Dear Mr. Varley,

I acknowledge with thanks your letter written on behalf of Mr. Mike Blackburn Chief Executive Officer in reply to my letter addressed to him.

Your reply utterly confuses me with respect to Halifax plc's justification for refusal to issue free shares (or the cash equivalent) to shareholders in the Halifax plc who are not resident in UK.

FREE SHARES  -  FREE GIFT IN CASH  -  NO LAWS APPLY ANYWHERE

My first point refers to the advice Halifax received from its "lawyers in the USA."

1. The advice they gave you is correct if the Halifax intended to issue, sell, or trade their free shares in the USA as stated in my letter to Mr.Blackburn.

2. If their advice was given in regard to the gift of free shares (or cash in lieu) then they were in error. There are no local, or indeed, national laws which would prohibit such a gift to a United States citizen.

If you have applied the answer which your US lawyers provided in the first case to the second case, then you have either been misinformed or you are attempting to confuse the issue. Please provide a lucid explanation to clear up the confusion which currently exists on this point.

VARLEY - OFFER TO PRESENT U.S. LAWYER ADVICE

The second point refers to the breach of local laws as they refer to the acceptance of free shares (or cash in lieu) by a US citizen from a foreign source.

Your letter states :

" have obtained information about local (U.S.) laws that I did not consider too difficult for you to comply with and that you cannot enter into detailed correspondence about the terms of foreign law."

If you read my letter with care you will note that I clearly stated "there are no such laws", therefore there would be nothing to comply with and detailed correspondence on the subject rendered absolutely unnecessary.

Please advise me of any information you may have in this regard. If I am in error, I would very much like to know your source, and if determined to be reliable, offer you my most sincere apology.

Perhaps you would care to state the name and contact details of the US lawyers Halifax contacted for said advice above.

The third and last point refers to the last paragraph of your letter which states that:

"I MUST CONFIRM THAT HALIFAX WILL NOT BE CHANGING THE TERMS OF ITS SHARE DISTRIBUTION SCHEME AND, INDEED, COULD NOT DO SO AT THIS STAGE .... MUST ADVISE THERE IS NO DISCRETION."

SIMON VARLEY HAS REITERATED THIS STATEMENT IN STANDARD FORM LETTERS THOUSANDS OF TIMES FOR OVER A YEAR, BUT . . .

I find this statement hard to believe, as I have in my possession a copy of a letter/contract signed by you and dated 4 September 1997. THE LETTER is a contract offered by you to a Halifax Gold Account holder well after the June 2nd 1997 Vesting Date deadline to change address to UK - a vital point Halifax refused to make clear and indeed was consistently evasive about throughout its conversion literature and correspondence.

The account holder is also a resident in one of the non-permitted territories in the Middle East. The contract/letter is an offer to pay him by cheque the cash equivalent of the value of the shares he was entitled to had he been resident in the UK at the time of the conversion.

I would be happy to receive such a letter. Will you please explain how it is possible to treat one depositor in one non-permitted territory fairly and not treat all with the same consideration.

Contrary to your previous statements, it is perfectly possible to send cash into non-permitted territories, a mere transfer that the Society could hardly consider to be "onerous." The transaction would be even less onerous if the cash equivalent of the shares due were deposited directly into the account of the shareholder. No money would even leave England and no laws, domestic or foreign or "interplanetary," would be violated.

UNHAV HAS INVESTIGATED AND DISCOVERED HALIFAX plc HAS SECRETLY PAID "CASH IN LIEU" OF SHARES AFTER DEADLINE IN VARIOUS OF ITS SO-CALLED "NON-PERMITTED TERRITORIES."

UNHAV - POISED TO BROADCAST TO UK & THE WORLD

Mr Brian Hazlehurst, UNHAV World Campaign Director, brianhaz@uninet.com.br, has asked me to inform you that he has in his possession many other letters similar to the one referred to above, offering cash in lieu of shares. In due time they will be released to the UK and Overseas Press, diverse British and international organs and prominent public figures, as well as posted on the UNHAV website : http://www.rain.org/~jmhmps/unhav.html

Your sincerely,

UNHAV - USA