Obligation UBS SA 0% ( XS0289966326 ) en USD

Société émettrice UBS SA
Prix sur le marché 100 %  ▲ 
Pays  Suisse
Code ISIN  XS0289966326 ( en USD )
Coupon 0%
Echéance 06/04/2015 - Obligation échue



Prospectus brochure de l'obligation UBS AG XS0289966326 en USD 0%, échue


Montant Minimal /
Montant de l'émission /
Description détaillée UBS AG est une banque mondiale offrant des services de gestion de fortune, d'investissement bancaire et de marchés financiers à une clientèle privée, institutionnelle et d'entreprises.

L'obligation UBS AG (XS0289966326), libellée en USD, à taux zéro et échéant le 06/04/2015, émise en Suisse, a été intégralement remboursée à son échéance à un prix de 100%, avec des paiements de coupons semestriels.








INFORMATION MEMORANDUM






UBS AG
(Incorporated with limited liability in Switzerland)
(acting through its London Branch)


USD4,750,000 8-year 16% Target Redemption with 100% Guaranteed Return On Investment
Notes due 2015
(redemption linked to basket of 20 stocks)

Issue Price as of the closing date: 100 per cent.


The USD4,750,000 8-year 16% Target Redemption with 100% Guaranteed Return On Investment Notes due 2015 (the
"Notes") relating to a basket of 20 stocks (further details of which are set out in the terms and conditions herein (the
"Shares")) each with a denomination of USD100 were issued by UBS AG (acting through its London Branch) (the
"Issuer") on 13 April 2007.

Expressions used in this Information Memorandum shall have the meanings given to them in the conditions of the Notes (the
"Conditions") which are set out herein.

Unless previously redeemed or purchased and cancelled as provided in the Conditions, each Note will be redeemed at the
Redemption Amount on the Redemption Settlement Date, subject as provided in Condition 4.

The Notes are represented by a Global Security (the "Global Security") which was deposited with a common depositary for
Euroclear Bank S.A./N.V. as operator of the Euroclear System ("Euroclear") and Clearstream Banking, société anonyme
("Clearstream") on 13 April 2007 (the "Closing Date"). Notes in definitive form will not be issued, except in the
circumstances described in Condition 2(b). The Notes are in registered form.

Application has been made to admit the Notes to listing on the Official List of the Luxembourg Stock Exchange and to
trading on the Euro MTF Market.

Prospective purchasers should carefully consider the risks of an investment in the Notes and be aware that these
Notes are only suitable for sophisticated investors who are capable of evaluating and bearing such risks. In
particular, prospective purchasers should note that the Coupon Amount and Early Redemption Amount are linked
to the price of the Shares. The Early Redemption Amount may be less than the principal amount of the Notes and
may be zero and the Coupon Amount may be zero. See "Risk Factors" for a discussion of certain factors to be
considered in connection with an investment in the Notes.


DOCUMENTS INCORPORATED BY REFERENCE.

The unaudited financial statements for the 3-month period ended 31 March 2007 of the Issuer and the following
document(s), filed by the Issuer with the United States Securities and Exchange Commission pursuant to Section 13 of the
U.S Securities Exchange Act of 1934 ("the Exchange Act") are incorporated herein by reference: the Annual Report (US
Version) on Form 20-F for the year ended 31 December 2006 of the Issuer which can be obtained on the Issuer's website at
www.ubs.com and which are also available free of charge at the offices of the Listing Agent.


Dated 9 July 2007
1



This Information Memorandum may only be used for the purposes for which it has been published.

This Information Memorandum includes particulars for the purpose of giving information with regard
to the issue by the Issuer of the Notes. The Issuer accepts responsibility for the information contained
in this Information Memorandum regarding the Issuer and the Notes. To the best of the knowledge
and belief of the Issuer (which has taken all reasonable care to ensure that such is the case) such
information is in accordance with the facts and does not omit anything likely to affect the import of
such information.

Information provided herein with respect to the Shares of the Companies and the Companies is taken
from publicly available information. Such information has not been independently verified by the
Issuer. The Issuer accepts responsibility for the accurate reproduction of such information but neither
the Issuer nor any of its Affiliates makes any further representation or warranty relating thereto.

No person is authorised to give any information or to make any representation not contained in this
Information Memorandum in connection with the issue and sale of the Notes and any information or
representation not contained herein must not be relied upon as having been authorised by or on
behalf of the Issuer. Neither the delivery of this Information Memorandum nor any sale made in
connection herewith shall, under any circumstances, create any implication that the information
herein is correct as at any time subsequent to the date hereof.

Any prospective purchaser of the Notes should consult with its own legal, regulatory, tax, business,
investment, financial and accounting advisers to the extent that it deems it necessary and should
make its own investment, hedging and trading decisions (including decisions regarding the
suitability of this investment) based upon its own judgment and upon advice from such advisers as
it deems necessary. The Issuer has not given investment advice or any recommendation. Any
purchase of the Notes may involve a high risk of loss. Payments to be made by the Issuer under the
Notes are dependent upon the performance of the Shares. There exists no guarantee or other
protection for holders in respect of the performance of the Shares. The Issuer will not owe any
person any duties or responsibilities whatsoever except for such duties or responsibilities as are set
out in the terms and conditions of the Notes.

The Notes have not been and will not be registered under the United States Securities Act of 1933, as
amended (the "Securities Act"), and have not been and may not be offered or sold within the United
States or to, or for the account or benefit of, a U.S. person (as defined herein).

The distribution of this Information Memorandum and the offer of the Notes in certain jurisdictions
may be restricted by law. Persons into whose possession this document comes are required by the
Issuer to inform themselves about, and to observe, any such restrictions. In this regard, see further
"Offering and Sale".

All references in this Information Memorandum to "USD" refer to the currency of the United States
of America and references to "CHF" refer to the currency of Switzerland.


Holders of the Notes should be aware that details of any transactions in relation to the Notes will be
disclosed to the Securities and Futures Commission of the Republic of China. By this notice Holders
agree to such disclosure and release UBS AG and its affiliates and subsidiaries from any duty of
disclosure of Holders.
2



RISK FACTORS

The purchase of Notes involves substantial risks and is suitable only for investors who have the
knowledge and experience in financial and business matters necessary to enable them to evaluate the
risks and the merits of an investment in the Notes. Before making an investment decision, prospective
purchasers of Notes should consider carefully, in the light of their own financial circumstances and
investment objectives, all the information set forth in this Information Memorandum and, in
particular, the considerations set forth below.

Taxation

Each Holder will assume and be solely responsible for any and all taxes of any jurisdiction or
governmental or regulatory authority, including, without limitation, any state or local taxes or other
like assessment or charges that may be applicable to any payment to it in respect of such Holder's
Notes. The Issuer will not pay any additional amounts to Holders to reimburse them for any tax,
assessment or charge required to be withheld or deducted from payments in respect of the Notes by
the Issuer or the Paying Agent.

Credit Risk

A prospective purchaser of the Notes should have such knowledge and experience in financial and
business matters and expertise in assessing credit risk that it is capable of evaluating the merits, risks
and suitability of investing in the Notes.

Provision of information

Neither the Issuer nor any of its Affiliates makes any representation as to the credit quality of the
Company. Any of such persons may have acquired, or during the term of the Notes may acquire, non-
public information with respect to the Company. None of such persons is under any obligation to
make such information available to Holders.

Business relationships

The Issuer or any of its Affiliates may have existing or future business relationships with the
Company (including, but not limited to, lending, depositary, risk management, advisory and banking
relationships), and will pursue actions and take steps that they deem or it deems necessary or
appropriate to protect their or its interests arising there from without regard to the consequences for a
Holder.

No claim against the Company

A Note will not represent a claim against the Company and, in the event of any loss, a Holder will not
have recourse under a Note to the Company.

Legality of purchase

Neither the Issuer nor any of its Affiliates has or assumes responsibility for the lawfulness of the
acquisition of the Notes by a prospective purchaser of the Notes, whether under the laws of the
jurisdiction of its incorporation or the jurisdiction in which it operates (if different), or for compliance
by that prospective purchaser with any law, regulation or regulatory policy applicable to it.

Independent review and advice

3


Each prospective purchaser of Notes must determine, based on its own independent review and such
professional advice as it deems appropriate under the circumstances, that its acquisition of the Notes
(i) is fully consistent with its (or if it is acquiring the Notes in a fiduciary capacity, the beneficiary's)
financial needs, objectives and condition, (ii) complies and is fully consistent with all investment
policies, guidelines and restrictions applicable to it (whether acquiring the Notes as principal or in a
fiduciary capacity) and (iii) is a fit, proper and suitable investment for it (or if it is acquiring the Notes
in a fiduciary capacity, for the beneficiary), notwithstanding the clear and substantial risks inherent in
investing in or holding the Notes.

No reliance

A prospective purchaser may not rely on the Issuer or any of its Affiliates in connection with its
determination as to the legality of its acquisition of the Notes or as to the other matters referred to
above.

No secondary market

Application has been made to admit the Notes to listing on the Official List of the Luxembourg Stock
Exchange and to trading on the Euro MTF Market. However, there can be no assurance that a
secondary market in the Notes will develop and no secondary market is expected to develop in respect
of the Notes. Moreover, even if a secondary market in the Notes does develop, there can be no
assurance that it will continue. Accordingly, the purchase of Notes is suitable only for investors who
can bear the risks associated with a lack of liquidity in the Notes and the financial and other risks
associated with an investment in the Notes.

PURCHASERS SHOULD BE AWARE THAT UNDER THE CONDITIONS OF THE NOTES
THE ISSUER OR ANY AFFILIATE MAY PURCHASE THE NOTES AT ANY TIME. SUCH
NOTES MAY BE HELD, RESOLD, OR CANCELLED. PURCHASERS SHOULD NOT
THEREFORE MAKE ANY ASSUMPTION AS TO THE NUMBER OF NOTES IN ISSUE AT
ANY ONE TIME.

THE EARLY REDEMPTION AMOUNT IN RESPECT OF ANY OF THE NOTES MAY BE
LESS THAN THE PRINCIPAL AMOUNT AND MAY BE ZERO.

4


CONDITIONS OF THE NOTES
The following terms and conditions, subject to amendment, have been endorsed on the Global
Security:

UBS AG, London Branch as issuer (the "Issuer") has issued USD4,750,000 in principal amount of 8-
year 16% Target Redemption with 100% Guaranteed Return On Investment Notes due 2015 linked to
a basket of 20 stocks (the "Notes").


1. Definitions

In these Conditions:

"Business Day" means a day (other than Saturday and Sunday) on which banks and foreign exchange
markets are open for business in New York.

"Calculation Agent" means UBS AG, London Branch acting as calculation agent of the Notes.

"Closing Price" means, subject to Condition 7, in respect of a Share and a Scheduled Trading Day, the
official closing price of such Share as published by the relevant Exchange for that day, or if such price
is not published for whatever reason, the value of a Share as of the actual closing time of the relevant
Exchange on that Scheduled Trading Day in the good faith estimation of the Calculation Agent.

"Coupon Payment Dates" means in respect of each Observation Date, the 5th Business Day after that
Observation Date currently expected to be October 15, 2007, April 14, 2008, October 14, 2008, April
13, 2009, October 13, 2009, April 13, 2010, October 13, 2010, April 13, 2011, October 13, 2011,
April 13, 2012, October 15, 2012, April 15, 2013, October 15, 2013, April 14, 2014, October 14,
2014 and April 13, 2015.

"Disrupted Day" means, in respect of a Share, a Scheduled Trading Day on which the relevant
Exchange or Related Exchange fails to open for trading during its regular trading session or on which
there is, during the one hour prior to the actual closing time of the relevant Exchange or Related
Exchange, a Trading Disruption or an Exchange Disruption in respect of that Share which is (in the
determination of the Calculation Agent) material, or there is a closure of the relevant Exchange or
Related Exchange prior to its Scheduled Closing Time with less than one hour's (which shall exclude,
where relevant, any time period when the relevant Exchange or Related Exchange is closed between
the end of the morning trading session and the start of the afternoon trading session) notice prior to
the actual time of closure or the deadline for inputting orders to execute trades at the closing time of
the relevant Exchange or Related Exchange (such closure an "Early Closure").

"Exchange" means New York Stock Exchange Inc., London Stock Exchange, Xetra electronic trading
system, Tokyo Stock Exchange, The Korea Exchange, Continuous Market (SIBE), Milan Stock
Exchange, The Stock Exchange of Hong Kong Limited and their respective successors, if any. The
Exchange "relevant" to a Share is the exchange on which the Share is listed, traded or publicly quoted.

"Exchange Disruption" means, in respect of a Share, any event (other than an Early Closure) that
disrupts or impairs (as determined by the Calculation Agent) the ability of market participants in
general (i) to effect transactions in, or obtain market values for, the Share on the relevant Exchange,
or (ii) to effect transactions in, or obtain market values for, futures or options contracts relating to the
Share on the relevant Related Exchange.

"Hedge Transactions" means any securities, futures or derivatives transactions entered into by the
Issuer or its affiliates with any party in any jurisdiction, including, without limitation, an entity
affiliates, related to or controlled by the issuer or any entity through which the Issuer or its affiliates
5


purchase and/or hold interests in Shares or other relevant securities or contracts to hedge the Issuer's
position under the Notes.

"Initial Spot Price" means, in respect of each Share, the Closing Price of the Share as of April 13,
2007 (the "Initial Determination Date") provided that if such day is not a Scheduled Trading Day for
a Share, the next following Scheduled Trading Day for such Share. If such Initial Determination Date
is a Disrupted Day for a Share then the Initial Determination Date for such Share shall be the first
succeeding Scheduled Trading Day which is not a Disrupted Day, unless each of the 8 Scheduled
Trading Days immediately following the day originally scheduled to be the Initial Determination Date
is a Disrupted Day, in which case that 8th Scheduled Trading Day shall be the Initial Determination
Date for such Share, notwithstanding the fact that it is a Disrupted Day, and the Calculation Agent
shall determine the Closing Price of the affected Share as of that Initial Determination Date based on
its good faith estimate of the value of that Share as of the closing time of the relevant Exchange on
that 8th Scheduled Trading Day. For the avoidance of doubt, the Closing Price(s) of the unaffected
Share(s) shall be determined on the Scheduled Initial Determination Date.

"Maturity Date" means the 16th Observation Date currently expected to be April 6, 2015.

"Observation Dates" means October 9, 2007, April 7, 2008, October 6, 2008, April 6, 2009, October
6, 2009, April 6, 2010, October 6, 2010, April 6, 2011, October 6, 2011, April 6, 2012, October 9,
2012, April 8, 2013, October 7, 2013, April 7, 2014, October 6, 2014 and April 6, 2015 respectively,
provided that in respect of a Share if any such day is not a Scheduled Trading Day for such Share then
the relevant Observation Date shall be the next following Scheduled Trading Day for such Share,
provided further that, if any date so determined falls on a Disrupted Day in respect of any Share, the
Observation Date for such Share shall be the first succeeding Scheduled Trading Day that is not a
Disrupted Day relating to that Share, unless each of the eight Scheduled Trading Days immediately
following the relevant Scheduled Observation Date is a Disrupted Day relating to that Share. In that
case, (i) that eighth Scheduled Trading Day shall be deemed to be the Observation Date for that Share,
notwithstanding the fact that such day is a Disrupted Day, and (ii) the Calculation Agent shall
determine the Closing Price of that Share as of that Observation Date based on its good faith estimate
of the value for that Share as of the actual closing time on the relevant Exchange on that eighth
Scheduled Trading Day. For the avoidance of doubt, the Closing Price(s) of the unaffected Share(s)
shall be determined on the Scheduled Observation Date. In respect of each relevant Scheduled
Observation Date, the Coupon Payment Date and/or the Redemption Settlement Date and/or the
Corresponding Redemption Date are determined by reference to the last occurring Observation Date.

"Principal Amount" means the principal amount of each Note, being USD100.

"Redemption Settlement Date" means, the fifth Business Day after the Maturity Date (currently
expected to be April 13, 2015).

"Related Exchange" means, in respect of a Share, the principal exchange (if any) on which options or
futures contracts relating to the Share are traded or quoted, as determined by the Calculation Agent.

"Scheduled Closing Time" means, in respect of an Exchange or Related Exchange and a Scheduled
Trading Day, the scheduled weekday closing time of such Exchange or Related Exchange on such
Scheduled Trading Day, without regard to after hours or any other trading outside of the regular
trading session hours.

"Scheduled Initial Determination Date" means any original date that, but for the occurrence of an
event causing a Disrupted Day, would have been an Initial Determination Date.

"Scheduled Observation Date" means any original date that, but for the occurrence of an event
causing a Disrupted Day, would have been an Observation Date.

6


"Scheduled Trading Day" means, in respect of a Share, a day on which each relevant Exchange and
each relevant Related Exchange are scheduled to be open for their respective regular trading sessions.

"Shares" means the shares in the common stock of the companies (the "Companies" and each a
"Company") as set out below and references to a "Share" are to the common stock as referred to
herein of a particular Company:

Company
Bloomberg Code
Apache Corp
APA UN
BASF AG
BAS GY
BP PLC
BP/ LN
Chevron Corp
CVX UN
E.ON AG
EOA GY
Endesa SA
ELE SM
Enel SPA
ENEL IM
Exxon Mobil Corp
XOM UN
Halliburton Co
HAL UN
Hong Kong & China Gas Co. Ltd./The
3 HK
Hongkong Electric Holdings Ltd
6 HK
Iberdrola SA
IBE SM
Kansai Electric Power Co. Inc./The
9503 JT
Korea Electric Power Corp.
015760 KS
National Grid PLC
NG/ LN
Repsol YPF SA
REP SM
Schlumberger Ltd
SLB UN
S-Oil Corp
010950 KS
Tokyo Electric Power Co. Inc./The
9501 JT
Yokogawa Electric Corp.
6841 JT

and the "Basket" is comprised of all the above Shares.

"Target Redemption Coupon Rate" means 16%, without adjustment.

"Trade Date" means March 30, 2007.

"Trading Disruption" means, in respect of a Share, any suspension of or limitation imposed on trading
by the relevant Exchange or Related Exchange or otherwise and whether by reason of movements in
price exceeding limits permitted by the relevant Exchange or Related Exchange or otherwise (i)
relating to the Share on the relevant Exchange, or (ii) in futures or options contracts relating to the
Share on the relevant Related Exchange.

"USD" means the lawful currency of the United States of America.


2.
Form and Transfer

(a)
The Notes will upon issue be represented by a Global Security which has been deposited with
a common depositary for Euroclear Bank S.A./N.V. as operator of the Euroclear System
("Euroclear", references to which term shall include any successor clearing system) and
Clearstream Banking, société anonyme ("Clearstream", references to which term shall include
any successor clearing system).

7


(b)
Individual certificates each evidencing a Holder's holding of Notes ("individual certificates")
will not be issued except where either Euroclear or Clearstream is closed for business for a
continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or
announces an intention to permanently cease business or does in fact do so. In such
circumstances the Issuer will appoint a registrar to keep a register of Holders and cause
sufficient individual certificates to be issued to persons with interest in the Notes represented
by the Global Security who have produced such information that is satisfactory to the Paying
Agent and the Issuer and who have given written instructions ordering the issue of the
relevant individual certificates, and the Issuer will make such amendments to the terms and
conditions of the Notes as the Issuer shall deem appropriate.

(c)
Interests in the Notes may only be transferred in accordance with the rules and procedures for
the time being of Euroclear and Clearstream. All transactions involving the Notes (including
transfers), in the open market or otherwise, must be effected through an account at Euroclear
or Clearstream (each a "Clearing System").

(d)
Title to each Note will pass upon registration of the transfer in the books of the relevant
Clearing System. The holder of a Note (the "Holder") will be the registered holder of the
same shown in the records maintained by the relevant Clearing System. Any certificate or
other document issued by Euroclear or Clearstream as to the principal amount of Notes
standing to the account of any Holder shall be conclusive and binding for all purposes, save in
the case of manifest error.

(e)
The Notes may only be transferred in principal amounts of USD100 or in integral multiples
thereof.


3. Status

The Notes constitute unsecured and unsubordinated obligations of the Issuer and rank and shall rank
equally among themselves and with all other present and future unsecured and unsubordinated
obligations of the Issuer, other than obligations preferred by mandatory provisions of law.


4. Redemption

(a) Final
Maturity


To the extent not previously redeemed or purchased and cancelled as provided below, each
Note will be redeemed by the delivery of the Redemption Amount on the Redemption
Settlement Date.

(b) Redemption
Amount


The cash amounts (the "Redemption Amount") to be delivered in full redemption of each
Note outstanding at maturity will be equal to the Principal Amount.




(c)
Redemption for Taxation Reasons


If the Issuer is required to pay any additional amounts under Condition 10(b) (whether
Condition 10(c) is applicable or not), then the Issuer may set a date for the early redemption
of the Notes (the "Early Redemption Settlement Date") and upon the Issuer giving not less
than 30 days' notice to the Holders of the election to early redeem, the Notes may be
redeemed by delivering on the Early Redemption Settlement Date a USD amount equal to the
value in USD of a Note as at the Early Redemption Date as determined by the Calculation
8


Agent in its absolute discretion based on, inter alia, the relevant Closing Price on or about the
Early Redemption Date. The date by reference to which such cash amount deliverable upon
an early redemption of the Notes in accordance with this Condition 4(c) (the "Early
Redemption Date") shall be specified in the notice.

(d)
Mandatory Early Redemption


If, on any Observation Date (except the 16th Observation Date) (i.e. such date being the
"Knock-out Observation Date"), the sum of (A) the Variable Coupon Rate (as defined in
Condition 6) in respect of that Observation Date and (B) the sum of the Variable Coupon
Rates in respect of each preceding Observation Date, is equal to the Target Redemption
Coupon Rate, each Note outstanding will be redeemed on the Corresponding Redemption
Date at its Principal Amount plus the product of the total Interest for each Calculation Period
and Principal Amount on the Corresponding Redemption Date but the Coupon in respect of
the Knock-out Observation Date as determined in accordance with Condition 6 will remain to
be payable on the 5th Business Day after the Knock-out Observation Date.

"Corresponding Redemption Date" means the day that is 3 Business Days after the effective
date of a written irrevocable notice delivered by a Holder to the Issuer in accordance with
Condition 14 to elect for the occurrence of a Corresponding Redemption Date in relation to
the Notes held by such Holder provided that (1) the holder is only entitled to give such notice
after the occurrence of the Knock-out Observation Date and (2) if, in relation to a Note, no
such notice is given prior to the Maturity Date then such a notice shall be deemed to be given
on the Maturity Date.

"USD 6 month LIBOR" means, regarding the first Calculation Period, the rate for deposits in
USD for a period of 6 months which appears on the Telerate Page 3750 at 11.00 am London
time, on the Scheduled Knock-out Redemption Date (if such day is not a London Banking
Day, the next following London Banking Day) and the rate shall apply to each days in the
first Calculation Period; and for the subsequent Calculation Period(s), the rate for deposits in
USD for a period of 6 months which appears on the Telerate Page 3750 at 11.00 am London
time, on the relevant Reset Date and the rate shall apply to each day in the corresponding
Calculation Period. If such rate does not appear on the Telerate Page 3750, the rate for that
Reset Date will be determined on the basis of the rates at which deposits in USD are offered
by the four major banks in the London interbank market at approximately 11.00 a.m., London
time, on the day that is the Reset Date, to prime banks in the London interbank market for a
period of 6 months commencing on that Reset Date and in an amount of the outstanding
aggregate Principal Amount. The Calculation Agent will request the principal London office
of each of the four major banks in the London interbank market to provide a quotation of its
rate. If at least two quotations are provided, the rate for that Reset Date will be the arithmetic
mean of the quotations. If fewer than two quotations are provided as requested, the rate for
that Reset Date will be the arithmetic mean of the rates quoted by major banks in New York,
selected by the Calculation Agent, at approximately 11.00 a.m., New York time, on that Reset
Date for loans in USD to leading European banks for a period of 6 months commencing on
that Reset Date and in an amount of the outstanding aggregate Principal Amount;

"Calculation Period" means, in respect of the first Calculation Period, the period from and
including the Scheduled Knock-out Redemption Date to (and excluding) the first day of an
integral multiple of 6 calendar months immediately after the Scheduled Knock-out
Redemption Date (provided that if it is not a Business Day, the next following Business Day)
and for the subsequent Calculation Periods, the period from and including the first day of an
integral multiple of 6 calendar months after the Scheduled Knock-out Redemption Date to
and excluding the first day of the next following integral multiple of 6 calendar months
(provided that if it is not a Business Day, the next following Business Day) and the last period
shall end on and excluding the relevant Corresponding Redemption Date;
9



"Day" means the actual number of days in each of the Calculation Periods;

"London Banking Day" means any day on which commercial banks are open for general
business (including dealings in foreign exchange and foreign currency deposits) in London.

"Interest" means (USD 6 month LIBOR) x Days/360;

"Reset Date" means, the first day of each Calculation Period (if is not a London Banking Day,
the next following London Banking Day).

"Scheduled Knock-out Redemption Date" means the 5th Business Day after the Knock-out
Observation Date.


5. Payments

Payments in respect of the Notes will be made to against presentation and (except in the case
of payment of Coupon Amounts unless the Notes are at the same time being redeemed)
surrender of the Global Security to or to the order of the Paying Agent subject in all cases to
any fiscal or other laws and regulations applicable thereto in the place of payment, but
without prejudice to the provisions of Condition 10. If any day for payment in respect of the
Notes is not a Business Day and a day on which (a) banks are open for business and carrying
out transactions in USD in the place of presentation and (b) the Clearing Systems are open for
business, transfer instructions shall not be given or cheques shall not be sent in respect of
payments to be made under the Notes until the next following day that is a Business Day and
a day on which (a) banks are open for business and carrying out transactions in USD in the
place of presentation and (b) the Clearing Systems are open for business provided no interest
or other amounts shall be payable in respect of such postponement or any late presentation.

If individual certificates are issued pursuant to Condition 2(b), after such issuance, all
payments in respect of the Notes shall be made through a Paying Agent by transfer to an USD
account maintained by the payee with a bank in New York if the details of such account is
kept in the Register, or if no such account details are available, by USD cheques drawn on a
bank in New York mailed to the relevant Holder (at the Holder's risks) at its address as
recorded in the Register, and in the case of redemption payment in respect of the Notes, such
payment shall only be made against the surrender of the relevant individual certificates at the
office of a Paying Agent, and no interest shall accrue for any delay in the receipt of
redemption payment if and to the extent that such delay is due to the Holder being late in
surrendering the relevant individual certificates or the due date for the payment not being a
business day in place of presentation and surrender; or if a cheque mailed in accordance with
these Conditions arrive after the due date for payment. The Holders entitled to any payment
hereunder are the persons shown on the Register to be holders of Notes at the close of
business on the 7th day before the due date of payment.


6. Coupons

On each Coupon Payment Date a coupon equal to the applicable Coupon Amount shall be
payable on each Note outstanding.

The "Coupon Amount" applicable to each Coupon Payment Date in respect of an Observation
Date shall be a USD amount equal to (without adjustment):

Variable Coupon Rate x Principal Amount
10