DATED: 15 AUGUST 2008

LAGOON FINANCE LIMITED

(incorporated with limited liability in Ireland)
(the "Issuer")

PROSPECTUS

Series 3 USD 285,000,000 Floating Rate Portfolio Credit Linked Leveraged Super Senior Secured Notes due 2018
(the "Notes")

DEUTSCHE BANK AG, LONDON BRANCH

as Arranger

The attention of investors is drawn to the section headed "Investment Considerations and Risk Factors" on page 3 of this Prospectus.

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TABLE OF CONTENTS INVESTMENT CONSIDERATIONS AND RISK FACTORS........................................................................... 3 GENERAL ....................................................................................................................................................... 8 TERMS AND CONDITIONS OF THE NOTES.............................................................................................. 10 OTHER INFORMATION................................................................................................................................ 50 SCHEDULE 1 TO THE TERMS AND CONDITIONS OF THE NOTES - FORM OF ADDITIONAL RESERVE AMOUNT NOTICE ...................................................................................................................... 51 SCHEDULE 2 TO THE TERMS AND CONDITIONS OF THE NOTES PORTFOLIO GUIDELINES ....... 53 SCHEDULE 3 TO THE TERMS AND CONDITIONS OF THE NOTES - ELIGIBILITY CRITERIA ............. 55 SCHEDULE 4 TO THE TERMS AND CONDITIONS OF THE NOTES ELIGIBLE DEALERS................. 56 SCHEDULE 5 TO THE TERMS AND CONDITIONS OF THE NOTES FORM OF SUBSTITUTION NOTICE ......................................................................................................................................................... 57 SCHEDULE 6 TO THE TERMS AND CONDITIONS OF THE NOTES FORM OF SUBORDINATION RESET NOTICE ............................................................................................................................................ 58 SCHEDULE 7 TO THE TERMS AND CONDITIONS OF THE NOTES FORM OF DELIVERY INSTRUCTION CERTIFICATE ..................................................................................................................... 59 FURTHER INFORMATION CONCERNING THE ISSUE DEED .................................................................. 61 FURTHER INFORMATION CONCERNING THE CALCULATION AGENT ................................................ 62 FURTHER INFORMATION CONCERNING THE SWAP AGREEMENT ..................................................... 63 FURTHER INFORMATION CONCERNING THE DEPOSIT ACCOUNT ..................................................... 64 USE OF PROCEEDS .................................................................................................................................... 65 TAX CONSIDERATIONS.............................................................................................................................. 65 LEGAL OPINIONS ........................................................................................................................................ 65 AVAILABILITY OF PROSPECTUS AND OTHER DOCUMENTS ............................................................... 65 PAYING AGENTS AND LISTING AGENT ................................................................................................... 65 SELLING RESTRICTIONS ........................................................................................................................... 66 ANNEX 1: INFORMATION CONCERNING THE ISSUER ........................................................................... 68 ANNEX 2: ASSET SWAP CONFIRMATION................................................................................................ 69 ANNEX 3: DEFAULT SWAP CONFIRMATION ........................................................................................... 77 ANNEX 4: INFORMATION CONCERNING THE INITIAL BOND SECURITIES ....................................... 152

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INVESTMENT CONSIDERATIONS AND RISK FACTORS Purchasers of Notes should conduct such independent investigation and analysis regarding the Issuer, the Reference Entities, the Reference Obligations, the Securities and the obligors in respect thereof, the Notes, the Swap Counterparty (each of the terms as defined herein) and all other relevant persons and market and economic factors as they deem appropriate to evaluate the merits and risks of an investment in the Notes. The Issuer and the Arranger disclaim any responsibility to advise purchasers of Notes of the risks and investment considerations associated with the purchase of the Notes as they may exist at the date hereof or from time to time thereafter. However, as part of such independent investigation and analysis, prospective purchasers of Notes should consider all the information set forth in the Base Prospectus and this Prospectus, including the considerations set forth below. (A) All payments to be made by the Issuer in respect of the Notes and the Swap Agreement related thereto will be made only from and to the extent of the sums received or recovered from time to time by or on behalf of the Issuer or the Trustee in respect of the Mortgaged Property (as defined in Condition 4(a)) in respect of such Notes; To the extent that such sums are less than the amount which the holders of the of Notes and the Swap Counterparty may have expected to receive if paragraph (A) above did not apply (the difference being referred to herein as a "shortfall"), such shortfall will be borne by such holders and by the Swap Counterparty in accordance with the Terms and Conditions of the Notes and the order of priorities specified in this Prospectus; and Each holder of the Notes, by subscribing for or purchasing the Notes, will be deemed to accept and acknowledge that it is fully aware that: (i) the holders of the Notes and the Swap Counterparty shall look solely to the sums referred to in paragraph (A), as applied in accordance with paragraph (B) above (the "Relevant Sums") for payments to be made by the Issuer in respect of the Notes and the Swap Agreement related thereto; the obligations of the Issuer to make payments in respect of the Notes and the Swap Agreement related thereto will be limited to the Relevant Sums and the holders of the Notes and the Swap Counterparty shall have no further recourse to the Issuer in respect of the Notes or the Swap Agreement related thereto; without prejudice to the foregoing, any right of the holders of the Notes and the Swap Counterparty to claim payment of any amount exceeding the Relevant Sums shall be automatically extinguished; and the holders of the Notes shall not be able to petition for the winding up of the Issuer or the appointment of an examiner in respect of the Issuer as a consequence of any such shortfall.

(B)

(C)

(ii)

(iii)

(iv)

Investment in the Notes is only suitable for investors who: (1) have the requisite knowledge and experience in financial and business matters, and access to, and knowledge of, appropriate analytical resources, to evaluate the information contained in the Base Prospectus and this Prospectus and the merits and risks of an investment in the Issuer in the context of such investors financial position and circumstances; are capable of bearing the economic risk of an investment in the Issuer for an indefinite period of time; are acquiring the Notes for their own account for investment, not with a view to resale, distribution or other disposition of the Notes (subject to any applicable law requiring that the disposition of the investors property be within its control); recognise that it may not be possible to make any transfer of the Notes for a substantial period of time, if at all; and are banks, investment banks, pension funds, insurance companies, securities firms, investment institutions, central governments, large international or supranational organisations or other entities,

(2) (3)

(4) (5)

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including inter alia treasuries and finance companies of large enterprises which are active on a regular and professional basis in the financial markets for their own account. Further, 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 beneficiarys) 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. Neither the Issuer, the Arranger, the Swap Counterparty nor any other person has or will make any representation or statement as to the suitability of the Notes for investors. Investors should obtain all required independent professional advice before purchasing the Notes. Any decision by any prospective purchaser to buy or hold the Notes should be made after conducting such independent investigations and analysis as it deems necessary and consulting such internal and/or external advisors (including, without limitation, tax, accounting, legal and financial advisors) that it considers necessary or prudent in order to make its own independent determination of the suitability for its purposes, of the advantages and risks and of the consequences of an investment in the Notes. Limited Recourse Obligations The Notes represent limited recourse debt obligations of the Issuer. The Notes are payable solely from the realisation of the security created pursuant to the Trust Deed. None of the Trustee, the Swap Counterparty or any of their affiliates or any other person or entity will be obliged to make payments in respect of the Notes. Consequently, the holders of the Notes must rely solely on distributions from the Swap Agreement for the payment of principal and interest thereon. In the event of a Credit Event, the Noteholders will have no recourse in respect of any consequential reduction in the outstanding principal amount of the Notes under the Conditions or otherwise against the Issuer, the Swap Counterparty or the Calculation Agent. If payments by the Swap Counterparty under the Swap Agreement and/or secured property are insufficient to make payments on the Notes, no other assets will be available for payment of the shortfall and, following realisation of the Mortgaged Property charged to secure the Notes, none of the Issuer, the Swap Counterparty, the Trustee or any of their Affiliates nor any other person shall be obliged to pay any shortfall and all outstanding claims shall be extinguished. In addition, the Trustee will in general be obliged pursuant to the terms of the Trust Deed in relation to the Notes to apply all moneys received by it in connection with the realisation or enforcement of the security constituted by or pursuant to such Trust Deed in accordance with Swap Counterparty Priority. In such circumstances the Trustee will apply moneys received by it to pay any amounts owed to it under the Trust Deed, to the Swap Counterparty under the Swap Agreement before paying amounts owing to Noteholders under the Notes. There may be insufficient moneys left from the realisation or enforcement of the security, following such payments to pay amounts owing to Noteholders in full or at all. After the moneys are distributed in accordance with the order of priorities specified in the Prospectus and the Trust Deed, the Noteholders are not entitled to take any further steps against the Issuer to recover any sum and no debt shall be owed by the Issuer in respect of any further sum. The Issuer or the Swap Counterparty may terminate the Default Swap or the Asset Swap in certain circumstances specified therein. If the Notes become due for redemption prior to their maturity, the Default Swap and the Asset Swap will be terminated. In addition and in general, termination of the Default Swap or Asset Swap will result in mandatory redemption of the Notes. In the event that the Default Swap or, as the case may be, the Asset Swap is terminated, the Issuer may be required to make substantial termination payments to the Swap Counterparty and such payments must be made before any payment of interest or principal is made on the Notes and will reduce the amounts available to make payments to Noteholders. Credit Event Investors should note that the Notes are credit-linked notes linked to the performance of the Reference Swap and the Reference Entities and the Reference Obligations defined herein and that the amount payable by the Issuer is dependent upon whether a Credit Event in respect of the Reference Swap has occurred. In certain circumstances no value may be realisable by Noteholders. No representation as to the performance of the Notes or the Reference Portfolio is made by any of the Issuer, the Arranger, the Swap Counterparty or the Calculation Agent.

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None of the Issuer, the Arranger, the Swap Counterparty, the Calculation Agent or any of their respective affiliates make any representation or warranty as to the performance of the Notes or the Reference Portfolio. The Portfolio The Initial Reference Portfolio in respect of the Default Swap is set out on pages 112 to 119 of the Default Swap. The Reference Entities constituting the Reference Portfolio may change from time to time as a result of Substitutions made by the Initial Owner. Exposure to Reference Entities and Reference Obligations set out in the Reference Portfolio (as updated from time to time) A Note does not represent a claim against any Reference Entity and, in the event of any loss, a Noteholder will not have recourse under a Note to any Reference Entity. However, investors in the Notes will be exposed to the credit risk of the Reference Entities and the Reference Obligations. Neither the Issuer, the Arranger, the Trustee nor any of them or other person on their behalf makes any representation or warranty, express or implied, as to the credit quality of any Reference Entity or the Reference Obligations. Each of such persons may have acquired, or during the term of the Notes may acquire, confidential information with respect to the Reference Entities or the Reference Obligations. None of such persons is under any obligation to make such information available to Noteholders. Prospective purchasers of Notes should pay particular attention to the leverage provisions of the Notes. Notwithstanding the fact that the initial principal amount of the Notes is USD 285,000,000, the credit protection effectively sold by the Noteholders is USD 1,805,000,000. In connection with the leveraged nature of the Notes and the credit default swap element of the Swap Agreement, the provisions of the Swap Agreement entitle the Swap Counterparty to terminate the Swap Agreement prior to its scheduled termination date if a Trigger Event (as defined in the Swap Agreement) occurs and if the Swap Agreement is so terminated, the Notes will become due for redemption prior to their stated maturity in accordance with the Terms and Conditions of the Notes. A Trigger Event at any time is defined so as to the take account of the exposure of the Swap Counterparty to the Issuer under the credit default swap element of the Swap Agreement, having regard to the Average Portfolio Spread, Spread Widening Factor and Spread Trigger (each as defined in the Swap Agreement). Provided that no Trigger Event (as defined in the Swap Agreement) has occurred in relation to the Notes, a Noteholder may give notice to the Issuer that it wishes to provide additional cash collateral to the Issuer. Prospective purchasers of Notes should review in detail the provisions of the Terms of the Notes (including paragraphs 20(i)(c), 24(A), 24(B), 25(B) and 25(C) of the Terms) and of the Swap Agreement. No Secondary Market Currently no secondary market exists for the Notes. The Arranger is not under any obligation to make a market in the Notes and it is highly unlikely that any secondary market for the Notes will develop. In the unlikely event that a secondary market in the Notes does develop, there can be no assurance that it will provide the Noteholders with liquidity of investment or that it will continue for the life of the Notes. Accordingly, the purchase of the 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. Investors must be prepared to hold the Notes until maturity. In addition, the Notes are subject to significant transfer restrictions as described under "Subscription and Sale" and "Transfer Restrictions" in the Base Prospectus which further limit the liquidity of the Notes. Application has been made to list the Notes on the Official List of the Irish Stock Exchange. Swap Agreement Investors in the Notes shall be deemed to have fully understood the provisions of the Default Swap and Asset Swap related thereto and, in particular, the fact that amounts due in respect of principal and interest on the Notes will be affected by the amounts due and payable by the Issuer under such Default Swap and Asset Swap.

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Ability of Initial Owner to Substitute Reference Entities The Initial Owner (or the Initial Owners Agent acting on its behalf) has the ability, subject to the written agreement of the Issuer and the Swap Counterparty and certain conditions specified in the Terms and Conditions, to substitute Reference Entities in the Reference Portfolio. Investors should note that Substitutions may alter the credit profile of the Reference Portfolio and may therefore increase or decrease the risk of the occurrence of a Credit Event in respect of the Reference Portfolio. In addition, investors should be aware that the effect of a Substitution may (i) increase or decrease the Additional Reserve Account Balance or (ii) increase or decrease the Portfolio Threshold Amount. To the extent that the Additional Reserve Account Balance is reduced as a result of Substitutions, investors will receive a lower amount on the maturity of the Notes in respect of the Additional Reserve Account Balance than would have been the case had no such Substitutions occurred. If the Portfolio Threshold Amount is decreased following Substitutions, losses occurring in respect of Reference Entities may trigger a Principal Amount Reduction in respect of the Notes more quickly than would have been the case had no such Substitutions occurred. None of the Issuer, the Swap Counterparty, the Trustee or any affiliate of them takes any responsibility for any actions of the Initial Owner (or the Initial Owners Agent acting on its behalf) or the consequences of any actions of the Initial Owner (or the Initial Owners Agent acting on its behalf) taken by it in accordance with the provisions relating to Substitutions. None of the Issuer, the Trustee or the Swap Counterparty is under any obligation to determine whether the Initial Owners Agent has been duly appointed by the Initial Owner or whether such appointment has terminated at any time that a Substitution is made by the Initial Owners Agent. The right to request Substitutions is solely that of the Initial Owner for so long as the Initial Owner is the Sole Beneficial Owner of the Notes. If the Initial Owner transfers all or some of the Notes to another party (and so ceases to be the Sole Beneficial Owner), no further Substitutions may be made. In connection with any Substitutions requested by the Initial Owner (or the Initial Owners Agent acting on its behalf), none of the Issuer, the Trustee or the Swap Counterparty shall be obliged to monitor whether the Initial Owner is the Sole Beneficial Owner at any time or make any other investigation or enquiry of any nature regarding the identity of the Sole Beneficial Owner and none of the Issuer, the Trustee or the Swap Counterparty shall have any liability whatsoever in respect of any consequences arising from Substitutions that are effected in circumstances where the Initial Owner is no longer the Sole Beneficial Owner or where the Initial Owners Agent acting on behalf of the Initial Owner has ceased to be appointed as such, unless such party has been notified by the Initial Owner that it has ceased to be the Sole Beneficial Owner or that the Initial Owners Agent has ceased to be the agent of the Initial Owner, as the case may be. There is a risk that the Initial Owner or the Initial Owners Agent could attempt to make Substitutions notwithstanding that the Initial Owner is no longer the Sole Beneficial Owner or that the Initial Owners Agent is no longer appointed as the Initial Owners Agent. The Initial Owner accepts liability for any losses incurred by any subsequent holder of the Notes due to failure by the Initial Owner to notify the Issuer, the Trustee and the Swap Counterparty of any transfer of the Notes. Subsequent holders of the Notes shall have no recourse against the Issuer, the Trustee and the Swap Counterparty but shall only have recourse against the Initial Owner for the recovery of any such losses. Prospective purchasers of the Notes should review in detail the provisions of the Terms of the Notes (including Condition 19 (as amended)). Fluctuations of the mark to market value of the Reference Swap Investors should note that they are exposed to the risk of fluctuations of the mark to market value of the Reference Swap. Under the Terms of the Notes Investors may be required to provide additional collateral to secure the Notes if a Trigger Event (as defined in the Default Swap) is in existence. The occurrence of such a Trigger Event is dependant on the mark to market value of the Reference Swap. Investors' failure to provide the additional collateral may result in the termination of the Default Swap and the mandatory redemption of the Notes. In such circumstances the Notes may be redeemed at an amount which is less than the nominal value of the Notes. Reliance on Creditworthiness of Deutsche Bank AG, London Branch The ability of the Issuer to meet its obligations under the Notes will depend on the receipt by it of payments under the Swap Agreement related thereto. Consequently, the Issuer is exposed not only to the occurrence of Credit Events in relation to any of the Reference Entities and the Reference Obligations, but also to the ability of Deutsche Bank AG, acting through its London Branch (as Swap Counterparty) to perform its

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obligations to make payments to the Issuer under the Swap Agreement and to Deutsche Bank AG, acting through its London Branch (as Deposit Bank) in relation to the Securities. Potential Conflicts of Interest Involving Deutsche Bank AG, London Branch Deutsche Bank AG, London Branch may have placed or underwritten certain of the Reference Obligations or certain of the obligations of Reference Entities and may have provided investment banking, commercial banking or other services to other parties in respect of the Reference Obligations or the obligations of Reference Entities. Taxation Each Noteholder 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 it, by reason of holding the Notes, or to any payment to it in respect of the Notes. Noteholders should inform themselves as to the tax consequences applicable to them of the acquisition, holding or disposal of the Notes. All payments of principal and interest by the Issuer in respect of the Notes may be made subject to any withholding or deduction for, or on account of, any applicable tax. In the event of the imposition of any such taxes, the Issuer will use all reasonable endeavours (subject to the consent of the Trustee and the Swap Counterparty) to arrange for the substitution of its obligations by a company incorporated in another jurisdiction or (subject as provided above) to change its residence for taxation purposes or, to the extent permitted by law, change its domicile to another jurisdiction, failing which, or if it is unable to do so in a tax efficient manner, it shall redeem the Notes, subject to certain exceptions. Purchasers of Notes should conduct such independent investigation and analysis regarding the tax treatment of the Notes, including the Default Swap and the Asset Swap as they deem appropriate to evaluate the merits and risks of an investment in the Notes. Tax risks include, without limitation, a change in any applicable law, treaty, rule or regulation or the interpretation thereof by any relevant authority which may adversely affect payments or deliveries in respect of the Notes, the Default Swap and/or the Asset Swap. In addition, if the Default Swap is recharacterised for tax purposes, payments to the Issuer under the Default Swap may be subject to excise tax. In addition to certain other circumstances, the Swap Agreements may be terminated if withholding taxes are imposed on payments made by the Issuer or the Swap Counterparty under the Swap Agreements. In such circumstances the Notes will be subject to mandatory redemption, Counterparty Priority shall apply and the swap termination payments and relevant tax may have the effect of reducing amounts available to Noteholders under the Notes. THE CONSIDERATIONS SET OUT ABOVE ARE NOT, AND ARE NOT INTENDED TO BE, A COMPREHENSIVE LIST OF ALL CONSIDERATIONS RELEVANT TO A DECISION TO PURCHASE OR HOLD ANY NOTES. THE ATTENTION OF INVESTORS IS ALSO DRAWN TO THE SECTIONS HEADED "INVESTOR SUITABILITY" AND "INVESTMENT CONSIDERATIONS AND RISK FACTORS" IN THE BASE PROSPECTUS.

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GENERAL Application will be made to the Irish Financial Services Regulatory Authority (the "Financial Regulator"), as competent authority under Directive 2003/71/EC (the "Prospectus Directive"), for the Prospectus to be approved. Application will be made to the Irish Stock Exchange Limited (the "Irish Stock Exchange") for the Notes to be admitted to the Official List and trading on its regulated market. This Prospectus, under which the Notes are issued, incorporates by reference the base prospectus dated 26 November 2007 (the "Base Prospectus") issued in relation to the Issuers USD 10,000,000,000 Secured Note Programme (the "Programme"). Deutsche Bank AG, London Branch, of Winchester House, 1 Great Winchester Street, London EC2N 2DB (the "Arranger") is the Arranger for the Notes. Terms defined in the Base Prospectus have the same meaning in this Prospectus. This Prospectus comprises a prospectus for the purposes of the Prospectus Directive. This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation, and no action is being taken to permit an offering of the Notes or the distribution of this Prospectus in any jurisdiction where such action is required. The Issuer is a private limited company and accordingly its Articles of Association prohibit any invitation to the public to subscribe for any shares or debentures of the Issuer. This Prospectus does not constitute an invitation to the public within the meaning of the Irish Companies Acts 1963 to 2006 to subscribe for the Notes. The Notes will be governed by and construed in accordance with English law. Subject to any limitations set out at Annex 4 herein, the Issuer accepts responsibility for the information contained in this document. To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. No person has been authorised to give any information or to make representations other than those contained in this Prospectus in connection with the issue or sale of the Notes and, if given or made, such information or representations must not be relied upon as having been authorised by the Issuer, the Arranger or either of them. Neither the delivery of this Prospectus nor any sale made in connection herewith shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof. Any foreign language included in the document is for convenience purposes only and does not form part of the Prospectus. Upon approval of the Prospectus by the Financial Regulator, the Prospectus will be filed with the Companies Registration Office in Ireland in accordance with Regulation 38(1)(b) of the Prospectus (Directive 2003/71/EC) Regulations 2005 (the "Prospectus Regulations"). Except as specified in this Prospectus, the Issuer does not intend to provide post issuance transaction information regarding the Notes or the Securities. Documents Incorporated By Reference This Prospectus should be read and construed in conjunction with the Base Prospectus which has been previously published and approved by the Financial Regulator. The Base Prospectus shall be deemed to be incorporated in, and form part of, this Prospectus, save that any statement contained in the Base Prospectus which is deemed to be incorporated herein shall be deemed to be modified or superseded for the purpose of this Prospectus to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded to constitute a part of this Prospectus.

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Expenses All payment of costs and expenses of the Issuer in connection with the issue of the Notes and any related Swap Agreement described in paragraph 20 of the Terms of the Notes set out below, will be met by the Swap Counterparty. It is anticipated that no surpluses shall be accumulated by the Issuer in respect of the Notes. The expenses related to the admission to trading of the Notes on the Irish Stock Exchange are estimated to be EUR 2,600. Documents Available for Inspection Copies of the following documents will be available for inspection and collection during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the registered office of the Issuer, the specified office of the Issuing and Paying Agent in London and the specified office of the Paying Agent in Ireland, free of charge, for so long as the Notes shall remain outstanding and, for so long as the Notes remain listed on the Irish Stock Exchange, at the office of the Listing Agent specified on the back page of this Prospectus: (i) (ii) (iii) this Prospectus, the Base Prospectus and any notice of amendment; the Issue Deed and any supplemental issue deed; each document incorporated by reference into the Issue Deed (including without limitation the documents setting out the terms of the Agency Agreement, the Purchase Agreement and the Swap Agreement referred to in paragraph 20 of the Terms of the Notes set out below); annual financial statements of the Issuer; the annual financial statements and the quarterly interim financial statements of Deutsche Bank Aktiengesellschaft; copies of any offering documents setting forth the terms and conditions of the Securities; copies of the annual financial statements and interim financial statements (if any) of the issuer of the Securities; and the Issuers memorandum and articles of association.

(iv) (v) (vi) (vii) (viii)

ERISA Considerations By its purchase and acceptance of a Note, each holder will be deemed to have represented and warranted that either (i) no ERISA Plan (as defined below) assets have been used to purchase such Notes or (ii) one or more prohibited transaction statutory or administrative exemptions applies such that the use of such plan assets to purchase and hold such Notes will not constitute a non-exempt prohibited transaction under the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the U.S. Internal Revenue Code of 1986, as amended (the "Code"). As used herein "ERISA Plan" means employee benefit plans subject to Title 1 of ERISA or an individual retirement account or employee benefit plan subject to Section 4975 of the Code or entities which may be deemed to hold the assets of any such plans.

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TERMS AND CONDITIONS OF THE NOTES Terms of Series 3 USD 285,000,000 Floating Rate Portfolio Credit Linked Leveraged Super Senior Secured Notes due 2018 The Notes designated above shall have the following terms (the Terms) which shall complete, modify and amend the Master Terms and Conditions (Version dated 30 November 2007) which are set out in the Issue Deed dated 25 July 2008 relating to the Notes: 1 Issuer: Lagoon Finance Limited. See Annex 1 - Information concerning the Issuer. Arranger: Deutsche Bank AG, acting through its London branch at Winchester House, 1 Great Winchester Street, London EC2N 2DB. 3. Not Applicable. United States dollars (USD).

(i) (ii)

Series: Tranche Number:

3 4

Specified Currency or Currencies: Aggregate Nominal Amount of Notes to be admitted to trading: (i) (ii) Series: Tranche:

USD 285,000,000. Not Applicable. 100 per cent. of the Aggregate Nominal Amount. USD 500,000. 25 July 2008. The Trade Date for the Notes is 27 June 2008.

5 6 7

Issue Price: Specified Denominations: (i) Issue Date:

(ii) 8

Interest Commencement Date:

28 June 2008. The Credit Event Cut-Off Date (as defined below) (the Scheduled Maturity Date) or, if the Termination Date falls after the Scheduled Maturity Date, the fifth Relevant Business Day following the Termination Date (the Extended Maturity Date), subject to adjustment in accordance with the Business Day Convention. If applicable, the Irish Stock Exchange and Noteholders will be notified, in respect of any such postponement of the Scheduled Maturity Date to the Extended Maturity Date. Credit Event Cut-Off Date means 20 June 2018. The term Termination Date is defined in the Default Swap Confirmation.

Maturity Date:

Interest Basis:

USD-LIBOR-BBA plus 3.141 per cent. per annum Floating Rate

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(further particulars specified below). 10 11 12 13 Redemption/Payment Basis: Change of Interest Redemption/Payment Basis: Put/Call Options: (i) (ii) Status of the Notes: Date on which Board approval for issuance of Notes obtained: or Credit Linked (see paragraph 24 below). Not Applicable. Not Applicable. Secured limited recourse obligations of the Issuer, secured as provided below. 24 July 2008.

14

Method of distribution:

Non-syndicated.

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 15 16 Fixed Rate Provisions: Floating Note Provisions: (i) Interest Period(s): Not Applicable. Applicable. The first Interest Period is from (and including) the Interest Commencement Date to (but excluding) the Issue Date. The second Interest Period is from (and including) the Issue Date to (but excluding) the first Interest Period Date. Thereafter, each successive Interest Period shall begin on (and include) an Interest Period Date and end on (but exclude) the next succeeding Interest Period Date. 20 March, 20 June, 20 September and 20 December in each year, commencing on 20 September 2008, and the final Interest Period Date will be the Scheduled Maturity Date, each subject to adjustment in accordance with the Business Day Convention. The interest accruing in respect of the first Interest Period and the second Interest Period shall be paid together on the second Business Day immediately following the Interest Period Date on which the second Interest Period ends. Thereafter, the interest accruing in respect of each Interest Period shall be paid on the second Business Day immediately following each Interest Period Date on which such Interest Period ends, provided that in respect of the Interest Period ending on (but excluding) the Scheduled Maturity Date, the interest shall be paid on the Scheduled Maturity Date. If the Maturity Date falls after the Scheduled Maturity Date, the Scheduled Maturity Date shall not be an Interest Payment Date and the Maturity Date shall be the final Interest Payment Date (and there shall be no Interest Payment Date between the Interest Payment Date relating to the Interest Period Date falling in March 2018 and the Maturity Date). Following Business Day Convention.

(ii)

Interest Period Dates:

(iii)

Specified Payment Date:

Interest

(iv)

Business Convention:

Day

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(v) (vi)

Business Centre(s): Manner in which the Rate(s) of Interest is/are to be determined: Party responsible for calculating the Rate(s) of Interest and Interest Amount(s):

London and New York. Screen Rate Determination.

(vii)

Calculation Agent. All communications to and by Deutsche Bank AG, London Branch in its capacity as Calculation Agent should be made to and will be made by Deutsche Bank AG, London Branch - Trust & Securities Services. The Calculation Agent shall cause the Interest Rate for each Interest Period determined by it, together with the relevant Interest Payment Date, to be notified to the Issuer, each of the Paying Agents and the Irish Stock Exchange as soon as possible after their determination but in no event later than the commencement of the relevant Interest Period.

(viii)

Rate of Interest:

From and including the Interest Commencement Date to but excluding the Issue Date, the Rate of Interest shall be equal to the Margin (as defined below). Thereafter, the Rate of Interest shall be equal to the Reference Rate (as defined below) plus the Margin. Rate Applicable. USD-LIBOR-BBA with a Designated Maturity (as each such term is defined in the 2006 ISDA Definitions) of three months, other than with respect to the first Interest Period where the Reference Rate shall be determined by interpolation between the one month and two months rates. Four major banks in the London interbank market. The first day of the relevant Interest Period. Reuters Screen Page LIBOR01 (as defined in the 2006 ISDA Definitions). Not Applicable. 3.141 per cent. per annum.

(ix)

Screen Determination: Reference Rate:

Reference Banks: Interest Dates: Determination

Relevant Screen Page: (x) (xi) (xii) (xiii) (xiv) (xv) ISDA Determination: Margin(s): Minimum Interest: Maximum Interest: Rate Rate of of

Not Applicable. Not Applicable. Actual/360. (A) Interest Amount

Day Count Fraction: Fall back provisions, rounding provisions, denominator and any other terms relating to the method of calculating

Subject as provided below, the Interest Amount payable on each Note in respect of each Interest Period shall be the amount (subject to a minimum of zero) determined

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interest on Floating Rate Notes, if different from those set out in the Conditions:

by the Calculation Agent to be such Notes pro rata share (rounded down to the nearest cent) of the sum of: (1) the product of: (i) the Notional Principal Amount of the Notes as at the relevant Interest Period Date; the Rate of Interest (as defined above) applicable to such Interest Period; and the Day Count Fraction;

(ii)

(iii)

provided that if the Maturity Date falls after the Scheduled Maturity Date, for the purpose of calculating the Interest Amount payable on each Note in respect of the Interest Payment Date falling on the Maturity Date, the Notional Principal Amount of the Notes shall be determined as at the Maturity Date; and (2) the sum of the Additional Interest Amounts and related Accrued Interest Amounts (each as defined below) (if any) in respect of such Interest Payment Date if it follows a date on which a Final Price has been determined in respect of an Undetermined Reference Entity under the Default Swap (each such Interest Payment Date an Additional Interest Payment Date).

Notional Principal Amount means, in respect of any date, an amount calculated by the Calculation Agent equal to: (a) the sum of the Outstanding Principal Amounts of the Notes (as defined in sub-paragraph 24(B)) less the greater of (x) an amount in USD equal to the aggregate of the Maximum Loss Determination Amounts (as defined below) in respect of all Undetermined Reference Entities less the Notional Additional Reserve Account Balance and (y) zero.

(b)

Undetermined Reference Entity means a Reference Entity under the Reference Swap for which an Event Determination Date has occurred but no Loss Determination Amount has been determined under the Default Swap as at such date. Maximum Loss Determination Amount means, in respect of each Credit Event relating to an Undetermined Reference Entity (as defined above), the maximum possible Loss Determination Amount that could be determined under the Default Swap as a result of such Credit Event, as determined by the Swap Calculation Agent in a commercially reasonable manner.

WS1201.525915.8

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(B)

Additional Interest Amounts

The Additional Interest Amount in respect of each Additional Interest Payment Date shall be calculated by the Calculation Agent in a commercially reasonable manner to reflect the additional amount (if any) which would have been paid on the Interest Payment Date in respect of each Interest Period during the Adjustment Period during which there are one or more Undetermined Reference Entities (the Interest Period Date in respect of the first such Interest Payment Date being the Relevant Coupon Accrual Date) had the Loss Determination Amount in respect of each relevant Reference Entity been calculated on the Interest Period Date corresponding to such Interest Payment Date for each then Undetermined Reference Entity. Adjustment Period means the period from (and including) the Interest Payment Date immediately preceding the relevant Event Determination Date (or, if no such Interest Payment Date exists, the Issue Date) to (but excluding) the Interest Payment Date immediately preceding the determination of the relevant Loss Determination Amount. (C) Accrued Interest Amount

The Accrued Interest Amount relating to any Additional Interest Amount shall be an amount equal to the aggregate of all interest amounts calculated in respect of each day during the period from (and including) the Relevant Coupon Accrual Date to (but excluding) the relevant Additional Interest Payment Date. Each such daily interest amount shall be equal to the product of: (i) (ii) (iii) the Interest Deferral Rate; the relevant Additional Interest Amount; and the Deferral Day Count Fraction, where:

Interest Deferral Rate means an overnight rate for USD as determined from time to time by the Calculation Agent in a commercially reasonable manner; and Deferral Rate Day Count Fraction means 1/360. (D) Interest on Extended Maturity Date

If the Maturity Date falls after the Scheduled Maturity Date an additional Interest Amount shall be payable on the Maturity Date and calculated as an amount equal to the aggregate of all interest amounts in respect of each day during the period from (and including) the Scheduled Maturity Date to (but excluding) the Maturity Date. Each such daily interest amount shall be equal to the product of: (i) the Interest Deferral Rate;

WS1201.525915.8

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(ii)

the sum of the Notional Principal Amount on the Maturity Date and the Interest Amount relating to the final Interest Period; and the Deferral Rate Day Count Fraction.

(iii)

(E) Interest on Notional Additional Reserve Amount Balance Any interest accrued on the Notional Additional Reserve Amount Balance (if any) and payable to Noteholders in accordance with these Terms shall constitute interest payable in respect of the Notes. (F) Payments pursuant to Condition 7(d)(i)

If pursuant to Condition 7(d)(i) (as amended below) the holders of 100 per cent. of the aggregate Outstanding Principal Amounts have elected to accept payment of net amounts in respect of the Notes, any amount otherwise due to Noteholders in accordance with this paragraph 16 (xv) shall be adjusted accordingly and the provisions of this paragraph 16(xv) shall be construed accordingly. (G) Collateral Buyback Adjustment

If, during any Interest Period, Legal & General Pensions Limited purchases any Potentially Defaulted Securities in accordance with Condition 7(c) (as amended), the Interest Amount payable on each Note in respect of such Interest Period and each Interest Period thereafter shall be adjusted by an amount (the Collateral Interest Adjustment Amount) equal to: (x) the product of (i) the Reference Rate determined in respect of such Interest Period; (ii) the outstanding principal amount of such Potentially Defaulted Securities and (iii) the Day Count Fraction, minus (y) the product of (i) the overnight USD LIBOR rate; (ii) the proceeds of sale received from Legal & General Pensions Limited in respect of such Potentially Defaulted Securities; and (iii) the Day Count Fraction, divided by the number of Notes then outstanding, all as determined by the Calculation Agent acting in a commercially reasonable manner as at the date of the relevant purchase of Potentially Defaulted Securities. If the Collateral Interest Adjustment Amount is a positive number, an amount equal to such Collateral Interest Adjustment Amount shall be subtracted from the Interest Amount payable in respect of the relevant Interest Period (subject to a minimum of zero) and if the Collateral Interest Adjustment Amount is a negative number, an amount equal to the absolute value of such Collateral Interest Adjustment Amount shall be added to the Interest Amount payable in respect of the relevant Interest Period. 17 Zero Coupon Note Provisions: Not Applicable

WS1201.525915.8

15

18

Index Linked Interest Note/other variable-linked interest Note Provisions: Dual Currency Note Provisions: Mortgaged Property: (i) (a) Securities:

Not Applicable

19 20

Not Applicable ) Securities means: (aa) USD 95,190,000 in principal amount of the 2.30 per cent. notes due 26 August 2008 issued by Bank of Scotland plc pursuant to its EuroCommercial Paper and Certificate of Deposit Programme (ISIN: XS0380055375); USD 95,193,000 in principal amount of the 2.29 per cent. notes due 26 August 2008 issued by Coperative Central Raiffeisen Boerenleenbank B.A. (Rabobank Nederland) pursuant to its EuroCommercial Paper and Certificate of Deposit Programme (ISIN: XS0380055532); USD 95,198,000 in principal amount of the 2.35 per cent. notes due 26 August 2008 issued by Deutsche Bank Aktiengesellschaft pursuant to its Commercial Paper Programme (ISIN: XS0380111541) (the Deutsche Bank Securities);

(bb)

(cc)

See Annex 4 Information concerning the Initial Bond Securities. (together the Initial Bond Securities); and (i) cash standing to the credit of the Deposit Account (as defined below) from time to time (the Securities Balance), which as at the Issue Date shall be in an amount of USD 5,034.13; and/or one or more Replacement Securities (as defined below) (together with the Initial Bond Securities, the Bond Securities) that may be selected by the Swap Counterparty in accordance with Condition 4(g)(ii) (as amended below).

(ii)

The Custodian shall maintain the Deposit Account with the Deposit Bank (as defined below) on the terms that the amount standing to the credit of the Deposit Account shall earn the rate of interest prevailing from time to time on deposits with such terms as shall be selected in the absolute discretion of the Custodian. The Issue Deed in respect of the Notes, dated the Issue Date, provides that the Trustee will be deemed to release the security over the Securities (or the relevant part thereof) to the extent required, inter alia, to make payments by the Issuer to Noteholders or Couponholders in respect of principal or interest in accordance with the Conditions of the Notes and/or to
WS1201.525915.8

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the Swap Counterparty in accordance with the terms of the Swap Agreement. The Issue Deed provides that the Trustee will be deemed to release from the security created by the Issue Deed over the Securities (or, as the case may be, a proportion of the Securities) (i) if any Notes are to be purchased by the Issuer pursuant to Condition 7(i), to enable the Securities (or the relevant part thereof) to be delivered and/or paid in accordance with Condition 7(i); or (ii) to the extent that such Securities are to be paid or delivered to the Swap Counterparty in accordance with Condition 4(g). (b) Substitution: Applicable. Condition 4(g) shall be deleted in its entirety and replaced with the following: (i) If the Bond Securities have a maturity date which falls prior to the Maturity Date or other date for final redemption of the Notes (Maturing Securities), the proceeds of redemption received upon maturity of such Maturing Securities shall be credited by the Custodian on behalf of the Issuer to the Deposit Account (in the case of any such proceeds denominated in a currency other than USD, having been converted into USD at the relevant spot rate determined by the Calculation Agent in a commercially reasonable manner) and shall be subject to the Security created by or pursuant to the Trust Deed. (ii) At any time from and including the Issue Date to but excluding the Scheduled Maturity Date, the Swap Counterparty may, by notice (which may be by email or telephone) to the Trustee, require that any Securities Balance (the Replaced Securities) then forming part of the Securities be replaced (a Replacement and each date on which such Replacement occurs, a Replacement Date) by securities or other assets (Replacement Securities) provided however that, upon any release of the Replaced Securities from the Security created by or pursuant to the Trust Deed, any such Replacement Securities are delivered, transferred or assigned to the Issuer and are subject to the Security created by or pursuant to the Trust Deed. The outstanding principal amount of Replacement Securities shall be an amount equal (converted when necessary into USD at the Relevant FX Rate (as defined below)) to the nominal amount of the Replaced Securities. The Swap Counterparty shall deliver the Replacement Securities to the Issuer in exchange for payment by the Issuer to the Swap Counterparty of the relevant Replaced Securities. The Trustee shall not be liable to the Issuer, the Noteholders or any other person and the Issuer shall not be liable to the Trustee, the Swap Counterparty or the Noteholders, in each case for any loss arising from any arrangement referred to in the Replacement Notice or otherwise from the operation of

WS1201.525915.8

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this Condition 4(g)(ii). (iii) If, on or prior to 26 August 2008, the Swap Counterpartys long-term credit rating by S&P falls below A, the Deutsche Bank Securities shall be delivered as soon as reasonably practicable by the Custodian on behalf of the Issuer to the Swap Counterparty (a Deutsche Bank Securities Delivery and each date on which such Deutsche Bank Securities Delivery occurs, a Deutsche Bank Securities Delivery Date) in exchange for the payment by the Swap Counterparty to the Issuer of an amount equal to the then outstanding principal amount of such Deutsche Bank Securities, which amounts shall be credited to the Deposit Account and shall be subject to the Security created by or pursuant to the Trust Deed. All rights of Replacement under this Condition 4(g) shall cease immediately upon the Security constituted by the Trust Deed becoming enforceable, whether in whole or in part. If applicable, a notice of amendment will be filed with the Irish Stock Exchange and Noteholders will be notified in respect of any such replacement of Securities. (c) Additional Reserve Account: (i) At any time during the period from (and including) the Issue Date up to the close of business on the date which is two Relevant Business Days preceding the Maturity Date (the Additional Reserve Amount Payment Period), any Noteholder may, on any Relevant Business Day, give notice (an Additional Reserve Amount Notice) to the Deposit Bank on behalf of the Issuer (with a copy to the Trustee and the Swap Counterparty) in the form set out in Schedule 1 to these Terms that it wishes to pay into the Additional Reserve Account (as defined below) the relevant Additional Reserve Amount (as defined below) on the relevant Additional Reserve Amount Payment Date (as defined below) (an Additional Reserve Amount Addition). Any Additional Reserve Amount Notice shall be effective when given to the Deposit Bank on behalf of the Issuer (with a copy to the Trustee and the Swap Counterparty) in accordance with Condition 15. No Additional Reserve Amount Notice may be withdrawn after receipt thereof by the Deposit Bank on behalf of the Issuer, the Trustee and the Swap Counterparty. After delivery of an Additional Reserve Amount Notice, no Noteholder may transfer any Notes until after receipt by the Issuer of the relevant Additional Reserve Amount. Failure properly to complete and deliver an Additional Reserve Amount Notice may result in such notice being treated as null and void. Any determination as to whether (i) such notice has been properly completed, (ii) the relevant Noteholder has duly given notice and (iii) the Additional Reserve Amount has
WS1201.525915.8

18

been duly paid, in each case in accordance with these Terms, shall be made by the Swap Counterparty in its sole and absolute discretion and shall be conclusive and binding on the Issuer, the Trustee and the Noteholders. Upon receipt of the relevant Additional Reserve Amount by the Deposit Bank: (a) an amount in USD equal to the relevant Additional Reserve Amount will be credited by the Deposit Bank to the Additional Reserve Account; the Additional Reserve Account Balance (as defined below) shall be increased accordingly; and such Additional Reserve Amount and the Additional Reserve Account Balance shall form part of the Mortgaged Property and shall be subject to the security interest created by or pursuant to the Trust Deed and the Issuer shall have no obligations to the Noteholders in respect of any Additional Reserve Amount or the Additional Reserve Account Balance, save as provided herein.

(b)

(c)

For the avoidance of doubt, Additional Reserve Amount Additions may be made on more than one occasion during the Additional Reserve Amount Payment Period. The Trust Deed provides that the Trustee will be deemed to release the security over any amounts held by the Custodian in the Additional Reserve Account to the extent required, inter alia, upon redemption or maturity of the Notes, to make payments to the Trustee, the Swap Counterparty or Noteholders in accordance with the Conditions of the Notes. Additional Reserve Amount means an amount in USD specified as such in the relevant Additional Reserve Amount Notice which amount must be equal to or greater than the Minimum Reserve Amount and an integral multiple of USD 500,000. Additional Reserve Amount Payment Date means the date specified as such in the relevant Additional Reserve Amount Notice, which date shall be (i) no earlier than the date such notice is effective and (ii) in the event that such notice is delivered on the last day of the Additional Reserve Amount Payment Period, such last day. Additional Reserve Account means the interest bearing USD account in the name of the Custodian opened by the Custodian on behalf of

WS1201.525915.8

19

the Issuer with the Deposit Bank, on terms that interest shall accrue daily on the Notional Additional Reserve Account Balance at a rate equal to an overnight rate for deposits in USD, determined by the Calculation Agent in a commercially reasonable manner on a daily basis, into which any Additional Reserve Amount shall be deposited. Such daily interest shall be added to the Additional Reserve Account Balance at the close of business (London time) on each date. Additional Reserve Account Balance means, at any time on any date, an amount in USD equal to the aggregate of all Additional Reserve Amounts that have been credited to the Additional Reserve Account, together with any accrued interest thereon. Minimum Reserve Amount means USD 500,000. Notional Additional Reserve Account Balance means, at any time on any date, an amount in USD equal to (i) the Additional Reserve Amount Balance; less (ii) any Additional Reserve Amount Payments which have previously been determined by the Calculation Agent in accordance with sub-paragraph 20(i)(c)(ii) below. (ii) On any date on which an Additional Reserve Account Payment is determined by the Calculation Agent pursuant to the Default Swap, the Notional Additional Reserve Account Balance shall be reduced by an amount equal to such Additional Reserve Account Payment.

(ii)

Security priorities):

(order

of

The Trustee shall apply all moneys received by it under the Trust Deed in connection with the realisation or enforcement of the security constituted by or pursuant to the Trust Deed in the following order of priorities: Swap Counterparty Priority.

(iii) (iv) (v) (vi) (vii)

Contract (if applicable): Beneficiary(ies): Securities Agreement: Counterparties: Swap Agreement applicable): Asset Swap: (if

Not Applicable. Not Applicable. Not Applicable. Not Applicable. The Asset Swap, the Default Swap (as such terms are defined below) and the CSA together constitute the Swap Agreement. (A) Under an ISDA Master Agreement which the Issuer and the Swap Counterparty have entered into by executing the Issue Deed (the ISDA Master Agreement), as supplemented by a confirmation thereto with an effective date of the Issue Date (the

WS1201.525915.8

20

Asset Swap Confirmation) (the ISDA Master Agreement as so supplemented by the Asset Swap Confirmation, the Asset Swap): (i) the Issuer will on the Issue Date pay to the Swap Counterparty the amount of USD 285,000,000 and the Swap Counterparty will deliver the Initial Bond Securities to the Custodian for the account of the Issuer and will pay the amount of USD 5,034.13 to the Deposit Bank for the account of the Issuer; the Swap Counterparty will pay to the Issuer sums equal to the Interest Amounts (including Additional Interest Amounts and related Accrued Interest Amounts and Interest on Extended Maturity Date and Interest on Notional Additional Reserve Account Balance) determined in accordance with sub-paragraph 16(xv) above and the Issuer will pay to the Swap Counterparty (1) sums equal to each amount of interest payable in respect of (a) any amount standing to the credit of the Deposit Account (if any), such payments to be made by or on behalf of the Issuer from payments received on the amount standing to the credit of the Deposit Account and/or (b) the Bond Securities held by or on behalf of Party B on or after the Effective Date (in accordance with the terms and conditions of the relevant Bond Securities) plus (2) sums equal to the Fixed Amounts (as defined in the Default Swap) payable by the Swap Counterparty to the Issuer under the Default Swap; the Swap Counterparty will on each Replacement Date (as defined in sub-paragraph 20(i)(b) above), if or to the extent that the Asset Swap shall not on or before such date have terminated in accordance with its terms, deliver the relevant Replacement Securities (as defined in sub-paragraph 20(i)(b) above) with full title guarantee to the Custodian for the account of the Issuer. The Issuer will on each Replacement Date, if or to the extent that the Asset Swap shall not on or before such date have terminated in accordance with its terms, pay to the Swap Counterparty the relevant Replaced Securities (as defined in subparagraph 20(i)(b) above); The Issuer will on each Replacement Date, if or to the extent that the Asset Swap shall not on or before such date have terminated in accordance with its terms, pay to the Swap Counterparty the relevant Replaced Securities (as defined in subparagraph 20(i)(b) above); (iv) the Issuer will deliver to the Swap Counterparty on each Deutsche Bank Securities Delivery Date, if or to the extent that the Asset Swap shall not on or before such date have terminated in accordance with its terms, the relevant Deutsche

(ii)

(iii)

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21

Bank Securities (as defined in sub-paragraph 20(i)(a) above). The Swap Counterparty will pay to the Issuer on each Deutsche Bank Securities Delivery Date (as defined in sub-paragraph 20(i)(b) above), if or to the extent that the Asset Swap shall not on or before such date have terminated in accordance with its terms, an amount in USD equal to the outstanding principal amount of such Deutsche Bank Securities; (v) if or to the extent that the Asset Swap shall not on or before such date have terminated in accordance with its terms, the Issuer will (a) pay to the Swap Counterparty on the Maturity Date the balance then standing to the credit of the Deposit Account (if any) and (b) deliver to the Swap Counterparty all outstanding Bond Securities. The Swap Counterparty will pay to the Issuer on the Maturity Date, if or to the extent that the Asset Swap shall not on or before such date have terminated in accordance with its terms, the aggregate of the Outstanding Principal Amounts of the Notes on such date; (vi) subject as provided below and subject to subparagraph (vii) below, if for any reason the Notes become subject to redemption (in whole) under Condition 7(c) (as amended), Condition 7(d) (as amended) or Condition 10 or following an Accelerated Redemption Date, the Asset Swap will be terminated in accordance with its terms and a termination payment may be payable by one party to the other reflecting the total losses and costs (or gain, in which case expressed as a negative number) of the other party in connection with the Asset Swap; if the Notes become due for redemption for any other reason (including redemption pursuant to paragraph 25(B) of the Terms) following the reduction of the aggregate of the Outstanding Principal Amounts of the Notes to zero, the Asset Swap will terminate upon the payment by the Issuer to the Swap Counterparty of the Cash Settlement Amount pursuant to the Default Swap, and no further payment shall be made by either party as a result thereof; the Issuer has in the Asset Swap agreed to purchase from the Swap Counterparty such Notes as are held by the Swap Counterparty, as required by the Swap Counterparty from time to time, provided that the Issuer will have received an amount sufficient to fund the purchase price payable by the Issuer. Upon such purchase and the payment of the purchase price, the obligations of the Issuer and the Swap Counterparty will be terminated in whole or, in the case of a purchase of part only of the Notes,

(vii)

(viii)

WS1201.525915.8

22

reduced pro rata; (ix) any amount due and unpaid on any date by either party to the Default Swap and the CSA will be subject to the netting provisions of the Master Swap Agreement and, to such extent, any such unpaid amount shall be netted against payments due from the Swap Counterparty to the Issuer (or vice versa) on such date under the Asset Swap; and except as specified above and in certain other circumstances specified therein, the Asset Swap will terminate on the Maturity Date of the Notes.

(x)

Default Swap:

(B) Under the ISDA Master Agreement, as supplemented by a confirmation thereto with an effective date of the Issue Date (the Default Swap Confirmation) (the ISDA Master Agreement as so supplemented by the Default Swap Confirmation, the Default Swap): (i) the Swap Counterparty shall pay to the Issuer the Fixed Amounts (as defined in the Default Swap) as specified thereunder for purchasing the credit default swap protection in respect of a portfolio of Reference Entities, as more particularly described in the Default Swap and the Reference Swap referred to therein; the Calculation Agent will, upon the determination of a Loss Determination Amount under the Default Swap following the occurrence of one or more Credit Events under the terms of the Reference Swap: (a) calculate the relevant payment to be made on the Termination Date from the Additional Reserve Account, which shall be an amount equal to the lesser of (i) the sum of the Loss Determination Amount and any Credit Event Unwind Costs (as defined in paragraph 33 below) (together, the CDS Total Payment) and (ii) any Notional Additional Reserve Account Balance (such amount the Additional Reserve Account Payment); and if the Additional Reserve Account Payment is less than the CDS Total Payment (such shortfall the Remainder Amount), calculate the Securities to be delivered to the Swap Counterparty on the Termination Date in respect thereof (the Delivered Securities) having a nominal value equal to such Remainder Amount (as defined above) (such amount the Reduction Amount).

(ii)

(b)

(iii)

On the Maturity Date, the Issuer shall pay to the Swap Counterparty an amount in USD equal to the aggregate of all Additional Reserve Account

WS1201.525915.8

23

Payments determined on or prior to the Maturity Date and shall deliver to the Swap Counterparty Bond Securities having an aggregate nominal value (converted into USD at the Relevant FX Rate in the case of Bond Securities denominated in a currency other than USD) (as determined by the Calculation Agent in a commercially reasonable manner) equal to the aggregate amount of all Delivered Securities determined on or prior to the Maturity Date. Where the Bond Securities consist of more than one series of securities, the Calculation Agent shall determine in its absolute discretion on the Maturity Date which such Bond Securities shall be so delivered. Relevant FX Rate means the spot currency exchange rate between USD and the currency in which the relevant Bond Securities are denominated, as determined by the Swap Counterparty on the Maturity Date. If the nominal amount of such aggregate Delivered Securities to be delivered to the Swap Counterparty on the Maturity Date is not a multiple of the lowest denomination of such Bond Securities (the relevant Securities Denomination), either: 1 if the condition set out in (A) below is satisfied, the Issuer shall instead deliver Bond Securities having a nominal amount equal to the next whole multiple of the relevant Securities Denomination in excess of the nominal amount of such aggregate Delivered Securities (the nominal amount of such delivered Bond Securities (converted where necessary into USD at the Relevant FX Rate) being the Overdelivery Securities Amount and such delivered Bond Securities being the Overdelivery Securities). The Calculation Agent shall subtract the aggregate of all Remainder Amounts from such Overdelivery Securities Amount (the result of such calculation being the Excess Delivery Amount) and the Swap Counterparty shall pay to the Issuer an amount in USD which equals the Excess Delivery Amount (such amount shall be paid into the Deposit Account and shall constitute Securities); or if the condition set out in (B) below is satisfied, the Issuer shall instead deliver Bond Securities having a nominal amount equal to the next whole multiple of the Securities Denomination lower than the nominal amount of such aggregate Delivered Securities (the nominal amount of such delivered Bond

WS1201.525915.8

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Securities (converted where necessary into USD at the Relevant FX Rate) being the Underdelivery Securities Amount and such delivered Bond Securities being the Underdelivery Securities). The Calculation Agent shall subtract the Underdelivery Securities Amount from the aggregate of all Remainder Amounts (the result of such calculation being the Shortfall Delivery Amount) and the Issuer shall pay to the Swap Counterparty an amount in USD which equals the Shortfall Delivery Amount (such amount shall be paid from the Deposit Account). The conditions referred to in (i) and (ii) above are: (A): if the Securities Balance is less than the Shortfall Delivery Amount; and if the Securities Balance is greater than or equal to the Shortfall Delivery Amount.

(B):

After exhaustion of the Bond Securities or in the circumstance specified in (B) above, the Issuer shall satisfy its obligations with respect to any unpaid part of the Cash Settlement Amount by payment from the Securities Balance. In no event shall the Issuer be liable to (i) deliver Bond Securities having a nominal amount greater than the aggregate nominal amount of the remaining Bond Securities or (ii) pay an amount from the Securities Balance greater than the outstanding amount of such Securities Balance; 3 Subject as provided below, if for any reason the Notes become subject to mandatory redemption (in whole) under Condition 7(c) (as amended), Condition 7(d) (as amended) or Condition 10, the Default Swap will terminate following the payment by the Issuer to the Swap Counterparty of any Cash Settlement Amount due on the Termination Date, together with any termination payment payable by one party to the other reflecting the total losses and costs (or gain, in which case expressed as a negative number) of the other party in connection with the Default Swap. Notwithstanding the foregoing, where the Notes become due for redemption in accordance with Condition 7(d) following the termination of the Swap Agreement in circumstances where Party A is the

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25

Defaulting Party, this Transaction shall terminate and, following the payment by the Issuer to the Swap Counterparty of any Cash Settlement Amount due on the Termination Date, no further payment shall be due from either party (including any termination payment under Section 6(e) of the Agreement); 4 if the aggregate of the Outstanding Principal Amounts of the Notes is reduced to zero and the Notes are redeemed pursuant to sub-paragraph 25(B) below, the Default Swap will terminate, and, following the payment by the Issuer to the Swap Counterparty of any Cash Settlement Amount due on the Termination Date, no further payment shall be made by either party; if an Event Notice is delivered by the Swap Counterparty to the Issuer designating an Accelerated Termination Date or if an Accelerated Termination Date is deemed to be designated, the Default Swap will terminate and the Issuer shall pay to the Swap Counterparty the Cash Settlement Amount then due, on the Accelerated Termination Date. In addition, on the Accelerated Termination Date, if the Accelerated Termination Amount is a positive amount the Issuer shall pay such amount to the Swap Counterparty and if the Accelerated Termination Amount is a negative amount, the Swap Counterparty shall pay the absolute value of such amount to the Issuer. No further payments will be due by either party; except as specified above and in certain other circumstances specified therein, the Default Swap will terminate on the Termination Date (as defined in the Default Swap Confirmation); and the Default Swap is referenced to the Reference Swap which is in turn referenced to a portfolio consisting of Reference Entities. Existing Reference Entities may be removed from the portfolio and new reference entities may be included in the portfolio in accordance with the substitution procedure set out in the Default Swap Confirmation.

The foregoing summary is qualified in its entirety by the terms of the Swap Agreement See also "Further information concerning the Swap Agreement below..

WS1201.525915.8

26

A copy of the Asset Swap Confirmation forms Annex 2 hereto. A copy of the Default Swap Confirmation forms Annex 3 hereto. Swap Counterparty: Deutsche Bank AG, acting through its London branch. In its capacity as Swap Counterparty, Deutsche Bank AG, acting through its London branch is also designated as the calculation agent (the Swap Calculation Agent) for the purpose of the Swap Agreement. Any determination by the Swap Calculation Agent shall be made in its sole and absolute discretion and shall be conclusive and binding on the Issuer, the Trustee, the Noteholders, the Agents and all other persons and no liability shall attach to the Swap Calculation Agent in respect thereof. (if None. Not Applicable. Not Applicable. Holder Request/Extraordinary /Creditor Direction Resolution Direction

Swap Guarantor applicable): (viii) (ix) 21

Details of Credit Support Document (if applicable): Credit Support Provider:

Realisation of Security

PROVISIONS RELATING TO REDEMPTION 22. 23. 24. Call Option: Noteholder Option: Final Redemption Amount of each Note: Not Applicable. Not Applicable. (A) Unless previously redeemed or purchased as specified herein or in the Conditions, the Final Redemption Amount on the Maturity Date for each Note shall be, subject to this paragraph 24 and paragraph 25 below, an amount in USD (as determined by the Calculation Agent in its sole and absolute discretion) equal to: (i) (ii) the Outstanding Principal Amount of such Note on the Maturity Date; plus an amount in USD equal to such Notes pro rata share of the Notional Additional Reserve Account Balance (as defined in paragraph 20) as at the close of business on the Relevant Business Day immediately preceding the Maturity Date, after taking into account any interest accruing thereon on such date; plus an amount in USD equal to such Notes pro rata share of the aggregate of all Excess Purchase Amounts as at the close of business on the Relevant Business Day immediately preceding the Maturity Date.

(iii)

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Excess Purchase Amount means, in relation to any purchase of Potentially Defaulted Securities by Legal & General Pensions Limited pursuant to Condition 7(c) (as amended), an amount in USD equal to (a) the relevant purchase price paid for such Potential Defaulted Securities, minus (b) the aggregate outstanding principal amount of such Potential Defaulted Securities, subject to a minimum of zero. Principal Amount Reduction: (B) On any date, the Outstanding Principal Amount of each Note shall be the Specified Denomination less the sum of all Principal Amount Reductions effective on such date (if any), each calculated in accordance with this sub-paragraph 24(B) and subject to a minimum of zero. On each date on which a Loss Determination Amount (as defined in the Default Swap) is determined in respect of a Credit Event under the Reference Swap, the Outstanding Principal Amount of each Note shall be reduced by an amount in USD (a Principal Amount Reduction) determined by the Swap Calculation Agent in respect of any such date, as being an amount in USD equal to the nominal amount of the Aggregate Reduction Amount determined on such date, divided by the number of Notes outstanding on such date. Aggregate Reduction Amount means, in respect of any date on which a Loss Determination Amount is determined, (a) the relevant CDS Total Payment minus (b) the related Additional Reserve Account Payment subject to a minimum of zero. Outstanding Credit Events at Scheduled Maturity Date: (C) If, as at the Scheduled Maturity Date, (a) one or more Event Determination Dates has occurred but the relevant Final Price(s) are still to be determined, (b) the Swap Counterparty has given notice pursuant to the Default Swap that a Potential Failure to Pay has occurred in relation to one or more Reference Entities, or (c) the Swap Counterparty has given notice pursuant to the Default Swap that, in its opinion, a Credit Event may have occurred and that the Conditions to Settlement may be satisfied during the relevant Notice Delivery Period but have not been so satisfied as at such date (each an Outstanding Credit Event): (i) in lieu of any payments otherwise due on the Scheduled Maturity Date, on the date on which the Scheduled Maturity Date would fall if it had not been extended or postponed in accordance with paragraph 8, the Issuer will apply an amount equal to (i) the aggregate of the Outstanding Principal Amounts of the Notes on such date, plus (ii) the

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Notional Additional Reserve Account Balance as at the close of business on the Relevant Business Day immediately preceding the Scheduled Maturity Date, plus (iii) the aggregate of all Excess Purchase Amounts as at the close of business on the Relevant Business Day immediately preceding the Scheduled Maturity Date less (iv) an amount equal to the aggregate Maximum Loss Determination Amounts in respect of such Outstanding Credit Events (each such Maximum Loss Determination Amount in respect of an Outstanding Credit Event, a Redemption Deduction), pro rata in redemption or, as the case may be, partial redemption of the Notes. The payment of the Final Redemption Amount will be made by instalments to the Noteholders; (ii) on the fifth Business Day following the determination of a Final Price in relation to any Outstanding Credit Event, the Issuer will apply an amount equal to (i) the relevant Redemption Deduction withheld pursuant to sub-paragraph (a) above minus (ii) the relevant Loss Determination Amount, pro rata in redemption or, as the case may be, partial redemption of the Notes; and on the fifth Business Day immediately following the expiration of the Notice Delivery Period in relation to any Outstanding Credit Event in respect of which a Loss Determination Amount has not been determined within the Notice Delivery Period, the Issuer will apply the relevant Redemption Deduction withheld pursuant to sub-paragraph (a) above, pro rata in redemption or, as the case may be, partial redemption of the Notes.

(iii)

Early Redemption: Purchases: Early Redemption: (A) (B) Condition 7(i) (Purchases) will apply to the Notes. The Notes shall be redeemed if, at any time, the aggregate of the Outstanding Principal Amounts thereof is reduced to zero and the date of such redemption shall be the relevant date on which the Principal Amount Reduction is determined resulting in the aggregate of the Outstanding Principal Amounts of all the Notes being reduced to zero (such date, the Early Redemption Date). For the purposes of redemption pursuant to this sub-paragraph 25(B), the Redemption Amount for each Note shall be an amount equal to such Notes pro rata share of the aggregate of all Excess Purchase Amounts.

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Accelerated Redemption:

(C)

If, in accordance with the terms of the Default Swap, (i) an Event Notice is delivered by the Swap Counterparty to the Issuer designating an Accelerated Termination Date or (ii) a date is deemed to be the Accelerated Termination Date then the Notes shall be redeemed (in whole) in the case of (i) above, on the day that falls on the fifth Relevant Business Day following the Accelerated Termination Date or, in the case of (ii) above, on the Termination Date (each such date the Accelerated Redemption Date) at their Redemption Amount. For the purposes of redemption pursuant to this sub-paragraph 25(C), the Redemption Amount for each Note shall be its pro rata share of: (i) the proceeds of realisation of Securities following the payment of any Cash Settlement Amount to the Swap Counterparty pursuant to the Default Swap plus (b) an amount in USD equal to the Notional Additional Reserve Account Balance (as defined in paragraph 20 above) (if any) as at the close of business on the Relevant Business Day immediately preceding the Accelerated Redemption Date plus (c) an amount in USD equal to the aggregate of all Excess Purchase Amounts as at the close of business on the Relevant Business Day immediately preceding the Accelerated Redemption Date; less the Additional Termination Unwind Costs (as defined in paragraph 33 below).

(ii)

Notwithstanding the foregoing, Noteholders shall have the option, exercisable by the holders of 100 per cent. of the aggregate Outstanding Principal Amount of the Notes (the Accelerated Redemption Collateral Delivery Option) to require the Issuer, in lieu of payment of the Redemption Amount described above and against payment by each Noteholder of their pro rata share of an amount in USD equal to the Additional Termination Unwind Costs (but excluding for these purposes from the calculation thereof any costs in relation to the realisation of the Securities) to such account as shall have been notified to it by or on behalf of the Issuer for such purpose, to deliver to such Noteholders on the Accelerated Redemption Date a pro rata share of any Securities then held by or on behalf of the Issuer following payment of any Cash Settlement Amount then due to the Swap Counterparty pursuant to the Default Swap, together with payment of a pro rata share of the Notional Additional Reserve Account Balance as at the Accelerated Redemption Date and a pro rata share of the aggregate of all Excess Purchase Amounts as at the Accelerated
WS1201.525915.8

30

Redemption Date. To exercise the Accelerated Redemption Collateral Delivery Option, Noteholders must present to any Paying Agent no later than two Business Days following the delivery of the relevant Event Notice an irrevocable delivery instruction certificate (in the form set out in Schedule 7 of these Terms (the Delivery Instruction Certificate). Any failure by Noteholders to exercise the Accelerated Redemption Collateral Delivery Option in accordance with the foregoing provisions shall result in the Notes being redeemed in cash as provided above. Payment in accordance with the foregoing provisions shall constitute full and final satisfaction of all of the Issuers obligations to make any payment of principal in respect of the principal amount of the Notes so to be redeemed and of any interest accruing in respect of such principal amount at any time after the first day of the Interest Period during which the Notes become subject to such early redemption and the Outstanding Principal Amount of each Note shall be deemed to be reduced accordingly. Mandatory Redemption: (E) The Notes will be subject to mandatory redemption (in whole) under Conditions 7(c) and 7(d) (each as amended), for which purpose the Repayable Assets will be all of the Securities. The Notes shall be redeemed Conditions 7(c) and 7(d) (each as the date fixed for redemption in notice (in each case the Redemption Date). pursuant to amended) at the relevant Mandatory

Subject as provided below, the Early Redemption Amount for the purposes of any redemption of the Notes pursuant to Condition 7(c), Condition 7(d) (each as amended) and Condition 10 shall be its pro rata share of: (i) the proceeds of realisation of the Securities following the payment of any Cash Settlement Amount to the Swap Counterparty pursuant to the Default Swap; plus an amount in USD equal to the Notional Additional Reserve Account Balance (as defined in paragraph 20 above) at the close of business on the Relevant Business Day immediately preceding the Mandatory Redemption Date; plus an amount in USD equal to the aggregate of all Excess Purchase Amounts at the close of business on the Relevant Business Day immediately preceding the Mandatory Redemption Date; less

(ii)

(iii)

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31

(iv)

the Early Redemption Unwind Costs.

The Early Redemption Amount for the purposes of any redemption of Notes pursuant to Condition 7(d) (as amended) following the termination of the Swap Agreement in circumstances where the Swap Counterparty is the Defaulting Party shall be its pro rata share of: (i) the proceeds of realisation of the Securities following the payment of any Cash Settlement Amount to the Swap Counterparty pursuant to the Default Swap; plus an amount in USD equal to the Notional Additional Reserve Account Balance (as defined in paragraph 20 above) at the close of business on the Relevant Business Day immediately preceding the Mandatory Redemption Date; plus an amount in USD equal to the aggregate of all Excess Purchase Amounts at the close of business on the Relevant Business Day immediately preceding the Mandatory Redemption Date; less any legal or other ancillary costs (expressed as a positive number) determined by the Calculation Agent, acting in good faith and in a commercially reasonable manner, incurred by the Issuer, the Trustee or the Swap Counterparty as a result of the occurrence of such early redemption,

(ii)

(iii)

(iv)

subject to a maximum of the Outstanding Principal Amount of such Note as at the Novation Cut-off Date. Payment in accordance with the provisions of this paragraph shall constitute full and final satisfaction of all of the Issuers obligations to make any payment of principal in respect of the principal amount of the Notes so to be redeemed or the relevant part thereof and of any interest accruing in respect of such principal amount at any time after the first day of the Interest Period during which the Notes become subject to mandatory redemption, and the Outstanding Principal Amount of each Note shall be deemed to be reduced to zero. GENERAL PROVISIONS APPLICABLE TO THE NOTES 26. Form of Notes: Bearer Notes. Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note. 27. Financial Centre(s) or other special provisions relating to payment dates: London and New York.

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28.

Talons for future Coupons or Receipts to be attached to Definitive Notes (and dates on which such Talons mature): Details relating to Partly Paid Notes: amount of each payment comprising the Issue Price and date on which each payment is to be made and consequences (if any) of failure to pay, including any right of the Issuer to forfeit the Notes and interest due on late payment: Details relating to Instalment Notes: amount of each instalment, date on which each payment is to be made: Agents and Trustee: Custodian:

No.

29.

Not Applicable.

30.

Not Applicable.

31.

The Custodian in respect of the Securities will be Deutsche Bank AG, Amsterdam Branch or any other person subsequently appointed as Custodian pursuant to the Agency Agreement subject to approval by the Trustee on behalf of the Noteholders. If, at any time when the Notes remain outstanding, the short term credit rating of the Custodian falls below A1+ by S&P or P-1 by Moodys (a Custodian Rating Downgrade) then no later than 30 calendar days after the occurrence of such Custodian Rating Downgrade the Custodian shall novate at the expense of the Custodian all (and not some only) of its rights and obligations under the Agency Agreement to any other entity with a short term credit rating not lower than A1+ by S&P or P-1 by Moodys and give a notice of such novation to the Noteholders in accordance with Condition 15.

Deposit Bank:

Deutsche Bank AG, acting through its London branch (the Deposit Bank) or any other person subsequently appointed as Deposit Bank pursuant to the Agency Agreement subject to approval by the Trustee on behalf of the Noteholders. Securities in the form of cash will be delivered to the Deposit Bank by the Swap Counterparty pursuant to the Asset Swap on the Issue Date and credited to an account in favour of the Issuer (the Deposit Account) on the Issue Date, subject to the security created by and pursuant to the Issue Deed. If on any date on which there are funds standing to the credit of the Deposit Account, the short term credit rating falls below A-1+ by S&P or P-1 by Moodys (a Deposit Bank Ratings Downgrade) then no later than 30 calendar days after the occurrence of such Deposit Bank Ratings Downgrade novate at the expense of the Deposit Bank all (and not some only) of its rights and obligations relating to the Deposit Account to any other entity with a short term credit rating not lower than A-1+ by S&P or P-1 by Moodys and give

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a notice of such novation to the Noteholders in accordance with Condition 15. Agent for Service of Process: Deutsche Bank AG, acting through its London branch at its registered office for the time being (currently at Winchester House, 1 Great Winchester Street, London EC2N 2DB). Deutsche Trustee Company Limited. Not Applicable. Deutsche Bank AG, acting through its London branch or any other person subsequently appointed as Agent pursuant to the Agency Agreement, subject to approval of the Trustee on behalf of the Noteholders. If on any date on which any of the Notes remain outstanding, the short term credit rating of the Issuing and Paying Agent falls below A-1+ by S&P or P-1 by Moodys (such event, an Agent Ratings Downgrade), the Issuing and Paying Agent shall no later than 30 days after the occurrence of such Agent Ratings Downgrade novate, at the expense of the Issuing and Paying Agent, all (and not some only) of its obligations to the Issuer under this Agreement to any other entity with a short term credit rating not lower than A-1+ by S&P or P-1 by Moodys and give a notice of such novation to the Noteholders in accordance with Condition 15. 32. Amendments to Master Terms and Conditions (Version dated 30 November 2007): (A) Condition 7(d)(i) shall be amended by adding the following after the words in respect of the Notes in the final line thereof: and provided that the holders of 100 per cent. of the aggregate Outstanding Principal Amounts have not elected to accept all future such payments net of any such amounts due. (B) Condition 7(c) shall be deleted in its entirety and replaced with the following: If the Calculation Agent determines in a commercially reasonable manner that any of the Securities (the Potentially Defaulted Securities) has become payable or repayable or has become capable of being declared due and repayable prior to their stated date of maturity for whatever reason or (unless the Trustee otherwise agrees) there is a payment default in respect of any of the Securities (any such event, a Potential Securities Default), the Selling Agent, acting on behalf of the Issuer, shall seek as soon as reasonably practicable, and in any event no later than three Business Days following the determination by the Calculation Agent of such Potential Securities Default, at least one firm bid quotation from recognised dealers in obligations of the same type as the Securities for the purchase of the Potentially Defaulted Securities. Such dealers shall be selected by the Selling Agent in its sole and absolute discretion, provided that Legal & General Pensions Limited shall in all cases be one of the selected dealers. Any firm quotation provided by Legal & General Pensions Limited shall be the firm quotation which Legal & General Pensions Limited would provide to a counterparty in the market, as determined in its sole
WS1201.525915.8

Trustee: Registrar and Transfer Agent: Principal Paying Agent:

34

and absolute discretion. If, no later than two Business Days following the relevant request for bids from the selected dealers, the Selling Agent has obtained at least one firm bid quotation the value of which is at least equal to the outstanding principal amount of the Potentially Defaulted Securities, the Selling Agent shall, on behalf of the Issuer, sell such Potentially Defaulted Securities to the highest bidder and shall arrange for the proceeds of sale to be credited to the Deposit Account on behalf for the Issuer. Such proceeds of sale shall be credited to the Deposit Account and may be applied in accordance with the provisions of Condition 4(g)(ii) (as amended). In such circumstances there shall be no redemption of the Notes in relation to such Potential Securities Default in accordance with this provision. If, on the date falling two Business Days following the relevant request for bids from the selected dealers, the Selling Agent has not obtained at least one firm bid quotation the value of which is at least equal to the nominal amount of the Potentially Defaulted Securities, all such Potentially Defaulted Securities together with any or all remaining Securities shall be deemed to have become immediately repayable (the Repayable Assets). The Issuer shall give notice as soon as reasonably practicable following such request to the Trustee and the Noteholders and on the due date for redemption specified in such notice, which shall not be later than 14 days after the date of such notice, shall redeem each Note at its Early Redemption Amount in whole. No amount shall be payable in respect of accrued interest for the Interest Period during which the relevant redemption date occurs. The Early Redemption Amount may be less than the principal amount of the Notes being redeemed. (C) A new Condition 19 shall be inserted: 19 Substitution (a) Right of Substitution Subject to the Conditions to Substitution set out in Condition 19(c) below, the Initial Owner (or the Initial Owners Agent acting on its behalf) may, on any Business Day during the period beginning on but excluding the Issue Date and ending on but excluding the day that falls 5 Business Days before the Scheduled Maturity Date (the Substitution Period), give notice (each a Substitution Request) to the Swap Counterparty that it shall include a new Reference Entity (a Substitution Reference Entity) in the Reference Portfolio in replacement of an existing Reference Entity (each, a Substituted Reference Entity and such replacement being a Substitution). Under the terms of the Default Swap, the Issuer, the Swap Counterparty and the Initial Owner have agreed to comply with the terms of this Condition 19. Each Substitution Request shall contain the following

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35

information: (i) the Reference Entity Notional Amount in respect of each Substituted Reference Entity (such amount the Substituted Reference Entity Notional Amount relating to such Substituted Reference Entity); the Reference Entity Notional Amount in respect of each corresponding Substitution Reference Entity (such amount the Substitution Reference Entity Notional Amount relating to such Substitution Reference Entity), which shall be equal to the Substituted Reference Entity Notional Amount relating to the corresponding Substituted Reference Entity); the legal name of each Substituted Reference Entity and each Substitution Reference Entity; and the Substitution Consequence.

(ii)

(iii)

(iv)

In exercising its right to make Substitutions, the Initial Owner may act through the Initial Owners Agent, acting as agent and solely on behalf of the Initial Owner. None of the Issuer, the Swap Calculation Agent or the Swap Counterparty is under any obligation to determine whether any person purporting to be the Initial Owners Agent has been duly appointed by the Initial Owner or whether such appointment has terminated and shall be entitled to assume that the Initial Owners Agent remains the agent of the Initial Owner until such time as they are notified by the Initial Owner to the contrary. The Initial Owner is under no obligation to exercise its right to make Substitutions. The right to make Substitutions is solely that of the Initial Owner and is subject to the Initial Owner being the Sole Beneficial Owner at the relevant time. The Issuer, the Swap Calculation Agent and the Swap Counterparty shall be entitled to assume that the Initial Owner is the Sole Beneficial Owner until such time as they are notified to the contrary by the Initial Owner. The Initial Owner shall notify the Issuer and the Swap Counterparty immediately upon it ceasing to be the Sole Beneficial Owner. In the event that all or any portion of the Notes are transferred to another party (such that the Initial Owner ceases to be the Sole Beneficial Owner) the right to make Substitutions in accordance with this Condition 19 shall automatically cease and, accordingly, the Reference Portfolio shall become static until such time as the Initial Owner becomes the Sole Beneficial Owner again. (b) Substitution Requests (i) Each Substitution Request shall be given to the Swap Counterparty either in writing (which shall include by electronic mail) or by telephone. Any Substitution in a Substitution Request

(ii)

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36

received by the Swap Counterparty prior to 11.00 a.m. (London time) on a Business Day shall be effected by 4 p.m. (London time) on such Business Day. Any Substitution in a Substitution Request received by the Swap Counterparty on or after 11.00 a.m. (London time) on a Business Day shall be effected by 4 p.m. (London time) on the next following Business Day (each such relevant date, a Substitution Date). (iii) The Substitution Request shall be invalid: (1) if the Substitution Reference Entity Notional Amount does not equal the Substituted Reference Entity Notional Amount; if the Swap Counterparty determines that, as at 2.00 p.m. (London time) on the relevant Substitution Date, the Substitution Request does not comply with the Conditions to Substitution (as defined below); or if the Swap Counterparty determines that any of the Notes are held beneficially by person(s) other than the Initial Owner or its affiliates.

(2)

(3)

The Swap Counterparty shall be under no obligation to assess independently whether the Substitution Request complies with the conditions set out in Condition 19(b)(iii)(2) above and shall be entitled to rely on the receipt of the Substitution Request from the Initial Owner (or the Initial Owners Agent acting on its behalf) as satisfaction of the relevant Conditions to Substitution. (iv) If the Swap Counterparty determines that any of the conditions set out in Conditions 19(b)(iii)(1), 19(b)(iii)(2) or 19(b)(iii)(3) above are applicable, the relevant Substitution Request shall be invalid and no Substitution shall be effected.

(c) Conditions to Substitution A Substitution may only occur if the following conditions (the Conditions to Substitution) are met: (i) the Initial Owner is the Sole Beneficial Owner on the date it delivers a Substitution Request and on the Substitution Date; following such Substitution the relevant Portfolio Guidelines (as set out in Schedule 2 to the Terms) would be satisfied in respect of the Reference Portfolio; following such Substitution the relevant Eligibility Criteria (as set out in Schedule 3 to

(ii)

(iii)

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37

the Terms) would be satisfied in respect of the Substitution Reference Entity; and (iv) the parties to the Default Swap have agreed in writing that paragraph 6 thereof shall be effective in accordance with sub-paragraph 6.2.

(d) Notice of Substitution Information If the Swap Counterparty receives a valid Substitution Request from the Initial Owner (or the Initial Owners Agent acting on its behalf), then prior to 2.00 p.m. (London time) on the relevant Substitution Date, the Swap Counterparty shall give a Notice of Substitution Information to the Initial Owner (or the Initial Owners Agent acting on its behalf). (e) Substitution Notice (i) During the Substitution Window the Initial Owner (or the Initial Owners Agent acting on its behalf) may: (A) deliver a notice (in writing in a form substantially similar to that set out in Schedule 5 to the Terms) (the Substitution Notice) to the Swap Counterparty; or elect, by notice to the Swap Counterparty (either in writing or by telephone (which shall include by electronic mail)), to discontinue the proposed Substitution (such notice, a Notice of Abandoned Substitution).

(B)

(ii)

Upon receipt of the Substitution Notice in accordance with Condition 19(e)(i)(A) above by the Swap Counterparty, the Swap Counterparty shall give effect to the Substitution in accordance with Conditions 19(f) and 19(g) below. Upon receipt by the Swap Counterparty of a Notice of Abandoned Substitution in accordance with Condition 19(e)(i)(B) above or if neither a Substitution Notice nor a Notice of Abandoned Substitution is received in accordance with Condition 19(e)(i), the proposed Substitution may not take place unless and until a new Substitution Request in respect thereof is made by the Initial Owner (or the Initial Owners Agent acting on its behalf).

(f) Effect of Substitution In respect of any Substitution, with effect from 2:00 p.m. (London time) on the relevant Substitution Date: (i) each Substituted Reference Entity shall be deemed to have been removed from the Reference Portfolio;

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38

(ii)

each Substitution Reference Entity shall be deemed to be included in the Reference Portfolio with a Reference Entity Notional Amount equal to the relevant Substitution Reference Entity Notional Amount; and the provisions of Condition 19(g) shall apply.

(iii)

In any case where a Substitution has been effected in circumstances in which the Eligibility Criteria are not satisfied in respect of the Substitution Reference Entity, such Substitution Reference Entity shall immediately be deemed to be removed from the Reference Portfolio and replaced with a Substitution Reference Entity which satisfies the Eligibility Criteria as determined by the Swap Calculation Agent. The Swap Counterparty shall consult with the Initial Owner (as long as the Initial Owner is the Sole Beneficial Owner) prior to effecting a removal pursuant to the preceding sentence. For the purposes of any Credit Event Notice in relation to the Default Swap, the Substitution shall be deemed to have been effected on the Substitution Date. If an Event Determination Date occurs on or after the Substitution Date, any subsequent Fixed Amount, Loss Determination Amount and Cash Settlement Amount with respect to the Default Swap shall be calculated on the basis of the Reference Portfolio after giving effect to the Substitution. (g) (i) Adjustment for Substitution Substitution Losses Gains and

On the Substitution Date, the Swap Counterparty shall calculate the Substitution Gain or the Substitution Loss, if any, relating to the relevant Substitution. If one or more Substitution Gains and/or one or more Substitution Losses are determined on the same day such Substitution Gains and Substitution Losses shall be netted by the Swap Counterparty (such net amount being the relevant Net Substitution Loss or Net Substitution Gain as the case may be) for the purposes of Condition 19(g)(ii). Any Substitution Loss or, as the case may be, Net Substitution Loss calculated pursuant to this Condition 19(g)(i) shall be applied in accordance with the provisions of Condition 19(g)(ii), provided that if such Substitution Loss is or, as the case may be, Net Substitution Loss is less than USD 5,000 it will be deemed to be zero. Any Substitution Gain or, as the case may be, Net Substitution Gain, calculated pursuant to this Condition 19(g)(i) shall be applied in accordance with the provisions of Condition 19(g)(ii), provided that if such Substitution Gain or, as the case may be, Net Substitution Gain is less than USD 5,000 it will be deemed to be

WS1201.525915.8

39

zero. (ii) Subject to Condition 19(g)(iii) below, if a Substitution Loss (or, as the case may be, a Net Substitution Loss) or Substitution Gain (or, as the case may be, a Net Substitution Gain) is determined on any date, the Swap Counterparty shall apply it in the manner below: (A) if the Initial Owner (or the Initial Owners Agent acting on its behalf) specified Subordination Change in the Substitution Request, in the event that a Substitution Loss (or, as the case may be, a Net Substitution Loss) is calculated by the Swap Counterparty, the Portfolio Threshold Amount shall be decreased by an amount equal to the Subordination Decrease. In the event that a Substitution Gain (or, as the case may be, a Net Substitution Gain) is calculated by the Swap Counterparty, the Portfolio Threshold Amount shall be increased by an amount equal to the Subordination Increase. However, if as a result of this sub-Condition, the Portfolio Threshold Amount would be reduced to zero no further Substitutions may be effected hereunder unless the same would result in a Substitution Gain; and If the Initial Owner (or the Initial Owners Agent acting on its behalf) specified Substitution Payment in the Substitution Request, in the event that a Substitution Loss (or, as the case may be, a Net Substitution Loss) is calculated by the Swap Counterparty, then the Additional Reserve Account Balance shall be reduced by an amount equal to the Substitution Payment. In the event that a Substitution Gain (or, as the case may be, a Net Substitution Gain) is calculated by the Swap Counterparty, then the Additional Reserve Account Balance shall be increased by an amount equal to the Substitution Payment. If the Initial Owner (or the Initial Owners Agent acting on its behalf) specified Subordination Change in the Substitution Request, and the Portfolio Threshold Amount after such Subordination Change would be: (c) (x) reduced and (y) less than 28 per cent. of the Initial Portfolio Notional Amount; or in excess of 30 per cent. of the Initial Portfolio Notional Amount,

(B)

(iii)

(A)

(d)

then no Subordination Change will occur

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and the Initial Owner (or the Initial Owners Agent acting on its behalf) will be deemed to have specified Substitution Payment. (B) If the Initial Owner (or the Initial Owners Agent acting on its behalf) specified Substitution Payment in the Substitution Request and either (x) the Additional Reserve Account Balance after such Substitution Payment would be less than the sum of all Additional Reserve Amounts paid into the Additional Reserve Account on or before such date or (y) the current Portfolio Threshold Amount is less than 28 per cent. of the Initial Portfolio Notional Amount, then no Substitution Payment will occur and the Initial Owner (or the Initial Owners Agent acting on its behalf) will be deemed to have specified Subordination Change, provided that if the conditions in (A) above are not satisfied, no Substitution shall occur.

(h) Subordination Reset Subject to the Conditions to Subordination Reset set out in Condition 19(i) below, the Initial Owner (or the Initial Owners Agent acting on its behalf) may, on any Business Day during the period beginning on but excluding the Issue Date and ending on but excluding the day that falls 5 Business Days before the Scheduled Maturity Date (the Subordination Reset Period), give notice (each a Subordination Reset Request) to the Swap Counterparty requesting that the Portfolio Threshold Amount shall be increased and the Additional Reserve Account Balance shall be decreased (each such notification being a Subordination Reset Request and such reset being a Subordination Reset). Each Subordination Reset Request shall contain the following information: (i) the amount by which the Additional Reserve Account Balance shall be decreased (an Additional Reserve Account Reduction Amount); and the date on which the Subordination Reset shall take effect (the Subordination Reset Date).

(ii)

In exercising its right to make Subordination Resets, the Initial Owner may act through the Initial Owners Agent, acting as agent and solely on behalf of the Initial Owner. None of the Issuer, the Swap Calculation Agent or the Swap Counterparty is under any obligation to determine whether any person purporting to be the Initial Owners Agent has been duly appointed by the Initial Owner or whether such appointment has terminated and shall be entitled to assume that the Initial Owners Agent remains the agent of the Initial Owner until such time as they are
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41

notified by the Initial Owner to the contrary. The Initial Owner is under no obligation to exercise its right to make Subordination Resets. The right to make Subordination Resets is solely that of the Initial Owner and is subject to the Initial Owner being the Sole Beneficial Owner at the relevant time. The Issuer, the Swap Calculation Agent and the Swap Counterparty shall be entitled to assume that the Initial Owner is the Sole Beneficial Owner until such time as they are notified to the contrary by the Initial Owner. The Initial Owner shall notify the Issuer and the Swap Counterparty immediately upon it ceasing to be the Sole Beneficial Owner. In the event that all or any portion of the Notes are transferred to another party (such that the Initial Owner ceases to be the Sole Beneficial Owner) the right to make Subordination Resets in accordance with this Condition 19 shall automatically cease until such time as the Initial Owner becomes the Sole Beneficial Owner again. (i) Subordination Reset Requests (i) Each Subordination Reset Request shall be given to the Swap Counterparty either in writing (which shall include by electronic mail) or by telephone. Any Subordination Reset in a Subordination Reset Request received by the Swap Counterparty prior to 11.00 a.m. (London time) on a Business Day shall be effected by 4.00 p.m. (London time) on the next following Business Day. Any Subordination Reset in a Subordination Reset Request received by the Swap Counterparty on or after 11.00 a.m. (London time) on a Business Day shall be effected by 4.00 p.m. (London time) on the second following Business Day (each such relevant date, a Subordination Reset Date). The Subordination Reset Request shall be invalid: (1) if the Swap Counterparty determines that, as at 2.00 p.m. (London time) on the relevant Subordination Reset Date, the Subordination Reset Request does not comply with the Conditions to Subordination Reset (as defined below); or if the Swap Counterparty determines that any of the Notes are held beneficially by person(s) other than the Initial Owner or its affiliates.

(ii)

(iii)

(2)

The Swap Counterparty shall be under no obligation to assess independently whether the Subordination Reset Request complies with the conditions set out in Condition 19(i)(iii)(1) above and shall be entitled to rely on the receipt of the Subordination Reset Request from the Initial
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42

Owner (or the Initial Owners Agent acting on its behalf) as satisfaction of the Conditions to Subordination Reset. (iv) If the Swap Counterparty determines that any of the conditions set out in Conditions 19(i)(iii)(1) or 19(i)(iii)(2) above are applicable, the relevant Subordination Reset Request shall be invalid and no Subordination Reset shall be effected.

(j) Conditions to Subordination Reset A Subordination Reset may only occur if the following conditions (the Conditions to Subordination Reset) are met: (i) the Initial Owner is the Sole Beneficial Owner on the date it delivers a Subordination Reset Request and on the Subordination Reset Date; following the relevant Subordination Reset, the Additional Reserve Account Balance would be no less than the sum of all Additional Reserve Amounts paid into the Additional Reserve Account Balance on or before such date; and following the relevant Subordination Reset, the Portfolio Threshold Amount would be no more than 30 per cent.

(ii)

(iv)

(k) Notice of Subordination Reset Information If the Swap Counterparty receives a valid Subordination Reset Request from the Initial Owner (or the Initial Owners Agent acting on its behalf), then prior to 2.00 p.m. (London time) on the relevant Subordination Reset Date, the Swap Counterparty shall give a Notice of Subordination Reset Information to the Initial Owner (or the Initial Owners Agent acting on its behalf). (l) Subordination Reset Notice (i) During the Subordination Reset Window the Initial Owner (or the Initial Owners Agent acting on its behalf) may: (A) deliver a notice (in writing in a form substantially similar to that set out in Schedule 6 to the Terms) (the Subordination Reset Notice) to the Swap Counterparty; or elect, by notice to the Swap Counterparty (either in writing or by telephone (which shall include by electronic mail)), to discontinue the proposed Subordination Reset (such notice, a Notice of Abandoned Subordination Reset).

(B)

(ii)

Upon receipt of the Subordination Reset Notice by the Swap Counterparty in accordance with

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Condition 19(l)(i)(A) above, the Swap Counterparty shall give effect to the Subordination Reset in accordance with Condition 19(m) below. Upon receipt by the Swap Counterparty of a Notice of Abandoned Subordination Reset in accordance with Condition 19(l)(i)(B) above or if neither a Subordination Reset Notice nor a Notice of Abandoned Substitution Reset is received in accordance with Condition 19(l)(i) above, the proposed Subordination Reset may not take place unless and until a new Subordination Reset Request in respect thereof is made by the Initial Owner (or the Initial Owners Agent acting on its behalf). (m) Effect of Subordination Reset In respect of any Subordination Reset complying with the Conditions to Subordination Reset, with effect from 2.00 p.m. (London time) on the relevant Subordination Reset Date, the Portfolio Threshold Amount shall be increased by an amount equal to the Subordination Reset Amount specified in the Notice of Subordination Reset Information and the Additional Reserve Account Balance shall be reduced by the Additional Reserve Account Reduction Amount. For such purposes: Eligible Dealer means each of the entities set out in Schedule 4 to the Terms. Eligibility Criteria means the Eligibility Criteria set out in Schedule 3 to the Terms. Firm Bid Quotation means, in respect of a Substitution Reference Entity, a bid side quotation (expressed as a percentage per annum or as an upfront percentage) given by an Eligible Dealer in its capacity as a market maker in the credit default swap market, to act as protection buyer in respect of a credit default swap referencing such Substitution Reference Entity based on the Market Standard Terms. Firm Offer Quotation means, in respect of a Substituted Reference Entity, an offer side quotation (expressed as a percentage per annum or as an upfront percentage) given by an Eligible Dealer in its capacity as a market maker in the credit default swap market, to act as a protection seller in respect of a credit default swap referencing such Substituted Reference Entity based on the Market Standard Terms. Initial Owner means Legal & General Pensions Limited; Initial Owners Agent means Legal and General Management Limited; Market Disruption Event means, in respect of any

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Substitution Request, the occurrence of an event which the Swap Counterparty determines in its discretion has a material impact on the pricing of credit default swaps involving the relevant Reference Entities. Market Standard Terms means the current standard and customary trading terms on which credit default swap transactions in respect of the relevant Reference Entity or proposed Substitution Reference Entity are traded in the credit derivatives market by Eligible Dealers. In the event that there are two or more Market Standard Terms that apply to a particular Reference Entity or proposed Substitution Reference Entity, then the parties acknowledge and agree that the terms on which Deutsche Bank AG typically trades shall be the Market Standard Terms for the purposes of this Condition 19. Notice of Subordination Reset Information means a notice (which may be in writing (which shall include by electronic mail) or by telephone) from the Swap Counterparty to the Initial Owner (or the Initial Owners Agent acting on its behalf) containing the Subordination Reset Information in respect of the proposed Subordination Reset. Notice of Substitution Information means a notice (which may be in writing (which shall include by electronic mail) or by telephone) from the Swap Counterparty to the Initial Owner (or the Initial Owners Agent acting on its behalf) containing the Substitution Information in respect of the proposed Substitution. Sole Beneficial Owner means, as at the date of determination, the beneficial owner of 100 per cent. of the interests in the Notes outstanding as at such date. Subordination Change means, in respect of a Substitution for which the Substitution Consequence is Subordination Change, an amount in USD determined by the Swap Counterparty in good faith and in a commercially reasonable manner as follows: (a) in the case of a Substitution Gain following such Substitution, the absolute increase in the Portfolio Threshold Amount (the Subordination Increase) which would result in the mark-to-market value or, as the case may be, cost of the Default Swap for the Swap Counterparty (determined by the Swap Counterparty in its discretion) being reduced (or, in the case of a mark-to-market cost, increased) by an amount equal to that Substitution Gain; and in the case of a Substitution Loss following such Substitution, the absolute decrease in the Portfolio Threshold Amount (the Subordination Decrease) which would result in the mark-to-market value or, as the case may be, cost of the Default Swap for the Swap Counterparty (determined by the Swap Counterparty in its discretion) being increased

(b)

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(or, in the case of a mark-to-market cost, reduced) by an amount equal to that Substitution Loss. Subordination Reset following information: (a) Information means the

the amount by which the Portfolio Threshold Amount shall be increased in respect of the proposed Subordination Reset (a Subordination Reset Amount); and the Additional Reserve Account Reduction Amount by which the Additional Reserve Account Balance shall be reduced in respect of the proposed Subordination Reset.

(b)

Subordination Reset Window means, in respect of any Subordination Reset Date, the period of time beginning when a Notice of Subordination Reset Information is received on that date and ending one hour later on that date. Substitution Consequence means a Subordination Change or a Substitution Payment, as shall be selected by the Initial Owner (or the Initial Owners Agent acting on its behalf) in its discretion in any Substitution Request or deemed selected by the operation of Condition 19(g)(iii)(A) or 19(g)(iii)(B). Substitution Gain means an amount equal to the Substitution Reference Figure, if the Substitution Reference Figure is a positive number. Substitution information: (a) Information means the following

if Subordination Change was specified as the Substitution Consequence in the relevant Substitution Request, the Subordination Change which would be made in respect of the proposed Substitution; or if Subordination Payment was specified as the Substitution Consequence in the relevant Substitution Request, the Substitution Payment which would be made in respect of the proposed Substitution.

(b)

Substitution Loss means an amount equal to the absolute value of the Substitution Reference Figure, if the Substitution Reference Figure is a negative number. Substitution Payment means, in respect of each Substitution for which the Substitution Consequence is Substitution Payment, an amount in USD determined by the Swap Counterparty in good faith and in a commercially reasonable manner equal to the relevant Substitution Gain or Substitution Loss, as applicable. Substitution Reference Figure means, in respect of each Substitution, an amount in USD determined by the

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Swap Counterparty in its discretion, which may be positive or negative, equal to the USD equivalent (any conversion into USD being made at the relevant spot exchange rate) of the sum of (A) and (B) where: A. is (i) the value to the Swap Counterparty of the protection bought by the Swap Counterparty under the Default Swap following such Substitution (but ignoring any change to the Portfolio Threshold Amount as a result of such Substitution) less (ii) the value to the Swap Counterparty of the protection bought by the Swap Counterparty under the Default Swap prior to such Substitution; and the cost to the Swap Counterparty of adjusting the hedges held against the Default Swap at the time of the relevant Substitution as a direct consequence of the Substitution.

B.

The Substitution Reference Figure shall take into account, inter alia, the Firm Offer Quotation in respect of the Substituted Reference Entity and the Firm Bid Quotation in respect of such Substitution Reference Entity. Substitution Window means, in respect of any Substitution Date, the period of time beginning when a Notice of Substitution Information is received on that date and ending one hour later on that date, provided that if the Swap Counterparty determines that there has been a Market Disruption Event, the Substitution Window shall end at 5.00 p.m. (London time), on such date. 33. Other final terms: Rounding: In calculating any amount payable on redemption of any Note (in whole or in part), all amounts shall be rounded down to the nearest cent. Additional Termination Unwind Costs means an amount (which may be either a positive or negative number) equal to the sum of: (i) the Final Value of the Reference Swap (as determined in accordance with the Default Swap); and the amount (if any) payable by either (i) the Issuer to the Swap Counterparty (expressed as a positive number) or (ii) the Swap Counterparty to the Issuer (expressed as a negative number) on termination of the Asset Swap as a result of the occurrence of the Trigger Event; and any legal or other ancillary costs (including any costs relating to the realisation of the Bond Securities) (expressed as a positive number) incurred by the Issuer, the Trustee or the Swap Counterparty as a result of such Accelerated Redemption as determined by the Calculation

Additional Definitions:

(ii)

(iii)

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Agent. Credit Event Notice means an irrevocable notice from the Issuer or the Swap Counterparty, as the case may be, to the other party (in the form, and delivered in the manner, described in the Default Swap) that describes a Credit Event that occurred on or after the Effective Date of the Default Swap. Credit Event Unwind Costs means, in respect of any Loss Determination Amount determined pursuant to the terms of the Default Swap (a CDS Payment): (i) the amount (if any) payable by the Issuer to the Swap Counterparty on the notional partial termination of the Asset Swap as a result of such CDS Payment; and (ii) any legal or other ancillary costs incurred by the Issuer, the Custodian, the Trustee or the Swap Counterparty as a result of such CDS Payment, each as determined by the Swap Calculation Agent in a commercially reasonable manner. Early Redemption Unwind Costs means, the sum of the following amounts (in each case as determined by the Calculation Agent in a commercially reasonable manner): (a) the Final Value of the Reference Swap (as determined in accordance with the Default Swap), provided that for this purpose the Final Value Determination Date shall be the Relevant Business Day prior to the Mandatory Redemption Date; the amount (if any) payable by either (i) the Issuer to the Swap Counterparty (expressed as a positive number) or (ii) the Swap Counterparty to the Issuer (expressed as a negative number) on termination of the Asset Swap as a result of an early redemption of the Notes (as determined by the Calculation Agent in a commercially reasonable manner); and any legal or other ancillary costs (expressed as a positive number) (including any costs in relation to the realisation of the Securities) determined by the Calculation Agent, acting in good faith and in a commercially reasonable manner, incurred by the Issuer, the Trustee or the Swap Counterparty as a result of the occurrence of such early redemption.

(b)

(c)

Event Determination Date means, in respect of a Credit Event, the date on which both the related Credit Event Notice and the related Notice of Publicly Available Information are effective. The following terms shall have the meanings ascribed to them in the Default Swap: (a) (b) Accelerated Termination Amount Accelerated Termination Date

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(c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) DISTRIBUTION 34. (i) (ii) 35. 36. 37. If syndicated, names of Managers: Stabilising Manager(s) (if any): name of Not Applicable. Not Applicable.

Cash Settlement Amount Credit Event Effective Date Event Notice Final Price Final Value of the Reference Swap Fixed Amount Loss Determination Amount Notice of Publicly Available Information Reference Entities Reference Swap Termination Date Trigger Event

If non-syndicated, Purchaser:

Deutsche Bank AG, acting through its London branch. Not Applicable. Not Applicable.

Additional selling restriction: Minimum Holding Amount:

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OTHER INFORMATION 1 LISTING (i) (ii) Listing: Admission to trading: Ireland. Application will be made on or after the Issue Date for the Notes to be admitted to trading on the Regulated Market of the Irish Stock Exchange. No assurance can be given that such listing will be obtained or, if so obtained, will be maintained for the term of the Notes. All such expenses are to be met by the Purchaser.

(iii)

Estimate of total expenses related to admission to trading:

2.

RATINGS Relevant Rating Agencies: Ratings: Not Applicable. Not Applicable.

OPERATIONAL INFORMATION ISIN: CUSIP Any clearing system(s) other than Euroclear Bank S.A./N.V. and Clearstream Banking socit anonyme and the relevant identification number(s): Delivery: Names and addresses of additional Paying Agent(s) (if any): XS0375464962. 037546496. Not Applicable.

Delivery free of payment. Not Applicable.

GENERAL Applicable TEFRA exemption: D Rules.

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SCHEDULE 1 TO THE TERMS AND CONDITIONS OF THE NOTES FORM OF ADDITIONAL RESERVE AMOUNT NOTICE To: Lagoon Finance Limited 5 Harbourmaster Place Dublin 1 Ireland

Attn: The Directors Cc: Deutsche Bank AG, acting through its London branch (as Swap Counterparty and Deposit Bank) Winchester House 1 Great Winchester Street London EC2N 2DB

Attn: Alex Pointier Correlation Trading Desk + 44 20 7545 7800 Cc: Deutsche Trustee Company Limited Winchester House 1 Great Winchester Street London EC2N 2DB

Attn: Trust & Securities Services [Date] Dear Sirs Lagoon Finance Limited Series 3 USD 285,000,000 Floating Rate Credit Linked Leveraged Super Senior Secured Notes due 2018 (ISIN: XS0375464962) issued on 25 July 2008 (the Notes) We represent, warrant and covenant that at the date of this notice we are the legal and beneficial owners of USD [] principal amount of the Notes and that we are authorised to execute and deliver this notice. In accordance with the provisions of paragraph 20(i)(c)(i) of the Terms of the Notes, we hereby give you irrevocable notice that we wish to pay the Additional Reserve Amount to the Additional Reserve Account notified by facsimile by you to the Contact Details specified below on the Additional Reserve Amount Payment Date, the details of which are set out below. Additional Reserve Amount: USD [amount must be greater than USD 500,000 and an integral multiple of USD 500,000] [date on which Noteholders intend to pay the Additional Reserve Amount, which must be a day falling during the Additional Reserve Amount Payment Period, which date shall be (i) no earlier than the date such notice is effective and (ii) in the event that such notice is delivered on the last day of the Additional Reserve Amount Payment Period, such last day] []

Additional Reserve Amount Payment Date:

Contact Details:

We hereby acknowledge to [] that this Additional Reserve Amount Notice may not be withdrawn and gives rise to an obligation on our part to pay the Additional Reserve Amount on the Additional Reserve Amount Payment Date and that after the delivery of this Additional Reserve Amount Notice, we may not transfer any
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Notes until after payment by us of the Additional Reserve Amount to the Additional Reserve Account on the Additional Reserve Amount Payment Date. Terms used in this letter and not otherwise defined shall have the meanings given to them in the Terms of the Notes. We authorise the production of this letter in any administrative or legal proceedings. Yours faithfully

[duly authorised signatory of the relevant Noteholder] [The Noteholder sending this notice must provide with this notice evidence satisfactory to the Issuer and the Swap Counterparty of its holding of Notes]

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SCHEDULE 2 TO THE TERMS AND CONDITIONS OF THE NOTES PORTFOLIO GUIDELINES No Substitution may cause the Reference Portfolio to contravene or, if the Reference Portfolio is already in contravention prior to such Substitution, cause a worsening of such contravention of the following guidelines: 1 2 The Reference Entity Notional Amount of a Reference Entity which is not an S&P High Yield Corporate Entity shall not exceed 1.50 per cent. of the Initial Portfolio Notional Amount. The aggregate of the Reference Entity Notional Amounts of Reference Entities in the same S&P Industry Classification Group (as such term is used by S&P) shall in each case not be more than 20.00 per cent. of the Initial Portfolio Notional Amount. The aggregate of the Reference Entity Notional Amounts of Reference Entities in any two S&P Industry Classification Groups (as such term is used by S&P) shall in each case not be more than 30.00 per cent. of the Initial Portfolio Notional Amount. The aggregate of the Portfolio Entity Notional Amounts of Reference Entities that are S&P High Yield Corporate Entities shall in each case be not more than 15.00 per cent. of the Initial Portfolio Notional Amount. The aggregate of the Portfolio Entity Notional Amounts of Reference Entities that have a country of incorporation with an S&P sovereign rating of less than A- shall be no more than 5.00 per cent. of the Initial Portfolio Notional Amount.

Definitions S&P High Yield Corporate Entity means each Reference Entity with an S&P Rating less than BBB-; S&P Rating means, in respect of a Reference Entity, the long-term foreign issuer credit rating assigned to such entity by S&P, provided that:

(a)

for the purposes of providing rating inputs, the rating input for any Reference Entity on credit watch negative shall be one notch below its S&P Rating, and any Reference Entity on credit watch positive will be one notch above its S&P Rating; if a long-term foreign issuer credit rating is not available but an issuer credit rating is available, the rating input for any Reference Entity will be determined in accordance with the then-current guidelines of S&P; notwithstanding the above, for the following Reference Entities, the rating input assigned to such entity by S&P shall be the rating assigned to their subordinated debt: (i) (ii) (iii) Federal National Mortgage Association; Federal Home Loan Mortgage Association; and Government National Mortgage Association;

(b)

(c)

(d)

if a long-term foreign issuer credit rating is not available and an issuer credit rating is not available, the rating input for any Reference Entity shall be the S&P Rating which is one notch below the S&P rating corresponding to the relevant Moodys rating if such Moodys rating is Baa3 or above; and two notches below the S&P rating corresponding to the relevant Moodys rating if such Moodys rating is Ba1 or below, provided that for the purposes of providing rating inputs, the rating input for any Reference Entity on credit watch negative by Moodys shall be one notch below the rating input determined in accordance with the previous paragraph; and

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(e)

the rating input for any Reference Entity unrated by S&P and Moodys and the rating input for any Reference Entity that is a Sovereign Reference Entity unrated by S&P shall be the credit assessment provided by S&P.

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SCHEDULE 3 TO THE TERMS AND CONDITIONS OF THE NOTES ELIGIBILITY CRITERIA The following Eligibility Criteria shall apply in respect of each Substitution Reference Entity which is to be included in the Reference Portfolio at the time of such Substitution of the relevant Substitution Reference Entity in the Reference Portfolio: 1 2 3 4. 5. Such Substitution Reference Entity must have a public rating by S&P. S&Ps long-term foreign issuer credit rating of such Substitution Reference Entity shall be at least BB-. Such Substitution Reference entity must have a country of incorporation with an S&P sovereign rating of at least BBB-. No Substitution Reference Entity shall be a Sovereign (as determined in good faith and in a commercially reasonable manner by the Calculation Agent). Such Substitution Reference Entity does not belong to the S&P Industry Classification Groups (as such term is used by S&P) ABS Consumer or ABS Commercial.

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SCHEDULE 4 TO THE TERMS AND CONDITIONS OF THE NOTES ELIGIBLE DEALERS JPMorgan Chase Bank, N.A. UBS Limited Goldman Sachs International Morgan Stanley Capital Services, Inc. Citigroup Global Markets Limited Merrill Lynch International The Royal Bank of Scotland PLC Credit Suisse International Barclays Bank PLC BNP Paribas Socit Gnrale Dresdner Bank AG Deutsche Bank AG Lehman Brothers International (Europe), London HSBC Bank PLC

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SCHEDULE 5 TO THE TERMS AND CONDITIONS OF THE NOTES FORM OF SUBSTITUTION NOTICE To: Deutsche Bank AG, acting through its London branch Winchester House 1 Great Winchester Street London EC2N 2DB Attention: Tel: Fax: Date: [Date] Alex Pointier +44 20 7545 7800 +44 113 336 2213

Re: Credit Default Swap dated 25 July 2008 entered into between Deutsche Bank AG London (the Counterparty), Lagoon Finance Limited and Legal & General Pensions Limited (as the same may be amended, modified or supplemented from time to time) (the CDS) in relation to the Series 3 USD 285,000,000 Floating Rate Credit Linked Leveraged Super Senior Secured Notes due 2018 issued by Lagoon Finance Limited We refer to the CDS and the Substitution Request dated [] and to the Notice of Substitution Information dated []. This notice is a Substitution Notice for the purposes of the CDS. Capitalised terms used in this notice but not otherwise defined in this notice shall have the meanings given to them in the issue deed dated 25 July 2008 entered into between Lagoon Finance Limited, Deutsche Trustee Company Limited, Deutsche Bank AG, acting through its London branch, Deutsche Bank AG, Amsterdam Branch and Deutsche International Corporate Services (Ireland) Limited. We hereby confirm that we wish to execute the Substitution to which such Substitution Request relates on the basis of the Substitution Information set out in such Notice of Substitution Information and the information specified below: Eligible Dealer(s): [to be inserted] Firm Bid Quotations (for each Substitution Reference Entity): [to be inserted] Firm Offer Quotations (for each Substituted Reference Entity): [to be inserted] Reference Entity Notional Amount (for each Substitution Reference Entity): [to be inserted] Reference Entity Notional Amount (for each Substituted Reference Entity): [to be inserted] Contact Details of Eligible Dealer(s): [to be inserted] Substitution Consequence: [to be inserted] .............................................................

For and on behalf of []

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SCHEDULE 6 TO THE TERMS AND CONDITIONS OF THE NOTESFORM OF SUBORDINATION RESET NOTICE To: Deutsche Bank AG, acting through its London branch Winchester House 1 Great Winchester Street London EC2N 2DB Attention: Tel: Fax: Date: [Date] Alex Pointier +44 20 7545 7800 +44 113 336 2213

Re: Credit Default Swap dated 25 July 2008 entered into between Deutsche Bank AG London (the Counterparty), Lagoon Finance Limited and Legal & General Pensions Limited (as the same may be amended, modified or supplemented from time to time) (the CDS) in relation to the Series 3 USD 285,000,000 Floating Rate Credit Linked Leveraged Super Senior Secured Notes due 2018 issued by Lagoon Finance Limited We refer to the CDS and the Subordination Reset Request dated [] and to the Notice of Subordination Reset Information dated []. This notice is a Subordination Reset Notice for the purposes of the CDS. Capitalised terms used in this notice but not otherwise defined in this notice shall have the meanings given to them in the issue deed dated 25 July 2008 entered into between Lagoon Finance Limited, Deutsche Trustee Company Limited, Deutsche Bank AG, acting through its London branch, Deutsche Bank AG, Amsterdam Branch and Deutsche International Corporate Services (Ireland) Limited. We hereby confirm that we wish to execute the Subordination Reset to which such Subordination Reset Request relates on the basis of the Subordination Reset Information set out in such Notice of Subordination Reset Information. ............................................................. For and on behalf of []

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SCHEDULE 7 TO THE TERMS AND CONDITIONS OF THE NOTES FORM OF DELIVERY INSTRUCTION CERTIFICATE

To:

Lagoon Finance Limited 5 Harbourmaster Place Dublin 1 Ireland

Attn: The Directors Cc: Deutsche Bank AG, acting through its London branch (as Paying Agent) Winchester House 1 Great Winchester Street London EC2N 2DB

Attn: Trust & Securities Services [Date] Dear Sirs Lagoon Finance Limited Series 3 USD 285,000,000 Floating Rate Credit Linked Leveraged Super Senior Secured Notes due 2018 (ISIN: XS0375464962) issued on 25 July 2008 (the Notes) 1 Introduction

Please read the notes set out in paragraph 2 below prior to completing this Delivery Instruction Certificate. This Delivery Instruction Certificate is not valid unless all of the paragraphs requiring completion are duly completed. 2 Delivery

When duly completed, this Delivery Instruction Certificate should be presented together with the Notes to which it relates to any Paying Agent. Delivery of the Securities to which a Noteholder is entitled shall be made on the Accelerated Redemption Date in accordance with the instructions set out in this Delivery Instruction Certificate. The Issuer shall not be obliged to deliver the Securities in respect of any Notes unless (a) a completed and executed Delivery Instruction Certificate relating to such Notes shall have been presented and surrendered together with the Notes at the specified office of any Paying Agent on or before 5.00 p.m., London time, on the third Business Day in London immediately prior to the Accelerated Redemption Date. If such Delivery Instruction Certificate is presented to a Paying Agent after 5.00 p.m., London time, on the day of presentation or if the day of presentation is not a Business Day in London, such Delivery Instruction Certificate shall be deemed to have been presented before 5.00 p.m., London time on the next following Business Day in London and (b) such Noteholder has paid its pro rata share of an amount in USD equal to the Additional Termination Unwind Costs (but excluding for such purposes any costs in relation to the realisation of the Securities) on or prior to the Accelerated Redemption Date to such account as has been notified to it by or on behalf of the Issuer. In the event that the Notes are evidenced by a Global Note held on behalf of Euroclear and Clearstream, Luxembourg, accountholders at Euroclear and Clearstream, Luxembourg will be required to give an irrevocable instruction to Euroclear or Clearstream, Luxembourg, as the case may be, to such effect in the form prescribed by the relevant clearance system (which may be in a form other than this Delivery Instruction Certificate), not later than 10.00 a.m., Brussels or Luxembourg time, as the case may be (or, in the case of an instruction to Euroclear via EUCLID or EUCLID 90, 11.00 a.m. Brussels time) on the Business Day prior to the date on which such Delivery Instruction Certificate is to be delivered. In such circumstances, the Delivery Instruction Notice shall be deemed to have been delivered to the Issuer on the Business Day following such irrevocable instruction having been given to the relevant clearance system.
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Receipt

As a receipt for this Delivery Instruction Certificate and the surrendered Notes, a copy duly marked with the relevant Paying Agents stamp and the date and time of receipt will be issued to the Noteholder. 4 Delivery Instructions

I/We the undersigned, am/are the holder of the Notes the principal amount and the serial numbers of which are specified below: [Principal amount of Notes in respect of which this Delivery Instruction Certificate relates] [Serial numbers of Notes in respect of which this Delivery Instruction Certificate relates]

I/We hereby direct that the Notes listed above be redeemed by delivery of the relevant Securities as follows: Euroclear for the account of securities account number Clearstream, Luxembourg for the account of securities account number

Terms used herein and not defined shall have the meanings given to them in the Conditions of the Notes. Name of Noteholder: Signed: Date: [To be completed by Paying Agent] Received by: [Signature and stamp of the Paying Agent] At its office at:

On: At:

.. (date) .. (time)

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FURTHER INFORMATION CONCERNING THE ISSUE DEED

General The Issue Deed is dated the Issue Date and is made between the Issuer, the Trustee (as specified on the back cover of this Prospectus) and the other parties named therein. It is entered into for the purpose of constituting and securing the Notes and setting out the terms of the agreement made between the parties specified therein in relation to the Notes. Set out below is a summary of the main provisions. Provisions Relating to the Issuer and the Trustee The Issue Deed (together with the Master Trust Terms dated 30 November 2007, the "Trust Deed") contains standard provisions which set out various obligations of the Issuer and the Trustee. The Trust Deed sets out the covenants of the Issuer, including, inter alia, provisions relating to its duty to provide various persons with information, to prepare and display certain information, to only do such things as are contemplated within the Trust Deed (most importantly, in relation to the issue of the Notes and other limited recourse investments which it is permitted to enter into) and its duties with respect to its obligations in respect of the Notes. The Trust Deed also sets out the basis for the remuneration, reimbursement of expenses, termination and indemnification of the Trustee in respect of its duties. The Trust Deed sets out the conditions for replacement of the Trustee; in particular that a replacement trustee must be approved by the Issuer and Noteholders (in the case of both retirement and removal of the Trustee). There will, however, always be a Trustee in place. Provisions which are supplemental to certain statutory provisions and which set out the powers of the Trustee and the extent of its duties are also included. Form of the Notes The Trust Deed sets out the Issuers covenant to pay in respect of, and certain provisions relating to, the Notes constituted and secured by the Issue Deed. It also sets out the form of the Notes themselves (both global and definitive forms). Terms and Conditions of the Notes The terms and conditions of the Notes (the "Conditions"), which are incorporated by reference into the Issue Deed, set out the terms and conditions of the Notes. The Conditions of the Notes are supplemented and amended by the Terms which should be read in conjunction with the Conditions. The Terms are also set out in this Prospectus. Swap, Agency and Purchase Agreements The Issue Deed sets out and executes the following: a) the Swap Agreement (as further described in the following section); b) the Agency Agreement, covering the duties, liabilities, appointment and change of the various agents, including the Issuing and Paying Agent and the Paying Agent; and c) the Purchase Agreement covering the provisions relating to the purchase of the Notes by the Purchaser, the conditions precedent to such arrangement, various representations, warranties, undertakings and agreements of the Issuer and the Purchaser and the selling restrictions applicable to the distribution of the Notes. The above summary is qualified in its entirety by the terms of the Issue Deed, which will be available as described under the heading "General" above.

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FURTHER INFORMATION CONCERNING THE CALCULATION AGENT The Calculation Agent is Deutsche Bank AG, London Branch (the "Calculation Agent") which is the London branch of Deutsche Bank Aktiengesellschaft ("DB AG"). The Calculation Agents address is Winchester House, 1 Great Winchester Street, London, EC2N 2DB. DB AG is the parent company of a group consisting of banks, capital market companies, fund management companies, a property finance company, instalment financing companies, research and consultancy companies and other domestic and foreign companies. The Calculation Agent's relationship with the Issuer is to act, where applicable, as Calculation Agent in relation to the Notes. DB AG has a relationship with the Issuer acting as Issuing and Paying Agent, Arranger, Swap Counterparty, Selling Agent and Deposit Bank in relation to the Notes. Business Activities The objects of DB AG, as laid down in its Articles of Association, include the transaction of all kinds of banking business, the provision of financial and other services and the promotion of international economic relations. DB AG may realise these objectives itself or through subsidiaries and affiliated companies. Calculation Agents Responsibilities The Calculation Agent is responsible for making any determination or calculation required pursuant to the Terms and Conditions of the Notes. Once a determination or calculation is made, the Calculation Agent is responsible for notifying the Issuer, the Trustee, the Issuing and Paying Agent, the Paying Agent, the Noteholders, the Arranger and such other persons as may be required by the Terms and Conditions of the Notes. Termination and Appointment of Calculation Agent The appointment of the Calculation Agent will terminate if the Calculation Agent becomes incapable of acting, or is adjudged bankrupt or insolvent, or files a voluntary petition in bankruptcy or if a resolution is passed or an order made for the winding up or dissolution of the Calculation Agent. The Issuer may appoint a Calculation Agent and/or terminate the appointment of any Calculation Agent by giving at least 60 days notice to that effect provided that no such termination of the appointment of the Calculation Agent shall take effect until a successor has been appointed and provided further that no such termination shall take effect if as a result of such termination there would cease to be a Calculation Agent. The Issuer will obtain the prior written approval of the Trustee to any appointment or termination by it and take appropriate steps to notify any such appointment or termination to the holders of the Notes.

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FURTHER INFORMATION CONCERNING THE SWAP AGREEMENT In respect of the Notes, and subject as provided below, in addition to the circumstances specified in paragraph 20(vii) of the Terms above, the Swap Agreement (as defined in such paragraph 20(vii) above) may be terminated early, (either in whole or, in certain circumstances, in part only) among other circumstances: (i) (ii) (iii) if at any time any of the Notes becomes due for redemption in accordance with the Conditions at any time prior to their maturity; at the option of one party, if there is a failure by the other party to pay any amounts due either Swap Agreement; under

if (subject as provided in the Swap Agreement) withholding taxes are imposed on payments made by the Issuer or the Swap Counterparty under either Swap Agreement or it becomes illegal for either party to perform its obligations under either Swap Agreement; upon the occurrence of certain other events as described in the Swap Agreement (with an effective date of the Issue Date as defined in the Terms) with respect to either party to the Swap Agreement, including insolvency; and Section 2(c) of the ISDA Master Agreement has been amended so that the netting of provisions therein shall apply to the Swap Agreement. payments

(iv)

(v)

If an Event of Default occurs with respect to the Swap Counterparty under the Swap Agreement, the Swap Counterparty, in its sole and absolute discretion, may elect to novate at its expense all (and not some only) of its obligations under the Swap Agreement to any other entity having a long-term credit rating not lower than "Aa3" by Moodys and AA- by S&P no later than the date falling 20 Business Days after the occurrence of such Event of Default (the "Optional Novation" and the date of such novation, the "Optional Novation Date") by giving not less than 5 Business Days' prior notice to the Issuer. Notwithstanding anything to the contrary in the Agreement, if an Optional Novation is exercised by the Swap Counterparty (i) the Issuer shall have no right to designate an Early Termination Date under Section 6(a) of the Agreement and (ii) no Early Termination Date shall occur under Section 6(c) of the Agreement. Consequences of Early Termination of Swap Agreement Upon any such early termination of any of the Swap Agreement, the Issuer or the Swap Counterparty may be liable to make a termination payment (subject as stated in paragraph 20 of the Terms above and the Swap Agreement) to the other party (regardless, if applicable, of which of such parties may have caused such termination). In all cases of early termination occurring other than by reason of a default by the Swap Counterparty (in which case the determination will be made by the Issuer), the termination payment will be determined by the Swap Counterparty on the basis of the Swap Counterpartys determination of the total losses and costs (or gain, in which case expressed as a negative number) of the parties in connection with the relevant Swap Agreement. On the occurrence of an early termination with regards to the Default Swap (as defined in sub-paragraph 20(vii)(B) of the Terms) the Issuer shall redeem the Notes in accordance with Condition 7(e). The information set out in the section of the Base Prospectus entitled "Information Concerning the Swap Counterparty" is hereby incorporated into this Prospectus in accordance with Article 11.1 of the Prospectus Directive. The above summary is qualified in its entirety by the terms of the Swap Agreement, which will be available as described under the heading "General" above.

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FURTHER INFORMATION CONCERNING THE DEPOSIT ACCOUNT As at the Issue Date, the Deposit Account is held at Deutsche Bank AG, London Branch in the name of the Custodian. The Deposit Account will be credited with the proceeds of the Notes on the Issue Date as described in paragraph 20 of the Terms above. The Deposit Account will be governed in accordance with the laws of England and Wales. As at the date of this Prospectus the balance on the Deposit Account is USD 5,034.13. The Deposit Account has no scheduled maturity and will exist perpetually. Deutsche Bank Aktiengesellschaft (DB AG) has securities admitted to trading on the Luxembourg Stock Exchange. DB AG is a banking institution and a stock corporation incorporated under the laws of Germany under registration number HRB 30 000. DB AG has its registered office in Frankfurt am Main, Germany. It maintains its head office at Taunusanlage 12, 60325 Frankfurt am Main and branch offices in Germany and abroad including in London, New York, Sydney, Tokyo and an Asia-Pacific Head Office in Singapore which serve as hubs for its operations in the respective regions. At any time from and including the Issue Date to but excluding the Scheduled Maturity Date, the Swap Counterparty may require that Replaced Securities then forming part of the Securities be replaced by Replacement Securities provided however that: (a) upon any release of the Replaced Securities from the Security created by or pursuant to the Trust Deed, any such Replacement Securities are delivered, transferred or assigned to the Issuer and are subject to the Security created by or pursuant to the Trust Deed; and the Replacement Securities are comprised of Eligible Securities.

(b)

Deutsche Bank AG, London Branch "Deutsche Bank AG, London Branch" is the London branch of DB AG. The registered address is Winchester House, 1 Great Winchester Street, London EC2N 2DB United Kingdom. On 12 January 1973, DB AG filed in the United Kingdom the documents required pursuant to section 407 of the Companies Act 1948 to establish a place of business within Great Britain. On 14 January 1993, DB AG registered under Schedule 21A to the Companies Act 1985 as having established a branch (Registration No. BR000005) in England and Wales. Deutsche Bank AG, London Branch is an authorized person for the purposes of section 19 of the Financial Services and Markets Act 2000. In the United Kingdom, it conducts wholesale banking business and through its Private Wealth Management division, it provides holistic wealth management advice and integrated financial solutions for wealthy individuals, their families and selected institutions.

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USE OF PROCEEDS The net proceeds of the issue of the Notes being a sum of USD 285,000,000 will be applied in the purchase of the Initial Bond Securities and deposited in the Deposit Account of an amount equal to USD 5,034.13 on the Issue Date in accordance with the Terms and Conditions of the Notes. Any associated costs of issuance and ongoing expenses of an administrative nature will be borne by the Arranger. TAX CONSIDERATIONS Neither the Issuer, nor the Swap Counterparty, is obliged to pay any additional amount for, or on account of, any payments under the Notes or any Swap Agreement which is the subject of a deduction or withholding for or on account of any tax. The imposition of such withholding or deduction would lead to a mandatory redemption of the Notes. LEGAL OPINIONS Legal opinions relating to the issue of the Notes and the obligations of the Issuer thereunder have been obtained with respect to the laws of England and Ireland. It is not intended that legal opinions will be obtained with respect to any other applicable laws and no investigation has been made into, or legal opinions obtained with respect to, the validity, binding nature or enforceability of the obligations of any obligor in respect of the Mortgaged Property (or any part thereof) under the laws of England or any other relevant jurisdiction. The legal opinions which have been obtained are subject to qualifications and are made on certain assumptions and, in general, a legal opinion with respect to the laws of one jurisdiction will not extend to express any opinion with respect to the validity or enforceability of security interests stated to be governed by the laws of another jurisdiction. AVAILABILITY OF PROSPECTUS AND OTHER DOCUMENTS For as long as any Notes remain outstanding, the Base Prospectus and this Prospectus (and any notice of amendment) issued by the Issuer since the date of first publication of the Base Prospectus will be available, during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) for inspection at the registered office of each of the Trustee, the Issuing and Paying Agent and the Paying Agent specified on the back cover of the Base Prospectus and will be available from the date hereof at the offices of the Listing Agent specified on the back cover of this Prospectus for so long as the Notes are listed on the Irish Stock Exchange. PAYING AGENTS AND LISTING AGENT The Issuing and Paying Agent for the Notes shall be Deutsche Bank AG, London Branch in such capacity and the Irish Paying Agent shall be Deutsche International Corporate Services (Ireland) Limited. The Listing Agent appointed in respect of the Notes is Deutsche Bank AG, London Branch.

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SELLING RESTRICTIONS General The Arranger and the Issuer have agreed that no action has been or will be taken in any jurisdiction that would permit a public offering of any of the Notes, or possession or distribution of the Base Prospectus or any part thereof including this Prospectus, or any other offering or publicity material relating to the Notes, in any country or jurisdiction where action for that purpose is required. The Arranger has agreed that it will comply with all applicable laws and regulations in each jurisdiction in which it acquires, offers, sells, or delivers Notes or has in its possession or distributes the Base Prospectus or any part thereof including this Prospectus, or any such other material, in all cases at its own expense unless otherwise agreed. European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), the Arranger represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of Notes to the public in that Relevant Member State, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State: (a) (b) at any time to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; at any time to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than 43,000,000 and (3) an annual net turnover of more than 50,000,000, as shown in its last annual or consolidated accounts; or at any time to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Arranger for any such offer; or at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive.

(c)

(d)

For the purposes of this provision, the expression an offer of Notes to the public in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe for the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. United Kingdom The Arranger agrees that: (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the FSMA)) received by it in connection with the issue or sale of any Notes in circumstances in which section 21(1) of the FSMA does not apply to the Issuer; and it has complied with and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.

(ii)

Ireland The Issuer is a private limited company and accordingly its Articles of Association prohibits any invitation or offer to the public to subscribe for any shares, debentures or other securities of the Issuer.

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The Arranger represents, warrants and agrees that, it has not offered, sold, placed or underwritten and will not offer, sell, place or underwrite the Notes, or do anything in Ireland in respect of the Notes, otherwise than in conformity with the provisions of: (i) the Prospectus Regulations and any rules issued by the Financial Regulator under Section 51 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 of Ireland (as amended) (the 2005 Act); the Irish Companies Acts 1963 to 2006; the European Communities (Markets in Financial Instruments) Regulations 2007 (as amended) of Ireland and it will conduct itself in accordance with any rules or codes of conduct and any conditions or requirements, or any other enactment, imposed or approved by the Financial Regulator; and the Market Abuse (Directive 2003/6/EC) Regulations 2005 and any rules issued by the Financial Regulator under Section 34 of 2005 Act.

(ii) (iii)

(iv)

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ANNEX 1 INFORMATION CONCERNING THE ISSUER The information set out in the section of the Base Prospectus entitled "Description of the Issuer" is hereby incorporated into this Prospectus in accordance with Article 11.1 of the Prospectus Directive. The issue of the Notes has been authorised by a resolution of the board of directors of the Issuer passed on 25 July 2008. As at the date of this Prospectus, save for issuances of any notes pursuant to the Programme, the Issuer has no borrowings or indebtedness in the nature of borrowings (including loan capital issued or created but unissued), term loans, liabilities under acceptances or acceptance credits, mortgages, charges or guarantees or other contingent liabilities. The indebtedness of the Issuer as at 14 August 2008 is USD 1,897,229,900. There has been no significant change in the financial or trading position of the Issuer and no material adverse change in the financial position or prospects of the Issuer since the date of its incorporation. The Issuer intends to publish its first financial statements in respect of the period ending on 31 December 2007. There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer is aware) which may have or have had from the date of incorporation to the date hereof a significant effect on the Issuer's financial position. Directors and Company Secretary The Directors of the Issuer are as follows: Michael Whelan Christian Currivan Paul McNaughton The business address of Michael Whelan is 5 Harbourmaster Place, IFSC, Dublin, Ireland, the business address of Christian Currivan is Apt. 17, Block 14, Gallery Quay Apts, Pearse Street, Dublin 2, Ireland and the business address of Paul McNaughton is "Dunloe", Whitshed Road, Greystones, County Wicklow, Ireland. The Company Secretary is Deutsche International Corporate Services (Ireland) Limited. Deutsche International Corporate Services (Ireland) Limited is the administrator of the Issuer. Its duties include the provision of certain administrative, accounting and related services. The appointment of the administrator may be terminated and the administrator may retire upon three months' notice subject to the appointment of an alternative administrator on similar terms to the existing administrator.

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ANNEX 2 ASSET SWAP CONFIRMATION Deutsche Bank Aktiengesellschaft Date: To: From: Our reference: Re: Dear Sir/Madam, The purpose of this letter agreement is to set forth the terms and conditions of the Transaction entered into between Deutsche Bank AG, acting through its London branch ("Party A") and Lagoon Finance Limited ("Party B") on the Trade Date specified below (the "Transaction"). This constitutes a "Confirmation" as referred to in the Agreement specified below. The definitions and provisions contained in the 2006 ISDA Definitions (the "2006 Definitions") as published by the International Swaps and Derivatives Association, Inc. and the definitions contained in the credit default swap confirmation dated 25 July 2008 between Party A and Party B (and for the limited purposes specified therein, the Initial Owner) (the "Default Swap") are incorporated by reference herein. In the event of any inconsistency between the 2006 Definitions, the Default Swap and this Confirmation, this Confirmation will govern. For the purposes of this Confirmation, all references in the 2006 Definitions and the Agreement (as defined below) to a "Swap Transaction" shall be deemed to apply to the Transaction referred to herein. Words and expressions defined in the terms and the conditions (as the same may be amended, modified or supplemented from time to time, the "Conditions") of the Notes shall bear the same meanings in this Confirmation and in the event of any inconsistency between words and meanings defined in the Conditions and words and expressions defined in this Confirmation, this Confirmation will govern. References herein to "paragraphs" and "Special Provisions" are to the paragraphs and Special Provisions hereof, unless the context requires otherwise. This Confirmation supplements, forms part of, and is subject to the Master Swap Agreement dated 25 July 2008 (as the same may be amended, modified or supplemented from time to time, the "Agreement") entered into between Party A and Party B by their execution of the Issue Deed (as the same may be amended, modified or supplemented from time to time, the "Issue Deed") dated 25 July 2008 between them and certain other persons for purposes including constituting the Notes and prescribing the Conditions. All provisions contained in the Agreement shall govern this Confirmation except as expressly modified below. 25 July 2008 Lagoon Finance Limited Deutsche Bank AG, acting through its London branch Summit No. C2073358M Asset Swap relating to Series 3 USD 285,000,000 Floating Rate Credit Linked Leveraged Super Senior Secured Notes due 2018 (the Notes)

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The terms of the particular Transaction to which this Confirmation relates are as follows, subject to the Special Provisions in paragraph 3 below, which will prevail over paragraph 1 below: 1. General Terms Trade Date: Effective Date: Termination Date: 2. Payments Floating Amounts - Party A: Floating Amounts: In respect of each Floating Rate Payer Payment Date, an amount equal to the aggregate of the Interest Amounts including Additional Interest Amounts and related Accrued Interest Amounts and Interest on Extended Maturity Date (as applicable) payable by Party B in respect of the Notes on the Interest Payment Date or Additional Interest Payment Date, as the case may be, coinciding with such Floating Rate Payer Payment Date. Party A. Each Interest Payment Date in respect of the Notes, including all Additional Interest Payment Dates and the Extended Maturity Date in respect of the Notes (as applicable). 27 June 2008. 25 July 2008. The Maturity Date of the Notes.

Floating Rate Payer: Floating Rate Payer Payment Dates:

Variable Rate Payments - Party B: Variable Amounts: Party B shall pay to Party A amounts equal to each amount of interest received by Party B in respect of (a) the Securities Balance and (b) the Bond Securities held by or on behalf of Party B on or after the Effective Date (in accordance with the terms and conditions of the relevant Bond Securities), in each case on the due dates for payment of such interest amounts. Party B.

Variable Rate Payer: Exchange Amounts Party A: Initial Exchange Date: Initial Exchange Amount:

Effective Date. Party A will deliver the Initial Bond Securities with full title guarantee to the Custodian for the account of Party B and will deposit USD 5,034.13 in the Deposit Account. Each Replacement Date. On each Interim Exchange Date 1, Party A will deliver the relevant Replacement Securities with full title guarantee to the

Interim Exchange Date 1: Interim Exchange Amount 1:

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Custodian for the account of Party B. Interim Exchange Date 2: Interim Exchange Amount 2: Each Deutsche Bank Securities Delivery Date. On each Interim Exchange Date 2, Party A will pay an amount in USD equal to the aggregate outstanding principal amount of the Deutsche Bank Securities. Termination Date. Party A shall pay the aggregate of the Outstanding Principal Amounts of the Notes as at the Final Exchange Date to Party B.

Final Exchange Date: Final Exchange Amount:

Exchange Amounts Party B: Initial Exchange Date: Initial Exchange Amount 1: Interim Exchange Date 1: Interim Exchange Amount: Effective Date. USD 285,000,000. Each Replacement Date. On each Interim Exchange Date 1, Party B shall pay to Party A the relevant Replaced Securities. Each Deutsche Bank Securities Delivery Date. On each Interim Exchange Date 2, Party B will deliver to Party the relevant Deutsche Bank Securities. Termination Date (subject to the Special Provisions specified in paragraph 3). Party B shall (a) pay to Party A the Securities Balance and (b) deliver to Party A all the outstanding Bond Securities.

Interim Exchange Date 2: Interim Exchange Amount 2:

Final Exchange Date: Final Exchange Amount(s):

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The dates and amounts of all of the payments specified in this paragraph 2 are subject to the Special Provisions specified in paragraph 3, which shall prevail in the event of any conflict. 3. 3.1 Special Provisions Early Termination If the Scheduled Maturity Date of the Notes is postponed in accordance with paragraph 8 of the Terms as a result of any Outstanding Credit Event: (a) on the date which should have been such Scheduled Maturity Date, Party A will pay to Party B an amount (the Partial Redemption Amount) equal (i) to the aggregate of the Outstanding Principal Amounts of the Notes less (ii) the aggregate Redemption Deductions in respect of all Outstanding Credit Events and Party B will pay and/or deliver Securities to Party A in an aggregate nominal amount equal to the Partial Redemption Amount; and on the fifth Business Day following the determination of a Loss Determination Amount in relation to any Outstanding Credit Event, Party A will pay to Party B an amount (the Withheld Redemption Amount) equal to (i) the relevant Redemption Deduction withheld pursuant to the immediately preceding sub-paragraph (a) in respect of such Outstanding Credit Event minus (ii) the relevant Loss Determination Amount and Party B will pay and/or deliver Securities to Party A in an aggregate nominal amount equal to the Withheld Redemption Amount; and on the fifth Business Day immediately following the expiration of the relevant Notice Delivery Period in relation to any Outstanding Credit Event in respect of which a Loss Determination Amount has not been determined within the Notice Delivery Period, Party A will pay to Party B an amount equal to the Redemption Deduction withheld pursuant to the immediately preceding sub-paragraph (a) in respect of such Outstanding Credit Event and Party B will pay and/or deliver Securities to Party A in an aggregate nominal amount equal to such Redemption Deduction.

(b)

(c)

3.2

Early Redemption of the Notes Subject as provided below, if the Notes become due for redemption in accordance with Condition 7(c), 7(d) or 10 or following an Accelerated Redemption Date this Transaction shall terminate and a termination payment shall be payable in accordance with Section 6(e) of the Agreement. If the Notes become due for redemption for any other reason (including redemption pursuant to sub-paragraph 25(B) of the Terms following the reduction of the aggregate of the Outstanding Principal Amounts of the Notes to zero), no termination payment shall be payable in accordance with Section 6(e) of the Agreement. For the avoidance of doubt, notwithstanding that no termination payment is payable in accordance with the foregoing, the parties shall remain under any obligation to make payments or deliveries that arose prior to any Early Termination Date. The reference to Additional Termination Event in Section 6(b)(iv) shall be deleted. Party B shall procure that notice is given to Party A of any notice of early redemption given pursuant to the Conditions or the terms and conditions of the Securities in respect of the Notes (upon Party B giving such notice in the former case or upon Party B becoming aware of such event in the latter case).

3.3

Purchase of Notes Party B will, at any time upon being so required by Party A from time to time, purchase any Notes held by Party A in accordance with Condition 7(i) and will, on the date of such purchase pay or deliver to Party A for its own account a proportion of the Securities in a nominal amount equal to the proportion of the Notes to be purchased. Party A will pay to Party B an amount which will be sufficient to fund the purchase price of the Notes, together with any associated costs. Upon such payment, the obligations of the parties hereunder will, by virtue of the provisions of paragraph 2 above, and of the other provisions of this

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paragraph 3, be reduced accordingly (in whole or, as the case may be, pro rata). Subject to the foregoing, no further payments shall be made by either party to the other in respect of the obligations under this Transaction so terminated. 3.4 Additional Party B Amounts Party B shall pay to Party A the sum of all Fixed Amounts (as defined in the Default Swap) due and payable by Party A to Party B under the Default Swap (each, a Default Swap Premium Payment) from time to time, on the due date for payment of each Default Swap Premium Payment under the Default Swap. 3.5 Termination in full of the Default Swap The termination in full of the Default Swap prior to the Termination Date of the Default Swap (as defined therein) shall constitute an Additional Termination Event hereunder, for which purpose Party B shall be the sole Affected Party. Notwithstanding Section 6(b) of the Agreement, an Early Termination Date shall be deemed to be designated hereunder in respect of such Additional Termination Event on the relevant termination date of the Default Swap. In such circumstances, a termination payment may be payable in accordance with Section 6(e) of the Agreement. 3.6 Notional partial termination upon the delivery of Securities pursuant to the Default Swap Upon the determination of any Loss Determination Amount pursuant to the Default Swap as more fully described therein, a notional Additional Termination Event in respect of the Notional Affected Portion of this Transaction (for which purpose Party B shall be the sole Affected Party) shall be deemed to have occurred but solely for the purposes of determining the Credit Event Unwind Costs (as defined in the Default Swap) and the Aggregate Delivered Amount and no termination payment shall actually be payable by one party to the other under this Agreement as a result thereof. Such determination shall be made as if an Early Termination Date shall be deemed to have been designated in respect of the Notional Affected Portion of this Transaction as of the Relevant Credit Event Determination Date. For such purpose: "Notional Affected Portion" of this Transaction means that part of this Transaction which is equal to the proportion which the Loss Determination Amount bears to the aggregate nominal amount of Securities immediately prior to the determination of the Loss Determination Amount, as determined by the Calculation Agent. "Relevant Credit Event Determination Date" means, in respect of the occurrence of a Credit Event and the determination of the Loss Determination Amount, the date of such determination. For the avoidance of doubt, such notional Additional Termination Event shall not constitute or result in an actual termination of any part of this Transaction. The determination of the Notional Affected Portion shall be an iterative process which will be repeated by the Calculation Agent (in relation to each Relevant Credit Event Determination Date) in a commercially reasonable manner. 3.7 Withholding or Deductions in respect of Securities For the avoidance of doubt, no Variable Amount by Party B hereunder shall be reduced on account of any deduction or withholding from any payment in respect of the Securities on account of any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any such payment of interest, or on account of any right of set-off, or for any other reason whatsoever.

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3.8

Credit Support Annex On any date on which any of the Notes remain outstanding, Party A may be required to provide Eligible Credit Support for its obligations to Party B under this Transaction in accordance with the terms of the 1995 ISDA Credit Support Annex (Bilateral Form Transfer English Law) dated 25 July 2008 (the CSA) and entered into between Party A and Party B. In the event that Party A fails to provide any such Eligible Credit Support, such failure shall constitute an Additional Termination Event hereunder, for which purpose Party B shall be the sole Affected Party. Notwithstanding Section 6(b) of the Agreement, an Early Termination Date shall be deemed to be designated hereunder in respect of such Additional Termination Event on the date falling 30 calendar days after Party As failure to take the actions described in this Paragraph 3.9.

3.9

Calculation Agent Party A, which shall make any determinations it is required to make in accordance with the Conditions and this Transaction. Any determination by Party A in such capacity shall be made in a commercially reasonable manner and shall be conclusive and binding on Party B, the Trustee, the Noteholders, the Paying Agents and all other persons and no liability shall attach to Party A in respect thereof. Wherever the Calculation Agent is required to make any determination, it may, acting in good faith and in a commercially reasonable manner, inter alia, decide issues of construction and legal interpretation.

3.10

Amendments If the Conditions are, following the Effective Date, amended in a way that affects the rights or obligations of Party A, such amendments shall not be effective as regards Party A without the prior written approval of Party A.

4.

Account Details Account Details for Party A: USD Deutsche Bank Trust Co., New York SWIFT BIC Code: BKTRUS33 Account Number: 04-411-739 Favour: Deutsche Bank AG, London Branch - Lagoon Finance Limited Series 3 Account Details for Party B: USD Deutsche Bank Trust Co., New York SWIFT BIC Code: BKTRUS33 Account Number: 04-411-747 Favour: Lagoon Finance Limited Series 3 and/or such other accounts as shall be advised by one Party to the other as and when necessary.

5.

Offices

The Office of Party A for this Transaction is Winchester House, 1 Great Winchester Street, London EC2N 2DB. The Office of Party B for this Transaction is 5 Harbourmaster Place, Dublin 1, Ireland.

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6.

Single Agreement The Agreement and the transactions evidenced by this Confirmation, the Default Swap Confirmation and the CSA form a single agreement between the parties.

7.

Additional Representations Each party represents to the other party on the date hereof that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for this Transaction): (A) Non-Reliance - It has made its own independent decision to enter into this Transaction, is acting at arm's length for its own account, and is not relying on any communication (written or oral) of the other party as a recommendation or investment advice regarding this Transaction. Evaluation and Understanding - It has the capability to evaluate and understand (on its own behalf or through independent professional advice), and does understand, the terms, conditions and risks of this Transaction and is willing to accept those terms and conditions and to assume (financially and otherwise) those risks. Concerning the Calculation Agent The Calculation Agent is not acting as a fiduciary for or as an advisor to either party in respect of its duties as Calculation Agent in respect of this Transaction and any determination by the Calculation Agent in the course of such duties shall be made in a commercially reasonable manner and shall be conclusive and binding on each party (in the absence of manifest error) and no liability shall attach to the Calculation Agent in respect thereof.

(B)

(C)

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EXECUTION PAGE OF ASSET SWAP CONFIRMATION LAGOON FINANCE LIMITED SERIES 3 Please confirm your agreement to be bound by the terms of the foregoing by executing a copy of this Confirmation and returning it to us by facsimile to: Deutsche Bank AG, acting through its London branch Attention: Repack Documentation Phone: +44 20 7547 1815 Fax: +44 20 7545 1913 Email: repackdocumentation.ldn@db.com Yours sincerely

DEUTSCHE BANK AG, ACTING THROUGH ITS LONDON BRANCH By: Name: Title: AUTHORISED SIGNATORY By: Name: Title: AUTHORISED SIGNATORY

LAGOON FINANCE LIMITED By: Name:

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ANNEX 3 DEFAULT SWAP CONFIRMATION

Date: To: Attention: Fax Number: Our Reference: To: Attention: Fax Number: Re:

25 July 2008 Lagoon Finance Limited The Directors + 353 (1) 680 6050 Summit No. C2048187M Legal and General Pensions Limited (the Initial Owner) Simon Bezzina Anton Eser +44 20 3124 2528 Credit Default Swap relating to the Series 3 USD 285,000,000 Floating Rate Credit Linked Leveraged Super Senior Secured Notes due 2018, ISIN: XS0375464962 (the "Notes")

Dear Sir/Madam, The purpose of this letter (this "Confirmation") is to confirm the terms and conditions of the Credit Derivative Transaction entered into between Deutsche Bank AG, acting through its London branch ("Party A") and Lagoon Finance Limited ("Party B") on the Trade Date specified below (the "Transaction"). This Confirmation constitutes a "Confirmation" as referred to in the Agreement specified below. The definitions and provisions contained in the 2003 ISDA Credit Derivatives Definitions, as supplemented by the May 2003 Supplement to the 2003 ISDA Credit Derivatives Definitions (together the "Credit Derivatives Definitions") each as published by the International Swaps and Derivatives Association, Inc. and as modified as set out herein, are incorporated into this Confirmation. Capitalised terms not otherwise defined herein or in the Credit Derivatives Definitions shall have the meanings given to such terms in the terms and conditions of the Notes (as the same may be amended, modified or supplemented from time to time, the "Conditions"). In the event of any inconsistency between any of this Confirmation, the Conditions and/or the Credit Derivatives Definitions, the first mentioned document will govern. This Confirmation supplements, forms a part of, and is subject to, the Master Swap Agreement, as amended and supplemented from time to time, (the "Agreement") between Party A and Party B entered into by the execution of the issue deed (as the same may be amended and supplemented from time to time (the "Issue Deed")) dated 25 July 2008 between us and certain other persons for purposes including constituting and prescribing the Conditions. All provisions contained in the Agreement govern this Confirmation except as expressly modified below. The Initial Owner is a party to this Transaction for the sole purpose of enabling it to exercise its right to make Substitutions in accordance with the Conditions and as described in Paragraph 6 of the Reference Swap. The Initial Owner acknowledges that Party B owes no direct contractual obligations to the Initial Owner or any of its agents under this Transaction and that none of the Initial Owner and its agents shall have any recourse against Party B in relation to this Transaction. Furthermore, the Initial Owner acknowledges that it or any of its agents under this Transaction may not institute, or join with any other person in bringing, instituting or joining insolvency proceedings (whether court based or otherwise) in relation to Party B (or take action in furtherance of a resolution of Party B for the winding-up of Party B), and none of them will have any claim in respect of any sum relating to any of the Party Bs assets. The terms of the Transaction to which this Confirmation relates are as follows:

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1.

General Terms: Trade Date: Effective Date: Termination Date: 27 June 2008. 25 July 2008. The earliest of: (i) the latest date on which a Loss Determination Amount (as such term is defined herein) is determined following which date the Outstanding Tranche Notional Amount is reduced to zero; and

(ii) the latest of: (a) the final day of the Notice Delivery Period (as defined in the Reference Swap) in the event that as at the Scheduled Termination Date, the Grace Period Extension Date (as applicable) or the Repudiation/Moratorium Evaluation Date (as applicable) one or more Credit Events (as defined in the Reference Swap) has occurred or, in the opinion of Party A, may have occurred, and the Conditions to Settlement (as defined in the Reference Swap) may be satisfied during the Notice Delivery Period but have not been so satisfied as at the Scheduled Termination Date, the Grace Period Extension Date (as applicable) or the Repudiation/Moratorium Evaluation Date (as applicable); and if an Event Determination Date occurs during the Notice Delivery Period but either or both (I) the date of determination of the Loss Determination Amount (as defined in the Reference Swap) and/or (II) the date of determination of the Loss Determination Amount (as defined herein) (if any), in each case, relating to such Event Determination Date occur after the final day of the Notice Delivery Period, the latest of any such date(s).

(b)

For the avoidance of doubt, this provision shall take precedence over any other provision in the Credit Derivatives Definitions purporting to specify another date as a Termination Date for the purposes of this Transaction. Scheduled Termination Date: Loss Limit: Fixed Rate Payer: Floating Rate Payer: Calculation Agent: 20 June 2018. USD 285,000,000. Party A. Party B. Deutsche Bank AG, acting through its London branch. Any requirement for the Calculation Agent to consult with the parties to this Transaction stipulated in the Credit Derivatives Definitions shall not apply to this Transaction. The Calculation Agent shall have no

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responsibility for good faith errors or omissions in respect of any calculations or determinations contemplated herein, and its calculations and determinations shall, in the absence of manifest error, be final, conclusive and binding on Party A and Party B. The Calculation Agent does not act as a fiduciary for or as an adviser to either party in respect of its duties as Calculation Agent hereunder. Whenever the Calculation Agent is required to make any determination it may, inter alia, decide issues of construction and legal interpretation in its discretion. Calculation Agent City: Business Day: Business Day Convention: London. London and New York. Modified Following (which, subject to Sections 1.4 and 1.6 of the Credit Derivatives Definitions, shall apply to any date referred to in this Confirmation that falls on a day that is not a Business Day, unless stated otherwise in this Confirmation).

2.

Fixed Payments: Fixed Rate Payer Calculation Amount: Subject to the provisions relating to "Deferral of Fixed Amounts" below, for any Fixed Rate Payer Calculation Period, the Outstanding Tranche Notional Amount on the last day of such period. On any date, and subject to a minimum of zero and the provisions of Paragraph 5.3 (Purchase of Notes), an amount equal to: (a) (b) the Loss Limit; less (x) the Aggregate Recovery Amount (as defined in the Reference Swap) divided by (y) the Leverage Factor; less the aggregate of all Reduction Amounts determined on or prior to such date (the "Aggregate Reduction Amount").

Outstanding Tranche Notional Amount:

(c)

Reference Swap Payment:

With respect to a Credit Event which occurs in respect of the Reference Swap, the amount equal to any Cash Settlement Amount that the Seller (each as defined under the terms of the Reference Swap) would be required to pay in respect of such Credit Event if the Reference Swap were actually in existence. For the avoidance of doubt, a Reference Swap Payment determined in relation to a Credit Event which has occurred in respect of the Reference Swap shall be determined on the date that the relevant Cash Settlement Amount is determined pursuant to the terms of the Reference Swap but shall be deemed to be effective as of the Event Determination Date (as defined in the Reference Swap) which relates to the relevant Credit Event.

Fixed Rate Payer Payment

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Dates:

Payer Period End Date provided that: (i) (ii) the final Fixed Rate Payer Payment Date shall be the Scheduled Termination Date; and provided further that, if the Termination Date falls after the Scheduled Termination Date, the Scheduled Termination Date shall not be a Fixed Rate Payer Payment Date but the Termination Date shall be the final Fixed Rate Payer Payment Date (and there shall be no Fixed Rate Payer Payment Dates between the Fixed Rate Payer Payment Date falling in March 2018 and the Termination Date).

Section 2.10 of the Credit Derivatives Definitions shall not apply to this Transaction. Fixed Rate Payer Period End Dates: 20 March, 20 June, 20 September and 20 December falling in each year, with the first Fixed Rate Payer Period End Date being 20 September 2008 and the final Fixed Rate Payer Period End Date being the Scheduled Termination Date. The Fixed Rate Payer Period End Dates shall be subject to adjustment in accordance with the Business Day Convention. Fixed Rate Payer Calculation Periods: Each period from, and including, one Fixed Rate Payer Period End Date to, but excluding, the next following Fixed Rate Payer Period End Date, except that (a) the initial Fixed Rate Payer Calculation Period will commence on, and include, the Business Day following Trade Date, and (b) the final Fixed Rate Payer Calculation Period will end on, and include, the earlier to occur of (i) the Scheduled Termination Date and (ii) the date on which the Outstanding Tranche Notional Amount is reduced to zero. 3.141 per cent. per annum. Day Count Actual/360. The parties acknowledge that the Fixed Amount payable by Party A in respect of a Fixed Rate Payer Calculation Period in accordance with the foregoing provisions of this Section 2 (the "Fixed Amount Calculation Provisions") cannot be determined until the Reference Swap Payments have been determined in respect of each Reference Entity (as defined in the Reference Swap) in respect of which an Event Determination Date has occurred on or prior to the last day of such Fixed Rate Payer Calculation Period (each Reference Entity in respect of which an Event Determination Date has occurred, a "Defaulted Reference Entity" and each Defaulted Reference Entity from time to time in respect of which the Reference Swap Payment has not been determined, an "Undetermined Reference Entity"). Accordingly, in circumstances where on the last day of

Fixed Rate: Fixed Rate Fraction:

Deferral of Fixed Amounts:

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a Fixed Rate Payer Calculation Period there are one or more Undetermined Reference Entities, a Fixed Amount shall not be payable on the relevant Fixed Rate Payer Payment Date (the "Scheduled Fixed Rate Payer Payment Date"). Instead: (i) on the Scheduled Fixed Rate Payer Payment Date Party A shall pay to Party B the Minimum Fixed Amount; and on the Fixed Rate Payer Payment Date following the determination of Reference Swap Payments in respect of every Undetermined Reference Entity (the "Additional Fixed Rate Payer Payment Date"), Party A shall pay to Party B the aggregate of the Fixed Amount Adjustment Payments relating to each Fixed Rate Payer Calculation Period ending in or falling in the relevant Deferral Period.

(ii)

Where: "Minimum Fixed Amount" means, with respect to a Fixed Rate Payer Calculation Period, the Fixed Amount which would have been payable in relation thereto in accordance with the Fixed Amount Calculation Provisions if on each day during such period on which one or more Defaulted Reference Entities are Undetermined Reference Entities, Reference Swap Payments had been determined in respect of each such Undetermined Reference Entity on the basis that the Final Price of each related Reference Obligation (each as defined in the Reference Swap) is zero. "Fixed Amount Adjustment Payment" means, with respect to a Fixed Rate Payer Calculation Period, an amount equal to (a) the Fixed Amount which would have been payable in respect thereof in accordance with the Fixed Amount Calculation Provisions on the Scheduled Fixed Rate Payer Payment Date in the absence of these "Deferral of Fixed Amounts" provisions if each Reference Swap Payment related to each Undetermined Reference Entity had been determined on the relevant Event Determination Date (based on the actual Final Price(s) relating thereto) minus (b) the Minimum Fixed Amount in respect thereof. Deferral Period: With respect to a Fixed Amount Adjustment Payment, the period from (and including) the relevant Scheduled Fixed Rate Payer Payment Date to (but excluding) the Additional Fixed Rate Payer Payment Date. Not Applicable.

3. 4.

Floating Payment: Settlement Terms Settlement Method: Settlement Currency:

Cash Settlement, subject as provided under "Cash Settlement Amount" below. USD.

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Cash Settlement Date: Cash Settlement Amount:

With respect to a Defaulted Reference Entity, the Termination Date. The aggregate of all Loss Determination Amounts determined pursuant to this Transaction on or prior to the Termination Date. With respect to a Defaulted Reference Entity, an amount equal to the relevant Reference Swap Payment. The Calculation Agent will, upon the determination of a Loss Determination Amount under this Transaction following the occurrence of one or more Credit Events under the terms of the Reference Swap: (i) calculate the relevant payment to be made on the Termination Date from the Additional Reserve Account, which shall be an amount equal to the lesser of (a) the sum of the Loss Determination Amount and any Credit Event Unwind Costs (as defined in the Conditions) (together, the CDS Total Payment) and (b) any Notional Additional Reserve Account Balance (such amount the Additional Reserve Account Payment); and if the Additional Reserve Account Payment is less than the CDS Total Payment (such shortfall the Remainder Amount), calculate the nominal amount in USD of the Securities (the Delivered Securities) equal to such Remainder Amount (such amount the Reduction Amount).

Loss Determination Amount:

(ii)

On the Termination Date, Party B shall pay to Party A an amount in USD equal to the aggregate of all Additional Reserve Account Payments determined on or prior to the Termination Date and shall deliver to Party A Bond Securities having an aggregate nominal value (converted into USD at the Relevant FX Rate in the case of Bond Securities denominated in a currency other than USD) (as determined by the Calculation Agent in a commercially reasonable manner) equal to the aggregate of all Delivered Securities determined on or prior to the Termination Date. Where the Bond Securities consist of more than one series of securities, the Calculation Agent shall determine in its absolute discretion on the Termination Date which Bond Securities shall be so delivered. Relevant FX Rate means the spot currency exchange rate between USD and the currency in which the relevant Bond Securities are denominated, as determined by Party A as at the Termination Date. If the nominal amount of such aggregate Delivered Securities to be delivered on the Termination Date is not a multiple of the lowest denomination of such Bond Securities (the relevant Securities Denomination), either:

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(i)

if the condition set out in (A) below is satisfied, Party B shall instead deliver Bond Securities having a nominal amount equal to the next whole multiple of the relevant Securities Denomination in excess of the nominal amount of such aggregate Delivered Securities (the nominal amount of such delivered Bond Securities (converted where necessary into USD at the Relevant FX Rate) being the Overdelivery Securities Amount and such delivered Bond Securities being the Overdelivery Securities). The Calculation Agent shall subtract the aggregate of all Remainder Amounts from such Overdelivery Securities Amount (the result of such calculation being the Excess Delivery Amount) and Party A shall pay to Party B an amount in USD which equals the Excess Delivery Amount (such amount shall be paid into the Deposit Account and shall constitute Securities); or if the condition set out in (B) below is satisfied, Party B shall instead deliver Bond Securities having a nominal amount equal to the next whole multiple of the Securities Denomination lower than the nominal amount of such aggregate Delivered Securities (the nominal amount of such delivered Bond Securities (converted where necessary into USD at the Relevant FX Rate) being the Underdelivery Securities Amount and such delivered Bond Securities being the Underdelivery Securities). The Calculation Agent shall subtract the Underdelivery Securities Amount from the aggregate of all Remainder Amounts (the result of such calculation being the Shortfall Delivery Amount) and Party B shall pay to Party A an amount in USD which equals the Shortfall Delivery Amount (such amount shall be paid from the Deposit Account).;

(ii)

The conditions referred to in (i) and (ii) above are: (A): if the amount standing to the balance of the Deposit Account (the Securities Balance) is less than the Shortfall Delivery Amount; and (B): if the Securities Balance is greater than or equal to the Shortfall Delivery Amount. After exhaustion of the Bond Securities or in the circumstance specified in (B) above, Party B shall satisfy its obligations with respect to any unpaid part of the Cash Settlement Amount by payment from the Securities Balance. In no event shall Party B be liable to (i) deliver Bond Securities having a nominal amount greater than the aggregate nominal amount of the remaining Bond Securities or (ii) pay an amount from the Securities
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Balance greater than the outstanding value of such Securities Balance.

5.

Additional Provisions: 5.1 5.1.1 Accelerated Termination Additional Termination Event

Notification of the Accelerated Termination Date shall constitute an Additional Termination Event in respect of this Transaction and in respect of which this Transaction shall be the sole Affected Transaction and Party B shall be the sole Affected Party. Notwithstanding Section 6(b) of the Agreement, the Accelerated Termination Date shall be deemed to have been designated as the Early Termination Date in respect of this Transaction. From (and including) the Termination Notification Date or, if a Trigger Event is in existence on the Termination Date, the Termination Date (in which case, for the avoidance of doubt, the Termination Date shall be deemed to be the Accelerated Termination Date irrespective of whether Party A has delivered an Event Notice to Party B), no further payments will be due by either party with respect to this Transaction, except as set out below. On the Accelerated Termination Date, (A) Party B shall pay to Party A an amount equal to the Cash Settlement Amount; and (B) (i) if the Accelerated Termination Amount is a positive amount Party B shall pay such amount to Party A or (ii) if the Accelerated Termination Amount is a negative amount, Party A shall pay the absolute value of such amount to Party B. For the avoidance of doubt, on the occurrence of the Accelerated Termination Date, no amount shall be payable pursuant to Section 6(e) of the Agreement. 5.1.2 Definitions

"Accelerated Termination Amount" means an amount in USD equal to the Final Value of the Reference Swap. "Accelerated Termination Date" means any Business Day from (and including) the Termination Notification Date to (and including) the date which is 10 Business Days after the Termination Notification Date designated by Party A in an Event Notice as a termination date for this Transaction. "Average Portfolio Spread" means, on any date, a rate per annum, expressed as a percentage and determined as follows: (i) (ii) On the Effective Date, the Average Portfolio Spread shall be the Initial Average Portfolio Spread; On each subsequent date falling on or prior to the Termination Date, the Average Portfolio Spread shall be determined by the Calculation Agent as the weighted average of the Relevant Rate for each Non-Defaulted Reference Entity on that date. For the avoidance of doubt, such weighted average shall be based on the Reference Entity Notional Amount (as defined in the Reference Swap) then applicable to each Non-Defaulted Reference Entity.

"Base Spread Trigger" means, on any date, an amount determined by the Calculation Agent by reference to the Spread Trigger Table in effect on that date as being the amount which corresponds in the Spread Trigger Table to the Remaining Tenor applicable on such date, as determined below:

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(i)

If the Reference Swap Remaining Tenor corresponds exactly to a value set out as a "Remaining Tenor" in the Spread Trigger Table, the Calculation Agent shall use as the Remaining Tenor the Reference Swap Remaining Tenor. If the Reference Swap Loss Percentage corresponds exactly to a value set out as a "Loss Percentage" in the Spread Trigger Table, the Calculation Agent shall use as the Loss Percentage the Reference Swap Loss Percentage. If either the Reference Swap Remaining Tenor or the Reference Swap Loss Percentage (in each case, the Relevant Input) does not correspond exactly to a value set out as a "Remaining Tenor" or, as the case may be, a Loss Percentage in the Spread Trigger Table, then the Base Spread Trigger shall be determined by the use of straight line interpolation by reference to the values returned when inputting as the Remaining Tenor or, as the case may be, the Loss Percentage the amounts set out in the Spread Trigger Table next lower and next higher to the Relevant Input. If neither the Reference Swap Remaining Tenor nor the Reference Swap Loss Percentage corresponds exactly to a value set out as a "Remaining Tenor" and a "Loss Percentage" respectively in the Spread Trigger Table then:

(ii)

(iii)

(a)

the Calculation Agent shall determine the two values, which would result from the application of paragraph (ii) above utilising (A) as the Loss Percentage the amounts set out in the Spread Trigger Table next lower and next higher to the relevant Reference Swap Loss Percentage; and (B), subject to sub-paragraph (b) below, as the Remaining Tenor the relevant Reference Swap Remaining Tenor; provided that the Base Spread Trigger shall be determined by the use of straight line interpolation between the two values determined by the Calculation Agent pursuant to sub-paragraph (a) above by reference to the amounts set out in the Spread Trigger Table next lower and next higher to the Reference Swap Remaining Tenor.

(b)

"Event Notice means a notice from Party A to Party B (which may be given orally or in writing, including by electronic means) specifying the occurrence of a Trigger Event and designating the Accelerated Termination Date. Party A shall have the right but not the obligation to deliver an Event Notice at any time during the period from (and including) the date on which a Trigger Event occurs to (and including) the Termination Date, provided that the relevant Trigger Event is then continuing.

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"Final Value of the Reference Swap" means, on any date (the "Final Value Determination Date"), an amount determined by Party A on the basis of quotations requested from four Reference Market Makers. Each such request will be for a firm quotation for an amount in USD, if any, that would be paid to Party A (expressed as a negative number) or by Party A (expressed as a positive number) in consideration of an agreement between Party A and the quoting Reference Market Maker to enter into a transaction on the day, which is three Business Days prior to the Accelerated Termination Date, that would have the effect of preserving for Party A the economic equivalent of any payment or delivery by the parties under the Reference Swap which would be required after such date. The quotations shall be given on the basis that such transaction shall be documented under a 2002 ISDA Master Agreement and a 1995 ISDA Credit Support Annex, in each case amended as deemed necessary by the Calculation Agent to reflect the characteristics of the relevant Reference Market Maker. The Final Value of the Reference Swap on the Final Value Determination Date shall be the lowest quotation obtained by Party A on such Final Value Determination Date, provided, however, that if no Reference Market Maker provides such a firm quotation then the Final Value of the Reference Swap shall be determined by Party A in a commercially reasonable manner. A quotation provided by a Reference Market Maker shall only be valid if at the time of providing such quotation such Reference Market Maker is rated at least AA- by Standard & Poors Ratings Services, a division of the McGraw-Hill Companies, Inc. ("S&P") or any successor rating agency thereto and Aa3 by Moodys Investors Service, Inc. or any successor rating agency thereto. "Initial Average Portfolio Spread" means 1.59 per cent. per annum. "Leverage Factor" means 1805/285. "Loss Percentage" means, on any date, the Reference Swap Loss Percentage on that date. "Markit Ltd" means Markit Group Limited, any successor independent credit default swap spread provider thereto, or any other independent provider of credit default swap spreads as agreed by Party A. "Nearest Available Rates" means the two mid-market spread quotations (in each case if any and in each case expressed as a percentage per annum) published or displayed by Markit Ltd at close of business on the Business Day preceding the relevant Determination Date in respect of the relevant Reference Entity on the basis of (a) a Notional CDS notionally entered into in respect of the relevant Reference Entity and specifying as the scheduled termination date the date published or displayed by Markit Ltd falling closest to but prior to the Scheduled Termination Date and (b) a Notional CDS notionally entered into in respect of the relevant Reference Entity and specifying as the scheduled termination date the date published or displayed by Markit Ltd falling closest to but following the Scheduled Termination Date. "Non-Defaulted Reference Entity" means, on any date, a Reference Entity in respect of which an Event Determination Date has not occurred pursuant to the Reference Swap on or prior to such date. "Notional CDS" means, in respect of a Reference Entity, a single name, physically settled credit default swap notionally entered into in respect of the relevant Reference Entity with a scheduled termination date falling on the Scheduled Termination Date and a fixed rate payer calculation amount and floating rate payer calculation amount equal to the relevant Reference Entity Notional Amount (as defined in the Reference Swap) and otherwise entered into on market standard terms (as determined by the Calculation Agent in a commercially reasonable manner) for such Reference Entity. "Reference Market Maker" means a leading dealer in a credit derivatives market selected by the Calculation Agent in a commercially reasonable manner.

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"Reference Swap" means a credit derivative transaction deemed for the purpose of this Transaction to have been entered into between Party A as protection buyer and an unspecified third party as protection seller on the terms set out in Schedule 1 hereto. In respect of the Reference Swap: (i) Deutsche Bank AG, acting through its London branch shall make any calculations or determinations, or take any other action, that would be required or permitted to be made or taken by the Reference Swap Calculation Agent, the notional Seller or the notional Buyer pursuant to the Reference Swap (including, without limitation to the generality of the foregoing, in relation to the occurrence or designation of Credit Events, the selection of Reference Obligations and the making of Reference Obligation Notifications, each in accordance with the terms set forth in Schedule 1) as if that Reference Swap were actually in existence and any such determination or calculation that it makes, and any other action that it takes, each in accordance with the terms set forth in Schedule 1, shall be deemed to have been duly made pursuant to the terms of the Reference Swap; any requirement for the Reference Swap Calculation Agent to provide any notices and to consult with the parties to this Transaction stipulated in the Credit Derivatives Definitions shall not apply with regard to the Reference Swap; any statement in writing which (a) has been signed by two authorised signatories of Deutsche Bank AG, acting through its London branch, (b) has been copied to Party B, (c) is expressed to be a notice given pursuant to the Reference Swap and (d) specifies whether such notice is given on behalf of the notional Buyer, the notional Seller or the Reference Swap Calculation Agent, shall upon receipt of such notice by Party B, be deemed to have been duly given to the notional Buyer and/or the notional Seller, as the case may be, pursuant to the Reference Swap; and any right of the notional Buyer, the notional Seller or the Reference Swap Calculation Agent, to serve any notice otherwise than in writing shall be deemed not to apply,

(ii)

(iii)

(iv)

provided that Deutsche Bank AG, acting through its London branch shall provide to Party B, as soon as reasonably practicable following receipt of the relevant request, such information relating to the Reference Swap (including, without limitation, in relation to the occurrence or designation of Credit Events and valuations thereunder) as may reasonably be requested by Party B. "Reference Swap Loss Percentage" means, on any date, the Aggregate Loss Determination Amount (as defined in the Reference Swap) on that date expressed as a percentage of the Initial Portfolio Notional Amount (as defined in the Reference Swap). "Reference Swap Remaining Tenor" means, on any date, the amount of time remaining with respect to the term of the Reference Swap (expressed in decimal form as a number of years) between such date and the Scheduled Maturity Date. "Relevant Rate" means, in respect of any Reference Entity on any date (the "Determination Date"), the mid-market spread quotation (expressed as a percentage per annum) published or displayed by Markit Ltd in respect of such Reference Entity at the close of business on the Business Day preceding such Determination Date on the basis of a Notional CDS notionally entered into in respect of the relevant Reference Entity (the "Published Relevant Rate"), provided that: (i) in the event that on any Determination Date Markit Ltd does not publish or display a Published Relevant Rate in respect of a Reference Entity, then the Calculation Agent shall determine the Relevant Rate in respect of such Reference Entity for such Determination Date by the use of straight line

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interpolation by reference to the Nearest Available Rates; (ii) in the event that on any Determination Date Markit Ltd does not publish or display a Published Relevant Rate in respect of a Reference Entity and it is not possible to determine the Nearest Available Rates, the Relevant Rate in respect of such Reference Entity on such Determination Date shall be the midmarket spread quotation (expressed as a percentage per annum) in respect of the relevant Reference Entity at the close of business on the Business Day preceding such Determination Date determined by the Calculation Agent in a commercially reasonable manner in respect of a Notional CDS notionally entered into in respect of the relevant Reference Entity. If the Relevant Rate is to be used for the purposes of serving an Event Notice, such determination shall be made by the Calculation Agent in its discretion acting in a commercially reasonable manner; and in no circumstances shall the Relevant Rate exceed 20 per cent.

(iii)

"Remaining Tenor" means, on any date, the amount of time (expressed in decimal form to two decimal places as a number of years) between that date and the Scheduled Maturity Date. "Spread Trigger" means, at any time on any date, an amount equal to the sum of (i) the Base Spread Trigger on such date and (ii) the product of: (i) (ii) (iii) the quotient of (x) 70 per cent. and (y) the Remaining Tenor; the quotient of (x) one and (y) the Leverage Factor; and the quotient of (x) the Notional Additional Reserve Account Balance less 50 per cent. of the Loss Limit (subject to a minimum of zero) and (y) the Loss Limit.

"Spread Trigger Table" means the table set out in Schedule 2 hereto. "Spread Widening Factor" means, at any time, on any date (the "Determination Date"), a number determined by the Calculation Agent at the request of Party A as follows: (i) the Calculation Agent shall observe the running mid-market spread published or displayed by Markit Ltd at close of business on the Business Day preceding such Determination Date in respect of the then current series of the Dow Jones iTraxx Europe and Dow Jones CDX.NA.IG indices or any successors thereto (the "Relevant Indices") based (in each case) on a notional amount equal to the Loss Limit and a maturity date equal to the benchmark 5 year scheduled termination date of transactions entered into in respect of the Relevant Indices; provided that, in the event that such mid-market spreads are not so published or displayed by Markit Ltd the Calculation Agent shall determine such running mid-market spreads in a commercially reasonable manner (the sum of such running mid-market spreads being the "Initial Running Spread"); the Calculation Agent shall at any time on such Determination Date request no less than four Reference Market Makers to provide indicative mid-market spread quotations for the running spread payable in respect of the then current series of the Dow Jones iTraxx Europe and Dow Jones CDX.NA.IG indices or any successors thereto based (in each case) on a notional amount equal to the Loss Limit and a maturity date equal to the benchmark 5 year scheduled termination date of transactions entered into in respect of the Relevant Indices (and in respect of each Reference Market Maker such quotations shall be summed); if a Reference Market Maker provides an indicative quotation in respect of only one Relevant Index or in respect of neither Relevant Index, then such

(ii)

(iii)

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Reference Market Makers quotation shall be ignored for the purposes of subparagraph (d) below; (iv) the lowest of the aggregated indicative mid-market quotations obtained from each Reference Market Maker shall be the "Final Running Spread", provided that in the event that no quotations can be so obtained the Calculation Agent shall determine such sum of mid-market spreads based on mid-market quotations determined by it in a commercially reasonable manner; and the Spread Widening Factor in respect of such Determination Date shall be an amount equal to the Final Running Spread in respect of such Determination Date divided by the Initial Running Spread in respect of such Determination Date.

(v)

For the avoidance of doubt, on any date on which Party A does not request the Calculation Agent to make the observations and determinations set out above, the Spread Widening Factor shall be deemed to be one. "Termination Notification Date" means the date of the effective delivery of an Event Notice. A "Trigger Event" shall occur if at any time on any day the Average Portfolio Spread multiplied by the Spread Widening Factor is greater than or equal to the Spread Trigger in respect of such time and date. 5.2 Representations (i) Each party represents and warrants to the other party as of the Trade Date that it is entering into this Transaction for investment, financial intermediation, hedging or other commercial purposes.

(ii) Each party hereby agrees that, as of the Trade Date: (a) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanations related to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction. (b) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Transaction. It is also capable of assuming, and assumes, the risks of this Transaction. (c) Status of Parties. The other party is not acting as a fiduciary for or an advisor to it in respect of this Transaction. (d) Hedging. Each party may hedge its obligations under this Transaction by entering into another credit default swap or similar transaction with the other party or with a third party. 5.3 Purchase of Notes If Party B purchases any Notes held by Deutsche Bank AG, acting through its London branch in accordance with Condition 7(i), on the date of such purchase the Outstanding Tranche Notional Amount and the Reference Swap will be reduced by a proportion corresponding to the proportion which the aggregate Outstanding Principal Amount of the Notes so purchased bears to the aggregate Outstanding Principal Amount of all the Notes immediately prior to such purchase (and for the purposes of reducing the Outstanding Tranche Notional Amount only, each of its component
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parts (being the Loss Limit and the Aggregate Reduction Amount) will be reduced by such relevant proportion). 5.4 Termination in full of the Asset Swap The termination in full of the Asset Swap prior to the Termination Date of this Transaction shall constitute an Additional Termination Event hereunder, for which purpose Party B shall be the sole Affected Party. Notwithstanding Section 6(b) of the Agreement, an Early Termination Date shall be deemed to be designated hereunder in respect of such Additional Termination Event as of the relevant termination date of the Asset Swap. In such circumstances, a termination payment may be payable in accordance with Section 6(e) of the Agreement. 5.5 Early Redemption of the Notes An Additional Termination Event shall be deemed to have occurred and an Early Termination Date shall be deemed to have been designated by Party A (in which case Party B shall be deemed to be the sole Affected Party and this Transaction shall be deemed to be an Affected Transaction) on the due date for redemption of the Notes if all (but not some only) of the Notes become due for redemption in accordance with the Conditions at any time prior to their maturity. For the avoidance of doubt, if an event or circumstance which would otherwise give rise to an Additional Termination Event under this provision would also constitute or give rise to any other Termination Event or Event of Default, it will be treated as only giving rise to such other Termination Event or Event of Default. Subject as provided below, if the Notes become due for redemption in accordance with Condition 7(c), 7(d) or 10 this Transaction shall terminate and a termination payment shall be payable in accordance with Section 6(e) of the Agreement. Notwithstanding the foregoing, where the Notes become due for redemption in accordance with Condition 7(d) following the termination of the Swap Agreement in circumstances where Party A is the Defaulting Party, this Transaction shall terminate and no further payment shall be due from either party (including any termination payment under Section 6(e) of the Agreement). If the Notes become due for redemption for any other reason (including on an Accelerated Redemption Date in accordance with sub-paragraph 25(C) of the Terms) no termination payment shall be payable in accordance with Section 6(e) of the Agreement. For the avoidance of doubt, notwithstanding that no termination payment is payable in accordance with the foregoing, the parties shall remain under any obligation to make payments or deliveries pursuant to the terms of this Confirmation that arose prior to any Early Termination Date. The reference to Additional Termination Event in Section 6(b)(iv) shall be deleted. Party B shall procure that notice is given to Party A of any notice of early redemption given pursuant to the Conditions or the terms and conditions of the Bond Securities in respect of the Notes (as defined in the Conditions) (upon Party B giving such notice in the former case or upon Party B becoming aware of such event in the latter case). 5.6 Party A Ratings Downgrade If on any date on which any of the Notes remain outstanding, the long-term credit rating of Party A falls below "A" by S&P (a "Party A Ratings Downgrade") then Party A shall provide Eligible Credit Support for its obligations to Party B under this Transaction in accordance with the terms of the 1995 ISDA Credit Support Annex (Bilateral Form Transfer English Law) dated 25 July 2008 (the CSA) and entered into between Party A and Party B. In the event that Party A fails to take such action following a Party A Ratings Downgrade, such failure shall constitute an Additional Termination Event hereunder, for which purpose Party B shall be the sole Affected Party. Notwithstanding Section 6(b) of the Agreement, an Early Termination Date shall be deemed to be designated hereunder in respect of such Additional Termination Event on the date falling 30 calendar days after Party As failure to take the actions described in this Paragraph 5.6.

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5.7

Third Parties Rights A person who is not a party to this Transaction has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any terms of this Transaction, but this does not affect any right or remedy of a third party which exists or is available apart from this Act.

5.8

Single Agreement The Agreement and the transactions evidenced by this Confirmation, the Asset Swap Confirmation and the CSA form a single agreement between the parties. Notwithstanding paragraph 10 of Part 4 of the Schedule to the Agreement (No Netting) Section 2(c) of the Agreement shall apply to this Transaction, save that sub-paragraph 2(c)(ii) shall not apply.

5.9

Amendments If the Conditions are, following the Effective Date, amended in a way that affects the rights or obligations of Party A, such amendments shall not be effective as regards Party A without the prior written approval of Party A.

6.

Notice and Account Details: Telephone and/or Facsimile Numbers and Contact Details for Notices: Party A: Deutsche Bank AG, acting through its London branch Legal Department Structured Products Tel: Fax: +44 20 7547 1822 +44 20 7545 8207

Structuring Team Tel: Fax: Party B: +44 20 7545 8478 +44 11 3336 2204 Lagoon Finance Limited

Attention: The Directors Tel: + 353 (1) 680 6000 Fax: + 353 (1) 680 6050 Account Details Account Details of Party A: USD Deutsche Bank Trust Co., New York SWIFT BIC Code: BKTRUS33 Favour: Deutsche Bank AG, London branch - Lagoon Finance Limited 3 USD Deutsche Bank Trust Co., New York SWIFT BIC Code: BKTRUS33 Favour: Lagoon Finance Limited 3

Account Details of Party B:

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7.

Offices: Buyer and Party A: Seller and Party B: London. Dublin.

8.

This Transaction Not a Contract of Insurance The parties confirm that this Transaction is not intended to be and does not constitute a contract of surety, insurance, guarantee or indemnity. The parties acknowledge that the payments to be made by Party B will be made independently and are not conditional upon Party A sustaining or being exposed to risk or loss and that the rights and obligations of the parties hereunder are not dependent upon Party A owning or having any legal, equitable or other interest in the Reference Swap and/or any Reference Obligations relating to the Reference Swap.

9.

Governing Law: This Confirmation shall be governed by and construed in accordance with English law.

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EXECUTION PAGE OF CREDIT DEFAULT SWAP CONFIRMATION LAGOON FINANCE LIMITED SERIES 3 Please confirm your agreement to be bound by the terms of the foregoing by executing a copy of this Confirmation and returning it to us by facsimile to: Attention: Telephone Fax: Email: Repack +44 20 +44 20 repackdocumentation.ldn@db.com 7547 7545 Documentation 1815 1913

This message will be the only form of Confirmation dispatched by us. Please execute and return it to us by facsimile immediately. If you wish to exchange hard copy forms of this Confirmation, please contact us.

Yours faithfully,

DEUTSCHE BANK AG, ACTING THROUGH ITS LONDON BRANCH By: Name: Title: AUTHORISED SIGNATORY

By: Name: Title: AUTHORISED SIGNATORY

Confirmed as of the date first written above:

LAGOON FINANCE LIMITED By: Name: Title:

LEGAL & GENERAL PENSIONS LIMITED By: Name: Title: DIRECTOR DIRECTOR

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Notwithstanding any other term of this Confirmation, capitalised terms contained in Schedule 1 below shall unless specifically stated to the contrary in Schedule 1 below (i) bear the meaning ascribed to them in Schedule 1 below and (ii) not bear the meaning ascribed to them in parts of this Confirmation other than Schedule 1 below. Accordingly, any reference in Schedule 1 to: (i) "Confirmation" shall be construed as a reference to the pro-forma confirmation contained in Schedule 1 below; and (ii) "Transaction" shall be to the transaction containing the terms stipulated by such pro-forma confirmation. Schedule 1 Reference Swap The definitions and provisions contained in the 2003 ISDA Credit Derivatives Definitions, as supplemented by the May 2003 Supplement to the 2003 ISDA Credit Derivatives Definitions (together the "Credit Derivatives Definitions") each as published by the International Swaps and Derivatives Association, Inc. and as modified as set out herein, are incorporated into this Confirmation. In the event of any inconsistency between this Confirmation and the Credit Derivatives Definitions, this Confirmation will govern. The terms of the Transaction to which this Confirmation relates are as follows: 1. General Terms: Trade Date: Effective Date: Termination Date: 27 June 2008. 25 July 2008. The earliest of: (i) the latest Cash Settlement Date which occurs following which date the Outstanding Tranche Notional Amount is reduced to zero; and

(ii) the latest of: (a) the final day of the Notice Delivery Period in the event that as at the Scheduled Termination Date, the Grace Period Extension Date (as applicable) or the Repudiation/Moratorium Evaluation Date (as applicable) one or more Credit Events has occurred or, in the opinion of Party A, may have occurred, and the Conditions to Settlement may be satisfied during the Notice Delivery Period but have not been so satisfied as at the Scheduled Termination Date, the Grace Period Extension Date (as applicable) or the Repudiation/Moratorium Evaluation Date (as applicable); and (b) if an Event Determination Date occurs during the Notice Delivery Period but either or both (I) the date of determination of the Loss Determination Amount and Recovery Amount and/or (II) the Cash Settlement Date (if any), in each case, relating to such Event Determination Date occur after the final day of the Notice Delivery Period, the latest of any such date(s). For the avoidance of doubt, this provision shall take precedence over any other provision in the Credit Derivatives Definitions purporting to specify another date as a Termination Date for the purposes of this Transaction.

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Scheduled Termination Date: Initial Tranche Amount: Notional

20 June 2018. USD 1,805,000,000. At any time an amount equal to the aggregate of the Reference Entity Notional Amounts for all Reference Entities at such time. USD 2,578,571,429. 30 per cent. of the Initial Portfolio Notional Amount. Deutsche Bank AG, acting through its London branch (the "Buyer"). Not Specified (the "Seller"). Deutsche Bank AG, acting through its London branch. London. London and New York. Modified Following (which, subject to Sections 1.4 and 1.6 of the Credit Derivatives Definitions, shall apply to any date referred to in this Confirmation that falls on a day that is not a Business Day, unless stated otherwise in this Confirmation). On the Effective Date, the portfolio of Reference Entities with associated Reference Entity Notional Amounts set out in Schedule A hereto, having an aggregate Reference Entity Notional Amount equal to the Initial Reference Portfolio Notional Amount (the Initial Reference Portfolio). Subsequent to the Effective Date the Reference Portfolio shall be the Initial Reference Portfolio as adjusted from time to time following a Substitution as described in Paragraph 6. Each of the Reference Entities comprised in the Reference Portfolio and any of their respective Successors. If, pursuant to Section 2.2 of the Credit Derivatives Definitions (as amended herein), the Calculation Agent determines that a single entity would be a Reference Entity under this Transaction more than once, then it will be deemed to be a Reference Entity only once hereunder, and from and including the date of such determination the Reference Entity Notional Amount with respect to such Reference Entity will be the sum of the Reference Entity Notional Amounts that would otherwise be applicable to it.

Portfolio Notional Amount:

Initial Portfolio Amount:

Notional

Portfolio Threshold Amount: Fixed Rate Payer: Floating Rate Payer: Calculation Agent: Calculation Agent City: Business Day: Business Day Convention:

Reference Portfolio:

Reference Entities:

Merger of Reference Entity with Seller or Buyer:

If (a) Seller or Buyer consolidates or amalgamates with, or merges into, or transfers all or substantially all its assets to a Reference Entity, (b) a Reference Entity consolidates or amalgamates with, or merges into, or transfers all or substantially all its assets to Seller or

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Buyer or (c) Seller or Buyer and a Reference Entity become Affiliates (each a "Merger Event", the date of such Merger Event, the "Merger Event Effective Date" and the Reference Entity in respect of which the Merger Event occurs, the "Merged Reference Entity"), then, unless Buyer notifies Seller that it does not wish the provisions of this paragraph to apply, the Merged Reference Entity shall irrevocably cease to be a Reference Entity for the purposes hereof with effect from the Merger Event Effective Date and Buyer shall either (i) select another entity to replace the Merged Reference Entity as a Reference Entity (a "Replacement Reference Entity") with effect from the Merger Event Effective Date provided that the selection of such Replacement Reference Entity shall meet the Conditions to Substitution and notify Seller of such selection or (ii) notify Seller that it does not wish to select a Replacement Reference Entity in which case the relevant Merged Reference Entity shall become a "Removed Merged Reference Entity" with effect from the Merger Event Effective Date and the Fixed Rate in respect of the Fixed Rate Payer Calculation Period in which the relevant Merger Event Effective Date falls and each subsequent Fixed Rate Payer Calculation Period shall be reduced to an amount equal to the product of (A) the Fixed Rate immediately prior to the Merger Event Effective Date and (B) an amount equal to the Portfolio Notional Amount immediately after the Merged Reference Entity ceases to be a Reference Entity divided by the Portfolio Notional Amount immediately prior to the date on which the Merged Reference Entity ceases to be a Reference Entity. For the avoidance of doubt, (a) Section 2.31 of the Credit Derivatives Definitions will not apply and (b) the Fixed Rate may be reduced on more than one occasion in accordance with the provisions of this Section "Merger of Reference Entity with Seller or Buyer". Defaulted Reference Entity: Reference Entity Categories: Each Reference Entity in respect of which an Event Determination Date has occurred. One of the following categories (each a "Reference Entity Category") shall be applicable to each Reference Entity: (a) European Corporate Reference Entities; (b) Subordinated European Reference Entities; Insurance Corporate

(c) Japan Corporate Reference Entities; (d) Singapore Corporate Reference Entities; (e) North American Corporate Reference Entities; (f) Australia Corporate Reference Entities; (g) Emerging European Corporate Reference Entities; (h) North American Insurance Reference Entities;

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(i) Latin America Corporate Bond Reference Entities. (j) Latin America Corporate Bond or Loan Reference Entities; (k) New Zealand Corporate Reference Entities; (l) Asia Corporate Reference Entities; (m) Latin America Sovereign Reference entities; and (n) Central and Eastern European and Middle East Sovereign Reference Entities Subject to the Section "Successor" below, the Reference Entity Category applicable to each Reference Entity in the Initial Reference Portfolio shall be the Reference Entity Category specified in respect of such Reference Entity in Schedule A hereto. The Reference Entity Category applicable to each Substitution Reference Entity (as defined in Condition 19) shall be the Reference Entity Category determined by the Calculation Agent in its sole discretion. Standard Terms Reference Entities: for Each Reference Entity shall be subject to the distinct terms which relate to the Reference Entity Category which is applicable to such Reference Entity (the "Standard Terms" for that Reference Entity Category). The Standard Terms for each Reference Entity Category are set out in the annexes to this Confirmation as follows: (a) the Standard Terms for European Corporate Reference Entities are set out in Annex 1; (b) the Standard Terms for Subordinated European Insurance Corporate Reference Entities are set out in Annex 2; (c) the Standard Terms for Japan Corporate Reference Entities are set out in Annex 3; (d) the Standard Terms for Singapore Corporate Reference Entities are set out in Annex 4; (e) the Standard Terms for North American Corporate Reference Entities are set out in Annex 5; (f) the Standard Terms for Australia Corporate Reference Entities are set out in Annex 6; (g) the Standard Terms for Emerging European Corporate Reference Entities are set out in Annex 7; (h) the Standard Terms for North American Insurance Reference Entities are set out in Annex 8; (i) the Standard Terms for Latin America Corporate Bond Reference Entities are set out in Annex 9. (j) the Standard Terms for Latin America Corporate
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Bond or Loan Reference Entities are set out in Annex 10; (k) the Standard Terms for New Zealand Corporate Reference Entities are set out in Annex 11; (l) the Standard Terms for Asia Corporate Reference Entities are set out in Annex 12; (m) the Standard Terms for Latin America Sovereign Reference Entities are set out in Annex 13; and (n) the Standard Terms for Central and Eastern European and Middle East Sovereign Reference Entities are set out in Annex 14. Monoline Insurer Reference Entity: Any Reference Entity that is determined in good faith and a commercially reasonable manner by the Calculation Agent to carry on the business of a monoline insurance company (or to be a holding company thereof). Section 2.2 of the Credit Derivatives Definitions is hereby amended by: (i) deleting the words "for the entire Credit Derivative Transaction" from each of Section 2.2(a)(i) and Section 2.2(a)(ii); deleting the words "for a New Credit Derivative Transaction" from each of Section 2.2(a)(iii) and Section 2.2(a)(iv) and replacing them with the words "and the Reference Entity Notional Amount in respect of each such Successor will be"; deleting Section 2.2(e) in its entirety and replacing it with the following:

Successor:

(ii)

(iii)

"(e) Where, pursuant to Section 2.2(a)(iii) or (iv) above, more than one Successor has been identified in respect of a Reference Entity (the "Original Reference Entity"), each Successor will be a Reference Entity for the purposes of this Transaction and the Reference Entity Notional Amount and, if applicable, the Loss Determination Amount and Recovery Amount in respect of each such Successor will be the Reference Entity Notional Amount and, if applicable, the Loss Determination Amount and Recovery Amount relating to the Original Reference Entity immediately prior to the Succession Event, in each case divided by the number of Successors. In addition the terms and conditions of this Transaction will be modified to the extent that any modification is required, as determined by the Calculation Agent, to preserve the economic effects of this Transaction prior to the occurrence of the relevant Succession Event." The Reference Entity Category applicable to a Successor to a Reference Entity shall be the same Reference Entity Category as that Reference Entity. However, if the Calculation Agent determines that more

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than one Reference Entity (each a "Prior Reference Entity") has pursuant to Section 2.2 of the Credit Derivatives Definitions (as amended herein) become a single Reference Entity and the Prior Reference Entities were not all within the same Reference Entity Categories, the Calculation Agent shall determine in its sole and absolute discretion the Reference Entity Category applicable to such resulting Reference Entity. Notwithstanding anything to the contrary in Section 2.2 of the Credit Derivatives Definitions (as amended herein), in relation to a Reference Entity in respect of which a Reference Obligation Notification has been effectively delivered by Buyer to Seller, "Successor" means in relation to such Reference Entity (1) where a Reference Obligation specified in the Reference Obligation Notification is a primary obligation of the relevant Reference Entity, the entity which directly or indirectly succeeds to such Reference Obligation by way of a Succession Event and (2) where a Reference Obligation specified in the Reference Obligation Notification is an Underlying Obligation, the entity which assumes the Qualifying Guarantee obligation in respect of such Reference Obligation or otherwise succeeds directly or indirectly to such Reference Obligation by way of a Succession Event and if pursuant to (1) or (2) above there is more than one Successor, such Successor as may be selected by the Calculation Agent in its sole and absolute discretion. Reference Obligations: With respect to a Defaulted Reference Entity: (i) for the purposes of determining whether the Not Subordinated Deliverable Obligation Characteristic is satisfied: (i) in the case of a Reference Entity contained in the Initial Reference Portfolio, the obligation specified as such, if any, opposite such Reference Entity in Schedule A hereto; and in the case of a Reference Entity included in the Reference Portfolio after the Effective Date, the obligation, if any, specified in accordance with the Substitution procedures set out in paragraph 6; and

(ii)

(ii)

for the purposes of determining a Loss Determination Amount in respect of a Defaulted Reference Entity, one or more obligations of that Defaulted Reference Entity (either (i) directly or (ii) as provider of a Qualifying Affiliate Guarantee or, if All Guarantees is specified as applicable in the Standard Terms to such Defaulted Reference Entity, as provider of any Qualifying Guarantee or (iii) in the case of a Defaulted Reference Entity which is a Monoline Insurer Reference Entity, as provider of a Qualifying Policy) that is (i) payable in an amount equal to its outstanding principal balance or Due and

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Payable Amount, as applicable, (ii) is not subject to any counterclaim, defence (other than a counterclaim or defence based on the factors set forth in Section 4.1(a)-(d) of the Credit Derivatives Definitions) or right of set-off by or of the Defaulted Reference Entity or any applicable Underlying Obligor and (iii) in the case of a Qualifying Guarantee other than a Qualifying Affiliate Guarantee, is capable, at the date of selection, of immediate assertion or demand by or on behalf of the holder or holders against the Defaulted Reference Entity for an amount at least equal to the Reference Obligation Notional Amount applicable to the relevant obligation apart from the giving of any notice of non-payment or similar procedural requirement, it being understood that acceleration of an Underlying Obligation shall not be considered a procedural requirement, selected by Buyer in its sole discretion and notified to Seller (such notice, a "Reference Obligation Notification") on or prior to the Valuation Date in respect of the relevant Defaulted Reference Entity, which either (i) constitute Reference Obligations pursuant to paragraph (a) above and/or (ii) fall within the Deliverable Obligation Category specified below and, subject to Section 2.21(c) of the Credit Derivatives Definitions, have each of the Deliverable Obligation Characteristics specified below. For the avoidance of doubt, provided that a Reference Obligation selected pursuant to paragraph (b) above (which is not a Reference Obligation by virtue of paragraph (a) above) satisfies the applicable Deliverable Obligation Category and Deliverable Obligation Characteristics on the date of selection, such obligation(s) may constitute Reference Obligation(s) for the purposes hereof irrespective of whether this continues to be the case subsequent to such date. In respect of the Reference Obligation(s) selected by Buyer in a Reference Obligation Notification: (i) the Buyer may alter such selection at any time on or prior to the Valuation Date in respect of the relevant Defaulted Reference Entity, provided that in respect of the Reference Obligation(s) selected pursuant to paragraph (b) above, the newly selected Reference Obligation(s) complies with the requirements set forth herein as at the date of its selection; each Reference Obligation Notification shall describe the selected Reference Obligation(s) in reasonable detail and shall specify for each such Reference Obligation the title or designation, maturity date and coupon rate; in the event that there is more than one selected Reference Obligation in respect of a Defaulted Reference Entity, the Buyer shall stipulate in the

(ii)

(iii)

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Reference Obligation Notification the amount of each selected Reference Obligation to be valued on the Valuation Date in respect of the Defaulted Reference Entity, the sum of such amounts not to exceed the Reference Entity Notional Amount in respect of such Defaulted Reference Entity; (iv) Section 2.30 of the Credit Derivatives Definitions shall not apply to such selected Reference Obligation(s); and if subsequent to selection of a Reference Obligation of such Defaulted Reference Entity, the Buyer determines that such Reference Obligation is likely to be redeemed and/or cancelled in whole, Buyer may by notice to Seller specify (a) the Valuation Date for calculating the Final Price of such Reference Obligation, which will be the date on which the Buyer has made such determination and (b) provide a certificate signed by a managing director (or other substantially equivalent title) of the Calculation Agent, which shall certify as to the likely redemption and/or cancellation of such Reference Obligation.

(v)

All Guarantees: Deliverable Obligation: Deliverable Category: Deliverable Characteristics: Interpretation: Obligation Obligation

In respect of a Reference Entity, as set out in the Standard Terms for that Reference Entity. Exclude Accrued Interest. In respect of a Reference Entity, as set out in the Standard Terms for that Reference Entity. In respect of a Reference Entity, as set out in the Standard Terms for that Reference Entity. For the purposes of this Confirmation: (i) each reference in the Credit Derivatives Definitions to "a Deliverable Obligation" and "the Deliverable Obligation" shall be deemed to be a reference to "a Reference Obligation" and "the Reference Obligation" respectively; each reference in the Credit Derivatives Definitions to "a Delivery Date" and "the Delivery Date" shall be deemed to be a reference to the date of selection of the relevant Reference Obligation, except that the words "Delivery Date or" and ", as the case may be" shall be deleted in the two places where they appear in Section 8.7(b)(i); each reference in the Credit Derivatives Definitions to "Physical Settlement Date" shall be deemed to be a reference to the date of selection of the relevant Reference Obligation; and the words "and all times thereafter" shall be deleted from Section 2.20(b)(i).

(ii)

(iii)

(iv)

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Reference Amount:

Entity

Notional

With respect to a Reference Entity: (i) comprised in the Initial Reference Portfolio, the amount specified in relation to such Reference Entity in Schedule A hereto, as adjusted from time to time in accordance with the provisions of this Confirmation; included in the Reference Portfolio subsequent to the Effective Date, an amount determined and adjusted in accordance with the Substitution procedures set out in Paragraph 6, as such amount may be adjusted in accordance with the provisions of this Confirmation.

(ii)

Reference Notional Amount:

Obligation

In respect of each Reference Obligation of a Defaulted Reference Entity, the amount specified in the relevant Reference Obligation Notification as the amount of such Reference Obligation to be valued on the relevant Valuation Date, provided that if only one Reference Obligation is specified in the relevant Reference Obligation Notification and no such amount is specified in respect of such Reference Obligation, the Reference Obligation Notional Amount of such Reference Obligation shall be an amount equal to the Reference Entity Notional Amount of the relevant Defaulted Reference Entity. With respect to each Reference Obligation, 100%.

Reference Price:

3.

Fixed Payments: Fixed Rate Payer Calculation Amount: Subject to the provisions relating to "Deferral of Fixed Amounts" below, for any Fixed Rate Payer Calculation Period, the Outstanding Tranche Notional Amount on the last day of such period. On any day, and subject to a minimum of zero, an amount equal to: (i) (ii) the Initial Tranche Notional Amount; less the sum of (i) the Aggregate Loss Determination Amount on that day less the Portfolio Threshold Amount, subject to a minimum of zero and (ii) the Aggregate Recovery Amount on such day less the Recovery Threshold (subject to a minimum of zero).

Outstanding Tranche Notional Amount:

Aggregate Loss Determination Amount: Loss Determination Amount:

On any day, an amount equal to the aggregate of all Loss Determination Amounts determined with respect to Defaulted Reference Entities on or prior to such date. With respect to any Defaulted Reference Entity the sum, for each Reference Obligation of such Defaulted Reference Entity specified in the relevant Reference Obligation Notification, of the greater of: (i) the relevant Reference Obligation Notional Amount multiplied by the amount by which the Reference Price exceeds the Final Price in respect of the relevant Reference Obligation;

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and (ii) zero.

The Loss Determination Amount for a Defaulted Reference Entity shall be calculated on the date on which all of the Final Prices for each relevant Reference Obligation have been determined and will be effective as of the Event Determination Date with respect to that Reference Entity. Recovery Threshold: Aggregate Recovery Amount: 0 per cent. of the Initial Portfolio Notional Amount. On any date, an amount equal to the aggregate of all Recovery Amounts calculated on or prior to that date with respect to (i) Defaulted Reference Entities and (ii) Removed Merged Reference Entities. With respect to any Defaulted Reference Entity, the Reference Entity Notional Amount minus the Loss Determination Amount. For the avoidance of doubt, a Recovery Amount for a Defaulted Reference Entity shall be calculated on the date on which all of the Final Prices for each relevant Reference Obligation have been determined but will be effective as of the Event Determination Date for the relevant Defaulted Reference Entity. With respect to any Removed Merged Reference Entity, the Reference Entity Notional Amount in respect of such Removed Merged Reference Entity. For the avoidance of doubt, a Recovery Amount for a Removed Merged Reference Entity shall be calculated and shall become effective on the date on which the relevant Merged Reference Entity becomes a Removed Merged Reference Entity. Fixed Rate Payer Payment Dates: The second Business Day following each Fixed Rate Payer Period End Date, provided that: (i) (ii) the final Fixed Rate Payment Date shall be the Scheduled Termination Date; and provided further that, if the Termination Date falls after the Scheduled Termination Date, the Scheduled Termination Date shall not be a Fixed Rate Payer Payment Date but the Termination Date shall be the final Fixed Rate Payer Payment Date (and there shall be no Fixed Rate Payer Payment Dates between the Fixed Rate Payer Payment Date falling in March 2018 and the Termination Date).

Recovery Amount:

Section 2.10 of the Credit Derivatives Definitions shall not apply to this Transaction. Fixed Rate Payer Period End Dates: Each of 20 March, 20 June, 20 September and 20 December falling in each year, with the first Fixed Rate Payer Period End Date being 20 September 2008 and the final Fixed Rate Payer Period End Date being the Scheduled Termination Date. Each period from, and including, one Fixed Rate Payer Period End Date to, but excluding, the next following Fixed Rate Payer Period End Date, except that (a) the initial Fixed Rate Payer Calculation Period will commence on, and include, the Business Day following Trade Date, and (b) the final Fixed Rate Payer

Fixed Rate Payer Calculation Period:

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Calculation Period will end on, and include, the earlier to occur of (i) the Scheduled Termination Date and (ii) the date on which the Outstanding Tranche Notional Amount is reduced to zero. Fixed Rate: Fixed Rate Day Count Fraction: Deferral of Fixed Amounts: 0.496 per cent. per annum. Actual/360. The parties acknowledge that the Fixed Amount payable by Buyer in respect of a Fixed Rate Payer Calculation Period in accordance with the foregoing provisions of this Section 2 (the "Fixed Amount Calculation Provisions") cannot be determined until the Loss Determination Amounts and Recovery Amounts have been determined in respect of each Reference Entity in respect of which an Event Determination Date has occurred on or prior to the last day of such Fixed Rate Payer Calculation Period (each Reference Entity in respect of which an Event Determination Date has occurred, a "Defaulted Reference Entity" and each Defaulted Reference Entity from time to time in respect of which the Loss Determination Amount and Recovery Amount have not been determined, an "Undetermined Reference Entity"). Accordingly, in circumstances where on the last day of a Fixed Rate Payer Calculation Period there are one or more Undetermined Reference Entities, a Fixed Amount shall not be payable on the relevant Fixed Rate Payer Payment Date (the "Scheduled Fixed Rate Payer Payment Date"). Instead: (i) on the Scheduled Fixed Rate Payer Payment Date Buyer shall pay to Seller the Minimum Fixed Amount; and on the Fixed Rate Payer Payment Date following the determination of Loss Determination Amounts and Recovery Amounts in respect of every Undetermined Reference Entity (the "Additional Fixed Rate Payer Payment Date"), Buyer shall pay to Seller the aggregate of the Fixed Amount Adjustment Payments relating to each Fixed Rate Payer Calculation Period ending in or falling in the relevant Deferral Period.

(ii)

Where: "Minimum Fixed Amount" means, with respect to a Fixed Rate Payer Calculation Period, the Fixed Amount which would have been payable in relation thereto in accordance with the Fixed Amount Calculation Provisions if on each day during such period on which one or more Defaulted Reference Entities are Undetermined Reference Entities, Loss Determination Amounts and Recovery Amounts had been determined in respect of each such Undetermined Reference Entity on the basis that the Final Price of each related Reference Obligation is zero.
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"Fixed Amount Adjustment Payment" means, with respect to a Fixed Rate Payer Calculation Period, an amount equal to (a) the Fixed Amount which would have been payable in respect thereof in accordance with the Fixed Amount Calculation Provisions on the Scheduled Fixed Rate Payer Payment Date in the absence of these "Deferral of Fixed Amounts" provisions if each Loss Determination Amount and Recovery Amount related to each Undetermined Reference Entity had been determined on the relevant Event Determination Date (based on the actual Final Price(s) relating thereto) minus (b) the Minimum Fixed Amount in respect thereof. Deferral Period: With respect to a Fixed Amount Adjustment Payment, the period from (and including) the relevant Scheduled Fixed Rate Payer Payment Date to (but excluding) the Additional Fixed Rate Payer Payment Date.

3.

Floating Payment: Floating Rate Calculation Amount: Payer With respect to each Reference Entity, the relevant Reference Entity Notional Amount. In respect of a Reference Entity, as set out in the Standard Terms for that Reference Entity. For the avoidance of doubt, the parties agree that the Conditions to Settlement may be satisfied more than once under this Transaction; provided, however, that the Conditions to Settlement may, subject to Credit Event Notice After Restructuring below, be satisfied once only with respect to each Reference Entity unless subsequent to the satisfaction of the Conditions to Settlement with respect to any Reference Entity, that Reference Entity becomes the Successor to one or more other Reference Entities in respect of which an Event Determination Date has not occurred, in which case the Conditions to Settlement may be satisfied again in relation to that Reference Entity a number of times equal to the number of Reference Entities in respect of which that Reference Entity is the Successor. Credit Events: Multiple Holder Obligation: Credit Event Notice: In respect of a Reference Entity, as set out in the Standard Terms for that Reference Entity. In respect of a Reference Entity, as set out in the Standard Terms for that Reference Entity. In respect of Japanese Corporate Reference Entities only, in Section 3.3 of the Credit Derivatives Definitions all references to Greenwich Mean Time shall be replaced by references to Tokyo time. In respect of all other Reference Entities, as set out in the Standard Terms for that Reference Entity. Credit Event Restructuring: Notice After Section 3.9 of the Credit Derivatives Definitions shall apply in respect of all Reference Entities excluding Reference Entities that are Japanese Corporate Reference Entities. If Section 3.9(b) of the Credit Derivatives Definitions is applicable to a Reference Entity, it shall be amended to read as follows: "(b) if the Notifying Party has delivered

Conditions to Settlement:

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a Credit Event Notice that specifies an Exercise Amount that is less than the outstanding Reference Entity Notional Amount for the relevant Reference Entity, (i) upon the satisfaction of the Conditions to Settlement, the parties shall perform their respective settlement obligations (if any) hereunder on the relevant Cash Settlement Date, with references to the Reference Entity Notional Amount in the relevant provisions being deemed to mean the relevant Exercise Amount, and (ii) thereafter, the Reference Entity Notional Amount for such Reference Entity shall be reduced by such Exercise Amount;". Obligation(s): In respect of a Reference Entity, as set out in the Standard Terms for that Reference Entity.

Obligation Category: Obligation Characteristics: Excluded Obligations: 4. Settlement Terms: ISDA Protocols:

In respect of a Reference Entity, as set out in the Standard Terms for that Reference Entity. In respect of a Reference Entity, as set out in the Standard Terms for that Reference Entity. None.

Buyer and Seller acknowledge and agree that if a protocol or other market standard valuation procedure sponsored by the International Swaps and Derivatives Association, Inc. (ISDA) or any other currently prevailing market standard protocol (a Protocol) is adopted in respect of one or more Reference Entities on or before the Valuation Date relating to such Reference Entity and Buyer is bound by, or opts into, such Protocol in connection with any credit derivatives transaction with any counterparty, then the Final Price of any Reference Obligation of such Reference Entity shall be determined on the basis of the procedures set forth in such Protocol in lieu of the procedures set forth in this Paragraph 4 (provided that, in the case of a Protocol not sponsored by ISDA, it shall apply only if at least four leading dealers (that are not Affiliates of one another) in credit derivatives subscribe to or adopt such Protocol). Cash Settlement. For the avoidance of doubt, for the purposes of determining a Loss Determination Amount with respect to a Defaulted Reference Entity, the Calculation Agent shall determine a Final Price in accordance with the valuation provisions of this Section 4 for each Reference Obligation selected by Buyer as set out above.

Settlement Method:

Valuation Date:

Single Valuation Date With respect to each Reference Obligation of a Defaulted Reference Entity, the Valuation Date shall be a date falling not less than 45 Business Days and not more than 140 Business Days following the relevant Event Determination Date, as selected by Buyer in its sole and absolute discretion.

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Valuation Time: Quotation Method: Quotation Amount: Minimum Quotation Amount: Dealers:

10.00 am in the city in which the Reference Obligation being valued is mainly or principally traded. Bid. The Reference Obligation Notional Amount with respect to the relevant Reference Obligation. USD 1,000,000 or its equivalent in the relevant Obligation Currency. A dealer in obligations of the type of obligations for which Quotations are to be obtained. The Dealers shall be selected by the Calculation Agent or, as the case may be, the Quotation Calculation Agent (as defined below) in its sole and absolute discretion, provided that each of Deutsche Bank AG, acting through its London branch and Legal & General Pensions Limited shall in all cases be one of the selected Dealers. Any firm quotation provided by Deutsche Bank AG, acting through its London branch shall be the firm quotation which Deutsche Bank AG, acting through its London branch would provide to a counterparty in the market, as determined in its sole and absolute discretion. Any firm quotation provided by Legal & General Pensions Limited shall be the firm quotation which Legal & General Pensions Limited would provide to a counterparty in the market, as determined in its sole and absolute discretion. USD. With respect to each Defaulted Reference Entity, three Business Days after the calculation of the Final Price for all Reference Obligations relating thereto. With respect to a Defaulted Reference Entity, the lowest of: (i) (a) the Aggregate Loss Determination Amount as at the date of determination of the Loss Determination Amount for such Defaulted Reference Entity (including the Loss Determination Amount for such Defaulted Reference Entity) less (b) the Portfolio Threshold Amount, subject to a minimum of zero; the Loss Determination Amount with respect to such Defaulted Reference Entity; and the Outstanding Tranche Notional Amount as at the date of determination of the Loss Determination Amount for such Defaulted Reference Entity (excluding from the calculation of Aggregate Loss Determination Amount the Loss Determination Amount and the Recovery Amount for such Defaulted Reference Entity).

Settlement Currency: Cash Settlement Date:

Cash Settlement Amount:

(ii) (iii)

Quotations:

Section 7.7 of the Credit Derivatives Definitions shall be deleted in its entirety and replaced with the following: "Quotation" means each Full Quotation and the Weighted Average Quotation obtained and expressed as a percentage with respect to a Valuation Date in the manner that follows:

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(iii)

In respect of each Reference Obligation, the Calculation Agent shall attempt to obtain Full Quotations with respect to the Valuation Date from five or more Dealers. If at least two such Full Quotations are not available on the same Business Day within three Business Days of the Valuation Date, then on the next following Business Day (and, if necessary, on each Business Day thereafter until the tenth Business Day following the relevant Valuation Date, such tenth Business Day being the "Interim Quotation Date") the Calculation Agent shall attempt to obtain Full Quotations from at five or more Dealers and, if at least two Full Quotations are not available, a Weighted Average Quotation. If the Calculation Agent is unable to obtain two or more Full Quotations or a Weighted Average Quotation in accordance with paragraph (i) above, then the Calculation Agent shall use its reasonable efforts to appoint a Dealer (other than the Calculation Agent or any Affiliate of the Calculation Agent) (the "Quotation Calculation Agent") not more than five Business Days after the Interim Quotation Date (the date of such appointment being the "Quotation Calculation Agent Appointment Date" for such Valuation Date). In the event that the Calculation Agent appoints a Quotation Calculation Agent pursuant to paragraph (ii) above, the Quotation Calculation Agent shall attempt to obtain Full Quotations with respect to the Quotation Calculation Agent Appointment Date from five or more Dealers. If the Quotation Calculation Agent is unable to obtain two or more such Full Quotations on the same Business Day within three Business Days of the relevant Quotation Calculation Agent Appointment Date, then on the next following Business Day (and, if necessary on each Business Day thereafter until the fifth Business Day following the relevant Quotation Calculation Agent Appointment Date (such fifth Business Day being the "Final Quotation Date")) the Quotation Calculation Agent shall attempt to obtain Full Quotations from five or more Dealers and, if two or more Full Quotations are not available, a Weighted Average Quotation. If the Quotation Calculation Agent is unable to obtain two or more Full Quotations or a Weighted Average Quotation on the same Business Day within five Business Days of the relevant Quotation Calculation Agent Appointment Date, the Quotations for the relevant Valuation Date shall be deemed to be any Full Quotation obtained from a Dealer on the Final Quotation Date, or if no Full Quotation is obtained, the weighted average of any firm quotations for the Reference Obligation obtained from Dealers on the Final Quotation Date (for which

(iv)

(v)

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108

purpose the weight applicable to each firm quotation shall be that part of the Quotation Amount for which such quotation was obtained and a firm quotation of zero shall be deemed to have been obtained with respect to that part of the Quotation Amount for which firm quotations were not obtained). If the Quotation Calculation Agent is unable to obtain any Full Quotation or a weighted average of any firm quotations on the Final Quotation Date, the Quotations for the relevant Valuation Date shall be as determined by the Calculation Agent (which determination may, for the avoidance of doubt, be equal to zero). (vi) In the event that the Calculation Agent is unable to appoint a Quotation Calculation Agent pursuant to paragraph (ii) above, and the Calculation Agent is unable to obtain two or more Full Quotations or a Weighted Average Quotation on the same Business Day within 10 Business Days of the relevant Valuation Date, then the Quotations for the relevant Valuation Date shall be zero. All Quotations obtained in accordance with the foregoing shall not include accrued but unpaid interest.

(vii)

Valuation Method:

Notwithstanding anything to the contrary in Section 7.5 of the Credit Derivatives Definitions, the Valuation Method shall be Highest. In respect of each Reference Obligation of a Defaulted Reference Entity, "Highest" means the highest Quotation obtained by the Calculation Agent (or in accordance with Section 7.7(b) or 7.7(c) of the Credit Derivatives Definitions (as amended herein)) in respect of such Reference Obligation on any Valuation Date.

5. 5.1

Additional Provisions: Additional Provisions for Monoline Insurer Reference Entities The Additional Provisions for Monoline Insurers published by the International Swaps and Derivatives Association, Inc. on 21 January 2005 (the "Additional Provisions") will apply to each Monoline Insurer Reference Entity only, amended as follows: (i) (ii) (iii) The last sentence of the definition of "Qualifying Policy" shall be deleted. Paragraph (e) of the Additional Provisions shall be deleted in its entirety. The words "and, if the benefit of the Qualifying Policy is not transferred as part of any transfer of the Insured Instrument, the Qualifying Policy must be transferable at least to the same extent as the Insured Instrument" shall be deleted from paragraph (i). The reference in paragraph (i) to Section 2.15(a)(ii) shall be deemed to be a reference to the Section "Reference Obligations" above and the last sentence of paragraph (i) shall be deleted.

(iv)

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109

5.2

Section 2.32 Restructuring Maturity Limitation and Fully Transferable Obligation Section 2.32 of the Credit Derivatives Definitions shall be amended as follows: (i) The first paragraph of Section 2.32 shall be deemed to be replaced in its entirety by the following: "Section 2.32. Restructuring Maturity Limitation and Fully Transferable Obligation. If "Restructuring Maturity Limitation and Fully Transferable Obligation Applicable" is specified as applicable in the Standard Terms relating to a Reference Entity and Restructuring is the only Credit Event specified in a Credit Event Notice delivered by Buyer, then an obligation can only be selected pursuant to paragraph (b) of the "Reference Obligations" Section above as a Reference Obligation if it is a Fully Transferable Obligation with a final maturity date not later than the Restructuring Maturity Limitation Date." (ii) Section 2.32(b) of the Credit Derivatives Definitions shall be amended to read: "Fully Transferable Obligation" means a Reference Obligation that is either Transferable, in the case of Bonds, or capable of being assigned or novated to all Eligible Transferees without the consent of any person being required, in the case of any Reference Obligation other than Bonds. Any requirement that notification of novation, assignment or transfer of a Reference Obligation be provided to a trustee, fiscal agent, administrative agent, clearing agent or paying agent for a Reference Obligation shall not be considered to be a requirement for consent for the purposes of this Section 2.32(b). For the purposes of determining whether a Reference Obligation is Transferable or is capable of being assigned or novated to Eligible Transferees, such determination shall be made as of the date of selection of such Reference Obligation pursuant to paragraph (b) of the "Reference Obligations" Section above, taking into account only the terms of the Reference Obligation and any related transfer or consent documents which the Calculation Agent considers likely to be obtainable."

5.3

Section 2.33 Modified Restructuring Maturity Limitation and Conditionally Transferable Obligation (i) Section 2.33 of the Credit Derivatives Definitions shall be amended to read: "Section 2.33. Modified Restructuring Maturity Limitation and Conditionally Transferable Obligation. If "Modified Restructuring Maturity Limitation and Conditionally Transferable Obligation Applicable" is specified as applicable in the Standard Terms relating to a Reference Entity and Restructuring is the only Credit Event specified in a Credit Event Notice delivered by Buyer, then an obligation can only be selected pursuant to paragraph (b) of the "Reference Obligations" Section above as a Reference Obligation if it is a Conditionally Transferable Obligation with a final maturity date not later than the Modified Restructuring Maturity Limitation Date. "Conditionally Transferable Obligation" means a Reference Obligation that is either Transferable, in the case of Bonds, or capable of being assigned or novated to all Modified Eligible Transferees without the consent of any person being required, in the case of any Reference Obligation other than Bonds, provided however that a Reference Obligation other than Bonds will be a Conditionally Transferable Obligation notwithstanding the consent of the Reference Entity or the guarantor, if any, of a Reference Obligation other than Bonds (or the consent of the relevant obligor if a Reference Entity is guaranteeing such Reference Obligation) or any agent is required for such novation, assignment or transfer so long as the terms of such Reference Obligation provide that such consent may not be unreasonably withheld or delayed. Any requirement that notification of novation, assignment or transfer of a Reference Obligation be provided to a trustee, fiscal agent, administrative agent, clearing agent or paying agent for a Reference Obligation shall not be considered to be a requirement for consent for the purposes of this Section 2.33(b). For the purposes of determining whether a Reference Obligation is Transferable or is capable of being assigned or novated to Modified Eligible Transferees, such determination

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shall be made as the date of selection of such Reference Obligation pursuant to paragraph (b) of the "Reference Obligations" Section above, taking into account only the terms of the Reference Obligation and any related transfer or consent documents which the Calculation Agent considers likely to be obtainable." (ii) For the avoidance of doubt, Section 2.33(b)(i) shall be deemed to have been deleted for the purposes of this Transaction.

6. 6.1

Substitutions Subject to the terms of this Paragraph 6 having been made effective in accordance with subParagraph 6.2 below, Party A and Party B acknowledge the Initial Owners right to make Substitutions in relation to the Reference Portfolio pursuant to and in accordance with Condition 19 of the Notes for so long as the Initial Owner remains the Sole Beneficial Owner of the Notes. Party A, Party B and the Initial Owner agree that the Initial Owner (or the Initial Owners Agent acting on its behalf) may make Substitutions in accordance with such Condition 19 and that the Reference Portfolio and the Portfolio Threshold Amount shall from time to time be adjusted to reflect any Substitutions so made, all as more particularly described in Condition 19. The Initial Owner agrees that it shall give immediate notice to Party A and Party B if (a) it ceases to be the Sole Beneficial Owner in respect of the Notes and/or (b) the Initial Owners Agent ceases to be appointed as agent of the Initial Owner in respect of Substitutions to the Reference Portfolio. Unless and until Party A and Party B have received such notice, they shall be entitled to assume that the Initial Owner remains the Sole Beneficial Owner and that the Initial Owners Agent remains the agent of the Initial Owner. In the absence of such notice, neither Party A nor Party B shall have any liability to any other person in relation to (a) any Substitution made following the Initial Owner ceasing to be the Sole Beneficial Owner and/or (b) any Substitution made by the Initial Owners Agent following the termination of its appointment as agent of the Initial Owner. The Initial Owner agrees to accept sole liability for any and all loss suffered by any other person resulting from a Substitution made to the Reference Portfolio following a failure by the Initial Owner to give any such notice.

6.2

This Paragraph 6 will not apply until such time as Party A, Party B and the Initial Owner have agreed in writing that the provisions of this Paragraph 6 will be effective. The provisions of this Paragraph 6 will duly take effect as at the date of such agreement.

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Schedule A

Reference Entity

Seniority

Reference Obligation ISIN

Reference Entity Notional Amount (USD) 20,628,571.43

Reference Obligation

Reference Entity Category

Ace Limited

Senior Unsecured

US 00440EAC12 US00817YAB48

ACE 8.875% OF 08/29 AET 7.875% OF 03/11 AA 6.5% OF 06/11 MO 7% OF 11/13

North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate

Aetna Inc.

Senior Unsecured

20,628,571.43

Alcoa Inc.

Senior Unsecured

US 013817AD35 US02209SAA15

20,628,571.43

Altria Group, Inc.

Senior Unsecured

20,628,571.43

American Electric Power Company, Inc. American Express Company American International Group, Inc. Amgen Inc.

Senior Unsecured

US 025537AE11 US025816AQ27

20,628,571.43

AEP 5.25% OF 06/15 AXP 4.875% OF 07/13

Senior Unsecured

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US031162AE03

20,628,571.43

AMGN 0% OF 03/32 APC 6.125% OF 03/12 ARW 6.875% OF 06/18 T 5.875% OF 08/12 T 6.5% OF 12/11 AZO 5.875% OF 10/12 BAX 6.625% OF 02/28 BA 6.5%

North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North

Anadarko Petroleum Corporation Arrow Electronics, Inc. AT&T Inc.

Senior Unsecured

US032511AT44

20,628,571.43

Senior Unsecured

US042735AL41

20,628,571.43

Senior Unsecured

US78387GAK94

20,628,571.43

AT&T MOBILITY LLC AutoZone, Inc.

Senior Unsecured

US17248RAF38

20,628,571.43

Senior Unsecured

US053332AC61

20,628,571.43

Baxter International Inc. Boeing Capital

WS1201.525915.8

Senior Unsecured

US071813AM10

20,628,571.43

Senior Unsecured

US097014AG93

20,628,571.43

112

Reference Entity

Seniority

Reference Obligation ISIN

Reference Entity Notional Amount (USD)

Reference Obligation

Reference Entity Category American Corporate North American Corporate

Corporation Bristol-Myers Squibb Company BRUNSWICK CORPORATION Burlington Northern Santa Fe Corporation Campbell Soup Company Capital One Bank (USA), National Association Cardinal Health, Inc. CARNIVAL CORPORATION Caterpillar Inc. Senior Unsecured 20,628,571.43

OF 02/12

Senior Unsecured

US117043AG45

20,628,571.43

BC 7.125% OF 08/27 BNI 6.75% OF 07/11 CPB 4.875% OF 10/13 COF 5.125% OF 02/14 CAH 5.85% OF 12/17 CCL 6.65% OF 01/28 CAT 6.55% OF 05/11

North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate

Senior Unsecured

US12189TAT16

20,628,571.43

Senior Unsecured

US134429AS81

20,628,571.43

Senior Unsecured

US14040EHK10

20,628,571.43

Senior Unsecured

US14149YAH18

20,628,571.43

Senior Unsecured

US143658AH53

20,628,571.43

Senior Unsecured

US149123BH31

20,628,571.43

CBS Corporation

Senior Unsecured

20,628,571.43

CenturyTel, Inc.

Senior Unsecured

US156700AG13

20,628,571.43

CTL 7.875% OF 08/12 CI 6.375% OF 10/11 CIT 7.75% OF 04/12 CMCSA 7.125% OF 06/13 CSC 7.375% OF 06/11 CAG 7% OF 10/28 COP 4.75%

North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American

CIGNA Corporation CIT Group Inc.

Senior Unsecured

US125509BG36

20,628,571.43

Senior Unsecured

US125581AB41

20,628,571.43

Comcast Cable Communications, LLC Computer Sciences Corporation ConAgra Foods, Inc. CONOCOPHILLI

Senior Unsecured

US20029PAN96

20,628,571.43

Senior Unsecured

US205363AE42

20,628,571.43

Senior Unsecured

US205887AR36

20,628,571.43

Senior Unsecured

US20825CAE49

20,628,571.43

WS1201.525915.8

113

Reference Entity

Seniority

Reference Obligation ISIN

Reference Entity Notional Amount (USD) 20,628,571.43

Reference Obligation

Reference Entity Category Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate

PS Constellation Energy Group, Inc. Cox Communications, Inc. CSX Corporation Senior Unsecured US210371AH31

OF 10/12 CEG 7% OF 04/12 COXENT 6.8% OF 08/28 CSX 5.3% OF 02/14 CVS 4.875% OF 09/14

Senior Unsecured

US224044AN72

20,628,571.43

Senior Unsecured

US126408GF40

20,628,571.43

CVS Caremark Corporation Darden Restaurants, Inc. Deere & Company Devon Energy Corporation Dominion Resources, Inc. Duke Energy Carolinas, LLC E. I. du Pont de Nemours and Company Eastman Chemical Company Embarq Corporation Federal Home Loan Mortgage Corporation Federal National Mortgage Association FirstEnergy Corp.

Senior Unsecured

US126650AV25

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US244199BB01

20,628,571.43

DE 6.95% OF 04/14 DVN 7.95% OF 04/32 D 6.25% OF 06/12

North American Corporate North American Corporate North American Corporate North American Corporate

Senior Unsecured

US251799AA02

20,628,571.43

Senior Unsecured

US25746UAJ88

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US263534BN84

20,628,571.43

DD 4.875% OF 04/14 EMN 7.6% OF 02/27

North American Corporate North American Corporate North American Corporate

Senior Unsecured

US277432AD23

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US3128X2UC78

20,628,571.43

FHLMC 5.08% OF 02/19 FNMA 5.5% OF 06/33 FE 6.45% OF 11/11

North American Corporate North American Corporate North American Corporate North American

Senior Unsecured

US31359MRX3 8 US337932AB30

20,628,571.43

Senior Unsecured

20,628,571.43

Fortune Brands, Inc.

Senior Unsecured

20,628,571.43

WS1201.525915.8

114

Reference Entity

Seniority

Reference Obligation ISIN

Reference Entity Notional Amount (USD) 20,628,571.43

Reference Obligation

Reference Entity Category Corporate

Gannett Co., Inc.

Senior Unsecured

North American Corporate GE 6% OF 06/12 GIS 0% OF 08/13 GR 7.625% OF 12/12 HAL 5.5% OF 10/10 HPQ 6.5% OF 07/12 HON 6.125% OF 11/11 IR 9% OF 08/21 IBM 4.75% OF 11/12 North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate IP 5.85% OF 10/12 SFI 6% OF 12/10 JCP 9% OF 08/12 KFT 5.625% OF 11/11 KSS 6.3% OF 03/11 LTD 6.125% OF North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American

General Electric Capital Corporation General Mills, Inc.

Senior Unsecured

US36962GYY42

20,628,571.43

Senior Unsecured

US370334AM65

20,628,571.43

Goodrich Corporation HALLIBURTON COMPANY Hewlett-Packard Company Honeywell International Inc. Ingersoll-Rand Company International Business Machines Corporation International Lease Finance Corporation International Paper Company iStar Financial Inc. J. C. Penney Company, Inc. Kraft Foods Inc.

Senior Unsecured

US382388AP13

20,628,571.43

Senior Unsecured

US406216AR24

20,628,571.43

Senior Unsecured

US428236AG84

20,628,571.43

Senior Unsecured

US438516AN69

20,628,571.43

Senior Unsecured

US456866AG74

20,628,571.43

Senior Unsecured

US459200BA86

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US460146BQ59

20,628,571.43

Senior Unsecured

US45031UAB70

20,628,571.43

Senior Unsecured

US708160BY11

20,628,571.43

Senior Unsecured

US50075NAB01

20,628,571.43

Kohl's Corporation Limited Brands,

Senior Unsecured

US500255AM62

20,628,571.43

Senior Unsecured

US532716AH08

20,628,571.43

WS1201.525915.8

115

Reference Entity

Seniority

Reference Obligation ISIN

Reference Entity Notional Amount (USD) 20,628,571.43

Reference Obligation

Reference Entity Category Corporate North American Corporate

Inc. Liz Claiborne, Inc. Senior Unsecured

12/12

Lockheed Martin Corporation Loews Corporation Macy's, Inc.

Senior Unsecured

US539830AE98

20,628,571.43

LMT 7.65% OF 05/16 LTR 8.875% OF 04/11 M 6.625% OF 04/11 MAR 4.625% OF 06/12 MMC 5.375% OF 07/14 MAS 5.875% OF 07/12

North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate

Senior Unsecured

US540424AE80

20,628,571.43

Senior Unsecured

US31410HAS04

20,628,571.43

Marriott International, Inc. MARSH & McLENNAN COMPANIES, INC. Masco Corporation MBIA Insurance Corporation McDonald's Corporation McKesson Corporation M.D.C. Holdings, Inc. MeadWestvaco Corporation MetLife, Inc.

Senior Unsecured

US571903AE36

20,628,571.43

Senior Unsecured

US571748AM43

20,628,571.43

Senior Unsecured

US574599AX44

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US58013MDM3 8 US58155QAA13

20,628,571.43

MCD 6% OF 04/11 MCK 7.75% OF 02/12 MDC 5.5% OF 05/13 MWV 6.85% OF 04/12 MET 6.125% OF 12/11 MOT 6.5% OF 09/25 NRUC 7.25% OF 03/12

North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate

Senior Unsecured

20,628,571.43

Senior Unsecured

US552676AN89

20,628,571.43

Senior Unsecured

US583334AA59

20,628,571.43

Senior Unsecured

US59156RAC25

20,628,571.43

Motorola, Inc.

Senior Unsecured

US620076AK59

20,628,571.43

National Rural Utilities Cooperative Finance Corporation

Senior Unsecured

US637432CU74

20,628,571.43

WS1201.525915.8

116

Reference Entity

Seniority

Reference Obligation ISIN

Newell Rubbermaid Inc. News America Incorporated NORFOLK SOUTHERN CORPORATION Nordstrom, Inc.

Senior Unsecured

US651229AB28

Reference Entity Notional Amount (USD) 20,628,571.43

Reference Obligation

Reference Entity Category North American Insurance North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate

NWL 6.75% OF 03/12 NWS 7.25% OF 05/18 NSC 7.7% OF 05/17 JWN 6.95% OF 03/28 NOC 7.125% OF 02/11 OMC 0% OF 02/31 PGN 5.625% OF 01/16

Senior Unsecured

US652482AM25

20,628,571.43

Senior Unsecured

US655844AE88

20,628,571.43

Senior Unsecured

US655664AH33

20,628,571.43

Northrop Grumman Corporation Omnicom Group Inc. Progress Energy, Inc. Quest Diagnostics Incorporated Radian Group Inc.

Senior Unsecured

US666807AT91

20,628,571.43

Senior Unsecured

US681919AK29

20,628,571.43

Senior Unsecured

US743263AL93

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US750236AB78

20,628,571.43

RDN 7.75% OF 06/11 RTN 7.2% OF 08/27 AL 4.875% OF 09/12 ROH 7.85% OF 07/29

North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate

Raytheon Company RIO TINTO ALCAN INC. Rohm and Haas Company R.R. Donnelley & Sons Company Safeway Inc.

Senior Unsecured

US755111AF81

20,628,571.43

Senior Unsecured

US013716AR64

20,628,571.43

Senior Unsecured

US775371AU10

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US786514BF54

20,628,571.43

SWY 5.8% OF 08/12 SLE 6.125% OF 11/32 SRE 6% OF 02/13

North American Corporate North American Corporate North American Corporate

Sara Lee Corporation Sempra Energy

Senior Unsecured

US803111AM56

20,628,571.43

Senior Unsecured

US816851AF69

20,628,571.43

WS1201.525915.8

117

Reference Entity

Seniority

Reference Obligation ISIN

Simon Property Group, L.P. Southwest Airlines Co. SPRINT NEXTEL CORPORATION Starwood Hotels & Resorts Worldwide, Inc. Target Corporation TEXTRON FINANCIAL CORPORATION The Allstate Corporation The Black & Decker Corporation The Dow Chemical Company The Chubb Corporation The Hartford Financial Services Group, Inc. The Home Depot, Inc. THE KROGER CO. THE NEW YORK TIMES COMPANY The SherwinWilliams Company The Walt Disney Company

Senior Unsecured

US828807AQ09

Reference Entity Notional Amount (USD) 20,628,571.43

Reference Obligation

Reference Entity Category North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Insurance North American Corporate

SPG 6.35% OF 08/12 LUV 6.5% OF 03/12 S 8.375% OF 03/12 HOT 7.875% OF 05/12 TGT 5.875% OF 03/12 TXT 5.125% OF 02/11 ALL 6.75% OF 05/18 BDK 7.125% OF 06/11 DOW 6% OF 10/12 CB 6% OF 11/11 HIG 4.75% OF 03/14

Senior Unsecured

US844741AV08

20,628,571.43

Senior Unsecured

US852060AS17

20,628,571.43

Senior Unsecured

US85590AAD63

20,628,571.43

Senior Unsecured

US87612EAH99

20,628,571.43

Senior Unsecured

US88319QJ204

20,628,571.43

Senior Unsecured

US020002AH49

20,628,571.43

Senior Unsecured

US091797AJ96

20,628,571.43

Senior Unsecured

US260543BR36

20,628,571.43

Senior Unsecured

US171232AF85

20,628,571.43

Senior Unsecured

US416515AM67

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US501044CE98

20,628,571.43

KR 5.5% OF 02/13 NYT 4.61% OF 09/12

North American Corporate North American Corporate North American Corporate

Senior Unsecured

US65011QAG7 3

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US25468PBX33

20,628,571.43

DIS 6.375% OF 03/12

North American Corporate

WS1201.525915.8

118

Reference Entity

Seniority

Reference Obligation ISIN

Time Warner Inc.

Senior Unsecured

US00184AAF21

Reference Entity Notional Amount (USD) 20,628,571.43

Reference Obligation

Reference Entity Category North American Corporate North American Corporate

TWX 6.875% OF 05/12

Toll Brothers, Inc.

Senior Unsecured

20,628,571.43

Transocean Inc.

Senior Unsecured

US893830AK59

20,628,571.43

RIG 7.375% OF 04/18 UNP 6.125% OF 01/12

North American Corporate North American Corporate North American Corporate

Union Pacific Corporation Universal Health Services, Inc. Valero Energy Corporation Viacom Inc.

Senior Unsecured

US907818CN66

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US91913YAD22

20,628,571.43

VLO 6.875% OF 04/12 VIA 6.25% OF 04/16 VZ 4.9% OF 09/15 WMT 5.75% OF 12/30 WM 5.25% OF 09/17 WFC 5.56% OF 10/15 WY 6.75% OF 03/12 WHR 7.75% OF 07/16 WYE 5.5% OF 03/13

North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate North American Corporate

Senior Unsecured

US925524BB50

20,628,571.43

Verizon Communications Inc. Wal-Mart Stores, Inc. Washington Mutual, Inc. Wells Fargo & Company Weyerhaeuser Company Whirlpool Corporation Wyeth

Senior Unsecured

US92344GAW6 9 XS0121617517

20,628,571.43

Senior Unsecured

20,628,571.43

Senior Unsecured

US939322AV52

20,628,571.43

Senior Unsecured

US949746NA59

20,628,571.43

Senior Unsecured

US962166BP84

20,628,571.43

Senior Unsecured

US963320AH94

20,628,571.43

Senior Unsecured

US983024AA80

20,628,571.43

XL CAPITAL LTD

Senior Unsecured

20,628,571.43

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Schedule B Portfolio Guidelines No Substitution may cause the Reference Portfolio to contravene or, if the Reference Portfolio is already in contravention prior to such Substitution, cause a worsening of such contravention of the following guidelines:

1 2

The Reference Entity Notional Amount of a Reference Entity which is not an S&P High Yield Corporate Entity shall not exceed 1.50 per cent. of the Initial Portfolio Notional Amount. The aggregate of the Reference Entity Notional Amounts of Reference Entities in the same S&P Industry Classification Group (as such term is used by S&P) shall in each case not be more than 20.00 per cent. of the Initial Portfolio Notional Amount. The aggregate of the Reference Entity Notional Amounts of Reference Entities in any two S&P Industry Classification Groups (as such term is used by S&P) shall in each case not be more than 30.00 per cent. of the Initial Portfolio Notional Amount. The aggregate of the Portfolio Entity Notional Amounts of Reference Entities that are S&P High Yield Corporate Entities shall in each case be not more than 15.00 per cent. of the Initial Portfolio Notional Amount. The aggregate of the Portfolio Entity Notional Amounts of Reference Entities that have a country of incorporation with an S&P sovereign rating of less than A- shall be no more than 5.00 per cent. of the Initial Portfolio Notional Amount.

Definitions S&P High Yield Corporate Entity means each Reference Entity with an S&P Rating less than BBB-; and S&P Rating means, in respect of a Reference Entity, the long-term foreign issuer credit rating assigned to such entity by S&P, provided that:

(a)

for the purposes of providing rating inputs, the rating input for any Reference Entity on credit watch negative shall be one notch below its S&P Rating, and any Reference Entity on credit watch positive will be one notch above its S&P Rating; if a long-term foreign issuer credit rating is not available but an issuer credit rating is available, the rating input for any Reference Entity will be determined in accordance with the then-current guidelines of S&P; notwithstanding the above, for the following Reference Entities, the rating input assigned to such entity by S&P shall be the rating assigned to their subordinated debt: (i) (ii) (iii) Federal National Mortgage Association; Federal Home Loan Mortgage Association; and Government National Mortgage Association;

(viii)

(ix)

(x)

if a long-term foreign issuer credit rating is not available and an issuer credit rating is not available, the rating input for any Reference Entity shall be the S&P Rating which is one notch below the S&P rating corresponding to the relevant Moodys rating if such Moodys rating is Baa3 or above; and two notches below the S&P rating corresponding to the relevant Moodys rating if such Moodys rating is Ba1 or below, provided that for the purposes of providing rating inputs, the rating input for any Reference Entity on credit watch negative by Moodys shall be one notch below the rating input determined in accordance with the previous paragraph; and

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(xi)

the rating input for any Reference Entity unrated by S&P and Moodys and the rating input for any Reference Entity that is a Sovereign Reference Entity unrated by S&P shall be the credit assessment provided by S&P.

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Schedule C Eligibility Criteria The following Eligibility Criteria shall apply in respect of each Substitution Reference Entity which is to be included in the Reference Portfolio at the time of such Substitution of the relevant Substitution Reference Entity in the Reference Portfolio:

1 2 3 4 5

Such Substitution Reference Entity must have a public rating by S&P. S&Ps long-term foreign issuer credit rating of such Substitution Reference Entity shall be at least BB-. Such Substitution Reference entity must have a country of incorporation with an S&P sovereign rating of at least BBB-. No Substitution Reference Entity shall be a Sovereign (as determined in good faith and in a commercially reasonable manner by the Calculation Agent). Such Substitution Reference Entity does not belong to the S&P Industry Classification Groups (as such term is used by S&P) ABS Consumer or ABS Commercial.

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Annex 1 to the Reference Swap: European Corporate Convention Terms

Calculation Agent City: Business Days: London If the Floating Rate Payer Calculation Amount is denominated in EUR: London & TARGET USD: London & New York GBP: London JPY: London & Tokyo CHF: London & Zurich Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Not Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Buyer Applicable

Restructuring: Modified Restructuring Maturity Limitation and Conditionally Transferable Obligation: Multiple Holder Obligation: Default Requirement: Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Borrowed Money None Applicable

Obligation(s):

Obligation Category: Obligation Characteristics:

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Deliverable Obligations:

Exclude Accrued Interest Deliverable Obligation Category: Deliverable Obligation Characteristics: Bond or Loan Not Subordinated Specified Currency: Standard Currencies Not Contingent Assignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer Specified

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Annex 2 to the Reference Swap: Subordinated European Insurance Corporate Convention Terms Calculation Agent City: Business Days: London If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London & TARGET GBP: London JPY: London & Tokyo CHF: London & Zurich Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Not Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Buyer Applicable

Restructuring Multiple Holder Obligation Default Requirement: Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Borrowed Money None

Obligation(s):

Obligation Category: Obligation Characteristics:

Deliverable Obligations:

Exclude Accrued Interest Deliverable Obligation Category: Deliverable Obligation Characteristics: Bond or Loan Not Subordinated Specified Currency:

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Standard Currencies

Specified

Consent Required Loan Not Contingent Assignable Loan Maximum years Maturity 30

Transferable Not Bearer

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Annex 3 to the Reference Swap: Japan Corporate Convention Terms

Calculation Agent City: Business Days:

Tokyo If the Floating Rate Payer Calculation Amount is denominated in JPY: London, New York & Tokyo USD: London, New York & Tokyo EUR: London, New York, Tokyo & TARGET

Business Day Convention: All Guarantees: Conditions to Settlement:

Following Applicable Credit Event Notice Section 3.9 of Definitions shall be excluded Section 3.3 of Definitions shall be amended by replacing Greenwich Mean Time with Tokyo Time Notifying Parties: Notice of Publicly Available Information: Buyer Applicable

Credit Event:

Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Not Applicable If the Floating Rate Payer Calculation Amount is in JPY, JPY 100,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. In all other cases, USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay.

Restructuring Multiple Holder Obligation: Default Requirement: Not Applicable If the Floating Rate Payer Calculation Amount is in JPY, JPY 1,000,000,000 or its equivalent in the relevant Obligation

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Currency as of the occurrence of the relevant Credit Event. In all other cases, USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Obligation(s): Obligation Category: Obligation Characteristics: Deliverable Obligations: Exclude Accrued Interest Deliverable Obligation Category: Deliverable Obligation Characteristics: Bond or Loan Not Subordinated Specified Currency: Standard Currencies Not Contingent Consent Required Loan Assignable Loan Transferable Maximum 30 years Not Bearer Maturity: Specified Borrowed Money Not Subordinated

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Annex 4 to the Reference Swap: Singapore Corporate Convention Terms Calculation Agent City: Business Days: London If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York & Singapore EUR: London, New York, TARGET & Singapore Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Not Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Buyer Applicable

Restructuring Multiple Holder Obligation: Default Requirement: Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Bond or Loan Not Subordinated Specified Currency: Standard Specified Currencies plus SGD Not Sovereign Lender Deliverable Obligations: Exclude Accrued Interest Deliverable Obligation Category: Deliverable Obligation Characteristics: Bond or Loan Not Subordinated

Obligation(s):

Obligation Category: Obligation Characteristics:

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Specified Currency: Standard Specified Currencies plus SGD Not Sovereign Lender Not Contingent Assignable Loan Transferable Maximum 30 years Not Bearer Maturity:

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Annex 5 to the Reference Swap: North American Corporate Convention Terms Calculation Agent City: Business Days: New York If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET GBP: London JPY: London & Tokyo CHF: London & Zurich Business Day Convention: All Guarantees: Conditions to Settlement: Following Not Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Not Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay Buyer Applicable

Restructuring, if specified as applicable in the relevant confirmation Restructuring Maturity Applicable Limitation and Fully Transferable Obligation: Multiple Holder Obligation: Default Requirement: Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Borrowed Money None

Obligation(s):

Obligation Category: Obligation Characteristics:

Deliverable Obligations:

Exclude Accrued Interest

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Deliverable Obligation Category: Deliverable Obligation Characteristics:

Bond or Loan Not Subordinated Specified Currency: Standard Specified Currencies Not Contingent Assignable Loan Consent Required Loan Transferable Maximum 30 year Not Bearer Maturity:

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Annex 6 to the Reference Swap: Australia Corporate Standard Terms Calculation Agent City: Business Days: New York If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York & Sydney AUD: London, New York & Sydney EUR: London, New York, TARGET & Sydney Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Not Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay Buyer Applicable

Restructuring Restructuring Maturity Limitation and Fully Transferable Obligation: Multiple Holder Obligation: Default Requirement: Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Applicable

Obligation(s):

Obligation Category: Obligation Characteristics:

Borrowed Money None

Deliverable Obligations:

Exclude Accrued Interest Deliverable Obligation Category: Bond or Loan

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Deliverable Obligation Characteristics:

Not Subordinated Specified Currency: Standard Specified Currencies plus AUD Not Contingent Assignable Loan Consent Required Loan Transferable Maximum 30 years Not Bearer Maturity:

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Annex 7 to the Reference Swap: Emerging European Corporate Convention Terms Calculation Agent City: Business Days: London If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York EUR: London, Target Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Buyer Applicable

Obligation Acceleration Repudiation/Moratorium Restructuring Multiple Holder Obligation: a) Not Applicable with respect to Obligation Category Bonds b) Applicable with respect to Obligation Category Loans Default Requirement: USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Bond or Loan Not Subordinated Not Domestic Currency Not Domestic Law

Obligation(s):

Obligation Category: Obligation Characteristics:

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Not Domestic Issuance Deliverable Obligations: Exclude Accrued Interest Deliverable Obligation Category: Deliverable Obligation Characteristics: Bond or Loan Not Subordinated Specified Currency: Standard Specified Currencies Not Domestic Law Not Domestic Issuance Not Contingent Transferable Not Bearer Assignable Loan Consent Required Loan

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Annex 8 to the Reference Swap: North American Insurance Convention Terms Calculation Agent City: Business Days: New York If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET GBP: London JPY: London & Tokyo CHF: London & Zurich Business Day Convention: All Guarantees: Conditions to Settlement: Following Not Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Not Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay Buyer Applicable

Restructuring, if specified as applicable in the relevant confirmation Restructuring Maturity Applicable Limitation and Fully Transferable Obligation: Multiple Holder Obligation: Default Requirement: Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Borrowed Money None

Obligation(s):

Obligation Category: Obligation Characteristics:

Deliverable Obligations:

Exclude Accrued Interest

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Deliverable Obligation Category: Deliverable Obligation Characteristics:

Bond or Loan Not Subordinated Specified Currency: Standard Specified Currencies Not Contingent Assignable Loan Consent Required Loan Transferable Maximum 30 years Not Bearer Maturity:

Additional Provisions :

Additional Provisions for Monoline Insurer reference entities shall apply

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Annex 9 to the Reference Swap: Latin America Corporate Bond Convention Terms Calculation Agent City: Business Days: London If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Failure to Pay Grace Period Extension: Payment Requirement: Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Buyer Applicable

Bankruptcy Obligation Acceleration Repudiation/Moratorium Restructuring Multiple Holder Obligation: Default Requirement: Not Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Bond Not Subordinated Not Domestic Currency Not Domestic Law Not Domestic Issuance Deliverable Obligations: Exclude Accrued Interest Deliverable Obligation Category:
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Obligation Category: Obligation Characteristics:

Bond

139

Deliverable Obligation Characteristics:

Not Subordinated Specified Currency: Standard Currencies Specified

Not Domestic Law Not Domestic Issuance Not Contingent Transferable Not Bearer

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Annex 10 to the Reference Swap: Latin America Corporate Bond or Loan Convention Terms Calculation Agent City: Business Days: London If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Failure to Pay Grace Period Extension: Payment Requirement: Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Buyer Applicable

Bankruptcy Obligation Acceleration Repudiation/Moratorium Restructuring Multiple Holder Obligation: Default Requirement: Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Bond or Loan Not Subordinated Not Sovereign Lender Not Domestic Currency Not Domestic Law Not Domestic Issuance

Obligation(s):

Obligation Category: Obligation Characteristics:

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Deliverable Obligations:

Exclude Accrued Interest Deliverable Obligation Category: Deliverable Obligation Characteristics: Bond or Loan Not Subordinated Specified Currency Not Sovereign Lender Not Domestic Law Not Contingent Not Domestic Issuance Assignable Loan Consent Required Loan Transferrable Not Bearer

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Annex 11 to the Reference Swap: New Zealand Corporate Convention Terms Calculation Agent City: Business Days: New York If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York & Auckland AUD: London, New York, Sydney & Auckland EUR: London, New York, TARGET & Auckland NZD: London, New York & Auckland Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Not Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay Buyer Applicable

Restructuring Restructuring Maturity Limitation and Fully Transferable Obligation: Multiple Holder Obligation: Default Requirement: Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Borrowed Money None Applicable

Obligation(s):

Obligation Category: Obligation Characteristics:

Deliverable Obligations:

Exclude Accrued Interest Deliverable Obligation Category: Bond or Loan

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Deliverable Obligation Characteristics:

Not Subordinated Specified Currency: Standard Specified Currencies plus NZD Not Contingent Assignable Loan Consent Required Loan Transferable Maximum 30 years Not Bearer Maturity:

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Annex 12 to the Reference Swap: Asia Corporate Convention Terms Calculation Agent City: Business Days: London If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London, New York & TARGET Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Bankruptcy Failure to Pay Grace Period Extension: Payment Requirement: Not Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Buyer Applicable

Restructuring Multiple Holder Obligation: Default Requirement: Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Bond or Loan Not Subordinated Not Sovereign Lender Not Domestic Currency Not Domestic Issuance Not Domestic Law Deliverable Obligations: Exclude Accrued Interest Deliverable Obligation Category: Bond or Loan

Obligation(s):

Obligation Category: Obligation Characteristics:

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Deliverable Obligation Characteristics:

Not Subordinated Specified Standard Currency Currency: Specified

Not Sovereign Lender Not Domestic Law Not Contingent Not Domestic Issuance Assignable Loan Transferable Maximum Maturity: 30 years Not Bearer

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Annex 13 to the Reference Swap: Latin America Sovereign Convention Terms Calculation Agent City: Business Days: London If the Floating Rate Payer Calculation Amount is denominated in USD: London, New York EUR: London, New York & TARGET Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Failure to Pay Grace Period Extension: Payment Requirement: Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Buyer Applicable

Obligation Acceleration Repudiation/Moratorium Restructuring Multiple Holder Obligation: Default Requirement: Not Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Bond Not Subordinated Not Domestic Currency Not Domestic Law Not Domestic Issuance Deliverable Obligations: Exclude Accrued Interest Deliverable Obligation Category: Bond

Obligation(s):

Obligation Category: Obligation Characteristics:

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Deliverable Obligation Characteristics:

Not Subordinated Specified Currency: Standard Specified Currencies Not Domestic Law Not Domestic Issuance Not Contingent Transferable Not Bearer

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Annex 14 to the Reference Swap: Central and Eastern European and Middle East Sovereign Convention Terms Calculation Agent City: Business Days: London If the Floating Rate Payer Calculation Amount is denominated in USD: London & New York EUR: London & TARGET GBP: London Business Day Convention: All Guarantees: Conditions to Settlement: Following Applicable Credit Event Notice Notifying Parties: Notice of Publicly Available Information: Credit Event: Failure to Pay Grace Period Extension: Payment Requirement: Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Buyer Applicable

Obligation Acceleration Repudiation/Moratorium Restructuring Multiple Holder Obligation: Default Requirement: Not Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Bond Not Subordinated Not Domestic Currency Not Domestic Law Not Domestic Issuance Deliverable Obligations: Exclude Accrued Interest Deliverable Obligation Category: Bond

Obligation(s):

Obligation Category: Obligation Characteristics:

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Deliverable Obligation Characteristics:

Not Subordinated Specified Currency: Standard Specified Currencies Not Domestic Law Not Contingent Not Domestic Issuance Transferable Not Bearer

Additional Provisions :

Applicable if the Reference Entity is the Russian Federation or the Republic of Hungary, otherwise Not Applicable

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Schedule 2 Spread Trigger Table

Main Trigger Matrix (Spreads in bps) Years to Maturity
10 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% 22.0% 23.0% 24.0% 25.0% 26.0% 27.0% 28.0% 29.0% 30.0% >30.0% 479 471 463 455 448 440 433 426 419 411 404 397 389 382 375 368 361 354 347 340 334 327 320 314 307 300 293 284 275 261 242 unwind 9 509 501 493 485 477 469 461 453 446 438 431 423 415 408 400 393 385 378 371 364 357 349 342 335 328 320 313 303 293 277 256 unwind 8 548 539 530 522 513 505 497 489 481 473 465 457 449 441 433 425 417 409 401 394 386 378 370 362 354 345 337 326 315 298 275 unwind 7 597 588 578 569 560 552 543 535 526 518 509 500 492 483 474 466 457 449 440 431 423 414 405 396 387 378 368 356 343 324 300 unwind 6 665 655 644 634 624 615 605 596 586 577 568 559 549 539 530 520 510 501 491 481 471 461 451 441 431 420 409 395 381 361 333 unwind 5 764 751 739 727 716 705 694 683 672 662 651 640 629 618 607 596 585 573 562 550 539 527 516 504 492 480 467 452 436 412 381 unwind 4 913 898 884 869 855 842 829 815 802 789 776 762 749 736 722 709 695 681 668 654 640 627 613 599 585 570 555 537 519 490 453 unwind 3 1,166 1,147 1,128 1,110 1,092 1,074 1,056 1,038 1,021 1,003 986 968 950 933 915 897 880 862 845 827 810 793 776 758 741 722 703 681 658 623 576 unwind 2 1,672 1,645 1,618 1,592 1,565 1,540 1,514 1,488 1,461 1,435 1,409 1,383 1,356 1,330 1,304 1,278 1,252 1,227 1,201 1,176 1,151 1,126 1,102 1,078 1,053 1,029 1,003 972 940 891 825 unwind 1 3,014 3,000 2,988 2,975 2,963 2,951 2,938 2,922 2,905 2,884 2,857 2,807 2,713 2,532 2,481 2,430 2,379 2,330 2,280 2,232 2,184 2,138 2,092 2,047 2,003 1,958 1,911 1,853 1,792 1,714 1,609 unwind 0 16,612 16,612 16,486 14,489 12,066 10,475 9,523 9,062 8,864 8,808 8,823 8,869 8,921 8,983 9,047 9,115 9,187 9,276 9,377 9,492 9,617 9,780 9,954 10,134 10,256 10,045 9,148 8,215 7,934 7,529 6,390 unwind

Losses

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ANNEX 4 INFORMATION CONCERNING THE INITIAL BOND SECURITIES The information in this Annex has been extracted from the sources described below (together, the Source Material). The Issuer takes responsibility only for the accuracy of the extraction and/or reproduction of such information and has made no independent investigation or verification thereof. The delivery of this Prospectus at any time does not imply any representation on the part of the Issuer, the Arranger, the Trustee, the Agents or any other person that any information contained therein is correct either at the date of this Prospectus or at any time subsequent to the date hereof. Such information is qualified in its entirety by the Source Material. The information relating to the undertaking/obligor has been accurately reproduced from information published by the undertaking/obligor or information available from the Bloomberg Information Service. So far as the Issuer is aware and is able to ascertain from information published by the undertaking/obligor and/or the Bloomberg Information Service no facts have been omitted which would render the reproduced information misleading. Purchasers of Notes should conduct such independent investigation and analysis regarding the Securities and all other assets from time to time comprising the Securities and the issuer(s) of the Securities and all other obligors in respect of the Securities from time to time as they deem appropriate to evaluate the merits and risks of an investment in the Notes. The Issuer and the Arranger disclaim any responsibility to advise purchasers of Notes of the risks and investment considerations associated with the purchase of the Notes as they may exist at the date hereof or from time to time thereafter. Part A Information concerning the Bank of Scotland Securities Definitions set out in this part of this Annex apply to this part of this Annex only. Terms used in this part of this Annex but not otherwise defined in this Prospectus shall have the meanings given to them in the documents of information listed below. The information contained in this part of this Annex has been extracted and/or reproduced from the following: (i) the Offering Document (as defined below). Please note that the Offering Document does not form part of this Prospectus; and (ii) information available from the Bloomberg Information Service. Copies of the Offering Document together with financial statements (if any), of the Securities Issuer are available for inspection and collection during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the registered office of the Issuer, at the specified office of the Paying Agent in Ireland for so long as any of the Notes shall remain outstanding and, for so long as the Notes remain listed on the Irish Stock Exchange, at the office of the Listing Agent specified on the back of this Prospectus (but only, in respect of each such document, for so long as the relevant assets constitute Securities for the Notes). The attention of prospective purchasers of Notes is drawn to Investment Considerations and Risk Factors herein and to the Offering Document. Offering Document: Securities Issuer: Information Memorandum dated 7 May 2008 Bank of Scotland plc acting through its Treasury Division, London office

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Address:

33 Old Broad Street London EC2N 1HZ United Kingdom

Country of incorporation: Nature of business:

Scotland The Securities Issuer is engaged in a range of banking, insurance broking, financial services and finance-related activities throughout the UK and internationally. USD 95,190,000 in principal amount of the 2.30 per cent. notes due 26 August 2008 issued by Bank of Scotland plc pursuant to its EuroCommercial Paper and Certificate of Deposit Programme The Securities are governed by, and construed in accordance with, English law. Luxembourg Stock Exchange XS0380055375 The Securities were issued pursuant to the EUR 25,000,000,000 Euro-Commercial Paper and Certificate of Deposit Programme of which the Securities Issuer is a party to. Part B

Nature of the Securities:

Legal jurisdiction to which the assets are subject: Exchange on which securities of the Securities Issuer are listed: ISIN: Method of origination of the assets:

Information concerning the Coperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) Securities Definitions set out in this part of this Annex apply to this part of this Annex only. Terms used in this part of this Annex but not otherwise defined in this Prospectus shall have the meanings given to them in the documents of information listed below. The information contained in this part of this Annex has been extracted and/or reproduced from the following: (i) the Offering Document (as defined below). Please note that the Offering Document does not form part of this Prospectus; and information available from the Bloomberg Information Service.

(ii)

Copies of the Offering Document together with financial statements (if any), of the Securities Issuer are available for inspection and collection during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the registered office of the Issuer, at the specified office of the Paying Agent in Ireland for so long as any of the Notes shall remain outstanding and, for so long as the Notes remain listed on the Irish Stock Exchange, at the office of the Listing Agent specified on the back of this Prospectus (but only, in respect of each such document, for so long as the relevant assets constitute Securities for the Notes). The attention of prospective purchasers of Notes is drawn to Investment Considerations and Risk Factors herein and to the Offering Document.

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Offering Document: Securities Issuer:

Information Memorandum dated 29 January 2007 Coperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) Croeselaan 18 3521 CB Utrecht The Netherlands

Address:

Country of incorporation: Nature of business:

The Netherlands The Securities Issuer is a cooperative entity formed primarily as a result of the merger of two banking cooperative entities in The Netherlands in December 1972. The Securities Issuer functions within the Rabobank Group as a bankers bank which provides service to the local banks in the form of support, advice and guidance. The Securities Issuer also provides supervision of the local Rabobanks pursuant to the provisions of the Financial Supervision Act. The Securities Issuer also operates its own banking business both complementary to and independent of the business of the local Rabobanks and is the holding company of various specialised subsidiaries. USD 95,193,000 in principal amount of the 2.29 per cent. notes due 26 August 2008 issued by Coperative Central Raiffeisen Boerenleenbank B.A. (Rabobank Nederland) pursuant to its EuroCommercial Paper and Certificate of Deposit Programme Laws of The Netherlands Luxembourg Stock Exchange XS0380055532 The Securities were issued pursuant to the Securities Issuers Euro 25,000,000,000 EuroCommercial Paper and Certificate of Deposit Programme.

Nature of the Securities:

Legal jurisdiction to which the assets are subject: Exchange on which securities of the Securities Issuer are listed: ISIN: Method of origination of the assets:

Part C Information concerning the Deutsche Bank Aktiengesellschaft Securities Definitions set out in this part of this Annex apply to this part of this Annex only. Terms used in this part of this Annex but not otherwise defined in this Prospectus shall have the meanings given to them in the documents of information listed below. The information contained in this part of this Annex has been extracted and/or reproduced from the following:

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(i)

the Offering Document (as defined below). Please note that the Offering Document does not form part of this Prospectus; information available from the Bloomberg Information Service; and information published by the Securities Issuer on its web site (http://www.db.com). Please note that this web site does not form part of this securities annex.

(ii) (iii)

Copies of the Offering Document together with financial statements (if any), of the Securities Issuer are available for inspection and collection during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the registered office of the Issuer, at the specified office of the Paying Agent in Ireland for so long as any of the Notes shall remain outstanding and, for so long as the Notes remain listed on the Irish Stock Exchange, at the office of the Listing Agent specified on the back of this Prospectus (but only, in respect of each such document, for so long as the relevant assets constitute Securities for the Notes). The attention of prospective purchasers of Notes is drawn to Investment Considerations and Risk Factors herein and to the Offering Document.. Offering Document: Securities Issuer: Address: Information Memorandum dated 11 May 2006 Deutsche Bank Aktiengesellschaft Taunusanlage 12 60262 Frankfurt am Main Germany Country of incorporation: Nature of business: Germany The Securities Issuer together with all entities in which it has a controlling financial interest is a global provider of a full range of corporate and investment banking, private clients and asset management products and services. USD 95,198,000 in principal amount of the 2.35 per cent. notes due 26 August 2008 issued by Deutsche Bank Aktiengesellschaft pursuant to its Commercial Paper Programme German law Luxembourg Stock Exchange XS0380111541 The Securities were issued pursuant to the Securities Issuers Euro 10,000,000,000 Commercial Paper Programme.

Nature of the Securities:

Legal jurisdiction to which the assets are subject: Exchange on which securities of the Securities Issuer are listed: ISIN: Method of origination of the assets:

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REGISTERED OFFICE OF THE ISSUER 5 Harbourmaster Place Dublin 1 Ireland TRUSTEE Deutsche Trustee Company Limited Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom

ISSUING AND PAYING AGENT Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom

PAYING AGENT Deutsche International Corporate Services (Ireland) Limited 5 Harbourmaster Place Dublin 1 Ireland

LEGAL ADVISERS to the Arranger and the Trustee as to English law: Linklaters LLP One Silk Street London EC2Y 8HQ United Kingdom to the Issuer as to Irish law: Listing Counsel:

Matheson Ormsby Prentice 70 Sir John Rogersons Quay Dublin 2 Ireland

Gide Loyrette Nouel LLP CityPoint 1 Ropemaker Street London EC2Y 9HT United Kingdom

LISTING AGENT Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom

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