HBOS plc and Lloyds TSB Group plc - s. 38(3)

November 13, 2008

Attention: Sheldon Vanderkooy

Further to your letters dated November 5, 2008, November 11, 2008 and November 12, 2008 (together, the Letter) we understand that:

1. Lloyds is proposing to complete the acquisition (the Acquisition) of HBOS pursuant to (i) the acquisition by Lloyds of all of the issued ordinary shares of HBOS pursuant to a scheme of arrangement under the United Kingdom Companies Act 2006 (the Scheme); and (ii) the acquisition by Lloyds of all of the issued preference shares of HBOS pursuant to a scheme of arrangement under the United Kingdom Companies Act 2006 (the Preference Share Scheme).

2. Pursuant to the Scheme, Lloyds will issue ordinary shares of Lloyds (the New Lloyds TSB Shares) to the former holders of ordinary shares of HBOS (the Scheme Shares), and pursuant to the Preference Share Scheme, Lloyds will issue several classes of preference shares of Lloyds (the New Lloyds TSB Preference Shares) to the former holders of preference shares of HBOS.

3. Lloyds is also intending to participate in the United Kingdom government's package of capital and funding measures for the United Kingdom banking sector pursuant to which Lloyds intends to make a placing and open offer of its shares (the Lloyds Open Offer Shares) whereby existing shareholders of Lloyds in certain jurisdictions (which may include accredited investors in Ontario) will be offered shares in Lloyds (the Lloyds Placing and Open Offer).

4. Lloyds is also intending to issue new ordinary shares to the shareholders of Lloyds by way of the capitalization of non-distributable reserves (the Proposed Capitalization Issue). However, the Proposed Capitalization Issue will not take place until 2009.

5. HBOS is intending to participate in the United Kingdom government's package of capital and funding measures for the United Kingdom banking sector pursuant to which HBOS intends to make a placing and open offer of its shares (the HBOS Open Offer Shares) whereby existing shareholders of HBOS in certain jurisdictions (which may include accredited investors in Ontario) will be offered shares in HBOS (the HBOS Placing and Open Offer).

6. The shareholders of HBOS will be sent, among other things, a Scheme document which will include a letter from the Chairman of HBOS, an explanatory statement concerning the Scheme and its effects, the Scheme itself and notice of meetings of the holders of ordinary shares of HBOS (together, the Scheme Document).

7. The preference shareholders of HBOS will be sent, among other things, a Preference Share Scheme document which will include a letter from the Chairman of HBOS, an explanatory statement concerning the Preference Share Scheme and its effects, the Preference Share Scheme itself and notices of meetings of the holders of preference shares of HBOS (including meetings convened by directors of the Courts (together, the Preference Share Scheme Document).

8. The shareholders of Lloyds (other than shareholders resident in certain excluded jurisdictions) will be able to access on the internet a prospectus (the Lloyds Prospectus), which is compliant with the provisions of the EU Prospectus Directive, in relation to the Acquisition, the Proposed Capitalization Issue and the Lloyds Placing and Open Offer. A summary document (the Lloyds Summary) summarizing the disclosure in the Lloyds Prospectus may be mailed to shareholders of Lloyds (other than shareholders resident in certain excluded jurisdictions) together with an application form for the purpose of subscribing for Lloyds Open Offer Shares.

9. Prospective purchasers (who must be accredited investors) in Ontario and other relevant Canadian jurisdictions pursuant to the Lloyds Placing and Open Offer may have access by the internet to a Canadian preliminary offering memorandum which will incorporate by reference the Lloyds Prospectus. A final Canadian offering memorandum which will incorporate by reference the Lloyds Prospectus will wrap the Lloyds Summary, if and when this is mailed to Canadian accredited investors.

10. The shareholders of HBOS (other than shareholders resident in certain excluded jurisdictions) will be able to access on the internet a prospectus (the HBOS Prospectus), which is compliant with the provisions of the EU Prospectus Directive, in relation to the HBOS Placing and Open Offer).

11. Prospective purchasers (who must be accredited investors) in Ontario and other relevant Canadian jurisdictions pursuant to the HBOS Placing and Open Offer may have access by the internet to a Canadian offering memorandum, which will incorporate by reference the HBOS Prospectus.

12. Canadian holders of HBOS shares will receive by post the Scheme Document and the Preference Share Scheme Document.

13. Lloyds will rely on appropriate exemptions from the prospectus and registration requirements of the Securities Act (Ontario) to distribute securities to residents of Ontario pursuant to the Scheme, the Preference Share Scheme and the Lloyds Placing and Open Offer.

14. HBOS will rely on appropriate exemptions from the prospectus and registration requirements of the Securities Act (Ontario) to distribute securities to residents of Ontario pursuant to the HBOS Placing and Open Offer.

15. The ordinary shares of Lloyds (the Lloyds TSB Shares) are currently admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange and Lloyds intends to apply for admission of the New Lloyds TSB Shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange.

16. The ordinary shares of Lloyds are currently listed on the New York Stock Exchange in the form of American Depository Shares (the Lloyds TSB ADSs) and Lloyds intends to apply to list the ordinary shares to be issued pursuant to the Scheme on the New York Stock Exchange (the New Lloyds TSB ADSs).

17. The ordinary shares of HBOS are currently admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange and, in the event that the Acquisition is not completed, HBOS intends to apply for admission of the HBOS Open Offer Shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange.

18. No preference shares of Lloyds of the same classes of any of the New Lloyds Preference Shares to be issued pursuant to the Preference Share Scheme are currently listed on any stock exchange or quoted on any quotation and trade reporting system.

19. The Scheme Document will contain one or more representations identical or substantially similar to the form of representation set out in the Letter (the Scheme Listing Representation): Lloyds TSB Shares are listed on the Official List and admitted to trading on the London Stock Exchange. The New Lloyds TSB Shares will be issued on the Effective Date. Application will be made to the UK Listing Authority for the New Lloyds TSB Shares to be admitted to the Official List and to the London Stock Exchange for the New Lloyds TSB Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective and that dealings, for normal settlement, will commence at 8:00 a.m. on [the Business Day after the Effective Date] which, subject to the sanction of the Scheme and the associated reduction of capital by the Court and the satisfaction (or waiver) of the Conditions, is expected to be on [•] 2009. The Lloyds TSB ADSs are listed on the NYSE. Applications will be made for the New Lloyds TSB ADSs to be admitted to listing on the NYSE.

20. The Preference Share Scheme Document will contain one or more representations identical or substantially similar to the form of representation set out in the Letter (the Preference Share Scheme Listing Representation): The New Lloyds TSB Preference Shares will be issued on the Effective Date. Application will be made to the UK Listing Authority for the New Lloyds TSB Preference Shares to be admitted to the Official List and to the London Stock Exchange to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective and that dealings, for normal settlement, will commence at 8:00 a.m. on [the Business Day after the Effective Date] which, subject to the sanction of the Preference Share Scheme and the associated reductions of capital by the Court and the satisfaction (or waiver) of the Conditions, is expected to be on [•] 2009.

21. The Lloyds Prospectus and the Lloyds Summary (together, the Lloyds Documents) will contain one or more representations identical or substantially similar to the form of representation set out in the Letter (the Lloyds Prospectus Listing Representation): Applications will be made to the UK Listing Authority for the Consideration Shares to be admitted to the Official List and to the London Stock Exchange for the Consideration Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. A supplemental listing application will be made to the NYSE for the Consideration ADRs to be issued pursuant to the Acquisition to be listed and traded thereon. It is expected that Admission of the Consideration Shares will occur and that dealings in the Consideration Shares on the London Stock Exchange will commence at 8:00 a.m. on [•] 2009. Application will be made to the UK Listing Authority for the Open Offer Shares to be admitted to the Official List and to London Stock Exchange for the Open Offer Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. As used in the Lloyds Prospectus, the term "Consideration Shares" means the New Lloyds TSB Shares; the term "Consideration ADRs" means the New Lloyds TSB ADSs and the term "Open Offer Shares" means the Lloyds Open Offer Shares.

22. The HBOS Prospectus will contain one or more representations identical or substantially similar to the form of representation set out in the Letter (the HBOS Prospectus Listing Representation): The Open Offer Shares, which will be cancelled pursuant to the Acquisition, will not be admitted to listing or trading on any exchange. However, it is expected that the Consideration Shares, to be issued by Lloyds TSB to holders of Scheme Shares (including the Open Offer Shares) pursuant to the Acquisition will be issued at 8:00 a.m. on 19 January 2009. Applications will be made to the FSA for the Consideration Shares to be admitted to the Official List and to the London Stock Exchange's main market for listed securities. It is expected that Admission of the Consideration Shares will become effective and that dealings in the Consideration Shares, fully paid, will commence at 8:00 a.m. on 19 January 2009. If the Open Offer Shares are issued but the Acquisition does not subsequently become Effective, then HBOS will apply for the Open Offer Shares to be admitted to the Official List and to the London Stock Exchange's main market for listed securities. As used in the HBOS Prospectus, the term "Open Offer Shares" means the HBOS Open Offer Shares and the term "Consideration Shares" means the New Lloyds TSB Shares.

23. The Scheme Document will include disclosure to the effect that (i) the admission of the New Lloyds TSB Shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange; and (ii) the listing of the New Lloyds TSB ADSs on the New York Stock Exchange, is not automatic or guaranteed.

24. The Preference Share Scheme Document will include disclosure to the effect that the admission of the New Lloyds TSB Preference Shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange is not automatic or guaranteed.

25. The Lloyds Documents will include disclosure to the effect that (i) the admission of the Consideration Shares (as defined in the Lloyds Prospectus) and the Lloyds Open Offer Shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange; and (ii) the listing of the Consideration ADRs (as defined in the Lloyds Prospectus) on the New York Stock Exchange, is not automatic or guaranteed.

26. The HBOS Prospectus will include disclosure to the effect that (i) the admission of the Consideration Shares (as defined in the HBOS Prospectus) to the Official List of the UK Listing Authority and to trading on the London Stock Exchange; and (ii) the admission of the HBOS Open Offer Shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange (in the event that the Acquisition is not completed), is not automatic or guaranteed.

27. The UK Listing Authority has not granted approval to the admission to the Official List of, and the London Stock Exchange has not granted approval to the listing of, any of Lloyd's securities to be issued pursuant to the Scheme, the Preference Share Scheme or the Lloyds Placing and Open Offer, conditional or otherwise, nor have they consented to, nor indicated that they do not object to the Scheme Listing Representation, the Preference Scheme Listing Representation or the Lloyds Prospectus Listing Representation.

28. The UK Listing Authority has not granted approval to the admission to the Official List of, and the London Stock Exchange has not granted approval to the listing of, the HBOS Open Offer Shares, conditional or otherwise, nor have they consented to, nor indicated that they do not object to the HBOS Prospectus Listing Representation.

29. The NYSE has not granted approval to the listing of any of Lloyd's securities to be issued pursuant to the Scheme or the Lloyds Placing and Open Offer, conditional or otherwise, nor has it consented to, nor indicated that it does not object to the Scheme Listing Representation or the Lloyds Prospectus Listing Representation.

30. The Filers seek permission to include the Scheme Listing Representation, the Preference Share Scheme Listing Representation, the Lloyds Prospectus Listing Representation and the HBOS Prospectus Listing Representation in the Scheme Document, the Preference Share Scheme Document, the Lloyds Documents and the HBOS Prospectus, respectively, to be provided to or made available to prospective Ontario purchasers.

Based upon the representations above and the representations contained in the Letter, permission is hereby granted pursuant to subsection 38(3) of the Securities Act (Ontario) to include the Scheme Listing Representation, the Preference Share Scheme Listing Representation, the Lloyds Prospectus Listing Representation and the HBOS Prospectus Listing Representation in the Scheme Document, the Preference Share Scheme Document, the Lloyds Documents and the HBOS Prospectus, respectively, to be provided to or made available to prospective Ontario purchasers.

Yours very truly,