Document:

Exhibit
4.5

 

GLOBAL
NOTE

 

THIS SUBORDINATED
NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SUBORDINATED NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SUBORDINATED NOTE REGISTERED, AND
NO TRANSFER OF THIS SUBORDINATED NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY
OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

THE RIGHTS
OF THE HOLDER OF THIS SUBORDINATED NOTE ARE, TO THE EXTENT AND IN THE MANNER SET FORTH IN SECTION 12.01 OF THE INDENTURE, SUBORDINATED
TO THE CLAIMS OF OTHER CREDITORS OF THE COMPANY, AND THIS SUBORDINATED NOTE IS ISSUED SUBJECT TO THE PROVISIONS OF THAT SECTION
12.01, AND THE HOLDER OF THIS SUBORDINATED NOTE, BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS
OF SECTION 12.01 OF THE INDENTURE AND THE TERMS OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF SCOTLAND.

 

     

     

    

CUSIP
No. 539439 AN9

ISIN
No. US539439AN92

 

LLOYDS BANKING
GROUP PLC

 

5.300% Subordinated
Debt Securities due 2045

 

 

	No. [●]	$[●]

 

 

LLOYDS BANKING GROUP PLC (herein
called the “Company,” which term includes any successor person under the Indenture (as defined on the reverse hereof)),
for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $[●] ([spelled
out] dollars) on December 1, 2045 or on such earlier date as the principal hereof may become due in accordance with the terms
hereof and to pay interest thereon semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2016,
and ending on December 1, 2045 (each, a “Payment Date”). Interest so payable on any Payment Date shall be paid to
the Holder in whose name this Subordinated Note is registered on the 15th calendar day immediately preceding the relevant Payment
Date, whether or not such day is a Business Day, as defined in the Indenture (each a “Regular Record Date”). If (i)
the Company fails to pay any installment of interest on any Subordinated Note on or before its Payment Date and such failure continues
for 14 days or (ii) the Company fails to pay all or any part of the principal of any Subordinated Note on any date on which such
principal shall otherwise have become due and payable, whether upon redemption or otherwise, and such failure continues for seven
days (each of (i) and (ii), a “Default”), the Trustee may commence a proceeding for the winding up of the Company
or a Qualifying Administration, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount
of any of the Outstanding Subordinated Notes to be due and payable.

 

Interest
shall accrue on this Subordinated Note from day to day from June 1, 2016 or from the most recent Payment Date at the rate of 5.300%
per annum, until the principal amount hereof is paid or made available for payment.

 

Payments
of interest on this Subordinated Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each
and, in the case of an incomplete month, the actual number of days elapsed in such period.

 

Payment of
the principal amount of (and premium, if any) and any interest on, this Subordinated Note will be made in such coin or currency
of the United States of America as at the time of payment is legal tender for payment of public and private debts. Such payment
shall be made to the Holder including through a Paying Agent of the Company outside the United Kingdom for collection by the Holder.
If the date for payment of the principal amount hereof (and premium, if any) or interest thereon is not a Business Day, then (subject
as provided in the Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as
if made on such date for payment and without any interest or other payment in respect of such delay.

 

     

     

    

Prior to
due presentment of this Subordinated Note for registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Subordinated Note is registered as the owner of such Subordinated Note
for the purpose of receiving payment of principal and interest, if any, on such Subordinated Note and for all other purposes whatsoever,
whether or not such Subordinated Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

 

Reference
is hereby made to the further provisions of this Subordinated Note set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.

 

Unless the
certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this
Subordinated Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

The exercise
of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or
cancellation of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes; (ii) the conversion of
all, or a portion, of the principal amount of, or interest on, the Subordinated Notes into shares or other securities or other
obligations of the Company or another person; and/or (iii) the amendment or alteration of the maturity of the Subordinated Notes,
or amendment of the amount of interest due on the Subordinated Notes, or the dates on which interest becomes payable, including
by suspending payment for a temporary period; which U.K. bail-in power may be exercised by means of variation of the terms of
the Subordinated Notes solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power.
With respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest
that have become due and payable (including principal that has become due and payable at Maturity), but which have not been paid,
prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial owner of the Subordinated Notes further acknowledges
and agrees that the rights of the Holders and/or Beneficial Owners under the Subordinated Notes are subject to, and will be varied,
if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

 

For
these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under
any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit
institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the
Company and the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented,
adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the
Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within
the context of a U.K. resolution regime under the Banking Act 2009 as the same has been or may be amended from time to time
(whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations of a
bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled,
amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and
a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K.
bail-in power).

 

 

     

     

    

IN WITNESS
WHEREOF, the Company has caused this Subordinated Note to be duly executed.

 

Dated: [●], 2016

 

	 	LLOYDS BANKING GROUP
        PLC

         

	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

 

	 

 

 

[Signature
Page to 2045 Global Note No. [●]]

 

     

     

    

CERTIFICATE
OF AUTHENTICATION

 

This is one
of the Subordinated Notes of the series designated herein referred to in the within-mentioned Indenture.

 

Dated: [●], 2016

 

 

	 	THE
BANK OF NEW YORK MELLON,

as Trustee

         

	 	 
	 	By:	 
	 	 	Authorized
Signatory

 

 

 

 

 

 

 

[Signature
Page to 2045 Global Note No. [●]]

 

     

     

    

[REVERSE
OF SECURITY]

 

This Subordinated
Note is one of a duly authorized issue of securities of the Company (herein called the “Subordinated Notes”) issued
and to be issued in one or more series under a Subordinated Indenture, dated as of November 4, 2014 (herein called the “Subordinated
Indenture”), between the Company, as issuer, and The Bank of New York Mellon, as Trustee (herein called the “Trustee,”
which term includes any successor trustee under the Subordinated Indenture), as supplemented by the Fifth Supplemental Indenture,
dated as of [●], 2016, between the Company and the Trustee (the “Fifth Supplemental Indenture, and, together with
the Subordinated Indenture, the “Indenture”) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Subordinated Notes and of the terms upon which the Subordinated Notes are, and are to be, authenticated
and delivered.

 

This Subordinated
Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $[●]. The Company
may, from time to time, without the consent of the Holders of the Subordinated Notes, issue additional Subordinated Notes of one
or more of the series of Subordinated Notes issued under the Subordinated Indenture, having the same ranking and the same interest
rate, Maturity, redemption terms and other terms as the Subordinated Notes, except for the price to the public, issue date, first
Interest Payment Date and temporary CUSIP, ISIN and/or other identifying numbers, provided that such additional Subordinated Notes
must be fungible with the outstanding Subordinated Notes for U.S. federal income tax purposes. Any such additional Subordinated
Notes, together with the Subordinated Notes of the applicable series, may constitute a single series of Subordinated Notes under
the Subordinated Indenture and shall be included in the definition of “Securities” in the Subordinated Indenture where
the context requires.

 

The Subordinated
Notes will constitute our direct, unconditional, unsecured and subordinated obligations ranking pari passu without any preference
among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated
indebtedness of the Company.

 

The rights
of the Holders of the Subordinated Notes of this series are, to the extent and in the manner set forth in Section 12.01 of the
Indenture, subordinated to the claims of all Senior Creditors of the Company, and this series of Subordinated Notes is issued
subject to the provisions of that Section 12.01, and the Holders of this series of Subordinated Notes, by accepting the same,
agree to and shall be bound by such provisions. The provisions of Section 12.01 of the Indenture and the terms of this paragraph
are governed by, and shall be construed in accordance with, the laws of Scotland.

 

If an Event
of Default occurs with respect to Subordinated Notes of any series, then in every such case the Trustee or the Holder or Holders
of not less than 25% in aggregate principal amount of the Outstanding Subordinated Notes of this series may declare the principal
amount, together with accrued interest (if any), and Additional

 

     

     

    

Amounts
(if any), payable on such Subordinated Notes, of all the Subordinated Notes to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such amount shall
become immediately due and payable.

 

Except as
otherwise provided in Article 5 of the Indenture, the Trustee may in its discretion proceed to protect and enforce its rights
and the rights of the Holders of the Subordinated Notes by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Subordinated
Indenture or in aid of the exercise of any power granted herein, or to enforce any other legal or equitable right vested in the
Trustee by the Subordinated Indenture or by law, provided, however, that the Company shall not, as a result of the bringing of
such judicial proceedings, be required to pay any amount representing or measured by reference to the principal of, or any interest
on, the Subordinated Notes prior to any date on which the principal of, or any interest on, the Subordinated Notes would have
otherwise been payable by the Company.

 

If a Default
occurs, the Trustee may commence a proceeding for the winding-up of the Company and/or prove in a winding-up of the Company or
a Qualifying Administration, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount
of any of the Outstanding Subordinated Notes to be due and payable.

 

Failure to
make any payment in respect of this Subordinated Note shall not be a Default if such payment is withheld or refused and an Opinion
of Counsel is delivered to the Trustee concluding that such sums were not paid in order to comply with any fiscal or other law
or regulation or with the order of any court of competent jurisdiction, provided, however, that the Trustee may by notice to the
Company require the Company to take such action (including but not limited to proceedings for a declaration by a court of competent
jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is
appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously
proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results
in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions
of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days
(in the case of payments under clause 5.03(a) of the Indenture) or seven days (in the case of payments under clause 5.03(b) Indenture)
after the Trustee gives written notice to the Company informing it of such resolution.

 

Subject to applicable law, no Holder may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation
or retention in respect of any amount owed to it by the Company arising under or in connection with the Subordinated Debt Securities.
The Holders of Subordinated Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off, counterclaim,
combination of accounts, compensation and retention with respect to the Subordinated Debt Securities or

 

     

     

    

this
Subordinated Indenture (or between the obligations under or in respect of any Subordinated Debt Securities and any liability owed
by a Holder to the Company) that they might otherwise have against the Company.

 

No remedy
against the Company other than as referred to in Article 5 of the Indenture shall be available to the Trustee or the Holders,
whether for the recovery of amounts owing in respect of the Subordinated Notes or under the Indenture or in respect of any breach
by the Company of any of its other obligations under or in respect of the Subordinated Notes or under the Subordinated Indenture,
except that the Trustee and the Holders shall have such rights and powers as they are required to have under the Trust Indenture
Act.

 

Amounts to
be paid on the Subordinated Notes will be made without deduction or withholding for, or on account of, any and all present and
future income, stamp and other taxes, levies, imposts, duties, charges or fees imposed, levied, collected, withheld or assessed
by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the
“Taxing Jurisdiction”), unless such deduction or withholding is required by law. If at any time a Taxing Jurisdiction
requires the Company to make such deduction or withholding, the Company will pay additional amounts with respect to the principal
of, interest and any other payment on, the Subordinated Notes (“Additional Amounts”) that are necessary in order that
the net amounts paid to the Holders of Subordinated Notes, after the deduction or withholding, shall equal the amounts which would
have been payable on the Subordinated Notes if the deduction or withholding had not been required. However, this will not apply
to any such tax, levy, impost, duty, charge or fee, which would not have been deducted or withheld but for the fact that:

 

(i) the Holder
or the Beneficial Owner of the Subordinated Note is a domiciliary, national or resident of, or engaging in business or maintaining
a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise having some connection with the Taxing
Jurisdiction other than the holding or ownership of a Subordinated Note, or the collection of any payment of, or in respect of,
principal of, or any interest or other payment on, any Subordinated Note;

 

(ii) except
in the case of winding-up in the United Kingdom, the relevant Subordinated Note is presented (where presentation is required)
for payment in the United Kingdom;

 

(iii) the
relevant Subordinated Note is presented (where presentation is required) for payment more than 30 days after the date payment
became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to the Additional
Amounts on presenting the same for payment at the close of that 30 day period;

 

(iv) the
Holder or the Beneficial Owner of the relevant Subordinated Note or the Beneficial Owner of any payment of, or in respect of,
principal of, or any interest or other payment on, the Subordinated Note failed to comply with a request of the Company

 

     

     

    

or
its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence
or identity of the Holder or the Beneficial Owner or (y) to make any declaration or other similar claim to satisfy any requirement,
which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing
Jurisdiction as a precondition to exemption from all or part of the tax, levy, impost, duty, charge or fee;

 

(v) the withholding
or deduction is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income, or any
directive amending, supplementing or replacing such directive or any law implementing or complying with, or introduced in order
to conform to, such directive or directives;

 

(vi) the
Subordinated Note is presented (where presentation is required) for payment by or on behalf of a Holder who would have been able
to avoid such withholding or deduction by presenting the Subordinated Note to another paying agent;

 

(vii) the
deduction or withholding is imposed by reason of Sections 1471-1474 of the US Internal Revenue Code and the U.S. Treasury regulations
thereunder or any agreement with the U.S. Internal Revenue Service in connection with these sections and regulations (“FATCA”),
any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA,
or any law, regulation or other official guidance enacted in any jurisdiction implementing, or relating to, FATCA or any intergovernmental
agreement; or

 

(viii) any
combination of subclauses (i) through (vii) above,

 

nor shall
Additional Amounts be paid with respect to the principal of or any interest or other payment on, the Subordinated Notes to any
Holder who is a fiduciary or partnership or any person other than the sole Beneficial Owner of such payment to the extent such
payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary
or partner or settlor with respect to such fiduciary or a member of such partnership or a Beneficial Owner who would not have
been entitled to such Additional Amounts, had it been the Holder.

 

Whenever
in the Indenture there is mentioned, in any context, the payment of the principal of or any interest or other payments on, or
in respect of, any Subordinated Notes of any series such mention shall be deemed to include mention of the payment of Additional
Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if
applicable) were made in any provisions hereof where such express mention is not made. Upon request from the Trustee or a paying
agent, the Company shall provide information reasonably necessary and readily available in order to enable to the Trustee or paying
agent to determine whether any withholding obligations under FATCA apply. None of the Company, the Trustee or a paying agent shall
have any liability in connection with the Company’s or Trustee’s or paying agent’s compliance with any such
withholding obligation under applicable law.

 

     

     

    

Subordinated
Notes may not be redeemed except in accordance with provisions of applicable law, applicable provisions of the Regulatory Capital
Requirements Regulations and except as provided in the Indenture. The Subordinated Notes may not be redeemed in whole or in part
at the option of the Holder thereof.

 

Subject
to the limitations specified below, the Company may, at the option of the Company, on not less than 30 nor more than 60 days’
notice, redeem the Subordinated Notes, as a whole but not in part, at a redemption price equal to 100% of the principal amount,
of the Subordinated Notes then outstanding, together with any accrued interest to (but excluding) the date fixed for redemption,
if at any time:

 

(i)       the
Company determines that as a result of a change in, or amendment to, the laws or regulations of the United Kingdom, or any political
subdivision or authority therein or thereof, having the power to tax, including any treaty to which the United Kingdom is a party,
or any change in any generally published application or interpretation of such laws, including a decision of any court or tribunal,
or any change in the generally published application or interpretation of such laws by any relevant tax authority or any generally
published pronouncement by any tax authority, which change, amendment or pronouncement (x) (subject to (y)) becomes, or would
become, effective on or after the Issue Date, or (y) in the case of a change in law, if such change is enacted by United Kingdom
Act of Parliament or implemented by statutory instrument, on or after the Issue Date (a “Tax Law Change”), the Company
has paid or will or would on the next payment date be required to pay Additional Amounts to any Holder of the Subordinated Notes;
and/or

 

(ii)       a
Tax Law Change would:

 

(A)       result
in the Company not being entitled to claim a deduction in respect of any payments in computing the Company’s taxation liabilities
or materially reducing the amount of such deduction;

 

(B)       prevent
the Subordinated Notes from being treated as loan relationships for United Kingdom tax purposes;

 

(C)       as
a result of the Subordinated Notes being in issue, result in the Company not being able to have losses or deductions set against
the profits or gains, or profits or gains offset by the losses or deductions, of companies with which it is or would otherwise
be so grouped for applicable United Kingdom tax purposes (whether under the group relief system current as of the date of issue
of the Subordinated Notes or any similar system or systems having like effect as may from time to time exist);

 

(D)       result
in a United Kingdom tax liability, or the receipt of income or profit which would be subject to United Kingdom tax, in respect
of a write-down of the principal amount of the Subordinated

 

     

     

    

Notes
or the conversion of the Subordinated Notes into shares or other obligations of the Company; or

 

(E)       result
in a Subordinated Note or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes,

 

(each such Tax Law Change, a
“Tax Event”); provided, however, in each case that the Company could not avoid the consequences of the
Tax Event by taking measures reasonably available to it.

 

Prior to
the delivery of any such notice of redemption, the Company shall deliver to the Trustee (i) a written legal opinion of independent
United Kingdom counsel of recognized standing (selected by the Company), in a form satisfactory to the Trustee, to the effect
that a Tax Event has occurred, and (ii) an Officer’s Certificate confirming (1) that all the conditions necessary for redemption
have occurred and that the Company could not avoid the consequences of the Tax Event by taking measures reasonably available to
it, and (2) that the Relevant Regulator is satisfied that the relevant change or event is material and was not reasonably foreseeable
by the Company on the Issue Date. The Trustee is entitled to conclusively rely on and accept such opinion and Officer’s
Certificate without any duty whatsoever of further inquiry, in which event such opinion and Officer’s Certificate shall
be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

 

Subject to
the conditions set out below, the Subordinated Notes are redeemable, as a whole but not in part, at the option of the Company,
on not less than 30 calendar days’ nor more than 60 calendar days’ notice, at any time, at a redemption price equal
to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of Subordinated Notes to the date
fixed for redemption if, immediately prior to the giving of the notice referred to above, a Capital Disqualification Event has
occurred.

 

Prior to
the giving of any notice of redemption, the Company must deliver to the Trustee an Officer’s Certificate stating that (i)
a Capital Disqualification Event has occurred, and (ii) the Company has demonstrated to the satisfaction of the Relevant Regulator
that the relevant change was not reasonably foreseeable by the Company as at the Issue Date. The Trustee shall be entitled to
accept such Officer’s Certificate without any further inquiry, in which event such Officer’s Certificate shall be
conclusive and binding on the Trustee and the Holders and Beneficial Owners.

 

Subject to
the conditions set out below, the Company may from time to time purchase Subordinated Notes in the open market or by tender or
by private agreement, in any manner and at any price or at differing prices. Subordinated Notes purchased or otherwise acquired
by the Company may be held, resold or at its sole discretion, surrendered to the Trustee for cancellation (in which case all Subordinated
Notes so surrendered will forthwith be cancelled in accordance with applicable law and thereafter may not be re-issued or resold).

 

     

     

    

The Subordinated
Notes may be redeemed or purchased by the Company prior to Maturity as provided in the foregoing paragraphs, subject to:

 

(a) the Company
giving notice to the Relevant Regulator and the Relevant Regulator granting permission to the Company to redeem or purchase the
Subordinated Notes;

 

(b) in respect
of any redemption of the Subordinated Notes proposed to be made prior to the fifth anniversary of the date of issuance of the
Subordinated Notes, if and to the extent then required under the relevant Regulatory Capital Requirements (a) in the case of an
optional redemption due to a Tax Event, the Company having demonstrated to the satisfaction of the Relevant Regulator that the
relevant change or event is material and was not reasonably foreseeable by the Company as at the Issue Date or (b) in the case
of redemption following the occurrence of a Capital Disqualification Event, the Company having demonstrated to the satisfaction
of the Relevant Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date; and

 

(c) if and
to the extent then required by the relevant Regulatory Capital Requirements (A) on or before the relevant redemption or purchase
date, the Company replacing the Subordinated Debt Securities with instruments qualifying as own funds of equal or higher quality
on terms that are sustainable for the income capacity of the Company; or (B) the Company demonstrating to the satisfaction of
the Relevant Regulator that its Tier 1 Capital and Tier 2 Capital would, following such redemption or purchase, exceed its minimum
capital requirements by a margin that the Relevant Regulator may consider necessary at such time based on the Regulatory Capital
Requirements.

 

Notwithstanding
the above conditions, if, at the time of any redemption or purchase, the prevailing Regulatory Capital Requirements permit the
repayment or purchase only after compliance with one or more alternative or additional preconditions to those set out above, the
Company shall comply with such other and/or, as appropriate, additional pre-condition(s).

 

If the Company
elects to redeem the Subordinated Notes, the Subordinated Notes will cease to accrue interest from the date of redemption, provided
the redemption price has been paid in accordance with the Indenture.

 

Upon
payment of (i) the amount of principal
(and premium, if any) so declared due and payable and (ii) accrued and unpaid interest, all of the Company’s obligations
in respect of the payment of the principal of (and premium, if any), and accrued and unpaid interest on, the Subordinated Notes
of this series shall terminate.

 

Notwithstanding
any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Subordinated
Notes, by accepting the Subordinated Notes or otherwise purchasing or acquiring the Subordinated Notes, each Holder (including
each Beneficial Owner) of the Subordinated Notes acknowledges, accepts, agrees to be bound by and consents to the exercise of
any U.K.

 

     

     

    

bail-in
power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation of all,
or a portion, of the principal amount of, or interest on, the Subordinated Notes; (ii) the conversion of all, or a portion, of
the principal amount of, or interest on, the Subordinated Notes into shares or other securities or other obligations of the Company
or another person; and/or (iii) the amendment or alteration of the maturity of the Subordinated Notes, or amendment of the amount
of interest due on the Subordinated Notes, or the dates on which interest becomes payable, including by suspending payment for
a temporary period; which U.K. bail-in power may be exercised by means of variation of the terms of the Subordinated Notes solely
to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. With respect to (i), (ii)
and (iii) above, references to principal and interest shall include payments of principal and interest that have become due and
payable (including principal that has become due and payable at Maturity), but which have not been paid, prior to the exercise
of any U.K. bail-in power. Each Holder and Beneficial Owner of the Subordinated Notes further acknowledges and agrees that the
rights of the Holders and/or Beneficial Owners under the Subordinated Notes are subject to, and will be varied, if necessary,
solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.

 

For these
purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws,
regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment
firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company and the Group, including
but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context
of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery
and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime under the Banking
Act 2009 as the same has been or may be amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary
legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm
or any of its affiliates can be reduced, cancelled, amended, transferred and/or converted into shares or other securities or obligations
of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority
with the ability to exercise a U.K. bail-in power).

 

By accepting
the Subordinated Notes or otherwise purchasing or acquiring the Subordinated Notes, each Holder and Beneficial Owner of the Subordinated
Notes:

 

(i)
acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to
the Subordinated Notes shall not give rise to a default or event of default for purposes of Section 315(b) (Notice of Default)
and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act; and

 

(ii)
to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate
a suit against the Trustee in

 

     

     

    

respect
of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either
case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated
Notes; and

 

(iii)
acknowledges and agrees that, upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee
shall not be required to take any further directions from Holders under Section 5.12 of the Subordinated Indenture, and (b) neither
the Subordinated Indenture nor the Fifth Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect
to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing, if, following
the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the Subordinated Notes remain
outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the
Subordinated Notes), then the Trustee’s duties under the Subordinated Indenture shall remain applicable with respect to
the Subordinated Notes following such completion to the extent that the Issuer and the Trustee shall agree pursuant to a supplemental
indenture or an amendment to the Subordinated Indenture.

 

By accepting
the Subordinated Notes or otherwise purchasing or acquiring the Subordinated Notes, each Holder and Beneficial Owner that acquires
its Subordinated Notes in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same
provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Subordinated Notes that acquire
the Subordinated Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement
to be bound by and consent to the terms of the Subordinated Notes related to the U.K. bail-in power.

 

By accepting
the Subordinated Notes or otherwise purchasing or acquiring the Subordinated Notes, each Holder and Beneficial Owner shall be
deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant
U.K. resolution authority of its decision to exercise such power with respect to the Subordinated Notes and (ii) authorized, directed
and requested DTC and any direct participant in DTC or other intermediary through which it holds such Subordinated Notes to take
any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Subordinated
Notes as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner or the Trustee.

 

No repayment
of the principal amount of the Subordinated Notes or payment of interest on the Subordinated Notes shall become due and payable
after the exercise of any U.K. bail-in power by the relevant U.K. resolution authority unless, at the time that such repayment
or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under
the laws and regulations of the United Kingdom and the European Union applicable to the Company and the Group.

 

     

     

    

Upon the
exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Notes, the Company
shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of
notifying Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes
only.

 

The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Subordinated Notes to be affected thereby by the Company and the Trustee with
the consent of the Holders of not less than two-thirds in principal amount of the Subordinated Notes at the time outstanding.
The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Outstanding Subordinated
Notes, on behalf of the Holders of all Subordinated Notes, to waive compliance by the Company with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Subordinated
Note shall be conclusive and binding upon such Holder and upon all future Holders of this Subordinated Note and of any Subordinated
Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Subordinated
Note.

 

No reference
herein to the Indenture and no provision of this Subordinated Note or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay, if and when due and payable, the principal of (and premium, if any)
and interest on, this Subordinated Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As set forth
in, and subject to, the provisions of the Indenture, no Holder of any Subordinated Note of this series shall have any right to
institute any proceeding, judicial or otherwise, with respect to the Subordinated Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless such Holder fulfills the requirements of Section 5.07 under the Indenture.

 

No
reference herein to the Indenture and no provision of this Subordinated Note or of the Indenture shall alter or impair the right
of the Holder of this Subordinated Note, which is
absolute and unconditional, to receive payment of the principal of (and premium, if any) and interest on, this Subordinated Note
when due and payable in accordance with the provisions of this Subordinated Note and the Indenture.

 

The Subordinated
Indenture, the Fifth Supplemental Indenture and the Subordinated Notes are governed by, and construed in accordance with, the
laws of the State of New York, except for the subordination and waiver of set-off provisions relating to the Subordinated Notes,
which are governed by, and construed in accordance with, the laws of Scotland.

 

Unless otherwise
defined herein, all terms used in this Subordinated Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.ex10-1.htm

Exhibit 10.1

 

 

 

November 21, 2016

 

 

Lighting Science Group Corporation, as Borrowers' Agent

1350 Division Road, Suite 102 | West Warwick, Rhode Island 02893

Attn.: General Counsel 

Facsimile No.: (321) 779-5521

Office: (321) 610-9446

 

RE:     Seventh Amendment to Loan and Security Agreement

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Loan and Security Agreement dated as of April 25, 2014 (as at any time amended, restated, supplemented or otherwise modified, the "Loan Agreement"), among LIGHTING SCIENCE GROUP CORPORATION, a Delaware corporation ("LSG"), BIOLOGICAL ILLUMINATION, LLC, a Delaware limited liability company ("BioLogical"), ENVIRONMENTAL LIGHT TECHNOLOGIES CORP., a Delaware corporation ("ELT"; LSG, BioLogical and ELT are hereinafter referred to collectively as "Borrowers" and each individually as a "Borrower"), the various financial institutions from time to time party thereto as lenders (collectively, "Lenders") and ACF FINCO I LP, as assignee of FCC, LLC, in its capacity as agent for Lenders (together with its successors and assigns in such capacity, "Agent"). Each capitalized term used herein, unless otherwise defined herein, shall have the meaning ascribed to such term in the Loan Agreement. 

 

Borrowers, Agent and Lenders desire to amend the Loan Agreement, on the terms and subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency of which are hereby severally acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

The Loan Agreement is hereby amended as follows:

 

(a)     By deleting the definition of "EBITDA" from Section 1 of the Loan Agreement in its entirety and by substituting the following in lieu thereof:

 

"EBITDA" means, with respect to any period, Borrowers' net income (excluding extraordinary gains) for such period, before provision for interest expense, taxes, depreciation, amortization and non-cash stock compensation, plus (i) to the extent deducted from the foregoing calculation of net income during such period, impairment charges with respect to Borrowers' goodwill, plus (ii) to the extent deducted from the foregoing calculation of net income during such period, losses with respect to dispositions of Borrowers' Equipment made during such period, minus (iii) to the extent included in the foregoing calculation of net income during such period, gains with respect to dispositions of Borrowers' Equipment made during such period, plus (iv) to the extent deducted from the foregoing calculation of net income during such period, adjustments in the fair market value of warrants issued by LSG, minus (v) to the extent included in the foregoing calculation of net income during such period, adjustments in the fair market value of warrants issued by LSG plus (vi) subject to satisfaction of the conditions hereon set forth in the Sixth Amendment Consent Letter and the Seventh Amendment Consent Letter, as applicable, the amount of cash equity contributions, other than the Sixth Amendment Equity Contribution, permitted hereunder in an amount not to exceed an aggregate of (i) $2,500,000 that is contributed to LSG from Sponsor from and including the Sixth Amendment Effective Date to and including March 30, 2017 plus (ii) an additional $2,500,000 that is contributed to LSG from Sponsor from and including the Seventh Amendment Effective Date to and including March 30, 2017, solely for purposes of determining compliance with Item 21 of the Schedule during the relevant fiscal quarters.

 

 

 

 

 

 

(b)     By adding the following definitions of "Seventh Amendment", "Seventh Amendment Consent Letter", "Seventh Amendment Effective Date" and "Seventh Amendment Equity Contribution" to Section 1 of the Loan Agreement in appropriate alphabetical order:

 

"Seventh Amendment" means that certain Seventh Amendment to Loan and Security Agreement, dated as of the Seventh Amendment Effective Date, by and among the Borrowers, Agent and the Lenders party thereto.

 

"Seventh Amendment Consent Letter" means that certain letter agreement dated as of the Seventh Amendment Effective Date, by and among the Obligors, Agent and Lenders, with respect to the Seventh Amendment Equity Contribution and related matters.

 

"Seventh Amendment Effective Date" means November 21, 2016.

 

"Seventh Amendment Equity Contribution" means the cash equity contribution related to the issuance of Series J Convertible Preferred Stock on the Seventh Amendment Effective Date in an amount not to exceed $2,500,000, made by Sponsor to LSG and immediately contributed to the capital of LSG in connection with the Seventh Amendment on or prior to the Seventh Amendment Effective Date.

 

(c)     By deleting Item 17 of the Schedule in its entirety and by substituting in lieu thereof the following:

 

17. Ownership Structure

 

	
Class of Capital Stock
	
Authorized
	
Issued and Outstanding
	
Conversion Price1

	 	 	 	 
	
Common Stock
	
975,000,000
	
217,780,6192
	
N/A

	 	 	 	 
	
Series H Convertible Preferred Stock
	
135,000
	
111,513.52
	
$0.95

	 	 	 	 
	
Series I Convertible Preferred Stock
	
90,000
	
57,365
	
$0.95

	 	 	 	 
	
Series J Convertible Preferred Stock
	
95,100
	
88,0623
	
$0.95

	 	 	 	 
	
Series K Preferred Stock
	
40,000
	
20,106.03
	
N/A

 

 

 

1 Each issued and outstanding share of Series H Convertible Preferred Stock, Series I Convertible Preferred Stock and Series J Convertible Preferred Stock is currently convertible into approximately 1,052.6 shares of Common Stock.

2 Excludes 2,505,000 treasury shares. 

3 The issued and outstanding shares of Series J Convertible Preferred Stock does not include any shares of Series J Preferred Stock that may be issued by Borrower pursuant to the preemptive rights of the holders of Borrower’s Series H Convertible Preferred Stock, Series I Convertible Preferred Stock or Series J Convertible Preferred Stock.

 

 

 

- 2 -

 

 

Voting and Managerial Control:

1. Pegasus Capital Advisors, L.P. and its affiliates

2. Riverwood Capital Partners, L.P. and its affiliates

3. Zouk Holdings Limited and its affiliates

 

The effectiveness of the amendments contained herein is subject to Agent's receipt of (a) a duly executed amendment to the Term Loan Agreement in form and substance satisfactory to Agent, (b) a duly executed secretary's or manager's certificate of resolutions with respect to each Borrower, in each case in form and substance satisfactory to Agent, and (c) LSG's receipt in cash of the Seventh Amendment Equity Contribution and an equity contribution under the Sixth Amendment Consent Letter, in an aggregate amount equal to $5,000,000.

 

In consideration of the amendments contained herein and the consent set forth in the Sixth Amendment Consent Letter, Borrowers hereby covenant and agree to, no later than the earlier of (a) December 31, 2016 (or such other date as may be agreed by Agent in its sole discretion (it being agreed that any date agreed upon by Medley for delivery to Medley of the items described below shall be deemed a date agreed to by Agent for purposes of this clause (a), as long as Agent has received prior written confirmation of such agreement from Medley)), and (b) solely in the case of the financial forecast described in clause (ii) below, the date on which such forecast is required pursuant to Section 9(a) of the Loan Agreement: (i) use commercially reasonable efforts to deliver to Agent an appraisal prepared by an appraiser approved by Agent (it being agreed that any appraiser approved by Medley shall be acceptable to Agent) of all intellectual property owned by the Obligors, such appraisal to be in form and substance satisfactory to Agent in its sole discretion (it being agreed that any appraisal in form and substance acceptable to Medley shall be deemed satisfactory to Agent), and (ii) deliver to Agent a financial forecast covering the fiscal years 2016 and 2017 in a form reasonably satisfactory to Agent in its sole discretion. Notwithstanding any provision of this letter amendment or any other Loan Document, Borrowers’ failure to perform or observe any covenant or other agreement contained in this paragraph shall constitute an immediate Event of Default under the Loan Agreement.

 

By its signature hereto, each Borrower hereby (a) ratifies and reaffirms the Obligations, each of the Loan Documents and all of such Borrower's covenants, duties, indebtedness and liabilities under the Loan Documents; (b) acknowledges and stipulates that the Loan Agreement and the other Loan Documents executed by such Borrower are legal, valid and binding obligations of such Borrower that are enforceable against such Borrower in accordance with the terms thereof; all of the Obligations are owing and payable without defense, offset or counterclaim (and to the extent there exists any such defense, offset or counterclaim on the date hereof, the same is hereby waived by each Borrower); and the security interests and liens granted by such Borrower in favor of Agent are duly perfected, first priority security interests and liens; and (c) represents and warrants to Agent and Lenders, to induce Agent and Lenders to enter into this agreement, that (i) no Default exists on the date hereof or would result from the effectiveness of this agreement, (ii) the execution, delivery and performance of this agreement have been duly authorized by all requisite company action on the part of such Borrower and this agreement has been duly executed and delivered by such Borrower, and (iii) all of the representations and warranties made by such Borrower in the Loan Agreement are true and correct on and as of the date hereof. Without limiting the generality of the foregoing, each Borrower acknowledges and agrees that nothing contained in this Amendment shall be construed as a waiver of any Default that may in the future occur pursuant to Section 13(a)(v) of the Loan Agreement, including as a result of any breach of Section 7.6 of the Term Loan Agreement.

 

 

 

- 3 -

 

  

In consideration of Agent's willingness to enter into this Amendment as set forth herein, Borrowers jointly and severally agree to pay to Agent and Lenders, on demand, all costs and expenses (including taxes and legal fees and expenses) incurred by Agent and Lenders in connection with the preparation, negotiation and execution of this agreement and any other Loan Documents executed pursuant hereto and any and all amendments, modifications, and supplements thereto. Except as otherwise expressly provided in this agreement, nothing herein shall be deemed to amend or modify any provision of the Loan Agreement or any of the other Loan Documents, each of which shall remain in full force and effect. This agreement is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction, and the Loan Agreement as herein modified shall continue in full force and effect. This agreement shall be governed by and construed in accordance with the internal laws of the State of Georgia and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This agreement may be executed in any number of counterparts and by different parties to this agreement on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any manually executed signature page hereto that is delivered by facsimile or other electronic transmission shall be deemed to be an original signature hereto. To the fullest extent permitted by applicable law, the parties hereto each hereby waives the right to trial by jury in any action, suit, counterclaim or proceeding arising out of or related to this agreement.

 

To induce Agent and Lenders to enter into this Amendment, each Borrower hereby RELEASES, ACQUITS AND FOREVER DISCHARGES Agent and each Lender, and all officers, directors, agents, employees, successors and assigns of Agent or any Lender, from any and all liabilities, claims, demands, actions or causes of action of any kind or nature (if there be any), whether absolute or contingent, disputed or undisputed, at law or in equity, or known or unknown, that any Borrower now has or ever had against Agent or any Lender arising under or in connection with any of the Loan Documents or otherwise. Each Borrower represents and warrants to Agent and Lenders that such Borrower has not transferred or assigned to any Person any claim that such Borrower ever had or claimed to have against Agent or any Lender.

 

[Signatures appear on following page]

 

 

 

- 4 -

 

  

The parties hereto have caused this agreement to be duly executed under seal and delivered by their respective duly authorized officers on the date first written above.

 

	
 
	
AGENT AND SOLE LENDER:

 

ACF FINCO I LP, as assignee of FCC, LLC 

 

By: /s/ John J. Nooney                              

Name:      John J. Nooney                         

Title:      Managing Director                     

 

[Signatures continue on following page.]

 

 

 

 

Letter Amendment to Loan and Security Agreement (Seventh Amendment) 

 

  

Accepted and agreed to:

 

BORROWERS:

 

LIGHTING SCIENCE GROUP CORPORATION

 

By: /s/ Ed Bednarcik                                                           

Name: Ed Bednarcik                                                           

Title: Chief Executive Officer                                            

 

 

BIOLOGICAL ILLUMINATION, LLC

 

By: /s/ Ed Bednarcik                                                          

Name: Ed Bednarcik                                                           

Title: Chief Executive Officer                                            

 

 

ENVIRONMENTAL LIGHT TECHNOLOGIES CORP.

 

By: /s/ Ed Bednarcik                                                           

Name: Ed Bednarcik                                                            

Title: Chief Executive Officer                                             

 

 

 

 

Consented to by Guarantor:

 

 

LSGC, LLC

 

By: /s/ Ed Bednarcik                                                             

Name: Ed Bednarcik                                                              

Title: Chief Executive Officer                                               

 

 

 

 

 

 

 

 

 

Letter Amendment to Loan and Security Agreement (Seventh Amendment)

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