BARCLAYS BANK PLC Barclays Capital

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underlying or any derivatives contracts linked to the underlying. Neither the Issuer nor the Manager(s)
nor their respective affiliates is restricted from selling, pledging or otherwise conveying all right, title
and interest in any underlying or any derivatives contracts linked to the underlying by virtue solely of it
having issued the Notes.
Transactions to offset or limit risk
Any person intending to use the Notes as a hedging instrument should recognise the correlation risk.
The Notes may not be a perfect hedge to an underlying or portfolio of which the underlying forms a
part. In addition, it may not be possible to liquidate the Notes at a level which directly reflects the price
of the underlying or portfolio of which the underlying forms a part. Potential investors should not rely
on the ability to conclude transactions during the term of the Notes to offset or limit the relevant risks;
this depends on the market situation and, in case of a Note linked to an underlying, the specific
underlying conditions. It is possible that such transactions can only be concluded at an unfavourable
market price, resulting in a corresponding loss for the Noteholder.
Expansion of the spread between bid and offer prices
In special market situations, where the Issuer is completely unable to conclude hedging transactions, or
where such transactions are very difficult to conclude, the spread between the bid and offer prices
which may be quoted by the Issuer may be temporarily expanded, in order to limit the economic risks
to the Issuer. Thus, Noteholders selling their Notes on an exchange or on the over-the-counter market
may be doing so at a price that is substantially lower than the actual value of the Notes at the time of
sale.
Effect on the Notes of hedging transactions by the Issuer
The Issuer may use a portion of the total proceeds from the sale of the Notes for transactions to hedge
the risks of the Issuer relating to the relevant Tranche of Notes. In such case, the Issuer or a company
affiliated with it may conclude transactions that correspond to the obligations of the Issuer under the
Notes. As a rule, such transactions are concluded prior to or on the Issue Date, but it is also possible to
conclude such transactions after issue of the Notes. On or before a valuation date, if any, the Issuer or a
company affiliated with it may take the steps necessary for closing out any hedging transactions. It
cannot, however, be ruled out that the price of an underlying, if any, will be influenced by such
transactions in individual cases. Entering into or closing out these hedging transactions may influence
the probability of occurrence or non-occurrence of determining events in the case of Notes with a value
based on the occurrence of a certain event in relation to an underlying.
2. General Risks relating to Changes in Market Conditions
Market Illiquidity
There can be no assurance as to how the Notes will trade in the secondary market or whether such
market will be liquid or illiquid or that there will be a market at all. If the Notes are not traded on any
securities exchange, pricing information for the Notes may be more difficult to obtain and the liquidity
and market prices of the Notes may be adversely affected. The liquidity of the Notes may also be
affected by restrictions on offers and sales of the securities in some jurisdictions. The more limited the
secondary market is, the more difficult it may be for the Noteholders to realise value for the Notes prior
to the exercise, expiration or maturity date.
Market Value of the Notes
The market value of the Notes will be affected by the creditworthiness of the Issuer and a number of
additional factors and the value of the Reference Assets or the Index, including, but not limited to, the
volatility of the Reference Assets or the index, the dividend rate on Underlying Securities, or the
dividend on the securities taken up in the Index, the issuer of the Underlying Securities financial results
and prospects, market interest yield rates, market liquidity and the time remaining to the maturity date.
The value of the Notes, the Reference Assets or the Index depends on a number of interrelated factors,
including economic, financial and political events in a global economy or elsewhere, including factors
affecting capital markets generally and the stock exchanges on which the Reference Assets, the
securities taken up in the Index, or the Index, are traded. The price at which a Noteholder will be able
to sell the Notes prior to maturity may be at a discount, which could be substantial, from the Issue Price
or the purchase price paid by such purchaser. The historical market prices of the Reference Assets or