Document:

Unassociated Document

    AMENDMENT AND WAIVER
AGREEMENT

     

    This
Amendment and Waiver Agreement (the “Agreement”)
is made and entered into as of July 13th, 2010
(the “Effective
Date”), by and among China Architectural Engineering, Inc., a Delaware
corporation (the “Company”); The Royal Bank of Scotland N.V., London Branch
(formerly ABN AMRO Bank N.V., London Branch) (“RBS
N.V.”); CITIC Capital China
Mezzanine Fund Limited (formerly known as “CITIC Allco Investments Limited.”)
(“CITIC,”
and together with RBS N.V., the “Bondholders”); The Royal Bank of Scotland (China) Co. Ltd.
Shenzhen Branch (formerly ABN AMRO Bank (China) Co., Ltd., Shenzhen Branch) (the
“Overdraft
Lender” and together with RBS N.V. and CITIC, the “Creditors”); Mr. Ken Luo, an individual; Mr. Jun Tang, an
individual; KGE Group Limited, a company
organized under the laws of Hong Kong (“KGE
Group”); and First Jet Investments Limited, a company organized under the laws
of the British Virgin Islands (“First
Jet”).

     

    Recitals

     

    WHEREAS,
on April 12, 2007, the Company sold and issued to RBS N.V. US $10,000,000
Variable Rate Convertible Bonds due 2012 (the “2007
Bonds”) and warrants to purchase 800,000 shares of common stock of the
Company expiring 2010 (the “2007
Warrants”);

     

    WHEREAS,
the 2007 Bonds were issued pursuant to a trust deed dated April 12, 2007, as
amended and restated on August 29, 2007 (the “2007 Trust
Deed”), entered into by and between the Company and The Bank of New York,
London Branch (the “Trustee”);

     

    WHEREAS,
the 2007 Warrants have been fully exercised pursuant to the terms of the 2007
Warrants and are no longer outstanding;

     

    WHEREAS,
on April 15, 2008, the Company issued to the Bondholders an aggregate amount of
US$20,000,000 12% Convertible Bonds due 2011 (the “2008
Bonds,” and together with the 2007 Bonds, the “Bonds”)
and 300,000 warrants to purchase 300,000 shares of common stock of the Company
expiring 2013 (the “2008
Warrants”);

     

    WHEREAS,
the 2008 Bonds were issued pursuant to a trust deed dated April 15, 2008, as
amended and restated on September 29, 2008, as may be amended from time to time
(the “2008
Trust Deed,” and together with the 2007 Trust Deed, the “Trust
Deeds”), entered into by and between the Company and the
Trustee;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    WHEREAS,
the 2008 Warrants, none of which have been exercised as of the date of this
Agreement, were issued pursuant to a Warrant Instrument dated April 15, 2008
(the “2008
Warrant Instrument”) entered into by and between the Bondholders and the
Company;

     

    WHEREAS,
the 2007 Trust Deed and 2008 Trust Deed each provide that the then-current
conversion price of the respective Bonds shall be adjusted downward upon certain
triggering events, including upon the issuance by the Company of shares of the
Company’s common stock, $0.001 par value per share (“Shares”)
for consideration per Share that is less
than the then-current conversion price of the respective Bonds, as determined
pursuant to the terms and conditions of the Trust Deeds;

     

    WHEREAS,
paragraph 8.1(e) of the 2008 Warrant Instrument provides that the occurrence of
an adjustment to the conversion price of the 2008 Bonds shall result in an
identical adjustment to the exercise price of the 2008 Warrants;

     

    WHEREAS,
the Company has agreed to provide a guarantee over an Overdraft Facility letter
(reference number CZ2008003C) provided by The Royal Bank of Scotland (China) Co.
Ltd. Shenzhen Branch, dated 13 May 2009 (the “Bank Overdraft
Facilities”);

     

    WHEREAS,
Condition 12(A)(xiv) of the Terms and Conditions of the 2008 Trust Deed provide
that it is an event of default if KGE Group ceases to own at least 45% of the
outstanding Shares;

     

    WHEREAS,
RBS N.V. holds 100% of the issued and outstanding 2007 Bonds, and the
Bondholders in aggregate hold 100% of the issued and outstanding 2008 Bonds and
100% of the 2008 Warrants;

     

    WHEREAS,
the Company is currently contemplating the issuance of up to 25,000,000 Shares
to First Jet as consideration for the acquisition
of First Jet’s 60% equity interest in Shanghai ConnGame Network
Ltd., a company organized under the laws of the People’s Republic of China
(“ConnGame”),
on the terms and conditions described in Appendix A attached
to this Agreement (the “Proposed
Issuance”);

     

    WHEREAS,
if consummated, the Proposed Issuance (a) would trigger a reduction in the
conversion price of each of the Bonds and a reduction in the exercise price of
the 2008 Warrants pursuant to the terms of the Bonds and the 2008 Warrants (the
“Adjustment
Rights”) and (b) would result in an event of default under Condition
12(A)(xiv) of the 2008 Bonds;

     

    
      
        
        

      

      
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    WHEREAS,
the Proposed Issuance is subject to the NASDAQ Stock Exchange and United States
federal securities law requirements described in Appendix
A;

     

    WHEREAS,
the parties entered into that certain Amendment and Waiver Agreement dated
February 24, 2010 (the “February 2010
Waiver”) as related to the Proposed Issuance and Agreed Payments pursuant
to which the Company made certain payments;

     

    WHEREAS,
each of the Bondholders is requested to waive their Adjustment Rights only as it
relates to the Proposed Issuance and to waive
their right to declare a default as a result of a failure of KGE Group to maintain the minimum
percentage ownership required under Condition 12(A)(xiv) of the 2008
Bonds only as it relates to the Proposed
Issuance, and only for the sole purpose of allowing the Proposed Issuance
to take place and be completed no later than three months from the effective
date of this Agreement;

     

    WHEREAS,
if any but not all the portion of the Proposed Issuance is consummated and the
Agreed Payments, as defined in Appendix B, are not
paid to the Creditors in accordance with the time periods and amounts set forth
in Appendix B;
then no rights of the Bondholders, including those rights under Condition
12(A)(xiv) of the 2008 Bonds and the
Adjustment Rights, shall be waived and appropriate adjustments shall be made to
the conversion prices of the Bonds and the exercise price of the 2008 Warrant to
reflect the Shares sold by the Company in the Proposed Issuance and an event of default under Condition 12(A)(xiv) of
the 2008 Bonds shall exist, making the 2008 Bonds immediately due and payable; and

     

    WHEREAS, immediately following the Proposed Issuance,
Mr. Jun Tang (through First Jet)
and Mr. Ken Luo (through KGE Group) will each beneficially own approximately 31.2% and
30.1%,
respectively, of the outstanding shares of the Company.

     

    NOW,
THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the parties hereto, intending to be legally bound, agree
as follows:

     

    1.           Waivers.  Subject
to compliance by the Company with the terms and conditions set forth, and for
the sole purpose of allowing the Proposed Issuance to take place in full, each
of the parties hereby agrees that, with respect to Shares issued pursuant to and
in accordance with the terms of the Proposed Issuance set forth herein
(including in Appendix
A and Appendix
B):

     

    
      
        
        

      

      
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               (A)           notwithstanding
any provisions of the Trust Deeds or the 2008 Warrant Instrument, or any other
related documents or agreements, the Adjustment Rights that would otherwise be
triggered by the Proposed Issuance shall not be applicable and shall be waived,
and there shall be no adjustment to the conversion price of the Bonds or the
exercise price of the 2008 Warrants; and

     

               (B)           no
default shall occur under Condition 12(A)(xiv) of the 2008 Trust Deed relating
to the minimum percentage ownership requirements by KGE Group,

     

    in each
case provided, that the
Company shall comply with clause 2 of this Agreement.

     

    2.           Payment
of Agreed Payments.
The Company agrees to pay to the Creditors each of the Agreed Payments in
the amounts and within the time periods indicated in Appendix
B.

     

    3.           Failure to Pay
Agreed Payments.  If any portion of the Proposed Issuance
occurs and any of the Agreed Payments are
not paid to the Creditors in the amounts and within the time periods specified
in Appendix B then no rights of the Bondholders, including those rights under
Condition 12(A)(xiv) of the 2008 Bonds and the Adjustment Rights, shall be
waived and appropriate adjustments shall be
made to the conversion prices of the Bonds and the exercise price of the 2008
Warrants to reflect the impact of the Shares issued in the Proposed
Issuance as if this Agreement had never been
executed and an event of default under Condition 12(A)(xiv) of the 2008 Bonds
shall exist, making the 2008 Bonds immediately due and payable.

     

    4.           Covenants of the
Company.

     

    (A)           The
Company will not repay or prepay any debt prior to its currently scheduled due
date until the Company makes all of the Agreed Payments specified in Appendix B and the
Bonds have been redeemed in full.

     

    (B)           The
Company agrees that any new indebtedness incurred by it for the purpose of
repaying Bank Overdraft Facilities shall (i) not exceed the outstanding amount
due and payable under the Bank Overdraft Facilities and (ii) be subordinated to
all amount owed under the Bonds.

     

    5.           Lock-Up of
Shares.

     

    (A)           First Jet and KGE Group each agree that, until all
liabilities due to the Creditors have been paid in full, they shall at all times maintain ownership
of a number of shares of common stock that
is equal to at least 20% and 15%,
respectively, of the shares outstanding immediately after the closing of the
Proposed Issuance (the “Company Lock-Up
Shares”) and they shall not offer, sell, contract to sell,
pledge, grant any option to purchase, make any short sale or
otherwise dispose of or encumber the
Company Lock-Up Shares. Mr. Jun Tang and Mr. Ken Luo each agree that, until all
liabilities due to the Creditors have been paid in full, they shall at all times
maintain beneficial ownership, as defined by the rules and regulations of the SEC, of
a number of shares of common stock of the
Company that is equal to at least 20% and 15%, respectively of the shares then
outstanding (the “Individual
Lock-Up Shares”) and that they shall not offer, sell, contract to sell,
pledge, grant any option to purchase, make
any short sale or otherwise dispose of or encumber any of the Individual Lock-Up
Shares.

     

    
      
        
        

      

      
        - 4 -

        
          

        

      

      
        
        

      

       

    

     (B)           Further,
Mr. Ken Luo agrees that prior to the Agreed Payments specified in Appendix B and
the interests of 2008 Bonds due on 15 October 2010 being paid in full, Mr. Ken
Luo will not offer, sell, contract to sell, pledge, grant any option to
purchase, make any short sale or otherwise dispose of or encumber any of CAEI
shares beneficially owned by Mr. Ken Luo unless with the prior consent of the
Creditors, which shall not be unreasonably withheld for the purpose of allowing
the Agreed Payments and the said interests to be made.

     

    6.           Reinstatement of
Waived Rights.  If (a) any
part of the Proposed Issuance is cancelled or not consummated within three (3)
months from the effective date of this Agreement and otherwise in accordance
with the terms of this Agreement and Appendix A,  or (b) if the Company breaches any agreement
contained herein including clause 4 hereof, or (c) if any of KGE
Group, First Jet, Mr. Ken Luo or Mr. Jun
Tang breaches the terms of clause 5 hereof, then all rights previously
waived or to be waived hereunder (including under clause 1), shall not be waived
and shall be reinstated, and any previous waivers shall be null and
void.

     

    7.           Continued Effect
of Trust Deeds and 2008 Warrant Instrument.  All terms and
conditions of the Trust Deeds and the 2008
Warrant Instrument, and related documents, not expressly amended or waived by
this Agreement remain unchanged and in full force and effect, and the parties
reserve all existing rights thereunder.  To the extent there is any
conflict between the terms of the Bonds or those
of the 2008 Warrants and the express terms hereof, the terms of this
Agreement shall take precedence.

     

    8.           No Negative
Impact on the Company’s Obligations.  The Company represents
and warrants to the Creditors that the acquisition of the equity interest in
ConnGame and the Proposed Issuance will not have a negative effect on the Company’s or any of its Subsidiaries’
liabilities and obligations owed to the Creditors.

     

    
      
        
        

      

      
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    9.           Agreement to
Subsequent Negotiations.  Upon and contingent upon Company’s
timely payment of all of the Agreed Payments in accordance with Appendix B and
the successful completion of the Proposed Issuance as described in Appendix A,
each of the Bondholders agrees to commence negotiations in good faith with the
Company to waive (i) its right to declare a default as a result of a any
defaults under the Trust Deeds existing at the time of such negotiations,
including but not limited to Condition 10A (Undertakings Not to Take or Permit
Certain Changes) and Condition 10B (Financial Covenants) of the
Terms and Conditions of the 2008 Trust Deed, and (ii) its Put Option Rights
under the Trust Deeds.  Solely for purposes of this clause 9, “Put Option
Rights” refers to each of the Bondholders’ rights under the 2007 Trust
Deed to require the Company to redeem the 2007 Bonds at 126.51% of the principal
amount, plus all accrued but unpaid interest, at any time after April 12, 2010,
and each of the Bondholders’ rights under the 2008 Trust Deed to require the
Company to redeem the 2008 Bonds at 116.61% of the principal amount of the Bonds
redeemed, plus all accrued but unpaid interest, on any Interest Payment Date on
or after April 15, 2010.

     

    10.           Ownership of the
Bonds and 2008 Warrants.  As of the date of this Agreement, RBS
N.V. hereby represents and warrants that it owns 100% of the 2007 Bonds, 37.5%
of the 2008 Bonds and 37.5% of the 2008 Warrants.  As of the date of
this Agreement, CITIC represents and warrants that it owns 62.5% of the 2008
Bonds and 62.5% of the 2008 Warrants.  As of the date of this
Agreement, each of RBS N.V. and CITIC represents and warrants that it is the
sole and lawful owner of all rights, title and interest in and to all ownership
interests indicated in the immediately preceding sentence, and that there has been no assignment or other
transfer of any such interests.

     

    11.           Accuracy of the
Appendices.  The Company (x) represents and warrants to each
Creditor that, as of the date of this Agreement, Appendix A and Appendix B are
accurate and complete descriptions of the Proposed Issuance and the required
approvals therefor and (y) covenants and agrees to use its best efforts to consummate the Proposed
Issuance and make the Agreed Payments in accordance with such
terms.  The Company acknowledges that the Creditors are executing this
Agreement in reliance on these representations and warranties, covenants and
agreements.

     

    12.           Compliance with
Laws and Regulations.  The Company shall comply with all
relevant Laws and Regulations applicable to it, including satisfying all
filings, notification and other requirements of Nasdaq, the United States
Securities and Exchange Commission and U.S. Securities Laws.

     

    
      
        
        

      

      
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    13.           Duly
Authorized.  The execution, delivery and performance of this
Agreement have been duly authorized by all required corporate action by each of
the parties hereto.

     

    14.           Notice to
Trustee.  The execution of this Agreement, and instructions
related to the actions contemplated hereunder, shall be provided to the Trustee
in accordance with the terms of the Bonds and the 2008
Warrants.

     

    15.           Counterparts.  This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same Agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party, it being understood that all parties need not sign the same
counterpart.

     

    16.           Successors and
Assigns.  It is expressly understood and agreed by the parties
that this Agreement and all of its terms shall be binding upon the parties’
respective representatives, executors, administrators, successors and
assigns.

     

     

    [SIGNATURE
PAGES TO FOLLOW]

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by
their duly authorized respective officers, as of the date first written
above.

     

    
      
        	 	CHINA ARCHITECTURAL
      ENGINEERING, INC.	 
	 	 	 	 
	
                 

              	
                By:

              	/s/ Luo
      Ken Yi	 
	 	Name:	Luo
      Ken Yi	 
	 	Title:	Chief
      Executive Officer	 

      

    

     

    
      	 	The Royal Bank of Scotland
      N.V., LONDON BRANCH	 
	 	 	 	 
	
               

            	
              By:

            	/s/ Lay
      Tueng Tan	 
	 	Name:	Lay
      Tueng Tan	 
	 	Title:	Director,
      Global Restructuring Group Asia	 

      	 	CITIC CAPITAL CHINA MEZZANINE
      FUND LIMITED (formerly known as CITIC Allco Investments
      Limited.)	 
	 	 	 	 
	
               

            	
              By:

            	/s/ Miu
      Cheung	 
	 	Name:	Miu
      Cheung	 
	 	Title:	Authorized
      Signatory	 

      	 	THE ROYAL BANK OF SCOTLAND
      (CHINA) CO. LTD. SHENZHEN BRANCH	 
	 	 	 	 
	
               

            	
              By:

            	/s/ Jeff
      Zhu	 
	 	Name:	Jeff
      Zhu	 
	 	Title:	Deputy
      Branch Manager	 

    

     

    
      	 	THE ROYAL BANK OF SCOTLAND
      (CHINA) CO. LTD. SHENZHEN BRANCH	 
	 	 	 	 
	
               

            	
              By:

            	/s/ Jeff
      Zhu	 
	 	Name:	Jeff
      Zhu	 
	 	Title:	Deputy
      Branch Manager	 

    

     

    [RBS BANK
STAMP]

     

    
      	
               

            	
              By:

            	/s/ Linda
      Gong	 
	 	Name:	Linda
      Gong	 
	 	Title:	GTS
      OPS MANAGER	 

    

    

    
      
        
        

      

      
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    [AMENDMENT AND WAIVER AGREEMENT –
CONTINUED]

     

    
      
        	 	MR. JUN TANG	 
	 	 	 	 
	
                 

              	/s/ Jun
      Tang	 

      

    
      	 	MR. KEN LUO	 
	 	 	 	 
	
               

            	/s/
      Luo Ken Yi	 

    

                                                                          

    
      	 	FIRST JET INVESTMENTS
      LIMITED	 
	 	 	 	 
	
               

            	/s/  Jun
      Tang	 
	 	By:	 
	 	Name:  Jun Tang	 
	 	Title:    Chairman	 

    

     

    
      	 	KGE GROUP
    LIMITED	 
	 	 	 	 
	
               

            	/s/  Luo
      Ken Yi	 
	 	By:	 
	 	Name:  Luo Ken Yi	 
	 	Title:    Chairman	 

    

     

    
      
        
        

      

      
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    APPENDIX
A

     

    PROPOSED
ISSUANCE

     

    The
Company intends to issue up to 25,000,000 shares of newly issued common stock of
the Company to acquire a 60% equity interest in ConnGame from
First Jet.  The Company expects that the consideration per share at which the 25,000,000
shares will be issued will be less than the current conversion price of the
Bonds, as determined under the terms and conditions of the Trust
Deeds.

     

    Nasdaq
Marketplace Rules require that the Company complete and submit an additional
listing application to the Nasdaq Stock Market and receive approval from NASDAQ
before the Company may issue any new shares in the Proposed
Issuance.  In addition, Nasdaq Marketplace Rule 5635 requires that,
among other things, the Company obtain shareholder approval of the issuances of
securities in connection with the acquisition of the stock or assets of another
company where the number of shares of common stock to be issued is or will be
equal to or in excess of 20% of the number of shares of common stock outstanding
before the issuance of the stock or securities, in addition to other
restrictions if certain tests are met.  Because the 25,000,000 shares
of common stock the Company intends to issue exceeds the 20% threshold as set
forth in the Nasdaq Marketplace Rules, and may also trigger other tests, the
Company must obtain shareholder approval, which is subject to compliance with
Section 14 of the Securities Exchange Act of 1934, as amended.  The
Company has obtained shareholder approval for the Proposed Issuance and has
filed a Preliminary Schedule 14C with the Securities and Exchange Commission
(“SEC”).  The Company has received and responded to comment letters
from the SEC and the Company intends to file and mail to shareholders a
Definitive Schedule 14C upon the SEC’s approval of the Preliminary Schedule
14C.

     

    Upon the issuance of the 25,000,000 shares of
newly issued common stock in the Proposed
Issuance, KGE Group Limited will own approximately 31.2% of the
outstanding shares of the Company’s common stock, based on the estimated 80,156,874 shares of common stock
that will be issued and outstanding  immediately following the Proposed
Issuance.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    APPENDIX
B

     

    PAYMENT
SCHEDULE FOR AMOUNTS DUE TO THE
CREDITORS

    

    The
Company agrees to make the following payments to the Creditors within the
following time periods (collectively, the “Agreed
Payments”):

     

    1.           Payment to the
Bondholders

     

               The
Company agrees to pay to the Bondholders all outstanding interests in arrears on
the Bonds, plus all other applicable interest up until the payment date, (i)
within thirty (30) days after the closing of the Proposed Issuance or (ii) 30 September 2010,
whichever is earlier.

    

    2.           Payments to the Overdraft
Lender

     

    The
Company agreed in the February 2010 Waiver to repay in total the principal
amount due and all accrued interest owed by the Company to the Overdraft Lender (the “Total Amount Owed”) in three
separate installments, and the Company made
partial payments on the
first and second installments.  The Company agrees to pay in full, all unsettled amounts which include all
outstanding principal amount of RMB $ 16,094,080.04 plus all
other applicable interest
up until the payment date, (i) within
thirty (30) days after the closing of the Proposed Issuance or (ii) 30 September 2010, whichever is
earlier.

     

    
      
        
        

      

      
        B-1Form of Global Security relating thereto

 Exhibit 4.2 

(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 10 ON THE FACE OF THIS SECURITY. 

			
	CUSIP No.: 06740L592	  	ISIN: US06740L5921
		  	Common Code: [            ]

BARCLAYS BANK PLC 

GLOBAL MEDIUM-TERM NOTES, SERIES A 
  

 

Barclays ETN+ Inverse S&P
500® VIX Short-Term
FuturesTM ETN 

due July 17, 2020 

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. 

 

 Company: Barclays Bank PLC 

Face Amount: $[        ], equal to [        ]
Securities at $20 per Security. 
 Initial Valuation Date: July 16, 2010 

Original Issue Date: July 21, 2010. 

Final Valuation Date: July 16, 2020. 

Stated Maturity Date: July 17, 2020 

Principal Amount per Security: $20 

Coupon: Interest will not be paid during the term of this Security. 

Reference Asset: S&P
500® VIX Short-Term
FuturesTM Index Excess Return (the “Index”).

 Index Sponsor: Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc.

 Payment at Maturity: At maturity, the Holder will receive a cash payment equal to the Closing
Indicative Note Value of the Securities on the Final Valuation Date. 
 Closing Indicative Note Value: The Closing Indicative Note Value
for each Security on any calendar day will equal (a) the Principal Amount per Security plus (b) the Inverse Index Performance Amount on such calendar day plus (c) the Accrued Interest on such calendar day minus
(d) the Accrued Fees on such calendar day; provided that if such calculation results in a negative value, the Closing Indicative Note Value will be $0. 

Inverse Index Performance Amount: On the Initial Valuation Date, the Inverse Index Performance Amount for each Security will equal $0. On any
subsequent calendar day, the Inverse Index Performance Amount for each Security will equal the product of (a) negative one times (b) the principal amount per Security times (c) the Index Performance Percentage on such calendar
day. 

  

 (Face of Security continued on next page) 

-2- 

 Index Performance Percentage: The Index Performance Percentage on the Initial Valuation Date will
equal 0%. On any subsequent calendar day, the Index Performance Percentage will equal (a) (i) the closing level of the Index on such calendar day (or, if such a day is not an Index Business Day, the closing level of the Index on the
immediately preceding Index Business Day) divided by (ii) the closing level of the Index on the Initial Valuation Date minus (b) 100% 

Accrued Interest: On the Initial Valuation Date, the Accrued Interest for each Security will equal $0. On any subsequent calendar day until
maturity or redemption, the Accrued Interest for each Security will equal the sum of (a) the Accrued Interest on the immediately preceding calendar day plus (b) the product of (i) the Closing Indicative Note Value on the
immediately preceding calendar day times (ii) the T-Bill rate divided by (iii) 360. 
 T-Bill Rate: The T-Bill
Rate will equal the most recent weekly investment rate for 28-day U.S. Treasury bills effective on the preceding Business Day in New York City. The weekly investment rate for 28-day U.S. Treasury bills is generally announced by the U.S. Treasury on
each Monday; on any Monday that is not a Business Day in New York City, the rate prevailing on the immediately preceding Business Day in New York City will apply. The most recent weekly investment rate for 28-day U.S. Treasury bills is published on
Bloomberg under the ticker symbol “USB4WIR”. The T-Bill Rate is expressed as a percentage. 

 

 Accrued Fees: On the Initial Valuation Date, the Accrued Fees for each Security will equal $0. On
any subsequent calendar day until maturity or redemption, the Accrued Fees for each Security will equal (a) the Accrued Fees on the immediately preceding calendar day plus (b) the product of (i) the Closing Indicative Note
Value on the immediately preceding Valuation Date times (ii) the Fee Rate divided by 365. 
 Fee Rate: The Fee Rate per
Security is 0.89%. 
 Optional Redemption: Subject to the notification requirements set forth in the Prospectus, the Holder may redeem
Securities on any Optional Redemption Date during the term of the Securities, subject to an intervening Automatic Termination Event. In such event, the Holder will receive a cash payment for each Security on the applicable Optional Redemption Date
equal to the Closing Indicative Note Value on the applicable Valuation Date. The Holder must redeem at least 50,000 of the Securities at one time in order to exercise the right to redeem the Securities on any Optional Redemption Date. 

Redemption Charge: The Redemption Charge is a one-time charge imposed upon Optional Redemption and is equal to 0.05% times the Closing
Indicative Note Value on the applicable Valuation Date. 
 Optional Redemption Date: The third Business Day following each Valuation Date
(other than the Final Valuation Date). The final Optional Redemption Date will be the third Business Day following the Valuation Date that is immediately prior to the Final Valuation Date.

  

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 Automatic Termination Event: The Company will automatically redeem the Securities (in whole only,
but not in part) if, on any Valuation Date prior to or on the Final Valuation Date, the Intraday Indicative Note Value is less than or equal to 50.0% of the principal amount per Security, or $10.00 for each Security. The Company will redeem the
Securities on the Automatic Redemption Date and will deliver a notice of redemption to the Depositary Trust Company (“DTC”). Upon such redemption, the Holder will receive a cash payment equal to the Automatic Redemption Value. 

Automatic Termination Date: An Automatic Termination Date is any Valuation Date on which an Automatic Termination Event occurs. 

Automatic Redemption Date: The fifth Business Day following the Automatic Termination Date; provided that if calculation of the Automatic
Redemption Value is postponed as a result of a Market Disruption Event, the Automatic Redemption Date will be the fifth Business Day after the Automatic Redemption Value is calculated. 

Intraday Indicative Note Value: The Intraday Indicative Note Value for each Security on any Valuation Date will equal (a) the Principal
Amount per Security plus (b) the Intraday Inverse Index Performance Amount plus (c) the Accrued Interest on the immediately preceding calendar day minus (d) the Accrued Fees on the immediately preceding calendar day;
provided that if such calculation results in a negative value, the Intraday Indicative Note Value will be $0. 
 Intraday Inverse
Index Performance Amount: The product of (a) negative one times (b) the Principal Amount per Security times (c) the Intraday Index Performance Percentage. 

Intraday Index Performance Percentage: The Intraday Index Performance Percentage equals (a) (i) the most recently published level of the
Index divided by (ii) the closing level of the Index on the Initial Valuation Date minus (b) 100%. 

 

 Automatic Redemption Value: The Automatic Redemption Value will be equal to the Closing Indicative
Note Value on the Automatic Termination Date. 
 Calculation Agent: Barclays Bank PLC 

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

Listing: NYSE Arca stock exchange (“NYSE Arca”) under the ticker symbol “XXV”.

  

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-4- 

 The “Standard &
Poor’s®”,
“S&P®”, “S&P
500®”, “Standard & Poor’s 500TM” and “S&P 500 VIX Short-Term
FuturesTM” are trademarks of S&P and have been licensed for use by the Company. “VIX” is a registered trademark of the CBOE and has been licensed for use by S&P. 

The Securities are not sponsored, endorsed, sold or promoted by S&P or the CBOE. S&P and CBOE make no representation, condition or warranty,
express or implied, to the owners of the Securities or any member of the public regarding the advisability of investing in securities generally or in the Securities or in the ability of either Index to track market performance. S&P’s and
CBOE’s only relationship to Barclays is the licensing of certain trademarks and trade names of S&P, CBOE and the Index which are determined, composed and calculated by S&P without regard to Barclays or the Securities. S&P has no
obligation to take the needs of Barclays or the owners of the Securities into consideration in determining, composing or calculating the Index. S&P and CBOE are not responsible for and have not participated in the determination of the timing of,
prices at, or quantities of the Securities to be issued or in the determination or calculation of the equation by which the Securities is to be converted into cash. S&P and CBOE have no obligation or liability in connection with the
administration, marketing or trading of the Securities. 
 NEITHER S&P, ITS AFFILIATES NOR THEIR THIRD PARTY LICENSORS, INCLUDING CBOE,
GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO.
S&P, ITS AFFILIATES AND THEIR THIRD PARTY LICENSORS, INCLUDING CBOE, SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS OR DELAYS THEREIN. S&P AND CBOE MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE MARKS, THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P, ITS AFFILIATES OR THEIR THIRD
PARTY LICENSORS, INCLUDING CBOE, BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE. 
 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. 

 

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 “Business Day” means a Monday, Tuesday, Wednesday, Thursday or Friday that
is neither a day on which banking institutions in New York City or London, as applicable, 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, 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) and notify the other in writing of such 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 such 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 such
quotation will be disregarded in determining the Default Amount. The “Default Quotation Period” will 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 so 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 is given of such quotation 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. 
 “Index Business Day” means any day on which (i) it is a Business Day in New York
City, and (ii) trading is generally conducted on the Chicago Board Options Exchange (“CBOE”). 
 “Market
Disruption Event” means any of the following with respect to the Index, 
  

	 	•	 	 the Index Sponsor does not publish the level of the Index on any Index Business Day; 

 

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-6- 

	 	•	 	 a suspension, absence or material limitation of trading of equity securities then constituting 20% or more of the level of the S&P
500® Index on the Relevant Exchanges for such securities for more than two hours of trading (one hour on any day
that is an “index roll date” for purposes of calculation the CBOE Volatility Index® (the “VIX
Index”) or the relevant successor index) during, or during the one hour period preceding the close of, the principal trading session on such Relevant Exchange; 

 

	 	•	 	 a breakdown or failure in the price and trade reporting systems of any Relevant Exchange for the S&P
500® Index as a result of which the reported trading prices for equity securities then constituting 20% or more
of the level of the S&P 500® Index are materially inaccurate (i) during the one hour preceding the
close of the principal trading session on such Relevant Exchange or (ii) during any one hour period of trading on such Relevant Exchange on any day that is an “index roll date” for purpose of calculating the VIX Index or the relevant
successor index; 

  

	 	•	 	 a suspension, absence or material limitation of trading on any Relevant Exchange for the VIX Index (or any relevant successor index) for more than two
hours of trading (one hour on any day that is an “index roll date” for purposes of calculation the VIX Index or the relevant successor index) during, or during the one hour period preceding the close of, the principal trading session on
such Relevant Exchange; 

  

	 	•	 	 a breakdown or failure in the price and trade reporting systems of the Relevant Exchange for the VIX Index (or the relevant successor index) as a
result of which the reported trading prices for SPX Options or futures on the VIX Index (or futures on the relevant successor index) during the one hour period preceding, and including, the scheduled time at which the value of SPX Options is
calculated for purposes of the VIX Index (or the relevant successor index) are materially inaccurate; 

  

	 	•	 	 a decision to permanently discontinue trading in SPX Options or futures on the VIX Index (or futures on the relevant successor index);

  

	 	•	 	 on any Index Business Day, the occurrence or existence of a lack of, or a material decline in, the liquidity in the market for trading in any futures
contract underlying the Index; 

  

	 	•	 	 any event or any condition (including without limitation any event or condition that occurs as a result of the enactment, promulgation, execution,
ratification, interpretation or application of, or any change in or amendment to, any law, rule or regulation by an applicable governmental authority) that results in an illiquid market for trading in any futures contract underlying the Index; and

  

	 	•	 	 the declaration or continuance of a general moratorium in respect of banking activities in any relevant city. 

For purposes of determining whether a market disruption event has occurred: 

 

	 	•	 	 a limitation on the hours or number of days of trading will not constitute a Market Disruption Event if it results from an announced change in the
regular business hours of the Relevant Exchange for the S&P 500® Index or the VIX Index (or the relevant
successor index); 

  

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-7- 

	 	•	 	 limitations pursuant to the rules of any Relevant Exchange similar to NYSE Rule 80B (or any applicable rule or regulation enacted or promulgated by any
other self-regulatory organization or any government agency of scope similar to NYSE Rule 80B as determined by the Index Sponsor) on trading during significant market fluctuations will constitute a suspension, absence or material limitation of
trading; 

  

	 	•	 	 a suspension of trading in an SPX Option or a futures contract on the VIX Index (or futures contract on the relevant successor index) by the Relevant
Exchange for the VIX Index (or the relevant successor index) by reason of: 

  

	 	•	 	 a price change exceeding limits set by such Relevant Exchange; 

 

	 	•	 	 an imbalance of orders relating to such options, or 

  

	 	•	 	 a disparity in bid and ask quotes relating to such options 

will, in each such case, constitute a suspension, absence or material limitation of trading on such Relevant Exchange; and 

 

	 	•	 	 a “suspension, absence or material limitation of trading” on any Relevant Exchange will not include any time when such Relevant Exchange is
itself closed for trading under ordinary circumstances. 

 “Relevant Exchange” means, with
respect to the S&P 500® Index, the primary exchange or market of trading for any equity security (or any
combination thereof) then included in the S&P 500® Index or, with respect to the VIX Index or any relevant
successor index, the primary exchange or market for SPX Options or futures on the VIX Index (or futures on the relevant successor index). 
 An
“Index Business Day” is a day on which (1) it is a business day in New York City, and (2) trading is generally conducted on the CBOE. 

“Qualified Financial Institution” means, at any time, a financial institution organized under the laws of any
jurisdiction in the United States 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 Ratings Services, (or any
successor) or P-1 or higher by Moody’s Investors Service (or any successor) or, in either case, such other comparable rating, if any, then used by such rating agency. 

“Scheduled Trading Day” means, in respect of the Index, any day on which (a) the value of the Index is published,
and (b) trading is generally conducted on the markets on which the securities comprising the Index are traded, in each case as determined by the Calculation Agent in its sole discretion. 

“SPX Options” means, the weighted series of out-of-the-money put and call options on the level of
the S&P 500® Index used to calculate the VIX Index, as described in the Prospectus. 

 

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-8- 

 “Stated Maturity Date” means July 17, 2020 or, if such day is not a
Business Day, the next succeeding Business Day; provided, however, if the fifth business day before this day does not qualify as a Valuation Date, then the Maturity Date will be the fifth Business Day following the Final Valuation
Date. 
 “Trading Day” means with respect to the Securities is a day on which (1) it is a Business Day in
New York City, (2) trading is generally conducted on the NYSE Arca, and (3) trading is generally conducted on the CBOE, in each case as determined by the Calculation Agent in its sole discretion. 

“Valuation Date” means each trading day from July 16, 2010 to July 16, 2020, subject to postponement as a
result of Market Disruption Events, such postponement not to exceed five Trading Days. We refer to July 16, 2010 as the “Initial Valuation Date” and July 16, 2020 as the “Final Valuation Date”. 

1. Promise to Pay Principal at Maturity, upon Optional Redemption or Automatic Termination Event 

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) “Optional Redemption” and elsewhere on the face this Security on the applicable Optional 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 Stated Maturity Date, (ii) “Automatic Termination Event” and elsewhere on the face of this Security on the
applicable Automatic Redemption Date, in the case of a Automatic Termination Event and (iii) “Payment at Maturity” and elsewhere on the face of this Security, on the Stated Maturity Date. 

2. Payment of Interest 

The principal of this Security shall not bear interest during its term. 

3. Discontinuance or Modification of the Index 

If the Index Sponsor discontinues publication of the Index, and Barclays Capital or any other person or entity publishes an index that the
Calculation Agent determines is comparable to the Index and the Calculation Agent approves such index as a successor index, then the Calculation Agent will determine the level of the Index on the applicable Valuation Date and the amount payable on
the Optional Redemption Date, Automatic Redemption Date or Stated Maturity Date, as the case may be, by reference to such successor index. 

If the Calculation Agent determines that the publication of the Index is discontinued and there is no successor index, or that the
closing level of the Index is not available for any reason, on the date on which the level of the Index is required to be determined, 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. 
  

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-9- 

 If the Calculation Agent determines that the Index or the method of calculating the Index
has been changed at any time in any respect, and whether the change is made by the Index Sponsor under its existing policies or following a modification of those policies, is due to the publication of a successor index, 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 level of the Index used to determine the amount payable
on the Optional Redemption Date, Automatic Redemption Date or Stated Maturity Date, as the case may be, is equitable. 
 All
determinations and adjustments to be made by the Calculation Agent may be made in the Calculation Agent’s sole discretion 

4. Payment at Maturity, upon Optional Redemption or Automatic Termination Event 

The payment of this Security that becomes due and payable on the Stated Maturity Date, on an Optional Redemption Date or Automatic
Termination Event, 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”, “Optional Redemption” and “Automatic Termination Event”,
respectively. The payment of this Security that becomes due and payable upon acceleration of the Stated Maturity Date hereof after an Event of Default has occurred pursuant to the Indenture shall be the Default Amount. When the payment 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. 
  

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-10- 

 5. Redemption Mechanics 

Subject to the minimum redemption amount provided under “Optional Redemption”, the Holder may require the Company to redeem the
Holder’s Securities on any Optional Redemption Date during the term of the Securities provided that such Holder (i) delivers a notice of redemption to the Company via electronic mail by no later than 4:00 p.m. New York City time on
the Business Day prior to the applicable Valuation Date; (ii) delivers a signed confirmation of redemption to the Company via facsimile by no later than 5:00 p.m. New York City 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 per Security equal to the applicable Closing Indicative Note Value on the applicable Valuation Date facing
Barclays Capital 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 Optional Redemption Date, which shall be the third Business Day
following the applicable Valuation Date (other than the Final Valuation Date). The final Optional Redemption Date shall be the third Business Day following such Valuation Date that is immediately prior to the Final Valuation Date. 

6. Role of Calculation Agent 

Initially, the Company will serve as the Calculation Agent. The Company may change the Calculation Agent after the Original Issue Date of
the Securities without notice. The Calculation Agent will, in its sole discretion, make all determinations regarding the value of the Securities, including at maturity or upon optional redemption or redemption arising from a Automatic Termination
Event, Market Disruption Events, Valuation Dates, Business Days, Trading Days, the Closing Indicative Note Value, the Accrued Interest, the Accrued Fees, the Default Amount, the Stated Maturity Date, the amount payable in respect of the Securities
at maturity, upon optional redemption and upon the occurrence of a Automatic Termination Event and any other calculations or determinations to be made by the Calculation Agent as specified herein. Absent manifest error, all determinations of the
Calculation Agent will be final and binding on the Holder and the Company, without any liability on the part of the Calculation Agent. The Holder will not be entitled to any compensation from the Company for any loss suffered as a result of any of
the above determinations by the Calculation Agent. 
 7. Payment 

Payment of any amount payable on this Security in cash 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 of any cash payable on this Security will be made to an account designated by the Holder (in writing to the Company and the Trustee on or before the Final Valuation
Date) and approved by the Company or, if no such account is designated and approved as aforesaid, at the office or agency of the Company maintained for that purpose in The City of New York (i.e., the office of the Trustee), provided,
however, that payment at Stated Maturity, upon Optional Redemtion or Automatic Termination Event shall be made only upon surrender of this Security at such office or agency (unless the Company expressly 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. 

 

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-11- 

 8. 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. 
 9. 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. 
 10.
Prospectus 
 Reference is made to the (i) the Prospectus related to the Securities, dated February 10, 2009,
(ii) the Prospectus Supplement, dated March 1, 2010 and (iii) the Pricing Supplement, dated [                    ], (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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-12- 

 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:	 	

 (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, limited to an aggregate initial offering price not to exceed $21,000,000,000 (or the equivalent thereof in any other currency or currencies or currency units), which amount may be increased at the
option of the Company if in the future it determines that it may wish to sell additional Securities of this series. 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 be 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 determined by the Calculation Agent in a manner reasonably calculated to preserve the
relative economic position of the Company and the Holders of Outstanding Securities. 
  

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-14- 

 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 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. 

 

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-15- 

 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 $20. 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.

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