Document:

Exhibit 4.2

	
 
    

 

BARCLAYS BANK PLC,

Issuer

 

TO

 

THE BANK OF NEW YORK MELLON,

Trustee

 

SUPPLEMENTAL INDENTURE

 

Dated as of April 30, 2015

 

Supplement to Indenture Dated

as of September 16, 2004

 

Senior Debt Securities

	
 
    

 

 

SUPPLEMENTAL INDENTURE, dated as of April 30, 2015 (this “Supplemental Indenture”) to the Indenture dated as of September 16, 2004, (the “Indenture”), between Barclays Bank PLC, a public limited company registered in England and Wales (herein called the “Company”), having its registered office at 1 Churchill Place, London E14 5HP, England, and The Bank of New York Mellon, a New York banking corporation, as trustee (the “Trustee”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Indenture.

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company has heretofore made, executed and delivered to the Trustee the Indenture, providing for the issuance from time to time of the Company’s unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series;

 

WHEREAS, the Company issued the distinct issuances (each an “Issue”) of Securities bearing each CUSIP number listed in Annex A (such securities, collectively the “Affected Securities”) which constitute part of the single series of debt securities entitled “Global Medium-Term Notes, Series A” issued by the Company pursuant to the Indenture;

 

WHEREAS, the Company desires to modify certain provisions of each Issue of Affected Securities to (i) provide the Company with an unqualified right to redeem all, but not less than all, outstanding Senior Debt Securities of such Issue in return for a cash payment in U.S. dollars per Senior Debt Security of such Issue in an amount equal to the principal amount of the Holder’s Senior Debt Securities of such Issue times the Index Factor (as defined in the Global Securities for such Issue) on the applicable Trading Date (as defined in the Global Securities for such Issue) minus the Investor Fee (as defined in the Global Securities for such Issue) on the applicable Trading Date; (ii) provide the Company with an unqualified right to initiate a split or a reverse split of the Senior Debt Securities of such Issue; (iii) reduce the Investor Fee for the Senior Debt Securities of such Issue applicable to the period beginning on the day after the Amendment Date and continuing until the Maturity Date (as defined in the Global Securities for such Issue) from an amount equal to 0.75% per annum times the principal amount of the Holder’s Senior Debt Securities of such Issue times the Index Factor to an amount equal to 0.70% per annum times the principal amount of the Holder’s Senior Debt Securities of such Issue times the Index Factor, in each case calculated on a daily basis; and (iv) reduce the minimum amount of Senior Debt Securities of such Issue required to be redeemed for the Holder to exercise the right of Early Redemption (as defined in the Global Securities for such Issue) from 50,000 Senior Debt Securities to 30,000 Senior Debt Securities;

 

WHEREAS, Section 9.02 of the Indenture provides that, with the consent of not less than a majority in aggregate principal amount of the Outstanding Senior Debt Securities of each series affected by such supplemental indenture, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental to the Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of the Holders of Senior Debt Securities of such series under the Indenture;

 

 

WHEREAS, the Company conducted a consent solicitation, which launched on November 19, 2013 (the “Consent Solicitation”) with respect to the matters contemplated by this Supplemental Indenture;

 

WHEREAS, through the Consent Solicitation the Trustee and the Company have received the consent of a majority in aggregate principal amount of each Issue of Affected Securities, as specified in Annex A, to the matters contemplated herein and as evidenced by the certificate from Broadridge Financial Solutions, Inc. attached as Annex B hereto; and

 

WHEREAS, this Supplemental Indenture is authorized by the Board Resolution dated July 12, 2013, and all things necessary to make this Supplemental Indenture a valid agreement of the Company and the Trustee according to its terms have been done;

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH

 

For and in consideration of the provisions set forth herein, it is mutually agreed, for the equal and proportionate benefit of all Holders, from time to time, of the Affected Securities as follows:

 

ARTICLE 1

Amendments

 

Section 1.01.                Concurrently with the execution and delivery of this Supplemental Indenture, each Issue of Affected Securities shall be amended in accordance with the corresponding revised Global Security set out in Annex C hereto (the “Replacement Securities”). This Supplemental Indenture shall amend each Issue of Affected Securities without any further action.

 

Section 1.02.                Immediately following the execution and delivery of this Supplemental Indenture, the outstanding Global Security for each Issue of Affected Securities shall be exchanged pursuant to the Indenture for the corresponding Replacement Security provided that the failure to issue the Replacement Security for any Issue shall not affect the validity of the outstanding Affected Securities of such Issue or the effect of this Supplemental Indenture with respect to the outstanding Affected Securities of such Issue.

 

ARTICLE 2

Miscellaneous Provisions

 

Section 2.01.                Other Terms of Indenture. Except insofar as herein otherwise expressly provided, all provisions, terms and conditions of the Indenture are in all respects ratified and confirmed and shall remain in full force and effect including, without limitation, Section 6.07.

 

Section 2.02.                Terms Defined. All terms defined in the Indenture shall have the same meanings when used herein.

 

Section 2.03.                Separability Clause. In case any provision in this 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 2.04.                Governing Law. This Supplemental Indenture shall be governed by and construed in accordance with the law of the State of New York.

 

Section 2.05.                Further Instruments.  The parties hereto will execute and deliver such further instruments and do such further acts and things as may reasonably be required to carry out the intent and purpose of this Supplemental Indenture.

 

Section 2.06.                Trust Indenture Act. If any provision of this Supplemental Indenture limits, qualifies or conflicts with another provision that is required to be included in this Supplemental Indenture by the Trust Indenture Act of 1939, as amended, the required provision shall control.

 

Section 2.07.                Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute one and the same instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 2.08.                The Trustee accepts the amendments of the Indenture effected by this Supplemental Indenture, but on the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee. Without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company, or for or with respect to (i) the validity or sufficiency of this Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Company by action or otherwise, (ii) the due execution hereof by the Company or (iv) the consequences of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters.

 

[Signature Page Follows]

 

 

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

 

	
 
    	
BARCLAYS BANK PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BARCLAYS BANK PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE BANK OF NEW YORK MELLON, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

[Signature Page to Supplemental Indenture]

 

 

Annex A*

 

List of Global Medium-Term Notes, Series A

 

	
Name of Securities 
    	
 
    	
Inception Date
    	
 
    	
CUSIP
    	
 
    	
Number of Holders
   Voting in Favor
    	
 
    	
Percent of Outstanding
   Securities Voting in Favor
    	
 
    
	
iPath® Bloomberg Commodity Index Total   ReturnSM ETN
    	
 
    	
June 6, 2006
    	
 
    	
06738C778
    	
 
    	
23,673,968.626
    	
 
    	
50.250
    	
%
    
	
iPath® Bloomberg Cocoa Subindex Total   ReturnSM ETN
    	
 
    	
June 24, 2008
    	
 
    	
06739H313
    	
 
    	
602,120.000
    	
 
    	
50.176
    	
%
    
	
iPath® Bloomberg Lead Subindex Total   ReturnSM ETN
    	
 
    	
June 24, 2008
    	
 
    	
06739H263
    	
 
    	
30,900.000
    	
 
    	
52.284
    	
%
    
	
iPath® S&P GSCI® Total Return Index ETN
    	
 
    	
June 6, 2006
    	
 
    	
06738C794
    	
 
    	
1,950,888.000
    	
 
    	
50.728
    	
%
    

 

*                                         Each CUSIP number has been assigned to this issue by Standard and Poor’s Corporation and is included solely for the convenience of the Holders. None of the Company, the Trustee, the Agent or any of their respective agents shall be responsible for the selection or use of each CUSIP number, nor is any representation made as to its correctness on the Securities or as indicated in any consent solicitation statement.

 

 

Annex B

 

Certificate of Broadridge Financial Solutions, Inc.

 

B-1

 

 

CERTIFICATE OF TABULATION AGENT

 

Solicitation of Consents relating to the Global Medium-Term Notes, Series A iPath® DJ-UBS Commodity Index Total Return ETNs due June 12, 2036 (CUSIP No.: 06738C778) (the “ETNs”)

 

Terms used in this certificate but not defined herein shall have the meanings set out in the Consent Solicitation Statement dated November 19, 2013, with respect to the ETN’s (the “CSS”). The aggregate amount of ETNs outstanding above represents the amount outstanding held through the Depository Trust Company (“DTC”).

 

We confirm that DTC has issued an Omnibus Proxy to the DTC participants listed on Exhibit A hereto (the “Direct DTC Participants”) pursuant to a DTC Omnibus Proxy Form dated November 21, 2013. We confirm that each of the Direct DTC Participants listed on the DTC Omnibus Proxy has granted us a Proxy to directly obtain consents from the underlying beneficial owners of the position such Direct DTC Participant holds in DTC. November 8, 2013 is the record date (the “Record Date”) to determine the beneficial owners entitled to give consent in connection with the CSS. We also confirm that we have confirmed with each Direct DTC Participant that all the consents we have obtained are from the proper underlying owner of the beneficial interest in the ETNs who owned such beneficial interest as of the Record Date.

 

We confirm that as of 5:00 p.m. Eastern Standard Time on March 31, 2015, Broadridge Financial Solutions, in its capacity as Solicitation and Tabulation Agent, had received consents from $1,183,698,431.30 in aggregate principal amount of the ETNs representing 50.250% of the Holders of the outstanding ETNs.

 

We further confirm that the Consents received represent a majority of the aggregate principal amount of the outstanding ETNs voting as a single class as calculated pursuant to the Indenture and that the Requisite Consents were obtained from Holders who were registered Holders as of the Record Date.

 

This certificate may also be relied upon conclusively by The Bank of New York Mellon as Trustee and Sullivan & Cromwell LLP.

 

This certificate is made at 5:00 p.m. Eastern Standard Time on March 31, 2015.

 

For and on behalf of

Broadridge Financial Solutions

 

	
/s/ Anthony LaPoma
    	
 
    
	
Anthony LaPoma
    

 

B-2

 

 

CERTIFICATE OF TABULATION AGENT

 

Solicitation of Consents relating to the Global Medium-Term Notes, Series A iPath® DJ-UBS Cocoa Subindex Total Return ETNs due June 24, 2038 (CUSIP No.: 06739H313) (the “ETNs”)

 

Terms used in this certificate but not defined herein shall have the meanings set out in the Consent Solicitation Statement dated November 19, 2013, with respect to the ETN’s (the “CSS”). The aggregate amount of ETNs outstanding above represents the amount outstanding held through the Depository Trust Company (“DTC”).

 

We confirm that DTC has issued an Omnibus Proxy to the DTC participants listed on Exhibit A hereto (the “Direct DTC Participants”) pursuant to a DTC Omnibus Proxy Form dated November 20, 2013. We confirm that each of the Direct DTC Participants listed on the DTC Omnibus Proxy has granted us a Proxy to directly obtain consents from the underlying beneficial owners of the position such Direct DTC Participant holds in DTC. November 8, 2013 is the record date (the “Record Date”) to determine the beneficial owners entitled to give consent in connection with the CSS. We also confirm that we have confirmed with each Direct DTC Participant that all the consents we have obtained are from the proper underlying owner of the beneficial interest in the ETNs who owned such beneficial interest as of the Record Date.

 

We confirm that as of 5:00 p.m. Eastern Standard Time on March 31, 2015, Broadridge Financial Solutions, in its capacity as Solicitation and Tabulation Agent, had received consents from $30,106,000.00 in aggregate principal amount of the ETNs representing 50.176% of the Holders of the outstanding ETNs.

 

We further confirm that the Consents received represent a majority of the aggregate principal amount of the outstanding ETNs voting as a single class as calculated pursuant to the Indenture and that the Requisite Consents were obtained from Holders who were registered Holders as of the Record Date.

 

This certificate may also be relied upon conclusively by The Bank of New York Mellon as Trustee and Sullivan & Cromwell LLP.

 

This certificate is made at 5: 00 p.m. Eastern Standard Time on March 31, 2015.

 

For and on behalf of

Broadridge Financial Solutions

 

	
/s/ Anthony LaPoma
    	
 
    

Anthony LaPoma

Manager — Voting Services

 

B-3

 

 

CERTIFICATE OF TABULATION AGENT

 

Solicitation of Consents relating to the Medium-Term Notes, Series A iPath® DJ-UBS Lead Subindex Total Return ETNs due June 24, 2038 (CUSIP No.: 06739H263) (the “ETNs”)

 

Terms used in this certificate but not defined herein shall have the meanings set out in the Consent Solicitation Statement dated November 19, 2013, with respect to the ETN’s (the “CSS”). The aggregate amount of ETNs outstanding above represents the amount outstanding held through the Depository Trust Company (“DTC”).

 

We confirm that DTC has issued an Omnibus Proxy to the DTC participants listed on Exhibit A hereto (the “Direct DTC Participants”) pursuant to a DTC Omnibus Proxy Form dated November 19, 2013. We confirm that each of the Direct DTC Participants listed on the DTC Omnibus Proxy has granted us a Proxy to directly obtain consents from the underlying beneficial owners of the position such Direct DTC Participant holds in DTC. November 8, 2013 is the record date (the “Record Date”) to determine the beneficial owners entitled to give consent in connection with the CSS. We also confirm that we have confirmed with each Direct DTC Participant that all the consents we have obtained are from the proper underlying owner of the beneficial interest in the ETNs who owned such beneficial interest as of the Record Date. 

 

We confirm that as of 5:00 p.m. Eastern Standard Time on March 31, 2015, Broadridge Financial Solutions, in its capacity as Solicitation and Tabulation Agent, had received consents from $1,545,000.00 in aggregate principal amount of the ETNs representing 52.284% of the Holders of the outstanding ETNs.

 

We further confirm that the Consents received represent a majority of the aggregate principal amount of the outstanding ETNs voting as a single class as calculated pursuant to the Indenture and that the Requisite Consents were obtained from Holders who were registered Holders as of the Record Date.

 

This certificate may also be relied upon conclusively by The Bank of New York Mellon as Trustee and Sullivan & Cromwell LLP.

 

This certificate is made at 5:00 p.m. Eastern Standard Time on March 31, 2015.

 

For and on behalf of

Broadridge Financial Solutions

 

	
/s/ Anthony LaPoma
    	
 
    

Anthony LaPoma

Manager — Voting Services

 

B-4

 

 

CERTIFICATE OF TABULATION AGENT

 

Solicitation of Consents relating to the Medium-Term Notes, Series A iPath® S & P GSCI Total Return Index ETNs due June 12, 2036 (CUSIP No.: 06738C794) (the “ETNs”)

 

Terms used in this certificate but not defined herein shall have the meanings set out in the Consent Solicitation Statement dated November 19, 2013, with respect to the ETN’s (the “CSS”). The aggregate amount of ETNs outstanding above represents the amount outstanding held through the Depository Trust Company (“DTC”).

 

We confirm that DTC has issued an Omnibus Proxy to the DTC participants listed on Exhibit A hereto (the “Direct DTC Participants”) pursuant to a DTC Omnibus Proxy Form dated November 20, 2013. We confirm that each of the Direct DTC Participants listed on the DTC Omnibus Proxy has granted us a Proxy to directly obtain consents from the underlying beneficial owners of the position such Direct DTC Participant holds in DTC. November 8, 2013 is the record date (the “Record Date”) to determine the beneficial owners entitled to give consent in connection with the CSS. We also confirm that we have confirmed with each Direct DTC Participant that all the consents we have obtained are from the proper underlying owner of the beneficial interest in the ETNs who owned such beneficial interest as of the Record Date.

 

We confirm that as of 5:00 p.m. Eastern Standard Time on March 31, 2015, Broadridge Financial Solutions, in its capacity as Solicitation and Tabulation Agent, had received consents from $97,544,400.00 in aggregate principal amount of the ETNs representing 50.728% of the Holders of the outstanding ETNs. 

 

We further confirm that the Consents received represent a majority of the aggregate principal amount of the outstanding ETNs voting as a single class as calculated pursuant to the Indenture and that the Requisite Consents were obtained from Holders who were registered Holders as of the Record Date.

 

This certificate may also be relied upon conclusively by The Bank of New York Mellon as Trustee and Sullivan & Cromwell LLP.

 

This certificate is made at 5:00 p.m. Eastern Standard Time on March 31, 2015.

 

For and on behalf of

Broadridge Financial Solutions

 

	
/s/ Anthony LaPoma
    	
 
    

Anthony LaPoma

Manager — Voting Services

 

B-5

 

Annex C

 

Forms of Amended and Restated Global Securities for the Securities bearing each CUSIP number listed in Annex A

 

C-1

 

(Face of Security)

 

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.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO BARCLAYS BANK PLC, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

BY PURCHASING THIS SECURITY, THE HOLDER AGREES TO CHARACTERIZE THIS SECURITY FOR ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED IN SECTION 12 ON THE FACE OF THIS SECURITY.

 

C-2

 

	
CUSIP   No. 06738C778
    	
 
    	
ISIN: US06738C7781
    

 

BARCLAYS BANK PLC

 

GLOBAL MEDIUM-TERM NOTES, SERIES A

 

 

iPath® Bloomberg Commodity Index Total ReturnSM ETN

due June 12, 2036

 

The following terms apply to this Security.  Capitalized terms that are not defined the first time they are used in this Security shall have the meanings indicated elsewhere in this Security.

 

Face Amount:  $[            ], equal to [        ] Securities at $50 per Security.

 

Index: The Bloomberg Commodity Index Total ReturnSM.

 

Inception Date:  June 6, 2006.

 

Amendment Date: April 30, 2015

 

Original Issue Date: June 9, 2006.

 

Interest Rate:  The principal of this Security shall not bear interest.

 

Denomination:  $50.

 

Payment at Maturity:  On the Maturity Date, the Company shall redeem this Security by paying to the Holder a cash payment in U.S. dollars in an amount equal to (1) the principal amount of the Holder’s Securities times (2) the Index Factor on the Final Valuation date minus (3) the Investor Fee on the Final Valuation Date unless such Securities were previously redeemed on a Redemption Date as provided under “Early Redemption”.

 

Early Redemption:  The Holder may, subject to the notification requirements provided under Section 5 hereof, require the Company to redeem the Holder’s Securities in whole or in part on any Redemption Date during the term of the Securities (“Holder Redemption”).  If the Holder requires the Company to redeem the Holder’s Securities on any Redemption Date, the Holder will receive a cash payment equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Valuation Date minus the Investor Fee on the applicable Valuation Date.  The Company shall not be required to redeem fewer than 30,000 Securities at one time, provided that the Company may from time to time in its sole discretion reduce, in part or in whole, this minimum redemption amount (the “Redemption Amount”) on a consistent basis for all Holders who hold Securities at the time the reduction becomes effective.

 

The Company may redeem the Securities (in whole but not in part) at its sole discretion on any Trading Day on or after the Inception Date until and including maturity (“Issuer Redemption”). To exercise its right to redeem, the Company must deliver notice to DTC and the Trustee not less than ten calendar days prior to the Redemption Date specified by the Company in such issuer redemption notice.  If the Company redeems the Securities, the Holder will receive a cash payment in U.S. dollars per Security in an amount equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Trading Date minus the Investor Fee on the applicable Trading Date.

 

Calculation Agent:  Barclays Bank PLC.

 

Defeasance:  Neither full defeasance nor covenant defeasance applies to this Security.

 

Listing:  NYSE Arca stock exchange.

 

C-3

 

OTHER TERMS:

 

All terms used in this Security that are not defined in this Security but are defined in the Indenture referred to on the reverse of this Security shall have the meanings assigned to them in the Indenture.  Section headings on the face of this Security are for convenience only and shall not affect the construction of this Security.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banking institutions in London or New York City generally are authorized or obligated by law, regulation or executive order to close.

 

“Default Amount” means, on any day, an amount in U.S. dollars, as determined by the Calculation Agent in its sole discretion, equal to the cost of having a Qualified Financial Institution (selected as provided below) expressly assume the due and punctual payment of the principal of this Security, and the performance or observance of every covenant hereof and of the Indenture on the part of the Company to be performed or observed with respect to this Security (or to undertake other obligations providing substantially equivalent economic value to the Holder of this Security as the Company’s obligations hereunder).  Such cost will equal (i) the lowest amount that a Qualified Financial Institution would charge to effect such assumption (or undertaking) plus (ii) the reasonable expenses (including reasonable attorneys’ fees) incurred by the Holder of this Security in preparing any documentation necessary for such assumption (or undertaking).  During the Default Quotation Period, each Holder of this Security and the Company may request a Qualified Financial Institution to provide a quotation of the amount it would charge to effect such assumption (or undertaking).  If either party obtains a quotation, it must notify the other party in writing of the quotation.  The amount referred to in clause (i) of this paragraph will equal the lowest (or, if there is only one, the only) quotation so obtained, and as to which notice is so given, during the Default Quotation Period; provided that, with respect to any quotation, the party not obtaining the quotation may object, on reasonable and significant grounds, to the effectuation of such assumption (or undertaking) by the Qualified Financial Institution providing such quotation and notify the other party in writing of such grounds within two Business Days after the last day of the Default Quotation Period, in which case that quotation will be disregarded in determining the Default Amount.  The “Default Quotation Period” shall be the period beginning on the day the Default Amount first becomes due and ending on the third Business Day after such due date, unless no such quotation is obtained, or unless every such quotation so obtained is objected to within five Business Days after such due date as provided above, in which case the Default Quotation Period will continue until the third Business Day after the first Business Day on which prompt notice of a quotation is given as provided above, unless such quotation is objected to as provided above within five Business Days after such first Business Day, in which case, the Default Quotation Period will continue as provided in this sentence. Notwithstanding the foregoing, if the Default Quotation Period (and the subsequent two Business Day objection period) has not ended prior to the Final Valuation Date, then the Default Amount will equal the Face Amount.

 

“Final Valuation Date” means June 5, 2036, or if such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Final Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will the Final Valuation Date be postponed by more than five Trading Days.

 

C-4

 

“Index Component” means, with respect to the Securities, any of the futures contracts on physical commodities that comprise the Index.

 

“Index Factor” means, on any given day, the amount equal to the closing value of the Index on that day divided by the closing value of the Index on the Inception Date.

 

“Investor Fee” means an amount equal to (1) (a) 0.75% per year (for the period from the Inception Date to and including the Amendment Date), and (b) 0.70% per year (for the period beginning the day after the Amendment Date until the Redemption Date, if after the Amendment Date, or the Maturity Date) times (2) the principal amount of the Holder’s Securities times (3) the Index Factor calculated on a daily basis in the following manner:  (i) the Investor Fee on the Inception Date shall equal zero; (ii) on each subsequent calendar day until and including the Amendment Date or, in the case of Securities with respect to which the Holder or the Issuer has exercised its right of Early Redemption prior to the Amendment Date, the applicable Valuation Date or Trading Day, the accrued Investor Fee will increase by an amount equal to (1) 0.75% per year times (2) the principal amount of the Holder’s Securities times (3) the Index Factor on that day (or, if such day is not a Trading Day, the Index Factor on the immediately preceding Trading Day) divided by (4) 365; and (iii) from the Amendment Date until and including the Final Valuation Date or, in the case of Securities with respect to which the Holder or the Issuer has exercised its right of Early Redemption after the Amendment Date, the applicable Valuation Date or Trading Day, the accrued Investor Fee will increase by an amount equal to (1) 0.70% per year times (2) the principal amount of the Holder’s Securities times (3) the Index Factor on that day (or, if such day is not a Trading Day, the Index Factor on the immediately preceding Trading Day) divided by (4) 365.

 

“Market Disruption Event” means, with respect to the Securities, in the opinion of the Calculation Agent and determined in its sole discretion:  (i) a material limitation, suspension or disruption in the trading of the Index Component which results in a failure by the trading facility on which the relevant contract is traded to report a daily contract reference price; (ii) the daily contract reference price for the Index Component has increased or decreased from the previous day’s daily contract reference price by the maximum amount permitted under the applicable rules or procedures of the relevant trading facility; (iii) the Index Sponsors fail to publish the closing value of the Index or the applicable trading facility or other price source fails to announce or publish the daily contract reference price for the Index Components; (iv) any other event, if the Calculation Agent determines in its sole discretion that the event materially interferes with the ability of Barclays Bank PLC or the ability of any affiliates of Barclays Bank PLC to unwind all or a material portion of a hedge with respect to the Securities that Barclays Bank PLC or any of its affiliates have effected or may effect.  The following events will not be Market Disruption Events: (a) a limitation on the hours or numbers of days of trading on a trading facility on which the Index Component is traded, but only if the limitation results from an announced change in the regular business hours of the relevant market; or (b) a decision by a trading facility to permanently discontinue trading in the Index Component.

 

“Maturity Date” means June 12, 2036, provided that if such date is not a Business Day, the Maturity Date will be the next succeeding Business Day; provided, however, that if the fifth Business Day preceding June 12, 2036 does not qualify as the Final

 

C-5

 

Valuation Date referred to above, then the Maturity Date will be the fifth Business Day following the Final Valuation Date.

 

“Qualified Financial Institution” means, at any time, a financial institution organized under the laws of any jurisdiction in the United States of America or Europe that at such time has outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated A-1 or higher by Standard & Poor’s, a division of The McGraw Hill Companies, Inc., Ratings Group (or any successor) or P-1 or higher by Moody’s Investors Service, Inc. (or any successor) or, in either case, such other comparable rating, if any, then used by such rating agency.

 

“Redemption Date” means (a) in the case of Holder Redemption, the third Business Day following each Valuation Date (other than the Final Valuation Date, where the final Redemption Date will be the third Business Day following the Valuation Date that is immediately prior to the Final Valuation Date); or (b) in the case of Issuer Redemption, the date specified by the Company in the issuer redemption notice, which will in no event be prior to the tenth calendar day following the date on which the Company delivers such issuer redemption notice.

 

“Successor Index” means any substitute index approved by the Calculation Agent as a Successor Index pursuant to Section 3 hereof.

 

“Trading Day” means a day on which (i) the value of the Index is published by the Index Sponsors, (ii) trading is generally conducted on NYSE Arca and (iii) trading is generally conducted on the markets on which the futures contracts underlying the relevant Index are traded, in each case as determined by the calculation agent in its sole discretion.

 

“Valuation Date” means each Business Day from June 15, 2006 to June 5, 2036, inclusive, or if such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will any Valuation Date be postponed by more than five Trading Days.

 

 

1.                                      Promise to Pay at Maturity or Upon Early Redemption

 

Barclays Bank PLC, a public limited company duly organized and existing under the laws of England and Wales (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay (or cause to be paid) to Cede & Co., as nominee for The Depository Trust Company, or registered assigns, the amount as calculated and provided under (i) “Early Redemption” and elsewhere on the face this Security on the applicable Redemption Date, in the case of any Securities in respect of which the Holder exercises its Holder Redemption right or the Company exercises its Issuer Redemption right prior to the Maturity Date, or (ii) “Payment at Maturity” and elsewhere on the face of this Security on the Maturity Date, in the case of all other Securities.

 

C-6

 

2.                                      Payment of Interest

 

The principal of this Security shall not bear interest.  Any return on this Security that may be deemed to be interest will in no event be higher than the maximum rate permitted by New York law, as it may be modified by U.S. law of general application.

 

3.                                      Discontinuance or Modification of the Index; Market Disruption Event

 

If the Index Sponsors discontinue publication of the Index and they or any other person or entity publishes an index that the calculation agent determines is comparable to the Index and approves as a successor index, then the calculation agent will determine the value of the Index on the applicable valuation date and the amount payable at maturity or upon redemption by reference to such successor index.

 

If the calculation agent determines that the publication of the Index is discontinued and that there is no successor index, or that the closing level of the Index is not available because of a market disruption event or for any other reason, on the date on which the value of the Index is required to be determined, or if for any other reason the Index is not available to us or the calculation agent on the relevant date, the calculation agent will determine the amount payable by a computation methodology that the calculation agent determines will as closely as reasonably possible replicate the Index.

 

If the calculation agent determines that the Index, the index components of the Index or the method of calculating the Index has been changed at any time in any respect—including any addition, deletion or substitution and any reweighting or rebalancing of index components, and whether the change is made by the Index Sponsors under their existing policies or following a modification of those policies, is due to the publication of a successor index, is due to events affecting one or more of the index components, or is due to any other reason—then the calculation agent will be permitted (but not required) to make such adjustments to the Index or method of calculating the Index as it believes are appropriate to ensure that the value of the Index used to determine the amount payable on the maturity date or upon redemption is equitable.

 

All determinations and adjustments to be made by the calculation agent with respect to the value of the Index and the amount payable at maturity or upon redemption or otherwise relating to the value of the Index may be made in the calculation agent’s sole discretion. See “Risk Factors” in the amended pricing supplement for a discussion of certain conflicts of interest which may arise with respect to the calculation agent.

 

4.                                      Payment at Maturity or Upon Early Redemption

 

The payment of this Security that becomes due and payable on the Maturity Date or on a Redemption Date, as the case may be, shall be the cash amount that must be paid to redeem this Security as provided above under “Payment at Maturity” and “Early Redemption”, respectively.  The payment of this Security that becomes due and payable upon acceleration of the Maturity Date hereof after an Event of Default has occurred pursuant to the Indenture shall be the Default Amount.  When the principal referred to in either of the two preceding sentences has been paid as provided herein (or such payment has been made available), the principal of this Security shall be deemed to have been paid in full, whether or

 

C-7

 

not this Security shall have been surrendered for payment or cancellation.  References to the payment at maturity or upon early redemption of this Security on any day shall be deemed to mean the payment of cash that is payable on such day as provided in this Security.  Notwithstanding the foregoing, solely for the purpose of determining whether any consent, waiver, notice or other action to be given or taken by Holders of Securities pursuant to the Indenture has been given or taken by Holders of Outstanding Securities in the requisite aggregate principal amount, the principal amount of this Security will be deemed to equal the Face Amount.  This Security shall cease to be Outstanding as provided in the definition of such term in the Indenture when the principal of this Security shall be deemed to have been paid in full as provided above.

 

5.                                      Redemption Mechanics

 

(a) Holder Redemption. Subject to the minimum Redemption Amount provided under “Holder Redemption”, the Holder may require the Company to redeem the Holder’s Securities on any Redemption Date during the term of the Securities provided that such Holder (i) delivers a notice of redemption to the Company via facsimile or email by no later than 4:00 p.m. New York time on the Business Day prior to the applicable Valuation Date; (ii) delivers a signed confirmation of redemption to the Company via facsimile or email by no later than 5:00 p.m. New York time on the same day; (iii) instructs the Holder’s DTC custodian to book a delivery versus payment trade with respect to the Holder’s Securities on the applicable Valuation Date at a price equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Valuation Date minus the Investor Fee on the applicable Valuation Date, facing Barclays DTC 5101; and (iv) causes the Holder’s DTC custodian to deliver the trade as booked for settlement via DTC prior to 10:00 a.m. New York time on the applicable Redemption Date, which shall be the third Business Day following the applicable Valuation Date (other than the Final Valuation Date).  The final Redemption Date shall be the third Business Day following such Valuation Date that is immediately prior to the Final Valuation Date.

 

(b) Issuer Redemption.  If the Company elects to exercise its right to redeem the Securities under “Issuer Redemption”, the Company will deliver written notice of such election to redeem to DTC and the Trustee not less than ten calendar days prior to the Redemption Date specified by the Company in such issuer redemption notice.  The Final Valuation Date will be deemed to be the third Trading Day prior to the Redemption Date (subject to postponement in the event of a Market Disruption Event), and the Securities will be redeemed on the Redemption Date specified by the Company in such issuer redemption notice, but in no event prior to the tenth calendar day following the date on which the Company delivers such issuer redemption notice. If the deemed Final Valuation Date referred to above is postponed and occurs less than two Business Days prior to the day that would otherwise be the Redemption Date, then the Redemption Date will be the second Business Day following the deemed Final Valuation Date as so postponed.

 

6.                                      Split or Reverse Split of the Securities

 

The initial principal amount on which a split or reverse split will be based will be as set out in the definition of Face Amount on the cover of this Security. On any Business Day, the Company may elect to initiate a split of the Securities or a reverse split of the Securities. Such date shall be deemed to be the “Announcement Date”, and the Company will

 

C-8

 

issue a notice to holders of the relevant Securities and a press release announcing the split or reverse split, specifying the effective date of the split or reverse split and the split or reverse split ratio.

 

If the Securities undergo a split, the Company will adjust the terms of the Securities accordingly.  For example, if the split ratio is 4 and hence the Securities undergo a 4:1 split, every investor who holds one Security via DTC on the relevant record date will, after the split, hold four Securities, and adjustments will be made as described below.  The record date for the split will be the 9th Business Day after the Announcement Date.  The principal amount of the Securities on such record date will be divided by 4 to reflect the 4:1 split of the Securities.  Any adjustment of the principal amount of the Securities will be rounded to 8 decimal places.  The split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

In the case of a reverse split, the Company reserves the right to address odd numbers of Securities (commonly referred to as “partials”) in a commercially reasonable manner determined by the Company in its sole discretion.  For example, if the reverse split ratio is 4 and the Securities undergo a 1:4 reverse split, every Holder holding 4 Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and adjustments will be made as described below.  The record date for the reverse split will be on the 9th Business Day after the Announcement Date.  The principal amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split of the Securities.  Any adjustment of the principal amount of the Securities will be rounded to 8 decimal places. The reverse split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

Holders who own a number of Securities on the record date which is not evenly divisible by the split ratio will receive the same treatment as all other holders for the maximum number of Securities they hold which is evenly divisible by the split ratio, and the Company will have the right to compensate holders for their remaining or “partial” Securities in a commercially reasonable manner determined by the Company in its sole discretion. The Company’s current intention is to provide a Holder with a cash payment for such Holder’s partials on the 17th Business Day following the Announcement Date in an amount equal to the appropriate percentage of the principal amount of the reverse split- adjusted Securities on the 14th Business Day following the Announcement Date times the Index Factor on the applicable Business Day minus the Investor Fee on the applicable Business Day.  For example, if the reverse split ratio is 1:4, a Holder who held 23 Securities via DTC on the record date would receive 5 post reverse split Securities on the immediately following Business Day, and a cash payment on the 17th Business Day following the Announcement Date that is equal to 3/4ths of the principal amount of the reverse split-adjusted Securities on the 14th Business Day following the Announcement Date times the Index Factor on the applicable Business Day minus the Investor Fee on the applicable Business Day.

 

In the event of a reverse split, the Redemption Amount will be adjusted accordingly by the Company, in its sole discretion and in a commercially reasonable manner, to take into account the reverse split.

 

C-9

 

7.                                      Role of Calculation Agent

 

The Calculation Agent will be solely responsible for all determinations and calculations regarding the value of the Securities, including at maturity or upon early redemption; Market Disruption Events; Business Days; Trading Days; the Investor Fee; the Default Amount; the closing value of the Index on the Inception Date and on any Valuation Date; the Maturity Date; Redemption Dates; the amount payable on the Securities and all such other matters as may be specified elsewhere herein as matters to be determined by the Calculation Agent. The Calculation Agent shall make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Calculation Agent shall be final and binding on the Company, the Holder and all other Persons having an interest in this Security, without liability on the part of the Calculation Agent.

 

The Company shall take such action as shall be necessary to ensure that there is, at all relevant times, a financial institution serving as the Calculation Agent hereunder.  The Company may, in its sole discretion at any time and from time to time, upon written notice to the Trustee, but without notice to the Holder of this Security, terminate the appointment of any Person serving as the Calculation Agent and appoint another Person (including any Affiliate of the Company) to serve as the Calculation Agent.  Insofar as this Security provides for the Calculation Agent to determine the value of the Index on any date or other information from any institution or other source, the Calculation Agent may do so from any source or sources of the kind contemplated or otherwise permitted hereby notwithstanding that any one or more of such sources are the Calculation Agent, Affiliates of the Calculation Agent or Affiliates of the Company.

 

8.                                      Default Amount

 

If an Event of Default occurs and the maturity of the Security is accelerated, the Default Amount will be payable in respect of this Security at maturity.

 

9.                                      Payment

 

Payment of any amount payable on this Security 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.  Payment will be made to an account designated by the Holder (in writing to the Company and the Trustee on or before the applicable Valuation Date) and acceptable to the Company or, if no such account is designated and acceptable as aforesaid, at the office or agency of the Company maintained for that purpose in The City of New York, provided, however, that payment on the Maturity Date or any Redemption Date shall be made only upon surrender of this Security at such office or agency (unless the Company waives surrender).  Notwithstanding the foregoing, if this Security is a Global Security, any payment may be made pursuant to the Applicable Procedures of the Depositary as permitted in said Indenture.

 

C-10

 

10.                               Reverse of this Security

 

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

 

11.                               Certificate of Authentication

 

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

 

12.                               Prospectus

 

Reference is made to the (i) the Prospectus related to the Securities, dated July 19, 2013, (ii) the Prospectus Supplement, dated July 19, 2013, (iii) and the Pricing Supplement, dated September 22, 2014, as amended on April 30, 2015 (together, the “Prospectus”).  The terms and conditions of this Security as fully set forth in the Prospectus are hereby incorporated by reference in their entirety into this Security and binding upon the parties hereto.  In the event of a conflict between the terms of the Prospectus and the terms of this Security, the Prospectus will control and if the Prospectus provides for a specific United States tax characterization, by purchasing a Security, you agree (in the absence of a change in law, an administrative determination or a judicial ruling to the contrary) to be bound for United States federal income tax purposes to such tax characterization.  Copies of the Prospectus are available from the Company or any underwriter or any dealer participating in the offering by calling toll free, 1-888-227-2275 (extension 2-3430).

 

C-11

 

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

 

	
 
    	
BARCLAYS BANK   PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

This is one of the Securities of the series designated herein and referred to in the Indenture.

 

Dated:

 

	
 
    	
THE BANK OF NEW   YORK MELLON
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

C-12

 

(Reverse of Security)

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”) issued and to be issued in one or more series under an Indenture, dated as of September 16, 2004 (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  Insofar as the provisions of the Indenture may conflict with the provisions set forth on the face of this Security, the latter shall control for purposes of this Security.

 

This Security is one of the series designated on the face hereof.  References herein to “this series” mean the series designated on the face hereof.

 

Payments under the Securities will be made without deduction or withholding for, or on account of, any and all present or future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”) now or hereafter 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 (each a “Taxing Jurisdiction”), unless such deduction or withholding is required by law.  If any such Taxes are at any time required by a Taxing Jurisdiction to be deducted or withheld, the Company will, subject to the exceptions and limitations set forth in Section 10.04 of the Indenture, pay such additional amounts of the principal of such Security and any other amounts payable on such Security (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holder of any Security, after such deduction or withholding, shall equal the amounts of the principal of such Security and any other amounts payable on such Security which would have been payable in respect of such Security had no such deduction or withholding been required.

 

If at any time the Company determines that as a result of a change in or amendment to the laws or regulations of a Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or a change in an official application or interpretation of such laws or regulations (including a decision of any court or tribunal), either generally or in relation to any particular Securities, which change, amendment, application or interpretation becomes effective on or after the Original Issue Date in making any payment of, or in respect of, the principal amount of the Securities, the Company would be required to pay any Additional Amounts with respect thereto, then the Securities will be redeemable upon not less than 35 nor more than 60 days’ notice by mail, at any time thereafter, in whole but not in part, at the election of the Company as provided in the Indenture at a redemption price equal to the principal amount thereof.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture

 

C-13

 

at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected (considered together as one class for this purpose).  The Indenture also contains provisions (i) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in aggregate principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof on or after the respective due dates expressed herein.

 

C-14

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Security as herein provided.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Senior Debt Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of this Security is payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Senior Debt Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing.  Thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

This Security, and any other Securities of this series and of like tenor, are issuable only in registered form without coupons in denominations of any multiple of $50.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security 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 Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

This Security and the Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

C-15

 

(Face of Security)

 

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.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO BARCLAYS BANK PLC, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

BY PURCHASING THIS SECURITY, THE HOLDER AGREES TO CHARACTERIZE THIS SECURITY FOR ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED IN SECTION 12 ON THE FACE OF THIS SECURITY.

 

C-16

 

	
CUSIP   No. 06739H313
    	
 
    	
ISIN: US06739H3131
    

 

BARCLAYS BANK PLC

 

GLOBAL MEDIUM-TERM NOTES, SERIES A

 

 

iPath® Bloomberg Cocoa Subindex Total ReturnSM ETN

due June 24, 2038

 

The following terms apply to this Security.  Capitalized terms that are not defined the first time they are used in this Security shall have the meanings indicated elsewhere in this Security.

 

Face Amount:  $[        ], equal to [        ] Securities at $50 per Security.

 

Index: The Bloomberg Cocoa Subindex Total ReturnSM.

 

Inception Date:  June 24, 2008.

 

Original Issue Date:  June 27, 2008

 

Amendment Date: April 30, 2015

 

Interest Rate:  The principal of this Security shall not bear interest.

 

Denomination:  $50.

 

Payment at Maturity:  On the Maturity Date, the Company shall redeem this Security by paying to the Holder a cash payment in U.S. dollars in an amount equal to (1) the principal amount of the Holder’s Securities times (2) the Index Factor on the Final Valuation date minus (3) the Investor Fee on the Final Valuation Date unless such Securities were previously redeemed on a Redemption Date as provided under “Early Redemption”.

 

Early Redemption:  The Holder may, subject to the notification requirements provided under Section 5 hereof, require the Company to redeem the Holder’s Securities in whole or in part on any Redemption Date during the term of the Securities (“Holder Redemption”).  If the Holder requires the Company to redeem the Holder’s Securities on any Redemption Date, the Holder will receive a cash payment equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Valuation Date minus the Investor Fee on the applicable Valuation Date.  The Company shall not be required to redeem fewer than 30,000 Securities at one time, provided that the Company may from time to time in its sole discretion reduce, in part or in whole, this minimum redemption amount (the “Redemption Amount”) on a consistent basis for all Holders who hold Securities at the time the reduction becomes effective.

 

The Company may redeem the Securities (in whole but not in part) at its sole discretion on any Trading Day on or after the Inception Date until and including maturity (“Issuer Redemption”). To exercise its right to redeem, the Company must deliver notice to DTC and the Trustee not less than ten calendar days prior to the Redemption Date specified by the Company in such issuer redemption notice.  If the Company redeems the Securities, the Holder will receive a cash payment in U.S. dollars per Security in an amount equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Trading Date minus the Investor Fee on the applicable Trading Date.

 

Calculation Agent:  Barclays Bank PLC.

 

Defeasance:  Neither full defeasance nor covenant defeasance applies to this Security.

 

Listing:  NYSE Arca stock exchange.

 

C-17

 

OTHER TERMS:

 

All terms used in this Security that are not defined in this Security but are defined in the Indenture referred to on the reverse of this Security shall have the meanings assigned to them in the Indenture.  Section headings on the face of this Security are for convenience only and shall not affect the construction of this Security.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banking institutions in London or New York City generally are authorized or obligated by law, regulation or executive order to close.

 

“Default Amount” means, on any day, an amount in U.S. dollars, as determined by the Calculation Agent in its sole discretion, equal to the cost of having a Qualified Financial Institution (selected as provided below) expressly assume the due and punctual payment of the principal of this Security, and the performance or observance of every covenant hereof and of the Indenture on the part of the Company to be performed or observed with respect to this Security (or to undertake other obligations providing substantially equivalent economic value to the Holder of this Security as the Company’s obligations hereunder).  Such cost will equal (i) the lowest amount that a Qualified Financial Institution would charge to effect such assumption (or undertaking) plus (ii) the reasonable expenses (including reasonable attorneys’ fees) incurred by the Holder of this Security in preparing any documentation necessary for such assumption (or undertaking).  During the Default Quotation Period, each Holder of this Security and the Company may request a Qualified Financial Institution to provide a quotation of the amount it would charge to effect such assumption (or undertaking).  If either party obtains a quotation, it must notify the other party in writing of the quotation.  The amount referred to in clause (i) of this paragraph will equal the lowest (or, if there is only one, the only) quotation so obtained, and as to which notice is so given, during the Default Quotation Period; provided that, with respect to any quotation, the party not obtaining the quotation may object, on reasonable and significant grounds, to the effectuation of such assumption (or undertaking) by the Qualified Financial Institution providing such quotation and notify the other party in writing of such grounds within two Business Days after the last day of the Default Quotation Period, in which case that quotation will be disregarded in determining the Default Amount.  The “Default Quotation Period” shall be the period beginning on the day the Default Amount first becomes due and ending on the third Business Day after such due date, unless no such quotation is obtained, or unless every such quotation so obtained is objected to within five Business Days after such due date as provided above, in which case the Default Quotation Period will continue until the third Business Day after the first Business Day on which prompt notice of a quotation is given as provided above, unless such quotation is objected to as provided above within five Business Days after such first Business Day, in which case, the Default Quotation Period will continue as provided in this sentence. Notwithstanding the foregoing, if the Default Quotation Period (and the subsequent two Business Day objection period) has not ended prior to the Final Valuation Date, then the Default Amount will equal the Face Amount.

 

“Final Valuation Date” means June 17, 2038, or if such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Final Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will the Final Valuation Date be postponed by more than five Trading Days.

 

C-18

 

“Index Component” means, with respect to the Securities, the futures contract on the commodity of cocoa that comprises the Index.

 

“Index Factor” means, on any given day, the amount equal to the closing value of the Index on that day divided by the closing value of the Index on the Inception Date.

 

“Investor Fee” means an amount equal to (1) (a) 0.75% per year (for the period from the Inception Date to and including the Amendment Date), and (b) 0.70% per year (for the period beginning the day after the Amendment Date until the Redemption Date, if after the Amendment Date, or the Maturity Date) times (2) the principal amount of the Holder’s Securities times (3) the Index Factor calculated on a daily basis in the following manner:  (i) the Investor Fee on the Inception Date shall equal zero; (ii) on each subsequent calendar day until and including the Amendment Date or, in the case of Securities with respect to which the Holder or the Issuer has exercised its right of Early Redemption prior to the Amendment Date, the applicable Valuation Date or Trading Day, the accrued Investor Fee will increase by an amount equal to (1) 0.75% per year times (2) the principal amount of the Holder’s Securities times (3) the Index Factor on that day (or, if such day is not a Trading Day, the Index Factor on the immediately preceding Trading Day) divided by (4) 365; and (iii) from the Amendment Date until and including the Final Valuation Date or, in the case of Securities with respect to which the Holder or the Issuer has exercised its right of Early Redemption after the Amendment Date, the applicable Valuation Date or Trading Day, the accrued Investor Fee will increase by an amount equal to (1) 0.70% per year times (2) the principal amount of the Holder’s Securities times (3) the Index Factor on that day (or, if such day is not a Trading Day, the Index Factor on the immediately preceding Trading Day) divided by (4) 365.

 

“Market Disruption Event” means, with respect to the Securities, in the opinion of the Calculation Agent and determined in its sole discretion:  (i) a material limitation, suspension or disruption in the trading of the Index Component which results in a failure by the trading facility on which the relevant contract is traded to report a daily contract reference price; (ii) the daily contract reference price for the Index Component has increased or decreased from the previous day’s daily contract reference price by the maximum amount permitted under the applicable rules or procedures of the relevant trading facility; (iii) the Index Sponsors fail to publish the closing value of the Index or the applicable trading facility or other price source fails to announce or publish the daily contract reference price for the Index Components; (iv) any other event, if the Calculation Agent determines in its sole discretion that the event materially interferes with the ability of Barclays Bank PLC or the ability of any affiliates of Barclays Bank PLC to unwind all or a material portion of a hedge with respect to the Securities that Barclays Bank PLC or any of its affiliates have effected or may effect.  The following events will not be Market Disruption Events: (a) a limitation on the hours or numbers of days of trading on a trading facility on which the Index Component is traded, but only if the limitation results from an announced change in the regular business hours of the relevant market; or (b) a decision by a trading facility to permanently discontinue trading in the Index Component.

 

“Maturity Date” means June 24, 2038, provided that if such date is not a Business Day, the Maturity Date will be the next succeeding Business Day; provided, however, that if the fifth Business Day preceding June 24, 2038 does not qualify as the Final

 

C-19

 

Valuation Date referred to above, then the Maturity Date will be the fifth Business Day following the Final Valuation Date.

 

“Qualified Financial Institution” means, at any time, a financial institution organized under the laws of any jurisdiction in the United States of America or Europe that at such time has outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated A-1 or higher by Standard & Poor’s, a division of The McGraw Hill Companies, Inc. (or any successor) or P-1 or higher by Moody’s Investors Service, Inc. (or any successor) or, in either case, such other comparable rating, if any, then used by such rating agency.

 

“Redemption Date” means (a) in the case of Holder Redemption, the third Business Day following each Valuation Date (other than the Final Valuation Date, where the final Redemption Date will be the third Business Day following the Valuation Date that is immediately prior to the Final Valuation Date); or (b) in the case of Issuer Redemption, the date specified by the Company in the issuer redemption notice, which will in no event be prior to the tenth calendar day following the date on which the Company delivers such issuer redemption notice.

 

“Successor Index” means any substitute index approved by the Calculation Agent as a Successor Index pursuant to Section 3 hereof.

 

“Trading Day” means any day on which (i) the value of the Index is published by the Index Sponsors, (ii) trading is generally conducted on NYSE Arca and (iii) trading is generally conducted on the markets on which the futures contracts underlying the relevant Index are traded, in each case as determined by the calculation agent in its sole discretion.

 

“Valuation Date” means each Business Day from June 25, 2008 to June 17, 2038, inclusive, or if such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will any Valuation Date be postponed by more than five Trading Days.

 

 

1.                                      Promise to Pay at Maturity or Upon Early Redemption

 

Barclays Bank PLC, a public limited company duly organized and existing under the laws of England and Wales (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay (or cause to be paid) to Cede & Co., as nominee for The Depository Trust Company, or registered assigns, the amount as calculated and provided under (i) “Early Redemption” and elsewhere on the face this Security on the applicable Redemption Date, in the case of any Securities in respect of which the Holder exercises its Holder Redemption right or the Company exercises its Issuer Redemption right prior to the Maturity Date, or (ii) “Payment at Maturity” and elsewhere on the face of this Security on the Maturity Date, in the case of all other Securities.

 

C-20

 

2.                                      Payment of Interest

 

The principal of this Security shall not bear interest.  Any return on this Security that may be deemed to be interest will in no event be higher than the maximum rate permitted by New York law, as it may be modified by U.S. law of general application.

 

3.                                      Discontinuance or Modification of the Index; Market Disruption Event

 

If the Index Sponsors discontinue publication of the Index and they or any other person or entity publishes an index that the calculation agent determines is comparable to the Index and approves as a successor index, then the calculation agent will determine the value of the Index on the applicable valuation date and the amount payable at maturity or upon redemption by reference to such successor index.

 

If the calculation agent determines that the publication of the Index is discontinued and that there is no successor index, or that the closing level of the Index is not available because of a market disruption event or for any other reason, on the date on which the value of the Index is required to be determined, or if for any other reason the Index is not available to us or the calculation agent on the relevant date, the calculation agent will determine the amount payable by a computation methodology that the calculation agent determines will as closely as reasonably possible replicate the Index.

 

If the calculation agent determines that the Index, the index components of the Index or the method of calculating the Index has been changed at any time in any respect—including any addition, deletion or substitution and any reweighting or rebalancing of index components, and whether the change is made by the Index Sponsors under their existing policies or following a modification of those policies, is due to the publication of a successor index, is due to events affecting one or more of the index components, or is due to any other reason—then the calculation agent will be permitted (but not required) to make such adjustments to the Index or method of calculating the Index as it believes are appropriate to ensure that the value of the Index used to determine the amount payable on the maturity date or upon redemption is equitable.

 

All determinations and adjustments to be made by the calculation agent with respect to the value of the Index and the amount payable at maturity or upon redemption or otherwise relating to the value of the Index may be made in the calculation agent’s sole discretion. See “Risk Factors” in the amended pricing supplement for a discussion of certain conflicts of interest which may arise with respect to the calculation agent.

 

4.                                      Payment at Maturity or Upon Early Redemption

 

The payment of this Security that becomes due and payable on the Maturity Date or on a Redemption Date, as the case may be, shall be the cash amount that must be paid to redeem this Security as provided above under “Payment at Maturity” and “Early Redemption”, respectively.  The payment of this Security that becomes due and payable upon acceleration of the Maturity Date hereof after an Event of Default has occurred pursuant to the Indenture shall be the Default Amount.  When the principal referred to in either of the two preceding sentences has been paid as provided herein (or such payment has been made available), the principal of this Security shall be deemed to have been paid in full, whether or

 

C-21

 

not this Security shall have been surrendered for payment or cancellation.  References to the payment at maturity or upon early redemption of this Security on any day shall be deemed to mean the payment of cash that is payable on such day as provided in this Security.  Notwithstanding the foregoing, solely for the purpose of determining whether any consent, waiver, notice or other action to be given or taken by Holders of Securities pursuant to the Indenture has been given or taken by Holders of Outstanding Securities in the requisite aggregate principal amount, the principal amount of this Security will be deemed to equal the Face Amount.  This Security shall cease to be Outstanding as provided in the definition of such term in the Indenture when the principal of this Security shall be deemed to have been paid in full as provided above.

 

5.                                      Redemption Mechanics

 

(a) Holder Redemption. Subject to the minimum Redemption Amount provided under “Holder Redemption”, the Holder may require the Company to redeem the Holder’s Securities on any Redemption Date during the term of the Securities provided that such Holder (i) delivers a notice of redemption to the Company via facsimile or email by no later than 4:00 p.m. New York time on the Business Day prior to the applicable Valuation Date; (ii) delivers a signed confirmation of redemption to the Company via facsimile or email by no later than 5:00 p.m. New York time on the same day; (iii) instructs the Holder’s DTC custodian to book a delivery versus payment trade with respect to the Holder’s Securities on the applicable Valuation Date at a price equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Valuation Date minus the Investor Fee on the applicable Valuation Date, facing Barclays DTC 5101; and (iv) causes the Holder’s DTC custodian to deliver the trade as booked for settlement via DTC prior to 10:00 a.m. New York time on the applicable Redemption Date, which shall be the third Business Day following the applicable Valuation Date (other than the Final Valuation Date).  The final Redemption Date shall be the third Business Day following such Valuation Date that is immediately prior to the Final Valuation Date.

 

(b) Issuer Redemption.  If the Company elects to exercise its right to redeem the Securities under “Issuer Redemption”, the Company will deliver written notice of such election to redeem to DTC and the Trustee not less than ten calendar days prior to the Redemption Date specified by the Company in such issuer redemption notice.  The Final Valuation Date will be deemed to be the third Trading Day prior to the Redemption Date (subject to postponement in the event of a Market Disruption Event), and the Securities will be redeemed on the Redemption Date specified by the Company in such issuer redemption notice, but in no event prior to the tenth calendar day following the date on which the Company delivers such issuer redemption notice. If the deemed Final Valuation Date referred to above is postponed and occurs less than two Business Days prior to the day that would otherwise be the Redemption Date, then the Redemption Date will be the second Business Day following the deemed Final Valuation Date as so postponed.

 

6.                                      Split or Reverse Split of the Securities

 

The initial principal amount on which a split or reverse split will be based will be as set out in the definition of Face Amount on the cover of this Security. On any Business

 

C-22

 

Day, the Company may elect to initiate a split of the Securities or a reverse split of the Securities. Such date shall be deemed to be the “Announcement Date”, and the Company will issue a notice to holders of the relevant Securities and a press release announcing the split or reverse split, specifying the effective date of the split or reverse split and the split or reverse split ratio.

 

If the Securities undergo a split, the Company will adjust the terms of the Securities accordingly.  For example, if the split ratio is 4 and hence the Securities undergo a 4:1 split, every investor who holds one Security via DTC on the relevant record date will, after the split, hold four Securities, and adjustments will be made as described below.  The record date for the split will be the 9th Business Day after the Announcement Date.  The principal amount of the Securities on such record date will be divided by 4 to reflect the 4:1 split of the Securities.  Any adjustment of the principal amount of the Securities will be rounded to 8 decimal places.  The split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

In the case of a reverse split, the Company reserves the right to address odd numbers of Securities (commonly referred to as “partials”) in a commercially reasonable manner determined by the Company in its sole discretion.  For example, if the reverse split ratio is 4 and the Securities undergo a 1:4 reverse split, every Holder holding 4 Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and adjustments will be made as described below.  The record date for the reverse split will be on the 9th Business Day after the Announcement Date.  The principal amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split of the Securities.  Any adjustment of the principal amount of the Securities will be rounded to 8 decimal places. The reverse split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

Holders who own a number of Securities on the record date which is not evenly divisible by the split ratio will receive the same treatment as all other holders for the maximum number of Securities they hold which is evenly divisible by the split ratio, and the Company will have the right to compensate holders for their remaining or “partial” Securities in a commercially reasonable manner determined by the Company in its sole discretion. The Company’s current intention is to provide a Holder with a cash payment for such Holder’s partials on the 17th Business Day following the Announcement Date in an amount equal to the appropriate percentage of the principal amount of the reverse split- adjusted Securities on the 14th Business Day following the Announcement Date times the Index Factor on the applicable Business Day minus the Investor Fee on the applicable Business Day.  For example, if the reverse split ratio is 1:4, a Holder who held 23 Securities via DTC on the record date would receive 5 post reverse split Securities on the immediately following Business Day, and a cash payment on the 17th Business Day following the Announcement Date that is equal to 3/4ths of the principal amount of the reverse split-adjusted Securities on the 14th Business Day following the Announcement Date times the Index Factor on the applicable Business Day minus the Investor Fee on the applicable Business Day.

 

In the event of a reverse split, the Redemption Amount will be adjusted accordingly by the Company, in its sole discretion and in a commercially reasonable manner, to take into account the reverse split.

 

C-23

 

7.                                      Role of Calculation Agent

 

The Calculation Agent will be solely responsible for all determinations and calculations regarding the value of the Securities, including at maturity or upon early redemption; Market Disruption Events; Business Days; Trading Days; the Investor Fee; the Default Amount; the closing value of the Index on the Inception Date and on any Valuation Date; the Maturity Date; Redemption Dates; the amount payable on the Securities and all such other matters as may be specified elsewhere herein as matters to be determined by the Calculation Agent. The Calculation Agent shall make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Calculation Agent shall be final and binding on the Company, the Holder and all other Persons having an interest in this Security, without liability on the part of the Calculation Agent.

 

The Company shall take such action as shall be necessary to ensure that there is, at all relevant times, a financial institution serving as the Calculation Agent hereunder.  The Company may, in its sole discretion at any time and from time to time, upon written notice to the Trustee, but without notice to the Holder of this Security, terminate the appointment of any Person serving as the Calculation Agent and appoint another Person (including any Affiliate of the Company) to serve as the Calculation Agent.  Insofar as this Security provides for the Calculation Agent to determine the value of the Index on any date or other information from any institution or other source, the Calculation Agent may do so from any source or sources of the kind contemplated or otherwise permitted hereby notwithstanding that any one or more of such sources are the Calculation Agent, Affiliates of the Calculation Agent or Affiliates of the Company.

 

8.                                      Default Amount

 

If an Event of Default occurs and the maturity of the Security is accelerated, the Default Amount will be payable in respect of this Security at maturity.

 

9.                                      Payment

 

Payment of any amount payable on this Security 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.  Payment will be made to an account designated by the Holder (in writing to the Company and the Trustee on or before the applicable Valuation Date) and acceptable to the Company or, if no such account is designated and acceptable as aforesaid, at the office or agency of the Company maintained for that purpose in The City of New York, provided, however, that payment on the Maturity Date or any Redemption Date shall be made only upon surrender of this Security at such office or agency (unless the Company waives surrender).  Notwithstanding the foregoing, if this Security is a Global Security, any payment may be made pursuant to the Applicable Procedures of the Depositary as permitted in said Indenture

 

10.                               Reverse of this Security

 

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

 

C-24

 

11.                               Certificate of Authentication

 

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

 

12.                               Prospectus

 

Reference is made to the (i) the Prospectus related to the Securities, dated July 19, 2013, (ii) the Prospectus Supplement, dated July 19, 2013, (iii) and the Pricing Supplement, dated September 22, 2014, as amended on April 30, 2015 (together, the “Prospectus”). The terms and conditions of this Security as fully set forth in the Prospectus are hereby incorporated by reference in their entirety into this Security and binding upon the parties hereto.  In the event of a conflict between the terms of the Prospectus and the terms of this Security, the Prospectus will control and if the Prospectus provides for a specific United States tax characterization, by purchasing a Security, you agree (in the absence of a change in law, an administrative determination or a judicial ruling to the contrary) to be bound for United States federal income tax purposes to such tax characterization.  Copies of the Prospectus are available from the Company or any underwriter or any dealer participating in the offering by calling toll free, 1-888-227-2275 (extension 2-3430).

 

C-25

 

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

 

	
 
    	
BARCLAYS BANK   PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

This is one of the Securities of the series designated herein and referred to in the Indenture.

 

Dated:

 

	
 
    	
THE BANK OF NEW   YORK MELLON
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

C-26

 

(Reverse of Security)

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”) issued and to be issued in one or more series under an Indenture, dated as of September 16, 2004 (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  Insofar as the provisions of the Indenture may conflict with the provisions set forth on the face of this Security, the latter shall control for purposes of this Security.

 

This Security is one of the series designated on the face hereof.  References herein to “this series” mean the series designated on the face hereof.

 

Payments under the Securities will be made without deduction or withholding for, or on account of, any and all present or future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”) now or hereafter 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 (each a “Taxing Jurisdiction”), unless such deduction or withholding is required by law.  If any such Taxes are at any time required by a Taxing Jurisdiction to be deducted or withheld, the Company will, subject to the exceptions and limitations set forth in Section 10.04 of the Indenture, pay such additional amounts of the principal of such Security and any other amounts payable on such Security (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holder of any Security, after such deduction or withholding, shall equal the amounts of the principal of such Security and any other amounts payable on such Security which would have been payable in respect of such Security had no such deduction or withholding been required.

 

If at any time the Company determines that as a result of a change in or amendment to the laws or regulations of a Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or a change in an official application or interpretation of such laws or regulations (including a decision of any court or tribunal), either generally or in relation to any particular Securities, which change, amendment, application or interpretation becomes effective on or after the Original Issue Date in making any payment of, or in respect of, the principal amount of the Securities, the Company would be required to pay any Additional Amounts with respect thereto, then the Securities will be redeemable upon not less than 35 nor more than 60 days’ notice by mail, at any time thereafter, in whole but not in part, at the election of the Company as provided in the Indenture at a redemption price equal to the principal amount thereof.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture

 

C-27

 

at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected (considered together as one class for this purpose).  The Indenture also contains provisions (i) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in aggregate principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof on or after the respective due dates expressed herein.

 

C-28

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Security as herein provided.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Senior Debt Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of this Security is payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Senior Debt Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing.  Thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

This Security, and any other Securities of this series and of like tenor, are issuable only in registered form without coupons in denominations of any multiple of $50.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security 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 Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

This Security and the Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

C-29

 

(Face of Security)

 

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.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO BARCLAYS BANK PLC, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

BY PURCHASING THIS SECURITY, THE HOLDER AGREES TO CHARACTERIZE THIS SECURITY FOR ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED IN SECTION 12 ON THE FACE OF THIS SECURITY.

 

C-30

 

	
CUSIP   No. 06739H263
    	
 
    	
ISIN: US06739H2638
    

 

BARCLAYS BANK PLC

 

GLOBAL MEDIUM-TERM NOTES, SERIES A

 

 

iPath® Bloomberg Lead Subindex Total ReturnSM ETN

due June 24, 2038

 

The following terms apply to this Security.  Capitalized terms that are not defined the first time they are used in this Security shall have the meanings indicated elsewhere in this Security.

 

Face Amount:  $[      ], equal to [      ] Securities at $50 per Security.

 

Index: The Bloomberg Lead Subindex Total ReturnSM.

 

Inception Date:  June 24, 2008.

 

Amendment Date: April 30, 2015

 

Original Issue Date: June 27, 2008.

 

Interest Rate:  The principal of this Security shall not bear interest.

 

Denomination:  $50.

 

Payment at Maturity:  On the Maturity Date, the Company shall redeem this Security by paying to the Holder a cash payment in U.S. dollars in an amount equal to (1) the principal amount of the Holder’s Securities times (2) the Index Factor on the Final Valuation date minus (3) the Investor Fee on the Final Valuation Date unless such Securities were previously redeemed on a Redemption Date as provided under “Early Redemption”.

 

Early Redemption:  The Holder may, subject to the notification requirements provided under Section 5 hereof, require the Company to redeem the Holder’s Securities in whole or in part on any Redemption Date during the term of the Securities (“Holder Redemption”).  If the Holder requires the Company to redeem the Holder’s Securities on any Redemption Date, the Holder will receive a cash payment equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Valuation Date minus the Investor Fee on the applicable Valuation Date.  The Company shall not be required to redeem fewer than 30,000 Securities at one time, provided that the Company may from time to time in its sole discretion reduce, in part or in whole, this minimum redemption amount (the “Redemption Amount”) on a consistent basis for all Holders who hold Securities at the time the reduction becomes effective.

 

The Company may redeem the Securities (in whole but not in part) at its sole discretion on any Trading Day on or after the Inception Date until and including maturity (“Issuer Redemption”). To exercise its right to redeem, the Company must deliver notice to DTC and the Trustee not less than ten calendar days prior to the Redemption Date specified by the Company in such issuer redemption notice.  If the Company redeems the Securities, the Holder will receive a cash payment in U.S. dollars per Security in an amount equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Trading Date minus the Investor Fee on the applicable Trading Date.

 

Calculation Agent:  Barclays Bank PLC.

 

Defeasance:  Neither full defeasance nor covenant defeasance applies to this Security.

 

Listing:  NYSE Arca stock exchange.

 

C-31

 

OTHER TERMS:

 

All terms used in this Security that are not defined in this Security but are defined in the Indenture referred to on the reverse of this Security shall have the meanings assigned to them in the Indenture.  Section headings on the face of this Security are for convenience only and shall not affect the construction of this Security.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banking institutions in London or New York City generally are authorized or obligated by law, regulation or executive order to close.

 

“Default Amount” means, on any day, an amount in U.S. dollars, as determined by the Calculation Agent in its sole discretion, equal to the cost of having a Qualified Financial Institution (selected as provided below) expressly assume the due and punctual payment of the principal of this Security, and the performance or observance of every covenant hereof and of the Indenture on the part of the Company to be performed or observed with respect to this Security (or to undertake other obligations providing substantially equivalent economic value to the Holder of this Security as the Company’s obligations hereunder).  Such cost will equal (i) the lowest amount that a Qualified Financial Institution would charge to effect such assumption (or undertaking) plus (ii) the reasonable expenses (including reasonable attorneys’ fees) incurred by the Holder of this Security in preparing any documentation necessary for such assumption (or undertaking).  During the Default Quotation Period, each Holder of this Security and the Company may request a Qualified Financial Institution to provide a quotation of the amount it would charge to effect such assumption (or undertaking).  If either party obtains a quotation, it must notify the other party in writing of the quotation.  The amount referred to in clause (i) of this paragraph will equal the lowest (or, if there is only one, the only) quotation so obtained, and as to which notice is so given, during the Default Quotation Period; provided that, with respect to any quotation, the party not obtaining the quotation may object, on reasonable and significant grounds, to the effectuation of such assumption (or undertaking) by the Qualified Financial Institution providing such quotation and notify the other party in writing of such grounds within two Business Days after the last day of the Default Quotation Period, in which case that quotation will be disregarded in determining the Default Amount.  The “Default Quotation Period” shall be the period beginning on the day the Default Amount first becomes due and ending on the third Business Day after such due date, unless no such quotation is obtained, or unless every such quotation so obtained is objected to within five Business Days after such due date as provided above, in which case the Default Quotation Period will continue until the third Business Day after the first Business Day on which prompt notice of a quotation is given as provided above, unless such quotation is objected to as provided above within five Business Days after such first Business Day, in which case, the Default Quotation Period will continue as provided in this sentence. Notwithstanding the foregoing, if the Default Quotation Period (and the subsequent two Business Day objection period) has not ended prior to the Final Valuation Date, then the Default Amount will equal the Face Amount.

 

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“Final Valuation Date” means June 17, 2038, or if such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Final Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will the Final Valuation Date be postponed by more than five Trading Days.

 

“Index Component” means, with respect to the Securities, the futures contract on the commodity of lead that comprises the Index.

 

“Index Factor” means, on any given day, the amount equal to the closing value of the Index on that day divided by the closing value of the Index on the Inception Date.

 

“Investor Fee” means an amount equal to (1) (a) 0.75% per year (for the period from the Inception Date to and including the Amendment Date), and (b) 0.70% per year (for the period beginning the day after the Amendment Date until the Redemption Date, if after the Amendment Date, or the Maturity Date) times (2) the principal amount of the Holder’s Securities times (3) the Index Factor calculated on a daily basis in the following manner:  (i) the Investor Fee on the Inception Date shall equal zero; (ii) on each subsequent calendar day until and including the Amendment Date or, in the case of Securities with respect to which the Holder or the Issuer has exercised its right of Early Redemption prior to the Amendment Date, the applicable Valuation Date or Trading Day, the accrued Investor Fee will increase by an amount equal to (1) 0.75% per year times (2) the principal amount of the Holder’s Securities times (3) the Index Factor on that day (or, if such day is not a Trading Day, the Index Factor on the immediately preceding Trading Day) divided by (4) 365; and (iii) from the Amendment Date until and including the Final Valuation Date or, in the case of Securities with respect to which the Holder or the Issuer has exercised its right of Early Redemption after the Amendment Date, the applicable Valuation Date or Trading Day, the accrued Investor Fee will increase by an amount equal to (1) 0.70% per year times (2) the principal amount of the Holder’s Securities times (3) the Index Factor on that day (or, if such day is not a Trading Day, the Index Factor on the immediately preceding Trading Day) divided by (4) 365.

 

“Market Disruption Event” means, with respect to the Securities, in the opinion of the Calculation Agent and determined in its sole discretion:  (i) a material limitation, suspension or disruption in the trading of the Index Component which results in a failure by the trading facility on which the relevant contract is traded to report a daily contract reference price; (ii) the daily contract reference price for the Index Component has increased or decreased from the previous day’s daily contract reference price by the maximum amount permitted under the applicable rules or procedures of the relevant trading facility; (iii) the Index Sponsors fail to publish the closing value of the Index or the applicable trading facility or other price source fails to announce or publish the daily contract reference price for the Index Components; (iv) any other event, if the Calculation Agent determines in its sole discretion that the event materially interferes with the ability of Barclays Bank PLC or the ability of any affiliates of Barclays Bank PLC to unwind all or a material portion of a hedge with respect to the Securities that Barclays Bank PLC or any of its affiliates have effected or may effect.  The following events will not be Market Disruption Events: (a) a limitation on the hours or numbers of days of trading on a trading

 

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facility on which the Index Component is traded, but only if the limitation results from an announced change in the regular business hours of the relevant market; or (b) a decision by a trading facility to permanently discontinue trading in the Index Component.

 

“Maturity Date” means June 24, 2038, provided that if such date is not a Business Day, the Maturity Date will be the next succeeding Business Day; provided, however, that if the fifth Business Day preceding June 24, 2038 does not qualify as the Final Valuation Date referred to above, then the Maturity Date will be the fifth Business Day following the Final Valuation Date.

 

“Qualified Financial Institution” means, at any time, a financial institution organized under the laws of any jurisdiction in the United States of America or Europe that at such time has outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated A-1 or higher by Standard & Poor’s, a division of The McGraw Hill Companies, Inc. (or any successor) or P-1 or higher by Moody’s Investors Service, Inc. (or any successor) or, in either case, such other comparable rating, if any, then used by such rating agency.

 

“Redemption Date” means (a) in the case of Holder Redemption, the third Business Day following each Valuation Date (other than the Final Valuation Date, where the final Redemption Date will be the third Business Day following the Valuation Date that is immediately prior to the Final Valuation Date); or (b) in the case of Issuer Redemption, the date specified by the Company in the issuer redemption notice, which will in no event be prior to the tenth calendar day following the date on which the Company delivers such issuer redemption notice.

 

“Successor Index” means any substitute index approved by the Calculation Agent as a Successor Index pursuant to Section 3 hereof.

 

“Trading Day” means any day on which (i) the value of the Index is published by the Index Sponsors, (ii) trading is generally conducted on NYSE Arca and (iii) trading is generally conducted on the markets on which the futures contracts underlying the relevant Index are traded, in each case as determined by the calculation agent in its sole discretion.

 

“Valuation Date” means each Business Day from June 25, 2008 to June 17, 2038, inclusive, or if such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will any Valuation Date be postponed by more than five Trading Days.

 

 

1.                                      Promise to Pay at Maturity or Upon Early Redemption

 

Barclays Bank PLC, a public limited company duly organized and existing under the laws of England and Wales (herein called the “Company,” which term includes any

 

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successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay (or cause to be paid) to Cede & Co., as nominee for The Depository Trust Company, or registered assigns, the amount as calculated and provided under (i) “Early Redemption” and elsewhere on the face this Security on the applicable Redemption Date, in the case of any Securities in respect of which the Holder exercises its Holder Redemption right or the Company exercises its Issuer Redemption right prior to the Maturity Date, or (ii) “Payment at Maturity” and elsewhere on the face of this Security on the Maturity Date, in the case of all other Securities.

 

2.                                      Payment of Interest

 

The principal of this Security shall not bear interest.  Any return on this Security that may be deemed to be interest will in no event be higher than the maximum rate permitted by New York law, as it may be modified by U.S. law of general application.

 

3.                                      Discontinuance or Modification of the Index; Market Disruption Event

 

If the Index Sponsors discontinue publication of the Index and they or any other person or entity publishes an index that the calculation agent determines is comparable to the Index and approves as a successor index, then the calculation agent will determine the value of the Index on the applicable valuation date and the amount payable at maturity or upon redemption by reference to such successor index.

 

If the calculation agent determines that the publication of the Index is discontinued and that there is no successor index, or that the closing level of the Index is not available because of a market disruption event or for any other reason, on the date on which the value of the Index is required to be determined, or if for any other reason the Index is not available to us or the calculation agent on the relevant date, the calculation agent will determine the amount payable by a computation methodology that the calculation agent determines will as closely as reasonably possible replicate the Index.

 

If the calculation agent determines that the Index, the index components of the Index or the method of calculating the Index has been changed at any time in any respect—including any addition, deletion or substitution and any reweighting or rebalancing of index components, and whether the change is made by the Index Sponsors under their existing policies or following a modification of those policies, is due to the publication of a successor index, is due to events affecting one or more of the index components, or is due to any other reason—then the calculation agent will be permitted (but not required) to make such adjustments to the Index or method of calculating the Index as it believes are appropriate to ensure that the value of the Index used to determine the amount payable on the maturity date or upon redemption is equitable.

 

All determinations and adjustments to be made by the calculation agent with respect to the value of the Index and the amount payable at maturity or upon redemption or otherwise relating to the value of the Index may be made in the calculation agent’s sole discretion. See “Risk Factors” in the amended pricing supplement for a discussion of certain conflicts of interest which may arise with respect to the calculation agent.

 

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4.                                      Payment at Maturity or Upon Early Redemption

 

The payment of this Security that becomes due and payable on the Maturity Date or on a Redemption Date, as the case may be, shall be the cash amount that must be paid to redeem this Security as provided above under “Payment at Maturity” and “Early Redemption”, respectively.  The payment of this Security that becomes due and payable upon acceleration of the Maturity Date hereof after an Event of Default has occurred pursuant to the Indenture shall be the Default Amount.  When the principal referred to in either of the two preceding sentences has been paid as provided herein (or such payment has been made available), the principal of this Security shall be deemed to have been paid in full, whether or not this Security shall have been surrendered for payment or cancellation.  References to the payment at maturity or upon early redemption of this Security on any day shall be deemed to mean the payment of cash that is payable on such day as provided in this Security.  Notwithstanding the foregoing, solely for the purpose of determining whether any consent, waiver, notice or other action to be given or taken by Holders of Securities pursuant to the Indenture has been given or taken by Holders of Outstanding Securities in the requisite aggregate principal amount, the principal amount of this Security will be deemed to equal the Face Amount.  This Security shall cease to be Outstanding as provided in the definition of such term in the Indenture when the principal of this Security shall be deemed to have been paid in full as provided above.

 

5.                                      Redemption Mechanics

 

(a) Holder Redemption: Subject to the minimum Redemption Amount provided under “Holder Redemption”, the Holder may require the Company to redeem the Holder’s Securities on any Redemption Date during the term of the Securities provided that such Holder (i) delivers a notice of redemption to the Company via facsimile or email by no later than 4:00 p.m. New York time on the Business Day prior to the applicable Valuation Date; (ii) delivers a signed confirmation of redemption to the Company via facsimile or email by no later than 5:00 p.m. New York time on the same day; (iii) instructs the Holder’s DTC custodian to book a delivery versus payment trade with respect to the Holder’s Securities on the applicable Valuation Date at a price equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Valuation Date minus the Investor Fee on the applicable Valuation Date, facing Barclays DTC 5101; and (iv) causes the Holder’s DTC custodian to deliver the trade as booked for settlement via DTC prior to 10:00 a.m. New York time on the applicable Redemption Date, which shall be the third Business Day following the applicable Valuation Date (other than the Final Valuation Date).  The final Redemption Date shall be the third Business Day following such Valuation Date that is immediately prior to the Final Valuation Date.

 

(b) Issuer Redemption.  If the Company elects to exercise its right to redeem the Securities under “Issuer Redemption”, the Company will deliver written notice of such election to redeem to DTC and the Trustee not less than ten calendar days prior to the Redemption Date specified by the Company in such issuer redemption notice.  The Final Valuation Date will be deemed to be the third Trading Day prior to the Redemption Date (subject to postponement in the event of a Market Disruption Event), and the Securities will be redeemed on the Redemption Date specified by the Company in such issuer redemption notice, but in no event prior to the tenth calendar day following the date on which the

 

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Company delivers such issuer redemption notice. If the deemed Final Valuation Date referred to above is postponed and occurs less than two Business Days prior to the day that would otherwise be the Redemption Date, then the Redemption Date will be the second Business Day following the deemed Final Valuation Date as so postponed.

 

6.                                      Split or Reverse Split of the Securities

 

The initial principal amount on which a split or reverse split will be based will be as set out in the definition of Face Amount on the cover of this Security. On any Business Day, the Company may elect to initiate a split of the Securities or a reverse split of the Securities. Such date shall be deemed to be the “Announcement Date”, and the Company will issue a notice to holders of the relevant Securities and a press release announcing the split or reverse split, specifying the effective date of the split or reverse split and the split or reverse split ratio.

 

If the Securities undergo a split, the Company will adjust the terms of the Securities accordingly.  For example, if the split ratio is 4 and hence the Securities undergo a 4:1 split, every investor who holds one Security via DTC on the relevant record date will, after the split, hold four Securities, and adjustments will be made as described below.  The record date for the split will be the 9th Business Day after the Announcement Date.  The principal amount of the Securities on such record date will be divided by 4 to reflect the 4:1 split of the Securities.  Any adjustment of the principal amount of the Securities will be rounded to 8 decimal places.  The split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

In the case of a reverse split, the Company reserves the right to address odd numbers of Securities (commonly referred to as “partials”) in a commercially reasonable manner determined by the Company in its sole discretion.  For example, if the reverse split ratio is 4 and the Securities undergo a 1:4 reverse split, every Holder holding 4 Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and adjustments will be made as described below.  The record date for the reverse split will be on the 9th Business Day after the Announcement Date.  The principal amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split of the Securities.  Any adjustment of the principal amount of the Securities will be rounded to 8 decimal places. The reverse split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

Holders who own a number of Securities on the record date which is not evenly divisible by the split ratio will receive the same treatment as all other holders for the maximum number of Securities they hold which is evenly divisible by the split ratio, and the Company will have the right to compensate holders for their remaining or “partial” Securities in a commercially reasonable manner determined by the Company in its sole discretion. The Company’s current intention is to provide a Holder with a cash payment for such Holder’s partials on the 17th Business Day following the Announcement Date in an amount equal to the appropriate percentage of the principal amount of the reverse split- adjusted Securities on the 14th Business Day following the Announcement Date times the Index Factor on the applicable Business Day minus the Investor Fee on the applicable Business Day.  For example, if the reverse split ratio is 1:4, a Holder who held 23 Securities via DTC on the record date would receive 5 post reverse split Securities on the immediately following

 

C-37

 

Business Day, and a cash payment on the 17th Business Day following the Announcement Date that is equal to 3/4ths of the principal amount of the reverse split-adjusted Securities on the 14th Business Day following the Announcement Date times the Index Factor on the applicable Business Day minus the Investor Fee on the applicable Business Day.

 

In the event of a reverse split, the Redemption Amount will be adjusted accordingly by the Company, in its sole discretion and in a commercially reasonable manner, to take into account the reverse split.

 

7.                                      Role of Calculation Agent

 

The Calculation Agent will be solely responsible for all determinations and calculations regarding the value of the Securities, including at maturity or upon early redemption; Market Disruption Events; Business Days; Trading Days; the Investor Fee; the Default Amount; the closing value of the Index on the Inception Date and on any Valuation Date; the Maturity Date; Redemption Dates; the amount payable on the Securities and all such other matters as may be specified elsewhere herein as matters to be determined by the Calculation Agent. The Calculation Agent shall make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Calculation Agent shall be final and binding on the Company, the Holder and all other Persons having an interest in this Security, without liability on the part of the Calculation Agent.

 

The Company shall take such action as shall be necessary to ensure that there is, at all relevant times, a financial institution serving as the Calculation Agent hereunder.  The Company may, in its sole discretion at any time and from time to time, upon written notice to the Trustee, but without notice to the Holder of this Security, terminate the appointment of any Person serving as the Calculation Agent and appoint another Person (including any Affiliate of the Company) to serve as the Calculation Agent.  Insofar as this Security provides for the Calculation Agent to determine the value of the Index on any date or other information from any institution or other source, the Calculation Agent may do so from any source or sources of the kind contemplated or otherwise permitted hereby notwithstanding that any one or more of such sources are the Calculation Agent, Affiliates of the Calculation Agent or Affiliates of the Company.

 

8.                                      Default Amount

 

If an Event of Default occurs and the maturity of the Security is accelerated, the Default Amount will be payable in respect of this Security at maturity.

 

9.                                      Payment

 

Payment of any amount payable on this Security 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.  Payment will be made to an account designated by the Holder (in writing to the Company and the Trustee on or before the applicable Valuation Date) and acceptable to the Company or, if no such account is designated and acceptable as aforesaid, at the office or agency of the Company maintained for that purpose in The City of New York, provided, however, that payment on the Maturity Date or any Redemption Date

 

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shall be made only upon surrender of this Security at such office or agency (unless the Company waives surrender).  Notwithstanding the foregoing, if this Security is a Global Security, any payment may be made pursuant to the Applicable Procedures of the Depositary as permitted in said Indenture.

 

10.                               Reverse of this Security

 

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

 

11.                               Certificate of Authentication

 

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

 

12.                               Prospectus

 

Reference is made to the (i) the Prospectus related to the Securities, dated July 19, 2013, (ii) the Prospectus Supplement, dated July 19, 2013, (iii) and the Pricing Supplement, dated September 22, 2014, as amended on April 30, 2015 (together, the “Prospectus”).  The terms and conditions of this Security as fully set forth in the Prospectus are hereby incorporated by reference in their entirety into this Security and binding upon the parties hereto.  In the event of a conflict between the terms of the Prospectus and the terms of this Security, the Prospectus will control and if the Prospectus provides for a specific United States tax characterization, by purchasing a Security, you agree (in the absence of a change in law, an administrative determination or a judicial ruling to the contrary) to be bound for United States federal income tax purposes to such tax characterization.  Copies of the Prospectus are available from the Company or any underwriter or any dealer participating in the offering by calling toll free, 1-888-227-2275 (extension 2-3430).

 

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

 

	
 
    	
BARCLAYS BANK   PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

This is one of the Securities of the series designated herein and referred to in the Indenture.

 

Dated:

 

	
 
    	
THE BANK OF NEW   YORK MELLON
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

C-40

 

(Reverse of Security)

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”) issued and to be issued in one or more series under an Indenture, dated as of September 16, 2004 (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  Insofar as the provisions of the Indenture may conflict with the provisions set forth on the face of this Security, the latter shall control for purposes of this Security.

 

This Security is one of the series designated on the face hereof.  References herein to “this series” mean the series designated on the face hereof.

 

Payments under the Securities will be made without deduction or withholding for, or on account of, any and all present or future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”) now or hereafter 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 (each a “Taxing Jurisdiction”), unless such deduction or withholding is required by law.  If any such Taxes are at any time required by a Taxing Jurisdiction to be deducted or withheld, the Company will, subject to the exceptions and limitations set forth in Section 10.04 of the Indenture, pay such additional amounts of the principal of such Security and any other amounts payable on such Security (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holder of any Security, after such deduction or withholding, shall equal the amounts of the principal of such Security and any other amounts payable on such Security which would have been payable in respect of such Security had no such deduction or withholding been required.

 

If at any time the Company determines that as a result of a change in or amendment to the laws or regulations of a Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or a change in an official application or interpretation of such laws or regulations (including a decision of any court or tribunal), either generally or in relation to any particular Securities, which change, amendment, application or interpretation becomes effective on or after the Original Issue Date in making any payment of, or in respect of, the principal amount of the Securities, the Company would be required to pay any Additional Amounts with respect thereto, then the Securities will be redeemable upon not less than 35 nor more than 60 days’ notice by mail, at any time thereafter, in whole but not in part, at the election of the Company as provided in the Indenture at a redemption price equal to the principal amount thereof.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture

 

C-41

 

at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected (considered together as one class for this purpose).  The Indenture also contains provisions (i) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in aggregate principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof on or after the respective due dates expressed herein.

 

C-42

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Security as herein provided.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Senior Debt Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of this Security is payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Senior Debt Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing.  Thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

This Security, and any other Securities of this series and of like tenor, are issuable only in registered form without coupons in denominations of any multiple of $50.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security 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 Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

This Security and the Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

C-43

 

(Face of Security)

 

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.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO BARCLAYS BANK PLC, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

BY PURCHASING THIS SECURITY, THE HOLDER AGREES TO CHARACTERIZE THIS SECURITY FOR ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED IN SECTION 12 ON THE FACE OF THIS SECURITY.

 

C-44

 

	
CUSIP   No. 06738C794
    	
 
    	
ISIN: US06738C7948
    

 

BARCLAYS BANK PLC

 

GLOBAL MEDIUM-TERM NOTES, SERIES A

 

 

iPath® S&P GSCI® Total Return Index ETN

due June 12, 2036

 

The following terms apply to this Security.  Capitalized terms that are not defined the first time they are used in this Security shall have the meanings indicated elsewhere in this Security.

 

Face Amount:  $[        ], equal to [        ] Securities at $50 per Security.

 

Index: S&P GSCI® Total Return Index.

 

Inception Date:  June 6, 2006.

 

Amendment Date:  April 30, 2015

 

Original Issue Date:  June 9, 2006.

 

Interest Rate:  The principal of this Security shall not bear interest.

 

Denomination:  $50.

 

Payment at Maturity:  On the Maturity Date, the Company shall redeem this Security by paying to the Holder a cash payment in U.S. dollars in an amount equal to (1) the principal amount of the Holder’s Securities times (2) the Index Factor on the Final Valuation date minus (3) the Investor Fee on the Final Valuation Date unless such Securities were previously redeemed on a Redemption Date as provided under “Early Redemption”

 

Early Redemption:  The Holder may, subject to the notification requirements provided under Section 5 hereof, require the Company to redeem the Holder’s Securities in whole or in part on any Redemption Date during the term of the Securities (“Holder Redemption”).  If the Holder requires the Company to redeem the Holder’s Securities on any Redemption Date, the Holder will receive a cash payment equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Valuation Date minus the Investor Fee on the applicable Valuation Date.  The Company shall not be required to redeem fewer than 30,000 Securities at one time, provided that the Company may from time to time in its sole discretion reduce, in part or in whole, this minimum redemption amount (the “Redemption Amount”) on a consistent basis for all Holders who hold Securities at the time the reduction becomes effective.

 

The Company may redeem the Securities (in whole but not in part) at its sole discretion on any Trading Day on or after the Inception Date until and including maturity (“Issuer Redemption”). To exercise its right to redeem, the Company must deliver notice to DTC and the Trustee not less than ten calendar days prior to the Redemption Date specified by the Company in such issuer redemption notice.  If the Company redeems the Securities, the Holder will receive a cash payment in U.S. dollars per Security in an amount equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Trading Date minus the Investor Fee on the applicable Trading Date.

 

Calculation Agent:  Barclays Bank PLC.

 

Defeasance:  Neither full defeasance nor covenant defeasance applies to this Security.

 

Listing:  NYSE Arca Stock Exchange.

 

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OTHER TERMS:

 

All terms used in this Security that are not defined in this Security but are defined in the Indenture referred to on the reverse of this Security shall have the meanings assigned to them in the Indenture.  Section headings on the face of this Security are for convenience only and shall not affect the construction of this Security.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banking institutions in London or New York City generally are authorized or obligated by law, regulation or executive order to close.

 

“Default Amount” means, on any day, an amount in U.S. dollars, as determined by the Calculation Agent in its sole discretion, equal to the cost of having a Qualified Financial Institution (selected as provided below) expressly assume the due and punctual payment of the principal of this Security, and the performance or observance of every covenant hereof and of the Indenture on the part of the Company to be performed or observed with respect to this Security (or to undertake other obligations providing substantially equivalent economic value to the Holder of this Security as the Company’s obligations hereunder).  Such cost will equal (i) the lowest amount that a Qualified Financial Institution would charge to effect such assumption (or undertaking) plus (ii) the reasonable expenses (including reasonable attorneys’ fees) incurred by the Holder of this Security in preparing any documentation necessary for such assumption (or undertaking).  During the Default Quotation Period, each Holder of this Security and the Company may request a Qualified Financial Institution to provide a quotation of the amount it would charge to effect such assumption (or undertaking).  If either party obtains a quotation, it must notify the other party in writing of the quotation.  The amount referred to in clause (i) of this paragraph will equal the lowest (or, if there is only one, the only) quotation so obtained, and as to which notice is so given, during the Default Quotation Period; provided that, with respect to any quotation, the party not obtaining the quotation may object, on reasonable and significant grounds, to the effectuation of such assumption (or undertaking) by the Qualified Financial Institution providing such quotation and notify the other party in writing of such grounds within two Business Days after the last day of the Default Quotation Period, in which case that quotation will be disregarded in determining the Default Amount.  The “Default Quotation Period” shall be the period beginning on the day the Default Amount first becomes due and ending on the third Business Day after such due date, unless no such quotation is obtained, or unless every such quotation so obtained is objected to within five Business Days after such due date as provided above, in which case the Default Quotation Period will continue until the third Business Day after the first Business Day on which prompt notice of a quotation is given as provided above, unless such quotation is objected to as provided above within five Business Days after such first Business Day, in which case, the Default Quotation Period will continue as provided in this sentence. Notwithstanding the foregoing, if the Default Quotation Period (and the subsequent two Business Day objection period) has not ended prior to the Final Valuation Date, then the Default Amount will equal the Face Amount.

 

C-46

 

“Final Valuation Date” means June 5, 2036, or if such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Final Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will the Final Valuation Date be postponed by more than five Trading Days.

 

“Index Component” means, with respect to the Securities, any of the futures contracts on physical commodities that comprise the Index.

 

“Index Factor” means, on any given day, the amount equal to the closing value of the Index on that day divided by the closing value of the Index on the Inception Date.

 

“Investor Fee” means an amount equal to (1) (a) 0.75% per year (for the period from the Inception Date to and including the Amendment Date), and (b) 0.70% per year (for the period beginning the day after the Amendment Date until the Redemption Date, if after the Amendment Date, or the Maturity Date) times (2) the principal amount of the Holder’s Securities times (3) the Index Factor calculated on a daily basis in the following manner:  (i) the Investor Fee on the Inception Date shall equal zero; (ii) on each subsequent calendar day until and including the Amendment Date or, in the case of Securities with respect to which the Holder or the Issuer has exercised its right of Early Redemption prior to the Amendment Date, the applicable Valuation Date or Trading Day, the accrued Investor Fee will increase by an amount equal to (1) 0.75% per year times (2) the principal amount of the Holder’s Securities times (3) the Index Factor on that day (or, if such day is not a Trading Day, the Index Factor on the immediately preceding Trading Day) divided by (4) 365; and (iii) from the Amendment Date until and including the Final Valuation Date or, in the case of Securities with respect to which the Holder or the Issuer has exercised its right of Early Redemption after the Amendment Date, the applicable Valuation Date or Trading Day, the accrued Investor Fee will increase by an amount equal to (1) 0.70% per year times (2) the principal amount of the Holder’s Securities times (3) the Index Factor on that day (or, if such day is not a Trading Day, the Index Factor on the immediately preceding Trading Day) divided by (4) 365.

 

“Market Disruption Event” means, with respect to the Securities, in the opinion of the Calculation Agent and determined in its sole discretion:  (i) a material limitation, suspension or disruption in the trading of any Index Component which results in a failure by the trading facility on which the relevant contract is traded to report a daily contract reference price; (ii) the daily contract reference price for any Index Component has increased or decreased from the previous day’s daily contract reference price by the maximum amount permitted under the applicable rules or procedures of the relevant trading facility; (iii) S&P Dow Jones Indices LLC fails to publish the closing value of the Index or the applicable trading facility or other price source fails to announce or publish the daily contract reference price for one or more Index Components; (iv) any other event, if the Calculation Agent determines in its sole discretion that the event materially interferes with the ability of Barclays Bank PLC or the ability of any affiliates of Barclays Bank PLC to unwind all or a material

 

C-47

 

portion of a hedge with respect to the Securities that Barclays Bank PLC or any of its affiliates have effected or may effect.  The following events will not be Market Disruption Events: (a) a limitation on the hours or numbers of days of trading on a trading facility on which any Index Component is traded, but only if the limitation results from an announced change in the regular business hours of the relevant market; or (b) a decision by a trading facility to permanently discontinue trading in any Index Component.

 

“Maturity Date” means June 12, 2036, provided that if such date is not a Business Day, the Maturity Date will be the next succeeding Business Day; provided, however, that if the fifth Business Day preceding June 12, 2036 does not qualify as the Final Valuation Date referred to above, then the Maturity Date will be the fifth Business Day following the Final Valuation Date.

 

“Qualified Financial Institution” means, at any time, a financial institution organized under the laws of any jurisdiction in the United States of America or Europe that at such time has outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated A-1 or higher by Standard & Poor’s, a division of The McGraw Hill Companies, Inc. (or any successor) or P-1 or higher by Moody’s Investors Service, Inc. (or any successor) or, in either case, such other comparable rating, if any, then used by such rating agency.

 

“Redemption Date” means (a) in the case of Holder Redemption, the third Business Day following each Valuation Date (other than the Final Valuation Date, where the final Redemption Date will be the third Business Day following the Valuation Date that is immediately prior to the Final Valuation Date); or (b) in the case of Issuer Redemption, the date specified by the Company in the issuer redemption notice, which will in no event be prior to the tenth calendar day following the date on which the Company delivers such issuer redemption notice.

 

“Successor Index” means any substitute index approved by the Calculation Agent as a Successor Index pursuant to Section 3 hereof.

 

“Trading Day” means any day on which (i) the value of the Index is published by S&P Dow Jones Indices LLC; (ii) trading is generally conducted on the NYSE Arca Stock Exchange; and (iii) trading is generally conducted on the markets on which the Index Components are traded, in each case as determined by the Calculation Agent in its sole discretion.

 

“Valuation Date” means each Business Day from June 15, 2006 to June 5, 2036, inclusive, or if such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will any Valuation Date be postponed by more than five Trading Days.

 

C-48

 

1.                                      Promise to Pay at Maturity or Upon Early Redemption

 

Barclays Bank PLC, a public limited company duly organized and existing under the laws of England and Wales (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay (or cause to be paid) to Cede & Co., as nominee for The Depository Trust Company, or registered assigns, the amount as calculated and provided under (i) “Early Redemption” and elsewhere on the face this Security on the applicable Redemption Date, in the case of any Securities in respect of the which the Holder exercises such Holder’s right to require the Company to redeem such Holder’s Securities prior to the Maturity Date, or (ii) “Payment at Maturity” and elsewhere on the face of this Security on the Maturity Date, in the case of all other Securities.

 

2.                                      Payment of Interest

 

The principal of this Security shall not bear interest.  Any return on this Security may be deemed to be interest will in no event be higher than the maximum rate permitted by New York law, as it may be modified by U.S. law of general application.

 

3.                                      Discontinuance or Modification of the Index; Market Disruption Event

 

If S&P Dow Jones Indices LLC discontinues publication of the Index and S&P Dow Jones Indices LLC or any other Person or entity publishes an index that the Calculation Agent determines is comparable to the discontinued Index and approves as a Successor Index, then the Calculation Agent will determine the value of the Index on the applicable Valuation Date and the amount payable on the Maturity Date or any Redemption Date by reference to such Successor Index.

 

If the Calculation Agent determines that the publication of the Index is discontinued and that there is no Successor Index, or that the closing value of the Index is not available because of a Market Disruption Event or for any other reason, on any Valuation Date, or if for any other reason the Index is not available to the Company or the Calculation Agent on any Valuation Date, the Calculation Agent will determine the amount payable by a computation methodology that the Calculation Agent determines will as closely as reasonably possible replicate the Index.

 

If the Calculation Agent determines that the Index, the Index Components or the method of calculating the Index has been changed at any time in any respect, including, without limitation, any addition, deletion or substitution and any reweighting or rebalancing of Index Components, and whether the change is made by S&P Dow Jones Indices LLC under its existing policies or following a modification of those policies, is due to the publication of a Successor Index, is due to events affecting one or more of the Index Components, or is due to any other reason, then the Calculation Agent will be permitted (but shall not be required) to make such adjustments to the Index or method of calculating the Index as it believes are

 

C-49

 

appropriate to ensure that the value of the Index used to determine the amount payable on the Maturity Date or upon Early Redemption is equitable.

 

The Calculation Agent shall have the right to postpone a Valuation Date, and thus the determination of the value of the Index, if the Calculation Agent determines that, on such Valuation Date, a Market Disruption Event occurs or is continuing in respect of any Index Component.  If such a postponement occurs, the Calculation Agent shall determine the value of the Index Components unaffected by the Market Disruption Event by using the closing value of such Index Component or Index Components on the scheduled Valuation Date and shall determine the value of any affected Index Component by using the closing value of such Index Component on the first Trading Day after that day on which no Market Disruption Event occurs or is continuing with respect to such Index Component.  In no event, however, may the Calculation Agent postpone a Valuation Date by more than five Trading Days.

 

In the event that a Valuation Date is postponed until the fifth Trading Day following the scheduled Valuation Date, but a Market Disruption Event occurs and is continuing on such day, that day shall nevertheless be a Valuation Date, and the Calculation Agent shall determine the value of the Index on such day by a good faith estimate in its sole discretion of the value of the Index that would have prevailed in the absence of a Market Disruption Event.

 

The Calculation Agent shall have the right to make all determinations and adjustments with respect to the Index in its sole discretion.

 

4.                                      Payment at Maturity or Upon Early Redemption

 

The payment of this Security that becomes due and payable on the Maturity Date or on a Redemption Date, as the case may be, shall be the cash amount that must be paid to redeem this Security as provided above under “Payment at Maturity” and “Early Redemption”, respectively.  The payment of this Security that becomes due and payable upon acceleration of the Maturity Date hereof after an Event of Default has occurred pursuant to the Indenture shall be the Default Amount.  When the principal referred to in either of the two preceding sentences has been paid as provided herein (or such payment has been made available), the principal of this Security shall be deemed to have been paid in full, whether or not this Security shall have been surrendered for payment or cancellation.  References to the payment at maturity or upon early redemption of this Security on any day shall be deemed to mean the payment of cash that is payable on such day as provided in this Security.  Notwithstanding the foregoing, solely for the purpose of determining whether any consent, waiver, notice or other action to be given or taken by Holders of Securities pursuant to the Indenture has been given or taken by Holders of Outstanding Securities in the requisite aggregate principal amount, the principal amount of this Security will be deemed to equal the Face Amount.  This Security shall cease to be Outstanding as provided in the definition of such term in the Indenture when the principal of this Security shall be deemed to have been paid in full as provided above.

 

C-50

 

5.                                      Redemption Mechanics

 

 (a) Holder Redemption: Subject to the minimum Redemption Amount provided under “Holder Redemption”, the Holder may require the Company to redeem the Holder’s Securities on any Redemption Date during the term of the Securities provided that such Holder (i) delivers a notice of redemption to the Company via facsimile or email by no later than 4:00 p.m. New York time on the Business Day prior to the applicable Valuation Date; (ii) delivers a signed confirmation of redemption to the Company via facsimile or email by no later than 5:00 p.m. New York time on the same day; (iii) instructs the Holder’s DTC custodian to book a delivery versus payment trade with respect to the Holder’s Securities on the applicable Valuation Date at a price equal to the principal amount of the Holder’s Securities times the Index Factor on the applicable Valuation Date minus the Investor Fee on the applicable Valuation Date, facing Barclays DTC 5101; and (iv) causes the Holder’s DTC custodian to deliver the trade as booked for settlement via DTC prior to 10:00 a.m. New York time on the applicable Redemption Date, which shall be the third Business Day following the applicable Valuation Date (other than the Final Valuation Date).  The final Redemption Date shall be the third Business Day following such Valuation Date that is immediately prior to the Final Valuation Date.

 

(b) Issuer Redemption.  If the Company elects to exercise its right to redeem the Securities under “Issuer Redemption”, the Company will deliver written notice of such election to redeem to DTC and the Trustee not less than ten calendar days prior to the Redemption Date specified by the Company in such issuer redemption notice.  The Final Valuation Date will be deemed to be the third Trading Day prior to the Redemption Date (subject to postponement in the event of a Market Disruption Event), and the Securities will be redeemed on the Redemption Date specified by the Company in such issuer redemption notice, but in no event prior to the tenth calendar day following the date on which the Company delivers such issuer redemption notice. If the deemed Final Valuation Date referred to above is postponed and occurs less than two Business Days prior to the day that would otherwise be the Redemption Date, then the Redemption Date will be the second Business Day following the deemed Final Valuation Date as so postponed..

 

6.                                      Split or Reverse Split of the Securities

 

The initial principal amount on which a split or reverse split will be based will be as set out in the definition of Face Amount on the cover of this Security. On any Business Day, the Company may elect to initiate a split of the Securities or a reverse split of the Securities. Such date shall be deemed to be the “Announcement Date”, and the Company will issue a notice to holders of the relevant Securities and a press release announcing the split or reverse split, specifying the effective date of the split or reverse split and the split or reverse split ratio.

 

If the Securities undergo a split, the Company will adjust the terms of the Securities accordingly.  For example, if the split ratio is 4 and hence the Securities undergo a 4:1 split, every investor who holds one Security via DTC on the relevant record date will, after the split, hold four Securities, and adjustments will be made as described below.  The record date for the split will be the 9th Business Day after the

 

C-51

 

Announcement Date.  The principal amount of the Securities on such record date will be divided by 4 to reflect the 4:1 split of the Securities.  Any adjustment of the principal amount of the Securities will be rounded to 8 decimal places.  The split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

In the case of a reverse split, the Company reserves the right to address odd numbers of Securities (commonly referred to as “partials”) in a commercially reasonable manner determined by the Company in its sole discretion.  For example, if the reverse split ratio is 4 and the Securities undergo a 1:4 reverse split, every Holder holding 4 Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and adjustments will be made as described below.  The record date for the reverse split will be on the 9th Business Day after the Announcement Date.  The principal amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split of the Securities.  Any adjustment of the principal amount of the Securities will be rounded to 8 decimal places. The reverse split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

Holders who own a number of Securities on the record date which is not evenly divisible by the split ratio will receive the same treatment as all other holders for the maximum number of Securities they hold which is evenly divisible by the split ratio, and the Company will have the right to compensate holders for their remaining or “partial” Securities in a commercially reasonable manner determined by the Company in its sole discretion. The Company’s current intention is to provide a Holder with a cash payment for such Holder’s partials on the 17th Business Day following the Announcement Date in an amount equal to the appropriate percentage of the principal amount of the reverse split- adjusted Securities on the 14th Business Day following the Announcement Date times the Index Factor on the applicable Business Day minus the Investor Fee on the applicable Business Day.  For example, if the reverse split ratio is 1:4, a Holder who held 23 Securities via DTC on the record date would receive 5 post reverse split Securities on the immediately following Business Day, and a cash payment on the 17th Business Day following the Announcement Date that is equal to 3/4ths of the principal amount of the reverse split-adjusted Securities on the 14th Business Day following the Announcement Date times the Index Factor on the applicable Business Day minus the Investor Fee on the applicable Business Day.

 

In the event of a reverse split, the Redemption Amount will be adjusted accordingly by the Company, in its sole discretion and in a commercially reasonable manner, to take into account the reverse split.

 

7.                                      Role of Calculation Agent

 

The Calculation Agent will be solely responsible for all determinations and calculations regarding the value of the Securities, including at maturity or upon early redemption; Market Disruption Events; Business Days; Trading Days; the Investor Fee; the Default Amount; the closing value of the Index on the Inception Date and on any Valuation Date; the Maturity Date; Redemption Dates; the amount payable on the Securities and all such other matters as may be specified elsewhere

 

C-52

 

herein as matters to be determined by the Calculation Agent. The Calculation Agent shall make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Calculation Agent shall be final and binding on the Company, the Holder and all other Persons having an interest in this Security, without liability on the part of the Calculation Agent.

 

The Company shall take such action as shall be necessary to ensure that there is, at all relevant times, a financial institution serving as the Calculation Agent hereunder.  The Company may, in its sole discretion at any time and from time to time, upon written notice to the Trustee, but without notice to the Holder of this Security, terminate the appointment of any Person serving as the Calculation Agent and appoint another Person (including any Affiliate of the Company) to serve as the Calculation Agent.  Insofar as this Security provides for the Calculation Agent to determine the value of the Index on any date or other information from any institution or other source, the Calculation Agent may do so from any source or sources of the kind contemplated or otherwise permitted hereby notwithstanding that any one or more of such sources are the Calculation Agent, Affiliates of the Calculation Agent or Affiliates of the Company.

 

8.                                      Default Amount

 

If any Event of Default occurs and the maturity of this Security is accelerated, the Default Amount will be payable in respect of this Security at maturity.

 

9.                                      Payment

 

Payment of any amount payable on this Security 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.  Payment will be made to an account designated by the Holder (in writing to the Company and the Trustee on or before the applicable Valuation Date) and acceptable to the Company or, if no such account is designated and acceptable as aforesaid, at the office or agency of the Company maintained for that purpose in The City of New York, provided, however, that payment on the Maturity Date or any Redemption Date shall be made only upon surrender of this Security at such office or agency (unless the Company waives surrender).  Notwithstanding the foregoing, if this Security is a Global Security, any payment may be made pursuant to the Applicable Procedures of the Depositary as permitted in said Indenture.

 

10.                               Reverse of this Security

 

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

 

11.                               Certificate of Authentication

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall

 

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not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

12.                               Prospectus

 

Reference is made to (i) the Prospectus related to the Securities dated July 19, 2013, (ii) the Prospectus Supplement, dated July 19, 2013, (iii) the Pricing Supplement, dated March 25, 2015, as amended on April 30, 2015 (together, the “Prospectus”).  The terms and conditions of this Security as fully set forth in the Prospectus are hereby incorporated by reference in their entirety into this Security and binding upon the parties hereto.  In the event of a conflict between the terms of the Prospectus and the terms of this Security, the Prospectus will control and if the Prospectus provides for a specific United States tax characterization, by purchasing a Security, you agree (in the absence of a change in law, an administrative determination or a judicial ruling to the contrary) to be bound for United States federal income tax purposes to such tax characterization.  Copies of the Prospectus are available from the Company or any underwriter or any dealer participating in the offering by calling toll free, 1-888-227-2275 (extension 2-3430).

 

C-54

 

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

 

	
 
    	
BARCLAYS BANK   PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

This is one of the Securities of the series designated herein and referred to in the Indenture.

 

Dated:

 

	
 
    	
THE BANK OF NEW   YORK MELLON
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

C-55

 

(Reverse of Security)

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”) issued and to be issued in one or more series under an Indenture, dated as of September 16, 2004 (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  Insofar as the provisions of the Indenture may conflict with the provisions set forth on the face of this Security, the latter shall control for purposes of this Security.

 

This Security is one of the series designated on the face hereof.  References herein to “this series” mean the series designated on the face hereof.

 

Payments under the Securities will be made without deduction or withholding for, or on account of, any and all present or future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”) now or hereafter 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 (each a “Taxing Jurisdiction”), unless such deduction or withholding is required by law.  If any such Taxes are at any time required by a Taxing Jurisdiction to be deducted or withheld, the Company will, subject to the exceptions and limitations set forth in Section 10.04 of the Indenture, pay such additional amounts of the principal of such Security and any other amounts payable on such Security (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holder of any Security, after such deduction or withholding, shall equal the amounts of the principal of such Security and any other amounts payable on such Security which would have been payable in respect of such Security had no such deduction or withholding been required.

 

If at any time the Company determines that as a result of a change in or amendment to the laws or regulations of a Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or a change in an official application or interpretation of such laws or regulations (including a decision of any court or tribunal), either generally or in relation to any particular Securities, which change, amendment, application or interpretation becomes effective on or after the Original Issue Date in making any payment of, or in respect of, the principal amount of the Securities, the Company would be required to pay any Additional Amounts with respect thereto, then the Securities will be redeemable upon not less than 35 nor more than 60 days’ notice by mail, at any time thereafter, in whole but not in part, at the election of the Company as provided in the Indenture at a redemption price equal to the principal amount thereof.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture

 

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at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected (considered together as one class for this purpose).  The Indenture also contains provisions (i) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in aggregate principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof on or after the respective due dates expressed herein.

 

C-57

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Security as herein provided.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Senior Debt Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of this Security is payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Senior Debt Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing.  Thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

This Security, and any other Securities of this series and of like tenor, are issuable only in registered form without coupons in denominations of any multiple of $50.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security 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 Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

This Security and the Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

C-58exhibit_4-13.htm

Exhibit 4.13

SECURITIES PURCHASE AGREEMENT

           THIS SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of July 9, 2014, is made between Elbit Vision Systems Ltd., a company organized under the laws of Israel, with headquarters located at 7 Bareket Street, P.O.B. 3047, Industrial Park, Caesarea, Israel 38900, Israel (the "Company"), and SMD Advanced Technologies Ltd., a company incorporated under the laws of the State of Israel, company number 51-107614-3 of P.O. Box 13303 Tel-Aviv 611320, Israel (the "Buyer").

WHEREAS:

A. The Company and the Buyer are executing and delivering this Agreement in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the "1933 Act") as promulgated by the United States Securities and Exchange Commission (the "SEC").

B. Subject to the terms set forth herein, the Buyer wishes to purchase, and the Company wishes to: (i) sell, upon the terms and conditions stated in this Agreement, an aggregate amount of 4,166,667 ordinary shares of the Company, par value NIS 1.0 ("Ordinary Shares") for $250,000 in three installments as set forth in Schedule 1 (the "Purchased Shares"); (ii) issue a certain warrant (the “First Warrant”) to purchase 1,250,000 Ordinary Shares with a value of $100,000 (the “First Warrant Shares”); (iii) issue an additional warrant (the "Second Warrant") to purchase 416,667 Ordinary Shares with a value of $33,333.36 (the “Second Warrant Shares”); and (iv) issue a third warrant (the "Third Warrant" and together with the Second and First Warrants, the "Warrants ") to purchase 416,667 Ordinary Shares with a value of $33,333.36 (the “Third Warrant Shares” and together with the Second and First Warrant Shares, the "Warrant Shares"); in substantially the form attached hereto as Exhibit A.

C. The parties hereto have agreed that the purchase contemplated herein shall be made in installments contingent on the achievement by the company of certain milestones, as set forth in Schedule 2 attached hereto (the "Milestones Schedule"); and

D. The Purchased Shares and the Warrants, collectively are referred to herein as the "SECURITIES".

NOW, THEREFORE, the Company and the Buyer hereby agree as follows:

 

1.           PURCHASE AND SALE OF PURCHASED SHARES AND WARRANTS.

a. INITIAL CLOSING. Upon the date hereof (the "Initial Closing"), (i) the Company shall issue and sell to the Buyer, and the Buyer agrees to purchase from the Company such number of Purchased Shares and at such agreed price as set forth opposite to the row entitled "Initial Closing", in Schedule 1, and (ii) the Company shall grant the Buyer the First Warrant.

  

  

  

b. SECOND CLOSING. Upon completion of the Second Milestone as set forth in Schedule 2, at the Second Closing (i) the Company shall issue and sell to the Buyer, and the Buyer agrees to purchase from the Company such number of Purchased Shares and at such agreed price as set forth opposite to the row entitled "Second Closing", in Schedule 1, and (ii) the Company shall grant the Buyer the Second Warrant.

 

c. THIRD CLOSING. Upon completion of the Third Milestone as set forth in Schedule 2, at the Third Closing (i) the Company shall issue and sell to the Buyer, and the Buyer agrees to purchase from the Company such number of Purchased Shares and at such agreed price as set forth opposite to the row entitled "Third Closing", in Schedule 1, and (ii) the Company shall grant the Buyer the Third Warrant.

d. PURCHASE PRICE. The purchase price for the Buyer (the "Purchase Price") of the Purchased Shares to be purchased by the Buyer shall be equal to six ($0.06) Cents for each Purchased Share being purchased by the Buyer for an aggregate consideration of $250,000. Subject to any adjustments under Section 2 of the Warrants, the exercise price of the Warrants Shares shall be equal to eight ($0.08) Cents for each Warrant Share exercised, as provided in the Warrants Agreement.

e. MILESTONES. In the event that the Company shall meet the Second Milestone and/or the Third Milestone on or prior to the Second Milestone Due Date or the Third Milestone Due Date, respectively, as set forth in Schedule 2, the Company shall immediately furnish the Buyer with written notice that (i) the respective Milestone was met (specifically noting the date on which the Milestone was met), supported by appropriate written evidence acceptable to the Buyer, and (ii) since the Initial Closing there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect (as defined below) (the "Milestone Notice"). Following receipt of the Milestone Notice, subject to the terms and conditions herein, Buyer shall be required to pay to the Company, within 30 (thirty) days of such date, the balance of the amount for investment set forth opposite to the row entitled "Second Closing" and/or "Third Closing", as applicable, in Schedule 1, and the transactions occurring on such date shall be referred to as a "Second Closing" and/or "Third Closing", as applicable. Notwithstanding anything to the contrary, in the event that the Company shall not meet the Second Milestone and/or the Third Milestone on or prior to the Second Milestone Due Date or the Third Milestone Due Date, respectively, the Buyer shall not be obligated to invest the applicable Purchase Price, but rather, until the end of 30 (thirty) days after the respective Milestone Due Date, the Buyer shall have the right, at its sole discretion, to purchase up to any portion of the Purchased Shares set forth opposite to the row entitled "Second Closing" and/or "Third Closing", as applicable, in Schedule 1 and simultaneously the Buyer shall be granted the respective proportionate amount of the Second Warrant and/or the Third Warrant, as applicable, and the transactions occurring on such date shall also be referred to as a "Second Closing" and/or "Third Closing", as applicable. Notwithstanding anything to the contrary, at any time as of the date hereof and prior the end of 30 (thirty) days after the Second Milestone Due Date or the Third Milestone Due Date, respectively, as set forth in Schedule 2, the Buyer shall have the right, at its sole discretion, to purchase up to any portion of the Purchased Shares set forth opposite to the row entitled "Second Closing" and/or "Third Closing", as applicable, in Schedule 1 and simultaneously the Buyer shall be granted the respective proportionate amount of the Second Warrant and/or the Third Warrant, as applicable, and the transactions occurring on such date shall also be referred to as a "Second Closing" and/or "Third Closing", as applicable.

  

  

  

 

2.           BUYER'S REPRESENTATIONS AND WARRANTIES.

The Buyer represents and warrants with respect to only itself that:

a. NO PUBLIC SALE OR DISTRIBUTION; PRIOR SALES. The Buyer is (i) acquiring the Purchased Shares and the Warrants, and (ii) upon exercise of the Warrants, will acquire the Warrant Shares issuable upon exercise thereof, as the case may be, in the ordinary course of business for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempt under the 1933 Act and has no agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities; PROVIDED, HOWEVER, that by making the representations herein,  the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time provided that such disposition is in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

b. ACCREDITED INVESTOR STATUS. The Buyer is an “accredited investor” within the meaning of Rule 501(a) under the 1933 Act;

c. RELIANCE ON EXEMPTIONS. No prospectus or offering memorandum has been delivered to the Buyer in connection with the purchase of Securities. The Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

d. INFORMATION. The Buyer and its advisors, if any, have been furnished with materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities that have been requested for deciding whether to acquire the Ordinary Shares. The Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company and have received, to their satisfaction, answers to such questions. Neither such inquiries nor any other investigations conducted by the Buyer or its advisors, if any, or its representatives shall modify, amend or affect the Buyer's right to rely on the Company's representations and warranties contained herein.

  

  

  

 

e. NO SOLICITATION OR ADVERTISING. The Buyer acknowledges that it has not purchased the Securities as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or, meeting whose attendees have been invited by general solicitation or general advertising;

f. The Buyer understands that the market price of the Company’s Ordinary Shares is volatile and that no representation is being made as to the future value of the Company’s Ordinary Shares. The Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities and is able to afford a complete loss of such investment.

g. NO GOVERNMENTAL REVIEW. The Buyer understands that no Israeli or United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

h. TRANSFER OR RESALE. The Buyer understands that: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and subsequent offers and sales of the Securities shall be made only (A) to the Company or a subsidiary thereof, (B) pursuant to a registration statement which has been declared effective under the 1933 Act, (C) outside the United States in a transaction meeting the requirements of Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations of the jurisdiction in which such sale is made , as applicable, or (D) pursuant to any other available exemption from the registration requirements of the 1933 Act; and (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder. The Buyer acknowledges that prior to registration, the Company shall require, prior to any offer, sale or other transfer of the Securities, the delivery of an opinion of counsel, in generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred only pursuant to an exemption from registration under the 1933 Act.

i. LEGENDS. The Buyer understands and acknowledges that upon the original issuance of the Purchased Shares and Warrant Shares, and until no longer required under the 1933 Act or applicable state securities laws, the certificates representing the Purchased Shares and Warrant Shares will bear the following legend:

  

  

  

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”).  THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION AFTER PROVIDING A SATISFACTORY LEGAL OPINION TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.

and that any certificate representing securities issued in exchange therefor or in substitution thereof will bear the same legend until, as provided by an opinion of counsel, such legend is no longer required under the 1933 Act. The Warrants shall bear the legend in the form attached to each warrant attached hereto.

j. VALIDITY; ENFORCEMENT. The Transaction Documents have been executed and delivered by the Buyer and when delivered in accordance with the terms hereof assuming valid execution by the other parties thereto, shall constitute the legal, valid and binding obligations of the Buyer enforceable against the Buyer in accordance with their respective terms, except (i) as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies, or (ii) as any rights to indemnity or contribution hereunder may be limited by federal and state securities laws and public policy consideration.

k. RESIDENCY. The Buyer is a resident of Israel.

 

3.             REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Buyer as of the date hereof that:

a. ORGANIZATION; GOOD STANDING; POWER; etc. The Company is duly organized and validly existing under the laws of the State of Israel. The Company has the requisite power and authority to execute, deliver and perform this Agreement and the other Transaction Documents and to consummate the transactions contemplated hereby and thereon. The execution, delivery and performance by the Company of this Agreement and consummation of the transactions contemplated hereby and thereon have been duly authorized by all necessary corporate actions of the Company.  Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof assuming valid execution by the other parties thereto, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application as applied by a competent court of law.  Each of the Purchased Shares and Warrant Shares, when issued to the Buyer according to the Transaction Documents will (i) be duly authorized, validly issued, fully paid, and non-assessable, and free and clear of liens, security interests, pledges, charges and encumbrances ("Liens") other than those Liens created by or disclosed in writing prior to the date hereof to the Buyer; (ii) have the rights, preferences, privileges, and restrictions set forth in the Articles of Association of the Company, attached hereto as Exhibit B (the “Articles”); (iii) will be free and clear of any encumbrance and of restrictions on transfer other than restrictions on transfer under applicable securities laws as detailed herein, or as set forth in the Articles; (iv) will be duly registered in the name of the Buyer in the Company’s shareholders register. No securities of the Company are entitled to preemptive or similar rights, and no third party has any right of first refusal, preemptive right, right of participation, or any similar right to participate in all or any of the transactions contemplated by the Transaction Documents.

  

  

  

 

b. CAPITALIZATION. The authorized capitalization of EVS on the date hereof is NIS 120,000,000 divided into 120,000,000 Ordinary Shares, par value NIS 1.00 each.  As of the date hereof, 80,798,290 Ordinary Shares are outstanding. Schedule 3(b) sets forth a capitalization table reflecting the issued and outstanding share capital of the Company on a fully diluted basis and on an as converted basis, and any and all right and option to acquire any securities of the Company, immediately prior and immediately following the Initial Closing, Second Closing (pro forma) and Third Closing (pro forma). The Company has reserved from its duly authorized share capital Ordinary Shares issuable pursuant to this Agreement, the Warrants in order to issue the Shares and Warrant Shares.

c. DOCUMENTS. The Company has filed all reports required to be filed by it under the 1933 Act and the Securities Exchange Act of 1934, as amended (the "1934 Act"), including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof. As of its date and as of the date hereof (except as any information in such report may have been superseded by subsequent reports filed or furnished to the SEC), the Company’s annual report on Form 20-F for the year ended December 31, 2013 complied in all material respects with the requirements of the 1933 Act and the 1934 Act and the rules and regulations of the Commission promulgated thereunder. The Form 20-F, together with all other reports filed or furnished to the SEC under the 1934 Act are hereinafter referred to as the “Public Documents”.

d. FINANCIAL STATEMENTS. The audited consolidated financial statements (the “Financial Statements”) of the Company for the year ended December 31, 2012 (i) were prepared in accordance with generally accepted accounting standards in the United States consistently applied throughout the periods involved, (ii) comply in all material respects with applicable accounting requirements and the published rules and regulations of the SEC, and (iii) fairly present, in all material respects, the consolidated financial condition, results of operations, cash flows and changes in shareholders’ equity of the Company and its subsidiaries at the dates and for the periods presented.

  

  

  

 

e. MATERIAL CHANGES. Since the report of the independent registered public accounting firm to the Board of Directors and Shareholders of the Company, dated April 29, 2013, there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect. “Material Adverse Effect” means a material and adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company, or on its ability to execute or perform any transaction or act contemplated under the Transaction Documents.

f. FILINGS, CONSENTS AND APPROVALS. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) the filing with the United States Securities and Exchange Commission (the "Commission") of the Registration Statement in accordance with the requirements of the Registration Rights Agreement and (ii) those that have been made or obtained prior to the date of this Agreement, including the consent of Bank Hapoalim BM and Bank Leumi Le-Israel Ltd, which are attached hereto as Exhibit C The execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby will not result in (i) any violation of, be in conflict with or constitute, with or without the passage of time or giving of notice, a material default under any provision of the Articles, or of any contract, order, license or permit to which the Company is a party or by which it or any of its property is bound, or applicable to the Company, its assets or its business; (ii) the creation of any encumbrance upon any assets of the Company; (iii) the suspension, revocation, impairment, forfeiture, or non-renewal of any permit, license, authorization, or approval applicable to the Company, its business or operations or any of its assets; or (iv) discontinuation of, or changes in the terms of, any business activity in which the Company is currently engaged or which it proposes to be engaged in.

g. COMPLIANCE WITH SECURITIES LAWS. The Securities have been offered in compliance with all applicable securities laws, including, without limitation, the Israeli Securities Law, 1968.

h. NO SOLICITATION OR ADVERTISING. No form of general solicitation or general advertising (as those terms are used in Regulation D) was  used by the Company, its affiliates or persons acting on behalf of any of them, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television or any seminar or meeting whose attendees had been invited by general solicitation or general advertising, in connection with the offer or sale of the Securities in the United States.

  

  

  

 

i. LITIGATION. Except as specified in the Public Documents or otherwise disclosed to the Buyer in writing prior to the date hereof, no litigation, arbitration or administrative proceedings are current or, to its knowledge, pending or threatened against the Company.

 

j. INTELLECTUAL PROPERTY. Except as set forth in Schedule 3(j) hereto, the Company owns, has developed, or has obtained the right to use free and clear of all liens and obligations (i) all Intellectual Property, including any Intellectual Property that resulted from or arose out of any work performed by or on behalf of the Company or by any employee, officer, consultant or contractor of the Company; (ii) there are no actions against the Company that are currently pending, or to the best knowledge of the Company, threatened by any third party contesting the validity, enforceability, use or ownership, or involving infringement, unauthorized use, of any Intellectual Property in any jurisdiction.  To the best knowledge of the Company, there are no facts or circumstances that would form the basis for any such action; (iii) to the best knowledge of the Company, the Company’s ownership, use, or otherwise commercial exploitation of the Intellectual Property does not constitute an unauthorized use, infringement or misappropriation of any patent, copyright, trade secret or other similar right, of any person (including pursuant to any non-disclosure agreements or obligations to which the Company or any of its present or former employees is a party); (iv) the Intellectual Property includes all of the intellectual property rights necessary to enable the Company to conduct its business in the manner in which it is currently being conducted and as currently proposed to be conducted; and (v) to the best knowledge of the Company, no person is infringing, violating, misusing or misappropriating any Intellectual Property, and no such claims have been made against any person by the Company, in any jurisdiction; “Intellectual Property” means any invention (whether or not patentable), patent or patent application for an invention (together with all reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof), identifying mark in which a party asserts trademark rights (whether registered or unregistered and whether or not relating to a published work), registration or pending application for registration of a trademark, name used as a trade name, name used as a fictitious business name, service mark (whether registered or unregistered), registration or pending application for registration of a service mark, goodwill, any work with respect to which a person asserts copyright rights (whether registered or unregistered), registration or pending application for copyright registration of a work (including any renewals thereof), any work with respect to which a person asserts maskwork protection, application for registration of a maskwork, domain name registration, information used by a person in connection with its business (including confidential business information, pricing and cost information, business and marketing plans and customer and supplier lists and information), any information of a person that it holds in confidence as a trade secret, any information of a person that it holds as proprietary know how, drawings, schematic drawings, methods, process engineering, secret processes and generic proprietary business assets commonly described using terms such as franchise, system, computer software, license to software or any other intellectual property or proprietary right, invention, design, blueprint, proprietary product, technology, proprietary right or other intellectual property right or intangible asset.

  

  

  

 

k. RELATED PARTY TRANSACTIONS. Except as disclosed in the Public Documents, the Company is not indebted, directly or indirectly, to any of its Major Shareholders, directors, officers, employees or to the knowledge of the Company their respective immediate families or to any affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred in the ordinary course of business and for other customary employee benefits made generally available to all employees. Except as disclosed in the Public Documents, none of the Company’s Major Shareholders, directors, officers, employees or to the knowledge of the Company any members of their immediate families, or any affiliate of the foregoing are, directly or indirectly, indebted to the Company or any of its subsidiaries, or have, either directly or indirectly, any (i) material commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship with the Company or any of its subsidiaries, or any of the Company’s customers, suppliers, service providers, joint venture partners, licenses or competitors that are required to be disclosed  under the reporting rules of any exchange on which the Company is traded, the laws or regulations of its jurisdiction of incorporation or the United States securities laws or rules or regulations thereunder; or (ii) financial interest in any material contract or arrangement to which the Company is a party or by which it may be bound. A "Major Shareholder" is a person or entity holding at least five percent (5%) of the Company's fully-diluted share capital as of the date of this Agreement.

l. OWNERSHIP OF TANGIBLE ASSETS. Except as disclosed in Schedule 3(l), the Company has good title to its tangible properties and assets.  With respect to the real property and tangible assets it leases, the Company is in material compliance with such leases and holds a valid leasehold interest free of any encumbrance of such leasehold interest. No tangible asset owned by the Company is shared by the Company with any other person.

m. TAX RETURNS. Other than the tax return for the year ended December 31, 2013, the Company has filed any and all tax returns and reports as required under applicable law and has paid any and all taxes and other assessments due (whether income tax, capital gains tax, or otherwise), if any. Each such return or report was true and complete in all material respects when filed. The Company has not made any elections under applicable laws or regulations (other than elections that related solely to methods of accounting, depreciation or amortization) that would have a Material Adverse Effect. The Company has not incurred any taxes, assessments or governmental charges other than in the ordinary course of business and the Company has made adequate provisions on its books of account for all taxes, assessments and governmental charges with respect to its business, properties and operations for such period. The Company has withheld or collected from each payment made to each of its employees, the amount of all taxes required to be withheld or collected therefrom, and has paid the same to the proper tax receiving officers or authorized depositories. There are no applicable taxes, fees or governmental charges payable by the Company in connection with the execution and delivery of the Transaction Documents and the consummation of the transactions contemplated thereunder.

  

  

  

 

n. EMPLOYEES. The Company is in compliance with all employment practices regarding minimum wages, payment of social benefits, work permits, health and safety, discrimination, and other laws which may be required in any jurisdiction in which the Company conducts business.

o. INSURANCE. All insurable assets and activities of the Company have been insured as is customary in the industry and pursuant to policies with terms customary in the industry in which the Company operates. No insurance company has ever denied coverage to the Company and its business. There is no claim by the Company pending under any of such policies. All premiums due under such policies have been paid and the Company is otherwise in compliance in all material respects with the terms and conditions of all such policies. Such policies are in full force and effect. The Company has not undertaken any action, or omitted to take any action, which could render any such insurance policy void or voidable or which would result in a material increase in the premium for any such insurance policy.

p. UNDERTAKINGS TO BANKS. The Company has been, and is in compliance with, and has not been and is not in any default or breach of any of its obligations under any of its agreements with any banks and other financial institutions.

q. REPORTS TO PUBLIC EXCHANGE. Notwithstanding anything herein to the contrary, information disclosed by the Company to the public by way of EDGAR, the SEC’s filing site, shall be deemed for all purposes of this Agreement as having been disclosed to the Buyer and included in the representations and warranties contained in this Section 2.

4.           CLOSING

a. At the Initial Closing the following actions shall take place immediately prior to or simultaneously upon the execution of this Agreement, and all such actions shall be deemed to take place simultaneously in accordance with their respective terms and none of which shall be deemed to have been completed until all such actions have been completed:

	
  

	
(i)

	
The Buyer shall execute each of the Transaction Documents and deliver the same to the Company.

	
  

	
(ii)

	
The Company shall execute and deliver to the Buyer (i) each of the Transaction Documents and (ii) the Initial Purchased Shares and (iii) the First Warrant being purchased by the Buyer pursuant to this Agreement.

  

  

  

 

	
  

	
(iii)

	
The Company shall deliver to the Buyer true and correct copies of resolutions of the Company's board of directors (i) issuing and selling to the Buyer the Purchased Shares and Warrants against payment of the Purchase Price pursuant to the installments detailed in Schedule 1, (ii) reserving for issuance up to 2,083,334 Ordinary Shares for the purpose of issuing the Warrant Shares in accordance with their terms in the Warrants;

	
  

	
(iv)

	
The Buyer shall deliver to the Company the Purchase Price (i.e. $150,000) for the Purchased Shares and First Warrant being purchased at the Initial Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

	
  

	
(v)

	
The Company shall deliver to the Buyer an undertaking of the Company and Messrs. Sam Cohen and Yaron Menashe with respect to the repayment of their loans to the Company in a form attached hereto as Exhibit D.

	
  

	
(vi)

	
A copy of the Company’s updated register of shareholders of the Company reflecting the issuance of 2,500,000 Purchased Shares shall be delivered to the Buyer.

 

b. At the Second Closing the following actions shall take place immediately and all such actions shall be deemed to take place simultaneously in accordance with their respective terms and none of which shall be deemed to have been completed until all such actions have been completed:

	
  

	
(i)

	
Deliver to the Buyer the Second Purchased Shares and the Second Warrant being purchased by the Buyer pursuant to this Agreement.

	
  

	
(ii)

	
The Buyer shall deliver to the Company the Purchase Price (i.e. $50,000) for the Purchased Shares and Second Warrant being purchased at the Second Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

	
  

	
(iii)

	
A copy of the Company’s updated register of shareholders of the Company reflecting the issuance of 833,333 Purchased Shares shall be delivered to the Buyer.

  

  

  

 

c. At the Third Closing the following actions shall take place immediately, and all such actions shall be deemed to take place simultaneously in accordance with their respective terms and none of which shall be deemed to have been completed until all such actions have been completed:

	
  

	
(i)

	
Deliver to the Buyer the Third Purchased Shares and the Third Warrant Shares being purchased by the Buyer pursuant to this Agreement.

	
  

	
(ii)

	
The Buyer shall deliver to the Company the Purchase Price (i.e. $50,000) for the Purchased Shares and Third Warrant being purchased at the Third Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.

	
  

	
(iii)

	
A copy of the Company’s updated register of shareholders of the Company reflecting the issuance of 833,333 Purchased Shares shall be delivered to the Buyer.

5.           OMITTED

6.           COVENANTS.

 

	
  

	
(i)

	
The majority of the proceeds from the issuance and sale of the Purchased Shares and Warrant Shares shall be utilized for the expansion of the Company’s marketing and development efforts of the Company's I-BAR product.

	
  

	
(ii)

	
The Company shall convert a portion of its share premium into share capital in compliance with Section 304 of the Companies Law, 1999 share capital.

	
  

	
(iii)

	
The Buyer shall have the right, exercisable by written notice to the Company, to appoint a non-voting observer to the Board of Directors of the Company for as long as the Buyer holds at least 5% of the issued and outstanding shares of the Company; and provided only that the observer shall be at no cost to the Company.

7.           MISCELLANEOUS.

a. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Israel, without giving effect to any statutes concerning choice or conflict of law (whether of the State of Israel or any other jurisdiction) that would cause the application of the laws of any jurisdiction other that the State of Israel. Any controversy or claim arising out of or in connection with this agreement or any breach or alleged breach hereof shall be exclusively resolved by the competent courts of Tel Aviv, Israel, and each of the parties hereby irrevocably submits to the exclusive jurisdiction of such courts.

b. COUNTERPARTS. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

  

  

  

 

c. HEADINGS. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

d. SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

e. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together with the other Transaction Documents, supersedes all other prior oral or written agreements between the Buyer, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Buyer. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.

f. NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) two business days in Israel after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

Elbit Vision Systems Ltd.

7 Bareket Street, P.O.B. 3047

Industrial Park, Caesarea

Israel 3088900

Telephone: + (972)-4-610-7609

 Fax: + (972)-4-610-7619

  

  

  

 

With a copy to (which shall not constitute notice):

Yigal Arnon & Co.

One Azrieli Center, Round Tower, Tel Aviv, Israel

Telephone: + (972)-3-608-7864

 Facsimile: + (972)-3-608-7714

Attention: Adrian Daniels, Adv.

If to the Buyer:

SMD Advanced Technologies Ltd.

P.O. Box 13303

Tel-Aviv 611320

Israel

Telephone: + (972)-72-2211-691

Email: yk@bykoou.com

With a copy to (which shall not constitute notice):

Shenhav & Co., Advocates & Notary

Or Towers, Building B, 11 Floor

4 Ha’nechoshet St.

Tel Aviv 69710

Attention: Amir Raz, Adv.

Fax: +972-3-6110788

E-mail: amir@shenhavlaw.co.il

A party’s address and facsimile number set forth above may be changed provided that such change is specified by written notice given to the other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

g. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors. Subject to the relevant securities laws, the Buyer may assign its rights hereunder without the consent of the Company provided that any assignee shall agree in writing to become subject to the terms of this Agreement and the other Transaction Documents. Notwithstanding the previous sentence, the right to appoint an Observer (as provided in the Observer Letter) shall not be assignable and shall terminate upon the assignment of this Agreement.

h. NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

  

  

  

 

i. FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

j. NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

[SIGNATURE PAGE FOLLOWS]

 

  

  

  

 

IN WITNESS WHEREOF, the Buyer and the Company have caused this Securities Purchase Agreement to be duly executed as of the date first written above.

COMPANY:

Elbit Vision Systems Ltd.

By:  ___________________

Name:

Title:

 

BUYER:

SMD Advanced Technologies Ltd.

By:  ___________________

Name:

Title:

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