Document:

Exhibit 4.1

 

 

 

_______________________________________

 

LLOYDS BANK PLC

 

as Issuer,

 

LLOYDS BANKING GROUP PLC

 

as Guarantor,

 

and

 

THE BANK OF NEW YORK MELLON,

 

acting through its London Branch

 

as Trustee

_______________________________________

 

FIFTH SUPPLEMENTAL INDENTURE

 

dated as of May 14, 2015

 

to

 

THE SENIOR DEBT SECURITIES INDENTURE

 

dated as of January 21, 2011

 

_______________________________________

 

 

 

 

 

 

 

  

  

  

FIFTH SUPPLEMENTAL INDENTURE (“Fifth Supplemental Indenture”), dated as of May 14, 2015, among LLOYDS BANK PLC, a corporation incorporated in England and Wales with registered number 2065, as issuer (the “Company”), LLOYDS BANKING GROUP PLC, a corporation incorporated in Scotland with registered number 95000, as guarantor (the “Guarantor”) and THE BANK OF NEW YORK MELLON, acting through its London Branch, as trustee (the “Trustee”).

 

WITNESSETH

 

WHEREAS, the Company, the Guarantor and the Trustee have executed and delivered a Senior Debt Securities Indenture dated as of January 21, 2011 (the “Senior Indenture,” and together with this Fifth Supplemental Indenture, the “Indenture”) to provide for the issuance of the Company’s Senior Debt Securities,  including the Securities (as defined below).

 

WHEREAS, Section 9.01(d) of the Senior Indenture permits the Company, the Guarantor and the Trustee to add to, change or eliminate any provisions of the Senior Indenture without the consent of Holders as permitted under Sections 2.01 and 3.01 of the Senior Indenture, subject to certain conditions;

 

WHEREAS, Section 9.01(f) of the Senior Indenture permits the Company, the Guarantor and the Trustee to enter into a supplemental indenture to establish the forms or terms of Senior Debt Securities of any series as permitted under Sections 2.01 and 3.01 of the Senior Indenture without the consent of holders;

 

WHEREAS, there are no debt securities Outstanding of any series created prior to the execution of this Fifth Supplemental Indenture which are entitled to the benefit of the provisions set forth herein or would be adversely affected by such provisions;

 

WHEREAS, the Board of Directors and the Guarantor board of directors have authorized the entry into this Fifth Supplemental Indenture, as required by Section 9.01 of the Senior Indenture;

 

WHEREAS, the parties hereto desire to establish, as further series of Senior Debt Securities under the Base Indenture, $1,250,000,000 1.750% Senior Notes due 2018 (the “2018 Fixed Rate Senior Notes”), $1,250,000,000 3.500% Senior Notes due 2025 (the “2025 Fixed Rate Senior Notes” and, together with the 2018 Fixed Rate Senior Notes, the “Fixed Rate Senior Notes”) and $400,000,000 Floating Rate Notes due 2018 (the “Floating Rate Notes” and, collectively with the 2018 Fixed Rate Senior Notes and the 2025 Fixed Rate Senior Notes, the “Securities”) and the Guarantees to be endorsed thereon pursuant to Sections 2.01 and 3.01 of the Senior Indenture. The Securities may be issued from time to time and any Securities issued as part of any series will constitute a single series of Securities under the Indenture and shall be included in the definition of “Securities” where the context requires;

 

WHEREAS, the Company and the Guarantor have requested that the Trustee execute and deliver this Fifth Supplemental Indenture and whereas all actions required by it to be taken in order to make this Fifth Supplemental Indenture a valid, binding and

 

  

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enforceable instrument in accordance with its terms, have been taken and performed, and the execution and delivery of this Fifth Supplemental Indenture has been duly authorized in all respects; and

 

WHEREAS, where indicated, this Fifth Supplemental Indenture shall amend and supplement the Senior Indenture; to the extent that the terms of the Senior Indenture are inconsistent with such provisions of this Fifth Supplemental Indenture, the terms of this Fifth Supplemental Indenture shall govern.

 

NOW, THEREFORE, the Company, the Guarantor and the Trustee mutually covenant and agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.01.  Definition of Terms.  For all purposes of this Fifth Supplemental Indenture:

 

(a)           a term defined anywhere in this Fifth Supplemental Indenture has the same meaning throughout;

 

(b)           capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Senior Indenture;

 

(c)           the singular includes the plural and vice versa;

 

(d)           headings are for convenience of reference only and do not affect interpretation; and

 

(e)           for the purposes of this Fifth Supplemental Indenture and the Senior Indenture, the term “series” shall mean a series of Securities.

 

ARTICLE 2

FORM OF SECURITIES AND GUARANTEE

 

Section 2.01.  Terms of the 2018 Fixed Rate Senior Notes.

(a)  The title of the 2018 Fixed Rate Senior Notes shall be the “1.750% Senior Notes due 2018”;

(b)  The aggregate principal amount of the 2018 Fixed Rate Senior Notes that may be authenticated and delivered under the Indenture shall not exceed $1,250,000,000, except as otherwise provided in the Indenture;

(c)  Principal on the 2018 Fixed Rate Senior Notes shall be payable on May 14, 2018;

  

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(d)  The 2018 Fixed Rate Senior Notes shall be issued in global registered form on May 14, 2015 and shall bear interest from May 14, 2015 payable semi-annually in arrears on May 14 and November 14 (each, an “Interest Payment Date”), commencing November 14, 2015. The 2018 Fixed Rate Senior Notes shall bear an annual interest rate of 1.750%;

Interest on the 2018 Fixed Rate Senior Notes will be calculated 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.  The Regular Record Dates for the 2018 Fixed Rate Senior Notes will be 15 calendar days immediately preceding the relevant Interest Payment Date, whether or not a Business Day;

(e)  No premium, upon redemption or otherwise, shall be payable by the Company on the 2018 Fixed Rate Senior Notes;

(f)  Principal of and any interest on the 2018 Fixed Rate Senior Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom;

(g)  The 2018 Fixed Rate Senior Notes may be redeemable pursuant to Section 11.08 of the Senior Indenture.  In connection with any redemption of the 2018 Fixed Rate Senior Notes pursuant to Section 11.08 of the Senior Indenture, the date referenced therein shall be May 14, 2015;

(h)  The Company shall have no obligation to redeem or purchase the 2018 Fixed Rate Senior Notes pursuant to any sinking fund or analogous provision;

(i)  The 2018 Fixed Rate Senior Notes shall be issued only in denominations of $200,000 and in integral multiples of $1,000 in excess thereof;

(j)  The principal amount of the 2018 Fixed Rate Senior Notes shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Senior Indenture;

(k)  The 2018 Fixed Rate Senior Notes shall not be converted into or exchanged at the option of the Company or otherwise for stock or other securities of the Company;

(l)  The 2018 Fixed Rate Senior Notes shall be denominated in, and payments thereon shall be made in, U.S. Dollars;

(m)  The payment of principal of (and premium, if any) or interest, if any, on the 2018 Fixed Rate Senior Notes shall be payable only in the coin or currency in which the 2018 Fixed Rate Senior Notes are denominated;

(n)  The 2018 Fixed Rate Senior Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and the initial Holder with

  

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respect to each such global security shall be Cede & Co., as nominee of The Depository Trust Company;

(o)  The 2018 Fixed Rate Senior Notes will not be initially issued in definitive form;

(p)  There is no Calculation Agent for the 2018 Fixed Rate Senior Notes;

(q)  The Events of Default on the 2018 Fixed Rate Senior Notes are as provided for in the Senior Indenture;

(r)  The form of the 2018 Fixed Rate Senior Notes to be issued on the date hereof and the Guarantee to be endorsed on the 2018 Fixed Rate Senior Notes shall be substantially in the form of Exhibit A hereto;

(s)  The Company may issue additional 2018 Fixed Rate Senior Notes (“Additional Notes”) after the date hereof having the same ranking and same interest rate, maturity date, redemption terms and other terms as the 2018 Fixed Rate Senior Notes except for the price to the public, issue date and first interest payment date, provided that such Additional Notes must be fungible with the outstanding 2018 Fixed Rate Senior Notes for U.S. federal income tax purposes.  Any such Additional Notes, together with the 2018 Fixed Rate Senior Notes will constitute a single series of securities under the Indenture;

(t)  Additional Amounts in respect of the 2018 Fixed Rate Senior Notes shall be payable as set forth in the Senior Indenture, as supplemented by this Fifth Supplemental Indenture.

Section 2.02.  Terms of the 2025 Fixed Rate Senior Notes.

(a)  The title of the 2025 Fixed Rate Senior Notes shall be the “3.500% Senior Notes due 2025”;

(b)  The aggregate principal amount of the 2025 Fixed Rate Senior Notes that may be authenticated and delivered under the Indenture shall not exceed $1,250,000,000, except as otherwise provided in the Indenture;

(c)  Principal on the 2025 Fixed Rate Senior Notes shall be payable on May 14, 2025;

(d)  The 2025 Fixed Rate Senior Notes shall be issued in global registered form on May 14, 2015 and shall bear interest from May 14, 2015 payable semi-annually in arrears on May 14 and November 14 (each, an “Interest Payment Date”), commencing November 14, 2015. The 2025 Fixed Rate Senior Notes shall bear an annual interest rate of 3.500%;

  

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Interest on the 2025 Fixed Rate Senior Notes will be calculated 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.  The Regular Record Dates for the 2025 Fixed Rate Senior Notes will be 15 calendar days immediately preceding the relevant Interest Payment Date, whether or not a Business Day;

(e)  No premium, upon redemption or otherwise, shall be payable by the Company on the 2025 Fixed Rate Senior Notes;

(f)  Principal of and any interest on the 2025 Fixed Rate Senior Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom;

(g)  The 2025 Fixed Rate Senior Notes may be redeemable pursuant to Section 11.08 of the Senior Indenture.  In connection with any redemption of the 2025 Fixed Rate Senior Notes pursuant to Section 11.08 of the Senior Indenture, the date referenced therein shall be May 14, 2015;

(h)  The Company shall have no obligation to redeem or purchase the 2025 Fixed Rate Senior Notes pursuant to any sinking fund or analogous provision;

(i)  The 2025 Fixed Rate Senior Notes shall be issued only in denominations of $200,000 and in integral multiples of $1,000 in excess thereof;

(j)  The principal amount of the 2025 Fixed Rate Senior Notes shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Senior Indenture;

(k)  The 2025 Fixed Rate Senior Notes shall not be converted into or exchanged at the option of the Company or otherwise for stock or other securities of the Company;

(l)  The 2025 Fixed Rate Senior Notes shall be denominated in, and payments thereon shall be made in, U.S. Dollars;

(m)  The payment of principal of (and premium, if any) or interest, if any, on the 2025 Fixed Rate Senior Notes shall be payable only in the coin or currency in which the 2025 Fixed Rate Senior Notes are denominated;

(n)  The 2025 Fixed Rate Senior Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and the initial Holder with respect to each such global security shall be Cede & Co., as nominee of The Depository Trust Company;

(o)  The 2025 Fixed Rate Senior Notes will not be initially issued in definitive form;

  

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(p)  There is no Calculation Agent for the 2025 Fixed Rate Senior Notes;

(q)  The Events of Default on the 2025 Fixed Rate Senior Notes are as provided for in the Senior Indenture;

(r)  The form of the 2025 Fixed Rate Senior Notes to be issued on the date hereof and the Guarantee to be endorsed on the 2025 Fixed Rate Senior Notes shall be substantially in the form of Exhibit B hereto;

(s)  The Company may issue additional 2025 Fixed Rate Senior Notes (“Additional Notes”) after the date hereof having the same ranking and same interest rate, maturity date, redemption terms and other terms as the 2025 Fixed Rate Senior Notes except for the price to the public, issue date and first interest payment date, provided that such Additional Notes must be fungible with the outstanding 2025 Fixed Rate Senior Notes for U.S. federal income tax purposes.  Any such Additional Notes, together with the 2025 Fixed Rate Senior Notes will constitute a single series of securities under the Indenture;

(t)  Additional Amounts in respect of the 2025 Fixed Rate Senior Notes shall be payable as set forth in the Senior Indenture, as supplemented by this Fifth Supplemental Indenture.

Section 2.03.  Terms of the Floating Rate Notes.

(a)  The title of the Floating Rate Notes shall be the “Floating Rate Notes due 2018”;

(b)  The aggregate principal amount of the Floating Rate Notes that may be authenticated and delivered under the Indenture shall not exceed $400,000,000, except as otherwise provided in the Indenture;

(c)  Principal on the Floating Rate Notes shall be payable on May 14, 2018;

(d)  The Floating Rate Notes shall be issued in global registered form on May 14, 2015.

The interest rate for the Floating Rate Notes for the first Floating Rate Interest Period (as defined below) will be LIBOR (as defined below) as determined on May 12, 2015 plus the Spread. The interest rate for each subsequent Floating Rate Interest Period will be LIBOR as determined on the applicable Interest Determination Date (as defined below) plus the Spread, in each case calculated on the basis of a 360-day year and the actual number of days elapsed. The Spread is 55 basis points.

The initial Floating Rate Interest Payment Date (as defined below) will fall on August 14, 2015. Thereafter, interest on the Floating Rate Notes will be paid quarterly in arrears on February 14, May 14, August 14 and November 14 of each year (together

  

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with the initial interest payment date, each a “Floating Rate Interest Payment Date”). However, if a Floating Rate Interest Payment Date would fall on a day that is not a business day, other than the interest payment date that is also the date of maturity, the Floating Rate Interest Payment Date will be postponed to the next succeeding day that is a business day and interest thereon will continue to accrue, except that if the business day falls in the next succeeding calendar month, the applicable Floating Rate Interest Payment Date will be the immediately preceding business day. In each such case, except for the Floating Rate Interest Payment Date falling on the maturity date, the Floating Rate Interest Periods and the Interest Reset Dates (as defined below) will be adjusted accordingly to calculate the amount of interest payable on the notes.

The interest rate will be reset on each Floating Rate Interest Payment Date (together with the initial interest reset date, each an “Interest Reset Date”). However, if any Interest Reset Date would otherwise be a day that is not a business day, that Interest Reset Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Interest Reset Date will be the immediately preceding business day.

Interest will be paid on the Floating Rate Notes to holders of record of each Floating Rate Note in respect of the principal amount thereof as at the 15th calendar day prior to the relevant Floating Rate Interest Payment Date.

The first interest period will begin on and include May 14, 2015 and will end on and exclude August 14, 2015. Thereafter, the interest period will be the periods from and including a Floating Rate Interest Payment Date to but excluding the immediately succeeding Floating Rate Interest Payment Date (together with the first interest period, each a “Floating Rate Interest Period”). However, the final Floating Rate Interest Period will be the period from and including the Floating Rate Interest Payment Date immediately preceding the Maturity Date to but excluding the Maturity Date.

The calculation agent in respect of the Floating Rate Notes will determine LIBOR (as defined below) for each Floating Rate Interest Period other than the first Floating Rate Interest Period on the second day in which dealings in United States dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market (a “London Banking Day”) prior to the first day of such Floating Rate Interest Period (an “Interest Determination Date”).

“LIBOR,” with respect to a Floating Rate Interest Period, shall be the offered rate (expressed as a percentage per annum) for deposits of U.S. dollars having a maturity of three months that appears on the Designated LIBOR Page (as defined below) as of 11:00 a.m., London time.

If no rate appears on the Designated LIBOR Page, LIBOR will be determined for such Interest Determination Date on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to prime banks in the London inter-bank market by four major banks in such

  

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market selected by the calculation agent, after consultation with us, for a term of three months and in a Representative Amount. The calculation agent will request that the principal London office of each of such banks provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m. in the City of New York on such Interest Determination Date by three major banks in New York City, selected by the calculation agent, after consultation with us, for loans in United States dollars to leading European banks, for a term of three months and in a Representative Amount. If at least two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean of such quotations. If fewer than two quotations are provided, then LIBOR for such Floating Rate Period will be LIBOR in effect with respect to the immediately preceding Floating Rate Interest Period.

“Designated LIBOR Page” means the Reuters Screen LIBOR01 display page, or any successor page, on Reuters or any successor service (or any such other service(s) as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits).

“Interest Determination Date” for each Floating Rate Interest Period will be the second London Banking Day preceding the first day of such Floating Rate Interest Period.

“London Banking Day” is any day in which dealings in United States dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

“Representative Amount” means an amount that in the judgment of the calculation agent is representative for a single transaction in U.S. dollars in such market at such time.

All calculations of the calculation agent, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and on the holders of the Floating Rate Notes.

All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).

The interest rate on the Floating Rate Notes will in no event be higher than the maximum rate permitted by law.

  

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(e)  No premium, upon redemption or otherwise, shall be payable by the Company on the Floating Rate Notes;

(f)  Principal of and any interest on the Floating Rate Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom;

(g)  The Floating Rate Notes may be redeemable pursuant to Section 11.08 of the Senior Indenture.  In connection with any redemption of the Floating Rate Notes pursuant to Section 11.08 of the Senior Indenture, the date referenced therein shall be May 14, 2015;

(h)  The Company shall have no obligation to redeem or purchase the Floating Rate Notes pursuant to any sinking fund or analogous provision;

(i)  The Floating Rate Notes shall be issued only in denominations of $200,000 and in integral multiples of $1,000 in excess thereof;

(j)  The principal amount of the Floating Rate Notes shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Senior Indenture;

(k)  The Floating Rate Notes shall not be converted into or exchanged at the option of the Company or otherwise for stock or other securities of the Company;

(l)  The Floating Rate Notes shall be denominated in, and payments thereon shall be made in, U.S. Dollars;

(m)  The payment of principal of (and premium, if any) or interest, if any, on the Floating Rate Notes shall be payable only in the coin or currency in which the Floating Rate Notes are denominated;

(n)  The Floating Rate Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and the initial Holder with respect to each such global security shall be Cede & Co., as nominee of The Depository Trust Company;

(o)  The Floating Rate Notes will not be initially issued in definitive form;

(p)  The Calculation Agent for the Floating Rate Notes will be The Bank of New York Mellon pursuant to the terms of a Calculation Agency Agreement dated May 14, 2015;

(q)  The Events of Default on the Floating Rate Notes are as provided for in the Senior Indenture;

  

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(r)  The form of the Floating Rate Notes to be issued on the date hereof and the Guarantee to be endorsed on the Floating Rate Notes shall be substantially in the form of Exhibit C hereto;

(s)  The Company may issue additional Floating Rate Notes (“Additional Notes”) after the date hereof having the same ranking and same interest rate, maturity date, redemption terms and other terms as the Floating Rate Notes except for the price to the public, issue date and first interest payment date, provided that such Additional Notes must be fungible with the outstanding Floating Rate Notes for U.S. federal income tax purposes.  Any such Additional Notes, together with the Floating Rate Notes will constitute a single series of securities under the Indenture;

(t)  Additional Amounts in respect of the Floating Rate Notes shall be payable as set forth in the Senior Indenture, as supplemented by this Fifth Supplemental Indenture.

ARTICLE 3

ADDITIONAL TERMS APPLICABLE TO THE SECURITIES

 

Section 3.01.    Addition of Definitions. With respect to the Securities only, Section 1.01 of the Senior Indenture is amended to include the following definitions (which shall be deemed to arise in Section 1.01 in their proper alphabetical order):

 

“Beneficial Owners” shall mean (a) if any Senior Debt Securities are in global form, the beneficial owners of the Senior Debt Securities (and any interest therein) and (b) if the Senior Debt Securities are held in definitive form, the holders in whose names the Senior Debt Securities are registered in the Senior Debt Security Register and any beneficial owners holding an interest in such Senior Debt Securities held in definitive form.

 

“relevant U.K. resolution authority” means any authority with the ability to exercise a U.K. bail-in power.

 

“U.K. bail-in power” means 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 or other members of 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 to the Banking Act 2009, as the same has been or may be amended from time to time (whether pursuant to the U.K. Financial Services (Banking Reform) Act 2013, secondary legislation or otherwise), pursuant to which obligations of a bank, banking group company, credit institution

 

  

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or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person.

 

Section  3.02   Events of Default. With respect to the Securities only, Section 5.01 of the Senior Indenture is amended by adding the following sentence at the end of the section:

 

The exercise of any U.K. bail-in power by the relevant U.K. resolution authority shall not constitute a default or an Event of Default under this Section 5.01.

 

Section  3.03.    Compensation and Reimbursement.  With respect to the Securities only, Section 6.07 of the Senior Indenture is amended in part to add the following sentence at the end of the section:

 

The Trustee’s right to reimbursement and indemnity under this Section 6.07 shall survive the payment in full of the Senior Debt Securities, the discharge of this Senior Debt Securities Indenture, the resignation or removal of the Trustee and any exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Senior Debt Securities.

Section  3.04.    Agreement with Respect to Exercise of U.K. Bail-In Power. The following provisions relate solely to the Securities established pursuant to this Fifth Supplemental Indenture:

 

(a)      By purchasing the Securities, each Holder (including each Beneficial Owner) of the Securities acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Securities and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Securities into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Securities solely to give effect to the above. Each Holder (including each Beneficial Owner) of the Securities further acknowledges and agrees that the rights of the holders under the Securities 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 expressed to implement such a cancellation or conversion.

 

(b)      By purchasing the Securities each Holder (including each Beneficial Owner) of the Securities:

 

(i)      acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority in respect of the Securities shall not give rise to a default or an 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;

 

  

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(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 Securities; 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 of the Securities under Section 5.12 of the Senior Indenture, and (b) neither the Senior Indenture nor this 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, any of the Securities 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 Securities), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Securities following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to this Fifth Supplemental Indenture.

 

(c)      By purchasing the Securities, each Holder (including each Beneficial Owner) that acquires its Securities 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 Securities that acquire the Securities 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 Securities related to the U.K. bail-in power.

 

(d)      By its purchase of the Securities, 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 Securities and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Securities to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Securities as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner.

 

(e)      No repayment of the principal amount of the Securities or payment of interest on the Securities 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.

 

  

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(f)      Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Securities, 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.

 

ARTICLE 4

amendments to the senior indenture

 

Section 4.01. Appointment of Agent for Service. With respect to any series of Senior Debt Securities issued under the Senior Indenture, including the Securities, Section 1.14 of the Senior Indenture is amended and restated in its entirety and shall read as follows:

 

Section 1.14. Appointment of Agent for Service. Each of the Company and the Guarantor has designated and appointed the Chief U.S. Counsel, Lloyds Bank plc (or any successor thereto), currently of 1095 Avenue of the Americas, 34th Floor, New York, NY 10036 as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York arising out of or relating to the Senior Debt Securities, this Senior Debt Securities Indenture or this Fifth Supplemental Indenture, but for that purpose only, and agrees that service of process upon such authorized agent shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Senior Debt Securities remain Outstanding until the appointment of a successor by the Company or the Guarantor and such successor’s acceptance of such appointment. Upon such acceptance, the Company or the Guarantor shall notify the Trustee of the name and address of such successor. Each of the Company and the Guarantor further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of such authorized agent in full force and effect so long as any of the Senior Debt Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company or the Guarantor to take any such action. Each of the Company and the Guarantor hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any right to trial by jury and any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

 

Section 4.02.     Notices to Trustee. With respect to any series of Senior Debt Securities issued under the Senior Indenture, including the Securities, Section 1.05(a) of the Senior Indenture is amended and restated in part to read as follows:

 

  

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Section 1.05. Notices, Etc. to Trustee, Company and Guarantor. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by the Senior Debt Securities Indenture or the Fifth Supplemental Indenture to be made upon, given or furnished to, or filed with,

(a) the Trustee by any Holder or by the Company or the Guarantor shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile) to the Trustee at its Corporate Trust Office and the Trustee agrees to accept and act upon facsimile transmission of written instructions pursuant to the Senior Debt Securities Indenture or the Fifth Supplemental Indenture; provided, however, that (x) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (y) such originally executed instructions or directions shall be  signed by an authorized representative of the party providing such instructions or directions; or

 

Section 4.03. Additional Amounts. With respect to any series of Senior Debt Securities issued under the Senior Indenture, including the Securities, Section 10.04 of the Senior Indenture is hereby amended and replaced in its entirety as follows:

 

Section 10.04.    Additional Amounts. Amounts to be paid on any series of Senior Debt Securities or under the Guarantee 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 or the Guarantor, as the case may be, to make such deduction or withholding, the Company, or the Guarantor, as the case may be, will pay additional amounts with respect to the principal of, interest and any other payment on, the Senior Debt Securities (“Additional Amounts”) that are necessary in order that the net amounts paid to the Holders of Senior Debt Securities of the particular series, after the deduction or withholding, shall equal the amounts which would have been payable on the Senior Debt Securities 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 Senior Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or is physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Debt Security, or the collection of any payment of (or in

 

  

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respect of) principal of, or any interest, or other payment on, any Senior Debt Security of the relevant series or under the Guarantee,

 

(ii) except in the case of winding-up in the United Kingdom, the relevant Senior Debt Security is presented (where presentation is required) for payment in the United Kingdom,

(iii) the relevant Senior Debt Security 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 Senior Debt Security or the beneficial owner of any payment of (or in respect of) principal of or any interest or other payment on, the Senior Debt Security failed to comply with a request of the Company or its liquidator or guarantor 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 relevant Senior Debt Security 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 relevant Senior Debt Security to another paying agent,

(vii) the deduction or withholding is imposed by reason of any agreement with the U.S. Internal Revenue Service in connection with Sections 1471-1474 of the U.S. Internal Revenue Code and the U.S. Treasury regulations thereunder (“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 Senior Debt Securities or under the Guarantee to any Holder who is a fiduciary or partnership or any person other than the sole

  

15

  

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 this Senior Debt Securities Indenture there is mentioned, in any context, the payment of the principal of or any interest or other payments on, in respect of, any Senior Debt Security 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 and/or the Guarantor, as the case may be, 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. Neither the Company, the Guarantor, 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.

Section 4.04. Optional Redemption Due to Changes in Tax Treatment. With respect to any series of Senior Debt Securities issued under the Senior Indenture, including the Securities, Section 11.08 of the Senior Indenture is hereby amended in part to amend and restate the final paragraph in its entirety, which shall read as follows:

Section 11.08  Optional Redemption Due to Changes in Tax Treatment.  In any case where the Company (or, if applicable, the Guarantor) shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Debt Securities of any series, the Company (or, if applicable, the Guarantor) shall be required to deliver to the Trustee prior to the giving of any notice of redemption (i) a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company or, if applicable, the Guarantor) in a form satisfactory to the Trustee confirming that the relevant change in the application or interpretation of such laws or regulations has occurred and that the Company (or, if applicable, the Guarantor) is entitled to exercise its right of redemption; and (ii) an Officer’s Certificate, evidencing compliance with such provisions and stating that it is entitled to redeem the Senior Debt Securities pursuant to the terms of the Senior Debt Securities.

 

ARTICLE 5

MISCELLANEOUS

 

Section 5.01.     Effect Of Supplemental Indenture.  Upon the execution and delivery of this Fifth Supplemental Indenture by each of the Company, the Guarantor and the Trustee, and the delivery of the documents referred to in Section 5.02 herein, the

 

  

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Senior Indenture shall be supplemented in accordance herewith, and this Fifth Supplemental Indenture shall form a part of the Senior Indenture for all purposes in respect of the Securities or otherwise as applicable.

 

Section 5.02.    Other Documents to be Given to the Trustee.  The Trustee shall be entitled to receive an Officer’s Certificate and an Opinion of Counsel stating the recitals contained in Section 1.02 of the Senior Indenture. As specified in Section 9.03 of the Senior Indenture and subject to the provisions of Section 6.03 of the Senior Indenture, the Trustee shall also be entitled to receive an Opinion of Counsel stating that that this Fifth Supplemental Indenture and the Securities whose terms are incorporated by reference herein are each, subject to Section 1.03 of the Senior Indenture, a legal, valid and binding obligation of the Company and the Guarantor enforceable in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditor’s rights generally, by equitable principles of general applicability and by possible judicial actions giving effect to governmental actions or foreign laws affecting creditors’ rights, and the Fifth Supplemental Indenture is permitted under the Indenture. The Trustee may rely on such Officer’s Certificate and Opinion of Counsel as conclusive evidence that this Fifth Supplemental Indenture complies with the applicable provisions of the Senior Indenture.

 

Section 5.03.   Confirmation Of Indenture.  The Senior Indenture, as supplemented and amended by this Fifth Supplemental Indenture with respect to the Securities or otherwise as applicable, is in all respects ratified and confirmed, and the Senior Indenture, this Fifth Supplemental Indenture and all indentures supplemental thereto shall, in respect of the Securities or otherwise as applicable, be read, taken and construed as one and the same instrument.  This Fifth Supplemental Indenture constitutes an integral part of the Senior Indenture and, where applicable, with respect to the Securities.  In the event of a conflict between the terms and conditions of the Senior Indenture and the terms and conditions of this Fifth Supplemental Indenture, the terms and conditions of this Fifth Supplemental Indenture shall prevail where applicable.

 

Section 5.04.    Concerning The Trustee.  The Trustee does not make any representations as to the validity or sufficiency of this Fifth Supplemental Indenture, the Guarantee or the Notes.  The recitals and statements herein are deemed to be those of the Company and the Guarantor and not the Trustee.  In entering into this Fifth Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Senior Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.

 

Section 5.05.   Governing Law.  This Fifth Supplemental Indenture, the Securities and the Guarantee shall be governed by and construed in accordance with the laws of the State of New York, except that the authorization and execution by the Company and the Guarantor of this Fifth Supplemental Indenture, the Securities and the Guarantee shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of the Company, the Guarantor and the Trustee, as the case may be.

 

  

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Section 5.06.     Separability.  In case any provision contained in this Fifth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 5.07.     Counterparts.  This Fifth Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

 

[Signature Pages Follow]

 

  

18

  

IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed as of the date first written above.

 

	  	
LLOYDS BANK PLC, as Issuer

 

	  
	 	 	 
	  	
By:

	/s/ Peter Green  	  
	  	  	
Name: Peter Green 

	  
	  	  	

Title: Senior Manager: Senior Funding

	  
	 	 	 
	 	 	 
	 	 	 
	  	
LLOYDS BANKING GROUP PLC, as Guarantor

 

	  
	 	 	 
	  	
By:

	/s/ Peter Green 	  
	  	  	
Name:  Peter Green 

	  
	  	  	
Title: Senior Manager: Senior Funding

	  

 

 

 

 

[Signature Page to Fifth Supplemental Indenture]

 

  

 

  

	  	
THE BANK OF NEW YORK  MELLON,

	  
	  	
as Trustee

	  
	 	 	 
	  	  	  	  
	  	
By:

	/s/ Paul Cattermole	  
	  	  	
Name: Paul Cattermole

	  
	  	  	
Title: Vice President

	  

 

 

 

 

 

 

[Signature Page to Fifth Supplemental Indenture]

  

 

  

 

EXHIBIT A

 

 

FORM OF 2018 FIXED RATE SENIOR GLOBAL NOTE

 

THIS SECURITY 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 SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY 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.

CUSIP No. [●]

ISIN No. [●]

Common Code:  [●]

 

 

LLOYDS BANK plc

 

[●]% SENIOR NOTE DUE 2018

 

Guaranteed by

LLOYDS BANKING GROUP plc

	
No. [●]

	
$[●]

LLOYDS BANK 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 $[●] ([●] million dollars) on May [●], 2018 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 May [●] and November [●] of each year, commencing on November [●], 2015, and ending on May [●], 2018 (each, a “Payment Date”). Interest so payable on any Payment Date shall be paid to the holder in whose name this Senior 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”). Any interest which is payable, but is not punctually paid or duly provided for, on any Payment Date is herein called “Default Interest”. Default Interest shall

 

  

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cease to be payable to the registered holder on the relevant Regular Record Date by virtue then of having been such holder, and such Default Interest may be paid by the Company, at its election in each case, as provided in clause (x) or (y) below: (x) the Company may elect to make payment of any Default Interest to registered holders at the close of business on a Special Record Date (a “Special Record Date”) for the payment of such Default Interest, such Special Record Date to be fixed in accordance with Section 3.07(a) of the Indenture or, (y) the Company may make payment of any Default Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the trustee of the proposed payment, such manner of payment shall be deemed practicable by the trustee.

Interest shall accrue on this Senior Note from day to day from the date of issuance hereof or from the most recent Payment Date at the rate of [●]% per annum, until the principal amount hereof is paid or made available for payment.

 

Payments of interest on this Senior 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 Senior 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 Senior 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 Senior Note is registered as the owner of such Senior Note for the purpose of receiving payment of principal and interest, if any, on such Senior Note and for all other purposes whatsoever, whether or not such Senior 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 Senior 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.

 

  

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Unless the certificate of authentication hereon has been executed by the trustee referred to on the reverse hereof by manual signature, this Senior 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 cancellation of all, or a portion, of the principal amount of, or interest on, this Senior Note and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, this Senior Note into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of this Senior Note solely to give effect to the above.  With respect to (i) and (ii) 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 (including each Beneficial Owner) of this Senior Note further acknowledges and agrees that the rights of the holders under this Senior Note 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 expressed to implement such a cancellation or conversion.

 

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 or other members of 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 U.K. Financial Services (Banking Reform) Act 2013 (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, 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).

 

[The rest of this page is intentionally left blank]

 

  

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

 

 

Dated: May [●], 2015

 

 

	 	

LLOYDS BANK PLC

	 
	 	 	 
	 	 	 	 
	 	
By:

	 	 
	 	 	
Name:

	 
	 	 	
Title:

	 

 

 

 

 

 

 

[2018 Fixed Rate Global Note No.[●] Signature Page]

  

A-4

  

GUARANTEE OF LLOYDS BANKING GROUP plc

LLOYDS BANKING GROUP plc (herein called the “Guarantor,” which term includes any successor person under the Indenture (as defined on the reverse hereof)) hereby unconditionally guarantees (the “Guarantee”) to each holder of this Senior Note the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to such Senior Note and the due and punctual payment of the sinking fund payments (if any) provided for pursuant to the terms of such Senior Note and any and all amounts under the Indenture (including but not limited to, the fees, expenses and indemnities of the trustee), when and as the same shall become due and payable, whether at maturity, by acceleration, redemption, repayment or otherwise, in accordance with the terms of such Senior Note and of the Indenture. In case of the failure of the Company punctually to pay any such principal, premium, interest, Additional Amounts or sinking fund payment and any and all amounts under the Indenture, (including but not limited to, the fees, expenses and indemnities of the trustee) the Guarantor hereby agrees to pay, or cause any such payment to be made, punctually when and as the same shall become due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise, and as if such payment were made by the Company in accordance with the terms of such Senior Note and of the Indenture.

Unless otherwise defined herein, all terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

  

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IN WITNESS WHEREOF, the Guarantor has caused this guarantee to be duly executed.

 

Dated: May [●], 2015

	  	
Executed by LLOYDS BANKING GROUP PLC

	  
	 	 	 
	 	 	 
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  
	  	  	  	  	  
	 	 	 	 	 
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

 

 

[2018 Fixed Rate Global Note No.[●] Signature Page]

  

A-6

  

CERTIFICATE OF AUTHENTICATION

 

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

 

Dated: May [●], 2015

 

	  	
THE BANK OF NEW YORK MELLON,

	 
	  	
as trustee

	 
	 	 	 
	 	 	 
	  	
By:

	  	 
	  	  	
Authorized Signatory

	 

 

 

 

 

[2018 Fixed Rate Global Note No.[●] Signature Page]

  

A-7

  

[REVERSE OF SECURITY]

 

This Senior Note is one of a duly authorized issue of securities of the Company (herein called the “Senior Notes”) issued and to be issued in one or more series under a Senior Debt Securities Indenture, dated as of January 21, 2011 (herein called the “Senior Indenture”), among the Company, as issuer, the Guarantor, as guarantor, and The Bank of New York Mellon, as trustee (herein called the “Trustee,” which term includes any successor trustee under the Senior Indenture), as supplemented by the Fifth Supplemental Indenture dated as of May [●], 2015, among the Company, the Guarantor and the Trustee (the “Fifth Supplemental Indenture” and, together with the Senior 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 Guarantor, the Trustee and the holders of the Senior Notes and of the terms upon which the Senior Notes are, and are to be, authenticated and delivered.

 

This Senior Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $[●]. The Company may, without the consent of the holders of the Senior Notes, issue additional notes having the same ranking and interest rate, maturity date, redemption terms and other terms as the Senior Notes except for the price to the public, issue date and first interest payment date, provided that such additional notes must be fungible with the outstanding Senior Notes for U.S. federal income tax purposes. Any such Senior Notes, together with this Senior Note, will constitute a single series of securities under the Indenture. The Senior Notes will initially be issued in the form of one or more global Senior Notes (each, a “Global Senior Note”). Except as provided in the Indenture, a Global Senior Note shall not be exchangeable for one or more definitive Senior Notes.

 

The Senior Notes of this series will constitute unsecured and unsubordinated obligations of the Company and the Guarantor, as described herein, and will rank pari passu without any preference among themselves.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee or the holder or holders of not less than 25% in aggregate principal amount of the Outstanding Senior Notes of this series may declare the principal amount of, and any accrued interest on, all the Senior Notes to be due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of holders of Senior Notes by such

 

  

A-8

  

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 Indenture or in aid of the exercise of any power granted thereon, or to enforce any other proper remedy, including the institution of proceedings in England or Scotland (but not elsewhere) for the winding up of the Company or the Guarantor, respectively.

 

By acceptance of the Senior Notes of this Series, the holder will be deemed to have waived any right of set-off or counterclaim with respect to such Senior Notes that they might otherwise have against the Company or the Guarantor, whether before or during a winding-up of the Company or the Guarantor.

 

Amounts to be paid on the Senior Notes of this Series or under the guarantee 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, 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 or the Guarantor, as the case may be, to make such deduction or withholding, the Company, or the Guarantor, as the case may be, will pay additional amounts with respect to the principal of, and interest and any other payments on, the Senior Notes of this series (“Additional Amounts”) that are necessary in order that the net amounts paid to the holders, after the deduction or withholding, shall equal the amounts which would have been payable on the Senior 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 Senior Note is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or is physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Note, or the collection of any payment of (or in respect of) principal of, or interest or other payments on, any Senior Note or under the guarantee,

 

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

 

(iii) the relevant Senior 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

 

  

A-9

  

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 Senior Note or the beneficial owner of any payment of (or in respect of) principal of, or interest or other payments on, the Senior Note failed to comply with a request of the Company or its liquidator or guarantor or other authorized person addressed to the holder (x) to provide information concerning the nationality, residence or identity of the holder or such 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 Senior 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 Senior Note to another paying agent in a Member State of the European Union,

 

(vii) the deduction or withholding is imposed by reason of any agreement with the U.S. Internal Revenue Service in connection with Sections 1471-1474 of the U.S. Internal Revenue Code and the U.S. Treasury regulations thereunder (“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 clauses (i) through (vii) above,

 

nor shall Additional Amounts be paid with respect to the principal of, or any interest or other payments on, the Senior Note or under the Guarantee 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.

 

  

A-10

  

 

References herein to the payment of the principal of or interest or other payments on any Senior Note shall be deemed to include mention of the payment of Additional Amounts provided for in the foregoing paragraph to the extent that, in such context, Additional Amounts are, were or would be payable under the foregoing provisions.

 

The Senior Notes of this series are redeemable, as a whole but not in part, at the option of the Company or the Guarantor, on not less than 30 nor more than 60 days’ notice, on any Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, in respect of the Senior Notes to the date fixed for redemption, if, at any time, the Company or, if applicable, the Guarantor shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after May [●], 2015:

 

(a) in making payment under the Senior Notes the Company (or, if applicable, the Guarantor) has or will or would on the next Payment Date become obligated to pay Additional Amounts;

 

(b) the payment of interest on the next Payment Date in respect of any of the Senior Notes would be treated as a “distribution” within the meaning of Chapter 2 of Part 23 of the Corporation Tax Act 2010 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

 

(c) on the next Payment Date the Company (or, if applicable, the Guarantor) would not be entitled to claim a deduction in respect of such payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).

 

In any case where the Company (or, if applicable, the Guarantor) shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Notes of this series, the Company  (or, if applicable, the Guarantor) shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company or, if applicable, the Guarantor) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company (or, if applicable, the Guarantor) is entitled to exercise its right of redemption.

 

  

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If the Company (or, if applicable, the Guarantor) elects to redeem the Senior Notes of this series, the Senior 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 (or, if applicable, the Guarantor’s) obligations in respect of the payment of the principal of (and premium, if any), and accrued and unpaid interest on, the Senior Notes of this series shall terminate.

 

By purchasing the Senior Notes, each holder (including each beneficial owner) of the Senior Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Senior Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Senior Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Senior Notes solely to give effect to the above. Each holder (including each beneficial owner) of the Senior Notes further acknowledges and agrees that the rights of the holders under the Senior 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 expressed to implement such a cancellation or conversion.

 

By purchasing the Senior Notes each holder (including each beneficial owner) of the Senior Notes:

 

(i) acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority in respect of the Senior Notes shall not give rise to a default or an 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;

 

(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 Senior Notes; and

 

  

A-12

  

 

(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 of the Senior Notes under Section 5.12 of the Senior Indenture, and (b) neither the Senior 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 Senior 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 Senior Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Senior Notes following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Fifth Supplemental Indenture.

 

By purchasing the Senior Notes, each holder (including each beneficial owner) that acquires its Senior 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 Senior Notes that acquire the Senior 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 Senior Notes related to the U.K. bail-in power.

 

By its purchase of the Senior 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 Senior Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Senior 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 Senior Notes as it may be imposed, without any further action or direction on the part of such holder or beneficial owner.

 

No repayment of the principal amount of the Senior Notes or payment of interest on the Senior 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.

 

  

A-13

  

 

Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Senior 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.

 

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 Guarantor and the rights of the holders of the Senior Notes of each series to be affected thereby by the Company and the Trustee with the consent of the holders of not less than a majority in principal amount of the Senior Notes at the time outstanding of each such series.  The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of the outstanding Senior Notes of each series, on behalf of the holders of all Senior Notes of such series, 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 Senior Note shall be conclusive and binding upon such holder and upon all future holders of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

 

No reference herein to the Indenture and no provision of this Senior 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 Senior 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 Senior Note of this series will have the right to institute any proceeding with respect to the Indenture, this Senior Note or any remedy thereunder; provided, however, that such limitations do not apply to a suit instituted by the holder hereof for the enforcement of payment of the principal or interest as and when the same shall have become due and payable in accordance with the terms hereof and the Indenture.

 

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

 

This Senior Note will be governed by the laws of the State of New York.

 

  

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Unless otherwise defined herein, all terms used in this Senior Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

 

 

 

  

A-15

  

 

 

EXHIBIT B

 

 

FORM OF 2025 FIXED RATE SENIOR GLOBAL NOTE

 

THIS SECURITY 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 SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY 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.

CUSIP No. [●]

ISIN No. [●]

Common Code:  [●]

 

 

LLOYDS BANK plc

 

[●]% SENIOR NOTE DUE 2025

 

Guaranteed by

LLOYDS BANKING GROUP plc

	
No. [●]

	
$[●]

LLOYDS BANK 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 $[●] ([●] million dollars)] on May [●], 2025 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 May [●] and November [●] of each year, commencing on November [●], 2015, and ending on May [●], 2025 (each, a “Payment Date”). Interest so payable on any Payment Date shall be paid to the holder in whose name this Senior 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”). Any interest which is payable, but is not punctually paid or duly provided for, on any Payment Date is herein called “Default Interest”. Default Interest shall

 

  

B-1

  

cease to be payable to the registered holder on the relevant Regular Record Date by virtue then of having been such holder, and such Default Interest may be paid by the Company, at its election in each case, as provided in clause (x) or (y) below: (x) the Company may elect to make payment of any Default Interest to registered holders at the close of business on a Special Record Date (a “Special Record Date”) for the payment of such Default Interest, such Special Record Date to be fixed in accordance with Section 3.07(a) of the Indenture or, (y) the Company may make payment of any Default Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the trustee of the proposed payment, such manner of payment shall be deemed practicable by the trustee.

Interest shall accrue on this Senior Note from day to day from the date of issuance hereof or from the most recent Payment Date at the rate of [●]% per annum, until the principal amount hereof is paid or made available for payment.

 

Payments of interest on this Senior 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 Senior 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 Senior 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 Senior Note is registered as the owner of such Senior Note for the purpose of receiving payment of principal and interest, if any, on such Senior Note and for all other purposes whatsoever, whether or not such Senior 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 Senior 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.

 

  

B-2

  

 

Unless the certificate of authentication hereon has been executed by the trustee referred to on the reverse hereof by manual signature, this Senior 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 cancellation of all, or a portion, of the principal amount of, or interest on, this Senior Note and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, this Senior Note into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of this Senior Note solely to give effect to the above.  With respect to (i) and (ii) 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 (including each Beneficial Owner) of this Senior Note further acknowledges and agrees that the rights of the holders under this Senior Note 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 expressed to implement such a cancellation or conversion.

 

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 or other members of 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 U.K. Financial Services (Banking Reform) Act 2013 (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, 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).

 

[The rest of this page is intentionally left blank]

 

  

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

 

 

Dated: May [●], 2015

 

 

	  	
LLOYDS BANK PLC

	  
	 	 	 
	 	 	 
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

 

 

[2025 Fixed Rate Global Note No.[●] Signature Page]

 

  

B-4

  

GUARANTEE OF LLOYDS BANKING GROUP plc

LLOYDS BANKING GROUP plc (herein called the “Guarantor,” which term includes any successor person under the Indenture (as defined on the reverse hereof)) hereby unconditionally guarantees (the “Guarantee”) to each holder of this Senior Note the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to such Senior Note and the due and punctual payment of the sinking fund payments (if any) provided for pursuant to the terms of such Senior Note and any and all amounts under the Indenture (including but not limited to, the fees, expenses and indemnities of the trustee), when and as the same shall become due and payable, whether at maturity, by acceleration, redemption, repayment or otherwise, in accordance with the terms of such Senior Note and of the Indenture. In case of the failure of the Company punctually to pay any such principal, premium, interest, Additional Amounts or sinking fund payment and any and all amounts under the Indenture, (including but not limited to, the fees, expenses and indemnities of the trustee) the Guarantor hereby agrees to pay, or cause any such payment to be made, punctually when and as the same shall become due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise, and as if such payment were made by the Company in accordance with the terms of such Senior Note and of the Indenture.

Unless otherwise defined herein, all terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

  

B-5

  

IN WITNESS WHEREOF, the Guarantor has caused this guarantee to be duly executed.

 

Dated: May [●], 2015

	  	
Executed by LLOYDS BANKING GROUP PLC

	  
	 	 	 
	 	 	 
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  
	  	  	  	  	  
	 	 	 	 	 
	 	 	 	 	 
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

 

[2025 Fixed Rate Global Note No.[●] Signature Page]

 

 

  

B-6

  

CERTIFICATE OF AUTHENTICATION

 

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

 

Dated: May [●], 2015

 

 

	  	
THE BANK OF NEW YORK MELLON,

	 
	  	
as trustee

	 
	 	 	 
	 	 	 
	  	
By:

	  	 
	  	 	
Authorized Signatory

	 

 

 

 

[2025 Fixed Rate Global Note No.[●] Signature Page]

 

 

  

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[REVERSE OF SECURITY]

 

This Senior Note is one of a duly authorized issue of securities of the Company (herein called the “Senior Notes”) issued and to be issued in one or more series under a Senior Debt Securities Indenture, dated as of January 21, 2011 (herein called the “Senior Indenture”), among the Company, as issuer, the Guarantor, as guarantor, and The Bank of New York Mellon, as trustee (herein called the “Trustee,” which term includes any successor trustee under the Senior Indenture), as supplemented by the Fifth Supplemental Indenture dated as of May [●], 2015, among the Company, the Guarantor and the Trustee (the “Fifth Supplemental Indenture” and, together with the Senior 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 Guarantor, the Trustee and the holders of the Senior Notes and of the terms upon which the Senior Notes are, and are to be, authenticated and delivered.

 

This Senior Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $[●]. The Company may, without the consent of the holders of the Senior Notes, issue additional notes having the same ranking and interest rate, maturity date, redemption terms and other terms as the Senior Notes except for the price to the public, issue date and first interest payment date, provided that such additional notes must be fungible with the outstanding Senior Notes for U.S. federal income tax purposes. Any such Senior Notes, together with this Senior Note, will constitute a single series of securities under the Indenture. The Senior Notes will initially be issued in the form of one or more global Senior Notes (each, a “Global Senior Note”). Except as provided in the Indenture, a Global Senior Note shall not be exchangeable for one or more definitive Senior Notes.

 

The Senior Notes of this series will constitute unsecured and unsubordinated obligations of the Company and the Guarantor, as described herein, and will rank pari passu without any preference among themselves.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee or the holder or holders of not less than 25% in aggregate principal amount of the Outstanding Senior Notes of this series may declare the principal amount of, and any accrued interest on, all the Senior Notes to be due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of holders of Senior 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 Indenture or in aid of the exercise of any power granted thereon, or to enforce any other proper remedy, including the institution of proceedings in England or Scotland (but not elsewhere) for the winding up of the Company or the Guarantor, respectively.

 

  

B-8

  

 

 

By acceptance of the Senior Notes of this Series, the holder will be deemed to have waived any right of set-off or counterclaim with respect to such Senior Notes that they might otherwise have against the Company or the Guarantor, whether before or during a winding-up of the Company or the Guarantor.

 

Amounts to be paid on the Senior Notes of this Series or under the guarantee 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, 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 or the Guarantor, as the case may be, to make such deduction or withholding, the Company, or the Guarantor, as the case may be, will pay additional amounts with respect to the principal of, and interest and any other payments on, the Senior Notes of this series (“Additional Amounts”) that are necessary in order that the net amounts paid to the holders, after the deduction or withholding, shall equal the amounts which would have been payable on the Senior 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 Senior Note is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or is physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Note, or the collection of any payment of (or in respect of) principal of, or interest or other payments on, any Senior Note or under the guarantee,

 

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

 

(iii) the relevant Senior 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 Senior Note or the beneficial owner of any payment of (or in respect of) principal of, or interest or other payments on, the Senior Note failed to comply with a request of the Company or its liquidator or guarantor or other authorized person addressed to the holder (x) to provide information concerning the nationality, residence or identity of the holder or such 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

 

  

B-9

  

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 Senior 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 Senior Note to another paying agent in a Member State of the European Union,

 

(vii) the deduction or withholding is imposed by reason of any agreement with the U.S. Internal Revenue Service in connection with Sections 1471-1474 of the U.S. Internal Revenue Code and the U.S. Treasury regulations thereunder (“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 clauses (i) through (vii) above,

 

nor shall Additional Amounts be paid with respect to the principal of, or any interest or other payments on, the Senior Note or under the Guarantee 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.

 

References herein to the payment of the principal of or interest or other payments on any Senior Note shall be deemed to include mention of the payment of Additional Amounts provided for in the foregoing paragraph to the extent that, in such context, Additional Amounts are, were or would be payable under the foregoing provisions.

 

The Senior Notes of this series are redeemable, as a whole but not in part, at the option of the Company or the Guarantor, on not less than 30 nor more than 60 days’ notice, on any Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, in respect of the Senior Notes to the date fixed for redemption, if, at any time, the Company or, if applicable, the Guarantor shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after May [●], 2015:

 

(a) in making payment under the Senior Notes the Company (or, if applicable, the Guarantor) has or will or would on the next Payment Date become obligated to pay Additional Amounts;

 

(b) the payment of interest on the next Payment Date in respect of any of the Senior Notes would be treated as a “distribution” within the meaning of Chapter 2 of Part 23 of the

 

  

B-10

  

Corporation Tax Act 2010 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

 

(c) on the next Payment Date the Company (or, if applicable, the Guarantor) would not be entitled to claim a deduction in respect of such payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).

 

In any case where the Company (or, if applicable, the Guarantor) shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Notes of this series, the Company  (or, if applicable, the Guarantor) shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company or, if applicable, the Guarantor) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company (or, if applicable, the Guarantor) is entitled to exercise its right of redemption.

 

If the Company (or, if applicable, the Guarantor) elects to redeem the Senior Notes of this series, the Senior 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 (or, if applicable, the Guarantor’s) obligations in respect of the payment of the principal of (and premium, if any), and accrued and unpaid interest on, the Senior Notes of this series shall terminate.

 

By purchasing the Senior Notes, each holder (including each beneficial owner) of the Senior Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Senior Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Senior Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Senior Notes solely to give effect to the above. Each holder (including each beneficial owner) of the Senior Notes further acknowledges and agrees that the rights of the holders under the Senior 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 expressed to implement such a cancellation or conversion.

 

By purchasing the Senior Notes each holder (including each beneficial owner) of the Senior Notes:

 

(i) acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority in respect of the Senior Notes shall not give rise to a default or an 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;

 

  

B-11

  

 

 

(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 Senior 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 of the Senior Notes under Section 5.12 of the Senior Indenture, and (b) neither the Senior 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 Senior 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 Senior Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Senior Notes following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Fifth Supplemental Indenture.

 

By purchasing the Senior Notes, each holder (including each beneficial owner) that acquires its Senior 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 Senior Notes that acquire the Senior 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 Senior Notes related to the U.K. bail-in power.

 

By its purchase of the Senior 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 Senior Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Senior 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 Senior Notes as it may be imposed, without any further action or direction on the part of such holder or beneficial owner.

 

No repayment of the principal amount of the Senior Notes or payment of interest on the Senior 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 Senior Notes, the Company shall provide a written notice to

 

  

B-12

  

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.

 

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 Guarantor and the rights of the holders of the Senior Notes of each series to be affected thereby by the Company and the Trustee with the consent of the holders of not less than a majority in principal amount of the Senior Notes at the time outstanding of each such series.  The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of the outstanding Senior Notes of each series, on behalf of the holders of all Senior Notes of such series, 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 Senior Note shall be conclusive and binding upon such holder and upon all future holders of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

 

No reference herein to the Indenture and no provision of this Senior 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 Senior 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 Senior Note of this series will have the right to institute any proceeding with respect to the Indenture, this Senior Note or any remedy thereunder; provided, however, that such limitations do not apply to a suit instituted by the holder hereof for the enforcement of payment of the principal or interest as and when the same shall have become due and payable in accordance with the terms hereof and the Indenture.

 

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

 

This Senior Note will be governed by the laws of the State of New York.

 

Unless otherwise defined herein, all terms used in this Senior Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

  

B-13

  

 

 

EXHIBIT C

 

 

FORM OF THE FLOATING RATE GLOBAL NOTE

 

THIS SECURITY 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 SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY 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.

CUSIP No. [●]

  ISIN No. [●]

Common Code: [●]

 

 

LLOYDS BANK plc

 

FLOATING RATE NOTE DUE 2018

 

  Guaranteed by

LLOYDS BANKING GROUP plc

 

 

	
No. [●] 

	
$[●]                 

 

 

LLOYDS BANK 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 $[●] ([●] million dollars) on May [●], 2018 or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon quarterly in arrears on February [●], May [●] , August [●] and November [●] of each year, commencing on August [●], 2015, and ending on May [●], 2018 (each, a “Floating Rate Interest Payment Date”). Interest so payable on any Floating Rate Interest Payment Date shall be paid to the holder in whose name this Senior Note is registered on the 15th calendar day immediately preceding the relevant Floating Rate Interest Payment Date.

Any interest which is payable, but is not punctually paid or duly provided for, on any Floating Rate Interest Payment Date is herein called “Default Interest”. Default Interest shall cease to be payable to the registered holder on the relevant Regular Record Date by virtue then of having been such holder, and such

 

  

C-1

  

Default Interest may be paid by the Company, at its election in each case, as provided in clause (x) or (y) below: (x) the Company may elect to make payment of any Default Interest to registered holders at the close of business on a Special Record Date (a “Special Record Date”) for the payment of such Default Interest, such Special Record Date to be fixed in accordance with Section 3.07(a) of the Indenture or, (y) the Company may make payment of any Default Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the trustee of the proposed payment, such manner of payment shall be deemed practicable by the trustee.

 

Interest shall accrue on this Senior Note from day to day from the date of issuance hereof until the principal amount hereof is paid or made available for payment.

 

Payment of the principal amount of (and premium, if any), and any interest on, this Senior 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 Senior 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 Senior Note is registered as the owner of such Senior Note for the purpose of receiving payment of principal and interest, if any, on such Senior Note and for all other purposes whatsoever, whether or not such Senior 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 Senior 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 Senior 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 cancellation of all, or a portion, of the principal amount of, or interest on, this Senior Note and/or (ii)

 

  

C-2

  

 

the conversion of all, or a portion, of the principal amount of, or interest on, this Senior Note into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of this Senior Note solely to give effect to the above.  With respect to (i) and (ii) 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 (including each beneficial owner) of this Senior Note further acknowledges and agrees that the rights of the holders under this Senior Note 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 expressed to implement such a cancellation or conversion.

 

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 or other members of 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 U.K. Financial Services (Banking Reform) Act 2013 (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, 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).

[The rest of this page is intentionally left blank]

 

 

 

  

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

 

Dated: May [●], 2015

 

 

	  	
LLOYDS BANK PLC

	  
	  	  	  	  	  
	  	  	  	  	  
	  	
By: 

	  	  
	  	  	  	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

 

[2018 Floating Rate Global Note Signature Page]

  

C-4

  

 

GUARANTEE OF LLOYDS BANKING GROUP plc

 

LLOYDS BANKING GROUP plc (herein called the “Guarantor,” which term includes any successor person under the Indenture (as defined on the reverse hereof)) hereby unconditionally guarantees (the “Guarantee”) to each holder of this Senior Note the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to such Senior Note and the due and punctual payment of the sinking fund payments (if any) provided for pursuant to the terms of such Senior Note and any and all amounts under the Indenture (including but not limited to, the fees, expenses and indemnities of the trustee), when and as the same shall become due and payable, whether at maturity, by acceleration, redemption, repayment or otherwise, in accordance with the terms of such Senior Note and of the Indenture. In case of the failure of the Company punctually to pay any such principal, premium, interest, Additional Amounts or sinking fund payment and any and all amounts under the Indenture, (including but not limited to, the fees, expenses and indemnities of the trustee) the Guarantor hereby agrees to pay, or cause any such payment to be made, punctually when and as the same shall become due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise, and as if such payment were made by the Company in accordance with the terms of such Senior Note and of the Indenture.

 

Unless otherwise defined herein, all terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

  

C-5

  

 

IN WITNESS WHEREOF, the Guarantor  has caused this guarantee to be duly executed.

 

Dated: May [●], 2015

 

	  	
Executed by LLOYDS BANKING  GROUP PLC

	  
	  	  	  	  	  
	  	  	  	  	  
	  	
By: 

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	
By: 

	  	  
	
 

	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

 

 

 

[Floating Rate Global Note Signature Page]

 

  

C-6

  

CERTIFICATE OF AUTHENTICATION

 

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

 

Dated: May [●], 2015

 

	  	
THE BANK OF NEW YORK MELLON, as trustee

	  
	  	  	  	  
	  	  	  	  
	  	
By:

	 	  
	  	  	
Authorized Signatory

	  

 

 

 

 

[Floating Rate Global Note Signature Page]

 

 

  

C-7

  

[REVERSE OF SECURITY]

 

This Senior Note is one of a duly authorized issue of securities of the Company (herein called the “Senior Notes”) issued and to be issued in one or more series under a Senior Debt Securities Indenture, dated as of January 21, 2011 (herein called the “Senior Indenture”), among the Company, as issuer, the Guarantor, as guarantor, and The Bank of New York Mellon, as trustee (herein called the “Trustee,” which term includes any successor trustee under the Senior Indenture) as supplemented by the Fifth Supplemental Indenture, dated as of May [●], 2015, among the Company, the Guarantor and the Trustee (the “Fifth Supplemental Indenture”, and, together with the Senior 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 Guarantor, the Trustee and the holders of the Senior Notes and of the terms upon which the Senior Notes are, and are to be, authenticated and delivered.

This Senior Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $[●]. The Company may, without the consent of the holders of the Senior Notes, issue additional notes having the same ranking and interest rate, maturity date, redemption terms and other terms as the Senior Notes except for the price to the public, issue date and first interest payment date, provided that such additional notes must be fungible with the outstanding Senior Notes for U.S. federal income tax purposes. Any such Senior Notes, together with this Senior Note, will constitute a single series of securities under the Indenture. The Senior Notes will initially be issued in the form of one or more global Senior Notes (each, a “Global Senior Note”). Except as provided in the Indenture, a Global Senior Note shall not be exchangeable for one or more definitive Senior Notes.

The Senior Notes of this series will constitute unsecured and unsubordinated obligations of the Company and the Guarantor, as described herein, and will rank pari passu without any preference among themselves.

 

The interest rate for the Senior Notes for the first Floating Rate Interest Period (as defined below) will be LIBOR (as defined below) as determined on May [●], 2015 plus the Spread. The interest rate for each subsequent Floating Rate Interest Period will be LIBOR as determined on the applicable Interest Determination Date (as defined below) plus the Spread, in each case calculated on the basis of a 360-day year and the actual number of days elapsed. The Spread is [●] basis points.

 

The initial Floating Rate Interest Payment Date (as defined below) will fall on August [●], 2015. Thereafter, interest on the Senior Notes will be paid

 

  

C-8

  

quarterly in arrears on February [●], May [●], August [●] and November [●] of each year, commencing on August [●], 2015, and ending on May [●], 2018 (each, a “Floating Rate Interest Payment Date”). Interest so payable on any Floating Rate Interest Payment Date shall be paid to the holder in whose name this Senior Note is registered on the 15th calendar day immediately preceding the relevant Floating Rate Interest Payment Date. However, if a Floating Rate Interest Payment Date would fall on a day that is not a Business Day, as defined in the Indenture (each a “Regular Record Date”), other than the interest payment date that is also the date of maturity, the Floating Rate Interest Payment Date will be postponed to the next succeeding day that is a business day and interest thereon will continue to accrue, except that if the business day falls in the next succeeding calendar month, the applicable Floating Rate Interest Payment Date will be the immediately preceding business day. In each such case, except for the Floating Rate Interest Payment Date falling on the maturity date, the Floating Rate Interest Periods and the Interest Reset Dates (as defined below) will be adjusted accordingly to calculate the amount of interest payable on the notes.

 

The interest rate will be reset on each Floating Rate Interest Payment Date (together with the initial interest reset date, each an “Interest Reset Date”). However, if any Interest Reset Date would otherwise be a day that is not a business day, that Interest Reset Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Interest Reset Date will be the immediately preceding business day.

 

Interest will be paid on the Senior Notes to holders of record of each Senior Note in respect of the principal amount thereof as at the 15th calendar day prior to the relevant Floating Rate Interest Payment Date. The first interest period will begin on and include May [●], 2015 and will end on and exclude August [●], 2015. Thereafter, the interest period will be the periods from and including a Floating Rate Interest Payment Date to but excluding the immediately succeeding Floating Rate Interest Payment Date (together with the first interest period, each a “Floating Rate Interest Period”). However, the final Floating Rate Interest Period will be the period from and including the Floating Rate Interest Payment Date immediately preceding the Maturity Date to but excluding the Maturity Date.

 

The calculation agent will determine LIBOR (as defined below) for each Floating Rate Interest Period other than the first Floating Rate Interest Period on the second day in which dealings in United States dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market (a “London Banking Day”) prior to the first day of such Floating Rate Interest Period (an “Interest Determination Date”).

 

  

C-9

  

 

 “LIBOR,” with respect to a Floating Rate Interest Period, shall be the offered rate (expressed as a percentage per annum) for deposits of U.S. dollars having a maturity of three months that appears on the Designated LIBOR Page (as defined below) as of 11:00 a.m., London time.

 

If no rate appears on the Designated LIBOR Page, LIBOR will be determined for such Interest Determination Date on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to prime banks in the London inter-bank market by four major banks in such market selected by the calculation agent, after consultation with us, for a term of three months and in a Representative Amount. The calculation agent will request that the principal London office of each of such banks provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m. in the City of New York on such Interest Determination Date by three major banks in New York City, selected by the calculation agent, after consultation with us, for loans in United States dollars to leading European banks, for a term of three months and in a Representative Amount. If at least two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean of such quotations. If fewer than two quotations are provided, then LIBOR for such Floating Rate Period will be LIBOR in effect with respect to the immediately preceding Floating Rate Interest Period.

 

“Designated LIBOR Page” means the Reuters Screen LIBOR01 display page, or any successor page, on Reuters or any successor service (or any such other service(s) as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for US dollar deposits).

 

“Interest Determination Date” for each Floating Rate Interest Period will be the second London Banking Day preceding the first day of such Floating Rate Interest Period.

 

“London Banking Day” is any day in which dealings in United States dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

 

“Representative Amount” means an amount that in the judgment of the calculation agent is representative for a single transaction in US dollars in such market at such time.

 

  

C-10

  

 

All calculations of the calculation agent, in the absence of manifest error, will be conclusive for all purposes and binding on the Issuer and on the holders of the Senior Notes.

 

All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).

 

The interest rate on the Senior Notes will in no event be higher than the maximum rate permitted by law.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee or the holder or holders of not less than 25% in aggregate principal amount of the Outstanding Senior Notes of this series may declare the principal amount of, and any accrued interest on, all the Senior Notes to be due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of holders of Senior 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 Indenture or in aid of the exercise of any power granted thereon, or to enforce any other proper remedy, including the institution of proceedings in England or Scotland (but not elsewhere) for the winding up of the Company or the Guarantor, respectively.

 

By acceptance of the Senior Notes of this Series, the holder will be deemed to have waived any right of set-off or counterclaim with respect to such Senior Notes that they might otherwise have against the Company or the Guarantor, whether before or during a winding-up of the Company or the Guarantor.

 

Amounts to be paid on the Senior Notes of this Series or under the guarantee 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, 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

 

  

C-11

  

Company or the Guarantor, as the case may be, to make such deduction or withholding, the Company, or the Guarantor, as the case may be, will pay additional amounts with respect to the principal of, and interest and any other payments on, the Senior Notes of this series (“Additional Amounts”) that are necessary in order that the net amounts paid to the holders, after the deduction or withholding, shall equal the amounts which would have been payable on the Senior 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 Senior Note is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or is physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Note, or the collection of any payment of (or in respect of) principal of, or interest or other payments on, any Senior Note or under the guarantee,

 

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

 

(iii) the relevant Senior 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 Senior Note or the beneficial owner of any payment of (or in respect of) principal of, or interest or other payments on, the Senior Note failed to comply with a request of the Company or its liquidator or guarantor or other authorized person addressed to the holder (x) to provide information concerning the nationality, residence or identity of the holder or such 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,

 

  

C-12

  

 

(vi) the Senior 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 Senior Note to another paying agent,

 

(vii) the deduction or withholding is imposed by reason of any agreement with the U.S. Internal Revenue Service in connection with Sections 1471-1474 of the U.S. Internal Revenue Code and the U.S. Treasury regulations thereunder (“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 clauses (i) through (vii) above,

 

nor shall Additional Amounts be paid with respect to the principal of, or any interest or other payments on, the Senior Note or under the Guarantee 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.

 

References herein to the payment of the principal of or interest or other payments on any Senior Note shall be deemed to include mention of the payment of Additional Amounts provided for in the foregoing paragraph to the extent that, in such context, Additional Amounts are, were or would be payable under the foregoing provisions.

 

The Senior Notes of this series are redeemable, as a whole but not in part, at the option of the Company or the Guarantor, on not less than 30 nor more than 60 days’ notice, on any Floating Rate Interest Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, in respect of the Senior Notes to the date fixed for redemption, if, at any time, the Company or, if applicable, the Guarantor shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after May [●], 2015:

 

(a) in making payment under the Senior Notes the Company (or, if applicable, the Guarantor) has or will or would on the next Floating Rate Interest Payment Date become obligated to pay Additional Amounts;

 

  

C-13

  

 

 

(b) the payment of interest on the next Floating Rate Interest Payment Date in respect of any of the Senior Notes would be treated as a “distribution” within the meaning of Chapter 2 of Part 23 of the Corporation Tax Act 2010 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

 

(c) on the next Floating Rate Interest Payment Date the Company (or, if applicable, the Guarantor) would not be entitled to claim a deduction in respect of such payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).

 

In any case where the Company (or, if applicable, the Guarantor) shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Notes of this series, the Company  (or, if applicable, the Guarantor) shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company or, if applicable, the Guarantor) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company (or, if applicable, the Guarantor) is entitled to exercise its right of redemption.

 

If the Company (or, if applicable, the Guarantor) elects to redeem the Senior Notes of this series, the Senior 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 (or, if applicable, the Guarantor’s) obligations in respect of the payment of the principal of (and premium, if any), and accrued and unpaid interest on, the Senior Notes of this series shall terminate.

 

By purchasing the Senior Notes, each holder (including each beneficial owner) of the Senior Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Senior Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Senior Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Senior Notes solely to give effect to the above. Each holder (including each beneficial owner) of the Senior Notes further acknowledges and agrees that the rights of the holders under the Senior Notes are subject to, and will be varied, if necessary,

 

  

C-14

  

solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.

 

By purchasing the Senior Notes each holder (including each beneficial owner) of the Senior Notes:

 

(i) acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority in respect of the Senior Notes shall not give rise to a default or an 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;

 

(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 Senior 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 of the Senior Notes under Section 5.12 of the Senior Indenture, and (b) neither the Senior 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 Senior 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 Senior Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Senior Notes following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Fifth Supplemental Indenture.

 

By purchasing the Senior Notes, each holder (including each beneficial owner) that acquires its Senior 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 Senior Notes that acquire the Senior Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement

 

  

C-15

  

to be bound by and consent to the terms of the Senior Notes related to the U.K. bail-in power.

 

By its purchase of the Senior 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 Senior Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Senior 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 Senior Notes as it may be imposed, without any further action or direction on the part of such holder or beneficial owner.

 

No repayment of the principal amount of the Senior Notes or payment of interest on the Senior 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 Senior 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.

 

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 Guarantor and the rights of the holders of the Senior Notes of each series to be affected thereby by the Company and the Trustee with the consent of the holders of not less than a majority in principal amount of the Senior Notes at the time outstanding of each such series.  The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of the outstanding Senior Notes of each series, on behalf of the holders of all Senior Notes of such series, 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 Senior Note shall be conclusive and binding upon such holder and upon all future holders of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

 

No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the obligation of the Company, which is

 

  

C-16

  

absolute and unconditional, to pay, if and when due and payable, the principal of (and premium, if any) and interest on, this Senior 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 Senior Note of this series will have the right to institute any proceeding with respect to the Indenture, this Senior Note or any remedy thereunder; provided, however, that such limitations do not apply to a suit instituted by the holder hereof for the enforcement of payment of the principal or interest as and when the same shall have become due and payable in accordance with the terms hereof and the Indenture.

 

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

 

This Senior Note will be governed by the laws of the State of New York.

 

Unless otherwise defined herein, all terms used in this Senior Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

 

C-17ex10-1.htm

 

Exhibit 10.1

 

SIXTH AGREEMENT OF AMENDMENT TO REVOLVING LOAN AND 

SECURITY AGREEMENT AND OTHER DOCUMENTS

 

 

This Sixth Agreement of Amendment to Revolving Loan and Security Agreement and Other Documents (this "Amendment") shall be dated and effective as of July 1, 2014 and is by and between STERLING NATIONAL BANK, having an office at 500 Seventh Avenue, New York, New York 10018 ("Sterling"), and any other entity becoming a lender pursuant to the Loan Agreement (as hereinafter defined) are individually referred to as a "Lender" and collectively referred to as the "Lenders", and Sterling as the agent for the Lenders as well as acting for the benefit of the Lenders (the "Agent"), and SPAR GROUP, INC., a Delaware corporation, NATIONAL ASSEMBLY SERVICES, INC., a Nevada corporation, SPAR GROUP INTERNATIONAL, INC., a Nevada corporation, SPAR ACQUISITION, INC., a Nevada corporation, SPAR TRADEMARKS, INC., a Nevada corporation, SPAR MARKETING FORCE, INC., a Nevada corporation, SPAR CANADA, INC., a Nevada corporation and SPAR CANADA COMPANY, an unlimited liability company incorporated in the Province of Nova Scotia, Canada (either separately, jointly, or jointly and severally, collectively, the "Borrowers"), each having an address at 333 Westchester Avenue, South Building, Suite 204, White Plains, New York 10604.

 

WHEREAS, the Borrowers have executed and delivered or have become parties to, as applicable, a certain Secured Revolving Loan Note dated July 6, 2010 in the original principal amount of Five Million and 00/100 Dollars ($5,000,000.00), payable to the order of the Agent, as same was subsequently increased to Six Million Five Hundred Thousand Dollars ($6,500,000.00) (collectively, the "Existing Note") and as same (and Sterling’s Commitment to make revolving loan advances) is being further increased to Seven Million Five Hundred Thousand and 00/100 Dollars ($7,500,000.00) pursuant to an Amended and Restated Secured Revolving Loan Note of even date herewith in the original principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000.00) issued by the Borrower to Sterling in order to continue and evidence the outstanding indebtedness under and amend, restate and completely replace the Existing Note (the "Note");

 

WHEREAS, in connection with the execution and delivery of the Existing Note and to secure payment and performance of the Note (and prior to its execution, the Existing Note) and other obligations of the Borrowers to the Agent, the Agent and the Borrowers have executed or become parties to, as applicable, a certain Revolving Loan and Security Agreement effective July 6, 2010, as same has been amended from time to time and as same is hereby further amended pursuant to the terms of this Amendment (collectively, the "Loan Agreement");

 

WHEREAS, in addition to the Note and the Loan Agreement, the Borrowers and the Agent have executed and/or delivered certain other collateral agreements, certificates and instruments perfecting or otherwise relating to the security interests created, which together with the Note and the Loan Agreement are hereinafter individually referred to as a "Loan Document" and collectively referred to as the "Loan Documents";

 

 

1

 

 

WHEREAS, SPAR Wings & Ink Company, an unlimited liability company incorporated in the Province of Nova Scotia, Canada merged with SPAR Canada Company with SPAR Canada Company being the surviving company and National Assembly Services, Inc., a New Jersey corporation, merged with National Assembly Services, Inc., a Nevada corporation, with such Nevada corporation being the surviving company;

 

WHEREAS, the Borrowers have requested that the Agent modify the amount of the Revolving Loan and make certain other modifications to the terms of the Revolving Loan evidenced by the Note, the Loan Agreement and the other Loan Documents to which the Agent has agreed provided the Borrowers enter into this Amendment;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which being hereby acknowledged, the Agent and the Borrowers hereby agree as follows:

 

1.      Capitalized terms not defined herein shall have the meaning set forth in the Loan Agreement. 

 

2.      Section 1.1(a) of the Loan Agreement is hereby amended to read in its entirety as follows:

 

"Lender agrees to provide, in its sole and absolute discretion, advances in the maximum aggregate amount of $7,500,000.00 to the Borrower for the Revolving Loan and Letters of Credit ("Commitment"), but not in excess of the Borrower's Borrowing Base, at one time or from time to time at the request of the Borrower on a Revolving Loan basis (the "Revolving Loan"), which may be repaid and reborrowed during the term of this Agreement. The full amount of outstanding principal and interest on account of the Revolving Loan is to be payable on the earlier of (i) two (2) years from the date of this Agreement, (ii) as provided in Article 14 of this Agreement or (iii) upon a Default as provided in this Agreement."

 

3.      The first paragraph of Section 1.1(b) of the Loan Agreement is hereby amended to read in its entirety as follows:

 

"The term "Borrowing Base" means an amount equal to the lesser of (i) Seven Million Five Hundred Thousand and 00/100 Dollars ($7,500,000.00) or the sum of (ii) up to eighty-five percent (85%) of the face amount of the Borrower's "Qualified Accounts" plus (iii) the lesser of (A) up to sixty-five percent (65%) of the face amount of the Borrower's otherwise Qualified Accounts which are unbilled for not more than up to sixty (60) days following completion of service or product, or (B) Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00), but which, in no event, shall exceed fifty percent (50%) of the Borrowing Base (in each case all less reserves determined by Agent for advertising allowances, warranty claims and other contingencies) as that term is defined in this Agreement, plus (iv) up to Five Hundred Thousand and 00/100 Dollars ($500,000.00) of the full unpaid and outstanding balance of any standby letters of credit which Lenders in their sole and absolute discretion may issue on account of the Borrower, which letters of credit are to be fully and separately cash collateralized."

 

 

2

 

 

4.      The Capital Expenditures covenant set forth in Section 7.16 in the Loan Agreement is hereby amended to read in its entirety as follows:

 

"The Borrower is not to enter into any agreement to purchase or pay for, or become obligated to pay for, capital expenditures in an amount aggregating in excess of $1,600,000.00 during any fiscal year."

 

5.      Section 6.7(g) of the Loan Agreement is hereby deleted and replaced with "[Intentionally Deleted]". 

 

6.     All references in the Loan Agreement and the other Loan Documents, if any, to (a) (i) SPAR Wings & Ink Company shall hereafter be to and mean SPAR Canada Company, and (ii) National Assembly Services, Inc., the New Jersey corporation, shall hereafter be to and mean National Assembly Services, Inc., the Nevada corporation, in each case whether by name or defined term, as a "Borrower" or otherwise; and (b) the "Note" or "Notes", whether by name, as a "Loan Document" or otherwise, shall hereafter be to and mean the Amended and Restated Secured Revolving Loan Note dated July 1, 2014, in the original maximum principal amount of Seven Million Five Hundred Thousand and 00/100 Dollars ($7,500,000.00), made payable by the Borrower to the order of Sterling, as amended, and issued in order to continue and evidence the outstanding indebtedness under and amend, restated and completely replace the Existing Note and any other note(s) that may be issued by Borrower to evidence the Revolving Loan.

 

7.      In the event of any ambiguity or inconsistency between the Loan Documents and this Amendment, the language and interpretation of this Amendment shall be deemed binding and paramount.

 

8.      The Borrowers hereby represent and warrant to the Agent that:

 

(a)     Each and every of the representations and warranties set forth in the Loan Agreement and the other Loan Documents are true in all material respects as of the date hereof and with the same effect as though made on the date hereof (except as and to the extent limited to reference dates), and are hereby incorporated herein in full by reference as if fully restated herein in its entirety;

 

 

3

 

 

(b)     No Default or event of Default and no event or condition which, with the giving of notice or lapse of time or both, would constitute such a default or event of Default, now exists or would exist under any Loan Document after giving effect hereto;

 

(c)     There are no defenses or offsets to its outstanding obligations under the Loan Agreement or any of the other Loan Documents executed in connection therewith, and if any such defenses or offsets exist without the knowledge of the Borrowers, the same are hereby waived;

 

(d)     The Borrowers are not subject to any legal or contractual restrictions on their ability to enter into this Amendment;

 

(e)      The individual(s) executing this Amendment on behalf of the Borrowers has the requisite power and authority to execute and deliver this Amendment and that all action necessary to authorize the execution, delivery and performance of this Amendment has been duly taken, and this Amendment is being duly executed and delivered by the officer or other representative authorized to execute and deliver this Amendment; and

 

(f)     As of the date hereof, the Borrowers are each duly formed, validly existing, and in good standing under the laws of the jurisdiction of its formation and each is duly qualified as a foreign corporation and in good standing under the laws of each other jurisdiction in which such qualification is required.

 

9.      It is expressly understood and agreed that all collateral security for the extensions of credit set forth in the Loan Agreement is and shall continue to be collateral security for all extensions of credit provided under the Loan Agreement as herein amended. Without limiting the generality of the foregoing, the Borrowers hereby absolutely and unconditionally confirm that each document and instrument executed by the Borrowers pursuant to the Loan Agreement continues in full force and effect, is hereby ratified and confirmed and is and shall continue to be applicable to the Loan Agreement (as herein amended).

 

10.    The amendment set forth herein is limited precisely as written and shall not be deemed to (a) be a consent to or a waiver of any other term or condition of the Loan Agreement, the Loan Documents or any of the documents referred to therein, or (b) prejudice any right or rights which the Agent may now have or may have in the future under or in connection with the Loan Agreement, the Loan Documents or any documents referred to therein, as amended. Whenever the Loan Agreement is referred to in the Loan Agreement, the Loan Documents or any of the instruments, agreements or other documents or papers executed and delivered in connection therewith, it shall be deemed to mean the Loan Agreement and other Loan Documents as amended hereby.

 

11.    The Borrowers agree to sign, deliver and file any additional documents and take any other actions that may reasonably be required by the Agent including, but not limited to, affidavits, resolutions, or certificates for the full and complete consummation of the matters covered by this Amendment.

 

 

4

 

 

12.    This Amendment is binding upon, inures to the benefit of, and is enforceable by, the heirs, personal representatives, successors and assigns of the parties hereto. This Amendment is not assignable by the Borrowers without the prior written consent of the Agent, provided, however, that this Amendment shall be deemed to be assigned with any assignment of the Loan Agreement consent to by the Agent.

 

13.    To the extent that any provision of this Amendment is determined by any court or legislature to be invalid or unenforceable in whole or in part either in a particular case or in all cases, such provision or part thereof is to be deemed surplusage. If that occurs, it shall not have the effect of rendering any other provision of this Amendment invalid or unenforceable and this Amendment is to be construed and enforced as if such invalid or unenforceable provision or part thereof were omitted.

 

14.    This Amendment may only be changed or amended by a written agreement signed by all of the parties. By execution of this Amendment, the Agent is not to be deemed to consent to any future renewal, extension or amendment of the Revolving Loan or the Loan Documents.

 

15.    This Amendment may be executed in one or more counterparts, each of which shall be deemed an original. Said counterparts shall constitute but one and the same instrument and shall be binding upon each of the undersigned individually as fully and completely as if all had signed but one instrument.

 

16.    This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of New York without giving effect to New York’s conflict of laws principles that would defer to the substantive laws of any other jurisdiction.

 

17.    The parties to this Amendment acknowledge that each has had the opportunity to consult independent counsel of their own choice, and that each has relied upon such counsel’s advice concerning this Amendment, the enforceability and interpretation of the terms contained in this Amendment and the consummation of the transaction and matters covered by this Amendment.

 

18.    The Borrowers agree that they shall be obligated for the payment of the Agent’s reasonable legal fees incurred in connection with the preparation of this Amendment.

 

 

5

 

 

The undersigned have caused this Amendment to be executed as of the day and year first above written.

 

	
 
	STERLING NATIONAL BANK	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
    
	
 

	
 
	
Name:
	Ronald J. Bongiovanni	
 

	
 
	
Title:
	First Vice President	
 

	
 
	SPAR GROUP, INC.	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
    
	
 

	
 
	
Name:
	
James R. Segreto
	
 

	
 
	
Title:
	
Chief Financial Officer, Treasurer and Secretary
	
 

	
 
	NATIONAL ASSEMBLY SERVICES, INC.	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
    
	
 

	
 
	
Name:
	
James R. Segreto
	
 

	
 
	
Title:
	
Chief Financial Officer, Treasurer and Secretary
	
 

 

	
 
	SPAR GROUP INTERNATIONAL, INC.	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
    
	
 

	
 
	
Name:
	
James R. Segreto
	
 

	
 
	
Title:
	
Chief Financial Officer, Treasurer and Secretary
	
 

       

	
 
	SPAR ACQUISITION, INC.	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
    
	
 

	
 
	
Name:
	
James R. Segreto
	
 

	
 
	
Title:
	
Chief Financial Officer, Treasurer and Secretary
	
 

	
 
	SPAR TRADEMARKS, INC.	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
    
	
 

	
 
	
Name:
	
James R. Segreto
	
 

	
 
	
Title:
	
Chief Financial Officer, Treasurer and Secretary
	
 

  

-Signatures Continued on Following Page-

 

 

6

 

 

	
 
	
SPAR MARKETING FORCE, INC.
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
    
	
 

	
 
	
Name:
	
James R. Segreto
	
 

	
 
	
Title:
	
Chief Financial Officer, Treasurer and Secretary
	
 

 

	
 
	SPAR CANADA, INC.	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
    
	
 

	
 
	
Name:
	
James R. Segreto
	
 

	
 
	
Title:
	
Chief Financial Officer, Treasurer and Secretary
	
 

 

	
 
	SPAR CANADA COMPANY	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
    
	
 

	
 
	
Name:
	
James R. Segreto
	
 

	
 
	
Title:
	
Chief Financial Officer, Treasurer and Secretary
	
 

 

 

7

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