N&P Announces Lifemark Loan Facility

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO AND SHOULD NOT BE DISTRIBUTED IN, FORWARDED TO OR TRANSMITTED IN OR INTO ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL SECURITIES OR OTHER LAWS OR REGULATIONS.

19th October 2010

N&P announces loan facility in favour of Lifemark SA ("Lifemark") to fund premium payments and other operating expenses

N&P (Norwich and Peterborough Building Society), together with CarVal Investors Limited, have agreed to make a loan to Lifemark (the "Lifemark Loan"). Unless prepaid or demanded earlier, the Lifemark Loan will be available until 15 February 2011 or if earlier, upon completion of a successful restructuring of Lifemark. The Lifemark Loan is an uncommitted facility which is repayable on demand.

In the absence of the Lifemark Loan, it is understood that further sales from Lifemark's portfolio of US traded life policies (the "Portfolio") would have been urgently required, thereby eroding the value of the assets available to Lifemark's creditors, including the holders of its Luxembourg-listed bonds.

The Lifemark Loan is intended to provide a source of liquidity for Lifemark to enable it to pay the premiums on its Portfolio and to meet certain other operating expenses falling due during the period of the Lifemark Loan, whilst Lifemark formulates and proposes a restructuring and recovery plan to its creditors, including its bondholders.

Subject to the terms of the Lifemark Loan, N&P will make available up to a maximum of £1.5 million at an interest rate commensurate with the risk profile of the loan.

The Trustee has agreed to allow certain amendments to be made to the trust deeds in respect of Lifemark's bonds with the ultimate aim of protecting the interests of the bondholders. Under these amended arrangements, the Lifemark Loan will be secured over the Portfolio which also forms the security for the Lifemark bonds. In all circumstances, the Lifemark Loan will rank ahead of bondholders. Lifemark has benefited and will continue to benefit from a loan of $17.2m provided by Billericay Trading Limited, the Gibraltar-registered trust of the Ford family.

The Financial Services Authority (FSA) has been informed of the Lifemark Loan. The FSA notes the attempt by N&P and CarVal to try to improve Lifemark's liquidity position.

The Lifemark Loan is one of a number of dimensions to the Keydata situation. N&P continues to discuss that situation actively with a number of relevant parties (including members of the regulatory community) with a view to seeking a resolution to the current position faced by its Keydata investors, the majority of whom bought Keydata plans which were backed by Lifemark bonds.

Contacts:

·; For further information, journalists please contact either:

·; N&P's Press Office on 01733 372074: Alison Rolls, AGM, head of communications [email protected]. Outside office hours, please call 01733 372359 for contact numbers

·; Financial Dynamics: Georgina Turner on 0207 269 7136 / [email protected]

Note to Editors:

·; Photos available on www.headlinemoney.co.uk

·; N&P is the UK's 9th largest building society with 46 branches.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF AN OFFER OR AN INVITATION TO SELL OR OTHERWISE DISPOSE OF ANY INVESTMENT OR RELATED RIGHTS IN ANY JURISDICTION.