Bond Lloyds Bank Group 6% ( XS0145407507 ) in GBP

Lloyds Bank Group

100 % ⇌

United Kingdom

XS0145407507 ( in GBP )

6% per year ( payment 1 time a year)

Perpetual

Prospectus brochure of the bond Lloyds Banking Group XS0145407507 en GBP 6%, maturity Perpetual

07/06/2026 ( In 172 days )

Lloyds Banking Group is a major British multinational banking and financial services corporation, offering a range of products and services to personal and corporate customers through its various brands, including Lloyds Bank, Halifax, and Bank of Scotland.

The Bond issued by Lloyds Bank Group ( United Kingdom ) , in GBP, with the ISIN code XS0145407507, pays a coupon of 6% per year.
The coupons are paid 1 time per year and the Bond maturity is Perpetual

OFFERING CIRCULAR
Dated 26 March 2002
LLOYDS TSB GROUP plc
(Incorporated in Scotland with limited liability under the Companies Acts
with registered number 95,000)
£500,000,000
6 per cent. Undated Subordinated Guaranteed Bonds callable 2032
guaranteed on a subordinated basis by
LLOYDS TSB BANK plc
(Incorporated in England with limited liability under the Companies Act 1862
and the Companies Act 1985 with registered number 2065)
Issue Price: 99.879 per cent.
The £500,000,000 6 per cent. Undated Subordinated Guaranteed Bonds callable 2032 of Lloyds TSB Group plc (the
` Issuer' ) guaranteed on a subordinated basis by Lloyds TSB Bank plc (the ` Guarantor' ) are proposed to be issued on 28
March 2002 (the ` Closing Date''). The Bonds will bear interest calculated from, and including 28 March 2002 to, but
excluding, 7 June 2032 at a rate of 6 per cent. per annum, payable annually in arrear on 7 June in each year starting on 7 June
2002. There will be a short first coupon payable on the first Interest Payment Date (as defined in Condition 4 ``Interest''). From,
and including, 7 June 2032, the Bonds will bear interest at a rate, reset every five years, of 2.02 per cent. per annum above the
gross redemption yield on a specified United Kingdom government security, payable annually in arrear on 7 June in each year, all
as more particularly described in Condition 4 ``Interest''.
The Bonds will be perpetual securities and not subject to any mandatory redemption provisions. The Bonds will be
redeemable on any Reset Date (as defined in Condition 4(d)) in whole, but not in part at the option of the Issuer, at their principal
amount, together with interest accrued to, but excluding, the date of redemption and all Arrears of Interest (as defined herein), if
any. The Bonds will also be redeemable, subject to the satisfaction of certain conditions, in whole but not in part, at any time
prior to the Reset Date and, thereafter, on any Interest Payment Date as a result of certain taxation reasons (all as more fully
described in Condition 5(b) ``Redemption for Taxation Reasons''). Under existing requirements, the Issuer may not redeem or
purchase any Bonds unless the Financial Services Authority has given its prior written consent.
The Bonds and the obligations of the Guarantor under the guarantee in respect thereof will constitute unsecured
obligations of the Issuer and the Guarantor respectively, subordinated to the claims of Senior Creditors (as defined in
Conditions 2 and 3 ``Status and Subordination'' and ``Subordinated Guarantee'', respectively).
The Bonds have been assigned a rating of A+ by Standard & Poor's Rating Services, a division of the McGraw Hill
Companies, Inc. (``Standard & Poor's' ) and a rating of Aa1 by Moody's Investors Service, Inc. (``Moody's''). A credit rating is
not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the
relevant rating organisation.
The Bonds will be represented initially by a temporary global Bond (the ` Temporary Global Bond''), without interest
coupons and talons, which will be deposited with a common depositary for Clearstream Banking, socie´te´ anonyme
(``Clearstream, Luxembourg' ) and Euroclear Bank S.A./N.V. as operator of the Euroclear System (``Euroclear' ) on or about
28 March 2002.
The Temporary Global Bond will be exchangeable for a permanent global Bond (the ` Permanent Global Bond''),
without interest coupons and talons, on or after a date which is expected to be 7 May 2002 upon certification as to non-US
beneficial ownership. Definitive Bonds will be available only in the limited circumstances set out in the Permanent Global Bond.
Application has been made to the Financial Services Authority in its capacity as competent authority under the Financial
Services and Markets Act 2000 (the ` UK Listing Authority' ) for the Bonds to be admitted to the official list of the UK Listing
Authority (the ` Official List' ) and to the London Stock Exchange plc (the ` London Stock Exchange' ) for the Bonds to be
admitted to trading on the London Stock Exchange's market for listed securities. Admission to the Official List of the UK Listing
Authority, together with admission to trading on the London Stock Exchange's market for listed securities, constitutes official
listing on a stock exchange.
Credit Suisse First Boston
UBS Warburg
Goldman Sachs International
Lehman Brothers

This document comprises listing particulars relating to the issue of the Bonds by the Issuer in accordance
with the listing rules (the ``Listing Rules'') made by the UK Listing Authority under Section 74 of the Financial
Services and Markets Act 2000 for the purpose of giving information with regard to the issue by the Issuer of the
Bonds, the Issuer and the Guarantor. Copies of this document have been delivered for registration to the Registrar
of Companies both in England and Wales and Scotland as required by Section 83 of the Financial Services and
Markets Act 2000. The Issuer and the Guarantor accept responsibility for the information contained in this
document. To the best of the knowledge and belief of each of the Issuer and the Guarantor (each having taken all
reasonable care to ensure that such is the case), the information contained in this document is in accordance with
the facts and does not omit anything likely to affect the import of such information.
No person is authorised to give any information or to make any representation not contained herein in
connection with the offering or sale of the Bonds and any information or representation not contained herein must
not be relied upon as having been authorised by the Issuer, the Guarantor or the Managers (as defined under
``Subscription and Sale'' below). Neither the delivery of this document nor any sale or purchase made in
connection herewith shall, under any circumstances, constitute a representation or create any implication that
there has been no change in the affairs of the Issuer or the Guarantor since the date hereof.
This document does not constitute an offer of, or an invitation by or on behalf of the Issuer, the Guarantor
or the Managers to subscribe for or purchase, any of the Bonds. The distribution of this document and the offering
of the Bonds in certain jurisdictions may be restricted by law. Persons into whose possession this document
comes are required by the Issuer, the Guarantor and the Managers to inform themselves about, and to observe,
any such restrictions. A further description of certain restrictions on the offering and sale of the Bonds and on the
distribution of this document is given under ``Subscription and Sale'' below.
The Bonds have not been and will not be registered under the US Securities Act of 1933, as amended, and
are subject to US tax law requirements. Subject to certain exceptions, Bonds may not be offered, sold or
delivered, directly or indirectly, within the United States or to US Persons.
References herein to the ``Group'' are to Lloyds TSB Group plc and its subsidiaries taken as a whole.
References herein to ``pounds'', ``sterling'' and ``£'' are to the currency of the United Kingdom of Great
Britain and Northern Ireland (the ``United Kingdom'' or the ``UK'').
In connection with this issue, Credit Suisse First Boston (Europe) Limited (``CSFB'') may over-allot
or effect transactions with a view to supporting the market price of the Bonds at a level higher than that
which might otherwise prevail for a limited period after the issue date. However, there may be no
obligation on CSFB to do this. Such stabilising, if commenced, may be discontinued at any time, and must
be brought to an end after a limited period.
2

TABLE OF CONTENTS
TERMS AND CONDITIONS OF THE BONDS.............................
4
LLOYDS TSB BANK PLC.....................................................
24
SUMMARY OF PROVISIONS RELATING TO THE
CAPITALISATION AND INDEBTEDNESS OF
BONDS WHILE IN GLOBAL FORM .......................................
17
LLOYDS TSB BANK PLC .................................................
29
USE OF PROCEEDS........................................................................
19
UNITED KINGDOM TAXATION............................................
32
LLOYDS TSB GROUP PLC ........................................................
20
SUBSCRIPTION AND SALE .....................................................
34
CAPITALISATION AND INDEBTEDNESS OF
GENERAL INFORMATION.......................................................
35
LLOYDS TSB GROUP PLC ....................................................
21
DOCUMENTS INCORPORATED BY REFERENCE
Any reference in this document to listing particulars means this document excluding all information
incorporated by reference. The Issuer has confirmed that any information incorporated by reference, including
any such information to which readers of this document are expressly referred, has not been and does not need to
be included in the listing particulars to satisfy the requirements of the Financial Services and Markets Act 2000 or
the Listing Rules. The Issuer believes that none of the information incorporated herein by reference conflicts in
any material respect with the information included in the listing particulars.
3

TERMS AND CONDITIONS OF THE BONDS
Neither the Trust Deed constituting the Bonds nor the Conditions of the Bonds will contain any
negative pledge covenant by the Issuer or the Guarantor or any events of default other than those set out in
Condition 9 below (which do not include, inter alia, a cross default provision).
The terms and conditions to be endorsed on each of the Bonds in definitive form (if issued) will be
substantially in the following form:
The £500,000,000 6 per cent. Undated Subordinated Guaranteed Bonds callable 2032 (the ``Bonds'',
which expression shall in these Conditions, unless the context otherwise requires, include any further bonds
issued pursuant to Condition 13 and forming a single series with the Bonds) of Lloyds TSB Group plc (the
``Issuer'') are constituted by a trust deed dated 28 March 2002 (the ``Trust Deed'') between the Issuer, Lloyds
TSB Bank plc (the ``Guarantor'') as guarantor and The Law Debenture Trust Corporation p.l.c. (the ``Trustee'',
which expression shall include all persons for the time being the trustee or trustees under the Trust Deed) as
trustee for the Bondholders and the Couponholders (both as defined below). The issue of the Bonds was
authorised by a resolution of a duly constituted committee of the Board of Directors of the Issuer passed on
7 February 2002. The giving of the guarantee in respect of the Bonds (the ``Guarantee'') was authorised by a
resolution of the Chairman's Committee of the Board of Directors of the Guarantor passed on 7 February 2002
and a resolution of the shareholders of the Guarantor passed on 26 March 2002. These Conditions include
summaries of, and are subject to, the detailed provisions of the Trust Deed. An Agency Agreement dated
28 March 2002 (the ``Agency Agreement'') has been entered into in relation to the Bonds between the Issuer, the
Trustee, Citibank, N.A., London office, as principal paying agent and the other paying agent named in it. The
principal paying agent and the other paying agent are referred to below respectively as the ``Principal Paying
Agent'' and the ``Paying Agents'' (which expression shall, where the context so permits, include the Principal
Paying Agent and any other paying agents appointed from time to time under the Agency Agreement). Copies of
the Trust Deed and the Agency Agreement are available for inspection during usual business hours at the
registered office for the time being of the Trustee (being at the date of issue of the Bonds at Fifth Floor, 100
Wood Street, London EC2V 7EX) and at the specified offices of the Paying Agents.
The holders of the Bonds (the ``Bondholders''), the holders (the ``Couponholders'') of the interest
coupons (the ``Coupons'') appertaining to the Bonds and the talons for further Coupons (the ``Talons'') are
entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and
are deemed to have notice of those provisions applicable to them of the Agency Agreement.
1.
Form, Denomination and Title
The Bonds are issued in bearer form in denominations of £1,000, £10,000 and £100,000. Bonds are
serially numbered and are issued with Coupons (and a Talon) attached and title will pass by delivery. Bonds of
one denomination are not exchangeable for Bonds of any other denomination.
Except as ordered by a court of competent jurisdiction or as required by law, the holder of any Bond,
Coupon or Talon shall be deemed to be and may be treated as its absolute owner for all purposes whether or not it
is overdue and regardless of any notice of ownership, trust or an interest in it, any writing on it or its theft or loss
and no person shall be liable for so treating the holder.
2.
Status and Subordination of the Bonds
(a)
No Set-off: Subject to applicable law, no Bondholder or Couponholder may exercise, claim or plead any
right of set-off, compensation or retention in respect of any amount owed to it by the Issuer or the Guarantor
arising under or in connection with the Bonds or Coupons and each Bondholder and Couponholder shall, by
virtue of being the holder of any Bond or Coupon (as the case may be), be deemed to have waived all such rights
of set-off, compensation or retention.
(b)
Status: The Bonds and the Coupons relating to them constitute unsecured, subordinated obligations of the
Issuer, conditional as described below, and rank pari passu without any preference among themselves.
4

(c)
Subordination: The rights of the Bondholders and the Couponholders are subordinated to the claims of
Senior Creditors (as defined below) and accordingly payments of principal and interest are conditional upon the
Issuer being solvent at the time of payment by the Issuer and no principal or interest shall be payable in respect of
the Bonds except to the extent that the Issuer could make such payment and still be solvent immediately
thereafter. For the purpose of this Condition 3(c), the Issuer shall be solvent if (i) it is able to pay its debts as they
fall due and (ii) its Assets exceed its Liabilities (other than its Liabilities to persons who are not Senior Creditors).
A report as to the solvency of the Issuer by two Directors of the Issuer or, in certain circumstances as provided in
the Trust Deed, the auditors of the Issuer or, if the Issuer is in winding-up, its liquidator, shall in the absence of
proven error be treated and accepted by the Issuer, the Trustee, the Bondholders and the Couponholders as correct
and sufficient evidence thereof.
If at any time an order is made or an effective resolution is passed for the winding-up in Scotland of the
Issuer, there shall be payable in respect of the Bonds (in lieu of any other payment), but subject as provided in this
Condition 2(c), such amount, if any, as would have been payable to a Bondholder if, on the day prior to the
commencement of the winding-up and thereafter, such holder of such Bond were the holder of a preference share
in the capital of the Issuer having a preferential right to a return of assets in the winding-up over the holders of all
issued shares for the time being in the capital of the Issuer on the assumption that such preference share was
entitled to receive on a return of assets in such winding-up an amount equal to the principal amount of such Bond
together with Arrears of Interest (as defined in Condition 4(c)), if any, and any accrued interest (other than
Arrears of Interest) up to, but excluding, the date of repayment (as provided in the Trust Deed) in respect thereof.
For the purposes of this Condition 2(c), ``Senior Creditors'' means creditors of the Issuer (i) who are
depositors or other unsubordinated creditors of the Issuer or (ii) whose claims are, or are expressed to be,
subordinated (whether only in the event of the winding-up of the Issuer or otherwise) to the claims of depositors
and other unsubordinated creditors of the Issuer but not further or otherwise or (iii) who are subordinated
creditors of the Issuer other than those whose claims are, or are expressed to rank, pari passu with, or junior to,
the claims of the Bondholders; ``Assets'' means the unconsolidated gross assets of the Issuer; and ``Liabilities''
means the unconsolidated gross liabilities of the Issuer, all as shown by the latest published audited balance sheet
of the Issuer, but adjusted for contingent assets and contingent liabilities and for subsequent events, all in such
manner as such Directors, the auditors or the liquidator (as the case may be) may determine.
N.B. The obligations of the Issuer in respect of the Bonds and the Coupons are conditional upon the Issuer
being solvent for the purpose of this Condition 2(c) immediately before and after payment by the Issuer. If this
Condition 2(c) is not satisfied, any amounts which might otherwise have been allocated in or towards payment of
principal and interest in respect of the Bonds may be used to absorb losses.
3.
Status and Subordination of the Guarantee
The payment of principal and interest in respect of the Bonds and all other moneys payable by the Issuer
under or pursuant to the Trust Deed has been irrevocably and (save as to subordination) unconditionally
guaranteed by the Guarantor, as provided in the Trust Deed. The obligations of the Guarantor under the
Guarantee constitute unsecured obligations of the Guarantor. The obligations of the Guarantor under the
Guarantee are subordinated to the claims of Senior Creditors (as defined below) and accordingly payments of
principal and interest are conditional upon the Guarantor being solvent at the time of payment by the Guarantor
and no principal or interest shall be payable in respect of the Bonds except to the extent that the Guarantor could
make such payment and still be solvent immediately thereafter. For the purpose of this Condition 3, the Guarantor
shall be solvent if (i) it is able to pay its debts as they fall due and (ii) its Assets exceed its Liabilities (other than
its Liabilities to persons who are not Senior Creditors). A report as to the solvency of the Guarantor by two
Directors of the Guarantor or, in certain circumstances as provided in the Trust Deed, the auditors of the
Guarantor or, if the Guarantor is in winding-up, its liquidator, shall in the absence of proven error be treated and
accepted by the Guarantor, the Trustee, the Bondholders and the Couponholders as correct and sufficient
evidence thereof. For the purpose of this Condition 3, amounts (whether by way of principal, interest or
otherwise) otherwise payable by the Issuer shall be deemed so payable notwithstanding that the solvency
condition set out in Condition 2(c) is not satisfied.
5

If at any time an order is made or an effective resolution is passed for the winding-up in England of the
Guarantor, there shall be payable under the Guarantee in respect of each Bond (in lieu of any other payment), but
subject as provided in this Condition 3, such amount, if any, as would have been payable to a Bondholder if, on
the day prior to the commencement of the winding-up and thereafter, such holder of such Bond were the holder of
a preference share in the capital of the Guarantor (ranking pari passu with the Cumulative Floating Rate
Preference Share of £1 in the capital of the Guarantor) having a preferential right to a return of assets in the
winding-up over the holders of all issued shares for the time being in the capital of the Guarantor on the
assumption that such preference share was entitled to receive on a return of assets in such winding-up an amount
equal to the principal amount of such Bond together with Arrears of Interest (as defined in Condition 4(c)), if any,
and any accrued interest (other than Arrears of Interest) up to, but excluding, the date of repayment (as provided
in the Trust Deed) in respect thereof.
For the purposes of this Condition 3, ``Senior Creditors'' means creditors of the Guarantor (i) who are
depositors or other unsubordinated creditors of the Guarantor or (ii) whose claims are, or are expressed to be,
subordinated (whether only in the event of the winding-up of the Guarantor or otherwise) to the claims of
depositors and other unsubordinated creditors of the Guarantor but not further or otherwise or (iii) who are
subordinated creditors of the Guarantor other than those whose claims are, or are expressed to rank, pari passu
with, or junior to, the claims of the Bondholders; ``Assets'' means the unconsolidated gross assets of the
Guarantor; and ``Liabilities'' means the unconsolidated gross liabilities of the Guarantor, all as shown by the
latest published audited balance sheet of the Guarantor, but adjusted for contingent assets and contingent
liabilities and for subsequent events, all in such manner as such Directors, the auditors or the liquidator (as the
case may be) may determine.
N.B. The obligations of the Guarantor in respect of the Bonds and the related Coupons are conditional
upon the Guarantor being solvent for the purpose of this Condition immediately before and after payment by the
Guarantor. If this Condition is not satisfied, any amounts which might otherwise have been allocated in or
towards payment of principal and interest in respect of the Bonds may be used to absorb losses.
4.
Interest
(a)
Rate of Interest: The Bonds bear interest at the rate of 6 per cent. per annum from, and including,
28 March 2002 to, but excluding, 7 June 2032 and thereafter at an applicable rate of interest determined in
accordance with paragraph (d) below (the ``Reset Rate of Interest''). Interest on the Bonds will be payable,
subject as provided below, in arrear on 7 June in each year (each an ``Interest Payment Date''), the first Interest
Payment Date being 7 June 2002. The amount payable on the first Interest Payment Date shall be £11.67 per
£1,000 principal amount of Bonds. If in any other circumstance, interest is required to be calculated for a period
of less than one year, it will be calculated on the basis of (i) the actual number of days in the period from, and
including, the date from which interest begins to accrue (for the purpose of this Condition 4(a), the ``Accrual
Date'') to, but excluding, the date on which it falls due divided by (ii) the actual number of days from, and
including, the Accrual Date to, but excluding, the next following Interest Payment Date.
(b)
Interest Payments: Interest will cease to accrue on the Bonds on the first due date for redemption thereof
unless, upon due presentation thereof, payment of principal is improperly withheld or refused or is not made by
reason of Condition 4(c) below, as the case may be. In such event interest will continue to accrue (as well after as
before any judgment) as provided in the Trust Deed.
(c)
Optional Payment of Interest: Without prejudice to the provisions of Condition 2, the Issuer shall not be
obliged to make payment of any interest accrued on the Bonds if, during the period of six months immediately
prior to the date on which payment of such interest would otherwise be due, no dividend shall have been declared,
paid or made on any class of share capital of the Issuer, and all interest not so paid shall, so long as the same
remains unpaid, constitute ``Arrears of Interest''. The Issuer may at its option (upon the expiry of not less than
seven days' notice to the Bondholders given in accordance with Condition 14 and subject to Condition 2) at any
time pay all or part of the Arrears of Interest (being, if part only, the whole of the interest that would have been
due on all the Bonds on any due date for the payment of interest) but so that, in the case of any such partial
payment, the interest that would have been due on any date shall not be paid prior to that accrued in respect of
6

any earlier date. If notice is given by the Issuer of its intention to pay the whole or part of Arrears of Interest, the
Issuer shall be obliged (subject to Condition 2) to do so upon the expiry of such notice.
All Arrears of Interest shall (subject to Condition 2) become due in full on the date on which any dividend
is next declared, paid or made on any class of share capital of the Issuer or, if earlier, the date set for any
redemption under Condition 5(b) or (c) or the commencement of a winding-up of the Issuer.
Arrears of Interest under this Condition 4(c) shall not bear interest.
(d)
The Reset Rate of Interest:
(i)
The Reset Rate of Interest for any Reset Period (as defined below) shall be the rate per annum
determined by the Agent Bank or such other person as may be appointed from time to time
pursuant to Condition 4(d)(iv) on the following basis. On the Determination Date (as defined
below) relating to such Reset Period, the Agent Bank shall determine the gross redemption yield
(calculated by the Agent Bank on the basis set out by the United Kingdom Debt Management
Office in the paper ``Formulae for Calculating Gilt Prices from Yields'' page 4, Section
One--Price/Yield Formulae ``Conventional Gilts; Double-dated and Undated Gilts with
Assumed (or Actual) Redemption or a Quasi-Coupon Date'' (published 8/6/1998) (as amended
or updated from time to time) on a semi-annual compounding basis) on the basis of the Benchmark
Five-Year Gilt (as defined below) in respect of that Reset Period (converted to an annualised
payment and expressed as a percentage rounded up (if necessary) to four decimal places) (the
``Yield'') with the price of the Benchmark Five-Year Gilt for this purpose being the arithmetic
mean of the offered and bid quotations for the sale or purchase on a spot delivery basis of such
Benchmark Five-Year Gilt as at 3.00 p.m. (London time) on the relevant Determination Date
(quoted by the Reference Dealers (as defined below)). The Reset Rate of Interest for such Reset
Period shall be the aggregate of the Yield, as so determined by the Agent Bank, and the Margin (as
defined below).
In these Conditions:
``Agent Bank'' means such investment bank as may be appointed as agent bank by the Issuer with the
prior written approval of the Trustee;
``Benchmark Five-Year Gilt'' means, in respect of a Reset Period, such United Kingdom government
security having a maturity date on or about the last day of such Reset Period as the Agent Bank, with the
agreement of the Reference Dealers, may determine to be appropriate;
``Business Day'' means, in relation to any place, a day on which commercial banks and foreign exchange
markets settle payments in that place;
``Determination Date'' means, in relation to any Reset Period, the fifth day prior to the first day of such
Reset Period, provided that if such fifth day is not a Business Day in London, it shall be postponed to the next day
which is a Business Day in London provided that such day occurs before the first day of such Reset Period. If
such day falls on or after the first day of such Reset Period, the Determination Date shall instead be the Business
Day in London preceding the first day of such Reset Period which is nearest to the first day of such Reset Period
and upon which the Agent Bank determines that it is possible to determine the Yield;
``Margin'' means 2.02 per cent. per annum;
``Reference Dealers'' means three brokers of gilts and/or gilt edged market makers or such other three
persons operating in the United Kingdom gilt-edged market (approved by the Trustee) as the Agent Bank may
select, each of which (A) is acting through its principal London office, (B) agrees with the Agent Bank's
nomination of the relevant Benchmark Five-Year Gilt and (C) is willing to provide the quotations referred to
above;
``Reset Date'' means 7 June 2032 and every fifth 7 June thereafter; and
7

``Reset Period'' means the period beginning on a Reset Date and ending on the day immediately
preceding the next succeeding Reset Date.
(ii)
The Issuer shall cause such Reset Rate of Interest to be notified to the Trustee, each of the Paying
Agents and any relevant listing authority as soon as practicable after the determination of such
Reset Rate of Interest and shall procure that the Principal Paying Agent gives notice to the
Bondholders thereof in accordance with Condition 14.
(iii)
If the Agent Bank for any reason defaults in its obligation to determine the Reset Rate of Interest
for any Reset Period in accordance with this Condition 4(d), the Trustee shall determine such
Reset Rate of Interest at such rate as, in its absolute discretion (having such regard as it shall think
fit to the procedure described in this Condition 4(d)), it shall deem fair and reasonable in all the
circumstances, and such determination shall be deemed to be a determination thereof by the Agent
Bank.
(iv)
So long as any Bonds remain outstanding (as defined in the Trust Deed), the Issuer will maintain
an Agent Bank. The Issuer may from time to time appoint another leading bank or investment
banking firm in London as Agent Bank as may be approved in writing by the Trustee. If the Agent
Bank is unable or unwilling to continue to act as the Agent Bank, the Issuer shall forthwith appoint
such other leading bank or investment banking firm in London as may be approved in writing by
the Trustee to act as such in it place. The Agent Bank may not resign its duties or be removed
without a successor having been appointed and approved as aforesaid.
(v)
All notifications, opinions, determinations, certificates, calculations, quotations and decisions
given, expressed, made or obtained for the purposes of this Condition 4(d), whether by the Agent
Bank or the Trustee, shall (in the absence of wilful default, bad faith or manifest error) be binding
on the Issuer, the Agent Bank, the Trustee, the Paying Agents and all Bondholders and
Couponholders and (in the absence as aforesaid) no liability to the Bondholders or Couponholders
or the Issuer shall attach to the Agent Bank or the Trustee in connection with the exercise or non-
exercise by it of its powers, duties and discretions.
5.
Redemption, Purchase and Options
(a)
Limitation on Redemption: The Bonds have no final maturity date and are only redeemable in accordance
with the following provisions of this Condition 5 or Condition 9. Any redemption or purchase of Bonds pursuant
to this Condition 5 is subject to the prior written consent of the Financial Services Authority (the ``FSA'') (so
long as the Issuer is required by the FSA to obtain such consent).
(b)
Redemption for Taxation Reasons:
(i)
If at any time the Issuer satisfies the Trustee immediately prior to the giving of the notice referred
to below that (x) if a payment of principal or interest in respect of the Bonds were to be due
(whether or not the same is in fact then due) on or before the next Interest Payment Date, either the
Issuer would, for reasons outside its control, be unable (after using such endeavours as the Trustee
shall consider reasonable) to make such payment of principal or interest without having to pay
additional amounts as provided or referred to in Condition 7, or the Guarantor would, for reasons
outside its control, be unable (after using such endeavours as the Trustee shall consider
reasonable) to procure payment by the Issuer and in making payment itself would be required to
pay such additional amounts or (y) on the next Interest Payment Date the payment of interest in
respect of the Bonds would be treated as a ``distribution'' within the meaning of the Income and
Corporation Taxes Act 1988 (or such other Act as may from time to time supersede or replace that
Act), the Issuer may at its option (subject to Condition 2(c)), having given not less than 30 nor
more than 60 days' notice in accordance with Condition 14, redeem all, but not some only, of the
Bonds then outstanding and shall also pay Arrears of Interest (if any) and any accrued interest
(other than Arrears of Interest) up to, but excluding, the date of redemption.
8

(ii)
Subject only to the obligation of the Issuer to use such endeavours as aforesaid, it shall be
sufficient to establish the existence of the circumstances required to be established pursuant to this
paragraph (b) if the Issuer shall deliver to the Trustee a certificate of an independent lawyer or
accountant satisfactory to the Trustee, in a form satisfactory to the Trustee, to the effect either that
such circumstances exist or that, upon a change in the taxation laws (or regulations made
thereunder) of the United Kingdom or any authority thereof or therein having power to tax or in
the application or interpretation of such laws or regulations, which at the date of such certificate is
proposed and which in the opinion of such lawyer or accountant can reasonably be expected to
become effective on or prior to such Interest Payment Date or time as is referred to in (i) above,
becoming so effective, such circumstances would exist.
(c)
Redemption at the Option of the Issuer: On giving not less than 7 nor more than 30 days' irrevocable
notice to the Trustee and the Bondholders, the Issuer may on any Reset Date redeem all but not some only of the
Bonds at their principal amount. Any such redemption of Bonds shall be at their principal amount together with
all Arrears of Interest (if any) as provided in Condition 4(c).
(d)
Purchases: The Issuer, the Guarantor or any other subsidiary of the Issuer may at any time purchase
Bonds in the open market or otherwise at any price. Any purchase by tender shall be made available to all
Bondholders alike.
(e)
Cancellation: All Bonds purchased by or on behalf of the Issuer or any of its subsidiaries may be
surrendered for cancellation by surrendering each such Bond together with all unmatured Coupons and all
unexchanged Talons to the Principal Paying Agent and if so surrendered, shall, together with all Bonds redeemed
by the Issuer, be cancelled forthwith (together with all unmatured Coupons and unexchanged Talons attached
thereto or surrendered therewith). Any Bonds so surrendered for cancellation may not be reissued or resold and
the obligations of the Issuer in respect of any such Bonds shall be discharged.
6.
Payments and Talons
(a) Method of Payment: Payments of principal and interest in respect of Bonds shall, subject as
mentioned below, be made against presentation and surrender of the relevant Bonds or Coupons (save as
specified in Condition 6(d)(ii)), as the case may be, at the specified office of any Paying Agent by a cheque
payable in pounds sterling, or, at the option of the holder, by transfer to a pounds sterling account maintained by
the payee with, a bank in London. The sole currency of payment and account in respect of the Bonds is pounds
sterling.
(b) Payments subject to Fiscal Laws: The Issuer reserves the right to require a Bondholder or
Couponholder to provide a Paying Agent with such certification or information as may be required to enable the
Issuer to comply with the requirements of the United States federal income tax laws.
(c) Appointment of Agents: The Principal Paying Agent and the other Paying Agents initially appointed
by the Issuer and the Guarantor and their respective specified offices are listed below. Subject as provided in the
Trust Deed and the Agency Agreement, the Principal Paying Agent and the other Paying Agents act solely as
agents of the Issuer and the Guarantor and do not assume any obligation or relationship of agency or trust for or
with any Bondholder or Couponholder. The Issuer and the Guarantor reserve the right at any time with the
approval of the Trustee to vary or terminate the appointment of the Principal Paying Agent or any other Paying
Agent and to appoint additional or other Paying Agents, provided that they shall at all times maintain (i) a
Principal Paying Agent and (ii) a Paying Agent having a specified office in the United Kingdom, which, so long
as the Bonds are listed on the official list (the ``Official List'') of the Financial Services Authority in its capacity
as competent authority under the Financial Services and Markets Act 2000 (the ``UK Listing Authority'') and
are admitted to trading on the market for listed securities of the London Stock Exchange plc (the ``London Stock
Exchange''), shall be in London and provided further, that if any European Union Directive on the taxation of
savings implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000, or any law
implementing or complying with, or introduced in order to conform to, such Directive is introduced, the Issuer
and the Guarantor shall maintain a Paying Agent with a specified office in a European Union member state (other
than the United Kingdom) that will not be obliged to withhold or deduct tax pursuant to such Directive.
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Notice of any such change or any change of any specified office shall promptly be given to the
Bondholders by the Issuer in accordance with Condition 14.
(d)
Unmatured Coupons and unexchanged Talons:
(i)
In relation to any Bond, if any payment is to be made in respect of interest the Interest Payment
Date for which falls on or after the date on which the winding-up of the Issuer is deemed to have
commenced, such payment shall be made only against presentation of the relevant Bond and the
Coupon for any such Interest Payment Date shall be void. In addition, any Bond presented for
payment after an order is made or an effective resolution is passed for the winding-up in Scotland
of the Issuer must be presented together with all Coupons in respect of Arrears of Interest relating
to Interest Payment Dates falling prior to such commencement of the winding-up of the Issuer,
failing which there shall be withheld from any payment otherwise due to the holder of such Bond
such proportion thereof as the Arrears of Interest due in respect of any such missing Coupon bears
to the total of the principal amount of the relevant Bond, all Arrears of Interest in respect thereof
and interest (other than Arrears of Interest) accrued on such Bond in respect of the Interest Period
current at the date of the commencement of the winding-up.
(ii)
Upon the due date for redemption of any Bond, unmatured Coupons relating to such Bond
(whether or not attached) shall become void and no payment shall be made in respect of them.
(iii)
Upon the due date for redemption of any Bond, any unexchanged Talon relating to such Bond
(whether or not attached) shall become void and no Coupon shall be delivered in respect of such
Talon.
(iv)
Where any Bond is presented for redemption without all unmatured Coupons and any
unexchanged Talon relating to it, and where any Bond is presented for redemption without any
unexchanged Talon relating to it, redemption shall be made only against the provision of such
indemnity as the Issuer may require.
(e)
Talons: On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued
in respect of any Bond, the Talon (if any) forming part of such Coupon sheet may be surrendered at the specified
office of the Principal Paying Agent in exchange for a further Coupon sheet (and if necessary another Talon for a
further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Condition 8).
(f)
Non-Business Days:
If any date for payment in respect of any Bond or Coupon is not a business day, the holder shall not be
entitled to payment until the next following business day nor to any interest or other sum in respect of such
postponed payment. In this paragraph, ``business day'' means a day (other than a Saturday or a Sunday) on which
banks and foreign exchange markets (including but not limited to pounds sterling) are open for business in both
London and in the relevant place of presentation (including but not limited to markets dealing in pounds sterling).
7.
Taxation
All payments of principal and/or interest by or on behalf of the Issuer or the Guarantor in respect of the
Bonds and the Coupons shall be made without withholding or deduction for or on account of any present or future
tax, duty or charge of whatsoever nature imposed or levied by or on behalf of the United Kingdom or any
authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In that
event, the Issuer or the Guarantor, as the case may be, shall pay such additional amounts as will result (after such
withholding or deduction) in receipt by the Bondholders, and the Couponholders of the sums which would have
been receivable (in the absence of such withholding or deduction) from it in respect of their Bonds and/or
Coupons, as the case may be; except that no such additional amounts shall be payable with respect to any Bond or
Coupon:
(a)
presented for payment by or on behalf of any holder who is liable to such tax, duty or charge in respect of
such Bond or Coupon by reason of such holder having some connection with the United Kingdom other than the
mere holding of such Bond or Coupon; or
10