent, and in the manner, required by the relevant Regulatory Capital Requirements, as defined below); (B)  in respect of any redemption of the Series 2 Existing Subordinated Notes proposed to be made prior to the	Any redemption, purchase, substitution or variation of the New Notes prior to the maturity date is subject to: (a) LBG giving notice to the Relevant Regulator and the Relevant Regulator granting permission to LBG to redeem, purchase, substitute or vary the New Notes, as the case may be (in each case to the extent, and in the manner, required by the relevant Applicable Regulations); and (b) in respect of any redemption of the New Notes proposed to be made prior to the fifth anniversary of the date of issuance of the New Notes, if and to the extent then required under the Applicable Regulations:  (A) in the case of an optional redemption due to a

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fifth anniversary of the date of issuance of the Series 2 Existing Subordinated Notes, if and to the extent then required under the relevant Regulatory Capital Requirements (a) in the case of redemption following the occurrence of a Tax Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by LBG as at the issue date or (b) in the case of redemption following the occurrence of a Capital Disqualification Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by LBG as at the issue date; and   (C)  compliance by LBG with any alternative or additional pre-conditions to redemption or purchase, as applicable, set out in the relevant Regulatory Capital Requirements for the time being.   Article 78(1) of the CRD IV (as defined below) Regulation provides that the Relevant Regulator shall, subject as provided in Article 78 and below, grant permission to redeem or purchase Subordinated Notes prior to the maturity date where either:   (a)  on or before the relevant redemption date or purchase date, as applicable, LBG replaces the Subordinated Notes with instruments  qualifying as own funds of equal or higher quality on terms that are sustainable for the income capacity of LBG; or   (b)  LBG has demonstrated to the satisfaction of the Relevant Regulator that its Tier 1 capital Tax Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by LBG as at the Issue Date; or (B) in the case of redemption following the occurrence of a Capital Disqualification Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by LBG as at the Issue Date;   (c) if and to the extent then required under the Applicable Regulations, either: (A) LBG having replaced the New Notes with instruments qualifying as own funds of equal or higher quality on terms that are sustainable for the income capacity of LBG; or (B) (save in the case of sub-paragraph (d)(A) below) LBG demonstrating to the satisfaction of the Relevant Regulator that the own funds and eligible liabilities of LBG would, following such redemption, purchase, substitution or variation exceed its minimum applicable capital requirements (including any applicable buffer requirements) by a margin that the Relevant Regulator considers necessary at such time; and   (d) in the case of any purchase prior to the fifth anniversary of the date of issuance of the New Notes, in addition to satisfying either of the conditions specified in paragraph (c) above, either: (A) LBG having, before or at the same time as such purchase, replaced the New Notes with own funds instruments of equal or higher quality at terms that are sustainable for the income  

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(as defined below) and Tier 2 capital (as defined below) would, following such redemption, exceed the capital ratios required under CRD IV by a margin that the Relevant Regulator may consider necessary on the basis set out in the CRD IV Directive.   Further, Article 78(4) provides that the Relevant Regulator may only permit LBG to redeem the Series 2 Existing Subordinated Notes before five years after the date of issuance of the Series 2 Existing Subordinated Notes not only if either of the conditions referred to in paragraphs (1) or (2) above is met, but also:   (a)   in the case of redemption due to the occurrence of a Capital Disqualification Event, (i) the Relevant Regulator considers such change to be sufficiently certain and (ii) LBG demonstrates to the satisfaction of the Relevant Regulator that the Capital Disqualification Event was not reasonably foreseeable at the time of issuance of the Subordinated Notes; or   (b)  in the case of redemption due to the occurrence of a Tax Event, LBG demonstrates to the satisfaction of the Relevant Regulator that such change is material and was not reasonably foreseeable at the time of issuance of the Subordinated Notes.   The rules under CRD IV may be modified from time to time after the date of issuance of the Series 2 Existing Subordinated Notes and LBG may be required to comply with any additional or alternative preconditions set out in the relevant Capital Regulations and/or required by the Relevant Regulator as a capacity of LBG, and the Relevant Regulator having permitted such action on the basis of the determination that it would be beneficial from a prudential point of view and justified by exceptional circumstances; or (B) the relevant New Notes being purchased for market-making purposes in accordance with the Applicable Regulations.   Notwithstanding the above conditions, if, at the time of any redemption, purchase, substitution or variation, the then-prevailing Applicable Regulations permit the repayment or purchase only after compliance with one or more alternative or additional preconditions to those set out above, LBG shall comply with such other and/or, as appropriate, additional pre-condition(s).  

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prerequisite to its consent to such redemptions or repurchases, at the time.

Series 3 Existing Subordinated Notes: Any redemption or repurchase with respect to the Series 3 Existing Subordinated Notes prior to the maturity date is subject to:

(a) LBG giving notice to the Relevant Regulator and the Relevant Regulator granting permission to LBG to redeem or purchase the New Notes of such series; and

(b) in respect of any redemption of The Series 3 Existing Subordinated Notes proposed to be made prior to the fifth anniversary of the Issue Date, if and to the extent then required under the relevant Regulatory Capital Requirements (A) in the case of an optional redemption of the Series 3 Existing Subordinated Notes due to a Tax Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change or event is material and was not reasonably foreseeable by LBG as at the applicable Issue Date, or (B) in the case of redemption of the Series 3 Existing Subordinated Notes following the occurrence of a Capital Disqualification Event, LBG having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by LBG as at the applicable Issue Date; and

(c) if and to the extent then required by the relevant Regulatory Capital Requirements (A) on or before the relevant redemption or purchase date, LBG replacing the Series 3 Existing

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Subordinated Notes with instruments qualifying as own funds of equal or higher quality on terms that are sustainable for the income capacity of LBG or (B) LBG demonstrating to the satisfaction of the Relevant Regulator that its Tier 1 Capital and Tier 2 Capital would, following such redemption or purchase of such Series 3 Existing Subordinated Notes exceed its minimum capital requirements by a margin that the Relevant Regulator may consider necessary at such time based on the Regulatory Capital Requirements.

Notwithstanding the above conditions, if, at the time of any redemption or purchase with respect to the Series 3 Existing Subordinated Notes, the prevailing Regulatory Capital Requirements permit the repayment or purchase only after compliance with one or more alternative or additional preconditions to those set out above, LBG shall comply with such other and/or, as appropriate, additional pre-condition(s).

“Relevant Regulator” means the U.K. Prudential Regulation Authority or such other governmental authority in the United Kingdom (or if the Issuer becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary supervisory authority with respect to the Issuer and/or the Group.

“Regulatory Capital Requirements” means any applicable minimum capital or capital requirements specified for banks or financial groups by the Relevant Regulator.

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	“CRD IV” means, taken together, (i) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, and any successor directive (the “CRD IV Directive”), (ii) Regulation(EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms amending Regulation (EU) No 648/2012, and any successor regulation (the “CRD IV Regulation”) and (iii) applicable capital adequacy banking regulations then in effect in the United Kingdom. “Tier 1 Capital” has the meaning given to it by the Regulatory Capital Requirements from time to time. “Tier 2 Capital” has the meaning given to it by the Regulatory Capital Requirements from time to time.
Agreement with Respect to the Exercise of U.K. Bail-in Power	By purchasing the Capped Offer Notes, each holder (including each beneficial owner) of the Capped Offer Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Capped Offer Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or	Notwithstanding any other agreements, arrangements, or understandings between us and any holder or beneficial owner of the New Notes by acquiring or holding the New Notes, each holder (including each beneficial owner) of the New Notes acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion,

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interest on, the Capped Offer Notes into shares or other securities or other obligations of LBG or another person, and/or (iii) for the Series 3 Existing Subordinated Notes, the amendment or alteration of the maturity of the Series 3 Existing Subordinated Notes, or amendment of the amount of interest due on the Series 3 Existing Subordinated Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; which U.K. bail-in power may be exercised by means of variation of the terms of the Capped Offer Notes solely to give effect to the above. With respect to (i) and (ii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the maturity date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each holder (including each beneficial owner) of the Capped Offer Notes further acknowledges and agrees that the rights of the holders under the Capped Offer Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.   For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United of the principal amount of, or interest on, the New Notes; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the New Notes into shares or other securities or other obligations of LBG or another person (and the issue to or conferral on the holder of such shares, securities or obligations), including by means of amendment, modification or variation of the terms of the New Notes; and/or (iii) the amendment or alteration of the maturity of the New Notes, or amendment of the amount of interest due on the New Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; any U.K. bail-in power may be exercised by means of variation of the terms of the New Notes solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the maturity date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each holder and each beneficial owner of the New Notes further acknowledges and agrees that the rights of the holders and/or beneficial owners under the New Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.   For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power

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Kingdom in effect and applicable in the United Kingdom to us or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which 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 U.K. resolution regime by way of amendment to the Banking Act 2009 as the same may be amended from time to time (whether pursuant to the Banking Reform Act 2013 or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).   According to the principles contained in the BRRD and the amendments to the Banking Act by way of the Banking Reform Act 2013, we expect that the relevant U.K. resolution authority would exercise its U.K. bail-in powers in respect of the Capped Offer Notes having regard to the hierarchy of creditor claims upon an insolvency of LBG (with the exception of excluded liabilities) and that the claims of holders of the Capped Offer Notes would be treated equally in respect of the exercise of the U.K. bail-in powers with all other claims that would rank existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to us and the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United Kingdom within the context of the U.K. resolution regime under the Banking Act as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which any right in a contract governing such obligations may be deemed to have been exercised (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).   According to the principles contained in the Banking Act, we expect that the relevant U.K. resolution authority would exercise its U.K. bail-in power in respect of the New Notes having regard to the hierarchy of creditor claims and that the holder or beneficial owner of the New Notes would be treated equally in respect of the exercise of the U.K. bail-in power with all other claims that

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pari passu with the Capped Offer Notes upon an insolvency of LBG. would rank pari passu with the New Notes upon an insolvency of LBG.   No repayment of the principal amount of the New Notes or payment of interest on the New Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 us under the laws and regulations of the United Kingdom applicable to us or other members of the Group. See also “Risk Factors—Under the terms of the New Notes, you will agree to be bound by and consent to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.”   Neither a reduction or cancellation, in part or in full, of the principal amount of, or interest on, the New Notes or the conversion thereof into another security or obligation of LBG or another person, as a result of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to LBG, nor the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes will be a default or an event of default for any purpose.   LBG’s obligations to indemnify the Trustee in accordance with the Section 6.07 of the Subordinated Indenture shall survive the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the New Notes.

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Repayment of Principal and Payment of Interest After Exercise of U.K. Bail-In Power	Series 2 Existing Subordinated Notes: Substantially the same as for the New Notes. Series 3 Existing Subordinated Notes: No repayment of the principal amount of the Series 3 Existing Subordinated Notes or payment of interest on the Series 3 Existing Subordinated Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 us under the laws and regulations of the U.K. and the European Union applicable to us and the Group.	No repayment of the principal amount of the New Notes or payment of interest on the New Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 us under the laws and regulations of the United Kingdom applicable to us or other members of the Group. See also “Risk Factors—Under the terms of the New Notes, you will agree to be bound by and consent to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.”
Events of Default; Default; Limitation of Remedies	Substantially the same as for the New Notes.	An “Event of Default” with respect to the New Notes shall result if either: ·     a court of competent jurisdiction makes an order which is not successfully appealed within 30 days; or ·     an effective shareholders’ resolution is validly adopted for the winding-up of LBG other than under or in connection with a scheme of amalgamation or reconstruction not involving a bankruptcy or insolvency. The exercise of any U.K. bail-in power by the relevant U.K. resolution authority shall not constitute an Event of Default. If an Event of Default occurs and is continuing, the Trustee or the holder or holders of at least 25% in aggregate principal amount of the New Notes may declare to be due and payable immediately in accordance with the terms of the Indenture the principal amount of, any

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accrued but unpaid payments. However, after such declaration but before the Trustee obtains a judgment or decree for payment of money due, the holder or holders of a majority in aggregate principal amount of the New Notes may rescind or annul the declaration of acceleration and its consequences, but only if all Events of Default have been cured or waived and all payments due, other than those due as a result of acceleration, have been made.

In addition to Events of Default, the Indenture also separately provides for Defaults. It shall be a “Default” with respect to the New Notes if:

·     any installment of interest upon any New Notes is not paid on or before the date specified for its payment in the Indenture and such failure continues for 14 days; or

·     all or any part of the principal of the New Notes is not paid when it becomes due and payable, whether upon redemption or otherwise, and such failure continues for seven days.

If a Default occurs and is continuing, the Trustee may commence a proceeding in Scotland (but not elsewhere) for the winding-up of LBG.

However, a failure to make any payment on the New Notes shall not be a Default if it is withheld or refused in order to comply with any applicable fiscal or other law or regulation or order of any court of competent jurisdiction and LBG delivers an opinion of counsel to the Trustee with that

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conclusion, at any time before the expiry of the applicable 14 day or seven day period by independent legal advisers.

Notwithstanding any contrary provisions, nothing shall impair the right of a holder, absent the holder’s consent, to sue for any payments due but unpaid with respect to the New Notes.

By accepting the New Notes, each holder and the Trustee will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to the New Notes or the Indenture (or between obligations which LBG may have under or in respect of any New Notes and any liability owed by a holder or the Trustee to LBG) that they might otherwise have against LBG, whether before or during the winding-up or liquidation of LBG.

The holder or holders of not less than a majority in aggregate principal amount of the New Notes may waive any past Event of Default or Default with respect to the New Notes, except an Event of Default or Default in respect of the payment of interest, if any, or principal of (or premium, if any) or payments on any New Notes or a covenant or provision of the Indenture which cannot be modified or amended without the consent of each holder of New Notes.

Subject to the provisions of the Indenture relating to the duties of the Trustee, if an Event of Default or a Default occurs and is continuing with respect to the New Notes, the Trustee will be under no obligation to take direction from any holder or holders of the New Notes, unless they have offered

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reasonable indemnity to the Trustee. Subject to the Indenture provisions for the indemnification of the Trustee, the holder or holders of a majority in aggregate principal amount of the outstanding New Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the New Notes, if the direction is not in conflict with any rule of law or with the Indenture and does not expose the Trustee to undue risk and the action would not be unjustly prejudicial to the holder or holders of the New Notes of such series not taking part in that direction. The Trustee may take any other action that it deems proper which is not inconsistent with that direction.

The Indenture provides that the Trustee will, within 90 days after the occurrence of an Event of Default or a Default with respect to the New Notes, give to each holder of the New Notes notice of the Event of Default or Default known to it, unless the Event of Default or Default, has been cured or waived; provided that the Trustee shall be protected in withholding notice (except for a payment default) if it determines in good faith that withholding notice is in the interest of the holders of the New Notes.

We are required to furnish to the Trustee a statement as to our compliance with all conditions and covenants under the Indenture (i) annually, and (ii) within five Business Days of a written request from the Trustee.

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Denomination	Substantially the same as for the New Notes.	Book-entry interests in the New Notes will be issued in minimum denominations of $200,000 and in integral multiples of $1,000 in excess thereof.
Governing Law	The indentures governing the Capped Offer Notes and the Capped Offer Notes are governed by, and construed in accordance with, the laws of the State of New York, except for the subordination and waiver of set-off provisions relating to the Capped Offer Notes, which are governed by the laws of Scotland.	The Subordinated Indenture, the Ninth Supplemental Indenture and the New Notes are governed by, and construed in accordance with, the laws of the State of New York, except for the subordination and waiver of set-off provisions relating to the New Notes, which are governed by, and construed in accordance with, the laws of Scotland.
Listing and Trading	New York Stock Exchange	New York Stock Exchange
Form and Depositary	Substantially the same as for the New Notes.	The New Notes shall initially be represented by one or more global securities in registered form, without coupons attached, and will be deposited with DTC, and will be registered in the name of such depositary or its nominee. Beneficial interests in the global debt securities will be shown on, and transfers thereof will be effected only through, the book-entry records maintained by DTC and its direct and indirect participants, including, as applicable, Euroclear and Clearstream, Luxembourg.
Trustee and Paying Agent	The Bank of New York Mellon, acting through its London Branch.	The Bank of New York Mellon, acting through its London Branch.
Business Day Convention Day Count Basis	Following, unadjusted 30/360 (in case of an incomplete month, based on actual number of days elapsed in such period)	Following, unadjusted 30/360 (in case of an incomplete month, based on actual number of days elapsed in such period)

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Taxation Considerations

U.S. Federal Income Tax Considerations

The following are material U.S. federal income tax consequences of the Exchange Offer and the ownership and disposition of the New Notes to the U.S. Holders described below. This discussion applies to you only if you hold your Existing Securities, and will hold the New Notes, as capital assets for U.S. federal income tax purposes. This discussion does not purport to be a comprehensive description of all of the tax considerations that may be relevant to your decision to participate in the Exchange Offer or your ownership of the New Notes. Furthermore, it does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including any special tax accounting rules under Section 451 of the Internal Revenue Code of 1986, as amended (the “Code”), alternative minimum tax and Medicare contribution tax consequences, as well as differing tax consequences applicable to you if you are one of special classes of U.S. Holders, such as:

· a financial institution;

· an insurance company;

· a regulated investment company;

· a dealer or an electing trader in securities that uses a market-to-market method of accounting for U.S. federal income tax purposes;

· a person that holds Existing Securities or will hold New Notes as part of a straddle, conversion or other integrated transaction;

· a person whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

· a tax-exempt entity, “individual retirement account” or “Roth IRA”;

· a person that owns, or is deemed to own, directly, indirectly or constructively 5% or more (by vote or value) of our equity interests;

· a person that holds Existing Securities, or that will hold New Notes, in connection with a trade or business conducted outside of the United States; or

· a partnership or other entity classified as a partnership for U.S. federal income tax purposes.

If an entity that is classified as a partnership for U.S. federal income tax purposes owns Existing Securities or New Notes, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding Existing Securities and partners in such partnerships should consult their tax advisers regarding the particular U.S. federal income tax consequences to them of the Exchange Offer and the ownership and disposition of New Notes.

This discussion is based on tax laws of the United States including the Code, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof, changes to any of which may affect the tax consequences described herein, possibly with retroactive effect.  This discussion does not address any aspect of state, local or non-U.S. taxation or any U.S. federal taxes other than income taxes (such as estate or gift taxes).

You are a “U.S. Holder” if you acquire New Notes pursuant to this Offer to Exchange and, for U.S. federal income tax purposes, you are a beneficial owner of Existing Securities and:

· a citizen or an individual resident of the United States;

· a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any state therein or the District of Columbia; or

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· an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

You should consult your tax adviser regarding the U.S. federal, state, local and non-U.S. tax consequences of participating in the Exchange Offer and of owning and disposing of New Notes in your particular circumstances.

Tax Characterization of the Existing Subordinated Notes and the New Notes

There is no direct legal authority as to the proper U.S. federal income tax treatment of an instrument that is denominated as a debt instrument and has significant debt features, but is subject to statutory bail-in powers such as the U.K. bail-in power. As indicated in the offering documents for the Existing Subordinated Notes, their respective issuers took the position that these notes were treated as debt for U.S. federal income tax purposes, and the remainder of this discussion assumes that this treatment is respected. We believe that the New Notes should be treated as debt for U.S. federal income tax purposes. If the New Notes are treated as debt, although the matter is not entirely clear, we believe the New Notes should be treated as “variable rate debt instruments.” We intend to take the position that for the purpose of determining whether and to what extent the New Notes will have original issue discount, the new Notes provide for stated interest at a single fixed rate from (and including) the Issue Date to (but excluding) the Reset Date, followed by a qualified floating rate (a “QFR”) from (and including) the Reset Date to (but excluding) the Maturity Date for U.S. federal income tax purposes. The remainder of this discussion assumes that the positions set forth above are respected.  

U.S. Federal Income Tax Consequences of the Any and All Offer

Exchange of ADSs

The exchange of ADSs of any series for New Notes and cash pursuant to the Any and All Offer (the “ADS Exchange”) should be treated as a redemption of the ADSs for U.S. federal income tax purposes. Under Section 302 of the Code, a corporation’s redemption of its equity securities (such as the ADSs) may be treated for U.S. federal income tax purposes either as a sale of the securities by the owner thereof, or as a distribution from the issuing corporation to the owner, depending on the facts. The redemption of the ADSs will generally be treated as a sale of the ADSs by you (rather than a distribution by us to you) provided that, after the application of certain constructive ownership attribution rules, the redemption either (i) results in a “complete redemption” of your interest in our equity or (ii) is “not essentially equivalent to a dividend”, each within the meaning of Section 302(b) of the Code. In general, a redemption of equity securities will not be essentially equivalent to a dividend with respect to you if the redemption results in a “meaningful reduction” in your equity interest in us. The Internal Revenue Service (“IRS”) has indicated in published guidance that if certain conditions are met, a redemption of nonvoting, non-convertible preferred equity securities, or of shares held by a small minority shareholder in a publicly and widely held corporation who exercises no control over the issuer’s corporate affairs, would generally be treated as not essentially equivalent to a dividend. Based on this guidance, and taking into account the terms of the ADSs and our ownership structure, we expect that the exchange of ADSs pursuant to the ADS Exchange generally will be treated as a sale of the ADSs to us, and the remainder of this discussion so assumes. However, you should consult your tax adviser regarding the application of the rules set forth in Section 302 of the Code in your specific circumstances, particularly if you also own our ordinary shares or American Depositary Shares representing our ordinary shares.  

      Subject to the discussion regarding the passive foreign investment company (“PFIC”) rules below, you should generally recognize capital gain or loss on the sale of your ADSs to us in an amount equal to the difference between (i) your adjusted tax basis in the ADSs and (ii) the sum of the “issue price” of the New Notes (determined as described below under “—Taxation of the New Notes—Issue Price”) and any cash received with respect to the sold ADSs. Generally, capital gains or losses will be long-term if the ADSs have been held for more than one year. The deductibility of capital losses is subject to limitations. Any gain or loss will generally be treated as U.S. source for foreign tax credit purposes.  Your initial tax basis in the New Notes received in the ADS Exchange should equal the issue price of the New Notes, and the holding period of the New Notes should begin on the day after the ADS Exchange.

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In general, a non-U.S. corporation will be a PFIC for any taxable year in which, after taking into account the income and assets of the corporation and certain subsidiaries pursuant to applicable “look-through rules”, either (i) at least 75% of its gross income is “passive income” or (ii) at least 50% of the average value of its assets (generally determined on a quarterly basis) consists of assets that produce, or are held for the production of, passive income. Although interest income is generally passive, under proposed Treasury regulations (that under current guidance from Treasury taxpayers can rely on prior to their finalization) certain banking income of licensed active banks is treated as non-passive. We believe that we were not a PFIC for our 2020 taxable year, and we do not expect to be a PFIC for our current taxable year. However, the proposed Treasury regulations may not be finalized in their current form. Moreover, our PFIC status for any taxable year depends on the composition of our income and assets, the value of our assets and the manner in which we operate our business, and cannot be determined until the end of the taxable year.  Accordingly, there can be no assurance that we were not a PFIC for any prior taxable year or that we will not be a PFIC for the current taxable year.  If we were a PFIC for any taxable year during which you owned ADSs, we would generally continue to be treated as a PFIC with respect to you even if we ceased to be a PFIC for subsequent taxable years (unless a certain purging election was made). If we are or were a PFIC for any taxable year during your holding period of the ADSs, you would be subject to adverse U.S. federal income tax consequences, including increased tax liability on gains from the disposition of ADSs. You should consult your tax adviser regarding our PFIC status for any taxable year during which you owned ADSs and the potential application of the PFIC rules to the disposition of the ADSs.

Exchange of Series 1 Existing Subordinated Notes

The Series 1 Existing Subordinated Notes were not issued by LBG. Therefore, the exchange of Series 1 Existing Subordinated Notes for New Notes and cash pursuant to the Any and All Offer (the “Series 1 Exchange”) will be a taxable transaction for U.S. federal income tax purposes. You will recognize gain or loss, if any, equal to the difference between the amount realized on the exchange and your adjusted tax basis in the Series 1 Existing Subordinated Notes. The amount realized on the exchange of your Series 1 Existing Subordinated Notes should equal the “issue price” of the New Notes received (determined as described below under “—Taxation of the New Notes—Issue Price”) and any cash payment received on the Series 1 Exchange (except to the extent attributable to accrued and unpaid interest). Your adjusted tax basis in the Series 1 Existing Subordinated Notes generally equals your purchase price for the Series 1 Existing Subordinated Notes, increased by any market discount on the Series 1 Existing Subordinated Notes previously included in gross income and reduced by any bond premium on the Series 1 Existing Subordinated Notes previously amortized.  Your initial tax basis in the New Notes received in the Series 1 Exchange will equal their issue price, and the holding period of the New Notes will begin on the day after the Series 1 Exchange.

Any gain or loss recognized with respect to a Series 1 Exchange generally will be capital gain or loss and will be long-term capital gain or loss if you held the Series 1 Existing Subordinated Notes for more than one year at the time of the exchange. Long-term capital gain recognized by non-corporate U.S. Holders is generally eligible for a reduced rate of taxation. The deductibility of capital losses is subject to limitations.

Amounts received with respect to accrued and unpaid interest on the Series 1 Existing Subordinated Notes will not form part of the amount realized on the exchange and will be taxed in the same manner as stated interest on the Series 1 Existing Subordinated Notes.

If you acquired your Series 1 Existing Subordinated Notes at a “market discount” (generally, a non-de minimis discount from their issue price), any gain recognized on the Series 1 Exchange would be taxed as ordinary interest income to the extent of accrued market discount that you had not previously elected to include in your income.

U.S. Federal Income Tax Consequences of the Capped Offer

The tax treatment of the exchange of the Series 2 Existing Subordinated Notes and/or the Series 3 Existing Subordinated Notes for New Notes and cash pursuant to the Capped Offer (a “Capped Exchange”) depends, in part, on whether the Capped Exchange is treated as resulting in a “significant modification” of the Capped Offer Notes, and if so, on whether the Capped Exchange is treated as a “recapitalization” for U.S. federal income tax purposes. We believe that each Capped Exchange should constitute a “significant modification” of the relevant Capped Offer Notes and the remainder of this discussion so assumes.  

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The extent to which you would be taxed on the gain realized with respect to a Capped Exchange depends on whether the Capped Exchange qualifies as a “recapitalization” for U.S. federal income tax purposes. In general, for the Capped Exchange to qualify as a recapitalization, the relevant series of Capped Offer Notes and the New Notes must be treated as “securities” for U.S. federal income tax purposes. Whether a debt instrument is a security is determined based on all the facts, including the term of the debt instrument. Generally, debt instruments with a term of ten years or more are considered securities. We intend to take the position that each Capped Exchange should be treated as a recapitalization for U.S. federal income tax purposes and the remainder of this discussion so assumes. You should consult your tax adviser regarding the consequences of a Capped Exchange if it does not qualify as a recapitalization for U.S. federal income tax purposes.  

If the Capped Exchange is treated as a recapitalization, you will not recognize any loss on the Capped Exchange. The amount of gain you will recognize with respect to a Capped Exchange should be the lower of (i) the amount of gain realized in the Capped Exchange (as described below) and (ii) the sum of (x) the Cash Consideration Amount received with respect to the Capped Exchange and, if applicable, (y) the excess of the principal amount of New Notes received in the Capped Exchange (including any fractional New Notes deemed received, as described below) over the principal amount of the exchanged Capped Offer Notes (the amount described in (ii) above is referred to herein as “Boot”). We believe that for this purpose, the term “principal amount” as applied to the New Notes means their stated principal amount. However, it is possible that the IRS could assert that for this purpose the principal amount of the New Notes means their issue price. For purposes of this computation, the gain realized on a Capped Exchange should equal the difference between the amount realized and your adjusted tax basis in the relevant Capped Offer Notes. The amount realized should in turn equal the “issue price” of the New Notes received (and fractional New Notes deemed received) with respect to the exchanged Capped Offer Notes (determined as described below under “—Taxation of the New Notes—Issue Price”) and the applicable Cash Consideration Amount.  Your adjusted tax basis in the Capped Offer Notes will generally equal your purchase price, increased by any market discount on the exchanged Capped Offer Notes previously included in gross income and reduced by any bond premium on the exchanged Capped Offer Notes previously amortized.  

If you receive cash in lieu of fractional New Notes, you should generally be treated as having received the fractional New Notes pursuant to the Capped Offer and then as having had those fractional New Notes sold for cash. As a result, you will generally recognize gain or loss on the receipt of cash in lieu of fractional New Notes, which gain or loss will generally be determined as described below under “—Taxation of the New Notes—Sale, Exchange or Redemption.”  

Your initial tax basis in the New Notes received (and fractional New Notes deemed received) with respect to any relevant Capped Offer Notes, to the extent the principal amount thereof does not exceed the principal amount of the exchanged Capped Offer Notes, will equal your adjusted tax basis in the latter, increased by any gain recognized on the Capped Exchange of the Capped Offer Notes and decreased by the amount of Boot received with respect to the Capped Exchange. Your tax basis in fractional New Notes will be determined by allocating your tax basis between the New Notes actually received and the fractional New Notes deemed received in accordance with their respective fair market values. Your holding period in these New Notes will include your holding period for the Capped Offer Notes exchanged therefor.

Your tax basis in any New Notes having a principal amount in excess of the principal amount of the Capped Offer Notes exchanged therefor will be the fair market value of these New Notes on the Settlement Date, and your holding period of these New Notes will begin on the day after the Settlement Date.

Any gain or loss recognized with respect to a Capped Exchange generally will be capital gain or loss (except to the extent of any accrued market discount, as discussed below) and should be long-term capital gain or loss if the relevant Existing Subordinated Notes have been held for more than one year. Long-term capital gain recognized by non-corporate U.S. Holders is generally eligible for a reduced rate of taxation. The deductibility of capital losses is subject to limitations.

Amounts received with respect to accrued and unpaid interest on the Capped Offer Notes will not form part of the amount realized on their exchanges and will be taxed in the same manner as stated interest on the Capped Offer Notes.

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If you acquired your Capped Offer Notes at a “market discount” (generally, a non-de minimis discount from their issue price), any gain recognized on their exchange would be taxed as ordinary interest income to the extent of accrued market discount that you had not previously elected to include in your income. In addition, any accrued market discount not taken into account due to the Capped Exchange being treated as a recapitalization will carry over to the New Notes received.

Tax Considerations for Existing Securities Not Exchanged

The Exchange Offer will not result in a taxable event for you with respect to Existing Securities that are not exchanged pursuant to the Exchange Offer. If you do not exchange your Existing Securities you will continue to have the same adjusted tax basis in and holding period for your Existing Securities that you had immediately prior to the Exchange Offer.

Taxation of the New Notes

Issue Price

If the New Notes are “publicly traded” for U.S. federal income tax purposes, their issue price will equal their fair market value on the Settlement Date. If the New Notes are not publicly traded but a substantial amount of them are issued in exchange for Existing Securities that are publicly traded, the issue price of the New Notes will be determined by reference to the fair market value of the publicly traded Existing Securities on the Settlement Date.  If neither the New Notes nor any Existing Securities exchanged therefor are publicly traded, the issue price of the New Notes will generally be their stated principal amount. We expect that the New Notes will be publicly traded for this purpose but there can be no assurance in this regard.

Under the applicable Treasury regulations, we are required to determine whether the New Notes are publicly traded (or whether any Existing Securities are publicly traded if the New Notes are not) and the issue price of the New Notes, and make these determinations available to you in a commercially reasonable fashion, including by electronic publication, within 90 days of the issue date of the New Notes. We intend to make this information available on our website. Our determination is binding on you, unless you explicitly disclose on your tax return that your determination is different and explain how you made that different determination.

Interest and Original Issue Discount

For U.S. federal income tax purposes if the “stated redemption price at maturity” of a debt instrument exceeds its issue price, and the excess equals or exceeds a prescribed de minimis threshold, the debt instrument will be treated as having been issued with original issue discount (“OID”). The stated redemption price at maturity is the sum of all payments required to be made under the debt instrument, other than payments of “qualified stated interest” (“QSI”). QSI is generally stated interest unconditionally payable at least annually during the entire term of the debt instrument. Under Treasury regulations applicable to variable rate debt instruments that provide for an initial fixed rate followed by a QFR, in order to determine the amount of QSI and any OID in respect of the New Notes, an equivalent fixed rate debt instrument must be constructed. The equivalent fixed rate debt instrument is constructed in the following manner: (i) first, the initial fixed rate is converted to a QFR that would preserve the fair market value of the New Notes, and (ii) second, each QFR (including the QFR determined under clause (i) above) is converted to a fixed rate substitute (which generally will be the value of that QFR as of the issue date of the New Notes). The QSI on the New Notes generally will be the lowest rate of interest in effect at any time under the equivalent fixed rate debt instrument, and any interest in excess of that rate generally will be treated as part of the stated redemption price at maturity and, therefore, as possibly giving rise to OID.  If the New Notes are not treated as issued with OID, all stated interest should be treated as QSI.  Whether the New Notes will be treated as issued with OID will depend in part on market conditions, and thus cannot be determined before the Settlement Date.

QSI on the New Notes will be includable in your income as ordinary interest income at the time it accrues or is received in accordance with your method of accounting for U.S. federal income tax purposes. You will be required to include OID in income for U.S. federal income tax purposes as it accrues, in accordance with a constant yield method based on a compounding of interest. The amount of OID allocable to an accrual period equals the excess of (a) the product of the equivalent fixed rate note’s adjusted issue price at the beginning of the accrual

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period and the equivalent fixed rate note’s yield to maturity over (b) the sum of the payments of QSI on the equivalent fixed rate note allocable to the accrual period. The “adjusted issue price” of the equivalent fixed rate note at the beginning of any accrual period is the issue price of the New Note, increased by (x) the amount of accrued OID for each prior accrual period and decreased by (y) the amount of any payments previously made on the equivalent fixed rate notes that were not QSI. QSI or OID allocable to an accrual period must be increased (or decreased) if the interest actually accrued or paid on the New Notes during an accrual period exceeds (or is less than) the interest assumed to be accrued or paid under the equivalent fixed rate debt instrument.

Interest income (including OID) will constitute foreign-source income, which may be relevant to you in calculating your foreign tax credit limitation.

You may make an election to include in income all interest that accrues on a New Note (including QSI, OID, de minimis OID, market discount and de minimis market discount, as adjusted by any amortizable bond premium or acquisition premium, as described below) in accordance with a constant-yield method based on the compounding of interest.

Amortizable Bond Premium

If your initial tax basis in the New Notes (determined as described under “U.S. Federal Income Tax Consequences of the Exchange Offer”) exceeds the stated redemption price at maturity of the equivalent fixed rate notes described above, the New Notes will be considered to have amortizable bond premium. In general, the amortizable bond premium with respect to New Notes will be the excess, if any, of your tax basis over the stated redemption price at maturity of the equivalent fixed rate notes and you may elect to amortize this bond premium, using a constant-yield method, over the term of the New Notes. You generally may use the amortizable bond premium allocable to an accrual period to offset qualified stated interest otherwise required to be included in income with respect to the New Notes in that accrual period. In addition, you will generally not be required to include any OID in your income with respect to the Notes.  An election to amortize bond premium applies to all taxable debt obligations then owned or thereafter acquired and may be revoked only with the consent of the IRS.

If you make a constant-yield election (as described under “—Stated Interest and Original Issue Discount”) for a New Note with amortizable bond premium, that election will result in a deemed election to amortize bond premium for all of your debt instruments with amortizable bond premium, and may be revoked only with the consent of the IRS with respect to debt instruments acquired after revocation.

Acquisition Premium

If your initial tax basis in the New Notes is greater than the New Notes’ issue price but less than or equal to the sum of all amounts payable on the New Notes other than QSI, you will be considered to have acquired the New Notes with acquisition premium. Under the acquisition premium rules, the amount of OID (if any) that you must include in gross income with respect to the New Notes for any taxable year will be reduced by the portion of acquisition premium properly allocable to that year.

Market Discount

As described above, any accrued market discount not recognized on a Capped Exchange will carry over to the New Notes received in the Capped Exchange. In addition, your New Notes will be treated as acquired with market discount if the issue price of the New Notes exceeds your initial tax basis in the New Notes by more than a prescribed de minimis amount. If your New Notes have market discount, you will be required to treat any gain on the sale, exchange or retirement of such New Notes as ordinary income to the extent of the market discount that is treated as having accrued on such New Notes at the time of the sale, exchange or retirement, and which you have not previously elected to include in your income. Any market discount will be considered to accrue ratably during the period from the Settlement Date to the maturity date of the New Notes unless you elect to accrue on a constant yield method. You may elect to include market discount in income currently as it accrues, in which case any gain recognized on the disposition of the New Notes will not be recharacterized as ordinary income.

Sale, Exchange or Redemption

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Upon the sale, exchange or redemption of a New Note, you will generally recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount realized (not including amounts attributable to accrued interest not previously included in income, which will be treated as stated interest as described in “—Interest and Original Issue Discount” above) and your adjusted tax basis in the New Note. Your adjusted tax basis in a New Note will equal your initial tax basis in the New Note (determined as described under “U.S. Federal Income Tax Consequences of the Exchange Offer”), increased by the amounts of any OID or market discount previously included in income with respect to the New Note and reduced by any amortized premium and any payments other than QSI received by you. Any gain or loss on the sale, exchange or redemption of a New Note generally will be capital gain or loss (except to the extent of any accrued market discount, as discussed in the preceding paragraph) and should be long-term capital gain or loss if the New Notes have been held for more than one year at the time of the disposition. Long-term capital gain recognized by non-corporate U.S. Holders is generally eligible for a reduced rate of taxation. The deductibility of capital losses is subject to limitation. Any gain or loss will generally be treated as U.S. source for foreign tax credit purposes.

Backup Withholding and Information Reporting

Information returns may be filed with the IRS in connection with payments (including the delivery of New Notes) under the Exchange Offer, payments or accrual of any OID on the New Notes, and the proceeds from a sale or other disposition of the New Notes. You may be subject to backup withholding on these payments and proceeds if you fail to provide your taxpayer identification number and comply with certain certification procedures or otherwise establish an exemption from backup withholding.  The amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund, provided that the required information is timely furnished to the IRS.

Certain U.S. Holders who are individuals and certain specified entities may be required to report information relating to non-U.S. accounts through which they hold New Notes (or information on the New Notes if the New Notes are not held through any financial institution). You should consult your tax advisers regarding your reporting obligations with respect to the New Notes.

U.K. Tax Consequences for U.S. Holders

The following is a description of certain U.K. tax consequences of the Exchange Offer, and ownership and disposal of New Notes, for U.S. Holders (as defined in “Taxation Considerations — U.S. Federal Income Tax Considerations”) who are resident in the U.S. for U.S. federal income tax purposes, are not resident in the U.K. for U.K. tax purposes, and do not at any relevant time (i) carry on a trade, profession or vocation in the U.K. through a branch or agency to which their Existing Securities or New Notes are attributable, or (ii) in the case of a corporate U.S. Holder, carry on a trade in the U.K. through a permanent establishment in the U.K. to which their Existing Securities or New Notes are attributable.

The comments below are of a general nature based on current U.K. tax law as applied in England and Wales and HM Revenue & Customs (“HMRC”) practice (which may not be binding on HMRC). They are not exhaustive of all possible tax considerations that may be relevant in the particular circumstances of each U.S. Holder. They do not necessarily apply where the income is deemed for tax purposes to be the income of any other person. Except to the extent expressly stated to the contrary, they relate only to the position of U.S. Holders who are the absolute beneficial owners of their New Notes and do not apply to certain classes of persons (such as dealers, individuals who have temporarily ceased to be resident in the U.K., and persons who are connected to us) to whom special rules may apply.

You should satisfy yourself as to the tax consequences in your own particular circumstances relating to the Exchange Offer. In particular, holders within the charge to U.K. income tax must take their own professional tax advice on the consequences of a disposal of their Existing Securities pursuant to the Exchange Offer.

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The Exchange Offer

Disposal. A U.S. Holder will not, upon disposal of Existing Securities or acquisition of New Notes pursuant to the Exchange Offer, be liable for U.K. taxation on gains realized, unless at the time of the disposal the U.S. Holder is resident for tax purposes in the U.K., carries on a trade, profession or vocation in the U.K. through a branch or agency in the U.K. to which their Existing Securities are attributable or, in the case of a corporate U.S. Holder, if the U.S. Holder carries on a trade in the U.K. through a permanent establishment in the U.K. to which their Existing Securities are attributable.

Payment of accrued interest will be made without withholding for or deduction of U.K. income tax, provided that the relevant Existing Subordinated Notes remain listed on a “recognised stock exchange” within the meaning of Section 1005 of the Income Tax Act 2007 (the “Act”). The New York Stock Exchange is currently a recognised stock exchange for these purposes. Payments of accrued dividend and other cash payments made pursuant to the Exchange Offer will be made without withholding for or deduction of U.K. income tax.

Payments in respect of accrued interest and accrued dividends on the Existing Securities will constitute U.K. source income for U.K. tax purposes and, as such, may be subject to U.K. income tax by direct assessment irrespective of the residence of the holder. However, where the payments are made without withholding or deduction on account of U.K. tax (as will be the case in respect of the Existing Securities as described above), the payments will not be assessed to U.K. income tax (other than in the hands of certain trustees) if you are not resident in the U.K. for tax purposes, except if you carry on a trade, profession or vocation in the U.K. through a U.K. branch or agency in connection with which the payments are received or to which the Existing Securities are attributable (or in the case of a corporate U.S. Holder, if you carry on a trade in the U.K. through a permanent establishment in the U.K. in connection with which the payments are received or to which Existing Securities are attributable), in which case (subject to exemptions for payments received by certain categories of agent) tax may be levied on the U.K. branch or agency (or permanent establishment).

Stamp Duty and Stamp Duty Reserve Tax. No U.K. stamp duty or stamp duty reserve tax will be payable by holders on purchase of their Existing Securities pursuant to the Exchange Offer.

New Notes

Payments.  Interest that we pay on the New Notes will be paid without withholding for or deduction of U.K. income tax, provided that the New Notes carry a right to interest and are and remain listed on a “recognised stock exchange” within the meaning of Section 1005 of the Act.  The New York Stock Exchange is currently a recognised stock exchange for these purposes.  The New Notes will be treated as listed on the New York Stock Exchange if they are officially listed in the United States in accordance with provisions corresponding to those generally applicable in EEA states and are admitted to trading on the New York Stock Exchange.

In all other cases, an amount on account of U.K. income tax must generally be withheld at the basic rate (currently 20%), unless one of certain exceptions relating to the status of the holder applies.  In particular, certain U.S. Holders will be entitled to receive payments free of withholding of U.K. income tax under the Treaty and will under current HMRC administrative procedures be able to make a claim for the issuance of a direction by HMRC to this effect.  However, such directions will be issued only on prior application to the relevant tax authorities by the holder in question.  If the New Notes are not listed on a recognised stock exchange, and such a direction is not given, we will be required to withhold tax, although a U.S. Holder entitled to relief under the Treaty may subsequently claim the amount withheld from HMRC.

Interest on the New Notes constitutes U.K. source income for U.K. tax purposes and, as such, may be subject to U.K. income tax by direct assessment irrespective of the residence of the holder.  However, where the payments are made without withholding or deduction on account of U.K. tax, the payments will not be assessed to U.K. income tax (other than in the hands of certain trustees) if you are not resident in the U.K. for tax purposes, except if you carry on a trade, profession or vocation in the U.K. through a U.K. branch or agency in connection with which the payments are received or to which the New Notes are attributable (or in the case of a corporate U.S. Holder, if you carry on a trade in the U.K. through a permanent establishment in the U.K. in connection with which the payments are received or to which the New Notes are attributable), in which case (subject to exemptions for payments received by certain categories of agent) tax may be levied on the U.K. branch or agency (or permanent establishment).

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Information relating to securities may be required to be provided to HMRC in certain circumstances.  This may include the value of the New Notes, details of the holders or beneficial owners of the New Notes (or the persons for whom the New Notes are held), details of the persons to whom payments derived from the New Notes are or may be paid and information and documents in connection with transactions relating to the New Notes.  Information may be required to be provided by, amongst others, the holders of the New Notes, persons by (or via) whom payments derived from the New Notes are made or who receive (or would be entitled to receive) such payments, persons who effect or are a party to transactions relating to the New Notes on behalf of others and certain registrars or administrators.  In certain circumstances, the information obtained by HMRC may be provided to tax authorities in other countries.

Disposal (including Redemption).  Subject to the provisions set out in the next paragraph in relation to temporary non-residents, a U.S. Holder will not, upon disposal (including redemption) of a New Note, be liable for U.K. taxation on gains realized, unless at the relevant time the U.S. Holder is resident for tax purposes in the U.K., carries on a trade, profession or vocation in the U.K. through a branch or agency in the U.K. to which the New Notes are attributable or, in the case of a corporate U.S. Holder, if the U.S. Holder carries on a trade in the U.K. through a permanent establishment in the U.K. to which the New Notes are attributable.

 A U.S. Holder who is an individual and who has ceased to be resident for tax purposes in the U.K. for a period of five years or less before again becoming resident for tax purposes in the U.K. and who disposes of a New Note during that period may be liable to U.K. tax on chargeable gains arising during the period of absence in respect of the disposal (including redemption), subject to any available exemption or relief.

 A U.S. Holder who is an individual or other non-corporation taxpayer will not, upon transfer or redemption of a New Note, be subject to any U.K. income tax charge on accrued but unpaid payments of interest, unless the U.S. Holder at any time in the relevant tax year was resident in the United Kingdom or carried on a trade, profession or vocation in the U.K. through a branch or agency to which the New Note is attributable.

 Annual Tax Charges.  Corporate U.S. Holders who are not resident in the U.K. and do not carry on a trade in the U.K. through a permanent establishment in the U.K. to which the New Notes are attributable will not be liable to U.K. tax charges or relief by reference to fluctuations in exchange rates or in respect of profits, gains and losses arising from the New Notes.

Stamp Duty and Stamp Duty Reserve Tax. The following paragraph is drafted on the basis, as is expected to be the case, that the New Notes are “exempt loan capital” (that is, that section 79(4) of the Finance Act 1986 applies to the New Notes).  

No U.K. stamp duty or stamp duty reserve tax should be payable on the issue, transfer or redemption of the New Notes.

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Certain Benefit Plan Investor Considerations

The U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”) imposes fiduciary standards and certain other requirements on employee benefit plans subject to Title I of ERISA, including collective investment funds, separate accounts, and other entities or accounts whose underlying assets are treated as assets of such plans pursuant to the U.S. Department of Labor “plan assets” regulation, 29 CFR Section 2510.3-101, as modified by Section 3(42) of ERISA (the “Plan Assets Regulation”) (collectively, “ERISA Plans”), and on those persons who are fiduciaries with respect to ERISA Plans. Investments by ERISA Plans are subject to ERISA’s general fiduciary requirements, including the requirement of investment prudence and diversification and the requirement that an ERISA Plan’s investments be made in accordance with the documents governing the plan. The prudence of a particular investment will be determined by the responsible fiduciary of an ERISA Plan by taking into account the ERISA Plan’s particular circumstances and all of the facts and circumstances of the investment including, but not limited to, the matters discussed in “Risk Factors” and the fact that in the future there may be no market in which the fiduciary will be able to sell or otherwise dispose of the New Notes.

In addition, Section 406 of ERISA and Section 4975 of the Code prohibit certain transactions involving the assets of an ERISA Plan, as well as those plans, accounts or other arrangements that are not subject to ERISA but which are subject to Section 4975 of the Code (together with ERISA Plans, “Plans”), and certain persons (referred to as “parties in interest” under ERISA or “disqualified persons” under the Code) having certain relationships to such Plans, unless a statutory or administrative exemption applies to the transaction. In particular, a sale or exchange of property or an extension of credit between a Plan and a “party in interest” or “disqualified person” may constitute a prohibited transaction. A party in interest or disqualified person who engages in a non-exempt prohibited transaction with a Plan may be subject to excise taxes or other liabilities under ERISA and the Code. In addition, a fiduciary of the Plan who caused the Plan to engage in such non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code.

While it cannot be free from doubt, for the reasons discussed in “Tax Considerations—U.S. Federal Income Tax Consequences”, the New Notes may be considered to have substantial equity features under the Plan Assets Regulation and, as a result, may be treated as equity interests in LBG for purposes of ERISA.

LBG, because of its business, directly or through its affiliates, may be considered a party in interest or disqualified person with respect to many Plans. Prohibited transactions within the meaning of Section 406 of ERISA or Section 4975 of the Code may arise if the New Notes are acquired by a Plan with respect to which LBG or an affiliate is a party in interest or a disqualified person, unless the New Notes are acquired pursuant to and in accordance with an applicable exemption. Certain exemptions from the prohibited transaction provisions of Section 406 of ERISA and Section 4975 of the Code may apply depending in part on the type of Plan fiduciary making the decision to acquire the New Notes and the circumstances under which that decision is made. Included among these exemptions are Prohibited Transaction Class Exemption (“PTCE”) 91-38 (relating to investments by bank collective investment funds), PTCE 84-14 (relating to transactions effected by a “qualified professional asset manager”), PTCE 90-1 (relating to investments by insurance company pooled separate accounts), PTCE 95-60 (relating to investments by insurance company general accounts) and PTCE 96-23 (relating to transactions determined by an in-house asset manager). In addition, ERISA Section 408(b)(17) and Section 4975(d)(20) of the Code provide a limited exemption for the purchase and sale of securities and related lending transactions, provided that neither the issuer of the securities nor any of its affiliates have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any Plan involved in the transaction, and provided further that the Plan pays no more than “adequate consideration” (within the meaning of ERISA Section 408(b)(17) and Section 4975(f)(10) of the Code) in connection with the transaction (the “service provider exemption”). There can be no assurance that any of these exemptions or any other exemption will be available with respect to transactions involving the Existing Securities and/or the New Notes.

Governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and non-U.S. plans (as described in Section 4(b)(4) of ERISA), while not subject to the fiduciary responsibility or prohibited transaction provisions of Title I of ERISA or Section 4975 of the Code, may nevertheless be subject to federal, state, local or non-U.S. laws or regulations that are substantially similar to the prohibited transaction provisions of Section 406 of ERISA and/or Section 4975 of the Code (“Similar Laws”). Fiduciaries of any such plans should consult with their counsel before tendering the Existing Securities and acquiring the New Notes.

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BY ITS TENDER OF THE EXISTING SECURITIES AND ACQUISITION AND HOLDING OF THE NEW NOTES, EACH HOLDER AND EACH TRANSFEREE WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT (A) EITHER (i) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF ERISA AND SUBJECT TO TITLE I OF ERISA, OR A “PLAN” AS DEFINED IN AND SUBJECT TO SECTION 4975 OF THE CODE, OR A GOVERNMENTAL PLAN, CHURCH PLAN OR NON-U.S. PLAN SUBJECT TO ANY SIMILAR LAW, OR AN ENTITY WHOSE ASSETS ARE TREATED AS ASSETS OF ANY SUCH PLAN OR (ii) ITS TENDER OF THE EXISTING SECURITIES AND ACQUISITION, HOLDING AND DISPOSITION OF THE NEW NOTES (OR ANY INTEREST THEREIN) WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, VIOLATE ANY SIMILAR LAW OR BE SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW OR REGULATION THAT COULD CAUSE THE UNDERLYING ASSETS OF THE ISSUER TO BE TREATED AS ASSETS OF THE INVESTOR IN ANY NEW NOTE (OR INTEREST THEREIN) BY VIRTUE OF ITS INTEREST AND THEREBY SUBJECT THE ISSUER (OR OTHER PERSONS RESPONSIBLE FOR THE INVESTMENT AND OPERATION OF THE ISSUER’S ASSETS) TO ANY SIMILAR LAW AND (B) NEITHER LBG, THE DEALER MANAGERS NOR ANY OF THEIR AFFILIATES IS A “FIDUCIARY” (WITHIN THE MEANING OF SECTION 3(21) OF ERISA, SECTION 4975 OF THE CODE, ANY SIMILAR LAW OR OTHERWISE) AS A RESULT OF THE TENDER OF THE EXISTING SECURITIES OR ACQUISITION, HOLDING AND DISPOSITION OF THE NEW NOTES (OR ANY INTEREST THEREIN) BY ANY PLAN.

Any fiduciary of a Plan or plan subject Similar Law that proposes to cause such Plan or plan to tender the Existing Securities and acquire the New Notes should consult with its counsel regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code to such an investment and to confirm that such investment will not constitute or result in a non-exempt prohibited transaction or any other violation of an applicable requirement of ERISA, the Code or any Similar Law.

The transfer of any New Notes to a Plan or plan subject to Similar Law is in no respect a representation by LBG or any of its affiliates that such an investment meets all relevant legal requirements with respect to investments by Plans or plans subject to Similar Law generally or any particular Plan or plan subject to Similar Law, or that such an investment is appropriate for Plans or plan subject to Similar Law generally or any particular Plan or plan subject to Similar Law. Neither this discussion nor anything provided in this prospectus is or is intended to be investment advice directed at any Plan or plan subject to Similar Law concerning the Exchange Offer.

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Validity of the New Notes

Our U.S. counsel, Davis Polk & Wardwell London LLP, will pass upon certain United States legal matters relating to the validity of the New Notes.  Our Scottish solicitors, CMS Cameron McKenna Nabarro Olswang LLP, will pass upon certain matters of Scots law relating to the validity of the New Notes. Allen & Overy LLP will pass upon certain matters of U.S. law on behalf of the Dealer Managers.

Experts

The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to the Annual Report of Lloyds Banking Group plc on Form 20-F for the year ended December 31, 2020 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

Index to Financial Statements

Please refer to page F-1 of our Annual Report on Form 20-F for the fiscal year ended December 31, 2020 and our Form 6-Ks containing our unaudited consolidated half-year results for the half-year ended 30 June 2021 and our interim results for the nine months ended September 30, 2021.

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Annex A—Formula to Determine the Total Exchange Consideration and New Notes Exchange Consideration

YLD	=	The exchange yield for the relevant series of Existing Securities, which equals the sum of (x) the Reference UST Yield for such Series and (y) the applicable Fixed Spread, expressed as a decimal number.
CPN	=	The contractual annual rate of interest or dividend, as applicable, payable on the relevant series of Existing Securities, expressed as a decimal number. The calculation is based on the assumption that all dividends are paid in full and when scheduled.
N	=	The number of scheduled semi-annual interest or dividend payments, as applicable, from (but not including) the Settlement Date to (and including) the first call date (in respect of the Preference Shares) or Maturity Date (in respect of the Existing Subordinated Notes), as applicable. The calculation is based on the assumption that all dividends are paid in full and when scheduled.
S	=	The number of days from (and including) the semi-annual dividend or interest payment, as applicable, date immediately preceding the Settlement Date, up to (but not including) the Settlement Date. The number of days is computed using the 30/360 day-count method.
/	=	Divide. The term immediately to the left of the division symbol is divided by the term immediately to the right of the division symbol before any addition or subtraction operations are performed.
exp	=	Exponentiate. The term to the left of “exp” is raised to the power indicated by the term to the right of “exp.”
	=	Summate. The term in the brackets to the right of the summation symbol is separately calculated “N” times k = 1 (substituting for “k” in that term each whole number between 1 and N, inclusive), and the separate calculations are then added together.
Accrued Interest / Accrued Dividend	=	$1,000(CPN/2) (S/180).
Total Exchange Consideration	=	The price per $1,000 principal amount of the Existing Securities being priced (excluding accrued interest). A tendering holder will receive a total amount per $1,000 principal amount (rounded to the nearest cent) equal to the Total Exchange Consideration plus accrued interest. The Total Exchange Consideration consists of the New Notes Exchange Consideration and, if applicable, the Cash Consideration Amount.
Formula for Total Exchange Consideration	=
New Notes Exchange Consideration	=	The Total Exchange Consideration minus the Cash Consideration Amount (where applicable).

136 

Annex B—Formula to Determine the Interest Rate on New Notes

Reference Yield	=	The bid-side yield, as calculated by the Dealer Managers in accordance with standard market practice, that corresponds to the bid-side price on the Benchmark Security set forth with respect to the New Notes on the front cover of this prospectus. The bid-side price for the Benchmark Security will be the bid-side price appearing at the Pricing Time on the Bloomberg Reference Page appearing on the front cover of this prospectus (or any other recognized quotation source selected by LBG in consultation with the Dealer Managers if such quotation report is not available or manifestly erroneous), rounded to three decimal places, with 0.0005 rounded down.
Spread to Benchmark Security	=	The Spread to Benchmark Security set forth with respect to the New Notes on the front cover of this prospectus.
Interest Rate on New Notes	=	The sum of (i) Reference Yield and (ii) the Spread to Benchmark Security.

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Annex C—Hypothetical Calculation of Total Exchange Consideration and New Notes Exchange Consideration

Target Bond	ADSs representing 6.413% Non-Cumulative Fixed to Floating Rate Preference Shares	ADSs representing 6.657% Non-Cumulative Fixed to Floating Rate Preference Shares	Subordinated Notes due 2033	4.500% Fixed Rate Subordinated Debt Securities due 2024	4.582% Subordinated Debt Securities due 2025
CPN	6.413%	6.657%	6.000%	4.500%	4.582%
First Call Date or Maturity Date	1-Oct-35	21-May-37	1-Nov-33	4-Nov-24	10-Dec-25
Reference UST Security	1.250% U.S. Treasury due August 15, 2031	1.750% U.S. Treasury due August 15, 2041	1.250% U.S. Treasury due August 15, 2031	0.750% U.S. Treasury due November 15, 2024	1.125% U.S. Treasury due October 31, 2026
Hypothetical Price Determination Time	6:00 AM Eastern Time, November 9, 2021	6:00 AM Eastern Time, November 9, 2021	6:00 AM Eastern Time, November 9, 2021	6:00 AM Eastern Time, November 9, 2021	6:00 AM Eastern Time, November 9, 2021
Hypothetical Price Determination Time Bloomberg Reference Page	FIT1	FIT1	FIT1	FIT1	FIT1
Hypothetical Settlement Date	14-Dec-21	14-Dec-21	14-Dec-21	14-Dec-21	14-Dec-21
Hypothetical Reference UST Yield at Hypothetical Price Determination Time	1.460%	1.872%	1.460%	0.718%	1.083%
Fixed Spread	+107	+83	+100	+50	+50
YLD	2.530%	2.702%	2.460%	1.218%	1.583%
N	28	31	24	6	8
S	73	23	43	40	4
Total Exchange Consideration - Components of Formula(1)
	$706.89	$660.81	$747.91	$965.53	$939.04
	$755.93	$839.91	$622.00	$132.35	$176.95
- $1,000(CPN/2) (S/180)	-$13.00	-$4.25	-$7.17	-$5.00	-$0.51
Total Exchange Consideration	$1,449.81	$1,496.46	$1,362.74	$1,092.88	$1,115.48
Cash Consideration Amount	$146.00	$110.00	$145.00	$0.00	$0.00
New Notes Exchange Consideration	$1,303.81	$1,386.46	$1,217.74	$1,092.88	$1,115.48
Accrued Interest / Accrued Dividend	$13.00	$4.25	$7.17	$5.00	$0.51
(1) Shown rounded to the nearest cent however unrounded values are used for the purposes of the calculation

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Annex D—Hypothetical Calculation of the Interest Rate Applicable to the New Notes

New Notes	Fixed Rate Reset Subordinated Debt Securities due 2046 with a call date in 2041
Reference UST Security	1.750% U.S. Treasury due August 15, 2041
Hypothetical Price Determination Time	6:00 AM Eastern Time, November 9, 2021
Hypothetical Price Determination Time Bloomberg Reference Page	FIT1
Hypothetical Reference UST Yield at Hypothetical Price Determination Time	1.872%
Spread to Benchmark Security	+150
Interest Rate on New Notes	3.372%

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ISSUER

Lloyds Banking Group plc
25 Gresham Street
London EC2V 7HN

United Kingdom

EXCHANGE AGENT

Lucid Issuer Services Limited
The Shard
32 London Bridge Street
London SE1 9SG
United Kingdom

Tel: +44 207 704 0880

Attention: Owen Morris / David Shilson
email: lbg@lucid-is.com
Website: https://deals.lucid-is.com/lbg-us

Any questions or requests for assistance or additional copies of this prospectus may be directed to the Exchange Agent and any questions regarding the terms of the Exchange Offer may be directed to the Dealer Managers listed below.

GLOBAL COORDINATORS AND JOINT LEAD DEALER MANAGERS

BofA Securities, Inc. 620 South Tryon Street, 20th Floor Charlotte, North Carolina 28255   Attention: Liability Management Group Telephone (London): +44-20-7996-5420 Telephone (U.S. Toll Free): +1 (888) 292-0070 Telephone (U.S.): +1 (980) 387-3907 Email: DG.LM-EMEA@bofa.com Credit Suisse Securities (USA) LLC 11 Madison Avenue   New York, New York 10010    Attn: Liability Management Group   Tel (London): +44 20 7883 8763 Tel (US): +1 (212) 538-2147 Tel (US toll free): +1 (800) 820-1653 Email: liability.management@credit-suisse.com Lloyds Securities Inc. 1095 Avenue of the Americas New York, NY 10036   Attention: Bond Syndicate Telephone (U.S.): +1 (212) 827-3145 Email: NALSIBondSyndicate@lbusa.com

LEGAL ADVISERS

To Lloyds Banking Group plc

As to U.S. law
Davis Polk & Wardwell London LLP
5 Aldermanbury Square
London EC2V 7HR
United Kingdom As to English law Linklaters LLP One Silk Street London EC2Y 8HQ United Kingdom As to Scots law CMS Cameron McKenna Nabarro Olswang LLP
Saltire Court 20 Castle Terrace Edinburgh EH1 2EN  
Scotland

To the Dealer Managers

As to U.S. law

Allen & Overy LLP

52 avenue Hoche

75008 Paris

France

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Indemnification of Directors and Officers.

Except as hereinafter set forth, there is no provision of the Memorandum and Articles of Association of LBG, or any contract, arrangement, agreement or statute under which any director or officer of LBG is insured or indemnified in any manner against any liability that he may incur in his capacity as such.

Deeds of Indemnity

LBG has entered into Deeds of Indemnity with the directors and certain officers of LBG that, subject to certain conditions precedent and limitations, in consideration for such director or officer continuing in or accepting office as a director or officer of (i) LBG, (ii) a subsidiary undertaking or holding company of LBG, or a subsidiary undertaking of LBG’s holding company or (iii) any undertaking in which such director or officer is acting as officer, employee, trustee or agent at LBG’s request, LBG will indemnify the director or officer against any liability, including (without limitation) any costs and expenses, incurred by, or attaching to, the director or officer in connection with any negligence, default, breach of duty or breach of trust by the director in relation to LBG or any associated company (as described in clauses (ii) and (iii) above) or in the actual or purported execution and/or discharge of his duties and/or the actual or purported exercise of his powers and/or otherwise in relation to or in connection with his duties, powers or office as an employee, officer, trustee or agent of LBG or any associated company (as described in clauses (ii) and (iii) above).

Articles 140, 141 and 142 of LBG’s Articles of Association provide:

Article 140 Indemnity

140.1 Subject to the provisions of, and so far as may be permitted by and consistent with, the statutes, any person who is or was at any time a director, officer, employee or trustee of LBG or of any associated company or organization may be indemnified by LBG out of its own funds against (a) any liability incurred by or attaching to him in connection with any negligence, default, breach of duty or breach of trust by him in relation to LBG or any associated company or organization; and (b) any other liability incurred by or attaching to him in the actual or purported execution and/or discharge of his duties and/or the exercise or purported exercise of his powers and/or otherwise in relation to or in connection with his duties, powers or offices.

140.2 Where any such person is indemnified against any liability in accordance with article 140.1, such indemnity shall extend to all costs, charges, losses, expenses and liabilities incurred by him in relation thereto.

Article 141 Insurance

141.1 Without prejudice to article 140 above, the directors shall have power to purchase and maintain insurance for or for the benefit of any person who is or was at any time a director, officer, employee or trustee of LBG or of any associated company or organization, including insurance against any liability incurred by or attaching to him in respect of any act or omission in the actual or purported execution and/or discharge of his duties and/or in the exercise or purported exercise of his powers and/or otherwise in relation to or in connection with his duties, powers or offices in relation to LBG or any associated company or organization (and all costs, charges, losses, expenses and liabilities incurred by him in relation thereto).

Article 142 Defense Expenditure

142.1 Subject to the provisions of, and so far as may be permitted by and consistent with, the statutes, LBG (i) may provide any person who is or was at any time a director, officer, employee or trustee of LBG or of any associated company or organization with funds to meet expenditure incurred or to be incurred by him in defending any criminal or civil proceedings in connection with any negligence, default, breach of duty or breach of trust by him in relation to LBG or any associated company or organization or in connection with any application for relief from liability under the statutes, and (ii) may do anything to enable any such a person to avoid incurring such expenditure.

II-1

142.2 Subject to the provisions of, and so far as may be permitted by and consistent with, the statutes, LBG (i) may provide any person who is or was at any time a director, officer, employee or trustee of LBG or of any associated company or organization with funds to meet expenditure incurred or to be incurred by him in defending himself in an investigation by a regulatory authority or against action proposed to be taken by a regulatory authority in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation to LBG or any associated company or organization, and (ii) may do anything to enable any such a person to avoid incurring such expenditure.

142.3 For the purpose of articles 140 to 142 an “associated company or organization” is any company or other body, whether or not incorporated, (i) which is LBG’s holding company or (ii) in which LBG or its holding company or any of the predecessors of LBG or of such holding company has any interest, whether direct or indirect, or (iii) which is in any way allied to or associated with LBG or its holding company or any of the predecessors of LBG or of such holding company (including any pension fund or employees’ share scheme in which any employees of LBG or of any associated company or organization are interested and any company acting as trustee for such pension fund or share scheme) or (iv) which is a subsidiary undertaking of any person mentioned in (iii) or (v) to which directors, officers, employees or trustees of LBG or of any subsidiary undertaking or any holding company of LBG are permitted by LBG or any subsidiary undertaking or any holding company of LBG to lend their services; and “person” shall include any natural person, partnership, other unincorporated association or body corporate.

Section 232 of the Companies Act 2006 provides:

(1) Any provision that purports to exempt a director of a company (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.

(2) Any provision by which a company directly or indirectly provides an indemnity (to any extent) for a director of the company, or of an associated company, against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director is void, except as permitted by–

(a) section 233 (provision of insurance),

(b) section 234 (qualifying third party indemnity provision), or

(c) section 235 (qualifying pension scheme indemnity provision).

(3) This section applies to any provision, whether contained in a company’s articles or in any contract with the company or otherwise.

(4) Nothing in this section prevents a company’s articles from making such provision as has previously been lawful for dealing with conflicts of interest.

Section 233 of the Companies Act 2006 provides:

Section 232(2) (voidness of provisions for indemnifying directors) does not prevent a company from purchasing and maintaining for a director of the company, or of an associated company, insurance against any such liability as is mentioned in that subsection.

Section 234 of the Companies Act 2006 provides:

(1) Section 232(2) (voidness of provisions for indemnifying directors) does not apply to qualifying third party indemnity provision.

(2) Third party indemnity provision means provision for indemnity against liability incurred by the director to a person other than the company or an associated company.

Such provision is qualifying third party indemnity provision if the following requirements are met.

(3) The provision must not provide any indemnity against:

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(a) any liability of the director to pay:

(i) a fine imposed in criminal proceedings, or

(ii) a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or

(b) any liability incurred by the director:

(i) in defending criminal proceedings in which he is convicted, or

(ii) in defending civil proceedings brought by the company, or an associated company, in which judgment is given against him, or

(iii) in connection with an application for relief (see subsection (6)) in which the court refuses to grant him relief.

(4) The references in subsection (3)(b) to a conviction, judgment or refusal of relief are to the final decision in the proceedings.

(5) For this purpose:

(a) a conviction, judgment or refusal of relief becomes final:

(i) if not appealed against, at the end of the period for bringing an appeal, or

(ii) if appealed against, at the time when the appeal (or any further appeal) is disposed of; and

(b) an appeal is disposed of:

(i) if it is determined and the period for bringing any further appeal has ended, or

(ii) if it is abandoned or otherwise ceases to have effect.

(6) The reference in subsection (3)(b)(iii) to an application for relief is to an application for relief under section 661(3) or (4) (power of court to grant relief in case of acquisition of shares by innocent nominee), or section 1157 (general power of court to grant relief in case of honest and reasonable conduct).

Section 1157 of the Companies Act 2006 provides:

(1) If in proceedings for negligence, default, breach of duty or breach of trust against:

(a) an officer of a company, or

(b) a person employed by a company as auditor (whether he is or is not an officer of the company), it appears to the court hearing the case that the officer or person is or may be liable but that he acted honestly and reasonably, and that having regard to all the circumstances of the case (including those connected with his appointment) he ought fairly to be excused, the court may relieve him, either wholly or in part, from his liability on such terms as it thinks fit.

(2) If any such officer or person has reason to apprehend that a claim will or might be made against him in respect of negligence, default, breach of duty or breach of trust–

(a) he may apply to the court for relief, and

(b) the court has the same power to relieve him as it would have had if it had been a court before which proceedings against him for negligence, default, breach of duty or breach of trust had been brought.

(3) Where a case to which subsection (1) applies is being tried by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant (in Scotland, the defender) ought in pursuance of that subsection to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case from the jury and forthwith direct judgment to be entered for the defendant (in Scotland, grant decree of absolvitor) on such terms as to costs (in Scotland, expenses) or otherwise as the judge may think proper.

II-3

In addition, LBG has obtained directors’ and officers’ insurance coverage, which, subject to policy terms and limitations, includes coverage to reimburse LBG for amounts that it may be required or permitted by law to pay directors or officers of LBG and its consolidated subsidiaries.

LBG will agree to indemnify our authorized representative in the United States from and against certain directors’ and officers’ liabilities.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted for directors, officers or persons controlling LBG pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.

Exhibits and Financial Statement Schedules.

Reference is made to the Exhibit Index and the Index to Financial Statements included herewith which are incorporated herein by reference.

Undertakings.

(a)       The undersigned registrant hereby undertakes:

(1)       To file during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)       to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)       to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total U.S. dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)       to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2)       That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)       To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)       To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering.

Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required by Section 10(a)(3) of the Securities Act of 1933 or Rule 3-19 and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.

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(5)       That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(b)       The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)       Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by one of our directors, officers or controlling persons in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(d)       The undersigned registrant hereby undertakes: (i) to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form F-4, within one Business Day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means, and (ii) to arrange or provide for a facility in the United States for the purpose of responding to such requests. The undertaking in subparagraph (i) above includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(e)       The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, Lloyds Banking Group plc has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in London, United Kingdom, on the 10^th day of November, 2021.

LLOYDS BANKING GROUP plc
By:	/s/ Claire-Elizabeth Padley
	Name:	Claire-Elizabeth Padley
	Title:	Head of Capital, HOLDCO and RRP

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard Shrimpton, Claire-Elizabeth Padley and Marian Galley and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, with full power of substitution, and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement or any registration statement in connection herewith that is to be effective upon filing pursuant to Rule 462(b) of the Securities Act, as amended, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission granting unto said attorneys-in-fact and agents and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated.

Signature	Title
/s/ Charlie Nunn
Charlie Nunn	(Executive Director, Group Chief Executive Officer)
/s/ William Chalmers
William Chalmers	(Executive Director, Group Chief Financial Officer)
/s/ Robin Budenberg
Robin Budenberg	(Chairman)
/s/ Alan Dickinson
Alan Dickinson	(Deputy Chairman and Senior Independent Director)
/s/ Sarah Legg
Sarah Legg	(Independent Director)

Signature	Title
/s/ Lord Lupton
Lord Lupton	(Independent Director)
/s/ Amanda Mackenzie
Amanda Mackenzie	(Independent Director)
/s/ Stuart Sinclair
Stuart Sinclair	(Independent Director)
/s/ Catherine Woods
Catherine Woods	(Independent  Director)
Harmeen Mehta	(Independent  Director)
/s/ Adriana Maestas
Adriana Maestas	(U.S. authorized representative)

EXHIBIT INDEX

Number	Description
3.1*	Memorandum and articles of association of Lloyds Banking Group plc (previously filed with the SEC on Form 20-F for the year ended December 31, 2009, dated May 13, 2010)
4.1*	Subordinated Debt Securities Indenture among Lloyds Banking Group plc, as Issuer, and The Bank of New York Mellon, as Trustee, dated as of November 4, 2014 (previously filed as Exhibit 4.1 to Form 6-K on November 4, 2014)
4.2	Form of Ninth Supplemental Indenture to the Subordinated Debt Securities Indenture among Lloyds Banking Group plc, as Issuer, and The Bank of New York Mellon, as Trustee
4.3	Form of Securities for the Subordinated Debt Securities (included in Exhibit 4.2)
5.1	Opinion of CMS Cameron McKenna LLP, Scottish solicitors to Lloyds Banking Group plc regarding the validity of the New Notes
5.2	Opinion of Davis Polk & Wardwell London LLP, U.S. counsel to Lloyds Banking Group plc regarding the validity of the New Notes
10.1	The resolutions adopted by a committee of the Board of Directors of HBOS plc passed on September 13, 2005, related to the Series 1 Preference Shares
10.2	The resolutions adopted by a committee of the Board of Directors of HBOS plc passed on May 3, 2007, related to the Series 2 Preference Shares
10.3	The resolutions adopted by a committee of the Board of Directors of Lloyds TSB Group plc passed on November 13, 2008, related to, among others, the Series 1 Preference Shares and Series 2 Preference Shares
10.4	Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020 among LBG, The Bank of New York Mellon, as Depositary and owners ad beneficial owners of Rule 144A American Depositary Shares, in respect of the Series 1 Preference Shares
10.5	Amended and Restated Regulation S Deposit Agreement dated as of February 18, 2020 among LBG, The Bank of New York Mellon, as Depositary and owners ad beneficial owners of Regulation S American Depositary Shares, in respect of the Series 1 Preference Shares
10.6	Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020 among LBG, The Bank of New York Mellon, as Depositary and owners ad beneficial owners of Rule 144A American Depositary Shares, in respect of the Series 2 Preference Shares
10.7	Amended and Restated Regulation S Deposit Agreement dated as of February 18, 2020 among LBG, The Bank of New York Mellon, as Depositary and owners ad beneficial owners of Regulation S American Depositary Shares, in respect of the Series 1 Preference Shares
10.8	Amended and Restated Indenture dated as of April 30, 2003 among HBOS plc, Bank of Scotland, SIF No. 2 and The Bank of New York, as Trustee, in respect of the Series 1 Existing Subordinated Notes
10.9	Supplemental Indenture to Amended and Restated Indenture dated October 30, 2003 between HBOS plc and The Bank of New York as Trustee, in respect of the Series 1 Existing Subordinated Notes
10.10*	First Supplemental Indenture between Lloyds Banking Group plc and The Bank of New York Mellon, as Trustee, dated as of November 4, 2014 to the Subordinated Debt Securities Indenture dated as of November 4, 2014 referenced above as Exhibit 4.1, in respect of the Series 2 Existing Subordinated Notes (previously filed as Exhibit 4.2 to Form 6-K on November 4, 2014)

10.11	Fifth Supplemental Indenture between Lloyds Banking Group plc and The Bank of New York Mellon, as Trustee, dated as of November 14, 2016 to the Subordinated Debt Securities Indenture dated as of November 4, 2014 referenced above as Exhibit 4.1, in respect of the Series 3 Existing Subordinated Notes
23.1	Consent of CMS Cameron McKenna LLP (contained in their opinion filed as Exhibit 5.1)
23.2	Consent of Davis Polk & Wardwell London LLP (contained in their opinion filed as Exhibit 5.2)
23.3	Consent of PricewaterhouseCoopers LLP
24.1	Powers of Attorney regarding Lloyds Banking Group plc (included on signature page to the registration statement)

25.1 Statement of Eligibility, dated as of November 10, 2021, for the Subordinated Debt Securities Indenture between Lloyds Banking Group plc, as Issuer, and The Bank of New York Mellon, as Indenture Trustee and referenced above as Exhibit 4.1

* Incorporated by reference.

EX-4.2

 Exhibit 4.2

_______________________________________

LLOYDS BANKING GROUP PLC

as Issuer,

and

THE BANK OF NEW YORK MELLON,
acting through its London Branch,

as Trustee

and

The Bank of New York Mellon SA/NV, Dublin Branch,

as Subordinated Debt Security Registrar

_______________________________________

NINTH SUPPLEMENTAL INDENTURE

dated as of November 10, 2021

to

THE SUBORDINATED DEBT SECURITIES INDENTURE

dated as of November 4, 2014

_______________________________________

TABLE OF CONTENTS

___________________ 

		Page
Article 1
DEFINITIONS		2
Section 1.01.	Definition of Terms.	2
Article 2
FORM OF SECURITIES		2
Section 2.01.	Terms of the Securities.	2
Article 3
ADDITIONAL TERMS APPLICABLE TO THE SECURITIES		6
Section 3.01.	Addition of Definitions.	6
Section 3.02.	Amendment of Definition.	9
Section 3.03.	Deletion of Definitions.	9
Section 3.04.	Deletion of Deferred Payment Provisions.	11
Section 3.05.	Deletion of Exchange Provisions.	12
Section 3.06.	Correction of Minor Defects in or Amendment of Subordinated Debt Securities.:	13
Section 3.07.	Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee.	14
Section 3.08.	Deletion of Satisfaction and Discharge Provisions.	15
Section 3.09.	Unconditional Right of Holders to Receive Principal, Premium and Interest, if any.	15
Section 3.10.	Undertaking for Costs.	16
Section 3.11.	Redemption and Purchase of Subordinated Debt Securities.	16
Section 3.12.	Exchanges Not Deemed Payment.	20
Section 3.13.	Exchange of Subordinated Debt Securities.	21
Section 3.14.	Events of Default.	21
Section 3.15.	Compensation and Reimbursement.	22
Section 3.16.	Certain Rights of Trustee.	22
Section 3.17.	Certain Rights of Subordinated Debt Security Registrar. .	22
Section 3.18.	Subordinated Debt Securities Subordinate to Claims of Senior Creditors.	22
Section 3.19.	Reliance on Judicial Order or Certificate of Liquidating Agent.	23
Section 3.20.	Additional Subordinated Debt Securities.	24
Section 3.21.	Agreement with Respect to Exercise of U.K. Bail-In Power.	24
Article 4
AMENDMENTS TO THE SUBORDINATED INDENTURE		26
Section 4.01.	Appointment of Agent for Service.	26
Section 4.02.	Notices to Trustee.	27
Section 4.03.	Additional Amounts.	28
Article 5
MISCELLANEOUS		30
Section 5.01.	Effect of Supplemental Indenture.	30
Section 5.02.	Other Documents to be Given to the Trustee.	30
Section 5.03.	Confirmation of Indenture.  .	31
Section 5.04.	Concerning the Trustee.	31
Section 5.05.	Governing Law.	31
Section 5.06.	Separability..	31
Section 5.07.	Concerning U.K. Bail-in Liability.	32
Section 5.08.	Counterparts.  Electronic Signatures.	33
Section 5.09.	Bail-in Relating to BRRD Party.	33

i 

NINTH SUPPLEMENTAL INDENTURE (“Ninth Supplemental Indenture”), dated as of November 10, 2021, among LLOYDS BANKING GROUP PLC, a corporation incorporated in Scotland with registered number 95000, and with its principal executive offices located at 25 Gresham Street, London EC2V 7HN, United Kingdom, as issuer (the “Company”) and THE BANK OF NEW YORK MELLON, acting through its London Branch, as trustee (the “Trustee”) and The Bank of New York Mellon SA/NV, Dublin Branch, as subordinated debt security registrar (the “Subordinated Debt Security Registrar”).

WITNESSETH

WHEREAS, the Company and the Trustee have executed and delivered a Subordinated Debt Securities Indenture dated as of November 4, 2014 (the “Subordinated Indenture,” and together with this Ninth Supplemental Indenture, the “Indenture”) to provide for the issuance of the Company’s subordinated debt securities (the “Subordinated Debt Securities”), including the Securities (as defined below).

WHEREAS, Section 9.01(d) of the Subordinated Indenture permits the Company and the Trustee to add to, change or eliminate any provisions of the Subordinated Indenture without the consent of Holders as permitted under Sections 2.01 and 3.01 of the Subordinated Indenture, subject to certain conditions;

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

WHEREAS, there are no debt securities Outstanding of any series created prior to the execution of this Ninth Supplemental Indenture which are entitled to the benefit of the provisions set forth herein or would be adversely affected by such provisions;

WHEREAS, the Board of Directors has authorized the entry into this Ninth Supplemental Indenture, as required by Section 9.01 of the Subordinated Indenture;

WHEREAS, the parties hereto desire to establish a series of Subordinated Debt Securities to be known as the [·]% Fixed Rate Reset Subordinated Debt Securities due 2046 (the “Securities”) pursuant to Sections 2.01 and 3.01 of the Subordinated Indenture. The Securities may be issued from time to time and any Securities issued as part of this series will constitute a single series of Securities under the Indenture and shall be included in the definition of “Securities” where the context requires;

WHEREAS, the Company has requested that the Trustee execute and deliver this Ninth Supplemental Indenture and whereas all actions required by it to be taken in order to make this Ninth 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 Ninth Supplemental Indenture has been duly authorized in all respects; and

WHEREAS, where indicated, this Ninth Supplemental Indenture shall amend and supplement the Subordinated Indenture; to the extent that the terms of the Subordinated Indenture are inconsistent with such provisions of this Ninth Supplemental Indenture, the terms of this Ninth Supplemental Indenture shall govern.

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 Ninth Supplemental Indenture:

(a)a term defined anywhere in this Ninth 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 Subordinated Indenture;

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

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

(e)for the purposes of this Ninth Supplemental Indenture and the Subordinated Indenture, the term “series” shall mean a series of Securities.

Article 2
FORM OF SECURITIES

Section 2.01.Terms of the Securities.

The following terms relating to the Securities are hereby established pursuant to Section 3.01 of the Subordinated Indenture:

(a)The title of the Securities shall be: the [·]% Fixed Rate Reset Subordinated Debt Securities due 2046 (the “Securities”);

(b)The aggregate principal amount of the Securities that may be authenticated and delivered under the Indenture shall not exceed $[·], except as otherwise provided in the Indenture;

(c)Principal on the Securities shall be payable on [·], 2046;

2 

(d)The Securities shall be issued in global registered form on [·], 2021 and shall bear interest from (and including) [·], 2021 to (but excluding) [·], 2041 (the “Reset Date”), at a rate per annum equal to (a) the yield, rounded to three decimal places when expressed as a percentage and calculated by BofA Securities, Inc., Credit Suisse Securities (USA) LLC and Lloyds Securities Inc. in accordance with standard market practice, that corresponds to the bid-side price of [•]% U.S. Treasury Notes due [•] as of the Pricing Time (as defined below) as displayed on the Bloomberg Government Pricing Monitor page FIT1 (or any recognized quotation source selected by the Company in its sole discretion if such quotation report is not available or is manifestly erroneous) plus (b) a fixed spread of [•] basis points (the “Initial Interest Rate”), and from (and including) the Reset Date to (but excluding) Maturity (as defined below) (the “Reset Period”), at a rate per annum calculated by the Calculation Agent on the Reset Determination Date (as defined below) as being equal to the sum of the applicable U.S. Treasury Rate (as defined below) (expressed as a rate per annum) and [·]% (the “Margin”), such sum being converted to a semi-annual rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down) (each a “Reset Rate of Interest”). Interest will be payable semi-annually in arrears on [·] and [·] of each year (each, an “Interest Payment Date”), commencing on [·], 2022 to (and including) Maturity.

Interest on the Securities will be calculated on the basis of a 360-day year consisting of twelve 30-day months and, in the case of an incomplete month, on the basis of the actual number of days elapsed in such period. Interest will be paid to the holders of record of the Securities on [·] and [·] immediately preceding the related Interest Payment Date, as applicable, whether or not a Business Day (each a “Regular Record Date”).

“Bail-in Legislation” means in relation to a Member State of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time.

“Bail-in Powers” means any Write-down and Conversion Powers as defined in relation to the relevant Bail-in Legislation.

“BRRD” means Directive 2014/59/EU (as amended or superseded) establishing a framework for the recovery and resolution of credit institutions and investment firms.

“BRRD Liability” has the same meaning as in such laws, regulations, rules or requirements implementing the BRRD under the applicable Bail-in Legislation.

“BRRD Party” means the Subordinated Debt Security Registrar.

“Calculation Agent” means The Bank of New York Mellon, London Branch, or its successor appointed by the Company pursuant to the Calculation Agent Agreement between the Company and The Bank of New York Mellon, London Branch, dated as of the date hereof.

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“EU Bail-in Legislation Schedule” means the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/.

“Pricing Time” means 10:00 a.m., New York City time, on [·], 2021.

“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Bail-in Powers in relation to the relevant BRRD Party.

“Reset Determination Date” means the second Business Day (as defined below) immediately preceding the Reset Date.

“U.S. Treasury Rate” means, with respect to the Reset Date, the rate per annum equal to: (1) the yield on actively traded U.S. Treasury securities adjusted to constant maturity on the Reset Determination Date and appearing under the caption “Treasury constant maturities” on the Reset Determination Date in the applicable most recently published statistical release designated “H.15 Daily Update”, or any successor publication that is published by the Board of Governors of the Federal Reserve System that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity, under the caption “Treasury Constant Maturities”, for the maturity of five years; or (2) if such release (or any successor release) is not published on the Reset Determination Date, or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the Reset Date.

The U.S. Treasury Rate shall be calculated by the Calculation Agent (as defined below).

If the U.S. Treasury Rate cannot be determined, for whatever reason, as described under (1) or (2) above, “U.S. Treasury Rate” means the rate in percentage per annum as notified by the Calculation Agent to the Company equal to the yield on U.S. Treasury securities having a maturity of five years as set forth in the most recently published statistical release designated “H.15 Daily Update” under the caption “Treasury constant maturities” (or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities” for the maturity of five years) on the Reset Determination Date.

“Comparable Treasury Issue” means, with respect to the Reset Period, the U.S. Treasury security or securities selected by the Company with a maturity date on or about the last day of the Reset Period and that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities denominated in U.S. dollars and having a maturity of five years.

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“Comparable Treasury Price” means, with respect to the Reset Date, (i) the arithmetic average of the Reference Treasury Dealer Quotations for the Reset Date received by the Company (calculated on the Reset Determination Date), after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if fewer than five such Reference Treasury Dealer Quotations are received by the Company, the arithmetic average of all such quotations, or (iii) if fewer than two such Reference Treasury Dealer Quotations are received by the Company, then such Reference Treasury Dealer Quotation as quoted in writing to the Company by a Reference Treasury Dealer.

“Reference Treasury Dealer” means each of up to five banks selected by the Company, or the affiliates of such banks, which are (i) primary U.S. Treasury securities dealers, and their respective successors (as long as such successors are also primary U.S. Treasury securities dealers), or (ii) market makers in pricing comparable corporate bond issues denominated in U.S. dollars.

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and the Reset Date, the arithmetic average, as determined by the Calculation Agent, of the bid and offered prices for the applicable Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, at 11:00 a.m. (New York City time), on the Reset Determination Date.

(e)No premium, upon redemption or otherwise, shall be payable by the Company on the Securities;

(f)Principal of and any interest on the Securities shall be paid to the Holder through The Bank of New York Mellon, acting through its London Branch, as the Paying Agent of the Company;

(g)The Securities shall not be redeemable except as provided in Article 11 of the Subordinated Indenture, as supplemented by this Ninth Supplemental Indenture;

(h)The Company shall have no obligation to redeem or purchase the Securities pursuant to any sinking fund or analogous provision;

(i)The Securities shall be issued only in denominations of $200,000 and in integral multiples of $1,000 in excess thereof;

(j)The principal amount of the Securities shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Subordinated Indenture, as amended by this Ninth Supplemental Indenture;

(k)Additional Amounts in respect of the Securities shall be payable as set forth in the Subordinated Indenture, as supplemented by this Ninth Supplemental Indenture;

(l)The Securities shall not be converted into or exchanged at the option of the Company;

(m)The Securities shall be denominated in, and payments thereon shall be made in, U.S. dollars;

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(n)The payment of principal of (and premium, if any) or interest, if any, on the Securities shall be payable only in the coin or currency in which the Securities are denominated;

(o)The Securities will be issued in the form of one or more global certificates in registered form (“Global Securities”) and will be deposited with a custodian for The Depository Trust Company (“DTC”) and registered in the name of DTC or its nominee;

(p)The Securities will not be initially issued in definitive form;

(q)The Bank of New York Mellon, London Branch will be the Calculation Agent for the Securities.

(r)Notwithstanding Section 5.03(a) of the Base Indenture, The Bank of New York Mellon SA/NV, Dublin Branch is hereby appointed “Subordinated Debt Security Registrar” for the purpose of registering the Securities and transfers of the Securities. The Subordinated Debt Security Register shall be maintained at the corporate trust office of the Subordinated Debt Security Registrar.

(s)The Events of Default on the Securities are as provided for in Section 5.01 of the Subordinated Indenture, as amended by this Ninth Supplemental Indenture;

(t)The subordination terms of the Securities are as provided for in Article 12 of the Subordinated Indenture as amended by ‎Section 3.18 of this Ninth Supplemental Indenture;

(u)The form of the Securities to be issued on the date hereof shall be substantially in the form of Exhibit A hereto; and

(v)The Company may issue additional Securities (“Additional Notes”) after the date hereof having the same ranking and same interest rate, Maturity, redemption terms and other terms as the Securities except for the price to the public, issue date, first interest payment date and temporary ISIN and/or other identifying numbers, provided that such Additional Notes must be fungible with the outstanding Securities for U.S. federal income tax purposes. Any such Additional Notes, together with the outstanding Securities will constitute a single series of securities under the Indenture.

Article 3
ADDITIONAL TERMS APPLICABLE TO THE SECURITIES

Section 3.01.Addition of Definitions. With respect to the Securities only, Section 1.01 of the Subordinated Indenture is amended to include the following definitions (which shall be deemed to arise in ‎Section 1.01 in their proper alphabetical order):

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“Applicable Regulations” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy and prudential supervision (including, without limitation, as to leverage) then in effect in the United Kingdom including, without limitation to the generality of the foregoing (and for so long as the same are applicable in the United Kingdom), 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 the Group).

“Beneficial Owners” shall mean (a) if any Subordinated Debt Securities are in global form, the beneficial owners of the Subordinated Debt Securities (and any interest therein) and (b) if the Subordinated Debt Securities are held in definitive form, the holders in whose names the Subordinated Debt Securities are registered in the Subordinated Debt Security Register and any beneficial owners holding an interest in such Subordinated Debt Securities held in definitive form.

“Compliant Securities” means securities issued directly by the Company that:

(a) have terms not materially less favorable to an investor than the terms of the Subordinated Debt Securities (as reasonably determined by the Company in consultation with an investment bank or financial adviser of international standing (which in either case is independent of the Company)) and provided that the Company has delivered an Officer’s Certificate to such effect (including as to such consultation) to the Trustee (upon which the Trustee shall be entitled to rely without further inquiry and without liability to any person) prior to the issue or variation of the relevant securities);

(b) subject to (a) above (1) contain terms which comply with the then current requirements of the Relevant Regulator in relation to Tier 2 capital; (2) provide for the same interest rate and Interest Payment Dates from time to time applying to the Subordinated Debt Securities; (3) rank pari passu with the ranking of the Subordinated Debt Securities; (4) preserve any existing rights under the Indenture to any accrued interest or other amounts which have not been either paid or canceled; and (5) preserve the obligations of the Company as to payments of principal in respect of the Subordinated Debt Securities, including (without limitation) as to the timing and amount of such payments;

(c) are (1) listed on the New York Stock Exchange or (2) listed on such other stock exchange as is a Recognized Stock Exchange at that time as selected by the Company; and

(d) where the Subordinated Debt Securities which have been substituted or varied had a published rating (solicited by, or assigned with the cooperation of, the Company) from a Rating Agency immediately prior to their substitution or variation, each such Rating Agency has ascribed, or announced its intention to ascribe, an equal or higher published rating to the relevant Compliant Securities.

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“Electronic Means” shall mean the following communications methods: S.W.I.F.T., e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder.

“Group” means the Company and its subsidiaries and subsidiary undertakings from time to time.

“Issue Date” means [•], 2021, being the date of the initial issue of the Securities.

“Maturity” means [·], 2046.

“Recognized Stock Exchange” means a recognized stock exchange as defined in section 1005 of the U.K. Income Tax Act 2007 as the same may be amended from time to time and any provision, statute or statutory instrument replacing the same from time to time.

“Relevant Regulator” means the Bank of England acting as the Prudential Regulatory Authority (the “PRA”) through its Prudential Regulation Committee or such other governmental authority in the United Kingdom (or if the Company becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary supervisory authority with respect to the Company and/or the Group in such circumstances.

“relevant U.K. resolution authority” means any authority with the ability to exercise a U.K. bail-in power.

“U.K. bail-in power” means any write-down, conversion, transfer, modification or suspension power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or its affiliates, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United Kingdom within the context of the U.K. resolution regime under the Banking Act 2009 as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which any obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, modified, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which any right in a contract governing such obligations may be deemed to have been exercised.

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Section 3.02.Amendment of Definition. With respect to the Securities only, the following definitions shall be amended in their entirety in Section 1.01 of the Subordinated Indenture:

“Business Day” shall mean any day, other than Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in the City of New York or in the City of London.

“Capital Disqualification Event” shall be deemed to have occurred if at any time the Company determines that there is a change (which has occurred or which the Relevant Regulator considers to be sufficiently certain) in the regulatory classification of the Securities which becomes effective after the Issue Date and that results, or would be likely to result, in the entire principal amount of the Securities being excluded from the Tier 2 Capital of the Company and/or Group (other than as a result of any applicable limitation on the amount of such capital).

“Executive Officer” means any individual authorized or designated by the Board of Directors through a power of attorney or otherwise for the purpose of executing this Subordinated Indenture and any other certificates, forms, notes and ancillary documents in connection therewith.

“Senior Creditors” means in respect of the Company (i) creditors of the Company whose claims are admitted to proof in the winding-up or administration of the Company and who are unsubordinated creditors of the Company and (ii) creditors of the Company whose claims are or are expressed to be subordinated to the claims of other creditors of the Company (other than those whose claims constitute, or would, but for any applicable limitation on the amount of such capital, constitute Tier 1 Capital or Tier 2 Capital of the Company, or whose claims rank or are expressed to rank pari passu with, or junior to, the claims of holders of the Securities).

“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.

Section 3.03.Deletion of Definitions. With respect to the Securities only, the following definitions shall be deleted in their entirety in Section 1.01 of the Subordinated Indenture:

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“ADR Custodian” means the custodian under the ADR Deposit Agreement.

“ADR Deposit Agreement” means the deposit agreement between the Company and The Bank of New York Mellon (previously named The Bank of New York) and the holders from time to time of American Depositary Receipts issued thereunder.

“ADR Depositary” means the depositary under the ADR Deposit Agreement.

“Applicable Banking Regulations” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy 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 PRA, 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).

“Capital Resources Requirement” and “Overall Financial Adequacy Rule” have the respective meanings given to such terms in the Applicable Banking Regulations and shall include any successor terms from time to time equivalent thereto as agreed between the Company and the Trustee.

“CRD IV” means, taken together, (i) the CRD IV Directive, (ii) the CRD IV Regulation and (iii) applicable capital adequacy banking regulations then in effect in the United Kingdom.

“CRD IV Directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, and any successor directive.

“CRD IV Regulation” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms amending Regulation (EU) No 648/2012, and any successor regulation.

“Deferred Amounts” means any Deferred Interest (including any interest amounts accrued thereon) and any amount of principal and/or premium payment of which has been deferred pursuant to ‎Section 3.07 (including any interest amounts accrued thereon) which has not been satisfied.

“Deferred Interest” has the meaning specified in Section 3.07.

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“Deferred Payment Date” has the meaning specified in Section 3.07.

“Deferred Record Date”, when used for the interest payable on any Deferred Payment Date on Subordinated Debt Securities of any series, means the date specified for the purpose pursuant to Section 3.01.

“Exchange Date”, when used with respect to any applicable series of Subordinated Debt Securities, has the meaning specified in Section 13.03.

“Exchange Securities” means securities issued by the Company provided that such securities shall contain terms which comply with the then current requirements of the PRA in relation to Tier 2 Capital or Tier 1 Capital).

“Foreign Currency” means the euro or any currency issued by the government of any country (or a group of countries or participating member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts.

“Foreign Government Securities” means with respect to Subordinated Debt Securities of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.

“Liquidator” has the meaning specified in Section 12.06.

Section 3.04.Deletion of Deferred Payment Provisions. With respect to the Securities only, the following Sections of the Subordinated Indenture are amended and restated in their entirety and shall read as follows:

Section 3.01. Amount Unlimited, Issuable in Series.

(d)       the rate or rates, if any, at which the Subordinated Debt Securities of the series shall accrue interest or the manner of calculation of such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07, and, in the case of registered Subordinated Debt Securities, the Regular Record Date for the interest payable on any Interest Payment Date, and any dates required to be established pursuant to Section 7.01;

Section 3.03. Execution, Authentication, Delivery and Dating. The first sentence of the fifth paragraph of Section 3.03 shall read as follows:

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No Subordinated Debt Security shall be entitled to any benefit under this Subordinated Debt Securities Indenture or be valid or obligatory for any purpose unless there appears on such Subordinated Debt Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual or electronic signature, and such certificate upon any Subordinated Debt Security shall be conclusive evidence, and the only evidence, that such Subordinated Debt Security has been duly authenticated and delivered hereunder and that such Subordinated Debt Security is entitled to the benefits of this Subordinated Debt Securities Indenture.

Section 3.07. Payment; Interest Rights Preserved. Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, interest, if any, on any Subordinated Debt Securities which is payable, and is paid or duly provided for, on any Interest Payment Date shall be paid, in the case of registered Subordinated Debt Securities, to the Person in whose name that Subordinated Debt Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest or, in the case of Global Securities held by any Holder, to the Holder including through a Paying Agent of the Company designated pursuant to Section 3.01 for collection by the Holder.

Section 11.06. Subordinated Debt Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Subordinated Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Subordinated Debt Securities shall cease to accrue interest. Upon surrender of any such Subordinated Debt Security for redemption in accordance with said notice, such Subordinated Debt Security shall be paid by the Company at the Redemption Price, together with accrued but unpaid interest to the Redemption Date; provided, however, that with respect to any Subordinated Debt Securities in registered form, unless otherwise specified as contemplated by Section 3.01, a payment of interest which is payable on an Interest Payment Date which is the Redemption Date, shall be payable to the Holders of such Subordinated Debt Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Date according to the terms of the Subordinated Debt Securities and the provisions of Section 3.07. Subordinated Debt Securities in definitive form shall be presented for redemption to the Paying Agent.

If any Subordinated Debt Security called for redemption shall not be so paid upon surrender thereof for redemption, the Subordinated Debt Security shall, until paid, continue to accrue interest from and after the Redemption Date in accordance with its terms and the provisions of Section 3.07.

Section 3.05.Deletion of Exchange Provisions. With respect to the Securities only:

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(i)             Sections 1.13 and 9.02(a) of the Subordinated Indenture is amended by deleting the reference to “Exchange Date” therein,

(ii)            Section 3.01(l) of the Subordinated Indenture is amended and restated in its entirety and shall read as follows:

(l)       [Reserved];

(iii)           Section 3.05 of the Subordinated Indenture is amended by deleting the following paragraph:

In the event that a Global Security is surrendered for redemption or exchange for Preference Shares or Exchange Securities in part pursuant to Section 11.07 or Section 13.05, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.

(iv)           Section 3.05(b) of the Subordinated Indenture is amended and restated in its entirety as follows:

(b)       Except as otherwise specified pursuant to Section 3.01, Subordinated Debt Securities of any series may only be exchanged for a like aggregate principal amount of Subordinated Debt Securities of such series of other authorized denominations containing identical terms and provisions. Subordinated Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Subordinated Debt Security or Subordinated Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.

Section 3.06.Correction of Minor Defects in or Amendment of Subordinated Debt Securities. With respect to the Securities only, Article 3 of the Subordinated Indenture is amended by adding Section 3.13, which shall read as follows:

Section 3.13. Correction of Minor Defects in or Amendment of Subordinated Debt Securities. If the Company or the Trustee shall become aware of any ambiguity, defect or inconsistency in any term of a Subordinated Debt Security or Certificate, as the case may be, or, with respect to any Subordinated Debt Security (including any Certificate) issued on or after the date hereof, the Company and the Trustee may amend such Subordinated Debt Security (including any Certificate) as contemplated by Section 9.01(h) (subject to Section 9.07) and the parties hereto shall provide for the execution, authentication, delivery and dating of one or more replacement Subordinated Debt Securities or Global Certificates, as the case may be, pursuant to Section 3.03 hereto, provided, however, that such amendment is not materially adverse to Holders of any Outstanding Subordinated Debt Securities.

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Section 3.07.Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee. With respect to the Securities only, to amend the following sections of the Subordinated Indenture in part:

(i)             to amend and restate, each in its entirety, Sections 5.03(a) and 5.03(b), which shall read as follows:

(a)       the Company fails to pay any installment of interest on any Subordinated Debt Security of such series on or before its Interest Payment Date and such failure continues for 14 days; or

(b)       the Company fails to pay all or any part of the principal of any Subordinated Debt Security of such series on any date on which such principal shall otherwise have become due and payable, whether upon redemption or otherwise, and such failure continues for seven days.

(ii)            to amend and restate the second paragraph of Sections 5.03 in its entirety, which shall read as follows:

If a Default occurs, the Trustee may commence a proceeding for the winding-up of the Company and/or prove in a winding-up of the Company or a Qualifying Administration for all due and payable amounts, provided that the Trustee may not declare the principal amount of any Outstanding Subordinated Debt Security to be due and payable.

(iii)           to amend and restate the third paragraph of Sections 5.03 in its entirety, which shall read as follows:

Subject to applicable law, including the Trust Indenture Act, no Holder or Beneficial Owner of the Subordinated Debt Securities may exercise or claim any right of set-off, counterclaim, combination of accounts, 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 Subordinated Debt Securities. The Holders and Beneficial Owners of Subordinated Debt Securities, by virtue of its holding of any Subordinated Debt Securities, shall be deemed to have waived any right of set-off, counterclaim, or combination of accounts, compensation and retention with respect to the Subordinated Debt Securities or this Subordinated Indenture (or between the obligations under or in respect of any Subordinated Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company, whether before or during a winding-up, liquidation of the Company or a Qualifying Administration. Notwithstanding the above, if any of such rights and claims of any such Holder against the Company are discharged by set-off, compensation or retention, such Holder will immediately pay an amount equal to the amount of such discharge to the Company or, in the event of the winding up of the Company or a Qualifying Administration, the liquidator or administrator (or other relevant insolvency official), as the case may be, and until such time as payment is made will hold a sum equal to such amount in trust for the Company or the liquidator or administrator (or other relevant insolvency official), as the case may be, and accordingly such discharge shall be deemed not to have taken place.

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(iv)           to amend and restate the fifth paragraph of Sections 5.03 in its entirety, which shall read as follows:

Except as otherwise provided in this Article 5, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Subordinated Debt Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law, provided, however, that the Company shall not, as a result of the bringing of such judicial proceedings, be required to pay any amount representing or measured by reference to the principal of, or any interest on, the Subordinated Debt Securities prior to any date on which the principal of, or any interest on, the Subordinated Debt Securities would have otherwise been payable by the Company.

(v)            to add the following sentence at the end of Sections 5.03:

No remedy against the Company other than as referred to in this Article 5 shall be available to the Trustee or the Holders, whether for the recovery of amounts owing in respect of the Subordinated Debt Securities or under this Subordinated Indenture or in respect of any breach by the Company of any of its other obligations under or in respect of the Subordinated Debt Securities or under this Subordinated Indenture, except that the Trustee and the Holders shall have such rights and powers as they are required to have under the Trust Indenture Act.

(vi)           to amend and restate Section 5.12(a) in its entirety, which shall read as follows:

(a)       such direction shall not be in conflict with any rule of law or with this Subordinated Indenture or shall not expose the Trustee to undue risk;

Section 3.08.Deletion of Satisfaction and Discharge Provisions. With respect to the Securities only, Article 4 of the Subordinated Indenture is deleted in its entirety.

Section 3.09.Unconditional Right of Holders to Receive Principal, Premium and Interest, if any. With respect to the Securities only, Section 5.08 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

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Section 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any. Subject to Section 12.01 in relation to subordination of Subordinated Debt Securities, and notwithstanding any other provision in this Subordinated Indenture, the Holder of any Subordinated Debt Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and interest, if any, on such Subordinated Debt Security on the respective Stated Maturities as expressed in such Subordinated Debt Security (or, in the case of redemption, on the Redemption Date) and, subject to Section 5.07, to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder or holder.

Section 3.10.Undertaking for Costs. With respect to the Securities only, Section 5.14 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

Section 5.14. Undertaking for Costs. All parties to this Subordinated Indenture agree, and each Holder of any Subordinated Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Subordinated Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Subordinated Debt Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security on or after the respective Stated Maturities expressed in such Subordinated Debt Security (or, in the case of redemption, on or after the Redemption Date).

Section 3.11.Redemption and Purchase of Subordinated Debt Securities. With respect to the Securities only, Article 11 of the Subordinated Indenture is amended by amending and restating Sections 11.01, 11.08, 11.09 and 11.10 in their entirety, and by adding Sections 11.11, 11.12 and 11.13, each of which shall read as follows:

Section 11.01. Applicability of Article. Subordinated Debt Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series) in accordance with this Article 11. Subordinated Debt Securities of any series may not be redeemed except in accordance with provisions of applicable law, applicable provisions of the Applicable Regulations and Section 11.13 below. The Subordinated Debt Securities of any series may not be redeemed in whole or in part at the option of the Holder thereof.

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Section 11.08. Optional Tax Redemption.

(a)           Subject always to Section 11.13 below, the Company will have the option to redeem the relevant series of Subordinated Debt Securities, as a whole but not in part, having given notice in accordance with Section 11.04 hereof, 100% of the principal amount of the Subordinated Debt Securities then outstanding, together with any accrued interest to (but excluding) the date fixed for redemption, if at any time the Company determines that:

(i)       as a result of a change in, or 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 effective on or after the Issue Date, or (y) in the case of a change in law, if such change is 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 Subordinated Debt 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 (or its corresponding funding costs as recognized in its financial statements) in respect of the Subordinated Debt Securities in computing its taxation liabilities or the amount or value of such deduction to the Company would be materially reduced;

(B)       prevent the Subordinated Debt Securities from being treated as loan relationships for United Kingdom tax purposes;

(C)       as a result of the Subordinated Debt 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 of the Issue Date or any similar system or systems having like effect as may from time to time exist);

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(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 Subordinated Debt Securities or the conversion of the Subordinated Debt Securities into shares or other obligations of the Company (including, pursuant to the terms and conditions of the Subordinated Debt Securities or as a result of the exercise of any regulatory powers under the Banking Act 2009); or

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

(each such Tax Law Change, 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 (i) a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company), in a form satisfactory to the Trustee, to the effect that a Tax Event has occurred, and (ii) an Officer’s Certificate confirming (1) that all the conditions necessary for redemption have occurred and that the Company could not avoid the consequences of the Tax Event by taking measures reasonably available to it, and (2) that the Relevant Regulator is satisfied that the relevant change or event is material and was not reasonably foreseeable by the Company on the Issue Date. The Trustee is entitled to conclusively rely on and accept such opinion and Officer’s Certificate without any duty whatsoever of further inquiry and without liability to any person, in which event such opinion and Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

Section 11.09. Optional Redemption Due to a Capital Disqualification Event. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities and subject to the conditions set out in Section 11.13 below, the Subordinated Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 calendar days’ nor more than 60 calendar days’ notice to each Holder of Subordinated Debt Securities to be redeemed, at any time, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such series of Subordinated Debt Securities to, but excluding, the date fixed for redemption if, immediately prior to the giving of the notice referred to above, a Capital Disqualification Event has occurred.

Prior to the giving of any notice of redemption, the Company must deliver to the Trustee an Officer’s Certificate stating that (i) a Capital Disqualification Event has occurred, and (ii) the Company has demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date. The Trustee shall be entitled to accept such Officer’s Certificate without any further inquiry and without liability to any person, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee and the Holders and Beneficial Owners.

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Section 11.10. Purchase. Subject to the conditions set out in Section 11.13 below, the Company may from time to time purchase Subordinated Debt Securities in the open market or by tender or by private agreement, in any manner and at any price or at differing prices. Subordinated Debt Securities purchased or otherwise acquired by the Company may be (i) held, (ii) resold or (iii) at the Company’s sole discretion, surrendered to the Trustee for cancellation (in which case all Subordinated Debt Securities so surrendered will forthwith be canceled in accordance with applicable law and thereafter may not be re-issued or resold).

Section 11.11. Optional Redemption. Subject to the conditions set out in Section 11.13 below, the Subordinated Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 15 calendar days’ nor more than 30 calendar days’ notice to each Holder of Subordinated Debt Securities to be redeemed, at any time, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such series of Subordinated Debt Securities to, but excluding, the date fixed for redemption, at the option of the Company on any date in the period commencing on (and including) [·], 2041 and ending on (and including) the Reset Date.

Section 11.12. Substitution or Variation. Upon the occurrence of a Capital Disqualification Event, the Company may, subject to the conditions set out in Section 11.13 below, but without any requirement for the consent or approval of the Holders of the Subordinated Debt Securities, at any time (whether before, on or following the Reset Date) on not less than 30 calendar days’ nor more than 60 calendar days’ notice to each Holder of Subordinated Debt Securities to be substituted or varied, either substitute all (but not some only) of the Subordinated Debt Securities for, or vary the terms of the Subordinated Debt Securities so that they remain or, as appropriate, become, Compliant Securities, and the Trustee shall (subject to the below) agree to such substitution or variation. Upon the expiry of such notice, the Company shall either vary the terms of or substitute the Subordinated Debt Securities, as the case may be.

Prior to the giving of any notice of substitution or variation, the Company must deliver to the Trustee an Officer’s Certificate stating that a Capital Disqualification Event has occurred, setting out the details thereof, and stating that the terms of the relevant Compliant Securities comply with the definition thereof. The Trustee shall be entitled to accept such Officer’s Certificate without any further inquiry and without liability to any person, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee and the Holders and Beneficial Owners of the Subordinated Debt Securities.

Section 11.13 Early Redemption, Purchase, Substitution or Variation – Relevant Regulator. Subordinated Debt Securities may be redeemed, purchased, substituted or varied by the Company prior to Maturity as provided under Article 11 of this Subordinated Indenture, subject to:

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(a) the Company giving notice to the Relevant Regulator and the Relevant Regulator granting permission to the Company to redeem, purchase, substitute or vary the Subordinated Debt Securities, as the case may be (in each case to the extent, and in the manner, required by the relevant Applicable Regulations);

(b) in respect of any redemption of the Subordinated Debt Securities 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 an optional redemption due to a Tax Event, the Company having 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 Capital Disqualification Event, the Company having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date;

(c) if and to the extent then required under the Applicable Regulations, either: (A) the Company having replaced the Subordinated Debt Securities with instruments qualifying as own funds of equal or higher quality on terms that are sustainable for the income capacity of the Company; or (B) (save in the case of sub-paragraph (d)(A) below) the Company demonstrating to the satisfaction of the Relevant Regulator that the own funds and eligible liabilities of the Company would, following such redemption, purchase, substitution or variation, exceed its minimum applicable capital requirements (including any applicable buffer requirements) by a margin that the Relevant Regulator considers necessary at such time; and

(d) in the case of any purchase prior to the fifth anniversary of the Issue Date, in addition to satisfying either of the conditions specified in paragraph (c) above, either: (A) the Company having, before or at the same time as such purchase, replaced the Subordinated Debt Securities with own funds instruments of equal or higher quality at terms that are sustainable for the income capacity of the Company, and the Relevant Regulator having permitted such action on the basis of the determination that it would be beneficial from a prudential point of view and justified by exceptional circumstances; or (B) the relevant Subordinated Debt Securities being purchased for market-making purposes in accordance with the Applicable Regulations.

Notwithstanding the above conditions, if, at the time of any redemption, purchase, substitution or variation the then-prevailing Applicable Regulations permit the repayment, purchase, substitution or variation only after compliance with one or more alternative or additional preconditions to those set out above, the Company shall comply with such other and/or, as appropriate, additional pre-condition(s).

Section 3.12.Exchanges Not Deemed Payment. With respect to the Securities only, Section 12.10 of the Subordinated Indenture is deleted in its entirety.

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Section 3.13.Exchange of Subordinated Debt Securities. With respect to the Securities only, Article 13 of the Subordinated Indenture is deleted in its entirety.

Section 3.14.Events of Default. With respect to the Securities only:

(i) Section 5.01 of the Subordinated Indenture is amended by adding the following sentence at the end of the section:

The exercise of any U.K. bail-in power by the relevant U.K. resolution authority shall not constitute a default or an Event of Default under this Section 5.01; and

(ii) Section 5.02 of the Subordinated Indenture is amended in part to restate in its entirety the first paragraph of such section as follows:

Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs with respect to Subordinated Debt Securities of any series and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series may declare the principal amount, together with accrued interest (if any) and Additional Amounts (if any), payable on such Subordinated Debt Securities, of all the Subordinated Debt Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such amount shall become immediately due and payable.

(iii) Section 5.02(a)(i) is hereby restated in its entirety as follows:

(i) the principal of, and premium, if any, on, any Subordinated Debt Securities of such series which have become due otherwise than by such declaration of acceleration and any due and payable interest, if any, thereon at the rate or rates prescribed therefor in such Subordinated Debt Securities,

(iv) Section 5.02 of the Subordinated Indenture is amended in part to restate in its entirety the last paragraph of such section as follows:

If the Subordinated Debt Securities become due and payable (whether pursuant to this Section 5.02 above or Article 11 below) and the Company fails to pay such amounts (or any damages awarded for breach of any obligations in respect of the Subordinated Debt Securities or this Indenture) forthwith upon demand, notwithstanding the continuing right of any Holder to receive payment of the principal of and interest on Subordinated Debt Securities, or to institute suit for the enforcement of any such payment, each in accordance with Section 316(b)(Directions and Waivers by Bondholders; Prohibition of Impairment of Holders’ Right to Repayment) of the Trust Indenture Act, the Trustee, in its own name and as trustee of an express trust, may institute proceedings for the winding up of the Company, and/or prove in a winding up of the Company or in a Qualifying Administration for all such due and payable amounts (including any damages awarded for breach of any obligations in respect of the Subordinated Debt Securities or this Indenture) but no other remedy shall be available to the Trustee or the Holders.

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Section 3.15.Compensation and Reimbursement. With respect to the Securities only, Section 6.07 of the Subordinated Indenture is amended in part to:

(i) restate in its entirety Section 6.07(b) as follows:

except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Subordinated Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined in a final, non-appealable order by a court of competent jurisdiction to have been caused by its own negligence or bad faith; and

(ii) to add the following sentence at the end of the section:

The Trustee’s right to reimbursement and indemnity under this Section 6.07 shall survive the payment in full of the Subordinated Debt Securities, the discharge of this Subordinated Indenture, the resignation or removal of the Trustee and any exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Debt Securities and the Indenture.

Section 3.16.Certain Rights of Trustee. With respect to the Securities only, Section 6.03 of the Subordinated Indenture is amended in part to add the following at the end of the section:

(m) The Trustee shall not be liable for errors in judgment made in good faith unless it was negligent in ascertaining the relevant facts; and

(n) The Trustee may hold funds uninvested without liability for interest in the absence of an agreement signed by the Trustee to the contrary.

Section 3.17.Certain Rights of Subordinated Debt Security Registrar and Paying Agent. The Subordinated Debt Security Registrar and Paying Agent shall have the benefit of the rights, protections, indemnifications and immunities granted to the Trustee in the Indenture, including, without limitation, Section 6.07 of the Base Indenture, mutatis mutandis.

Section 3.18.Subordinated Debt Securities Subordinate to Claims of Senior Creditors. With respect to the Securities only, Section 12.01 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

Section 12.01. Subordinated Debt Securities Subordinate to Claims of Senior Creditors.

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(a)       Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company covenants and agrees, and each Holder of Subordinated Debt Securities of each series, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article 12, in the event of:

(i)       an order being made, or an effective resolution being 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, the terms of which reorganization, reconstruction, amalgamation do not provide that the Subordinated Debt Securities shall thereby become redeemable or repayable in accordance with their terms); or

(ii)       a Qualifying Administration,

the Holders will have a right against the Company in respect of or arising under (including any damages awarded for breach of any obligations under) the Subordinated Debt Securities and the Subordinated Indenture relating to them to claim for all amounts due to them in respect of the Subordinated Debt Securities including the principal amount thereof (plus any premium) and any accrued but unpaid interest thereon. Such rights and claims will be subordinated to, and subject in right of payment to, the prior payment in full of, all claims of all Senior Creditors. The rights and claims of the Holders of the Subordinated Debt Securities shall rank pari passu without any preference among themselves and rank junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness of the Company and shall rank at least pari passu with the claims of holders of all obligations of the Company which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital of the Company and in priority to (1) the claims of holders of all obligations of the Company which constitute Tier 1 Capital of the Company, (2) the claims of holders of all undated or perpetual subordinated obligations of the Company and (3) the claims of holders of all share capital of the Company.

(b)       The provisions of this Article 12 shall apply only to rights or claims payable under Section 12.01 (a) or to amounts payable pursuant thereto and under any Subordinated Debt Securities of any series and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Sections 5.03(a)(i) and 5.06 hereof, or the rights and remedies of the Trustee in respect thereof.

Section 3.19.Reliance on Judicial Order or Certificate of Liquidating Agent. With respect to the Securities only, Section 12.06 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

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Section 12.06. Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 6.01, and the Holders of the Subordinated Debt Securities of the series shall be entitled to rely upon (a) any order or decree entered by any court in which such winding-up of the Company or similar case or proceeding, including a proceeding for the suspension of payments is pending, or (b) a certificate of the administrator of the Company, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or the Holders of such Subordinated Debt Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the Senior Creditors and other claims against the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12.

Section 3.20.Additional Subordinated Debt Securities. With respect to the Securities only, Section 3.12 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

Section 3.12. Additional Subordinated Debt Securities. The Company may, from time to time, without the consent of the Holders of the Subordinated Debt Securities of any series, issue additional Subordinated Debt Securities of one or more of the series of Subordinated Debt Securities issued under this Subordinated Indenture, having the same ranking and same interest rate, Maturity, redemption terms and other terms, except for the price to the public, issue date and first Interest Payment Date, as the Subordinated Debt Securities. Any such additional Subordinated Debt Securities, together with the outstanding Subordinated Debt Securities of the applicable series, will constitute a single series of Subordinated Debt Securities under this Subordinated Indenture and shall be included in the definition of “Subordinated Debt Securities” in this Subordinated Indenture where the context requires; provided, however, that if the original Subordinated Debt Securities are determined by the Company to be debt for U.S. federal income tax purposes and the additional Subordinated Debt Securities are not fungible with the outstanding Subordinated Debt Securities for U.S. federal income tax purposes, the additional Subordinated Debt Securities must have CUSIP, ISIN and/or other identifying numbers different from those used for the outstanding Subordinated Debt Securities.

Section 3.21.Agreement with Respect to Exercise of U.K. Bail-In Power. The following provisions relate solely to the Securities established pursuant to this Ninth Supplemental Indenture:

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(a)Notwithstanding any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Securities by acquiring or holding the Securities, each Holder (including each Beneficial Owner) of the Securities acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Securities; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Securities into shares or other securities or other obligations of the Company or another person; and/or (iii) the amendment or alteration of the Maturity of the Securities, or amendment of the amount of interest due on the Securities, or the dates on which interest becomes payable, including by suspending payment for a temporary period; any U.K. bail-in power may be exercised by means of variation of the terms of the Securities solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at Maturity), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and each Beneficial Owner of the Securities further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Securities are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

(b)By its acceptance of the Securities, each Holder and Beneficial Owner:

(i)acknowledges and agrees that no exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Securities shall give rise to a Default or an Event of 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 U.K. bail-in power by the relevant U.K. resolution authority with respect to the Securities;

(iii)acknowledges and agrees that, (A) upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, the Trustee shall not be required to take any further directions from Holders or Beneficial Owners of the Securities under Section 5.12 of the Subordinated Indenture, and the Indenture shall impose no duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, any of the Securities remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Securities), then the Trustee’s duties under the Indenture shall remain applicable with respect to the 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 in writing that a supplemental indenture is not necessary; and.

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(iv)shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Securities and (ii) 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 U.K. bail-in power with respect to the Securities as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner or the Trustee.

(c)Each Holder or Beneficial Owner that acquires its Securities in the secondary market shall be deemed to acknowledge, 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 Securities that acquire the 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 Securities, including in relation to the U.K. bail-in power.

(d)No repayment of principal following any proposed redemption of the Securities or payment of interest on the Securities shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 applicable to the Company or other members of the Group.

(e)Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Securities, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. 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 only.

Article 4
AMENDMENTS TO THE SUBORDINATED INDENTURE

Section 4.01.Appointment of Agent for Service. With respect to any series of Subordinated Debt Securities issued under the Subordinated Indenture, including the Securities, Section 1.14 of the Subordinated Indenture is amended and restated in its entirety and shall read as follows:

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Section 1.14. Appointment of Agent for Service. The Company has designated and appointed the Chief Legal Officer, North America of Lloyds Bank Corporate Markets plc (or any successor thereto), currently of 1095 Avenue of the Americas, New York, NY 10036 as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York, arising out of or relating to the Subordinated Debt Securities, this Subordinated Indenture or this Ninth Supplemental Indenture, but for that purpose only, and agrees that service of process upon such authorized agent shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Subordinated Debt Securities remain Outstanding until the appointment of a successor by the Company and such successor’s acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee of the name and address of such successor. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of such authorized agent in full force and effect so long as any of the Subordinated Debt Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take any such action. The Company and the Trustee each hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any right to trial by jury and any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

Section 4.02.Notices to Trustee. With respect to any series of Subordinated Debt Securities issued under the Subordinated Indenture, including the Securities, Section 1.05 of the Subordinated Indenture is amended and restated in its entirety to read as follows:

Section 1.05. (a) Notices, Etc. to Trustee, Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by the Subordinated Indenture or the Ninth Supplemental Indenture to be made upon, given or furnished to, or filed with,

(i) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile or e-mail) to the Trustee at its Corporate Trust Office and the Trustee agrees to accept and act upon facsimile or electronic transmission of written instructions pursuant to the Subordinated Indenture or the Ninth Supplemental Indenture; provided, however, that (x) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (y) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions; or

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(ii) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and (i) mailed, in the case of the Company, first-class postage prepaid, addressed to it at the address of its principal office specified in the first paragraph of this Subordinated Indenture (unless another address has been previously furnished in writing to the Trustee by the Company, in which case at the last such address) marked “Attention: Company Secretary”, or (ii) faxed to +44 20 7158 3298/3299 marked “Attention: Company Secretary”.

(b) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to the Indenture and delivered using Electronic Means; provided, however, that the Company shall provide to the Trustee evidence of the Executive Officers. If the Company elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Company understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Executive Officer have been sent by such Executive Officer. The Company shall be responsible for ensuring that only Executive Officers transmit such Instructions to the Trustee and that the Company and all Executive Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Company agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Company; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.

Section 4.03.Additional Amounts. With respect to any series of Subordinated Debt Securities issued under the Subordinated Indenture, including the Securities, Section 10.04 of the Subordinated Indenture is hereby amended and replaced in its entirety as follows:

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Section 10.04. Additional Amounts. Amounts to be paid on any series of Subordinated Debt Securities will be made without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges or fees imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If at any time a Taxing Jurisdiction requires the Company to make such deduction or withholding, the Company will pay additional amounts with respect to withholding or deduction on payments of interest on (but not principal or any other payments on), the Subordinated Debt Securities (“Additional Amounts”) that are necessary in order that the net amounts paid to the Holders of Subordinated Debt Securities of the particular series, after the deduction or withholding, shall equal the amounts which would have been payable with respect to interest on the Subordinated Debt Securities if the deduction or withholding had not been required. However, this will not apply to any such amount with respect to interest that would not have been deducted or withheld but for the fact that:

(i) the Holder or the Beneficial Owner of the Subordinated Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise having some connection with the Taxing Jurisdiction other than the holding or ownership of a Subordinated Debt Security, or the collection of any payment of, or in respect of, principal of, or any interest or other payment on, any Subordinated Debt Security of the relevant series,

(ii) except in the case of a winding-up in the United Kingdom, the relevant Subordinated Debt Security is presented (where presentation is required) for payment in the United Kingdom,

(iii) the relevant Subordinated Debt Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to the Additional Amounts on presenting the same for payment at the close of that 30 day period,

(iv) the Holder or the Beneficial Owner of the relevant Subordinated Debt Security or the Beneficial Owner of any payment of, or in respect of, principal of, or any interest or other payment on, the Subordinated Debt Security failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or the Beneficial Owner or (y) to make any declaration or other similar claim to satisfy any requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of the tax, levy, impost, duty, charge or fee,

(v) the deduction or withholding is imposed by reason of any agreement with the U.S. Internal Revenue Service in connection with Sections 1471-1474 of the US Internal Revenue Code and the U.S. Treasury regulations thereunder (“FATCA”), any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA, or any law, regulation or other official guidance enacted or issued in any jurisdiction implementing, or relating to, FATCA or any intergovernmental agreement, or

29 

(vi) any combination of subclauses (i) through (v) above,

nor shall Additional Amounts be paid with respect to any payment on the Subordinated Debt Securities to any Holder who is a fiduciary or partnership or any person other than the sole Beneficial Owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a Beneficial Owner who would not have been entitled to such Additional Amounts with respect to interest on the Subordinated Debt Securities, had it been the Holder.

Whenever in this Subordinated Indenture there is mentioned, in any context, the payment of interest on any Subordinated Debt Security of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made. Upon request from the Trustee or a paying agent, the Company shall provide information reasonably necessary and readily available in order to enable to the Trustee or paying agent to determine whether any withholding obligations under FATCA apply. None of the Company, the Trustee or a paying agent shall have any liability in connection with the Company’s or Trustee’s or paying agent’s compliance with any such withholding obligation under applicable law.

Article 5
MISCELLANEOUS

Section 5.01.Effect of Supplemental Indenture. Upon the execution and delivery of this Ninth Supplemental Indenture by each of the Company and the Trustee, and the delivery of the documents referred to in ‎Section 5.02 herein, the Subordinated Indenture shall be supplemented in accordance herewith, and this Ninth Supplemental Indenture shall form a part of the Subordinated Indenture for all purposes in respect of the Securities or otherwise as applicable.

Section 5.02.Other Documents to be Given to the Trustee. The Trustee shall be entitled to receive an Officer’s Certificate and an Opinion of Counsel stating the conditions contained in Section 1.02 of the Subordinated Indenture and, in the case of the Opinion of Counsel, stating the Indenture is a legal, binding and valid obligation of the Company enforceable in accordance with its terms. As specified in Section 9.03 of the Subordinated Indenture and subject to the provisions of Section 6.03 of the Subordinated Indenture, the Trustee shall also be entitled to receive an Opinion of Counsel stating that that this Ninth Supplemental Indenture is authorized or permitted by the Subordinated Indenture, and the Ninth Supplemental Indenture, and the Securities whose terms are incorporated by reference herein are each, subject to Section 1.03 of the Subordinated Indenture, a legal, valid and binding obligation of the Company enforceable in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditor’s rights generally, by equitable principles of general applicability and by possible judicial actions giving effect to governmental actions or foreign laws affecting creditors’ rights, and the Ninth Supplemental Indenture is permitted under the Indenture. The Trustee may rely on such Officer’s Certificate and Opinion of Counsel as conclusive evidence that this Ninth Supplemental Indenture complies with the applicable provisions of the Subordinated Indenture.

30 

Section 5.03.Confirmation of Indenture. The Subordinated Indenture, as supplemented and amended by this Ninth Supplemental Indenture with respect to the Securities or otherwise as applicable, is in all respects ratified and confirmed, and the Subordinated Indenture, this Ninth Supplemental Indenture and all indentures supplemental thereto shall, in respect of the Securities or otherwise as applicable, be read, taken and construed as one and the same instrument. This Ninth Supplemental Indenture constitutes an integral part of the Subordinated Indenture and, where applicable, with respect to the Securities. In the event of a conflict between the terms and conditions of the Subordinated Indenture and the terms and conditions of this Ninth Supplemental Indenture, the terms and conditions of this Ninth Supplemental Indenture shall prevail where applicable.

Section 5.04.Concerning the Trustee. The Trustee does not make any representations as to the validity or sufficiency of this Ninth Supplemental Indenture or the Securities. The recitals and statements herein are deemed to be those of the Company and not the Trustee. In entering into this Ninth Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Subordinated Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.

Section 5.05.Governing Law. This Ninth Supplemental Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York, except that (i) the authorization and execution by the Company of this Ninth Supplemental Indenture and the Securities 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 and the Subordinated Debt Security Registrar, as the case may be and (ii) ‎Section 3.18 of this Ninth Supplemental Indenture (other than the Trustee’s and the Subordinated Debt Security Registrar’s own rights, duties or immunities thereunder) and the third paragraph of Section 5.03 of the Subordinated Indenture in relation to the waiver of any right of set-off or counterclaim with respect to the Securities or the Indenture shall be governed by and construed in accordance with the laws of Scotland.

Section 5.06.Separability. In case any provision contained in this Ninth Supplemental Indenture 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.

31 

Section 5.07.Concerning U.K. Bail-in Liability. Notwithstanding and to the exclusion of any other term of this Ninth Supplemental Indenture or the Subordinated Indenture or any other agreements, arrangements, or understanding between the Company and the Trustee, the Trustee acknowledges and accepts that a U.K. Bail-in Liability arising under this Agreement may be subject to the exercise of U.K. Bail-in Powers by the relevant U.K. resolution authority, and acknowledges, accepts, and agrees to be bound by:

(a)the effect of the exercise of U.K. Bail-in Powers by the relevant U.K. resolution authority in relation to any U.K. Bail-in Liability of the Company to the Trustee under this Ninth Supplemental Indenture or the Subordinated Indenture, that (without limitation) may include and result in any of the following, or some combination thereof:

(i)the reduction of all, or a portion, of the U.K. Bail-in Liability or outstanding amounts due thereon;

(ii)the conversion of all, or a portion, of the U.K. Bail-in Liability into shares, other securities or other obligations of the Company or another person (and the issue to or conferral on the Trustee of such shares, securities or obligations);

(iii)the cancellation of the U.K. Bail-in Liability; and/or

(iv)the amendment or alteration of any interest, if applicable, thereon, the Maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and

(b)the variation of the terms of this Ninth Supplemental Indenture, as deemed necessary by the relevant U.K. resolution authority, to give effect to the exercise of U.K. Bail-in Powers by the relevant U.K. resolution authority.

“U.K. Bail-in Legislation” means Part I of the U.K. Banking Act 2009 and any other law, regulation, rule or requirement applicable from time to time in the U.K. relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).

“U.K. Bail-in Liability” means a liability in respect of which the U.K. Bail-in Powers may be exercised.

32 

“U.K. Bail-in Powers” means any write-down, conversion, transfer, modification or suspension power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to Lloyds Banking Group plc or its affiliates, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United Kingdom within the context of the U.K. resolution regime under the U.K. Banking Act 2009 as the same has been or may be amended from time to time (whether pursuant to the U.K. Financial Services (Banking Reform) Act 2013 (the “Banking Reform Act 2013”), secondary legislation or otherwise), pursuant to which any obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, modified, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which any right in a contract governing such obligations may be deemed to have been exercised. A reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power.

“Write-down and Conversion Powers” means the powers under the Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or affiliate of a bank or investment firm, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability.

Section 5.08.Counterparts. Electronic Signatures. This Ninth 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. The words “execution,” “signed,” “signature,” and words of like import in this Supplemental Indenture or in any certificate, agreement or document related to this Thirteenth Supplemental Indenture shall include electronic signatures (including, without limitation, DocuSign and Adobe Sign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.

Section 5.09.Bail-in Relating to BRRD Party. Notwithstanding any other term of this Agreement or any other agreements, arrangements, or understanding between the parties, each counterparty to a BRRD Party under this Agreement acknowledges, accepts, and agrees to be bound by:

(a)the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of any BRRD Party to it under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:

33 

(i)the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon;

(ii)the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the relevant BRRD Party or another person (and the issue to or conferral on it of such shares, securities or obligations);

(iii)the cancellation of the BRRD Liability;

(iv)the amendment or alteration of the amounts due in relation to the BRRD Liability, including any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and

(b)the variation of the terms of this Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority.

[Signature Pages Follow]

34 

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

LLOYDS BANKING GROUP PLC, as Issuer
By:
	Name:
	Title:

[Signature Page to Ninth Supplemental Indenture]

THE BANK OF NEW YORK MELLON, acting through its London Branch, as Trustee
By:
	Name:
	Title:

The Bank of New York Mellon SA/NV, Dublin Branch, as Subordinated Debt Security Registrar

Name:

Title:

[Signature Page to Ninth Supplemental Indenture]

EXHIBIT A

FORM OF GLOBAL SECURITY

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE RIGHTS OF THE HOLDER OF THIS SUBORDINATED DEBT SECURITY ARE, TO THE EXTENT AND IN THE MANNER SET FORTH IN SECTION 12.01 OF THE INDENTURE, SUBORDINATED TO THE CLAIMS OF OTHER CREDITORS OF THE COMPANY, AND THIS SUBORDINATED NOTE IS ISSUED SUBJECT TO THE PROVISIONS OF THAT SECTION 12.01, AND THE HOLDER OF THIS SUBORDINATED NOTE, BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS OF SECTION 12.01 OF THE INDENTURE AND THE TERMS OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF SCOTLAND.

A-3 

ISIN No. [•]

Common Code: [•]

LLOYDS BANKING GROUP PLC

[•]% FIXED RATE RESET SUBORDINATED DEBT SECURITIES DUE 2046 WITH A CALL DATE IN 2041

No. 1 $[•]

LLOYDS BANKING GROUP PLC (herein called the “Company”, which term includes any successor person under the Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to The Bank of New York Depository (Nominees) Limited, or registered assigns, the principal sum of $[•] ([•] hundred million U.S. dollars) on [•], 2046 or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon semi-annually in arrears on [•] and [•] of each year, commencing on [•], 2022, and ending on [•], 2046 (each, a “Payment Date”). Interest so payable on any Payment Date shall be paid to the Holder in whose name this Subordinated Debt Security is registered on [·] and [·] immediately preceding the related Payment Date, as applicable, whether or not a Business Day (each a “Regular Record Date”). If (i) the Company fails to pay any installment of interest on any Subordinated Debt Security on or before its Payment Date and such failure continues for 14 days or (ii) the Company fails to pay all or any part of the principal of any Subordinated Debt Security on any date on which such principal shall otherwise have become due and payable, whether upon redemption or otherwise, and such failure continues for seven days (each of (i) and (ii), a “Default”), the Trustee may commence a proceeding for the winding up of the Company or a Qualifying Administration, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount of any of the Outstanding Subordinated Debt Securities to be due and payable.

Interest shall accrue on this Subordinated Debt Security from (and including) the date of issuance to (but excluding) [•], 2041 (the “Reset Date”) at the rate per annum equal to (a) the yield, rounded to three decimal places when expressed as a percentage and calculated by BofA Securities, Inc., Credit Suisse Securities (USA) LLC and Lloyds Securities Inc. in accordance with standard market practice, that corresponds to the bid-side price of [•]% U.S. Treasury Notes due [•] as of the Pricing Time (as defined below) as displayed on the Bloomberg Government Pricing Monitor page FIT1 (or any recognized quotation source selected by the Company in its sole discretion if such quotation report is not available or is manifestly erroneous) plus (b) a fixed spread of [•] basis points (the “Initial Interest Rate”) and from (and including) the Reset Date to (but excluding) Maturity (the “Reset Period”), at a rate per annum calculated by the Calculation Agent on the second Business Day immediately preceding the Reset Date (the “Reset Determination Date”) as being equal to the sum of the applicable U.S. Treasury Rate (as defined below) (expressed as a rate per annum) and [•]% (the “Margin”), such sum being converted to a semi-annual rate in accordance with market convention (rounded to three decimal places, with 0.0005 rounded down) (the “Reset Rate of Interest”).

A-4 

Interest on the Subordinated Debt Securities will be calculated on the basis of a 360-day year consisting of twelve 30-day months and, in the case of an incomplete month, on the basis of the actual number of days elapsed in such period. If any scheduled Interest Payment Date is not a Business Day, the Company will pay interest on the next Business Day, but interest on that payment will not accrue during the period from and after the scheduled Interest Payment Date. If the scheduled Maturity date or date of redemption or repayment is not a Business Day, the Company may pay interest and principal on the next succeeding Business Day, but interest on that payment will not accrue during the period from and after the scheduled Maturity date or date of redemption or repayment.

Payment of the principal amount of (and premium, if any) and any interest on, this Subordinated Debt Security will be made in U.S. dollars. Such payment shall be made through one or more Paying Agents appointed under the Indenture to the Holder of this Subordinated Debt Security. If the date for payment of the principal amount hereof (and premium, if any) or interest thereon is not a Business Day, then (subject as provided in the Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment and without any interest or other payment in respect of such delay.

Prior to due presentment of this Subordinated Debt 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 Subordinated Debt Security is registered as the owner of such Subordinated Debt Security for the purpose of receiving payment of principal and interest, if any, on such Subordinated Debt Security and for all other purposes whatsoever, whether or not such Subordinated Debt Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

Reference is hereby made to the further provisions of this Subordinated Debt 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.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual or electronic signature, this Subordinated Debt Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

A-5 

The exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Subordinated Debt Securities; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Subordinated Debt Securities into shares or other securities or other obligations of the Company or another person (and the issue to or conferral on the holder of such shares, securities or obligations), including by means of amendment, modification or variation of the terms of the Subordinated Debt Securities; and/or (iii) the amendment or alteration of the Maturity of the Subordinated Debt Securities, or amendment of the amount of interest due on the Subordinated Debt Securities, or the dates on which interest becomes payable, including by suspending payment for a temporary period; any U.K. bail-in power may be exercised by means of variation of the terms of the Subordinated Debt Securities solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at Maturity), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and each Beneficial owner of the Subordinated Debt Securities further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Subordinated Debt Securities are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

For these purposes, a “U.K. bail-in power” is any write-down, conversion, transfer, modification or suspension power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company and the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United Kingdom within the context of the U.K. resolution regime under the Banking Act 2009 as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, modified, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which any right in a contract governing such obligations may be deemed to have been exercised. A reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

“U.S. Treasury Rate” means, with respect to the Reset Date, the rate per annum equal to: (1) the yield on actively traded U.S. Treasury securities adjusted to constant maturity for one-year maturities on the Reset Determination Date and appearing under the caption “Treasury constant maturities” on the Reset Determination Date in the applicable most recently published statistical release designated “H.15 Daily Update”, or any successor publication that is published by the Board of Governors of the Federal Reserve System that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity, under the caption “Treasury Constant Maturities”, for the maturity of five years; or (2) if such release (or any successor release) is not published on the Reset Determination Date, or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the Reset Date.

A-6 

The U.S. Treasury Rate shall be calculated by the Calculation Agent (as defined below).

If the U.S. Treasury Rate cannot be determined, for whatever reason, as described under (1) or (2) above, “U.S. Treasury Rate” means the rate in percentage per annum as notified by the Calculation Agent to the Company equal to the yield on U.S. Treasury securities having a maturity of five years as set forth in the most recently published statistical release designated “H.15 Daily Update” under the caption “Treasury constant maturities” (or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities” for the maturity of five years) on the Reset Determination Date.

“Calculation Agent” means The Bank of New York Mellon, London Branch, or its successor appointed by the Company from time to time in accordance with the Calculation Agent Agreement between the Company and The Bank of New York Mellon, London Branch, dated as of the Issue Date.

“Comparable Treasury Issue” means, with respect to the Reset Period, the U.S. Treasury security or securities selected by the Company with a maturity date on or about the last day of the Reset Period and that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities denominated in U.S. dollars and having a maturity of five years.

“Comparable Treasury Price” means, with respect to the Reset Date, (i) the arithmetic average of the Reference Treasury Dealer Quotations for the Reset Date received by the Company (calculated on the Reset Determination Date), after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if fewer than five such Reference Treasury Dealer Quotations are received by the Company, the arithmetic average of all such quotations, or (iii) if fewer than two such Reference Treasury Dealer Quotations are received by the Company, then such Reference Treasury Dealer Quotation as quoted in writing to the Company by a Reference Treasury Dealer.

“Reference Treasury Dealer” means each of up to five banks selected by the Company, or the affiliates of such banks, which are (i) primary U.S. Treasury securities dealers, and their respective successors (as long as such successors are also primary U.S. Treasury securities dealers), or (ii) market makers in pricing comparable corporate bond issues denominated in U.S. dollars.

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and the Reset Date, the arithmetic average, as determined by the Calculation Agent, of the bid and offered prices for the applicable Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, at 11:00 a.m. (New York City time), on the Reset Determination Date.

A-7 

IN WITNESS WHEREOF, the Company has caused this Subordinated Debt Security to be duly executed.

Dated: [•], 2021

LLOYDS BANKING GROUP PLC
By:
	Name:
	Title:

A-8 

CERTIFICATE OF AUTHENTICATION

This is one of the Subordinated Debt Securities of the series designated herein referred to in the within-mentioned Indenture.

Dated: [•], 2021

THE BANK OF NEW YORK MELLON, as Trustee
By:
	Authorized Signatory

A-9 

[REVERSE OF SECURITY]

This security is one of a duly authorized issue of securities of the Company (herein called the “Subordinated Debt Securities”) issued and to be issued in one or more series under a Subordinated Indenture, dated as of November 4, 2014 (herein called the “Subordinated Indenture”), between the Company, as issuer, and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Subordinated Indenture), as supplemented by the Ninth Supplemental Indenture, dated as of [•], 2021, among the Company, the Trustee and The Bank of New York Mellon SA/NV, Dublin Branch, as Subordinated Debt Security Registrar (the “Ninth Supplemental Indenture, and, together with the Subordinated Indenture, the “Indenture”) to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Subordinated Debt Securities and of the terms upon which the Subordinated Debt Securities are, and are to be, authenticated and delivered.

This Subordinated Debt Security is one of the series designated on the face hereof, initially limited in aggregate principal amount to $[•]. The Company may, from time to time, without the consent of the Holders of the Subordinated Debt Securities, issue additional Subordinated Debt Securities of one or more of the series of Subordinated Debt Securities issued under the Subordinated Indenture, having the same ranking and the same interest rate, Maturity, redemption terms and other terms as the Subordinated Debt Securities, except for the price to the public, issue date and first Interest Payment Date, provided that such additional Subordinated Debt Securities must be fungible with the outstanding Subordinated Debt Securities for U.S. federal income tax purposes. Any such additional Subordinated Debt Securities, together with the Subordinated Debt Securities of the applicable series, will constitute a single series of Subordinated Debt Securities under the Subordinated Indenture and shall be included in the definition of “Securities” in the Subordinated Indenture where the context requires.

The Subordinated Debt Securities will constitute our direct, unconditional, unsecured, unguaranteed and subordinated obligations ranking pari passu without any preference among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness of the Company.

The rights of the Holders of the Subordinated Debt Securities of this series are, to the extent and in the manner set forth in Section 12.01 of the Indenture, subordinated to the claims of all Senior Creditors of the Company, and this series of Subordinated Debt Securities is issued subject to the provisions of that Section 12.01, and the Holders of this series of Subordinated Debt Securities, by accepting the same, agree to and shall be bound by such provisions. The provisions of Section 12.01 of the Indenture and the terms of this paragraph are governed by, and shall be construed in accordance with, the laws of Scotland.

A-1 

If an Event of Default occurs with respect to Subordinated Debt Securities of any series, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of this series may declare the principal amount, together with accrued interest (if any), and Additional Amounts (if any), payable on such Subordinated Debt Securities, of all the Subordinated Debt Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such amount shall become immediately due and payable.

Except as otherwise provided in Article 5 of the Indenture, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of the Subordinated Debt Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Subordinated Indenture or in aid of the exercise of any power granted herein, or to enforce any other legal or equitable right vested in the Trustee by the Subordinated Indenture or by law, provided, however, that the Company shall not, as a result of the bringing of such judicial proceedings, be required to pay any amount representing or measured by reference to the principal of, or any interest on, the Subordinated Debt Securities prior to any date on which the principal of, or any interest on, the Subordinated Debt Securities would have otherwise been payable by the Company.

If a Default occurs, the Trustee may commence a proceeding for the winding-up of the Company and/or prove in a winding-up of the Company or a Qualifying Administration for all due and payable amounts, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount of any of the Outstanding Subordinated Debt Securities to be due and payable.

Failure to make any payment in respect of this Subordinated Debt Security shall not be a Default if such payment is withheld or refused and an Opinion of Counsel is delivered to the Trustee concluding that such sums were not paid in order to comply with any fiscal or other law or regulation or with the order of any court of competent jurisdiction, provided, however, that the Trustee may by notice to the Company require the Company to take such action (including but not limited to proceedings for a declaration by a court of competent jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days (in the case of payments under clause 5.03(a) of the Indenture) or seven days (in the case of payments under clause 5.03(b) Indenture) after the Trustee gives written notice to the Company informing it of such resolution.

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Subject to applicable law, no Holder or Beneficial Owner of the Subordinated Debt Securities may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation or retention in respect of any amount owed to it by the Company arising under or in connection with the Subordinated Debt Securities. The Holders and Beneficial Owners of Subordinated Debt Securities, by virtue of its holding of any Subordinated Debt Securities deemed to have waived any right of set-off, counterclaim, or combination of accounts, compensation and retention with respect to the Subordinated Debt Securities or this Subordinated Indenture (or between the obligations under or in respect of any Subordinated Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company.

No remedy against the Company other than as referred to in Article 5 of the Indenture shall be available to the Trustee (on behalf of the Holders) or the Holders, whether for the recovery of amounts owing in respect of the Subordinated Debt Securities or under the Indenture or in respect of any breach by the Company of any of its other obligations under or in respect of the Subordinated Debt Securities or under the Subordinated Indenture, except that the Trustee and the Holders shall have such rights and powers as they are required to have under the Trust Indenture Act.

Amounts to be paid on the Subordinated Debt Securities will be made without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges or fees imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If at any time a Taxing Jurisdiction requires the Company to make such deduction or withholding, the Company will pay additional amounts with respect to the payments of interest on (but not principal or any other payments), the Subordinated Debt Securities (“Additional Amounts”) that are necessary in order that the net amounts paid to the Holders of Subordinated Debt Securities of the particular series, after the deduction or withholding, shall equal the amounts which would have been payable with respect to interest on the Subordinated Debt Securities if the deduction or withholding had not been required. However, this will not apply to any such amount with respect to interest that would not have been deducted or withheld but for the fact that:

(i) the Holder or the Beneficial Owner of the Subordinated Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise having some connection with the Taxing Jurisdiction other than the holding or ownership of a Subordinated Debt Security, or the collection of any payment of, or in respect of, principal of, or any interest or other payment on, any Subordinated Debt Security;

(ii) except in the case of winding-up in the United Kingdom, the relevant Subordinated Debt Security is presented (where presentation is required) for payment in the United Kingdom;

(iii) the relevant Subordinated Debt Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to the Additional Amounts on presenting the same for payment at the close of that 30 day period;

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(iv) the Holder or the Beneficial Owner of the relevant Subordinated Debt Security or the Beneficial Owner of any payment of, or in respect of, principal of, or any interest or other payment on, the Subordinated Debt Security failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or the Beneficial Owner or (y) to make any declaration or other similar claim to satisfy any requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of the tax, levy, impost, duty, charge or fee;

(v) the deduction or withholding is imposed by reason of any agreement with the U.S. Internal Revenue Service in connection with Sections 1471-1474 of the US Internal Revenue Code and the U.S. Treasury regulations thereunder (“FATCA”), any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA, or any law, regulation or other official guidance enacted or issued in any jurisdiction implementing, or relating to, FATCA or any intergovernmental agreement; or

(vi) any combination of subclauses (i) through (v) above,

nor shall Additional Amounts be paid with respect to any interest payment on the Subordinated Debt Securities to any Holder who is a fiduciary or partnership or any person other than the sole Beneficial Owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a Beneficial Owner who would not have been entitled to such Additional Amounts with respect to interest on the Subordinated Debt Securities, had it been the Holder.

Whenever in the Indenture there is mentioned, in any context, the payment of interest on any Subordinated Debt Securities of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made. Upon request from the Trustee or a paying agent, the Company shall provide information reasonably necessary and readily available in order to enable to the Trustee or paying agent to determine whether any withholding obligations under FATCA apply. None of the Company, the Trustee or a paying agent shall have any liability in connection with the Company’s or Trustee’s or paying agent’s compliance with any such withholding obligation under applicable law.

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Subordinated Debt Securities may not be redeemed except in accordance with provisions of applicable law, applicable provisions of the Applicable Regulations and except as provided in the Indenture. The Subordinated Debt Securities may not be redeemed in whole or in part at the option of the Holder thereof.

Subject to the limitations specified below, the Company may, at the option of the Company, on not less than 30 nor more than 60 days’ notice, redeem the Subordinated Debt Securities, as a whole but not in part, at a redemption price equal to 100% of the principal amount, of the Subordinated Debt Securities then outstanding, together with any accrued interest to (but excluding) the date fixed for redemption, if at any time the Company determines that:

(i)            as a result of a change in, or 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 effective on or after the date of issuance of the Subordinated Debt Securities (the “Issue Date”), or (y) in the case of a change in law, if such change is 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 Subordinated Debt 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 (or its corresponding funding costs as recognized in its financial statements) in respect of the Subordinated Debt Securities in computing its taxation liabilities or the amount or value of such deduction to the Company would be materially reduced;

(B)       prevent the Subordinated Debt Securities from being treated as loan relationships for United Kingdom tax purposes;

(C)       as a result of the Subordinated Debt 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 of the Issue Date or any similar system or systems having like effect as may from time to time exist);

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(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 Subordinated Debt Securities or the conversion of the Subordinated Debt Securities into shares or other obligations of the Company (including, pursuant to the terms and conditions of the Subordinated Debt Securities or as a result of the exercise of any regulatory powers under the Banking Act 2009); or

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

(each such Tax Law Change, 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.

Prior to the delivery of any such notice of redemption, the Company shall deliver to the Trustee (i) a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company), in a form satisfactory to the Trustee, to the effect that a Tax Event has occurred, and (ii) an Officer’s Certificate confirming (1) that all the conditions necessary for redemption have occurred and that the Company could not avoid the consequences of the Tax Event by taking measures reasonably available to it, and (2) that the Relevant Regulator is satisfied that the relevant change or event is material and was not reasonably foreseeable by the Company on the Issue Date. The Trustee is entitled to conclusively rely on and accept such opinion and Officer’s Certificate without any duty whatsoever of further inquiry and without liability to any person, in which event such opinion and Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

Subject to the conditions set out below, the Subordinated Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 calendar days’ nor more than 60 calendar days’ notice, at any time, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of Subordinated Debt Securities to, but excluding, the date fixed for redemption if, immediately prior to the giving of the notice referred to above, a Capital Disqualification Event has occurred.

Prior to the giving of any notice of redemption, the Company must deliver to the Trustee an Officer’s Certificate stating that (i) a Capital Disqualification Event has occurred, and (ii) the Company has demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date. The Trustee shall be entitled to accept such Officer’s Certificate without any further inquiry and without liability to any person, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee and the Holders and Beneficial Owners.

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Subject to the conditions set out below, the Company may from time to time purchase Subordinated Debt Securities in the open market or by tender or by private agreement, in any manner and at any price or at differing prices. Subordinated Debt Securities purchased or otherwise acquired by the Company may be held, resold or at the Company’s sole discretion, surrendered to the Trustee for cancellation (in which case all Subordinated Debt Securities so surrendered will forthwith be cancelled in accordance with applicable law and thereafter may not be re-issued or resold).

Subject to the conditions set out below, the Subordinated Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 15 calendar days’ nor more than 30 calendar days’ notice to each Holder of Subordinated Debt Securities to be redeemed, at any time, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such series of Subordinated Debt Securities to, but excluding, the date fixed for redemption, at the option of the Company on any date in the period commencing on (and including) September 15, 2026 and ending on (and including) the Reset Date.

Upon the occurrence of a Capital Disqualification Event, the Company may, subject to the conditions set out in Section 11.13 of the Ninth Supplemental Indenture, but without any requirement for the consent or approval of the Holders of the Subordinated Debt Securities, at any time (whether before, on or following the Reset Date) either substitute all (but not some only) of the Subordinated Debt Securities for, or vary the terms of the Subordinated Debt Securities so that they remain or, as appropriate, become, Compliant Securities, and the Trustee shall (subject to the below) agree to such substitution or variation. Upon the expiry of such notice, the Company shall either vary the terms of or substitute the Subordinated Debt Securities, as the case may be.

Prior to the giving of any notice of substitution or variation, the Company must deliver to the Trustee an Officer’s Certificate stating that a Capital Disqualification Event, has occurred, setting out the details thereof, and stating that the terms of the relevant Compliant Securities comply with the definition thereof. The Trustee shall be entitled to accept such Officer’s Certificate without any further inquiry, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee and the Holders and Beneficial Owners of the Subordinated Debt Securities.

“Compliant Securities” means securities issued directly by the Company that:

(a) have terms not materially less favorable to an investor than the terms of the Subordinated Debt Securities (as reasonably determined by the Company in consultation with an investment bank or financial adviser of international standing (which in either case is independent of the Company)) and provided that the Company has delivered an Officer’s Certificate to such effect (including as to such consultation) to the Trustee (upon which the Trustee shall be entitled to rely without further inquiry and without liability to any person) prior to the issue or variation of the relevant securities);

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(b) subject to (a) above (1) contain terms which comply with the then current requirements of the Relevant Regulator in relation to Tier 2 capital; (2) provide for the same interest rate and Interest Payment Dates from time to time applying to the Subordinated Debt Securities; (3) rank pari passu with the ranking of the Subordinated Debt Securities; (4) preserve any existing rights under the Indenture to any accrued interest or other amounts which have not been either paid or canceled; and (5) preserve the obligations of the Company as to payments of principal in respect of the Subordinated Debt Securities, including (without limitation) as to the timing and amount of such payments;

(c) are (1) listed on the New York Stock Exchange or (2) listed on such other stock exchange as is a Recognized Stock Exchange at that time as selected by the Company; and

(d) where the Subordinated Debt Securities which have been substituted or varied had a published rating (solicited by, or assigned with the cooperation of, the Company) from a Rating Agency immediately prior to their substitution or variation, each such Rating Agency has ascribed, or announced its intention to ascribe, an equal or higher published rating to the relevant Compliant Securities.

“Recognized Stock Exchange” means a recognized stock exchange as defined in section 1005 of the U.K. Income Tax Act 2007 as the same may be amended from time to time and any provision, statute or statutory instrument replacing the same from time to time.

The Subordinated Debt Securities may be redeemed, purchased, substituted or varied by the Company prior to Maturity as provided in the foregoing paragraphs, subject to:

(a) the Company giving notice to the Relevant Regulator and the Relevant Regulator granting permission to the Company to redeem, purchase, substitute or vary the Subordinated Debt Securities as the case may be (in each case to the extent, and in the manner, required by the relevant Applicable Regulations);

(b) in respect of any redemption of the Subordinated Debt Securities 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 an optional redemption due to a Tax Event, the Company having 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 Capital Disqualification Event, the Company having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date;

(c) if and to the extent then required under the Applicable Regulations, either: (A) the Company having replaced the Subordinated Debt Securities with instruments qualifying as own funds of equal or higher quality on terms that are sustainable for the income capacity of the Company; or (B) (save in the case of sub-paragraph (d)(A) below) the Company demonstrating to the satisfaction of the Relevant Regulator that the own funds and eligible liabilities of the Company would, following such redemption or purchase, substitution or variation, exceed its minimum applicable capital requirements (including any applicable buffer requirements) by a margin that the Relevant Regulator considers necessary at such time; and

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(d) in the case of any purchase prior to the fifth anniversary of the Issue Date, in addition to satisfying either of the conditions specified in paragraph (c) above, either: (A) the Company having, before or at the same time as such purchase, replaced the Subordinated Debt Securities with own funds instruments of equal or higher quality at terms that are sustainable for the income capacity of the Company, and the Relevant Regulator having permitted such action on the basis of the determination that it would be beneficial from a prudential point of view and justified by exceptional circumstances; or (B) the relevant Subordinated Debt Securities being purchased for market- making purposes in accordance with the Applicable Regulations.

Notwithstanding the above conditions, if, at the time of any redemption, purchase, substitution or variation the then prevailing Applicable Regulations permit the repayment, purchase, substitution or variation only after compliance with one or more alternative or additional preconditions to those set out above, the Company shall comply with such other and/or, as appropriate, additional pre-condition(s).

If the Company elects to redeem the Subordinated Debt Securities, the Subordinated Debt Securities will cease to accrue interest from the date of redemption, provided the redemption price has been paid in accordance with the Indenture.

Upon payment of (i) the amount of principal (and premium, if any) so declared due and payable and (ii) accrued and unpaid interest, all of the Company’s obligations in respect of the payment of the principal of (and premium, if any), and accrued and unpaid interest on, the Subordinated Debt Securities of this series shall terminate.

Notwithstanding any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Subordinated Debt Securities, by purchasing or acquiring the Subordinated Debt Securities, each Holder (including each Beneficial Owner) of the Subordinated Debt Securities acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Subordinated Debt Securities; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Subordinated Debt Securities into shares or other securities or other obligations of the Company or another person; and/or (iii) the amendment or alteration of the Maturity of the Subordinated Debt Securities, or amendment of the amount of interest due on the Subordinated Debt Securities, or the dates on which interest becomes payable, including by suspending payment for a temporary period; which U.K. bail-in power may be exercised by means of variation of the terms of the Subordinated Debt Securities solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at Maturity), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial Owner of the Subordinated Debt Securities further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Subordinated Debt Securities are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

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For these purposes, a “U.K. bail-in power” is any write-down, conversion, transfer, modification or suspension power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company and the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted in the United Kingdom within the context of the U.K. resolution regime under the Banking Act 2009 as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which any obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, modified, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (or suspended for a temporary period) or pursuant to which any right in a contract governing such obligations may be deemed to have been exercised. A reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power.

No repayment of the principal amount of the Subordinated Debt Securities or payment of interest on the Subordinated Debt Securities shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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 applicable to the Company or other members of the Group.

Neither a reduction or cancellation, in part or in full, of the principal amount of, or interest on, the Subordinated Debt Securities or the conversion thereof into another security or obligation of the Company or another person, as a result of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Company, nor the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Debt Securities will be a default or an event of default for any purpose.

The Company’s obligations to indemnify the Trustee in accordance with Section 6.07 of the Subordinated Indenture shall survive the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Debt Securities.

By its acquisition of the Subordinated Debt Securities, each Holder and each Beneficial Owner of the Subordinated Debt Securities 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 U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Debt Securities.

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By its acquisition of the Subordinated Debt Securities each Holder and each Beneficial Owner of the Subordinated Debt Securities acknowledges and agrees that:

(i) the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Debt Securities shall not give rise to a Default or Event of 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) upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee shall not be required to take any further directions from Holders under Section 5.12 of the Subordinated Indenture, and (b) neither the Subordinated Indenture nor this Ninth Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the Subordinated Debt Securities remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Subordinated Debt Securities), then the Trustee’s duties under the Subordinated Indenture shall remain applicable with respect to the Subordinated Debt Securities following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Subordinated Indenture, unless the Company and the Trustee agree that a supplemental indenture is not necessary; and,

(iii) it shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Subordinated Debt Securities and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Subordinated Debt Securities to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Subordinated Debt Securities as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner or the Trustee.

Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Debt Securities, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes only.

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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 Subordinated Debt Securities to be affected thereby by the Company and the Trustee with the consent of the Holders of not less than two-thirds in principal amount of the Subordinated Debt Securities at the time outstanding. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Outstanding Subordinated Debt Securities, on behalf of the Holders of all Subordinated Debt Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Subordinated Debt Security shall be conclusive and binding upon such Holder and upon all future Holders of this Subordinated Debt Security and of any Subordinated Debt Security issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Subordinated Debt Security.

No reference herein to the Indenture and no provision of this Subordinated Debt Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay, if and when due and payable, the principal of (and premium, if any) and interest on, this Subordinated Debt Security at the times, place and rate, and in the coin or currency, herein prescribed.

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Subordinated Debt Security of this series shall 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 hereunder, unless such holder fulfills the requirements of Section 5.07 under the Indenture.

No reference herein to the Indenture and no provision of this Subordinated Debt Security or of the Indenture shall alter or impair the right of the Holder of this Subordinated Debt Security, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and interest on, this Subordinated Debt Security when due and payable in accordance with the provisions of this Subordinated Debt Security and the Indenture.

The Subordinated Indenture, the Ninth Supplemental Indenture and the Subordinated Debt Securities are governed by, and construed in accordance with, the laws of the State of New York, except for the subordination and waiver of set-off provisions relating to the Subordinated Debt Securities, which are governed by, and construed in accordance with, the laws of Scotland.

Unless otherwise defined herein, all terms used in this Subordinated Debt Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

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EX-5.1

Exhibit 5.1

	CMS Cameron McKenna Nabarro Olswang LLP Saltire Court 20 Castle Terrace Edinburgh EH1 2EN DX 553001 EDINBURGH LP 2 EDINBURGH 6 T +44 131 228 8000 F +44 131 228 8888 cms.law
Lloyds Banking Group plc 25 Gresham Street London EC2V 7HN

10 November 2021

Your ref

Our ref - DOCS/EDN/LLO015

Dear Sirs

We have acted as solicitors in Scotland for Lloyds Banking Group plc (the Company) in connection with the offering by the Company to exchange Fixed Rate Reset Subordinated Debt Securities due 2046 with a call date in 2041 (the Notes) to be issued by the Company plus (if applicable) the relevant cash consideration amount, plus accrued and unpaid dividends or interest (as the case may be) in cash, plus (if applicable) cash amounts in lieu of any fractional Notes, for: (i) American Depositary Shares (ADSs) representing the Company’s 6.413% Non-Cumulative Fixed to Floating Rate Preference Shares, (ii) ADSs representing the Company’s 6.657% Non-Cumulative Fixed to Floating Rate Preference Shares, (iii) 6.00% Subordinated Notes due 2033 issued by HBOS plc, (iv) the Company’s 4.582% Subordinated Debt Securities due 2025 and (v) the Company’s 4.500% Fixed Rates Subordinated Debt Securities due 2024. The Notes are to be issued pursuant to a subordinated indenture dated as of 4 November 2014 (the Original Indenture) between the Company and The Bank of New York Mellon, acting through its London branch, as trustee (the Trustee), as supplemented by a ninth supplemental indenture to be entered into between the Company and the Trustee (the Ninth Supplemental Indenture and, together with the Original Indenture, the Indenture).

We, as your solicitors, have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary for the purposes of rendering this opinion. For the purposes of opinion (2) in the next paragraph, we have assumed (i) the genuineness of all signatures and seals, (ii) the conformity to

CMS Cameron McKenna Nabarro Olswang LLP is a limited liability partnership registered in England and Wales with registration number OC310335. It is a body corporate which uses the word “partner” to refer to a member, or an employee or consultant with equivalent standing and qualifications. It is authorised and regulated by the Solicitors Regulation Authority of England and Wales with SRA number 423370. A list of members and their professional qualifications is open to inspection at the registered office, Cannon Place, 78 Cannon Street, London EC4N 6AF. Members are either solicitors or registered foreign lawyers. VAT registration number: 974 899 925. Further information about the firm can be found at cms.law

CMS Cameron McKenna Nabarro Olswang LLP is a member of CMS Legal Services EEIG (CMS EEIG), a European Economic Interest Grouping that coordinates an organisation of independent law firms. CMS EEIG provides no client services. Such services are solely provided by CMS EEIG’s member firms in their respective jurisdictions. CMS EEIG and each of its member firms are separate and legally distinct entities, and no such entity has any authority to bind any other. CMS EEIG and each member firm are liable only for their own acts or omissions and not those of each other. The brand name “CMS” and the term “firm” are used to refer to some or all of the member firms or their offices. Further information can be found at www.cmslegal.com.

Notice: the firm does not accept service by e-mail of court proceedings, other processes or formal notices of any kind without specific prior written agreement.

original documents, and completeness, of all documents submitted to us as copies and the authenticity of the originals, and (iii) that all relevant resolutions of the directors of the Company were duly passed at properly convened meetings, and have not been amended or rescinded.

On the basis of the foregoing, we advise you that, in our opinion, (1) the Notes have been duly authorized in accordance with the Indenture, and, when the Notes have been (a) executed and authenticated, and (b) delivered and duly paid for by the purchasers thereof, the Notes will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally (including the Banking Act 2009 and any secondary legislation, instruments or orders made, or which may be made, under it) and equitable principles of general applicability, and (2) the Original Indenture and the Eighth Supplemental Indenture have been duly authorized by all necessary corporate action on the part of the Company, and, insofar as Scots law governs the formalities of execution and delivery thereof, have been duly executed and delivered by or on behalf of the Company.

The foregoing opinion is limited to the laws of Scotland. We have made no investigation of the laws of any jurisdiction other than Scotland and neither express nor imply any opinion as to any other laws and in particular the laws of the State of New York and the laws of the United States of America and our opinion is subject to such laws including the matters stated in the opinion of Davis Polk & Wardwell London LLP. The laws of the State of New York are the chosen governing law of the Notes and we have assumed that the Notes constitute valid, binding and enforceable obligations of the Company, enforceable against the Company in accordance with their terms, under such laws.

We hereby consent to the filing of this opinion as an exhibit to a report on Form 6-K to be filed by the Company on the date hereof. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the US Securities Act of 1933, as amended.

This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by or furnished to any other person without our prior written consent.

Yours faithfully,

/s/ CMS Cameron McKenna Nabarro Olswang LLP

For and on behalf of CMS Cameron McKenna Nabarro Olswang LLP

2

EX-5.2

Exhibit 5.2

		draft
	Davis Polk & Wardwell llp 450 Lexington Avenue New York, NY 10017 davispolk.com

November 10, 2021

Lloyds Banking Group plc
25 Gresham Street
London EC2V 7HN
United Kingdom

Ladies and Gentlemen:

We have acted as special United States counsel for Lloyds Banking Group plc, a public limited company organized under the laws of Scotland (the “Company”) in connection with a Registration Statement on Form F-4 (the “Registration Statement”) filed with the United States Securities and Exchange Commission under the United States Securities Act of 1933, as amended (the “Securities Act”) and a related Prospectus dated November 10, 2021 (the “Prospectus”), in connection with the offer by the Company to exchange Fixed Rate Reset Subordinated Debt Securities due 2046 with a call date in 2041 (the “Securities”), to be issued by the Company plus (if applicable) the relevant cash consideration amount, plus accrued and unpaid dividends or interest (as the case may be) in cash, plus (if applicable) cash amounts in lieu of any fractional Securities (the “Exchange Offer”), for: (i) American Depositary Shares (“ADSs”) representing the Company’s 6.413% Non-Cumulative Fixed to Floating Rate Preference Shares, (ii) ADSs representing the Company’s 6.657% Non-Cumulative Fixed to Floating Rate Preference Shares, (iii) 6.00% Subordinated Notes due 2033 issued by HBOS plc, (iv) the Company’s 4.582% Subordinated Debt Securities due 2025 and (v) the Company’s 4.500% Fixed Rate Subordinated Debt Securities due 2024 (together, the “Existing Securities”).

The Securities are to be issued pursuant to the provisions of the subordinated debt securities indenture dated as of November 4, 2014 (the “Base Indenture”) between the Company and The Bank of New York Mellon, acting through its London Branch, as trustee (the “Trustee”), as supplemented by the ninth supplemental indenture dated as of the date hereof among the Company, the Trustee and The Bank of New York Mellon SA/NV, Dublin Branch, as subordinated debt security registrar (the “Ninth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).

We, as your Special United States counsel, have examined originals or copies of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for the purpose of rendering this opinion.

In rendering the opinions expressed herein, we have, without independent inquiry or investigation, assumed that (i) all documents submitted to us as originals are authentic and complete, (ii) all documents submitted to us as copies conform to authentic, complete originals, (iii) all signatures on all documents that we reviewed are genuine, (iv) all natural persons executing documents had and have the legal capacity to do so, (v) all statements in certificates of public officials and officers of the Company that we reviewed were and are accurate, (vi) all representations made by the Company as to matters of fact in the documents that we reviewed were and are accurate and (vii) the Ninth Supplemental Indenture will be executed in substantially the same form as filed with the United States Securities and Commission as an exhibit to the Registration Statement..

		draft
	Lloyds Banking Group plc

Based upon the foregoing, and subject to the additional assumptions and qualifications set forth below, we advise you that, in our opinion:

(1) Assuming that the Base Indenture has been, and the Ninth Supplemental Indenture will be, duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Base Indenture has been, and the Ninth Supplemental Indenture will be, duly executed and delivered by the Company, and assuming the Base Indenture has been, and the Ninth Supplemental Indenture will be, duly authorized, executed and delivered by each of the Company and the Trustee and that each of the Trustee and the Company has full power, authority and legal right to enter into and perform its obligations thereunder, the Base Indenture and the Ninth Supplemental Indenture constitute or will constitute, as the case may be, a valid and binding agreement of the Company, enforceable against the Company in accordance with their terms, provided that we express no opinion as to the validity, legally binding effect or enforceability of any provision that permits holders to collect any portion of stated principal amount upon acceleration of the Securities to the extent determined to constitute unearned interest; and

(2) Assuming that the Securities have been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Securities when authenticated in accordance with the terms of the Indenture and issued and delivered in exchange for the Existing Securities pursuant to the Exchange Offer will be valid and binding obligations of the Company entitled to the benefits under the Indenture, enforceable against the Company in accordance with their terms provided that we express no opinion as to the validity, legally binding effect or enforceability of any provision that permits holders to collect any portion of stated principal amount upon acceleration of the Securities to the extent determined to constitute unearned interest.

Our opinions in paragraphs (1) and (2) are subject to (i) the effects of applicable bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability and (ii) possible judicial or regulatory actions giving effect to governmental actions or foreign laws affecting creditors’ rights.

We express no opinion with respect to the provisions in the Securities relating to the acknowledgement of and consent to the exercise of any U.K. bail-in power (as defined therein) or Section 3.20 of the Ninth Supplemental Indenture.

In connection with the opinions expressed above, we have assumed that, at or prior to the time of the delivery of any Securities, (i) the Registration Statement shall have been declared effective and such effectiveness shall not have been suspended; (ii) the Company is, and shall remain, validly existing as a corporation under the laws of Scotland; and (iii) there shall not have occurred any change in law affecting the validity or enforceability of the Securities. We have also assumed that (i) the execution, delivery and performance of the Securities (a) is within the Company’s corporate powers, (b) do not contravene, or constitute a default under, the certificate of incorporation or bylaws or other constitutive documents of the Company, (c) require no action by or in respect of, or filing with, any governmental body, agency or official and (d) do not contravene, or constitute a default under, any provision of applicable law or regulation or any judgment, injunction, order or decree or any agreement or other instrument binding upon such party.

We are members of the Bar of the State of New York, and the foregoing opinion is limited to the laws of the State of New York and the federal laws of the United States, except that we express no opinion as to any law, rule or regulation that is applicable to the Company, the Documents or the transactions contemplated thereby solely because such law, rule or regulation is part of a regulatory regime applicable to any party to any of the Documents or any of its affiliates due to the specific assets or business of such party or such affiliate. Insofar as the foregoing opinion involves matters governed by Scots law, we have relied, without

November 10, 2021 2

		draft
	Lloyds Banking Group plc

independent inquiry or investigation, on the opinion of CMS Cameron McKenna Nabarro Olswang LLP, special legal counsel in Scotland for the Company, dated as of June 15, 2021, to be filed as an exhibit to a report on Form 6-K concurrently with this opinion.

We hereby consent to the use of our name under the caption “Validity of the New Notes” in the Prospectus forming a part of the Registration Statement and to the filing, as an exhibit to the Registration Statement, of this opinion. In addition, we consent to the incorporation by reference of this opinion and consent into a registration statement filed pursuant to Rule 462(b) under the Securities Act. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.

Very truly yours,

/s/ Davis Polk & Wardwell London LLP

Davis Polk & Wardwell London LLP

November 10, 2021 3

EX-10.1

Exhibit 10.1

Lysanne J W Black
Senior Deputy Company Secretary
26^th September 2006

HBOS plc

Written Resolutions of the Special Committee of the Board of Directors

WRITTEN RESOLUTIONS

1 Authority

It was noted that the Special Committee requires to be comprised of at least four Directors, one of whom must be the Chairman of HBOS plc, the Senior Independent Director of HBOS plc or an independent Non-Executive Director of HBOS plc. It was duly noted that these resolutions had been forwarded to four Directors, one of whom is the independent Non-Executive Director.

It was noted that the Special Committee can act by written resolution to make decisions on matters of urgency concerning HBOS plc which would otherwise require a decision of the Board but which cannot, in the opinion of the Chairman or the Senior Independent Director or a Non-Executive Director and the Chief Executive, await the next meeting of the Board.

It was further noted that no Board meeting had been called to discuss the matters to be considered by the Special Committee.

2 Directors’ Interests

By their execution of these resolutions, the Directors declare that there are no interests in these resolutions which are required to be disclosed by s.317 of the Companies Act 1985 or the Articles of Association of the Company (‘the Articles’).

3 Offer of Non-Cumulative Callable Dollar Preference Shares of US $1 each

3.1 It was noted that the purpose of the following resolutions was, if thought fit, to approve in principle an increase in the Company’s regulatory capital base by the creation and issuance of up to US$1,500m Non-Cumulative Callable Dollar Preference Shares (‘Preference Shares’) of US$1 each at a premium of US$999 (‘the Offer’) and any further steps necessary in connection with the applications for admission of the American Depositary Receipts (“ADRs”) evidencing the American Depositary Shares (“ADSs”) representing the Preference Shares to the Official List and to the London Stock Exchange plc’s (‘the Exchange’) Gilt-Edged and Fixed Interest Market (together referred to in these minutes as ‘Admission’).

3.2 It was noted that the Offer is intended to be marketed to institutional investors domiciled in the United States. The Company intends to issue the Preference Shares which will then be deposited with The Bank of New York as depositary (the ‘Depositary’). The Depositary will in turn sell ADSs evidenced by the ADRs to investors. Each ADS will represent an interest in the designated number of Preference Shares. Application will be made for the ADRs to be admitted to the Official List and to the Exchange’s Gilt-Edged and Fixed Interest Market. No application will be made for the Preference Shares to be admitted to the Official List nor to the Exchange’s Gilt-Edged and Fixed Interest Market.

3.3 The following matters were noted:

3.3.1 The maximum amount to be raised under the Offer would not exceed US$1,500 million. The internal limit agreed by the Boards of the Company, the Governor and Company of the Bank of Scotland and Halifax plc on 23 November 2004 for non-innovative Tier 1 non-equity capital issuance for the calendar year 2005 was £1,000 million. It was noted that the issuance of 750,000 sterling denominated preference shares in May 2005 had raised £750 million and that the remaining available limit of £250 million was insufficient to cover the proposed issue of the Preference Shares. The Directors would therefore be required to authorise an increase in the internal limit for the issuance of non-innovative Tier 1, non-equity capital from £1,000 million to £1,750 million.

3.3.2 In addition to the existing powers of the Directors to allot relevant securities, pursuant to a resolution passed at the annual general meeting of the Company on 27 April 2005, the Directors have been generally and unconditionally authorised pursuant to and in accordance with section 80 of the Companies Act 1985 to exercise all the powers of the Company to allot relevant securities up to the aggregate nominal amount of £796,000,000, Euro 1,500,000,000 and U.S.$2,000,000,000.

3.3.3 Pursuant to Article 4.7 the Company may not issue the Preference Shares unless the requirements set out in that Article have been complied with. It was noted that KPMG Audit Plc (“KPMG”), the Company’s auditors, have been asked to produce a letter (“the KPMG letter”) on or around the date of issue of the Preference Shares if the Committee so resolves to approve in principle an increase in its regulatory base by the creation and issuance of the Preference Shares, reporting that (i) immediately following the issue of the Preference Shares the aggregate nominal amount of the Preference Shares, when added to the aggregate nominal amount of the 9¼% Preference Shares, the 9¾% Preference Shares (each as defined in the Articles), the non-cumulative redeemable preference shares with an initial dividend rate of 6.0884 per cent. each year and the non-cumulative redeemable preference shares with a dividend rate of 6.475 per cent. each year (all together the “Priority Preference Shares”) in issue will not exceed an amount equal to 25% of the Adjusted Capital and Reserves as defined in the Articles and (ii) the average of the annual profit after taxation and before extraordinary items and dividends of the Company as shown in the Relevant Accounts (as defined in the Articles) for the three most recent accounting reference periods of the Company to have ended prior to the date of the issue of the Preference Shares exceeds four and a half times the aggregate annual amount of the dividends (exclusive of any imputed tax credit available to shareholders) payable in the then current accounting reference period in respect of the Priority Preference Shares and the Preference Shares.

3.3.4 The dividends due on the Priority Preference Shares had been paid in full on the most recent dividend payment dates thereof and therefore the creation and issuance of the Preference Shares would not be regarded as a variation or abrogation of the rights of the holders of the Priority Preference Shares under Article 10.1 of the Articles.

3.3.5 The Preference Shares would not be ‘equity securities’ within the meaning of the Companies Act 1985 and therefore the pre-emption rights set out in section 89 of the Companies Act 1985 would not apply to the issue of the Preference Shares (if the Committee so decide in principle to issue the Preference Shares).

3.4 It was noted that the following documents in connection with the Offer were in the possession of the Senior Deputy Secretary and that such documents can be requested from the Senior Deputy Secretary at any time by the Directors for review:-

3.4.1 A draft prospectus containing details of the Offer (‘the Prospectus’); and

3.4.2 Copies of the documents described in the Prospectus as being available for inspection.

3.5 It was noted that attached to these resolutions was a draft document titled ‘The Terms of Issue of the Preference Shares’ which set out certain of the principal terms of issue and the rights attaching to the Preference Shares (and which provides, inter alia, that the Preference Shares may, subject to investor demand, be issued in up to three distinct series, each of which will be identical in every material respect except for its aggregate issue amount and the terms relating to the calculation and payment of dividends thereon).

3.6 It was further noted that the documents listed in paragraphs 3.4.1 and 3.4.2 together with the Terms of Issue of the Preference Shares are hereinafter referred to as ‘the Offering Documents’.

4 Prospectus

4.1 It was noted that under the Prospectus Directive (being a directive of pan-European effectiveness regulating the form and content of prospectuses pursuant to which securities may be offered in the European Economic Area, implemented in the United Kingdom through the amended Financial Services and Markets Act 2000) the Company is responsible for ensuring that the Prospectus contains the information necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses of the Company and the rights attributed to the ADRs.

4.2 It was noted that the following responsibility statement is contained on page 2 of the Prospectus which is available to the Directors for inspection:-

“The Company accepts responsibility for the information contained in this Prospectus. The Company, having taken care to ensure such is the case, confirms that the information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import.”

It was noted that it was insufficient that any material fact was contained in a document referred to as being available for inspection. All material facts had to appear in the Prospectus (which includes all documents incorporated therein by reference). It was also noted that every significant new factor, material mistake or inaccuracy relating to the information included in the prospectus which is capable of affecting the assessment of the securities which arises or is noted between the time when the Prospectus is approved by the UK Listing Authority and the time when trading of the ADRs commences shall be required to be mentioned in a supplement to the Prospectus. Consequently, it was

further noted that the Prospectus must be reviewed by the Directors prior to admission of the ADRs to the Official List and to trading by the Exchange.

4.3 It was noted that each of Retail Division, Corporate and Treasury Division, Insurance & Investment Division and Strategy & International Operations Division had provided the relevant business descriptions in respect of each such Division in the section entitled ‘Description of the Company’ beginning on page 53 of the Prospectus, which is available to the Directors for inspection.

4.4 It was noted that a statement entitled ‘Conflicts of Interest’ is contained on page 62 of the Prospectus in terms that:

“No potential conflicts of interest exist at the date of this Prospectus between the duties of the directors to HBOS and their private interests or other duties”.

By their execution of these resolutions the Directors confirm that such statement is true and accurate and not misleading in respect of its application to the Company.

4.5 It was noted that a section entitled ‘General Information’ is contained on page 120 of the Prospectus which provides:

“There has been no significant change in the financial or trading position of the HBOS Group since June 30, 2005 nor any material adverse change in the prospects of the HBOS Group since December 31, 2004.”

“Neither the Company nor any of its subsidiaries is or has been involved in any governmental, legal or arbitration proceedings, nor to the Company’s knowledge, are any governmental, legal or arbitration proceedings pending or threatened involving the Company or any of its subsidiaries of which the Company is aware during the 12 months preceding the date of this Prospectus, which may have or have had in the recent past a significant effect on the financial position or profitability of the Company and its subsidiaries taken as a whole.”

By their execution of these resolutions the Directors confirm that each such statement is true and accurate and not misleading in respect of the application to the Company.

4.6 The Committee carefully considered the Offer and Admission and the Terms of Issue of the Preference Shares.

4.7 It was noted that no verification notes had been prepared in respect of the Prospectus. It was noted that the Directors were instead relying on

the verification of the sections of the Prospectus entitled ‘Description of the Company’ and ‘General Information’ from the verification notes previously prepared by Linklaters and Milbank, Tweed, Hadley & McCoy LLP for the Company’s US MTN programme and the replies thereto which had been provided or obtained by the Company Secretarial team and certain other members of management.

4.8 It was noted that the Articles required the Directors to decide on certain of the terms of the Preference Shares before they are allotted. These terms were set out in the Terms of Issue of the Preference Shares which provides, inter alia, that the Preference Shares may, subject to investor demand, be issued in up to three distinct series, each of which will be identical in every material respect except for its aggregate issue amount and the terms relating to the calculation and payment of dividends thereon. By his execution of these resolutions, each Committee member acknowledges that he has carefully considered the Terms of Issue of the Preference Shares. It was noted that a summary of the rights of the Preference Shares was set out in the section entitled ‘Description of the Preference Shares’ in the Prospectus.

4.9 It was noted that provided the KPMG Letter is issued the requirements set out in Article 4.7 of the Articles as explained in paragraph 3.3.3 above will be fully complied with (if the Committee so resolve to approve in principle an increase in its regulatory base by the creation and issuance of the Preference Shares).

5 Resolutions

5.1 By their execution of these resolutions, the Committee members AGREE and RESOLVE, on behalf of the Board of the Company, that the internal limit for the issue of non-innovative Tier 1, non-equity capital for the calendar year 2005 be increased from £1,000 million to £1,750 million.

5.2 By their execution of these resolutions, the Committee members AGREE and RESOLVE, on behalf of the Board of the Company, that, subject to the final Prospectus being approved by the UK Listing Authority:-

5.2.1 The Offer and the terms of issue and the rights attaching to the Preference Shares (which provides, inter alia, that the Preference Shares may, subject to investor demand, be issued in up to three distinct series, each of which will be identical in every material respect except for its aggregate issue amount and the terms relating to the calculation and payment of dividends thereon) as set out in the Terms of Issue of the Preference Shares be approved, and that any Director of the Company be authorised to agree to such additions and amendments to the Terms of Issue of the Preference Shares as he/she may deem necessary and/or desirable and approve the final version of the Terms of Issue of

the Preference Shares (incorporating such additions and amendments) prior to allotment;

5.2.2 The draft Prospectus be approved;

5.2.3 Admission be approved and application be made to the UK Listing Authority and to the Exchange respectively for admission of all of the ADRs proposed to be issued (i) to the Official List; and (ii) to the Exchange’s Gilt-Edged and Fixed Interest Market;

5.2.4 Arrangements be made for the final Prospectus to be published in accordance with the requirements of the Prospectus Rules of the UK Listing Authority;

5.2.5 (i) The Company Secretary, (ii) any member of the Committee, (iii) any Director of the Company or (iv) two authorised signatories acting together being one of Lindsay MacKay, Cliff Pattenden, Claire Bright, Ian Haywood or Richard Shrimpton and one of Lorinda Long, Lorrane Campbell, Michael Pithey and Amarpal Takk (‘two Authorised Signatories’) be and are hereby instructed and is/are hereby authorised to sign the final Prospectus for and on behalf of the Company;

5.2.6 (i) The Company Secretary, (ii) any member of the Committee, (iii) any Director of the Company or (iv) two Authorised Signatories be and is/are hereby instructed and is/are hereby authorised to make an application to the UK Listing Authority for the ADRs proposed to be offered to be admitted to the Official List of the UK Listing Authority and in that connection supply to the UK Listing Authority such information and documents and to give such undertakings and to pay such fees as may be necessary;

5.2.7 (i) The Company Secretary, (ii) any member of the Committee, (iii) any Director of the Company or (iv) two Authorised Signatories be and is/are hereby instructed and authorised to make an application to the Exchange for the ADRs proposed to be issued to be admitted to trading by the Exchange and in that connection supply to the Exchange such information and documents and to give such undertakings and to pay such fees as may be necessary;

5.2.8 (i) The Company Secretary, (ii) any member of the Committee or (iii) any Director of the Company or (iv) two Authorised Signatories be authorised to agree to any additions and amendments to any other Offering Documents (but including the Prospectus) and to approve the final version of such Offering Documents;

5.2.9 All such other Offering Documents as are mentioned in paragraph 5.2.9 above be and are hereby approved and (i) any member of the Committee, (ii) any Director of the Company or (iii) two Authorised Signatories be authorised to sign such Offering Documents for and on behalf of the Company and deliver the same to the persons entitled thereto;

5.2.10 (i) Any member of the Committee, (ii) any Director of the Company or (iii) two Authorised Signatories be authorised to execute any letters, certificates, notices, forms or other documents (as a deed or otherwise) whatsoever which he/she considers is necessary and/or desirable in connection with the Offer and the Admission for and on behalf of the Company (including, without limiting the generality of the foregoing, any deposit agreement governing the relationship between the Company, the Depositary and the ADR holders and an underwriting agreement between the Company, Lehman Brothers Inc, Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc (‘the Underwriting Agreement’)); and

5.2.11 (i) Any member of the Committee, (ii) any Director of the Company or (iii) two Authorised Signatories be authorised to take any further or other action which he/she considers necessary and/or desirable in connection with the Offer and the Admission.

6 Allotment of the Preference Shares

The Committee AGREED and RESOLVED on behalf of the Board of the Company that any Director be authorised to approve the allotment and issue of up to US$1,500m Preference Shares fully paid up pursuant to the Underwriting Agreement subject to the Underwriting Agreement becoming unconditional and not being terminated and the Company Secretary was instructed to arrange for the filing in due course with the Registrar of Companies of the relevant Form(s) 88(2).

Signed on 13^th September by:

/s/ Colin Matthew

Colin Matthew

/s/ George Mitchell

George Mitchell

/s/ Phil Hodkinson

Phil Hodkinson

/s/ Brian Ivory

Brian Ivory

EX-10.2

Exhibit 10.2

HBOS PLC

RESOLUTIONS OF A DIRECTOR OF HBOS PLC

NON INNOVATIVE TIER 1 ISSUE

1 AUTHORITY

The Director noted that he had been given authority to approve and execute the matters which are the subject of these resolutions in resolutions adopted by the Capital and Structured Transactions Approval Committee (“CASTAC”) of HBOS plc (“the Company”) on 3 May 2007.

2 DIRECTORS’ INTERESTS

By his execution of these resolutions, the Director declares that there are no interests in these resolutions which are required to be disclosed by s.317 of the Companies Act 1985 or the Articles of Association of the Company.

3 TERMS OF ISSUE OF NON-CUMULATIVE CALLABLE DOLLAR PREFERENCE SHARES OF US$1 EACH

3.1 The Director noted that CASTAC had on 3 May 2007 approved a document titled ‘The Terms of Issue of the Preference Shares’ which set out, inter alia, that the Preference Shares proposed to be issued may be issued in up to two distinct series.

3.2 The Director further noted that CASTAC had on 3 May 2007 authorised any Director of the Company to agree any additions and amendments to the Terms of Issue of the Preference Shares as he/she may deem necessary and/or desirable and approve the final version of the Terms of Issue of the Preference Shares (incorporating such additions and amendments) prior to allotment.

3.3 The Director further noted that attached to these resolutions was the final version of the Terms of Issue of the Preference Shares which set out, inter alia, that only one series of Preference Shares is to be issued and that such series will comprise Fixed-to-Floating Rate Non-Cumulative Callable Dollar Preference Shares of US$1 each.

4 RESOLUTIONS

4.1 By his execution of these resolutions, the Director AGREES and RESOLVES that, subject to the final offering prospectus being approved by the UK Listing Authority:-

4.1.1 the additions and amendments made to the earlier draft of the Terms of Issue of the Preference Shares be approved;

4.1.2 the terms of issue and the rights attaching to the Preference Shares as set out in the attached Terms of Issue of the Preference Shares be approved;

4.1.3 750,000 Fixed-to-Floating Rate Non-Cumulative Callable Dollar Preference Shares of US$1 each be allotted and issued fully paid up for cash together with a premium of US $999 per Preference Share in cash pursuant to (i) the purchase agreement between Goldman Sachs & Co., J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated (together ‘the Initial Purchasers’) and the Company dated on or around the date of these resolutions and/or (ii) any declaration of trust by any nominee in favour of the Initial Purchasers (‘a Declaration of Trust’), subject to the Purchase Agreement becoming unconditional and not being terminated and the Declaration of Trust being entered into; and

4.1.4 the Company Secretary was instructed to arrange for the filing in due course with the Registrar of Companies of the relevant Form(s) 88(2).

/s/ Bernard Higgins	18 May 2007
Director	Date

EX-10.3

Exhibit 10.3

Companies Acts

Written Resolution of a Committee of

the Board of Directors of Lloyds TSB Group plc (the “Company”)

Pursuant to Article 100 of the Articles of Association of the Company, we the undersigned, constituting a Committee (the “Committee”) of the board of the directors of the Company duly authorised pursuant to a resolution of the board of the Company passed on 17th September, 2008 as appended hereto as Annex 1 do as follows:

1. we note that in connection with the recommended acquisition of HBOS plc by the Company as announced on 18 September 2008 and subsequently amended on 13 October 2008 (the “Acquisition”), the board of HBOS plc intends to propose that each class of Preference shares issued by HBOS plc (the “HBOS Preference Shares”) be exchanged for preference shares to be issued by the Company (the “Transaction”). It is proposed that the Transaction be implemented by way of a scheme of arrangement under sections 895 to 899 of the Companies Act 2006 (the “Preference Scheme”). Under the terms of the Preference Scheme, and subject to the satisfaction or, if permitted, waiver of certain conditions, holders of HBOS Preference Shares will be entitled to receive new preference shares issued by the Company (the “New Lloyds TSB Preference Shares”) in exchange for the cancellation of their HBOS Preference Shares on the following basis:

For every HBOS 9¼% Preference Share	One new Lloyds TSB 9¼% Preference Share
For every HBOS 9¾% Preference Share	One new Lloyds TSB 9¾% Preference Share
For every HBOS 6.0884% Preference Share	One new Lloyds TSB 6.0884% Preference Share
For every HBOS 6.475% Preference Share	One new Lloyds TSB 6.475% Preference Share
For every HBOS 6.3673% Preference Share	One new Lloyds TSB 6.3673% Preference Share
For every HBOS 6.413% Preference Share	One new Lloyds TSB 6.413% Preference Share
For every HBOS 5.92% Preference Share	One new Lloyds TSB 5.92% Preference Share
For every HBOS 6.657% Preference Share	One new Lloyds TSB 6.657% Preference Share
For every HBOS 12% Preference Share	One new Lloyds TSB 12% Preference Share

2. we note that there will be certain differences between the terms and conditions of each class of the HBOS Preference Shares and the New Lloyds TSB Preference Shares and that: (i) the description of the New Lloyds TSB Preference Shares including summary key features and differences to HBOS Preference Shares as set out in Part 4 of proof 4 of the circular prepared by HBOS plc regarding the Recommended proposal for the cancellation of certain HBOS Preference Shares of HBOS plc and the issue of New Lloyds TSB Preference Shares by Lloyds TSB Group plc to be effected by the Preference Scheme (the “HBOS Scheme Document”), as attached hereto; and (ii) the description of the New Lloyds TSB Preference Shares as set out in Part IV of the draft Lloyds TSB Group plc preference share prospectus, as attached hereto, have been considered by us;

3. we also note that permission will be sought for the New Lloyds TSB Preference Shares to be admitted to the Official List of the UK Listing Authority and admitted to trading on the regulated market of the London Stock Exchange following issue;

4. we further note that three series of the HBOS Preference Shares, namely the HBOS 6.657% Preference Shares, the HBOS 5.92% Preference Shares and the HBOS 6.413% Preference Shares were initially subscribed in the form of American Depositary Shares evidenced by American Depositary Receipts and that, if required, the Company may issue new American Depositary Receipts and/or or warrants and/or enter into one or more agreements to supplement the depositary agreements relating to such American Depositary Receipts; and

5. we have considered the Transaction (including, without limitation, all commercial terms pertaining to it) and the proposals set out above and, having considered the matters referred to in section 172(1)

of the Companies Act 2006 in connection with directors’ duties to promote the success of the Company we hereby unanimously pass the resolution set out below and agree that the said resolution shall for all purposes be as valid and effective as if the same has been passed at a quorate and duly convened meeting of the Committee of the Company:

(A) the Company agrees to the Transaction and the Company’s participation in the Transaction and to the extent necessary or desirable, the Preference Scheme, subject to the satisfaction or, if permitted, waiver of relevant conditions set out in the HBOS Scheme Document (the latest draft of the relevant conditions included in the HBOS Scheme Document are set out in Annex 2 hereof);

(B) a Power of Attorney, substantially in the form appended to these resolutions as Annex 3, be executed on behalf of the Company conferring certain powers and discretions on the attorneys named therein in connection with the Transaction.

Signed:

/s/ John Eric Daniels

Group Chief Executive

Dated this 13th day of November 2008

Signed:

/s/ George Truett Tate

Director

Dated this 13th day of November 2008

Signed:

/s/ Timothy James William Tookey

Director

Dated this 13th day of November 2008

EX-10.4

Exhibit 10.4

[Execution Copy]

LLOYDS BANKING GROUP plc

and

THE BANK OF NEW YORK MELLON

As Depositary

and

OWNERS AND BENEFICIAL OWNERS OF
RULE 144A AMERICAN DEPOSITARY SHARES

Amended and Restated Rule 144A Deposit Agreement

(Preference shares – series)

Dated as of February 18, 2020

AMENDED AND RESTATED RULE 144A DEPOSIT AGREEMENT

AMENDED AND RESTATED RULE 144A DEPOSIT AGREEMENT dated as of February 18, 2020 among LLOYDS BANKING GROUP plc (as successor by merger to HBOS plc), incorporated under the laws of Scotland (herein called the Company), THE BANK OF NEW YORK MELLON (formerly known as The Bank of New York), a New York banking corporation (herein called the Depositary), and all Owners and Beneficial Owners from time to time of Rule 144A American Depositary Shares issued hereunder.

W I T N E S S E T H :

WHEREAS, HBOS plc and the Depositary entered into a Rule 144A deposit agreement dated as of September 29, 2005 (the “Prior Deposit Agreement”) for the purposes stated in that agreement; and

WHEREAS, the Company assumed the Prior Deposit Agreement as successor by merger to HBOS plc; and

WHEREAS, the Company and the Depositary now wish to amend the Prior Deposit Agreement to (i) provide that Rule 144A American Depositary Shares may be uncertificated securities or may be certificated securities evidenced by Rule 144A American Depositary Receipts (ii) change the provisions relating to voting of Deposited Securities (as hereinafter defined) and (iii) to update the Prior Deposit Agreement in various other respects; and

WHEREAS, the Company desires to provide, as hereinafter set forth in this Amended and Restated Rule 144A Deposit Agreement, for the deposit of Preference Shares (as hereinafter defined) of one or more Series (as hereinafter defined) of the Company from time to time with the Depositary or with the Custodian (as hereinafter defined) as agent of the Depositary for the purposes set forth in this Amended and Restated Rule 144A Deposit Agreement, for the creation of Rule 144A American Depositary Shares of one or more corresponding series representing the Preference Shares so deposited and for the execution and delivery of Rule 144A American Depositary Receipts evidencing the Rule 144A American Depositary Shares; and

WHEREAS, the Rule 144A American Depositary Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Amended and Restated Rule 144A Deposit Agreement;

NOW, THEREFORE, in consideration of the premises, it is agreed by and among the parties hereto that the Prior Deposit Agreement is hereby amended and restated as follows:

ARTICLE 1. DEFINITIONS

The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Amended and Restated Rule 144A Deposit Agreement:

SECTION 1.01 American Depositary Shares.

The term “American Depositary Shares” shall mean Rule 144A American Depositary Shares, the securities representing the interests in the Deposited Securities and evidenced by the Receipts issued hereunder. Each American Depositary Share shall represent the number of Preference Shares specified in Exhibit A to this Deposit Agreement, until there shall occur a distribution upon Deposited Securities covered by Section 4.03 or a change in Deposited Securities covered by Section 4.08 with respect to which additional Receipts are not executed and delivered, and thereafter American Depositary Shares shall represent the amount of Preference Shares or other Deposited Securities specified in such Sections.

SECTION 1.02 Beneficial Owner.

The term “Beneficial Owner” shall mean each person owning from time to time any beneficial interest in the American Depositary Shares evidenced by any Receipt.

SECTION 1.03 Commission.

The term “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

SECTION 1.04 Company.

The term “Company” shall mean Lloyds Banking Group plc, incorporated under the laws of Scotland, and its successors.

SECTION 1.05 Consultation.

The term “Consultation” shall mean the good faith attempt by the Depositary to discuss, if practicable, the relevant issue in a timely manner with a person employed by the Company reasonably believed by the Depositary to be empowered by the Company to engage in such discussion on behalf of the Company.

SECTION 1.06 Custodian.

The term “Custodian” shall mean The Bank of New York Mellon, acting through an office located in the United Kingdom, as custodian for the Depositary for the purposes of this Deposit Agreement, or any other firm or corporation which may

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hereafter be appointed by the Depositary pursuant to the terms of Section 5.05, as substitute or additional custodian hereunder, as the context shall require and shall also mean all of them collectively.

SECTION 1.07 Deliver; Surrender.

(a)       The term “deliver,” or its noun form, when used with respect to Shares, shall mean (i) one or more book-entry transfers to an account or accounts maintained with a depository institution authorized under applicable law to effect bookentry transfers of such securities or (ii) the physical transfer of certificates representing Shares.

(b)       The term “deliver,” or its noun form, when used with respect to Receipts, shall mean (i) one or more book-entry transfers of American Depositary Shares to an account or accounts at DTC designated by the person entitled to such delivery or (ii) if book-entry settlement is no longer available for American Depository Shares in the circumstances specified in Section 2.01(c), delivery at the Corporate Trust Office of the Depositary of one or more Receipts.

(c)       The term “surrender,” when used with respect to Receipts, shall mean (i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary or (ii) surrender to the Depositary at its Corporate Trust Office of one or more Receipts.

SECTION 1.08 Deposit Agreement.

The term “Deposit Agreement” shall mean this Amended and Restated Rule 144A Deposit Agreement, as the same may be further amended from time to time in accordance with the provisions of this Deposit Agreement.

SECTION 1.09 Depositary; Corporate Trust Office.

The term “Depositary” shall mean The Bank of New York Mellon, a New York banking corporation, and any successor as depositary hereunder. The term “Corporate Trust Office”, when used with respect to the Depositary, shall mean the office of the Depositary which at the date of this Agreement is 240 Greenwich Street, New York, New York 10286.

SECTION 1.10 Deposited Securities.

The term “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement and any and all other securities, property and cash received by the Depositary or the Custodian in respect thereof and at such time held hereunder, subject as to cash to the provisions of Section 4.05.

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SECTION 1.11 Dollars.

The term “Dollars” shall mean United States dollars.

SECTION 1.12 DTC.

The term DTC shall mean The Depository Trust Company, or its successor.

SECTION 1.13 Foreign Registrar.

The term “Foreign Registrar” shall mean the entity that presently carries out the duties of registrar for the Shares or any successor as registrar for the Shares and any other appointed agent of the Company for the transfer and registration of Shares.

SECTION 1.14 Owner.

The term “Owner” shall mean the person in whose name a Receipt is registered on the books of the Depositary maintained for such purpose.

SECTION 1.15 Preference Shares.

The term “Preference Shares” shall mean non-cumulative dollar preference shares of one or more Series of the Company that are validly issued and outstanding and fully paid, nonassessable and that were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference Shares or interim certificates representing such Preference Shares; provided, however, that, if there shall occur any change in par value, a split-up or consolidation or any other reclassification or, upon the occurrence of an event described in Section 4.08, an exchange or conversion in respect of the Preference Shares of the Company, the term “Preference Shares” shall thereafter also mean the successor securities resulting from such change in nominal value, split-up or consolidation or such other reclassification or such exchange or conversion.

SECTION 1.16 Receipts.

The term “Receipts” shall mean the Rule 144A American Depositary Receipts issued hereunder evidencing American Depositary Shares.

SECTION 1.17 Registrar.

The term “Registrar” shall mean any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed to register Receipts and transfers of Receipts as herein provided.

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SECTION 1.18 Securities Act.

The term “Securities Act” shall mean the United States Securities Act of 1933, as amended.

SECTION 1.19 Securities Exchange Act.

The term “Securities Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.

SECTION 1.20 Series.

The term “Series” shall have the meaning specified in Section 2.10.

ARTICLE 2. FORM OF RECEIPTS, BOOK-ENTRY SYSTEM, DEPOSIT OF PREFERENCE SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS

SECTION 2.01 Form and Transferability of Receipts.

(a)       Definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the Depositary and, if a Registrar for the Receipts shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar. The Depositary shall maintain books on which each Receipt so executed and delivered as hereinafter provided and the transfer of each such Receipt shall be registered. Receipts bearing the manual or facsimile signature of a duly authorized signatory of the Depositary who was at any time a proper signatory of the Depositary shall bind the Depositary, notwithstanding that such signatory has ceased to hold such office prior to the execution and delivery of such Receipts by the Registrar or did not hold such office on the date of issuance of such Receipts.

Each Receipt shall bear the following legend:

THE RULE 144A AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE PREFERENCE SHARES REPRESENTED THEREBY (THE “PREFERENCE SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON

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WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A; (2) IN AN OFFSHORE TRANSACTION PURSUANT TO AND IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT; OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR THE RESALE OF THESE SECURITIES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE PREFERENCE SHARES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK, OTHER THAN A RULE 144A RESTRICTED DEPOSITARY RECEIPT FACILITY, UNLESS AND UNTIL SUCH TIME AS SUCH PREFERENCE SHARES ARE NO LONGER RESTRICTED SECURITIES WITHIN THE MEANING OF RULE 144(a)(3) UNDER THE SECURITIES ACT.

In addition to the foregoing, the Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be required (i) by the Depositary after consultation with the Company or (ii) to comply with any applicable law or regulations or with the rules and regulations of any securities exchange upon which the American Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date or manner of issuance of the underlying Deposited Securities or otherwise.

Each Receipt shall bear a CUSIP number, if any, assigned to the series of American Depositary Shares that it evidences. That CUSIP number shall be different from any CUSIP number that is or may be assigned to any other depositary receipt facility relating to the Shares.

(b)       The Company and the Depositary expect that application will be made to DTC for acceptance of the American Depositary Shares of each series for its book-entry settlement system.

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So long as the American Depositary Shares of any Series are eligible for book-entry settlement with DTC, unless otherwise required by law, all the American Depositary Shares of that Series shall be represented by a global Receipt registered in the name of a nominee of DTC (initially expected to be Cede & Co.) and no Beneficial Owner of American Depositary Shares of that Series shall receive or be entitled to receive a separate Receipt evidencing those American Depositary Shares.

For so long as a global Receipt is registered in the name of a nominee of DTC, it shall bear a legend substantially in the following form:

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Depositary or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.

(c)       If, at any time when American Depositary Shares of a Series are evidenced by a global Receipt, DTC ceases to make its book-entry settlement system available for the American Depositary Shares of that Series, the Company shall consult with the Depositary regarding other arrangements for book-entry settlement. Only in the event that it is impracticable without undue effort or expense to continue to make the American Depositary Shares of a Series available in book-entry form as determined by the Company and the Depositary shall the Company instruct the Depositary to make separate Receipts of that Series available to the Beneficial Owners, which availability shall be subject to such additions, deletions and modifications to the form of Receipt attached hereto as Exhibit A and this Deposit Agreement, and subject to the requirements of any other documents, statements or certifications in connection therewith, as the Company and the Depositary may, from time to time, agree.

The Receipts shall be typewritten, in the case of a global Receipt, and otherwise shall be engraved, lithographed, printed, or typewritten, or in such other form as may be agreed upon by the Company and the Depositary. A global Receipt shall state that it evidences the aggregate amount of American Depositary Shares held at the time at DTC.

(d)       Title to a Receipt (and to the American Depositary Shares evidenced thereby), when properly endorsed or accompanied by proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York; provided, however, that the Depositary and the Company, notwithstanding any notice to the contrary, may treat the Owner thereof as the absolute owner thereof for the purpose of determining the person

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entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes.

SECTION 2.02 Deposit of Preference Shares.

Subject to the terms and conditions of this Deposit Agreement, Preference Shares or evidence of rights to receive Preference Shares may be deposited by delivery thereof to the Custodian hereunder, in form satisfactory to the Custodian, together with all such certifications as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, and, if the Depositary requires, together with a written order directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order, a Receipt or Receipts for the number of American Depositary Shares representing such deposit.

No Preference Shares shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in England that is then performing the function of the regulation of currency exchange. If required by the Depositary, Preference Shares presented for deposit at any time, whether or not the transfer books of the Company or the Foreign Registrar, if applicable, are closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Preference Shares or to receive other property which any person in whose name the Preference Shares are or have been recorded may thereafter receive upon or in respect of such deposited Preference Shares, or in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.

No Preference Shares shall be accepted for deposit under this Deposit Agreement unless the Depositary has received a duly executed and completed certification and agreement in substantially the form appearing as Annex I to this Deposit Agreement by or on behalf of the person acquiring beneficial ownership of any American Depositary Shares to be issued in respect of that deposit.

At the request and risk and expense of any person proposing to deposit Preference Shares, and for the account of such person, the Depositary may receive certificates for Preference Shares to be deposited, together with the other instruments herein specified, for the purpose of forwarding such Preference Share certificates to the Custodian for deposit hereunder.

Upon each delivery to a Custodian of a certificate or certificates for Preference Shares to be deposited hereunder, together with the other documents above specified, such Custodian shall, as soon as transfer and recordation can be accomplished, present such certificate or certificates to the Company or the Foreign Registrar, if applicable, for transfer and recordation of the Preference Shares being deposited in the name of the Depositary or its nominee or such Custodian or its nominee.

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Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or at such other place or places as the Depositary shall determine.

SECTION 2.03 Execution and Delivery of Receipts.

Upon receipt by any Custodian of any deposit pursuant to Section 2.02 hereunder (and in addition, if the transfer books of the Company or the Foreign Registrar, if applicable, are open, the Depositary may in its sole reasonable discretion require a proper acknowledgment or other evidence from the Company or the Foreign Registrar, as the case may be, that any Deposited Securities have been recorded upon the books of the Company or the Foreign Registrar, if applicable, in the name of the Depositary or its nominee or such Custodian or its nominee), together with the other documents required as above specified, such Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order a Receipt or Receipts are deliverable in respect thereof and the number of American Depositary Shares to be evidenced thereby. Such notification shall be made by letter or, at the request, risk and expense of the person making the deposit, by cable, telex or facsimile transmission. Upon receiving such notice from such Custodian, or upon the receipt of Preference Shares by the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall, without unreasonable delay, execute and deliver at its Corporate Trust Office, to or upon the order of the person or persons entitled thereto, a Receipt or Receipts, registered in the name or names and evidencing any authorized number of American Depositary Shares requested by such person or persons, but only upon payment to the Depositary of the fees and expenses of the Depositary for the execution and delivery of such Receipt or Receipts as provided in Section 5.09, and of all taxes and governmental charges and fees and expenses payable in connection with such deposit and the transfer of the Deposited Securities.

SECTION 2.04 Registration of Transfer of Receipts: Combination and Split-up of Receipts.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register transfers of Receipts on its transfer books from time to time, upon any surrender of a Receipt, by the Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer, and duly stamped as may be required by the laws of the State of New York and of the United States of America. Thereupon the Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person entitled thereto.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested,

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evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.

The Depositary may appoint one or more co-transfer agents for the purpose of effecting transfers, combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Owners or persons entitled to Receipts and will be entitled to protection and indemnity to the same extent as the Depositary.

SECTION 2.05 Surrender of Receipts and Withdrawal of Preference Shares.

Upon surrender at the Corporate Trust Office of the Depositary of a Receipt for the purpose of withdrawal of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, and upon payment of the fee of the Depositary for the surrender of Receipts as provided in Section 5.09 and payment of all taxes and governmental charges payable in connection with such surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of this Deposit Agreement, the articles of association of the Company and the terms of the Deposited Securities, the Owner of such Receipt shall be entitled to delivery, to him or upon his order, of the amount of Deposited Securities at the time represented by the American Depositary Shares evidenced by such Receipt. Delivery of such Deposited Securities may be made by the delivery of (a) certificates in the name of such Owner or as ordered by him or certificates properly endorsed or accompanied by proper instruments of transfer to such Owner or as ordered by him and (b) any other securities, property and cash to which such Owner is then entitled in respect of such Receipts to such Owner or as ordered by him. Such delivery shall be made, as hereinafter provided, without unreasonable delay.

Notwithstanding the foregoing, no Deposited Securities may be withdrawn upon surrender of a Receipt unless at or prior to the time of surrender the Depositary has received a duly executed and completed written certificate and agreement, in substantially the form attached as Annex II to this Deposit Agreement, by or on behalf of the person surrendering such Receipt who after such withdrawal will be the beneficial owner of such Deposited Securities.

A Receipt surrendered for such purposes may be required by the Depositary to be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Owner thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be delivered to or

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upon the written order of a person or persons designated in such order. Thereupon the Depositary shall, without unreasonable delay, direct the Custodian to deliver at the office of such Custodian, subject to Sections 2.06, 3.01 and 3.02 and to the other terms and conditions of this Deposit Agreement, to or upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, except that the Depositary may make delivery to such person or persons at the Corporate Trust Office of the Depositary of any dividends or distributions with respect to the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.

At the request, risk and expense of any Owner so surrendering a Receipt, and for the account of such Owner, the Depositary shall direct the Custodian to forward any cash or other property (other than rights) comprising, and forward a certificate or certificates and other proper documents of title for, the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt to the Depositary for delivery at the Corporate Trust Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Owner, by cable, telex or facsimile transmission.

SECTION 2.06 Limitations on Execution and Delivery, Transfer and Surrender of Receipts.

As a condition precedent to the execution and delivery, registration of transfer, split-up, combination or surrender of any Receipt or withdrawal of any Deposited Securities, the Depositary, Custodian or Registrar may require payment from the depositor of Preference Shares or the presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Preference Shares being deposited or withdrawn) and payment of any applicable fees as herein provided, may require the production of proof satisfactory to it as to the identity and genuineness of any signature, may require delivery of such certifications as the Company may from time to time specify in writing to the Depositary to assure the Company of compliance with the Securities Act and the rules and regulations thereunder and may also require compliance with any regulations the Depositary may reasonably establish consistent with the provisions of this Deposit Agreement, including, without limitation, this Section 2.06.

The delivery of Receipts against deposit of Preference Shares generally or against deposit of particular Preference Shares may be suspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement or provisions governing the Deposited Securities, or for any other reason. The Depositary shall notify the Company of any

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suspension or refusal under the preceding sentence that is other than in the ordinary course of business. The Depositary shall in no event be required to accept Preference Shares for deposit or deliver Receipts against such deposits if the Depositary believes that at the time of issuance such Receipts would not be eligible under paragraph (d)(3) of Rule 144A under the Securities Act.

SECTION 2.07 Lost Receipts, etc.

In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary shall execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall execute and deliver a new Receipt in substitution for a destroyed, lost or stolen Receipt, the Owner thereof shall have (a) filed with the Depositary (i) a request for such execution and delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable requirements imposed by the Depositary.

SECTION 2.08 Cancellation and Destruction of Surrendered Receipts.

All Receipts surrendered to the Depositary shall be canceled by the Depositary. The Depositary is authorized to destroy Receipts so canceled.

SECTION 2.09 Maintenance of Records.

The Depositary agrees to maintain or cause its agents to maintain records of all American Depositary Shares surrendered and Deposited Securities withdrawn under Section 2.05, substitute Receipts delivered under Section 2.07, and of cancelled and destroyed Receipts under Section 2.08, in keeping with procedures ordinarily followed by stock transfer agents located in the United States or as required by the laws or regulations governing the Depositary. If requested writing by the Company, the Depositary will tum such records over to the Company, if the request is received before those records are destroyed in accordance with the Depositary’s or agent’s regular practices.

SECTION 2.10 Issuance in Series.

If the Company issues Preference Shares in more than one class or series or that otherwise entitle their holders to rights that vary from the rights to which other Preference Shares entitle their holders, the following provisions shall apply, notwithstanding anything to the contrary in this Deposit Agreement:

(a)       The word “Series,” when used with respect to Preference Shares, shall mean all outstanding Preference Shares that entitle their holders to identical rights

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with respect to those Preference Shares, regardless of the title or any other designation that may be assigned to Preference Shares.

(b)       The Depositary shall direct the Custodian to hold Preference Shares of a Series deposited under this Deposit Agreement, and other Deposited Securities it receives in respect of those Preference Shares in a segregated account different from the account in which it holds Preference Shares of any other Series.

(c)       Preference Shares of each series that are deposited under this Deposit Agreement shall be represented by a “Series” of American Depositary Shares separate from the American Depositary Shares representing Preference Shares of any other Series. The Depositary shall assign a designation to each Series of American Depositary Shares and shall reflect in its records the series to which each American Depositary Share belongs. Each series of American Depositary Shares shall be evidenced by a ‘‘Series” of Receipts separate from the Receipts evidencing American Depositary Shares of any other Series. Each Receipt shall be marked to indicate the designation of the Series of the American Depositary Shares evidenced by that Receipt and to identify the Series of Preference Shares those American Depositary Shares represent.

(d)       If the rights to which deposited Preference Shares of a Series entitle their holders are modified such that those rights become identical to the rights to which deposited Preference Shares of another Series entitle their holders, the Depositary shall cause the Custodian to combine the accounts in which the former separate Series of Preference Shares are held, the series of American Depositary Shares representing those Preference Shares will automatically be combined into one Series of American Depositary Shares and the Depositary may take any action necessary or convenient to effect that combination. At any time after that combination, the Owners of Receipts affected by that combination will be entitled to surrender their Receipts to the Depositary and receive Receipts reflecting the designation of the American Depositary Shares owned by them as a result of that combination.

(e)       Owners and Beneficial Owners of American Depositary Shares of a Series shall be entitled to rights under this Deposit Agreement only with respect to deposited Preference Shares of the corresponding Series and other Deposited Securities received in respect of deposited Preference Shares of that Series.

SECTION 2.11 Uncertificated American Depositary Shares: Direct Registration System.

Notwithstanding anything to the contrary in this Deposit Agreement:

(a)       American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to this Deposit Agreement summarizes the terms and conditions of, and will be

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the prospectus required under the Securities Act for, both certificated and uncertificated American Depositary Shares. Except for those provisions of this Deposit Agreement that by their nature do not apply to uncertificated American Depositary Shares, all the provisions of this Deposit Agreement shall apply, mutatis mutandis, to uncertificated American Depositary Shares as well as to certificated American Depositary Shares, and to Owners and holders of uncertificated American Depositary Shares as well as to Owners and holders of Receipts.

(b) (i) The term “deliver”, or its noun form, when used with respect to Receipts, shall mean (A) book-entry transfer of American Depositary Shares to an account at The Depository Trust Company, or its successor (“DTC”), designated by the person entitled to such delivery, (B) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (C) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts evidencing American Depositary Shares registered in the name requested by that person.

(ii)       The term “surrender”, when used with respect to Receipts, shall mean (A) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (B) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (C) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.

(c)       American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.

(d)       The Depositary shall have a duty to register a transfer in the case of uncertificated American Depositary Shares, upon receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below). The Depositary, upon surrender of a Receipt for the purpose of exchanging it for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging them for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

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(e)       Upon satisfaction of the conditions for replacement of a Receipt that is mutilated, lost, destroyed or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form unless otherwise requested by the Owner.

(f) (i) The parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.

(ii)       In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in clause (i) above has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with this Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND BENEFICIAL OWNERS OF RECEIPTS

SECTION 3.01 Filing Proofs, Certificates and Other Information.

Any person presenting Preference Shares for deposit or any Owner or Beneficial Owner may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, legal or beneficial ownership of American Depositary Shares or other securities, compliance with all applicable laws or regulations or the terms of this Deposit Agreement or the Receipts, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper or as the Company may reasonably require by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of any Receipt or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of

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any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. The Depositary shall provide to the Company, as promptly as practicable, upon its written request, copies of any such proof of citizenship or residence or other information referred to above so requested, to the extent that disclosure is permitted under applicable law.

SECTION 3.02 Liability of Owner or Beneficial Owner for Taxes.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to any Receipt or any Deposited Securities represented by any Receipt, such tax or other governmental charge shall be payable by the Owner or Beneficial Owner of such Receipt to the Depositary. The Depositary may refuse to effect any transfer of such Receipt or any withdrawal of Deposited Securities represented by American Depositary Shares evidenced by such Receipt until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner or Beneficial Owner thereof any part or all of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner or Beneficial Owner of such Receipt shall remain liable for any deficiency.

SECTION 3.03 Warranties on Deposit of Preference Shares.

Every person depositing Preference Shares under this Deposit Agreement shall be deemed thereby to represent and warrant, in addition to the matters set forth in the certificate and agreement required under Section 2.02, that such Preference Shares and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference Shares and that the person making such deposit is duly authorized so to do. Such representations and warranties shall survive the deposit of Preference Shares and delivery of Receipts.

SECTION 3.04 Disclosure of Interests.

To the extent that the provisions of or governing any Deposited Securities including, without limitation, the provisions of the Company’s Articles of Association as in effect from time to time and resolutions and regulations of the Company’s Board of Directors adopted in compliance with such Articles of Association or any applicable laws or regulations in the United Kingdom, the United States or any other country, may require the disclosure of beneficial or other ownership of Deposited Securities, other Shares and other securities of the Company and may provide for blocking transfer and voting or other rights to enforce such disclosure or limit such ownership, the Depositary shall use its reasonable efforts to comply, to the extent permitted by applicable law, with the Company’s reasonable written instructions in respect of any such

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disclosure, enforcement or limitation. Owners and Beneficial Owners shall comply with all such disclosure requirements and enforcement and ownership limitations and shall cooperate with the Depositary and the Depositary’s compliance with such Company instructions in respect thereof.

ARTICLE 4. THE DEPOSITED SECURITIES

SECTION 4.01 Cash Distributions.

Whenever the Depositary shall receive any cash dividend or other cash distribution on any Deposited Securities, the Depositary shall, as promptly as practicable, subject to the provisions of Section 4.05, convert such dividend or distribution into Dollars and shall distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09) to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively; provided, however, that in the event that the Company or the Depositary shall be required to withhold and does withhold from such cash dividend or such other cash distribution an amount on account of taxes, the amount distributed to the Owner of the Receipts evidencing American Depositary Shares representing such Deposited Securities shall be reduced accordingly. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Owner a fraction of one cent. Any such fractional amounts shall be rounded to the nearest whole cent and so distributed to Owners entitled thereto. The Company or its agent will remit to the appropriate governmental agency in the United Kingdom all amounts withheld and owing to such agency. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies.

SECTION 4.02 Distributions Other Than Cash, Shares or Rights.

Subject to the provisions of Sections 4.11 and 5.09, whenever the Depositary shall receive any distribution other than a distribution described in Section 4.01, 4.03 or 4.04, the Depositary shall, after Consultation with the Company, as promptly as practicable, cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary or any taxes or other governmental charges, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that the Company or the Depositary withhold an amount on account of taxes or other governmental charges or that such securities must be registered under the Securities Act in order to be distributed to Owners or Beneficial Owners) the Depositary deems such distribution not to be feasible, the Depositary may, after consultation with the Company to the extent practicable, as promptly as practicable, adopt such method as it may

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reasonably deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09) shall be distributed by the Depositary to the Owners entitled thereto, all in the manner and subject to the conditions described in Section 4.01. The Depositary may withhold any distribution of securities under this Section 4.02 if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act. To the extent that such securities or property or the net proceeds thereof are not effectively distributed to Owners as provided in this Section 4.02, the same shall constitute Deposited Securities and each American Depositary Share shall thereafter also represent its proportionate interest in such securities, property or net proceeds.

SECTION 4.03 Distributions in Preference Shares.

If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Preference Shares, the Depositary may, after Consultation with the Company, and shall, if the Company shall so request in writing, distribute to the Owners of outstanding Receipts entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, additional Receipts evidencing an aggregate number of American Depositary Shares representing the amount of Preference Shares received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Preference Shares and the issuance of American Depositary Shares evidenced by Receipts, including the withholding of any tax or other governmental charge as provided in Section 4.11 and the payment of the fees and expenses of the Depositary as provided in Section 5.09. Each beneficial owner of Receipts so distributed will be deemed to have acknowledged that the American Depositary Shares and the Preference Shares have not been registered under the Securities Act and to have agreed to comply with any applicable restrictions on transfer set forth on the face of those Receipts. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary shall use its reasonable efforts to sell the amount of Preference Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also represent the additional Preference Shares distributed upon the Deposited Securities represented thereby.

SECTION 4.04 Rights.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Preference Shares or any rights of any other nature, the Depositary, after consultation with the Company, shall have discretion as to the procedure to be followed in making such rights

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available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary reasonably determines, after consultation with the Company, that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems reasonably appropriate.

In circumstances in which rights would otherwise not be distributed, if an Owner of Receipts requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Preference Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Preference Shares, and the Company shall cause the Preference Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Preference Shares so purchased to be deposited pursuant to Section 2.02 of this Deposit Agreement, and shall, pursuant to Section 2.03 of this Deposit Agreement, execute and deliver Receipts to such Owner. In case of a distribution pursuant to the second paragraph of this Section 4.04, such Receipts shall be legended in accordance with applicable U.S. law and shall be subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under such laws.

If the Depositary reasonably determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may, and at the written request of the Company shall, offer to sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in

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Section 5.09 and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of this Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any Receipt or otherwise. Those proceeds shall be distributed in accordance with Section 4.01.

The Depositary will not offer rights to Owners unless the offering and sale of both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in this Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner of Receipts requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

Neither the Depositary nor the Company shall be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

SECTION 4.05 Conversion of Foreign Currency.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any Receipt or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09.

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.

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If at any time the Depositary or the Custodian shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under this Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account. The Depositary makes no representation that the exchange rate used or obtained in any currency conversion under this Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.03. The methodology used to determine exchange rates used in currency conversions is available upon request.

SECTION 4.06 Fixing of Record Date.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Preference Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Preference Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (which shall be as near as practicable to any corresponding record date set by the Company) (a) for the determination of the Owners who shall be (i) entitled to receive

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such dividend, distribution or rights or the net proceeds of the sale thereof or (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) who shall be responsible for any fee or charges assessed by the Depositary pursuant to this Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Preference Shares. Subject to the provisions of Sections 4.01 through 4.05 and to the other terms and conditions of this Deposit Agreement, the Owners on such record date shall be entitled, as the case may be, to receive the amount distributable by the Depositary with respect to such dividend or other distribution or such rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively, to give voting instructions or to act in respect of any other such matter.

SECTION 4.07 Voting of Deposited Securities.

The Company shall request the Depositary in writing to act under this Section 4.07 in respect of each meeting of holders of Preference Shares at which holders of Preference Shares have a right to vote. Upon receipt of that request and a notice of that meeting, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in the notice of meeting provided by the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Scottish law and of the Articles of Association of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Preference Shares represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose (the “Instruction Date” the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Preference Shares represented by the American Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Preference Shares other than in accordance with instructions received from Owners.

In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company requests the Depositary to act under the first sentence of this Section 4.07, the Company shall give the Depositary notice of the meeting or solicitation not less than 40 days prior to the meeting date or date for giving proxies or consents. There can be no assurance that Owners generally or any Owner in particular will receive the notice provided for in this Section 4.07 sufficiently prior to the Instruction Date to ensure that the Depositary will vote the Preference Shares or other Deposited Securities in accordance with the provisions set forth in this Section 4.07.

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SECTION 4.08 Changes Affecting Deposited Securities.

In circumstances where the provisions of Section 4.03 do not apply, upon any change in nominal value, change in par value, split-up, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a Custodian in exchange for or in conversion of or in respect of Deposited Securities, shall be treated as new Deposited Securities under this Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

SECTION 4.09 Reports.

The Depositary shall make available for inspection by Owners at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary shall also send to the Owners copies of such reports when furnished by the Company pursuant to Section 5.06. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English, to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

SECTION 4.10 Lists of Owners.

Promptly upon request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names Receipts are registered on the books of the Depositary.

SECTION 4.11 Withholding.

In the event that the Depositary determines that any distribution in property (including Preference Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary reasonably deems necessary and practicable to pay such taxes or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of

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such taxes or charges to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.

Services for Owners and Beneficial Owners that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, this Deposit Agreement.

SECTION 4.12 Redemption of Deposited Securities.

If the Depositary receives a notice that Deposited Securities are to be redeemed, the Depositary shall (i) call for surrender a corresponding number of American Depositary Shares, (ii) notify the Owners of those American Depositary Shares that the Deposited Securities underlying their American Depositary Shares will be surrendered for redemption and (iii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date. Owners of American Depositary Shares affected by the redemption may surrender the Receipts evidencing those American Depositary Shares and receive delivery of money or other property the Depositary receives upon redemption of Deposited Securities as provided in Section 2.05.

If the Depositary receives notice that less than all the Deposited Securities are to be redeemed, the Depositary shall determine in its discretion which American Depositary Shares to call for surrender in connection with that redemption. If the Depositary calls for surrender less than all the American Depositary Shares evidenced by a Receipt in connection with a redemption of Deposited Securities, the Depositary shall, upon surrender of that Receipt, deliver to the Owner a Receipt evidencing the amount of American Depositary Shares evidenced by the surrendered Receipt that were not called for surrender.

ARTICLE 5 THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY

SECTION 5.01 Maintenance of Office and Transfer Books by the Depositary.

Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain facilities for the execution and delivery, registration, registration of transfers and surrender of Receipts in accordance with the provisions of this Deposit Agreement.

The Depositary shall keep books, at its Corporate Trust Office, for the registration of Receipts and transfers of Receipts which at all reasonable times shall be

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open for inspection by the Owners, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a business or object other than the business of the Company or a matter related to this Deposit Agreement or the Receipts.

The Depositary may close the transfer books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder and shall close them upon the reasonable written request of the Company. The Depositary shall notify the Company of any closure under the preceding sentence that is outside the ordinary course of business as soon as practicable.

If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more stock exchanges in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registry of such Receipts in accordance with any requirements of such exchange or exchanges.

SECTION 5.02 Prevention or Delay in Performance by the Depositary or the Company.

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Beneficial Owner if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any provision, present or future, of the Articles of Association of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from, or be subject to any civil or criminal penalty on account of, doing or performing any act or thing which by the terms of this Deposit Agreement or Deposited Securities it is provided shall be done or performed; nor shall the Depositary or the Company or any of their respective directors, employees, agents or affiliates incur any liability to any Owner or Beneficial Owner of any Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of this Deposit Agreement it is provided shall or may be done or performed, (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement, (iii) for the inability of any Owner or Beneficial Owner to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Owners or Beneficial Owners or (iv) for any special, consequential or punitive damages for any breach of the terms of this Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02, or 4.03, or an offering or distribution pursuant to Section 4.04, or for any other reason, such distribution or offering may not be made available to Owners, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the

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net proceeds available to such Owners, then the Depositary, after Consultation with the Company, shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse.

SECTION 5.03 Obligations of the Depositary, the Custodian and the Company.

The Company assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to Owners or Beneficial Owners, except that it agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Beneficial Owner (including, without limitation, liability with respect to the validity or worth of the Deposited Securities), except that it agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts on behalf of any Owner, Beneficial Owner or other person.

Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Preference Shares for deposit, any Owner or any other person believed by it in good faith to be competent to give such advice or information. Each of the Company and the Depositary may rely and shall be protected in relying upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.

The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith.

No disclaimer of liability under the United States federal securities laws is intended by any provision of this Deposit Agreement.

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SECTION 5.04 Resignation and Removal of the Depositary.

The Depositary may at any time resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

The Depositary may at any time be removed by the Company by 90 days’ prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary or (ii) the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on the written request of the Company shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Deposited Securities to such successor, and shall deliver to such successor a list of the Owners of all outstanding Receipts. Any such successor depositary shall promptly mail notice of its appointment to the Owners.

Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

SECTION 5.05 The Custodians.

The Custodian shall be subject at all times and in all respects to the directions of the Depositary and shall be responsible solely to it. The Depositary shall be responsible for the compliance by the Custodian with the applicable provisions of this Deposit Agreement, but only to the extent the Depositary would be responsible if the duties of the Custodian were duties of the Depositary under this Deposit Agreement. The Custodian may resign and be discharged from its duties hereunder by notice of such resignation delivered to the Depositary at least 30 days prior to the date on which such resignation is to become effective. If, upon such resignation there would be no Custodian acting under this Deposit Agreement, the Depositary shall, with the approval of the Company, which approval shall not be unreasonably withheld or delayed, as promptly as practicable after receiving such notice, appoint a substitute custodian, which shall thereafter be a Custodian hereunder. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners to do so, it may appoint a substitute or additional custodian or custodians, each of which shall thereafter be a Custodian hereunder. The Depositary shall notify the Company of the appointment of a substitute

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or additional custodian as soon as practicable. Upon demand of the Depositary, any Custodian shall deliver such of the Deposited Securities held by it as are requested of it to any other Custodian. Each substitute or additional custodian shall deliver to the Depositary, forthwith upon its appointment, an acceptance of such appointment satisfactory in form and substance to the Depositary.

Upon the appointment of any successor depositary hereunder, the Custodian then acting hereunder shall forthwith become, without any further act or writing, the agent hereunder of such successor depositary and the appointment of such successor depositary shall in no way impair the authority of each Custodian hereunder; but the successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to that Custodian all such instruments as may be proper to give to that Custodian full and complete power and authority as agent hereunder of such successor depositary.

SECTION 5.06 Notices and Reports.

On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Preference Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action in respect of any cash or other distributions or the offering of any rights, the Company agrees to transmit to the Depositary and the Custodian a copy of the notice thereof in English but otherwise in the form given or to be given to holders of Preference Shares or other Deposited Securities.

The Company will arrange for the translation into English, if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompt transmittal by the Company to the Depositary and the Custodian of such notices and any other reports and communications which are made generally available by the Company to holders of its Preference Shares. If requested in writing by the Company, the Depositary will arrange for the mailing, at the Company’s expense, of copies of such notices, reports and communications to all Owners. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings.

The Company will deliver to the Depositary and the Custodian a copy (in English or with an English translation) of all provisions of or governing the Preference Shares and any other Deposited Securities. Promptly upon any change in such provisions, the Company shall deliver promptly to the Depositary and the Custodian a copy (in English or with an English translation) of such provisions as so changed. The Depositary and its agents may rely on the copy of such provisions as so delivered for all purposes of this Deposit Agreement.

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SECTION 5.07 Distribution of Additional Shares, Rights. etc.

If the Company or any affiliate of the Company determines to make any issuance or distribution of (1) additional Preference Shares, (2) rights to subscribe for Preference Shares, (3) securities convertible into Preference Shares, or (4) rights to subscribe for such securities (each a “Distribution”), the Company shall notify the Depositary in writing in English as promptly as practicable and in any event before the Distribution starts and, if requested in writing by the Depositary, the Company shall promptly furnish to the Depositary a written opinion from U.S. counsel for the Company that is reasonably satisfactory to the Depositary, stating whether or not the Distribution requires, or, if made in the United States, would require, registration under the Securities Act. If, in the opinion of that counsel, the Distribution requires, or, if made in the United States, would require, registration under the Securities Act, that counsel shall furnish to the Depositary a written opinion as to whether or not there is a registration statement under the Securities Act in effect that will cover that Distribution. The Company shall be under no obligation to file a registration statement with respect to any Distribution.

The Company agrees with the Depositary that neither the Company nor any company controlled by, controlling or under common control with the Company will at any time deposit any Shares, either originally issued or previously issued and reacquired by the Company or any such affiliate, unless a Registration Statement is in effect as to such Shares under the Securities Act.

SECTION 5.08 Indemnification.

The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and any Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to, the reasonable and documented fees and expenses of counsel) which may arise out of or in connection with acts performed or omitted pursuant to the provisions of this Deposit Agreement and of the Receipts, as the same may be amended, modified or supplemented from time to time, by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by the Company or any of its directors, employees, agents and affiliates.

The Depositary agrees to indemnify the Company, its directors, employees, agents and affiliates and hold them harmless from any liability or expense which may arise out of acts performed or omitted by the Depositary or its Custodian or their respective directors, employees, agents and affiliates due to their negligence or bad faith.

The obligations set forth in this Section 5.08 shall survive the termination of this Deposit Agreement and the succession or substitution of any indemnified person.

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If a claim is asserted or an action is commenced against a person that is entitled to seek and intends to seek indemnification for that claim or action under this Section 5.08 (an “Indemnifiable Claim”), that person (an “Indemnified Person”) shall (i) promptly notify in writing the person obligated to provide that indemnification (the “Indemnifying Person”) of that assertion or commencement and (ii) consult in good faith with the Indemnifying Person as to the conduct of the defense of that Indemnifiable Claim. Neither the Indemnified Person nor the Indemnifying Person shall compromise or settle an Indemnifiable Claim without the consent in writing of the other (which consent shall not be unreasonably withheld).

SECTION 5.09 Charges of Depositary.

The Company agrees to pay the fees, reasonable expenses and out-ofpocket charges of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The following charges shall be incurred by any party depositing or withdrawing Preference Shares or by any party surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited Securities or a distribution of Receipts pursuant to Section 4.03) or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Preference Shares generally on the share register of the Company or Foreign Registrar and applicable to transfers of Preference Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and facsimile transmission expenses as are expressly provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts pursuant to Section 2.03, 4.03 or 4.04 and the surrender of Receipts pursuant to Section 2.05 or 6.02, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to this Deposit Agreement, including, but not limited to Sections 4.01 through 4.04, (7) a fee for the distribution of securities pursuant to Section 4.02, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Preference Shares) but which securities are instead distributed by the Depositary to Owners, (8) a fee of $.02 or less per American Depositary Share (or portion thereof) for depositary services, which will accrue on the last day of each calendar year and will be payable as provided in clause 9 below: provided, however, that

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no fee will be assessed under this clause 8 to the extent that a fee of $.02 was charged pursuant to clause 6 above during that calendar year and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Preference Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 and shall be collected at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

The Depositary may own and deal in any class of securities of the Company and its affiliates and in Receipts.

SECTION 5.10 Retention of Depositary Documents.

The Depositary is authorized to destroy those documents, records, bills and other data compiled during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the Depositary unless the Company reasonably requests in writing that such papers be retained for a longer period and that request is received prior to that destruction.

SECTION 5.11 Exclusivity.

The Company agrees not to appoint any other depositary for issuance of American or global depositary receipts so long as The Bank of New York Mellon is acting as Depositary hereunder.

SECTION 5.12 Available Information.

If, at any time prior to the termination of this Deposit Agreement, the Company is neither a reporting company under Section 13 or 15(d) of the Securities Exchange Act nor exempt from the reporting requirements of the Securities Exchange Act by reason of Rule 12g3-2(b) thereunder, the Company will provide, at its expense, to any Owner or Beneficial Owner or any holder of Preference Shares, and to any prospective purchaser of American Depositary Shares or Shares designated by such person, upon request of such Owner, Beneficial Owner, holder or prospective purchaser, the information required by Rule 144A(d)(4)(i) and otherwise comply with Rule 144A(d)(4). If at any time the Company is neither subject to Section 13 or 15(d) of the Securities Exchange Act nor exempt pursuant to Rule 12g3-2(b) under the Securities Exchange Act (as determined by the Office of International Corporate Finance of the Commission), the Company shall immediately so notify the Depositary, and the Depositary may so notify the Owners in writing at the Company’s expense.

The Company hereby authorizes the Depositary to deliver such information as is furnished by the Company to the Depositary during any period in which the Company informs the Depositary it is subject to the information delivery

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requirements of Rule 144A(d)(4) to any such Owner, Beneficial Owner, holder of Preference Shares or prospective purchaser at the request of such person. The Company agrees to reimburse the Depositary for its reasonable expenses in connection with such deliveries and to provide the Depositary with such information in such quantities as the Depositary may from time to time reasonably request.

SECTION 5.13 Information for Regulatory Compliance.

Each of the Company and the Depositary shall provide to the other, as promptly as practicable, information from its records or otherwise available to it that is reasonably requested by the other to permit the other to comply with applicable law or requirements of governmental, tax or regulatory authorities.

ARTICLE 6. AMENDMENT AND TERMINATION

SECTION 6.01 Amendment.

The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Beneficial Owners in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding Receipts until the expiration of 30 days after notice of such amendment shall have been given to the Owners of outstanding Receipts. Every Owner and Beneficial Owner, at the time any amendment so becomes effective, shall be deemed, by continuing to hold such Receipt or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

SECTION 6.02 Termination.

The Depositary shall, at any time at the direction of the Company, terminate this Deposit Agreement by mailing notice of termination to the Owners of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate this Deposit Agreement by mailing notice of termination to the Company and the Owners of all Receipts then outstanding if at least 60 days have passed since the Depositary delivered to the Company a written notice of its election to resign and a successor depositary has not been appointed and accepted its appointment as provided in Section 5.04. On and after the date of termination, the Owner of a Receipt will, upon (a) surrender of such Receipt at the

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Corporate Trust Office of the Depositary, (b) payment of the fee of the Depositary for the surrender of Receipts referred to in Section 2.05, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt. If any Receipts shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in this Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges). At any time after the date of termination, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges) and except for its obligations to the Company, its directors, employees, agents and affiliates under Section 5.08. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary under Sections 5.08 and 5.09.

ARTICLE 7. MISCELLANEOUS

SECTION 7.01 Counterparts.

This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any Owner or Beneficial Owner during business hours.

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SECTION 7.02 No Third Party Beneficiaries.

This Deposit Agreement is for the exclusive benefit of the parties hereto and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.

SECTION 7.03 Severability.

In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

SECTION 7.04 Owners and Beneficial Owners as Parties; Binding Effect.

The Owners and Beneficial Owners of Receipts from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance thereof or any interest therein.

SECTION 7.05 Notices.

Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to Lloyds Banking Group plc, 71 Lombard Street, London, England, or any other place to which the Company may have transferred its principal office with notice to the Depositary.

Any and all notices to be given to the Depositary shall be deemed to have been duly given if in English and personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to The Bank of New York Mellon, 240 Greenwich Street, New York, New York 10286, Attention: American Depositary Receipt Administration, or any other place to which the Depositary may have transferred its Corporate Trust Office with notice to the Company.

Any and all notices to be given to any Owner shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to such Owner at the address of such Owner as it appears on the transfer books for Receipts of the Depositary, or, if such Owner shall have filed with the Depositary a written request that notices intended for such Owner be mailed to some other address, at the address designated in such request.

Delivery of a notice sent by mail or cable, telex or facsimile transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Company

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may, however, act upon any cable, telex or facsimile transmission received by it, notwithstanding that such cable, telex or facsimile transmission shall not subsequently be confirmed by letter as aforesaid.

SECTION 7.06 Submission to Jurisdiction: Appointment of Agent for Service of Process.

The Company hereby (i) irrevocably designates and appoints CT Corporation System, 28 Liberty Street, New York, New York 10005, as the Company’s authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, (ii) consents and submits to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agrees that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company agrees to deliver, upon the execution and delivery of this Deposit Agreement, a written acceptance by such agent of its appointment as such agent. The Company further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment in full force and effect for so long as any American Depositary Shares or Receipts remain outstanding or this Agreement remains in force. In the event the Company fails to continue such designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices hereunder, and service so made shall be deemed completed ten (10) days after the same shall have been so mailed.

SECTION 7.07 Governing Law.

This Deposit Agreement and the Receipts shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York.

SECTION 7.08 Waiver of Immunities.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under

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or arising out of or in connection with the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

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IN WITNESS WHEREOF, LLOYDS BANKING GROUP plc and THE BANK OF NEW YORK MELLON have duly executed this Deposit Agreement as of the day and year first set forth above and all Owners and Beneficial Owners shall become parties hereto upon acceptance by them of Receipts issued in accordance with the terms hereof or any interest therein.

LLOYDS BANKING GROUP plc
By:	/s/William Chalmers
	Name:	William Chalmers
	Title:	Chief Financial Officer

By:	/s/
	Name:
	Title:

THE BANK OF NEW YORK MELLON, as Depositary
By:	/s/ Robert W. Goad
	Name:	Robert W. Goad
	Title:	Managing Director

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 Annex I

Certification and Agreement of Certain Acquirers of

Receipts Upon Deposit of Preference Shares Pursuant to

Section 2.02 of the Amended and Restated Rule 144A Deposit Agreement

We refer to the Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020 (the “Deposit Agreement”) among LLOYDS BANKING GROUP plc (the “Company”), THE BANK OF NEW YORK MELLON, as Depositary, and Owners and Beneficial Owners of Rule 144A American Depositary Receipts (the “Receipts”) issued thereunder. Capitalized terms used but not defined herein shall have the meanings given them in the Deposit Agreement.

l.       This certification and agreement is furnished in connection with the deposit of Preference Shares and issuance of Rule 144A American Depositary Shares to be evidenced by one or more Receipts pursuant to Section 2.02 of the Deposit Agreement.

2.       We acknowledge (or if we are acting for the account of another person, such person has confirmed to us that it acknowledges) that the Receipts, the Rule 144A American Depositary Shares evidenced thereby and the Shares represented thereby have not been and will not be registered under the Securities Act (the “Act”).

3.       We certify that either:

A. We are a qualified institutional buyer (as defined in Rule 144A under the Act), and at the time of issuance of the Receipt or Receipts referred to above, we (or one or more qualified institutional buyers for whose account we are acting) will be the beneficial owner of the Rule 144A American Depositary Shares evidenced thereby.

OR

B. We are a broker-dealer acting for the account of our customer; our customer has confirmed to us that it is a qualified institutional buyer and either (i) at the time of issuance of the Receipt or Receipts referred to above, it will be the beneficial owner of the Rule 144A American Depositary Shares evidenced thereby, or (ii) it is acting for the account of a qualified institutional buyer that, at the time of issuance of the Receipt or Receipts referred to above, will be the beneficial owner of the Rule 144A American Depositary Shares evidenced thereby.

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4.       We agree (or if we are acting for the account of another person, such person has confirmed to us that it agrees) that we (or it) will not offer, sell, pledge or otherwise transfer the Receipts, the Rule 144A American Depositary Shares evidenced thereby or the Preference Shares represented thereby except (a) to a person whom we reasonably believe (or it and anyone acting on its behalf reasonably believes) is a qualified institutional buyer within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, (b) in accordance with Regulation S under the Act, or (c) in accordance with Rule 144 under the Act (if available), in each case in accordance with any applicable securities laws of any state of the United States.

Very truly yours,
[NAME OF CERTIFYING ENTITY]
By:
	Name:
	Title:

Dated:

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Annex II

Certification and Agreement of Persons Receiving

Deposited Securities Upon Withdrawal

Pursuant to Section 2.05 of

the Amended and Restated Rule 144A Deposit Agreement

We refer to the Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020 (the “Deposit Agreement”) among LLOYDS BANKING GROUP plc (the “Company”), THE BANK OF NEW YORK MELLON, as Depositary thereunder, and Owners and Beneficial Owners of Rule 144A American Depositary Receipts (the “Receipts”) issued thereunder. Capitalized terms used but not defined herein shall have the meanings given them in the Deposit Agreement.

1.       We are surrendering a Receipt or Receipts in accordance with the terms of the Deposit Agreement for the purpose of withdrawal of the Deposited Securities represented by the Rule 144A American Depositary Shares evidenced by such Receipt or Receipts (the “Preference Shares”) pursuant to Section 2.05 of the Deposit Agreement.

2.       We acknowledge (or if we are acting for the account of another person, such person has confirmed that it acknowledges) that the Preference Shares have not been and will not be registered under the Securities Act (the “Act”).

3.       We certify that either:

(a)       We are a qualified institutional buyer (as defined in Rule 144A under the Act) acting for our own account or for the account of one or more qualified institutional buyers, and either:

(i)       we have (or it has) sold or otherwise transferred, or agreed to sell or otherwise transfer and at or prior to the time of withdrawal will have sold or otherwise transferred, the Receipts or the Preference Shares in accordance with Regulation S under the Act and we are (or it is), or prior to such sale we were (or it was), the beneficial owner of the Receipts, or

(ii)       we have (or it has) sold or otherwise transferred, or agreed to sell or otherwise transfer and at or prior to the time of withdrawal will have sold or otherwise transferred, the Receipts or the Preference Shares to another qualified institutional buyer in accordance with Rule 144A under the Act and we are (or it is), or

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prior to such sale we were (or it was), the beneficial owner of the Receipts, or

(iii)       we (or it) will be the beneficial owner of the Preference Shares upon withdrawal, and, accordingly, we agree (or if we are acting for the account of one or more qualified institutional buyers, each such qualified institutional buyer has confirmed to us that it agrees) that (x) we (or it) will not offer, sell, pledge or otherwise transfer the Preference Shares except (A) to a person whom we reasonably believe (or it and anyone acting on its behalf reasonably believes) is a qualified institutional buyer within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, (B) in accordance with Regulation S under the Act, or (C) in accordance with Rule 144 under the Act (if available), in each case in accordance with any applicable securities laws of any state of the United States, and (y) we (or it) will not deposit or cause to be deposited such Preference Shares into any depositary receipt facility established or maintained by a depositary bank (including any such facility maintained by the Depositary), other than a Rule 144A restricted depositary receipt facility, so long as such Preference Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Act.

OR

(b)       We are located outside the United States (within the meaning of Regulation S under the Act); we acquired, or have agreed to acquire and at or prior to the time of the withdrawal will have acquired, the Receipts or the Preference Shares outside the United States (within the meaning of Regulation S); and we are, or upon acquisition thereof will be, the beneficial owner of the Receipts or the Preference Shares.

4.       If we are a broker-dealer, we further certify that we are acting for the account of our customer and that our customer has confirmed the accuracy of the representations contained in paragraph 3 hereof that are applicable to it (including the representations with respect to beneficial ownership) and, if paragraph 3(a)(iii) is applicable to our customer, has confirmed that it will comply with the agreements set forth in paragraph 3(a)(iii).

Very truly yours,
[NAME OF CERTIFYING ENTITY]
By:
	Name:
	Title:

Dated:

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EXHIBIT A

No.
	RULE 144A AMERICAN
	DEPOSITARY SHARES
	(Each Rule 144A American Depositary Share represents 100 deposited Preference Shares)

SOLELY FOR PURPOSES OF TRADING AND SETTLEMENT, THE RULE 144A AMERICAN DEPOSITARY SHARES MAY BE DEEMED TO HAVE A PRINCIPAL AMOUNT OF $100,000 PER RULE 144A AMERICAN DEPOSITARY SHARE.

THE RULE 144A AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE PREFERENCE SHARES REPRESENTED THEREBY (THE “PREFERENCE SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (I) TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A; (2) IN AN OFFSHORE TRANSACTION PURSUANT TO AND IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT; OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR THE RESALE OF THESE SECURITIES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE PREFERENCE SHARES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK, OTHER THAN A RULE 144A RESTRICTED DEPOSITARY RECEIPT FACILITY, UNLESS AND UNTIL SUCH TIME AS SUCH PREFERENCE SHARES ARE NO LONGER RESTRICTED

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SECURITIES WITHIN THE MEANING OF RULE 144(a)(3) UNDER THE SECURITIES ACT.

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Depositary or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.

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THE BANK OF NEW YORK MELLON

RULE 144A AMERICAN DEPOSITARY RECEIPT

FOR NON-CUMULATIVE DOLLAR PREFERENCE SHARES

OF

LLOYDS BANKING GROUP plc

(INCORPORATED UNDER THE LAWS OF SCOTLAND)

The Bank of New York Mellon, as depositary (herein called the Depositary), hereby certifies that _____________________________________________________________

or registered assigns IS THE OWNER OF_______________________________________

RULE 144A AMERICAN DEPOSITARY SHARES

representing deposited non-cumulative dollar preference shares (herein called Preference Shares) of Lloyds Banking Group plc, incorporated under the laws of Scotland (herein called the Company). At the date hereof, each Rule 144A American Depositary Share represents 100 Preference Shares deposited or subject to deposit under the Deposit Agreement (as such term is hereinafter defined) at The Bank of New York Mellon, acting through an office located in the United Kingdom (herein called the Custodian). The Depositary’s Corporate Trust Office and its principal executive office are located at 240 Greenwich Street, New York, N.Y. 10286.

THE DEPOSITARY’S CORPORATE TRUST OFFICE ADDRESS IS

240 GREENWICH STREET, NEW YORK, N.Y. 10286

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1.        THE DEPOSIT AGREEMENT.

This Rule 144A American Depositary Receipt is one of an issue (herein called Receipts), all issued and to be issued upon the terms and conditions set forth in the Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020, as the same may be amended from time to time in accordance with its terms (the “Deposit Agreement”), by and among the Company, the Depositary, and all Owners and Beneficial Owners from time to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary Shares or any interest therein agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights of Owners and Beneficial Owners of the Receipts and the rights and duties of the Depositary in respect of the Preference Shares deposited thereunder and any and all other securities, property and cash from time to time received in respect of such Preference Shares and held thereunder (such Preference Shares, securities, property, and cash are herein called Deposited Securities). Copies of the Deposit Agreement are on file at the Depositary’s Corporate Trust Office in New York City and at the office of the Custodian.

The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.

2.       SURRENDER OF RECEIPTS AND WITHDRAWAL OF PREFERENCE SHARES.

Upon surrender at the Corporate Trust Office of the Depositary of this Receipt, and upon payment of the fee of the Depositary provided in this Receipt, and subject to the terms and conditions of the Deposit Agreement, the articles of association of the Company and the terms of the Deposited Securities, the Owner hereof is entitled to delivery, to him or upon his order, of the Deposited Securities at the time represented by the American Depositary Shares for which this Receipt is issued. Delivery of such Deposited Securities may be made by the delivery of (a) certificates in the name of the Owner hereof or as ordered by him or certificates properly endorsed or accompanied by proper instruments of transfer and (b) any other securities, property and cash to which such Owner is then entitled in respect of this Receipt. Such delivery will be made at the option of the Owner hereof, either at the office of the Custodian or at the Corporate Trust Office of the Depositary, provided that the forwarding of certificates for Shares or other Deposited Securities for such delivery at the Corporate Trust Office of the Depositary shall be at the risk and expense of the Owner hereof.

Notwithstanding the foregoing, no Deposited Securities may be withdrawn upon surrender of a Receipt unless at or prior to the time of surrender the Depositary has received a duly executed and completed written certificate and agreement, in

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substantially the form of Annex II to the Deposit Agreement, by or on behalf of the person surrendering such Receipt who after such withdrawal will be the beneficial owner of such Deposited Securities.

3.       TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

The transfer of this Receipt is registrable on the books of the Depositary at its Corporate Trust Office by the Owner hereof in person or by a duly authorized attorney, upon surrender of this Receipt properly endorsed for transfer or accompanied by proper instruments of transfer and funds sufficient to pay any applicable transfer taxes and the expenses of the Depositary and upon compliance with such regulations, if any, as the Depositary may establish for such purpose. This Receipt may be split into other such Receipts, or may be combined with other such Receipts into one Receipt, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, or surrender of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require payment from the depositor of the Preference Shares or the presentor of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Preference Shares being deposited or withdrawn) and payment of any applicable fees as provided in this Receipt, may require the production of proof satisfactory to it as to the identity and genuineness of any signature, may require delivery of such certifications as the Company may from time to time specify in writing to the Depositary to assure the Company of compliance with the Securities Act and the rules and regulations thereunder and may also require compliance with any regulations the Depositary may establish consistent with the provisions of the Deposit Agreement or this Receipt, including, without limitation, this Article 3.

The delivery of Receipts against deposit of Preference Shares generally or against deposit of particular Preference Shares may be suspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement or this Receipt or provisions governing the Deposited Securities, or for any other reason.

The Depositary shall in no event be required to accept Preference Shares for deposit or deliver Receipts against such deposit if the Depositary believes that at the time of issuance such Receipts would not be eligible under paragraph (d)(3) of Rule 144A under the Securities Act.

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4.       LIABILITY OF OWNER OR BENEFICIAL OWNER FOR TAXES.

If any tax or other governmental charge shall become payable with respect to any Receipt or any Deposited Securities represented hereby, such tax or other governmental charge shall be payable by the Owner or Beneficial Owner hereof to the Depositary. The Depositary may refuse to effect any transfer of this Receipt or any withdrawal of Deposited Securities represented by American Depositary Shares evidenced by such Receipt until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner or Beneficial Owner hereof any part or all of the Deposited Securities represented by the American Depositary Shares evidenced by this Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner or Beneficial Owner hereof shall remain liable for any deficiency.

5.       WARRANTIES ON DEPOSIT OF PREFERENCE SHARES.

Every person depositing Preference Shares under the Deposit Agreement shall be deemed thereby to represent and warrant, in addition to the matters covered by the certification and agreement required under Section 2.02 of the Deposit Agreement, that such Preference Shares and each certificate therefor, if applicable, are validly issued, fully paid, non-assessable, and were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference Shares and that the person making such deposit is duly authorized so to do. Such representations and warranties shall survive the deposit of Preference Shares and delivery of Receipts.

6.       FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Preference Shares for deposit or any Owner or Beneficial Owner of a Receipt may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, legal or beneficial ownership of American Depositary Shares or other securities, compliance with all applicable laws or regulations and the terms of the Deposit Agreement, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper or as the Company may reasonably request by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of any Receipt or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. No Preference Share shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in the United Kingdom that is then performing the function of the regulation of currency exchange.

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7.       CHARGES OF DEPOSITARY.

The Company agrees to pay the fees, reasonable expenses and out-of pocket charges of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The following charges shall be incurred by any party depositing or withdrawing Preference Shares or by any party surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited Securities or a distribution of Receipts pursuant to Section 4.03 of the Deposit Agreement), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Preference Shares generally on the share register of the Company or Foreign Registrar and applicable to transfers of Preference Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals under the terms of the Deposit Agreement, (3) such cable, telex and facsimile transmission expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05 of the Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts pursuant to Section 2.03, 4.03 or 4.04 of the Deposit Agreement and the surrender of Receipts pursuant to Section 2.05 or 6.02 of the Deposit Agreement, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to Sections 4.01 through 4.04 of the Deposit Agreement, (7) a fee for the distribution of securities pursuant to Section 4.02 of the Deposit Agreement, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Preference Shares), but which securities are instead distributed by the Depositary to Owners, (8) a fee of $.02 or less per American Depositary Share (or portion thereof) for depositary services, which will accrue on the last day of each calendar year and will be payable as provided in clause 9 below; provided, however, that no fee will be assessed under this clause 8 to the extent that a fee of $.02 was charged pursuant to clause 6 above during that calendar year and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Preference Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 of the Deposit Agreement and shall be collected at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

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The Depositary, may own and deal in any class of securities of the Company and its affiliates and in Receipts.

8.       DISCLOSURE OF INTERESTS.

To the extent that the provisions of or governing any Deposited Securities including, without limitation, the provisions of the Company’s Articles of Association as in effect from time to time and resolutions and regulations of the Company’s Board of Directors adopted in compliance with such Articles of Association or any applicable laws or regulations in the United Kingdom, the United States or any other country, may require the disclosure of beneficial or other ownership of Deposited Securities, other Shares and other securities of the Company and may provide for blocking transfer and voting or other rights to enforce such disclosure or limit such ownership, the Depositary shall use its reasonable efforts to comply, to the extent permitted by applicable law, with the Company’s reasonable written instructions in respect of any such disclosure, enforcement or limitation. Owners and holders shall comply with all such disclosure requirements and enforcement and ownership limitations and shall cooperate with the Depositary and the Depositary’s compliance with such Company instructions in respect thereof.

9.       TITLE TO RECEIPTS.

It is a condition of this Receipt and every successive Owner and Beneficial Owner of this Receipt by accepting or holding the same consents and agrees, that title to this Receipt when properly endorsed or accompanied by proper instruments of transfer, is transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York: provided, however, that the Depositary and the Company, notwithstanding any notice to the contrary, may treat the person in whose name this Receipt is registered on the books of the Depositary as the absolute owner hereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement or for all other purposes.

10.       VALIDITY OF RECEIPT.

This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the Depositary and, if a Registrar for the Receipts shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar.

11.       AVAILABLE INFORMATION; INSPECTION OF TRANSFER BOOKS.

If, at any time prior to the termination of the Deposit Agreement, the Company is neither a reporting company under Section 13 or 15(d) of the Securities

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Exchange Act nor exempt from the reporting requirements of the Securities Exchange Act by reason of Rule 12g3-2(b) thereunder, the Company will provide, at its expense, to any Owner or Beneficial Owner or any holder of Preference Shares, and to any prospective purchaser of American Depositary Shares or Preference Shares designated by such person, upon request of such Owner, Beneficial Owner, holder or prospective purchaser, the information required by Rule 144A(d)(4)(i) and otherwise comply with Rule 144A(d)(4). If at any time the Company is neither subject to Section 13 or 15(d) of the Securities Exchange Act nor exempt pursuant to Rule 12g3-2(b) under the Securities Exchange Act (as determined by the Office of International Corporate Finance of the Commission), the Company shall immediately so notify the Depositary, and the Depositary may so notify the Owners in writing at the Company’s expense.

The Company hereby authorizes the Depositary to deliver such information as is furnished by the Company to the Depositary during any period in which the Company informs the Depositary it is subject to the information delivery requirements of Rule 144A(d)(4) to any such Owner, Beneficial Owner, holder of Preference Shares or prospective purchaser at the request of such person. The Company agrees to reimburse the Depositary for its reasonable expenses in connection with such deliveries and to provide the Depositary with such information in such quantities as the Depositary may from time to time reasonably request.

The Depositary will make available for inspection by Owners of Receipts at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary will also send to Owners of Receipts copies of such reports when furnished by the Company pursuant to the Deposit Agreement. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

The Depositary will keep books, at its Corporate Trust Office, for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Owners of Receipts provided that such inspection shall not be for the purpose of communicating with Owners of Receipts in the interest of a business or object other than the business of the Company or a matter related to the Deposit Agreement or the Receipts.

12.       DIVIDENDS AND DISTRIBUTIONS.

Whenever the Depositary receives any cash dividend or other cash distribution on any Deposited Securities, the Depositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgment of the Depositary be converted on a reasonable basis into United States dollars transferable to the United

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States, and subject to the Deposit Agreement, as promptly as practicable, convert such dividend or distribution into dollars and will distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement) to the Owners of Receipts entitled thereto; provided, however, that in the event that the Company or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, the amount distributed to the Owners of the Receipts evidencing American Depositary Shares representing such Deposited Securities shall be reduced accordingly.

Subject to the provisions of Sections 4.11 and 5.09 of the Deposit Agreement, whenever the Depositary receives any distribution other than a distribution described in Section 4.01, 4.03 or 4.04 of the Deposit Agreement, the Depositary will, after Consultation with the Company, as promptly as practicable, cause the securities or property received by it to be distributed to the Owners entitled thereto, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners of Receipts entitled thereto, or if for any other reason the Depositary deems such distribution not to be feasible, the Depositary may, after Consultation with the Company, as promptly as practicable, adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement) will be distributed by the Depositary to the Owners of Receipts entitled thereto all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. The Depositary may withhold any distribution of Securities under Section 4.02 of the Deposit Agreement if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act. To the extent that such securities or property or the net proceeds thereof are not effectively distributed to Owners as provided in Section 4.02 of the Deposit Agreement, the same shall constitute Deposited Securities and each American Depositary Share shall thereafter also represent its proportionate interest in such securities, property or net proceeds.

If any distribution consists of a dividend in, or free distribution of, Preference Shares, the Depositary may, after Consultation with the Company, and shall, if the Company shall so request in writing, distribute to the Owners of outstanding Receipts entitled thereto, additional Receipts evidencing an aggregate number of American Depositary Shares representing the amount of Preference Shares received as such dividend or free distribution subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Preference Shares and the issuance of American Depositary Shares evidenced by Receipts, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Section 5.09 of the

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Deposit Agreement. Each beneficial owner of Receipts so distributed will be deemed to have acknowledged that the American Depositary Shares and the Preference Shares have not been registered under the Securities Act and to have agreed to comply with any applicable restrictions on transfer set forth on the face of those Receipts. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary will use its reasonable efforts to sell the amount of Preference Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also represent the additional Shares distributed upon the Deposited Securities represented thereby.

In the event that the Depositary determines that any distribution in property (including Preference Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Preference Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary reasonably deems necessary and practicable to pay any such taxes or charges, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners of Receipts entitled thereto.

Services for Owners and Beneficial Owners that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, the Deposit Agreement.

13.       RIGHTS.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Shares or any rights of any other nature, the Depositary, after consultation with the Company, shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary reasonably determines, after consultation with the Company, that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems reasonably appropriate.

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In circumstances in which rights would otherwise not be distributed, if an Owner of Receipts requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Preference Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Preference Shares, and the Company shall cause the Preference Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Preference Shares so purchased to be deposited pursuant to Section 2.02 of the Deposit Agreement, and shall, pursuant to Section 2.03 of the Deposit Agreement, execute and deliver Receipts to such Owner. In case of a distribution pursuant to the second paragraph of Section 4.04 of the Deposit Agreement, such Receipts shall be legended in accordance with applicable U.S. laws and shall be subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under such laws.

If the Depositary reasonably determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may, and at the written request of the Company shall, offer to sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement and all truces and governmental charges payable in connection with such rights and subject to the terms and conditions of the Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any Receipt or otherwise. Those proceeds shall be distributed in accordance with Section 4.01 of the Deposit Agreement.

The Depositary will not offer rights to Owners unless the offering and sale of both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in the Deposit

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Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner of Receipts requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

Neither the Depositary nor the Company shall be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

14.       CONVERSION OF FOREIGN CURRENCY.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any Receipt or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09 of the Deposit Agreement.

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.

If at any time the Depositary or the Custodian shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

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If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account. The Depositary makes no representation that the exchange rate used or obtained in any currency conversion under the Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.03 of the Deposit Agreement. The methodology used to determine exchange rates used in currency conversions is available upon request.

15.       RECORD DATES.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Preference Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Preference Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (which shall be as near as practicable to any corresponding record date set by the Company) (a) for the determination of the Owners of Receipts who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fees or charges assessed by the Depositary pursuant to the Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Preference Shares, subject to the provisions of the Deposit Agreement.

16.       VOTING OF DEPOSITED SECURITIES.

The Company shall request the Depositary in writing to act under Section 4.07 of the Deposit Agreement in respect of each meeting of holders of Preference Shares at which holders of Preference Shares have a right to vote. Upon receipt of that request and a notice of that meeting, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in the notice of meeting provided by the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Scottish law and of the Articles of Association of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Preference Shares represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose (the “Instruction Date”), the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Preference Shares represented by the American Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Preference Shares other than in accordance with instructions received from Owners.

In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company requests the Depositary to act under the first sentence of Section 4.07 of the Deposit Agreement, the Company shall give the Depositary notice of the meeting or solicitation not less than 40 days prior to the meeting date or date for giving proxies or consents. There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the Instruction Date to ensure that the Depositary will vote the Preference Shares or other Deposited Securities in accordance with the provisions of Section 4.07 of the Deposit Agreement.

17.       CHANGES AFFECTING DEPOSITED SECURITIES.

In circumstances where the provisions of Section 4.03 of the Deposit Agreement do not apply, upon any change in nominal value, change in par value, split-up, consolidation, or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a Custodian in exchange for or in conversion of or in respect of Deposited Securities shall be treated as new Deposited Securities under the Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

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18.       LIABILITY OF THE COMPANY AND DEPOSITARY.

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Beneficial Owner if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any other governmental or regulatory authority, or by reason of any provision, present or future, of the Articles of Association of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from or be subject to any civil or criminal penalty on account of doing or performing any act or thing which by the terms of the Deposit Agreement or Deposited Securities it is provided shall be done or performed; nor shall the Depositary or the Company or any of their respective directors, employees, agents or affiliates incur any liability to any Owner or Beneficial Owner of a Receipt (i) by reason of any non-performance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of the Deposit Agreement it is provided shall or may be done or performed, (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement, (iii) for the inability of any Owner or Beneficial Owner to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Owners or Beneficial Owners or (iv) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02 or 4.03 of the Deposit Agreement, or an offering or distribution pursuant to Section 4.04 of the Deposit Agreement, such distribution or offering may not be made available to Owners of Receipts, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary, after Consultation with the Company, shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse. Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Owners or Beneficial Owners of Receipts, except that they agree to perform their obligations specifically set forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be subject to any liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts on behalf of any Owner, Beneficial Owner or other person. Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Owner or Beneficial Owner of a Receipt, or any other person believed by it in good faith to be competent to give such advice or information. Each of the Company and the Depositary may rely and shall be protected in relying upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been

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signed or presented by the proper party or parties. The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith. The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with a matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises, the Depositary performed its obligations without negligence or bad faith while it acted as Depositary. No disclaimer of liability under the United States federal securities laws is intended by any provision of the Deposit Agreement.

19.       RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR CUSTODIAN.

The Depositary may at any time resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by 90 days’ prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners of Receipts to do so, it may appoint a substitute or additional Custodian.

20.       AMENDMENT.

The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Beneficial Owners in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees and cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners of Receipts, shall, however, not become effective as to outstanding Receipts until the expiration of thirty days after notice of such amendment shall have been given to the Owners of outstanding Receipts. Every Owner and Beneficial Owner of a Receipt at the time any amendment so becomes effective shall be deemed, by continuing to hold such Receipt or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the Deposited Securities represented thereby except in order to comply with mandatory provisions of applicable law.

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21.       TERMINATION OF DEPOSIT AGREEMENT.

The Depositary at any time at the direction of the Company, shall terminate the Deposit Agreement by mailing notice of termination to the Owners of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement by mailing notice of termination to the Company and the Owners of all Receipts then outstanding if at least 60 days have passed since the Depositary delivered to the Company a written notice of its election to resign and a successor depositary has not been appointed and accepted its appointment as provided in the Deposit Agreement. On and after the date of termination, the Owner of a Receipt will, upon (a) surrender of such Receipt at the Corporate Trust Office of the Depositary, (b) payment of the fee of the Depositary for the surrender of Receipts referred to in Section 2.05 of the Deposit Agreement, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt. If any Receipts shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges). At any time after the date of termination, the Depositary may sell the Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it thereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges) and except for its obligations to the Company, its directors, employees, agents and affiliates under Section 5.08 of the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary with respect to indemnification, charges, and expenses.

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22.       SUBMISSION TO JURISDICTION.

In the Deposit Agreement, the Company has (i) appointed CT Corporation System, 28 Liberty Street, New York, New York 10005, as the Company’s authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) consented and submitted to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding.

23.       WAIVER OF IMMUNITIES.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

24.       ISSUANCE IN SERIES.

If the Company issues Preference Shares in more than one class or series or that otherwise entitle their holders to rights that vary from the rights to which other Preference Shares entitle their holders, the following provisions shall apply, notwithstanding anything to the contrary in the Deposit Agreement:

(a)       The word “Series,” when used with respect to Preference Shares, shall mean all outstanding Preference Shares that entitle their holders to identical rights with respect to those Preference Shares, regardless of the title or any other designation that may be assigned to Preference Shares.

(b)       The Depositary shall direct the Custodian to hold Preference Shares of a Series deposited under the Deposit Agreement, and other Deposited Securities it receives in respect of those Preference Shares in a segregated account different from the account in which it holds Preference Shares of any other Series.

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(c)       Preference Shares of each Series that are deposited under the Deposit Agreement shall be represented by a “Series” of American Depositary Shares separate from the American Depositary Shares representing Preference Shares of any other Series. The Depositary shall assign a designation to each Series of American Depositary Shares and shall reflect in its records the Series to which each American Depositary Share belongs. Each Series of American Depositary Shares shall be evidenced by a “Series” of Receipts separate from the Receipts evidencing American Depositary Shares of any other Series. Each Receipt shall be marked to indicate the designation of the Series of the American Depositary Shares evidenced by that Receipt and to identify the Series of Preference Shares those American Depositary Shares represent.

(d)       If the rights to which deposited Preference Shares of a Series entitle their holders are modified such that those rights become identical to the rights to which deposited Preference Shares of another Series entitle their holders, the Depositary shall cause the Custodian to combine the accounts in which the former separate Series of Preference Shares are held, the Series of American Depositary Shares representing those Preference Shares will automatically be combined into one Series of American Depositary Shares and the Depositary may take any action necessary or convenient to effect that combination. At any time after that combination, the Owners of Receipts affected by that combination will be entitled to surrender their Receipts to the Depositary and receive Receipts reflecting the designation of the American Depositary Shares owned by them as a result of that combination.

(e)       Owners and Beneficial Owners of American Depositary Shares of a Series shall be entitled to rights under the Deposit Agreement only with respect to deposited Preference Shares of the corresponding Series and other Deposited Securities received in respect of deposited Preference Shares of that Series.

25.       REDEMPTION OF DEPOSITED SECURITIES.

If the Depositary receives a notice that Deposited Securities are to be redeemed, the Depositary shall (i) call for surrender a corresponding number of American Depositary Shares, (ii) notify the Owners of those American Depositary Shares that the Deposited Securities underlying their American Depositary Shares will be surrendered for redemption and (iii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date. Owners of American Depositary Shares affected by the redemption may surrender the Receipts evidencing those American Depositary Shares and receive delivery of money or other property the Depositary receives upon redemption of Deposited Securities as provided in Section 2.05 of the Deposit Agreement.

If the Depositary receives notice that less than all the Deposited Securities are to be redeemed, the Depositary shall determine in its discretion which American Depositary Shares to call for surrender in

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connection with that redemption. If the Depositary calls for surrender less than all the American Depositary Shares evidenced by a Receipt in connection with a redemption of Deposited Securities, the Depositary shall, upon surrender of that Receipt, deliver to the Owner a Receipt evidencing the amount of American Depositary Shares evidenced by the surrendered Receipt that were not called for surrender.

26.       UNCERTIFICATED AMERICAN DEPOSITARY SHARES; DIRECT REGISTRATION SYSTEM.

Notwithstanding anything to the contrary in the Deposit Agreement:

(a)       American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to the Deposit Agreement summarizes the terms and conditions of, and will be the prospectus required under the Securities Act for, both certificated and uncertificated American Depositary Shares. Except for those provisions of the Deposit Agreement that by their nature do not apply to uncertificated American Depositary Shares, all the provisions of the Deposit Agreement shall apply, mutatis mutandis, to uncertificated American Depositary Shares as well as to certificated American Depositary Shares, and to Owners and Beneficial Owners of uncertificated American Depositary Shares as well as to Owners and Beneficial Owners of Receipts.

(b) (i) The term “deliver”, or its noun form, when used with respect to Receipts, shall mean (A) book-entry transfer of American Depositary Shares to an account at The Depository Trust Company, or its successor (“DTC”), designated by the person entitled to such delivery, (B) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (C) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts evidencing American Depositary Shares registered in the name requested by that person.

(ii)       The term “surrender”, when used with respect to Receipts, shall mean (A) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (B) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (C) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.

(c)       American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.

(d)       The Depositary shall have a duty to register a transfer in the case of uncertificated American Depositary Shares, upon receipt from the Owner of a proper

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instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below). The Depositary, upon surrender of a Receipt for the purpose of exchanging it for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging them for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

(e)       Upon satisfaction of the conditions for replacement of a Receipt that is mutilated, lost, destroyed or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form unless otherwise requested by the Owner.

(f) (i) The parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.

     (ii) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in clause (i) above has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 of the Deposit Agreement shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with the Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

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EX-10.5

Exhibit 10.5

[Execution Copy]

LLOYDS BANKING GROUP plc

and

THE BANK OF NEW YORK MELLON

As Depositary

and

OWNERS AND BENEFICIAL OWNERS OF
REGULATION S AMERICAN DEPOSITARY SHARES

Amended and Restated Regulation S Deposit Agreement

(Preference shares - series)

Dated as of February 18, 2020

AMENDED AND RESTATED REGULATION S DEPOSIT AGREEMENT

AMENDED AND RESTATED REGULATION S DEPOSIT AGREEMENT dated as of February 18, 2020 among LLOYDS BANKING GROUP plc, incorporated under the laws of Scotland (herein called the Company), THE BANK OF NEW YORK MELLON (formerly known as The Bank of New York), a New York banking corporation (herein called the Depositary), and all Owners and Beneficial Owners from time to time of Regulation S American Depositary Receipts issued hereunder.

WITNESSETH:

WHEREAS, HBOS plc and the Depositary entered into a Regulation S deposit agreement dated as of September 29, 2005 (the “Prior Deposit Agreement”) for the purposes stated in that agreement; and

WHEREAS, the Company assumed the Prior Deposit Agreement as successor by merger to HBOS plc; and

WHEREAS, the Company and the Depositary now wish to amend the Prior Deposit Agreement to (i) provide that Regulation S American Depositary Shares may be uncertificated securities or may be certificated securities evidenced by Regulation S American Depositary Receipts (ii) change the provisions relating to voting of Deposited Securities (as hereinafter defined) and (iii) to update the Prior Deposit Agreement in various other respects; and

WHEREAS, the Company desires to provide, as hereinafter set forth in this Amended and Restated Regulation S Deposit Agreement, for the deposit of Preference Shares (as hereinafter defined) of one or more Series (as hereinafter defined) of the Company from time to time with the Depositary or with the Custodian (as hereinafter defined) as agent of the Depositary for the purposes set forth in this Amended and Restated Regulation S Deposit Agreement, for the creation of Regulation S American Depositary Shares of one or more corresponding series representing the Preference Shares so deposited and for the execution and delivery of Regulation S American Depositary Receipts evidencing the Regulation S American Depositary Shares; and

WHEREAS, the Regulation S American Depositary Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Amended and Restated Regulation S Deposit Agreement;

NOW, THEREFORE, in consideration of the premises, it is agreed by and among the parties hereto that the Prior Deposit Agreement is hereby amended and restated as follows:

ARTICLE 1. DEFINITIONS

The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Amended and Restated Regulation S Deposit Agreement:

SECTION 1.01 American Depositary Shares.

The term “American Depositary Shares” shall mean Regulation S American Depositary Shares, the securities representing the interests in the Deposited Securities and evidenced by the Receipts issued hereunder. Each American Depositary Share shall represent the number of Preference Shares specified in Exhibit A to this Deposit Agreement, until there shall occur a distribution upon Deposited Securities covered by Section 4.03 or a change in Deposited Securities covered by Section 4.08 with respect to which additional Receipts are not executed and delivered, and thereafter American Depositary Shares shall represent the amount of Preference Shares or other Deposited Securities specified in such Sections.

SECTION 1.02 Beneficial Owner.

The term “Beneficial Owner” shall mean each person owning from time to time any beneficial interest in the American Depositary Shares evidenced by any Receipt.

SECTION 1.03 Commission.

The term “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

SECTION 1.04 Company.

The term “Company” shall mean Lloyds Banking Group plc, incorporated in Scotland under the Companies Act 1985, and its successors.

SECTION 1.05 Consultation.

The term “Consultation” shall mean the good faith attempt by the Depositary to discuss, if practicable, the relevant issue in a timely manner with a person employed by the Company reasonably believed by the Depositary to be empowered by the Company to engage in such discussion on behalf of the Company.

SECTION 1.06 Custodian.

The term “Custodian” shall mean The Bank of New York Mellon, acting through an office located in the United Kingdom, as custodian for the Depositary for the purposes of this Deposit Agreement, or any other firm or corporation which may

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hereafter be appointed by the Depositary pursuant to the terms of Section 5.05, as substitute or additional custodian hereunder, as the context shall require and shall also mean all of them collectively.

SECTION 1.07 Deliver; Surrender.

(a)       The term “deliver,” or its noun form, when used with respect to Shares, shall mean (i) one or more book-entry transfers to an account or accounts maintained with a depository institution authorized under applicable law to effect book-entry transfers of such securities or (ii) the physical transfer of certificates representing Shares.

(b)       The term “deliver,” or its noun form, when used with respect to Receipts, shall mean (i) one or more book-entry transfers of American Depositary Shares to an account or accounts at DTC designated by the person entitled to such delivery or (ii) if book-entry settlement is no longer available for American Depository Shares in the circumstances specified in Section 2.01(c), delivery at the Corporate Trust Office of the Depositary of one or more Receipts.

(c)       The term “surrender,” when used with respect to Receipts, shall mean (i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary or (ii) surrender to the Depositary at its Corporate Trust Office of one or more Receipts.

SECTION 1.08 Deposit Agreement.

The term “Deposit Agreement” shall mean this Regulation S Deposit Agreement, as the same may be amended from time to time in accordance with the provisions of this Deposit Agreement.

SECTION 1.09 Depositary; Corporate Trust Office.

The term “Depositary” shall mean The Bank of New York Mellon, a New York banking corporation, and any successor as depositary hereunder. The term “Corporate Trust Office”, when used with respect to the Depositary, shall mean the office of the Depositary which at the date of this Agreement is 240 Greenwich Street, New York, New York 10286.

SECTION 1.10 Deposited Securities.

The term “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement and any and all other securities, property and cash received by the Depositary or the Custodian in respect thereof and at such time held hereunder, subject as to cash to the provisions of Section 4.05.

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SECTION 1.11 Dollars.

The term “Dollars” shall mean United States dollars.

SECTION 1.12 DTC.

The term DTC shall mean The Depository Trust Company, or its successor.

SECTION 1.13 Effective Time.

The term “Effective Time” shall have the meaning set forth in Section 2.02.

SECTION 1.14 Foreign Registrar.

The term “Foreign Registrar” shall mean the entity that presently carries out the duties of registrar for the Shares or any successor as registrar for the Shares and any other appointed agent of the Company for the transfer and registration of Shares.

SECTION 1.15 Owner.

The term “Owner” shall mean the person in whose name a Receipt is registered on the books of the Depositary maintained for such purpose.

SECTION 1.16 Preference Shares.

The term “Preference Shares” shall mean non-cumulative dollar preference shares of one or more Series of the Company that are validly issued and outstanding and fully paid, nonassessable and that were not issued in violation of any pre-emptive or similar rights of the holders of outstanding Preference or interim certificates representing such Preference Shares; provided, however, that, if there shall occur any change in par value, a split-up or consolidation or any other reclassification or, upon the occurrence of an event described in Section 4.08, an exchange or conversion in respect of the Preference Shares of the Company, the term “Preference Shares” shall thereafter also mean the successor securities resulting from such change in nominal value, split-up or consolidation or such other reclassification or such exchange or conversion.

SECTION 1.17 Receipts.

The term “Receipts” shall mean the Regulation S American Depositary Receipts issued hereunder evidencing American Depositary Shares.

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SECTION 1.18 Registrar.

The term “Registrar” shall mean any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed to register Receipts and transfers of Receipts as herein provided.

SECTION 1.19 Regulation S.

The term “Regulation S” shall mean Rules 901 through 905, inclusive, under the Securities Act, as such Rules may from time to time be amended.

SECTION 1.20 Restricted Period.

The term “Restricted Period” shall mean the 40-day period after the later of the commencement of the offering of American Depositary Shares and Shares and the related closing.

SECTION 1.21 Restricted Securities.

The term “Restricted Securities” shall mean Shares, or Receipts representing Shares, that are acquired directly or indirectly from the Company or any affiliate (as defined in Rule 144 under the Securities Act) of the Company in a transaction or chain of transactions not involving any public offering, or that are held by an officer, director (or person performing similar functions) or other affiliate of the Company, or that would require registration under the Securities Act in connection with the public offer and sale thereof in the United States, or that are subject to other restrictions on sale or deposit under the laws of the United States or Scotland, or under a shareholder agreement or the articles of incorporation of the Company.

SECTION 1.22 Rule 144 A.

The term “Rule 144A” shall mean Rule 144A under the Securities Act.

SECTION 1.23 Rule 144A Deposit Agreement.

The term “Rule 144A Deposit Agreement” shall mean the Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020 among the Company, the Depositary and the owners and beneficial owners of Rule 144A American Depositary Receipts issued thereunder, as the same may be amended from time to time.

SECTION 1.24 Rule 144A ADSs: Rule 144A ADRs.

The term “Rule 144A GDSs” shall mean the Rule 144A American Depositary Shares issued pursuant to the Rule 144A Deposit Agreement. The term “Rule 144A ADRs” shall mean the Rule 144A American Depositary Receipts evidencing the Rule 144A ADSs.

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SECTION 1.25 Securities Act.

The term “Securities Act “ shall mean the United States Securities Act of 1933, as amended.

SECTION 1.26 Securities Exchange Act.

The term “Securities Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.

ARTICLE 2. FORM OF RECEIPTS, BOOK-ENTRY SYSTEM, DEPOSIT OF PREFERENCE SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS

SECTION 2.01 Form and Transferability of Receipts.

(a)       Definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the Depositary and, if a Registrar for the Receipts shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar. The Depositary shall maintain books on which each Receipt so executed and delivered as hereinafter provided and the transfer of each such Receipt shall be registered. Receipts bearing the manual or facsimile signature of a duly authorized signatory of the Depositary who was at any time a proper signatory of the Depositary shall bind the Depositary, notwithstanding that such signatory has ceased to hold such office prior to the execution and delivery of such Receipts by the Registrar or did not hold such office on the date of issuance of such Receipts.

Each Receipt shall bear the following legend:

THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE PREFERENCE SHARES REPRESENTED THEREBY (THE “PREFERENCE SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD (DEFINED AS 40 DAYS AFTER THE LATER OF (I) THE COMMENCEMENT OF THE OFFERING OF REGULATION S AMERICAN DEPOSITARY SHARES AND PREFERENCE SHARES AND (II) THE RELATED CLOSING) EXCEPT (1) IN AN

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OFFSHORE TRANSACTION PURSUANT TO AND IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT OR (2) TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS; PROVIDED, THAT IN CONNECTION WITH ANY TRANSFER UNDER (2) ABOVE, THE TRANSFEROR SHALL, PRIOR TO THE SETTLEMENT OF SUCH SALE, WITHDRAW THE PREFERENCE SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AMENDED AND RESTATED REGULATION S DEPOSIT AGREEMENT AND INSTRUCT THAT SUCH PREFERENCE SHARES BE DELIVERED TO THE CUSTODIAN UNDER THE RULE 144A DEPOSIT AGREEMENT FOR ISSUANCE IN ACCORDANCE WITH THE TERMS AND CONDITIONS THEREOF, OF RULE 144A AMERICAN DEPOSITARY SHARES TO OR FOR THE ACCOUNT OF SUCH QUALIFIED INSTITUTIONAL BUYER.

UPON THE EXPIRATION OF THE RESTRICTED PERIOD, THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED IN THIS LEGEND IF, AT THE TIME OF SUCH EXPIRATION, THE OFFER AND SALE OF THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY BY THE HOLDER THEREOF IN THE UNITED STATES WOULD NOT BE RESTRICTED UNDER THE SECURITIES LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES.

In addition to the foregoing, the Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be required (i) by the Depositary after consultation with the Company or (ii) to comply with any applicable law or regulations or with the rules and regulations of any securities exchange upon which the American Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date or manner of issuance of the underlying Deposited Securities or otherwise.

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Each Receipt shall bear a CUSIP number, if any, assigned to the series of American Depositary Shares that it evidences. That CUSIP number shall be different from any CUSIP number that is or may be assigned to any other depositary receipt facility relating to the Shares.

(b)       The Company and the Depositary expect that application will be made to DTC for acceptance of the American Depositary Shares of each series for its book-entry settlement system.

So long as the American Depositary Shares of any Series are eligible for book-entry settlement with DTC, unless otherwise required by law, all the American Depositary Shares of that Series shall be represented by a global Receipt registered in the name of a nominee of DTC (initially expected to be Cede & Co.) and no Beneficial Owner of American Depositary Shares of that Series shall receive or be entitled to receive a separate Receipt evidencing those American Depositary Shares.

For so long as a global Receipt is registered in the name of a nominee of DTC, it shall bear a legend substantially in the following form:

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Depositary or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.

In addition, the Company and the Depositary expect that applications will be made to each of Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) for acceptance of the American Depositary Shares of each Series for its book-entry settlement system.

(c)       If, at any time when American Depositary Shares of a Series are evidenced by a global Receipt, DTC (or, during the Restricted Period, Euroclear or Clearstream, Luxemburg) ceases to make its book-entry settlement system available for the American Depositary Shares of that Series, the Company shall consult with the Depositary regarding other arrangements for book-entry settlement. Only in the event that it is impracticable without undue effort or expense to continue to make the American Depositary Shares of that Series available in book-entry form as determined by the Company and the Depositary shall the Company instruct the Depositary to make separate Receipts of that Series available to the Beneficial Owners, which availability shall be subject to such additions, deletions and modifications to the form of Receipt attached hereto as Exhibit A and this Deposit Agreement, and subject to the requirements of any

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other documents, statements or certifications in connection therewith, as the Company and the Depositary may, from time to time, agree.

The Receipts shall be typewritten, in the case of a global Receipt, and otherwise shall be engraved, lithographed, printed, or typewritten, or in such other form as may be agreed upon by the Company and the Depositary. A global Receipt shall state that it evidences the aggregate amount of American Depositary Shares held at the time at DTC.

(d)       Title to a Receipt (and to the American Depositary Shares evidenced thereby), when properly endorsed or accompanied by proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York; provided, however, that the Depositary and the Company, notwithstanding any notice to the contrary, may treat the Owner thereof as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes.

SECTION 2.02 Deposit of Preference Shares.

Subject to the terms and conditions of this Deposit Agreement, Preference Shares or evidence of rights to receive Preference Shares may be deposited by delivery thereof to the Custodian hereunder, accompanied by any appropriate instrument or instruments of transfer, or endorsement, in form satisfactory to the Custodian, together with all such certifications as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, and, if the Depositary requires, together with a written order directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order, a Receipt or Receipts for the number of American Depositary Shares representing such deposit.

No Preference Shares shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in England that is then performing the function of the regulation of currency exchange. If required by the Depositary, Preference Shares presented for deposit at any time, whether or not the transfer books of the Company or the Foreign Registrar, if applicable, are closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Preference Shares or to receive other property which any person in whose name the Preference Shares are or have been recorded may thereafter receive upon or in respect of such deposited Preference Shares, or in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.

Prior to the effectiveness of a registration statement under the Securities Act relating to the American Depositary Shares (the “Effective Time”), no Preference

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Shares shall be accepted for deposit under this Deposit Agreement unless the Depositary has received a duly executed and completed certification and agreement in substantially the form appearing as Annex I to this Deposit Agreement by or on behalf of the person acquiring beneficial ownership of any American Depositary Shares to be issued in respect of that deposit.

At the request and risk and expense of any person proposing to deposit Preference Shares, and for the account of such person, the Depositary may receive certificates for Preference Shares to be deposited, together with the other instruments herein specified, for the purpose of forwarding such Preference Share certificates to the Custodian for deposit hereunder.

Upon each delivery to a Custodian of a certificate or certificates for Preference Shares to be deposited hereunder, together with the other documents above specified, such Custodian shall, as soon as transfer and recordation can be accomplished, present such certificate or certificates to the Company or the Foreign Registrar, if applicable, for transfer and recordation of the Preference Shares being deposited in the name of the Depositary or its nominee or such Custodian or its nominee.

Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or at such other place or places as the Depositary shall determine.

SECTION 2.03 Execution and Delivery of Receipts.

Upon receipt by any Custodian of any deposit pursuant to Section 2.02 hereunder (and in addition, if the transfer books of the Company or the Foreign Registrar, if applicable, are open, the Depositary may in its sole reasonable discretion require a proper acknowledgment or other evidence from the Company or the Foreign Registrar, as the case may be, that any Deposited Securities have been recorded upon the books of the Company or the Foreign Registrar, if applicable, in the name of the Depositary or its nominee or such Custodian or its nominee), together with the other documents required as above specified, such Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order a Receipt or Receipts are deliverable in respect thereof and the number of American Depositary Shares to be evidenced thereby. Such notification shall be made by letter or, at the request, risk and expense of the person making the deposit, by cable, telex or facsimile transmission. Upon receiving such notice from such Custodian, or upon the receipt of Preference Shares by the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall, without unreasonable delay, execute and deliver at its Corporate Trust Office, to or upon the order of the person or persons entitled thereto, a Receipt or Receipts, registered in the name or names and evidencing any authorized number of American Depositary Shares requested by such person or persons, but only upon payment to the Depositary of the fees and expenses of the Depositary for the execution and delivery of such Receipt or Receipts as provided in Section 5.09, and of all

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taxes and governmental charges and fees and expenses payable in connection with such deposit and the transfer of the Deposited Securities.

SECTION 2.04 Registration of Transfer of Receipts: Combination and Split-up of Receipts.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register transfers of Receipts on its transfer books from time to time, upon any surrender of a Receipt, by the Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer, and duly stamped as may be required by the laws of the State of New York and of the United States of America. Thereupon the Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person entitled thereto.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.

The Depositary may appoint one or more co-transfer agents for the purpose of effecting transfers, combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Owners or persons entitled to Receipts and will be entitled to protection and indemnity to the same extent as the Depositary.

SECTION 2.05 Surrender of Receipts and Withdrawal of Preference Shares.

Upon surrender at the Corporate Trust Office of the Depositary of a Receipt for the purpose of withdrawal of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, and upon payment of the fee of the Depositary for the surrender of Receipts as provided in Section 5.09 and payment of all taxes and governmental charges payable in connection with such surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of this Deposit Agreement, the articles of association of the Company and the terms of the Deposited Securities, the Owner of such Receipt shall be entitled to delivery, to him or upon his order, of the amount of Deposited Securities at the time represented by the American Depositary Shares evidenced by such Receipt. Delivery of such Deposited Securities may be made by the delivery of (a) certificates in the name of such Owner or as ordered by him or certificates properly endorsed or accompanied by proper instruments of transfer to such Owner or as ordered by him and (b) any other securities, property and cash to which such Owner is then entitled in respect of such Receipts to

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such Owner or as ordered by him. Such delivery shall be made, as hereinafter provided, without unreasonable delay.

Notwithstanding the foregoing, during the Restricted Period, no Deposited Securities may be withdrawn upon surrender of a Receipt unless at or prior to the time of surrender the Depositary has received a duly executed and completed written certificate and agreement, in substantially the form attached as Annex II to this Deposit Agreement, by or on behalf of the person surrendering such Receipt who after such withdrawal will be the beneficial owner of such Deposited Securities.

A Receipt surrendered for such purposes may be required by the Depositary to be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Owner thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be delivered to or upon the written order of a person or persons designated in such order. Thereupon the Depositary shall, without unreasonable delay, direct the Custodian to deliver at the office of such Custodian, subject to Sections 2.06, 3.01 and 3.02 and to the other terms and conditions of this Deposit Agreement, to or upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, except that the Depositary may make delivery to such person or persons at the Corporate Trust Office of the Depositary of any dividends or distributions with respect to the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.

At the request, risk and expense of any Owner so surrendering a Receipt, and for the account of such Owner, the Depositary shall direct the Custodian to forward any cash or other property (other than rights) comprising, and forward a certificate or certificates and other proper documents of title for, the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt to the Depositary for delivery at the Corporate Trust Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Owner, by cable, telex or facsimile transmission.

Prior to the expiration of the Restricted Period, no Owner may transfer American Depositary Shares or Preference Shares represented thereby to, or for the account of, a qualified institutional buyer as defined in Rule 144A (“QIB”) unless such Owner (i) withdraws such Preference Shares in accordance with this Section 2.05 and (ii) instructs the Depositary to deliver the Preference Shares so withdrawn to the account of the custodian under the Rule 144A Deposit Agreement for issuance thereunder of Rule 144A GDSs to or for the account of such QIB. Issuance of such Rule 144A GDSs shall be subject to the terms and conditions of the Rule 144A Deposit Agreement including with respect to the deposit of Preference Shares and the issuance of Rule 144A GDSs,

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including delivery of the duly executed and completed written certificate and agreement required under Section 2.02 of the Rule 144A Deposit Agreement, by or on behalf of the person who will be the beneficial owner of such Rule 144A GDRs, representing that such person is a QIB and agreeing that it will comply with the restrictions on transfer set forth in the Rule 144A Deposit Agreement and to payment of the fees, charges and taxes provided therein.

SECTION 2.06 Limitations on Execution and Delivery, Transfer and Surrender of Receipts.

As a condition precedent to the execution and delivery, registration of transfer, split-up, combination or surrender of any Receipt or withdrawal of any Deposited Securities, the Depositary, Custodian or Registrar may require payment from the depositor of Preference Shares or the presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Preference Shares being deposited or withdrawn) and payment of any applicable fees as herein provided, may require the production of proof satisfactory to it as to the identity and genuineness of any signature, may require delivery of such certifications as the Company may from time to time specify in writing to the Depositary to assure the Company of compliance with the Securities Act and the rules and regulations thereunder and may also require compliance with any regulations the Depositary may reasonably establish consistent with the provisions of this Deposit Agreement, including, without limitation, this Section 2.06.

The delivery of Receipts against deposit of Preference Shares generally or against deposit of particular Preference Shares may be suspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement or provisions governing the Deposited Securities, or for any other reason. The Depositary shall notify the Company of any suspension or refusal under the preceding sentence that is other than in the ordinary course of business.

After the expiration of the Restricted Period or any other applicable restricted period in the case of a subsequent issuance of American Depositary Shares, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any Preference Shares that would be required to be registered under the provisions of the Securities Act for the public offer and sale thereof in the United States, unless a registration statement is in effect as to such Preference Shares for such offer and sale.

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Without limiting the foregoing, Preference Shares that the Depositary believes have been withdrawn from a restricted depositary receipt facility established or maintained by a depositary bank (including any such other facility maintained by the Depositary) may be accepted for deposit hereunder only if those Preference Shares are not “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, and the Depositary may, as a condition of accepting those Preference Shares for deposit hereunder, require the person depositing those Preference Shares to provide the Depositary with a certificate to the foregoing effect.

Notwithstanding anything to the contrary in this Deposit Agreement or the Receipts, at and after the Effective Time, the surrender of outstanding Receipts and withdrawal of Deposited Securities may not be suspended, subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Preference Shares in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the Receipts or to the withdrawal of the Deposited Securities.

SECTION 2.07 Lost Receipts, etc.

In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary shall execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall execute and deliver a new Receipt in substitution for a destroyed, lost or stolen Receipt, the Owner thereof shall have (a) filed with the Depositary (i) a request for such execution and delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable requirements imposed by the Depositary.

SECTION 2.08 Cancellation and Destruction of Surrendered Receipts.

All Receipts surrendered to the Depositary shall be canceled by the Depositary. The Depositary is authorized to destroy Receipts so canceled.

SECTION 2.09 Maintenance of Records.

The Depositary agrees to maintain or cause its agents to maintain records of all American Depositary Shares surrendered and Deposited Securities withdrawn under Section 2.05, substitute Receipts delivered under Section 2.07, and of cancelled and destroyed Receipts under Section 2.08, in keeping with procedures ordinarily followed by stock transfer agents located in the United States or as required by the laws or regulations governing the Depositary. If requested in writing by the Company, the Depositary will turn such records over to the Company, if the request is received before

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those records are destroyed in accordance with the Depositary’s or agent’s regular practices.

SECTION 2.10 Issuance in Series.

If the Company issues Preference Shares in more than one class or series or that otherwise entitle their holders to rights that vary from the rights to which other Preference Shares entitle their holders, the following provisions shall apply, notwithstanding anything to the contrary in this Deposit Agreement:

(a)       The word “Series,” when used with respect to Preference Shares, shall mean all outstanding Preference Shares that entitle their holders to identical rights with respect to those Preference Shares, regardless of the title or any other designation that may be assigned to Preference Shares.

(b)       The Depositary shall direct the Custodian to hold Preference Shares of a Series deposited under this Deposit Agreement, and other Deposited Securities it receives in respect of those Preference Shares in a segregated account different from the account in which it holds Preference Shares of any other Series.

(c)       Preference Shares of each Series that are deposited under this Deposit Agreement shall be represented by a “Series” of American Depositary Shares separate from the American Depositary Shares representing Preference Shares of any other Series. The Depositary shall assign a designation to each Series of American Depositary Shares and shall reflect in its records the series to which each American Depositary Share belongs. Each series of American Depositary Shares shall be evidenced by a “Series” of Receipts separate from the Receipts evidencing American Depositary Shares of any other Series. Each Receipt shall be marked to indicate the designation of the Series of the American Depositary Shares evidenced by that Receipt and to identify the Series of Preference Shares those American Depositary Shares represent.

(d)       If the rights to which deposited Preference Shares of a Series entitle their holders are modified such that those rights become identical to the rights to which deposited Preference Shares of another Series entitle their holders, the Depositary shall cause the Custodian to combine the accounts in which the former separate Series of Preference Shares are held, the Series of American Depositary Shares representing those Preference Shares will automatically be combined into one Series of American Depositary Shares and the Depositary may take any action necessary or convenient to effect that combination. At any time after that combination, the Owners of Receipts affected by that combination will be entitled to surrender their Receipts to the Depositary and receive Receipts reflecting the designation of the American Depositary Shares owned by them as a result of that combination.

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(e)       Owners and Beneficial Owners of American Depositary Shares of a Series shall be entitled to rights under this Deposit Agreement only with respect to deposited Preference Shares of the corresponding Series and other Deposited Securities received in respect of deposited Preference Shares of that Series.

SECTION 2.11 Uncertificated American Depositary Shares; Direct Registration System.

Notwithstanding anything to the contrary in this Deposit Agreement:

(a)       American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to this Deposit Agreement summarizes the terms and conditions of, and will be the prospectus required under the Securities Act for, both certificated and uncertificated American Depositary Shares. Except for those provisions of this Deposit Agreement that by their nature do not apply to uncertificated American Depositary Shares, all the provisions of this Deposit Agreement shall apply, mutatis mutandis, to uncertificated American Depositary Shares as well as to certificated American Depositary Shares, and to Owners and holders of uncertificated American Depositary Shares as well as to Owners and holders of Receipts.

(b)       (i) The term “deliver”, or its noun form, when used with respect to Receipts, shall mean (A) book-entry transfer of American Depositary Shares to an account at The Depository Trust Company, or its successor (“DTC”), designated by the person entitled to such delivery, (B) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (C) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts evidencing American Depositary Shares registered in the name requested by that person.

(ii) The term “surrender”, when used with respect to Receipts, shall mean (A) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (B) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (C) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.

(c)       American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.

(d)       The Depositary shall have a duty to register a transfer in the case of uncertificated American Depositary Shares, upon receipt from the Owner of a proper

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instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below). The Depositary, upon surrender of a Receipt for the purpose of exchanging it for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging them for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

(e)       Upon satisfaction of the conditions for replacement of a Receipt that is mutilated, lost, destroyed or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form unless otherwise requested by the Owner.

(f)       (i) The parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.

(ii) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in clause (i) above has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with this Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

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ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND BENEFICIAL OWNERS OF RECEIPTS

SECTION 3.01 Filing Proofs, Certificates and Other Information.

Any person presenting Preference Shares for deposit or any Owner or Beneficial Owner of a Receipt may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, legal or beneficial ownership of American Depositary Shares or other securities, compliance with all applicable laws or regulations or the terms of this Deposit Agreement or the Receipts, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper or as the Company may reasonably require by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of any Receipt or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. The Depositary shall provide, as promptly as practicable, upon its written request, copies of any such proof of citizenship or residence or other information referred to above so requested, to the extent that disclosure is permitted under applicable law.

SECTION 3.02 Liability of Owner or Beneficial Owner for Taxes.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to any Receipt or any Deposited Securities represented by any Receipt, such tax or other governmental charge shall be payable by the Owner or Beneficial Owner of such Receipt to the Depositary. The Depositary may refuse to effect any transfer of such Receipt or any withdrawal of Deposited Securities represented by American Depositary Shares evidenced by such Receipt until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner or Beneficial Owner thereof any part or all of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner or Beneficial Owner of such Receipt shall remain liable for any deficiency.

SECTION 3.03 Warranties on Deposit of Preference Shares.

Every person depositing Preference Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that such Preference Shares and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent and warrant that, except with respect

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to the initial deposit and any deposit permitted hereunder pursuant to Section 4.03, 4.04 or 4.08, such person is not and shall not become at any time while such person holds Receipts or any beneficial interest therein an affiliate of the Company. In addition, every person depositing Preference Shares, taking delivery of or transferring Receipts, or surrendering Receipts and withdrawing Preference Shares under this Deposit Agreement shall also be deemed thereby (a) prior to the Effective Time, to (1) have made the representations and warranties required pursuant to Section 2.02, (2) acknowledge and agree that the American Depositary Shares evidenced thereby and the Preference Shares represented thereby have not been registered under the Securities Act and, during the Restricted Period, may not be offered, sold, pledged or otherwise transferred except (i) outside the United States in accordance with Rule 903 or 904 of Regulation S or (ii) to a person whom the seller reasonably believes is a qualified institutional buyer (“QIB”) as defined in Rule 144A in a transaction meeting the requirements of Rule 144A, in each case in accordance with any applicable securities laws of any State of the United States; provided that in connection with any transfer during the Restricted Period under (ii) above, the transferor shall withdraw the Preference Shares or other Deposited Securities in accordance with the terms and conditions of the Deposit Agreement and instruct that such Preference Shares be delivered to the custodian under the Rule 144A Deposit Agreement for issuance, in accordance with the terms and conditions thereof, of Rule 144A GDSs to or for the account of such QIB, and (3) acknowledge and agree that there can be no assurance that a registration statement under the Securities Act relating to the American Depositary Shares will be filed or, if filed, will be declared effective under the Securities Act by the Commission, and that there can be no assurance as to the timing of the filing of any such registration statement or the timing of the effectiveness thereof under the Securities Act, or (b) at or after the Effective Time, to represent and warrant that such Preference Shares are not, and American Depositary Shares representing such Preference Shares would not be, Restricted Securities. All representations, warranties, acknowledgements and agreements required by this Section 3.03 shall service the deposit of Preference Shares and delivery of Receipts.

SECTION 3.04 Disclosure of Interests.

To the extent that the provisions of or governing any Deposited Securities including, without limitation, the provisions of the Company’s Articles of Association as in effect from time to time and resolutions and regulations of the Company’s Board of Directors adopted in compliance with such Articles of Association or any applicable laws or regulations in the United Kingdom, the United States or any other country, may require the disclosure of beneficial or other ownership of Deposited Securities, other Shares and other securities of the Company and may provide for blocking transfer and voting or other rights to enforce such disclosure or limit such ownership, the Depositary shall use its reasonable efforts to comply, to the extent permitted by applicable law, with the Company’s reasonable written instructions in respect of any such disclosure, enforcement or limitation. Owners and Beneficial Owners shall comply with all such disclosure requirements and enforcement and ownership limitations and shall cooperate

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with the Depositary and the Depositary’s compliance with such Company instructions in respect thereof.

The Company may from time to time request Owners to provide information as to the capacity in which such Owners own or owned Receipts and regarding the identity of any other persons then or previously having a beneficial interest in such Receipts and the nature of such interest and various other matters. Each Owner agrees to provide any information requested by the Company or the Depositary pursuant to this Section 3.04. The Depositary agrees to comply with reasonable written instructions received from time to time from the Company requesting that the Depositary forward any such requests to the Owners and to forward to the Company any such responses to such requests received by the Depositary.

ARTICLE 4. THE DEPOSITED SECURITIES

SECTION 4.01 Cash Distributions.

Whenever the Depositary shall receive any cash dividend or other cash distribution on any Deposited Securities, the Depositary shall, as promptly as practicable, subject to the provisions of Section 4.05, convert such dividend or distribution into Dollars and shall distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09) to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively; provided, however, that in the event that the Company or the Depositary shall be required to withhold and does withhold from such cash dividend or such other cash distribution an amount on account of taxes, the amount distributed to the Owner of the Receipts evidencing American Depositary Shares representing such Deposited Securities shall be reduced accordingly. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Owner a fraction of one cent. Any such fractional amounts shall be rounded to the nearest whole cent and so distributed to Owners entitled thereto. The Company or its agent will remit to the appropriate governmental agency in the United Kingdom all amounts withheld and owing to such agency. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies.

SECTION 4.02 Distributions Other Than Cash, Preference Shares or Rights.

Subject to the provisions of Sections 4.11 and 5.09, whenever the Depositary shall receive any distribution other than a distribution described in Section 4.01, 4.03 or 4.04, the Depositary shall, after Consultation with the Company, as promptly as practicable, cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary or any taxes or other governmental charges, in proportion to the number

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of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that the Company or the Depositary withhold an amount on account of taxes or other governmental charges or that such securities must be registered under the Securities Act in order to be distributed to Owners or Beneficial Owners) the Depositary deems such distribution not to be feasible, the Depositary may, after consultation with the Company to the extent practicable, as promptly as practicable, adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09) shall be distributed by the Depositary to the Owners entitled thereto, all in the manner and subject to the conditions described in Section 4.01. The Depositary may withhold any distribution of securities under this Section 4.02 if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act. To the extent that such securities or property or the net proceeds thereof are not effectively distributed to Owners as provided in this Section 4.02, the same shall constitute Deposited Securities and each American Depositary Share shall thereafter also represent its proportionate interest in such securities, property or net proceeds.

SECTION 4.03 Distributions in Preference Shares.

If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Preference Shares, the Depositary, after Consultation with the Company may, and shall, if the Company shall so request in writing, distribute to the Owners of outstanding Receipts entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, additional Receipts evidencing an aggregate number of American Depositary Shares representing the amount of Preference Shares received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Preference Shares and the issuance of American Depositary Shares evidenced by Receipts, including the withholding of any tax or other governmental charge as provided in Section 4.11 and the payment of the fees and expenses of the Depositary as provided in Section 5.09. Prior to the Effective Time, each beneficial owner of Receipts so distributed will be deemed to have acknowledged that the American Depositary Shares and the Preference Shares have not been registered under the Securities Act and to have agreed to comply with any applicable restrictions on transfer set forth on the face of those Receipts. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary shall use reasonable efforts to sell the amount of Preference Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in

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Section 4.01. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also represent the additional Preference Shares distributed upon the Deposited Securities represented thereby.

SECTION 4.04 Rights.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Preference Shares or any rights of any other nature, the Depositary, after consultation with the Company, shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary reasonably determines, after consultation with the Company, that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems reasonably appropriate.

In circumstances in which rights would otherwise not be distributed, if an Owner of Receipts requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Preference Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Preference Shares, and the Company shall cause the Preference Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Preference Shares so purchased to be deposited pursuant to Section 2.02 of this Deposit Agreement, and shall, pursuant to Section 2.03 of this Deposit Agreement, execute and deliver Receipts to such Owner. In the case of a distribution pursuant to the

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second paragraph of this Section 4.04, such Receipts shall be legended in accordance with applicable U.S. law and shall be subject to the appropriate restrictions on sale, deposit, cancellation and transfer under such laws.

If the Depositary reasonably determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may, and at the written request of the Company shall, offer to sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of this Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any Receipt or otherwise. Those proceeds shall be distributed in accordance with Section 4.01.

The Depositary will not offer rights to Owners unless the offering and sale of both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in this Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner of Receipts requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

Neither the Depositary nor the Company shall be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

SECTION 4.05 Conversion of Foreign Currency.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such

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warrants or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any Receipt or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09.

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.

If at any time the Depositary or the Custodian shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under this Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account. The Depositary makes no representation that the exchange rate used or obtained in any currency conversion under this Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.03. The methodology used to determine exchange rates used in currency conversions is available upon request.

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SECTION 4.06 Fixing of Record Date.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Preference Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Preference Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (which shall be as near as practicable to any corresponding record date set by the Company) (a) for the determination of the Owners who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof or (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) who shall be responsible for any fee or charges assessed by the Depositary pursuant to this Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Preference Shares. Subject to the provisions of Sections 4.01 through 4.05 and to the other terms and conditions of this Deposit Agreement, the Owners on such record date shall be entitled, as the case may be, to receive the amount distributable by the Depositary with respect to such dividend or other distribution or such rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively, to give voting instructions or to act in respect of any other such matter.

SECTION 4.07 Voting of Deposited Securities.

The Company shall request the Depositary in writing to act under this Section 4.07 in respect of each meeting of holders of Preference Shares at which holders of Preference Shares have a right to vote. Upon receipt of that request and a notice of that meeting, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in the notice of meeting provided by the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Scottish law and of the Articles of Association of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Shares represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose (the “Instruction Date”), the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Preference Shares represented by the American Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Preference Shares other than in accordance with instructions received from Owners.

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In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company requests the Depositary to act under the first sentence of this Section 4.07, the Company shall give the Depositary notice of the meeting or solicitation not less than 40 days prior to the meeting date or date for giving proxies or consents. There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the Instruction Date to ensure that the Depositary will vote the Preference Shares or other Deposited Securities in accordance with the provisions of this Section 4.07.

SECTION 4.08 Changes Affecting Deposited Securities.

In circumstances where the provisions of Section 4.03 do not apply, upon any change in nominal value, change in par value, split-up, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a Custodian in exchange for or in conversion of or in respect of Deposited Securities, shall be treated as new Deposited Securities under this Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Preference Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

SECTION 4.09 Reports.

The Depositary shall make available for inspection by Owners at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary shall also send to the Owners copies of such reports when furnished by the Company pursuant to Section 5.06. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English, to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

SECTION 4.10 Lists of Owners.

Promptly upon request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names Receipts are registered on the books of the Depositary.

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SECTION 4.11 Withholding.

In the event that the Depositary determines that any distribution in property (including Preference Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Preference Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary reasonably deems necessary and practicable to pay such taxes or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.

Services for Owners and Beneficial Owners that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, this Deposit Agreement.

SECTION 4.12 Redemption of Deposited Securities.

If the Depositary receives a notice that Deposited Securities are to be redeemed, the Depositary shall (i) call for surrender a corresponding number of American Depositary Shares, (ii) notify the Owners of those American Depositary Shares that the Deposited Securities underlying their American Depositary Shares will be surrendered for redemption and (iii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date. Owners of American Depositary Shares affected by the redemption may surrender the Receipts evidencing those American Depositary Shares and receive delivery of money or other property the Depositary receives upon redemption of Deposited Securities as provided in Section 2.05.

If the Depositary receives notice that less than all the Deposited Securities are to be redeemed, the Depositary shall determine in its discretion which American Depositary Shares to call for surrender in connection with that redemption. If the Depositary calls for surrender less than all the American Depositary Shares evidenced by a Receipt in connection with a redemption of Deposited Securities, the Depositary shall, upon surrender of that Receipt, deliver to the Owner a Receipt evidencing the amount of American Depositary Shares evidenced by the surrendered Receipt that were not called for surrender.

ARTICLE 5. THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY

SECTION 5.01 Maintenance of Office and Transfer Books by the Depositary.

Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain facilities for the execution and delivery, registration,

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registration of transfers and surrender of Receipts in accordance with the provisions of this Deposit Agreement.

The Depositary shall keep books, at its Corporate Trust Office, for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Owners, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a business or object other than the business of the Company or a matter related to this Deposit Agreement or the Receipts.

The Depositary may close the transfer books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder and shall close them upon the reasonable written request of the Company. The Depositary shall notify the Company of any closure under the preceding sentence that is outside the ordinary course of business as soon as practicable.

If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more stock exchanges in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registry of such Receipts in accordance with any requirements of such exchange or exchanges.

SECTION 5.02 Prevention or Delay in Performance by the Depositary or the Company.

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Beneficial Owner if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any provision, present or future, of the Articles of Association of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from, or be subject to any civil or criminal penalty on account of, doing or performing any act or thing which by the terms of this Deposit Agreement or Deposited Securities it is provided shall be done or performed; nor shall the Depositary or the Company or any of their respective directors, employees, agents or affiliates incur any liability to any Owner or Beneficial Owner of any Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of this Deposit Agreement it is provided shall or may be done or performed, (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement, (iii) for the inability of any Owner or Beneficial Owner to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Owners or Beneficial Owners or (iv) for any special, consequential or punitive damages for any breach of the terms of this

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Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01,4.02, or 4.03, or an offering or distribution pursuant to Section 4.04, or for any other reason, such distribution or offering may not be made available to Owners, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary, after Consultation with the Company, shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse.

SECTION 5.03 Obligations of the Depositary, the Custodian and the Company.

The Company assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to Owners or Beneficial Owners, except that it agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Beneficial Owner (including, without limitation, liability with respect to the validity or worth of the Deposited Securities), except that it agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts on behalf of any Owner, Beneficial Owner or other person.

Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Preference Shares for deposit, any Owner or any other person believed by it in good faith to be competent to give such advice or information. Each of the Company and the Depositary may rely and shall be protected in relying upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.

The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such

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vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith.

No disclaimer of liability under the United States federal securities laws is intended by any provision of this Deposit Agreement.

SECTION 5.04 Resignation and Removal of the Depositary.

The Depositary may at any time resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

The Depositary may at any time be removed by the Company by 90 days’ prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary or (ii) the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on the written request of the Company shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Deposited Securities to such successor, and shall deliver to such successor a list of the Owners of all outstanding Receipts. Any such successor depositary shall promptly mail notice of its appointment to the Owners.

Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

SECTION 5.05 The Custodians.

The Custodian shall be subject at all times and in all respects to the directions of the Depositary and shall be responsible solely to it. The Depositary shall be responsible for the compliance by the Custodian with the applicable provisions of this Deposit Agreement, but only to the extent the Depositary would be responsible if the duties of the Custodian were duties of the Depositary under this Deposit Agreement. The Custodian may resign and be discharged from its duties hereunder by notice of such resignation delivered to the Depositary at least 30 days prior to the date on which such

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resignation is to become effective. If, upon such resignation there would be no Custodian acting under this Deposit Agreement, the Depositary shall, as promptly as practicable after receiving such notice, with the approval of the Company, which approval shall not be unreasonably withheld or delayed, appoint a substitute custodian, which shall thereafter be a Custodian hereunder. The Depositary shall notify the Company of the appointment of a substitute or additional custodian as soon as practicable. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners to do so, it may appoint a substitute or additional custodian or custodians, each of which shall thereafter be a Custodian hereunder. Upon demand of the Depositary, any Custodian shall deliver such of the Deposited Securities held by it as are requested of it to any other Custodian. Each substitute or additional custodian shall deliver to the Depositary, forthwith upon its appointment, an acceptance of such appointment satisfactory in form and substance to the Depositary.

Upon the appointment of any successor depositary hereunder, the Custodian then acting hereunder shall forthwith become, without any further act or writing, the agent hereunder of such successor depositary and the appointment of such successor depositary shall in no way impair the authority of each Custodian hereunder; but the successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to that Custodian all such instruments as may be proper to give to that Custodian full and complete power and authority as agent hereunder of such successor depositary.

SECTION 5.06 Notices and Reports.

On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Preference Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action in respect of any cash or other distributions or the offering of any rights, the Company agrees to transmit to the Depositary and the Custodian a copy of the notice thereof in English but otherwise in the form given or to be given to holders of Preference Shares or other Deposited Securities.

The Company will arrange for the translation into English, if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompt transmittal by the Company to the Depositary and the Custodian of such notices and any other reports and communications which are made generally available by the Company to holders of its Preference Shares. If requested in writing by the Company, the Depositary will arrange for the mailing, at the Company’s expense, of copies of such notices, reports and communications to all Owners. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings.

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The Company will deliver to the Depositary and the Custodian a copy (in English or with an English translation) of all provisions of or governing the Preference Shares and any other Deposited Securities. Promptly upon any change in such provisions, the Company shall deliver promptly to the Depositary and the Custodian a copy (in English or with an English translation) of such provisions as so changed. The Depositary and its agents may rely on the copy of such provisions as so delivered for all purposes of this Deposit Agreement.

SECTION 5.07 Distribution of Additional Preference Shares, Rights, etc.

If the Company or any affiliate of the Company determines to make any issuance or distribution of (1) additional Preference Shares, (2) rights to subscribe for Preference Shares, (3) securities convertible into Preference Shares, or (4) rights to subscribe for such securities (each a “Distribution”), the Company shall notify the Depositary in writing in English as promptly as practicable and in any event before the Distribution starts and, if requested in writing by the Depositary, the Company shall promptly furnish to the Depositary a written opinion from U.S. counsel for the Company that is reasonably satisfactory to the Depositary, stating whether or not the Distribution requires, or, if made in the United States, would require, registration under the Securities Act. If, in the opinion of that counsel, the Distribution requires, or, if made in the United States, would require, registration under the Securities Act, that counsel shall furnish to the Depositary a written opinion as to whether or not there is a registration statement under the Securities Act in effect that will cover that Distribution. The Company shall be under no obligation to file a registration statement with respect to any Distribution.

The Company agrees with the Depositary that neither the Company nor any company controlled by, controlling or under common control with the Company will at any time deposit any Preference Shares, either originally issued or previously issued and reacquired by the Company or any such affiliate, unless a Registration Statement is in effect as to such Preference Shares under the Securities Act.

SECTION 5.08 Indemnification.

The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and any Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to, the reasonable and documented fees and expenses of counsel) which may arise out of or in connection with (a) any registration with the Commission of American Depositary Shares or Deposited Securities or the offer or sale of those securities in the United States or (b) acts performed or omitted, pursuant to the provisions of this Deposit Agreement and of the Receipts, as the same may be amended, modified or supplemented from time to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by the Company or any of its directors, employees, agents and affiliates.

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The Depositary agrees to indemnify the Company, its directors, employees, agents and affiliates and hold them harmless from any liability or expense which may arise out of acts performed or omitted by the Depositary or its Custodian or their respective directors, employees, agents and affiliates due to their negligence or bad faith.

The obligations set forth in this Section 5.08 shall survive the termination of this Deposit Agreement and the succession or substitution of any indemnified person.

If a claim is asserted or an action is commenced against a person that is entitled to seek and intends to seek indemnification for that claim or action under this Section 5.08 (an “Indemnifiable Claim”), that person (an “Indemnified Person”) shall (i) promptly notify in writing the person obligated to provide that indemnification (the “Indemnifying Person”) of that assertion or commencement and (ii) consult in good faith with the Indemnifying Person as to the conduct of the defense of that Indemnifiable Claim. Neither the Indemnified Person nor the Indemnifying Person shall compromise or settle an Indemnifiable Claim without the consent in writing of the other (which consent shall not be unreasonably withheld).

SECTION 5.09 Charges of Depositary.

The Company agrees to pay the fees, reasonable expenses and out-of- pocket charges of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The following charges shall be incurred by any party depositing or withdrawing Preference Shares or by any party surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited Securities or a distribution of Receipts pursuant to Section 4.03) or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Preference Shares generally on the share register of the Company or Foreign Registrar and applicable to transfers of Preference Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and facsimile transmission expenses as are expressly provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts pursuant to Section 2.03, 4.03 or 4.04 and the surrender of Receipts pursuant to Section 2.05 or 6.02, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any

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cash distribution made pursuant to this Deposit Agreement, including, but not limited to Sections 4.01 through 4.04, (7) a fee for the distribution of securities pursuant to Section 4.02, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Preference Shares) but which securities are instead distributed by the Depositary to Owners, (8) a fee of $.02 or less per American Depositary Share (or portion thereof) for depositary services, which will accrue on the last day of each calendar year and will be payable as provided in clause 9 below; provided, however, that no fee will be assessed under this clause 8 to the extent that a fee of $.02 was charged pursuant to clause 6 above during that calendar year and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Preference Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 and shall be collected at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

The Depositary may own and deal in any class of securities of the Company and its affiliates and in Receipts.

SECTION 5.10 Retention of Depositary Documents.

The Depositary is authorized to destroy those documents, records, bills and other data compiled during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the Depositary unless the Company reasonably requests in writing that such papers be retained for a longer period and that request is received prior to that destruction.

SECTION 5.11 Exclusivity.

The Company agrees not to appoint any other depositary for issuance of American or global depositary receipts so long as The Bank of New York Mellon is acting as Depositary hereunder.

SECTION 5.12 List of Restricted Securities Owners.

The Company shall provide to the Depositary a list setting forth, to the actual knowledge of the Company, those persons or other entities that beneficially own Restricted Securities as of the date of this Deposit Agreement, and the Company shall update that list on a regular basis. The Company agrees to advise in writing each of the persons or other entities so listed that Restricted Securities, so long as they remain Restricted Securities, are ineligible for deposit under this Deposit Agreement. The Depositary may rely on such a list or update but shall not be liable for any action or omission made in reliance thereon.

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SECTION 5.13 Available Information.

If, at any time prior to the expiration of the Restricted Period, the Company is neither a reporting company under Section 13 or 15(d) of the Securities Exchange Act nor exempt from the reporting requirements of the Securities Exchange Act by reason of Rule 12g3-2(b) thereunder, the Company will provide, at its expense, to any Owner or Beneficial Owner or any holder of Preference Shares, and to any prospective purchaser of American Depositary Shares or Preference Shares designated by such person, upon request of such Owner, Beneficial Owner, holder or prospective purchaser, the information required by Rule 144A(d)(4)(i) and otherwise comply with Rule 144A(d)(4). If at any time the Company is neither subject to Section 13 or 15(d) of the Securities Exchange Act nor exempt pursuant to Rule 12g3-2(b) under the Securities Exchange Act (as determined by the Office of International Corporate Finance of the Commission), the Company shall immediately so notify the Depositary, and the Depositary may so notify the Owners in writing at the Company’s expense.

The Company hereby authorizes the Depositary to deliver such information as is furnished by the Company to the Depositary during any period in which the Company informs the Depositary it is subject to the information delivery requirements of Rule 144A(d)(4) to any such Owner, Beneficial Owner, holder of Preference Shares or prospective purchaser at the request of such person. The Company agrees to reimburse the Depositary for its reasonable expenses in connection with such deliveries and to provide the Depositary with such information in such quantities as the Depositary may from time to time reasonably request.

SECTION 5.14 Information for Regulatory Compliance.

Each of the Company and the Depositary shall provide to the other, as promptly as practicable, information from its records or otherwise available to it that is reasonably requested by the other to permit the other to comply with applicable law or requirements of governmental, tax or regulatory authorities.

ARTICLE 6. AMENDMENT AND TERMINATION

SECTION 6.01 Amendment.

The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Beneficial Owners in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding Receipts until the expiration of 30 days after notice of such amendment shall have been given to the Owners of outstanding

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Receipts. Every Owner and Beneficial Owner, at the time any amendment so becomes effective, shall be deemed, by continuing to hold such Receipt or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

SECTION 6.02 Termination.

The Depositary shall, at any time at the direction of the Company, terminate this Deposit Agreement by mailing notice of termination to the Owners of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate this Deposit Agreement by mailing notice of termination to the Company and the Owners of all Receipts then outstanding if at least 60 days have passed since the Depositary delivered to the Company a written notice of its election to resign and a successor depositary has not been appointed and accepted its appointment as provided in Section 5.04. On and after the date of termination, the Owner of a Receipt will, upon (a) surrender of such Receipt at the Corporate Trust Office of the Depositary, (b) payment of the fee of the Depositary for the surrender of Receipts referred to in Section 2.05, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt. If any Receipts shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in this Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges). At any time after the date of termination, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the

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account of the Owner of such Receipt in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges) and except for its obligations to the Company, its directors, employees, agents and affiliates under Section 5.08. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary under Sections 5.08 and 5.09.

ARTICLE 7. MISCELLANEOUS

SECTION 7.01 Counterparts.

This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any Owner or Beneficial Owner during business hours.

SECTION 7.02 No Third Party Beneficiaries.

This Deposit Agreement is for the exclusive benefit of the parties hereto and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.

SECTION 7.03 Severability.

In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

SECTION 7.04 Owners and Beneficial Owners as Parties: Binding Effect.

The Owners and Beneficial Owners of Receipts from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance thereof or any interest therein.

SECTION 7.05 Notices.

Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to Lloyds Banking Group plc, 71 Lombard Street, London, England, or any other place to which the Company may have transferred its principal office with notice to the Depositary.

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Any and all notices to be given to the Depositary shall be deemed to have been duly given if in English and personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to The Bank of New York Mellon, 240 Greenwich Street, New York, New York 10286, Attention: American Depositary Receipt Administration, or any other place to which the Depositary may have transferred its Corporate Trust Office with notice to the Company.

Any and all notices to be given to any Owner shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to such Owner at the address of such Owner as it appears on the transfer books for Receipts of the Depositary, or, if such Owner shall have filed with the Depositary a written request that notices intended for such Owner be mailed to some other address, at the address designated in such request.

Delivery of a notice sent by mail or cable, telex or facsimile transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Company may, however, act upon any cable, telex or facsimile transmission received by it, notwithstanding that such cable, telex or facsimile transmission shall not subsequently be confirmed by letter as aforesaid.

SECTION 7.06 Submission to Jurisdiction: Appointment of Agent for Service of Process.

The Company hereby (i) irrevocably designates and appoints CT Corporation System, 28 Liberty Street, New York, New York 10005, as the Company’s authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, (ii) consents and submits to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agrees that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company agrees to deliver, upon the execution and delivery of this Deposit Agreement, a written acceptance by such agent of its appointment as such agent. The Company further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment in full force and effect for so long as any American Depositary Shares or Receipts remain outstanding or this Agreement remains in force. In the event the Company fails to continue such designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices

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hereunder, and service so made shall be deemed completed ten (10) days after the same shall have been so mailed.

SECTION 7.07 Governing Law.

This Deposit Agreement and the Receipts shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York.

SECTION 7.08 Waiver of Immunities.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

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IN WITNESS WHEREOF, LLOYDS BANKING GROUP plc and THE BANK OF NEW YORK MELLON have duly executed this Deposit Agreement as of the day and year first set forth above and all Owners and Beneficial Owners shall become parties hereto upon acceptance by them of Receipts issued in accordance with the terms hereof or any interest therein.

LLOYDS BANKING GROUP plc
By:	/s/ William Chalmers
	Name:	William Chalmers
	Title:	Chief Financial Officer

By:
	Name:
	Title:

THE BANK OF NEW YORK MELLON,
as Depositary
By:	/s/ Robert W. Goad
	Name:	Robert W. Goad
	Title:	Managing Director

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 Annex I

Certification and Agreement of Certain Acquirers of
Receipts Upon Deposit of Preference Shares Pursuant to
Section 2.02 of the Amended and Restated Regulation S Deposit Agreement

We refer to the Amended and Restated Regulation S Deposit Agreement dated as of February 18, 2020 (the “Deposit Agreement”) among LLOYDS BANKING GROUP plc (the “Company”), THE BANK OF NEW YORK MELLON, as Depositary, and Owners and Beneficial Owners of Regulation S American Depositary Receipts (the “Receipts”) issued thereunder. Capitalized terms used but not defined herein shall have the meanings given them in the Deposit Agreement.

1.       This certification and agreement is furnished in connection with the deposit of Preference Shares and issuance of American Depositary Shares to be evidenced by one or more Receipts pursuant to Section 2.02 of the Deposit Agreement.

2.       We acknowledge (or if we are a broker-dealer, our customer has confirmed to us that it acknowledges) that the Receipts, the American Depositary Shares evidenced thereby and the Preference Shares represented thereby have not been and will not be registered under the Securities Act (the “Act”).

3.       We certify that either:

A. We are, or at the time the Preference Shares are deposited and at the time the Receipts are issued will be, the beneficial owner of the Preference Shares and of the American Depositary Shares evidenced by such Receipt or Receipts, and (i) we are not a U.S. person (as defined in Regulation S under the Act) and we are located outside the United States (within the meaning of Regulation S) and acquired, or have agreed to acquire and will have acquired, the Preference Shares to be deposited outside the United States, (ii) we are not an affiliate of the Company or a person acting on behalf of such an affiliate, and (iii) we are not in the business of buying and selling securities or, if we are in such business, we did not acquire the securities to be deposited from the Company or any affiliate thereof in the initial distribution of the American Depositary Shares and Preference Shares.

OR

B. We are a broker-dealer acting on behalf of our customer; our customer has confirmed to us that it is, or at the time the Preference Shares are deposited and at the time the Receipt or Receipts are issued will be, the

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beneficial owner of the Preference Shares and of the American Depositary Shares evidenced by such Receipt or Receipts, and (i) it is not a U.S. person (as defined in Regulation S under the Act) and it is located outside the United States (within the meaning of Regulation S and acquired, or have agreed to acquire and will have acquired, the Preference Shares to be deposited outside the United States, (ii) it is not an affiliate of the Company or a person acting on behalf of such an affiliate, and (iii) it is not in the business of buying and selling securities or, if it is in such business, it did not acquire the securities to be deposited from the Company or any affiliate thereof in the initial distribution of American Depositary Shares and Preference Shares.

4.       We agree (or if we are a broker-dealer, our customer has confirmed to us that it agrees) that prior to expiration of 40 days after the later of the commencement of the offering of American Depositary Shares on behalf of the Company and the related closing (the “restricted period”), we (or it) will not offer, sell, pledge or otherwise transfer such Receipts, the American Depositary Shares evidenced thereby or the Preference Shares represented thereby except (a) to a person whom we reasonably believe (or it and anyone acting on its behalf reasonably believes) is a qualified institutional buyer within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, or (b) in accordance with Regulation S under the Act, in either case in accordance with any applicable securities laws of any state of the United States. We further agree (or if we are a broker-dealer, our customer has confirmed to us that it agrees) that if we sell or otherwise transfer (or it sells or otherwise transfers) the American Depositary Shares evidenced by the Receipt or Receipts referred to above or the Preference Shares represented thereby in accordance with clause (a) above prior to the expiration of the restricted period, we (or our customer) will, prior to settlement of such sale, cause such Preference Shares to be withdrawn in accordance with the terms and conditions of the Deposit Agreement and we (or our customer) will cause instructions to be given to the Depositary to deliver such Preference Shares to the custodian under the Rule 144A Deposit Agreement for deposit thereunder and issuance of a Rule 144A American Depositary Receipt evidencing Rule 144A American Depositary Shares upon receipt of the proper certification on behalf of the purchaser and otherwise in accordance with the terms and conditions of such Rule 144A Deposit Agreement.

	Very truly yours,
	[NAME OF CERTIFYING ENTITY]
	By:
		Title:
Dated:

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Annex II

Certification and Agreement of Persons Receiving
Deposited Securities Upon Withdrawal
Pursuant to Section 2.05 of
the Amended and Restated Regulation S Deposit Agreement

We refer to the Amended and Restated Regulation S Deposit Agreement dated as of February 18, 2020 (the “Deposit Agreement”) among LLOYDS BANKING GROUP plc (the “Company”), THE BANK OF NEW YORK MELLON, as Depositary thereunder, and Owners and Beneficial Owners of Regulation S American Depositary Receipts (the “Receipts”) issued thereunder. Capitalized terms used but not defined herein shall have the meanings given them in the Deposit Agreement.

1. We are surrendering a Receipt or Receipts in accordance with the terms of the Deposit Agreement for the purpose of withdrawal of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt or Receipts (the “Preference Shares”) pursuant to Section 2.05 of the Deposit Agreement.

2. We acknowledge (or if we are a broker-dealer, our customer has confirmed to us that it acknowledges) that the Receipts, the American Depositary Shares evidenced thereby and the securities represented thereby have not been and will not be registered under the Securities Act (the “Act”).

3. We certify that either:

(a)        We are located outside the United States (within the meaning of Regulation S under the Act), and either:

(i)       we have sold or otherwise transferred, or agreed to sell or otherwise transfer and at or prior to the time of withdrawal will have sold or otherwise transferred, the Receipts or the Preference Shares in accordance with Regulation S under the Act, and we are, or prior to such sale or other transfer we were, the beneficial owner of the Receipts, or

(ii)       we have sold or otherwise transferred, or agreed to sell or otherwise transfer and at or prior to the time of withdrawal will have sold or otherwise transferred the Receipts or the Preference Shares to a qualified institutional buyer (as defined in Rule 144A under the Act) in accordance with Rule 144A, and, accordingly, we are separately giving instructions to the Depositary to deliver the Preference Shares to the custodian under the Rule 144A Deposit Agreement for deposit thereunder

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and issuance of a Rule 144A American Depositary Receipt evidencing Rule 144A American Depositary Shares upon receipt of the proper certification on behalf of the purchaser and otherwise in accordance with the terms and conditions of such Rule 144A Deposit Agreement, and we are, or prior to such sale or other transfer we were, the beneficial owner of the Receipts, or

(iii)       we will be the beneficial owner of the Preference Shares upon withdrawal, and, accordingly, we agree that, prior to the expiration of 40 days after the later of the commencement of the offering of American Depositary Shares and Preference Shares on behalf of the Company and the related closing, we will not offer, sell, pledge or otherwise transfer the Preference Shares except (A) to a person whom we (and anyone acting on our behalf) reasonably believe is a qualified institutional buyer within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, or (B) in accordance with Regulation S under the Act.

OR

(b)        We are a qualified institutional buyer (as defined in Rule 144A under the Act) acting for our own account or for the account of one or more qualified institutional buyers; we have agreed to acquire (or it has agreed to acquire), the Receipts or the Preference Shares in a transaction which we understand is being made in reliance upon Rule 144A, and, accordingly, we (or it) are separately taking all action necessary to cause the Preference Shares being withdrawn to be deposited under the Rule 144A Deposit Agreement for issuance of a Rule 144A Global Depositary Receipt evidencing Rule 144A American Depositary Shares.

4. If we are a broker-dealer, we further certify that we are acting for the account of our customer and that our customer has confirmed the accuracy of the representations contained in paragraph 3 hereof that are applicable to it and, if paragraph 3(a)(iii) is applicable to our customer, has confirmed that it will comply with the agreements set forth in paragraph 3(a)(iii).

	Very truly,
	[NAME OF CERTIFYING ENTITY]
	By:
		Title:
Dated:

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EXHIBIT A

No. REGULATION S AMERICAN DEPOSITARY SHARES (Each Regulation S American Depositary Share represents 100 deposited Preference Shares)

SOLELY FOR PURPOSES OF TRADING AND SETTLEMENT, THE REGULATION S AMERICAN DEPOSITARY SHARES MAY BE DEEMED TO HAVE A PRINCIPAL AMOUNT OF $100,000 PER REGULATION S AMERICAN DEPOSITARY SHARE.

THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE PREFERENCE SHARES REPRESENTED THEREBY (THE “PREFERENCE SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD (DEFINED AS 40 DAYS AFTER THE LATER OF (I) THE COMMENCEMENT OF THE OFFERING OF REGULATION S AMERICAN DEPOSITARY SHARES AND PREFERENCE SHARES AND (II) THE RELATED CLOSING) EXCEPT (1) IN AN OFFSHORE TRANSACTION PURSUANT TO AND IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT OR (2) TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS; PROVIDED, THAT IN CONNECTION WITH ANY TRANSFER UNDER (2) ABOVE, THE TRANSFEROR SHALL, PRIOR TO THE SETTLEMENT OF SUCH SALE, WITHDRAW THE PREFERENCE SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AMENDED AND RESTATED REGULATION S DEPOSIT AGREEMENT AND INSTRUCT THAT SUCH PREFERENCE SHARES BE DELIVERED TO THE CUSTODIAN UNDER THE RULE 144A DEPOSIT AGREEMENT FOR ISSUANCE IN ACCORDANCE WITH THE TERMS AND CONDITIONS THEREOF, OF RULE 144A AMERICAN

DEPOSITARY SHARES TO OR FOR THE ACCOUNT OF SUCH QUALIFIED INSTITUTIONAL BUYER.

UPON THE EXPIRATION OF THE RESTRICTED PERIOD, THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED IN THIS LEGEND IF, AT THE TIME OF SUCH EXPIRATION, THE OFFER AND SALE OF THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY BY THE HOLDER THEREOF IN THE UNITED STATES WOULD NOT BE RESTRICTED UNDER THE SECURITIES LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES.

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Depositary or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.

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THE BANK OF NEW YORK MELLON
REGULATION S AMERICAN DEPOSITARY RECEIPT
FOR NON-CUMULATIVE DOLLAR PREFERENCE SHARES
OF
LLOYDS BANKING GROUP PLC
(INCORPORATED UNDER THE LAWS OF SCOTLAND)

The Bank of New York Mellon, as depositary (herein called the Depositary), hereby certifies that _____________________________________________, or registered assigns IS THE OWNER OF ___________________________

REGULATION S AMERICAN DEPOSITARY SHARES

representing deposited non-cumulative dollar preference shares (herein called Preference Shares) of Lloyds Banking Group plc, incorporated under the laws of Scotland (herein called the Company). At the date hereof, each American Depositary Share represents 100 Preference Shares deposited or subject to deposit under the Deposit Agreement (as such term is hereinafter defined) at The Bank of New York Mellon, acting through an office located in the United Kingdom (herein called the Custodian). The Depositary’s Corporate Trust Office and its principal executive office are located at 240 Greenwich Street, New York, N.Y. 10286.

THE DEPOSITARY’S CORPORATE TRUST OFFICE ADDRESS IS
240 GREENWICH STREET, NEW YORK, N.Y. 10286

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1.       THE DEPOSIT AGREEMENT.

This Regulation S American Depositary Receipt is one of an issue (herein called Receipts), all issued and to be issued upon the terms and conditions set forth in the Amended and Restated Regulation S Deposit Agreement, dated as of February 18, 2020, as the same may be amended from time to time in accordance with its terms (the “Deposit Agreement”), by and among the Company, the Depositary, and all Owners and Beneficial Owners from time to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary Shares or any interest therein agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights of Owners and Beneficial Owners of the Receipts and the rights and duties of the Depositary in respect of the Preference Shares deposited thereunder and any and all other securities, property and cash from time to time received in respect of such Preference Shares and held thereunder (such Preference Shares, securities, property, and cash are herein called Deposited Securities). Copies of the Deposit Agreement are on file at the Depositary’s Corporate Trust Office in New York City and at the office of the Custodian.

The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.

2.        SURRENDER OF RECEIPTS AND WITHDRAWAL OF PREFERENCE SHARES.

Upon surrender at the Corporate Trust Office of the Depositary of this Receipt, and upon payment of the fee of the Depositary provided in this Receipt, and subject to the terms and conditions of the Deposit Agreement, the articles of association of the Company and the terms of the Deposited Securities, the Owner hereof is entitled to delivery, to him or upon his order, of the Deposited Securities at the time represented by the American Depositary Shares for which this Receipt is issued. Delivery of such Deposited Securities may be made by the delivery of (a) certificates in the name of the Owner hereof or as ordered by him or certificates properly endorsed or accompanied by proper instruments of transfer and (b) any other securities, property and cash to which such Owner is then entitled in respect of this Receipt. Such delivery will be made at the option of the Owner hereof, either at the office of the Custodian or at the Corporate Trust Office of the Depositary, provided that the forwarding of certificates for Preference Shares or other Deposited Securities for such delivery at the Corporate Trust Office of the Depositary shall be at the risk and expense of the Owner hereof.

Notwithstanding the foregoing, during the Restricted Period, no Deposited Securities may be withdrawn upon surrender of a Receipt unless at or prior to the time of surrender the Depositary has received a duly executed and completed written certificate

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and agreement, in substantially the form of Annex II to the Deposit Agreement, by or on behalf of the person surrendering such Receipt who after such withdrawal will be the beneficial owner of such Deposited Securities.

Prior to the expiration of the Restricted Period, no Owner may transfer American Depositary Shares or Preference Shares represented thereby to, or for the account of, a qualified institutional buyer as defined in Rule 144A (“QIB”) unless such Owner (i) withdraws such Preference Shares in accordance with Section 2.05 of the Deposit Agreement and (ii) instructs the Depositary to deliver the Preference Shares so withdrawn to the account of the custodian under the Rule 144A Deposit Agreement for issuance thereunder of Rule 144A GDSs to or for the account of such QIB. Issuance of such Rule 144A GDSs shall be subject to the terms and conditions of the Rule 144A Deposit Agreement including with respect to the deposit of Preference Shares and the issuance of Rule 144A GDSs, including delivery of the duly executed and completed written certificate and agreement required under Section 2.02 of the Rule 144A Deposit Agreement, by or on behalf of the person who will be the beneficial owner of such Rule 144A GDRs, representing that such person is a QIB and agreeing that it will comply with the restrictions on transfer set forth in the Rule 144A Deposit Agreement and to payment of the fees, charges and taxes provided therein.

3.       TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

The transfer of this Receipt is registrable on the books of the Depositary at its Corporate Trust Office by the Owner hereof in person or by a duly authorized attorney, upon surrender of this Receipt properly endorsed for transfer or accompanied by proper instruments of transfer and funds sufficient to pay any applicable transfer taxes and the expenses of the Depositary and upon compliance with such regulations, if any, as the Depositary may establish for such purpose. This Receipt may be split into other such Receipts, or may be combined with other such Receipts into one Receipt, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, or surrender of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require payment from the depositor of the Preference Shares or the presentor of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Preference Shares being deposited or withdrawn) and payment of any applicable fees as provided in this Receipt, may require the production of proof satisfactory to it as to the identity and genuineness of any signature, may require delivery of such certifications as the Company may from time to time specify in writing to the Depositary to assure the Company of compliance with the Securities Act and the rules and regulations thereunder and may also require compliance with any regulations the Depositary may establish consistent with the provisions of the Deposit Agreement or this Receipt, including, without limitation, this Article 3.

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The delivery of Receipts against deposit of Preference Shares generally or against deposit of particular Preference Shares may be suspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement or this Receipt or provisions governing the Deposited Securities, or for any other reason.

After the expiration of the Restricted Period or any other applicable restricted period in the case of a subsequent issuance of American Depositary Shares, the Depositary shall not knowingly accept for deposit under the Deposit Agreement any Preference Shares that would be required to be registered under the provisions of the Securities Act for the public offer and sale thereof in the United States, unless a registration statement is in effect as to such Preference Shares for such offer and sale.

Without limiting the foregoing, Preference Shares that the Depositary believes have been withdrawn from a restricted depositary receipt facility established or maintained by a depositary bank (including any such other facility maintained by the Depositary) may be accepted for deposit under the Deposit Agreement only if those Preference Shares are not “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, and the Depositary may, as a condition of accepting those Preference Shares for deposit, require the person depositing those Preference Shares to provide the Depositary with a certificate to the foregoing effect.

Notwithstanding anything to the contrary in the Deposit Agreement or the Receipts, at and after the Effective Time, the surrender of outstanding Receipts and withdrawal of Deposited Securities may not be suspended, subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Preference Shares in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the Receipts or to the withdrawal of the Deposited Securities.

4.       LIABILITY OF OWNER OR BENEFICIAL OWNER FOR TAXES.

If any tax or other governmental charge shall become payable with respect to any Receipt or any Deposited Securities represented hereby, such tax or other governmental charge shall be payable by the Owner or Beneficial Owner hereof to the Depositary. The Depositary may refuse to effect any transfer of this Receipt or any withdrawal of Deposited Securities represented by American Depositary Shares evidenced by such Receipt until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner or Beneficial Owner hereof any part or all of the Deposited Securities represented by the American Depositary

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Shares evidenced by this Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner or Beneficial Owner hereof shall remain liable for any deficiency.

5.       WARRANTIES ON DEPOSIT OF PREFERENCE SHARES.

Every person depositing Preference Shares under the Deposit Agreement shall be deemed thereby to represent and warrant, in addition to the matters covered by the certification and agreement required under Section 2.02 of the Deposit Agreement, that such Preference Shares and each certificate therefor, if applicable, are validly issued, fully paid, non-assessable, and were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent and warrant that, except with respect to the initial deposit and any deposit permitted hereunder pursuant to Section 4.03, 4.04 or 4.08, such person is not and shall not become at any time while such person holds Receipts or any beneficial interest therein an affiliate of the Company. In addition, every person depositing Preference Shares, taking delivery of or transferring Receipts, or surrendering Receipts and withdrawing Preference Shares under the Deposit Agreement shall also be deemed thereby (a) prior to the Effective Time, to (1) have made the representations and warranties required pursuant to Section 2.02 of the Deposit Agreement, (2) acknowledge and agree that the American Depositary Shares evidenced thereby and the Preference Shares represented thereby have not been registered under the Securities Act and, during the Restricted Period, may not be offered, sold, pledged or otherwise transferred except (i) outside the United States in accordance with Rule 903 or 904 of Regulation S or (ii) to a person whom the seller reasonably believes is a qualified institutional buyer (“QIB”) as defined in Rule 144A in a transaction meeting the requirements of Rule 144A, in each case in accordance with any applicable securities laws of any State of the United States; provided that in connection with any transfer during the Restricted Period under (ii) above, the transferor shall withdraw the Preference Shares or other Deposited Securities in accordance with the terms and conditions of the Deposit Agreement and instruct that such Preference Shares be delivered to the custodian under the Rule 144A Deposit Agreement for issuance, in accordance with the terms and conditions thereof, of Rule 144A GDSs to or for the account of such QIB, and (3) acknowledge and agree that there can be no assurance that a registration statement under the Securities Act relating to the American Depositary Shares will be filed or, if filed, will be declared effective under the Securities Act by the Commission, and that there can be no assurance as to the timing of the filing of any such registration statement or the timing of the effectiveness thereof under the Securities Act, or (b) at or after the Effective Time, to represent and warrant that such Preference Shares are not, and American Depositary Shares representing such Preference Shares would not be, Restricted Securities. All representations, warranties, acknowledgements and agreements required by Section 3.03 of the Deposit Agreement shall service the deposit of Preference Shares and delivery of Receipts.

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6.       FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Preference Shares for deposit or any Owner or Beneficial Owner of a Receipt may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, legal or beneficial ownership of American Depositary Shares or other securities, compliance with all applicable laws or regulations and the terms of the Deposit Agreement, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper or as the Company may reasonably request by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of any Receipt or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. No Preference Share shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in the United Kingdom that is then performing the function of the regulation of currency exchange.

7.       CHARGES OF DEPOSITARY.

The Company agrees to pay the fees, reasonable expenses and out-of-pocket charges of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The following charges shall be incurred by any party depositing or withdrawing Preference Shares or by any party surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited Securities or a distribution of Receipts pursuant to Section 4.03 of the Deposit Agreement), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Preference Shares generally on the share register of the Company or Foreign Registrar and applicable to transfers of Preference Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals under the terms of the Deposit Agreement, (3) such cable, telex and facsimile transmission expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05 of the Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts pursuant to Section 2.03, 4.03 or 4.04 of the Deposit Agreement and the surrender of Receipts

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pursuant to Section 2.05 or 6.02 of the Deposit Agreement, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to Sections 4.01 through 4.04 of the Deposit Agreement, (7) a fee for the distribution of securities pursuant to Section 4.02 of the Deposit Agreement, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Preference Shares), but which securities are instead distributed by the Depositary to Owners, (8) ) a fee of $.02 or less per American Depositary Share (or portion thereof) for depositary services, which will accrue on the last day of each calendar year and will be payable as provided in clause 9 below; provided, however, that no fee will be assessed under this clause 8 to the extent that a fee of $.02 was charged pursuant to clause 6 above during that calendar year and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Preference Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 of the Deposit Agreement and shall be collected at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

The Depositary may own and deal in any class of securities of the Company and its affiliates and in Receipts.

8.       DISCLOSURE OF INTERESTS.

To the extent that the provisions of or governing any Deposited Securities including, without limitation, the provisions of the Company’s Articles of Association as in effect from time to time and resolutions and regulations of the Company’s Board of Directors adopted in compliance with such Articles of Association or any applicable laws or regulations in the United Kingdom, the United States or any other country, may require the disclosure of beneficial or other ownership of Deposited Securities, other Shares and other securities of the Company and may provide for blocking transfer and voting or other rights to enforce such disclosure or limit such ownership, the Depositary shall use its reasonable efforts to comply, to the extent permitted by applicable law, with the Company’s reasonable written instructions in respect of any such disclosure, enforcement or limitation. Owners and Beneficial Owners shall comply with all such disclosure requirements and enforcement and ownership limitations and shall cooperate with the Depositary and the Depositary’s compliance with such Company instructions in respect thereof.

9.       TITLE TO RECEIPTS.

It is a condition of this Receipt and every successive Owner and Beneficial Owner of this Receipt by accepting or holding the same consents and agrees, that title to this Receipt when properly endorsed or accompanied by proper instruments of transfer, is

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transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York; provided, however, that the Depositary and the Company, notwithstanding any notice to the contrary, may treat the person in whose name this Receipt is registered on the books of the Depositary as the absolute owner hereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement or for all other purposes.

10.       VALIDITY OF RECEIPT.

This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the Depositary and, if a Registrar for the Receipts shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar.

11.       AVAILABLE INFORMATION; INSPECTION OF TRANSFER BOOKS.

If, at any time prior to the expiration of the Restricted Period, the Company is neither a reporting company under Section 13 or 15(d) of the Securities Exchange Act nor exempt from the reporting requirements of the Securities Exchange Act by reason of Rule 12g3-2(b) thereunder, the Company will provide, at its expense, to any Owner or Beneficial Owner or any holder of Preference Shares, and to any prospective purchaser of American Depositary Shares or Preference Shares designated by such person, upon request of such Owner, Beneficial Owner, holder or prospective purchaser, the information required by Rule 144A(d)(4)(i) and otherwise comply with Rule 144A(d)(4). If at any time the Company is neither subject to Section 13 or 15(d) of the Securities Exchange Act nor exempt pursuant to Rule 12g3-2(b) under the Securities Exchange Act (as determined by the Office of International Corporate Finance of the Commission), the Company shall immediately so notify the Depositary, and the Depositary may so notify the Owners in writing at the Company’s expense.

The Company hereby authorizes the Depositary to deliver such information as is furnished by the Company to the Depositary during any period in which the Company informs the Depositary it is subject to the information delivery requirements of Rule 144A(d)(4) to any such Owner, Beneficial Owner, holder of Preference Shares or prospective purchaser at the request of such person. The Company agrees to reimburse the Depositary for its reasonable expenses in connection with such deliveries and to provide the Depositary with such information in such quantities as the Depositary may from time to time reasonably request.

The Company currently furnishes the Securities and Exchange Commission (hereinafter called the “Commission”) with certain public reports and documents required by foreign law or otherwise under Rule 12g3-2(b) under the Securities Exchange Act of 1934. Such reports and documents will be available for

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inspection and copying by Owners and Beneficial Owners at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington, D.C. 20549.

The Depositary will make available for inspection by Owners of Receipts at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary will also send to Owners of Receipts copies of such reports when furnished by the Company pursuant to the Deposit Agreement. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

The Depositary will keep books, at its Corporate Trust Office, for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Owners of Receipts provided that such inspection shall not be for the purpose of communicating with Owners of Receipts in the interest of a business or object other than the business of the Company or a matter related to the Deposit Agreement or the Receipts.

12.       DIVIDENDS AND DISTRIBUTIONS.

Whenever the Depositary receives any cash dividend or other cash distribution on any Deposited Securities, the Depositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgment of the Depositary be converted on a reasonable basis into United States dollars transferable to the United States, and subject to the Deposit Agreement, as promptly as practicable, convert such dividend or distribution into dollars and will distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement) to the Owners of Receipts entitled thereto; provided, however, that in the event that the Company or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, the amount distributed to the Owners of the Receipts evidencing American Depositary Shares representing such Deposited Securities shall be reduced accordingly.

Subject to the provisions of Sections 4.11 and 5.09 of the Deposit Agreement, whenever the Depositary receives any distribution other than a distribution described in Section 4.01, 4.03 or 4.04 of the Deposit Agreement, the Depositary will, after Consultation with the Company, as promptly as practicable, cause the securities or property received by it to be distributed to the Owners entitled thereto, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be

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made proportionately among the Owners of Receipts entitled thereto, or if for any other reason the Depositary deems such distribution not to be feasible, the Depositary may, after Consultation with the Company, as promptly as practicable, adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement) will be distributed by the Depositary to the Owners of Receipts entitled thereto all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. The Depositary may withhold any distribution of Securities under Section 4.02 of the Deposit Agreement if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act. To the extent that such securities or property or the net proceeds thereof are not effectively distributed to Owners as provided in Section 4.02 of the Deposit Agreement, the same shall constitute Deposited Securities and each American Depositary Share shall thereafter also represent its proportionate interest in such securities, property or net proceeds.

If any distribution consists of a dividend in, or free distribution of, Preference Shares, the Depositary may, after Consultation with the Company, and shall, if the Company shall so request in writing, distribute to the Owners of outstanding Receipts entitled thereto, additional Receipts evidencing an aggregate number of American Depositary Shares representing the amount of Preference Shares received as such dividend or free distribution subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Preference Shares and the issuance of American Depositary Shares evidenced by Receipts, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement. Prior to the Effective Time, each beneficial owner of Receipts so distributed will be deemed to have acknowledged that the American Depositary Shares and the Preference Shares have not been registered under the Securities Act and to have agreed to comply with any applicable restrictions on transfer set forth on the face of those Receipts. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary will use its reasonable efforts to sell the amount of Preference Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also represent the additional Preference Shares distributed upon the Deposited Securities represented thereby.

In the event that the Depositary determines that any distribution in property (including Preference Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Preference Shares and rights to subscribe therefor) in such amounts and in

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such manner as the Depositary deems necessary and practicable to pay any such taxes or charges, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners of Receipts entitled thereto.

Services for Owners and Beneficial Owners that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, the Deposit Agreement.

13.       RIGHTS.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Preference Shares or any rights of any other nature, the Depositary, after consultation with the Company, shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary reasonably determines, after consultation with the Company, that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems reasonably appropriate.

In circumstances in which rights would otherwise not be distributed, if an Owner of Receipts requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Preference Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Preference Shares, and the Company shall cause the Preference Shares so purchased to be delivered to the

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Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Preference Shares so purchased to be deposited pursuant to Section 2.02 of the Deposit Agreement, and shall, pursuant to Section 2.03 of the Deposit Agreement, execute and deliver Receipts to such Owner. In the case of a distribution pursuant to the second paragraph of Section 4.04 of the Deposit Agreement, such Receipts shall be legended in accordance with applicable U.S. laws and shall be subject to the appropriate restrictions on sale, deposit, cancellation and transfer under such laws.

If the Depositary reasonably determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may, and at the written request of the Company, shall offer to sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of the Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any Receipt or otherwise. Those proceeds shall be distributed in accordance with Section 4.01 of the Deposit Agreement.

The Depositary will not offer rights to Owners unless the offering and sale of both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in the Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner of Receipts requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

Neither the Depositary nor the Company shall be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

14.       CONVERSION OF FOREIGN CURRENCY.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into

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Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any Receipt or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09 of the Deposit Agreement.

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.

If at any time the Depositary or the Custodian shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account. The Depositary makes no representation that the exchange rate used or obtained in any currency conversion under the Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined

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will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.03 of the Deposit Agreement. The methodology used to determine exchange rates used in currency conversions is available upon request.

15.       RECORD DATES.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Preference Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Preference Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (which shall be as near as practicable to any corresponding record date set by the Company) (a) for the determination of the Owners of Receipts who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fees or charges assessed by the Depositary pursuant to the Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Preference Shares, subject to the provisions of the Deposit Agreement.

16.       VOTING OF DEPOSITED SECURITIES.

The Company shall request the Depositary in writing to act under Section 4.07 of the Deposit Agreement in respect of each meeting of holders of Preference Shares at which holders of Preference Shares have a right to vote. Upon receipt of that request and a notice of that meeting, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in the notice of meeting provided by the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Scottish law and of the Articles of Association of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Preference Shares represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose (the “Instruction Date”), the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Preference Shares represented by the American Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Preference Shares other than in accordance with instructions received from Owners.

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In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company requests the Depositary to act under the first sentence of Section 4.07 of the Deposit Agreement, the Company shall give the Depositary notice of the meeting or solicitation not less than 40 days prior to the meeting date or date for giving proxies or consents. There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the Instruction Date to ensure that the Depositary will vote the Preference Shares or other Deposited Securities in accordance with the provisions of Section 4.07 of the Deposit Agreement.

17.       CHANGES AFFECTING DEPOSITED SECURITIES.

In circumstances where the provisions of Section 4.03 of the Deposit Agreement do not apply, upon any change in nominal value, change in par value, split-up, consolidation, or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a Custodian in exchange for or in conversion of or in respect of Deposited Securities shall be treated as new Deposited Securities under the Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Preference Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

18.       LIABILITY OF THE COMPANY AND DEPOSITARY.

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Beneficial Owner if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any other governmental or regulatory authority, or by reason of any provision, present or future, of the Articles of Association of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from or be subject to any civil or criminal penalty on account of doing or performing any act or thing which by the terms of the Deposit Agreement or Deposited Securities it is provided shall be done or performed; nor shall the Depositary or the Company or any of their respective directors, employees, agents or affiliates incur any liability to any Owner or Beneficial Owner of a Receipt (i) by reason of any non-performance or delay, caused as aforesaid, in the

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performance of any act or thing which by the terms of the Deposit Agreement it is provided shall or may be done or performed, (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement, (iii) for the inability of any Owner or Beneficial Owner to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Owners or Beneficial Owners or (iv) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02 or 4.03 of the Deposit Agreement, or an offering or distribution pursuant to Section 4.04 of the Deposit Agreement, such distribution or offering may not be made available to Owners of Receipts, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary, after Consultation with the Company, shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse. Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Owners or Beneficial Owners of Receipts, except that they agree to perform their obligations specifically set forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be subject to any liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts on behalf of any Owner, Beneficial Owner or other person. Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Preference Shares for deposit, any Owner or Beneficial Owner of a Receipt, or any other person believed by it in good faith to be competent to give such advice or information. Each of the Company and the Depositary may rely and shall be protected in relying upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties. The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith. The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with a matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises, the Depositary performed its obligations without negligence or bad faith while it acted as Depositary. No disclaimer of liability under the United States federal securities laws is intended by any provision of the Deposit Agreement.

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19.       RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR CUSTODIAN.

The Depositary may at any time resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by 90 days’ prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners of Receipts to do so, it may appoint a substitute or additional Custodian.

20.       AMENDMENT.

The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Beneficial Owners in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees and cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners of Receipts, shall, however, not become effective as to outstanding Receipts until the expiration of thirty days after notice of such amendment shall have been given to the Owners of outstanding Receipts. Every Owner and Beneficial Owner of a Receipt at the time any amendment so becomes effective shall be deemed, by continuing to hold such Receipt or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the Deposited Securities represented thereby except in order to comply with mandatory provisions of applicable law.

21.       TERMINATION OF DEPOSIT AGREEMENT.

The Depositary at any time at the direction of the Company, shall terminate the Deposit Agreement by mailing notice of termination to the Owners of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement by mailing notice of termination to the Company and the Owners of all Receipts then outstanding if at least 60 days have passed since the Depositary delivered to the Company a written notice of its election to resign and a successor depositary has not been appointed and accepted its appointment as provided in the Deposit Agreement. On and after the date of termination, the Owner of a Receipt will, upon (a) surrender of such Receipt at the Corporate Trust Office of the Depositary, (b) payment of the fee of the Depositary for the

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surrender of Receipts referred to in Section 2.05 of the Deposit Agreement, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt. If any Receipts shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges). At any time after the date of termination, the Depositary may sell the Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it thereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges) and except for its obligations to the Company, its directors, employees, agents and affiliates under Section 5.08 of the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary with respect to indemnification, charges, and expenses.

22.       SUBMISSION TO JURISDICTION.

In the Deposit Agreement, the Company has (i) appointed CT Corporation System, 28 Liberty Street, New York, New York 10005, as the Company’s authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) consented and submitted to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding.

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23.       WAIVER OF IMMUNITIES.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

24.       ISSUANCE IN SERIES.

If the Company issues Preference Shares in more than one class or series or that otherwise entitle their holders to rights that vary from the rights to which other Preference Shares entitle their holders, the following provisions shall apply, notwithstanding anything to the contrary in the Deposit Agreement:

(a)       The word “Series,” when used with respect to Preference Shares, shall mean all outstanding Preference Shares that entitle their holders to identical rights with respect to those Preference Shares, regardless of the title or any other designation that may be assigned to Preference Shares.

(b)       The Depositary shall direct the Custodian to hold Preference Shares of a Series deposited under the Deposit Agreement, and other Deposited Securities it receives in respect of those Preference Shares in a segregated account different from the account in which it holds Preference Shares of any other Series.

(c)       Preference Shares of each Series that are deposited under the Deposit Agreement shall be represented by a “Series” of American Depositary Shares separate from the American Depositary Shares representing Preference Shares of any other Series. The Depositary shall assign a designation to each Series of American Depositary Shares and shall reflect in its records the Series to which each American Depositary Share belongs. Each Series of American Depositary Shares shall be evidenced by a “Series” of Receipts separate from the Receipts evidencing American Depositary Shares of any other Series. Each Receipt shall be marked to indicate the designation of the Series of the American Depositary Shares evidenced by that Receipt and to identify the Series of Preference Shares those American Depositary Shares represent.

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(d)       If the rights to which deposited Preference Shares of a Series entitle their holders are modified such that those rights become identical to the rights to which deposited Preference Shares of another Series entitle their holders, the Depositary shall cause the Custodian to combine the accounts in which the former separate Series of Preference Shares are held, the Series of American Depositary Shares representing those Preference Shares will automatically be combined into one Series of American Depositary Shares and the Depositary may take any action necessary or convenient to effect that combination. At any time after that combination, the Owners of Receipts affected by that combination will be entitled to surrender their Receipts to the Depositary and receive Receipts reflecting the designation of the American Depositary Shares owned by them as a result of that combination.

(e)       Owners and Beneficial Owners of American Depositary Shares of a Series shall be entitled to rights under the Deposit Agreement only with respect to deposited Preference Shares of the corresponding Series and other Deposited Securities received in respect of deposited Preference Shares of that Series.

25.       REDEMPTION OF DEPOSITED SECURITIES.

If the Depositary receives a notice that Deposited Securities are to be redeemed, the Depositary shall (i) call for surrender a corresponding number of American Depositary Shares, (ii) notify the Owners of those American Depositary Shares that the Deposited Securities underlying their American Depositary Shares will be surrendered for redemption and (iii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date. Owners of American Depositary Shares affected by the redemption may surrender the Receipts evidencing those American Depositary Shares and receive delivery of money or other property the Depositary receives upon redemption of Deposited Securities as provided in Section 2.05 of the Deposit Agreement.

If the Depositary receives notice that less than all the Deposited Securities are to be redeemed, the Depositary shall determine in its discretion which American Depositary Shares to call for surrender in connection with that redemption. If the Depositary calls for surrender less than all the American Depositary Shares evidenced by a Receipt in connection with a redemption of Deposited Securities, the Depositary shall, upon surrender of that Receipt, deliver to the Owner a Receipt evidencing the amount of American Depositary Shares evidenced by the surrendered Receipt that were not called for surrender.

26.       UNCERTIFICATED AMERICAN DEPOSITARY SHARES; DIRECT REGISTRATION SYSTEM.

Notwithstanding anything to the contrary in the Deposit Agreement:

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(a)       American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to the Deposit Agreement summarizes the terms and conditions of, and will be the prospectus required under the Securities Act for, both certificated and uncertificated American Depositary Shares. Except for those provisions of the Deposit Agreement that by their nature do not apply to uncertificated American Depositary Shares, all the provisions of the Deposit Agreement shall apply, mutatis mutandis, to uncertificated American Depositary Shares as well as to certificated American Depositary Shares, and to Owners and Beneficial Owners of uncertificated American Depositary Shares as well as to Owners and Beneficial Owners of Receipts.

(b)          (i) The term “deliver”, or its noun form, when used with respect to Receipts, shall mean (A) book-entry transfer of American Depositary Shares to an account at The Depository Trust Company, or its successor (“DTC”), designated by the person entitled to such delivery, (B) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (C) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts evidencing American Depositary Shares registered in the name requested by that person.

(ii) The term “surrender”, when used with respect to Receipts, shall mean (A) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (B) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (C) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.

(c)       American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.

(d)       The Depositary shall have a duty to register a transfer in the case of uncertificated American Depositary Shares, upon receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below). The Depositary, upon surrender of a Receipt for the purpose of exchanging it for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging them for certificated American Depositary Shares, shall execute and deliver

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to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

(e)       Upon satisfaction of the conditions for replacement of a Receipt that is mutilated, lost, destroyed or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form unless otherwise requested by the Owner.

(f)       (i) The parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.

          (ii) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in clause (i) above has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 of the Deposit Agreement shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with the Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

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EX-10.6

 Exhibit 10.6

[Execution Copy]

LLOYDS BANKING GROUP plc

and

THE BANK OF NEW YORK MELLON

As Depositary

and

OWNERS AND BENEFICIAL OWNERS OF
RULE 144A AMERICAN DEPOSITARY SHARES

Amended and Restated Rule 144A Deposit Agreement

(Preference shares - series)

Dated as of February 18, 2020

AMENDED AND RESTATED RULE 144A DEPOSIT AGREEMENT

AMENDED AND RESTATED RULE 144A DEPOSIT AGREEMENT dated as of February 18, 2020 among LLOYDS BANKING GROUP plc (as successor by merger to HBOS plc), incorporated under the laws of Scotland (herein called the Company), THE BANK OF NEW YORK MELLON (formerly known as The Bank of New York), a New York banking corporation (herein called the Depositary), and all Owners and Beneficial Owners from time to time of Rule 144A American Depositary Shares issued hereunder.

W I T N E S S E T H :

WHEREAS, HBOS plc and the Depositary entered into a Rule 144A deposit agreement dated as of September 29, 2005 (the “Prior Deposit Agreement”) for the purposes stated in that agreement; and

WHEREAS, the Company assumed the Prior Deposit Agreement as successor by merger to HBOS plc; and

WHEREAS, the Company and the Depositary now wish to amend the Prior Deposit Agreement to (i) provide that Rule 144A American Depositary Shares may be uncertificated securities or may be certificated securities evidenced by Rule 144A American Depositary Receipts (ii) change the provisions relating to voting of Deposited Securities (as hereinafter defined) and (iii) to update the Prior Deposit Agreement in various other respects; and

WHEREAS, the Company desires to provide, as hereinafter set forth in this Amended and Restated Rule 144A Deposit Agreement, for the deposit of Preference Shares (as hereinafter defined) of one or more Series (as hereinafter defined) of the Company from time to time with the Depositary or with the Custodian (as hereinafter defined) as agent of the Depositary for the purposes set forth in this Amended and Restated Rule 144A Deposit Agreement, for the creation of Rule 144A American Depositary Shares of one or more corresponding series representing the Preference Shares so deposited and for the execution and delivery of Rule 144A American Depositary Receipts evidencing the Rule 144A American Depositary Shares; and

WHEREAS, the Rule 144A American Depositary Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Amended and Restated Rule 144A Deposit Agreement;

NOW, THEREFORE, in consideration of the premises, it is agreed by and among the parties hereto that the Prior Deposit Agreement is hereby amended and restated as follows:

ARTICLE 1. DEFINITIONS

The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Amended and Restated Rule 144A Deposit Agreement:

SECTION 1.01American Depositary Shares.

The term “American Depositary Shares” shall mean Rule 144A American Depositary Shares, the securities representing the interests in the Deposited Securities and evidenced by the Receipts issued hereunder. Each American Depositary Share shall represent the number of Preference Shares specified in Exhibit A to this Deposit Agreement, until there shall occur a distribution upon Deposited Securities covered by Section 4.03 or a change in Deposited Securities covered by Section 4.08 with respect to which additional Receipts are not executed and delivered, and thereafter American Depositary Shares shall represent the amount of Preference Shares or other Deposited Securities specified in such Sections.

SECTION 1.02Beneficial Owner.

The term “Beneficial Owner” shall mean each person owning from time to time any beneficial interest in the American Depositary Shares evidenced by any Receipt.

SECTION 1.03Commission.

The term “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

SECTION 1.04Company.

The term “Company” shall mean Lloyds Banking Group plc, incorporated under the laws of Scotland, and its successors.

SECTION 1.05Consultation.

The term ‘‘Consultation” shall mean the good faith attempt by the Depositary to discuss, if practicable, the relevant issue in a timely manner with a person employed by the Company reasonably believed by the Depositary to be empowered by the Company to engage in such discussion on behalf of the Company.

SECTION 1.06 Custodian.

The term “Custodian” shall mean The Bank of New York Mellon, acting through an office located in the United Kingdom, as custodian for the Depositary for the purposes of this Deposit Agreement, or any other firm or corporation which may

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hereafter be appointed by the Depositary pursuant to the terms of Section 5.05, as substitute or additional custodian hereunder, as the context shall require and shall also mean all of them collectively.

SECTION 1.07Deliver; Surrender.

(a)The term “deliver,” or its noun form, when used with respect to Shares, shall mean (i) one or more book-entry transfers to an account or accounts maintained with a depository institution authorized under applicable law to effect book-entry transfers of such securities or (ii) the physical transfer of certificates representing Shares.

(b)The term “deliver,” or its noun form, when used with respect to Receipts, shall mean (i) one or more book-entry transfers of American Depositary Shares to an account or accounts at DTC designated by the person entitled to such delivery or (ii) if book-entry settlement is no longer available for American Depository Shares in the circumstances specified in Section 2.0l(c), delivery at the Corporate Trust Office of the Depositary of one or more Receipts.

(c)The term “surrender,” when used with respect to Receipts, shall mean (i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary or (ii) surrender to the Depositary at its Corporate Trust Office of one or more Receipts.

SECTION 1.08Deposit Agreement.

The term “Deposit Agreement” shall mean this Amended and Restated Rule 144A Deposit Agreement, as the same may be further amended from time to time in accordance with the provisions of this Deposit Agreement.

SECTION 1.09Depositary; Corporate Trust Office.

The term “Depositary” shall mean The Bank of New York Mellon, a New York banking corporation, and any successor as depositary hereunder. The term “Corporate Trust Office”, when used with respect to the Depositary, shall mean the office of the Depositary which at the date of this Agreement is 240 Greenwich Street, New York, New York 10286.

SECTION 1.10Deposited Securities.

The term “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement and any and all other securities, property and cash received by the Depositary or the Custodian in respect thereof and at such time held hereunder, subject as to cash to the provisions of Section 4.05.

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SECTION 1.11 Dollars.

The term “Dollars” shall mean United States dollars.

SECTION 1.12 DTC.

The term DTC shall mean The Depository Trust Company, or its successor.

SECTION 1.13 Foreign Registrar.

The term “Foreign Registrar” shall mean the entity that presently carries out the duties of registrar for the Shares or any successor as registrar for the Shares and any other appointed agent of the Company for the transfer and registration of Shares.

SECTION 1.14Owner.

The term “Owner” shall mean the person in whose name a Receipt is registered on the books of the Depositary maintained for such purpose.

SECTION 1.15Preference Shares.

The term “Preference Shares” shall mean non-cumulative dollar preference shares of one or more Series of the Company that are validly issued and outstanding and fully paid, nonassessable and that were not issued in violation of any pre emptive or similar rights of the holders of outstanding Preference Shares or interim certificates representing such Preference Shares; provided, however, that, if there shall occur any change in par value, a split-up or consolidation or any other reclassification or, upon the occurrence of an event described in Section 4.08, an exchange or conversion in respect of the Preference Shares of the Company, the term “Preference Shares” shall thereafter also mean the successor securities resulting from such change in nominal value, split-up or consolidation or such other reclassification or such exchange or conversion.

SECTION 1.16 Receipts.

The term “Receipts” shall mean the Rule 144A American Depositary Receipts issued hereunder evidencing American Depositary Shares.

SECTION 1.17 Registrar.

The term “Registrar” shall mean any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed to register Receipts and transfers of Receipts as herein provided.

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SECTION 1.18 Securities Act.

The term “Securities Act” shall mean the United States Securities Act of 1933, as amended.

SECTION 1.19 Securities Exchange Act.

The term “Securities Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.

SECTION 1.20 Series.

The term “Series” shall have the meaning specified in Section 2.10.

ARTICLE 2. FORM OF RECEIPTS, BOOK-ENTRY SYSTEM, DEPOSIT OF PREFERENCE SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS

SECTION 2.01 Form and Transferability of Receipts.

(a)       Definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the Depositary and, if a Registrar for the Receipts shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar. The Depositary shall maintain books on which each Receipt so executed and delivered as hereinafter provided and the transfer of each such Receipt shall be registered. Receipts bearing the manual or facsimile signature of a duly authorized signatory of the Depositary who was at any time a proper signatory of the Depositary shall bind the Depositary, notwithstanding that such signatory has ceased to hold such office prior to the execution and delivery of such Receipts by the Registrar or did not hold such office on the date of issuance of such Receipts.

Each Receipt shall bear the following legend:

THE RULE 144A AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE PREFERENCE SHARES REPRESENTED THEREBY (THE “PREFERENCE SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON

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WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A; (2) IN AN OFFSHORE TRANSACTION PURSUANT TO AND IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT; OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR THE RESALE OF THESE SECURITIES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE PREFERENCE SHARES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK, OTHER THAN A RULE 144A RESTRICTED DEPOSITARY RECEIPT FACILITY, UNLESS AND UNTIL SUCH TIME AS SUCH PREFERENCE SHARES ARE NO LONGER RESTRICTED SECURITIES WITHIN THE MEANING OF RULE 144(a)(3) UNDER THE SECURITIES ACT.

In addition to the foregoing, the Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be required (i) by the Depositary after consultation with the Company or (ii) to comply with any applicable law or regulations or with the rules and regulations of any securities exchange upon which the American Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date or manner of issuance of the underlying Deposited Securities or otherwise.

Each Receipt shall bear a CUSIP number, if any, assigned to the series of American Depositary Shares that it evidences. That CUSIP number shall be different from any CUSIP number that is or may be assigned to any other depositary receipt facility relating to the Shares.

(b)       The Company and the Depositary expect that application will be made to DTC for acceptance of the American Depositary Shares of each series for its book-entry settlement system.

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So long as the American Depositary Shares of any Series are eligible for book-entry settlement with DTC, unless otherwise required by law, all the American Depositary Shares of that Series shall be represented by a global Receipt registered in the name of a nominee of DTC (initially expected to be Cede & Co.) and no Beneficial Owner of American Depositary Shares of that Series shall receive or be entitled to receive a separate Receipt evidencing those American Depositary Shares.

For so long as a global Receipt is registered in the name of a nominee of DTC, it shall bear a legend substantially in the following form:

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Depositary or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.

(c)If, at any time when American Depositary Shares of a Series are evidenced by a global Receipt, DTC ceases to make its book-entry settlement system available for the American Depositary Shares of that Series, the Company shall consult with the Depositary regarding other arrangements for book-entry settlement. Only in the event that it is impracticable without undue effort or expense to continue to make the American Depositary Shares of a Series available in book-entry form as determined by the Company and the Depositary shall the Company instruct the Depositary to make separate Receipts of that Series available to the Beneficial Owners, which availability shall be subject to such additions, deletions and modifications to the form of Receipt attached hereto as Exhibit A and this Deposit Agreement, and subject to the requirements of any other documents, statements or certifications in connection therewith, as the Company and the Depositary may, from time to time, agree.

The Receipts shall be typewritten, in the case of a global Receipt, and otherwise shall be engraved, lithographed, printed, or typewritten, or in such other form as may be agreed upon by the Company and the Depositary. A global Receipt shall state that it evidences the aggregate amount of American Depositary Shares held at the time at DTC.

(d)Title to a Receipt (and to the American Depositary Shares evidenced thereby), when properly endorsed or accompanied by proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York; provided, however, that the Depositary and the Company, notwithstanding any notice to the contrary, may treat the Owner thereof as the absolute owner thereof for the purpose of determining the person

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entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes.

SECTION 2.02 Deposit of Preference Shares.

Subject to the terms and conditions of this Deposit Agreement, Preference Shares or evidence of rights to receive Preference Shares may be deposited by delivery thereof to the Custodian hereunder, in form satisfactory to the Custodian, together with all such certifications as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, and, if the Depositary requires, together with a written order directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order, a Receipt or Receipts for the number of American Depositary Shares representing such deposit.

No Preference Shares shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in England that is then performing the function of the regulation of currency exchange. If required by the Depositary, Preference Shares presented for deposit at any time, whether or not the transfer books of the Company or the Foreign Registrar, if applicable, are closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Preference Shares or to receive other property which any person in whose name the Preference Shares are or have been recorded may thereafter receive upon or in respect of such deposited Preference Shares, or in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.

No Preference Shares shall be accepted for deposit under this Deposit Agreement unless the Depositary has received a duly executed and completed certification and agreement in substantially the form appearing as Annex I to this Deposit Agreement by or on behalf of the person acquiring beneficial ownership of any American Depositary Shares to be issued in respect of that deposit.

At the request and risk and expense of any person proposing to deposit Preference Shares, and for the account of such person, the Depositary may receive certificates for Preference Shares to be deposited, together with the other instruments herein specified, for the purpose of forwarding such Preference Share certificates to the Custodian for deposit hereunder.

Upon each delivery to a Custodian of a certificate or certificates for Preference Shares to be deposited hereunder, together with the other documents above specified, such Custodian shall, as soon as transfer and recordation can be accomplished, present such certificate or certificates to the Company or the Foreign Registrar, if applicable, for transfer and recordation of the Preference Shares being deposited in the name of the Depositary or its nominee or such Custodian or its nominee.

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Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or at such other place or places as the Depositary shall determine.

SECTION 2.03 Execution and Delivery of Receipts.

Upon receipt by any Custodian of any deposit pursuant to Section 2.02 hereunder (and in addition, if the transfer books of the Company or the Foreign Registrar, if applicable, are open, the Depositary may in its sole reasonable discretion require a proper acknowledgment or other evidence from the Company or the Foreign Registrar, as the case may be, that any Deposited Securities have been recorded upon the books of the Company or the Foreign Registrar, if applicable, in the name of the Depositary or its nominee or such Custodian or its nominee), together with the other documents required as above specified, such Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order a Receipt or Receipts are deliverable in respect thereof and the number of American Depositary Shares to be evidenced thereby. Such notification shall be made by letter or, at the request, risk and expense of the person making the deposit, by cable, telex or facsimile transmission. Upon receiving such notice from such Custodian, or upon the receipt of Preference Shares by the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall, without unreasonable delay, execute and deliver at its Corporate Trust Office, to or upon the order of the person or persons entitled thereto, a Receipt or Receipts, registered in the name or names and evidencing any authorized number of American Depositary Shares requested by such person or persons, but only upon payment to the Depositary of the fees and expenses of the Depositary for the execution and delivery of such Receipt or Receipts as provided in Section 5.09, and of all taxes and governmental charges and fees and expenses payable in connection with such deposit and the transfer of the Deposited Securities.

SECTION 2.04 Registration of Transfer of Receipts; Combination and Split-up of Receipts.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register transfers of Receipts on its transfer books from time to time, upon any surrender of a Receipt, by the Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer, and duly stamped as may be required by the laws of the State of New York and of the United States of America. Thereupon the Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person entitled thereto.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested,

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evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.

The Depositary may appoint one or more co-transfer agents for the purpose of effecting transfers, combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Owners or persons entitled to Receipts and will be entitled to protection and indemnity to the same extent as the Depositary.

SECTION 2.05 Surrender of Receipts and Withdrawal of Preference Shares.

Upon surrender at the Corporate Trust Office of the Depositary of a Receipt for the purpose of withdrawal of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, and upon payment of the fee of the Depositary for the surrender of Receipts as provided in Section 5.09 and payment of all taxes and governmental charges payable in connection with such surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of this Deposit Agreement, the articles of association of the Company and the terms of the Deposited Securities, the Owner of such Receipt shall be entitled to delivery, to him or upon his order, of the amount of Deposited Securities at the time represented by the American Depositary Shares evidenced by such Receipt. Delivery of such Deposited Securities may be made by the delivery of (a) certificates in the name of such Owner or as ordered by him or certificates properly endorsed or accompanied by proper instruments of transfer to such Owner or as ordered by him and (b) any other securities, property and cash to which such Owner is then entitled in respect of such Receipts to such Owner or as ordered by him. Such delivery shall be made, as hereinafter provided, without unreasonable delay.

Notwithstanding the foregoing, no Deposited Securities may be withdrawn upon surrender of a Receipt unless at or prior to the time of surrender the Depositary has received a duly executed and completed written certificate and agreement, in substantially the form attached as Annex II to this Deposit Agreement, by or on behalf of the person surrendering such Receipt who after such withdrawal will be the beneficial owner of such Deposited Securities.

A Receipt surrendered for such purposes may be required by the Depositary to be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Owner thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be delivered to or upon the written order of a person or persons designated in such order. Thereupon the Depositary shall, without unreasonable delay, direct the Custodian to deliver at the office of such Custodian, subject to Sections 2.06, 3.01 and 3.02 and to the other terms and conditions of this Deposit Agreement, to or

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upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, except that the Depositary may make delivery to such person or persons at the Corporate Trust Office of the Depositary of any dividends or distributions with respect to the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.

At the request, risk and expense of any Owner so surrendering a Receipt, and for the account of such Owner, the Depositary shall direct the Custodian to forward any cash or other property (other than rights) comprising, and forward a certificate or certificates and other proper documents of title for, the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt to the Depositary for delivery at the Corporate Trust Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Owner, by cable, telex or facsimile transmission.

SECTION 2.06 Limitations on Execution and Delivery, Transfer and Surrender of Receipts.

As a condition precedent to the execution and delivery, registration of transfer, split-up, combination or surrender of any Receipt or withdrawal of any Deposited Securities, the Depositary, Custodian or Registrar may require payment from the depositor of Preference Shares or the presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Preference Shares being deposited or withdrawn) and payment of any applicable fees as herein provided, may require the production of proof satisfactory to it as to the identity and genuineness of any signature, may require delivery of such certifications as the Company may from time to time specify in writing to the Depositary to assure the Company of compliance with the Securities Act and the rules and regulations thereunder and may also require compliance with any regulations the Depositary may reasonably establish consistent with the provisions of this Deposit Agreement, including, without limitation, this Section 2.06.

The delivery of Receipts against deposit of Preference Shares generally or against deposit of particular Preference Shares may be suspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement or provisions governing the Deposited Securities, or for any other reason. The Depositary shall notify the Company of any

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suspension or refusal under the preceding sentence that is other than in the ordinary course of business. The Depositary shall in no event be required to accept Preference Shares for deposit or deliver Receipts against such deposits if the Depositary believes that at the time of issuance such Receipts would not be eligible under paragraph (d)(3) of Rule 144A under the Securities Act.

SECTION 2.07Lost Receipts, etc.

In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary shall execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall execute and deliver a new Receipt in substitution for a destroyed, lost or stolen Receipt, the Owner thereof shall have (a) filed with the Depositary (i) a request for such execution and delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable requirements imposed by the Depositary.

SECTION 2.08 Cancellation and Destruction of Surrendered Receipts.

All Receipts surrendered to the Depositary shall be canceled by the Depositary. The Depositary is authorized to destroy Receipts so canceled.

SECTION 2.09 Maintenance of Records.

The Depositary agrees to maintain or cause its agents to maintain records of all American Depositary Shares surrendered and Deposited Securities withdrawn under Section 2.05, substitute Receipts delivered under Section 2.07, and of cancelled and destroyed Receipts under Section 2.08, in keeping with procedures ordinarily followed by stock transfer agents located in the United States or as required by the laws or regulations governing the Depositary. If requested writing by the Company, the Depositary will tum such records over to the Company, if the request is received before those records are destroyed in accordance with the Depositary’s or agent’s regular practices.

SECTION 2.10 Issuance in Series.

If the Company issues Preference Shares in more than one class or series or that otherwise entitle their holders to rights that vary from the rights to which other Preference Shares entitle their holders, the following provisions shall apply, notwithstanding anything to the contrary in this Deposit Agreement:

(a)The word “Series,” when used with respect to Preference Shares, shall mean all outstanding Preference Shares that entitle their holders to identical rights

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with respect to those Preference Shares, regardless of the title or any other designation that may be assigned to Preference Shares.

(b)The Depositary shall direct the Custodian to hold Preference Shares of a Series deposited under this Deposit Agreement, and other Deposited Securities it receives in respect of those Preference Shares in a segregated account different from the account in which it holds Preference Shares of any other Series.

(c)Preference Shares of each series that are deposited under this Deposit Agreement shall be represented by a “Series” of American Depositary Shares separate from the American Depositary Shares representing Preference Shares of any other Series. The Depositary shall assign a designation to each Series of American Depositary Shares and shall reflect in its records the series to which each American Depositary Share belongs. Each series of American Depositary Shares shall be evidenced by a “Series” of Receipts separate from the Receipts evidencing American Depositary Shares of any other Series. Each Receipt shall be marked to indicate the designation of the Series of the American Depositary Shares evidenced by that Receipt and to identify the Series of Preference Shares those American Depositary Shares represent.

(d)If the rights to which deposited Preference Shares of a Series entitle their holders are modified such that those rights become identical to the rights to which deposited Preference Shares of another Series entitle their holders, the Depositary shall cause the Custodian to combine the accounts in which the former separate Series of Preference Shares are held, the series of American Depositary Shares representing those Preference Shares will automatically be combined into one Series of American Depositary Shares and the Depositary may take any action necessary or convenient to effect that combination. At any time after that combination, the Owners of Receipts affected by that combination will be entitled to surrender their Receipts to the Depositary and receive Receipts reflecting the designation of the American Depositary Shares owned by them as a result of that combination.

(e)Owners and Beneficial Owners of American Depositary Shares of a Series shall be entitled to rights under this Deposit Agreement only with respect to deposited Preference Shares of the corresponding Series and other Deposited Securities received in respect of deposited Preference Shares of that Series.

SECTION 2.11Uncertificated American Depositary Shares; Direct Registration System.

Notwithstanding anything to the contrary in this Deposit Agreement:

(a)American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to this Deposit Agreement summarizes the terms and conditions of, and will be

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the prospectus required under the Securities Act for, both certificated and uncertificated American Depositary Shares. Except for those provisions of this Deposit Agreement that by their nature do not apply to uncertificated American Depositary Shares, all the provisions of this Deposit Agreement shall apply, mutatis mutandis, to uncertificated American Depositary Shares as well as to certificated American Depositary Shares, and to Owners and holders of uncertificated American Depositary Shares as well as to Owners and holders of Receipts.

(b)(i) The term “deliver”, or its noun form, when used with respect to Receipts, shall mean (A) book-entry transfer of American Depositary Shares to an account at The Depository Trust Company, or its successor (“DTC”), designated by the person entitled to such delivery, (B) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (C) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts evidencing American Depositary Shares registered in the name requested by that person.

(ii) The term “surrender”, when used with respect to Receipts, shall mean (A) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (B) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (C) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.

(c)American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.

(d)The Depositary shall have a duty to register a transfer in the case of uncertificated American Depositary Shares, upon receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below). The Depositary, upon surrender of a Receipt for the purpose of exchanging it for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging them for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

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(e)Upon satisfaction of the conditions for replacement of a Receipt that is mutilated, lost, destroyed or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form unless otherwise requested by the Owner.

(f) (i) The parties acknowledge that the Direct Registration System (‘“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.

     (ii)  In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in clause (i) above has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with this Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS ANDBENEFICIAL OWNERS OF RECEIPTS

SECTION 3.01 Filing Proofs, Certificates and Other Information.

Any person presenting Preference Shares for deposit or any Owner or Beneficial Owner may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, legal or beneficial ownership of American Depositary Shares or other securities, compliance with all applicable laws or regulations or the terms of this Deposit Agreement or the Receipts, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper or as the Company may reasonably require by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of any Receipt or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of

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any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. The Depositary shall provide to the Company, as promptly as practicable, upon its written request, copies of any such proof of citizenship or residence or other information referred to above so requested, to the extent that disclosure is permitted under applicable law.

SECTION 3.02 Liability of Owner or Beneficial Owner for Taxes.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to any Receipt or any Deposited Securities represented by any Receipt, such tax or other governmental charge shall be payable by the Owner or Beneficial Owner of such Receipt to the Depositary. The Depositary may refuse to effect any transfer of such Receipt or any withdrawal of Deposited Securities represented by American Depositary Shares evidenced by such Receipt until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner or Beneficial Owner thereof any part or all of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner or Beneficial Owner of such Receipt shall remain liable for any deficiency.

SECTION 3.03 Warranties on Deposit of Preference Shares.

Every person depositing Preference Shares under this Deposit Agreement shall be deemed thereby to represent and warrant, in addition to the matters set forth in the certificate and agreement required under Section 2.02, that such Preference Shares and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference Shares and that the person making such deposit is duly authorized so to do. Such representations and warranties shall survive the deposit of Preference Shares and delivery of Receipts.

SECTION 3.04 Disclosure of Interests.

To the extent that the provisions of or governing any Deposited Securities including, without limitation, the provisions of the Company’s Articles of Association as in effect from time to time and resolutions and regulations of the Company’s Board of Directors adopted in compliance with such Articles of Association or any applicable laws or regulations in the United Kingdom, the United States or any other country, may require the disclosure of beneficial or other ownership of Deposited Securities, other Shares and other securities of the Company and may provide for blocking transfer and voting or other rights to enforce such disclosure or limit such ownership, the Depositary shall use its reasonable efforts to comply, to the extent permitted by applicable law, with the Company’s reasonable written instructions in respect of any such disclosure, enforcement or limitation. Owners and Beneficial Owners shall comply with all such

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disclosure requirements and enforcement and ownership limitations and shall cooperate with the Depositary and the Depositary’s compliance with such Company instructions in respect thereof.

ARTICLE 4. THE DEPOSITED SECURITIES

SECTION 4.01 Cash Distributions.

Whenever the Depositary shall receive any cash dividend or other cash distribution on any Deposited Securities, the Depositary shall, as promptly as practicable, subject to the provisions of Section 4.05, convert such dividend or distribution into Dollars and shall distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09) to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively; provided, however, that in the event that the Company or the Depositary shall be required to withhold and does withhold from such cash dividend or such other cash distribution an amount on account of taxes, the amount distributed to the Owner of the Receipts evidencing American Depositary Shares representing such Deposited Securities shall be reduced accordingly. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Owner a fraction of one cent. Any such fractional amounts shall be rounded to the nearest whole cent and so distributed to Owners entitled thereto. The Company or its agent will remit to the appropriate governmental agency in the United Kingdom all amounts withheld and owing to such agency. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies.

SECTION 4.02 Distributions Other Than Cash, Shares or Rights.

Subject to the provisions of Sections 4.11 and 5.09, whenever the Depositary shall receive any distribution other than a distribution described in Section 4.01, 4.03 or 4.04, the Depositary shall, after Consultation with the Company, as promptly as practicable, cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary or any taxes or other governmental charges, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that the Company or the Depositary withhold an amount on account of truces or other governmental charges or that such securities must be registered under the Securities Act in order to be distributed to Owners or Beneficial Owners) the Depositary deems such distribution not to be feasible, the Depositary may, after consultation with the Company to the extent practicable, as promptly as practicable, adopt such method as it may

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reasonably deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09) shall be distributed by the Depositary to the Owners entitled thereto, all in the manner and subject to the conditions described in Section 4.01. The Depositary may withhold any distribution of securities under this Section 4.02 if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act. To the extent that such securities or property or the net proceeds thereof are not effectively distributed to Owners as provided in this Section 4.02, the same shall constitute Deposited Securities and each American Depositary Share shall thereafter also represent its proportionate interest in such securities, property or net proceeds.

SECTION 4.03Distributions in Preference Shares.

If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Preference Shares, the Depositary may, after Consultation with the Company, and shall, if the Company shall so request in writing, distribute to the Owners of outstanding Receipts entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, additional Receipts evidencing an aggregate number of American Depositary Shares representing the amount of Preference Shares received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Preference Shares and the issuance of American Depositary Shares evidenced by Receipts, including the withholding of any tax or other governmental charge as provided in Section 4.11 and the payment of the fees and expenses of the Depositary as provided in Section 5.09. Each beneficial owner of Receipts so distributed will be deemed to have acknowledged that the American Depositary Shares and the Preference Shares have not been registered under the Securities Act and to have agreed to comply with any applicable restrictions on transfer set forth on the face of those Receipts. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary shall use its reasonable efforts to sell the amount of Preference Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also represent the additional Preference Shares distributed upon the Deposited Securities represented thereby.

SECTION 4.04 Rights.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Preference Shares or any rights of any other nature, the Depositary. after consultation with the Company, shall have discretion as to the procedure to be followed in making such rights

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available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary reasonably determines, after consultation with the Company, that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems reasonably appropriate.

In circumstances in which rights would otherwise not be distributed, if an Owner of Receipts requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Preference Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Preference Shares, and the Company shall cause the Preference Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Preference Shares so purchased to be deposited pursuant to Section 2.02 of this Deposit Agreement, and shall, pursuant to Section 2.03 of this Deposit Agreement, execute and deliver Receipts to such Owner. In case of a distribution pursuant to the second paragraph of this Section 4.04, such Receipts shall be legended in accordance with applicable U.S. law and shall be subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under such laws.

If the Depositary reasonably determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may, and at the written request of the Company shall, offer to sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in

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Section 5.09 and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of this Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any Receipt or otherwise. Those proceeds shall be distributed in accordance with Section 4.01.

The Depositary will not offer rights to Owners unless the offering and sale of both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in this Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner of Receipts requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

Neither the Depositary nor the Company shall be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

SECTION 4.05 Conversion of Foreign Currency.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any Receipt or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09.

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.

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If at any time the Depositary or the Custodian shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under this Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account. The Depositary makes no representation that the exchange rate used or obtained in any currency conversion under this Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.03. The methodology used to determine exchange rates used in currency conversions is available upon request.

SECTION 4.06 Fixing of Record Date.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Preference Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Preference Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (which shall be as near as practicable to any corresponding record date set by the Company) (a) for the determination of the Owners who shall be (i) entitled to receive

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such dividend, distribution or rights or the net proceeds of the sale thereof or (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) who shall be responsible for any fee or charges assessed by the Depositary pursuant to this Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Preference Shares. Subject to the provisions of Sections 4.0 l through 4.05 and to the other terms and conditions of this Deposit Agreement, the Owners on such record date shall be entitled, as the case may be, to receive the amount distributable by the Depositary with respect to such dividend or other distribution or such rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively, to give voting instructions or to act in respect of any other such matter.

SECTION 4.07Voting of Deposited Securities.

The Company shall request the Depositary in writing to act under this Section 4.07 in respect of each meeting of holders of Preference Shares at which holders of Preference Shares have a right to vote. Upon receipt of that request and a notice of that meeting, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in the notice of meeting provided by the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Scottish law and of the Articles of Association of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Preference Shares represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose (the “Instruction Date”), the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Preference Shares represented by the American Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Preference Shares other than in accordance with instructions received from Owners.

In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company requests the Depositary to act under the first sentence of this Section 4.07, the Company shall give the Depositary notice of the meeting or solicitation not less than 40 days prior to the meeting date or date for giving proxies or consents. There can be no assurance that Owners generally or any Owner in particular will receive the notice provided for in this Section 4.07 sufficiently prior to the Instruction Date to ensure that the Depositary will vote the Preference Shares or other Deposited Securities in accordance with the provisions set forth in this Section 4.07.

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SECTION 4.08 Changes Affecting Deposited Securities.

In circumstances where the provisions of Section 4.03 do not apply, upon any change in nominal value, change in par value, split-up, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a Custodian in exchange for or in conversion of or in respect of Deposited Securities, shall be treated as new Deposited Securities under this Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

SECTION 4.09 Reports.

The Depositary shall make available for inspection by Owners at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary shall also send to the Owners copies of such reports when furnished by the Company pursuant to Section 5.06. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English, to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

SECTION 4.10Lists of Owners.

Promptly upon request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names Receipts are registered on the books of the Depositary.

SECTION 4.11Withholding.

In the event that the Depositary determines that any distribution in property (including Preference Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary reasonably deems necessary and practicable to pay such taxes or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of

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such taxes or charges to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.

Services for Owners and Beneficial Owners that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, this Deposit Agreement.

SECTION 4.12Redemption of Deposited Securities.

If the Depositary receives a notice that Deposited Securities are to be redeemed, the Depositary shall (i) call for surrender a corresponding number of American Depositary Shares, (ii) notify the Owners of those American Depositary Shares that the Deposited Securities underlying their American Depositary Shares will be surrendered for redemption and (iii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date. Owners of American Depositary Shares affected by the redemption may surrender the Receipts evidencing those American Depositary Shares and receive delivery of money or other property the Depositary receives upon redemption of Deposited Securities as provided in Section 2.05.

If the Depositary receives notice that less than all the Deposited Securities are to be redeemed, the Depositary shall determine in its discretion which American Depositary Shares to call for surrender in connection with that redemption. If the Depositary calls for surrender less than all the American Depositary Shares evidenced by a Receipt in connection with a redemption of Deposited Securities, the Depositary shall, upon surrender of that Receipt, deliver to the Owner a Receipt evidencing the amount of American Depositary Shares evidenced by the surrendered Receipt that were not called for surrender.

ARTICLE 5. THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY

SECTION 5.01 Maintenance of Office and Transfer Books by the Depositary.

Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain facilities for the execution and delivery, registration, registration of transfers and surrender of Receipts in accordance with the provisions of this Deposit Agreement.

The Depositary shall keep books, at its Corporate Trust Office, for the registration of Receipts and transfers of Receipts which at all reasonable times shall be

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open for inspection by the Owners, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a business or object other than the business of the Company or a matter related to this Deposit Agreement or the Receipts.

The Depositary may close the transfer books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder and shall close them upon the reasonable written request of the Company. The Depositary shall notify the Company of any closure under the preceding sentence that is outside the ordinary course of business as soon as practicable.

If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more stock exchanges in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registry of such Receipts in accordance with any requirements of such exchange or exchanges.

SECTION 5.02 Prevention or Delay in Performance by the Depositary or the Company.

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Beneficial Owner if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any provision, present or future, of the Articles of Association of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from, or be subject to any civil or criminal penalty on account of, doing or performing any act or thing which by the terms of this Deposit Agreement or Deposited Securities it is provided shall be done or performed; nor shall the Depositary or the Company or any of their respective directors, employees, agents or affiliates incur any liability to any Owner or Beneficial Owner of any Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of this Deposit Agreement it is provided shall or may be done or performed, (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement, (iii) for the inability of any Owner or Beneficial Owner to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Owners or Beneficial Owners or (iv) for any special, consequential or punitive damages for any breach of the terms of this Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02, or 4.03, or an offering or distribution pursuant to Section 4.04, or for any other reason, such distribution or offering may not be made available to Owners, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the

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net proceeds available to such Owners, then the Depositary, after Consultation with the Company, shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse.

SECTION 5.03 Obligations of the Depositary. the Custodian and the Company.

The Company assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to Owners or Beneficial Owners, except that it agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Beneficial Owner (including, without limitation, liability with respect to the validity or worth of the Deposited Securities), except that it agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts on behalf of any Owner, Beneficial Owner or other person.

Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Preference Shares for deposit, any Owner or any other person believed by it in good faith to be competent to give such advice or information. Each of the Company and the Depositary may rely and shall be protected in relying upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.

The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith.

No disclaimer of liability under the United States federal securities laws is intended by any provision of this Deposit Agreement.

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SECTION 5.04Resignation and Removal of the Depositary.

The Depositary may at any time resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

The Depositary may at any time be removed by the Company by 90 days’ prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary or (ii) the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on the written request of the Company shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Deposited Securities to such successor, and shall deliver to such successor a list of the Owners of all outstanding Receipts. Any such successor depositary shall promptly mail notice of its appointment to the Owners.

Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

SECTION 5.05The Custodians.

The Custodian shall be subject at all times and in all respects to the directions of the Depositary and shall be responsible solely to it. The Depositary shall be responsible for the compliance by the Custodian with the applicable provisions of this Deposit Agreement, but only to the extent the Depositary would be responsible if the duties of the Custodian were duties of the Depositary under this Deposit Agreement. The Custodian may resign and be discharged from its duties hereunder by notice of such resignation delivered to the Depositary at least 30 days prior to the date on which such resignation is to become effective. If, upon such resignation there would be no Custodian acting under this Deposit Agreement, the Depositary shall, with the approval of the Company, which approval shall not be unreasonably withheld or delayed, as promptly as practicable after receiving such notice, appoint a substitute custodian, which shall thereafter be a Custodian hereunder. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners to do so, it may appoint a substitute

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or additional custodian or custodians, each of which shall thereafter be a Custodian hereunder. The Depositary shall notify the Company of the appointment of a substitute or additional custodian as soon as practicable. Upon demand of the Depositary, any Custodian shall deliver such of the Deposited Securities held by it as are requested of it to any other Custodian. Each substitute or additional custodian shall deliver to the Depositary, forthwith upon its appointment, an acceptance of such appointment satisfactory in form and substance to the Depositary.

Upon the appointment of any successor depositary hereunder, the Custodian then acting hereunder shall forthwith become, without any further act or writing, the agent hereunder of such successor depositary and the appointment of such successor depositary shall in no way impair the authority of each Custodian hereunder; but the successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to that Custodian all such instruments as may be proper to give to that Custodian full and complete power and authority as agent hereunder of such successor depositary.

SECTION 5.06 Notices and Reports.

On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Preference Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action in respect of any cash or other distributions or the offering of any rights, the Company agrees to transmit to the Depositary and the Custodian a copy of the notice thereof in English but otherwise in the form given or to be given to holders of Preference Shares or other Deposited Securities.

The Company will arrange for the translation into English, if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompt transmittal by the Company to the Depositary and the Custodian of such notices and any other reports and communications which are made generally available by the Company to holders of its Preference Shares. If requested in writing by the Company, the Depositary will arrange for the mailing, at the Company’s expense, of copies of such notices, reports and communications to all Owners. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings.

The Company will deliver to the Depositary and the Custodian a copy (in English or with an English translation) of all provisions of or governing the Preference Shares and any other Deposited Securities. Promptly upon any change in such provisions, the Company shall deliver promptly to the Depositary and the Custodian a copy (in English or with an English translation) of such provisions as so changed. The Depositary and its agents may rely on the copy of such provisions as so delivered for all purposes of this Deposit Agreement.

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SECTION 5.07 Distribution of Additional Shares. Rights. etc.

If the Company or any affiliate of the Company determines to make any issuance or distribution of (I) additional Preference Shares, (2) rights to subscribe for Preference Shares, (3) securities convertible into Preference Shares, or (4) rights to subscribe for such securities (each a “Distribution”), the Company shall notify the Depositary in writing in English as promptly as practicable and in any event before the Distribution starts and, if requested in writing by the Depositary, the Company shall promptly furnish to the Depositary a written opinion from U.S. counsel for the Company that is reasonably satisfactory to the Depositary, stating whether or not the Distribution requires, or, if made in the United States, would require, registration under the Securities Act. If, in the opinion of that counsel, the Distribution requires, or, if made in the United States, would require, registration under the Securities Act, that counsel shall furnish to the Depositary a written opinion as to whether or not there is a registration statement under the Securities Act in effect that will cover that Distribution. The Company shall be under no obligation to file a registration statement with respect to any Distribution.

The Company agrees with the Depositary that neither the Company nor any company controlled by, controlling or under common control with the Company will at any time deposit any Shares, either originally issued or previously issued and reacquired by the Company or any such affiliate, unless a Registration Statement is in effect as to such Shares under the Securities Act.

SECTION 5.08 Indemnification.

The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and any Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to, the reasonable and documented fees and expenses of counsel) which may arise out of or in connection with acts performed or omitted pursuant to the provisions of this Deposit Agreement and of the Receipts, as the same may be amended, modified or supplemented from time to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by the Company or any of its directors, employees, agents and affiliates.

The Depositary agrees to indemnify the Company, its directors, employees, agents and affiliates and hold them harmless from any liability or expense which may arise out of acts performed or omitted by the Depositary or its Custodian or their respective directors, employees, agents and affiliates due to their negligence or bad faith.

The obligations set forth in this Section 5.08 shall survive the termination of this Deposit Agreement and the succession or substitution of any indemnified person.

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If a claim is asserted or an action is commenced against a person that is entitled to seek and intends to seek indemnification for that claim or action under this Section 5.08 (an “Indemnifiable Claim”), that person (an “Indemnified Person”) shall (i) promptly notify in writing the person obligated to provide that indemnification (the “Indemnifying Person”) of that assertion or commencement and (ii) consult in good faith with the Indemnifying Person as to the conduct of the defense of that Indemnifiable Claim. Neither the Indemnified Person nor the Indemnifying Person shall compromise or settle an Indemnifiable Claim without the consent in writing of the other (which consent shall not be unreasonably withheld).

SECTION 5.09 Charges of Depositary.

The Company agrees to pay the fees, reasonable expenses and out-of-pocket charges of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The following charges shall be incurred by any party depositing or withdrawing Preference Shares or by any party surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited Securities or a distribution of Receipts pursuant to Section 4.03) or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Preference Shares generally on the share register of the Company or Foreign Registrar and applicable to transfers of Preference Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and facsimile transmission expenses as are expressly provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts pursuant to Section 2.03, 4.03 or 4.04 and the surrender of Receipts pursuant to Section 2.05 or 6.02, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to this Deposit Agreement, including, but not limited to Sections 4.01 through 4.04, (7) a fee for the distribution of securities pursuant to Section 4.02, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Preference Shares) but which securities are instead distributed by the Depositary to Owners, (8) a fee of $.02 or less per American Depositary Share (or portion thereat) for depositary services, which will accrue on the last day of each calendar year and will be payable as provided in clause 9 below; provided, however, that

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no fee will be assessed under this clause 8 to the extent that a fee of $.02 was charged pursuant to clause 6 above during that calendar year and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Preference Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 and shall be collected at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

The Depositary may own and deal in any class of securities of the Company and its affiliates and in Receipts.

SECTION 5.10Retention of Depositary Documents.

The Depositary is authorized to destroy those documents, records, bills and other data compiled during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the Depositary unless the Company reasonably requests in writing that such papers be retained for a longer period and that request is received prior to that destruction.

SECTION 5.11Exclusivity.

The Company agrees not to appoint any other depositary for issuance of American or global depositary receipts so long as The Bank of New York Mellon is acting as Depositary hereunder.

SECTION 5.12Available Information.

If, at any time prior to the termination of this Deposit Agreement, the Company is neither a reporting company under Section 13 or 15(d) of the Securities Exchange Act nor exempt from the reporting requirements of the Securities Exchange Act by reason of Rule 12g3-2(b) thereunder, the Company will provide, at its expense, to any Owner or Beneficial Owner or any holder of Preference Shares, and to any prospective purchaser of American Depositary Shares or Shares designated by such person, upon request of such Owner, Beneficial Owner, holder or prospective purchaser, the information required by Rule 144A(d)(4)(i) and otherwise comply with Rule 144A(d)(4). If at any time the Company is neither subject to Section 13 or 15(d) of the Securities Exchange Act nor exempt pursuant to Rule 12g3-2(b) under the Securities Exchange Act (as determined by the Office of International Corporate Finance of the Commission), the Company shall immediately so notify the Depositary, and the Depositary may so notify the Owners in writing at the Company’s expense.

The Company hereby authorizes the Depositary to deliver such information as is furnished by the Company to the Depositary during any period in which the Company informs the Depositary it is subject to the information delivery

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requirements of Rule 144A(d)(4) to any such Owner, Beneficial Owner, holder of Preference Shares or prospective purchaser at the request of such person. The Company agrees to reimburse the Depositary for its reasonable expenses in connection with such deliveries and to provide the Depositary with such information in such quantities as the Depositary may from time to time reasonably request.

SECTION 5.13 Information for Regulatory Compliance.

Each of the Company and the Depositary shall provide to the other, as promptly as practicable, information from its records or otherwise available to it that is reasonably requested by the other to permit the other to comply with applicable law or requirements of governmental, tax or regulatory authorities.

ARTICLE 6. AMENDMENT AND TERMINATION

SECTION 6.01 Amendment.

The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Beneficial Owners in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding Receipts until the expiration of 30 days after notice of such amendment shall have been given to the Owners of outstanding Receipts. Every Owner and Beneficial Owner, at the time any amendment so becomes effective, shall be deemed, by continuing to hold such Receipt or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

SECTION 6.02Termination.

The Depositary shall, at any time at the direction of the Company, terminate this Deposit Agreement by mailing notice of termination to the Owners of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate this Deposit Agreement by mailing notice of termination to the Company and the Owners of all Receipts then outstanding if at least 60 days have passed since the Depositary delivered to the Company a written notice of its election to resign and a successor depositary has not been appointed and accepted its appointment as provided in Section 5.04. On and after the date of termination, the Owner of a Receipt will, upon (a) surrender of such Receipt at the

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Corporate Trust Office of the Depositary, (b) payment of the fee of the Depositary for the surrender of Receipts referred to in Section 2.05, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt. If any Receipts shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in this Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges). At any time after the date of termination, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges) and except for its obligations to the Company, its directors, employees, agents and affiliates under Section 5.08. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary under Sections 5.08 and 5.09.

ARTICLE 7. MISCELLANEOUS

SECTION 7.01 Counterparts.

This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any Owner or Beneficial Owner during business hours.

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SECTION 7.02 No Third Party Beneficiaries.

This Deposit Agreement is for the exclusive benefit of the parties hereto and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.

SECTION 7.03 Severability.

In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

SECTION 7.04 Owners and Beneficial Owners as Parties: Binding Effect.

The Owners and Beneficial Owners of Receipts from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance thereof or any interest therein.

SECTION 7.05 Notices.

Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to Lloyds Banking Group plc, 71 Lombard Street, London, England, or any other place to which the Company may have transferred its principal office with notice to the Depositary.

Any and all notices to be given to the Depositary shall be deemed to have been duly given if in English and personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to The Bank of New York Mellon, 240 Greenwich Street, New York, New York 10286, Attention: American Depositary Receipt Administration, or any other place to which the Depositary may have transferred its Corporate Trust Office with notice to the Company.

Any and all notices to be given to any Owner shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to such Owner at the address of such Owner as it appears on the transfer books for Receipts of the Depositary, or, if such Owner shall have filed with the Depositary a written request that notices intended for such Owner be mailed to some other address, at the address designated in such request.

Delivery of a notice sent by mail or cable, telex or facsimile transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Company

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may, however, act upon any cable, telex or facsimile transmission received by it, notwithstanding that such cable, telex or facsimile transmission shall not subsequently be confirmed by letter as aforesaid.

SECTION 7.06 Submission to Jurisdiction; Appointment of Agent for Service of Process.

The Company hereby (i) irrevocably designates and appoints CT Corporation System, 28 Liberty Street, New York, New York 10005, as the Company’s authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, (ii) consents and submits to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agrees that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company agrees to deliver, upon the execution and delivery of this Deposit Agreement, a written acceptance by such agent of its appointment as such agent. The Company further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment in full force and effect for so long as any American Depositary Shares or Receipts remain outstanding or this Agreement remains in force. In the event the Company fails to continue such designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices hereunder, and service so made shall be deemed completed ten (10) days after the same shall have been so mailed.

SECTION 7.07Governing Law.

This Deposit Agreement and the Receipts shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York.

SECTION 7.08Waiver of Immunities.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under

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or arising out of or in connection with the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

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IN WITNESS WHEREOF, LLOYDS BANKING GROUP plc and THE BANK OF NEW YORK MELLON have duly executed this Deposit Agreement as of the day and year first set forth above and all Owners and Beneficial Owners shall become parties hereto upon acceptance by them of Receipts issued in accordance with the terms hereof or any interest therein.

LLOYDS BANKING GROUP plc
By:	/s/ William Chalmers
	Name:	William Chalmers
	Title:	Chief Financial Officer

By:
	Name:
	Title:

THE BANK OF NEW YORK MELLON, as Depositary
By:	/s/ Robert W. Goad
	Name:	Robert W. Goad
	Title:	Managing Director

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Annex I

Certification and Agreement of Certain Acquirers of
Receipts Upon Deposit of Preference Shares Pursuant to
Section 2.02 of the Amended and Restated Rule 144A Deposit Agreement

We refer to the Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020 (the “Deposit Agreement”) among LLOYDS BANKING GROUP plc (the “Company”), THE BANK OF NEW YORK MELLON, as Depositary, and Owners and Beneficial Owners of Rule 144A American Depositary Receipts (the “Receipts”) issued thereunder. Capitalized terms used but not defined herein shall have the meanings given them in the Deposit Agreement.

1.       This certification and agreement is furnished in connection with the deposit of Preference Shares and issuance of Rule 144A American Depositary Shares to be evidenced by one or more Receipts pursuant to Section 2.02 of the Deposit Agreement.

2.       We acknowledge (or if we are acting for the account of another person, such person has confirmed to us that it acknowledges) that the Receipts, the Rule 144A American Depositary Shares evidenced thereby and the Shares represented thereby have not been and will not be registered under the Securities Act (the “Act”).

3.       We certify that either:

A. We are a qualified institutional buyer (as defined in Rule 144A under the Act), and at the time of issuance of the Receipt or Receipts referred to above, we (or one or more qualified institutional buyers for whose account we are acting) will be the beneficial owner of the Rule 144A American Depositary Shares evidenced thereby.

OR

B. We are a broker-dealer acting for the account of our customer; our customer has confirmed to us that it is a qualified institutional buyer and either (i) at the time of issuance of the Receipt or Receipts referred to above, it will be the beneficial owner of the Rule 144A American Depositary Shares evidenced thereby, or (ii) it is acting for the account of a qualified institutional buyer that, at the time of issuance of the Receipt or Receipts referred to above, will be the beneficial owner of the Rule 144A American Depositary Shares evidenced thereby.

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4.We agree (or if we are acting for the account of another person, such person has confirmed to us that it agrees) that we (or it) will not offer, sell, pledge or otherwise transfer the Receipts, the Rule 144A American Depositary Shares evidenced thereby or the Preference Shares represented thereby except (a) to a person whom we reasonably believe (or it and anyone acting on its behalf reasonably believes) is a qualified institutional buyer within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, (b) in accordance with Regulation S under the Act, or (c) in accordance with Rule 144 under the Act (if available), in each case in accordance with any applicable securities laws of any state of the United States.

Very truly yours,
[NAME OF CERTIFYING ENTITY]
By:
	Name:
	Title:

Dated:

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Annex II

Certification and Agreement of Persons Receiving
Deposited Securities Upon Withdrawal
Pursuant to Section 2.05 of
the Amended and Restated Rule 144A Deposit Agreement

We refer to the Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020 (the “Deposit Agreement”) among LLOYDS BANKING GROUP plc (the “Company”), THE BANK OF NEW YORK MELLON, as Depositary thereunder, and Owners and Beneficial Owners of Rule 144A American Depositary Receipts (the “Receipts”) issued thereunder. Capitalized terms used but not defined herein shall have the meanings given them in the Deposit Agreement.

l.       We are surrendering a Receipt or Receipts in accordance with the terms of the Deposit Agreement for the purpose of withdrawal of the Deposited Securities represented by the Rule 144A American Depositary Shares evidenced by such Receipt or Receipts (the “Preference Shares”) pursuant to Section 2.05 of the Deposit Agreement.

2.       We acknowledge (or if we are acting for the account of another person, such person has confirmed that it acknowledges) that the Preference Shares have not been and will not be registered under the Securities Act (the “Act”).

3.       We certify that either:

(a)       We are a qualified institutional buyer (as defined in Rule 144A under the Act) acting for our own account or for the account of one or more qualified institutional buyers, and either:

(i)       we have (or it has) sold or otherwise transferred, or agreed to sell or otherwise transfer and at or prior to the time of withdrawal will have sold or otherwise transferred, the Receipts or the Preference Shares in accordance with Regulation S under the Act and we are (or it is), or prior to such sale we were (or it was), the beneficial owner of the Receipts, or

(ii)we have (or it has) sold or otherwise transferred, or agreed to sell or otherwise transfer and at or prior to the time of withdrawal will have sold or otherwise transferred, the Receipts or the Preference Shares to another qualified institutional buyer in accordance with Rule 144A under the Act and we are (or it is), or

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prior to such sale we were (or it was), the beneficial owner of the Receipts, or

(iii)we (or it) will be the beneficial owner of the Preference Shares upon withdrawal, and, accordingly, we agree (or if we are acting for the account of one or more qualified institutional buyers, each such qualified institutional buyer has confirmed to us that it agrees) that (x) we (or it) will not offer, sell, pledge or otherwise transfer the Preference Shares except (A) to a person whom we reasonably believe (or it and anyone acting on its behalf reasonably believes) is a qualified institutional buyer within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, (B) in accordance with Regulation S under the Act, or (C) in accordance with Rule 144 under the Act (if available), in each case in accordance with any applicable securities laws of any state of the United States, and (y) we (or it) will not deposit or cause to be deposited such Preference Shares into any depositary receipt facility established or maintained by a depositary bank (including any such facility maintained by the Depositary), other than a Rule 144A restricted depositary receipt facility, so long as such Preference Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Act.

OR

(b)       We are located outside the United States (within the meaning of Regulation S under the Act); we acquired, or have agreed to acquire and at or prior to the time of the withdrawal will have acquired, the Receipts or the Preference Shares outside the United States (within the meaning of Regulation S); and we are, or upon acquisition thereof will be, the beneficial owner of the Receipts or the Preference Shares.

4.If we are a broker-dealer, we further certify that we are acting for the account of our customer and that our customer has confirmed the accuracy of the representations contained in paragraph 3 hereof that are applicable to it (including the representations with respect to beneficial ownership) and, if paragraph 3(a)(iii) is applicable to our customer, has confirmed that it will comply with the agreements set forth in paragraph 3(a)(iii).

Very truly yours,
[NAME OF CERTIFYING ENTITY]
By:
	Name:
	Title:

Dated:

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EXHIBIT A

No.
	RULE144AAMERICAN DEPOSITARY SHARES
	(Each Rule 144A American Depositary Share represents 100 deposited Preference Shares)

SOLELY FOR PURPOSES OF TRADING AND SETTLEMENT, THE RULE 144A AMERICAN DEPOSITARY SHARES MAY BE DEEMED TO HAVE A PRINCIPAL AMOUNT OF $100,000 PER RULE 144A AMERICAN DEPOSITARY SHARE.

THE RULE 144A AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE PREFERENCE SHARES REPRESENTED THEREBY (THE “PREFERENCE SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A; (2) IN AN OFFSHORE TRANSACTION PURSUANT TO AND IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT; OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR THE RESALE OF THESE SECURITIES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE PREFERENCE SHARES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK, OTHER THAN A RULE 144A RESTRICTED DEPOSITARY RECEIPT FACILITY, UNLESS AND UNTIL SUCH TIME AS SUCH PREFERENCE SHARES ARE NO LONGER RESTRICTED

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SECURITIES WITHIN THE MEANING OF RULE 144(a)(3) UNDER THE SECURITIES ACT.

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Depositary or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.

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THE BANK OF NEW YORK MELLON
RULE 144A AMERICAN DEPOSITARY RECEIPT
FOR NON-CUMULATIVE DOLLAR PREFERENCE SHARES
OF
LLOYDS BANKING GROUP plc
(INCORPORATED UNDER THE LAWS OF SCOTLAND)

The Bank of New York Mellon, as depositary (herein called the Depositary), hereby certifies that _____________________________________________________________ ,

or registered assigns IS THE OWNER OF _______________________________________

RULE 144A AMERICAN DEPOSITARY SHARES

representing deposited non-cumulative dollar preference shares (herein called Preference Shares) of Lloyds Banking Group plc, incorporated under the laws of Scotland (herein called the Company). At the date hereof, each Rule 144A American Depositary Share represents 100 Preference Shares deposited or subject to deposit under the Deposit Agreement (as such term is hereinafter defined) at The Bank of New York Mellon, acting through an office located in the United Kingdom (herein called the Custodian). The Depositary’s Corporate Trust Office and its principal executive office are located at 240 Greenwich Street, New York, N.Y. 10286.

THE DEPOSITARY’S CORPORATE TRUST OFFICE ADDRESS IS
240 GREENWICH STREET, NEW YORK, N.Y. 10286

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1.THE DEPOSIT AGREEMENT.

This Rule 144A American Depositary Receipt is one of an issue (herein called Receipts), all issued and to be issued upon the terms and conditions set forth in the Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020, as the same may be amended from time to time in accordance with its terms (the “Deposit Agreement”), by and among the Company, the Depositary, and all Owners and Beneficial Owners from time to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary Shares or any interest therein agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights of Owners and Beneficial Owners of the Receipts and the rights and duties of the Depositary in respect of the Preference Shares deposited thereunder and any and all other securities, property and cash from time to time received in respect of such Preference Shares and held thereunder (such Preference Shares, securities, property, and cash are herein called Deposited Securities). Copies of the Deposit Agreement are on file at the Depositary’s Corporate Trust Office in New York City and at the office of the Custodian.

The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.

2.       SURRENDER OF RECEIPTS AND WITHDRAWAL OF PREFERENCE SHARES.

Upon surrender at the Corporate Trust Office of the Depositary of this Receipt, and upon payment of the fee of the Depositary provided in this Receipt, and subject to the terms and conditions of the Deposit Agreement, the articles of association of the Company and the terms of the Deposited Securities, the Owner hereof is entitled to delivery, to him or upon his order, of the Deposited Securities at the time represented by the American Depositary Shares for which this Receipt is issued. Delivery of such Deposited Securities may be made by the delivery of (a) certificates in the name of the Owner hereof or as ordered by him or certificates properly endorsed or accompanied by proper instruments of transfer and (b) any other securities, property and cash to which such Owner is then entitled in respect of this Receipt. Such delivery will be made at the option of the Owner hereof, either at the office of the Custodian or at the Corporate Trust Office of the Depositary, provided that the forwarding of certificates for Shares or other Deposited Securities for such delivery at the Corporate Trust Office of the Depositary shall be at the risk and expense of the Owner hereof.

Notwithstanding the foregoing, no Deposited Securities may be withdrawn upon surrender of a Receipt unless at or prior to the time of surrender the Depositary has received a duly executed and completed written certificate and agreement, in

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substantially the form of Annex II to the Deposit Agreement, by or on behalf of the person surrendering such Receipt who after such withdrawal will be the beneficial owner of such Deposited Securities.

3.       TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

The transfer of this Receipt is registrable on the books of the Depositary at its Corporate Trust Office by the Owner hereof in person or by a duly authorized attorney, upon surrender of this Receipt properly endorsed for transfer or accompanied by proper instruments of transfer and funds sufficient to pay any applicable transfer taxes and the expenses of the Depositary and upon compliance with such regulations, if any, as the Depositary may establish for such purpose. This Receipt may be split into other such Receipts, or may be combined with other such Receipts into one Receipt, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, or surrender of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require payment from the depositor of the Preference Shares or the presentor of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Preference Shares being deposited or withdrawn) and payment of any applicable fees as provided in this Receipt, may require the production of proof satisfactory to it as to the identity and genuineness of any signature, may require delivery of such certifications as the Company may from time to time specify in writing to the Depositary to assure the Company of compliance with the Securities Act and the rules and regulations thereunder and may also require compliance with any regulations the Depositary may establish consistent with the provisions of the Deposit Agreement or this Receipt, including, without limitation, this Article 3.

The delivery of Receipts against deposit of Preference Shares generally or against deposit of particular Preference Shares may be suspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement or this Receipt or provisions governing the Deposited Securities, or for any other reason.

The Depositary shall in no event be required to accept Preference Shares for deposit or deliver Receipts against such deposit if the Depositary believes that at the time of issuance such Receipts would not be eligible under paragraph (d)(3) of Rule 144A under the Securities Act.

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4.       LIABILITY OF OWNER OR BENEFICIAL OWNER FOR TAXES.

If any tax or other governmental charge shall become payable with respect to any Receipt or any Deposited Securities represented hereby, such tax or other governmental charge shall be payable by the Owner or Beneficial Owner hereof to the Depositary. The Depositary may refuse to effect any transfer of this Receipt or any withdrawal of Deposited Securities represented by American Depositary Shares evidenced by such Receipt until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner or Beneficial Owner hereof any part or all of the Deposited Securities represented by the American Depositary Shares evidenced by this Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner or Beneficial Owner hereof shall remain liable for any deficiency.

5.       WARRANTIES ON DEPOSIT OF PREFERENCE SHARES.

Every person depositing Preference Shares under the Deposit Agreement shall be deemed thereby to represent and warrant, in addition to the matters covered by the certification and agreement required under Section 2.02 of the Deposit Agreement, that such Preference Shares and each certificate therefor, if applicable, are validly issued, fully paid, non-assessable, and were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference Shares and that the person making such deposit is duly authorized so to do. Such representations and warranties shall survive the deposit of Preference Shares and delivery of Receipts.

6.       FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Preference Shares for deposit or any Owner or Beneficial Owner of a Receipt may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, legal or beneficial ownership of American Depositary Shares or other securities, compliance with all applicable laws or regulations and the terms of the Deposit Agreement, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper or as the Company may reasonably request by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of any Receipt or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. No Preference Share shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in the United Kingdom that is then performing the function of the regulation of currency exchange.

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7.       CHARGES OF DEPOSITARY.

The Company agrees to pay the fees, reasonable expenses and ou-of-pocket charges of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The following charges shall be incurred by any party depositing or withdrawing Preference Shares or by any party surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited Securities or a distribution of Receipts pursuant to Section 4.03 of the Deposit Agreement), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Preference Shares generally on the share register of the Company or Foreign Registrar and applicable to transfers of Preference Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals under the terms of the Deposit Agreement, (3) such cable, telex and facsimile transmission expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05 of the Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts pursuant to Section 2.03, 4.03 or 4.04 of the Deposit Agreement and the surrender of Receipts pursuant to Section 2.05 or 6.02 of the Deposit Agreement, (6) a fee of $.02 or less per American Depositary Share (or portion thereat) for any cash distribution made pursuant to Sections 4.01 through 4.04 of the Deposit Agreement, (7) a fee for the distribution of securities pursuant to Section 4.02 of the Deposit Agreement, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Preference Shares), but which securities are instead distributed by the Depositary to Owners, (8) ) a fee of $.02 or less per American Depositary Share (or portion thereof) for depositary services, which will accrue on the last day of each calendar year and will be payable as provided in clause 9 below; provided, however, that no fee will be assessed under this clause 8 to the extent that a fee of $.02 was charged pursuant to clause 6 above during that calendar year and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Preference Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 of the Deposit Agreement and shall be collected at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

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The Depositary, may own and deal in any class of securities of the Company and its affiliates and in Receipts.

8.       DISCLOSURE OF INTERESTS.

To the extent that the provisions of or governing any Deposited Securities including, without limitation, the provisions of the Company’s Articles of Association as in effect from time to time and resolutions and regulations of the Company’s Board of Directors adopted in compliance with such Articles of Association or any applicable laws or regulations in the United Kingdom, the United States or any other country, may require the disclosure of beneficial or other ownership of Deposited Securities, other Shares and other securities of the Company and may provide for blocking transfer and voting or other rights to enforce such disclosure or limit such ownership. the Depositary shall use its reasonable efforts to comply. to the extent permitted by applicable law, with the Company’s reasonable written instructions in respect of any such disclosure, enforcement or limitation. Owners and holders shall comply with all such disclosure requirements and enforcement and ownership limitations and shall cooperate with the Depositary and the Depositary’s compliance with such Company instructions in respect thereof.

9.       TITLE TO RECEIPTS.

It is a condition of this Receipt and every successive Owner and Beneficial Owner of this Receipt by accepting or holding the same consents and agrees, that title to this Receipt when properly endorsed or accompanied by proper instruments of transfer, is transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York; provided, however, that the Depositary and the Company, notwithstanding any notice to the contrary, may treat the person in whose name this Receipt is registered on the books of the Depositary as the absolute owner hereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement or for all other purposes.

10.       VALIDITY OF RECEIPT.

This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the Depositary and, if a Registrar for the Receipts shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar.

11.       AVAILABLE INFORMATION; INSPECTION OF TRANSFER BOOKS.

If, at any time prior to the termination of the Deposit Agreement, the Company is neither a reporting company under Section 13 or l5(d) of the Securities

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Exchange Act nor exempt from the reporting requirements of the Securities Exchange Act by reason of Rule 12g3-2(b) thereunder, the Company will provide, at its expense, to any Owner or Beneficial Owner or any holder of Preference Shares, and to any prospective purchaser of American Depositary Shares or Preference Shares designated by such person, upon request of such Owner, Beneficial Owner, holder or prospective purchaser, the information required by Rule 144A(d)(4)(i) and otherwise comply with Rule 144A(d)(4). If at any time the Company is neither subject to Section 13 or 15(d) of the Securities Exchange Act nor exempt pursuant to Rule 12g3-2(b) under the Securities Exchange Act (as determined by the Office of International Corporate Finance of the Commission), the Company shall immediately so notify the Depositary, and the Depositary may so notify the Owners in writing at the Company’s expense.

The Company hereby authorizes the Depositary to deliver such information as is furnished by the Company to the Depositary during any period in which the Company informs the Depositary it is subject to the information delivery requirements of Rule 144A(d)(4) to any such Owner, Beneficial Owner, holder of Preference Shares or prospective purchaser at the request of such person. The Company agrees to reimburse the Depositary for its reasonable expenses in connection with such deliveries and to provide the Depositary with such information in such quantities as the Depositary may from time to time reasonably request.

The Depositary will make available for inspection by Owners of Receipts at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary will also send to Owners of Receipts copies of such reports when furnished by the Company pursuant to the Deposit Agreement. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

The Depositary will keep books, at its Corporate Trust Office, for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Owners of Receipts provided that such inspection shall not be for the purpose of communicating with Owners of Receipts in the interest of a business or object other than the business of the Company or a matter related to the Deposit Agreement or the Receipts.

12.       DIVIDENDS AND DISTRIBUTIONS.

Whenever the Depositary receives any cash dividend or other cash distribution on any Deposited Securities, the Depositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgment of the Depositary be converted on a reasonable basis into United States dollars transferable to the United

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States, and subject to the Deposit Agreement, as promptly as practicable, convert such dividend or distribution into dollars and will distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement) to the Owners of Receipts entitled thereto; provided, however, that in the event that the Company or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, the amount distributed to the Owners of the Receipts evidencing American Depositary Shares representing such Deposited Securities shall be reduced accordingly.

Subject to the provisions of Sections 4.11 and 5.09 of the Deposit Agreement, whenever the Depositary receives any distribution other than a distribution described in Section 4.01, 4.03 or 4.04 of the Deposit Agreement, the Depositary will, after Consultation with the Company, as promptly as practicable, cause the securities or property received by it to be distributed to the Owners entitled thereto, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners of Receipts entitled thereto, or if for any other reason the Depositary deems such distribution not to be feasible, the Depositary may, after Consultation with the Company, as promptly as practicable, adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement) will be distributed by the Depositary to the Owners of Receipts entitled thereto all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. The Depositary may withhold any distribution of Securities under Section 4.02 of the Deposit Agreement if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act. To the extent that such securities or property or the net proceeds thereof are not effectively distributed to Owners as provided in Section 4.02 of the Deposit Agreement, the same shall constitute Deposited Securities and each American Depositary Share shall thereafter also represent its proportionate interest in such securities, property or net proceeds.

If any distribution consists of a dividend in, or free distribution of, Preference Shares, the Depositary may, after Consultation with the Company, and shall, if the Company shall so request in writing, distribute to the Owners of outstanding Receipts entitled thereto. additional Receipts evidencing an aggregate number of American Depositary Shares representing the amount of Preference Shares received as such dividend or free distribution subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Preference Shares and the issuance of American Depositary Shares evidenced by Receipts, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Section 5.09 of the

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Deposit Agreement. Each beneficial owner of Receipts so distributed will be deemed to have acknowledged that the American Depositary Shares and the Preference Shares have not been registered under the Securities Act and to have agreed to comply with any applicable restrictions on transfer set forth on the face of those Receipts. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary will use its reasonable efforts to sell the amount of Preference Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also represent the additional Shares distributed upon the Deposited Securities represented thereby.

In the event that the Depositary determines that any distribution in property (including Preference Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Preference Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary reasonably deems necessary and practicable to pay any such taxes or charges, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners of Receipts entitled thereto.

Services for Owners and Beneficial Owners that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, the Deposit Agreement.

13.       RIGHTS.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Shares or any rights of any other nature, the Depositary, after consultation with the Company, shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary reasonably determines, after consultation with the Company, that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems reasonably appropriate.

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In circumstances in which rights would otherwise not be distributed, if an Owner of Receipts requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Preference Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Preference Shares, and the Company shall cause the Preference Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Preference Shares so purchased to be deposited pursuant to Section 2.02 of the Deposit Agreement, and shall, pursuant to Section 2.03 of the Deposit Agreement, execute and deliver Receipts to such Owner. In case of a distribution pursuant to the second paragraph of Section 4.04 of the Deposit Agreement, such Receipts shall be legended in accordance with applicable U.S. laws and shall be subject to the appropriate restrictions on sale, deposit, cancellation, and transfer under such laws.

If the Depositary reasonably determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may, and at the written request of the Company shall, offer to sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of the Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any Receipt or otherwise. Those proceeds shall be distributed in accordance with Section 4.01 of the Deposit Agreement.

The Depositary will not offer rights to Owners unless the offering and sale of both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in the Deposit

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Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner of Receipts requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

Neither the Depositary nor the Company shall be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

14.       CONVERSION OF FOREIGN CURRENCY.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any Receipt or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09 of the Deposit Agreement.

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.

If at any time the Depositary or the Custodian shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

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If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account. The Depositary makes no representation that the exchange rate used or obtained in any currency conversion under the Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.03 of the Deposit Agreement. The methodology used to determine exchange rates used in currency conversions is available upon request.

15.      RECORD DATES.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Preference Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Preference Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (which shall be as near as practicable to any corresponding record date set by the Company) (a) for the determination of the Owners of Receipts who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fees or charges assessed by the Depositary pursuant to the Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Preference Shares, subject to the provisions of the Deposit Agreement.

16.       VOTING OF DEPOSITED SECURITIES.

The Company shall request the Depositary in writing to act under Section 4.07 of the Deposit Agreement in respect of each meeting of holders of Preference Shares at which holders of Preference Shares have a right to vote. Upon receipt of that request and a notice of that meeting, the Depositary shall, as soon as practicable thereafter, mail

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to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in the notice of meeting provided by the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Scottish law and of the Articles of Association of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Preference Shares represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose (the “Instruction Date”), the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Preference Shares represented by the American Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Preference Shares other than in accordance with instructions received from Owners.

In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company requests the Depositary to act under the first sentence of Section 4.07 of the Deposit Agreement, the Company shall give the Depositary notice of the meeting or solicitation not less than 40 days prior to the meeting date or date for giving proxies or consents. There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the Instruction Date to ensure that the Depositary will vote the Preference Shares or other Deposited Securities in accordance with the provisions of Section 4.07 of the Deposit Agreement.

17.       CHANGES AFFECTING DEPOSITED SECURITIES.

In circumstances where the provisions of Section 4.03 of the Deposit Agreement do not apply, upon any change in nominal value, change in par value, split up, consolidation, or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a Custodian in exchange for or in conversion of or in respect of Deposited Securities shall be treated as new Deposited Securities under the Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

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18.       LIABILITY OF THE COMPANY AND DEPOSITARY.

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Beneficial Owner if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any other governmental or regulatory authority, or by reason of any provision, present or future, of the Articles of Association of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from or be subject to any civil or criminal penalty on account of doing or performing any act or thing which by the terms of the Deposit Agreement or Deposited Securities it is provided shall be done or performed; nor shall the Depositary or the Company or any of their respective directors, employees, agents or affiliates incur any liability to any Owner or Beneficial Owner of a Receipt (i) by reason of any non-performance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of the Deposit Agreement it is provided shall or may be done or performed, (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement, (iii) for the inability of any Owner or Beneficial Owner to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Owners or Beneficial Owners or (iv) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02 or 4.03 of the Deposit Agreement, or an offering or distribution pursuant to Section 4.04 of the Deposit Agreement, such distribution or offering may not be made available to Owners of Receipts, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary, after Consultation with the Company, shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse. Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Owners or Beneficial Owners of Receipts, except that they agree to perform their obligations specifically set forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be subject to any liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts on behalf of any Owner, Beneficial Owner or other person. Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Owner or Beneficial Owner of a Receipt, or any other person believed by it in good faith to be competent to give such advice or information. Each of the Company and the Depositary may rely and shall be protected in relying upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been

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signed or presented by the proper party or parties. The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith. The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with a matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises, the Depositary performed its obligations without negligence or bad faith while it acted as Depositary. No disclaimer of liability under the United States federal securities laws is intended by any provision of the Deposit Agreement.

19.      RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR CUSTODIAN.

The Depositary may at any time resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by 90 days’ prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners of Receipts to do so, it may appoint a substitute or additional Custodian.

20.       AMENDMENT.

The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Beneficial Owners in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than truces and other governmental charges, registration fees and cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners of Receipts, shall, however, not become effective as to outstanding Receipts until the expiration of thirty days after notice of such amendment shall have been given to the Owners of outstanding Receipts. Every Owner and Beneficial Owner of a Receipt at the time any amendment so becomes effective shall be deemed, by continuing to hold such Receipt or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the Deposited Securities represented thereby except in order to comply with mandatory provisions of applicable law.

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21.       TERMINATION OF DEPOSIT AGREEMENT.

The Depositary at any time at the direction of the Company, shall terminate the Deposit Agreement by mailing notice of termination to the Owners of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement by mailing notice of termination to the Company and the Owners of all Receipts then outstanding if at least 60 days have passed since the Depositary delivered to the Company a written notice of its election to resign and a successor depositary has not been appointed and accepted its appointment as provided in the Deposit Agreement. On and after the date of termination, the Owner of a Receipt will, upon (a) surrender of such Receipt at the Corporate Trust Office of the Depositary, (b) payment of the fee of the Depositary for the surrender of Receipts referred to in Section 2.05 of the Deposit Agreement, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt. If any Receipts shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of the Deposit Agreement, and any applicable truces or governmental charges). At any time after the date of termination, the Depositary may sell the Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it thereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges) and except for its obligations to the Company, its directors, employees, agents and affiliates under Section 5.08 of the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary with respect to indemnification, charges, and expenses.

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22.       SUBMISSION TO JURISDICTION.

In the Deposit Agreement, the Company has (i) appointed CT Corporation System, 28 Liberty Street, New York, New York 10005, as the Company’s authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) consented and submitted to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding.

23.       WAIVER OF IMMUNITIES.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

24.       ISSUANCE IN SERIES.

If the Company issues Preference Shares in more than one class or series or that otherwise entitle their holders to rights that vary from the rights to which other Preference Shares entitle their holders, the following provisions shall apply, notwithstanding anything to the contrary in the Deposit Agreement:

(a)The word “Series,” when used with respect to Preference Shares, shall mean all outstanding Preference Shares that entitle their holders to identical rights with respect to those Preference Shares, regardless of the title or any other designation that may be assigned to Preference Shares.

(b)The Depositary shall direct the Custodian to hold Preference Shares of a Series deposited under the Deposit Agreement, and other Deposited Securities it receives in respect of those Preference Shares in a segregated account different from the account in which it holds Preference Shares of any other Series.

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(c)Preference Shares of each Series that are deposited under the Deposit Agreement shall be represented by a “Series” of American Depositary Shares separate from the American Depositary Shares representing Preference Shares of any other Series. The Depositary shall assign a designation to each Series of American Depositary Shares and shall reflect in its records the Series to which each American Depositary Share belongs. Each Series of American Depositary Shares shall be evidenced by a “Series” of Receipts separate from the Receipts evidencing American Depositary Shares of any other Series. Each Receipt shall be marked to indicate the designation of the Series of the American Depositary Shares evidenced by that Receipt and to identify the Series of Preference Shares those American Depositary Shares represent.

(d)If the rights to which deposited Preference Shares of a Series entitle their holders are modified such that those rights become identical to the rights to which deposited Preference Shares of another Series entitle their holders, the Depositary shall cause the Custodian to combine the accounts in which the former separate Series of Preference Shares are held, the Series of American Depositary Shares representing those Preference Shares will automatically be combined into one Series of American Depositary Shares and the Depositary may take any action necessary or convenient to effect that combination. At any time after that combination, the Owners of Receipts affected by that combination will be entitled to surrender their Receipts to the Depositary and receive Receipts reflecting the designation of the American Depositary Shares owned by them as a result of that combination.

(e)Owners and Beneficial Owners of American Depositary Shares of a Series shall be entitled to rights under the Deposit Agreement only with respect to deposited Preference Shares of the corresponding Series and other Deposited Securities received in respect of deposited Preference Shares of that Series.

25.       REDEMPTION OF DEPOSITED SECURITIES.

If the Depositary receives a notice that Deposited Securities are to be redeemed, the Depositary shall (i) call for surrender a corresponding number of American Depositary Shares, (ii) notify the Owners of those American Depositary Shares that the Deposited Securities underlying their American Depositary Shares will be surrendered for redemption and (iii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date. Owners of American Depositary Shares affected by the redemption may surrender the Receipts evidencing those American Depositary Shares and receive delivery of money or other property the Depositary receives upon redemption of Deposited Securities as provided in Section 2.05 of the Deposit Agreement.

If the Depositary receives notice that less than all the Deposited Securities are to be redeemed, the Depositary shall determine in its discretion which American Depositary Shares to call for surrender in connection with that redemption. If the Depositary calls for surrender less than all the American Depositary Shares evidenced by a Receipt in

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connection with a redemption of Deposited Securities, the Depositary shall, upon surrender of that Receipt, deliver to the Owner a Receipt evidencing the amount of American Depositary Shares evidenced by the surrendered Receipt that were not called for surrender.

26.       UNCERTIFICATED AMERICAN DEPOSITARY SHARES; DIRECT REGISTRATION SYSTEM.

Notwithstanding anything to the contrary in the Deposit Agreement:

(a)       American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to the Deposit Agreement summarizes the terms and conditions of, and will be the prospectus required under the Securities Act for, both certificated and uncertificated American Depositary Shares. Except for those provisions of the Deposit Agreement that by their nature do not apply to uncertificated American Depositary Shares, all the provisions of the Deposit Agreement shall apply, mutatis mutandis, to uncertificated American Depositary Shares as well as to certificated American Depositary Shares, and to Owners and Beneficial Owners of uncertificated American Depositary Shares as well as to Owners and Beneficial Owners of Receipts.

(b) (i) The term “deliver”, or its noun form, when used with respect to Receipts, shall mean (A) book-entry transfer of American Depositary Shares to an account at The Depository Trust Company, or its successor (“DTC”), designated by the person entitled to such delivery, (B) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (C) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts evidencing American Depositary Shares registered in the name requested by that person.

     (ii)  The term “surrender”, when used with respect to Receipts, shall mean (A) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (B) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (C) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.

(c)       American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.

(d)       The Depositary shall have a duty to register a transfer in the case of uncertificated American Depositary Shares, upon receipt from the Owner of a proper

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instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below). The Depositary, upon surrender of a Receipt for the purpose of exchanging it for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging them for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

(e)       Upon satisfaction of the conditions for replacement of a Receipt that is mutilated, lost, destroyed or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form unless otherwise requested by the Owner.

(f) (i) The parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary ofprior authorization from the Owner to register such transfer.

     (ii) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in clause (i) above has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 of the Deposit Agreement shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with the Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

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EX-10.7

Exhibit 10.7

[Execution Copy]

LLOYDS BANKING GROUP plc

and

THE BANK OF NEW YORK MELLON

As Depositary

and

OWNERS AND BENEFICIAL OWNERS OF

REGULATION S AMERICAN DEPOSITARY SHARES

Amended and Restated Regulation S Deposit Agreement

(Preference shares - series)

Dated as of February 18, 2020

AMENDED AND RESTATED REGULATION S DEPOSIT AGREEMENT

AMENDED AND RESTATED REGULATION S DEPOSIT AGREEMENT dated as of February 18, 2020 among LLOYDS BANKING GROUP plc, incorporated under the laws of Scotland (herein called the Company), THE BANK OF NEW YORK MELLON (formerly known as The Bank of New York), a New York banking corporation (herein called the Depositary), and all Owners and Beneficial Owners from time to time of Regulation S American Depositary Receipts issued hereunder.

W I T N E S S E T H :

WHEREAS, HBOS plc and the Depositary entered into a Regulation S deposit agreement dated as of September 29, 2005 (the “Prior Deposit Agreement”) for the purposes stated in that agreement; and

WHEREAS, the Company assumed the Prior Deposit Agreement as successor by merger to HBOS plc; and

WHEREAS, the Company and the Depositary now wish to amend the Prior Deposit Agreement to (i) provide that Regulation S American Depositary Shares may be uncertificated securities or may be certificated securities evidenced by Regulation S American Depositary Receipts (ii) change the provisions relating to voting of Deposited Securities (as hereinafter defined) and (iii) to update the Prior Deposit Agreement in various other respects; and

WHEREAS, the Company desires to provide, as hereinafter set forth in this Amended and Restated Regulation S Deposit Agreement, for the deposit of Preference Shares (as hereinafter defined) of one or more Series (as hereinafter defined) of the Company from time to time with the Depositary or with the Custodian (as hereinafter defined) as agent of the Depositary for the purposes set forth in this Amended and Restated Regulation S Deposit Agreement, for the creation of Regulation S American Depositary Shares of one or more corresponding series representing the Preference Shares so deposited and for the execution and delivery of Regulation S American Depositary Receipts evidencing the Regulation S American Depositary Shares; and

WHEREAS, the Regulation S American Depositary Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Amended and Restated Regulation S Deposit Agreement;

NOW, THEREFORE, in consideration of the premises, it is agreed by and among the parties hereto that the Prior Deposit Agreement is hereby amended and restated as follows:

ARTICLE 1. DEFINITIONS

The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective terms used in this Amended and Restated Regulation S Deposit Agreement:

SECTION 1.01 American Depositary Shares.

The term “American Depositary Shares” shall mean Regulation S American Depositary Shares, the securities representing the interests in the Deposited Securities and evidenced by the Receipts issued hereunder. Each American Depositary Share shall represent the number of Preference Shares specified in Exhibit A to this Deposit Agreement, until there shall occur a distribution upon Deposited Securities covered by Section 4.03 or a change in Deposited Securities covered by Section 4.08 with respect to which additional Receipts are not executed and delivered, and thereafter American Depositary Shares shall represent the amount of Preference Shares or other Deposited Securities specified in such Sections.

SECTION 1.02 Beneficial Owner.

The term “Beneficial Owner” shall mean each person owning from time to time any beneficial interest in the American Depositary Shares evidenced by any Receipt.

SECTION 1.03 Commission.

The term “Commission” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

SECTION 1.04 Company.

The term “Company” shall mean Lloyds Banking Group plc, incorporated in Scotland under the Companies Act 1985, and its successors.

SECTION 1.05 Consultation.

The term “Consultation” shall mean the good faith attempt by the Depositary to discuss, if practicable, the relevant issue in a timely manner with a person employed by the Company reasonably believed by the Depositary to be empowered by the Company to engage in such discussion on behalf of the Company.

SECTION 1.06 Custodian.

The term “Custodian” shall mean The Bank of New York Mellon, acting through an office located in the United Kingdom, as custodian for the Depositary for the purposes of this Deposit Agreement, or any other firm or corporation which may

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hereafter be appointed by the Depositary pursuant to the terms of Section 5.05, as substitute or additional custodian hereunder, as the context shall require and shall also mean all of them collectively.

SECTION 1.07 Deliver; Surrender.

(a)       The term “deliver,” or its noun form, when used with respect to Shares, shall mean (i) one or more book-entry transfers to an account or accounts maintained with a depository institution authorized under applicable law to effect book-entry transfers of such securities or (ii) the physical transfer of certificates representing Shares.

(b)       The term “deliver,” or its noun form, when used with respect to Receipts, shall mean (i) one or more book-entry transfers of American Depositary Shares to an account or accounts at DTC designated by the person entitled to such delivery or (ii) if book-entry settlement is no longer available for American Depository Shares in the circumstances specified in Section 2.01(c), delivery at the Corporate Trust Office of the Depositary of one or more Receipts.

(c)       The term “surrender,” when used with respect to Receipts, shall mean (i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary or (ii) surrender to the Depositary at its Corporate Trust Office of one or more Receipts.

SECTION 1.08 Deposit Agreement.

The term “Deposit Agreement” shall mean this Regulation S Deposit Agreement, as the same may be amended from time to time in accordance with the provisions of this Deposit Agreement.

SECTION 1.09 Depositary: Corporate Trust Office.

The term “Depositary” shall mean The Bank of New York Mellon, a New York banking corporation, and any successor as depositary hereunder. The term “Corporate Trust Office”, when used with respect to the Depositary, shall mean the office of the Depositary which at the date of this Agreement is 240 Greenwich Street, New York, New York 10286.

SECTION 1.10 Deposited Securities.

The term “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement and any and all other securities, property and cash received by the Depositary or the Custodian in respect thereof and at such time held hereunder, subject as to cash to the provisions of Section 4.05.

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SECTION 1.11 Dollars.

The term “Dollars” shall mean United States dollars.

SECTION 1.12 DTC.

The term DTC shall mean The Depository Trust Company, or its successor.

SECTION 1.13 Effective Time.

The term “Effective Time” shall have the meaning set forth in Section 2.02.

SECTION 1.14 Foreign Registrar.

The term “Foreign Registrar” shall mean the entity that presently carries out the duties of registrar for the Shares or any successor as registrar for the Shares and any other appointed agent of the Company for the transfer and registration of Shares.

SECTION 1.15 Owner.

The term “Owner” shall mean the person in whose name a Receipt is registered on the books of the Depositary maintained for such purpose.

SECTION 1.16 Preference Shares.

The term “Preference Shares” shall mean non-cumulative dollar preference shares of one or more Series of the Company that are validly issued and outstanding and fully paid, nonassessable and that were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference or interim certificates representing such Preference Shares; provided, however, that, if there shall occur any change in par value, a split-up or consolidation or any other reclassification or, upon the occurrence of an event described in Section 4.08, an exchange or conversion in respect of the Preference Shares of the Company, the term “Preference Shares” shall thereafter also mean the successor securities resulting from such change in nominal value, split-up or consolidation or such other reclassification or such exchange or conversion.

SECTION 1.17 Receipts.

The term “Receipts” shall mean the Regulation S American Depositary Receipts issued hereunder evidencing American Depositary Shares.

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SECTION 1.18 Registrar.

The term “Registrar” shall mean any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed to register Receipts and transfers of Receipts as herein provided.

SECTION 1.19 Regulation S.

The term “Regulation S” shall mean Rules 901 through 905, inclusive, under the Securities Act, as such Rules may from time to time be amended.

SECTION 1.20 Restricted Period.

The term “Restricted Period” shall mean the 40-day period after the later of the commencement of the offering of American Depositary Shares and Shares and the related closing.

SECTION 1.21 Restricted Securities.

The term “Restricted Securities” shall mean Shares, or Receipts representing Shares, that are acquired directly or indirectly from the Company or any affiliate (as defined in Rule 144 under the Securities Act) of the Company in a transaction or chain of transactions not involving any public offering, or that are held by an officer, director (or person performing similar functions) or other affiliate of the Company, or that would require registration under the Securities Act in connection with the public offer and sale thereof in the United States, or that are subject to other restrictions on sale or deposit under the laws of the United States or Scotland, or under a shareholder agreement or the articles of incorporation of the Company.

SECTION 1.22 Rule 144A.

The term “Rule 144A” shall mean Rule 144A under the Securities Act.

SECTION 1.23 Rule 144A Deposit Agreement.

The term “Rule 144A Deposit Agreement” shall mean the Amended and Restated Rule 144A Deposit Agreement dated as of February 18, 2020 among the Company, the Depositary and the owners and beneficial owners of Rule 144A American Depositary Receipts issued thereunder, as the same may be amended from time to time.

SECTION 1.24 Rule 144A ADSs; Rule 144A; ADRs.

The term “Rule 144A GDSs” shall mean the Rule 144A American Depositary Shares issued pursuant to the Rule 144A Deposit Agreement. The term “Rule 144A ADRs” shall mean the Rule 144A American Depositary Receipts evidencing the Rule 144A ADSs.

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SECTION 1.25 Securities Act.

The term “Securities Act” shall mean the United States Securities Act of 1933, as amended.

SECTION 1.26 Securities Exchange Act.

The term “Securities Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.

ARTICLE 2. FORM OF RECEIPTS, BOOK-ENTRY SYSTEM, DEPOSIT OF PREFERENCE SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS

SECTION 2.01 Form and Transferability of Receipts.

(a)       Definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the Depositary and, if a Registrar for the Receipts shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar. The Depositary shall maintain books on which each Receipt so executed and delivered as hereinafter provided and the transfer of each such Receipt shall be registered. Receipts bearing the manual or facsimile signature of a duly authorized signatory of the Depositary who was at any time a proper signatory of the Depositary shall bind the Depositary, notwithstanding that such signatory has ceased to hold such office prior to the execution and delivery of such Receipts by the Registrar or did not hold such office on the date of issuance of such Receipts.

Each Receipt shall bear the following legend:

THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE PREFERENCE SHARES REPRESENTED THEREBY (THE “PREFERENCE SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD (DEFINED AS 40 DAYS AFTER THE LATER OF (I) THE COMMENCEMENT OF THE OFFERING OF REGULATION S AMERICAN DEPOSITARY SHARES AND PREFERENCE SHARES AND (II) THE RELATED CLOSING) EXCEPT (1) IN AN

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OFFSHORE TRANSACTION PURSUANT TO AND IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATIONS UNDER THE SECURITIES ACT OR (2) TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS; PROVIDED, THAT IN CONNECTION WITH ANY TRANSFER UNDER (2) ABOVE, THE TRANSFEROR SHALL, PRIOR TO THE SETTLEMENT OF SUCH SALE, WITHDRAW THE PREFERENCE SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AMENDED AND RESTATED REGULATION S DEPOSIT AGREEMENT AND INSTRUCT THAT SUCH PREFERENCE SHARES BE DELIVERED TO THE CUSTODIAN UNDER THE RULE 144A DEPOSIT AGREEMENT FOR ISSUANCE IN ACCORDANCE WITH THE TERMS AND CONDITIONS THEREOF, OF RULE 144A AMERICAN DEPOSITARY SHARES TO OR FOR THE ACCOUNT OF SUCH QUALIFIED INSTITUTIONAL BUYER.

UPON THE EXPIRATION OF THE RESTRICTED PERIOD, THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED IN THIS LEGEND IF, AT THE TIME OF SUCH EXPIRATION, THE OFFER AND SALE OF THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY BY THE HOLDER THEREOF IN THE UNITED STATES WOULD NOT BE RESTRICTED UNDER THE SECURITIES LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES.

In addition to the foregoing, the Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be required (i) by the Depositary after consultation with the Company or (ii) to comply with any applicable law or regulations or with the rules and regulations of any securities exchange upon which the American Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the date or manner of issuance of the underlying Deposited Securities or otherwise.

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Each Receipt shall bear a CUSIP number, if any, assigned to the series of American Depositary Shares that it evidences. That CUSIP number shall be different from any CUSIP number that is or may be assigned to any other depositary receipt facility relating to the Shares.

(b)       The Company and the Depositary expect that application will be made to DTC for acceptance of the American Depositary Shares of each series for its book-entry settlement system.

So long as the American Depositary Shares of any Series are eligible for book-entry settlement with DTC, unless otherwise required by law, all the American Depositary Shares of that Series shall be represented by a global Receipt registered in the name of a nominee of DTC (initially expected to be Cede & Co.) and no Beneficial Owner of American Depositary Shares of that Series shall receive or be entitled to receive a separate Receipt evidencing those American Depositary Shares.

For so long as a global Receipt is registered in the name of a nominee of DTC, it shall bear a legend substantially in the following form:

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Depositary or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.

In addition, the Company and the Depositary expect that applications will be made to each of Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) for acceptance of the American Depositary Shares of each Series for its book-entry settlement system.

(c)       If, at any time when American Depositary Shares of a Series are evidenced by a global Receipt, DTC (or, during the Restricted Period, Euroclear or Clearstream, Luxemburg) ceases to make its book-entry settlement system available for the American Depositary Shares of that Series, the Company shall consult with the Depositary regarding other arrangements for book-entry settlement. Only in the event that it is impracticable without undue effort or expense to continue to make the American Depositary Shares of that Series available in book-entry form as determined by the Company and the Depositary shall the Company instruct the Depositary to make separate Receipts of that Series available to the Beneficial Owners, which availability shall be subject to such additions, deletions and modifications to the form of Receipt attached hereto as Exhibit A and this Deposit Agreement, and subject to the requirements of any

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other documents, statements or certifications in connection therewith, as the Company and the Depositary may, from time to time, agree.

The Receipts shall be typewritten, in the case of a global Receipt, and otherwise shall be engraved, lithographed, printed, or typewritten, or in such other form as may be agreed upon by the Company and the Depositary. A global Receipt shall state that it evidences the aggregate amount of American Depositary Shares held at the time at DTC.

(d)       Title to a Receipt (and to the American Depositary Shares evidenced thereby), when properly endorsed or accompanied by proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York; provided, however, that the Depositary and the Company, notwithstanding any notice to the contrary, may treat the Owner thereof as the absolute owner thereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes.

SECTION 2.02 Deposit of Preference Shares.

Subject to the terms and conditions of this Deposit Agreement, Preference Shares or evidence of rights to receive Preference Shares may be deposited by delivery thereof to the Custodian hereunder, accompanied by any appropriate instrument or instruments of transfer, or endorsement, in form satisfactory to the Custodian, together with all such certifications as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, and, if the Depositary requires, together with a written order directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order, a Receipt or Receipts for the number of American Depositary Shares representing such deposit.

No Preference Shares shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in England that is then performing the function of the regulation of currency exchange. If required by the Depositary, Preference Shares presented for deposit at any time, whether or not the transfer books of the Company or the Foreign Registrar, if applicable, are closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, which will provide for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Preference Shares or to receive other property which any person in whose name the Preference Shares are or have been recorded may thereafter receive upon or in respect of such deposited Preference Shares, or in lieu thereof, such agreement of indemnity or other agreement as shall be satisfactory to the Depositary.

Prior to the effectiveness of a registration statement under the Securities Act relating to the American Depositary Shares (the “Effective Time”), no Preference

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Shares shall be accepted for deposit under this Deposit Agreement unless the Depositary has received a duly executed and completed certification and agreement in substantially the form appearing as Annex I to this Deposit Agreement by or on behalf of the person acquiring beneficial ownership of any American Depositary Shares to be issued in respect of that deposit.

At the request and risk and expense of any person proposing to deposit Preference Shares, and for the account of such person, the Depositary may receive certificates for Preference Shares to be deposited, together with the other instruments herein specified, for the purpose of forwarding such Preference Share certificates to the Custodian for deposit hereunder.

Upon each delivery to a Custodian of a certificate or certificates for Preference Shares to be deposited hereunder, together with the other documents above specified, such Custodian shall, as soon as transfer and recordation can be accomplished, present such certificate or certificates to the Company or the Foreign Registrar, if applicable, for transfer and recordation of the Preference Shares being deposited in the name of the Depositary or its nominee or such Custodian or its nominee.

Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or at such other place or places as the Depositary shall determine.

SECTION 2.03 Execution and Delivery of Receipts.

Upon receipt by any Custodian of any deposit pursuant to Section 2.02 hereunder (and in addition, if the transfer books of the Company or the Foreign Registrar, if applicable, are open, the Depositary may in its sole reasonable discretion require a proper acknowledgment or other evidence from the Company or the Foreign Registrar, as the case may be, that any Deposited Securities have been recorded upon the books of the Company or the Foreign Registrar, if applicable, in the name of the Depositary or its nominee or such Custodian or its nominee), together with the other documents required as above specified, such Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order a Receipt or Receipts are deliverable in respect thereof and the number of American Depositary Shares to be evidenced thereby. Such notification shall be made by letter or, at the request, risk and expense of the person making the deposit, by cable, telex or facsimile transmission. Upon receiving such notice from such Custodian, or upon the receipt of Preference Shares by the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall, without unreasonable delay, execute and deliver at its Corporate Trust Office, to or upon the order of the person or persons entitled thereto, a Receipt or Receipts, registered in the name or names and evidencing any authorized number of American Depositary Shares requested by such person or persons, but only upon payment to the Depositary of the fees and expenses of the Depositary for the execution and delivery of such Receipt or Receipts as provided in Section 5.09, and of all

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taxes and governmental charges and fees and expenses payable in connection with such deposit and the transfer of the Deposited Securities.

SECTION 2.04 Registration of Transfer of Receipts; Combination and Split-up of Receipts.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register transfers of Receipts on its transfer books from time to time, upon any surrender of a Receipt, by the Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer, and duly stamped as may be required by the laws of the State of New York and of the United States of America. Thereupon the Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person entitled thereto.

The Depositary, subject to the terms and conditions of this Deposit Agreement, shall upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.

The Depositary may appoint one or more co-transfer agents for the purpose of effecting transfers, combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Owners or persons entitled to Receipts and will be entitled to protection and indemnity to the same extent as the Depositary.

SECTION 2.05 Surrender of Receipts and Withdrawal of Preference Shares.

Upon surrender at the Corporate Trust Office of the Depositary of a Receipt for the purpose of withdrawal of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, and upon payment of the fee of the Depositary for the surrender of Receipts as provided in Section 5.09 and payment of all taxes and governmental charges payable in connection with such surrender and withdrawal of the Deposited Securities, and subject to the terms and conditions of this Deposit Agreement, the articles of association of the Company and the terms of the Deposited Securities, the Owner of such Receipt shall be entitled to delivery, to him or upon his order, of the amount of Deposited Securities at the time represented by the American Depositary Shares evidenced by such Receipt. Delivery of such Deposited Securities may be made by the delivery of (a) certificates in the name of such Owner or as ordered by him or certificates properly endorsed or accompanied by proper instruments of transfer to such Owner or as ordered by him and (b) any other securities, property and cash to which such Owner is then entitled in respect of such Receipts to such

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Owner or as ordered by him. Such delivery shall be made, as hereinafter provided, without unreasonable delay.

Notwithstanding the foregoing, during the Restricted Period, no Deposited Securities may be withdrawn upon surrender of a Receipt unless at or prior to the time of surrender the Depositary has received a duly executed and completed written certificate and agreement, in substantially the form attached as Annex II to this Deposit Agreement, by or on behalf of the person surrendering such Receipt who after such withdrawal will be the beneficial owner of such Deposited Securities.

A Receipt surrendered for such purposes may be required by the Depositary to be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Owner thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be delivered to or upon the written order of a person or persons designated in such order. Thereupon the Depositary shall, without unreasonable delay, direct the Custodian to deliver at the office of such Custodian, subject to Sections 2.06, 3.01 and 3.02 and to the other terms and conditions of this Deposit Agreement, to or upon the written order of the person or persons designated in the order delivered to the Depositary as above provided, the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, except that the Depositary may make delivery to such person or persons at the Corporate Trust Office of the Depositary of any dividends or distributions with respect to the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.

At the request, risk and expense of any Owner so surrendering a Receipt, and for the account of such Owner, the Depositary shall direct the Custodian to forward any cash or other property (other than rights) comprising, and forward a certificate or certificates and other proper documents of title for, the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt to the Depositary for delivery at the Corporate Trust Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Owner, by cable, telex or facsimile transmission.

Prior to the expiration of the Restricted Period, no Owner may transfer American Depositary Shares or Preference Shares represented thereby to, or for the account of, a qualified institutional buyer as defined in Rule 144A (“QIB”) unless such Owner (i) withdraws such Preference Shares in accordance with this Section 2.05 and (ii) instructs the Depositary to deliver the Preference Shares so withdrawn to the account of the custodian under the Rule 144A Deposit Agreement for issuance thereunder of Rule 144A GDSs to or for the account of such QIB. Issuance of such Rule 144A GDSs shall be subject to the terms and conditions of the Rule 144A Deposit Agreement including with respect to the deposit of Preference Shares and the issuance of Rule 144A GDSs,

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including delivery of the duly executed and completed written certificate and agreement required under Section 2.02 of the Rule 144A Deposit Agreement, by or on behalf of the person who will be the beneficial owner of such Rule 144A GDRs, representing that such person is a QIB and agreeing that it will comply with the restrictions on transfer set forth in the Rule 144A Deposit Agreement and to payment of the fees, charges and taxes provided therein.

SECTION 2.06 Limitations on Execution and Delivery, Transfer and Surrender of Receipts.

As a condition precedent to the execution and delivery, registration of transfer, split-up, combination or surrender of any Receipt or withdrawal of any Deposited Securities, the Depositary, Custodian or Registrar may require payment from the depositor of Preference Shares or the presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Preference Shares being deposited or withdrawn) and payment of any applicable fees as herein provided, may require the production of proof satisfactory to it as to the identity and genuineness of any signature, may require delivery of such certifications as the Company may from time to time specify in writing to the Depositary to assure the Company of compliance with the Securities Act and the rules and regulations thereunder and may also require compliance with any regulations the Depositary may reasonably establish consistent with the provisions of this Deposit Agreement, including, without limitation, this Section 2.06.

The delivery of Receipts against deposit of Preference Shares generally or against deposit of particular Preference Shares may be suspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of this Deposit Agreement or provisions governing the Deposited Securities, or for any other reason. The Depositary shall notify the Company of any suspension or refusal under the preceding sentence that is other than in the ordinary course of business.

After the expiration of the Restricted Period or any other applicable restricted period in the case of a subsequent issuance of American Depositary Shares, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any Preference Shares that would be required to be registered under the provisions of the Securities Act for the public offer and sale thereof in the United States, unless a registration statement is in effect as to such Preference Shares for such offer and sale.

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Without limiting the foregoing, Preference Shares that the Depositary believes have been withdrawn from a restricted depositary receipt facility established or maintained by a depositary bank (including any such other facility maintained by the Depositary) may be accepted for deposit hereunder only if those Preference Shares are not “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, and the Depositary may, as a condition of accepting those Preference Shares for deposit hereunder, require the person depositing those Preference Shares to provide the Depositary with a certificate to the foregoing effect.

Notwithstanding anything to the contrary in this Deposit Agreement or the Receipts, at and after the Effective Time, the surrender of outstanding Receipts and withdrawal of Deposited Securities may not be suspended, subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Preference Shares in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the Receipts or to the withdrawal of the Deposited Securities.

SECTION 2.07 Lost Receipts, etc.

In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary shall execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall execute and deliver a new Receipt in substitution for a destroyed, lost or stolen Receipt, the Owner thereof shall have (a) filed with the Depositary (i) a request for such execution and delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable requirements imposed by the Depositary.

SECTION 2.08 Cancellation and Destruction of Surrendered Receipts.

All Receipts surrendered to the Depositary shall be canceled by the Depositary. The Depositary is authorized to destroy Receipts so canceled.

SECTION 2.09 Maintenance of Records.

The Depositary agrees to maintain or cause its agents to maintain records of all American Depositary Shares surrendered and Deposited Securities withdrawn under Section 2.05, substitute Receipts delivered under Section 2.07, and of cancelled and destroyed Receipts under Section 2.08, in keeping with procedures ordinarily followed by stock transfer agents located in the United States or as required by the laws or regulations governing the Depositary. If requested writing by the Company, the Depositary will turn such records over to the Company, if the request is received before

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those records are destroyed in accordance with the Depositary’s or agent’s regular practices.

SECTION 2.10 Issuance in Series.

If the Company issues Preference Shares in more than one class or series or that otherwise entitle their holders to rights that vary from the rights to which other Preference Shares entitle their holders, the following provisions shall apply, notwithstanding anything to the contrary in this Deposit Agreement:

(a)       The word “Series,” when used with respect to Preference Shares, shall mean all outstanding Preference Shares that entitle their holders to identical rights with respect to those Preference Shares, regardless of the title or any other designation that may be assigned to Preference Shares.

(b)       The Depositary shall direct the Custodian to hold Preference Shares of a Series deposited under this Deposit Agreement, and other Deposited Securities it receives in respect of those Preference Shares in a segregated account different from the account in which it holds Preference Shares of any other Series.

(c)       Preference Shares of each Series that are deposited under this Deposit Agreement shall be represented by a “Series” of American Depositary Shares separate from the American Depositary Shares representing Preference Shares of any other Series. The Depositary shall assign a designation to each Series of American Depositary Shares and shall reflect in its records the series to which each American Depositary Share belongs. Each series of American Depositary Shares shall be evidenced by a “Series” of Receipts separate from the Receipts evidencing American Depositary Shares of any other Series. Each Receipt shall be marked to indicate the designation of the Series of the American Depositary Shares evidenced by that Receipt and to identify the Series of Preference Shares those American Depositary Shares represent.

(d)       If the rights to which deposited Preference Shares of a Series entitle their holders are modified such that those rights become identical to the rights to which deposited Preference Shares of another Series entitle their holders, the Depositary shall cause the Custodian to combine the accounts in which the former separate Series of Preference Shares are held, the Series of American Depositary Shares representing those Preference Shares will automatically be combined into one Series of American Depositary Shares and the Depositary may take any action necessary or convenient to effect that combination. At any time after that combination, the Owners of Receipts affected by that combination will be entitled to surrender their Receipts to the Depositary and receive Receipts reflecting the designation of the American Depositary Shares owned by them as a result of that combination.

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(e)       Owners and Beneficial Owners of American Depositary Shares of a Series shall be entitled to rights under this Deposit Agreement only with respect to deposited Preference Shares of the corresponding Series and other Deposited Securities received in respect of deposited Preference Shares of that Series.

SECTION 2.11 Uncertificated American Depositary Shares; Direct Registration System.

Notwithstanding anything to the contrary in this Deposit Agreement:

(a)       American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to this Deposit Agreement summarizes the terms and conditions of, and will be the prospectus required under the Securities Act for, both certificated and uncertificated American Depositary Shares. Except for those provisions of this Deposit Agreement that by their nature do not apply to uncertificated American Depositary Shares, all the provisions of this Deposit Agreement shall apply, mutatis mutandis, to uncertificated American Depositary Shares as well as to certificated American Depositary Shares, and to Owners and holders of uncertificated American Depositary Shares as well as to Owners and holders of Receipts.

(b) (i) The term “deliver”, or its noun form, when used with respect to Receipts, shall mean (A) book-entry transfer of American Depositary Shares to an account at The Depository Trust Company, or its successor (“DTC”), designated by the person entitled to such delivery, (B) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (C) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts evidencing American Depositary Shares registered in the name requested by that person.

      (ii)  The term “surrender”, when used with respect to Receipts, shall mean (A) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (B) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (C) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.

(c)       American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.

(d)       The Depositary shall have a duty to register a transfer in the case of uncerificated American Depositary Shares, upon receipt from the Owner of a proper

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instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below). The Depositary, upon surrender of a Receipt for the purpose of exchanging it for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging them for certificated American Depositary Shares, shall execute and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

(e)       Upon satisfaction of the conditions for replacement of a Receipt that is mutilated, lost, destroyed or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form unless otherwise requested by the Owner.

(f)       (i) The parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.

            (ii)  In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in clause (i) above has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with this Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

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ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND BENEFICIAL OWNERS OF RECEIPTS

SECTION 3.01 Filing Proofs, Certificates and Other Information.

Any person presenting Preference Shares for deposit or any Owner or Beneficial Owner of a Receipt may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, legal or beneficial ownership of American Depositary Shares or other securities, compliance with all applicable laws or regulations or the terms of this Deposit Agreement or the Receipts, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper or as the Company may reasonably require by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of any Receipt or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. The Depositary shall provide, as promptly as practicable, upon its written request, copies of any such proof of citizenship or residence or other information referred to above so requested, to the extent that disclosure is permitted under applicable law.

SECTION 3.02 Liability of Owner or Beneficial Owner for Taxes.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary with respect to any Receipt or any Deposited Securities represented by any Receipt, such tax or other governmental charge shall be payable by the Owner or Beneficial Owner of such Receipt to the Depositary. The Depositary may refuse to effect any transfer of such Receipt or any withdrawal of Deposited Securities represented by American Depositary Shares evidenced by such Receipt until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner or Beneficial Owner thereof any part or all of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner or Beneficial Owner of such Receipt shall remain liable for any deficiency.

SECTION 3.03 Warranties on Deposit of Preference Shares.

Every person depositing Preference Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that such Preference Shares and each certificate therefor, if applicable, are validly issued, fully paid, nonassessable and were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent and warrant that, except with respect

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to the initial deposit and any deposit permitted hereunder pursuant to Section 4.03, 4.04 or 4.08, such person is not and shall not become at any time while such person holds Receipts or any beneficial interest therein an affiliate of the Company. In addition, every person depositing Preference Shares, taking delivery of or transferring Receipts, or surrendering Receipts and withdrawing Preference Shares under this Deposit Agreement shall also be deemed thereby (a) prior to the Effective Time, to (1) have made the representations and warranties required pursuant to Section 2.02, (2) acknowledge and agree that the American Depositary Shares evidenced thereby and the Preference Shares represented thereby have not been registered under the Securities Act and, during the Restricted Period, may not be offered, sold, pledged or otherwise transferred except (i) outside the United States in accordance with Rule 903 or 904 of Regulation S or (ii) to a person whom the seller reasonably believes is a qualified institutional buyer (“QIB”) as defined in Rule 144A in a transaction meeting the requirements of Rule 144A, in each case in accordance with any applicable securities laws of any State of the United States; provided that in connection with any transfer during the Restricted Period under (ii) above, the transferor shall withdraw the Preference Shares or other Deposited Securities in accordance with the terms and conditions of the Deposit Agreement and instruct that such Preference Shares be delivered to the custodian under the Rule 144A Deposit Agreement for issuance, in accordance with the Terms and conditions thereof, of Rule 144A GDSs to or for the account of such QIB, and (3) acknowledge and agree that there can be no assurance that a registration statement under the Securities Act relating to the American Depositary Shares will be filed or, if filed, will be declared effective under the Securities Act by the Commission, and that there can be no assurance as to the timing of the filing of any such registration statement or the timing of the effectiveness thereof under the Securities Act, or (b) at or after the Effective Time, to represent and warrant that such Preference Shares are not, and American Depositary Shares representing such Preference Shares would not be, Restricted Securities. All representations, warranties, acknowledgements and agreements required by this Section 3.03 shall service the deposit of Preference Shares and delivery of Receipts.

SECTION 3.04 Disclosure of Interests.

To the extent that the provisions of or governing any Deposited Securities including, without limitation, the provisions of the Company’s Articles of Association as in effect from time to time and resolutions and regulations of the Company’s Board of Directors adopted in compliance with such Articles of Association or any applicable laws or regulations in the United Kingdom, the United States or any other country, may require the disclosure of beneficial or other ownership of Deposited Securities, other Shares and other securities of the Company and may provide for blocking transfer and voting or other rights to enforce such disclosure or limit such ownership, the Depositary shall use its reasonable efforts to comply, to the extent permitted by applicable law, with the Company’s reasonable written instructions in respect of any such disclosure, enforcement or limitation. Owners and Beneficial Owners shall comply with all such disclosure requirements and enforcement and ownership limitations and shall cooperate

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with the Depositary and the Depositary’s compliance with such Company instructions in respect thereof.

The Company may from time to time request Owners to provide information as to the capacity in which such Owners own or owned Receipts and regarding the identity of any other persons then or previously having a beneficial interest in such Receipts and the nature of such interest and various other matters. Each Owner agrees to provide any information requested by the Company or the Depositary pursuant to this Section 3.04. The Depositary agrees to comply with reasonable written instructions received from time to time from the Company requesting that the Depositary forward any such requests to the Owners and to forward to the Company any such responses to such requests received by the Depositary.

ARTICLE 4. THE DEPOSITED SECURITIES

SECTION 4.01 Cash Distributions.

Whenever the Depositary shall receive any cash dividend or other cash distribution on any Deposited Securities, the Depositary shall, as promptly as practicable, subject to the provisions of Section 4.05, convert such dividend or distribution into Dollars and shall distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09) to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively; provided, however, that in the event that the Company or the Depositary shall be required to withhold and does withhold from such cash dividend or such other cash distribution an amount on account of taxes, the amount distributed to the Owner of the Receipts evidencing American Depositary Shares representing such Deposited Securities shall be reduced accordingly. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Owner a fraction of one cent. Any such fractional amounts shall be rounded to the nearest whole cent and so distributed to Owners entitled thereto. The Company or its agent will remit to the appropriate governmental agency in the United Kingdom all amounts withheld and owing to such agency. The Depositary will forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file necessary reports with governmental agencies.

SECTION 4.02 Distributions Other Than Cash, Preference Shares or Rights.

Subject to the provisions of Sections 4.11 and 5.09, whenever the Depositary shall receive any distribution other than a distribution described in Section 4.01, 4.03 or 4.04, the Depositary shall, after Consultation with the Company, as promptly as practicable, cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary or any taxes or other governmental charges, in proportion to the number

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of American Depositary Shares representing such Deposited Securities held by them respectively, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that the Company or the Depositary withhold an amount on account of taxes or other governmental charges or that such securities must be registered under the Securities Act in order to be distributed to Owners or Beneficial Owners) the Depositary deems such distribution not to be feasible, the Depositary may, after consultation with the Company to the extent practicable, as promptly as practicable, adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09) shall be distributed by the Depositary to the Owners entitled thereto, all in the manner and subject to the conditions described in Section 4.01. The Depositary may withhold any distribution of securities under this Section 4.02 if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act. To the extent that such securities or property or the net proceeds thereof are not effectively distributed to Owners as provided in this Section 4.02, the same shall constitute Deposited Securities and each American Depositary Share shall thereafter also represent its proportionate interest in such securities, property or net proceeds.

SECTION 4.03 Distributions in Preference Shares.

If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Preference Shares, the Depositary, after Consultation with the Company may, and shall, if the Company shall so request in writing, distribute to the Owners of outstanding Receipts entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited Securities held by them respectively, additional Receipts evidencing an aggregate number of American Depositary Shares representing the amount of Preference Shares received as such dividend or free distribution, subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Preference Shares and the issuance of American Depositary Shares evidenced by Receipts, including the withholding of any tax or other governmental charge as provided in Section 4.11 and the payment of the fees and expenses of the Depositary as provided in Section 5.09. Prior to the Effective Time, each beneficial owner of Receipts so distributed will be deemed to have acknowledged that the American Depositary Shares and the Preference Shares have not been registered under the Securities Act and to have agreed to comply with any applicable restrictions on transfer set forth on the face of those Receipts. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary shall use reasonable efforts to sell the amount of Preference Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in

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Section 4.01. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also represent the additional Preference Shares distributed upon the Deposited Securities represented thereby.

SECTION 4.04 Rights.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Preference Shares or any rights of any other nature, the Depositary, after consultation with the Company, shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary reasonably determines, after consultation with the Company, that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems reasonably appropriate.

In circumstances in which rights would otherwise not be distributed, if an Owner of Receipts requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Preference Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Preference Shares, and the Company shall cause the Preference Shares so purchased to be delivered to the Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Preference Shares so purchased to be deposited pursuant to Section 2.02 of this Deposit Agreement, and shall, pursuant to Section 2.03 of this Deposit Agreement, execute and deliver Receipts to such Owner. In the case of a distribution pursuant to the

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second paragraph of this Section 4.04, such Receipts shall be legended in accordance with applicable U.S. law and shall be subject to the appropriate restrictions on sale, deposit, cancellation and transfer under such laws.

If the Depositary reasonably determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may, and at the written request of the Company shall, offer to sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of this Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any Receipt or otherwise. Those proceeds shall be distributed in accordance with Section 4.01.

The Depositary will not offer rights to Owners unless the offering and sale of both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in this Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner of Receipts requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

Neither the Depositary nor the Company shall be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

SECTION 4.05 Conversion of Foreign Currency.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such

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warrants or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any Receipt or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09.

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.

If at any time the Depositary or the Custodian shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any Government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under this Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account. The Depositary makes no representation that the exchange rate used or obtained in any currency conversion under this Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.03. The methodology used to determine exchange rates used in currency conversions is available upon request.

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SECTION 4.06 Fixing of Record Date.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Preference Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Preference Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (which shall be as near as practicable to any corresponding record date set by the Company) (a) for the determination of the Owners who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof or (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) who shall be responsible for any fee or charges assessed by the Depositary pursuant to this Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Preference Shares. Subject to the provisions of Sections 4.01 through 4.05 and to the other terms and conditions of this Deposit Agreement, the Owners on such record date shall be entitled, as the case may be, to receive the amount distributable by the Depositary with respect to such dividend or other distribution or such rights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held by them respectively, to give voting instructions or to act in respect of any other such matter.

SECTION 4.07 Voting of Deposited Securities.

The Company shall request the Depositary in writing to act under this Section 4.07 in respect of each meeting of holders of Preference Shares at which holders of Preference Shares have a right to vote. Upon receipt of that request and a notice of that meeting, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in the notice of meeting provided by the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Scottish law and of the Articles of Association of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Shares represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose (the “Instruction Date”), the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Preference Shares represented by the American Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Preference Shares other than in accordance with instructions received from Owners.

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In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company requests the Depositary to act under the first sentence of this Section 4.07, the Company shall give the Depositary notice of the meeting or solicitation not less than 40 days prior to the meeting date or date for giving proxies or consents. There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the Instruction Date to ensure that the Depositary will vote the Preference Shares or other Deposited Securities in accordance with the provisions of this Section 4.07.

SECTION 4.08 Changes Affecting Deposited Securities.

In circumstances where the provisions of Section 4.03 do not apply, upon any change in nominal value, change in par value, split-up, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation or sale of assets affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a Custodian in exchange for or in conversion of or in respect of Deposited Securities, shall be treated as new Deposited Securities under this Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Preference Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

SECTION 4.09 Reports.

The Depositary shall make available for inspection by Owners at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary shall also send to the Owners copies of such reports when furnished by the Company pursuant to Section 5.06. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English, to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

SECTION 4.10 Lists of Owners.

Promptly upon request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names Receipts are registered on the books of the Depositary.

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SECTION 4.11 Withholding.

In the event that the Depositary determines that any distribution in property (including Preference Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Preference Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary reasonably deems necessary and practicable to pay such taxes or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes or charges to the Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.

Services for Owners and Beneficial Owners that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, this Deposit Agreement.

SECTION 4.12 Redemption of Deposited Securities.

If the Depositary receives a notice that Deposited Securities are to be redeemed, the Depositary shall (i) call for surrender a corresponding number of American Depositary Shares, (ii) notify the Owners of those American Depositary Shares that the Deposited Securities underlying their American Depositary Shares will be surrendered for redemption and (iii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date. Owners of American Depositary Shares affected by the redemption may surrender the Receipts evidencing those American Depositary Shares and receive delivery of money or other property the Depositary receives upon redemption of Deposited Securities as provided in Section 2.05.

If the Depositary receives notice that less than all the Deposited Securities are to be redeemed, the Depositary shall determine in its discretion which American Depositary Shares to call for surrender in connection with that redemption. If the Depositary calls for surrender less than all the American Depositary Shares evidenced by a Receipt in connection with a redemption of Deposited Securities, the Depositary shall, upon surrender of that Receipt, deliver to the Owner a Receipt evidencing the amount of American Depositary Shares evidenced by the surrendered Receipt that were not called for surrender.

ARTICLE 5. THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY

SECTION 5.01 Maintenance of Office and Transfer Books by the Depositary.

Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain facilities for the execution and delivery, registration,

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registration of transfers and surrender of Receipts in accordance with the provisions of this Deposit Agreement.

The Depositary shall keep books, at its Corporate Trust Office, for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Owners, provided that such inspection shall not be for the purpose of communicating with Owners in the interest of a business or object other than the business of the Company or a matter related to this Deposit Agreement or the Receipts.

The Depositary may close the transfer books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder and shall close them upon the reasonable written request of the Company. The Depositary shall notify the Company of any closure under the preceding sentence that is outside the ordinary course of business as soon as practicable.

If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more stock exchanges in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registry of such Receipts in accordance with any requirements of such exchange or exchanges.

SECTION 5.02 Prevention or Delay in Performance by the Depositary or the Company.

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Beneficial Owner if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any provision, present or future, of the Articles of Association of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from, or be subject to any civil or criminal penalty on account of, doing or performing any act or thing which by the terms of this Deposit Agreement or Deposited Securities it is provided shall be done or performed; nor shall the Depositary or the Company or any of their respective directors, employees, agents or affiliates incur any liability to any Owner or Beneficial Owner of any Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of this Deposit Agreement it is provided shall or may be done or performed, (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement, (iii) for the inability of any Owner or Beneficial Owner to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Owners or Beneficial Owners or (iv) for any special, consequential or punitive damages for any breach of the terms of this

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Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02, or 4.03, or an offering or distribution pursuant to Section 4.04, or for any other reason, such distribution or offering may not be made available to Owners, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary, after Consultation with the Company, shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse.

SECTION 5.03 Obligations of the Depositary. the Custodian and the Company.

The Company assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to Owners or Beneficial Owners, except that it agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit Agreement to any Owner or Beneficial Owner (including, without limitation, liability with respect to the validity or worth of the Deposited Securities), except that it agrees to perform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.

Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts on behalf of any Owner, Beneficial Owner or other person.

Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Preference Shares for deposit, any Owner or any other person believed by it in good faith to be competent to give such advice or information. Each of the Company and the Depositary may rely and shall be protected in relying upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.

The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such

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vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith.

No disclaimer of liability under the United States federal securities laws is intended by any provision of this Deposit Agreement.

SECTION 5.04 Resignation and Removal of the Depositary.

The Depositary may at any time resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

The Depositary may at any time be removed by the Company by 90 days’ prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary or (ii) the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on the written request of the Company shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Deposited Securities to such successor, and shall deliver to such successor a list of the Owners of all outstanding Receipts. Any such successor depositary shall promptly mail notice of its appointment to the Owners.

Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

SECTION 5.05 The Custodians.

The Custodian shall be subject at all times and in all respects to the directions of the Depositary and shall be responsible solely to it. The Depositary shall be responsible for the compliance by the Custodian with the applicable provisions of this Deposit Agreement, but only to the extent the Depositary would be responsible if the duties of the Custodian were duties of the Depositary under this Deposit Agreement. The Custodian may resign and be discharged from its duties hereunder by notice of such resignation delivered to the Depositary at least 30 days prior to the date on which such

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resignation is to become effective. If, upon such resignation there would be no Custodian acting under this Deposit Agreement, the Depositary shall, as promptly as practicable after receiving such notice, with the approval of the Company, which approval shall not be unreasonably withheld or delayed, appoint a substitute custodian, which shall thereafter be a Custodian hereunder. The Depositary shall notify the Company of the appointment of a substitute or additional custodian as soon as practicable. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners to do so, it may appoint a substitute or additional custodian or custodians, each of which shall thereafter be a Custodian hereunder. Upon demand of the Depositary, any Custodian shall deliver such of the Deposited Securities held by it as are requested of it to any other Custodian. Each substitute or additional custodian shall deliver to the Depositary, forthwith upon its appointment, an acceptance of such appointment satisfactory in form and substance to the Depositary.

Upon the appointment of any successor depositary hereunder, the Custodian then acting hereunder shall forthwith become, without any further act or writing, the agent hereunder of such successor depositary and the appointment of such successor depositary shall in no way impair the authority of each Custodian hereunder; but the successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to that Custodian all such instruments as may be proper to give to that Custodian full and complete power and authority as agent hereunder of such successor depositary.

SECTION 5.06 Notices and Reports.

On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Preference Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action in respect of any cash or other distributions or the offering of any rights, the Company agrees to transmit to the Depositary and the Custodian a copy of the notice thereof in English but otherwise in the form given or to be given to holders of Preference Shares or other Deposited Securities.

The Company will arrange for the translation into English, if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompt transmittal by the Company to the Depositary and the Custodian of such notices and any other reports and communications which are made generally available by the Company to holders of its Preference Shares. If requested in writing by the Company, the Depositary will arrange for the mailing, at the Company’s expense, of copies of such notices, reports and communications to all Owners. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings.

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The Company will deliver to the Depositary and the Custodian a copy (in English or with an English translation) of all provisions of or governing the Preference Shares and any other Deposited Securities. Promptly upon any change in such provisions, the Company shall deliver promptly to the Depositary and the Custodian a copy (in English or with an English translation) of such provisions as so changed. The Depositary and its agents may rely on the copy of such provisions as so delivered for all purposes of this Deposit Agreement.

SECTION 5.07 Distribution of Additional Shares, Rights, etc.

If the Company or any affiliate of the Company determines to make any issuance or distribution of (1) additional Preference Shares, (2) rights to subscribe for Preference Shares, (3) securities convertible into Preference Shares, or (4) rights to subscribe for such securities (each a “Distribution”), the Company shall notify the Depositary in writing in English as promptly as practicable and in any event before the Distribution starts and, if requested in writing by the Depositary, the Company shall promptly furnish to the Depositary a written opinion from U.S. counsel for the Company that is reasonably satisfactory to the Depositary, stating whether or not the Distribution requires, or, if made in the United States, would require, registration under the Securities Act. If, in the opinion of that counsel, the Distribution requires, or, if made in the United States, would require, registration under the Securities Act, that counsel shall furnish to the Depositary a written opinion as to whether or not there is a registration statement under the Securities Act in effect that will cover that Distribution. The Company shall be under no obligation to file a registration statement with respect to any Distribution.

The Company agrees with the Depositary that neither the Company nor any company controlled by, controlling or under common control with the Company will at any time deposit any Preference Shares, either originally issued or previously issued and reacquired by the Company or any such affiliate, unless a Registration Statement is in effect as to such Preference Shares under the Securities Act.

SECTION 5.08 Indemnification.

The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliates and any Custodian against, and hold each of them harmless from, any liability or expense (including, but not limited to, the reasonable and documented fees and expenses of counsel) which may arise out of or in connection with (a) any registration with the Commission of American Depositary Shares or Deposited Securities or the offer or sale of those securities in the United States or (b) acts performed or omitted, pursuant to the provisions of this Deposit Agreement and of the Receipts, as the same may be amended, modified or supplemented from time to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents and affiliates, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by the Company or any of its directors, employees, agents and affiliates.

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The Depositary agrees to indemnify the Company, its directors, employees, agents and affiliates and hold them harmless from any liability or expense which may arise out of acts performed or omitted by the Depositary or its Custodian or their respective directors, employees, agents and affiliates due to their negligence or bad faith.

The obligations set forth in this Section 5.08 shall survive the termination of this Deposit Agreement and the succession or substitution of any indemnified person.

If a claim is asserted or an action is commenced against a person that is entitled to seek and intends to seek indemnification for that claim or action under this Section 5.08 (an “Indemnifiable Claim”), that person (an “Indemnified Person”) shall (i) promptly notify in writing the person obligated to provide that indemnification (the “Indemnifying Person”) of that assertion or commencement and (ii) consult in good faith with the Indemnifying Person as to the conduct of the defense of that Indemnifiable Claim. Neither the Indemnified Person nor the Indemnifying Person shall compromise or settle an Indemnifiable Claim without the consent in writing of the other (which consent shall not be unreasonably withheld).

SECTION 5.09 Charges of Depositary.

The Company agrees to pay the fees, reasonable expenses and out-of-pocket charges of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The following charges shall be incurred by any party depositing or withdrawing Preference Shares or by any party surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited Securities or a distribution of Receipts pursuant to Section 4.03) or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Preference Shares generally on the share register of the Company or Foreign Registrar and applicable to transfers of Preference Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and facsimile transmission expenses as are expressly provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts pursuant to Section 2.03, 4.03 or 4.04 and the surrender of Receipts pursuant to Section 2.05 or 6.02, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any

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cash distribution made pursuant to this Deposit Agreement, including, but not limited to Sections 4.01 through 4.04, (7) a fee for the distribution of securities pursuant to Section 4.02, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Preference Shares) but which securities are instead distributed by the Depositary to Owners, (8) a fee of $.02 or less per American Depositary Share (or portion thereof) for depositary services, which will accrue on the last day of each calendar year and will be payable as provided in clause 9 below; provided, however, that no fee will be assessed under this clause 8 to the extent that a fee of $.02 was charged pursuant to clause 6 above during that calendar year and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Preference Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 and shall be collected at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

The Depositary may own and deal in any class of securities of the Company and its affiliates and in Receipts.

SECTION 5.10 Retention of Depositary Documents.

The Depositary is authorized to destroy those documents, records, bills and other data compiled during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the Depositary unless the Company reasonably requests in writing that such papers be retained for a longer period and that request is received prior to that destruction.

SECTION 5.11 Exclusivity.

The Company agrees not to appoint any other depositary for issuance of American or global depositary receipts so long as The Bank of New York Mellon is acting as Depositary hereunder.

SECTION 5.12 List of Restricted Owners.

The Company shall provide to the Depositary a list setting forth, to the actual knowledge of the Company, those persons or other entities that beneficially own Restricted Securities as of the date of this Deposit Agreement, and the Company shall update that list on a regular basis. The Company agrees to advise in writing each of the persons or other entities so listed that Restricted Securities, so long as they remain Restricted Securities, are ineligible for deposit under this Deposit Agreement. The Depositary may rely on such a list or update but shall not be liable for any action or omission made in reliance thereon.

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SECTION 5.13 Available Information.

If, at any time prior to the expiration of the Restricted Period, the Company is neither a reporting company under Section 13 or 15(d) of the Securities Exchange Act nor exempt from the reporting requirements of the Securities Exchange Act by reason of Rule 12g3-2(b) thereunder, the Company will provide, at its expense, to any Owner or Beneficial Owner or any holder of Preference Shares, and to any prospective purchaser of American Depositary Shares or Preference Shares designated by such person, upon request of such Owner, Beneficial Owner, holder or prospective purchaser, the information required by Rule 144A(d)(4)(i) and otherwise comply with Rule 144A(d)(4). If at any time the Company is neither subject to Section 13 or 15(d) of the Securities Exchange Act nor exempt pursuant to Rule 12g3-2(b) under the Securities Exchange Act (as determined by the Office of International Corporate Finance of the Commission), the Company shall immediately so notify the Depositary, and the Depositary may so notify the Owners in writing at the Company’s expense.

The Company hereby authorizes the Depositary to deliver such information as is furnished by the Company to the Depositary during any period in which the Company informs the Depositary it is subject to the information delivery requirements of Rule 144A(d)(4) to any such Owner, Beneficial Owner, holder of Preference Shares or prospective purchaser at the request of such person. The Company agrees to reimburse the Depositary for its reasonable expenses in connection with such deliveries and to provide the Depositary with such information in such quantities as the Depositary may from time to time reasonably request.

SECTION 5.14 Information for Regulatory Compliance.

Each of the Company and the Depositary shall provide to the other, as promptly as practicable, information from its records or otherwise available to it that is reasonably requested by the other to permit the other to comply with applicable law or requirements of governmental, tax or regulatory authorities.

ARTICLE 6. AMENDMENT AND TERMINATION

SECTION 6.01 Amendment.

The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Beneficial Owners in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, not become effective as to outstanding Receipts until the expiration of 30 days after notice of such amendment shall have been given to the Owners of outstanding

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Receipts. Every Owner and Beneficial Owner, at the time any amendment so becomes effective, shall be deemed, by continuing to hold such Receipt or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law.

SECTION 6.02 Termination.

The Depositary shall, at any time at the direction of the Company, terminate this Deposit Agreement by mailing notice of termination to the Owners of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate this Deposit Agreement by mailing notice of termination to the Company and the Owners of all Receipts then outstanding if at least 60 days have passed since the Depositary delivered to the Company a written notice of its election to resign and a successor depositary has not been appointed and accepted its appointment as provided in Section 5.04. On and after the date of termination, the Owner of a Receipt will, upon (a) surrender of such Receipt at the Corporate Trust Office of the Depositary, (b) payment of the fee of the Depositary for the surrender of Receipts referred to in Section 2.05, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt. If any Receipts shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in this Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges). At any time after the date of termination, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the

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account of the Owner of such Receipt in accordance with the terms and conditions of this Deposit Agreement, and any applicable taxes or governmental charges) and except for its obligations to the Company, its directors, employees, agents and affiliates under Section 5.08. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary under Sections 5.08 and 5.09.

ARTICLE 7. MISCELLANEOUS

SECTION 7.01 Counterparts.

This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Deposit Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any Owner or Beneficial Owner during business hours.

SECTION 7.02 No Third Party Beneficiaries.

This Deposit Agreement is for the exclusive benefit of the parties hereto and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.

SECTION 7.03 Severability.

In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

SECTION 7.04 Owners and Beneficial Owners as Parties; Binding Effect.

The Owners and Beneficial Owners of Receipts from time to time shall be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance thereof or any interest therein.

SECTION 7.05 Notices.

Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to Lloyds Banking Group plc, 71 Lombard Street, London, England, or any other place to which the Company may have transferred its principal office with notice to the Depositary.

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Any and all notices to be given to the Depositary shall be deemed to have been duly given if in English and personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to The Bank of New York Mellon, 240 Greenwich Street, New York, New York 10286, Attention: American Depositary Receipt Administration, or any other place to which the Depositary may have transferred its Corporate Trust Office with notice to the Company.

Any and all notices to be given to any Owner shall be deemed to have been duly given if personally delivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to such Owner at the address of such Owner as it appears on the transfer books for Receipts of the Depositary, or, if such Owner shall have filed with the Depositary a written request that notices intended for such Owner be mailed to some other address, at the address designated in such request.

Delivery of a notice sent by mail or cable, telex or facsimile transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Company may, however, act upon any cable, telex or facsimile transmission received by it, notwithstanding that such cable, telex or facsimile transmission shall not subsequently be confirmed by letter as aforesaid.

SECTION 7.06 Submission to Jurisdiction; Appointment of Agent for Service of Process.

The Company hereby (i) irrevocably designates and appoints CT Corporation System, 28 Liberty Street, New York, New York 10005, as the Company’s authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, (ii) consents and submits to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agrees that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. The Company agrees to deliver, upon the execution and delivery of this Deposit Agreement, a written acceptance by such agent of its appointment as such agent. The Company further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment in full force and effect for so long as any American Depositary Shares or Receipts remain outstanding or this Agreement remains in force. In the event the Company fails to continue such designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Company at its address last specified for notices

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hereunder, and service so made shall be deemed completed ten (10) days after the same shall have been so mailed.

SECTION 7.07 Governing Law.

This Deposit Agreement and the Receipts shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York.

SECTION 7.08 Waiver of Immunities.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

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IN WITNESS WHEREOF, LLOYDS BANKING GROUP plc and THE BANK OF NEW YORK MELLON have duly executed this Deposit Agreement as of the day and year first set forth above and all Owners and Beneficial Owners shall become parties hereto upon acceptance by them of Receipts issued in accordance with the terms hereof or any interest therein.

LLOYDS BANKING GROUP plc
By:	/s/ William Chalmers
	Name:	William Chalmers
	Title:	Chief Financial Officer

By:
	Name:
	Title:

THE BANK OF NEW YORK MELLON, as Depositary
By:	/s/ Robert W. Goad
	Name:	Robert W. Goad
	Title:	Managing Director

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Annex I

Certification and Agreement of Certain Acquirers of

Receipts Upon Deposit of Preference Shares Pursuant to

Section 2.02 of the Amended and Restated Regulation S Deposit Agreement

We refer to the Amended and Restated Regulation S Deposit Agreement dated as of February 18, 2020 (the “Deposit Agreement”) among LLOYDS BANKING GROUP plc (the “Company”), THE BANK OF NEW YORK MELLON, as Depositary, and Owners and Beneficial Owners of Regulation S American Depositary Receipts (the “Receipts”) issued thereunder. Capitalized terms used but not defined herein shall have the meanings given them in the Deposit Agreement.

l.       This certification and agreement is furnished in connection with the deposit of Preference Shares and issuance of American Depositary Shares to be evidenced by one or more Receipts pursuant to Section 2.02 of the Deposit Agreement.

2.       We acknowledge (or if we are a broker-dealer, our customer has confirmed to us that it acknowledges) that the Receipts, the American Depositary Shares evidenced thereby and the Preference Shares represented thereby have not been and will not be registered under the Securities Act (the “Act”).

3.       We certify that either:

A. We are, or at the time the Preference Shares are deposited and at the time the Receipts are issued will be, the beneficial owner of the Preference Shares and of the American Depositary Shares evidenced by such Receipt or Receipts, and (i) we are not a U.S. person (as defined in Regulation S under the Act) and we are located outside the United States (within the meaning of Regulation S) and acquired, or have agreed to acquire and will have acquired, the Preference Shares to be deposited outside the United States, (ii) we are not an affiliate of the Company or a person acting on behalf of such an affiliate, and (iii) we are not in the business of buying and selling securities or, if we are in such business, we did not acquire the securities to be deposited from the Company or any affiliate thereof in the initial distribution of the American Depositary Shares and Preference Shares.

OR

B. We are a broker-dealer acting on behalf of our customer; our customer has confirmed to us that it is, or at the time the Preference Shares are deposited and at the time the Receipt or Receipts are issued will be, the

beneficial owner of the Preference Shares and of the American Depositary Shares evidenced by such Receipt or Receipts, and (i) it is not a U.S. person (as defined in Regulation S under the Act) and it is located outside the United States (within the meaning of Regulation S and acquired, or have agreed to acquire and will have acquired, the Preference Shares to be deposited outside the United States, (ii) it is not an affiliate of the Company or a person acting on behalf of such an affiliate, and (iii) it is not in the business of buying and selling securities or, if it is in such business, it did not acquire the securities to be deposited from the Company or any affiliate thereof in the initial distribution of American Depositary Shares and Preference Shares.

4.       We agree (or if we are a broker-dealer, our customer has confirmed to us that it agrees) that prior to expiration of 40 days after the later of the commencement of the offering of American Depositary Shares on behalf of the Company and the related closing (the “restricted period”), we (or it) will not offer, sell, pledge or otherwise transfer such Receipts, the American Depositary Shares evidenced thereby or the Preference Shares represented thereby except (a) to a person whom we reasonably believe (or it and anyone acting on its behalf reasonably believes) is a qualified institutional buyer within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, or (b) in accordance with Regulation S under the Act, in either case in accordance with any applicable securities laws of any state of the United States. We further agree (or if we are a broker-dealer, our customer has confirmed to us that it agrees) that if we sell or otherwise transfer (or it sells or otherwise transfers) the American Depositary Shares evidenced by the Receipt or Receipts referred to above or the Preference Shares represented thereby in accordance with clause (a) above prior to the expiration of the restricted period, we (or our customer) will, prior to settlement of such sale, cause such Preference Shares to be withdrawn in accordance with the terms and conditions of the Deposit Agreement and we (or our customer) will cause instructions to be given to the Depositary to deliver such Preference Shares to the custodian under the Rule 144A Deposit Agreement for deposit thereunder and issuance of a Rule 144A American Depositary Receipt evidencing Rule 144A American Depositary Shares upon receipt of the proper certification on behalf of the purchaser and otherwise in accordance with the terms and conditions of such Rule 144A Deposit Agreement.

Very truly yours,
[NAME OF CERTIFYING ENTITY]
By:
	Title:

Dated:

Annex II

Certification and Agreement of Persons Receiving

Deposited Securities Upon Withdrawal

Pursuant to Section 2.05 of

the Amended and Restated Regulation S Deposit Agreement

We refer to the Amended and Restated Regulation S Deposit Agreement dated as of February 18, 2020 (the “Deposit Agreement”) among LLOYDS BANKING GROUP plc (the “Company”), THE BANK OF NEW YORK MELLON, as Depositary thereunder, and Owners and Beneficial Owners of Regulation S American Depositary Receipts (the “Receipts”) issued thereunder. Capitalized terms used but not defined herein shall have the meanings given them in the Deposit Agreement.

1.       We are surrendering a Receipt or Receipts in accordance with the terms of the Deposit Agreement for the purpose of withdrawal of the Deposited Securities represented by the American Depositary Shares evidenced by such Receipt or Receipts (the “Preference Shares”) pursuant to Section 2.05 of the Deposit Agreement.

2.       We acknowledge (or if we are a broker-dealer, our customer has confirmed to us that it acknowledges) that the Receipts, the American Depositary Shares evidenced thereby and the securities represented thereby have not been and will not be registered under the Securities Act (the “Act”).

3.       We certify that either:

(a)       We are located outside the United States (within the meaning of Regulation S under the Act), and either:

(i)       we have sold or otherwise transferred, or agreed to sell or otherwise transfer and at or prior to the time of withdrawal will have sold or otherwise transferred, the Receipts or the Preference Shares in accordance with Regulation S under the Act, and we are, or prior to such sale or other transfer we were, the beneficial owner of the Receipts, or

(ii)       we have sold or otherwise transferred, or agreed to sell or otherwise transfer and at or prior to the time of withdrawal will have sold or otherwise transferred the Receipts or the Preference Shares to a qualified institutional buyer (as defined in Rule 144A under the Act) in accordance with Rule 144A, and, accordingly, we are separately giving instructions to the Depositary to deliver the Preference Shares to the custodian under the Rule 144A Deposit Agreement for deposit thereunder

and issuance of a Rule 144A American Depositary Receipt evidencing Rule 144A American Depositary Shares upon receipt of the proper certification on behalf of the purchaser and otherwise in accordance with the terms and conditions of such Rule 144A Deposit Agreement, and we are, or prior to such sale or other transfer we were, the beneficial owner of the Receipts, or

(iii)       we will be the beneficial owner of the Preference Shares upon withdrawal, and, accordingly, we agree that, prior to the expiration of 40 days after the later of the commencement of the offering of American Depositary Shares and Preference Shares on behalf of the Company and the related closing, we will not offer, sell, pledge or otherwise transfer the Preference Shares except (A) to a person whom we (and anyone acting on our behalf) reasonably believe is a qualified institutional buyer within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, or (B) in accordance with Regulation S under the Act.

OR

(b)       We are a qualified institutional buyer (as defined in Rule 144A under the Act) acting for our own account or for the account of one or more qualified institutional buyers; we have agreed to acquire (or it has agreed to acquire), the Receipts or the Preference Shares in a transaction which we understand is being made in reliance upon Rule 144A, and, accordingly, we (or it) are separately taking all action necessary to cause the Preference Shares being withdrawn to be deposited under the Rule 144A Deposit Agreement for issuance of a Rule 144A Global Depositary Receipt evidencing Rule 144A American Depositary Shares.

4.       If we are a broker-dealer, we further certify that we are acting for the account of our customer and that our customer has confirmed the accuracy of the representations contained in paragraph 3 hereof that are applicable to it and, if paragraph 3(a)(iii) is applicable to our customer, has confirmed that it will comply with the agreements set forth in paragraph 3(a)(iii).

Very truly yours,
[NAME OF CERTIFYING ENTITY]
By:
	Title:

Dated:

EXHIBIT A

No.
	REGULATION S AMERICAN
	DEPOSITARY SHARES
	(Each Regulation S American Depositary Share represents 100 deposited Preference Shares)

SOLELY FOR PURPOSES OF TRADING AND SETTLEMENT, THE REGULATION S AMERICAN DEPOSITARY SHARES MAY BE DEEMED TO HAVE A PRINCIPAL AMOUNT OF $100,000 PER REGULATION S AMERICAN DEPOSITARY SHARE.

THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE PREFERENCE SHARES REPRESENTED THEREBY (THE “PREFERENCE SHARES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD (DEFINED AS 40 DAYS AFTER THE LATER OF (I) THE COMMENCEMENT OF THE OFFERING OF REGULATION S AMERICAN DEPOSITARY SHARES AND PREFERENCE SHARES AND (II) THE RELATED CLOSING) EXCEPT (1) IN AN OFFSHORE TRANSACTION PURSUANT TO AND IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT OR (2) TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS; PROVIDED, THAT IN CONNECTION WITH ANY TRANSFER UNDER (2) ABOVE, THE TRANSFEROR SHALL, PRIOR TO THE SETTLEMENT OF SUCH SALE, WITHDRAW THE PREFERENCE SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AMENDED AND RESTATED REGULATION S DEPOSIT AGREEMENT AND INSTRUCT THAT SUCH PREFERENCE SHARES BE DELIVERED TO THE CUSTODIAN UNDER THE RULE 144A DEPOSIT AGREEMENT FOR ISSUANCE IN ACCORDANCE WITH THE TERMS AND CONDITIONS THEREOF, OF RULE 144A AMERICAN

DEPOSITARY SHARES TO OR FOR THE ACCOUNT OF SUCH QUALIFIED INSTITUTIONAL BUYER.

UPON THE EXPIRATION OF THE RESTRICTED PERIOD, THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED IN THIS LEGEND IF, AT THE TIME OF SUCH EXPIRATION, THE OFFER AND SALE OF THE REGULATION S AMERICAN DEPOSITARY SHARES EVIDENCED HEREBY AND THE DEPOSITED SECURITIES REPRESENTED THEREBY BY THE HOLDER THEREOF IN THE UNITED STATES WOULD NOT BE RESTRICTED UNDER THE SECURITIES LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES.

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Depositary or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.

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THE BANK OF NEW YORK MELLON

REGULATION S AMERICAN DEPOSITARY RECEIPT

FOR NON-CUMULATIVE DOLLAR PREFERENCE SHARES

OF

LLOYDS BANKING GROUP PLC

(INCORPORATED UNDER THE LAWS OF SCOTLAND)

The Bank of New York Mellon, as depositary (herein called the Depositary), hereby certifies that _____________________________________________________________,

or registered assigns IS THE OWNER OF_______________________________________

REGULATION S AMERICAN DEPOSITARY SHARES

representing deposited non-cumulative dollar preference shares (herein called Preference Shares) of Lloyds Banking Group plc, incorporated under the laws of Scotland (herein called the Company). At the date hereof, each American Depositary Share represents 100 Preference Shares deposited or subject to deposit under the Deposit Agreement (as such term is hereinafter defined) at The Bank of New York Mellon, acting through an office located in the United Kingdom (herein called the Custodian). The Depositary’s Corporate Trust Office and its principal executive office are located at 240 Greenwich Street, New York, N.Y. 10286.

THE DEPOSITARY’S CORPORATE TRUST OFFICE ADDRESS IS

240 GREENWICH STREET, NEW YORK, N.Y. 10286

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1.       THE DEPOSIT AGREEMENT.

This Regulation S American Depositary Receipt is one of an issue (herein called Receipts), all issued and to be issued upon the terms and conditions set forth in the Amended and Restated Regulation S Deposit Agreement, dated as of February 18, 2020, as the same may be amended from time to time in accordance with its terms (the “Deposit Agreement”), by and among the Company, the Depositary, and all Owners and Beneficial Owners from time to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary Shares or any interest therein agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights of Owners and Beneficial Owners of the Receipts and the rights and duties of the Depositary in respect of the Preference Shares deposited thereunder and any and all other securities, property and cash from time to time received in respect of such Preference Shares and held thereunder (such Preference Shares, securities, property, and cash are herein called Deposited Securities). Copies of the Deposit Agreement are on file at the Depositary’s Corporate Trust Office in New York City and at the office of the Custodian.

The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.

2.       SURRENDER OF RECEIPTS AND WITHDRAWAL OF PREFERENCE SHARES.

Upon surrender at the Corporate Trust Office of the Depositary of this Receipt, and upon payment of the fee of the Depositary provided in this Receipt, and subject to the terms and conditions of the Deposit Agreement, the articles of association of the Company and the terms of the Deposited Securities, the Owner hereof is entitled to delivery, to him or upon his order, of the Deposited Securities at the time represented by the American Depositary Shares for which this Receipt is issued. Delivery of such Deposited Securities may be made by the delivery of (a) certificates in the name of the Owner hereof or as ordered by him or certificates properly endorsed or accompanied by proper instruments of transfer and (b) any other securities, property and cash to which such Owner is then entitled in respect of this Receipt. Such delivery will be made at the option of the Owner hereof, either at the office of the Custodian or at the Corporate Trust Office of the Depositary, provided that the forwarding of certificates for Preference Shares or other Deposited Securities for such delivery at the Corporate Trust Office of the Depositary shall be at the risk and expense of the Owner hereof.

Notwithstanding the foregoing, during the Restricted Period, no Deposited Securities may be withdrawn upon surrender of a Receipt unless at or prior to the time of surrender the Depositary has received a duly executed and completed written certificate

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and agreement, in substantially the form of Annex II to the Deposit Agreement, by or on behalf of the person surrendering such Receipt who after such withdrawal will be the beneficial owner of such Deposited Securities.

Prior to the expiration of the Restricted Period, no Owner may transfer American Depositary Shares or Preference Shares represented thereby to, or for the account of, a qualified institutional buyer as defined in Rule 144A (“QIB”) unless such Owner (i) withdraws such Preference Shares in accordance with Section 2.05 of the Deposit Agreement and (ii) instructs the Depositary to deliver the Preference Shares so withdrawn to the account of the custodian under the Rule 144A Deposit Agreement for issuance thereunder of Rule 144A GDSs to or for the account of such QIB. Issuance of such Rule 144A GDSs shall be subject to the terms and conditions of the Rule 144A Deposit Agreement including with respect to the deposit of Preference Shares and the issuance of Rule 144A GDSs, including delivery of the duly executed and completed written certificate and agreement required under Section 2.02 of the Rule 144A Deposit Agreement, by or on behalf of the person who will be the beneficial owner of such Rule 144A GDRs, representing that such person is a QIB and agreeing that it will comply with the restrictions on transfer set forth in the Rule 144A Deposit Agreement and to payment of the fees, charges and taxes provided therein.

3.       TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

The transfer of this Receipt is registrable on the books of the Depositary at its Corporate Trust Office by the Owner hereof in person or by a duly authorized attorney, upon surrender of this Receipt properly endorsed for transfer or accompanied by proper instruments of transfer and funds sufficient to pay any applicable transfer taxes and the expenses of the Depositary and upon compliance with such regulations, if any, as the Depositary may establish for such purpose. This Receipt may be split into other such Receipts, or may be combined with other such Receipts into one Receipt, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, or surrender of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require payment from the depositor of the Preference Shares or the presentor of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Preference Shares being deposited or withdrawn) and payment of any applicable fees as provided in this Receipt, may require the production of proof satisfactory to it as to the identity and genuineness of any signature, may require delivery of such certifications as the Company may from time to time specify in writing to the Depositary to assure the Company of compliance with the Securities Act and the rules and regulations thereunder and may also require compliance with any regulations the Depositary may establish consistent with the provisions of the Deposit Agreement or this Receipt, including, without limitation, this Article 3.

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The delivery of Receipts against deposit of Preference Shares generally or against deposit of particular Preference Shares may be suspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or under any provision of the Deposit Agreement or this Receipt or provisions governing the Deposited Securities, or for any other reason.

After the expiration of the Restricted Period or any other applicable restricted period in the case of a subsequent issuance of American Depositary Shares, the Depositary shall not knowingly accept for deposit under the Deposit Agreement any Preference Shares that would be required to be registered under the provisions of the Securities Act for the public offer and sale thereof in the United States, unless a registration statement is in effect as to such Preference Shares for such offer and sale.

Without limiting the foregoing, Preference Shares that the Depositary believes have been withdrawn from a restricted depositary receipt facility established or maintained by a depositary bank (including any such other facility maintained by the Depositary) may be accepted for deposit under the Deposit Agreement only if those Preference Shares are not “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, and the Depositary may, as a condition of accepting those Preference Shares for deposit, require the person depositing those Preference Shares to provide the Depositary with a certificate to the foregoing effect.

Notwithstanding anything to the contrary in the Deposit Agreement or the Receipts, at and after the Effective Time, the surrender of outstanding Receipts and withdrawal of Deposited Securities may not be suspended, subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Preference Shares in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the Receipts or to the withdrawal of the Deposited Securities.

4.       LIABILITY OF OWNER OR BENEFICIAL OWNER FOR TAXES.

If any tax or other governmental charge shall become payable with respect to any Receipt or any Deposited Securities represented hereby, such tax or other governmental charge shall be payable by the Owner or Beneficial Owner hereof to the Depositary. The Depositary may refuse to effect any transfer of this Receipt or any withdrawal of Deposited Securities represented by American Depositary Shares evidenced by such Receipt until such payment is made, and may withhold any dividends or other distributions, or may sell for the account of the Owner or Beneficial Owner hereof any part or all of the Deposited Securities represented by the American Depositary

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Shares evidenced by this Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of such tax or other governmental charge and the Owner or Beneficial Owner hereof shall remain liable for any deficiency.

5.       WARRANTIES ON DEPOSIT OF PREFERENCE SHARES.

Every person depositing Preference Shares under the Deposit Agreement shall be deemed thereby to represent and warrant, in addition to the matters covered by the certification and agreement required under Section 2.02 of the Deposit Agreement, that such Preference Shares and each certificate therefor, if applicable, are validly issued, fully paid, non-assessable, and were not issued in violation of any preemptive or similar rights of the holders of outstanding Preference Shares and that the person making such deposit is duly authorized so to do. Every such person shall also be deemed to represent and warrant that, except with respect to the initial deposit and any deposit permitted hereunder pursuant to Section 4.03, 4.04 or 4.08, such person is not and shall not become at any time while such person holds Receipts or any beneficial interest therein an affiliate of the Company. In addition, every person depositing Preference Shares, taking delivery of or transferring Receipts, or surrendering Receipts and withdrawing Preference Shares under the Deposit Agreement shall also be deemed thereby (a) prior to the Effective Time, to (1) have made the representations and warranties required pursuant to Section 2.02 of the Deposit Agreement, (2) acknowledge and agree that the American Depositary Shares evidenced thereby and the Preference Shares represented thereby have not been registered under the Securities Act and, during the Restricted Period, may not be offered, sold, pledged or otherwise transferred except (i) outside the United States in accordance with Rule 903 or 904 of Regulation S or (ii) to a person whom the seller reasonably believes is a qualified institutional buyer (“QIB”) as defined in Rule 144A in a transaction meeting the requirements of Rule 144A, in each case in accordance with any applicable securities laws of any State of the United States; provided that in connection with any transfer during the Restricted Period under (ii) above, the transferor shall withdraw the Preference Shares or other Deposited Securities in accordance with the terms and conditions of the Deposit Agreement and instruct that such Preference Shares be delivered to the custodian under the Rule 144A Deposit Agreement for issuance, in accordance with the terms and conditions thereof, of Rule 144A GDSs to or for the account of such QIB, and (3) acknowledge and agree that there can be no assurance that a registration statement under the Securities Act relating to the American Depositary Shares will be filed or, if filed, will be declared effective under the Securities Act by the Commission, and that there can be no assurance as to the timing of the filing of any such registration statement or the timing of the effectiveness thereof under the Securities Act, or (b) at or after the Effective Time, to represent and warrant that such Preference Shares are not, and American Depositary Shares representing such Preference Shares would not be, Restricted Securities. All representations, warranties, acknowledgements and agreements required by Section 3.03 of the Deposit Agreement shall service the deposit of Preference Shares and delivery of Receipts.

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6.       FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Preference Shares for deposit or any Owner or Beneficial Owner of a Receipt may be required from time to time to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, legal or beneficial ownership of American Depositary Shares or other securities, compliance with all applicable laws or regulations and the terms of the Deposit Agreement, or such information relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to execute such certificates and to make such representations and warranties, as the Depositary may deem necessary or proper or as the Company may reasonably request by written request to the Depositary. The Depositary may withhold the delivery or registration of transfer of any Receipt or the distribution of any dividend or sale or distribution of rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof or other information is filed or such certificates are executed or such representations and warranties made. No Preference Share shall be accepted for deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been granted by any governmental body in the United Kingdom that is then performing the function of the regulation of currency exchange.

7.       CHARGES OF DEPOSITARY.

The Company agrees to pay the fees, reasonable expenses and out-of pocket charges of the Depositary and those of any Registrar only in accordance with agreements in writing entered into between the Depositary and the Company from time to time. The Depositary shall present its statement for such charges and expenses to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The following charges shall be incurred by any party depositing or withdrawing Preference Shares or by any party surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited Securities or a distribution of Receipts pursuant to Section 4.03 of the Deposit Agreement), or by Owners, as applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of Preference Shares generally on the share register of the Company or Foreign Registrar and applicable to transfers of Preference Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals under the terms of the Deposit Agreement, (3) such cable, telex and facsimile transmission expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign currency pursuant to Section 4.05 of the Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts pursuant to Section 2.03, 4.03 or 4.04 of the Deposit Agreement and the surrender of Receipts

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pursuant to Section 2.05 or 6.02 of the Deposit Agreement, (6) a fee of $.02 or less per American Depositary Share (or portion thereof) for any cash distribution made pursuant to Sections 4.01 through 4.04 of the Deposit Agreement, (7) a fee for the distribution of securities pursuant to Section 4.02 of the Deposit Agreement, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a result of the deposit of such securities (for purposes of this clause 7 treating all such securities as if they were Preference Shares), but which securities are instead distributed by the Depositary to Owners, (8) a fee of $.02 or less per American Depositary Share (or portion thereof) for depositary services, which will accrue on the last day of each calendar year and will be payable as provided in clause 9 below; provided, however, that no fee will be assessed under this clause 8 to the extent that a fee of $.02 was charged pursuant to clause 6 above during that calendar year and (9) any other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Preference Shares or other Deposited Securities (which charge shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.06 of the Deposit Agreement and shall be collected at the sole discretion of the Depositary by billing such Owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions).

The Depositary may own and deal in any class of securities of the Company and its affiliates and in Receipts.

8.       DISCLOSURE OF INTERESTS.

To the extent that the provisions of or governing any Deposited Securities including, without limitation, the provisions of the Company’s Articles of Association as in effect from time to time and resolutions and regulations of the Company’s Board of Directors adopted in compliance with such Articles of Association or any applicable laws or regulations in the United Kingdom, the United States or any other country, may require the disclosure of beneficial or other ownership of Deposited Securities, other Shares and other securities of the Company and may provide for blocking transfer and voting or other rights to enforce such disclosure or limit such ownership, the Depositary shall use its reasonable efforts to comply, to the extent permitted by applicable law, with the Company’s reasonable written instructions in respect of any such disclosure, enforcement or limitation. Owners and Beneficial Owners shall comply with all such disclosure requirements and enforcement and ownership limitations and shall cooperate with the Depositary and the Depositary’s compliance with such Company instructions in respect thereof.

9.       TITLE TO RECEIPTS.

It is a condition of this Receipt and every successive Owner and Beneficial Owner of this Receipt by accepting or holding the same consents and agrees, that title to this Receipt when properly endorsed or accompanied by proper instruments of transfer, is

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transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York; provided, however, that the Depositary and the Company, notwithstanding any notice to the contrary, may treat the person in whose name this Receipt is registered on the books of the Depositary as the absolute owner hereof for the purpose of determining the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit Agreement or for all other purposes.

10.       VALIDITY OF RECEIPT.

This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory for any purpose, unless this Receipt shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the Depositary and, if a Registrar for the Receipts shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar.

11.       AVAILABLE INFORMATION; INSPECTION OF TRANSFER BOOKS.

If, at any time prior to the expiration of the Restricted Period, the Company is neither a reporting company under Section 13 or 15(d) of the Securities Exchange Act nor exempt from the reporting requirements of the Securities Exchange Act by reason of Rule 12g3-2(b) thereunder, the Company will provide, at its expense, to any Owner or Beneficial Owner or any holder of Preference Shares, and to any prospective purchaser of American Depositary Shares or Preference Shares designated by such person, upon request of such Owner, Beneficial Owner, holder or prospective purchaser, the information required by Rule 144A(d)(4)(i) and otherwise comply with Rule 144A(d)(4). If at any time the Company is neither subject to Section 13 or 15(d) of the Securities Exchange Act nor exempt pursuant to Rule 12g3-2(b) under the Securities Exchange Act (as determined by the Office of International Corporate Finance of the Commission), the Company shall immediately so notify the Depositary, and the Depositary may so notify the Owners in writing at the Company’s expense.

The Company hereby authorizes the Depositary to deliver such information as is furnished by the Company to the Depositary during any period in which the Company informs the Depositary it is subject to the information delivery requirements of Rule 144A(d)(4) to any such Owner, Beneficial Owner, holder of Preference Shares or prospective purchaser at the request of such person. The Company agrees to reimburse the Depositary for its reasonable expenses in connection with such deliveries and to provide the Depositary with such information in such quantities as the Depositary may from time to time reasonably request.

The Company currently furnishes the Securities and Exchange Commission (hereinafter called the “Commission”) with certain public reports and documents required by foreign law or otherwise under Rule 12g3-2(b) under the Securities Exchange Act of 1934. Such reports and documents will be available for

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inspection and copying by Owners and Beneficial Owners at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington, D.C. 20549.

The Depositary will make available for inspection by Owners of Receipts at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from the Company which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company. The Depositary will also send to Owners of Receipts copies of such reports when furnished by the Company pursuant to the Deposit Agreement. Any such reports and communications, including any such proxy soliciting material, furnished to the Depositary by the Company shall be furnished in English to the extent such materials are required to be translated into English pursuant to any regulations of the Commission.

The Depositary will keep books, at its Corporate Trust Office, for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Owners of Receipts provided that such inspection shall not be for the purpose of communicating with Owners of Receipts in the interest of a business or object other than the business of the Company or a matter related to the Deposit Agreement or the Receipts.

12.       DIVIDENDS AND DISTRIBUTIONS.

Whenever the Depositary receives any cash dividend or other cash distribution on any Deposited Securities, the Depositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgment of the Depositary be converted on a reasonable basis into United States dollars transferable to the United States, and subject to the Deposit Agreement, as promptly as practicable, convert such dividend or distribution into dollars and will distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement) to the Owners of Receipts entitled thereto; provided, however, that in the event that the Company or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, the amount distributed to the Owners of the Receipts evidencing American Depositary Shares representing such Deposited Securities shall be reduced accordingly.

Subject to the provisions of Sections 4.11 and 5.09 of the Deposit Agreement, whenever the Depositary receives any distribution other than a distribution described in Section 4.01, 4.03 or 4.04 of the Deposit Agreement, the Depositary will, after Consultation with the Company, as promptly as practicable, cause the securities or property received by it to be distributed to the Owners entitled thereto, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution cannot be

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made proportionately among the Owners of Receipts entitled thereto, or if for any other reason the Depositary deems such distribution not to be feasible, the Depositary may, after Consultation with the Company, as promptly as practicable, adopt such method as it may deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, the public or private sale of the securities or property thus received, or any part thereof, and the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement) will be distributed by the Depositary to the Owners of Receipts entitled thereto all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. The Depositary may withhold any distribution of Securities under Section 4.02 of the Deposit Agreement if it has not received satisfactory assurances from the Company that the distribution does not require registration under the Securities Act. To the extent that such securities or property or the net proceeds thereof are not effectively distributed to Owners as provided in Section 4.02 of the Deposit Agreement, the same shall constitute Deposited Securities and each American Depositary Share shall thereafter also represent its proportionate interest in such securities, property or net proceeds.

If any distribution consists of a dividend in, or free distribution of, Preference Shares, the Depositary may, after Consultation with the Company, and shall, if the Company shall so request in writing, distribute to the Owners of outstanding Receipts entitled thereto, additional Receipts evidencing an aggregate number of American Depositary Shares representing the amount of Preference Shares received as such dividend or free distribution subject to the terms and conditions of the Deposit Agreement with respect to the deposit of Preference Shares and the issuance of American Depositary Shares evidenced by Receipts, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement. Prior to the Effective Time, each beneficial owner of Receipts so distributed will be deemed to have acknowledged that the American Depositary Shares and the Preference Shares have not been registered under the Securities Act and to have agreed to comply with any applicable restrictions on transfer set forth on the face of those Receipts. In lieu of delivering Receipts for fractional American Depositary Shares in any such case, the Depositary will use its reasonable efforts to sell the amount of Preference Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.01 of the Deposit Agreement. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also represent the additional Preference Shares distributed upon the Deposited Securities represented thereby.

In the event that the Depositary determines that any distribution in property (including Preference Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may by public or private sale dispose of all or a portion of such property (including Preference Shares and rights to subscribe therefor) in such amounts and in

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such manner as the Depositary deems necessary and practicable to pay any such taxes or charges, and the Depositary shall distribute the net proceeds of any such sale after deductions of such taxes or charges to the Owners of Receipts entitled thereto.

Services for Owners and Beneficial Owners that may permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are not provided under, and are outside the scope of, the Deposit Agreement.

13.       RIGHTS.

In the event that the Company shall offer or cause to be offered to the holders of any Deposited Securities any rights to subscribe for additional Preference Shares or any rights of any other nature, the Depositary, after consultation with the Company, shall have discretion as to the procedure to be followed in making such rights available to any Owners or in disposing of such rights on behalf of any Owners and making the net proceeds available to such Owners or, if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to any Owners or dispose of such rights and make the net proceeds available to such Owners, then the Depositary shall allow the rights to lapse. If at the time of the offering of any rights the Depositary reasonably determines, after consultation with the Company, that it is lawful and feasible to make such rights available to all or certain Owners but not to other Owners, the Depositary may distribute to any Owner to whom it determines the distribution to be lawful and feasible, in proportion to the number of American Depositary Shares held by such Owner, warrants or other instruments therefor in such form as it deems reasonably appropriate.

In circumstances in which rights would otherwise not be distributed, if an Owner of Receipts requests the distribution of warrants or other instruments in order to exercise the rights allocable to the American Depositary Shares of such Owner hereunder, the Depositary will make such rights available to such Owner upon written notice from the Company to the Depositary that (a) the Company has elected in its sole discretion to permit such rights to be exercised and (b) such Owner has executed such documents as the Company has determined in its sole discretion are reasonably required under applicable law.

If the Depositary has distributed warrants or other instruments for rights to all or certain Owners, then upon instruction from such an Owner pursuant to such warrants or other instruments to the Depositary from such Owner to exercise such rights, upon payment by such Owner to the Depositary for the account of such Owner of an amount equal to the purchase price of the Preference Shares to be received upon the exercise of the rights, and upon payment of the fees and expenses of the Depositary and any other charges as set forth in such warrants or other instruments, the Depositary shall, on behalf of such Owner, exercise the rights and purchase the Preference Shares, and the Company shall cause the Preference Shares so purchased to be delivered to the

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Depositary on behalf of such Owner. As agent for such Owner, the Depositary will cause the Preference Shares so purchased to be deposited pursuant to Section 2.02 of the Deposit Agreement, and shall, pursuant to Section 2.03 of the Deposit Agreement, execute and deliver Receipts to such Owner. In the case of a distribution pursuant to the second paragraph of Section 4.04 of the Deposit Agreement, such Receipts shall be legended in accordance with applicable U.S. laws and shall be subject to the appropriate restrictions on sale, deposit, cancellation and transfer under such laws.

If the Depositary reasonably determines that it is not lawful and feasible to make such rights available to all or certain Owners, it may, and at the written request of the Company, shall offer to sell the rights, warrants or other instruments in proportion to the number of American Depositary Shares held by the Owners to whom it has determined it may not lawfully or feasibly make such rights available, and allocate the net proceeds of such sales (net of the fees and expenses of the Depositary as provided in Section 5.09 of the Deposit Agreement and all taxes and governmental charges payable in connection with such rights and subject to the terms and conditions of the Deposit Agreement) for the account of such Owners otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practical basis without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of any Receipt or otherwise. Those proceeds shall be distributed in accordance with Section 4.01 of the Deposit Agreement.

The Depositary will not offer rights to Owners unless the offering and sale of both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act with respect to a distribution to all Owners or are registered under the provisions of such Act; provided, that nothing in the Deposit Agreement shall create any obligation on the part of the Company to file a registration statement with respect to such rights or underlying securities or to endeavor to have such a registration statement declared effective. If an Owner of Receipts requests the distribution of warrants or other instruments, notwithstanding that there has been no such registration under the Securities Act, the Depositary shall not effect such distribution unless it has received an opinion from recognized counsel in the United States for the Company upon which the Depositary may rely that such distribution to such Owner is exempt from such registration.

Neither the Depositary nor the Company shall be responsible for any failure to determine that it may be lawful or feasible to make such rights available to Owners in general or any Owner in particular.

14.       CONVERSION OF FOREIGN CURRENCY.

Whenever the Depositary or the Custodian shall receive foreign currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis into

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Dollars and the resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars shall be distributed to the Owners entitled thereto or, if the Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such Dollars, then to the holders of such warrants or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Owners on account of exchange restrictions, the date of delivery of any Receipt or otherwise and shall be net of any expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.09 of the Deposit Agreement.

If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.

If at any time the Depositary or the Custodian shall determine that in its judgment any foreign currency received by the Depositary or the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion may hold such foreign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled to receive the same.

If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency received by the Depositary to, or hold such balance uninvested and without liability for interest thereon for the respective accounts of, the Owners entitled thereto.

The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the Deposit Agreement and the rate that the Depositary or its affiliate receives when buying or selling foreign currency for its own account. The Depositary makes no representation that the exchange rate used or obtained in any currency conversion under the Deposit Agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined

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will be the most favorable to Owners, subject to the Depositary’s obligations under Section 5.03 of the Deposit Agreement. The methodology used to determine exchange rates used in currency conversions is available upon request.

15.       RECORD DATES.

Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever the Depositary shall receive notice of any meeting of holders of Preference Shares or other Deposited Securities, or whenever for any reason the Depositary causes a change in the number of Preference Shares that are represented by each American Depositary Share, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (which shall be as near as practicable to any corresponding record date set by the Company) (a) for the determination of the Owners of Receipts who shall be (i) entitled to receive such dividend, distribution or rights or the net proceeds of the sale thereof, (ii) entitled to give instructions for the exercise of voting rights at any such meeting or (iii) responsible for any fees or charges assessed by the Depositary pursuant to the Deposit Agreement, or (b) on or after which each American Depositary Share will represent the changed number of Preference Shares, subject to the provisions of the Deposit Agreement.

16.       VOTING OF DEPOSITED SECURITIES.

The Company shall request the Depositary in writing to act under Section 4.07 of the Deposit Agreement in respect of each meeting of holders of Preference Shares at which holders of Preference Shares have a right to vote. Upon receipt of that request and a notice of that meeting, the Depositary shall, as soon as practicable thereafter, mail to the Owners a notice, the form of which notice shall be in the sole discretion of the Depositary, which shall contain (a) such information as is contained in the notice of meeting provided by the Company, (b) a statement that the Owners as of the close of business on a specified record date will be entitled, subject to any applicable provision of Scottish law and of the Articles of Association of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the amount of Preference Shares represented by their respective American Depositary Shares and (c) a statement as to the manner in which such instructions may be given. Upon the written request of an Owner on such record date, received on or before the date established by the Depositary for such purpose (the “Instruction Date”), the Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the amount of Preference Shares represented by the American Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the Preference Shares other than in accordance with instructions received from Owners.

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In order to give Owners a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if the Company requests the Depositary to act under the first sentence of Section 4.07 of the Deposit Agreement, the Company shall give the Depositary notice of the meeting or solicitation not less than 40 days prior to the meeting date or date for giving proxies or consents. There can be no assurance that Owners generally or any Owner in particular will receive the notice described in the preceding paragraph sufficiently prior to the Instruction Date to ensure that the Depositary will vote the Preference Shares or other Deposited Securities in accordance with the provisions of Section 4.07 of the Deposit Agreement.

17.       CHANGES AFFECTING DEPOSITED SECURITIES.

In circumstances where the provisions of Section 4.03 of the Deposit Agreement do not apply, upon any change in nominal value, change in par value, splitup, consolidation, or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a Custodian in exchange for or in conversion of or in respect of Deposited Securities shall be treated as new Deposited Securities under the Deposit Agreement, and American Depositary Shares shall thenceforth represent, in addition to the existing Deposited Securities, the right to receive the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may execute and deliver additional Receipts as in the case of a dividend in Preference Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited Securities.

18.       LIABILITY OF THE COMPANY AND DEPOSITARY.

Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates shall incur any liability to any Owner or Beneficial Owner if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any other governmental or regulatory authority, or by reason of any provision, present or future, of the Articles of Association of the Company, or by reason of any provision of any securities issued or distributed by the Company, or any offering or distribution thereof, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Depositary or the Company shall be prevented, delayed or forbidden from or be subject to any civil or criminal penalty on account of doing or performing any act or thing which by the terms of the Deposit Agreement or Deposited Securities it is provided shall be done or performed; nor shall the Depositary or the Company or any of their respective directors, employees, agents or affiliates incur any liability to any Owner or Beneficial Owner of a Receipt (i) by reason of any non-performance or delay, caused as aforesaid, in the

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performance of any act or thing which by the terms of the Deposit Agreement it is provided shall or may be done or performed, (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement, (iii) for the inability of any Owner or Beneficial Owner to benefit from any distribution, offering, right or other benefit that is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Owners or Beneficial Owners or (iv) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement. Where, by the terms of a distribution pursuant to Section 4.01, 4.02 or 4.03 of the Deposit Agreement, or an offering or distribution pursuant to Section 4.04 of the Deposit Agreement, such distribution or offering may not be made available to Owners of Receipts, and the Depositary may not dispose of such distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the Depositary, after Consultation with the Company, shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse. Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the Deposit Agreement to Owners or Beneficial Owners of Receipts, except that they agree to perform their obligations specifically set forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be subject to any liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts on behalf of any Owner, Beneficial Owner or other person. Neither the Depositary nor the Company shall be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Preference Shares for deposit, any Owner or Beneficial Owner of a Receipt, or any other person believed by it in good faith to be competent to give such advice or information. Each of the Company and the Depositary may rely and shall be protected in relying upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties. The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effect of any such vote, provided that any such action or nonaction is in good faith. The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with a matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises, the Depositary performed its obligations without negligence or bad faith while it acted as Depositary. No disclaimer of liability under the United States federal securities laws is intended by any provision of the Deposit Agreement.

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19.       RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR CUSTODIAN.

The Depositary may at any time resign as Depositary by written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by 90 days’ prior written notice of such removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositary or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners of Receipts to do so, it may appoint a substitute or additional Custodian.

20.       AMENDMENT.

The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of Owners or Beneficial Owners in any respect which they may deem necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes and other governmental charges, registration fees and cable, telex or facsimile transmission costs, delivery costs or other such expenses), or which shall otherwise prejudice any substantial existing right of Owners of Receipts, shall, however, not become effective as to outstanding Receipts until the expiration of thirty days after notice of such amendment shall have been given to the Owners of outstanding Receipts. Every Owner and Beneficial Owner of a Receipt at the time any amendment so becomes effective shall be deemed, by continuing to hold such Receipt or any interest therein, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the Deposited Securities represented thereby except in order to comply with mandatory provisions of applicable law.

21.       TERMINATION OF DEPOSIT AGREEMENT.

The Depositary at any time at the direction of the Company, shall terminate the Deposit Agreement by mailing notice of termination to the Owners of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement by mailing notice of termination to the Company and the Owners of all Receipts then outstanding if at least 60 days have passed since the Depositary delivered to the Company a written notice of its election to resign and a successor depositary has not been appointed and accepted its appointment as provided in the Deposit Agreement. On and after the date of termination, the Owner of a Receipt will, upon (a) surrender of such Receipt at the Corporate Trust Office of the Depositary, (b) payment of the fee of the Depositary for the

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surrender of Receipts referred to in Section 2.05 of the Deposit Agreement, and (c) payment of any applicable taxes or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by the American Depositary Shares evidenced by such Receipt. If any Receipts shall remain outstanding after the date of termination, the Depositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the Owners thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights and other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges). At any time after the date of termination, the Depositary may sell the Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it thereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon becoming general creditors of the Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement, except to account for such net proceeds and other cash (after deducting, in each case, the fee of the Depositary for the surrender of a Receipt, any expenses for the account of the Owner of such Receipt in accordance with the terms and conditions of the Deposit Agreement, and any applicable taxes or governmental charges) and except for its obligations to the Company, its directors, employees, agents and affiliates under Section 5.08 of the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary with respect to indemnification, charges, and expenses.

22.       SUBMISSION TO JURISDICTION.

In the Deposit Agreement, the Company has (i) appointed CT Corporation System, 28 Liberty Street, New York, New York 10005, as the Company’s authorized agent in the United States upon which process may be served in any suit or proceeding arising out of or relating to the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) consented and submitted to the jurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may be instituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding.

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23.       WAIVER OF IMMUNITIES.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Preference Shares or Deposited Securities, the American Depositary Shares, the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

24.       ISSUANCE IN SERIES.

If the Company issues Preference Shares in more than one class or series or that otherwise entitle their holders to rights that vary from the rights to which other Preference Shares entitle their holders, the following provisions shall apply, notwithstanding anything to the contrary in the Deposit Agreement:

(a)       The word “Series,” when used with respect to Preference Shares, shall mean all outstanding Preference Shares that entitle their holders to identical rights with respect to those Preference Shares, regardless of the title or any other designation that may be assigned to Preference Shares.

(b)       The Depositary shall direct the Custodian to hold Preference Shares of a Series deposited under the Deposit Agreement, and other Deposited Securities it receives in respect of those Preference Shares in a segregated account different from the account in which it holds Preference Shares of any other Series.

(c)       Preference Shares of each Series that are deposited under the Deposit Agreement shall be represented by a “Series” of American Depositary Shares separate from the American Depositary Shares representing Preference Shares of any other Series. The Depositary shall assign a designation to each Series of American Depositary Shares and shall reflect in its records the Series to which each American Depositary Share belongs. Each Series of American Depositary Shares shall be evidenced by a “Series” of Receipts separate from the Receipts evidencing American Depositary Shares of any other Series. Each Receipt shall be marked to indicate the designation of the Series of the American Depositary Shares evidenced by that Receipt and to identify the Series of Preference Shares those American Depositary Shares represent.

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(d)       If the rights to which deposited Preference Shares of a Series entitle their holders are modified such that those rights become identical to the rights to which deposited Preference Shares of another Series entitle their holders, the Depositary shall cause the Custodian to combine the accounts in which the former separate Series of Preference Shares are held, the Series of American Depositary Shares representing those Preference Shares will automatically be combined into one Series of American Depositary Shares and the Depositary may take any action necessary or convenient to effect that combination. At any time after that combination, the Owners of Receipts affected by that combination will be entitled to surrender their Receipts to the Depositary and receive Receipts reflecting the designation of the American Depositary Shares owned by them as a result of that combination.

(e)       Owners and Beneficial Owners of American Depositary Shares of a Series shall be entitled to rights under the Deposit Agreement only with respect to deposited Preference Shares of the corresponding Series and other Deposited Securities received in respect of deposited Preference Shares of that Series.

25.       REDEMPTION OF DEPOSITED SECURITIES.

If the Depositary receives a notice that Deposited Securities are to be redeemed, the Depositary shall (i) call for surrender a corresponding number of American Depositary Shares, (ii) notify the Owners of those American Depositary Shares that the Deposited Securities underlying their American Depositary Shares will be surrendered for redemption and (iii) surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date. Owners of American Depositary Shares affected by the redemption may surrender the Receipts evidencing those American Depositary Shares and receive delivery of money or other property the Depositary receives upon redemption of Deposited Securities as provided in Section 2.05 of the Deposit Agreement.

If the Depositary receives notice that less than all the Deposited Securities are to be redeemed, the Depositary shall determine in its discretion which American Depositary Shares to call for surrender in connection with that redemption. If the Depositary calls for surrender less than all the American Depositary Shares evidenced by a Receipt in connection with a redemption of Deposited Securities, the Depositary shall, upon surrender of that Receipt, deliver to the Owner a Receipt evidencing the amount of American Depositary Shares evidenced by the surrendered Receipt that were not called for surrender.

26.       UNCERTIFICATED AMERICAN DEPOSITARY SHARES; DIRECT REGISTRATION SYSTEM.

Notwithstanding anything to the contrary in the Deposit Agreement:

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(a)       American Depositary Shares may be certificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit A to the Deposit Agreement summarizes the terms and conditions of, and will be the prospectus required under the Securities Act for, both certificated and uncertificated American Depositary Shares. Except for those provisions of the Deposit Agreement that by their nature do not apply to uncertificated American Depositary Shares, all the provisions of the Deposit Agreement shall apply, mutatis mutandis, to uncertificated American Depositary Shares as well as to certificated American Depositary Shares, and to Owners and Beneficial Owners of uncertificated American Depositary Shares as well as to Owners and Beneficial Owners of Receipts.

(b)       (i) The term “deliver”, or its noun form, when used with respect to Receipts, shall mean (A) book-entry transfer of American Depositary Shares to an account at The Depository Trust Company, or its successor (“DTC”), designated by the person entitled to such delivery, (B) registration of American Depositary Shares not evidenced by a Receipt on the books of the Depositary in the name requested by the person entitled to such delivery and mailing to that person of a statement confirming that registration or (C) if requested by the person entitled to such delivery, delivery at the Corporate Trust Office of the Depositary to the person entitled to such delivery of one or more Receipts evidencing American Depositary Shares registered in the name requested by that person.

(ii) The term “surrender”, when used with respect to Receipts, shall mean (A) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary, (B) delivery to the Depositary at its Corporate Trust Office of an instruction to surrender American Depositary Shares not evidenced by a Receipt or (C) surrender to the Depositary at its Corporate Trust Office of one or more Receipts evidencing American Depositary Shares.

(c)       American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registered securities under the laws of the State of New York.

(d)       The Depositary shall have a duty to register a transfer in the case of uncertificated American Depositary Shares, upon receipt from the Owner of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below). The Depositary, upon surrender of a Receipt for the purpose of exchanging it for uncertificated American Depositary Shares, shall cancel that Receipt and send the Owner a statement confirming that the Owner is the owner of the same number of uncertificated American Depositary Shares that the surrendered Receipt evidenced. The Depositary, upon receipt of a proper instruction (including, for the avoidance of doubt, instructions through DRS and Profile as provided in subsection (f) below) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging them for certificated American Depositary Shares, shall execute and deliver

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to the Owner a Receipt evidencing the same number of certificated American Depositary Shares.

(e)       Upon satisfaction of the conditions for replacement of a Receipt that is mutilated, lost, destroyed or stolen, the Depositary shall deliver to the Owner the American Depositary Shares evidenced by that Receipt in uncertificated form unless otherwise requested by the Owner.

(f)       (i) The parties acknowledge that the Direct Registration System (“DRS”) and Profile Modification System (“Profile”) shall apply to uncertificated American Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the Depositary may register the ownership of uncertificated American Depositary Shares, which ownership shall be evidenced by periodic statements issued by the Depositary to the Owners entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of prior authorization from the Owner to register such transfer.

(ii) In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties understand that the Depositary will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an Owner in requesting a registration of transfer and delivery as described in clause (i) above has the actual authority to act on behalf of the Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, the provisions of Sections 5.03 and 5.08 of the Deposit Agreement shall apply to the matters arising from the use of the DRS. The parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositary through the DRS/Profile System and in accordance with the Deposit Agreement shall not constitute negligence or bad faith on the part of the Depositary.

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EX-10.8

Exhibit 10.8

EXECUTION VERSION

HBOS PLC,

as Issuer and Guarantor

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND,

as Issuer and Guarantor

SCOTLAND INTERNATIONAL FINANCE NO. 2 B.V.,

as Issuer

and

THE BANK OF NEW YORK,

as Trustee

AMENDED AND RESTATED
INDENTURE

Dated as of April 30, 2003

Subordinated Debt Securities

Unconditionally and Irrevocably Guaranteed on
a Subordinated Basis by HBOS plc and The Governor and Company
of the Bank of Scotland, as applicable

TABLE OF CONTENTS

RECITALS	1
Article One DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	1
SECTION 101. Definitions.	1
SECTION 102. Compliance Certificates and Opinions.	7
SECTION 103. Form of Documents Delivered to Trustee.	7
SECTION 104. Acts of Holders.	8
SECTION 105. Notices. Etc. to Trustee, Issuer or Guarantors.	9
SECTION 106. Notice to Holders: Waiver.	9
SECTION 107. Conflict with Trust Indenture Act.	10
SECTION 108. Effect of Headings and Table of Contents.	10
SECTION 109. Successors and Assigns.	10
SECTION 110. Separability Clause.	10
SECTION 111. Benefits of Indenture.	10
SECTION 112. Governing Law.	10
SECTION 113. Legal Holidays.	10
SECTION 114. Appointment of Agent for Service.	11
SECTION 115. Separate Counterparts.	11
Article Two SECURITY FORMS	11
SECTION 201. Forms Generally.	11
SECTION 202. Form of Face of Security.	12
SECTION 203. Form of Reverse of Security.	22
SECTION 204. Form of Trustee’s Certificate of Authentication.	42
SECTION 205. Form of Guarantee.	42
Article Three THE SECURITIES	44
SECTION 301. Amount Unlimited: Issuable in Series.	44
SECTION 302. Denominations.	46
SECTION 303. Execution. Authentication, Delivery and Dating.	46
SECTION 304. Temporary Securities.	47
SECTION 305. Registration, Registration of Transfer and Exchange.	47
SECTION 306. Mutilated. Destroyed. Lost and Stolen Securities.	51
SECTION 307. Payment of Interest; Interest Rights Preserved.	51
SECTION 308. Persons Deemed Owners.	52
SECTION 309. Cancellation.	52
SECTION 310. Computation of Interest.	52
Article Four SATISFACTION AND DISCHARGE	53
SECTION 401. Satisfaction and Discharge of Indenture.	53
SECTION 402. Application of Trust Money.	53
Article Five REMEDIES	54
SECTION 501. Events of Default.	54
SECTION 502. Acceleration of Maturity; Rescission and Annulment.	54
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.	55
SECTION 504. Trustee May File Proofs of Claim.	56
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.	56
SECTION 506. Application of Money Collected.	57
SECTION 507. Limitation on Suits.	57
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium, if any, and Interest.	58
SECTION 509. Restoration of Rights and Remedies.	58
SECTION 510. Rights and Remedies Cumulative.	58
SECTION 511. Delay or Omission Not Waiver.	58
SECTION 512. Control by Holders.	58
SECTION 513. Waiver of Past Defaults.	59

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SECTION 514. Undertaking for Costs.	59
SECTION 515. Waiver of Stay or Extension Laws.	60
Article Six THE TRUSTEE	60
SECTION 601. Certain Duties and Responsibilities.	60
SECTION 602. Notice of Defaults.	61
SECTION 603. Certain Rights of Trustee.	61
SECTION 604. Not Responsible for Recitals or Issuance of Securities.	62
SECTION 605. May Hold Securities.	62
SECTION 606. Money Held in Trust.	62
SECTION 607. Compensation and Reimbursement.	62
SECTION 608. Disqualification Conflict Of Interests.	62
SECTION 609. Corporate Trustee Required: Eligibility.	67
SECTION 610. Resignation and Removal: Appointment of Successor.	67
SECTION 611. Acceptance of Appointment by Successor.	68
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.	69
SECTION 613. Preferential Collection of Claims Against Issuer.	69
SECTION 614. Authenticating Agents.	72
Article Seven HOLDERS’ LISTS AND REPORTS BY TRUSTEE, ISSUER AND GUARANTORS	73
SECTION 701. Issuer to Furnish Trustee Names and Addresses of Holders.	73
SECTION 702. Preservation of Information: Communications to Holders.	74
SECTION 703. Reports by Trustee.	74
SECTION 704. Reports by the Issuer and the Guarantors.	75
Article Eight CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE	76
SECTION 801. Issuer or Guarantors May Consolidate, Etc. Only on Certain Terms.	76
SECTION 802. Successor Corporation to be Substituted.	77
SECTION 803. Assumption by Guarantors or Subsidiary of Issuer’s Obligations.	77
SECTION 804. Addition of Designated Subsidiaries as Issuer.	79
Article Nine SUPPLEMENTAL INDENTURES	79
SECTION 901. Supplemental Indentures Without Consent of Holders.	79
SECTION 902. Supplemental Indentures with Consent of Holders.	80
SECTION 903. Execution of Supplemental Indentures.	81
SECTION 904. Effect of Supplemental Indentures.	81
SECTION 905. Conformity with the Trust Indenture Act.	81
SECTION 906. Reference in Securities to Supplemental Indentures.	81
Article Ten COVENANTS	82
SECTION 1001. Payment of principal, Premium, if any, Interest and Additional Amounts.	82
SECTION 1002. Maintenance of Office or Agency.	82
SECTION 1003. Money for Securities Payments to Be Held in Trust.	83
SECTION 1004. Corporate Existence.	84
SECTION 1005. Statements as to Compliance.	84
SECTION 1006. Subordination.	84
SECTION 1007. Office or Agency for Certain Purposes.	89
SECTION 1008. Rule 144A Information Requirement.	89
Article Eleven REDEMPTION OF SECURITIES	89
SECTION 1101. Applicability of Article.	89
SECTION 1102. Election to Redeem; Notice to Trustee.	89
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.	89
SECTION 1104. Notice of Redemption.	90
SECTION 1105. Deposit of Redemption Price.	90
SECTION 1106. Securities Payable on Redemption Date.	90
SECTION 1107. Securities Redeemed in Part.	31
SECTION 1108. Optional Redemption Due to Changes in Tax Treatment.	91

iii

Article Twelve SINKING FUNDS	92
SECTION 1201. Applicability of Article.	92
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.	92
SECTION 1203. Redemption of Securities for Sinking Fund.	92
Article Thirteen GUARANTEES AND SUBORDINATION	93
SECTION 1301. Guarantee.	93
SECTION 1302. Subrogation.	94
SECTION 1303. Execution and Delivery of Guarantees.	94
SECTION 1304. Subordination.	95
SECTION 1305. HBOS and BOS Not to Permit Amendment of SIF’s Articles of Association.	97
Article Fourteen DEFEASANCE	97
SECTION 1401. Defeasance Upon Deposit of Cash or U.S. Government Obligations.	97
SECTION 1402. Repayment to Issuer and Guarantors.	98
SECTION 1403. Indemnity for U.S. Government Obligations.	98

iv

AMENDED AND RESTATED INDENTURE, dated as of April 30, 2003 (the “Indenture”) among HBOS plc, a corporation incorporated in Scotland under the Companies Act 1985 with registered number SC 218813, having its registered office at The Mound, Edinburgh, Scotland EH1 1YZ, (“HBOS” and, in its capacity as guarantor of Securities issued under this Indenture by any Issuer (other than HBOS), a “Guarantor”), THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND, a bank constituted and existing under the laws of Scotland, having its principal office at The Mound, Edinburgh, Scotland EH1 1YZ, (“BOS” and, in its capacity as guarantor of Securities issued under this Indenture by any Issuer (other than HBOS or BOS), a “Guarantor” and, collectively with HBOS in their respective capacities as Guarantors, the “Guarantors”), SCOTLAND INTERNATIONAL FINANCE NO. 2 B.V., a private limited liability company (“besloten vennootschap met beperkte aansprakelijkheid”) incorporated under the laws of The Netherlands (“SIF”), having its corporate seat at Herengracht 548, 1017 CG, Amsterdam, other subsidiaries of HBOS designated from time to time as an Issuer hereunder in accordance with the provisions of Section 804 hereof, and THE BANK OF NEW YORK, a banking corporation duly organized and existing under the laws of the State of New York, as Trustee (the “Trustee”), having its Corporate Trust Office at 101 Barclay Street, New York, New York 10286.

RECITALS

BOS, SIF and the Trustee heretofore executed and delivered an Indenture dated August 21, 1992 (as amended heretofore, the “1992 Indenture”) in respect of the issuance from time to time of certain unsecured subordinated debentures, notes or other evidences of indebtedness to be issued in one or more series by BOS, SIF or certain designated subsidiaries of BOS, as provided in the 1992 Indenture.

Section 901(6) of the 1992 Indenture provides that BOS, SIF and the Trustee may amend the 1992 Indenture without the consent of any Holders; provided that any changes shall become effective only as to Securities of any series subsequently created.

BOS, SIF and the Trustee desire to amend the 1992 Indenture to add HBOS as an Issuer and Guarantor thereunder and in certain other respects.

HBOS, BOS and SIF, and, upon execution and delivery of a supplemental indenture, in form satisfactory to the Trustee, in accordance with Section 804 hereof, each Designated Subsidiary (as hereinafter defined) have duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of certain of their respective unsecured subordinated debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as in this Indenture provided.

All things necessary to make this Indenture a valid agreement of HBOS, BOS and SIF, in accordance with its terms, have been done.

The Guarantors desire to make the Guarantees provided for herein, as applicable, in respect of Securities issued under this Indenture by BOS, SIF or any Designated Subsidiary.

All things necessary to make the Guarantees, when executed by the Guarantors and endorsed on the Securities issued under this Indenture by BOS, SIF or any Designated Subsidiary, and authenticated and delivered hereunder, the valid obligations of the Guarantors, and to make this Indenture a valid agreement of the Guarantors, in accordance with their and its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:

Article One

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions.

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

1 

(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as applied in the United Kingdom and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and

(4) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

The terms and conditions of this Indenture, including the terms and conditions of any Guarantee hereunder, and references herein to Securities, shall apply only to Securities issued after the date hereof under this Indenture, and shall not apply to any securities issued under the 1992 Indenture prior to the date hereof (to which the terms and conditions of the 1992 Indenture will continue to apply).

References herein to the Guarantors and Guarantees shall be inapplicable to any Security issued by HBOS and to any Security issued by BOS (in respect of any guarantee made by BOS) under this Indenture.

References herein to the bankruptcy, winding up, liquidation or sequestration of an Issuer or a Guarantor shall be deemed to refer to any analogous proceedings or procedure or process under the laws of any applicable jurisdiction.

Certain terms, used principally in Article Six, are defined in that Article.

Certain terms, used principally in Sections 1006 and 1304, respectively, are defined in those Sections.

“1992 Indenture” has the meaning set forth in the Recitals hereto.

“Act”, when used with respect to any Holder, has the meaning specified in Section 104.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Authenticating Agent” means any Person authorized to authenticate and deliver Securities on behalf of the Trustee pursuant to Section 614.

“Board of Directors” means (i) when used with reference to HBOS, the board of directors of HBOS, (ii) when used with reference to BOS, the board of directors of BOS, (iii) when used with reference to SIF, the Management Board of SIF or any duly authorized committee thereof, and (iv) when used with reference to a Designated Subsidiary, a governing body of such Designated Subsidiary having functions equivalent to those of the board of directors of a United States corporation.

“Board Resolution” means, subject to Section 103(c), (i) when used with reference to HBOS, a copy of a resolution duly passed by the Board of Directors of HBOS, (ii) when used with reference to BOS, a copy of a resolution duly passed by the Board of Directors of BOS, (iii) when used with reference to SIF, a copy of a resolution duly passed by its Management Board, and, (iv) when used with reference to a Designated Subsidiary, a copy of a resolution of the Board of Directors of such Designated Subsidiary duly passed by the Board of Directors of such Designated Subsidiary and, in each case, certified by the Company Secretary of such Person (i) to have been duly passed by such Board of Directors and (ii) to be in full force and effect on the date of such certification, and

2 

delivered to the Trustee. As used in this Indenture, reference to action taken pursuant to a Board Resolution shall include all action taken by an officer, director or attorney-in-fact of the Issuer or a Guarantor which has been duly authorized by the Board of Directors of the Issuer or such Guarantor, as the case may be, to take such action and which has been delegated to such officer, director or attorney-in-fact.

“Business Day”, when used with respect to any Place of Payment, means each day which is not a Saturday, a Sunday or a day on which banking institutions in that Place of Payment are authorized or obligated by law to remain closed.

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it, then the body performing such duties at such time.

“Company Secretary” means (i) when used in reference to HBOS, the Company Secretary of HBOS, (ii) when used in reference to BOS, the Secretary or any Assistant Secretary of BOS, (iii) when used in reference to SIF, one of the Managing Directors of SIF, and (iv) when used in reference to a Designated Subsidiary, any Person permitted to certify resolutions adopted and/or passed by a governing body of such Designated Subsidiary having functions equivalent to those of the board of directors of a United States corporation under the laws, statutes and regulations of the jurisdiction of such Designated Subsidiary and the articles of incorporation and any by-laws or similar documents of such Designated Subsidiary.

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business shall principally be administered, which at the date hereof is Floor 21W, 101 Barclay Street, New York, New York 10286; Attention: Corporate Trust Administration.

“corporation” includes corporations, associations, companies and business trusts.

“Default” has the meaning specified in Section 503.

“Defaulted Interest” has the meaning specified in Section 307.

“Depositary” means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depositary by the Issuer pursuant to Section 301, which must be a clearing agency registered under the Securities Exchange Act and, if so provided pursuant to Section 301 with respect to the Securities of a series, any successor to such Person. If at any time there is more than one such Person, “Depositary” shall mean, with respect to any series of Securities, the qualifying entity which has been appointed with respect to the Securities of that series.

“Designated Subsidiary” means any Subsidiary designated by HBOS as a Designated Subsidiary for the purposes of this Indenture to become an Issuer of Securities, which Subsidiary has executed and delivered a supplemental indenture, in form satisfactory to the Trustee, as described in Section 804 hereof.

“Discharged” has the meaning specified in Section 1401.

“Dual Currency Security” means a Security in respect of which payments of principal and/or interest are made or to be made in such different currencies, and calculated upon such basis as provided in such Security.

“Executive Officer” means (i) in the case of HBOS, the Chairman, the Deputy Chairman, any Chief Executive or the Group Finance Director, (ii) in the case of BOS, the Governor, any Deputy Governor, or any Executive Director, (iii) in the case of SIF, a Managing Director, and (iv) in the case of any Designated Subsidiary, a Person performing duties equivalent to the duties of an executive officer of a United States corporation, and, in each case, any other person authorized by a Board Resolution to carry out the functions such officer performs.

“Financial Services Authority” means the Financial Services Authority of the United Kingdom.

“Financial Services Authority Practices” means the practices and requirements of the Financial Services Authority relating to Tier 2 Capital in effect from time to time.

3 

“Global Security” means a Security evidencing all or part of a series of Securities, issued to the Depositary for such series or its nominee and registered in the name of such Depositary or nominee.

“Guarantee” means any guarantee of HBOS and/or BOS, as applicable, endorsed on a Security authenticated and delivered pursuant to this Indenture and shall include the guarantee set forth in Section 1301.

“Guarantors” means (i) when the Issuer is BOS, HBOS as Guarantor and (ii) when the Issuer is SIF or a Designated Subsidiary, HBOS and BOS as Guarantors, and references herein to the “Guarantors” shall be read to be references to either or both of the Guarantors, as appropriate.

“Holder” means a Person in whose name a Security is registered in the Security Register.

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section 301.

“interest”, when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

“Interest Payment Date”, when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

“Issuer” means each of HBOS, BOS, SIF and the Designated Subsidiaries until a successor shall have succeeded to any such Person pursuant to the applicable provisions of this Indenture, and thereafter “Issuer” shall also mean such successor. Where the context so requires in this Indenture, and in relation to any Security or series of Securities or any Security or series of Securities proposed to be issued under this Indenture, “Issuer” shall mean whichever of HBOS, BOS, SIF or a Designated Subsidiary is the issuer, or proposed issuer, of such Security or series of Securities.

“Issuer Order” or “Issuer Request” means (a) a written statement, request or order signed in the name of an Issuer or (b) with respect to Global Securities in respect of which Citibank N.A., London office, has been appointed Paying Agent and Registrar, instructions given on behalf of an Issuer by the electronic timesharing facility known as the Citi Treasury Manager by an Executive Officer of such Issuer, any other authorized officer of such Issuer or, if authorized by a power of attorney executed by any such Executive Officer or other officer or by the Board of Directors of such Issuer or otherwise in accordance with the laws, statutes and regulations of the jurisdiction of incorporation of such Issuer and the articles of incorporation and by-laws or similar documents of such Issuer, by such other person as may be authorized in such power of attorney, subject to Section 103(b) and (c), and delivered to the Trustee.

“Management Board” means the managing board of SIF described in Article 11 of the Articles of Association of SIF.

“Managing Director” means, with respect to SIF, any member of the Management Board of SIF.

“Maturity”, when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

“Officer’s Certificate” means a certificate signed by an Executive Officer of such Person, or a duly authorized attorney-in-fact appointed by an Executive Officer of such Person, the Board of Directors of such Person or otherwise in accordance with the laws, statutes and regulations of the jurisdiction of incorporation of such Person and the articles of incorporation and by-laws or similar documents of such Person and, in the case of any Issuer, subject to Section 103(b) and (c), and delivered to the Trustee.

“Opinion of Counsel” means a written opinion of counsel, who may be an employee of or regular counsel for the Issuer or a Guarantor, or may be other counsel satisfactory to the Trustee.

4 

“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.

“Outstanding”, when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

(i)       Securities theretofore cancelled 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 has been theretofore deposited with the Trustee or any Paying Agent (other than the Issuer or the Guarantors) in trust or set aside and segregated in trust by the Issuer or the Guarantors (if the Issuer or the Guarantors, as the case may be, shall act as their own respective Paying Agents) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and

(iii)       Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, 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 Issuer or the Guarantors;

provided 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, (a) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, (b) the principal amount of a Dual Currency Security that shall be deemed to be Outstanding for such purposes shall be the original principal amount thereof at the time of issuance, (c) the principal amount of a Security denominated in a foreign currency or currency unit shall be the U.S. dollar equivalent, determined as of the date of original issuance of such Security, of the principal amount (or, in the case of a Dual Currency Security, the original principal amount) of such Security (or, in the case of an Original Issue Discount Security denominated in a foreign currency or currency unit, the U.S. dollar equivalent as of the date of original issuance of such Security of the amount determined as provided in (a) above), and (d) Securities owned by the Issuer, either of the Guarantors or any other obligor upon the Securities or any Affiliate of the Issuer, either of the Guarantors 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 the Trustee knows to be so owned shall be so disregarded. For purposes of (b) and (c) above, the U.S. dollar equivalent of a Security denominated in a foreign currency shall be determined on the basis of the spot rate for the sale of the U.S. Dollar against the purchase of such foreign currency in the London foreign exchange market quoted by any leading bank (other than HBOS or any of its subsidiaries) selected by the Issuer on the date of original issuance of such Security. Securities so owned as described in (d) above 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 Issuer, either of the Guarantors or any other obligor upon the Securities or any Affiliate of the Issuer, either of the Guarantors or of such other obligor.

“Paying Agent” means any Person (which may include the Issuer or either of the Guarantors) authorized by the Issuer to pay the principal of (and premium, if any) or interest on any Securities on behalf of the Issuer.

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Place of Payment”, when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any) and interest, if any, on the Securities of that series are payable as specified in or as contemplated by Section 301.

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“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

“Redemption Date”, when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture; provided that Tier 2 Securities shall not be redeemed in whole or in part except in accordance with the Financial Services Authority Practices.

“Redemption Price”, when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture, exclusive of accrued and unpaid interest.

“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose pursuant to Section 301.

“Responsible Officer”, when used with respect to the president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee, which in each case is assigned to its Corporate Trust Office, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

“Restricted Security” means any of the Securities that bears or is required to bear the legend set forth in Section 305.

“Securities” has the meaning stated in the fourth recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

“Securities Act” means the Securities Act of 1933, as amended.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Security Register” and “Security Registrar” have the respective meanings specified in Section 305.

“Senior Creditors” has, as the context requires, the meanings stated in Section 1006 and Section 1304.

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.

“Stated Maturity”, when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

“Subordinated Creditors” has, as the context requires, the meanings stated in Section 1006 and Section 1304.

“Subsidiary” means any corporation of which HBOS, directly and/or indirectly through one or more Persons, owns more than 50% of the shares of voting stock. For the purposes of this definition, “voting stock” means stock of the class or classes having general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

“Tier 2 Securities” means Securities issued under this Indenture which constitute Tier 2 Capital in accordance with the requirements in effect from time to time of the Financial Services Authority.

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter

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“Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as provided in Section 905.

“U.S. Government Obligations” means noncallable or non- redeemable (i) direct obligations of the United States of America for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States of America, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a) (2) of the Securities Act) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depositary receipt.

“Undated Security” means any Security issued hereunder by any Issuer other than SIF in respect of which there is no fixed Stated Maturity or fixed Redemption Date. Notwithstanding any other provision of this Indenture, SIF may not issue any Securities in respect of which there is no fixed Stated Maturity or fixed Redemption Date.

“United Kingdom” means the United Kingdom of Great Britain and Northern Ireland.

SECTION 102. Compliance Certificates and Opinions.

Except as otherwise expressly provided by this Indenture, upon any application or request by the Issuer or either of the Guarantors to the Trustee to take any action under any provision of this Indenture, the Issuer or such Guarantor, as the case may be, shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than the Officer’s Certificate delivered pursuant to Section 1005) shall include:

(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

SECTION 103. Form of Documents Delivered to Trustee.

(a)       In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one

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such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

(b)       For so long as SIF shall be a corporation organized under the laws of The Netherlands, any instrument or document required to be signed by or on behalf of SIF hereunder shall be signed as provided in this Section 103 (b). Each such document or instrument shall be signed on behalf of SIF by a Managing Director. In addition, in the event that any law, statute or regulation of The Netherlands, or any provision of the articles of association of SIF, requires that any such instrument or document be signed by any Person other than a Managing Director in order for such instrument or document to be legal, valid or binding, such instrument or document shall be signed by such other Person as shall be so required.

(c)       In the event that a Subsidiary assumes the obligations of an Issuer pursuant to Section 803, then any instrument or document required to be signed by or on behalf of such Issuer hereunder shall be signed by such Person or Persons as shall be required by the laws, statutes or regulations of such jurisdiction, and by the provisions of the articles of incorporation and any by-laws or similar instrument of such Subsidiary, in order for such instrument or document to be legal, valid and binding. In addition, any Officer’s Certificate of any such Subsidiary may be signed by any Person or Persons performing duties equivalent to the duties of an executive officer of a United States corporation, and any resolution of such Subsidiary which has been adopted by a governing body of such Subsidiary having functions equivalent to those of a United States board of directors and certified by any Person permitted to certify such a resolution under the laws, statutes and regulations of the jurisdiction of such Subsidiary and the articles of incorporation and any by-laws or similar documents of such Subsidiary, shall constitute a Board Resolution hereunder.

(d)       Any certificate or opinion of an Executive Officer or other officer of any Issuer or either of the Guarantors may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, or a certificate of or representations by, counsel, unless such Executive Officer or other officer knows, or in the exercise of reasonable care should know, that the Opinion of Counsel or the certificate or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Executive Officer or other officer or of an Issuer or either of the Guarantors, as the case may be, stating that the information with respect to such factual matters is in the possession of such Issuer or such Guarantor, as the case may be, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

(e)       Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

SECTION 104. Acts of Holders.

(a)       Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer and the Guarantors.

Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Issuer and the Guarantors, if made in the manner provided in this Section.

Without limiting the generality of the foregoing, unless otherwise established in or pursuant to a Board Resolution or set forth or determined in an Officer’s Certificate, or established in one or more

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indentures supplemental hereto, pursuant to Section 301, a Holder, including a Depositary that is a Holder of a Global Security, may make, give or take, by a proxy, or proxies, duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and a Depositary that is a Holder of a Global Security may provide its proxy or proxies to the beneficial owners of interests in any such Global Security through such Depositary’s standing instructions and customary practices.

(b)       The fact and date of the execution by any Person of any such instrument, writing or proxy may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument, writing or proxy acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument, writing or proxy, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(c)       The ownership of Securities shall be proved by the Security Register.

(d)       Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange thereof or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Security.

(e)       The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to sign any instrument evidencing or embodying an Act of the Holders. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to sign any such instrument evidencing or embodying an Act of the Holders or to revoke any such instrument previously signed, whether or not such Persons continue to be Holders after such record date. No such instrument shall be valid or effective for more than 90 days after such record date.

SECTION 105. Notices. Etc. to Trustee, Issuer or Guarantors.

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Issuer or either of the Guarantors shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at the address of its Corporate Trust Office specified in the first paragraph of this Indenture, or

(2) the Issuer or either of the Guarantors by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class air mail postage prepaid, to such Issuer or such Guarantor, to HBOS Treasury Services plc at 33 Old Broad Street, London EC2N 1HZ, Attention: Legal Department or at any other address previously furnished in writing to the Trustee by any such Issuer or such Guarantor.

SECTION 106. Notice to Holders: Waiver.

Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall

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be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

SECTION 107. Conflict with Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, if applicable, such imposed duties shall control.

SECTION 108. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

SECTION 109. Successors and Assigns.

All covenants and agreements in this Indenture by the Issuer or either Guarantor shall bind its respective successors and assigns, whether so expressed or not.

SECTION 110. Separability Clause.

In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 111. Benefits of Indenture.

Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Holders, and, to the extent set forth in Section 308, any Depositary, any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 112. Governing Law.

This Indenture and the Securities (except as stated in Section 203 and Section 205 and except for Section 1006 and Section 1304) shall be governed by, and construed in accordance with, the laws of the State of New York. Section 1006 and Section 1304 of this Indenture shall be governed by, and construed in accordance with, the laws of England.

SECTION 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture) payment of interest, if any, or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be. With respect to any Security bearing interest at a floating rate, if any Interest Payment Date would otherwise fall on a date which is not a Business Day, it shall be postponed to the next Business Day unless it would thereby fall into the next calendar month, in which event it shall be brought forward to the preceding Business Day.

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SECTION 114. Appointment of Agent for Service.

Each Issuer and each Guarantor hereby appoints each of (1) the New York Branch of BOS as its agent upon which process may be served in any legal action or proceeding which may be instituted in any Federal or State court in the Borough of Manhattan, The City of New York, and (2) the London Office of HBOS as its agent upon which process may be served in any legal action or proceeding which may be instituted in any court in England, in each case, arising out of or relating to the Securities, the Guarantees or this Indenture. Service of process upon any such agent at the office of such agent at 380 Madison Avenue, New York, New York 10017, Attention: General Manager (or such other address in the Borough of Manhattan, The City of New York as such agent shall furnish in writing to the Trustee) or at 33 Old Broad Street, London EC2N 1HZ, England (or such other address in London, England as such agent shall furnish in writing to the Trustee), and written notice of said service to an Issuer or a Guarantor, as the case may be, by the Person serving the same addressed as provided in Section 105, shall be deemed in every respect effective service of process upon such Issuer or such Guarantor, as the case may be, in any such legal action or proceeding, and each Issuer and each Guarantor hereby submits to the jurisdiction of any such court in which any such legal action or proceeding is so instituted. Each such appointment shall be irrevocable so long as the Holders of Securities shall have any rights pursuant to the terms thereof or of this Indenture or until the appointment of a successor by such Issuer or such Guarantor with the consent of the Trustee and such successor’s acceptance of such appointment. Each Issuer and each Guarantor further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of each such agent or successor.

SECTION 115. Separate Counterparts.

This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

Article Two

SECURITY FORMS

SECTION 201. Forms Generally.

The Securities of each series shall be in substantially the form set forth in this Article, or as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officer or officers executing such Securities, as evidenced by the officer’s or officers’ execution of the Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by an Executive Officer, Company Secretary, any other authorized officer or duly authorized attorney-in-fact of the Issuer, and delivered to the Trustee at or prior to the delivery of the Issuer Order contemplated by Section 303 for the authentication and delivery of such Securities.

The Trustee’s certificates of authentication shall be in substantially the form set forth in this Article.

The Guarantee by the Guarantors to be endorsed on the Securities of each series (other than Securities issued by HBOS) shall be substantially in the form set forth in this Article, or as shall be established by action of the Board of Directors, or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officer or officers executing such Guarantees, as evidenced by the officer’s or officers’ execution (whether by facsimile or otherwise) of the Guarantees. If the form of Guarantee to be endorsed on the Securities of each such series is established by action of the Board of Directors, a copy of an appropriate record of such action shall be certified by the Secretary or any general manager of the

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Guarantors, and delivered to the Trustee at or prior to the execution by the Guarantors pursuant to Section 303 of the series of Securities on which such form of Guarantee is to be endorsed.

The definitive Securities and Guarantees shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officer or officers executing such Securities, as evidenced by the officer’s or officers’ execution of such Securities.

SECTION 202. Form of Face of Security.

(a)       Form of Face of Fixed Rate Security

[Insert any legend required by the United States Internal Revenue Code of 1986 and the regulations thereunder.]

[If this Security is a Global Security, insert:] THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

IF THIS SECURITY IS A GLOBAL SECURITY AS INDICATED ON THE FACE HEREOF, UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED UPON SUCH TRANSFER OR EXCHANGE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER PERSON AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY SUCH PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER PERSON, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

[If the Security is a Restricted Security, insert legend set forth in Section 305(d).]

[If the Security is an Original Issue Discount Security, insert the legend below:]

[FOR PURPOSES OF SECTION 1273 AND 1275 OF THE U.S. INTERNAL REVENUE CODE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (“OID”) ON THIS SECURITY IS THE PERCENTAGE OF ITS PRINCIPAL AMOUNT SET FORTH BELOW, THE YIELD TO MATURITY IS THE PERCENTAGE SET FORTH BELOW, AND THE ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE INITIAL SHORT ACCRUAL PERIOD, IF ANY, IS THE PERCENTAGE OF THE PRINCIPAL AMOUNT OF THIS SECURITY SET FORTH BELOW.]

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[* INDICATES LANGUAGE TO BE DELETED IF THE ISSUER IS HBOS PLC OR THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND]

[** INDICATES LANGUAGE TO BE DELETED IF THE ISSUER IS HBOS PLC]

REGISTERED REGISTERED

[Name of Issuer]

(a ____________ incorporated under
the laws of ____________ and having its
corporate seat in _________________)

No. FXR-______ MEDIUM-TERM SUBORDINATED NOTE
(Fixed Rate)

[UNCONDITIONALLY AND IRREVOCABLY GUARANTEED ON
A SUBORDINATED BASIS BY
HBOS PLC [AND]*]**
[THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND]*

PRINCIPAL AMOUNT AND CURRENCY OR CURRENCY UNIT: DENOMINATIONS (if necessary): OPTION TO RECEIVE PAYMENTS IN SPECIFIED CURRENCY: ORIGINAL ISSUE DATE: STATED MATURITY: COMPUTATION PERIOD (if other than 360-day year of twelve 30-day months): INTEREST RATE: INTEREST PAYMENT DATE(S): REGULAR RECORD DATE(S):

REDEMPTION DATE(S): REDEMPTION PERCENTAGE(S): EXCHANGE RATE AGENT (if other than the Paying Agent): UNLESS BOX IS CHECKED, SECURITY SHALL CONSTITUTE TIER 2 CAPITAL IN ACCORDANCE WITH AND SUBJECT TO THE REQUIREMENTS OF THE FINANCIAL SERVICES AUTHORITY IN EFFECT AT ORIGINAL ISSUE DATE: [ ] ADDITIONAL BUSINESS DAYS:
(if necessary): IF SECURITY IS GLOBAL SECURITY, CHECK BOX BELOW AND ATTACH “Schedule to Global Security”: [ ]

ORIGINAL ISSUE DISCOUNT SECURITY: If applicable, the following will be completed solely for the purpose of applying the United States federal income tax original issue discount (“OID”) rules: TOTAL AMOUNT OF OID: OID AS PERCENTAGE OF PRINCIPAL AMOUNT: YIELD TO MATURITY: SHORT ACCRUAL PERIOD OID:

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[Name of Issuer], (herein called the “Issuer”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to

, or registered assigns, the principal amount specified above in the currency or currency unit so specified (any currency or currency unit other than U.S. dollars being hereinafter referred to as a “Specified Currency”) on the Stated Maturity specified above and to pay interest thereon (computed, unless a different Computation Period is specified above, on the basis of a 360-day year of twelve 30- day months) from and including the Original Issue Date of this Security specified above (the “Original Issue Date”) or from and including the most recent Interest Payment Date to which interest on this Security (or any predecessor Security) has been paid or duly provided for, on the Interest Payment Date(s) specified above in each year (each an “Interest Payment Date”) and at Maturity (as defined on the reverse hereof), commencing on the first Interest Payment Date next succeeding the Original Issue Date, at the rate per annum equal to the Interest Rate specified above, until the principal hereof is paid or made available for payment; provided that, unless the Holder (as defined on the reverse hereof) hereof is entitled to make, and has made, a Specified Currency Payment Election (as hereinafter defined) with respect to one or more such payments, the Issuer will make such payments in U.S. dollars in amounts determined as set forth on the reverse hereof. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person in whose name this Security (or one or more predecessor Securities) is registered at the close of business on the fifteenth day (whether or not a Market Day, as defined on the reverse hereof) next preceding such Interest Payment Date or such other Regular Record Date specified above (the “Regular Record Date”); provided that interest payable at Maturity will be payable to the person to whom principal shall be payable; and provided, further, that if the Original Issue Date is after a Regular Record Date and before the next succeeding Interest Payment Date the first payment of interest shall be payable on the second Interest Payment Date following the Original Issue Date to the person in whose name this Security (or one or more predecessor Securities) is registered at the close of business on the Regular Record Date immediately preceding such second Interest Payment Date. The interest payable hereon on any Interest Payment Date will be the interest accrued from and including the Original Issue Date or from and including the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, to but excluding such Interest Payment Date. Notwithstanding the foregoing, the interest payable at Maturity will include interest accrued to but excluding the date of Maturity.

If this Security is a Global Security as indicated on the face hereof, the Depositary for any Security of this series which is a Global Security shall be The Depository Trust Company in New York City.

Payment of the principal of and premium, if any, and interest on this Security will be made upon presentation or, at Maturity, surrender of this Security at the corporate trust office of the Paying Agent (as defined on the reverse hereof), or such other office or agency of the Issuer maintained by it for that purpose in the Borough of Manhattan, The City of New York 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; provided that if this Security is a Global Security as indicated on the face hereof, payment to the Depositary may be made, by wire transfer to the account designated by the Depositary in writing; provided, however, that if this Security is not a Global Security, payment of the principal of and any premium and interest on this Security due at Maturity will be made in immediately available funds at such corporate trust office or such other offices or agencies if this Security is presented to the Paying Agent or any other paying agent in time for the Paying Agent or such other paying agent to make such payments in accordance with its normal procedures; and provided, further, that, at the option of the Issuer, payment of interest (other than interest payable at Maturity) may be made by check mailed to the address of the person entitled thereto as such address shall appear in the Security Register (as defined on the reverse hereof) unless that address is in the Issuer’s country of incorporation or, if different, country of tax residence; and, provided, further, that notwithstanding the foregoing, a holder of US$10,000,000 or more in aggregate principal amount of Securities of this series having the same Interest Payment Date shall be entitled to receive payments of interest, other than interest due at Maturity, by wire transfer of immediately available funds to an account at a bank located in The City of New York (or other location consented to by the Issuer) if appropriate wire transfer instructions have

14 

been received by the Paying Agent or such other paying agent in writing not less than 15 calendar days prior to the applicable Interest Payment Date; and provided, further, that notwithstanding the foregoing if (i) this Security is denominated in a Specified Currency, (ii) the Holder hereof is entitled to make, and has made, a Specified Currency Payment Election with respect to such payments and (iii) the Specified Currency is not unavailable due to the imposition of exchange controls or other circumstances beyond the control of the Issuer, then (a) the payment of principal of and any premium or interest on this Security other than at Maturity will be made in the Specified Currency (or, if such Specified Currency is not at the time of such payment legal tender for the payment of public and private debts, in such other coin or currency of the country which issued such Specified Currency as at the time of such payment is legal tender for the payment of such debts) by check drawn upon a bank office located outside the United States, and (b) any such payments due at Maturity will be made in such Specified Currency (or, if applicable, such other coin or currency) by wire transfer of immediately available funds to an account maintained by the Holder hereof with a bank office located in the country which issued the Specified Currency upon presentation of this Security to the Paying Agent or any other paying agent in time for such wire transfer to be made by the Paying Agent or such other paying agent in accordance with its normal procedures. Unless otherwise specified above, if this Security is denominated in a Specified Currency the Holder hereof may elect to receive payments of the principal of and any premium or interest on this Security in such Specified Currency (a “Specified Currency Payment Election”) by delivery of a written request (including, in the case of an election with respect to payments at Maturity, appropriate wire transfer instructions) to the Paying Agent at its corporate trust office referred to above on or prior to the relevant Regular Record Date or the sixteenth day prior to Maturity, as the case may be. A Holder may elect to receive payment in the Specified Currency for all principal and premium and interest payments and need not file a separate election for each payment. Such election will remain in effect until revoked by written notice to the Paying Agent, but written notice of any such revocation must be received by the Paying Agent on or prior to the relevant Regular Record Date or the sixteenth day prior to Maturity, as the case may be.

As provided in the Indenture, any amounts to be paid by the Issuer under this Security shall be paid without deduction or withholding for any and all present and future taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the country of incorporation of the Issuer, or, in the event that a Subsidiary [or HBOS plc]** [or The Governor and the Company of the Bank of Scotland]* assumes the obligations of the Issuer (an “Assuming Party”) in respect of the Securities of this series pursuant to the provisions of the Indenture, the country of incorporation of such Assuming Party, and, if different, the country of tax residence of the Issuer or such Assuming Party or, in each case, any political subdivision or taxing authority thereof or therein (the “Issuer Taxing Jurisdiction”), or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by the Issuer Taxing Jurisdiction, the Issuer will pay such additional amount in respect of principal, premium and interest as may be necessary in order that the net amounts paid to the Holder hereof or to the Trustee, as the case may be, pursuant to the Indenture, after such deduction or withholding shall equal the respective amounts of principal, premium and interest as specified herein to which such Holder or such Trustee would be entitled if no such deduction or withholding had been made; provided that the foregoing shall not apply to any such tax, levy, impost or other governmental charge (i) which would not be payable or due but for the fact that the beneficial owner or Holder hereof is a domiciliary, national or resident of, or engaging in business (whether through a branch, agency or otherwise) or maintaining a permanent establishment or being physically present in, the Issuer Taxing Jurisdiction or otherwise having some connection with the Issuer Taxing Jurisdiction other than the holding or ownership of this Security, or receiving income herefrom, or the enforcement hereof, (ii) which would not be payable or due but for the failure to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with the Issuer Taxing Jurisdiction required by any statute or regulation or by practice of the Issuer Taxing Jurisdiction as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, if compliance is possible pursuant to the provisions of any statute or regulation or by practice of the Issuer Taxing Jurisdiction as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, (iii) which would not be payable or due but for the fact that this Security was presented more than 30 days after the date such payment became due or was provided for, whichever is later, except to the extent that the Holder hereof would have been entitled to additional amounts on presenting the same for payment on or before the expiry of such period of 30 days, or (iv) which would not have been imposed if the beneficial owner of this Security

15 

had been the Holder of this Security or which, if the beneficial owner of this Security had been the Holder of this Security, would have been excluded pursuant to clauses (i) through (iii) inclusive above.

The Securities of this series may be redeemed as a whole at the option of the Issuer [or [HBOS plc, a corporation incorporated in Scotland (the “Guarantor”)]** [or The Governor and Company of the Bank of Scotland, a bank constituted and existing under the laws of Scotland (the “Guarantor” and collectively with HBOS plc, in its capacity as Guarantor, the “Guarantors”)]* at any time at a redemption price equal to 100% of the principal amount hereof (or, if this Security is an Original Issue Discount Security (as defined on the reverse hereof), of the Amortized Face Amount hereof), together with accrued interest to the date fixed for redemption, if, at any time, the Issuer [or the Guarantor[s]*]** shall determine that as a result of any change in or amendment to the laws of the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision or taxing authority thereof or therein affecting taxation, or change in an application or interpretation of such laws, which change, amendment, application or interpretation becomes effective on or after the Original Issue Date or in the event that an Assuming Party assumes the obligations of the Issuer in respect of the Securities of this series pursuant to the terms of the Indenture, the date of such assumption (the “Relevant Date”) (i) in making any payment under the Securities or the Indenture [or the Guarantee]**, as the case may be, the Issuer [or the Guarantor[s]*]** [, as the case may be,]* would become obligated to pay additional amounts with respect thereto as a result of any taxes, levies, imposts or other governmental charges whatsoever imposed (whether by way of withholding or deduction or otherwise) by or for the account of the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision or taxing authority thereof or therein, (ii) [any tax would be imposed (whether by way of deduction or withholding or otherwise) or relief from tax would be withdrawn by the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision or taxing authority thereof or therein, upon or with respect to any interest payments received or receivable by the Issuer from the Guarantor[s]*, as applicable or any subsidiaries of the Guarantor[s]*, as applicable, incorporated in, or resident for tax purposes under the laws of, the United Kingdom, or (iii)]** based upon an opinion of legal advisors to the Issuer [or the Guarantor[s]* [, as the case may be,]** as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in, the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision thereof (whether or not such action was taken or brought with respect to the Issuer [or the Guarantor[s]*]**), which action is taken or brought on or after the Relevant Date, there is a substantial probability that the circumstances described in clause (i) or (ii) would exist.

If this Security constitutes Tier 2 Capital in accordance with the requirements of the Financial Services Authority, any such redemption requires the prior consent of the Financial Services Authority.

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.

Unless the certificate of authentication hereon has been executed by the Authenticating Agent referred to on the reverse hereof by manual signature, this Security [and the Guarantee endorsed hereon]** shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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

Dated: __________, ____	[Name of Issuer]
	By
		Title:

16 

AUTHENTICATING AGENT’S CERTIFICATE OF
AUTHENTICATION

This is one of the Securities
of the series designated
therein referred to in the
within-mentioned Indenture.

By THE BANK OF NEW YORK, as Trustee By CITIBANK, N.A., as Authenticating Agent
By:
	Authorized Signatory

(b)       Form of Face of Floating Rate Security

[Insert any legend required by the United States Internal Revenue Code of 1986 and the regulations thereunder.]

[If this Security is a Global Security, insert:] THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

IF THIS SECURITY IS A GLOBAL SECURITY AS INDICATED ON THE FACE HEREOF, UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED UPON SUCH TRANSFER OR EXCHANGE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER PERSON AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY SUCH PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER PERSON, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

[If the Security is a Restricted Security, insert legend set forth in Section 305(d).]

[If the Security is an Original Issue Discount Security, insert the legend below:]

[FOR PURPOSES OF SECTION 1273 AND 1275 OF THE U.S. INTERNAL REVENUE CODE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (“OID”) ON THIS SECURITY IS THE PERCENTAGE OF ITS PRINCIPAL AMOUNT SET FORTH BELOW, THE YIELD TO MATURITY IS THE PERCENTAGE SET FORTH BELOW, AND THE ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE INITIAL SHORT ACCRUAL PERIOD, IF ANY, IS THE PERCENTAGE OF THE PRINCIPAL AMOUNT OF THIS SECURITY SET FORTH BELOW.]

17 

[* INDICATES LANGUAGE TO BE DELETED IF THE ISSUER IS HBOS plc OR THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND]

[** INDICATES LANGUAGE TO BE DELETED IF THE ISSUER IS HBOS plc]

REGISTERED REGISTERED

[Name of Issuer]

(a ____________ incorporated under
the laws of ____________ and having its
corporate seat in _________________)

No. FXR-______ MEDIUM-TERM SUBORDINATED NOTE
(Floating Rate)

[UNCONDITIONALLY AND IRREVOCABLY GUARANTEED ON
A SUBORDINATED BASIS BY
HBOS PLC [AND]*] **
[THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND]*

PRINCIPAL AMOUNT AND CURRENCY OR CURRENCY UNIT:	INTEREST RESET DATE(S):
DENOMINATIONS (if necessary):	INITIAL INTEREST RESET DATE:
OPTION TO RECEIVE PAYMENTS IN SPECIFIED CURRENCY:	INTEREST DETERMINATION DATE(S):
ORIGINAL ISSUE DATE:	REGULAR RECORD DATE(S):
STATED MATURITY:	REDEMPTION DATE(S):
COMPUTATION PERIOD:	REDEMPTION PERCENTAGE(S):
INTEREST RATE BASIS:	CALCULATION AGENT (if other than the Paying Agent):
	CALCULATION DATE:
INDEX MATURITY:	EXCHANGE RATE AGENT (if other than the Paying Agent):
SPREAD (PLUS OR MINUS):	UNLESS BOX IS CHECKED, SECURITY SHALL CONSTITUTE TIER 2 CAPITAL IN ACCORDANCE WITH AND SUBJECT TO THE REQUIREMENTS OF THE FINANCIAL SERVICES AUTHORITY IN EFFECT AT ORIGINAL ISSUE DATE: [ ]
ALTERNATE RATE EVENT SPREAD:	ADDITIONAL BUSINESS DAYS (if necessary):
SPREAD MULTIPLIER:	IF SECURITY IS GLOBAL SECURITY, CHECK BOX BELOW AND ATTACH “Schedule to Global Security”: [ ]
INITIAL INTEREST RATE:	ORIGINAL ISSUE DISCOUNT SECURITY:
MAXIMUM INTEREST RATE, IF ANY:	If applicable, the following will be completed solely for the purpose of applying the United States federal income tax original issue discount (“OID”) rules:
MINIMUM INTEREST RATE, IF ANY:	TOTAL AMOUNT OF OID:
INTEREST PAYMENT PERIOD:	OID AS PERCENTAGE OF PRINCIPAL AMOUNT:
INTEREST PAYMENT MONTH(S):	YIELD TO MATURITY:
INTEREST PAYMENT DATE(S):	SHORT ACCRUAL PERIOD OID:
INTEREST PAYMENT PERIOD:
INTEREST RESET MONTH(S):

[Name of Issuer], (herein called the “Issuer”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to

18 

, or registered assigns, the principal amount specified above in the currency or currency unit so specified (any currency or currency unit other than U.S. dollars being hereinafter referred to as a “Specified Currency”) on the Stated Maturity specified above and to pay interest thereon, from and including the Original Issue Date of this Security specified above (the “Original Issue Date”) or from and including the most recent Interest Payment Date (as hereinafter defined) to which interest on this Security (or any predecessor Security) has been paid or duly provided for, (or, if the Interest Reset Period specified above is daily or weekly, from and including the day following the Regular Record Date (as hereinafter defined) immediately preceding such Interest Payment Date), at a rate per annum equal to the Initial Interest Rate specified above (the “Initial Interest Rate”) until the first Interest Reset Date (as defined on the reverse hereof) following the Original Issue Date and thereafter at a rate determined in accordance with the provisions on the reverse hereof under the heading “Determination of CD Rate”, “Determination of Commercial Paper Rate”, “Determination of Prime Rate”, “Determination of Federal Funds Effective Rate”, “Determination of LIBOR”, “Determination of EURIBOR, “Determination of Treasury Rate” or “Determination of CMT Rate”, depending upon whether the Interest Rate Basis specified above is CD Rate, Commercial Paper Rate, Prime Rate, Federal Funds Effective Rate, LIBOR, EURIBOR, Treasury Rate or CMT Rate, until the principal hereof is paid or made available for payment; provided that, unless the Holder (as defined on the reverse hereof) hereof is entitled to make, and has made, a Specified Currency Payment Election (as hereinafter defined) with respect to one or more such payments, the Issuer will make such payments in U.S. dollars in amounts determined as set forth on the reverse hereof. Such interest shall be payable by the Issuer monthly, quarterly, semi-annually or annually as specified above under “Interest Payment Period” and, unless otherwise specified above under “Interest Payment Date(s)”, such interest shall be payable by the Issuer on the third Wednesday of the month or months specified above under “Interest Payment Month(s)” in each year (or if any such day is not a Market Day (as defined on the reverse hereof) with respect to this Security, on the next succeeding Market Day (as defined on the reverse hereof) with respect to this Security or, if the Interest Rate Basis specified above is LIBOR or EURIBOR and the next succeeding such Market Day falls in the next calendar month, the immediately preceding such Market Day) (each date so specified above or, if none is so specified, determined as herein provided, an “Interest Payment Date”) and at Maturity, commencing on the first Interest Payment Date next succeeding the Original Issue Date, or, if the Interest Reset Period specified above is weekly and the Original Issue Date is after a Regular Record Date (as hereinafter defined) and on or prior to the next succeeding Interest Payment Date, on the second Interest Payment Date next succeeding the Original Issue Date. The interest so payable, and punctually paid or duly provided for, on any such Interest Payment Date will be paid to the person in whose name this Security (or one or more predecessor Securities) is registered at the close of business on the fifteenth day (whether or not a Market Day) next preceding such Interest Payment Date or such other Regular Record Date specified above (the “Regular Record Date”); provided that interest payable at Maturity will be payable to the person to whom principal shall be payable; and provided, further, that if the Original Issue Date is after a Regular Record Date and before the next succeeding Interest Payment Date the first payment of interest shall be payable on the second Interest Payment Date following the Original Issue Date to the person in whose name this Security (or one or more predecessor Securities) is registered at the close of business on the Regular Record Date immediately preceding such second Interest Payment Date. The interest payable hereon on any Interest Payment Date will be the interest accrued from and including the Original Issue Date or from and including the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, to but excluding such Interest Payment Date; provided that if the Interest Reset Period specified on the face hereof is daily or weekly, the interest payable on any Interest Payment Date will be the interest accrued from and including the Original Issue Date or from and including the day following the most recent Regular Record Date in respect of which interest has been paid or duly provided for, as the case may be, to but excluding the day following the Regular Record Date immediately preceding such Interest Payment Date. Notwithstanding the foregoing, the interest payable at Maturity will include interest accrued to but excluding the date of Maturity. Accrued interest hereon shall be calculated by multiplying the face amount hereof by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated. The interest factor for each such day (expressed as a decimal rounded upwards, if necessary, as described below) shall be computed by dividing the interest rate (expressed as a decimal rounded upwards, if necessary, as

19 

described below) applicable to such day by (i) 360 if the Interest Rate Basis specified on the face hereof is the Commercial Paper Rate, Prime Rate, CD Rate, Federal Funds Effective Rate, LIBOR or EURIBOR, (ii) the actual number of days in the year (365 or 366, as the case may be) if the Interest Rate Basis specified on the face hereof is the Treasury Rate or the CMT Rate, or (iii) notwithstanding the foregoing, the number of days in the Computation Period, if any, specified on the face hereof. Except as otherwise provided herein, all percentages resulting from any calculation with respect to this Security will be rounded, if necessary, to the nearest one-hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being rounded to 9.87654% (or .0987654)), and all dollar amounts and all amounts in Specified Currencies used in or resulting from such calculations will be rounded to the nearest cent and unit, respectively (with one-half cent and one-half unit being rounded upwards).

If this Security is a Global Security, the Depositary for any Security of this series which is a Global Security shall be The Depository Trust Company in New York City.

Payment of the principal of and premium, if any, and interest on this Security will be made upon presentation or, at Maturity, surrender of this Security at the corporate trust office of the Paying Agent (as defined on the reverse hereof), or such other office or agency of the Issuer maintained by it for that purpose in the Borough of Manhattan, The City of New York 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; provided that if this Security is a Global Security as indicated on the face hereof, payment to the Depositary may be made, by wire transfer to the account designated by the Depositary in writing; provided, however, that if this Security is not a Global Security, payment of the principal of and any premium and interest on this Security due at Maturity will be made in immediately available funds at such corporate trust office or such other offices or agencies if this Security is presented to the Paying Agent or any other paying agent in time for the Paying Agent or such other paying agent to make such payments in accordance with its normal procedures; and provided, further, that, at the option of the Issuer, payment of interest (other than interest payable at Maturity) may be made by check mailed to the address of the person entitled thereto as such address shall appear in the Security Register (as defined on the reverse hereof) unless that address is in the Issuer’s country of incorporation or, if different, country of tax residence; and, provided, further, that notwithstanding the foregoing, a holder of US$10,000,000 or more in aggregate principal amount of Securities of this series having the same Interest Payment Date shall be entitled to receive payments of interest, other than interest due at Maturity, by wire transfer of immediately available funds to an account at a bank located in The City of New York (or other location consented to by the Issuer) if appropriate wire transfer instructions have been received by the Paying Agent or such other paying agent in writing not less than 15 calendar days prior to the applicable Interest Payment Date; and provided, further, that notwithstanding the foregoing if (i) this Security is denominated in a Specified Currency, (ii) the Holder hereof is entitled to make, and has made, a Specified Currency Payment Election with respect to such payments and (iii) the Specified Currency is not unavailable due to the imposition of exchange controls or other circumstances beyond the control of the Issuer, then (a) the payment of principal of and any premium or interest on this Security other than at Maturity will be made in the Specified Currency (or, if such Specified Currency is not at the time of such payment legal tender for the payment of public and private debts, in such other coin or currency of the country which issued such Specified Currency as at the time of such payment is legal tender for the payment of such debts) by check drawn upon a bank office located outside the United States, and (b) any such payments due at Maturity will be made in such Specified Currency (or, if applicable, such other coin or currency) by wire transfer of immediately available funds to an account maintained by the Holder hereof with a bank office located in the country which issued the Specified Currency upon presentation of this Security to the Paying Agent or any other paying agent in time for such wire transfer to be made by the Paying Agent or such other paying agent in accordance with its normal procedures. Unless otherwise specified above, if this Security is denominated in a Specified Currency the Holder hereof may elect to receive payments of the principal of and any premium or interest on this Security in such Specified Currency (a “Specified Currency Payment Election”) by delivery of a written request (including, in the case of an election with respect to payments at Maturity, appropriate wire transfer instructions) to the Paying Agent at its corporate trust office referred to above on or prior to the relevant Regular Record Date or the sixteenth day prior to Maturity, as the case may be. A Holder may elect to receive payment in the Specified Currency for all principal and premium and interest payments and need not file a separate election for each payment. Such election will remain in effect until revoked by written notice to the Paying Agent, but written

20 

notice of any such revocation must be received by the Paying Agent on or prior to the relevant Regular Record Date or the sixteenth day prior to Maturity, as the case may be.

As provided in the Indenture, any amounts to be paid by the Issuer under this Security shall be paid without deduction or withholding for any and all present and future taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the country of incorporation of the Issuer, or, in the event that a Subsidiary [or HBOS plc]** [or The Governor and the Company of the Bank of Scotland]* assumes the obligations of the Issuer (an “Assuming Party”) in respect of the Securities of this series pursuant to the provisions of the Indenture, the country of incorporation of such Assuming Party, and, if different, the country of tax residence of the Issuer or such Assuming Party or, in each case, any political subdivision or taxing authority thereof or therein (the “Issuer Taxing Jurisdiction”), or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by the Issuer Taxing Jurisdiction, the Issuer will pay such additional amount in respect of principal, premium and interest as may be necessary in order that the net amounts paid to the Holder hereof or to the Trustee, as the case may be, pursuant to the Indenture, after such deduction or withholding shall equal the respective amounts of principal, premium and interest as specified herein to which such Holder or such Trustee would be entitled if no such deduction or withholding had been made; provided that the foregoing shall not apply to any such tax, levy, impost or other governmental charge (i) which would not be payable or due but for the fact that the beneficial owner or Holder hereof is a domiciliary, national or resident of, or engaging in business (whether through a branch, agency or otherwise) or maintaining a permanent establishment or being physically present in, the Issuer Taxing Jurisdiction or otherwise having some connection with the Issuer Taxing Jurisdiction other than the holding or ownership of this Security, or receiving income herefrom, or the enforcement hereof, (ii) which would not be payable or due but for the failure to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with the Issuer Taxing Jurisdiction required by any statute or regulation or by practice of the Issuer Taxing Jurisdiction as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, if compliance is possible pursuant to the provisions of any statute or regulation or by practice of the Issuer Taxing Jurisdiction as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, (iii) which would not be payable or due but for the fact that this Security was presented more than 30 days after the date such payment became due or was provided for, whichever is later, except to the extent that the Holder hereof would have been entitled to additional amounts on presenting the same for payment on or before the expiry of such period of 30 days, or (iv) which would not have been imposed if the beneficial owner of this Security had been the Holder of this Security or which, if the beneficial owner of this Security had been the Holder of this Security, would have been excluded pursuant to clauses (i) through (iii) inclusive above.

The Securities of this series may be redeemed as a whole at the option of the Issuer [or HBOS plc, a corporation incorporated in Scotland (the “Guarantor”)]** [or The Governor and Company of the Bank of Scotland, a bank constituted and existing under the laws of Scotland (the “Guarantor”) and collectively with HBOS plc, in its capacity as Guarantor, the “Guarantors”)]* at any time at a redemption price equal to 100% of the principal amount hereof (or, if this Security is an Original Issue Discount Security (as defined on the reverse hereof), of the Amortized Face Amount hereof), together with accrued interest to the date fixed for redemption, if, at any time, the Issuer [or the Guarantor[s]*]** shall determine that as a result of any change in or amendment to the laws of the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision or taxing authority thereof or therein affecting taxation, or change in an application or interpretation of such laws, which change, amendment, application or interpretation becomes effective on or after the Original Issue Date or in the event that an Assuming Party assumes the obligations of the Issuer in respect of the Securities of this series pursuant to the terms of the Indenture, the date of such assumption (the “Relevant Date”) (i) in making any payment under the Securities or the Indenture [or the Guarantee]**, as the case may be, the Issuer [or the Guarantor[s]*]** [, as the case may be,]* would become obligated to pay additional amounts with respect thereto as a result of any taxes, levies, imposts or other governmental charges whatsoever imposed (whether by way of withholding or deduction or otherwise) by or for the account of the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision or taxing authority thereof or therein, (ii) [any tax would be imposed (whether by way of deduction or withholding or otherwise) or relief from tax would be withdrawn by the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision or taxing authority thereof or therein, upon or with respect to any interest payments received or receivable by the Issuer from the Guarantor[s]*, as

21 

applicable or any subsidiaries of the Guarantor[s]*, as applicable, incorporated in, or resident for tax purposes under the laws of, the United Kingdom, or (iii)]** based upon an opinion of legal advisors to the Issuer [or the Guarantor[s]* [, as the case may be,]** as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in, the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision thereof (whether or not such action was taken or brought with respect to the Issuer [or the Guarantor[s]*]**), which action is taken or brought on or after the Relevant Date, there is a substantial probability that the circumstances described in clause (i) or (ii) would exist.

If this Security constitutes Tier 2 Capital in accordance with the requirements of the Financial Services Authority, any such redemption requires the prior consent of the Financial Services Authority.

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.

Unless the certificate of authentication hereon has been executed by the Authenticating Agent referred to on the reverse hereof by manual signature, this Security [and the Guarantee endorsed hereon]** shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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

Dated: __________, ____	[Name of Issuer]
	By
		Title:

AUTHENTICATING AGENT’S CERTIFICATE OF
AUTHENTICATION

This is one of the Securities
of the series designated
therein referred to in the
within-mentioned Indenture.

By THE BANK OF NEW YORK, as Trustee By CITIBANK, N.A., as Authenticating Agent
By:
	Authorized Signatory

SECTION 203. Form of Reverse of Security.

[* INDICATES LANGUAGE TO BE DELETED IF THE ISSUER IS HBOS plc OR THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND]

[** INDICATES LANGUAGE TO BE DELETED IF THE ISSUER IS HBOS plc]

(a)       Form of Reverse of Fixed Rate Security

This Security is one of a duly authorized issue of Medium-Term Notes of the Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Amended and Restated Indenture dated as of April 30, 2003 (herein called the “Indenture”) among HBOS plc (the “Company”), The Governor and Company of the Bank of Scotland, Scotland International Finance

22 

No. 2 B.V. and The Bank of New York, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. The series designated as “Medium-Term Notes”, of which this Security forms part, is limited in aggregate principal amount (or in the case of Original Issue Discount Securities or Securities with the amount payable in respect of principal or any premium or interest to be determined by reference to the value, rate or price of one or more specified indices (“Indexed Securities”), aggregate initial offering price) outstanding together with any other Medium-Term Notes issued by any Issuer under the Indenture or the Amended and Restated Indenture dated as of April 30, 2003 among HBOS plc, The Governor and Company of the Bank of Scotland and HBOS Treasury Services plc (together with HBOS plc, The Governor and Company of the Bank of Scotland, Scotland International Finance No. 2 B.V. and any subsidiary designated by HBOS plc, the “US MTN Issuers”) and the Trustee or instruments issued by any Issuer under the US MTN Issuers’ and BOS International (Australia) Limited’s Euro Note Issuance Programme at any time up to US$65,000,000,000 (or if Securities of this series denominated in one or more Specified Currencies are issued by any of the US MTN Issuers, the equivalent thereof in such Specified Currencies based upon the Program Exchange Rate (as defined below) on the date such Issuer agreed to issue such Securities). The terms of individual Securities may vary with respect to interest rates, interest rate formulas, issue dates, maturity dates, currencies or otherwise, all as provided in the Indenture. To the extent not inconsistent herewith, the terms of the Indenture are hereby incorporated by reference herein.

The Issuer has appointed Citibank, N.A. as the paying agent (the “Paying Agent”, which term includes any additional or successor Paying Agent appointed by the Issuer) with respect to the Securities, and the Trustee has appointed Citibank, N.A. as the authenticating agent (the “Authenticating Agent”, which term includes any additional or successor Authenticating Agent appointed by the Trustee) with respect to the Securities.

As used herein, the following terms have the following meaning: “Market Day” means (i) with respect to any Security of this series other than a Security of this series the Interest Rate Basis of which specified on the face hereof is LIBOR or a Security of this series denominated in a Specified Currency, any day that is a Business Day in The City of New York, (ii) with respect to any Security of this series the Interest Rate Basis of which specified on the face hereof is LIBOR, any Business Day in London, England on which dealings in U.S. dollars are transacted in the London interbank market, (iii) with respect to any Security of this series denominated in a Specified Currency, any Business Day in The City of New York that is also a Business Day in the financial center of the country of the Specified Currency or, with respect to a Security of this series denominated in Euro, in Luxembourg and on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System (the “TARGET System”) is operating, and (iv) any other Business Day indicated on the face of this Security; “Business Day”, when used with respect to any Place of Payment means any day which is not a Saturday or Sunday and which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law to close; “Market Exchange Rate” for any Specified Currency means the noon buying rate in The City of New York for cable transfers for such Specified Currency as certified for customs purposes by (or, if not so certified, as otherwise determined by) the Federal Reserve Bank of New York; and “Program Exchange Rate” for any Specified Currency means the Paying Agent’s London office’s spot rate of exchange for the sale in London of US dollars for such Specified Currency on the date any Issuer agreed to issue the relevant Securities, Medium-Term Notes or instruments, as the case may be, or such other amount as HBOS (on behalf of the Guarantors and the Issuer) and the Agents under the Amended and Restated Private Placement Agreement dated April 30, 2003 among the Issuer and the other parties named therein may agree.

This Security will not be subject to any sinking fund and is not subject to redemption or repayment at the option of the Holder prior to maturity except for redemption for the tax reasons specified on the face hereof and as otherwise provided on the face hereof in accordance with the provisions of the following paragraph.

Except for the tax reasons specified on the face of this Security, unless otherwise indicated on the face of this Security, this Security may not be redeemed at the option of the Issuer prior to the Maturity Date. If so indicated on the face of this Security, this Security may be redeemed

23 

in whole or in part at the option of the Issuer on or after the Redemption Dates (or ranges of Redemption Dates) specified on the face hereof at a Redemption Price determined as provided in the next succeeding sentence, together with interest accrued and unpaid hereon to the date of redemption (except as provided below). Unless otherwise specified on the face hereof, the “Redemption Price” for any such redemption shall be the amount determined by multiplying the Redemption Percentage specified on the face hereof with respect to the relevant Redemption Date (or range of such dates) by the portion of the principal amount hereof (or if this Security is an Original Issue Discount Security, the portion of the Amortized Face Amount hereof) to be redeemed; provided, that in no event shall the Redemption Price be less than 100% of the portion of the principal amount hereof (or, if this Security is an Original Issue Discount Security, the portion of the Amortized Face Amount hereof) to be redeemed. Notice of redemption shall be mailed to the registered holders of the Securities designated for redemption at their addresses as the same shall appear on the Security Register not less than 30 nor more than 60 days prior to the date fixed for redemption, subject to all the conditions and provisions of the Indenture. In the event of redemption of this Security in part only, a new Security or Securities for the amount of the unredeemed portion hereof shall be issued in the name of the holder hereof upon the cancellation hereof.

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of this Security shall not be a Business Day at any place of payment, then payment of principal of and premium or interest, if any, on this Security need not be made at such place of payment on such date, but may be made on the next succeeding Business Day at such place of payment with the same force and effect as if made on the Interest Payment Date, Redemption Date or at the Stated Maturity and no interest on such payment shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity and no interest on such payment shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be to such next succeeding Business Day.

The indebtedness evidenced by this Security is, to the extent, and in the manner provided in Section 1006 of the Indenture, subordinated and subject in right of payment to the prior payment in full of the claims of all of the Senior Creditors (as defined in the Indenture) of the Issuer and this Security is issued subject to said Section 1006 of the Indenture, and each Holder of this Security, by accepting the same, agrees to and shall be bound by such provisions as provided in the Indenture. [If the Security is not an Undated Security or a Security issued by The Governor and Company of the Bank of Scotland, insert: Amounts due and payable under the Securities shall be due and payable by the Issuer in the event of the bankruptcy, winding up or liquidation of the Issuer only if and to the extent that the Issuer could make payment thereof rateably with the claims of other Subordinated Creditors (as defined in the Indenture) of the Issuer and still be solvent immediately thereafter. For this purpose, the Issuer shall be considered to be solvent if it is able to pay its debts to its Senior Creditors (as so defined) in full.] [If this Security is a Security (other than an Undated Security) issued by The Governor and Company of the Bank of Scotland, insert: Amounts due and payable under the Securities shall be due and payable by the Issuer in the event of the sequestration or winding up of the Issuer only if and to the extent that the Issuer could make payment thereof rateably with the claims of other Subordinated Creditors (as defined in the Indenture) of the Issuer and still be solvent immediately thereafter. For this purpose, the Issuer shall be considered to be solvent if it is able to pay its debts to its Senior Creditors (as so defined) in full.] [If this Security is an Undated Security, insert: Amounts due and payable under the Securities shall be conditional (such condition is referred to as the “Solvency Condition”) upon the Issuer [and, in relation to Securities which are guaranteed, the Guarantor]** being solvent at the time of payment by the Issuer and in that no amount shall be payable under the Securities except to the extent that the Issuer [and, in relation to Securities which are guaranteed (assuming that a payment was then due by the Guarantor), the Guarantor]** could make such payment and still be solvent (whether or not it is bankrupt, being [sequestrated or]** liquidated or is in winding up) immediately thereafter. In such circumstances, no amounts payable in respect of such amounts which would otherwise fall due for payment shall fall so due (subject always to the provisions of the parenthetical clause in Section 503(1) of the Indenture), and instead, such payment shall become due for payment only if and when and to the extent that [both]** the Issuer [and, in relation to Securities which are guaranteed, the Guarantor (assuming that a payment was then due by the Guarantor]** could make such payment in whole or in part and still be solvent (whether or not it is bankrupt or being liquidated [or sequestrated]** or in winding up) immediately thereafter. [Interest will continue to accrue on this Security, payment of which is suspended pursuant to the provisions of the immediately preceding sentence in accordance with the terms of this Security and the Indenture.] For this purpose, the Issuer [and the Guarantor, as

24 

the case may be,]** shall be considered to be solvent if (A) it is able to pay its debts to Senior Creditors (as defined in the Indenture) as they fall due and (B) its Assets (as defined in the Indenture) exceed its Liabilities (as defined in the Indenture) to Senior Creditors (as so defined). Amounts representing interest in respect of which the Solvency Condition is not satisfied on the due date for the payment thereof shall, so long as the same remains unpaid, constitute “Arrears of Interest” (to the extent described in the Indenture). Arrears of Interest in respect of Undated Securities shall not bear interest. Without prejudice to the foregoing provisions, the Issuer shall not be obliged to make payment of the interest accrued in respect of any period on the due date for the payment thereof (for the purposes of this paragraph and the immediately succeeding paragraph, “Accrual Period” and “Payment Date” respectively) if during the period of twelve months ending on such Payment Date no dividend or other Distribution (as defined in the Indenture) shall have been declared, paid or made on any class of stock or share capital of [include the relevant issuer: HBOS plc / The Governor and Company of the Bank of Scotland]; and all interest not so paid shall, so long as the same remains unpaid, constitute Arrears of Interest. The Issuer may, subject to the provisions of the immediately succeeding sentence, at its option (upon the expiry of not less than seven days’ notice to the Holders of the Securities given in accordance with the relevant provisions of the Securities) at any time pay all or part of the Arrears of Interest (being, if part only, the whole of the interest accrued on all of such Securities during any one or more Accrual Periods) but so that, in the case of any such partial payment, the interest accrued during any Accrual Period shall not be paid prior to that accrued during any earlier Accrual Period. If there are outstanding more than one series of Undated Securities, then the Issuer may not pay all or part of the Arrears of Interest in respect of any such series unless it pays all or (as near as practicable) an equivalent proportion of the Arrears of Interest in respect of each other series of its Undated Securities then outstanding. All Arrears of Interest shall (subject to satisfaction of the Solvency Condition and subject to Section 1006(c)(iv) of the Indenture) become due in full on the date on which any dividend or other Distribution (as defined in the Indenture) is next declared, paid or made on any class of stock or share capital of [include the relevant issuer: HBOS plc / The Governor and Company of the Bank of Scotland] or, if earlier, the date set for any redemption permitted under Section 1108 of the Indenture or any early redemption exercised at the option of the Issuer (other than a partial redemption) in accordance with the terms of the Securities. [If redemption permitted, insert: or an early redemption exercised at the option of the Holder in accordance with the terms of the Securities] or the commencement of the liquidation, sequestration or winding up of [insert the relevant issuer: HBOS plc / The Governor and Company of the Bank of Scotland]]

[If this Security is an Undated Security issued by HBOS plc, insert: If, at any time, an order is made for the liquidation or winding up of HBOS plc or an effective resolution is passed for the winding up of HBOS plc, this Security shall become due and payable in accordance with the provisions of this paragraph and the Issuer shall, in lieu of any other payment on this Security, but subject to satisfaction of the Solvency Condition, be obliged to pay, in respect of this Security, such amounts as would have been payable if the Holder of this Security had, on the day preceding the commencement of such liquidation or winding up, become a holder of preference stock or shares in the capital of HBOS plc forming or being part of a class having a preferential right in the liquidation or winding up over the holders of all other classes of stock and shares in the capital of HBOS plc and entitled to receive in such liquidation or winding up an amount equal to the Redemption Price and interest (if any) accrued since the Payment Date immediately preceding or coinciding with the commencement of such liquidation or winding up to the date of such repayment and all Arrears of Interest and/or, as the case may be, all such interest due but unpaid.]

[If this Security is an Undated Security issued by The Governor and Company of the Bank of Scotland, insert: If, at any time, an order is made for the sequestration or winding up of The Governor and Company of the Bank of Scotland or an effective resolution is passed for the winding up of The Governor and Company of the Bank of Scotland, this Security shall become due and payable in accordance with the provisions of this paragraph and the Issuer shall, in lieu of any other payment on this Security, but subject to satisfaction of the Solvency Condition, be obliged to pay, in respect of the Securities, such amounts as would have been payable if the Holder of this Security had, on the day preceding the commencement of such sequestration or winding up, become a holder of preference stock or shares in the capital of The Governor and Company of the Bank of Scotland forming or being part of a class having a preferential right in the sequestration or winding up over the holders of all other classes of stock and shares in the capital of The Governor and Company of the Bank of Scotland and entitled to receive in

25 

such sequestration or winding up an amount equal to the Redemption Price and interest (if any) accrued since the Payment Date immediately preceding or coinciding with the commencement of such sequestration or winding up to the date of such repayment and all Arrears of Interest and/or, as the case may be, all such interest due but unpaid.]

In addition, in the event of the bankruptcy, sequestration, liquidation or winding up of the Issuer, if any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Issuer being subordinated to the payment of the Securities, shall be received by the Trustee or the Holders, before the claims of all Senior Creditors (as defined in the Indenture) of the Issuer have been paid in full, such payment or distribution shall be held in trust by the Trustee or such Holders, as applicable, and shall be immediately returned by it or them to the liquidator or trustee or receiver in bankruptcy of the Issuer. Thereupon, such payment or distribution will be deemed not to have been made or received. If any of the said rights and claims of any Holder against the Issuer is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the liquidator or trustee or receiver in bankruptcy of the Issuer and until such time as payment is made will hold a sum equal to such amount in trust for the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not to have taken place.

The provisions of Section 1006 of the Indenture and the provisions of the two [if this Security is an Undated Security, substitute: three] immediately preceding paragraphs relating to the subordination of the Securities shall be governed by, and shall be construed in accordance with, the laws of England.

The Indenture contains provisions for defeasance of the entire indebtedness of this Security.

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal (or, if the Securities are Original Issue Discount Securities, such portion of the principal amount of the Securities as described in the next paragraph hereof) of the Securities of this series shall, without any act of the Trustee or the Holder hereof, become immediately due and payable without presentment, demand, protest or other notice of any kind as provided in the Indenture.

If this Security is designated on the face hereof as an Original Issue Discount Security (an “Original Issue Discount Security”), then, notwithstanding anything to the contrary contained in this Security, upon the redemption or acceleration of Maturity of this Security there shall be payable, in lieu of the principal amount due at the Stated Maturity hereof, an amount equal to the Amortized Face Amount of this Security. The “Amortized Face Amount” of an Original Issue Discount Security shall be the amount equal to the sum of (a) the issue price of this Security (as defined below), plus (b) that portion of the difference between the issue price and the principal amount of this Security that has been amortized at the Stated Yield (as defined below) of such Security (computed in accordance with Section 1272(a)(4) of the U.S. Internal Revenue Code and U.S. Treasury Regulations Section 1.1272-1(b), in each case as in effect on the Original Issue Date of such Security) at the date as of which the Amortized Face Amount is calculated, but in no event shall the Amortized Face Amount exceed the principal amount of this Security due at the Stated Maturity hereof. As used in the previous sentence “issue price” means the principal amount due at the Stated Maturity hereof less the Total Amount of OID of this Security specified on the face hereof; the “Stated Yield” of this Security means the Yield to Maturity specified on the face hereof for the period from the Original Issue Date hereof to the Stated Maturity hereof on the basis of its issue price and such principal amount payable at the Stated Maturity thereof.

If a Default with respect to Securities of this series shall occur and be continuing, the Issuer will, upon demand of the Trustee pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal, premium (if any) and interest (if any). [If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee may petition for the winding up or sequestration of the Guarantor[s]*.]** Upon the occurrence of a Default with respect to Securities of this series, the Holder of this Security shall not at any time be entitled to exercise any right of set-off or counterclaim which may be available to any such Holder against amounts owing by the Issuer [or the Guarantor[s]*]** in respect of this Security. If, notwithstanding the provisions of the immediately preceding sentence, any of the rights and claims of the Holder of this Security is discharged by set-off, the Holder of this Security will immediately pay an

26 

amount equal to the amount of such discharge to the Issuer [or the Guarantor[s]*, as appropriate,]** and until such time as payment is made will hold a sum equal to such amount in trust for the Issuer or the Guarantor[s]*, as appropriate]**. Accordingly, such discharge will be deemed not to have taken place.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer and the Trustee with the consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Securities at the time Outstanding of all series to be affected (voting as a class). The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

[The Guarantor[s]* or a Subsidiary of the Guarantor[s]* may assume the obligations of the Issuer hereunder under certain circumstances set forth in Section 803 of the Indenture. The Guarantor[s]* shall assume the obligations of the Issuer hereunder in certain events set forth in Section 803 of the Indenture.]**

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and premium and interest, if any, on and certain additional amounts in respect of this Security at the times, place and rate, and in the coin or currency, herein prescribed.

If this Security is denominated in a Specified Currency, unless the Holder hereof is entitled to make, and has made, a Specified Currency Payment Election with respect to such payments as provided on the face hereof, the Holder of this Security shall receive payments of principal and any premium and interest in U.S. dollars at an exchange rate based on the highest bid quotation in The City of New York received by the Exchange Rate Agent (who, unless otherwise specified on the face hereof, shall be the Paying Agent who has been appointed as the Exchange Rate Agent by the Issuer) at approximately 11:00 A.M., New York City time, on the second Market Day with respect to this Security preceding the applicable payment date from three recognized foreign exchange dealers (one of which may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the Issuer for the purchase by the quoting dealer of the Specified Currency for U.S. dollars for settlement on such payment date of the aggregate amount of such Specified Currency payable to all Holders of Securities of this series denominated in such Specified Currency and scheduled to receive U.S. dollar payment on such payment date and at which the applicable dealer commits to execute a contract. All currency exchange costs incurred by the Issuer in converting a Specified Currency into U.S. dollars in order to make payments hereon will be borne by the Holder of this Security by deductions from such payments. If such bid quotations are not available, or if a Specified Currency Payment Election has been made with respect to such payments, payments will be made in the Specified Currency (or, if such Specified Currency is not at the time of such payment legal tender for the payment of public and private debts, such other coin or currency of the country which issued such Specified Currency as at the time of such payment is legal tender for the payment of such debts); provided that if such Specified Currency (or, if applicable, such other coin or currency) is unavailable due to the imposition of exchange controls or other circumstances beyond the Issuer’s control, the Issuer will be entitled to make payments in U.S. dollars on the basis of the Market Exchange Rate for such Specified Currency (or, if applicable, such other coin or currency) on the second Market Day with respect to this Security prior to such payment date or, if such Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate or as otherwise indicated hereon.

If this Security is a Global Security as indicated on the face hereof, this Security shall be exchangeable for Securities registered in the names of Persons other than the Depositary with respect to such series or its nominee only as provided in this paragraph. This Security shall be so exchangeable if (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as Depositary for such series or at any time ceases to be a clearing agency registered as such under the

27 

Securities Exchange Act, (ii) the Issuer executes and delivers to the Trustee an Officer’s Certificate providing that this Security shall be so exchangeable or (iii) there shall have occurred and be continuing a Default or an Event of Default with respect to the Securities of such series. Securities so issued in exchange for this Security shall be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in authorized denominations and in the aggregate having the same principal amount as this Security and registered in such names as the Depositary for such Global Security shall direct.

If this Security is a Global Security as indicated on the face hereof, any Person having a beneficial interest in this Security may request the Depositary to instruct the Paying Agent to exchange all or part of such interest for a definitive Security upon receipt by the Paying Agent of a certification from such Person in the form of Annex A hereto, unless such Person is transferring such interest to an institution that is an “accredited investor”, as defined in Regulation D under the Securities Act, in which case, upon receipt by the Paying Agent of a certification from such transferee in the form of Annex B hereto. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Paying Agent, the aggregate principal amount of the Global Security to be reduced (such reduction to be reflected on the Schedule hereto) and, following such reduction, the Issuer will execute[, and the applicable Guarantor[s]* will endorse the Guarantee on]**, and the Authenticating Agent will authenticate and deliver to such Person or such transferee, as the case may be, a definitive Security.

If this Security is a Global Security as indicated on the face hereof, at such time as all interests in this Security have either been exchanged for definitive Securities, redeemed, repurchased or cancelled, this Security shall be cancelled by the Paying Agent. At any time prior to such cancellation, if any interest in this Security is exchanged for definitive Securities, redeemed, repurchased or cancelled, the principal amount of Securities represented by this Security shall be reduced and the Paying Agent shall cause an endorsement to be made on the Schedule hereto to reflect such reduction.

[If this Security is a Global Security which is a Restricted Security, insert:] [Any Person having a beneficial interest in a Global Security which is a Restricted Security may request the Trustee to exchange all or part of such interest for another Global Security upon receipt by the Trustee of a certification from such Person in the form of Annex A to the Global Security to the effect that such transaction complies with the requirements of Regulation S promulgated under the Securities Act. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security being transferred to be reduced (such reduction to be reflected on the Schedule thereto) and, following such reduction, the aggregate principal amount of the Global Security being purchased to be increased (such increase to be reflected in the Schedule thereto). If following such increase the aggregate principal amount of the Global Security being purchased (as reflected in the Schedule thereto) exceeds the aggregate face amount thereof, the Issuer will execute[, the Guarantor[s]* will endorse the Guarantee on,]** and the Trustee will authenticate and deliver to the Depositary, a Global Security having an aggregate face amount equal to such aggregate principal amount.]

[If this Security is a definitive Security which is a Restricted Security, insert:] [This Security shall be exchangeable in whole or in part for a beneficial interest in a Global Security registered in the name of the Depositary with respect to such series or its nominee if the Holder delivers this Security to the Trustee and instructs the Trustee to exchange all or part of this Security for a beneficial interest in a Global Security; provided that this Restricted Security may not be exchanged for a beneficial interest in a Global Security except upon receipt by the Trustee of a certification by the Holder to the effect that (i) such Holder is, or believes such Holder’s transferee is, as the case may be, a “Qualified Institutional Buyer”, as defined in Rule 144A promulgated under the Securities Act, or (ii) such transaction complies with the requirements of Regulation S promulgated under the Securities Act, in each case substantially in the form of Annex A hereto. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security to be increased (such increase to be reflected on the Schedule thereto). If necessary as a result of such an exchange, the Issuer will execute[, the Guarantor[s]* will endorse the Guarantee on,]** and the Trustee will authenticate and deliver to such Holder or such transferee, a definitive Security. If following such increase the aggregate principal amount of the Global Security (as reflected in the Schedule thereto) exceeds the aggregate face amount thereof, the Issuer will execute[, the Guarantor[s]* will endorse the Guarantee

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on,]** and the Trustee will authenticate and deliver to the Depositary, a Global Security having an aggregate face amount equal to such aggregate principal amount.]

The Paying Agent has been appointed registrar (the “Security Registrar”) for the Securities, and the Paying Agent will maintain at its office in The City of New York a register for the registration and transfer of the Securities (the “Security Register”). As provided in the Indenture and subject to certain limitations therein set forth, the transfer of (if this Security is a Global Security as indicated on the face hereof) a Security of the series of which this Security is a part or (if this Security is not a Global Security) this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the aforesaid office of the Paying Agent, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and with identical terms, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities of (if this Security is a Global Security as indicated on the face hereof) the series of which this Security is a part or (if this Security is not a Global Security) this series are issuable only in registered form without coupons in denominations of US$1,000 (or, in the case of Securities denominated in a Specified Currency, the equivalent thereof in such Specified Currency at the Market Exchange Rate on the date the Issuer agrees to issue such Security, rounded down to the nearest 1,000 units of such Specified Currency) and in integral multiples of US$1,000 in excess thereof (or, in the case of Securities denominated in a Specified Currency, 1,000 units of such Specified Currency). As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series with identical terms of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Issuer, the Trustee, the Paying Agent and any agent of the Issuer or the Trustee or the Paying Agent 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 Issuer, the Trustee, the Paying Agent 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.

All terms used in this Security which are defined in the Indenture and not defined herein shall have the meanings assigned to them in the Indenture.

(b)       Form of Reverse of Floating Rate Security

This Security is one of a duly authorized issue of Medium-Term Notes of the Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Amended and Restated Indenture dated as of April 30, 2003 (herein called the “Indenture”) among HBOS plc (the “Company”), The Governor and Company of the Bank of Scotland, Scotland International Finance No. 2 B.V. and The Bank of New York, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. The series designated as “Medium-Term Notes”, of which this Security forms part, is limited in aggregate principal amount (or in the case of Original Issue Discount Securities or Securities with the amount payable in respect of principal or any premium or interest to be determined by reference to the value, rate or price of one or more specified indices (“Indexed Securities”), aggregate initial offering price) outstanding together with any other Medium-Term Notes issued by any issuer under the Indenture or the Amended and Restated Indenture dated as of April 30, 2003 among HBOS plc, The Governor and

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Company of the Bank of Scotland and HBOS Treasury Services plc (together with HBOS plc, the Governor and Company of the Bank of Scotland, Scotland International Finance No. 2 B.V. and any subsidiary designated by HBOS plc, the “US MTN Issuers”) and the Trustee or instruments issued by any Issuer under the US MTN Issuers’ and BOS International (Australia) Limited’s Euro Note Issuance Programme at any time up to US$65,000,000,000 (or if Securities of this series denominated in one or more Specified Currencies are issued by any of the US MTN Issuers, the equivalent thereof in such Specified Currencies based upon the Program Exchange Rate (as defined below) on the date such Issuer agreed to issue such Securities). The terms of individual Securities may vary with respect to interest rates, interest rate formulas, issue dates, maturity dates, currencies or otherwise, all as provided in the Indenture. To the extent not inconsistent herewith, the terms of the Indenture are hereby incorporated by reference herein.

The Issuer has appointed Citibank, N.A. as the paying agent (the “Paying Agent”, which term includes any additional or successor Paying Agent appointed by the Issuer) with respect to the Securities, and the Trustee has appointed Citibank, N.A. as the authenticating agent (the “Authenticating Agent”, which term includes any additional or successor Authenticating Agent appointed by the Trustee) with respect to the Securities.

As used herein, the following terms have the following meaning: “London Market Day” means any day on which deposits in U.S. dollars are transacted in the London interbank market; “Market Day” means (i) with respect to any Security of this series other than a Security of this series the Interest Rate Basis of which specified on the face hereof is LIBOR or a Security of this series denominated in a Specified Currency, any day that is a Business Day in The City of New York, (ii) with respect to any Security of this series the Interest Rate Basis of which specified on the face hereof is LIBOR, any Business Day in London, England on which dealings in U.S. dollars are transacted in the London interbank market, (iii) with respect to any Security of this series denominated in a Specified Currency, any Business Day in The City of New York that is also a Business Day in the financial center of the country of the Specified Currency or, with respect to a Security of this series denominated in Euro, in Luxembourg and on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System (the “TARGET System”) is operating, and (iv) any other Business Day indicated on the face of this Security; “Business Day”, when used with respect to any Place of Payment means any day which is not a Saturday or Sunday and which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law to close; “Market Exchange Rate” for any Specified Currency means the noon buying rate in The City of New York for cable transfers for such Specified Currency as certified for customs purposes by (or, if not so certified, as otherwise determined by) the Federal Reserve Bank of New York; and “Program Exchange Rate” for any Specified Currency means the Paying Agent’s London office’s spot rate of exchange for the sale in London of US dollars for such Specified Currency on the date any Issuer agreed to issue the relevant Securities, Medium-Term Notes or instruments, as the case may be, or such other amount as the Guarantor (on behalf of itself and the Issuer) and the Agents under the Amended and Restated Private Placement Agreement dated April 30, 2003 among the Issuer and the other parties named therein may agree.

This Security will not be subject to any sinking fund and is not subject to redemption or repayment at the option of the Holder prior to maturity except for redemption for the tax reasons specified on the face hereof and as otherwise provided on the face hereof in accordance with the provisions of the following paragraph.

Except for the tax reasons specified on the face of this Security, unless otherwise indicated on the face of this Security, this Security may not be redeemed at the option of the Issuer prior to the Maturity Date. If so indicated on the face of this Security, this Security may be redeemed in whole or in part at the option of the Issuer on or after the Redemption Dates (or range of Redemption Dates) specified on the face hereof at a Redemption Price determined as provided in the next succeeding sentence, together with interest accrued and unpaid hereon to the date of redemption (except as provided below). Unless otherwise specified on the face hereof, the “Redemption Price” for any such redemption shall be the amount determined by multiplying the Redemption Percentage specified on the face hereof with respect to the relevant Redemption Date (or range of such dates) by the portion of the principal amount hereof (or if this Security is an Original Issue Discount Security, the portion of the Amortized Face Amount hereof) to be redeemed; provided that in no event shall the Redemption Price be less than 100% of the portion of the principal amount hereof (or, if this Security is an Original Issue Discount Security, the portion of the Amortized Face Amount hereof) to be

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redeemed. Notice of redemption shall be mailed to the registered holders of the Securities designated for redemption at their addresses as the same shall appear on the Security Register not less than 30 nor more than 60 days prior to the date fixed for redemption, subject to all the conditions and provisions of the Indenture. In the event of redemption of this Security in part only, a new Security or Securities for the amount of the unredeemed portion hereof shall be issued in the name of the holder hereof upon the cancellation hereof.

The rate of interest on this Security will be reset daily, weekly, monthly, quarterly, semi-annually or annually, as specified on the face hereof under Interest Reset Period (each date upon which interest is so reset as provided below being hereinafter referred to as an “Interest Reset Date”), and the interest rate in effect on any day shall be (a) if such day is an Interest Reset Date, the interest rate for such Interest Reset Date or (b) if such day is not an Interest Reset Date the interest rate for the immediately preceding Interest Reset Date; provided that (i) the interest rate in effect for the period from the Original Issue Date of this Security (or one or more predecessor Securities) to but excluding the first Interest Reset Date will be the Initial Interest Rate specified on the face hereof and (ii) the interest rate in effect for the ten calendar days immediately prior to Maturity of this Security will be that in effect on the tenth calendar day preceding such Maturity. Notwithstanding the foregoing, the interest rate hereon shall not be greater than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate, if any, specified on the face hereof and in no event shall be higher than the maximum rate permitted by New York law, as the same may be modified by United States Federal law of general application. Unless otherwise specified on the face hereof and except as provided in the next succeeding sentence, the Interest Reset Date with respect to this Security will be, if the Interest Reset Period specified on the face hereof is daily, each Market Day; if the Interest Reset Period specified on the face hereof is weekly (unless the Interest Rate Basis specified on the face hereof is the Treasury Rate), the Wednesday of each week; if the Interest Reset Period specified on the face hereof is weekly and the Interest Rate Basis specified on the face hereof is the Treasury Rate, except as otherwise provided below, the Tuesday of each week; if the Interest Reset Period specified on the face hereof is monthly, the third Wednesday of each month; if the Interest Reset Period specified on the face hereof is quarterly, the third Wednesday of each March, June, September and December; if the Interest Reset Period specified on the face hereof is semi-annually, the third Wednesday of two months in each year specified under “Interest Reset Month(s)” on the face hereof; and if the Interest Reset Period specified on the face hereof is annually, the third Wednesday of the one month in each year specified under “Interest Reset Month(s)” on the face hereof. If, pursuant to the preceding sentence, any Interest Reset Date would otherwise be a day that is not a Market Day with respect to this Security, the Interest Reset Date shall be the next succeeding day that is a Market Day with respect to this Security, except that if the Interest Rate Basis specified on the face hereof is LIBOR and the immediately succeeding such Market Day falls in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding such Market Day. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date the rate of interest on this Security shall be the rate determined in accordance with the provisions of the applicable heading below.

Determination of CD Rate. If the Interest Rate Basis specified on the face hereof is the CD Rate, the interest rate with respect to this Security for any Interest Reset Date shall equal (a) the rate on the second Market Day with respect to this Security immediately preceding such Interest Reset Date (the “CD Rate Interest Determination Date”) for negotiable certificates of deposit having the Index Maturity specified on the face hereof (i) as published in the weekly statistical release entitled “Statistical Release H.15(519), Selected Interest Rates”, or any successor publication, published by the Board of Governors of the United States Federal Reserve System (“H.15(519)”) under the heading “CDs (Secondary Market)” or (ii) if such rate is not so published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such CD Rate Interest Determination Date, then as published in H.15 Daily Update under the heading “CDs (Secondary Market)”, or (b) if such rate is not published in either H.15 (519) or H.15 Daily Update by 3:00 P.M., New York City time, on such Calculation Date, the arithmetic mean, as calculated by the Calculation Agent on such Calculation Date, of the secondary market offered rates, as of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date, of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable certificates of deposit of major United States money market banks with a remaining maturity closest to the Index Maturity specified on the face hereof in a denomination of U.S.$5,000,000, in each of the above cases adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof; provided that if the dealers selected as aforesaid by the

31 

Calculation Agent are not quoting as mentioned in this sentence, the CD Rate shall be the CD Rate in effect on such CD Rate Interest Determination Date.

Determination of Commercial Paper Rate. If the Interest Rate Basis specified on the face hereof is the Commercial Paper Rate, the interest rate with respect to this Security for any Interest Reset Date shall equal (a) the Money Market Yield (calculated as described below) of the rate on the second Market Day with respect to this Security immediately preceding such Interest Reset Date (the “Commercial Paper Interest Determination Date”) for commercial paper having the Index Maturity specified on the face hereof, (i) as published in H.15(519) under the heading “Commercial Paper– Nonfinancial”, or (ii) if such rate is not so published prior to 3:00 P.M., New York City time, on the Calculation Date pertaining to such Commercial Paper Interest Determination Date, then as published in H.15 Daily Update under the heading “Commercial Paper–Nonfinancial”, or (b) if such rate is not published in either H.15(519) or H.15 Daily Update by 3:00 P.M., New York City time, on such Calculation Date, the Money Market Yield of the arithmetic mean, as calculated by the Calculation Agent on such Calculation Date, of the offered rates, as of 11:00 A.M., New York City time, on such Commercial Paper Interest Determination Date, of three leading dealers of commercial paper in The City of New York selected by the Calculation Agent for commercial paper having the Index Maturity specified on the face hereof placed for an industrial issuer whose bond rating is “AA”, or the equivalent, from a nationally recognized rating agency, in each of the above cases adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof; provided that if such dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate shall be the Commercial Paper Rate in effect on such Commercial Paper Interest Determination Date.

“Money Market Yield” shall be a yield (expressed as a percentage rounded upwards, if necessary, to the next higher one-hundred thousandth of a percentage point), calculated in accordance with the following formula:

Money Market Yield =	D x 360	x 100,
	360 - (D x M)

where “D” refers to the per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and “M” refers to the actual number of days in the interest period for which interest is being calculated.

Determination of Prime Rate. If the Interest Rate Basis specified on the face hereof is the Prime Rate, the interest rate with respect to this Security for any Interest Reset Date shall equal (a) the rate on the second Market Day with respect to this Security immediately preceding such Interest Reset Date (the “Prime Rate Interest Determination Date”) as published in H.15(519) under the heading “Bank Prime Loan”, (b) if such rate is not so published prior to 3:00 P.M., New York City time, then the Prime Rate will be the rate on such Prime Rate Interest Determination Date as published in H.15 Daily Update under the heading “Bank Prime Loan”. In the event such rate is not published in either H.15(519) or H.15 Daily Update, then the Prime Rate will be the arithmetic mean, as calculated by the Calculation Agent on such Calculation Date, of the rates of interest publicly announced by each bank that appears on the display designated as page “USPRIME1” on the Reuters Monitor Money Rates Service (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks) (“Reuters Screen USPRIME1 Page”) as such bank’s prime rate or base lending rate as in effect for that Prime Rate Interest Determination Date, or (c) if fewer than four such rates but more than one such rate appear on the Reuters Screen USPRIME1 Page for the Prime Rate Interest Determination Date, the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date by at least two of the three major money center banks in The City of New York selected by the Calculation Agent, or (d) if fewer than two quotations are provided, the arithmetic mean of the rates furnished in The City of New York by the appropriate number of substitute banks or trust companies organized and doing business under the laws of the United States, or any State thereof, having total equity capital of at least U.S.$500,000,000 and being subject to supervision or examination by Federal or State authority, selected by the Calculation Agent to provide such rate or rates, in each of the above cases adjusted by

32 

the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof; provided that if the banks or trust companies selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Prime Rate will be the same as the Prime Rate for the immediate preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Prime Rate will be the Initial Interest Rate).

Determination of Federal Funds Effective Rate. If the Interest Rate Basis specified on the face hereof is the Federal Funds Effective Rate, the interest rate with respect to this Security for any Interest Reset Date shall equal (a) the rate on the second Market Day with respect to this Security immediately preceding such Interest Reset Date (the “Federal Funds Effective Interest Determination Date”) for Federal Funds having the Index Maturity specified on the face hereof (i) as published in H.15(519) under the heading “Federal Funds (Effective)” as displayed on Bridge Telerate Inc. on page 120 or (ii) if such rate is not so published prior to 3:00 P.M., New York City time, on the Calculation Date pertaining to such Federal Funds Effective Interest Determination Date, then as published in H.15 Daily Update under the heading “Federal Funds (Effective)” or (b) if by 3:00 P.M., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or H.15 Daily Update, the arithmetic mean, as calculated by the Calculation Agent on such Calculation Date, of the rates, as of 9:00 A.M., New York City time, on such Federal Funds Effective Interest Determination Date, for the last transaction in overnight Federal Funds arranged by three leading brokers of Federal Funds transactions in The City of New York selected by the Calculation Agent, in each of the above cases adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof; provided that if the brokers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Federal Funds Effective Rate will be the Federal Funds Effective Rate in effect on such Federal Funds Effective Interest Determination Date.

Determination of LIBOR. If the Interest Rate Basis specified on the face hereof is LIBOR, the interest rate with respect to this Security for any Interest Reset Date shall be determined by the Calculation Agent in accordance with the following provisions:

(i)       On the second London Market Day prior to such Interest Reset Date (a “LIBOR Interest Determination Date”), the Calculation Agent will determine LIBOR on the basis of the offered rate for deposits of not less than U.S.$1,000,000 having the Index Maturity specified on the face hereof, commencing on the second London Market Day immediately following such LIBOR Interest Determination Date, which appears on the display designated as page 3740 or page 3750, as applicable on the Dow Jones Telerate Service (or such other page as may replace any such page on that service for the purpose of displaying London interbank offered rates of major banks for deposits in U.S. dollars) as of 11:00 A.M., London time, on that LIBOR Interest Determination Date, adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof; provided that no such offered rate appears, LIBOR for such LIBOR Interest Determination Date will be determined as described in (ii) below.

(ii)       If on any LIBOR Interest Determination Date no rate appears on Telerate Page 3740 or 3750 as described in (i) above, the Calculation Agent will request the principal London office of four major banks in the London interbank market, as selected by the Calculation Agent, to provide the Calculation Agent with its quotation at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date of the rate it offers to prime banks in the London interbank market for deposits in U.S. dollars having the Index Maturity shown on the face hereof and in a principal amount equal to an amount of not less than U.S.$1,000,000 that in the Calculation Agent’s judgment is representative for a single transaction in such market at such time. If at least two such quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean, as calculated by the Calculation Agent, of such quotations, adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof. If fewer than two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean, as calculated by the Calculation Agent, of the rates quoted at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date by three major banks in London, England, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks, having the Index Maturity shown on the face hereof and in a principal amount equal to an amount of not less than U.S.$1,000,000 that in the Calculation Agent’s judgment is representative for a single transaction in such market at such time, adjusted by the addition or

33 

subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof; provided that if the banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR will be the LIBOR in effect on such LIBOR Interest Determination Date.

Determination of EURIBOR. If the Interest Rate Basis specified on the face hereof is EURIBOR, the interest rate with respect to this Security for any Interest Reset Date shall be determined by the Calculation Agent in accordance with the following provisions:

(i)       On the second London Market Day prior to such Interest Reset Date (a “EURIBOR Interest Determination Date”), the Calculation Agent will determine EURIBOR on the basis of the offered rate for deposits of not less than the equivalent of U.S.$1,000,000 in Euros having the Index Maturity specified on the face hereof, commencing on the second London Market Day immediately following such EURIBOR Interest Determination Date, which appears on the display designated as Page 248, as applicable, on the Bridge Telerate, Inc. (or such other page as may replace any such page on that service for the purpose of displaying Euro-zone interbank offered rates of major banks for deposits in U.S. dollars) as of 11:00 A.M., Brussels time, on that EURIBOR Interest Determination Date, adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof; provided that if no such offered rate appears, EURIBOR for such EURIBOR Interest Determination Date will be determined as described in (ii) below.

(ii)       If on any EURIBOR Interest Determination Date no rate appears on Telerate Page 248 as described in (i) above, the Calculation Agent will request the principal London office of four major banks in the London interbank market, as selected by the Calculation Agent, to provide the Calculation Agent with its quotation at approximately 11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date of the rate it offers to prime banks in the Euro-zone interbank market for deposits in U.S. dollars having the Index Maturity shown on the face hereof and in a principal amount equal to an amount of not less than the equivalent of U.S.$1,000,000 in Euro that in the Calculation Agent’s judgment is representative for a single transaction in such market at such time. If at least two such quotations are provided, EURIBOR for such EURIBOR Interest Determination Date will be the arithmetic mean, as calculated by the Calculation Agent, of such quotations, adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof. If fewer than two quotations are provided, EURIBOR for such EURIBOR Interest Determination Date will be the arithmetic mean, as calculated by the Calculation Agent, of the rates quoted at approximately 11:00 A.M., Brussels time, on such EURIBOR Interest Determination Date by four major banks in the Euro-zone, selected by the Calculation Agent, for loans in Euros to leading European banks, having the Index Maturity shown on the face hereof and in a principal amount equal to an amount of not less than the equivalent of U.S.$1,000,000 in Euro that in the Calculation Agent’s judgment is representative for a single transaction in such market at such time, adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof; provided that if the banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, EURIBOR will be the EURIBOR in effect on such EURIBOR Interest Determination Date.

Determination of Treasury Rate. If the Interest Rate Basis specified on the face hereof is the Treasury Rate, the interest rate with respect to this Security for any Interest Reset Date shall equal (a) the rate for the most recent auction of direct obligations of the United States (“Treasury Bills”) having the Index Maturity shown on the face hereof as published on the display on Bridge Telerate, Inc. on page 56 or page 57 under the caption “AVGE INVEST YIELD” on the Treasury Interest Determination Date (as defined below) or (b) if such rate is not so published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Treasury Interest Determination Date, the auction average rate (expressed as bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) for such auction as otherwise announced by the United States Department of the Treasury or (c) in the event that the results of the auction of Treasury Bills having the Index Maturity specified on the face hereof are not published or reported as provided in (a) or (b) above by 3:00 P.M., New York City time, on such Calculation Date or if no such auction is held in a particular week, the rate published in H.15(519) under the heading “U.S. Government Securities/Treasury Bills/Secondary Market”, or any successor publication or heading for Treasury Bills having the Index Maturity specified on the face hereof, in each of the above cases adjusted by the

34 

addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof; provided that if such dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Treasury Rate shall be the Treasury Rate on such Treasury Interest Determination Date.

The “Treasury Interest Determination Date” pertaining to an Interest Reset Date will be the day on which Treasury bills are auctioned for the week in which such Interest Reset Date falls, or if no auction is held for such week, the Monday of such week (or if Monday is a legal holiday, the next succeeding Market Day) and the Interest Reset Date will be the Market Day immediately following such Treasury Interest Determination Date. Treasury bills are usually sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is usually held on the following Tuesday, except that such auction may be held on the preceding Friday. If an auction is held for such week on Monday or the preceding Friday, such Monday or preceding Friday shall be the Treasury Interest Determination Date for such week, and the Interest Reset Date for such week shall be the Tuesday of such week (or, if such Tuesday is not a Market Day, the next succeeding Market Day). If the auction for such week is held on any day of such week other than Monday, then such date shall be the Treasury Interest Determination Date and the Interest Reset Date for such week shall be the next succeeding Market Day.

Determination of CMT Rate. If the Interest Rate Basis specified on the face hereof is the CMT Rate, the interest rate with respect to this security for any Interest Reset Date shall equal: (a) the rate on the second Market Day with respect to this Security immediately preceding such Interest Reset Date (the “CMT Rate Interest Determination Date”) displayed for the Index Maturity designated in such CMT Rate Note on the Designated CMT Telerate Page (as defined below) under the caption “… Treasury Constant Maturities … Federal Reserve Board Release H.15” “Mondays Approximately 3:45 p.m.” under the column for the Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT Telerate Page is 7051, the rate on such CMT Interest Determination Date, and (ii) if the Designated CMT Telerate Page is 7052, the week or the month, as applicable ended immediately preceding the week in which the related CMT Interest Determination Date occurs; (b) if such rate is no longer displayed on the relevant page, or if not displayed by 3:00 p.m., New York City time, on the related Calculation Date, then the CMT Rate for such CMT Interest Determination Date will be such Treasury Constant Maturity rate for the Designated CMT Maturity Index as published in the relevant H.15(519); (c) if such rate is no longer published, or if not published by 3:00p.m., New York City time, on the related Calculation Date, then the CMT Rate for such CMT Interest Determination Date will be such Treasury Constant Maturity rate for the Designated CMT Maturity Index (or other United States Treasury rate for the Designated CMT Maturity Index) for the CMT Interest Determination Date with respect to the related CMT Interest Reset Date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Designated CMT Telerate Page and published in the relevant H.15(519); (d) if such information is not provided by 3:00 p.m., New York time, on the related Calculation Date, then the CMT Rate for the CMT Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean of the secondary market closing offer side prices as of approximately 3:30 p.m., New York time, on the CMT Interest Determination Date reported, according to their records, by three leading primary United States government securities dealers (each a “Reference Dealer”) in the City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent (from five such Reference Dealers selected by the Calculation Agent after consultation with the Company, and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest), for the most recently issued direct noncallable fixed rate obligations of the United States (“Treasury Notes”) with an original maturity of approximately the Designated CMT Maturity Index and remaining term to maturity of not less than such Designated CMT Maturity Index minus one year; (e) if the Calculation Agent cannot obtain three such Treasury Notes quotations, the CMT Rate for such CMT Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on the CMT Interest Determination Date of three Reference Dealers in the City of New York (from five such Reference Dealers selected by the Calculation Agent, after consultation with the Company, and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest), for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining

35 

term to maturity closest to the Designated CMT Maturity Index and in an amount of at least $100,000,000; and (f) if three or four (and not five) of such Reference Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor the lowest of such quotes will be eliminated, in each of the above cases adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof provided that if fewer than three Reference Dealers selected by the Calculation Agent are quoting as described herein, the CMT Rate for such Interest Reset Date will be the same as the CMT Rate in effect on such CMT Interest Determination Date. If two Treasury Notes with an original maturity as described in the second preceding clause having remaining terms to maturity equally close to the Designated CMT Maturity Index, the quotes for the Treasury Note with the shorter remaining term to maturity will be used.

Unless otherwise specified on the face hereof, the Calculation Date pertaining to any Interest Determination Date shall be the first to occur of (a)(i) in the case of any CD Rate Interest Determination Date, Commercial Paper Rate Interest Determination Date, Treasury Interest Determination Date, Federal Funds Effective Rate Interest Determination Date or CMT Interest Rate Determination Date, the tenth day after such interest determination date or, if any such day is not a Market Day with respect to this Security, the next succeeding such Market Day or (ii) in the case of any Prime Rate Interest Determination Date or LIBOR Interest Determination Date, such interest determination date, and (b) the Market Day preceding the applicable Interest Payment Date or the Stated Maturity (or the date of redemption or repayment, if any) as the case may be. The Calculation Agent shall calculate the interest rate hereon in accordance with the foregoing on or before each Calculation Date. At the request of the Holder hereof, the Calculation Agent will provide to the Holder hereof the interest rate hereon then in effect and, if determined, the interest rate which will become effective as of the next Interest Reset Date. Unless otherwise specified on the face hereof, the Calculation Agent shall be the Paying Agent.

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of this Security shall not be a Business Day at any place of payment, then payment of principal of and premium or interest, if any, on this Security need not be made at such place of payment on such date, but may be made on the next succeeding Business Day at such place of payment with the same force and effect as if made on the Interest Payment Date, Redemption Date or at the Stated Maturity and no interest on such payment shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity and no interest on such payment shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be to such next succeeding Business Day.

The indebtedness evidenced by this Security is, to the extent, and in the manner provided in Section 1006 of the Indenture, subordinated and subject in right of payment to the prior payment in full of the claims of all of the Senior Creditors (as defined in the Indenture) of the Issuer and this Security is issued subject to said Section 1006 of the Indenture, and each Holder of this Security, by accepting the same, agrees to and shall be bound by such provisions as provided in the Indenture. [If the Security is not an Undated Security or a Security issued by The Governor and Company of the Bank of Scotland, insert: Amounts due and payable under the Securities shall be due and payable by the Issuer in the event of the bankruptcy, winding up or liquidation of the Issuer only if and to the extent that the Issuer could make payment thereof rateably with the claims of other Subordinated Creditors (as defined in the Indenture) of the Issuer and still be solvent immediately thereafter. For this purpose, the Issuer shall be considered to be solvent if it is able to pay its debts to its Senior Creditors (as so defined) in full.] [If this Security is a Security (other than an Undated Security) issued by The Governor and Company of the Bank of Scotland, insert: Amounts due and payable under the Securities shall be due and payable by the Issuer in the event of the sequestration or winding up of the Issuer only if and to the extent that the Issuer could make payment thereof rateably with the claims of other Subordinated Creditors (as defined in the Indenture) of the Issuer and still be solvent immediately thereafter. For this purpose, the Issuer shall be considered to be solvent if it is able to pay its debts to its Senior Creditors (as so defined) in full.] [If this Security is an Undated Security, insert: Amounts due and payable under the Securities shall be conditional (such condition is referred to as the “Solvency Condition”) upon the Issuer [and, in relation to Securities which are guaranteed, the Guarantor]** being solvent at the time of payment by the Issuer and in that no amount shall be payable under the Securities except to the extent that the Issuer [and, in relation to Securities which are guaranteed (assuming that a payment was then due by the Guarantor), the Guarantor]** could make such payment and still be solvent (whether or not

36 

it is bankrupt, being [sequestrated or]** liquidated or is in winding up) immediately thereafter. In such circumstances, no amounts payable in respect of such amounts which would otherwise fall due for payment shall fall so due (subject always to the provisions of the parenthetical clause in Section 503(1) of the Indenture), and instead, such payment shall become due for payment only if and when and to the extent that [both]** the Issuer [and, in relation to Securities which are guaranteed, the Guarantor (assuming that a payment was then due by the Guarantor]** could make such payment in whole or in part and still be solvent (whether or not it is bankrupt or being liquidated [or sequestrated]** or in winding up) immediately thereafter. [Interest will continue to accrue on this Security, payment of which is suspended pursuant to the provisions of the immediately preceding sentence in accordance with the terms of this Security and the Indenture.] For this purpose, the Issuer [and the Guarantor, as the case may be,]** shall be considered to be solvent if (A) it is able to pay its debts to Senior Creditors (as defined in the Indenture) as they fall due and (B) its Assets (as defined in the Indenture) exceed its Liabilities (as defined in the Indenture) to Senior Creditors (as so defined). Amounts representing interest in respect of which the Solvency Condition is not satisfied on the due date for the payment thereof shall, so long as the same remains unpaid, constitute “Arrears of Interest” (to the extent described in the Indenture). Arrears of Interest in respect of Undated Securities shall not bear interest. Without prejudice to the foregoing provisions, the Issuer shall not be obliged to make payment of the interest accrued in respect of any period on the due date for the payment thereof (for the purposes of this paragraph and the immediately succeeding paragraph, “Accrual Period” and “Payment Date” respectively) if during the period of twelve months ending on such Payment Date no dividend or other Distribution (as defined in the Indenture) shall have been declared, paid or made on any class of stock or share capital of [include the relevant issuer: HBOS plc / The Governor and Company of the Bank of Scotland]; and all interest not so paid shall, so long as the same remains unpaid, constitute Arrears of Interest. The Issuer may, subject to the provisions of the immediately succeeding sentence, at its option (upon the expiry of not less than seven days’ notice to the Holders of the Securities given in accordance with the relevant provisions of the Securities) at any time pay all or part of the Arrears of Interest (being, if part only, the whole of the interest accrued on all of such Securities during any one or more Accrual Periods) but so that, in the case of any such partial payment, the interest accrued during any Accrual Period shall not be paid prior to that accrued during any earlier Accrual Period. If there are outstanding more than one series of Undated Securities, then the Issuer may not pay all or part of the Arrears of Interest in respect of any such series unless it pays all or (as near as practicable) an equivalent proportion of the Arrears of Interest in respect of each other series of its Undated Securities then outstanding. All Arrears of Interest shall (subject to satisfaction of the Solvency Condition and subject to Section 1006(c)(iv) of the Indenture) become due in full on the date on which any dividend or other Distribution (as defined in the Indenture) is next declared, paid or made on any class of stock or share capital of [include the relevant issuer: HBOS plc / The Governor and Company of the Bank of Scotland] or, if earlier, the date set for any redemption permitted under Section 1108 of the Indenture or any early redemption exercised at the option of the Issuer (other than a partial redemption) in accordance with the terms of the Securities. [If redemption permitted, insert: or an early redemption exercised at the option of the Holder in accordance with the terms of the Securities] or the commencement of the liquidation, sequestration or winding up of [insert the relevant issuer: HBOS plc / The Governor and Company of the Bank of Scotland]]

[If this Security is an Undated Security issued by HBOS plc, insert: If, at any time, an order is made for the liquidation or winding up of HBOS plc or an effective resolution is passed for the winding up of HBOS plc, this Security shall become due and payable in accordance with the provisions of this paragraph and the Issuer shall, in lieu of any other payment on this Security, but subject to satisfaction of the Solvency Condition, be obliged to pay, in respect of this Security, such amounts as would have been payable if the Holder of this Security had, on the day preceding the commencement of such liquidation or winding up, become a holder of preference stock or shares in the capital of HBOS plc forming or being part of a class having a preferential right in the liquidation or winding up over the holders of all other classes of stock and shares in the capital of HBOS plc and entitled to receive in such liquidation or winding up an amount equal to the Redemption Price and interest (if any) accrued since the Payment Date immediately preceding or coinciding with the commencement of such liquidation or winding up to the date of such repayment and all Arrears of Interest and/or, as the case may be, all such interest due but unpaid.]

[If this Security is an Undated Security issued by The Governor and Company of the Bank of Scotland, insert: If, at any time, an order is made for the sequestration or winding up of The Governor and Company of the Bank of Scotland or an effective resolution is passed for the winding up of The

37 

Governor and Company of the Bank of Scotland, this Security shall become due and payable in accordance with the provisions of this paragraph and the Issuer shall, in lieu of any other payment on this Security, but subject to satisfaction of the Solvency Condition, be obliged to pay, in respect of the Securities, such amounts as would have been payable if the Holder of this Security had, on the day preceding the commencement of such sequestration or winding up, become a holder of preference stock or shares in the capital of The Governor and Company of the Bank of Scotland forming or being part of a class having a preferential right in the sequestration or winding up over the holders of all other classes of stock and shares in the capital of The Governor and Company of the Bank of Scotland and entitled to receive in such sequestration or winding up an amount equal to the Redemption Price and interest (if any) accrued since the Payment Date immediately preceding or coinciding with the commencement of such sequestration or winding up to the date of such repayment and all Arrears of Interest and/or, as the case may be, all such interest due but unpaid.]

In addition, in the event of the bankruptcy, sequestration, liquidation or winding up of the Issuer, if any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Issuer being subordinated to the payment of the Securities, shall be received by the Trustee or the Holders, before the claims of all Senior Creditors (as defined in the Indenture) of the Issuer have been paid in full, such payment or distribution shall be held in trust by the Trustee or such Holders, as applicable, and shall be immediately returned by it or them to the liquidator or trustee or receiver in bankruptcy of the Issuer. Thereupon, such payment or distribution will be deemed not to have been made or received. If any of the said rights and claims of any Holder against the Issuer is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the liquidator or trustee or receiver in bankruptcy of the Issuer and until such time as payment is made will hold a sum equal to such amount in trust for the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not to have taken place.

The provisions of Section 1006 of the Indenture and the provisions of the two [if this Security is an Undated Security, substitute: three] immediately preceding paragraphs relating to the subordination of the Securities shall be governed by, and shall be construed in accordance with, the laws of England.

The Indenture contains provisions for defeasance of the entire indebtedness of this Security.

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal (or, if the Securities are Original Issue Discount Securities, such portion of the principal amount of the Securities as described in the next paragraph hereof) of the Securities of this series shall, without any act of the Trustee or the Holder hereof, become immediately due and payable without presentment, demand, protest or other notice of any kind as provided in the Indenture.

If this Security is designated on the face hereof as an Original Issue Discount Security (an “Original Issue Discount Security”), then, notwithstanding anything to the contrary contained in this Security, upon the redemption or acceleration of Maturity of this Security there shall be payable, in lieu of the principal amount due at the Stated Maturity hereof, an amount equal to the Amortized Face Amount of this Security. The “Amortized Face Amount” of an Original Issue Discount Security shall be the amount equal to the sum of (a) the issue price of this Security (as defined below), plus (b) that portion of the difference between the issue price and the principal amount of this Security that has been amortized at the Stated Yield (as defined below) of such Security (computed in accordance with Section 1272(a)(4) of the U.S. Internal Revenue Code and U.S. Treasury Regulations Section 1.1272-1(b), in each case as in effect on the Original Issue Date of such Security) at the date as of which the Amortized Face Amount is calculated, but in no event shall the Amortized Face Amount exceed the principal amount of this Security due at the Stated Maturity hereof. As used in the previous sentence “issue price” means the principal amount due at the Stated Maturity hereof less the Total Amount of OID of this Security specified on the face hereof; the “Stated Yield” of this Security means the Yield to Maturity specified on the face hereof for the period from the Original Issue Date hereof to the Stated Maturity hereof on the basis of its issue price and such principal amount payable at the Stated Maturity thereof.

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If a Default with respect to Securities of this series shall occur and be continuing, the Issuer will, upon demand of the Trustee pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal, premium (if any) and interest (if any). [If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee may petition for the winding up or sequestration of the Guarantor[s]*.]** Upon the occurrence of a Default with respect to Securities of this series, the Holder of this Security shall not at any time be entitled to exercise any right of set-off or counterclaim which may be available to any such Holder against amounts owing by the Issuer [or the Guarantor[s]*]** in respect of this Security. If, notwithstanding the provisions of the immediately preceding sentence, any of the rights and claims of the Holder of this Security is discharged by set-off, the Holder of this Security will immediately pay an amount equal to the amount of such discharge to the Issuer [or the Guarantor[s]*, as appropriate,]** and until such time as payment is made will hold a sum equal to such amount in trust for the Issuer [or the Guarantor[s]*, as appropriate]**. Accordingly, such discharge will be deemed not to have taken place.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer and the Trustee with the consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Securities at the time Outstanding of all series to be affected (voting as a class). The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

[The Guarantor[s]* or a Subsidiary of the Guarantor[s]* may assume the obligations of the Issuer hereunder under certain circumstances set forth in Section 803 of the Indenture. The Guarantor[s]* shall assume the obligations of the Issuer hereunder in certain events set forth in Section 803 of the Indenture.]**

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and premium and interest, if any, on and certain additional amounts in respect of this Security at the times, place and rates, and in the coin or currency, herein prescribed.

If this Security is denominated in a Specified Currency, unless the Holder hereof is entitled to make, and has made, a Specified Currency Payment Election with respect to such payments as provided on the face hereof, the Holder of this Security shall receive payments of principal and any premium and interest in U.S. dollars at an exchange rate based on the highest bid quotation in The City of New York received by the Exchange Rate Agent (who, unless otherwise specified on the face hereof, shall be the Paying Agent who has been appointed as the Exchange Rate Agent by the Issuer) at approximately 11:00 A.M., New York City time, on the second Market Day with respect to this Security preceding the applicable payment date from three recognized foreign exchange dealers (one of which may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the Issuer for the purchase by the quoting dealer of the Specified Currency for U.S. dollars for settlement on such payment date of the aggregate amount of such Specified Currency payable to all Holders of Securities of this series denominated in such Specified Currency and scheduled to receive U.S. dollar payment on such payment date and at which the applicable dealer commits to execute a contract. All currency exchange costs incurred by the Issuer in converting a Specified Currency into U.S. dollars in order to make payments hereon will be borne by the Holder of this Security by deductions from such payments. If such bid quotations are not available, or if a Specified Currency Payment Election has been made with respect to such payments, payments will be made in the Specified Currency (or, if such Specified Currency is not at the time of such payment legal tender for the payment of public and private debts, such other coin or currency of the country which issued such Specified Currency as at the time of such payment is legal tender for the payment of such debts); provided that if such Specified Currency (or, if applicable, such other coin or currency) is unavailable due to the imposition of exchange controls or other circumstances beyond the Issuer’s control, the Issuer will be entitled to

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make payments in U.S. dollars on the basis of the Market Exchange Rate for such Specified Currency (or, if applicable, such other coin or currency) on the second Market Day with respect to this Security prior to such payment date or, if such Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate or as otherwise indicated hereon.

If this Security is a Global Security as indicated on the face hereof, this Security shall be exchangeable for Securities registered in the names of Persons other than the Depositary with respect to such series or its nominee only as provided in this paragraph. This Security shall be so exchangeable if (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as Depositary for such series or at any time ceases to be a clearing agency registered as such under the Securities Exchange Act, (ii) the Issuer executes and delivers to the Trustee an Officer’s Certificate providing that this Security shall be so exchangeable or (iii) there shall have occurred and be continuing a Default or an Event of Default with respect to the Securities of such series. Securities so issued in exchange for this Security shall be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in authorized denominations and in the aggregate having the same principal amount as this Security and registered in such names as the Depositary for such Global Security shall direct.

If this Security is a Global Security as indicated on the face hereof, any Person having a beneficial interest in this Security may request the Depositary to instruct the Paying Agent to exchange all or part of such interest for a definitive Security upon receipt by the Paying Agent of a certification from such Person in the form of Annex A hereto, unless such Person is transferring such interest to an institution that is an “accredited investor”, as defined in Regulation D under the Securities Act, in which case, upon receipt by the Paying Agent of a certification from such transferee in the form of Annex B hereto. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Paying Agent, the aggregate principal amount of the Global Security to be reduced (such reduction to be reflected on the Schedule hereto) and, following such reduction, the Issuer will execute[, and the applicable Guarantor[s]* will endorse the Guarantee on]**, and the Authenticating Agent will authenticate and deliver to such Person or such transferee, as the case may be, a definitive Security.

If this Security is a Global Security as indicated on the face hereof, at such time as all interests in this Security have either been exchanged for definitive Securities, redeemed, repurchased or cancelled, this Security shall be cancelled by the Paying Agent. At any time prior to such cancellation, if any interest in this Security is exchanged for definitive Securities, redeemed, repurchased or cancelled, the principal amount of Securities represented by this Security shall be reduced and the Paying Agent shall cause an endorsement to be made on the Schedule hereto to reflect such reduction.

[If this Security is a Global Security which is a Restricted Security, insert:] [Any Person having a beneficial interest in a Global Security which is a Restricted Security may request the Trustee to exchange all or part of such interest for another Global Security upon receipt by the Trustee of a certification from such Person in the form of Annex A to the Global Security to the effect that such transaction complies with the requirements of Regulation S promulgated under the Securities Act. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security being transferred to be reduced (such reduction to be reflected on the Schedule thereto) and, following such reduction, the aggregate principal amount of the Global Security being purchased to be increased (such increase to be reflected in the Schedule thereto). If following such increase the aggregate principal amount of the Global Security being purchased (as reflected in the Schedule thereto) exceeds the aggregate face amount thereof, the Issuer will execute[, the Guarantor[s]* will endorse the Guarantee on,]** and the Trustee will authenticate and deliver to the Depositary, a Global Security having an aggregate face amount equal to such aggregate principal amount.]

[If this Security is a definitive Security which is a Restricted Security, insert:] [This Security shall be exchangeable in whole or in part for a beneficial interest in a Global Security registered in the name of the Depositary with respect to such series or its nominee if the Holder delivers this Security to the Trustee and instructs the Trustee to exchange all or part of this Security for a beneficial interest in a Global Security; provided that this Restricted Security may not be exchanged for a beneficial interest in a Global Security except upon receipt by the Trustee of a certification by the Holder to the effect that (i) such Holder is, or believes such Holder’s transferee is, as the case may be, a “Qualified Institutional

40 

Buyer”, as defined in Rule 144A promulgated under the Securities Act, or (ii) such transaction complies with the requirements of Regulation S promulgated under the Securities Act, in each case substantially in the form of Annex A hereto. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security to be increased (such increase to be reflected on the Schedule thereto). If necessary as a result of such an exchange, the Issuer will execute[, the Guarantor[s]* will endorse the Guarantee on,]** and the Trustee will authenticate and deliver to such Holder or such transferee, a definitive Security. If following such increase the aggregate principal amount of the Global Security (as reflected in the Schedule thereto) exceeds the aggregate face amount thereof, the Issuer will execute[, the Guarantor[s]* will endorse the Guarantee on,]** and the Trustee will authenticate and deliver to the Depositary, a Global Security having an aggregate face amount equal to such aggregate principal amount.]

The Paying Agent has been appointed registrar (the “Security Registrar”) for the Securities, and the Paying Agent will maintain at its office in The City of New York a register for the registration and transfer of the Securities (the “Security Register”). As provided in the Indenture and subject to certain limitations therein set forth, the transfer of (if this Security is a Global Security as indicated on the face hereof) a Security of the series of which this Security is a part or (if this Security is not a Global Security) this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the aforesaid office of the Paying Agent, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and with identical terms, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities of (if this Security is a Global Security as indicated on the face hereof) the series of which this Security is a part or (if this Security is not a Global Security) this series are issuable only in registered form without coupons in denominations of US$1,000 (or, in the case of Securities denominated in a Specified Currency, the equivalent thereof in such Specified Currency at the Market Exchange Rate on the date the Issuer agrees to issue such Security, rounded down to the nearest 1,000 units of such Specified Currency) and in integral multiples of US$1,000 in excess thereof (or, in the case of Securities denominated in a Specified Currency, 1,000 units of such Specified Currency). As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series with identical terms of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Issuer, the Trustee, the Paying Agent and any agent of the Issuer or the Trustee or the Paying Agent 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 Issuer, the Trustee, the Paying Agent 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.

All terms used in this Security which are defined in the Indenture and not defined herein shall have the meanings assigned to them in the Indenture.

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SECTION 204. Form of Trustee’s Certificate of Authentication.

This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK, as Trustee
By
	Authorised Signatory

SECTION 205. Form of Guarantee.

[* INDICATES LANGUAGE TO BE DELETED IF THE ISSUER IS THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND]

[This Guarantee is to be endorsed on the Securities of each series other than Securities issued by HBOS.]

GUARANTEE

For value received, HBOS plc, a corporation incorporated in Scotland under the Companies Act 1985 (in its capacity as guarantor, herein called the “Guarantor”, which term includes any successor corporation under the Indenture referred to in the Security upon which this Guarantee is endorsed) [and THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND, a bank constituted and existing under the laws of Scotland (in its capacity as guarantor, herein called the “Guarantor”, which term includes any successor corporation under the Indenture referred to in the Security upon which this Guarantee is endorsed, and together with HBOS plc as Guarantor, the “Guarantors”),]* hereby [jointly and severally and ]* unconditionally and irrevocably guarantee[s]* to the Holder of the Security upon which this Guarantee is endorsed the due and punctual payment of the principal of and premium, if any, and interest, if any, on such Security and the due and punctual payment of the sinking fund payments, if any, referred to therein when and as the same shall become due and payable, whether at the Stated Maturity, by call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein. In case of the failure of the Issuer (as defined on the face of this Security) punctually to make any such payment of principal, premium, if any, or interest, if any, or any sinking fund payment, if any, the Guarantor[s]* hereby [jointly and severally]* agree[s] to make any such payment punctually when and as the same shall become due and payable, whether at the Stated Maturity, by call for redemption or otherwise, and as if such payment were made by the Issuer.

The Guarantor[s]* hereby further agree[s] that any amounts to be paid by the Guarantor[s]* under this Guarantee shall be paid without deduction or withholding for any and all present and future taxes, levies, imposts and other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the United Kingdom of Great Britain and Northern Ireland (the “United Kingdom”) or any political subdivision or taxing authority thereof or therein, or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by the United Kingdom or any such subdivision or authority, the Guarantor[s]* will pay such additional amount in respect of principal, premium, if any, and interest, if any, and sinking fund payments, if any, as may be necessary in order that the net amounts paid to the Holder or the Trustee, as the case may be, pursuant to this Guarantee after such deduction or withholding shall equal the respective amounts of principal and premium, if any, and interest, if any, and sinking fund payments, if any, as specified in such Security to which the Holder or the Trustee would be entitled if no such deduction or withholding had been made; provided that the foregoing shall not apply to any such tax, levy, impost or other governmental charge (i) which would not be payable or due but for the fact that the beneficial owner or Holder of such Security is a domiciliary, national or resident of, or engaging in business (whether through a branch, agency or otherwise) or maintaining a permanent establishment or being physically present in, the United Kingdom or such political subdivision or otherwise having some connection with the United Kingdom or such political subdivision other than the holding or ownership of such Security, or receiving income therefrom, or the enforcement of such Security or this Guarantee, (ii) which would not be payable or due but for the failure to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with the United Kingdom or any political

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subdivision thereof of the Holder or beneficial owner of such Security, if compliance is possible pursuant to the provisions of any statute or regulation or by practice of the United Kingdom or such political subdivision as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, (iii) which would not be payable or due but for the fact that such Security was presented more than 30 days after the date such payment became due or was provided for, whichever is later, except to the extent that the Holder thereof would have been entitled to additional amounts on presenting the same for payment on or before the expiry of such period of 30 days, or (iv) which would not have been imposed if the beneficial owner of such Security had been the Holder of such Security or which, if the beneficial owner of such Security had been the Holder of such Security, would have been excluded pursuant to clauses (i) through (iii) inclusive above.

[Each]* [The] Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or such Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or the Guarantor[s]*, provided that notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor[s]*, increase the principal amount of such Security, change the Stated Maturity of any Security, change the currency of payment with respect to any Security, or increase the rate of interest, if any, thereon or increase any premium payable upon redemption thereof or increase any sinking fund payment required under such Security. The Guarantor[s]* hereby waive[s] diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced thereby [or with respect to any sinking fund payment required under such Security] and all demands whatsoever, and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in such Security and this Guarantee.

This obligation is not a deposit and is not insured by the United States Federal Deposit Insurance Corporation.

The Guarantor[s]* shall be subrogated to all rights of the Holder of such Security against the Issuer in respect of any amounts paid to such Holder by the Guarantor[s]* pursuant to the provisions of this Guarantee; provided that the Guarantor[s]* shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of and premium if any, and interest, if any, on all Securities of the same series issued under such Indenture shall have been paid in full.

Subject to the rights of other creditors of the Guarantor[s]* set forth in this Guarantee and in such Indenture, no reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor[s]*, which is [joint and several and]* absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest, if any, on, and sinking fund payments, if any, with respect to, the Security upon which this Guarantee is endorsed.

Claims under the Guarantee are, to the extent and in the manner set forth in Section 1304 of such Indenture, subordinated to claims of other creditors of the Guarantor[s]*, and this Guarantee is issued subject to the provisions of that Section 1304, and the Holder of such Security by accepting the same, agrees to and shall be bound by such provisions. In addition, in the event of the sequestration, winding up or liquidation of a Guarantor, if any payment or distribution of assets of such Guarantor of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of such Guarantor being subordinated to the payment under the Guarantee, shall be received by the Trustee or the Holders, before the claims of all Senior Creditors (as defined in the Indenture) of such Guarantor have been paid in full, such payment or distribution shall be held in trust by the Trustee or the Holders, as applicable, for the benefit of, and shall be immediately returned by it or them to, the liquidator or trustee of such Guarantor. Thereupon, such payment or distribution will be deemed not to have been made or received. If any of the said rights and claims of any Holder against such Guarantor is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the liquidator or trustee of such Guarantor and until such time as payment is made will hold a sum equal to such amount in trust for the liquidator or trustee of such Guarantor. Accordingly, such discharge will be deemed not to have taken place. The provisions of Section 1304 of the Indenture, and the terms of this paragraph, are governed by, and shall be construed in accordance with, the laws of England.

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Except as set forth in the immediately preceding paragraph, this Guarantee shall be governed by, and construed in accordance with, the laws of the State of New York.

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

All terms used in this Guarantee which are defined in such Indenture shall have the meanings assigned to them in such Indenture.

IN WITNESS WHEREOF, the Guarantor[s]* [has/have] caused this Guarantee to be signed by the Chairman, the Executive Deputy Chairman, any Chief Executive or the Group Finance Director or any other officer of such Guarantor so authorized by a Board Resolution.

HBOS plc		[THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
By		By
	[Title]		[Title]]*

Dated the date on the face hereof.

Article Three

THE SECURITIES

SECTION 301. Amount Unlimited: Issuable in Series.

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. All Notes of one issuance need not be issued at the same time and, unless otherwise provided, an issuance may be reopened, without the consent of any holder, for issuances of additional Securities which will be consolidated and form one series with the Securities of previous issuance. There shall be established in or pursuant to Board Resolutions of the Issuer, and, subject to Section 303, set forth or determined in the manner provided, in Officer’s Certificates, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series:

(1) the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities);

(2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906, or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);

(3) the date or dates on which the principal of (and premium, if any, on) the Securities of the series is payable; provided that the principal of Securities of any series which constitute Tier 2 Securities may not be repaid in whole or in part except in accordance with the Financial Services Authority Practices; and, provided, further, SIF may not issue any series of Securities in respect of which there is no fixed Stated Maturity or fixed Redemption Date;

(4) the rate or rates (or the formula pursuant to which such rate or rates shall be determined) at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date for the interest payable on any Interest Payment Date;

(5) the place or places, if any, in addition to or in the place of the office of the Trustee in The City of New York, where the principal of and premium, if any, and interest, if any, on Securities of the series shall be payable and where such Securities may be registered or transferred;

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(6) if applicable, the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Issuer; provided that the Securities of any series which constitute Tier 2 Securities may not be redeemed in whole or in part except in accordance with the Financial Services Authority Practices;

(7) the obligation, if any, of the Issuer to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof, and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; provided that the Securities of any series which constitute Tier 2 Securities may not be redeemed in whole or in part, whether pursuant to a sinking fund or analogous provision, except in accordance with the Financial Services Authority Practices; and, provided, further, that the Securities of any series which constitute Tier 2 Securities may not be redeemed in whole or in part at the option of the Holder thereof at any time except in accordance with the Financial Services Authority Practices;

(8) if other than denominations of $1,000 (or in the case of Securities not denominated in U.S. dollars, the equivalent thereof in such foreign currency or composite currency, rounded down to the nearest 1,000 units of such foreign currency or composite currency) and integral multiples of $1,000 (or in the case of Securities not denominated in U.S. dollars, 1,000 units of such foreign currency or composite currency) in excess thereof, the denominations in which Securities of the series shall be issuable;

(9) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon acceleration of the Maturity thereof pursuant to Section 502 and the rate at which the Securities of the series shall bear interest in the case of a default in payment of principal thereof;

(10) if other than such coin or currency of the United States of America as at the time of payment is legal tender for payment of public or private debts, the coin or currency, including composite currencies such as the European Currency Unit, in which payment of the principal of (and premium, if any) and interest, if any, on the Securities of the series shall be payable;

(11) if the principal of and premium, if any, or interest, if any, on the Securities of the series are to be payable, at the election of the Issuer or a Holder thereof, in a coin or currency other than that in which the Securities are stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made;

(12) if the amount of payments of principal of and premium, if any, or interest, if any, on the Securities of the series may be determined with reference to an index, the manner in which such amounts shall be determined;

(13) any Defaults or Events of Default with respect to such series of Securities, if not set forth herein;

(14) if the Securities of the series shall be issued in whole or in part in the form of one or more Global Securities, (i) whether beneficial owners of interests in any such Global Security may exchange such interests for Securities of such series of like tenor and of authorized form and denomination and the circumstances under which any such changes may occur, if other than in the manner provided in Section 305 and (ii) the Depositary for such Global Security or Securities; and

(15) any other terms of the series, including the covenants to be applicable to Securities of such series (which terms shall not be inconsistent with the provisions of this Indenture).

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolutions referred to above and (subject to Section 303) set forth in the Officer’s Certificates referred to above or in any such indenture supplemental hereto. All Securities of any one series need not be issued at one time and, unless otherwise provided, a series

45 

may be reopened for issuances of additional Securities of such series or to establish additional terms of such series of Securities.

If any of the terms of the series, including the form of Security of such series, are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by an Executive Officer, Company Secretary, any other authorized officer or duly authorized attorney-in-fact of the Issuer, and delivered to the Trustee at or prior to the delivery of the Issuer Order contemplated by Section 303 for the authentication and delivery of such series of Securities.

SECTION 302. Denominations.

The Securities of each series shall be issuable in registered form without coupons, except as otherwise expressly provided in an indenture supplemental hereto, in such denominations as shall be specified as contemplated by Section 301. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 (or in the case of Securities not denominated in U.S. dollars, the equivalent thereof in such foreign currency or composite currency, rounded down to the nearest 1,000 units of such foreign currency or composite currency) and integral multiples of $1,000 (or in the case of Securities not denominated in U.S. dollars, 1,000 units of such foreign currency or composite currency) in excess thereof.

SECTION 303. Execution. Authentication. Delivery and Dating.

The Securities shall be executed on behalf of the Issuer by any Executive Officer. The Securities of any series shall be executed by such additional officer, if any, as shall be specified pursuant to Section 301. The signature of any of these officers on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signature of any individual who was at any time the proper officer of the Issuer shall bind the Issuer, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of such Securities or did not hold such office at the date of authentication of such Securities.

At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Securities of any series executed by the Issuer having endorsed thereon Guarantees by the Guarantors to the Trustee for authentication, together with an Issuer Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Issuer Order shall authenticate and deliver such Securities. In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601(a) (2)) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms of such Securities have been established in conformity with the provisions of this Indenture, and that such Securities, when authenticated and delivered by the Trustee and issued by the Issuer in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Issuer, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors’ rights and to general equity principles.

The Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties, protections or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

Notwithstanding the provisions of Section 301 and of the second preceding paragraph of this Section, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officer’s Certificate otherwise required pursuant to Section 301 or the Issuer Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the time of authentication upon original issuance of the first Security of such series to be issued.

To the extent authorized in a Board Resolution and set forth in an Officer’s Certificate or established in or pursuant to a Board Resolution and established in one or more supplemental indentures, such Issuer Order may be electronically transmitted and may provide instructions as to registration of holders,

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principal amounts, rates of interest, maturity dates and other matters contemplated by such Board Resolution and Officer’s Certificate or supplemental indenture.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Issuer, and the Issuer shall deliver such Security to the Trustee for cancellation as provided in Section 309 together with a-statement (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Issuer, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

SECTION 304. Temporary Securities.

Pending the preparation of definitive Securities of any series, the Issuer may execute, and upon delivery of an Issuer Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officer or officers executing such Securities may determine, as evidenced by their execution of such Securities.

If temporary Securities of any series are issued, the Issuer will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Issuer in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Issuer shall execute, the Guarantors shall endorse the Guarantee on, and the Trustee shall authenticate and deliver in exchange therefor, a like principal amount of definitive Securities of the same series and of like tenor of authorized denominations. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series.

SECTION 305. Registration, Registration of Transfer and Exchange.

(a)       The Issuer shall cause to be kept at the Corporate Trust Office of the Trustee or other office or agency of the Issuer in a Place of Payment a register (the register maintained in such office and in any other office or agency of the Issuer in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided. The Trustee shall provide copies of the Security from time to time, to any Paying Agent in accordance with Section 701.

Upon surrender for registration of transfer of any Security of any series at the office or agency in a Place of Payment for that series, the Issuer shall execute, the Guarantors shall endorse the Guarantee on, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor.

At the option of the Holder, any Security or Securities of any series, other than a Global Security, may be exchanged for other Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Issuer shall execute, the Guarantors shall endorse the Guarantee on, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

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All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Issuer and the Guarantors, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

To permit registrations of transfers and exchanges, the Issuer shall execute, the Guarantors shall endorse the Guarantee on, and the Trustee shall authenticate and deliver, definitive Securities at the Security Registrar’s request. No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchanges or transfers) pursuant to Section 304, 906 or 1107 not involving any transfer.

(b)       Notwithstanding the foregoing, the transfer and exchange of an interest in a Global Security of any series shall be effected through a Depositary, in accordance with this Indenture and the restrictions on transfer set forth on such Global Security and the procedures of the Depositary therefor.

(c)       When definitive Securities are presented to the Security Registrar with a request to register the transfer of such definitive Securities or to exchange such definitive Securities for an equal principal amount of definitive Securities of other authorized denominations, the Security Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided that the definitive Securities surrendered for transfer or exchange (i) shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or his attorney, and (ii) in the case of definitive Restricted Securities only, shall be accompanied by either a certification from such Holder or such Holder’s transferee in substantially the form of Annex A or B to such Security, as applicable, or, if required pursuant to the restrictions on transfer set forth in the legend in Section 305 (d), an opinion of counsel satisfactory to the Issuer and the Guarantors, confirming the availability of an exemption from the registration requirements of the Securities Act.

(d)       Except as permitted by the following paragraph, each certificate evidencing part or all of the Restricted Securities of a series by a Global Security and the definitive Restricted Securities shall bear a legend in substantially the following form:

[* INDICATES LANGUAGE TO BE DELETED IF THE ISSUER IS THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND]

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY (1) ONLY IN MINIMUM PRINCIPAL AMOUNTS OF US$1,000 (OR THE EQUIVALENT THEREOF IN ANOTHER CURRENCY OR COMPOSITE CURRENCY) AND (2) PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR THE GUARANTOR[S]* OR ANY AFFILIATE OF THE ISSUER OR THE GUARANTOR[S]* WERE THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE ISSUER OR THE GUARANTOR[S]* OR TO AN AGENT THAT IS A PARTY TO THE AMENDED AND RESTATED PRIVATE PLACEMENT AGREEMENT DATED APRIL 30, 2003, AS AMENDED (AN “AGENT”), (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE HAS BEEN GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR IS BEING MADE TO A PERSON OTHER THAN A U.S. PERSON AS DEFINED IN THE

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SECURITIES ACT IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, AND A CERTIFICATE IN THE FORM OF ANNEX A ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEROR TO THE TRUSTEE, (D) TO AN INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION AND A CERTIFICATE IN THE FORM OF ANNEX B ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE TRUSTEE, (E) THROUGH AN AGENT TO AN INSTITUTIONAL PURCHASER THAT IS AN ACCREDITED INVESTOR (AS SO DEFINED) AND A CERTIFICATE IN THE FORM OF ANNEX A ATTACHED TO THIS SECURITY IS DELIVERED BY SUCH AGENT TO THE TRUSTEE OR (F) PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AS CONFIRMED IN AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER AND THE GUARANTOR[S]*.

Upon any sale or other transfer of a Restricted Security (including any Restricted Securities represented in whole or in part by a Global Security) after the two year period referred to in the legend above or satisfying the conditions set forth in clause (B), or with respect to any Restricted Security that may be sold pursuant to Rule 144(k) promulgated under the Securities Act, (i) in the case of any definitive Restricted Security, the Security Registrar shall permit the Holder thereof to exchange such Restricted Security for definitive Securities that do not bear the legend set forth above and rescind any restriction on the transfer of such Security and (ii) any such Restricted Securities in whole or in part represented by a Global Security shall not be subject to any restriction on transfer set forth above; provided that, with respect to any request for an exchange of a Restricted Security for a definitive Security which does not bear a legend, which request is made in reliance upon Rule 144(k), the Holder thereof shall certify in writing to the Security Registrar that such request is so being made in reliance on and pursuant to Rule 144(k) and the Security Registrar may conclusively rely on such certificate for purposes of effecting such exchange or transfer in accordance with this Section.

(e)       Notwithstanding any other provisions (other than the provisions set forth in Section 305(f) of this Section), a Global Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(f)       If at any time the Depositary for the Securities notifies the Issuer and the Guarantors that it is unwilling or unable to continue as Depositary for the Securities of such series, the Issuer or the Guarantors shall appoint a successor Depositary with respect to the Securities of such series. If a successor Depositary for the Securities of a series is not appointed by the Issuer or the Guarantors within 90 days after the Issuer or the Guarantors receives such notice, the Issuer will execute and the Guarantors will endorse the Guarantee on, and the Trustee, upon receipt of an Officer’s Certificate for the authentication and delivery of definitive Securities, will authenticate and deliver Securities in definitive form, in an aggregate principal amount equal to the principal amount of the Securities represented by a Global Security, in exchange for such Global Security.

The Issuer or the Guarantors may at any time and in their respective sole discretion determine that the Securities represented by a Global Security shall no longer be represented by such Global Security. In such event the Issuer will execute, the Guarantors will endorse the Guarantee on, and the Trustee, upon receipt of an Officer’s Certificate for the authentication and delivery of definitive Securities, will authenticate and deliver, Securities in definitive form in an aggregate principal amount equal to the principal amount of the Global Security, in exchange for such Global Security.

If a definitive Security of a series is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any Regular Record Date and before the opening of business at such office or agency on the next succeeding Interest Payment Date, interest will not be payable on such Interest Payment Date in respect of such definitive Security, but will be payable on such Interest Payment Date only to the Person to whom interest in respect of such portion of such Global Security is payable in accordance with the provisions of this Indenture.

Definitive Securities issued in exchange for any portion of a Global Security pursuant to this Section 305 shall be registered in such names and in such authorized denominations as the Depositary,

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pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such definitive Securities to the Persons in whose names such Securities are so registered.

(g)       Any Person having a beneficial interest in a Global Security may request the Trustee to exchange all or part of such interest for a definitive Security upon receipt by the Trustee of a certification from such Person in the form of Annex A to the Global Security, unless such Person is transferring such interest to an institution that is an “accredited investor”, as defined in Regulation D under the Securities Act, in which case, upon receipt by the Trustee of a certification from such transferee in the form of Annex B to the Global Security. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security to be reduced (such reduction to be reflected on the Schedule thereto) and, following such reduction, the Issuer will execute, the Guarantors will endorse the Guarantee on, and the Trustee will authenticate and deliver to such Person or such transferee, as the case may be, a definitive Security.

Any Person having a beneficial interest in a Global Security which is a Restricted Security may request the Trustee to exchange all or part of such interest for an interest in another Global Security upon receipt by the Trustee of a certification from such Person in the form of Annex A to the Global Security to the effect that such transaction complies with the requirements of Regulation S promulgated under the Securities Act. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security representing the interest being transferred to be reduced (such reduction to be reflected on the Schedule thereto) and, following such reduction, the aggregate principal amount of the Global Security representing the interest being purchased to be increased (such increase to be reflected in the Schedule thereto). If following such increase the aggregate principal amount of the Global Security representing the interest being purchased (as reflected in the Schedule thereto) exceeds the aggregate face amount thereof, the Issuer will execute, the Guarantors will endorse the Guarantee on, and the Trustee will authenticate and deliver to the Depositary, a Global Security having an aggregate face amount equal to such aggregate principal amount.

A definitive Restricted Security may not be exchanged for a beneficial interest in a Global Security except upon receipt by the Trustee of a certification by the Holder or transferor thereof to the effect that (i) such Holder is, or believes such Holder’s transferee is, as the case may be, a “Qualified Institutional Buyer”, as defined in Rule 144A promulgated under the Securities Act, or (ii) such transaction complies with the requirements of Regulation S promulgated under the Securities Act, in each case substantially in the form of Annex A to the Global Security. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security to be increased (such increase to be reflected in the Schedule thereto). If necessary as a result of such an exchange, the Issuer will execute, the Guarantors will endorse the Guarantee on, and the Trustee will authenticate and deliver to such Holder or such transferee, a definitive Security. If following such increase the aggregate principal amount of the Global Security (as reflected in the Schedule thereto) exceeds the aggregate face amount thereof, the Issuer will execute, the Guarantors will endorse the Guarantee on, and the Trustee will authenticate and deliver to the Depositary, a Global Security having an aggregate face amount equal to such aggregate principal amount.

(h)       At such time as all interests in a Global Security have either been exchanged for definitive Securities, redeemed, repurchased or cancelled, such Global Security shall be cancelled by the Trustee. At any time prior to such cancellation, if any interest in a Global Security is exchanged for definitive Securities, redeemed, repurchased or cancelled, the principal amount of Securities represented by such Global Security shall be reduced and the Trustee shall cause an endorsement to be made on the Schedule to such Global Security to reflect such reduction.

(i)       The Issuer shall not be required (i) to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or

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exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

SECTION 306. Mutilated. Destroyed. Lost and Stolen Securities.

If any mutilated Security is surrendered to the Trustee, the Issuer shall execute, the Guarantors shall endorse the Guarantee on, and the Trustee shall authenticate and deliver in exchange therefor, a new security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Issuer and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Issuer or the Trustee that such Security has been acquired by a bona fide purchaser, the Issuer shall execute, the Guarantors shall endorse the Guarantee on, and upon the Issuer’s request, the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Issuer in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 307. Payment of Interest; Interest Rights Preserved.

Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Issuer, at its election in each case, as provided in clause (1) or (2) below:

(1) The Issuer may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Issuer shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Issuer of such Special Record

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Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at its address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2).

(2) The Issuer may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after written notice given by the Issuer to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

SECTION 308. Persons Deemed Owners.

Prior to due presentment of a Security for registration of transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 307) interest, if any, on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Issuer, the Trustee nor any agent of the Issuer or the Trustee shall be affected by notice to the contrary. All such payments so made to any such Person, or upon such Person’s order, shall be valid, and, to the extent of the sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Security.

No holder of any beneficial interest in any Global Security held on its behalf by a Depositary shall have any rights under this Indenture with respect to such Global Security, and such Depositary may be treated by the Issuer, the Trustee, and any agent of the Issuer or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall impair, as between a Depositary and such holders of beneficial interests, the operation of customary practices governing the exercise of the rights of the Depositary as holder of any Security.

SECTION 309. Cancellation.

All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Issuer or the Guarantors may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Issuer or the Guarantors may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Issuer has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee may be destroyed by the Trustee and, if so destroyed, the Trustee shall furnish the Issuer with a certificate of destruction with respect thereto.

SECTION 310. Computation of Interest.

Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest, if any, on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

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Article Four

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

This Indenture shall upon an Issuer Request cease to be of further effect with respect to the Securities of any series (except as to any surviving rights of registration of transfer or exchange of Securities of such series herein expressly provided for), and the Trustee, at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Securities of such series, when

(1) either (A) all Securities of such series theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the case of clause (B) (i) (ii), or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest, if any, to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

(2) the Issuer or the Guarantors have paid or caused to be paid all other sums payable hereunder by the Issuer in respect of such Securities; and

(3) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to such Securities have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer and the Guarantors to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive.

SECTION 402. Application of Trust Money.

Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent), to the Persons entitled thereto, of the principal (and premium, if any) and interest, if any, for whose payment such money has been deposited with or received by the Trustee.

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Article Five

REMEDIES

SECTION 501. Events of Default.

“Event of Default”, wherever used herein with respect to Securities of a particular series, means (i) the making of an order by a court having jurisdiction in the premises or the passing of a shareholders’ resolution for the winding up (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) or sequestration of either of the Guarantors or (ii) any other Event of Default provided with respect to Securities of such series.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then the principal amount (or, if any of the Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof) of all of the Securities of that series shall, without any act by the Trustee or the Holders, become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived.

At any time after such an acceleration with respect to Securities of any series has occurred and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Issuer, the Guarantors and the Trustee, may rescind and annul such acceleration and its consequences if

(1) the Issuer or the Guarantors have paid or deposited with the Trustee a sum sufficient to pay

(A) all overdue interest, if any, on all Securities of that series,

(B) the principal of and premium, if any, on any Securities of that series which have become due otherwise than by such acceleration and interest thereon at the rate or rates prescribed therefor in such Securities,

(C) to the extent that payment of such interest is lawful, interest upon any overdue interest at the rate or rates prescribed therefor in such Securities, and

(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(2) all Defaults with respect to Securities of that series, other than the non-payment of the principal of and accrued interest on Securities of that series which have become due solely by such acceleration, have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and become due and payable pursuant to the provisions hereof, then, from and after such acceleration, unless such acceleration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.

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Upon such an acceleration, or receipt by the Trustee of any written notice of rescission and annulment thereof, with respect to Securities of a series all or part of which is represented by a Global Security, a record date shall be established for determining Holders of Outstanding Securities of such series entitled to join in such notice, which record date shall be at the close of business on the day of such acceleration or the day the Trustee receives such notice, as the case may be. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided that unless such rescission and annulment shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day which is 90 days after such record date, such rescission and annulment shall automatically and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written notice of rescission or annulment which has been cancelled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 502.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

“Default” wherever used herein with respect to Securities of a particular series, means any one of the following events (whatever the reason for such Default and whether it shall be voluntary or involuntary or be effected by operation of law pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) default in the payment of any interest upon any Security of such series when it becomes due and payable, and continuance of such default for a period of 30 days (For the purposes of this clause (1) in relation to Undated Securities (A) a payment shall be deemed to be due even if the Solvency Condition (as such term is defined in Section 1006 (c) (i)) is not satisfied, and (B) for the avoidance of doubt, the exercise by the Issuer of its right, pursuant to Section 1006(c) (iii), not to make any payment or payments of interest shall not constitute failure to make payment of interest.); or

(2) default in the payment of any principal of (or premium, if any, on) or the Redemption Price of any Security of such series when it becomes due and payable; or

(3) default in the making of any sinking fund payment, if any, when and as due by the terms of a Security of such series or beyond any period of grace provided with respect thereto.

The Issuer covenants that if (a) any Event of Default shall occur the Issuer will and (b) any Default shall occur, upon demand of the Trustee, the Issuer will, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest, if any, and interest on any overdue principal (and premium, if any) and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue interest, at the rate or rates prescribed therefor in such Securities; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may petition for the winding up or sequestration of each relevant Guarantor.

Upon the occurrence of a Default with respect to Securities of a particular series, Holders of such Securities shall not at any time be entitled to exercise any right of set-off or counterclaim which may be available to any such Holder against amounts owing by the Issuer or each relevant Guarantor in respect of such Securities. If, notwithstanding the provisions of the preceding sentence, any of the rights and claims of any Holder of such Securities is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the Issuer or each relevant Guarantor, as the case may be, or, if applicable, the liquidator or trustee of such Issuer or each relevant Guarantor and until such time as payment is made will hold a sum equal to such amount in trust for such Issuer or each relevant Guarantor, as the case may be, or, if applicable, the liquidator or trustee of such Issuer or each relevant Guarantor. Accordingly, such discharge will be deemed not to have taken place.

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If an Event of Default with respect to the Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law; provided that neither the Trustee nor the Holders shall have any power or right to accelerate the principal of the Securities except as provided in Section 502.

No recourse for the payment of the principal of (or premium, if any) or interest, if any, on any Security, or for any claim based thereon or on the Guarantee endorsed thereon or otherwise in respect thereof or of such Guarantee and no recourse under or upon any obligation, covenant or agreement of the Issuer or each relevant Guarantor in this Indenture, or in any Security, in the Guarantee endorsed thereon, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder (other than each relevant Guarantor under the terms of the Guarantees), officer or director, past, present or future, of the Issuer or of each relevant Guarantor or of any successor corporation of either, either directly or through the Issuer or each relevant Guarantor or any successor corporation of either, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that to the extent lawful all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture, the issue of the Securities of a series, and the endorsement of the Guarantees thereon.

SECTION 504. Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, winding up, sequestration or other judicial proceeding relative to the Issuer, either of the Guarantors or any other obligor upon the Securities or the property of the Issuer, either of the Guarantors or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities of a series shall then be due and payable as therein expressed or by acceleration or otherwise and irrespective of whether the Trustee shall have made any demand on the Issuer or the Guarantors for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,

(1) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

(2) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

The provisions of this Section 504 are subject, in the case of the Issuer, to the provisions of Section 1006 and, in the case of the Guarantors, to the provisions of Section 1304.

SECTION 505. Trustee May Enforce Claims Without Possession of Securities.

All rights of action and claims under this Indenture or the Securities of any series may be prosecuted and enforced by the Trustee without the possession of any of the Securities of any such series or the

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production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities of any such series in respect of which such judgment has been recovered.

SECTION 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this Article in respect of the Securities of any series shall, subject to the provisions of Sections 1006 and 1304, be applied in the following order with respect to the Securities of such series, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under Section 607;

SECOND: In case the principal (and premium, if any) of the Securities of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest, if any, on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee and to the extent permitted by law) upon the overdue installments of interest at the rate prescribed therefor in such Securities, such payments to be made rateably to the Persons entitled thereto, without discrimination or preference;

THIRD: In case the principal (or premium, if any) of the Securities of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and premium, if any, and interest, if any with interest upon the overdue principal and premium, if any, and (to the extent that such interest has been collected by the Trustee and to the extent permitted by law) upon overdue installments of interest at the rate prescribed therefor in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and any premium and interest, without preference or priority of principal over interest, or of interest over principal or premium, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series, rateably to the aggregate of such principal and any premium and accrued and unpaid interest; and

FOURTH: To the payment of the remainder, if any, to the Issuer, the Guarantors or any other Person lawfully entitled thereto.

SECTION 507. Limitation on Suits.

No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver, liquidator or trustee in sequestration, or for any other remedy hereunder, unless

(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default or Default with respect to the Securities of that series;

(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default or Default in its own name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

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(5) 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 Securities of that series;

it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders.

SECTION 508. Unconditional Right of Holders to Receive Principal, Premium, if any, and Interest.

Subject to Sections 1006 and 1304, notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 307) interest, if any, on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Issuer, the Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall to the extent permitted by law, be cumulative and in addition to every right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the assertion or employment of any other right or remedy under this Indenture.

SECTION 511. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default or Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

SECTION 512. Control by Holders.

The Holders of a majority in principal amount of the Outstanding Securities of each series affected (with each series voting as a separate class) shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that

(1) such direction shall not be in conflict with any rule of law or with this Indenture,

(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction,

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(3) such direction shall not be unduly prejudicial to the rights of another Holder, and

(4) such direction shall not involve the Trustee in personal liability.

Upon receipt by the Trustee of any written notice directing the time, method or place of conducting any such proceeding or exercising any such trust or power, with respect to Securities of a series all or part of which is represented by a Global Security, a record date shall be established for determining Holders of Outstanding Securities of such series entitled to join in such notice, which record date shall be at the close of business on the day the Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided that unless Holders of a majority in principal amount of the Outstanding Securities of such series shall have joined in such notice prior to the day which is 90 days after such record date, such notice shall automatically and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new notice identical to a notice which has been cancelled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 512.

SECTION 513. Waiver of Past Defaults.

The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default

(1) in the payment of the principal of (or premium, if any), or interest, if any, on any Security of such series, or

(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive any past default hereunder. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to waive any default hereunder, whether or not such Holders remain Holders after such record date; provided that unless such majority in principal amount shall have been obtained prior to the date which is 90 days after such record date, any such waiver previously given shall automatically and without further action by any Holder be cancelled and of no further effect.

Upon any such waiver, such default shall cease to exist, and any Event of Default or Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

SECTION 514. Undertaking for Costs.

All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or premium, if any, or interest, if any, on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date).

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SECTION 515. Waiver of Stay or Extension Laws.

Each of the Issuers and the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and each of the Issuer and the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

Article Six

THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities.

(a)       Except during the continuance of an Event of Default or Default with respect to the Securities of any series,

(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.

(b)       In case an Event of Default or Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

(c)       No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that

(1) this subsection (c) shall not be construed to limit the effect of subsection (a) of this Section;

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any series, determined as provided in Section 512, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and

(4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense.

(d)       Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

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SECTION 602. Notice of Defaults.

Within 90 days after the occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of such series, as their names and addresses appear in the Security Register, notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; provided that, except in the case of a default in the payment of the principal of (or premium, if any) or interest, if any, on any Security of such series or in the payment of any sinking fund installment with respect to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders of Securities of such series. For the purposes of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default or Default with respect to Securities of such series.

SECTION 603. Certain Rights of Trustee.

Subject to the provisions of Section 601:

(a)       the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)       any request or direction of the Issuer or the Guarantors mentioned herein shall be sufficiently evidenced by an Issuer Request or Issuer Order or as otherwise expressly provided herein and any resolution of the Board of Directors of the Issuer or the Guarantors may be sufficiently evidenced by a Board Resolution;

(c)       whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate or an Opinion of Counsel;

(d)       the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e)       the Trustee shall be under no obligation to expend or risk its own funds or to exercise, at the request or direction of any of the Holders, any of the rights or powers vested in it by this Indenture pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f)       the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled upon reasonable request to examine the books, records and premises of the Issuer or the Guarantors or both, personally or by agent or attorney other than, in the case of the Guarantors, any such books and records containing information as to the affairs of the customers of the Guarantors or any of their subsidiaries; and

(g)       the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

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SECTION 604. Not Responsible for Recitals or Issuance of Securities.

The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer and the Guarantors, as the case may be, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities or of any offering memorandum, disclosure statement or any other offering material relating to any of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Issuer of Securities or the proceeds thereof.

SECTION 605. May Hold Securities.

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with any Issuer or the Guarantors with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

SECTION 606. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder.

SECTION 607. Compensation and Reimbursement.

Each Issuer and Guarantor agrees

(1) to pay to the Trustee from time to time such compensation as is agreed upon in writing, or, if no such agreement exists, reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel, which compensation, expenses and disbursements shall be set forth in sufficient detail), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and

(3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

SECTION 608. Disqualification Conflict Of Interests.

(a)       If the Trustee has or shall acquire any conflicting interest, as defined in this Section, with respect to the Securities of any series, then, within 90 days after ascertaining that it has such conflicting interest, and if the Event of Default or Default (exclusive of any period of grace or requirement of notice) to which such conflicting interest relates has not been cured or duly waived or otherwise eliminated before the end of such 90-day period, it shall either eliminate such conflicting interest, except as otherwise provided herein, or resign with respect to the Securities of that series in the manner and with the effect hereinafter specified in this Article and the Issuer and the Guarantors shall promptly appoint a successor trustee in the manner provided in Section 610.

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(b)       In the event that the Trustee shall fail to comply with the provisions of subsection (a) of this Section with respect to the Securities of any series, the Trustee shall, within 10 days after the expiration of such 90-day period, transmit by mail to all Holders of Securities of that series, as their names and addresses appear in the Security Register, notice of such failure.

(c)       For the purposes of this Section, the Trustee shall be deemed to have a conflicting interest with respect to the Securities of any series if an Event of Default or Default (exclusive of any period of grace or requirement of notice) with respect to such Securities has occurred and is continuing and

(1) the Trustee is trustee under this Indenture with respect to the Outstanding Securities of any series other than that series or is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Issuer are outstanding, unless such other indenture is a collateral trust indenture under which the only collateral consists of Securities issued under this Indenture, provided that there shall be excluded from the operation of this paragraph with respect to the Securities of any series other than that series or any indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Issuer are outstanding, if

(i) this Indenture and such other indenture or indentures (and all series of securities issuable thereunder) are wholly unsecured and rank equally and such other indenture or indentures (and such series) are hereafter qualified under the Trust Indenture Act, unless the Commission shall have found and declared by order pursuant to subsection (b) of Section 305 or subsection (c) of Section 307 of the Trust Indenture Act that differences exist between the provisions of this Indenture with respect to Securities of that series and one or more other series and the provisions of such other indenture or indentures (or such series) which are so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under this Indenture with respect to the Securities of that series and such other series or under such other indenture or indentures, or

(ii) the Issuer shall have sustained the burden of proving, on application to the Commission and after opportunity for hearing thereon, that trusteeship under this Indenture with respect to the Securities of that series and such other series or such other indenture or indentures is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under this Indenture with respect to the Securities of that series and such other series or under such other indenture or indentures;

(2) the Trustee or any of its directors or executive officers is an underwriter for the Issuer;

(3) the Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with or an underwriter for the Issuer;

(4) the Trustee or any of its directors or executive officers is a director, officer, partner, employee, appointee or representative of the Issuer, or of an underwriter (other than the Trustee itself) for the Issuer who is currently engaged in the business of underwriting, except that (i) one individual may be a director or an executive officer, or both, of the Trustee and a director or

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an executive officer, or both, of the Issuer but may not be at the same time an executive officer of both the Trustee and the Issuer; (ii) if and so long as the number of directors of the Trustee in office is more than nine, one additional individual may be a director or an executive officer, or both, of the Trustee and a director of the Issuer; and (iii) the Trustee may be designated by the Issuer or by any underwriter for the Issuer to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent or depositary, or in any other similar capacity, or, subject to the provisions of paragraph (1) of this subsection, to act as trustee, whether under an indenture or otherwise;

(5) 10% or more of the voting securities of the Trustee is beneficially owned either by the Issuer or by any director, partner or executive officer thereof, or 20% or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or 10% or more of the voting securities of the Trustee is beneficially owned either by an underwriter for the Issuer or by any director, partner or executive officer thereof, or is beneficially owned, collectively, by any two or more such persons;

(6) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this subsection defined), (i) 5% or more of the voting securities, or 10% or more of any other class of security, of the Issuer, not including the Securities issued under this Indenture and securities issued under any other indenture under which the Trustee is also trustee, or (ii) 10% or more of any class of security of an underwriter for the Issuer;

(7) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this subsection defined), 5% or more of the voting securities of any person who, to the knowledge of the Trustee, owns 10% or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with, the Issuer;

(8) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this subsection defined), 10% or more of any class of security of any person who, to the knowledge of the Trustee, owns 50% or more of the voting securities of the Issuer;

(9) the Trustee owns, on the date of an Event of Default or Default (exclusive of any period of grace or requirement of notice) with respect to Securities issued under this Indenture or any anniversary of such Event of Default or Default while such Event of Default or Default remains outstanding, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of 25% or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under paragraph (6), or (8) of this subsection. As to any such securities of which the Trustee acquired ownership through becoming executor, administrator or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply, for a period of two years from the date of such acquisition, to the extent that such securities included in such estate do not exceed 25% of such voting securities or 25% of any such class of security. Promptly after the dates of any such Event of Default or Default and annually in each succeeding year that an Event of Default or Default exists with respect to Securities issued under this Indenture, the Trustee shall make a check of its holdings of such securities in any of the above- mentioned capacities as of such dates. If the Issuer fails to make payment in full of the principal of (or premium, if any) or interest, if any, on any of the Securities when and as the same becomes due and payable, and such failure

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continues for 30 days thereafter, the Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such 30-day period, and after such date, notwithstanding the foregoing provisions of this paragraph, all such securities so held by the Trustee, with sole or joint control over such securities vested in it, shall, but only so long as such failure shall continue, be considered as though beneficially owned by the Trustee for the purposes of paragraphs (6), (7) and (8) of this subsection; or

(10) except under the circumstances described in paragraphs (1), (3), (4), (5) or (6) or subsection (b) of Section 613 hereof, the Trustee shall be or shall become a creditor of the Issuer or a Guarantor.

For purposes of paragraph (1) of this subsection, and of Sections 512 and 513, the term “series of securities” or “series” means a series, class or group of securities issuable under an indenture pursuant to whose terms holders of one such series may vote to direct the indenture trustee, or otherwise take action pursuant to a vote of such holders, separately from holders of another such series; provided that “series of securities” or “series” shall not include any series of securities issuable under an indenture if all such series rank equally and are wholly unsecured.

The specification of percentages in paragraphs (5) to (9), inclusive, of this subsection shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of paragraph (3) or (7) of this subsection.

For the purposes of paragraphs (6), (7), (8) and (9) of this subsection only, (i) the terms “security” and “securities” shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay moneys lent to a person by one or more banks, trust companies or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; (ii) an obligation shall be deemed to be “in default” when a default in payment of principal shall have continued for 30 days or more and shall not have been cured; and (iii) the Trustee shall not be deemed to be the owner or holder of (A) any security which it holds as collateral security, as trustee or otherwise, for an obligation which is not in default as defined in clause (ii) above, or (B) any security which it holds as collateral security under this Indenture, irrespective of any default hereunder, or (C) any security which it holds as agent for collection, or as custodian, escrow agent or depositary, or in any similar representative capacity.

(d)       For the purposes of this Section:

(1) The term “underwriter”, when used with reference to the Issuer, means every person who, within one year prior to the time as of which the determination is made, has purchased from the Issuer with a view to, or has offered or sold for the Issuer in connection with, the distribution of any security of the Issuer outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors’ or sellers’ commission.

(2) The term “director” means any director of a corporation or any individual performing similar functions with respect to any organization, whether incorporated or unincorporated.

(3) The term “person” means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, an unincorporated organization or a government or political subdivision thereof. As used in this paragraph, the term “trust” shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security.

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(4) The term “voting security” means any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any trust, agreement or arrangement whereby a trustee or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or management of the affairs of a person.

(5) The term “Issuer” means any obligor upon the relevant series of Securities, including the Guarantors.

(6) The term “executive officer” means the president, every vice president, every trust officer, the cashier, the secretary and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the board of directors.

(e)       The percentages of voting securities and other securities specified in this Section shall be calculated in accordance with the following provisions:

(1) A specified percentage of the voting securities of the Trustee, the Issuer or any other person referred to in this Section (each of whom is referred to as a “person” in this paragraph) means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person.

(2) A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding.

(3) The term “amount”, when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares and the number of units if relating to any other kind of security.

(4) The term “outstanding” means issued and not held by or for the account of the issuer. The following securities shall not be deemed outstanding within the meaning of this definition:

(i) securities of an issuer held in a sinking fund relating to securities of the issuer of the same class;

(ii) securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation evidenced by such other class of securities is not in default as to principal or interest or otherwise;

(iii) securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise; and

(iv) securities held in escrow if placed in escrow by the issuer thereof; provided that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof.

(5) A security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges; provided that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences

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in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different classes and provided, further, that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture.

(f)       Except in the case of a default in the payment of the principal of (or premium, if any) or interest, if any, on any Securities issued under the Indenture, or in the payment of any sinking or purchase fund installment, the Trustee shall not be required to resign as provided by this Section if such Trustee shall have sustained the burden of proving, on application to the Commission and after opportunity for hearing thereon, that (i) the default under the Indenture may be cured or waived during a reasonable period and under the procedures described in such application, and (ii) a stay of the Trustee’s duty to resign will not be inconsistent with the interest of Holders. The filing of such an application shall automatically stay the performance of the duty to resign until the Commission orders otherwise.

SECTION 609. Corporate Trustee Required: Eligibility.

There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State or Territory thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. The Issuer may not, nor may any person directly or indirectly controlling, controlled by, or under common control with the Issuer, serve as Trustee.

SECTION 610. Resignation and Removal: Appointment of Successor.

(a)       No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.

(b)       The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Issuer of each series of Securities and the Guarantors. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

(c)       The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Issuer and the Guarantors.

(d)       If at any time:

(1) the Trustee shall fail to comply with Section 608(a) after written request therefor by the Issuer or the Guarantors or by any Holder who has been a bona tide Holder of a Security for at least six months, or

(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by any Issuer or the Guarantors or by any such Holder, or

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(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, (i) any Issuer by a Board Resolution may remove the Trustee with respect to all Securities issued by it, or (ii) subject to Section 514, unless the Trustee’s duty to resign is stayed as provided in Section 608, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

(e)       If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Issuer, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Issuer, the Guarantors and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Issuer. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Issuer or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona tide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

(f)       The Issuer shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities of such series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

SECTION 611. Acceptance of Appointment by Successor.

(a)       In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to each Issuer, to the Guarantors and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Issuer, the Guarantors or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

(b)       In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Issuer of each such series, the Guarantors, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall

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contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Issuer or any successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

(c)       Upon request of any such successor Trustee, the Issuer and the Guarantors shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

(d)       No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

SECTION 612. Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

SECTION 613. Preferential Collection of Claims Against Issuer.

(a)       Subject to subsection (b) of this Section, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of any Issuer within three months prior to a default, as defined in subsection (C) of this Section, or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the Holders of the Securities of such Issuer and the holders of other indenture securities, as defined in subsection (C) of this Section:

(1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such three months’ period and valid as against any such Issuer and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in paragraph (2) of this subsection, or from the exercise of any right of set-off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against any such Issuer upon the date of such default; and

(2) all property received by the Trustee in respect of any claims as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such three months’ period, or an amount equal to the proceeds of any such property, if disposed of, subject to the

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rights, if any, of any such Issuer and its other creditors in such property or such proceeds.

Nothing herein contained, however, shall affect the right of the Trustee:

(A) to retain for its own account (i) payments made on account of any such claim by any Person (other than any such Issuer) who is liable thereon, and (ii) the proceeds of the bona tide sale of any such claim by the Trustee to a third Person, and (iii) distributions made in cash, securities or other property in respect of claims filed against any such Issuer in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law;

(B) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such three months’ period;

(C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such three months’ period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default, as defined in subsection (C) of this Section, would occur within three months; or

(D) to receive payment on any claim referred to in paragraph (B) or (C), against the release of any property held as security for such claim as provided in paragraph (B) or (C), as the case may be, to the extent of the fair value of such property.

For the purposes of paragraphs (B), (C) and (D), property substituted after the beginning of such three months’ period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of such paragraphs is created in renewal of or in substitution for or for the purpose of repaying or refunding any pre-existing claim of the Trustee as such creditor, such claim shall have the same status as such pre-existing claim.

If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned among the Trustee, the Holders and the holders of other indenture securities in such manner that the Trustee, the Holders and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against any such Issuer in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law or other applicable law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from any such Issuer of the funds and property in such special account and before crediting to the respective claims of the Trustee and the Holders and the holders of other indenture securities dividends on claims filed against any such Issuer in winding up, sequestration, bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act, applicable State law or other applicable law but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term “dividends” shall include any distribution with respect to such claim, in winding up, sequestration, liquidation, bankruptcy or receivership or proceedings for reorganization pursuant to the Federal Bankruptcy Act, applicable State law or other applicable law, whether such distribution is made in cash, securities or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such winding up, sequestration bankruptcy, receivership or proceedings for reorganization is pending shall have jurisdiction (i) to apportion among the Trustee, the Holders and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such

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special account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee and the Holders and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula.

Any Trustee which has resigned or been removed after the beginning of such three months’ period shall be subject to the provisions of this subsection as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such three months’ period, it shall be subject to the provisions of this subsection if and only if the following conditions exist:

(i) the receipt of property or reduction of claim, which would have given rise to the obligation to account, if such Trustee had continued as Trustee, occurred after the beginning of such three months’ period; and

(ii) such receipt of property or reduction of claim occurred within three months after such resignation or removal.

(b)       There shall be excluded from the operation of subsection (a) of this Section a creditor relationship arising from:

(1) the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee;

(2) advances authorized by a receivership or bankruptcy court of competent jurisdiction or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advances and of the circumstances surrounding the making thereof is given to the Holders at the time and in the manner provided in this Indenture;

(3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity;

(4) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction, as defined in subsection (c) of this Section;

(5) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Issuer; and

(6) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper, as defined in subsection (c) of this Section.

(c)       For the purposes of this Section only:

(1) the term “default” means any failure to make payment in full of the principal of or interest on any of the Securities or upon the other indenture securities when and as such principal or interest becomes due and payable;

(2) the term “other indenture securities” means securities upon which any such Issuer is an obligor (as defined in the Trust Indenture Act) outstanding

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under any other indenture (i) under which the Trustee is also trustee, (ii) which contains provisions substantially similar to the provisions of this Section, and (iii) under which a default exists at the time of the apportionment of the funds and property held in such special account;

(3) the term “cash transaction” means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand;

(4) the term “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by any such Issuer for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided that the security is received by the Trustee simultaneously with the creation of the creditor relationship with any such Issuer arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation;

(5) the term “Issuer” means any obligor upon the Securities, including the Guarantors; and

(6) the term “Federal Bankruptcy Act” means the Bankruptcy Code or Title 11 of the United States Code.

SECTION 614. Authenticating Agents.

From time to time the Trustee, in its sole discretion, may appoint one or more Authenticating Agents with respect to one or more series of Securities with power to act on the Trustee’s behalf and subject to its direction in the authentication and delivery of Securities of such series or in connection with transfers and exchanges under Sections 304, 305 and 306 as fully to all intents and purposes as though the authenticating Agent had been expressly authorized by those Sections of this Indenture to authenticate and deliver Securities of such series. For all purposes of this Indenture, the authentication and delivery of Securities by an authenticating Agent pursuant to this Section shall be deemed to be authentication and delivery of such Securities “by the Trustee”. Each such Authenticating Agent shall be acceptable to the Issuer and the Guarantors and shall at all times be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal, State or District of Columbia authority. If such corporation publishes reports of condition at least annually pursuant to law or the requirements of such authority, then for the purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation into which any Authenticating Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation or to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of the Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the parties hereto or the Authenticating Agent or such successor corporation.

An Authenticating Agent may resign at any time by giving written notice of resignation to the Trustee, the Issuer and the Guarantors. The Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Issuer and the Guarantors. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section, the Trustee may appoint a successor

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Authenticating Agent which shall be acceptable to the Issuer and the Guarantors and shall mail notice of such appointment to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as the names and addresses of such Holders appear on the Security Register. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

The Issuer and the Guarantors each agree to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.

The Trustee shall incur no liability for the appointment of any Authenticating Agent with respect to the Securities of one or more series or for any misconduct or negligence of such Authenticating Agent, including without limitation, its authentication of the Securities upon original issuance or pursuant to Section 306. In the event the Trustee does incur liability for any such misconduct or negligence of the Authenticating Agent, the Issuer and the Guarantors each agree to indemnify the Trustee for, and hold it harmless against, any such liability, including the costs and expenses of defending itself against any liability in connection with such misconduct or negligence of the Authenticating Agent.

If an appointment with respect to one or more series of Securities is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:

This is one of the Securities of the series designated therein and referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK, as Trustee
By
	As Authenticating Agent

By
	By Authorized Signatory

Article Seven

HOLDERS’ LISTS AND REPORTS BY TRUSTEE, ISSUER AND GUARANTORS

SECTION 701. Issuer to Furnish Trustee Names and Addresses of Holders.

The Issuer will furnish or cause to be furnished to the Trustee with respect to the Securities of each series

(a)       semi-annually, not later than 5 days after each Regular Record Date, or, in the case of any series of Securities on which semi-annual interest is not payable, not more than 5 days after such semi-annual dates as may be specified by the Trustee, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date or semi-annual date, as the case may be, and

(b)       at such other times as the Trustee may request in writing, within 30 days after the receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided that so long as the Trustee is Security Registrar for any series of Securities, no such list shall be required to be furnished with respect to any such series. As soon as practicable after the Trustee has received such list of names and addresses of

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the Holders, the Trustee shall forward a copy of such list to the Paying Agent or Paying Agents appointed in respect of the Securities of such series.

SECTION 702. Preservation of Information: Communications to Holders.

(a)       The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.

(b)       If three or more Holders (herein referred to as “applicants”) apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under this Indenture or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either

(i) afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 702(a), or

(ii) inform such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 702 (a), and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application.

If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 702(a) a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interest of the Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.

(c)       Every Holder of Securities, by receiving and holding the same, agrees with the Issuer, the Guarantors and the Trustee that neither the Issuer, the Guarantors nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 702 (b), regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 702 (b).

SECTION 703. Reports by Trustee.

(a)       Within 60 days after May 30 of each year commencing with 1993, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, a brief report dated as of such May 30 with respect to any of the following events which may have occurred in

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the previous twelve months (but if no such event has occurred within such period no report need be transmitted):

(1) any change to its eligibility under Section 609 and its qualifications under Section 608;

(2) the creation of or any material change to a relationship specified in paragraphs (1) through (10) of subsection (c) of Section 608;

(3) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities, on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate not more than 1/2 of 1% of the principal amount of the Securities Outstanding on the date of such report;

(4) any change to the amount, interest rate and maturity date of all other indebtedness owing by the Issuer or the Guarantors (or by any other obligor on the Securities) to the Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in Section 613(b) (2), (3), (4) or (6)

(5) any change to the property and funds, if any, physically in the possession of the Trustee as such on the date of such report;

(6) any additional issue of Securities which the Trustee has not previously reported; and

(7) any action taken by the Trustee in the performance of its duties hereunder which it has not previously reported and which in its opinion materially affects the Securities, except action in respect of a default, notice of which has been or is to be withheld by the Trustee in accordance with Section 602.

(b)       The Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, a brief report with respect to the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) since the date of the last report transmitted pursuant to subsection (a) of this Section (or if no such report has yet been so transmitted, since the date of execution of this instrument) for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities, on property or funds held or collected by it as Trustee and which it has not previously reported pursuant to this subsection, except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate 10% or less of the principal amount of the Securities Outstanding at such time, such report to be transmitted within 90 days after such time.

(c)       A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed and with the Issuer and the Guarantors. The Issuer will notify the Trustee when any Securities are listed on any stock exchange.

SECTION 704. Reports by the Issuer and the Guarantors.

This Section shall not be operative as a part of this Indenture until this Indenture is qualified under the Trust Indenture Act, and until such qualification this Indenture shall be construed as if this Section were not contained herein.

The Issuer and the Guarantors shall:

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(1) file with the Trustee, within 15 days after the Issuer or the Guarantors are required to file the same with the Commission, four copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Issuer or the Guarantors may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act; or, if the Issuer is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;

(2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Issuer and/or the Guarantors with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

(3) transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Issuer or the Guarantors, as the case may be, pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.

Article Eight

CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE

SECTION 801. Issuer or Guarantors May Consolidate, Etc. Only on Certain Terms.

The Issuer and either Guarantor may, without the consent of any Holder, consolidate with or merge or amalgamate into any other corporation or transfer their respective assets substantially as an entirety to any corporation organized, in the case of any Issuer, under the laws of its country of incorporation and, in the case of either of the Guarantors, under the laws of the United Kingdom, or, in either case, any political subdivision thereof, provided that:

(1) the corporation formed by such consolidation or into which such Issuer or such Guarantor is merged or amalgamated or the corporation which acquires by transfer the assets of such Issuer or such Guarantor substantially as an entirety shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest, if any, and all other amounts payable on and any sinking fund payments in respect of, in the case of an Issuer, all, the Securities issued by such Issuer, or, in the case of the Guarantors, all the Securities such Guarantor has guaranteed, pursuant to the terms of the Indenture and the due and punctual performance and observance of all covenants and conditions of this Indenture on the part of such Issuer or such Guarantor, as the case may be, to be performed or observed;

(2) immediately after giving effect to such transaction, no Event of Default or Default, and no event which, after notice or lapse of time or both, would become an Event of Default or Default, shall have happened and be continuing; and

(3) such Issuer or such Guarantor, as the case may be, has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

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SECTION 802. Successor Corporation to be Substituted.

Upon any consolidation by any Issuer or either of the Guarantors with or merger or amalgamation by any Issuer or either of the Guarantors into any other corporation or any transfer of the assets of any Issuer or either of the Guarantors substantially as an entirety in accordance with Section 801, the successor corporation formed by such consolidation or into which such Issuer or such Guarantor is merged or amalgamated or to which such transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, such Issuer or such Guarantor, as the case may be, under this Indenture with the same effect as if such successor corporation had been named as an Issuer or a Guarantor, as the case may be, herein, and thereafter the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities.

SECTION 803. Assumption by Guarantors or Subsidiary of Issuer’s Obligations.

Either of the Guarantors or a Subsidiary may assume the obligations of any Issuer (other than HBOS), (or any corporation which shall have previously assumed the obligations of any such Issuer) for the due and punctual payment of the principal of (and premium, if any) and interest, if any, and all other amounts payable on, and any sinking fund payments in respect of, all or any series of Securities issued by such Issuer pursuant to the terms of the Indenture and the due and punctual performance and observance of all covenants of this Indenture on the part of such Issuer to be performed or observed, provided that:

(1) such Guarantor or such Subsidiary, as the case may be, shall expressly assume such obligations by an indenture supplemental hereto, in form satisfactory to the Trustee, executed and delivered to the Trustee and

(A) if such Subsidiary assumes such obligations, such Guarantor shall, by such supplemental indenture, confirm that its Guarantee shall apply to such Subsidiary’s obligations under the Securities and this Indenture, as modified by such supplemental indenture;

(B) if a Guarantor assumes such obligations, those obligations of such Guarantor shall be subordinated to the same extent as its obligations under the Guarantees are subordinated hereunder; and

(C) if a Subsidiary, having as its principal business the business of banking, assumes such obligations, those obligations may be subordinated (so far as legally permissible) in a winding up of that Subsidiary to the claims of the depositors and other creditors of such Subsidiary (other than subordinated creditors);

(2) at the time of any such assumption by a Subsidiary incorporated under the laws of a jurisdiction other than the United Kingdom or the country of incorporation of the relevant Issuer or, in each case, any political subdivision thereof, no taxes, levies, imposts or other governmental charges whatsoever are applicable under the laws of such jurisdiction to any payment by such Subsidiary to a U.S. Person (as defined in Regulation S under the Securities Act);

(3) such Guarantor or such Subsidiary, as the case may be, shall agree in such supplemental indenture that any amount to be paid by such Guarantor or such Subsidiary to Holders of the Securities shall be paid without deduction or withholding for any and all present and future taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the United Kingdom or by the country of incorporation of such Subsidiary or, in each case, any political subdivision or taxing authority thereof or therein, or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by the United Kingdom or such country as aforesaid, or any of their respective political subdivisions or taxing authorities, the Guarantor or such Subsidiary, as the case may be, will pay any such additional amount in respect of principal (and premium, if any), interest and sinking fund payments, if any, as may be necessary in order that the net amounts paid to the Holders of the Securities or the Trustee, as the case may be, pursuant to the Securities or the Indenture after such deduction or

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withholding, shall equal the respective amounts of principal (and premium, if any), interest and sinking fund payments, if any, as specified in the Securities or the Indenture to which such Holders or the Trustee would be entitled if no such deduction or withholding had been made; provided that the foregoing shall not apply to any such tax, levy, impost or other governmental charge which would not be payable or due but for the fact that (i) the beneficial owner or Holder thereof is a domiciliary, national or resident of, or engaging in business (whether through a branch, agency or otherwise) or maintaining a permanent establishment or being physically present in, the United Kingdom or such other country, as the case may be, or a political subdivision thereof or otherwise having such connection with the United Kingdom or such other country, as the case may be, or a political subdivision thereof other than the holding or ownership of such Security, or receiving income therefrom, or the enforcement of such Security or the Guarantee, (ii) which would not be payable or due but for failure to comply with any certification, identification or reporting requirements concerning the nationality, residence, identity or connection with the United Kingdom or such other country or any political subdivision thereof of the Holder or beneficial owner of such Security, if compliance is possible pursuant to the provisions of any statute or regulation or by practice of the United Kingdom or such other country or any political subdivision thereof as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, (iii) which would not be payable or due but for the fact that such Security was presented more than 30 days after the date such payment became due or was provided for, whichever is later except to the extent that the Holder thereof would have been entitled to additional amounts on presenting the same for payment on or before the expiry of such period of 30 days, or (iv) which would not have been imposed if the beneficial owner of such Security had been the Holder of such Security or which, if the beneficial owner of such Security had been the Holder of such Security, would have been excluded pursuant to clauses (i) through (iii) inclusive above;

(4) immediately after giving effect to such transaction, no Event of Default or Default, and no event which, after notice or lapse of time or both, would become an Event of Default or Default, shall have occurred and be continuing; and

(5) such Guarantor, or such Subsidiary, as the case may be, shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such assumption and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

Either of the Guarantors shall assume the obligations of any Issuer (other than HBOS) (or any corporation which shall have previously assumed the obligations of such Issuer) for the due and punctual payment of the principal of (and premium, if any) and interest, if any, and all other amounts payable on, (and any sinking fund payments, if any, in respect of,) the Securities issued by any such Issuer pursuant to the terms of the Indenture and the due and punctual performance and observance of all covenants of this Indenture on the part of any such Issuer to be performed or observed in the event that:

(A) the entry of a decree or order by a court having jurisdiction in the premises adjudging such Issuer bankrupt or insolvent or (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of such Issuer under any applicable law of the country of incorporation of such Issuer or any political subdivision thereof or appointing a receiver, liquidator, assignee, trustee, sequestrator or other similar official of such Issuer or of any substantial part of its property, or (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days; or

(B) the institution by such Issuer of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) the filing of a petition or answer or consent seeking reorganization or relief under any applicable bankruptcy, insolvency or similar law of the country of

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incorporation of such Issuer or any political subdivision thereof or the consent by it to the filing of such petitioner to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or similar official of such Issuer or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) the taking of corporate action by such Issuer in furtherance of any such action and such Guarantor shall comply with paragraphs (1) (b), (2) and (4) of this Section 803.

Such Guarantor shall not, by virtue of such assumption, be obligated to pay any principal, premium, if any, or interest or any other additional amounts due in respect of Securities sooner than the same would have been payable by such Issuer pursuant to this Indenture, except if an Event of Default has occurred.

Upon any such assumption, such Guarantor or such Subsidiary shall succeed to, and be substituted for and may exercise every right and power of, such Issuer under this Indenture with the same effect, as if such Guarantor or such Subsidiary had been named as an Issuer herein, and the Person named as such “Issuer” shall be released from its liability as obligor upon the Securities.

SECTION 804. Addition of Designated Subsidiaries as Issuer.

From time to time, HBOS may designate, pursuant to and in accordance with the provisions of this Section, any Subsidiary as a Designated Subsidiary and thereupon such Subsidiary shall, for all purposes, become an Issuer of Securities under this Indenture and shall be bound by the provisions of this Indenture as if it were expressly named as an Issuer herein and shall have all of the rights, obligations and duties of an Issuer in respect of the Securities issued by it hereunder. HBOS may designate a Subsidiary as a Designated Subsidiary and, without the consent of the Holders of any Securities, such Designated Subsidiary shall become an Issuer under this Indenture, provided that:

(1) the Designated Subsidiary executes and delivers a supplemental indenture, in form satisfactory to the Trustee, pursuant to which such Designated Subsidiary agrees to be bound as an Issuer under this Indenture in respect of Securities to be issued by it hereunder from time to time; and

(2) each Guarantor confirms in writing its Guarantee shall apply to such Designated Subsidiary’s obligations under the Securities and this Indenture, as modified by such supplemental indenture.

Article Nine

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

Without the consent of any Holders, the relevant Issuer, the Guarantors and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(1) to evidence the succession of another corporation to any Issuer or either of the Guarantors and the assumption by any such successor of the covenants of any such Issuer or either of the Guarantors herein and in the Securities or Guarantees;

(2) to add a Designated Subsidiary as an Issuer of Securities under this Indenture in accordance with the provisions of Section 804;

(3) to add to the covenants of any such Issuer or either of the Guarantors for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Issuer or either of the Guarantors;

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(4) to add any additional Events of Default or Defaults;

(5) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in uncertificated form or global form, or to permit or facilitate the issuance of extendible Securities;

(6) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only as to the Securities of any series created by such supplemental indenture and Securities of any series subsequently created to which such change or elimination is made applicable by the subsequent supplemental indenture creating such series;

(7) to secure the Securities;

(8) to establish the form or terms of Securities of any series as permitted by Sections 201 and 301;

(9) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b);

(10) to provide for any rights of the Holders of Securities of any series to require the repurchase of Securities of such series by the Issuer; provided that the Securities of any series which constitute Tier 2 Securities may not be repurchased in whole or in part by the Issuer except in accordance with the Financial Services Authority Practices;

(11) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action shall not adversely affect the interests of the Holders of Securities of any series in any material respect; or

(12) to modify, alter, amend or supplement this Indenture in any other respect which is not materially adverse to Holders, which does not involve a change described in clause (1), (2) or (3) of Section 902 hereof and which, in the judgment of the Trustee, is not to the prejudice of the Trustee.

SECTION 902. Supplemental Indentures with Consent of Holders.

(1) change the Stated Maturity of the principal of, or any installment of principal of or interest, if any, on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon the acceleration of the Maturity thereof pursuant to Section 502, or reduce any sinking fund payment, including in each case additional amounts or change any Place of Payment where, or the coin or currency in which, any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), modify the

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provisions of the Indenture with respect to the subordination of the obligations of the Issuer or the Guarantees in a manner adverse to the Holders, or

(2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

(3) modify any of the provisions of this Section or Section 513, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, provided that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 611(b) and 901(8), or

(4) change in any manner adverse to the interests of the Holders of any Securities the terms and conditions of the obligations of the Guarantors in respect of the due and punctual payment of the principal thereof (and premium, if any) and interest, if any, thereon or any sinking fund payments, if any, provided for in respect thereof (including in each case additional amounts payable under the Guarantees).

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

SECTION 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

SECTION 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

SECTION 905. Conformity with the Trust Indenture Act.

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.

SECTION 906. Reference in Securities to Supplemental Indentures.

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by

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the Trustee as to any matter provided for in such supplemental indenture. If the Issuer and the Guarantors shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee, the Issuer and the Guarantors, to any such supplemental indenture may be prepared and executed by the Issuer, the Guarantees endorsed thereon may be executed by the Guarantors and such Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

Article Ten

COVENANTS

SECTION 1001. Payment of principal, Premium, if any, Interest and Additional Amounts.

The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any) and interest, if any, on the Securities of that series in accordance with the terms of the Securities and this Indenture.

Each installment of interest on the Securities of any series may be paid by mailing checks for such interest payable to or upon the written order of the Holders of Securities entitled thereto as they shall appear on the registry books of the Issuer.

The Issuer hereby further agrees that any amounts to be paid by the Issuer with respect to each Security shall be paid without deduction or withholding for any and all present and future taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the country of incorporation of the Issuer or, if different, the country of tax residence of the Issuer or any political subdivision or taxing authority thereof or therein (the “Issuer Taxing Jurisdiction”) or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by the Issuer Taxing Jurisdiction, the Issuer will pay such additional amount in respect of principal, premium, if any, interest, if any, and sinking fund payments, if any, as may be necessary in order that the net amounts paid to the Holder of such Security or to the Trustee or any Paying Agent, as the case may be, under this Indenture, after such deduction or withholding, shall equal the respective amounts of principal, premium, if any, interest, if any, and sinking fund payments, if any, as specified in the Security to which such Holder or the Trustee would be entitled if no such deduction or withholding had been made; provided that the foregoing shall not apply to any such taxes, levies, imposts or other governmental charges (i) which would not be payable or due but for the fact that the beneficial owner or Holder of such Security is a domiciliary, national or resident of, or engaging in business (whether through a branch, agency or otherwise) or maintaining a permanent establishment or being physically present in, the Issuer Taxing Jurisdiction or otherwise having some connection with the Issuer Taxing Jurisdiction other than the holding or ownership of such Security, or receiving income therefrom, or the enforcement of such Security, (ii) which would not be payable or due but for the fact that, where presentation is required, such Security was presented more than thirty days after the date such payment became due or was provided for, whichever is later, except to the extent that the Holder thereof would have been entitled to additional amounts on presenting the same for payment on or before the expiry of 30 days, or (iii) which would not be payable or due but for the failure to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with the Issuer Taxing Jurisdiction of the Holder or beneficial owner of such Security, if compliance is possible pursuant to the provisions of any statute or regulation or by any practice of the Issuer Taxing Jurisdiction as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, or (iv) which would not have been imposed if the beneficial owner of the Security had been the Holder of such Security or which, if the beneficial owner of such Security had been the Holder of such Security, would have been excluded pursuant to clauses (i) through (iii) inclusive above.

SECTION 1002. Maintenance of Office or Agency.

The Issuer will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuer in respect of the Securities of that series and this Indenture may be served. An Issuer will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time any Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the

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Corporate Trust Office of the Trustee, and, in such event, the Trustee shall act as such Issuer’s agent to receive all such presentations, surrenders, notices and demands.

The Issuer may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve any Issuer of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. An Issuer will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

SECTION 1003. Money for Securities Payments to Be Held in Trust.

If the Issuer or either Guarantor shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest, if any, on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

Whenever the Issuer shall have one or more Paying Agents for any series of Securities, it will, on, in case the payment referred to below is made in same day funds, or, in all other cases, prior to, each due date of the principal of (and premium, if any) or interest, if any, on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of its failure so to act.

The Issuer will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:

(1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

(2) give the Trustee notice of any default by the Issuer (or any other obligor upon the Securities of that series) in the making of any payment of principal (and premium, if any) or interest, if any, on the Securities of that series; and

(3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

Any Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in trust by such Issuer or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by such Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer or either of the Guarantors, in trust for the payment of the principal of (and premium, if any) or interest, if any, on any Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Issuer or such Guarantor, as the case may be, on Issuer Request, or (if then held by the Issuer or either of the Guarantors) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Issuer and such Guarantor for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer or such Guarantor as trustee thereof, shall thereupon cease; provided that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City, County and State of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the

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date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer or such Guarantor, as the case may be.

SECTION 1004. Corporate Existence.

Subject to Article Eight, each Issuer and each of the Guarantors will do or cause to be done all things necessary to preserve and keep in full force and effect its respective corporate existence.

SECTION 1005. Statements as to Compliance.

Each Issuer and each of the Guarantors will deliver to the Trustee, within 45 days after May 30 of each year commencing 2004, an Officer’s Certificate (which need not comply with the second paragraph of Section 102), stating as to the signers thereof that

(1) a review of the activities of such Issuer or such Guarantor, as the case may be, during such year and of its performance under this Indenture has been made under their supervision, and

(2) to the best of their knowledge based on such review, the Issuer or such Guarantor, as the case may be, has fulfilled all its obligations under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such obligation which is continuing, specifying each such default known to them and the nature and status thereof.

SECTION 1006. Subordination.

(a)       Subordination of Securities other than Undated Securities and Securities issued by BOS.

(i) The rights and claims of the Trustee and the Holders of Securities (other than Undated Securities and Securities issued by BOS) against the Issuer under the Indenture and under any such Security are subordinated to the extent set forth in this Section 1006 (a), in the event of the bankruptcy, winding up or liquidation of the Issuer, to the claims of Senior Creditors of the Issuer, so that amounts due and payable under the Indenture and under any such Security shall be due and payable by the Issuer in such bankruptcy, winding up or liquidation only if and to the extent that the Issuer could make payment thereof rateably with the claims of other Subordinated Creditors of the Issuer and still be solvent immediately thereafter. For the purposes of this Section 1006 (a), the Issuer shall be considered to be solvent if it is able to pay its debts to Senior Creditors of the Issuer in full.

(ii) A report in writing as to the solvency of the Issuer by its receiver in bankruptcy, or liquidator in winding up or liquidation shall, unless the contrary is proved, be treated and accepted by the Issuer, the Guarantors, the Trustee and the Holders of such Securities as correct and sufficient evidence thereof.

For the purposes of this Section 1006(a):

(1) The term “Senior Creditors” means all of the creditors of the Issuer who are unsubordinated creditors of the Issuer.

(2) The term “Subordinated Creditors” means creditors of the Issuer (including, without limitation, Holders of Securities) whose claims against the Issuer are subordinated in the event of the bankruptcy, winding up or liquidation of the Issuer in any manner to the claims of any unsecured and unsubordinated creditors of the Issuer but excluding those subordinated creditors of the Issuer (if any) whose claims rank or are expressed to rank

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junior to (i) the claims of the Trustee and the Holders of Securities and/or (ii) the claims of any other creditors of the Issuer whose claims rank or are expressed to rank pari passu with the claims of the Trustee and the Holders of Securities.

(b)       Subordination of Securities (other than Undated Securities) issued by BOS.

(i) The rights and claims of the Trustee and the Holders of Securities (other than Undated Securities) issued by BOS against BOS under the Indenture and under any such Security are subordinated to the extent set forth in this Section 1006 (b), in the event of the winding up or sequestration of BOS, to the claims of Senior Creditors of BOS so that amounts due and payable under the Indenture and under any such Security shall be due and payable by BOS in such winding up or sequestration only if and to the extent that BOS could make payment thereof rateably with the claims of other Subordinated Creditors of BOS and still be solvent immediately thereafter. For this purpose, BOS shall be considered to be solvent if it is able to pay its debts to its Senior Creditors in full.

(ii) A report in writing as to the solvency of BOS by its liquidator or trustee shall, unless the contrary is proved, be treated and accepted by BOS, HBOS, as Guarantor, the Trustee and the Holders of such Securities as correct and sufficient evidence thereof.

For the purposes of this Section 1006 (b):

(1) The term “Senior Creditors” means creditors of BOS whose claims are lodged or admitted to proof in the winding up or sequestration of BOS and who are unsubordinated creditors of BOS.

(2) The term “Subordinated Creditors” means creditors of BOS (including, without limitation, Holders of Securities issued by BOS) whose claims against BOS are subordinated in the event of the winding up or sequestration of BOS in any manner to the claims of any unsecured and unsubordinated creditors of BOS, but excluding those subordinated creditors of BOS (if any) whose claims rank or are expressed to rank junior to (i) the claims of the Trustee and the Holders of Securities of BOS and/or (ii) the claims of any other creditors of BOS whose claims rank or are expressed to rank pari passu with the claims of the Trustee and the Holders of Securities of BOS.

(c)       Subordination of Undated Securities.

(i) The rights and claims of the Trustee and the Holders of Undated Securities, against the Issuer under the Indenture and under any such Security are subordinated to the extent set forth in this Section 1006(c), to the claims of Senior Creditors of the Issuer in that the payments of principal, Redemption Price, interest or other amounts payable in respect of any such Security will be conditional (such condition is referred to as the “Solvency Condition”) upon the Issuer and, in relation to Securities which are guaranteed, the Guarantor being solvent at the time of payment by the Issuer and in that no principal, Redemption Price, interest or other amounts shall be payable in respect of any such Security except to the extent that the Issuer and, in relation to Securities which are guaranteed (assuming that a payment was then due by the Guarantor), the Guarantor could make such payment and still be solvent (whether or not it is bankrupt, being sequestrated or liquidated or is in winding up) immediately thereafter. In such circumstances, no principal, Redemption Price, interest or other amounts payable in respect of such Undated Securities which would otherwise fall due for payment shall fall so due (subject always to the provisions of the

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parenthetical clause in Section 503(1)), and, instead, such payment shall become due for payment only if and when and to the extent that both the Issuer of such Undated Securities and, in relation to Undated Securities which are guaranteed, the Guarantor (assuming that a payment was then due by the Guarantor) could make such payment in whole or in part and still be solvent (whether or not it is bankrupt or being liquidated or sequestrated or in winding up) immediately thereafter. Interest will continue to accrue on any such Undated Securities payment of which is suspended pursuant to the provisions of the immediately preceding sentence in accordance with the provisions of such Undated Securities and this Indenture. For the purposes of this Section 1006(c), the Issuer and the Guarantors, as the case may be, shall be considered to be solvent if (A) it is able to pay its debts to Senior Creditors (as defined below) as they fall due and (B) its Assets (as defined below) exceed its Liabilities (as defined below) to Senior Creditors. Amounts representing interest in respect of which the Solvency Condition is not satisfied on the due date for the payment thereof shall, so long as the same remains unpaid, constitute “Arrears of Interest” (otherwise than for the purposes of Section 1006(c) (iii) below). Arrears of Interest in respect of Undated Securities shall not bear interest. In addition, Undated Securities issued by HBOS shall rank pari passu with its €415,000,000 Fixed to Floating Rate Subordinated Extendable Maturity Notes 2048, ₤245,000,000 7.881 per cent. Subordinated Extendable Maturity Notes 2048, £300,000,000 7.50 per cent. Undated Subordinated Step-up Notes, €300,000,000 Floating Rate Undated Subordinated Step-up Notes, ¥42,500,000,000 3.50 per cent. Undated Subordinated Step-up Notes, £600,000,000 Undated Subordinated Notes, €500,000,000 Fixed to Floating Rate Undated Subordinated Notes, £500,000,000 5.75 per cent. Undated Subordinated Step-up Notes, $1,000,000,000 6.85 per cent. Undated Subordinated Notes and ₤600,000,000 5.75 per cent. Undated Subordinated Step-up Notes, and Undated Securities issued by BOS shall rank pari passu with its $250,000,000 Undated Floating Rate Primary Capital Notes, its £200,000,000 Perpetual Subordinated Notes, its £100,000,000 Instruments, its ¥17,000,000,000 Instruments, its £150,000,000 Instruments and its £150,000,000 Instruments.

(ii) A report in writing as to the solvency of the Issuer or a Guarantor by two Executive Officers of the Issuer or, as the case may be, such Guarantor or the independent public accountants or auditors of the Issuer, or as the case may be, such Guarantor or if the Issuer, or, as the case may be, such Guarantor is bankrupt or has been sequestrated or is being liquidated or wound up, its receiver in bankruptcy, its trustee or, as the case may be, its liquidator shall, unless the contrary is proved, be treated and accepted by the Issuer, such Guarantor, the Trustee and the Holders of such Securities as correct and sufficient evidence thereof.

(iii) Without prejudice to the provisions of Section 1006 (c)(i), the Issuer shall not be obliged to make payment of the interest accrued in respect of any period on the due date for the payment thereof (for the purposes of this Section 1006 (c)(iii) and Section 1006 (c)(iv) , “Accrual Period” and “Payment Date” respectively) if during the period of twelve months ending on such Payment Date no dividend or other Distribution (as defined below) shall have been declared, paid or made on any class of stock or share capital of, where the Issuer is HBOS, HBOS or, where the Issuer is BOS, BOS; and all interest not so paid shall, so long as the same remains unpaid, constitute “Arrears of Interest”. The Issuer may, subject to the provisions of the immediately succeeding sentence, at its option (upon the expiry of not less than seven days’ notice to the Holders of Undated Securities given in accordance with the relevant provisions of such Undated Securities) at any time pay all or part of the Arrears of Interest (being, if part only, the whole of the interest accrued on all of such Undated Securities during any one or

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more Accrual Periods) but so that, in the case of any such partial payment, the interest accrued during any Accrual Period shall not be paid prior to that accrued during any earlier Accrual Period. If an Issuer shall have outstanding more than one series of Undated Securities, then the Issuer may not pay all or part of the Arrears of Interest in respect of any such series unless it pays all or (as near as practicable) an equivalent proportion of the Arrears of Interest in respect of each other series of its Undated Securities then outstanding. All Arrears of Interest shall (subject to satisfaction of the Solvency Condition and subject to Section 1006(c)(iv)) become due in full on the date on which any dividend or other Distribution is next declared, paid or made on any class of stock or share capital of, where the Issuer is HBOS, HBOS or, where the Issuer is BOS, BOS or, if earlier, the date set for any redemption permitted under Section 1108, any early redemption exercised at the option of the Issuer (other than a partial redemption) in accordance with the terms of any Undated Security, or where the Issuer is BOS the commencement of the sequestration or winding up of BOS or, where the Issuer is HBOS, the commencement of the liquidation or winding up of HBOS. If notice is given by the Issuer of its intention to pay the whole or part of Arrears of Interest, the Issuer shall be obliged (subject to satisfaction of the Solvency Condition and subject to Section 1006(c)(iv)) to do so upon the expiry of such notice. Arrears of Interest in respect of Undated Securities shall not bear interest.

(iv) If, at any time where the Issuer is BOS, an order is made for the sequestration or winding up of BOS or an effective resolution is passed for the winding up of BOS or, where the Issuer is HBOS, an order is made for the liquidation or winding up of HBOS or an effective resolution is passed for the winding up of HBOS, the Undated Securities shall become due and payable in accordance with the provisions of this Section 1006(c)(iv) and the Issuer shall, in lieu of any other payment on Undated Securities representing principal, Redemption Price, accrued interest, Arrears of Interest and/or interest due but unpaid, but subject to satisfaction of the Solvency Condition, be obliged to pay, in respect of such Securities, such amounts as would have been payable if the Holders of such Securities had, on the day preceding the commencement of such sequestration, liquidation or winding up, become holders of preference stock or shares in the capital of HBOS or BOS, as the case may be, forming or being part of a class having a preferential right in the sequestration, liquidation or winding up over the holders of all other classes of stock and shares in the capital of HBOS or BOS, as the case may be, and entitled to receive in such sequestration, liquidation or winding up an amount equal to the Redemption Price and interest (if any) accrued since the Payment Date immediately preceding or coinciding with the commencement of such sequestration, liquidation or winding up to the date of such repayment and all Arrears of Interest and/or, as the case may be, all such interest due but unpaid.

For purposes of this Section 1006 (c)

(1) The term “Assets” means the non-consolidated gross assets of the Issuer or, as the case may be, the applicable Guarantor.

(2) The term “Distribution” means (a) any dividend paid by the Issuer or the applicable Guarantor, including a capital dividend, (b) any other distribution out of assets of the Issuer or the Guarantor (whether in cash or otherwise) in respect of stock or shares in such Issuer or Guarantor, except so much of the distribution, if any, as represents a repayment of capital on the stock or shares or is, when it is made, equal in amount or value to any new consideration received by such Issuer or Guarantor for the distribution, (c) any redeemable capital stock or any security, issued by the Issuer or the applicable Guarantor in respect of stock or shares in such Issuer or

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Guarantor otherwise than wholly for new consideration, or such part of any redeemable capital stock or share capital or any security so issued as is not properly referable to new consideration, and (d) a distribution within section 209 or 418 of the United Kingdom Income and Corporation Taxes Act 1988 as in force on August 21, 1992.

(3) The term “Liabilities” means the non-consolidated gross liabilities of the Issuer or, as the case may be, the applicable Guarantor, in each case, as shown by the latest published audited balance sheet of the Issuer or, as the case may be, such Guarantor, but adjusted for contingencies and for subsequent events in such manner and to such extent as such Executive Officers, independent public accountants or auditors or, as the case may be, receiver in bankruptcy, trustee or liquidator may determine to be appropriate.

(4) The term “Senior Creditors” means in relation to the Issuer or the applicable Guarantor, creditors of the Issuer or, as the case may be, such Guarantor (a) who are unsubordinated creditors of the Issuer or, as the case may be, such Guarantor or (b) whose claims are, or are expressed to be, subordinated to the claims of depositors and/or other creditors, whether subordinated or unsubordinated, of the Issuer or, as the case may be, such Guarantor other than those whose claims rank or are expressed to rank pari passu with or junior to the claims of the Trustee and Holders of Undated Securities.

(d)       Certain Additional Limitations. In the event of the bankruptcy, liquidation or sequestration or winding up of the Issuer, if any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Issuer being subordinated to the payment of the Securities, shall be received by the Trustee or the Holders, before the claims of all Senior Creditors (as such term is defined, in the case of Securities, other than Undated Securities and Securities issued by BOS, in Section 1006(a), in the case of Securities, other than Undated Securities, issued by BOS, in Section 1006(b), and, in the case of Undated Securities, in Section 1006(c)) of the Issuer have been paid in full, such payment or distribution shall be held in trust by the Trustee or such Holders, as applicable, and shall be immediately returned by it or them to the liquidator or trustee or receiver in bankruptcy of the Issuer. Thereupon, such payment or distribution will be deemed not to have been made or received. If any of the said rights and claims of any Holder against the Issuer is discharged by set off, such Holder will immediately pay an amount equal to the amount of such discharge to the liquidator or trustee or receiver in bankruptcy of the Issuer and until such time as payment is made will hold a sum equal to such amount in trust for the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not to have taken place.

(e)       Claims of the Trustee Unaffected. The provisions of this Section apply only to amounts payable under Section 1001 and under any Security, and nothing in this Section shall affect or prejudice any claim by the Trustee against the Issuer in respect of the costs, charges, expenses, liabilities, indemnification or remuneration of the Trustee.

(f)       Limitation on SIF’s Ability to Issue Priority Debt. SIF will not issue any debt obligations or incur any indebtedness for borrowed money which ranks in priority to the obligations of SIF under Section 1001 or the Securities. Nothing contained herein shall in any way restrict the right of SIF to issue debt obligations, or to give any guarantee or indemnity of any nature, ranking pari passu with or junior to the obligations of SIF in respect of the Securities and, if any modification to the provisions of this Section to permit such ranking is necessary or expedient, the Trustee is hereby authorized without the consent of the Holders of Securities to concur with SIF in executing a supplemental indenture effecting such modification.

(g)       No Limitation on other Issuers’ Ability to Issue Debt. Nothing contained herein shall in any way restrict the right of an Issuer other than SIF to issue debt obligations, or to give any guarantee or indemnity of any nature, ranking in priority to or pari passu with or junior to the

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obligations of such Issuer in respect of the Securities and, if any modification to the provisions of this Section to permit such ranking is necessary or expedient, the Trustee is hereby authorized without the consent of the Holders of Securities to concur with such Issuer in executing a supplemental indenture effecting such modification.

SECTION 1007. Office or Agency for Certain Purposes.

As long as any of the Securities remain outstanding, each of the Guarantors will maintain an office or agency (or offices or agencies) in the Place of Payment, where notices and demands to or upon each of the Guarantors in respect of the Securities of any series or of this Indenture may be served, and where the Securities of any series may be presented for payment under the Guarantees.

SECTION 1008. Rule 144A Information Requirement.

For so long as any of the Securities of a series remain outstanding and are “restricted securities” within the meaning of Rule 144A(a) (3) under the Securities Act, HBOS covenants and agrees that it shall, during any period in which HBOS is not subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act and is not exempt from such requirements under Rule 12g3-2(b) under the Securities Exchange Act, make available to any Holder of Securities of a series that are “restricted securities” in connection with any sale thereof and any prospective purchaser of Securities from such Holder, in each case upon request, the information specified in, and meeting the requirements of, Rule 144A(d) (4) under the Securities Act.

Article Eleven

REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article.

Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article. The Securities of any series which constitute Tier 2 Securities may not be redeemed in whole or in part except in accordance with the U.K. Financial Services and Markets Act 2000. The Securities of any series which constitute Tier 2 Securities may not be redeemed in whole or in part at the option of the Holder thereof except in accordance with the Financial Services Authority Practices.

SECTION 1102. Election to Redeem; Notice to Trustee.

The election of the Issuer to redeem any Securities shall be evidenced by an Officer’s Certificate. In case of any redemption at the election of the Issuer of less than all the Securities of any series, the Issuer shall, at least 60 days prior to the Redemption Date fixed by the Issuer (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series to be redeemed, such notice to be accompanied by a written statement signed by an Executive Officer or other authorized officer of the Issuer stating that no defaults in the payment of interest or Events of Default with respect to the Securities of that series have occurred (which have not been waived or cured). In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Issuer shall furnish the Trustee with an Officer’s Certificate evidencing compliance with such restriction.

SECTION 1103. Selection by Trustee of Securities to Be Redeemed.

If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the

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minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series.

Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in a written statement signed by an authorized officer of the Issuer and delivered to the Security Registrar at least 60 days prior to the Redemption Date as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written statement which is an Affiliate of the Issuer.

The Trustee shall promptly notify the Issuer in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

SECTION 1104. Notice of Redemption.

Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price,

(3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed,

(4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,

(5) the place or places where such Securities are to be surrendered for payment of the Redemption Price, and

(6) that the redemption is for a sinking fund, if such is the case.

Notice of redemption of Securities to be redeemed at the election of the Issuer shall be given by the Issuer or, at the Issuer’s request, by the Trustee in the name and at the expense of the Issuer.

SECTION 1105. Deposit of Redemption Price.

On, in the case of same day funds, or in all other cases at least one Business Day prior to any Redemption Date, the Issuer shall deposit with the Trustee or with a Paying Agent (or, if the Issuer is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date (to the extent that such amounts are not already on deposit at such time in accordance with the provisions of Section 401 or 1006).

SECTION 1106. Securities Payable on Redemption Date.

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Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price and accrued and unpaid interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Issuer at the Redemption Price, together with accrued and unpaid interest to the Redemption Date; provided that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

SECTION 1107. Securities Redeemed in Part.

Any Security (including any Global Security) which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Issuer or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Issuer shall execute, the Guarantors shall endorse the Guarantee on, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered; provided that if a Global Security is so surrendered, such new Security shall be in a denomination equal to the unredeemed portion of the principal of the Global Security so surrendered.

SECTION 1108. Optional Redemption Due to Changes in Tax Treatment.

Unless otherwise provided in the Securities of any series, if, as the result of any change in or any amendment to the laws of the Issuer Taxing Jurisdiction, or the United Kingdom or, if different, the country of tax residence of either of the Guarantors or any political subdivision or taxing authority thereof or therein (the “Guarantor Taxing Jurisdiction”) or with respect to any Subsidiary that has assumed the obligations of an Issuer hereunder, the country in which such Subsidiary is organized or, if different, the country of tax residence of such Subsidiary or of any political subdivision or taxing authority thereof or therein (the “Subsidiary Taxing Jurisdiction”, and the Issuer Taxing Jurisdiction, the Guarantor Taxing Jurisdiction and Subsidiary Taxing Jurisdiction, are collectively referred to as the “Relevant Taxing Jurisdiction”), affecting taxation, or any change in an application or interpretation of such laws, which change, amendment, application or interpretation becomes effective on or after the date specified for such series pursuant to Section 301(6) or the date of any assumption of the Issuer’s obligations pursuant to Section 803, as the case may be, it is determined by the Issuer (or any Subsidiary that has assumed the Issuer’s obligations hereunder) or such Guarantor that (i) in making payment under the Securities or the Guarantee, the Issuer or such Guarantor (or such Subsidiary), as the case may be, would be required to pay additional amounts with respect thereto as a result of any taxes, levies, imposts or other governmental charges imposed (whether by way of withholding or deduction or otherwise) by or for the account of any Relevant Taxing Jurisdiction, (ii) any tax would be imposed (whether by way of deduction or withholding or otherwise) or relief from tax would be withdrawn by any Relevant Taxing Jurisdiction, upon or with respect to any interest payments received or receivable by the Issuer (or such Subsidiary) from such Guarantor or any other subsidiaries incorporated in, or resident for tax purposes under the laws of, the United Kingdom, or (iii) based upon an opinion of independent legal advisors to the Issuer (or such Subsidiary) or such Guarantor, as the case may be, as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in, any Relevant Taxing Jurisdiction (whether or not such action was taken or brought with respect to the Issuer or such Subsidiary or such Guarantor), which action is taken or brought on or after the date specified for such series pursuant to Section 301(6) or the date of any such assumption of an Issuer’s obligations under the Indenture, as the case may be, there is a substantial probability that the circumstances described in clause (i) or (ii) would exist, the Issuer (or such Subsidiary) or such Guarantor may, at its option, redeem such Securities in whole at any time, subject in the case of Undated Securities, to the Solvency Condition (as defined in Section 1006(c) (i)) being satisfied at such time, at a Redemption Price equal to 100’s of the principal amount thereof plus accrued interest to the date fixed for redemption (except in the case of Outstanding Original Issue Discount Securities which

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may be redeemed at the Redemption Price specified by the terms of each series of such Securities). Prior to any redemption of such Securities pursuant to this Section, the Issuer (or such Subsidiary) or such Guarantor shall provide the Trustee with an Officer’s Certificate of the Issuer, such Guarantor or such Subsidiary, stating that the Issuer is entitled to effect such redemption and setting forth in reasonable detail a statement of circumstances showing that the conditions precedent to the right of the Issuer (or such Subsidiary) or such Guarantor to redeem such Securities pursuant to this Section have occurred.

Article Twelve

SINKING FUNDS

SECTION 1201. Applicability of Article.

The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series. The Securities of any series which constitute Tier 2 Securities may not be redeemed in whole or in part, whether pursuant to a sinking fund or analogous provision, except in accordance with the Financial Services Authority Practices.

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a Mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.

In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option (a) deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Issuer or receive credit for Securities of such series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant to Section 309, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Issuer through any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund Redemption Price specified in such Securities. Tier 2 Securities may not be purchased by the Issuer thereof, any Subsidiary or the Guarantors at any time except in accordance with the Financial Services Authority Practices.

SECTION 1203. Redemption of Securities for Sinking Fund.

Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Issuer will deliver to the Trustee an Officer’s Certificate specifying (a) the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, (b) whether or not the Issuer intends to exercise its right, if any, to make an optional sinking fund payment with respect to such series on the next ensuing sinking fund payment date and, if so, the amount of such optional sinking fund payment, and (c) the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202, and will also deliver to the Trustee any Securities so delivered. Such written statement shall be irrevocable and upon its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Issuer, on or before any such 60th day, to deliver such written statement and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Issuer (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof or and (ii) that the Issuer will make no optional sinking fund payment with respect to such series as provided in this Section.

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Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Issuer in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1105, 1106 and 1107.

The Trustee shall not redeem or cause to be redeemed any Security of a series with sinking fund moneys or mail any notice of redemption of Securities of such series by operation of the sinking fund during the continuance of a default in payment of interest with respect to Securities of that series or an Event of Default or Default with respect to the Securities of that series except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event of Default or Default, shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Event of Default or Default, be deemed to have been collected under Article Five and held for the payment of all such Securities. In case such default, Event of Default or Default shall have been waived as provided in Section 513 or the default or Event of Default or Default cured on or before the 60th day preceding the sinking fund payment date, such moneys shall thereafter be applied on such sinking fund payment date in accordance with this Section to the redemption of such Securities.

Article Thirteen

GUARANTEES AND SUBORDINATION

SECTION 1301. Guarantee.

In the case of Securities issued by BOS, HBOS as Guarantor, hereby unconditionally and irrevocably guarantees to each Holder of a Security authenticated and made available for delivery by the Trustee, and to the Trustee on behalf of each such Holder, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on such Securities and the due and punctual payment of any sinking fund payments provided for pursuant to the terms of such Securities when and as the same shall become due and payable, whether at the Stated Maturity, by call for redemption or otherwise, in accordance with the terms of such Securities and of this Indenture. In the case of Securities issued by an Issuer other than HBOS or BOS, HBOS and BOS as Guarantors hereby unconditionally and irrevocably, jointly and severally guarantee to each Holder of a Security authenticated and made available for delivery by the Trustee, and to the Trustee on behalf of each such Holder, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on such Securities and the due and punctual payment of any sinking fund payments provided for pursuant to the terms of such Securities when and as the same shall become due and payable, whether at the Stated Maturity, by call for redemption or otherwise, in accordance with the terms of such Securities and of this Indenture. In case of the failure of the Issuer punctually to make any such principal, premium, interest or sinking fund payment, each Guarantor hereby agrees to make pay amounts to be paid by it under this Guarantee punctually when and as the same shall become due and payable, whether at the Stated Maturity, by call for redemption or otherwise and as if such payment were made by the Issuer. Each Guarantor hereby further agrees that any amounts to be paid by it under this Guarantee shall be paid without deduction or withholding for any and all present and future taxes, levies, imposts and other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the Guarantor Taxing Jurisdiction, or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by the Guarantor Taxing Jurisdiction, such Guarantor will pay such additional amount in respect of principal (and premium, if any), interest, if any, and sinking fund payments, if any, as may be necessary in order that the net amounts paid to the Holders of the Securities or the Trustee, as the case may be, pursuant to this Guarantee, after such deduction or withholding, shall equal the respective amounts of principal (and premium, if any), interest and sinking fund payments, if any, as specified in the Securities to which such Holders or the Trustee would be entitled if no such deduction or withholding had been made; provided that the foregoing shall not apply to any such tax, levy, impost or other governmental charge (i) which would not be payable or due but for the fact that the Holder of such Securities is a domiciliary, national or resident of, or engaging in business (whether through a branch, agency or otherwise) or maintaining a permanent establishment or being physically present in, the Guarantor Taxing Jurisdiction or otherwise having some connection with the Guarantor Taxing Jurisdiction other than the holding or ownership of a Security, or receiving income therefrom or the enforcement of, a Security or the Guarantee, (ii) which

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would not be payable or due but for the failure to comply with any certification, identification, or other reporting requirements concerning the nationality, residence, identity or connection with the Guarantor Taxing Jurisdiction of the Holder or beneficial owner of the Securities, if compliance is possible pursuant to the provisions of any statute or regulation or by practice of the United Kingdom or such political subdivision as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, (iii) which would not be payable or due but for the fact that such Security was presented more than 30 days after the date such payment became due or was provided for, whichever is later, except to the extent that the Holder thereof would have been entitled to additional amounts on presenting the same for payment on or before the expiry of such period of 30 days, or (iv) which would not have been imposed if the beneficial owner of the Securities had been the Holder of the Securities or which, if the beneficial owner of the Securities had been the Holder of the Securities, would have been excluded pursuant to clauses (i) through (iii) inclusive above. Each Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of, and unaffected by, any invalidity, irregularity or unenforceability of any Security of any series or this Indenture, any failure to enforce the provisions of any Security of any series or any series or this Indenture, any waiver, modification or indulgence granted to the Issuer with respect thereto by the Holder of any Security of any series or the Trustee, or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided that notwithstanding the foregoing, no such waiver, modification or indulgence by a Guarantor shall without the consent of such Guarantor increase the principal amount of a Security or the interest rate thereon or change the Stated Maturity of a Security or change the currency of payment with respect to a Security or increase any premium payable upon redemption thereof or increase any sinking fund payment required under such Security. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to any Security or the indebtedness evidenced thereby or with respect to any sinking fund payment required pursuant to the terms of a Security issued under this Indenture and all demands whatsoever, and covenants that the Guarantee under which it is Guarantor will not be discharged except by complete performance of the obligations contained in the Securities, and such Guarantee.

SECTION 1302. Subrogation.

The Guarantors shall be subrogated to all rights of the Holder of a Security against the Issuer in respect of any amounts paid to such Holder by the Guarantors pursuant to the provisions of this Guarantee; provided that the Guarantors shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of (and premium, if any) and interest on all Securities of the relevant series shall have been paid in full.

SECTION 1303. Execution and Delivery of Guarantees.

To evidence its guarantee set forth in Section 1301, each Guarantor hereby agrees to execute the Guarantee manually or by facsimile in the form established pursuant to Section 205, to be endorsed on each Security issued by an Issuer other than HBOS or, when BOS is Issuer, other than BOS, authenticated and delivered by the Trustee. Each such Guarantee shall be executed on behalf of the Guarantors by an Executive Officer or any other officer of the relevant Guarantor so authorized by a Board Resolution. Guarantees so executed on Securities authenticated and delivered by the Trustee shall be valid and binding obligations of the Guarantors.

Guarantees bearing the manual or facsimile signature of any individual who was at any time an Executive Officer or another officer authorized by a Board Resolution to execute such Guarantee shall bind the relevant Guarantor, notwithstanding that such individual shall have ceased to be an Executive Officer or such other authorized officer prior to the authentication and delivery of the Securities upon which such Guarantees are endorsed or was not an Executive Officer or such other authorized officer at the date of authentication of such Securities.

The Delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee endorsed thereon on behalf of the Guarantors.

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SECTION 1304. Subordination.

(a)       Subordination of Guarantee issued in respect of Securities other than Undated Securities.

(i) The rights and claims of the Trustee and the Holders of Securities other than Undated Securities against a Guarantor under Section 1301 and under any Guarantee are subordinated to the extent set forth in this Section 1304 (a), in the event of the liquidation or winding up of HBOS or in the event of the sequestration or winding up of BOS, as the case may be, to the claims of Senior Creditors of such Guarantor, so that amounts guaranteed under Section 1301 and under any Guarantee shall be due and payable by such Guarantor in such winding up, liquidation or sequestration only if, and to the extent that, such Guarantor could make payment thereof rateably with the claims of other Subordinated Creditors of such Guarantor and still be solvent immediately thereafter. For the purposes of this Section 1304(a), a Guarantor shall be considered to be solvent if it is able to pay its debts to Senior Creditors of such Guarantor in full.

(ii) A report in writing as to the solvency of a Guarantor by its liquidator or trustee shall, unless the contrary is proved, be treated and accepted by such Guarantor, the Issuer, the Trustee and the Holders of such Securities as correct and sufficient evidence thereof.

For the purposes of this Section 1304 (a):

(1) The term “Senior Creditors” means creditors of a Guarantor whose claims are lodged or admitted to proof in the winding up, liquidation or sequestration of such Guarantor and who are unsubordinated creditors of such Guarantor.

(2) The term “Subordinated Creditors” means creditors of a Guarantor (including, without limitation, Holders of Securities described in Section 1304 (a) (i)) whose claims against such Guarantor are subordinated in the event of the winding up, liquidation or sequestration of such Guarantor in any manner to the claims of any unsecured and unsubordinated creditors of such Guarantor but excluding those subordinated creditors of such Guarantor (if any) whose claims rank or are expressed to rank junior to (i) the claims of the Trustee and the Holders of such Securities and/or (ii) the claims of any other creditors of such Guarantor whose claims rank or are expressed to rank pari passu with the claims of the Trustee and the Holders of such Securities.

(b)       Subordination of Guarantee issued in respect of Undated Securities.

(i) The rights and claims of the Trustee and the Holders of Undated Securities against the Guarantor under Section 1301 and under any Guarantee are subordinated, to the extent set forth in this Section 1304(b), to the claims of Senior Creditors (as defined below) of such Guarantor in that the payment of amounts guaranteed by such Guarantor under Section 1301 and under any Guarantee will be conditional upon such Guarantor being solvent at the time of payment by such Guarantor and in that no amounts guaranteed by such Guarantor under Section 1301 and under any Guarantee shall be payable except to the extent that such Guarantor could make such payment and still be solvent (whether or not it is being sequestrated, liquidated or is in winding up)

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immediately thereafter. In such circumstances, no amounts guaranteed under such Guarantee, which would otherwise fall due for payment shall fall so due (subject always to the provisions of the parenthetical clause in Section 503 (1)), and, instead, such payment shall become due for payment only if and when and to the extent that such Guarantor could make such payment in whole or in part and still be solvent (whether or not it is being sequestrated, liquidated or in winding up) immediately thereafter. For the purposes of this Section 1304(b), such Guarantor shall be considered to be solvent if (A) it is able to pay its debts to Senior Creditors (as defined below) as they fall due and (B) its Assets (as defined below) exceed its Liabilities (as defined below) to Senior Creditors. In addition, any such Guarantee shall rank pari passu with the obligations of such Guarantor in respect of, in the case when the Guarantor is HBOS, its €415,000,000 Fixed to Floating Rate Subordinated Extendable Maturity Notes 2048, ₤245,000,000 7.881 per cent. Subordinated Extendable Maturity Notes 2048, £300,000,000 7.50 per cent. Undated Subordinated Step-up Notes, €300,000,000 Floating Rate Undated Subordinated Step-up Notes, ¥42,500,000,000 3.50 per cent. Undated Subordinated Step-up Notes, £600,000,000 Undated Subordinated Notes, €500,000,000 Fixed to Floating Rate Undated Subordinated Notes, £500,000,000 5.75 per cent. Undated Subordinated Step-up Notes, $1,000,000,000 6.85 per cent. Undated Subordinated Notes and ₤600,000,000 5.75 per cent. Undated Subordinated Step-up Notes and, in the case when BOS is the Guarantor, its $250,000,000 Undated Floating Rate Primary Capital Notes, its £200,000,000 Perpetual Subordinated Notes, its £100,000,000 Instruments, its ¥17,000,000,000 Instruments, its £150,000,000 Instruments and its £150,000,000 Instruments.

(ii) A report in writing as to the solvency of the Guarantor by two Executive Officers of such Guarantor or the independent public accountants or auditors of such Guarantor or if such Guarantor has been sequestrated or liquidated or is being wound up, its liquidator or trustee shall, unless the contrary is proved, be treated and accepted by the Issuer, such Guarantor, the Trustee and the Holders of such Undated Securities as correct and sufficient evidence thereof.

For purposes of this Section 1304 (b):

(1) The term “Assets” means the non-consolidated gross assets of such Guarantor.

(2) The term “Liabilities” means the non-consolidated gross liabilities of such Guarantor as shown by the latest published audited balance sheet of such Guarantor, but adjusted for contingencies and for subsequent events in such manner and to such extent as such Executive Officers, independent public accountants or auditors, trustee or liquidator may determine to be appropriate.

(3) The term “Senior Creditors” means in relation to such Guarantor, creditors of such Guarantor (a) who are unsubordinated creditors of such Guarantor or (b) whose claims are, or are expressed to be, subordinated to the claims of depositors and/or other creditors, whether subordinated or unsubordinated of such Guarantor other than those whose claims rank or are expressed to rank pari passu with or junior to the claims of the Trustee and Holders of Undated Securities.

(c)       Certain Additional Limitations. In addition, in the event of the winding up, liquidation or sequestration of a Guarantor, if any payment or distribution of assets of such Guarantor of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of such Guarantor being subordinated to the payment under the Guarantee, shall be received by the Trustee or the Holders, before the claims of all Senior Creditors (as such term is defined, in the case of Securities other than Undated Securities, in Section 1304(a) and, in the case of Undated Securities, in Section 1304(b)) of such Guarantor have been paid in full, such payment or distribution shall be held in trust by the Trustee or the Holders, as applicable, for the benefit of, and shall be immediately returned by it or them to the liquidator or trustee of such Guarantor. Thereupon, such payment or distribution will be deemed not to have been made or received. If any of the said rights and claims of

96 

any Holder against such Guarantor is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the liquidator or trustee of such Guarantor and until such time as payment is made will hold a sum equal to such amount in trust for the liquidator or trustee of such Guarantor. Accordingly, such discharge will be deemed not to have taken place.

(d)       Claims of Trustee Unaffected. The provisions of this Section apply only to amounts payable under Section 1301 and under any Guarantee, and nothing in this Section shall affect or prejudice any claim by the Trustee against either of the Guarantors in respect of the costs, charges, expenses, liabilities, indemnification or remuneration of the Trustee.

(e)       No limitation on Guarantors’ Ability to Issue Debt or Guarantees. Nothing contained herein shall in any way restrict the right of either of the Guarantors to issue debt obligations, or to give any guarantee or indemnity of any nature, ranking in priority to or pari passu with or junior to the obligations of such Guarantor under its Guarantee in respect of the Securities and, if any modification to the provisions of this Section to permit such ranking is necessary or expedient, the Trustee is hereby authorized without the consent of the Holders of Securities to concur with HBOS and/or BOS, as the case may be, in executing a supplemental indenture effecting such modification.

SECTION 1305. HBOS and BOS Not to Permit Amendment of SIF’s Articles of Association.

Each of HBOS and BOS hereby covenants that it will not permit SIF’s Articles of Association to be amended or modified so as to eliminate or modify in any manner adverse to the interests of the Holders of Securities issued by SIF the provision thereof limiting SIF’s objects to the incurrence of subordinated debt obligations and the making of subordinated loans to HBOS and its Subsidiaries.

Article Fourteen

DEFEASANCE

SECTION 1401. Defeasance Upon Deposit of Cash or U.S. Government Obligations.

At the Issuer’s or a Guarantor’s option, either (a) the Issuer shall be deemed to be Discharged (as defined below) for its obligations with respect to any series of Securities and such Guarantor shall be deemed to be Discharged from its obligations with respect to the Guarantees relating to such Securities, on the 91st day after the applicable conditions set forth below have been satisfied, or (b) the Issuer and such Guarantor, as the case may be, shall cease to be under any obligation to comply with any term, provision or condition set forth in Sections 801 or 1005 and non-compliance with such Sections shall not give rise to any Default under Section 503 (4), with respect to any series of Securities, at any time after the applicable conditions set forth below have been satisfied:

(1) the Issuer or the Guarantor shall have deposited or caused to be deposited irrevocably with the Trustee or its agent as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of such Securities (i) cash, or (ii) U.S. Government Obligations, which, through the payment of interest and principal in respect thereof, in accordance with their terms, will provide, not later than the due date of any payment of money, an amount in cash, or (iii) a combination of (i) and (ii) above, in each case sufficient (in the case of (ii) and (iii), in the opinion of a firm of nationally recognized independent public accountants expressed in a written certification thereof delivered to the Trustee) to pay and discharge each installment of principal (including any mandatory sinking fund payments) of and any premium and interest on all the Securities of such series on the dates such installments of premium and interest, if any, or principal are due;

(2) no Event of Default or Default shall have occurred and be continuing on the date of such deposit;

(3) in the case of the Securities of such series being Discharged pursuant to clause (a) only, the Issuer or the Guarantor shall have delivered to the Trustee either (i) an Opinion of Counsel to the effect that Holders of the Securities of such series will not recognize income, gain or loss

97 

for United States Federal income tax purposes as a result of the Issuer’s or the Guarantor’s exercise of its option under clause (a) above and will be subject to United States Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised, or (ii) a ruling to that effect received from or published by the United States Internal Revenue Service; and

(4) If the Issuer or the Guarantor has deposited or caused to be deposited cash and/or U.S. Government Obligations to pay or discharge the principal of and interest on the Outstanding Securities of a series to and including a redemption date pursuant to clause (1) hereof, such redemption date shall be irrevocably designated by a Board Resolution delivered to the Trustee on or prior to the date of deposit of such cash and/or U.S. Government Obligations, and such Board Resolution shall be accompanied by an irrevocable Issuer Order that the Trustee give notice of such redemption in the name and at the expense of the Issuer or the Guarantor not less than 30 nor more than 60 days prior to such redemption date in accordance with Section 1104.

“Discharged” means that the Issuer shall be deemed to have paid and discharged the entire indebtedness represented by and obligations under the Securities of such series and to have satisfied all the obligations under this Indenture relating to the Securities of such series and the Guarantor shall be deemed to have satisfied all its obligations under this Indenture and with respect to the Guarantees relating to such Securities (and the Trustee at the expense of the Issuer and the Guarantor shall execute proper instruments acknowledging the same), except (A) the rights of the Holders of Securities of such series to receive from the trust fund described in clause (1) above payment of the principal of (and premium, if any) and any interest on such Securities when such payments are due; (B) the Issuer’s obligations with respect to such Securities under Sections 304, 305, 306, 607, 1002, 1003 and 1403; and (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder.

SECTION 1402. Repayment to Issuer and Guarantors.

The Trustee and any Paying Agent promptly shall pay to the Issuer or the Guarantors upon request any excess cash and/or U.S. Government Obligations held by them at any time.

SECTION 1403. Indemnity for U.S. Government Obligations.

The Issuer or the Guarantors shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

HBOS PLC
By	/s/ HBOS Plc
Name
Title

By	/s/ HBOS Plc
Name
Title

99 

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
By	/s/ The Governor and Company of the Bank of Scotland
Name
Title

By	/s/ The Governor and Company of the Bank of Scotland
Name
Title

100 

SCOTLAND INTERNATIONAL FINANCE NO. 2 B.V.
By	/s/ Scotland International Finance No. 2 B.V.
Name
Title

101 

THE BANK OF NEW YORK, as Trustee
By	/s/ The Bank of New York
Name:
Title:

102 

EX-10.9

Exhibit 10.9

EXECUTION COPY

HBOS PLC,

as Issuer

and

THE BANK OF NEW YORK,

as Trustee

SUPPLEMENTAL INDENTURE

Dated as of October 30, 2003

5.375% Undated Fixed to Floating Rate Subordinated Notes

Milbank, Tweed, Hadley & McCloy

London

SUPPLEMENTAL INDENTURE, dated as of October 30, 2003 (herein called the “Supplemental Indenture”), among HBOS PLC, a company incorporated in Scotland under the Companies Act 1985 with registered number SC218813, having its registered office at The Mound, Edinburgh, Scotland EH1 1YZ (in its capacity as issuer of Securities issued under the Original Indenture (as defined below) as amended and supplemented by this Supplemental Indenture, the “Issuer”) and THE BANK OF NEW YORK, a banking corporation duly organized and existing under the laws of the State of New York, as Trustee (the “Trustee”), having its Corporate Trust Office at 101 Barclay Street, New York, New York 10286.

RECITALS

The Issuer, The Governor and Company of the Bank of Scotland and Scotland International Finance No. 2 B.V. have heretofore executed and delivered to the Trustee an Amended and Restated Indenture, dated as of April 30, 2003, as amended and supplemented from time to time (hereinafter called the “Original Indenture”), to provide for the issuance from time to time of certain of their respective unsecured subordinated debentures, notes or other evidences of indebtedness (hereinafter called the “Securities”), the form and terms of which are to be established as set forth in Sections 201 and 301 of the Original Indenture;

Section 901 of the Original Indenture provides, among other things, that the Issuer and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of changing the provisions of the Original Indenture;

The Issuer desires to create a series of the Securities in an aggregate principal amount of up to $1,000,000,000 to be designated the “5.375% Undated Fixed to Floating Rate Subordinated Notes” (the “Subordinated Notes”) and all action on the part of the Issuer necessary to authorize the issuance of the Subordinated Notes under the Original Indenture and this Supplemental Indenture has been duly taken; and

All acts and things necessary have been done and performed to make the Subordinated Notes (when executed by the Issuer and completed, authenticated and delivered by the Trustee as provided in the Original Indenture, as amended and supplemented by this Supplemental Indenture) the valid and binding obligations of the Issuer and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms;

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That in consideration of the premises, the Issuer covenants and agrees with the Trustee, for the equal benefit of holders of the Subordinated Notes, as follows:

2

ARTICLE ONE

DEFINITIONS

Unless otherwise defined herein, the use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture and the form of Subordinated Note attached hereto as Exhibit A.

ARTICLE TWO

TERMS AND ISSUANCE OF THE SUBORDINATED NOTES

Section 201. Issue of Subordinated Notes. A series of Securities which shall be designated the “5.375% Undated Fixed to Floating Rate Subordinated Notes” shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of the Original Indenture as amended and supplemented by this Supplemental Indenture (including the form of Subordinated Note set forth as Exhibit A hereto). The aggregate principal amount of Subordinated Notes of the series created hereby which may be authenticated and delivered under the Original Indenture on October30, 2003 shall not, except as permitted by the provisions of the Original Indenture, exceed $1,000,000,000.

Section 202. Form of Subordinated Notes; Incorporation of Terms. The form of the Subordinated Notes shall be substantially in the form of Exhibit A attached hereto. The terms of such Subordinated Notes are herein incorporated by reference and are part of this Supplemental Indenture.

Section 203. Amendments. The Original Indenture is hereby amended as it relates to the Subordinated Notes as follows. The Original Indenture is not amended as it relates to any other series of Securities issued or to be issued thereunder.

(a) Section 107 is hereby deleted.

(b) Section 501 is amended and restated to read as follows:

‘“Event of Default”, wherever used herein means the making of an order by a court having jurisdiction in the premises or the passing of a shareholders’ resolution for the winding up (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) of the Issuer.’

(c) The second, third and fourth paragraphs of Section 503 are amended and restated to read as follows:

“The Issuer covenants that if (a) any Event of Default shall occur and be continuing the Issuer will and (b) any Default shall occur and be continuing, upon demand of the Trustee, the Issuer will, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest, if any, and interest on any overdue principal (and premium, if any) and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue interest, at the rate or rates prescribed therefor in such Securities; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

3

If the Issuer fails to pay such amounts forthwith upon such demand, the remedies of the Trustee, in its own name and as trustee of an express trust, shall be limited to petitioning for the bankruptcy, liquidation or winding up of the Issuer and proving the amounts due and payable and claiming in such bankruptcy, liquidation or winding up, provided that the maturity of any of the outstanding Subordinated Notes may not be accelerated except as provided in Section 502.

Upon the occurrence of an Event of Default or Default with respect to Securities of a particular series, Holders of such Securities shall not at any time be entitled to exercise any right of set-off or counterclaim which may be available to any such Holder against amounts owing by the Issuer in respect of such Securities. If, notwithstanding the provisions of the preceding sentence, any of the rights and claims of any Holder of such Securities is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the Issuer or, if applicable, the liquidator or trustee or receiver in bankruptcy of such Issuer to be held on trust for the unsubordinated creditors of the Issuer and until such time as payment is made will hold a sum equal to such amount in trust for the Issuer or, if applicable, the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not to have taken place.”

(d) The penultimate paragraph of Section 503 is hereby deleted.

(e) Section 507 is hereby amended by adding the following sentence at the end thereof:

“Notwithstanding the foregoing, the remedies of the Holders of any Subordinated Notes shall be limited to petitioning for the bankruptcy, liquidation or winding up of the Issuer and proving the amounts due and payable and claiming in such bankruptcy, liquidation or winding up, provided that the maturity of any of the outstanding Subordinated Notes may not be accelerated except as provided in Section 502.”

(f) Section 508 is hereby deleted.

(g) Section 510 is amended and restated to read as follows:

“The rights and remedies conferred upon or reserved to the Trustee or to the Holders by this Indenture are intended to be exclusive and shall preclude (to the extent lawful) all other rights and remedies, provided that the assertion or employment of any right or remedy available under this Indenture shall not prevent the assertion or employment of any other right or remedy under this Indenture.”

(h) Section 905 is hereby deleted.

(i)       Section 1006(d) is amended and restated to read as follows:

“(d)    Certain Additional Limitations. In the event of the bankruptcy, liquidation or winding up of the Issuer, if any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Issuer being subordinated to the payment of the Securities, shall be received by the Trustee or the Holders, before the claims of all Senior Creditors (as such term is defined in Section 1006(c)) of the Issuer have been paid in full, such payment or distribution shall be held in trust by the Trustee or such Holders, as applicable, and shall be immediately returned by it or them to the liquidator or trustee or receiver in bankruptcy of the Issuer to be held on trust for the unsubordinated creditors of the

4

Issuer. Thereupon, such payment or distribution will be deemed not to have been made or received. If any of the said rights and claims of any Holder against the Issuer is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the liquidator or trustee or receiver in bankruptcy of the Issuer to be held on trust for the unsubordinated creditors of the Issuer and until such time as payment is made will hold a sum equal to such amount in trust for the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not to have taken place.”

(j) Article 13 is deleted in its entirety.

ARTICLE THREE

MISCELLANEOUS

Section 301. Execution of Supplemental Indenture. This Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Supplemental Indenture forms a part thereof.

Section 302. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

Section 303. Successors and Assigns. All covenants and agreements in this Supplemental Indenture by the Issuer shall bind their respective successors and assigns, whether so expressed or not.

Section 304. Separability Clause. In case any provision in this Supplemental Indenture or in the Subordinated Notes 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 305. Benefits of Supplemental Indenture. Nothing in this Supplemental Indenture or in the Subordinated Notes, 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 this Supplemental Indenture.

Section 306. Governing Law. This Supplemental Indenture and each Subordinated Note (except as stated in Section 203 and Section 205 of the Original Indenture and except for Section 1006 of the Original Indenture) shall be governed by, and construed in accordance with, the laws of the State of New York. Section 1006 of the Original Indenture shall be governed by, and construed in accordance with, the laws of England.

Section 307. Execution and Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 308. Trustee Not Responsible for Recitals, etc.. The recitals contained herein shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture. The Trustee shall not be accountable for the use or application by the Issuer of the Notes or the proceeds thereof.

5

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

HBOS PLC
By:	/s/ HBOS Plc
Name:
Title:

THE BANK OF NEW YORK,
as Trustee
By:	/s/ The Bank of New York
Name:
Title:

6

EXHIBIT A
to Supplemental Indenture

[Form of Note]

[Form of Face of Note]

[If this Security is a Global Security, insert:]

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

IF THIS SECURITY IS A GLOBAL SECURITY AS INDICATED ON THE FACE HEREOF, UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED UPON SUCH TRANSFER OR EXCHANGE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER PERSON AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY SUCH PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER PERSON, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

[If the Security is a Restricted Security, insert:]

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY (1) ONLY IN MINIMUM PRINCIPAL AMOUNTS OF US$1,000 (OR THE EQUIVALENT THEREOF IN ANOTHER CURRENCY OR COMPOSITE CURRENCY) AND (2) PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE ISSUER OR TO AN AGENT THAT IS A PARTY TO THE AMENDED AND RESTATED PRIVATE PLACEMENT AGREEMENT DATED APRIL 30, 2003, AS AMENDED (AN “AGENT”), (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE HAS BEEN GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR IS BEING MADE TO A PERSON OTHER THAN A U.S. PERSON AS DEFINED IN THE SECURITIES ACT IN COMPLIANCE WITH

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REGULATION S UNDER THE SECURITIES ACT, AND A CERTIFICATE IN THE FORM OF ANNEX A ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEROR TO THE TRUSTEE, (D) TO AN INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION AND A CERTIFICATE IN THE FORM OF ANNEX B ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE TRUSTEE, (E) THROUGH AN AGENT TO AN INSTITUTIONAL PURCHASER THAT IS AN ACCREDITED INVESTOR (AS SO DEFINED) AND A CERTIFICATE IN THE FORM OF ANNEX A ATTACHED TO THIS SECURITY IS DELIVERED BY SUCH AGENT TO THE TRUSTEE OR (F) PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AS CONFIRMED IN AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER.

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REGISTERED REGISTERED

HBOS PLC

(a corporation incorporated in Scotland under the Companies Act 1985 

having its registered office at The Mound, Edinburgh, Scotland EH1 1YZ)

No. U.S. HBOS 007-[01]

CUSIP:	[Rule 144A Global Note:  4041A2AG9]
	[Regulation S Global Note: 4041A3AF9]
ISIN:	[Rule 144A Global Note:  US4041A2AG96]
	[Regulation S Global Note: US4041A3AF96]
Common Code:	[Rule 144A Global Note:  017938894]
	[Regulation S Global Note:  017938860]

MEDIUM-TERM SUBORDINATED NOTE 

(Undated Fixed to Floating Rate)

PRINCIPAL AMOUNT AND CURRENCY OR CURRENCY UNIT: USD [1,000,000,000]	INTEREST RESET MONTH(S): February, May, August and November.
DENOMINATIONS (if necessary): N/A	INTEREST RESET DATE(S): 1st of each such month.
OPTION TO RECEIVE PAYMENTS IN SPECIFIED CURRENCY: N/A	INITIAL INTEREST RESET DATE: November 1, 2013 (the “First Call Date”)
ORIGINAL ISSUE DATE: October 30, 2003	INTEREST DETERMINATION DATE(S): as provided below
STATED MATURITY: N/A	REGULAR RECORD DATE(S): Until the First Call Date: April 15th and October 15th. After the First Call Date: January 15th, April 15th, July 15th and October 15th.
COMPUTATION PERIOD: From the Original Issue Date until the First Call Date: 30/360. After the First Call Date: Actual/360	REDEMPTION DATE(S): The First Call Date and each Interest Payment Date thereafter.
INTEREST RATE (from the Original Issuer Date until the First Call Date): Fixed Rate of 5.375%  per annum (the “Initial Interest Rate”).	REDEMPTION PERCENTAGE(S): 100%
INTEREST RATE (after the First Call Date (defined below): Floating Rate of USD 3-month LIBOR plus 1.7025%.	CALCULATION AGENT (if other than the Paying Agent): N/A
INTEREST RATE BASIS: LIBOR	CALCULATION DATE: N/A
INDEX MATURITY: 3 months	EXCHANGE RATE AGENT (if other than the Paying Agent): N/A
SPREAD (PLUS OR MINUS): plus 1.7025%	UNLESS BOX IS CHECKED, SECURITY SHALL CONSTITUTE TIER 2 CAPITAL IN ACCORDANCE WITH AND SUBJECT TO THE REQUIREMENTS OF THE FINANCIAL SERVICES AUTHORITY IN EFFECT AT ORIGINAL ISSUE DATE:   [ ]
ALTERNATE RATE EVENT SPREAD: N/A	ADDITIONAL BUSINESS DAYS (if necessary): N/A
SPREAD MULTIPLIER: N/A	IF SECURITY IS GLOBAL SECURITY, CHECK BOX BELOW AND ATTACH “Schedule to Global Security”: [X]
MAXIMUM INTEREST RATE, IF ANY: N/A	ORIGINAL ISSUE DISCOUNT SECURITY:
MINIMUM INTEREST RATE, IF ANY: N/A	If applicable, the following will be completed solely for the purpose of applying the United States federal income tax original issue discount (“OID”) rules:

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INTEREST PAYMENT PERIOD: Until the First Call Date: Semi-annual After the First Call Date: Quarterly	TOTAL AMOUNT OF OID: N/A
INTEREST PAYMENT MONTH(S): Until the First Cal Date: May and November After the First Call Date: February, May, August and November.	OID AS PERCENTAGE OF PRINCIPAL AMOUNT: N/A
INTEREST PAYMENT DATE(S): 1st of each such month.	YIELD TO MATURITY: N/A
	SHORT ACCRUAL PERIOD OID: N/A

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HBOS plc (herein called the “Issuer”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to, or registered assigns, the principal amount specified above in the currency or currency unit so specified upon redemption hereof as provided below and to pay interest thereon, from and including the Original Issue Date of this Security specified above (the “Original Issue Date”) or from and including the most recent Interest Payment Date (as hereinafter defined) to which interest on this Security (or any predecessor Security) has been paid or duly provided for, at a rate per annum equal to the Initial Interest Rate specified above (the “Initial Interest Rate”) until the First Call Date and thereafter at a rate determined in accordance with the provisions on the reverse hereof under the heading “Determination of LIBOR”, until the principal hereof is paid or made available for payment. Such interest shall be payable by the Issuer quarterly or semi-annually as specified above under “Interest Payment Period” and such interest shall be payable by the Issuer on the “Interest Payment Date(s)” specified above of the month or months specified above under “Interest Payment Month(s)” in each year (or if any such day is not a Market Day (as defined on the reverse hereof) with respect to this Security, on the next succeeding Market Day (as defined on the reverse hereof) with respect to this Security or, following the First Call Date, if the next succeeding such Market Day falls in the next calendar month, the immediately preceding such Market Day) (each date so specified above or, if none is so specified, determined as herein provided, an “Interest Payment Date”) and upon redemption hereof, commencing on the first Interest Payment Date next succeeding the Original Issue Date. The interest so payable, and punctually paid or duly provided for, on any such Interest Payment Date will be paid to the person in whose name this Security (or one or more predecessor Securities) is registered at the close of business on the “Regular Record Date” specified above (the “Regular Record Date”); provided that interest payable upon redemption will be payable to the person to whom principal shall be payable. The interest payable hereon on any Interest Payment Date will be the interest accrued from and including the Original Issue Date or from and including the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, to but excluding such Interest Payment Date. Notwithstanding the foregoing, the interest payable upon redemption will include interest accrued to but excluding the date of such redemption. Accrued interest hereon shall be calculated by multiplying the face amount hereof by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated. The interest factor for each such day (expressed as a decimal rounded upwards, if necessary, as described below) shall be computed by dividing the interest rate (expressed as a decimal rounded upwards, if necessary, as described below) applicable to such day by the number of days in the “Computation Period” specified on the face hereof. Except as otherwise provided herein, all percentages resulting from any calculation with respect to this Security will be rounded, if necessary, to the nearest one-hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being rounded to 9.87654% (or .0987654)), and all dollar amounts and all amounts in Specified Currencies used in or resulting from such calculations will be rounded to the nearest cent and unit, respectively (with one-half cent and one-half unit being rounded upwards).

If this Security is a Global Security as indicated on the face hereof, the Depositary for any Security of this series which is a Global Security shall be The Depository Trust Company in New York City.

Payment of the principal of and premium, if any, and interest on this Security will be made upon presentation or, upon redemption, surrender of this Security at the corporate trust office of the Paying Agent (as defined on the reverse hereof), or such other office or agency of the Issuer maintained by it for that purpose in the Borough of Manhattan, The City of New York 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; provided that if this Security is a Global Security as indicated on the face hereof, payment to the Depositary may be made, by wire transfer to the account designated by the Depositary in writing; provided that if this Security is not a Global Security, payment of the principal of and any premium and interest on this Security due upon redemption will be made in immediately available funds at such corporate trust office or such other offices or agencies if this Security is presented to the Paying Agent or any other paying agent in time for the Paying Agent or such other paying agent to make such payments in accordance with its normal procedures; and provided, further, that, at the option of the Issuer, payment of interest (other than interest payable upon redemption) may be made by check mailed to the address of the person entitled thereto as such address shall appear in the Security Register (as defined on the reverse hereof) unless that address is in the Issuer’s country of incorporation or, if different, country of tax residence; and, provided, further,

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that notwithstanding the foregoing, a holder of US$10,000,000 or more in aggregate principal amount of Securities of this series having the same Interest Payment Date shall be entitled to receive payments of interest, other than interest due upon redemption, by wire transfer of immediately available funds to an account at a bank located in The City of New York (or other location consented to by the Issuer) if appropriate wire transfer instructions have been received by the Paying Agent or such other paying agent in writing not less than 15 calendar days prior to the applicable Interest Payment Date.

As provided in the Indenture, any amounts to be paid by the Issuer under this Security shall be paid without deduction or withholding for any and all present and future taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the country of incorporation of the Issuer, or, in the event that a Subsidiary assumes the obligations of the Issuer (an “Assuming Party”) in respect of the Securities of this series pursuant to the provisions of the Indenture, the country of incorporation of such Assuming Party, and, if different, the country of tax residence of the Issuer or such Assuming Party or, in each case, any political subdivision or taxing authority thereof or therein (the “Issuer Taxing Jurisdiction”), or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by the Issuer Taxing Jurisdiction, the Issuer will pay such additional amount in respect of principal, premium and interest as may be necessary in order that the net amounts paid to the Holder hereof or to the Trustee, as the case may be, pursuant to the Indenture, after such deduction or withholding shall equal the respective amounts of principal, premium and interest as specified herein to which such Holder or such Trustee would be entitled if no such deduction or withholding had been made; provided that the foregoing shall not apply to any such tax, levy, impost or other governmental charge (i) which would not be payable or due but for the fact that the beneficial owner or Holder hereof is a domiciliary, national or resident of, or engaging in business (whether through a branch, agency or otherwise) or maintaining a permanent establishment or being physically present in, the Issuer Taxing Jurisdiction or otherwise having some connection with the Issuer Taxing Jurisdiction other than the holding or ownership of this Security, or receiving income herefrom, or the enforcement hereof, (ii) which would not be payable or due but for the failure to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with the Issuer Taxing Jurisdiction required by any statute or regulation or by practice of the Issuer Taxing Jurisdiction as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, if compliance is possible pursuant to the provisions of any statute or regulation or by practice of the Issuer Taxing Jurisdiction as a condition to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, (iii) which would not be payable or due but for the fact that this Security was presented more than 30 days after the date such payment became due or was provided for, whichever is later, except to the extent that the Holder hereof would have been entitled to additional amounts on presenting the same for payment on or before the expiry of such period of 30 days, or (iv) which would not have been imposed if the beneficial owner of this Security had been the Holder of this Security or which, if the beneficial owner of this Security had been the Holder of this Security, would have been excluded pursuant to clauses (i) through (iii) inclusive above.

The Securities of this series may be redeemed as a whole at the option of the Issuer at any time at a redemption price equal to 100% of the principal amount hereof, together with accrued interest to the date fixed for redemption, if, at any time, the Issuer shall determine that as a result of any change in or amendment to the laws of the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision or taxing authority thereof or therein affecting taxation, or change in an application or interpretation of such laws, which change, amendment, application or interpretation becomes effective on or after the Original Issue Date or in the event that an Assuming Party assumes the obligations of the Issuer in respect of the Securities of this series pursuant to the terms of the Indenture, the date of such assumption (the “Relevant Date”) (i) in making any payment under the Securities or the Indenture, as the case may be, the Issuer would become obligated to pay additional amounts with respect thereto as a result of any taxes, levies, imposts or other governmental charges whatsoever imposed (whether by way of withholding or deduction or otherwise) by or for the account of the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision or taxing authority thereof or therein, (ii) based upon an opinion of legal advisors to the Issuer as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in, the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision thereof (whether or not such action was taken or brought with respect to the Issuer, which action is taken or brought on or after the Relevant Date, there is a substantial probability that the circumstances described in clause (i) would exist.

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If this Security constitutes Tier 2 Capital in accordance with the requirements of the Financial Services Authority, any such redemption requires the prior consent of the Financial Services Authority.

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.

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

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

Dated: _________, ____	HBOS PLC
	By:
	Title:

AUTHENTICATING AGENT’S CERTIFICATE OF

AUTHENTICATION

This is one of the Securities

of the series designated

therein referred to in the

within-mentioned Indenture.

By:	THE BANK OF NEW YORK,
	as Trustee
By:	CITIBANK, N.A., as Authenticating Agent
By:
	Authorized Signatory

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[FORM OF REVERSE OF SECURITY]

This Security is one of a duly authorized issue of Medium-Term Notes of the Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Amended and Restated Indenture dated as of April 30, 2003 (herein called the “Indenture”) among HBOS plc (the “Company”), The Governor and Company of the Bank of Scotland, Scotland International Finance No. 2 B.V. (“SIF No. 2”) and The Bank of New York, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. The series designated as “Medium-Term Notes”, of which this Security forms part, is limited in aggregate principal amount (or in the case of Original Issue Discount Securities or Securities with the amount payable in respect of principal or any premium or interest to be determined by reference to the value, rate or price of one or more specified indices (“Indexed Securities”), aggregate initial offering price) outstanding together with any other Medium-Term Notes issued by any issuer under the Indenture or the Amended and Restated Indenture dated as of April 30, 2003 among HBOS plc, The Governor and Company of the Bank of Scotland and HBOS Treasury Services plc (together with HBOS plc, The Governor and Company of the Bank of Scotland and Scotland International Finance No. 2 B.V. and any subsidiary designated by HBOS plc, the “US MTN Issuers”) and the Trustee or instruments issued by any Issuer under the US MTN Issuers’ and BOS International (Australia) Limited’s Euro Note Issuance Programme at any time up to US$65,000,000,000 on the date such Issuer agreed to issue such Securities). The terms of individual Securities may vary with respect to interest rates, interest rate formulas, issue dates, maturity dates, currencies or otherwise, all as provided in the Indenture. To the extent not inconsistent herewith, the terms of the Indenture are hereby incorporated by reference herein.

The Issuer has appointed Citibank, N.A. as the paying agent (the “Paying Agent”, which term includes any additional or successor Paying Agent appointed by the Issuer) with respect to the Securities, and the Trustee has appointed Citibank, N.A. as the authenticating agent (the “Authenticating Agent”, which term includes any additional or successor Authenticating Agent appointed by the Trustee) with respect to the Securities.

As used herein, the following terms have the following meaning: “London Market Day” means any day on which deposits in U.S. dollars are transacted in the London interbank market; “Market Day” means any day that is a Business Day in The City of New York.

This Security will not be subject to any sinking fund and is not subject to redemption or repayment at the option of the Holder prior to maturity except for redemption for the tax reasons specified on the face hereof and as otherwise provided on the face hereof in accordance with the provisions of the following paragraph.

This Security may be redeemed in whole or in part at the option of the Issuer (i) for the tax reasons specified on the face of this Security and (ii) on or after the Redemption Dates (or ranges of Redemption Dates) specified on the face hereof at a Redemption Price determined as provided in the next succeeding sentence, together with interest accrued and unpaid hereon to the Redemption Date (except as provided below). Unless otherwise specified on the face hereof, the “Redemption Price” for any such redemption shall be the amount determined by multiplying the Redemption Percentage specified on the face hereof with respect to the relevant Redemption Date (or ranges of such dates) by the portion of the principal amount hereof. Notice of redemption shall be mailed to the registered holders of the Securities designated for redemption at their addresses as the same shall appear on the Security Register not less than 30 nor more than 60 days prior to the date fixed for redemption, subject to all the conditions and provisions of the Indenture. In the event of redemption of this Security in part only, a new Security or Securities for the amount of the unredeemed portion hereof shall be issued in the name of the holder hereof upon the cancellation hereof.

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The interest rate in effect for the period from the Original Issue Date of this Security (or one or more predecessor Securities) to but excluding the first Interest Reset Date will be the Initial Interest Rate specified on the face hereof. On and after the First Call Date, the rate of interest on this Security will be reset quarterly (each date upon which interest is so reset as provided below being hereinafter referred to as an “Interest Reset Date”), and the interest rate in effect on any day shall be (a) if such day is an Interest Reset Date, the interest rate for such Interest Reset Date or (b) if such day is not an Interest Reset Date the interest rate for the immediately preceding Interest Reset Date. Notwithstanding the foregoing, the interest rate hereon shall not be greater than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate, if any, specified on the face hereof and in no event shall be higher than the maximum rate permitted by New York law, as the same may be modified by United States Federal law of general application. The Interest Reset Date with respect to this Security will be the “Interest Reset Date(s)” of each “Interest Reset Month(s)” on the face hereof. If, pursuant to the preceding sentence, any Interest Reset Date would otherwise be a day that is not a Market Day with respect to this Security, the Interest Reset Date shall be the next succeeding day that is a Market Day with respect to this Security, except that if the immediately succeeding such Market Day falls in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding such Market Day. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date the rate of interest on this Security shall be the rate determined in accordance with the provisions below.

Determination of LIBOR. The interest rate with respect to this Security for any Interest Reset Date shall be determined by the Calculation Agent in accordance with the following provisions:

(i)       On the second London Market Day prior to such Interest Reset Date (a “LIBOR Interest Determination Date”), the Calculation Agent will determine LIBOR on the basis of the offered rate for deposits of not less than U.S.$1,000,000 having the Index Maturity specified on the face hereof, commencing on the second London Market Day immediately following such LIBOR Interest Determination Date, which appears on the display designated as page 3740 or page 3750, as applicable on the Dow Jones Telerate Service (or such other page as may replace any such page on that service for the purpose of displaying London interbank offered rates of major banks for deposits in U.S. dollars) as of 11:00 A.M., London time, on that LIBOR Interest Determination Date, adjusted by the addition of the Spread specified on the face hereof; provided that no such offered rate appears, LIBOR for such LIBOR Interest Determination Date will be determined as described in (ii) below.

(ii)       If on any LIBOR Interest Determination Date no rate appears on Telerate Page 3740 or 3750 as described in (i) above, the Calculation Agent will request the principal London office of four major banks in the London interbank market, as selected by the Calculation Agent, to provide the Calculation Agent with its quotation at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date of the rate it offers to prime banks in the London interbank market for deposits in U.S. dollars having the Index Maturity shown on the face hereof and in a principal amount equal to an amount of not less than U.S.$1,000,000 that in the Calculation Agent’s judgment is representative for a single transaction in such market at such time. If at least two such quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean, as calculated by the Calculation Agent, of such quotations, adjusted by the addition or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on the face hereof. If fewer than two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean, as calculated by the Calculation Agent, of the rates quoted at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date by three major banks in London, England, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks, having the Index Maturity shown on the face hereof and in a principal amount equal to an amount of not less than U.S.$1,000,000 that in the Calculation Agent’s judgment is representative for a single transaction in such market at such time, adjusted by the addition of the Spread specified on the face hereof; provided that if the banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR will be the LIBOR in effect on such LIBOR Interest Determination Date.

Unless otherwise specified on the face hereof, the Calculation Date pertaining to any Interest Determination Date shall be the first to occur of (a) such interest determination date, and (b) the Market Day preceding the applicable Interest Payment Date (or the Redemption Date, if any) as the case may be. The Calculation Agent shall calculate the interest rate hereon in accordance with the foregoing on or before each Calculation Date. At the request of the Holder hereof, the Calculation Agent will provide to the Holder hereof the interest rate hereon then in effect and, if determined, the interest rate which will become effective as of the next Interest Reset Date. Unless otherwise specified on the face hereof, the Calculation Agent shall be the Paying Agent.

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In any case where any Interest Payment Date or Redemption Date of this Security shall not be a Business Day at any place of payment, then payment of principal of and premium or interest, if any, on this Security need not be made at such place of payment on such date, but may be made on the next succeeding Business Day at such place of payment with the same force and effect as if made on the Interest Payment Date or Redemption Date and no interest on such payment shall accrue for the period from and after such Interest Payment Date or Redemption Date and no interest on such payment shall accrue for the period from and after such Interest Payment Date or Redemption Date, as the case may be, to such next succeeding Business Day.

The indebtedness evidenced by this Security is, to the extent, and in the manner provided in Section 1006 of the Indenture, subordinated and subject in right of payment to the prior payment in full of the claims of all of the Senior Creditors (as defined in the Indenture) of the Issuer and this Security is issued subject to said Section 1006 of the Indenture, and each Holder of this Security, by accepting the same, agrees to and shall be bound by such provisions as provided in the Indenture. Amounts due and payable under the Securities shall be conditional (such condition is referred to as the “Solvency Condition”) upon the Issuer being solvent at the time of payment by the Issuer and in that no amount shall be payable under the Securities except to the extent that the Issuer could make such payment and still be solvent (whether or not it is bankrupt, being liquidated or is in winding up) immediately thereafter. In such circumstances, no amounts payable in respect of such amounts which would otherwise fall due for payment shall fall so due (subject always to the provisions of the parenthetical clause in Section 503(1) of the Indenture), and instead, such payment shall become due for payment only if and when and to the extent that the Issuer could make such payment in whole or in part and still be solvent (whether or not it is bankrupt or being liquidated or in winding up) immediately thereafter. Interest will continue to accrue on this Security, payment of which is suspended pursuant to the provisions of the immediately preceding sentence in accordance with the terms of this Security and the Indenture. For this purpose, the Issuer shall be considered to be solvent if (A) it is able to pay its debts to Senior Creditors (as defined in the Indenture) as they fall due and (B) its Assets (as defined in the Indenture) exceed its Liabilities (as defined in the Indenture) to Senior Creditors (as so defined). Amounts representing interest in respect of which the Solvency Condition is not satisfied on the due date for the payment thereof shall, so long as the same remains unpaid, constitute “Arrears of Interest” (to the extent described in the Indenture). Arrears of Interest in respect of Undated Securities shall not bear interest. Without prejudice to the foregoing provisions, the Issuer shall not be obliged to make payment of the interest accrued in respect of any period on the due date for the payment thereof (for the purposes of this paragraph and the immediately succeeding paragraph, “Accrual Period” and “Payment Date” respectively) if during the period of twelve months ending on such Payment Date no dividend or other Distribution (as defined in the Indenture) shall have been declared, paid or made on any class of stock or share capital of the Issuer; and all interest not so paid shall, so long as the same remains unpaid, constitute Arrears of Interest. The Issuer may, subject to the provisions of the immediately succeeding sentence, at its option (upon the expiry of not less than seven days’ notice to the Holders of the Securities given in accordance with the relevant provisions of the Securities) at any time pay all or part of the Arrears of Interest (being, if part only, the whole of the interest accrued on all of such Securities during any one or more Accrual Periods) but so that, in the case of any such partial payment, the interest accrued during any Accrual Period shall not be paid prior to that accrued during any earlier Accrual Period. If there are outstanding more than one series of Undated Securities, then the Issuer may not pay all or part of the Arrears of Interest in respect of any such series unless it pays all or (as near as practicable) an equivalent proportion of the Arrears of Interest in respect of each other series of its Undated Securities then outstanding. All Arrears of Interest shall (subject to satisfaction of the Solvency Condition and subject to Section 1006(c)(iv) of the Indenture) become due in full on the date on which any dividend or other Distribution (as defined in the Indenture) is next declared, paid or made on any class of stock or share capital of the Issuer or, if earlier, the date set for any redemption permitted under Section 1108 of the Indenture or any early redemption exercised at the option of the Issuer (other than a partial redemption) in accordance with the terms of the Securities or the commencement of the bankruptcy, liquidation or winding up of the Issuer.

If, at any time, an order is made for the liquidation or winding up of the Issuer or an effective resolution is passed for the winding up of the Issuer, this Security shall become due and payable in accordance with the provisions of this paragraph and the Issuer shall, in lieu of any other payment on this Security, but subject to satisfaction of the Solvency Condition, be obliged to pay, in respect of this Security, such amounts as would have been payable if the Holder of this Security had, on the day preceding the commencement of such liquidation or winding up, become a holder of preference stock or shares in the capital of the Issuer forming or being part of a class having a preferential right in the liquidation or winding up over the holders of all other classes of stock and shares in the capital of the Issuer and entitled to receive in such liquidation or winding up an amount equal to the Redemption Price and interest (if any) accrued since the Payment Date immediately preceding or coinciding with the commencement of such liquidation or winding up to the date of such repayment and all Arrears of Interest and/or, as the case may be, all such interest due but unpaid.

11

In addition, in the event of the bankruptcy, liquidation or winding up of the Issuer, if any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Issuer being subordinated to the payment of the Securities, shall be received by the Trustee or the Holders, before the claims of all Senior Creditors (as defined in the Indenture) of the Issuer have been paid in full, such payment or distribution shall be held in trust by the Trustee or such Holders, as applicable, and shall be immediately returned by it or them to the liquidator or trustee or receiver in bankruptcy of the Issuer to be held on trust for the unsubordinated creditors of the Issuer. Thereupon, such payment or distribution will be deemed not to have been made or received. If any of the said rights and claims of any Holder against the Issuer is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the liquidator or trustee or receiver in bankruptcy of the Issuer and until such time as payment is made will hold a sum equal to such amount in trust for the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not to have taken place.

The provisions of Section 1006 of the Indenture and the provisions of the three immediately preceding paragraphs relating to the subordination of the Securities shall be governed by, and shall be construed in accordance with, the laws of England.

The Indenture contains provisions for defeasance of the entire indebtedness of this Security.

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series shall, without any act of the Trustee or the Holder hereof, become immediately due and payable without presentment, demand, protest or other notice of any kind as provided in the Indenture.

If a Default with respect to Securities of this series shall occur and be continuing, the Issuer will, upon demand of the Trustee pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal, premium (if any) and interest (if any). Upon the occurrence of a Default with respect to Securities of this series, the Holder of this Security shall not at any time be entitled to exercise any right of set-off or counterclaim which may be available to any such Holder against amounts owing by the Issuer in respect of this Security. If, notwithstanding the provisions of the immediately preceding sentence, any of the rights and claims of the Holder of this Security is discharged by set-off, the Holder of this Security will immediately pay an amount equal to the amount of such discharge to the Issuer or, if applicable, the liquidator or trustee or receiver in bankruptcy of the Issuer to be held on trust for the unsubordinated creditors of the Issuer and until such time as payment is made will hold a sum equal to such amount in trust for the Issuer or, if applicable, the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not to have taken place.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer and the Trustee with the consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Securities at the time Outstanding of all series to be affected (voting as a class). The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and premium and interest, if any, on and certain additional amounts in respect of this Security at the times, place and rates, and in the coin or currency, herein prescribed.

12

If this Security is a Global Security as indicated on the face hereof, this Security shall be exchangeable for Securities registered in the names of Persons other than the Depositary with respect to such series or its nominee only as provided in this paragraph. This Security shall be so exchangeable if (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as Depositary for such series or at any time ceases to be a clearing agency registered as such under the Securities Exchange Act, (ii) the Issuer executes and delivers to the Trustee an Officer’s Certificate providing that this Security shall be so exchangeable or (iii) there shall have occurred and be continuing a Default or an Event of Default with respect to the Securities of such series. Securities so issued in exchange for this Security shall be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in authorized denominations and in the aggregate having the same principal amount as this Security and registered in such names as the Depositary for such Global Security shall direct.

If this Security is a Global Security as indicated on the face hereof, any Person having a beneficial interest in this Security may request the Depositary to instruct the Paying Agent to exchange all or part of such interest for a definitive Security upon receipt by the Paying Agent of a certification from such Person in the form of Annex A hereto, unless such Person is transferring such interest to an institution that is an “accredited investor”, as defined in Regulation D under the Securities Act, in which case, upon receipt by the Paying Agent of a certification from such transferee in the form of Annex B hereto. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Paying Agent, the aggregate principal amount of the Global Security to be reduced (such reduction to be reflected on the Schedule hereto) and, following such reduction, the Issuer will execute, and the Authenticating Agent will authenticate and deliver to such Person or such transferee, as the case may be, a definitive Security.

If this Security is a Global Security as indicated on the face hereof, at such time as all interests in this Security have either been exchanged for definitive Securities, redeemed, repurchased or cancelled, this Security shall be cancelled by the Paying Agent. At any time prior to such cancellation, if any interest in this Security is exchanged for definitive Securities, redeemed, repurchased or cancelled, the principal amount of Securities represented by this Security shall be reduced and the Paying Agent shall cause an endorsement to be made on the Schedule hereto to reflect such reduction.

[If this Security is a Global Security which is a Restricted Security, insert:] [Any Person having a beneficial interest in a Global Security which is a Restricted Security may request the Trustee to exchange all or part of such interest for another Global Security upon receipt by the Trustee of a certification from such Person in the form of Annex A to the Global Security to the effect that such transaction complies with the requirements of Regulation S promulgated under the Securities Act. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security being transferred to be reduced (such reduction to be reflected on the Schedule thereto) and, following such reduction, the aggregate principal amount of the Global Security being purchased to be increased (such increase to be reflected in the Schedule thereto). If following such increase the aggregate principal amount of the Global Security being purchased (as reflected in the Schedule thereto) exceeds the aggregate face amount thereof, the Issuer will execute, and the Trustee will authenticate and deliver to the Depositary, a Global Security having an aggregate face amount equal to such aggregate principal amount.]

[If this Security is a definitive Security which is a Restricted Security, insert:] [This Security shall be exchangeable in whole or in part for a beneficial interest in a Global Security registered in the name of the Depositary with respect to such series or its nominee if the Holder delivers this Security to the Trustee and instructs the Trustee to exchange all or part of this Security for a beneficial interest in a Global Security; provided that this Restricted Security may not be exchanged for a beneficial interest in a Global Security except upon receipt by the Trustee of a certification by the Holder to the effect that (i) such Holder is, or believes such Holder’s transferee is, as the case may be, a “Qualified Institutional Buyer”, as defined in Rule 144A promulgated under the Securities Act, or (ii) such transaction complies with the requirements of Regulation S promulgated under the Securities Act, in each case substantially in the form of Annex A hereto. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security to be increased (such increase to be reflected on the Schedule thereto). If necessary as a result of such an exchange, the Issuer will execute, and the Trustee will authenticate and

13

deliver to such Holder or such transferee, a definitive Security. If following such increase the aggregate principal amount of the Global Security (as reflected in the Schedule thereto) exceeds the aggregate face amount thereof, the Issuer will execute and the Trustee will authenticate and deliver to the Depositary, a Global Security having an aggregate face amount equal to such aggregate principal amount.]

The Paying Agent has been appointed registrar (the “Security Registrar”) for the Securities, and the Paying Agent will maintain at its office in The City of New York a register for the registration and transfer of the Securities (the “Security Register”). As provided in the Indenture and subject to certain limitations therein set forth, the transfer of (if this Security is a Global Security as indicated on the face hereof) a Security of the series of which this Security is a part or (if this Security is not a Global Security) this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the aforesaid office of the Paying Agent, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and with identical terms, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities of (if this Security is a Global Security as indicated on the face hereof) the series of which this Security is a part or (if this Security is not a Global Security) this series are issuable only in registered form without coupons in denominations of US$1,000 and in integral multiples of US$1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series with identical terms of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Issuer, the Trustee, the Paying Agent and any agent of the Issuer or the Trustee or the Paying Agent 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 Issuer, the Trustee, the Paying Agent 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.

All terms used in this Security which are defined in the Indenture and not defined herein shall have the meanings assigned to them in the Indenture.

14

__________________

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM	-	as tenants in common
TEN ENT	-	as tenants by the entireties
JT TEN	-	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT
MIN ACT	-		Custodian
		(Custodian)
			Under Uniform
		(Minor)
		Gifts to Minors Act (________________)
		(State)

Additional abbreviations may also be used though not in the above list.

__________________

15

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

_____________________________________________________________

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

_____________________________________________________________

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

_____________________________________________________________

_____________________________________________________________

the within Security and all rights thereunder, hereby irrevocably constituting and appointing _____________________

attorney to transfer said Security on the books of the Issuer, with full power of substitution in the premises.

Date:_______________     X                                     NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever.

THIS SECURITY IS SUBJECT TO THE TRANSFER RESTRICTIONS DESCRIBED IN THE LEGEND ON THE FACE HEREOF AND IN THE PROVISIONS SET FORTH ON THE REVERSE OF THIS SECURITY. TRANSFERS OF THIS SECURITY IN WHOLE OR IN PART REQUIRE DELIVERY TO THE PAYING AGENT OF AN APPROPRIATELY COMPLETED AND EXECUTED CERTIFICATE IN THE FORM OF EXHIBIT A OR EXHIBIT B TO THIS SECURITY, AS THE CASE MAY BE, AT THE ADDRESS SET FORTH IN SUCH CERTIFICATES.

16

[INSERT EXHIBITS A AND B FROM U.S. OFFERING MEMORANDUM AS ANNEX A AND ANNEX B, RESPECTIVELY, TO THIS NOTE]

17

[IF THIS IS A GLOBAL SECURITY AS INDICATED ON THE FACE HEREOF, THIS SCHEDULE FORMS PART OF THE SECURITY]

Schedule to Global Security

Interest, Principal Payments, Exchanges,

Redemptions and Purchases

The following payments of interest, increases in this Global Security resulting from exchanges of all or portions of definitive Securities for interests herein, and decreases in the principal amount hereof resulting from principal payments, redemptions, and exchanges of portions hereof for definitive Securities and purchases of Securities represented hereby have been made:

Date of payment, exchange, redemp-tions or purchase	Amount of Interest Payment	Increase in principal amount of this Global Security resulting from exchange of all or portions of definitive Securities	Portion of principal amount of this Global Security paid or exchanged for definitive Bonds or redeemed or purchased	Aggregate outstanding principal amount of this Global Security following such payment, exchange, redemption purchase	Notation made by
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________
________	_________	____________	___________	______________	________

1

EX-10.11

 Exhibit 10.11

EXECUTION VERSION

LLOYDS BANKING GROUP PLC

as Issuer,

and

THE BANK OF NEW YORK MELLON,
acting through its London Branch

as Trustee

FIFTH SUPPLEMENTAL INDENTURE

dated as of November 14, 2016

to

THE SUBORDINATED DEBT SECURITIES INDENTURE

dated as of November 4, 2014

table of contents

 Page

ARTICLE 1
DEFINITIONS
Section 1.01.  Definition of Terms	2
ARTICLE 2
FORM OF SECURITIES
Section 2.01.  Terms of the Securities	2
ARTICLE 3
ADDITIONAL TERMS APPLICABLE TO THE SECURITIES
Section 3.01.  Addition of Definitions	4
Section 3.02.  Amendment of Definition	5
Section 3.03.  Deletion of Definitions	6
Section 3.04.  Deletion of Deferred Payment Provisions	8
Section 3.05.  Deletion of Exchange Provisions	9
Section 3.06. Correction of Minor Defects in or Amendment of Subordinated Debt Securities	10
Section 3.07.  Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee	10
Section 3.08.  Deletion of Satisfaction and Discharge Provisions	12
Section 3.09. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any	12
Section 3.10.  Undertaking for Costs	12
Section 3.11.  Redemption and Repurchases of Subordinated Debt Securities	13
Section 3.12.  Exchanges Not Deemed Payment	16
Section 3.13.  Exchange of Subordinated Debt Securities	16
Section 3.14.  Events of Default. With respect to the Securities only:	16
Section 3.15.  Compensation and Reimbursement	17
Section 3.16.  Certain Rights of Trustee	18
Section 3.17. Subordinated Debt Securities Subordinate to Claims of Senior Creditors	18
Section 3.18.  Reliance on Judicial Order or Certificate of Liquidating Agent	19
Section 3.19.  Additional Subordinated Debt Securities	19
Section 3.20.  Agreement with Respect to Exercise of U.K. Bail-In Power	20
ARTICLE 4
AMENDMENTS TO THE SUBORDINATED INDENTURE
Section 4.01.  Appointment of Agent for Service	22

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Section 4.02.  Notices to Trustee	23
Section 4.03. Additional Amounts	24
ARTICLE 5
MISCELLANEOUS
Section 5.01.  Effect Of Supplemental Indenture	26
Section 5.02.  Other Documents to be Given to the Trustee	26
Section 5.03.  Confirmation Of Indenture	27
Section 5.04.  Concerning The Trustee	27
Section 5.05. Governing Law	27
Section 5.06.  Separability	27
Section 5.07.  Counterparts	27
Section 5.08.  Concerning BRRD Liability	27

ii 

FIFTH SUPPLEMENTAL INDENTURE (“Fifth Supplemental Indenture”), dated as of November 14, 2016, between LLOYDS BANKING GROUP PLC, a corporation incorporated in Scotland with registered number 95000, and with its principal executive offices located at 25 Gresham Street, London EC2V 7HN, United Kingdom, as issuer (the “Company”) and THE BANK OF NEW YORK MELLON, acting through its London Branch, as trustee (the “Trustee”).

WITNESSETH

WHEREAS, the Company and the Trustee have executed and delivered a Subordinated Debt Securities Indenture dated as of November 4, 2014 (the “Subordinated Indenture,” and together with this Fifth Supplemental Indenture, the “Indenture”) to provide for the issuance of the Company’s subordinated debt securities (the “Subordinated Debt Securities”), including the Securities (as defined below).

WHEREAS, Section 9.01(d) of the Subordinated Indenture permits the Company and the Trustee to add to, change or eliminate any provisions of the Subordinated Indenture without the consent of Holders as permitted under Sections 2.01 and 3.01 of the Subordinated Indenture, subject to certain conditions;

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

WHEREAS, there are no debt securities Outstanding of any series created prior to the execution of this Fifth Supplemental Indenture which are entitled to the benefit of the provisions set forth herein or would be adversely affected by such provisions;

WHEREAS, the Board of Directors has authorized the entry into this Fifth Supplemental Indenture, as required by Section 9.01 of the Subordinated Indenture;

WHEREAS, the parties hereto desire to establish a series of Subordinated Debt Securities to be known as the $824,033,000 5.300% Subordinated Debt Securities due 2045 (the “Securities”) pursuant to Sections 2.01 and 3.01 of the Subordinated Indenture. The Securities may be issued from time to time and any Securities issued as part of this series will constitute a single series of Securities under the Indenture and shall be included in the definition of “Securities” where the context requires;

WHEREAS, the Company has requested that the Trustee execute and deliver this Fifth Supplemental Indenture and whereas all actions required by it to be taken in order to make this Fifth 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 Fifth Supplemental Indenture has been duly authorized in all respects; and

WHEREAS, where indicated, this Fifth Supplemental Indenture shall amend and supplement the Subordinated Indenture; to the extent that the terms of the Subordinated

Indenture are inconsistent with such provisions of this Fifth Supplemental Indenture, the terms of this Fifth Supplemental Indenture shall govern.

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 Fifth Supplemental Indenture:

(a)       a term defined anywhere in this Fifth 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 Subordinated Indenture;

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

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

(e)       for the purposes of this Fifth Supplemental Indenture and the Subordinated Indenture, the term “series” shall mean a series of Securities.

ARTICLE 2
FORM OF SECURITIES

Section 2.01. Terms of the Securities.

The following terms relating to the Securities are hereby established pursuant to Section 3.01 of the Subordinated Indenture:

(a)       The title of the Securities shall be: the 5.300% Subordinated Debt Securities due 2045 (the “Securities”);

(b)       The aggregate principal amount of the Securities that may be authenticated and delivered under the Indenture shall not exceed $824,033,000, except as otherwise provided in the Indenture;

(c)       Principal on the Securities shall be payable on December 1, 2045;

(d)       The Securities shall be issued in global registered form on November 14, 2016 and shall bear interest from June 1, 2016 payable semi-annually in arrears on June 1 and December 1 (each, an “Interest Payment Date”), commencing December 1, 2016. The Securities shall bear an annual interest rate of 5.300%.

2 

Interest on the Securities will be calculated on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such period. The Regular Record Dates for the Securities will be 15 calendar days immediately preceding the relevant Interest Payment Date, whether or not a Business Day;

(e)       No premium, upon redemption or otherwise, shall be payable by the Company on the Securities;

(f)       Principal of and any interest on the Securities shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom;

(g)       The Securities shall not be redeemable except as provided in Article 11 of the Subordinated Indenture, as supplemented by the Fifth Supplemental Indenture;

(h)       The Company shall have no obligation to redeem or purchase the Securities pursuant to any sinking fund or analogous provision;

(i)       The Securities shall be issued only in denominations of $200,000 and in integral multiples of $1,000 in excess thereof;

(j)       The principal amount of the Securities shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Subordinated Indenture, as amended by this Fifth Supplemental Indenture;

(k)       Additional Amounts in respect of the Securities shall be payable as set forth in the Subordinated Indenture, as supplemented by this Fifth Supplemental Indenture;

(l)       The Securities shall not be converted into or exchanged at the option of the Company;

(m)       The Securities shall be denominated in, and payments thereon shall be made in, U.S. Dollars;

(n)       The payment of principal of (and premium, if any) or interest, if any, on the Securities shall be payable only in the coin or currency in which the Securities are denominated;

(o)       The Securities will be issued in the form of one or more global securities in registered form, without coupons attached, and the initial Holder with respect to each such global security shall be Cede & Co., as nominee of The Depository Trust Company;

(p)       The Securities will not be initially issued in definitive form;

(q)       There is no Calculation Agent for the Securities;

3 

(r)       The Events of Default on the Securities are as provided for in Section 5.01 of the Subordinated Indenture, as amended by the Fifth Supplemental Indenture;

(s)       The subordination terms of the Securities are as provided for in Article 12 of the Subordinated Indenture as amended by Section 3.17 of this Fifth Supplemental Indenture;

(t)       The form of the Securities to be issued on the date hereof shall be substantially in the form of Exhibit A hereto; and

(u)       The Company may issue additional Securities (“Additional Notes”) after the date hereof having the same ranking and same interest rate, Maturity, redemption terms and other terms as the Securities except for the price to the public, issue date, first Interest Payment Date and temporary CUSIP, ISIN and/or other identifying numbers, provided that such Additional Notes must be fungible with the outstanding Securities for U.S. federal income tax purposes. Any such Additional Notes, together with the Securities will constitute a single series of securities under the Indenture.

ARTICLE 3
ADDITIONAL TERMS APPLICABLE TO THE SECURITIES

Section 3.01. Addition of Definitions. With respect to the Securities only, Section 1.01 of the Subordinated Indenture is amended to include the following definitions (which shall be deemed to arise in Section 1.01 in their proper alphabetical order):

“Beneficial Owners” shall mean (a) if any Subordinated Debt Securities are in global form, the beneficial owners of the Subordinated Debt Securities (and any interest therein) and (b) if the Subordinated Debt Securities are held in definitive form, the holders in whose names the Subordinated Debt Securities are registered in the Subordinated Debt Security Register and any beneficial owners holding an interest in such Subordinated Debt Securities held in definitive form.

“Electronic Means” shall mean the following communications methods: S.W.I.F.T., e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder.

“Group” means the Company together with its subsidiaries and associated undertakings.

“Issue Date” means November 14, 2016, being the date of the initial issue of the Securities.

“Maturity” means December 1, 2045.

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“Regulatory Capital Requirements” means any applicable minimum capital or capital requirements specified for banks or financial groups by the Relevant Regulator.

“Relevant Regulator” means the U.K. Prudential Regulatory Authority or such other governmental authority in the United Kingdom (or if the Company becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary supervisory authority with respect to the Company and/or the Group.

“relevant U.K. resolution authority” means any authority with the ability to exercise a U.K. bail-in power.

“U.K. bail-in power” means any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company and the Group, including but not limited to any such laws, regulations, rules or requirements which 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 U.K. resolution regime under the Banking Act 2009 as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person.

Section 3.02. Amendment of Definition. With respect to the Securities only, the following definitions shall be amended in their entirety in Section 1.01 of the Subordinated Indenture:

“Business Day” shall mean any day, other than Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in the City of New York or in the City of London.

“Capital Disqualification Event” shall be deemed to have occurred if at any time the Company determines that as a result of a change (which has occurred or which the Relevant Regulator considers to be sufficiently certain) in the regulatory classification of the Securities which becomes effective after the Issue Date, and that results, or would be likely to result, in the entire principal amount of the Securities being excluded from the Tier 2 Capital of the Company.

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“Executive Officer” means any individual authorized or designated by the Board of Directors through a power of attorney or otherwise for the purpose of executing this Subordinated Indenture and any other certificates, forms, notes and ancillary documents in connection therewith.

“Senior Creditors” means in respect of the Company (i) creditors of the Company whose claims are admitted to proof in the winding-up or administration of the Company and who are unsubordinated creditors of the Company and (ii) creditors of the Company whose claims are or are expressed to be subordinated to the claims of other creditors of the Company (other than those whose claims constitute, or would, but for any applicable limitation on the amount of such capital, constitute Tier 1 Capital or Tier 2 Capital of the Company, or whose claims rank or are expressed to rank pari passu with, or junior to, the claims of holders of the Securities).

“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.

Section 3.03. Deletion of Definitions. With respect to the Securities only, the following definitions shall be deleted in their entirety in Section 1.01 of the Subordinated Indenture:

“ADR Custodian” means the custodian under the ADR Deposit Agreement.

“ADR Deposit Agreement” means the deposit agreement between the Company and The Bank of New York Mellon (previously named The Bank of New York) and the holders from time to time of American Depositary Receipts issued thereunder.

“ADR Depositary” means the depositary under the ADR Deposit Agreement.

“Applicable Banking Regulations” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy 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 PRA, 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).

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“Capital Resources Requirement” and “Overall Financial Adequacy Rule” have the respective meanings given to such terms in the Applicable Banking Regulations and shall include any successor terms from time to time equivalent thereto as agreed between the Company and the Trustee.

“CRD IV” means, taken together, (i) the CRD IV Directive, (ii) the CRD IV Regulation and (iii) applicable capital adequacy banking regulations then in effect in the United Kingdom.

“CRD IV Directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, and any successor directive.

“CRD IV Regulation” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms amending Regulation (EU) No 648/2012, and any successor regulation.

“Deferred Amounts” means any Deferred Interest (including any interest amounts accrued thereon) and any amount of principal and/or premium payment of which has been deferred pursuant to Section 3.07 (including any interest amounts accrued thereon) which has not been satisfied.

“Deferred Interest” has the meaning specified in Section 3.07.

“Deferred Payment Date” has the meaning specified in Section 3.07.

“Deferred Record Date”, when used for the interest payable on any Deferred Payment Date on Subordinated Debt Securities of any series, means the date specified for the purpose pursuant to Section 3.01.

“Exchange Date”, when used with respect to any applicable series of Subordinated Debt Securities, has the meaning specified in Section 13.03.

“Exchange Securities” means securities issued by the Company provided that such securities shall contain terms which comply with the then current requirements of the PRA in relation to Tier 2 Capital or Tier 1 Capital).

“Foreign Currency” means the euro or any currency issued by the government of any country (or a group of countries or participating member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts.

“Foreign Government Securities” means with respect to Subordinated Debt Securities of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that

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issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.

“Liquidator” has the meaning specified in Section 12.06.

“U.S. Government Obligations” means non-callable (i) direct obligations of the United States for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.

Section 3.04. Deletion of Deferred Payment Provisions. With respect to the Securities only, the following Sections of the Subordinated Indenture are amended and restated in their entirety and shall read as follows:

Section 3.01. Amount Unlimited, Issuable in Series.

(d)       the rate or rates, if any, at which the Subordinated Debt Securities of the series shall accrue interest or the manner of calculation of such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07, and, in the case of registered Subordinated Debt Securities, the Regular Record Date for the interest payable on any Interest Payment Date, and any dates required to be established pursuant to Section 7.01;

Section 3.07. Payment; Interest Rights Preserved. Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, interest, if any, on any Subordinated Debt Securities which is payable, and is paid or duly provided for, on any Interest Payment Date shall be paid, in the case of registered Subordinated Debt Securities, to the Person in whose name that Subordinated Debt Security (or one

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or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest or, in the case of Global Securities held by any Holder, to the Holder including through a Paying Agent of the Company designated pursuant to Section 3.01 outside the United Kingdom for collection by the Holder.

In the case of registered Subordinated Debt Securities where payment is to be made in Dollars, payment at any Paying Agent’s office outside The City of New York will be made in Dollars by check drawn on, or, at the request of the Holder, by transfer to a Dollar account maintained by the payee with, a bank in The City of New York.

Section 11.06. Subordinated Debt Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Subordinated Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Subordinated Debt Securities shall cease to accrue interest. Upon surrender of any such Subordinated Debt Security for redemption in accordance with said notice, such Subordinated Debt Security shall be paid by the Company at the Redemption Price, together with accrued but unpaid interest to the Redemption Date; provided, however, that with respect to any Subordinated Debt Securities in registered form, unless otherwise specified as contemplated by Section 3.01, a payment of interest which is payable on an Interest Payment Date which is the Redemption Date, shall be payable to the Holders of such Subordinated Debt Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Date according to the terms of the Subordinated Debt Securities and the provisions of Section 3.07. Subordinated Debt Securities in definitive form shall be presented for redemption to the Paying Agent.

If any Subordinated Debt Security called for redemption shall not be so paid upon surrender thereof for redemption, the Subordinated Debt Security shall, until paid, continue to accrue interest from and after the Redemption Date in accordance with its terms and the provisions of Section 3.07.

Section 3.05. Deletion of Exchange Provisions. With respect to the Securities only:

(i)       Sections 1.13 and 9.02(a) of the Subordinated Indenture is amended by deleting the reference to “Exchange Date” therein,

(ii)       Section 3.01(l) of the Subordinated Indenture is amended and restated in its entirety and shall read as follows:

(l)       [Reserved];

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(iii)       Section 3.05 of the Subordinated Indenture is amended by deleting the following paragraph:

In the event that a Global Security is surrendered for redemption or exchange for Preference Shares or Exchange Securities in part pursuant to Section 11.07 or Section 13.05, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.

(iv)       Section 3.05(b) of the Subordinated Indenture is amended and restated in its entirety as follows:

(b)       Except as otherwise specified pursuant to Section 3.01, Subordinated Debt Securities of any series may only be exchanged for a like aggregate principal amount of Subordinated Debt Securities of such series of other authorized denominations containing identical terms and provisions. Subordinated Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Subordinated Debt Security or Subordinated Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.

Section 3.06. Correction of Minor Defects in or Amendment of Subordinated Debt Securities. With respect to the Securities only, Article 3 of the Subordinated Indenture is amended by adding Section 3.13, which shall read as follows:

Section 3.13. Correction of Minor Defects in or Amendment of Subordinated Debt Securities. If the Company or the Trustee shall become aware of any ambiguity, defect or inconsistency in any term of a Subordinated Debt Security or Global Security, as the case may be, or, with respect to any Subordinated Debt Security (including any Global Security) issued on or after the date hereof, the Company and the Trustee may amend such Subordinated Debt Security (including any Global Security) as contemplated by Section 9.01(h) (subject to Section 9.07) and the parties hereto shall provide for the execution, authentication, delivery and dating of one or more replacement Subordinated Debt Securities or Global Securities, as the case may be, pursuant to Section 3.03 hereto, provided, however, that such amendment is not materially adverse to Holders of any Outstanding Subordinated Debt Securities.

Section 3.07. Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee. With respect to the Securities only, to amend the following sections of the Subordinated Indenture in part:

(i)       to amend and restate, each in its entirety, Sections 5.03(a) and 5.03(b), which shall read as follows:

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(a)       the Company fails to pay any installment of interest on any Subordinated Debt Security of such series on or before its Interest Payment Date and such failure continues for 14 days; or

(b)       the Company fails to pay all or any part of the principal of any Subordinated Debt Security of such series on any date on which such principal shall otherwise have become due and payable, whether upon redemption or otherwise, and such failure continues for seven days.

(ii)       to amend and restate the second paragraph of Sections 5.03 in its entirety, which shall read as follows:

If a Default occurs, the Trustee may commence a proceeding for the winding-up of the Company and/or prove in a winding-up of the Company or a Qualifying Administration, provided that the Trustee may not declare the principal amount of any Outstanding Subordinated Debt Security to be due and payable.

(iii)       to amend and restate the third paragraph of Sections 5.03 in its entirety, which shall read as follows:

Subject to applicable law, no Holder may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation or retention in respect of any amount owed to it by the Company arising under or in connection with the Subordinated Debt Securities. The Holders of Subordinated Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off, counterclaim, combination of accounts, compensation and retention with respect to the Subordinated Debt Securities or this Subordinated Indenture (or between the obligations under or in respect of any Subordinated Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company, whether before or during a winding-up, liquidation of the Company or a Qualifying Administration. Notwithstanding the above, if any of such rights and claims of any such Holder against the Company are discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the Company or, in the event of the winding up of the Company or a Qualifying Administration, the liquidator or administrator (or other relevant insolvency official), as the case may be, and until such time as payment is made will hold a sum equal to such amount in trust for the Company or the liquidator or administrator (or other relevant insolvency official), as the case may be, and accordingly such discharge shall be deemed not to have taken place.

(iv)       to amend and restate the fifth paragraph of Sections 5.03 in its entirety, which shall read as follows:

Except as otherwise provided in this Article 5, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Subordinated Debt Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any

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such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law, provided, however, that the Company shall not, as a result of the bringing of such judicial proceedings, be required to pay any amount representing or measured by reference to the principal of, or any interest on, the Subordinated Debt Securities prior to any date on which the principal of, or any interest on, the Subordinated Debt Securities would have otherwise been payable by the Company.

(v)       to add the following sentence at the end of Sections 5.03:

No remedy against the Company other than as referred to in this Article 5 shall be available to the Trustee or the Holders, whether for the recovery of amounts owing in respect of the Subordinated Debt Securities or under this Subordinated Indenture or in respect of any breach by the Company of any of its other obligations under or in respect of the Subordinated Debt Securities or under this Subordinated Indenture, except that the Trustee and the Holders shall have such rights and powers as they are required to have under the Trust Indenture Act.

(vi)       to amend and restate Section 5.12(a) in its entirety, which shall read as follows:

(a)       such direction shall not be in conflict with any rule of law or with this Subordinated Indenture or shall not expose the Trustee to undue risk;

Section 3.08. Deletion of Satisfaction and Discharge Provisions. With respect to the Securities only, Article 4 of the Subordinated Indenture is deleted in its entirety.

Section 3.09. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any. With respect to the Securities only, Section 5.08 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

Section 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any. Subject to Section 12.01 in relation to subordination of Subordinated Debt Securities, and notwithstanding any other provision in this Subordinated Indenture, the Holder of any Subordinated Debt Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and interest, if any, on such Subordinated Debt Security on the respective Stated Maturities as expressed in such Subordinated Debt Security (or, in the case of redemption, on the Redemption Date) and, subject to Section 5.07, to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder or holder.

Section 3.10. Undertaking for Costs. With respect to the Securities only, Section 5.14 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

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Section 5.14. Undertaking for Costs. All parties to this Subordinated Indenture agree, and each Holder of any Subordinated Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Subordinated Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Subordinated Debt Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security on or after the respective Stated Maturities expressed in such Subordinated Debt Security (or, in the case of redemption, on or after the Redemption Date).

Section 3.11. Redemption and Repurchases of Subordinated Debt Securities. With respect to the Securities only, Article 11 of the Subordinated Indenture is amended by amending and restating Sections 11.01, 11.08, 11.09 and 11.10 in their entirety, and by adding Section 11.11, each of which shall read as follows:

Section 11.01. Applicability of Article. Subordinated Debt Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series) in accordance with this Article 11. Subordinated Debt Securities of any series may not be redeemed except in accordance with provisions of applicable law, applicable provisions of the Regulatory Capital Requirements Regulations and Section 11.11 below. The Subordinated Debt Securities of any series may not be redeemed in whole or in part at the option of the Holder thereof.

Section 11.08. Optional Tax Redemption.

(a)       Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities and subject always to Section 11.11 below, the Company will have the option to redeem the relevant series of Subordinated Debt Securities, as a whole but not in part, having given notice in accordance with Section 11.04 hereof, 100% of the principal amount of the Subordinated Debt 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 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

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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 in law, if such change is 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 Subordinated Debt 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 Subordinated Debt Securities from being treated as loan relationships for United Kingdom tax purposes;

(C)       as a result of the Subordinated Debt 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 of the date of issue of the Subordinated Debt 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 Subordinated Debt Securities or the conversion of the Subordinated Debt Securities into shares or other obligations of the Company; or

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

(each such Tax Law Change, 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 (i) a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company), in a form satisfactory to the Trustee, to the effect that a Tax Event has occurred, and (ii) an Officer’s

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Certificate confirming (1) that all the conditions necessary for redemption have occurred and that the Company could not avoid the consequences of the Tax Event by taking measures reasonably available to it, and (2) that the Relevant Regulator is satisfied that the relevant change or event is material and was not reasonably foreseeable by the Company on the Issue Date. The Trustee is entitled to conclusively rely on and accept such opinion and Officer’s Certificate without any duty whatsoever of further inquiry, in which event such opinion and Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

Section 11.09. Optional Redemption Due to a Capital Disqualification Event. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities and subject to the conditions set out in Section 11.11 below, the Subordinated Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 calendar days’ nor more than 60 calendar days’ notice to each Holder of Subordinated Debt Securities to be redeemed, at any time, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such series of Subordinated Debt Securities to, but excluding, the date fixed for redemption if, immediately prior to the giving of the notice referred to above, a Capital Disqualification Event has occurred.

Prior to the giving of any notice of redemption, the Company must deliver to the Trustee an Officer’s Certificate stating that (i) a Capital Disqualification Event has occurred, and (ii) the Company has demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date. The Trustee shall be entitled to accept such Officer’s Certificate without any further inquiry, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee and the Holders and Beneficial Owners.

Section 11.10. Repurchases. Subject to the conditions set out in Section 11.11 below, the Company may from time to time purchase Subordinated Debt Securities in the open market or by tender or by private agreement, in any manner and at any price or at differing prices. Subordinated Debt Securities purchased or otherwise acquired by us may be (i) held, (ii) resold or (iii) at our sole discretion, surrendered to the Trustee for cancellation (in which case all Subordinated Debt Securities so surrendered will forthwith be cancelled in accordance with applicable law and thereafter may not be re-issued or resold).

Section 11.11. Early Redemption or Repurchases – Relevant Regulator. Subordinated Debt Securities may be redeemed or purchased by the Company prior to Maturity as provided under Article 11 of this Subordinated Indenture, subject to:

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(a)       the Company giving notice to the Relevant Regulator and the Relevant Regulator granting permission to the Company to redeem or purchase the Subordinated Debt Securities; and

(b)       in respect of any redemption of the Subordinated Debt Securities proposed to be made prior to the fifth anniversary of the date of issuance of the Subordinated Debt Securities, if and to the extent then required under the relevant Regulatory Capital Requirements (A) in the case of an optional redemption due to a Tax Event, the Company having 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 Capital Disqualification Event, the Company having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date; and

(c)       if and to the extent then required by the relevant Regulatory Capital Requirements (A) on or before the relevant redemption or purchase date, the Company replacing the Subordinated Debt Securities with instruments qualifying as own funds of equal or higher quality on terms that are sustainable for the income capacity of the Company; or (B) the Company demonstrating to the satisfaction of the Relevant Regulator that its Tier 1 Capital and Tier 2 Capital would, following such redemption or purchase, exceed its minimum capital requirements by a margin that the Relevant Regulator may consider necessary at such time based on the Regulatory Capital Requirements.

Notwithstanding the above conditions, if, at the time of any redemption or purchase, the prevailing Regulatory Capital Requirements permit the repayment or purchase only after compliance with one or more alternative or additional preconditions to those set out above, the Company shall comply with such other and/or, as appropriate, additional pre-condition(s).

Section 3.12. Exchanges Not Deemed Payment. With respect to the Securities only, Section 12.10 of the Subordinated Indenture is deleted in its entirety.

Section 3.13. Exchange of Subordinated Debt Securities. With respect to the Securities only, Article 13 of the Subordinated Indenture is deleted in its entirety.

Section 3.14. Events of Default. With respect to the Securities only:

(i)       Section 5.01 of the Subordinated Indenture is amended by adding the following sentence at the end of the section:

The exercise of any U.K. bail-in power by the relevant U.K. resolution authority shall not constitute a default or an Event of Default under this Section 5.01; and

(ii)       Section 5.02 of the Subordinated Indenture is amended in part to restate in its entirety the first paragraph of such section as follows:

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Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs with respect to Subordinated Debt Securities of any series and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series may declare the principal amount, together with accrued interest (if any) and Additional Amounts (if any), payable on such Subordinated Debt Securities, of all the Subordinated Debt Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such amount shall become immediately due and payable.

(iii)       Section 5.02(a)(i) is hereby restated in its entirety as follows:

(i)       the principal of, and premium, if any, on, any Subordinated Debt Securities of such series which have become due otherwise than by such declaration of acceleration and any due and payable interest, if any, thereon at the rate or rates prescribed therefor in such Subordinated Debt Securities,

(iv)       Section 5.02 of the Subordinated Indenture is amended in part to restate in its entirety the last paragraph of such section as follows:

If the Subordinated Debt Securities become due and payable (whether pursuant to this Section 5.02 above or Article 11 below) and the Company fails to pay such amounts (or any damages awarded for breach of any obligations in respect of the Subordinated Debt Securities or this Indenture) forthwith upon demand, notwithstanding the continuing right of any Holder to receive payment of the principal of and interest on Subordinated Debt Securities, or to institute suit for the enforcement of any such payment, each in accordance with Section 316(b) (Directions and Waivers by Bondholders; Prohibition of Impairment of Holders’ Right to Repayment) of the Trust Indenture Act, the Trustee, in its own name and as trustee of an express trust, may institute proceedings for the winding up of the Company, and/or prove in a winding up of the Company or in a Qualifying Administration for all such due and payable amounts (including any damages awarded for breach of any obligations in respect of the Subordinated Debt Securities or this Indenture) but no other remedy shall be available to the Trustee or the Holders.

Section 3.15. Compensation and Reimbursement. With respect to the Securities only, Section 6.07 of the Subordinated Indenture is amended in part to:

(i)       restate in its entirety Section 6.07(b) as follows:

except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Subordinated Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall

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be determined in a final, non-appealable order by a court of competent jurisdiction to have been caused by its own negligence or bad faith; and

(ii)       to add the following sentence at the end of the section:

The Trustee’s right to reimbursement and indemnity under this Section 6.07 shall survive the payment in full of the Subordinated Debt Securities, the discharge of this Subordinated Indenture, the resignation or removal of the Trustee and any exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Debt Securities.

Section 3.16. Certain Rights of Trustee. With respect to the Securities only, Section 6.03 of the Subordinated Indenture is amended in part to add the following at the end of the section:

(m)       The Trustee shall not be liable for errors in judgment made in good faith unless it was negligent in ascertaining the relevant facts; and

(n)       The Trustee may hold funds uninvested without liability for interest in the absence of an agreement signed by the Trustee to the contrary.

Section 3.17. Subordinated Debt Securities Subordinate to Claims of Senior Creditors. With respect to the Securities only, Section 12.01 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

Section 12.01. Subordinated Debt Securities Subordinate to Claims of Senior Creditors.

(a)       Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company covenants and agrees, and each Holder of Subordinated Debt Securities of each series, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article 12, in the event of:

(i)       an order being made, or an effective resolution being 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, the terms of which reorganization, reconstruction, or amalgamation do not provide that the Subordinated Debt Securities shall thereby become redeemable or repayable in accordance with their terms); or

(ii)       a Qualifying Administration,

the Holders will have a right against the Company in respect of or arising under (including any damages awarded for breach of any obligations under) the Subordinated Debt Securities and the Subordinated Indenture relating to them to claim for all amounts due to them in respect of the Subordinated Debt Securities including the principal amount thereof (plus any premium) and any accrued but

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unpaid interest thereon. Such rights and claims will be subordinated to, and subject in right of payment to, the prior payment in full of, all claims of all Senior Creditors. The rights and claims of the Holders of the Subordinated Debt Securities shall rank pari passu without any preference among themselves and rank junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness and shall rank at least pari passu with the claims of holders of all obligations of the Company which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital of the Company and in priority to (1) the claims of holders of all obligations of the Company which constitute Tier 1 Capital of the Company, (2) the claims of holders of all undated or perpetual subordinated obligations of the Company and (3) the claims of holders of all share capital of the Company.

(b)       The provisions of this Article 12 shall apply only to rights or claims payable under Section 12.01 (a) or to amounts payable pursuant thereto and under any Subordinated Debt Securities of any series and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Sections 5.03(a)(i) and 5.06 hereof, or the rights and remedies of the Trustee in respect thereof.

Section 3.18. Reliance on Judicial Order or Certificate of Liquidating Agent. With respect to the Securities only, Section 12.06 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

Section 12.06. Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 6.01, and the Holders of the Subordinated Debt Securities of the series shall be entitled to rely upon (a) any order or decree entered by any court in which such winding-up of the Company or similar case or proceeding, including a proceeding for the suspension of payments is pending, or (b) a certificate of the administrator of the Company, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or the Holders of such Subordinated Debt Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the Senior Creditors and other claims against the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12.

Section 3.19. Additional Subordinated Debt Securities. With respect to the Securities only, Section 3.12 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

Section 3.12. Additional Subordinated Debt Securities. The Company may, from time to time, without the consent of the Holders of the Subordinated Debt Securities of any series, issue additional Subordinated Debt Securities of one or more of the series of Subordinated Debt Securities issued under this

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Subordinated Indenture, having the same ranking and same interest rate, Maturity, redemption terms and other terms, except for the price to the public, issue date, first Interest Payment Date and temporary CUSIP, ISIN and/or other identifying numbers, as the Subordinated Debt Securities. Any such additional Subordinated Debt Securities, together with the Subordinated Debt Securities of the applicable series, may constitute a single series of Subordinated Debt Securities under this Subordinated Indenture and shall be included in the definition of “Subordinated Debt Securities” in this Subordinated Indenture where the context requires; provided, however, that if the original Subordinated Debt Securities are determined by the Company to be debt for U.S. federal income tax purposes and the additional Subordinated Debt Securities are not fungible with the outstanding Subordinated Debt Securities for U.S. federal income tax purposes, the additional Subordinated Debt Securities must have CUSIP, ISIN and/or other identifying numbers different from those used for the outstanding Subordinated Debt Securities.

Section 3.20. Agreement with Respect to Exercise of U.K. Bail-In Power. The following provisions relate solely to the Securities established pursuant to this Fifth Supplemental Indenture:

(a)       Notwithstanding any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Securities, by tendering or exchanging existing securities for, or otherwise purchasing or acquiring the Securities, each Holder (including each Beneficial Owner) of the Securities acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Securities; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Securities into shares or other securities or other obligations of the Company or another person; and/or (iii) the amendment or alteration of the maturity of the Securities, or amendment of the amount of interest due on the Securities, or the dates on which interest becomes payable, including by suspending payment for a temporary period; which U.K. bail-in power may be exercised by means of variation of the terms of the Securities solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at Maturity), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial Owner of the Securities further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Securities are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

(b)       By tendering or exchanging existing securities for, or otherwise purchasing or acquiring the Securities, each Holder and Beneficial Owner of the Securities:

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(i)       acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority in respect of the Securities shall not give rise to a default or an Event of 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 U.K. bail-in power by the relevant U.K. resolution authority with respect to the Securities; and

(iii)       acknowledges and agrees that, upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee shall not be required to take any further directions from Holders of the Securities under Section 5.12 of the Subordinated Indenture, and (b) neither the Subordinated Indenture nor this Fifth Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, any of the Securities remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Securities), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Securities following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to this Fifth Supplemental Indenture.

(c)       By tendering or exchanging existing securities for, or otherwise purchasing the Securities, 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 Securities that acquire the 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 Securities related to the U.K. bail-in power.

(d)       By its purchase or acquisition of the Securities, each Holder and Beneficial Owner shall also be deemed to have (i) consented to the exercise of any U.K. bail- in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Securities and (ii) 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 U.K. bail-in power with respect to the Securities as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner or the Trustee.

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(e)       No repayment of the principal amount of the Securities or payment of interest on the Securities shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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.

(f)       Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Securities, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes only.

ARTICLE 4
AMENDMENTS TO THE SUBORDINATED INDENTURE

Section 4.01. Appointment of Agent for Service. With respect to any series of Subordinated Debt Securities issued under the Subordinated Indenture, including the Securities, Section 1.14 of the Subordinated Indenture is amended and restated in its entirety and shall read as follows:

Section 1.14. Appointment of Agent for Service. The Company has designated and appointed the Chief U.S. Counsel, Lloyds Banking Group plc (or any successor thereto), currently of 1095 Avenue of the Americas, 34th Floor, New York, NY 10036 as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York, arising out of or relating to the Subordinated Debt Securities, this Subordinated Indenture or this Fifth Supplemental Indenture, but for that purpose only, and agrees that service of process upon such authorized agent shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Subordinated Debt Securities remain Outstanding until the appointment of a successor by the Company and such successor’s acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee of the name and address of such successor. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of such authorized agent in full force and effect so long as any of the Subordinated Debt Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take any such action. The Company and the Trustee each hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any

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right to trial by jury and any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

Section 4.02. Notices to Trustee. With respect to any series of Subordinated Debt Securities issued under the Subordinated Indenture, including the Securities, Section 1.05 of the Subordinated Indenture is amended and restated in its entirety to read as follows:

Section 1.05. (a) Notices, Etc. to Trustee, Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by the Subordinated Indenture or the Fifth Supplemental Indenture to be made upon, given or furnished to, or filed with,

(i)       the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile or e-mail) to the Trustee at its Corporate Trust Office and the Trustee agrees to accept and act upon facsimile or electronic transmission of written instructions pursuant to the Subordinated Indenture or the Fifth Supplemental Indenture; provided, however, that (x) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (y) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions; or

(ii)       the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and (i) mailed, in the case of the Company, first-class postage prepaid, addressed to it at the address of its principal office specified in the first paragraph of this Subordinated Indenture (unless another address has been previously furnished in writing to the Trustee by the Company, in which case at the last such address) marked “Attention: Company Secretary”, or (ii) faxed to +44 20 7158 3298/3299 marked “Attention: Company Secretary”.

(b) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to the Indenture and delivered using Electronic Means; provided, however, that the Company shall provide to the Trustee evidence of the Executive Officers. If the Company elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Company understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Executive Officer have been sent by such Executive Officer. The Company shall be responsible for ensuring that only Executive Officers transmit such Instructions to the Trustee and that the Company and all Executive Officers are solely responsible to safeguard the use and

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confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Company agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Company; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.

Section 4.03. Additional Amounts. With respect to any series of Subordinated Debt Securities issued under the Subordinated Indenture, including the Securities, Section 10.04 of the Subordinated Indenture is hereby amended and replaced in its entirety as follows:

Section 10.04. Additional Amounts. Amounts to be paid on any series of Subordinated Debt Securities will be made without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges or fees imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If at any time a Taxing Jurisdiction requires the Company to make such deduction or withholding, the Company will pay additional amounts with respect to the principal of, interest and any other payment on, the Subordinated Debt Securities (“Additional Amounts”) that are necessary in order that the net amounts paid to the Holders of Subordinated Debt Securities of the particular series, after the deduction or withholding, shall equal the amounts which would have been payable on the Subordinated Debt Securities if the deduction or withholding had not been required. However, this will not apply to any such tax, levy, impost, duty, charge or fee, which would not have been deducted or withheld but for the fact that:

(i)       the Holder or the Beneficial Owner of the Subordinated Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise having some connection with the Taxing Jurisdiction other than the holding or ownership of a Subordinated Debt Security, or the collection of any payment of, or in respect of, principal of, or any interest or other payment on, any Subordinated Debt Security of the relevant series,

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(ii)       except in the case of winding-up in the United Kingdom, the relevant Subordinated Debt Security is presented (where presentation is required) for payment in the United Kingdom,

(iii)       the relevant Subordinated Debt Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to the Additional Amounts on presenting the same for payment at the close of that 30-day period,

(iv)       the Holder or the Beneficial Owner of the relevant Subordinated Debt Security or the Beneficial Owner of any payment of, or in respect of, principal of, or any interest or other payment on, the Subordinated Debt Security failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or the Beneficial Owner or (y) to make any declaration or other similar claim to satisfy any requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of the tax, levy, impost, duty, charge or fee,

(v)       the withholding or deduction is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income, or any directive amending, supplementing or replacing such directive or any law implementing or complying with, or introduced in order to conform to, such directive or directives,

(vi)       the relevant Subordinated Debt Security is presented (where presentation is required) for payment by or on behalf of a Holder who would have been able to avoid such withholding or deduction by presenting the relevant Subordinated Debt Security to another paying agent,

(vii)       the deduction or withholding is imposed by reason of Sections 1471- 1474 of the US Internal Revenue Code and the U.S. Treasury regulations thereunder or any agreement with the U.S. Internal Revenue Service in connection with these sections and regulations (“FATCA”), any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA, or any law, regulation or other official guidance enacted in any jurisdiction implementing, or relating to, FATCA or any intergovernmental agreement, or

(viii)       any combination of subclauses (i) through (vii) above,

nor shall Additional Amounts be paid with respect to the principal of or any interest or other payment on, the Subordinated Debt Securities to any Holder who is a fiduciary or partnership or any person other than the sole Beneficial Owner of such payment to the extent such payment would be required by the laws of any

25 

Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a Beneficial Owner who would not have been entitled to such Additional Amounts, had it been the Holder.

Whenever in this Subordinated Indenture there is mentioned, in any context, the payment of the principal of or any interest or other payments on, or in respect of, any Subordinated Debt Security of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made. Upon request from the Trustee or a paying agent, the Company shall provide information reasonably necessary and readily available in order to enable to the Trustee or paying agent to determine whether any withholding obligations under FATCA apply. None of the Company, the Trustee or a paying agent shall have any liability in connection with the Company’s or Trustee’s or paying agent’s compliance with any such withholding obligation under applicable law.

ARTICLE 5
MISCELLANEOUS

Section 5.01. Effect Of Supplemental Indenture. Upon the execution and delivery of this Fifth Supplemental Indenture by each of the Company and the Trustee, and the delivery of the documents referred to in Section 5.02 herein, the Subordinated Indenture shall be supplemented in accordance herewith, and this Fifth Supplemental Indenture shall form a part of the Subordinated Indenture for all purposes in respect of the Securities or otherwise as applicable.

Section 5.02. Other Documents to be Given to the Trustee. The Trustee shall be entitled to receive an Officer’s Certificate and an Opinion of Counsel stating the recitals contained in Section 1.02 of the Subordinated Indenture and, in the case of the Opinion of Counsel, stating the Indenture is a legal, binding and valid obligation enforceable in accordance with its terms. As specified in Section 9.03 of the Subordinated Indenture and subject to the provisions of Section 6.03 of the Subordinated Indenture, the Trustee shall also be entitled to receive an Opinion of Counsel stating that that this Fifth Supplemental Indenture is authorized or permitted by the Indenture, and the Fifth Supplemental Indenture, and the Securities whose terms are incorporated by reference herein are each, subject to Section 1.03 of the Subordinated Indenture, a legal, valid and binding obligation of the Company enforceable in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditor’s rights generally, by equitable principles of general applicability and by possible judicial actions giving effect to governmental actions or foreign laws affecting creditors’ rights, and the Fifth Supplemental Indenture is permitted under the Indenture. The Trustee may rely on such

26 

Officer’s Certificate and Opinion of Counsel as conclusive evidence that this Fifth Supplemental Indenture complies with the applicable provisions of the Subordinated Indenture.

Section 5.03. Confirmation Of Indenture. The Subordinated Indenture, as supplemented and amended by this Fifth Supplemental Indenture with respect to the Securities or otherwise as applicable, is in all respects ratified and confirmed, and the Subordinated Indenture, this Fifth Supplemental Indenture and all indentures supplemental thereto shall, in respect of the Securities or otherwise as applicable, be read, taken and construed as one and the same instrument. This Fifth Supplemental Indenture constitutes an integral part of the Subordinated Indenture and, where applicable, with respect to the Securities. In the event of a conflict between the terms and conditions of the Subordinated Indenture and the terms and conditions of this Fifth Supplemental Indenture, the terms and conditions of this Fifth Supplemental Indenture shall prevail where applicable.

Section 5.04. Concerning The Trustee. The Trustee does not make any representations as to the validity or sufficiency of this Fifth Supplemental Indenture or the Securities. The recitals and statements herein are deemed to be those of the Company and not the Trustee. In entering into this Fifth Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Subordinated Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.

Section 5.05. Governing Law. This Fifth Supplemental Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York, except that (i) the authorization and execution by the Company of this Fifth Supplemental Indenture and the Securities 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 and (ii) Section 3.17 of this Fifth Supplemental Indenture (other than the Trustee’s own rights, duties or immunities thereunder) and the third paragraph of Section 5.03 of the Subordinated Indenture in relation to the waiver of any right of set-off or counterclaim with respect to the Securities or the Indenture shall be governed by and construed in accordance with the laws of Scotland.

Section 5.06. Separability. In case any provision contained in this Fifth Supplemental Indenture 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 5.07. Counterparts. This Fifth 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.

Section 5.08. Concerning BRRD Liability. Notwithstanding and to the exclusion of any other term of this Fifth Supplemental Indenture or the Subordinated Indenture or any other agreements, arrangements, or understanding between the Company and the

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Trustee, the Trustee acknowledges and accepts that a BRRD Liability arising under this Agreement may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts, and agrees to be bound by:

(a)       the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of the Company to the Trustee under this Fifth Supplemental Indenture or the Subordinated Indenture, that (without limitation) may include and result in any of the following, or some combination thereof:

(i)       the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon;

(ii)       the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the Company or another person (and the issue to or conferral on the Trustee of such shares, securities or obligations);

(iii)       the cancellation of the BRRD Liability; and/or

(iv)       the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and

(b)       the variation of the terms of this Fifth Supplemental Indenture, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority.

“Bail-in Legislation” means Part I of the UK Banking Act 2009 and any other law, regulation, rule or requirement applicable from time to time in the UK relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).

“Bail-in Powers” means any Write-down and Conversion Powers as defined in relation to the Bail-in Legislation.

“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.

“BRRD Liability” means a liability in respect of which the relevant Write- down and Conversion Powers in the applicable Bail-in Legislation may be exercised.

“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Bail-in Powers in relation to the Company.

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“Write-down and Conversion Powers” means the powers under the Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or affiliate of a bank or investment firm, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability.

[Signature Pages Follow]

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

LLOYDS BANKING GROUP PLC, as Issuer
By:	/s/ Vishal Savadia
	Name:	Vishal Savadia
	Title:	Head of Capital Issuance & Structuring

[Signature Page to Fifth Supplemental Indenture]

THE BANK OF THE NEW YORK MELLON, as Trustee
By:	/s/ Robert Timmons
	Name:	Robert Timmons
	Title:	Vice President

[Signature Page to Fifth Supplemental Indenture]

EXHIBIT A

FORM OF GLOBAL NOTE

THIS SUBORDINATED NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SUBORDINATED NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SUBORDINATED NOTE REGISTERED, AND NO TRANSFER OF THIS SUBORDINATED NOTE 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.

THE RIGHTS OF THE HOLDER OF THIS SUBORDINATED NOTE ARE, TO THE EXTENT AND IN THE MANNER SET FORTH IN SECTION 12.01 OF THE INDENTURE, SUBORDINATED TO THE CLAIMS OF OTHER CREDITORS OF THE COMPANY, AND THIS SUBORDINATED NOTE IS ISSUED SUBJECT TO THE PROVISIONS OF THAT SECTION 12.01, AND THE HOLDER OF THIS SUBORDINATED NOTE, BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS OF SECTION 12.01 OF THE INDENTURE AND THE TERMS OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF SCOTLAND.

CUSIP No. [●]
ISIN No. [●]
Common Code: [●]

LLOYDS BANKING GROUP PLC

5.300% SUBORDINATED DEBT SECURITIES DUE 2045

No. [●] $[●]

LLOYDS BANKING GROUP PLC (herein called the “Company,” which term includes any successor person under the Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $[●] ([spelled out] dollars) on December 1, 2045 or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2016, and ending on December 1, 2045 (each, a “Payment Date”). Interest so payable on any Payment Date shall be paid to the Holder in whose name this Subordinated Note is registered on the 15th calendar day immediately preceding the relevant Payment Date, whether or not such day is a Business Day, as defined in the Indenture (each a “Regular Record Date”). If (i) the Company fails to pay any installment of interest on any Subordinated Note on or before its Payment Date and such failure continues for 14 days or (ii) the Company fails to pay all or any part of the principal of any Subordinated Note on any date on which such principal shall otherwise have become due and payable, whether upon redemption or otherwise, and such failure continues for seven days (each of (i) and (ii), a “Default”), the Trustee may commence a proceeding for the winding up of the Company or a Qualifying Administration, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount of any of the Outstanding Subordinated Notes to be due and payable.

Interest shall accrue on this Subordinated Note from day to day from June 1, 2016 or from the most recent Payment Date at the rate of 5.300% per annum, until the principal amount hereof is paid or made available for payment.

Payments of interest on this Subordinated Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such period.

Payment of the principal amount of (and premium, if any) and any interest on, this Subordinated Note will 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. Such payment shall be made to the Holder including through a Paying Agent of the Company outside the United Kingdom for collection by the Holder. If the date for payment of the principal amount hereof (and premium, if any) or interest thereon is not a Business Day, then (subject as provided in the Indenture) such payment shall be made on the next succeeding Business Day with the same force

and effect as if made on such date for payment and without any interest or other payment in respect of such delay.

Prior to due presentment of this Subordinated Note 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 Subordinated Note is registered as the owner of such Subordinated Note for the purpose of receiving payment of principal and interest, if any, on such Subordinated Note and for all other purposes whatsoever, whether or not such Subordinated Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

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

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Subordinated Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

The exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes into shares or other securities or other obligations of the Company or another person; and/or (iii) the amendment or alteration of the maturity of the Subordinated Notes, or amendment of the amount of interest due on the Subordinated Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; which U.K. bail-in power may be exercised by means of variation of the terms of the Subordinated Notes solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at Maturity), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial owner of the Subordinated Notes further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Subordinated Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company and the Group, including but not limited to any such laws, regulations, rules or requirements which 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 U.K. resolution regime under the Banking Act 2009 as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary

legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

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

Dated: [●], 2016

LLOYDS BANKING GROUP PLC
By:
	Name:
	Title:

[Signature Page to 2045 Global Note No. [●]]

CERTIFICATE OF AUTHENTICATION

This is one of the Subordinated Notes of the series designated herein referred to in the within-mentioned Indenture.

Dated: [●], 2016

THE BANK OF NEW YORK MELLON, as Trustee
By:
	Authorized Signatory

[Signature Page to 2045 Global Note No. [●]]

[REVERSE OF SECURITY]

This Subordinated Note is one of a duly authorized issue of securities of the Company (herein called the “Subordinated Notes”) issued and to be issued in one or more series under a Subordinated Indenture, dated as of November 4, 2014 (herein called the “Subordinated Indenture”), between the Company, as issuer, and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Subordinated Indenture), as supplemented by the Fifth Supplemental Indenture, dated as of November 14, 2016, between the Company and the Trustee (the “Fifth Supplemental Indenture, and, together with the Subordinated Indenture, the “Indenture”) to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Subordinated Notes and of the terms upon which the Subordinated Notes are, and are to be, authenticated and delivered.

This Subordinated Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $824,033,000. The Company may, from time to time, without the consent of the Holders of the Subordinated Notes, issue additional Subordinated Notes of one or more of the series of Subordinated Notes issued under the Subordinated Indenture, having the same ranking and the same interest rate, Maturity, redemption terms and other terms as the Subordinated Notes, except for the price to the public, issue date, first Interest Payment Date and temporary CUSIP, ISIN and/or other identifying numbers, provided that such additional Subordinated Notes must be fungible with the outstanding Subordinated Notes for U.S. federal income tax purposes. Any such additional Subordinated Notes, together with the Subordinated Notes of the applicable series, may constitute a single series of Subordinated Notes under the Subordinated Indenture and shall be included in the definition of “Securities” in the Subordinated Indenture where the context requires.

The Subordinated Notes will constitute our direct, unconditional, unsecured and subordinated obligations ranking pari passu without any preference among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness of the Company.

The rights of the Holders of the Subordinated Notes of this series are, to the extent and in the manner set forth in Section 12.01 of the Indenture, subordinated to the claims of all Senior Creditors of the Company, and this series of Subordinated Notes is issued subject to the provisions of that Section 12.01, and the Holders of this series of Subordinated Notes, by accepting the same, agree to and shall be bound by such provisions. The provisions of Section 12.01 of the Indenture and the terms of this paragraph are governed by, and shall be construed in accordance with, the laws of Scotland.

If an Event of Default occurs with respect to Subordinated Notes of any series, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Notes of this series may

declare the principal amount, together with accrued interest (if any), and Additional Amounts (if any), payable on such Subordinated Notes, of all the Subordinated Notes to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such amount shall become immediately due and payable.

Except as otherwise provided in Article 5 of the Indenture, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of the Subordinated Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Subordinated Indenture or in aid of the exercise of any power granted herein, or to enforce any other legal or equitable right vested in the Trustee by the Subordinated Indenture or by law, provided, however, that the Company shall not, as a result of the bringing of such judicial proceedings, be required to pay any amount representing or measured by reference to the principal of, or any interest on, the Subordinated Notes prior to any date on which the principal of, or any interest on, the Subordinated Notes would have otherwise been payable by the Company.

If a Default occurs, the Trustee may commence a proceeding for the winding-up of the Company and/or prove in a winding-up of the Company or a Qualifying Administration, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount of any of the Outstanding Subordinated Notes to be due and payable.

Failure to make any payment in respect of this Subordinated Note shall not be a Default if such payment is withheld or refused and an Opinion of Counsel is delivered to the Trustee concluding that such sums were not paid in order to comply with any fiscal or other law or regulation or with the order of any court of competent jurisdiction, provided, however, that the Trustee may by notice to the Company require the Company to take such action (including but not limited to proceedings for a declaration by a court of competent jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days (in the case of payments under clause 5.03(a) of the Indenture) or seven days (in the case of payments under clause 5.03(b) of the Indenture) after the Trustee gives written notice to the Company informing it of such resolution.

Subject to applicable law, no Holder may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation or retention in respect of any amount owed to it by the Company arising under or in connection with the Subordinated Debt Securities. The Holders of Subordinated Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off, counterclaim, combination of

accounts, compensation and retention with respect to the Subordinated Debt Securities or this Subordinated Indenture (or between the obligations under or in respect of any Subordinated Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company.

No remedy against the Company other than as referred to in Article 5 of the Indenture shall be available to the Trustee or the Holders, whether for the recovery of amounts owing in respect of the Subordinated Notes or under the Indenture or in respect of any breach by the Company of any of its other obligations under or in respect of the Subordinated Notes or under the Subordinated Indenture, except that the Trustee and the Holders shall have such rights and powers as they are required to have under the Trust Indenture Act.

Amounts to be paid on the Subordinated Notes will be made without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges or fees imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If at any time a Taxing Jurisdiction requires the Company to make such deduction or withholding, the Company will pay additional amounts with respect to the principal of, interest and any other payment on, the Subordinated Notes (“Additional Amounts”) that are necessary in order that the net amounts paid to the Holders of Subordinated Notes, after the deduction or withholding, shall equal the amounts which would have been payable on the Subordinated Notes if the deduction or withholding had not been required. However, this will not apply to any such tax, levy, impost, duty, charge or fee, which would not have been deducted or withheld but for the fact that:

(i)       the Holder or the Beneficial Owner of the Subordinated Note is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise having some connection with the Taxing Jurisdiction other than the holding or ownership of a Subordinated Note, or the collection of any payment of, or in respect of, principal of, or any interest or other payment on, any Subordinated Note;

(ii)       except in the case of winding-up in the United Kingdom, the relevant Subordinated Note is presented (where presentation is required) for payment in the United Kingdom;

(iii)       the relevant Subordinated Note is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to the Additional Amounts on presenting the same for payment at the close of that 30 day period;

(iv)       the Holder or the Beneficial Owner of the relevant Subordinated Note or the Beneficial Owner of any payment of, or in respect of, principal of, or any interest or

other payment on, the Subordinated Note failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or the Beneficial Owner or (y) to make any declaration or other similar claim to satisfy any requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of the tax, levy, impost, duty, charge or fee;

(v)       the withholding or deduction is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income, or any directive amending, supplementing or replacing such directive or any law implementing or complying with, or introduced in order to conform to, such directive or directives;

(vi)       the Subordinated Note is presented (where presentation is required) for payment by or on behalf of a Holder who would have been able to avoid such withholding or deduction by presenting the Subordinated Note to another paying agent;

(vii)       the deduction or withholding is imposed by reason of Sections 1471-1474 of the US Internal Revenue Code and the U.S. Treasury regulations thereunder or any agreement with the U.S. Internal Revenue Service in connection with these sections and regulations (“FATCA”), any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA, or any law, regulation or other official guidance enacted in any jurisdiction implementing, or relating to, FATCA or any intergovernmental agreement; or

(viii)       any combination of subclauses (i) through (vii) above,

nor shall Additional Amounts be paid with respect to the principal of or any interest or other payment on, the Subordinated Notes to any Holder who is a fiduciary or partnership or any person other than the sole Beneficial Owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a Beneficial Owner who would not have been entitled to such Additional Amounts, had it been the Holder.

Whenever in the Indenture there is mentioned, in any context, the payment of the principal of or any interest or other payments on, or in respect of, any Subordinated Notes of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made. Upon request from the Trustee or a paying agent, the Company shall provide information reasonably necessary and readily available in order to enable to the Trustee or paying agent to determine whether any withholding obligations under FATCA apply. None of the Company, the Trustee or a paying agent shall have any liability in connection

with the Company’s or Trustee’s or paying agent’s compliance with any such withholding obligation under applicable law.

Subordinated Notes may not be redeemed except in accordance with provisions of applicable law, applicable provisions of the Regulatory Capital Requirements Regulations and except as provided in the Indenture. The Subordinated Notes may not be redeemed in whole or in part at the option of the Holder thereof.

Subject to the limitations specified below, the Company may, at the option of the Company, on not less than 30 nor more than 60 days’ notice, redeem the Subordinated Notes, as a whole but not in part, at a redemption price equal to 100% of the principal amount, of the Subordinated Notes 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 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 in law, if such change is 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 Subordinated Notes; 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 Subordinated Notes from being treated as loan relationships for United Kingdom tax purposes;

(C)       as a result of the Subordinated Notes 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 of the date of issue of the Subordinated Notes 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 Subordinated Notes or the conversion of the Subordinated Notes into shares or other obligations of the Company; or

(E)       result in a Subordinated Note or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes,

(each such Tax Law Change, 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.

Prior to the delivery of any such notice of redemption, the Company shall deliver to the Trustee (i) a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company), in a form satisfactory to the Trustee, to the effect that a Tax Event has occurred, and (ii) an Officer’s Certificate confirming (1) that all the conditions necessary for redemption have occurred and that the Company could not avoid the consequences of the Tax Event by taking measures reasonably available to it, and (2) that the Relevant Regulator is satisfied that the relevant change or event is material and was not reasonably foreseeable by the Company on the Issue Date. The Trustee is entitled to conclusively rely on and accept such opinion and Officer’s Certificate without any duty whatsoever of further inquiry, in which event such opinion and Officer’s Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

Subject to the conditions set out below, the Subordinated Notes are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 calendar days’ nor more than 60 calendar days’ notice, at any time, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of Subordinated Notes to the date fixed for redemption if, immediately prior to the giving of the notice referred to above, a Capital Disqualification Event has occurred.

Prior to the giving of any notice of redemption, the Company must deliver to the Trustee an Officer’s Certificate stating that (i) a Capital Disqualification Event has occurred, and (ii) the Company has demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date. The Trustee shall be entitled to accept such Officer’s Certificate without any further inquiry, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee and the Holders and Beneficial Owners.

Subject to the conditions set out below, the Company may from time to time purchase Subordinated Notes in the open market or by tender or by private agreement, in any manner and at any price or at differing prices. Subordinated Notes purchased or otherwise acquired by the Company may be held, resold or at its sole discretion, surrendered to the Trustee for cancellation (in which case all Subordinated Notes so

surrendered will forthwith be cancelled in accordance with applicable law and thereafter may not be re-issued or resold).

The Subordinated Notes may be redeemed or purchased by the Company prior to Maturity as provided in the foregoing paragraphs, subject to:

(a)       the Company giving notice to the Relevant Regulator and the Relevant Regulator granting permission to the Company to redeem or purchase the Subordinated Notes;

(b)       in respect of any redemption of the Subordinated Notes proposed to be made prior to the fifth anniversary of the date of issuance of the Subordinated Notes, if and to the extent then required under the relevant Regulatory Capital Requirements (a) in the case of an optional redemption due to a Tax Event, the Company having 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 Capital Disqualification Event, the Company having demonstrated to the satisfaction of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date; and

(c)       if and to the extent then required by the relevant Regulatory Capital Requirements (A) on or before the relevant redemption or purchase date, the Company replacing the Subordinated Debt Securities with instruments qualifying as own funds of equal or higher quality on terms that are sustainable for the income capacity of the Company; or (B) the Company demonstrating to the satisfaction of the Relevant Regulator that its Tier 1 Capital and Tier 2 Capital would, following such redemption or purchase, exceed its minimum capital requirements by a margin that the Relevant Regulator may consider necessary at such time based on the Regulatory Capital Requirements.

Notwithstanding the above conditions, if, at the time of any redemption or purchase, the prevailing Regulatory Capital Requirements permit the repayment or purchase only after compliance with one or more alternative or additional preconditions to those set out above, the Company shall comply with such other and/or, as appropriate, additional pre-condition(s).

If the Company elects to redeem the Subordinated Notes, the Subordinated Notes will cease to accrue interest from the date of redemption, provided the redemption price has been paid in accordance with the Indenture.

Upon payment of (i) the amount of principal (and premium, if any) so declared due and payable and (ii) accrued and unpaid interest, all of the Company’s obligations in respect of the payment of the principal of (and premium, if any), and accrued and unpaid interest on, the Subordinated Notes of this series shall terminate.

Notwithstanding any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Subordinated Notes, by accepting the Subordinated Notes or otherwise purchasing or acquiring the Subordinated

Notes, each Holder (including each Beneficial Owner) of the Subordinated Notes acknowledges, accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Subordinated

Notes; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes into shares or other securities or other obligations of the Company or another person; and/or (iii) the amendment or alteration of the maturity of the Subordinated Notes, or amendment of the amount of interest due on the Subordinated Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; which U.K. bail-in power may be exercised by means of variation of the terms of the Subordinated Notes solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at Maturity), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial Owner of the Subordinated Notes further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Subordinated Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company and the Group, including but not limited to any such laws, regulations, rules or requirements which 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 U.K. resolution regime under the Banking Act 2009 as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

By accepting the Subordinated Notes or otherwise purchasing or acquiring the Subordinated Notes, each Holder and Beneficial Owner of the Subordinated Notes:

(i)       acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Notes shall not give rise to a default or event of 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; and

(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 U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Notes; and

(iii)       acknowledges and agrees that, upon the exercise of any U.K. bail- in power by the relevant U.K. resolution authority, (a) the Trustee shall not be required to take any further directions from Holders under Section 5.12 of the Subordinated Indenture, and (b) neither the Subordinated Indenture nor the Fifth Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the Subordinated Notes remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Subordinated Notes), then the Trustee’s duties under the Subordinated Indenture shall remain applicable with respect to the Subordinated Notes following such completion to the extent that the Issuer and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Subordinated Indenture.

By accepting the Subordinated Notes or otherwise purchasing or acquiring the Subordinated Notes, each Holder and Beneficial Owner that acquires its Subordinated Notes 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 Subordinated Notes that acquire the Subordinated Notes 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 Subordinated Notes related to the U.K. bail-in power.

By accepting the Subordinated Notes or otherwise purchasing or acquiring the Subordinated Notes, each Holder and Beneficial Owner shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Subordinated Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Subordinated Notes to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Subordinated Notes as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner or the Trustee.

No repayment of the principal amount of the Subordinated Notes or payment of interest on the Subordinated Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. 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.

Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Notes, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes only.

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 Subordinated Notes to be affected thereby by the Company and the Trustee with the consent of the Holders of not less than two-thirds in principal amount of the Subordinated Notes at the time outstanding. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Outstanding Subordinated Notes, on behalf of the Holders of all Subordinated Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Subordinated Note shall be conclusive and binding upon such Holder and upon all future Holders of this Subordinated Note and of any Subordinated Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Subordinated Note.

No reference herein to the Indenture and no provision of this Subordinated Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay, if and when due and payable, the principal of (and premium, if any) and interest on, this Subordinated Note at the times, place and rate, and in the coin or currency, herein prescribed.

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Subordinated Note of this series shall have any right to institute any proceeding, judicial or otherwise, with respect to the Subordinated Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless such Holder fulfills the requirements of Section 5.07 under the Indenture.

No reference herein to the Indenture and no provision of this Subordinated Note or of the Indenture shall alter or impair the right of the Holder of this Subordinated Note, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and interest on, this Subordinated Note when due and payable in accordance with the provisions of this Subordinated Note and the Indenture.

The Subordinated Indenture, the Fifth Supplemental Indenture and the Subordinated Notes are governed by, and construed in accordance with, the laws of the State of New York, except for the subordination and waiver of set-off provisions relating to the Subordinated Notes, which are governed by, and construed in accordance with, the laws of Scotland.

Unless otherwise defined herein, all terms used in this Subordinated Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

EX-23.3

Exhibit 23.3

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form F-4 of Lloyds Banking Group plc of our report dated February 26, 2021 relating to the financial statements, and the effectiveness of internal control over financial reporting, which appears in Lloyds Banking Group plc's Annual Report on Form 20-F for the year ended December 31, 2020. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

London, United Kingdom

November 10, 2021

EX-25.1

Exhibit 25.1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

□ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)

THE BANK OF NEW YORK MELLON
(Exact name of trustee as specified in its charter)

New York (Jurisdiction of incorporation if not a U.S. national bank)	13-5160382 (I.R.S. employer identification no.)
240 Greenwich Street, New York, N.Y. (Address of principal executive offices)	10286 (Zip code)

Legal Department

The Bank of New York Mellon

240 Greenwich Street

New York, NY 10286

(212) 495-1784

(Name, address and telephone number of agent for service)

_____________________

Lloyds Banking Group plc

(Exact name of obligor as specified in its charter)

Scotland (State or other jurisdiction of  incorporation or organization)	Not Applicable  (I.R.S. employer  identification no.)
25 Gresham Street  London EC2V 7HN  United Kingdom  (Address of principal executive offices)	Not Applicable  (Zip code)

_____________________

Subordinated Debt Securities
(Title of the indenture securities)

1. General information. Furnish the following information as to the Trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

Name	Address
Superintendent of the Department of Financial Services of the State of New York	One State Street, New York, N.Y. 10004-1417, and Albany, N.Y. 12223
Federal Reserve Bank of New York	33 Liberty Street, New York, N.Y. 10045
Federal Deposit Insurance Corporation	550 17th Street, N.W., Washington, D.C. 20429
The Clearing House Association L.L.C.	1114 Avenue of the Americas, 17th Floor, New York, N.Y. 10036

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

16. List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).

1. A copy of the Organization Certificate of The Bank of New York Mellon (formerly known as The Bank of New York, itself formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits la and lb to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152735).

4. A copy of the existing By-laws of the Trustee (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-229519).

6. The consent of the Trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-229519).

7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, The Bank of New York Mellon, a banking corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in London, England, on the 10^th day of November, 2021.

THE BANK OF NEW YORK MELLON
By:	/s/ Tina Howson
	Name: Title:

EXHIBIT 7

Consolidated Report of Condition of

THE BANK OF NEW YORK MELLON

of 240 Greenwich Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, 

a member of the Federal Reserve System, at the close of business June 30, 2021, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.

ASSETS	Dollar amounts in thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin		4,418,000
Interest-bearing balances		142,659,000
Securities:
Held-to-maturity securities		52,321,000
Available-for-sale debt securities		102,839,000
Equity securities with readily determinable fair values not held for trading		67,000
Federal funds sold and securities purchased under agreements to resell:
Federal funds sold in domestic offices		0
Securities purchased under agreements to resell		13,933,000
Loans and lease financing receivables:
Loans and leases held for sale		0
Loans and leases held for investment		29,525,000
LESS: Allowance for loan and lease losses		229,000
Loans and leases held for investment, net of allowance		29,296,000
Trading assets		11,289,000
Premises and fixed assets (including capitalized leases)		2,938,000
Other real estate owned		1,000
Investments in unconsolidated subsidiaries and associated companies		1,603,000
Direct and indirect investments in real estate ventures		0
Intangible assets		6,971,000
Other assets		16,203,000
Total assets		384,538,000

LIABILITIES
Deposits:
In domestic offices	214,188,000
Noninterest-bearing	90,927,000
Interest-bearing	123,261,000
In foreign offices, Edge and Agreement subsidiaries, and IBFs	124,493,000
Noninterest-bearing	7,607,000
Interest-bearing	116,886,000
Federal funds purchased and securities sold under agreements to repurchase:
Federal funds purchased in domestic offices	0
Securities sold under agreements to repurchase	4,801,000
Trading liabilities	2,813,000
Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)	473,000
Not applicable
Not applicable
Subordinated notes and debentures	0
Other liabilities	8,793,000
Total liabilities	355,561,000
EQUITY CAPITAL
Perpetual preferred stock and related surplus	0
Common stock	1,135,000
Surplus (exclude all surplus related to preferred stock)	11,690,000
Retained earnings	16,688,000
Accumulated other comprehensive income	-536,000
Other equity capital components	0
Total bank equity capital	28,977,000
Noncontrolling (minority) interests in consolidated subsidiaries	0
Total equity capital	28,977,000
Total liabilities and equity capital	384,538,000

I, Emily Portney, Chief Financial Officer of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

Emily Portney
Chief Financial Officer

We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.

Thomas P. Gibbons	Directors
Samuel C. Scott
Joseph J. Echevarria