Lloyds TSB Bank plc

Payments using the alternative coupon satisfaction mechanism. If theinvestment bank is unable to determine appropriate amendments, asnotified to the Bank and the Trustee, the provisions relating to"Definitive Suspension" as set out in Condition 8(d) shall apply. Duringa Definitive Suspension, the provisions of Condition 4 shall continue toapply and the Bank will be unable to redeem any Capital Securities ifthere has been any deferral of a Coupon Payment.Additional Amounts The Bank will pay additional amounts to Holders of the CapitalSecurities to gross up Payments upon the imposition of UK withholdingtax, subject to customary exceptions.Exchange, Variation orRedemption for TaxationReasonsExchange, Variation orRedemption for RegulatoryReasonsRemedy for Non-PaymentThe Bank may, subject to the prior consent of the FSA, redeem all, butnot some only, of the Capital Securities at their principal amounttogether with any Outstanding Payments in the event that for reasonsoutside its control it is required to pay additional amounts in respect ofUnited Kingdom withholding taxation as provided in Condition 11 ofthe Terms and Conditions of the Capital Securities, subject toCondition 2. Upon the occurrence of certain other changes in thetreatment of the Capital Securities for taxation purposes, which changesaffect payments of interest falling due on or prior to 22 November 2007the Bank may, subject to the prior consent of the FSA, exchange theCapital Securities for, or vary the terms of the Capital Securities so thatthey become, Upper Tier 2 Securities or, if such change in tax treatmentalso affects or would affect the Upper Tier 2 Securities and subject toCondition 2, redeem all, but not some only, of the Capital Securities attheir principal amount together with any Outstanding Payments.The Capital Securities will qualify as Tier 1 Capital for the purposes ofthe FSA's capital adequacy regulations. If at any time the FSA hasdetermined that securities of the nature of the Capital Securities ceaseto qualify as Tier 1 Capital, the Bank may, subject to the prior consentof the FSA, exchange the Capital Securities for, or vary the terms of theCapital Securities so that they become, Upper Tier 2 Securities or, ifsuch exchange or varied securities do not or would not qualify as UpperTier 2 Capital or certain other provisions apply, and subject toCondition 2, redeem all, but not some only, of the Capital Securities attheir principal amount together with any Outstanding Payments.The sole remedy against the Bank available to the Trustee or anyHolder of Capital Securities for recovery of amounts owing in respectof the Capital Securities will be the institution of proceedings for thewinding-up of the Bank and/or proving in such winding-up.Form Bearer. The Capital Securities will be represented initially by theTemporary Global Capital Security, which will be deposited outside theUnited States with a Common Depositary for Euroclear Bank S.A./N.Vas operator of the Euroclear System ("Euroclear") and ClearstreamBanking, société anonyme ("Clearstream, Luxembourg") on or about13 November 2002. Interests in the Temporary Global Capital Securitywill be exchangeable for interests in the Permanent Global CapitalSecurity on or after a date which is expected to be 23 December 2002upon certification as to non-US beneficial ownership as required byUS Treasury regulations and as described in the Temporary GlobalCapital Security. Capital Securities in definitive bearer form withcoupons and a talon attached on issue will be issued in exchange forinterests in the Permanent Global Capital Security (a) uponnon-payment of sums when due as set out in Condition 10, (b) at anytime at the option of the Bank, or (c) in other limited circumstances.ListingApplication has been made to admit the Capital Securities to theOfficial List of the UK Listing Authority and to trading on the LondonStock Exchange.6