Lloyds TSB Bank plc

shares of the Bank. Such class would rank junior to the claims ofSenior Creditors and junior to any notional class of preference shares inthe capital of the Bank by reference to which the amount payable inrespect of any Junior Subordinated Debt in the winding-up of the Bankis determined. The Holders' claims in a winding-up shall be limited to(other than in the case of a solvent winding up) the principal amount ofthe relevant Capital Securities (and no amounts will be payable inrespect of any Coupon including any Deferred Coupon Payment) or (inthe case of a solvent winding up) the principal amount of the relevantCapital Securities (and amounts accrued and unpaid in respect of anyCoupon including any Deferred Coupon Payment).Deferral of Coupon PaymentsDividend and CapitalRestrictionIf the Bank, at its sole discretion, determines on the 20th business dayprior to the date on which any Coupon Payment would, in the absenceof deferral in accordance with Condition 4, be due and payable, that itis, or payment of the relevant Coupon Payment will result in the Bankbeing, in non-compliance with applicable Capital Regulations, the Bankmay elect to defer such Coupon Payment, subject to the restrictionsdescribed below. Such Deferred Coupon Payment shall be satisfied onlyon the date upon which the Capital Securities are redeemed, but shallnot be paid in any other circumstances. No interest will accrue on aDeferred Coupon Payment.If the Bank defers a Payment for any reason as described above then nopayments will be permitted on (and no purchases or redemptions will bepermitted of) the ordinary share capital or directly or indirectly issuedpreference or preferred securities or other issued Tier 1 securities of theBank or the Parent until the Bank next makes a Coupon Payment.Alternative Coupon Satisfaction Investors will always receive payments made in respect of the CapitalMechanismSecurities in cash. However, if the Bank defers a Coupon Payment, thenany such Deferred Coupon Payment must be satisfied by the Bank bythe issue of its ordinary shares. In that event, the Parent will issue itsordinary shares to the Trustee or its agent in exchange for the ordinaryshares so issued by the Bank. When sold, the Parent's shares willprovide a cash amount which, when converted into U.S. dollars, thePrincipal Paying Agent, on behalf of the Trustee, will pay to theHolders in respect of the relevant Payment. The Calculation Agent willcalculate in advance the number of ordinary shares of the Bank or theParent to be issued in order to enable the Trustee or its agent to raisethe full amount of money due on the relevant payment date to Holders.InsufficiencyMarket Disruption EventSuspensionEach of the Bank and the Parent is required to keep available for issueenough ordinary shares as it reasonably considers would be required tosatisfy from time to time any Deferred Coupon Payments and the nextyear's Coupon Payments or Payments using the alternative couponsatisfaction mechanism.If, in the opinion of the Bank, a Market Disruption Event in respect ofthe Parent's shares exists on or after the 15th Business Day precedingany date upon which the Bank is due to satisfy a payment using thealternative coupon satisfaction mechanism, the payment to Holders maybe deferred until the Market Disruption Event no longer exists.If, following any take-over offer or any reorganisation, restructuring orscheme of arrangement, the Parent or any subsequent New Ownerceases to be the ultimate holding company of the Lloyds TSB group ofcompanies, the Bank shall give notice thereof and any changes to thedocumentation relating to the Capital Securities determined by anindependent investment bank to be appropriate in order to preservesubstantially the economic effect for the Holders of a holding of theCapital Securities prior to the Suspension will be made by the Bank andthe Trustee. Pending such changes the Bank will be unable to satisfy5