BASE PROSPECTUS DATED 15 NOVEMBER 2006(Registered by the Monetary Authority of Singapore on 15 November 2006)

This document is important. If you are in any doubt as to the action you should take, you should consultyour legal, financial, tax, or other professional adviser.

JUBILEE GLOBAL FINANCE LIMITED(incorporated with limited liability in the Cayman Islands)

U.S.$8,000,000,000 RETAIL SECURED NOTE PROGRAMME

Under the U.S.$8,000,000,000 Retail Secured Note Programme (the “Programme”) described in this Base Prospectus,Jubilee Global Finance Limited (the “Issuer”) may from time to time incur indebtedness up to a maximum amount ofU.S.$8,000,000,000 in the form of structured notes (“Notes”), which will be issued in Series (as defined herein in thesection “Summary of the Retail Secured Note Programme”) to the public in Singapore. Notes will be issued on the termsset out herein, and as described in a pricing statement to be issued by the Issuer in connection with each issue of a Seriesof Notes (each, a “Pricing Statement”). Potential investors should read this Base Prospectus together with the relevantPricing Statement in order to understand the terms and conditions of each Series of Notes.

Merrill Lynch (Singapore) Pte. Ltd. is the Programme Arranger of the Programme (the “Programme Arranger”).However, prospective investors should note that the Notes offered under the Programme represent the sole obligationsof the Issuer and do not represent the obligations of, or interests in, Merrill Lynch (as defined herein). The Hongkong andShanghai Banking Corporation Limited is the issuing and paying agent of the Programme (the “Issuing and PayingAgent”).

Each Series of Notes will be secured by a charge on and/or assignment of and/or other security interest over or in respectof certain transferable securities (the “Securities”) and may also be secured by an assignment of the Issuer’s rights, titleand interest under an interest rate and/or currency exchange agreement and/or other derivatives transactions (includingany applicable guarantee, a “Swap”), a contract under which the Issuer may agree to buy or sell securities or enter intoother contractual relations (a “Securities Agreement”), a credit support document (a “Credit Support Document”),together with such additional security, if any, as may be described in the relevant Pricing Statement. The Issuer’s rights,title and interest in and under any Securities, each Swap, each Securities Agreement and each Credit Support Documentare referred to in this Base Prospectus as “Collateral”. The Notes will also be secured by a charge in favour of theTrustee over (a) all sums held by the Issuing and Paying Agent and/or the Custodian (as defined herein) to meetpayments due in respect of any Obligation (as defined in the Master Conditions) and (b) any sums received by the Issuingand Paying Agent under any Credit Support Document, Swap and/or Securities Agreement, by an assignment of theIssuer’s rights, title and interest against the Custodian, to the extent that they relate to the Securities and by anassignment of the Issuer’s rights under the Agency Agreement (as defined herein). All the Issuer’s assets subject to theSecurity (as defined herein) constituted by each Supplemental Trust Deed (as defined herein) are referred to in this BaseProspectus as “Mortgaged Property”. The obligations of the Issuer under a Swap, a Securities Agreement and/or aContract (as defined in the Master Conditions), as the case may be, together with claims (if any) by the Custodian and/orthe Issuing and Paying Agent in respect of payments made on behalf of the Issuer, will also be secured by certain assetscomprised in the Mortgaged Property. Claims against the Issuer by holders of the Notes (the “Noteholders”) of aparticular Series and, if applicable, the Swap Counterparty (as defined herein), Counterparty (as defined in the MasterConditions), Beneficiary (as defined in the Master Conditions), the Custodian and the Issuing and Paying Agent, will belimited to the Mortgaged Property applicable to that Series.

A copy of this Base Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the“Authority”). The Authority assumes no responsibility for the contents of this Base Prospectus. Registration of this BaseProspectus by the Authority does not imply that the Securities and Futures Act (as defined herein), or any other legal orregulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of thestructured notes being offered for investment. No application has been or will be made to list the Notes on any securitiesexchange. The Notes may or may not be rated by any Rating Agency (as defined herein).

Prospective investors in the Notes should note that there are many different types of notes or bonds in themarket place, many of which will have unique and distinctive features. Not all notes or bonds are principalprotected. The relevant Pricing Statement to be issued by the Issuer in respect of each Series of Notes willindicate whether the relevant Series of Notes are principal protected. Notes which are sold or redeemed beforetheir maturity date will be subject to unwinding or other transaction costs, and the amount received byprospective investors may be lower than the initial amount invested.

The purchase of any Notes to be issued under the Programme involves certain risks. You should ensure that youunderstand the nature of the Notes, in particular, the section headed “Risk Factors”, and should carefully studythe matters set out in the relevant Pricing Statement, before you invest in the Notes. There will be no guaranteefrom any entity to you that you will recover any amount payable under the Notes and you could lose all or asubstantial part of your investment in the Notes. No Notes shall be issued or allocated on the basis of this BaseProspectus later than 24 months after the date of registration of this Base Prospectus.

Programme Arranger and Dealer

MERRILL LYNCH (SINGAPORE) PTE. LTD.

An offering of Notes under this Base Prospectus will not be underwritten. Any such offering of Notes may not proceed if aminimum principal amount of the Notes, to be determined by the Programme Arranger in its sole discretion, is not fully subscribedor purchased. In such event, all application or subscription moneys will be returned in full (without interest or any share of revenueor other benefit arising therefrom).

The Notes will solely be obligations of the Issuer and will not be guaranteed or insured by, or be the responsibility of, any otherentity. While the Swap Guarantor (as defined herein) may execute Swap Guarantees (as defined herein) in connection with eachSeries of Notes, such guarantees are solely to guarantee the payment obligations of the Swap Counterparty (as defined herein)under the Swap Agreement (as defined herein). The Notes will not be obligations of, and will not be guaranteed or insured by,any of the Transaction Participants (as defined herein), in particular the Swap Guarantor. The Notes do not represent depositswith or other liabilities of the Trustee (as defined herein), the Programme Arranger or any of their respective affiliates or relatedcorporations. The Issuer is not in the business of deposit-taking and does not hold itself out as accepting deposits on a day today basis nor will it accept deposits on a day to day basis. None of the Programme Arranger, the Swap Counterparty, the SwapGuarantor, the Calculation Agent, the Market Agent, or any of their affiliates (together, “Merrill Lynch”) in any way stand behindthe capital value or performance of the Notes, or of the assets held by the Issuer. The obligations of Merrill Lynch to the Issuerand/or the Noteholders are limited to that expressed in its written agreement(s) with the Issuer.

The Issuer has not been rated by any Rating Agency. The Securities may or may not be rated by any Rating Agency. Please seethe section headed “Description of the Swap Guarantor” for information on the credit rating of the Swap Guarantor. A credit ratingfor the Swap Guarantor or where applicable, the Securities or the issuer of such Securities is not a reflection of the credit ratingof the Notes. None of Moody’s (as defined herein), Fitch (as defined herein) and/or Standard & Poor’s (as defined herein) has,where applicable and relevant, consented to the specification of their credit ratings where it may appear in this Base Prospectus.A credit rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawalat any time by any Rating Agency. A suspension, reduction or withdrawal of any of the ratings may adversely affect the marketprice of the Notes. Neither the Issuer nor the Programme Arranger makes any representation as to the accuracy or reliability ofthe credit ratings save that the Issuer and the Programme Arranger have taken reasonable care to correctly extract and/orreproduce such information in its proper form and context. More information on credit ratings can be found at the websites of Fitchat www.fitchratings.com, Standard & Poor’s at www.standardandpoors.com and Moody’s at www.moodys.com. Neither the Issuernor the Programme Arranger has conducted or will be conducting independent investigations on the Reference Assets (asdefined herein) in respect of (i) any legal or regulatory provisions which may materially affect the performance of the ReferenceAssets, (ii) any significant representations and warranties made concerning the Reference Assets by any party and the remediesavailable if such representations and warranties are breached, (iii) any material cross-default provisions relating to the ReferenceAssets, (iv) the nature and extent of exposure of the Reference Assets to an entity which accounts for 10% or more of the valueof the pool of Reference Assets and such Reference Assets relate to the securities or performance of such entity and (v) thematerial terms or agreements involving the Reference Assets. Neither the Issuer nor the Programme Arranger makes anyrepresentations as to the Reference Assets.

This Base Prospectus is not and does not purport to be investment advice. You should conduct such independent investigationand analysis regarding the Programme and any Notes to be issued under it and the other assets on which the obligations of theIssuer under any Notes may be secured (including, without limitation, in respect of the issuer and any guarantor thereof) as youdeem appropriate. You should make an investment only after you have determined that such investment is suitable for yourfinancial investment objectives.

This Base Prospectus is accurate as at the date stated on the cover. You must not assume that information in this BaseProspectus is accurate at any time after the date of this Base Prospectus. If the information in this Base Prospectus needs tobe updated at the time a Pricing Statement is registered, the Issuer will provide such updates in either a supplemental BaseProspectus or replacement Base Prospectus and lodge it with the Authority. The latest Pricing Statement will tell you whethersuch supplements or replacements have been lodged and published. If we do lodge and publish such supplements orreplacements to the Base Prospectus, you should read this Base Prospectus as including the supplement or, as the case maybe, replacement, starting from the date of such supplement or replacement, wherever reference is made to this Base Prospectus.

Each Series of Notes in bearer form will be represented on issue by a temporary global note in bearer form (each a “TemporaryGlobal Note”) or a permanent global note in bearer form (each a “Permanent Global Note”). Notes in registered form will berepresented by registered certificates (each a “Certificate”). Global Notes and Global Certificates (both as defined herein) maybe deposited on the Issue Date with The Central Depository (Pte) Limited (“CDP”), subject to any restrictions or conditions whichmay be applicable (as specified in the relevant Pricing Statement), or a common depositary on behalf of Euroclear Bank S.A./N.V.(“Euroclear”) and Clearstream Banking, societe anonyme (“Clearstream, Luxembourg”) (each a “clearing system”). Theprovisions governing the exchange of interests in Global Notes and Global Certificates are described in the section “Summaryof Provisions Relating to the Notes while in Global Form”.

Throughout this Base Prospectus, the term “Noteholder” is used to mean the investors in the Notes. Prospective investorsshould be aware that for the purposes of the terms and conditions of the Notes, where the Note is a Global Note or GlobalCertificate held by CDP or through Euroclear or Clearstream, Luxembourg, the term “Noteholders” shall mean the personsshown in the records of CDP, Euroclear or Clearstream, Luxembourg as a holder of a principal amount of the Notes other thanwith respect to the payment of principal, interest and any other amounts in respect of the Notes, for which purpose the bearerof the Global Note or, as the case may be, the person shown in the Register (as defined herein) at the date of business on theRecord Date (as defined in the section “Master Terms and Conditions of the Notes”) shall be treated as the holder of such Notes.

You should contact the Distributors (as defined herein) whose addresses will be set out in the relevant PricingStatement if you wish to purchase any Notes. See the section “Subscription Procedures” for further details on how toapply for the Notes.

NOTICE

Each of the Issuer, its directors and the Programme Arranger, collectively and individually accept fullresponsibility for the accuracy of the information contained in this Base Prospectus. They confirm,having made all reasonable enquiries, that to the best of their knowledge and belief the facts stated andthe opinions expressed in this Base Prospectus are fair and accurate in all material respects as at thedate of this Base Prospectus and that there are no material facts the omission of which would make anystatement in this Base Prospectus misleading. The Programme Arranger has given its consent to theissue of this Base Prospectus with the inclusion herein of its name and all references thereto, in theform and context in which it appears in this Base Prospectus and the relevant Pricing Statements.

Merrill Lynch & Co., Inc. accepts full responsibility for the accuracy of the information relating to it andto its group companies contained in this Base Prospectus. It confirms, having made all reasonableenquiries, that to the best of its knowledge and belief, this Base Prospectus contains no untruestatement relating to it or to its group companies (including a statement which is misleading in the formand context in which it is included and including a material omission).

HSBC Institutional Trust Services (Singapore) Limited has not separately verified the informationcontained herein other than information in respect of itself in its capacity as Trustee and The Hongkongand Shanghai Banking Corporation Limited has not separately verified the information contained hereinother than information in respect of itself in its capacities as Issuing and Paying Agent, Paying Agent,Transfer Agent, Registrar and Custodian. Accordingly, no representation, warranty or undertaking,express or implied, is made and no responsibility or liability is accepted by HSBC Institutional TrustServices (Singapore) Limited in its capacity as Trustee and The Hongkong and Shanghai BankingCorporation Limited in its capacities as Issuing and Paying Agent, Paying Agent, Transfer Agent,Registrar and Custodian as to the accuracy or completeness of the information contained herein, or anyfurther information supplied in relation to or in connection with the Programme or any of the Notes ortheir distribution, other than information in respect of itself. The statements made in this paragraph arewithout prejudice to the respective responsibilities of the Issuer, its directors and the ProgrammeArranger.

The Notes are offered to the public in Singapore solely on the basis of the information contained andrepresentations made in this Base Prospectus, the relevant Pricing Statement and any supplementthereto or replacement thereof. No person has been authorised to give any information or to make anyrepresentation other than those contained in this Base Prospectus or the relevant Pricing Statement inconnection with the issue and offering of the Notes and, if given or made, such information orrepresentation must not be relied upon as having been authorised by any of the Issuer, its directors, theProgramme Arranger, the Dealer, the Swap Guarantor, the Swap Counterparty, the Trustee, TheHongkong and Shanghai Banking Corporation Limited in its capacities as Issuing and Paying Agent,Paying Agent, Transfer Agent, Registrar and Custodian and the Distributors (as defined herein) or theirrespective affiliates (together, other than the Issuer and its directors, the “Transaction Participants”)nor shall any Transaction Participant be responsible for any losses arising from such information orrepresentation.

Neither the delivery of this Base Prospectus and/or the relevant Pricing Statement nor any sale madein connection therewith shall, under any circumstances, create any implication that there has been nochange in the affairs of the Issuer and Merrill Lynch since the date hereof or the date of the relevantPricing Statement or that there has been no adverse change in the financial position of the Issuer andMerrill Lynch since the date hereof or the date of the relevant Pricing Statement or that any otherinformation supplied in connection with the Notes is correct as of any time subsequent to the date onwhich it is supplied or, if different, the date indicated in the document containing the same.Notwithstanding the above, the Securities and Futures Act provides that if the Issuer becomes awareof (a) a false or misleading statement in this Base Prospectus and/or relevant Pricing Statement, (b) anomission from this Base Prospectus and/or relevant Pricing Statement of any information that shouldhave been included pursuant to the Securities and Futures Act, (c) a new circumstance that has arisen

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since this Base Prospectus and/or relevant Pricing Statement has been lodged with the Authority andwould have been required to be included pursuant to the Securities and Futures Act if suchcircumstance had arisen before this Base Prospectus and/or relevant Pricing Statement was lodgedwith the Authority, and such statement, omission or circumstance is materially adverse from the pointof view of an investor, the Issuer may lodge a supplementary or replacement Base Prospectus and/orPricing Statement with the Authority. The Securities and Futures Act also provides that before theexpiration of 24 months from the date of registration of this Base Prospectus, the Issuer may, if itintends to update any information in this Base Prospectus or include new information in this BaseProspectus, lodge a supplementary or replacement Base Prospectus with the Authority, provided thatno offer of any Series of Notes is subsisting at the time of lodgment.

Merrill Lynch may, subject to compliance with applicable laws and regulations, from time to time, asprincipal or agent, have positions in, buy or sell, or make a market in any securities, currencies,financial instruments or other assets underlying the Notes. Merrill Lynch may provide investmentbanking and other services to, and/or have officers who serve as directors of, the Reference Assets(where such Reference Assets are entities) referred to in the relevant Pricing Statement. Merrill Lynchmay pay or receive brokerage or other fees in connection with the Notes. Merrill Lynch’s hedgingactivities related to the Notes may have an impact on the price of the underlying assets and may affectthe likelihood that any relevant barrier is crossed.

Neither this Base Prospectus nor any further information supplied pursuant to the terms of theProgramme or the Notes are intended to provide the basis of any credit or other evaluation and shouldnot be considered as investment advice or a recommendation by or on behalf of the Issuer, its directorsand/or the Transaction Participants that any recipient of this Base Prospectus or any further informationsupplied pursuant to the terms of the Programme or any of the Notes should subscribe for or purchaseany of the Notes. Each prospective investor contemplating purchasing any of the Notes should makeits own independent investigation of the financial condition and affairs of the Issuer, and its ownappraisal of the Issuer’s creditworthiness.

The Issuer, its directors and/or the Transaction Participants do not represent that this Base Prospectusmay be lawfully distributed, or that any of the Notes may be lawfully offered, in compliance with anyapplicable registration or other requirements in any jurisdiction other than Singapore or pursuant to anexemption available under any such requirements in any jurisdiction other than Singapore, or assumeany responsibility for facilitating any such distribution or offering. Accordingly, persons into whosepossession this Base Prospectus or any of the Notes come must inform themselves about, andobserve, any such restrictions. In particular, no action has been taken by the Issuer, its directors and/orthe Transaction Participants (save for the registration of this Base Prospectus with the Authority) whichwould permit a public offering of any of the Notes or distribution of this Base Prospectus in anyjurisdiction where action for that purpose is required. Accordingly, none of the Notes may be offered orsold, directly or indirectly, and neither this Base Prospectus nor any relevant Pricing Statement,advertisement or other offering material may be distributed or published in any jurisdiction, exceptunder circumstances that will result in compliance with any applicable laws and regulations.

In particular, the Notes have not been and will not be registered under the United States Securities Actof 1933, as amended (the “Securities Act”) and include Notes in bearer form that are subject to U.S.tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered withinthe United States or to U.S. persons. For a further description of certain restrictions on offers and salesof Notes and on distribution of this Base Prospectus, see the section “Selling Restrictions” below forfurther details.

References to any website in this Base Prospectus is intended to assist prospective investors to accessfurther information relating to the subject as indicated. Prospective investors should conduct such websearches as they deem appropriate and ensure that they are viewing the most up-to-date information.Information appearing on such websites does not form part of this Base Prospectus. None of theProgramme Arranger, the Dealer, the Issuer and its directors accepts any responsibility whatsoever that

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such information, if available, is accurate and/or up-to-date, and no responsibility is accepted in relationto any such information by any person responsible for this Base Prospectus.

None of the Distributors is responsible in any way for ensuring the accuracy of the Prospectuses.

Any action an investor may wish to take against the Issuer in accordance with the terms and conditionsof the Notes will require the cooperation of the Trustee. Investors may have no right of direct actionagainst the Issuer and if such investors maintain investment accounts with their Distributors, suchinvestors will need to rely upon their Distributor or broker to contact the Trustee to take action againstthe Issuer on their behalf in accordance with the terms of the Trust Deed (as defined herein). The termsof business of one Distributor or broker with another may be very different and prospective investorsare advised to understand the terms of business of their Distributor and to ensure they understand thecircumstances in which they may rely upon their Distributor to act on their behalf.

This Base Prospectus should be read and construed in conjunction with the relevant Pricing Statementand any supplements to or replacements of this Base Prospectus. The terms applicable to eachTranche (as defined herein) or Series of the Notes will contain terms applicable to that Tranche orSeries (as the case may be), which will be set out in the relevant Pricing Statement. References in thePricing Statement to “Notes” are to the Notes of one Series only, not to all Notes that may be issuedunder the Programme; details of the relevant Series being shown on the face of the relevant Notes andin the relevant Pricing Statement. This Base Prospectus, the relevant Pricing Statement and anysupplements thereto or replacements thereof shall together comprise the prospectus (the“Prospectus”) for each Tranche or Series of Notes.

This Base Prospectus does not contain the information required by the following paragraphs under theNinth Schedule to the Securities and Futures (Offers of Investments) (Shares and Debentures)Regulations 2005, which shall be published from time to time, where relevant and/or where the Issuerhas not been exempted from disclosing such information, by way of a Pricing Statement in relation toeach public offer of a Series of Notes under the Programme:

(1) Paragraph 1(e) of Part I (the maturity date of such series of Notes being offered);

(2) Paragraph 1 (a), (b), (c), (d), (e), (f), (g) and (h) of Part III (a summary of the main terms of theNotes being offered);

(3) Paragraphs 1 to 5 and 7 of Part IV (information on, amongst others, the offer statistics, the methodof offer and timetable and the manner in which the results of allocation will be made public);

(4) Paragraphs 3 (a) to (d) and 7 of Part V (information on, amongst others, the manner in whichprincipal and interest will be determined);

(5) Paragraphs 2 to 5 and 7 of Part VI (information on the characteristics of the Reference Assets andsignificant exposure to the Reference Assets);

(6) Paragraphs 2 and 5 of Part VIII (information on the offer details and plan of distribution); and

(7) Paragraph 5 (a) and (b), Paragraph 16 (e) and (f) and Paragraph 17 of Part X (information on, (i)a summary of the payment characteristics of the Notes and information on the underlyingsecurities, (ii) the nature of concentration of Reference Assets with the reference counterpartiesand the material terms of the agreements with the reference counterparties providing theReference Assets, and (iii) the pool assets).

In this Base Prospectus and (if applicable) the Pricing Statement, unless otherwise specified or thecontext otherwise requires, references to “U.S. Dollars”, “USD” or “U.S.$” are to the lawful currencyof the United States of America and references to “Singapore Dollars”, “SGD” or “S$” are to thelawful currency of the Republic of Singapore.

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CONTENTS

Page

SUMMARY OF THE RETAIL SECURED NOTE PROGRAMME . . . . . . . . . . . . . . . . . . . . . . 2

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

SUBSCRIPTION PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

MARKET MAKING ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

MERRILL LYNCH EXCHANGE OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

GENERAL INFORMATION ON REFERENCE ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

DESCRIPTION OF THE SECURITY ARRANGEMENTS IN RESPECT OF THE NOTES . . . . 23

DESCRIPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

DESCRIPTION OF THE SWAP AGREEMENT AND THE SWAP GUARANTEE. . . . . . . . . . . 27

DESCRIPTION OF THE SWAP GUARANTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

DESCRIPTION OF THE SWAP COUNTERPARTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

DESCRIPTION OF THE PROGRAMME ARRANGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

THE ISSUING AND PAYING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

SETTLEMENT, CLEARANCE AND CUSTODY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

TAXATION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

SELLING RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

MASTER TERMS AND CONDITIONS OF THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM. . . . . 82

GLOSSARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

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SUMMARY OF THE RETAIL SECURED NOTE PROGRAMME

The following summary does not purport to be complete and is qualified in its entirety by the remainderof this Base Prospectus. To determine the terms and conditions which apply to any Series of Notes, itis necessary to read the terms and conditions of the Notes (see the section “Master Terms andConditions of the Notes” in this Base Prospectus (the “Master Conditions”)) together with the relevantPricing Statement. Words and expressions defined in the section “Master Terms and Conditions of theNotes” below shall have the same meanings in this summary.

Issuer : Jubilee Global Finance Limited, an orphan special purpose companyincorporated in the Cayman Islands with limited liability. As the Issuer is anorphan special purpose company, its shares are legally owned by the ShareTrustee (as defined herein), the ultimate beneficiaries of which are certaincharities.

Description : Retail Secured Note Programme pursuant to which the Issuer may issueNotes on a secured limited recourse basis. The Retail Secured NoteProgramme allows for the issue by the Issuer of up to U.S.$8,000,000,000(or the equivalent in other currencies at the date of issue) in aggregatenominal amount of Notes outstanding at any one time.

Duration : No specified duration or period.

Programme Arranger : Merrill Lynch (Singapore) Pte. Ltd. has acted as the Programme Arranger inarranging the establishment of the Programme and may also provide fromtime to time the Issuer with the proposed terms of each Series. The issue ofeach Series will be subject to the prior approval of the Board of Directors ofthe Issuer. In addition, the Issuer may appoint other persons as localarrangers in respect of one or more particular Series of Notes which may beoffered in countries outside Singapore.

Trustee : HSBC Institutional Trust Services (Singapore) Limited. The Trustee haspower to enforce the rights of the Noteholders under the Notes on behalf ofthe Noteholders.

Registrar : The Hongkong and Shanghai Banking Corporation Limited, unlessotherwise specified in the relevant Pricing Statement.

Issuing and PayingAgent

: The Hongkong and Shanghai Banking Corporation Limited, or such otherparty or parties as set out in the relevant Pricing Statement who isresponsible for payment of interest, principal or redemption amount to theholders of Notes issued in bearer form and certain other administrativeduties incidental to such functions.

Calculation Agent : Merrill Lynch International, or such other party or parties as set out in therelevant Pricing Statement who is responsible for the calculation of any rateor amount in relation to the Notes.

Custodian : Unless otherwise specified in the Pricing Statement, the Custodian inrespect of each issue of Notes will be The Hongkong and Shanghai BankingCorporation Limited. The Custodian will hold the Securities in custody forthe Notes.

Distributors : The Issuer will enter into arrangements with one or more distributors (the“Distributors”) for the purpose of the distribution of the Notes toprospective investors. See the section headed “Subscription Procedures”below for further details.

Dealer : Merrill Lynch (Singapore) Pte. Ltd. or such other party named as such in theDealer Agreement. See the section headed “Subscription Procedures”below for further details.

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Market Agent : Merrill Lynch (Singapore) Pte. Ltd. or such other party or parties as specifiedand defined in the relevant Pricing Statement.

Mortgaged Property : The Notes of each Series will be secured in the manner set out in Condition4 of the Master Conditions, including by a charge on and/or assignment ofand/or other security interest over or in respect of the Collateral and theAgency Agreement and all sums held from time to time by the Custodianand/or the Issuing and Paying Agent insofar as such sums relate to thatSeries. Each Series may also be secured on such additional security asmay be described in the relevant Pricing Statement. References in thisBase Prospectus to “Security” are to the security constituted by the relevantSupplemental Trust Deed and/or such other security document referred toin the Supplemental Trust Deed.

Limited Recourse : For each Series, the Trustee, any counterparty to a Swap, SecuritiesAgreement, Credit Support Document and or Contract (the “OtherCreditors”), the holders of the relevant Notes, Coupons (as defined in theMaster Conditions), Receipts (as defined in the Master Conditions) andTalons (as defined in the Master Conditions) and each of the Custodian andthe Issuing and Paying Agent (in each case to the extent that their claimsare secured) shall have recourse only to the Mortgaged Property in respectof such Series. If the Trustee having realised the same, the net proceeds areinsufficient for the Issuer to make all payments which would then be due, theobligations of the Issuer will be limited to such net proceeds of realisation,the Trustee, the Other Creditors, the Custodian, the Issuing and PayingAgent and the holders of Notes, Coupons, Receipts or Talons, or anyoneacting on behalf of any of them shall not be entitled to take any further stepsagainst the Issuer to recover any further sum and no debt shall be owed toany of such persons by the Issuer. In particular, none of the Trustee, theOther Creditors, the Custodian, the Issuing and Paying Agent, any holder ofNotes, Coupons, Receipts or Talons, or any other party to the relevantSupplemental Trust Deed (as defined herein) may institute, or join with anyother person in bringing, instituting, or joining, insolvency proceedings(whether court based or otherwise) in relation to the Issuer, and none ofthem shall have any claim in respect of any sum arising in respect of theMortgaged Property for any other Series.

Method of Issue : Unless otherwise specified in the relevant Pricing Statement, the Issuer willenter into arrangements with one or more Distributors for the distribution ofthe Notes subscribed by the public in Singapore. See the provisions of therelevant Pricing Statement for further details. If so agreed between theIssuer and the Dealer in respect of any Series of Notes, the Issuer may alsoissue Notes to the Dealer and the Dealer may subscribe for such Notespursuant to the Programme, as described below under the heading “WhereNotes are offered to the Dealer in the section titled “SubscriptionProcedures”.

Issuance in Series : The Notes will be issued in series (each a “Series”) having one or moreIssue Dates and on terms otherwise identical (or identical other than inrespect of the first payment of interest), the Notes of each Series beingintended to be interchangeable with all other Notes of that Series.

Each Series may be issued in tranches (each a “Tranche”) on the sameor different Issue Dates. The specific terms of each Tranche (which will besupplemented, where necessary, with supplemental terms and conditionsand, which are identical in respect of the Issue Date, Issue Price and firstpayment of interest) will be set out in the Pricing Statement.

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Pricing Statement : A Pricing Statement will be issued by the Issuer in connection with eachSeries of Notes and where the Series comprises more than one Tranche, aPricing Statement will provide details of each Tranche. The terms andconditions applicable to each such Series of Notes are described in thesection “Master Terms and Conditions of the Notes” contained herein, assupplemented, amended and/or replaced as described and summarised inthe relevant Pricing Statement. This Base Prospectus must be read inconjunction with the relevant Pricing Statement.

Issue Price : Notes may be issued at their nominal amount or at a discount or premiumto their nominal amount, as set out in the relevant Pricing Statement.

Form of Notes : The Notes may be issued in bearer form only (“Bearer Notes”) or inregistered form only (“Registered Notes”). Each Tranche of Bearer Noteswill be represented on issue by a Temporary Global Note if (i) definitiveNotes are to be made available to Noteholders following the expiry of 40days after their Issue Date or (ii) such Notes have an initial maturity of morethan one year and are being issued in compliance with the D Rules (asdefined in the paragraph headed “Selling Restrictions” below), otherwisesuch Tranche will be represented by a Permanent Global Note. RegisteredNotes will be represented by Certificates, one Certificate being issued inrespect of each Noteholder’s entire holding of Registered Notes of oneSeries. Certificates representing Registered Notes that are registered in thename of a nominee for one or more clearing systems are referred to as“Global Certificates” and will be represented on issue by a GlobalCertificate. Permanent Global Notes will be exchangeable, in whole but notin part (except in certain circumstances), for definitive Notes only in verylimited circumstances including, (i) by the Issuer giving notice to the Issuingand Paying Agent, the Trustee and the Noteholders of its intention to effectsuch exchange; (ii) if it is provided that the Permanent Global Note isexchangeable for definitive Notes at the request of the holder, by suchholder giving notice to the Issuing and Paying Agent of its election for suchexchange; (iii) if the Permanent Global Note is an Exchangeable BearerNote, by the holder hereof giving notice to the Issuing and Paying Agent ofits election to exchange the whole or a part of the Permanent Global Notefor Registered Notes; (iv) otherwise, if the Permanent Global Note is held onbehalf of Euroclear, Clearstream, Luxembourg or any other clearing system(an “Alternative Clearing System”) and any such clearing system isclosed for business for a continuous period of 14 days (other than by reasonof holidays, statutory or otherwise) or announces an intention permanentlyto cease business or does in fact do so; or (v) otherwise, if the PermanentGlobal Note is held by or on behalf of CDP and (a) an Event of Default (asdefined in the Conditions) has occurred and is continuing, (b) CDP hasclosed for business for a continuous period of 14 days (other than by reasonof holiday, statutory or otherwise), (c) CDP has announced an intention topermanently cease business and no alternative clearing system is availableor (d) CDP has notified the Issuer that it is unable or unwilling to act asdepository for the Notes and to continue performing its duties set out in theDepository Services Agreement and no Alternative Clearing System isavailable.

Credit Support : Notes may be issued with the benefit of monoline guarantees or other formsof credit enhancement. Where applicable, a description of any form of creditenhancement relevant to an issue of Notes will be included in the relevantPricing Statement.

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Swap Agreement : In connection with the issues of the Notes, the Issuer may enter into one ormore derivative transactions between the Issuer and the SwapCounterparty. See the section headed “Description of the Swap Agreementand the Swap Guarantee” for more information, in particular for the functionof the Swap Guarantee in relation to the Programme.

Clearing Systems : CDP, Clearstream, Luxembourg, Euroclear and/or any alternative clearingsystem as may be specified in the relevant Pricing Statement.

Currencies : Notes may be denominated in any currency as determined by the Issuerand as indicated in the relevant Pricing Statement.

Maturity : Notes may be issued with any maturity as set out in the relevant PricingStatement.

Denomination : Notes will be in such denominations as may be specified in the relevantPricing Statement.

Early Redemption : Early redemption will be permitted for taxation reasons and, subject to allrelevant legal and regulatory requirements, will otherwise be permitted atthe option of the Issuer or a holder to the extent specified in the relevantPricing Statement.

Redemption on Maturity : Notes may be redeemed at par or at such other redemption amount aboveor below par as may be determined in accordance with the terms andconditions of the relevant Series of Notes as set out in the relevant PricingStatement.

Mandatory Redemption : If all or some of the Securities relating to a Series become repayable priorto their stated maturity or there is a payment default in respect of any suchSecurities, the Notes of that Series shall become repayable in whole or inpart. See the section headed “Master Terms and Conditions of the Notes —Redemption, Purchase and Options” for further details.

Redemption byInstalments

: Notes which provide for Instalment Dates and Instalment Amounts in therelevant Pricing Statement will be partially redeemed on each InstalmentDate at the specified Instalment Amounts as set out in the relevant PricingStatement.

Interest : Notes may be interest-bearing or non-interest bearing. Interest (if any) mayaccrue at a fixed rate or a floating rate or other variable rate and the methodof calculating interest may vary between the Issue Date and the MaturityDate (as defined herein) of the relevant Series as set out in the relevantPricing Statement.

Status of Notes : The Notes of a Series will be secured, limited recourse obligations of theIssuer ranking pari passu without any preference among themselves andsecured in the manner described in “Master Terms and Conditions of theNotes — Security”. Recourse in respect of any Series will be limited to theMortgaged Property relating to that Series. Claims of Noteholders and, ifapplicable, the Other Creditors, the Trustee, the Registrar, the Custodian,the Paying Agents, the Transfer Agent and the Corporate Services Providershall rank in accordance with the priorities specified in the relevantSupplemental Trust Deed. The Pricing Statement will disclose the order ofpriority of claims in connection with the realisation or enforcement of thesecurity in accordance with Condition 4(b).

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Negative Pledge/Restrictions

: So long as any of the Notes remain outstanding, the Issuer will not, withoutthe consent of the Trustee and any Other Creditors, incur any other debt orengage in any business (other than issues of Notes contemplated by thisBase Prospectus and entering into transactions contemplated by thisProgramme), declare any dividends, have any subsidiaries or employees,purchase, own, lease or otherwise acquire any real property, consolidate ormerge with any other person, convey or transfer its properties or assetssubstantially as an entity to any person (other than as contemplated by theMaster Conditions) or issue any shares (other than the 1,000 ordinaryshares of U.S.$1.00 each already issued and legally held by the ShareTrustee). However, the Issuer may incur non-recourse indebtedness havingsubstantially similar terms as to limitation of recourse as the Notes.

Waiver : The Trustee may, without the consent of the Noteholders or Couponholders(as defined in the Master Conditions) and without prejudice to its rights inrespect of any subsequent breach, from time to time and at any time, if in itsopinion the interests of the Noteholders will not be materially prejudicedthereby, waive or authorise, on such terms as seem expedient to it, anybreach or proposed breach by the Issuer of the Trust Deed or the MasterConditions or the relevant Credit Support Document or other SecuredAgreement or determine that an Event of Default or Potential Event ofDefault shall not be treated as such provided that the Trustee shall not do soin contravention of an express direction given by an ExtraordinaryResolution. No such direction or request shall affect a previous waiver,authorisation or determination. Any such waiver, authorisation ordetermination shall be binding on the Noteholders and the Couponholdersand, if the Trustee so requires, shall be notified to the Noteholders as soonas practicable.

Modification : The Trustee may agree without the consent of the Noteholders orCouponholders to any modification (subject to certain exceptions) to theTrust Deed or any Supplemental Trust Deed, Credit Support Document orSecured Agreement of a formal, minor or technical nature or to correct amanifest error. The Trustee may also so agree to any modification to theTrust Deed or any Supplemental Trust Deed, Credit Support Document orSecured Agreement that is in its opinion not materially prejudicial to theinterests of the Noteholders.

Withholding Tax : All payments of principal and interest by the Issuer in respect of the Notesand Coupons may be made subject to any withholding or deduction for, oron account of, any Cayman Islands taxation. However, under CaymanIslands laws existing as at the date of this Base Prospectus, payments inrespect of the Notes will not be subject to taxation in the Cayman Islandsand no withholding will be required on such payments to any holder of aNote. See the section headed “Taxation of Notes — The Cayman Islands”for further details.

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Notices : So long as any Notes are represented by a Global Note or a GlobalCertificate which is held by CDP or held through Euroclear or Clearstream,Luxembourg or any alternative clearing system, notices required to be givento Noteholders shall be validly given by the delivery of the relevant notice tothe relevant clearing system for communication by it to entitledaccountholders in the case of Euroclear and Clearstream, Luxembourg and,where prior arrangements have been made, in the case of CDP. In caseswhere no prior arrangements have been made with CDP for notices to bedelivered through it, other arrangements may be made to deliver notices toinvestors, for instance, though the Trustee.

Except where Notes are held by investors in their direct SecuritiesAccount (as defined herein) with CDP, in all other cases, the Distributorswill be the accountholders for the purpose of delivery of notices to theNoteholders through the clearing systems and Noteholders will thereforeneed to rely on their Distributors to communicate such notices to them.

Notices may also be published in a daily newspaper of general circulationin Singapore.

Selling Restrictions : See the section headed “Selling Restrictions” for a discussion of certainrestrictions on the offering of the Notes and the distribution of offeringmaterials in various jurisdictions.

Notes in bearer form will be issued in compliance with U.S. Treas. Reg.§1.163-5(c)(2)(i)(D) (the “D Rules”) unless (i) the relevant PricingStatement states that Notes are issued in compliance with U.S. Treas. Reg.§1.163-5(c)(2)(i)(C) (the “C Rules”) or (ii) the Notes are issued other thanin compliance with the D Rules or the C Rules but in circumstances in whichthe Notes will not constitute “registration required obligations” under theUnited States Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”),which circumstances will be referred to in the relevant Pricing Statement asa transaction to which TEFRA is not applicable.

Rating : The Notes may or may not be rated by any Rating Agency. More informationon whether a particular Series of Notes is rated will be set out in the relevantPricing Statement.

Governing Law : English law except that the Swap Guarantee will be governed by New Yorklaw.

Listing : The Notes will not be listed on any securities exchange.

Terms and Conditions : The terms and conditions of the Notes as described in the section “MasterTerms and Conditions of the Notes” in this Base Prospectus.

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RISK FACTORS

Prior to making an investment decision, you should carefully consider, along with the other informationset out in this Base Prospectus, the risk factors below. You should also consider any risk factors orinvestment considerations set out in the relevant Pricing Statement, prior to making an investmentdecision in the relevant Series of Notes. Structured securities such as the Notes are sophisticatedinstruments and can involve a high degree of risk. Before applying for any of the Notes, you shouldconsider whether the Notes are suitable for you in light of your own financial circumstances andinvestment objectives.You are strongly recommended to consult your financial, legal and other advisersbefore making any investment decision.

The information set out herein is included for the purpose of enabling prospective investors and theiradvisers to make an informed assessment of the terms of the Notes, general risks of investing in theNotes, and the capacity of the Issuer to fulfil its obligations under the Notes. The risk factors set out inthis Base Prospectus and the relevant Pricing Statement cannot disclose or foresee all risks of theNotes. Prospective investors should not rely on the information set out herein and in the relevantPricing Statement as the sole basis for any investment decision in relation to the Notes but should seekappropriate and relevant advice concerning the appropriateness of an investment in the Notes for theirparticular circumstances.

Suitability of the Notes

The purchase of the Notes involves certain risks including market risk, credit risk and liquidity risk.Investors should ensure that they understand the nature of all these risks before making a decision toinvest in the Notes. This Base Prospectus and the relevant Pricing Statement for each Series of Notesare not and do not purport to be investment advice. You should conduct such independent investigationand analysis regarding the Notes and the assets on which the obligations of the Issuer under the Notesare secured as you deem appropriate. You should make an investment only after you have determinedthat such investment is suitable for your financial investment objectives. You should consider carefullywhether the Notes are suitable for you in light of your experience, objectives, financial position andother relevant circumstances.

Risk of Fluctuations in Value of the Notes

Structured products such as the Notes can be volatile instruments and may be subject to considerablefluctuations in value and other risks inherent in investing in securities and there can be no assurancethat any appreciation in value will occur or that capital value will be preserved. The price of the Notesmay fall in value as rapidly as it may rise due to, including (but not limited to) variations in the frequencyand magnitude of the changes in the price of any securities or any derivative instruments that mayunderlie the Notes or in the level of any index to which the Notes relate, dividends and interest rates,the credit quality of the Securities, and the creditworthiness of the Swap Counterparty and SwapGuarantor.

In addition, any downgrading of the rating of the Securities or the Swap Counterparty or the SwapGuarantor could result in a reduction in the value of the Notes.

Special Purpose Company

The Issuer is a special purpose company established for the purpose of issuing multiple Series ofsecured Notes under the Programme. The Issuer’s only assets are its issued share capital andtransaction fees and those assets on which each Series is secured. Should any unforeseen expensesor liabilities (which have not been provided for) arise, the Issuer may be unable to meet them, leadingto an Event of Default under the Notes.

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There is no certainty that Noteholders will recover any amounts payable under the Notes. Due to the“limited recourse” nature of the Notes, claims in respect of the Notes are limited to the net proceeds ofenforcement of the Mortgaged Property (see the paragraph headed “Issuer’s Ability to Meet itsObligations Under the Notes — Limited Recourse” below). In addition, if a claim is brought against theIssuer (whether under statute, common law or otherwise), such claim not being subject to suchcontractual limited recourse provisions, the only assets available to meet such claim will be the issuedshare capital of the Issuer, being U.S.$1,000 and the transaction fees. The only other material assetsof the Issuer will be the assets on which each Series is secured, which will be subject to the priorsecurity interests of the Noteholders and any other secured parties under that Series.

Proceedings against the Issuer

Any action an investor may wish to take against the Issuer in accordance with the terms and conditionsof the Notes will require the cooperation of the Trustee. Investors may have no right of direct actionagainst the Issuer and if such investors maintain investment accounts with their Distributors, suchinvestors will need to rely upon their Distributor or broker to contact the Trustee to take action againstthe Issuer on their behalf in accordance with the terms of the Trust Deed (as defined herein).

Issuer’s Ability to Meet its Obligations Under the Notes — Limited Recourse

The Notes will be limited recourse obligations of the Issuer secured on the Mortgaged Property(including any Securities comprised therein) and are not or will not be (as the case may be) obligationsor responsibilities of, or guaranteed by, any other person or entity. For the avoidance of doubt, none ofthe Trustee, the Programme Arranger, the Issuer, the Agents, the Swap Counterparty, the SwapGuarantor or guarantor of any Securities and any entity on whose condition the payments on the Notesare dependent has any obligation to any Noteholder for payment of any amount by the Issuer in respectof the Notes. There is no guarantee from any entity to Noteholders that they will recover any amountspayable under the Notes.

The ability of the Issuer to meet its obligations to pay principal of, and any interest or premium on, theNotes will be dependent on the receipt by the Issuer of moneys due to it under the Mortgaged Property(including any Securities comprised therein). The Noteholders shall have no recourse to the Issuerbeyond the moneys derived by or on behalf of the Issuer in respect of the Mortgaged Property. To theextent therefore that the issuer or guarantor (as appropriate) of any Securities fails to make paymentsin respect of the Securities held by the Issuer, the Issuer will have insufficient funds available to meetits obligations in respect of the Notes. In such event, any shortfall would be borne by the Noteholdersin accordance with the priorities specified in the Master Conditions. See the section headed “Summaryof the Secured Note Programme — Status of Notes” for a description of such priorities.

Priority of Claims and Potential for Insufficient Security on Sale of Securities and/or onEnforcement

In the event that any Securities are required to be sold pursuant to the Master Conditions or the securityconstituted by the Trust Deed becomes enforceable in accordance with the Master Conditions, the netsums realised could be insufficient to pay all the amounts due, inter alia, to the Noteholders under theNotes. Unless otherwise stated in the Pricing Statement, the sums realised from any such sale of theSecurities will be subject to deduction of the costs and expenses associated with such sale. In addition,all costs and expenses incurred by the Trustee in enforcing the Security will be deducted from theproceeds of such enforcement before such proceeds are paid to the Noteholders. After taking action toenforce the Security as provided in the Master Conditions, the Trustee shall not be entitled to take anyfurther steps against the Issuer to recover any sum still unpaid and no debt shall be owed by the Issuerin respect of such sum. In particular, no Noteholder may petition or take any other step for thewinding-up of the Issuer nor shall any of them have any claim in respect of any sum over or in respectof any assets of the Issuer which are security for other liabilities of the Issuer.

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As described under the section headed “Description of the Swap Agreement and the Swap Guarantee”,the Issuer has entered into the Master Agreement in connection with the establishment of theProgramme. In connection with certain issues of Notes under the Programme (and as will be set outin the Pricing Statement), the Issuer will collateralise its obligations under the relevant Swap Agreementby, inter alia, granting security to the Swap Counterparty over the relevant Securities pursuant to theSupplemental Trust Deed. Unless otherwise specified in the Pricing Statement, the security interest ofthe Swap Counterparty in the Mortgaged Property (together with the security interests of the Trustee,the Custodian, the Issuing and Paying Agent and any Other Creditors) will rank prior to the securityinterest of the Noteholders in the Mortgaged Property. As a result, if the Issuer defaults or is otherwiseunable to perform its obligations under the Swap Agreement, the Mortgaged Property may be liquidatedto satisfy the claims of the Swap Counterparty, thereby reducing or eliminating the Mortgaged Property.Accordingly, there can be no assurance that the net proceeds, if any, realised from the liquidation of theMortgaged Property or any enforcement of the security for the Notes will be sufficient for theNoteholders to recover the principal of, and interest on, the Notes and any other amounts payableunder the Notes.

Any remedies available to the Trustee to enforce the security on behalf of the Noteholders could involvedelays. If any such delay occurs, there will be a corresponding delay in making payment to theNoteholders of sums recovered on such enforcement. In realising the security, and unless otherwisespecified in the Pricing Statement, if “Creditor B Direction” (as defined at Master Condition 4(d)) isspecified in the relevant Pricing Statement, the Trustee is obliged to act in accordance with thedirections of the Beneficiary (as defined in the Master Conditions) and/or the Counterparty (as definedin the Master Conditions) and/or the Swap Counterparty and/or the Custodian and/or the Issuing andPaying Agent (provided that sums are due to these parties). The Trustee shall have no responsibilityfor any loss, liability, cost, claim, action, demand or expense incurred by any Noteholder by reason ofso acting.

The Swap

If a Swap Agreement is entered into in connection with any issue of Notes and is terminated in whole,the Notes will be redeemed. Derivative contracts such as the Swap Agreement have special risksassociated with them, including possible default by the counterparty to the transaction and risk tointerest rate and currency movements in the case of an early termination of the Swap Agreement, allof which could result in significant losses. See the section headed “Description of the Swap Agreementand the Swap Guarantee” below for further details.

Should there be a default by the Swap Counterparty in its payment obligations under the SwapAgreement, the Swap Guarantor will fulfil its payment obligations on its behalf. However, should theSwap Guarantor default, the Swap Agreement will be terminated early. If there is an early terminationof the Swap Agreement, the Issuer or the Swap Counterparty may be liable to make a terminationpayment (determined in accordance with the Swap Agreement) to the other (regardless, if applicable,of which of such parties may have caused such termination). If there is an early termination of the SwapAgreement and consequently an early redemption of the Notes occurs (by the operation of Condition7(c) of the Master Conditions), there is no assurance that the proceeds from the liquidation of theMortgaged Property plus (if the termination payment is due to the Issuer) or minus (if the terminationpayment is due to the Swap Counterparty) such termination payment will be sufficient to repay theprincipal amount due to be paid in respect of the Notes and any other amounts in respect thereof thatare due.

The termination payment following any such early termination of the Swap Agreement will be calculatedand made in US dollars or such other currency as a particular Series is issued in. The amount of anytermination payment will be based on the market value of the terminated Swap Agreement based onmarket quotations of the cost of entering into a swap transaction with the same terms and conditionsthat would have the effect of preserving the economic equivalent of the respective full paymentobligations of the parties. Any such termination payment could, depending on fluctuations in exchangerates and/or the interest rate environment, be substantial.

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Bankruptcy of the Issuer

Under the Trust Deed, the Trustee has in essence agreed, and each Noteholder will be deemed to haveagreed, that no action may be commenced or sustained against the Issuer under any bankruptcy orsimilar law for the winding up or liquidation of the Issuer. Notwithstanding such agreements, there canbe no assurance that such agreements would prevent the Issuer from becoming a debtor in a voluntaryor involuntary case under any bankruptcy, insolvency or similar laws of a foreign jurisdiction. In theevent the Issuer becomes a debtor in a case under any bankruptcy, insolvency or similar laws of aforeign jurisdiction, a delay or substantial reduction in payments to holders of the Notes may occur.

Liquidity of the Securities

If the Security in respect of the Notes becomes enforceable for any reason and the Trustee takes stepsto realise the Security in accordance with the Master Conditions, the extent to which the claims ofNoteholders will be met will depend in part on the amount of the proceeds received by the Trustee inconnection with the sale of the Securities, also affecting the yield on the Notes. The price obtainablefor the Securities will depend on the liquidity of the Securities in the over-the-counter market. Noassurance can be given by any of the Issuer, the Swap Counterparty, the Trustee, the Market Agent orthe Programme Arranger as to any of these matters, or in respect of the amount of the liquidationproceeds of any other part of the Mortgaged Property.

On any early redemption of the Notes for any reason, the redemption moneys payable to theNoteholders, and consequently the yield on the Notes, will depend in part on the proceeds of sale ofthe Securities in the over-the-counter market. The amount of such proceeds will depend on the liquidityof the Securities. Furthermore, you are also advised that the Calculation Agent (or such other agentappointed for this purpose) may exercise its discretion pursuant to the sale of the Securities, includingwith respect to the identity of the parties from whom bids for the Securities may be solicited and theevaluation of these bids. There can be no assurance that the exercise of discretion by the CalculationAgent (or such other party, as the case may be) in either of these circumstances will not have anadverse effect on the yield realised in respect of the Notes.

Market, Liquidity and Yield Considerations

The Notes may not have an established trading market when issued. There can be no assurance of asecondary market for the Notes or the liquidity of such market if one develops. Indeed, the Notes couldbe traded in the secondary market at prices that may be higher or lower than the initial purchase pricedepending on many factors, including the prevailing interest rates and prevailing interest ratesexpectations, the Issuer’s perceived credit quality, the perceived credit quality of the SwapCounterparty, the Swap Guarantor and the issuer of the Securities and the market for any similarsecurities. Consequently, you may not be able to sell your Notes readily or at prices that will enable youto realise a yield comparable to that of similar instruments (if any) with a developed secondary market.

The Market Agent may implement market making arrangements in connection with an issue of Notes.That a Market Agent intends to make a market in the Notes does not mean that it may be under anyobligation to do so, and in such case there can therefore be no assurance that it will do so, or if it doesso, that it will continue to do so. Accordingly, there can be no assurance that members of the public orNoteholders will have access to a firm bid price for Notes which they wish to sell. Please read thesection “Market Making Arrangements” below for a description of the circumstances in which you maybe able to sell your Notes after the Issue Date.

Unless otherwise disclosed in the applicable Pricing Statement, Merrill Lynch International shall, inconnection with each issue of Notes, be granted the Merrill Lynch Exchange Option, pursuant to whichit will be granted the right, with respect to Notes that it beneficially owns, to exchange any or all of such

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Notes for a pro rata amount of the relevant Securities from the Issuer. See the section headed “MerrillLynch Exchange Option” below for further details. If Merrill Lynch International exercises the MerrillLynch Exchange Option, on one or more occasions and in the circumstances described above, therewill as a result of such exercise be a proportionate reduction in the principal amount of the Notesoutstanding with effect from the date of such exercise. There can be no assurance that any suchexercise and any such consequent reduction will not have an adverse effect on the liquidity of themarket for the Notes and/or the market price of the Notes.

Tax consequences of holding the Notes

You should consider the tax consequences of investing in the Notes and consult your tax adviser aboutyour own tax situation.

The Notes issued by the Issuer are intended to be qualifying debt securities (“Qualifying DebtSecurities”) for the purposes of and are entitled to tax concessions under section 43N of the IncomeTax Act (as defined herein). However, there is no assurance that the Notes will continue to enjoy thetax concessions should the tax laws be amended or revoked prior to maturity of the Notes.

Deemed Notice of Provisions of the Master Conditions, the Swap Agreement and the Trust Deed

The descriptions of the Master Conditions, the Swap Agreement and the Trust Deed contained in thisBase Prospectus are summaries only and Noteholders are bound by, and are deemed to have noticeof, all the provisions of such documents. The full text of these documents is or, as the case may be, willbe available for inspection as set out under “General and Statutory Information” below.

Descriptions of the Programme and the Notes are summaries only

The descriptions of the Programme and the Notes included in this Base Prospectus and the relevantPricing Statement are summaries only. The full terms and conditions of the Notes are binding on theNoteholders, and can be reviewed by reading together the following: (i) the Master Conditions as setout in full in this Base Prospectus in the section headed “Master Terms and Conditions of the Notes”which constitutes the basis of all Notes to be offered under the Programme, and (ii) the relevant PricingSupplement (as appended to the relevant Pricing Statement) which applies, disapplies, supplementsand/or amends the Master Conditions in the manner required to reflect the particular terms andconditions applicable only to the relevant Series of Notes (or tranche thereof). Copies of the legaldocumentation relating to the Programme are available for inspection as described in the sectionheaded “General and Statutory Information” below. As and when any Series of Notes (or Tranchesthereof) are issued, copies of the relevant Pricing Supplement and the relevant Pricing Statement willalso be available for inspection in the manner and form set out in the relevant Pricing Statement.

Consequences of Non-availability of Definitive Notes or Definitive Certificates in respect ofNotes

Unless otherwise specified in the relevant Pricing Statement, each Series of Notes will be in the formof one or more Global Notes or Global Certificates, and no definitive Notes will be issued under anycircumstances unless it becomes impractical, impossible or illegal to hold the Notes in global form.Individual Noteholders must hold their Notes in (1) a direct Securities Account with CDP/securities sub-account with a Depository Agent or (2) an investment account with anaccountholder at an authorised depository common to Euroclear or Clearstream, Luxembourg,depending on which clearing system the relevant Series of Notes are cleared. For the purposeof the initial allocation of the Notes, you must already have, or must open, (1) a direct SecuritiesAccount with CDP, (2) an investment account with any of the Distributors who are alsoDepository Agents as described in the section “Subscription Procedures”, or (3) you mustalready have access to trading facilities at Euroclear or Clearstream, Luxembourg through othermeans. See the section “Settlement, Clearance and Custody” below for further details. Your ability topledge your interest in the Notes to any person or otherwise to take action in respect of your interest,

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may be affected by the lack of any definitive Notes or definitive Certificates in respect of any Series. Thestandard terms and conditions of the investment account of any of the Distributors may permit it to takea security interest in, or to impose other restrictions on, the Notes credited to the account or to exercisea lien, right of set-off or similar claim against you in respect of moneys held in any of your accountsmaintained with it to secure any amounts which may be owing by you to it.

For so long as any of the Notes are represented by a Global Note or a Global Certificate held by orthrough a clearing system, notices that are required to be given to the Noteholders shall be given bybeing delivered to the relevant clearing system. Any notice so delivered shall be deemed to have beenduly given to the Noteholders. Except where Notes are held by you in your direct Securities Accountwith CDP, you will have to rely on your Distributor to distribute notices to you which it receives throughthe clearing system from the Issuer. The Issuer, the Programme Arranger, the Trustee and the PayingAgent accepts no responsibility for any failure or delay on the part of the Distributors in doing so.

For so long as any of the Notes are represented by a Global Note or a Global Certificate held througha clearing system and for the purposes of payments required to be made by the Issuer to Noteholders,except where Notes are held by you in your direct Securities Account with CDP where you will betreated as the Noteholder and such payments will be credited through CDP from the Issuer, theDistributors will be treated as the Noteholders. Therefore, you will have to rely on your Distributor tocredit your account with payments credited to it through the clearing system from the Issuer. The Issuer,the Programme Arranger, the Trustee and the Paying Agent accept no responsibility for any failure ordelay on the part of the Distributors in performing their contractual duties to you.

Return on an investment in Notes will be affected by charges incurred by investors

The Pricing Statement in respect of an issue of Notes will describe the interest, principal and otherapplicable payments which may be made under the relevant Notes. However, investors’ total return onan investment in any Notes will also be affected by fees charged by their Distributors or others. Feesmay be charged by the Distributors for the opening and operation of an investment account, transfersof Notes, custody services and on payments of interest and principal. Investors are therefore advisedto consult their Distributors to ascertain the basis on which fees will be charged by the Distributors ontheir Notes.

No audited financial statements

The Issuer is required by Singapore law to lodge a profit and loss account and balance sheet for thefirst six months of, and for, every financial year with the Authority and the Trustee. However, you shouldnote that the Trustee has, as permitted under Singapore law, agreed to dispense with the requirementfor the profit and loss account and balance sheet of the Issuer to be audited. Accordingly, the Issuer willnot appoint any auditor and accordingly, such profit and loss account and balance sheet will not beaudited by any independent third party.

The Notes are governed by English law and the courts of England have non-exclusivejurisdiction in respect of the Notes

The Notes are governed by English law and the courts of England have non-exclusive jurisdiction inrespect of disputes involving the Notes. English law may be materially different from the equivalentSingapore law in its application to the Notes. If prospective investors are in any doubt as to theimplications of English law being the governing law in respect of the Notes and the courts of Englandhaving non-exclusive jurisdiction in respect of disputes involving the Notes, they should consult theirsolicitors and other professional advisers.

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The Swap Guarantee is governed by New York law

The Swap Guarantee is governed by New York law and the courts of the State of New York havenon-exclusive jurisdiction in respect of disputes involving the Notes. New York law may be materiallydifferent from the equivalent Singapore law in its application to the Notes. If prospective investors arein any doubt as to the implications of New York law being the governing law in respect of the Notes andthe courts of the State of New York having non-exclusive jurisdiction in respect of disputes involving theNotes, they should consult their solicitors and other professional advisers.

Change of law

The Master Conditions of each Series of Notes are governed by English law in effect as at the IssueDate of such Series of Notes. No assurance can be given as to the impact of any possible judicialdecision or change to English law or adminstrative practive in England after the Issue Date of suchSeries of Notes.

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SUBSCRIPTION PROCEDURES

General

Under a Dealer Agreement dated 15 November 2006 between the Issuer and Merrill Lynch (Singapore)Pte. Ltd., Merrill Lynch (Singapore) Pte. Ltd. was appointed as the programme arranger and dealer forthe Programme. The Issuer will enter into Distributor Appointment Agreements (as defined herein),together with the Programme Arranger, the Dealer and the Market Agent (as defined herein), with oneor more Distributors in connection with each issue of Notes for the purpose of the distribution of theNotes to prospective investors. The Dealer will be responsible for allocating the Notes of each Seriesto the relevant Distributors. In any event, the Issuer will not grant any pre-emptive rights for thesubscription or purchase of the Notes.

If you wish to purchase any Notes as part of the Issuer’s offering pursuant to this Base Prospectus andany Pricing Statement, you must contact one of the Distributors as Notes are only offered through theDistributors. However, the Issuer may make arrangements for certain Series of Notes to be soldthrough other channels, whether in Singapore or abroad. Offers of Notes made through other channelscould be made at a lower issue price, or on other terms, than are available to prospective investors whobuy Notes from a Distributor specified in the relevant Pricing Statement. For example, the Issuer maysell Notes to private banks on terms different from those offered in a Pricing Statement. The privatebanks may then sell Notes to their customers on any terms they choose.

The relationship you have with your Distributor is governed by the customer agreement (if any and ifapplicable) you sign with your Distributor and is not related to or controlled by the Issuer or theProgramme Arranger or the Dealer or by anything in this Base Prospectus or the relevant PricingStatement. The Distributor Appointment Agreements will set out amongst other things the requirementfor the Distributors to comply with the “Selling Restrictions” section set out in this Base Prospectus andall relevant laws, regulations and guidelines or codes issued by the Authority.

When prospective investors apply to purchase any Notes through a Distributor, they may becharged a handling fee by the Distributor in connection with such subscription. Prospectiveinvestors are advised to contact one of the Distributors (whose contact details will appear in therelevant Pricing Statement) for further details of any such handling fee which may be levied. Thehandling fees payable to one Distributor may differ from those payable to another Distributor.

Prospective investors are advised that arrangements for the purchase by them of any Notes aspart of the initial issue of a Series of Notes (including, without limitation, arrangementsregarding the time and method of payment of the purchase price for the Notes, the amount ofthe charges to be levied by the Distributor, the opening and closing period (if any) for placingan order for the Notes and the arrangements for refund or payment of additional sums) may beas separately agreed between the prospective investors and the Distributor and may be subjectto the Distributor’s terms and conditions relating to such arrangements. Each Distributor mayimpose different arrangements relating to the purchase of the Notes and prospective investorsshould contact the Distributors for information relating to such arrangements. It is importantthat you familiarise yourself with, and ensure that you understand and accept, the terms andconditions imposed by the Distributors.

The identities and respective contact details of the Distributors for each specific Series of Notes will beset out in the relevant Pricing Statement. Prospective investors may also, upon request, availthemselves to such information on the Distributors at the office of the Programme Arranger inSingapore (the address of which is set out on the last page of this Base Prospectus) during normalbusiness hours on any weekday for so long as any Notes remain outstanding.

The relevant Pricing Statement will set out the terms, conditions and procedures for application andacceptance of the Notes. The relevant Pricing Statement will also include a description of the mannerin which results of the allocation of the Notes being offered are to be made public and whereappropriate, the manner for refunding excess amounts paid by applicants.

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Where Notes are to be cleared through CDP

In addition to the information under “General” above, where it is indicated in the relevant PricingStatement that the clearing system for the Notes is CDP, you must either (i) open a, or have an existing,direct Securities Account with CDP; or (ii) open an investment account with a Distributor who is aDepository Agent (as defined herein) approved by CDP under the Companies Act (as defined herein),to maintain securities sub-accounts and to hold the Notes in such securities sub-accounts forthemselves and their clients.

If you wish to open such an investment account with a Distributor, you must arrange to open aninvestment account in good time before placing your order.

Some important points about opening, and holding your Notes in, an investment account are as follows:

• Applications to open an investment account with a Distributor will be processed by the Distributoraccording to its normal procedures and criteria for acceptance. None of the Issuer, theProgramme Arranger and the Dealer accepts any responsibility for the account opening processof any Distributor or for any consequences of, or result from, such an application by you.

• Investment account and other related services with respect to the Notes will be supplied by theDistributors subject to their standard terms and conditions for the provision of such services. Youshould familiarise yourself with, and ensure you understand and accept, the terms and conditionsof operation of the investment account before making your application to open an investmentaccount. None of the Issuer, the Programme Arranger and the Dealer accepts any responsibilityfor any consequences of, or arising from, the use of the investment account or services providedby the Distributors.

• The Distributors will charge fees for the opening and operating of an investment account: youshould check with the Distributor with which you intend to open an investment account what feeswill be chargeable. Fees may be charged in respect of individual transactions, such as transfersof Notes; on a periodic basis for safe custody; and on payments of interest and principal whenthey are received. You should check with the Distributor with which you intend to open aninvestment account on what basis fees will be charged in respect of your Notes.

• You should ask for and read carefully the standard terms and conditions which govern theoperation of an investment account with your Distributor as these will determine your rights andobligations with such party. The terms and conditions thereunder may permit the Distributor totake a security interest in, or to impose other restrictions on, the Notes credited to your investmentaccount or to exercise a lien, right of set-off or similar claim against you in respect of moneys heldin any of your accounts maintained with it to secure any amounts which may be owing by you tothe Distributor. The Issuer, the Programme Arranger, the Dealer and the Trustee accept noresponsibility for any claims any Distributor may have against you in respect of or as aconsequence of, or arising from the use of the Distributor’s services.

Where Notes are offered to the Dealer

If so agreed between the Issuer and the Dealer, the Issuer may issue, at the Issue Price, a portion ofany Series of Notes from time to time issued by it, to the Dealer. Thereafter, the Dealer may offer suchNotes pursuant to exemptions invoked under Section 274 and/or Section 275 of the SFA at such priceand other terms as the Dealer may deem appropriate (i) to an institutional investor under Section 274of the SFA, or (ii) to a relevant person pursuant to Section 275(1), or to any person pursuant to Section275(1A), and in accordance with the conditions specified in, Section 275 of the SFA.

In such event, this Base Prospectus and the relevant Pricing Statement or any other document ormaterial in connection with the offer or sale, or invitation for subscription or purchase of such Notes,may not be circulated or distributed, nor may such Notes be offered or sold, or be made the subject ofan invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore otherthan (i) to an institutional investor under Section 274 of the SFA, or (ii) to a relevant person pursuant

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to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions,specified in Section 275 of the SFA.

Where such Notes are subscribed or purchased under Section 275 of the SFA by a relevant personwhich is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the solebusiness of which is to hold investments and the entire share capital of which is owned by one ormore individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investmentsand each beneficiary of the trust is an individual who is an accredited investor,

shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rightsand interest (howsoever described) in that trust shall not be transferred within six months after thatcorporation or that trust has acquired the Notes pursuant to an offer made under Section 275 of the SFAexcept:

(1) to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant persondefined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on termsthat such shares, debentures and units of shares and debentures of that corporation or such rightsand interest in that trust are acquired at a consideration of not less than S$200,000 (or itsequivalent in a foreign currency) for each transaction, whether such amount is to be paid for incash or by exchange of securities or other assets, and further for corporations, in accordance withthe conditions specified in Section 275 of the SFA;

(2) where no consideration is or will be given for the transfer; or

(3) where the transfer is by operation of law.

Confirmations from Prospective Investors

At the time you buy the Notes, you will be asked to complete an application form and your Distributorwill require you to confirm for the benefit of the Issuer, the Programme Arranger, the Dealer, the Trusteeand the Distributor that:

• you have read and understood this Base Prospectus together with the relevant Pricing Statementand any supplement thereto for the Notes you want to buy;

• you accept that neither the Issuer, its directors nor the Programme Arranger and the Dealeraccepts any responsibility for the provision of services, including custody services, by yourdistributor;

• you commit to pay the purchase price for the Notes up to the amount of Notes you apply for;

• you understand and agree that the Issuer is not required to, and will not, appoint an auditor andtherefore, any profit and loss account and balance sheet lodged by the Issuer with the Authorityand the Trustee will not be audited by any independent third party; and

• you are not located within the United States and are not a U.S. Person within the meaning ofRegulation S under the Securities Act (which includes any person resident in the United Statesand any partnership or corporation organised or incorporated under the laws of the United States).

Your Distributor may well require you to make further confirmations in addition to these.

No Distributor should accept an order the Notes unless you have read and understood this BaseProspectus together with the relevant Pricing Statement and any supplement thereto for the Notes youwant to buy.

Your distributor should be able to explain to you how the Notes work and to answer your questions.

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MARKET MAKING ARRANGEMENTS

Merrill Lynch (Singapore) Pte. Ltd. in its capacity as Market Agent intends, but is under no obligation,to make a market in the Notes. In this capacity, it intends to quote every week on a best efforts basisa price obtained from Merrill Lynch International at which it is willing to purchase Notes (a “bid” price)for and on behalf of Merrill Lynch International. Such market activities by the Market Agent are expectedto commence with effect from the date falling three months following the Issue Date of a Series or aTranche of Notes. However, it is expected that in order to facilitate the payment of Coupons on and/orRedemption and/or Early Redemption of Notes, there will be periods during which Merrill Lynch(Singapore) Pte. Ltd. will not be providing such market activities (the “Black-Out Periods”). The fulldetails of the specific market making arrangements and the applicable Black-Out Periods (if any) foreach Tranche or Series of Notes will be set out in the relevant Pricing Statement. The price quoted willbe by reference to the denomination of the Notes or an integral multiple thereof and will be expressedas a percentage of the principal amount of the Notes.

Prices quoted by the Market Agent will be obtained from Merrill Lynch International as determined bythe Merrill Lynch International in its absolute discretion. Such prices may be equal to, higher or lowerthan the Issue Price of the Notes, and will vary depending on many factors, including (without limitation)issue costs and expenses, prevailing interest rates, general market conditions, the financial conditionof the Issuer and the liquidity, prices and volatility of the market (if any) for any securities of a naturecomparable to that of the Notes.

The bid prices for the Notes will be quoted by the Market Agent to a Distributor. The bid prices for theNotes which may be quoted by one Distributor to a prospective seller of the Notes, may be differentfrom the corresponding prices quoted by the Market Agent to that Distributor, and/or the bid pricesquoted by another Distributor to that individual.

Therefore, if you would like to know the bid prices of the Notes from time to time and/or if you wouldlike to sell any Notes prior to their maturity, you should contact your Distributor.

These market making arrangements are limited and do not assure an active trading market forthe Notes. There can be no assurance that the Market Agent will make a market in the Notes, orif it does so, that it will continue to do so. Accordingly, there can be no assurance that investorsor members of the public will have access to a firm bid price for the Notes in a principal amountwhich they may wish to sell.

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MERRILL LYNCH EXCHANGE OPTION

Unless otherwise disclosed in the applicable Pricing Statement, Merrill Lynch International shall, inconnection with each issue of Notes, be granted the right (the “Merrill Lynch Exchange Option”) fromtime to time and on one or more occasions, with respect to Notes that it beneficially owns, to exchangeany or all of such Notes for a pro rata amount of the relevant Securities (rounded down to the nearestdenomination of the Securities, if the respective denominations of the Notes and the Securities are notequal) from the Issuer, on giving not less than three Singapore, London, Hong Kong and New YorkBusiness Days’ notice to the Issuer, the Trustee, the Custodian and the Issuing and Paying Agent.

There will as a result of each exercise of the Merrill Lynch Exchange Option be a proportionatereduction in the principal amount of the Notes outstanding. The Issuer will notify the Noteholders of theexercise of the Merrill Lynch Exchange Option if, following such exercise, the outstanding principalamount of the Notes decreases to an amount less than 50 per cent., 30 per cent. and 10 per cent.,respectively, of the original principal amount thereof. Each such notice will specify the amount of Notesbeing exchanged and will be given as soon as practicable thereafter and in any event will be given nolater than five Singapore, London, Hong Kong and New York Business Days after such exercise.

Any Notes purchased by the Market Agent for and on behalf of Merrill Lynch International which aresubject to the Merrill Lynch Exchange Option shall be surrendered to the Issuing and Paying Agent orto its order for cancellation and the corresponding amount of the relevant Securities shall be releasedfrom the security created in respect thereof. The Issuer shall procure that the Custodian shall deliverand transfer free of all encumbrances such principal amount of the relevant Securities to or to the orderof Merrill Lynch International in the manner customary for the settlement of securities similar to theSecurities, in each case on the date specified in the notice of the exercise of the Merrill Lynch ExchangeOption, provided that Merrill Lynch International shall be liable to pay all taxes, duties and expensesthat may be incurred in connection with the delivery and transfer of such Securities.

If Merrill Lynch International exercises the Merrill Lynch Exchange Option, a pro rata amount of therelevant Swap Agreement (if any) corresponding to that proportion of the Notes to be exchanged willbe terminated without any termination payment being due from the Issuer or the Swap Counterparty.

The Merrill Lynch Exchange Option applies to Notes beneficially owned by Merrill Lynch International.Notes may be acquired by Merrill Lynch International by the Market Agent acting for and on its behalfafter the Issue Date of the Notes pursuant to the market making arrangements (if any) to beimplemented in connection with the issue of the Notes, or otherwise.

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FEES AND EXPENSES

The Issuer will enter into a disbursement agreement with Merrill Lynch International or an affiliate ofMerrill Lynch International for Merrill Lynch International or an affiliate of Merrill Lynch International topay all the fees and expenses incurred in connection with the Programme, such as the fees of theTrustee and the Issuing and Paying Agent, the Paying Agent, the Custodian’s fees, administrative fees,the legal fees and where applicable, the Registrar’s fees and also including expenses incurred inconnection with the selection and acquisition of exposure to the Reference Assets (as defined herein)for each Series of Notes. As all the fees and expenses will be borne by Merrill Lynch International oran affiliate of Merrill Lynch International, no fees nor expenses are expected to be deducted from theproceeds of any issue of Notes or be borne by the Noteholders, unless indicated otherwise in therelevant Pricing Statement. Accordingly, no fees and expenses are expected to be paid out of the cashflows of the Issuer or from the Securities.

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GENERAL INFORMATION ON REFERENCE ASSETS

This section sets out general information on certain aspects of the Reference Assets. For more detailedinformation on the Reference Assets, it is necessary to refer to the relevant Pricing Statement, whichwill set out the information applicable to each Series of Notes.

How exposure to the Reference Assets is created

The Notes to be issued under the Programme include notes such as equity-linked notes, commodity-linked notes, index-linked notes, credit-linked notes, currency-linked notes, fund-linked notes, interest-linked notes and hybrid notes (e.g. notes that are both equity-linked and credit-linked).

The Notes are intended to provide you with a coupon for assuming exposure to the Reference Assets.Each Pricing Statement will disclose more information on the type of notes being issued, how sucharrangements to create exposure to the Reference Assets work and in particular, the Reference Assetsthat are specific to that particular Series of Notes.

Characteristics of Reference Assets

Potential investors in the Notes should note the following information on the Reference Assets inrelation to such Notes:

(i) The Reference Assets may comprise:

(a) any equity securities such as stocks, units or shares issued by a corporation, a bodyunincorporated or any entity listed on an Approved Securities Exchange (as defined herein);

(b) any right, option or derivative in respect of such equity securities, such as warrants, whichmay be listed on an Approved Securities Exchange;

(c) a basket comprising such equity securities and/or any right, option or derivative thereof;

(d) any commodity;

(e) any right, option or derivative contract in respect of a commodity, such as futures contracts,which may be listed on a futures exchange;

(f) a basket comprising of, and/or any right, option or derivative in respect of, such commodityor futures contract;

(g) any index published by a publisher of a stock exchange, or any other form or type of index;

(h) a basket of such indices;

(i) any corporation, body unincorporated, or any other entity, listed on any stock exchange;

(j) a basket of such corporations, bodies unincorporated, or entities;

(k) any credit or debt obligations of any corporation, body unincorporated, or any other entity,listed on any stock exchange;

(l) a basket of such credits or debt obligations;

(m) any sovereign state;

(n) a basket of such sovereign states;

(o) any legal currency of any country;

(p) any exchange rate in respect of such currencies;

(q) a basket comprising of such currencies or exchange rates;

(r) an interest rate benchmark;

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(s) a basket of such interest rate benchmarks;

(t) exchange-traded funds; or

(u) a basket of such exchange-traded funds.

(ii) There are no material terms and conditions that are expected to apply in respect of each type ofReference Assets.

(iii) There is no specific method and criteria by which the Reference Assets are selected. ReferenceAssets would be selected based on investor demand for the type of such Notes which are basedon or linked to such Reference Assets.

(iv) There are no processes for handling delinquencies, losses, bankruptcies and recoveries inrelation to such Reference Assets.

(v) Upon the occurrence of certain events, the Calculation Agent has the authority to replace,substitute or amend a Reference Asset in accordance with the terms in the Pricing Supplementand the Issuer will inform Noteholders of such events by giving notices in accordance with theMaster Conditions — Condition 16. More information on these specified events will be set out inthe relevant Pricing Statement as these events are specific to each Series of Notes. If theReference Assets are not replaced, substituted or amended, the Notes may, and in any casealways in accordance with the terms of the Pricing Supplement, be redeemed early.

In relation to other types of notes that are linked to Reference Assets which do not fall into one and/ora combination of the Reference Assets set out above, we will, where applicable, lodge a supplementaryBase Prospectus or replacement Base Prospectus or the relevant Pricing Statement with the Authorityto provide the following information:

(1) the type or types of Reference Assets;

(2) the material terms and conditions that apply in respect of each type of Reference Assets;

(3) the method and criteria by which the Reference Assets are selected, if applicable;

(4) the process for handling delinquencies, losses, bankruptcies and recoveries in relation to suchReference Assets;

(5) where legal or regulatory provisions may materially affect performance of the Reference Assetsor payments or expected payments of the Notes, these provisions and their effect; and

(6) the circumstances where Reference Assets may be added, substituted or removed, including:

(a) when and how the Reference Assets can be removed or substituted;

(b) any differences in the criteria for additional Reference Assets and the criteria used to selectthe then current pool of Reference Assets;

(c) any requirement to add or remove the Reference Assets and any effects of not meetingthose requirements; and

(d) how investors will be notified of changes to the pool of Reference Assets.

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DESCRIPTION OF THE SECURITY ARRANGEMENTSIN RESPECT OF THE NOTES

Introduction

The Notes will be secured, limited recourse obligations of the Issuer. The purpose of this section is toprovide you with further information in respect of these important features of the Notes, which areincluded in the Master Conditions for the purpose of helping to protect your investment in the Notes.However, the following description is a summary only of certain material aspects of the securityarrangements and is subject in all respects to the terms of the Trust Deed and the Master Conditions,of which Noteholders are deemed to have notice and by which they are bound. Further details inrespect of the security arrangements will be provided in the Pricing Statement. A copy of the Trust Deedis available for inspection as set out under “General and Statutory Information” below.

The Issuer will, pursuant to the provisions of the Trust Deed (comprising (i) the Trust Deed dated 15November 2006 in relation to the Programme, and (ii) a Supplemental Trust Deed to be dated the IssueDate in respect of each Series of Notes), grant the Security described in the Pricing Statement to theTrustee as continuing security for the payment of all sums due under the Trust Deed and the Notes andthe performance of its obligations under the Swap Agreement (if applicable). The Trustee shall holdsuch Security on behalf of itself, the Noteholders, the Custodian, the Swap Counterparty (if applicable)and the Agents.

Security Arrangements — Clearing System

The Security may include a fixed charge over Securities which may be held by or through the Custodianthrough Euroclear and/or Clearstream, Luxembourg and/or any alternative clearing system. The chargeis intended to create a property interest in the Securities in favour of the Trustee to secure the Issuer’sliabilities. However, unless otherwise stated in the Pricing Statement, the Securities will be held by orthrough the Custodian through a clearing system and the Securities will not be delivered in definitiveform (except in limited circumstances applicable to the Securities). Consequently, neither the Issuer northe Custodian will be the legal owner of the Securities themselves. The interests which the Custodianholds on behalf of the Issuer and which are traded in the clearing system are not therefore the physicalSecurities themselves but a series of contractual rights. These rights consist of (i) the Issuer’s rightsagainst the Custodian, (ii) the Custodian’s rights as an accountholder against the clearing system, (iii)the rights of the clearing system against the common depositary (or its nominee if the Securities are inregistered form and are registered in the name of such nominee) and (iv) the rights of the commondepositary (or, if applicable, its nominee) against the issuer of the Securities. As a result, whereSecurities are held in a clearing system, the Security will take the form of an assignment of theIssuer’s rights against the Custodian under the Agency Agreement rather than a charge over theSecurities themselves.

Enforcement of the Security

Unless otherwise described in the Pricing Statement, the Security shall become enforceable:

(i) if payment in respect of the Notes is not made when due and payable or delivery of Securities isnot made pursuant to Condition 7(h) (if applicable);

(ii) if there are Secured Agreements, on termination thereof with sums due and payable but unpaidto the Other Creditors;

(iii) upon failure by the Issuer to reimburse the Custodian in respect of payments properly made to anyparty of sums receivable on the Securities;

(iv) upon failure by the Issuer to reimburse the Issuing and Paying Agent in respect of paymentsproperly made to holders of Notes, Coupons and Receipts;

(v) in the other circumstances described in Condition 10 of the Master Conditions; or

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(vi) in the other circumstances described in the Supplemental Trust Deed relating to the Series ofNotes.

In such circumstances and unless otherwise described in the Pricing Statement, the Trustee may at itsdiscretion and shall if a direction in writing is given by the relevant parties pursuant to Condition 4(d)of the Master Conditions, take possession of and/or realise the Security (provided that if some only ofthe Notes have become repayable then the Trustee shall take possession of or realise only thatproportion of the Securities equal to the proportion of the nominal amount of the Notes that are subjectto acceleration) and/or take action against any person liable in respect of any Repayable Assets (asdefined in the Master Conditions) to enforce repayment of such Repayable Assets, enforce, terminateand/or realise any Credit Support Document, Swap and/or Securities Agreement in accordance with itsor their terms, and/or take action against any Obligor (as defined in the Master Conditions) but withoutany liability as to the consequence of such action and without having regard to the effect of such actionon individual Noteholders or Couponholders provided that the Trustee shall not be required to take anyaction that would involve any personal liability or expense without first being indemnified to itssatisfaction.

Priority of Claims and Potential for Insufficient Security on Sale of Securities and/or onEnforcement

In the event that any Securities are required to be sold pursuant to the Master Conditions or theSecurity constituted by the Trust Deed becomes enforceable in accordance with the Master Conditions,the net sums realised could be insufficient to pay all the amounts due, inter alia, to the Noteholdersunder the Notes. Unless otherwise stated in the Pricing Statement, the sums realised from any suchsale of the Securities will be subject to deduction of the costs and expenses associated with such sale.In addition, all costs and expenses incurred by the Trustee in enforcing the Security will be deductedfrom the proceeds of such enforcement before such proceeds are paid to the Noteholders. After takingaction to enforce the Security as provided in the Master Conditions, the Trustee shall not be entitled totake any further steps against the Issuer to recover any sum still unpaid and no debt shall be owed bythe Issuer in respect of such sum. In particular, no Noteholder may petition or take any other step forthe winding-up of the Issuer nor shall any of them have any claim in respect of any sum over or inrespect of any assets of the Issuer which are security for other liabilities of the Issuer.

As described under the section “Description of the Swap Agreement and the Swap Guarantee” below,the Issuer has entered into the Master Agreement in connection with the establishment of theProgramme. In connection with certain issues of Notes under the Programme (and as will be set outin the Pricing Statement), the Issuer will collateralise its obligations under the relevant Swaps by, interalia, granting security to the Swap Counterparty over the relevant Securities pursuant to theSupplemental Trust Deed. Unless otherwise specified in the Pricing Statement, the security interest ofthe Swap Counterparty in the Mortgaged Property (together with the security interests of the Trustee,the Custodian, the Issuing and Paying Agent and any Other Creditors) will rank prior to the securityinterest of the Noteholders in the Mortgaged Property. As a result, if the Issuer defaults or is otherwiseunable to perform its obligations under the Swap, the Mortgaged Property may be liquidated to satisfythe claims of the Swap Counterparty, thereby reducing or eliminating the Mortgaged Property. The netproceeds, if any, realised from the liquidation of the Mortgaged Property or any enforcement of thesecurity for the Notes may not therefore be sufficient for the Noteholders to recover the principal of, andinterest on, the Notes and any other amounts payable under the Notes.

Limited Recourse Provisions

The Trustee, the Noteholders, the Swap Counterparty, the Custodian and the Agents (in each case tothe extent that their claims are secured) shall have recourse only to the Mortgaged Property. If, theTrustee having realised the same, the net proceeds are insufficient for the Issuer to make all paymentsthen due to all such parties, the obligations of the Issuer will be limited to such net proceeds ofrealisation and no other assets of the Issuer will be available to meet such shortfall; the Trustee, the

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Custodian, the Agents, the Noteholders, the Swap Counterparty, or anyone acting on behalf of any ofthem shall not be entitled to take any further steps against the Issuer to recover any further sum andno debt shall be owed to any of such persons by the Issuer. The relevant Pricing Statement will disclosethe order of priority of claims in the application of all moneys received in connection with the realisationor enforcement of the Security. None of the Trustee, the Custodian, the Agents, any Noteholder or theSwap Counterparty may petition or take any other step for the winding-up of the Issuer, and none ofthem shall have any claim in respect of any sum arising in respect of the Mortgaged Property for anyother Series.

The Security is granted to the Trustee by the Issuer as continuing security:

(i) for the payment of all sums due under the Trust Deed and the Notes;

(ii) for the payment of all claims of the Custodian and/or the Issuing and Paying Agent forreimbursement of payments properly made to any party of sums receivable on the Securities orfor reimbursement in respect of payments of principal and interest properly made to holders ofNotes, Coupons and Receipts, respectively; and

(iii) for the performance of the Issuer’s obligations (if any) under the Secured Agreements or otherrelevant documentation as set out in the relevant Supplemental Trust Deed in each case, astrustee for itself and/or the holders of Notes, Coupons and Receipts, the Custodian, the Issuingand Paying Agent and the Other Creditors.

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DESCRIPTION OF SECURITIES

It is expected that the Securities will be issued by Merrill Lynch & Co., Inc., Merrill Lynch International& Co. C.V. or Merrill Lynch S.A. The Issuer may also purchase transferable securities issued by thirdparty issuers as Securities, provided that such securities are rated investment grade by Fitch, Standard& Poor’s or Moody’s. The Pricing Statement for each Series of Notes will specify the Securities (ifapplicable) for such Series of Notes.

The Securities in respect of a Series of Notes (if any) are part of the Security for such Series of Notes.On the Issue Date, it is expected that the Issuer will use the proceeds of the relevant Series of Notesto purchase the Securities. The Securities will usually be transferable securities issued by a memberof the Merrill Lynch group (which may be Merrill Lynch International & Co. C.V., Merrill Lynch & Co., Inc.or Merrill Lynch S.A.). However, the Programme Arranger may also select transferable securities ofthird party issuers as Securities. In the event that transferable securities of third party issuers are usedas Securities, it is expected that such securities will have to be rated investment grade by Fitch,Standard & Poor’s or Moody’s. More details of the Securities for each Series of Notes will be set outin the relevant Pricing Statement.

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DESCRIPTION OF THE SWAP AGREEMENT AND THE SWAP GUARANTEE

The following description is a summary only of certain aspects of the Swap Agreement and the SwapGuarantee and is subject in all respects to the terms of the Swap Agreement and the Swap Guarantee.You are deemed to have notice of, and to be bound by the terms of, the Swap Agreement and the SwapGuarantee. Capitalised terms used in this section and not defined elsewhere in this Base Prospectushave the meanings given to them in the Swap. See “Description of Swap Counterparty” and“Description of Swap Guarantor” for further details on the Swap Counterparty and the Swap Guarantor.

You are advised that the Notes will not be obligations of and will not be guaranteed by either theSwap Counterparty or the Swap Guarantor. The Swap Guarantee comprises a guarantee infavour of the Issuer only in respect of the Swap Counterparty’s payments due under the SwapAgreement.

A copy of the Swap Agreement and the Swap Guarantee will be available for inspection in the place andcircumstances set out in the section headed “General and Statutory Information” below.

The Swap Agreement

The Issuer will be entering into a 1992 ISDA Master Agreement (Multicurrency-Cross Border) andSchedule thereto each dated on or about the issue date of the first Series of Notes to be issued underthe Programme with Merrill Lynch International as counterparty (the “Master Agreement”) inconnection with the establishment of the Programme.

In connection with an issue of Notes under the Programme, the Issuer may execute one or moreconfirmations (each, a “Confirmation”) to the Master Agreement. Each Confirmation will have aneffective date as of the Issue Date of the relevant Series of Notes. In respect of a relevant Series ofNotes only, the relevant Confirmation(s), together with the Master Agreement, is(are) referred to in thisBase Prospectus as the “Swap Agreement” and the relevant counterparty (counterparties) to theSwap Agreement is (are) referred to as the “Swap Counterparty”.

The Issuer may, pursuant to the Swap Agreement in connection with an issue of Notes enter intointerest rate and/or currency swap arrangements to enable the Issuer to make the payments scheduledto be made on a Series of Notes where the scheduled payments on the Securities forming part of theMortgaged Property for such Series of Notes do not correspond with the payments due to be made onthe Notes. The Issuer may also enter into other types of derivative transactions pursuant to the SwapAgreement. These derivatives transactions will be dependent on the type and structure of a particularSeries of Notes.

A summary of the relevant arrangements under the Swap Agreement as it relates to a particular Seriesof Notes will be included in the relevant Pricing Statement.

The Master Agreements and each Confirmation will be governed by English law.

Termination of the Swap Agreement

The Swap Agreement will provide that it shall terminate on its Termination Date (as defined therein),unless it is terminated prior to that date on the occurrence of any of the following events including (each,a “Swap Termination Event”):

(a) at the election of the non-defaulting party upon an Event of Default under the terms of the SwapAgreement, including:

(i) the failure of the other party to make a payment or delivery when due and payable under theSwap Agreement;

(ii) the occurrence of certain insolvency-related events;

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(iii) non-compliance by the Swap Guarantor with any of its obligations under the SwapGuarantee or the ceasing of the Swap Guarantee to be in full force and effect; and

(b) on the occurrence of certain Termination Events, including:

(i) it becoming illegal for either party to perform its obligations under the Swap Agreement or theSwap Guarantor to perform its obligations under the Swap Guarantee; and

(ii) when the Notes become due and payable (in whole but not in part) prior to their scheduledmaturity date.

The Swap Agreement will provide that neither the Issuer nor the Swap Counterparty will in anycircumstances be under any obligation to pay to the other party any amount in respect of any liabilityfor or on account of any Tax (as defined in the Swap Agreement). Accordingly, if any deduction orwithholding is imposed on either party, the Swap Agreement will terminate and the Notes will becomerepayable as described below.

Upon any such early termination of the Swap Agreement, the Notes will become repayable inaccordance with Condition 7(d) of the Master Conditions. Furthermore, the Issuer or the SwapCounterparty may be liable to make a termination payment (determined in accordance with theSwap Agreement) to the other (regardless, if applicable, of which of such parties may havecaused such termination). There is no assurance that the liquidation proceeds of the relevantMortgaged Property, including the proceeds from the sale of any Securities, plus (if suchpayment is owed to the Issuer) or minus (if such payment is owed by the Issuer) suchtermination payment will be sufficient to repay the principal amount due to be paid in respectof the Notes and any other amounts in respect thereof that are due.

As referred to above, the Issuer or the Swap Counterparty may be liable to make a termination paymentto the other. The termination payment will be calculated and made in U.S. dollars or such other currencyas a particular Series is issued in. The amount of any termination payment will be based on the marketvalue of the terminated Swap Agreement based on market quotations of the cost of entering into a swaptransaction with the same terms and conditions that would have the effect of preserving the economicequivalent of the respective full payment obligations of the parties. Any such termination paymentcould, depending on fluctuations in exchange rates and/or the interest rate environment and/or othermarket factors, be substantial.

The Swap Guarantee

In connection with the entry into by the Issuer and the Swap Counterparty of the Master Agreement,Merrill Lynch & Co., Inc. as Swap Guarantor will be executing a swap guarantee to be dated on or aboutthe issue date of the first Series of Notes to be issued under the Programme (the “Swap Guarantee”).

Pursuant to the provisions of the Swap Guarantee, the Swap Guarantor will unconditionally guaranteeto the Issuer the due and punctual payment of all amounts payable by the Swap Counterparty to theIssuer under the Swap Agreement. In the event that the Swap Counterparty fails to pay punctually theamounts payable under the Swap Agreement, the Swap Guarantor will pay such amounts as and whenthe same becomes due and payable.

The Swap Guarantee comprises a guarantee only in respect of the Swap Counterparty’spayments due under the Swap Agreement. It is not a guarantee in respect of the Notes. Upon anyearly termination of the Swap Agreement as described under “Termination of the Swap Agreement”above, the obligation of the Swap Guarantor will solely be to guarantee the due and punctual paymentby the Swap Counterparty of the termination payment (if any) due from the Swap Counterparty to theIssuer thereunder.

The Swap Guarantee will be governed by New York law.

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DESCRIPTION OF THE SWAP GUARANTOR

It is expected that Merrill Lynch & Co., Inc. may act as Swap Guarantor under the Swap Guaranteewhere the Issuer enters into a Swap Agreement. Should there be a change in the identity of the SwapGuarantor, the Pricing Statement will provide the details on the new entity. Merrill Lynch & Co., Inc. mayalso act as issuer of the Securities and/or as guarantor of the Securities. The Pricing Statement foreach Series of Notes will specify the capacity of Merrill Lynch & Co., Inc.

Merrill Lynch & Co., Inc. was incorporated under the laws of the State of Delaware, U.S.A., in 1973. Theprincipal executive office of Merrill Lynch & Co., Inc. is located at 4 World Financial Center, New York,New York 10080, United States of America. Merrill Lynch & Co., Inc.’s registered office in the State ofDelaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,Wilmington, Delaware 19801, United States of America.

Merrill Lynch & Co., Inc. is a holding company that, through its subsidiaries and affiliates, providesinvestment, financing, insurance and related services to individuals and institutions on a global basisthrough its broker dealer, insurance and other financial services subsidiaries. Its principal subsidiariesinclude Merrill Lynch, Pierce, Fenner & Smith Incorporated, Merrill Lynch International, Merrill LynchGovernment Securities, Inc., Merrill Lynch Capital Services, Inc., Merrill Lynch Investment Managers,L.P., Merrill Lynch Investment Managers Limited, Merrill Lynch Bank USA, Merrill Lynch Bank & TrustCo., Merrill Lynch International Bank Limited, Merrill Lynch Capital Markets Bank Limited, Merrill LynchMortgage Capital Inc., Merrill Lynch Japan Securities Co., Ltd., Merrill Lynch Life Insurance Company,ML Life Insurance Company of New York, Merrill Lynch Derivative Products AG and ML IBK Positions,Inc. The services, which the company and its principal subsidiaries provide includes:

• securities brokerage, trading, and underwriting;

• investment banking, strategic advisory services (including mergers and acquisitions) and othercorporate finance activities;

• wealth management products and services, including financial, retirement and generationalplanning;

• asset management and investment advisory and related record keeping services;

• origination, brokerage, dealer and related activities in swaps, options, forwards, exchange-tradedfutures, other derivatives, commodities and foreign exchange products;

• securities clearance, settlement financing services and prime brokerage;

• private equity and other principal investing activities;

• proprietary trading of securities, derivatives and loans;

• banking, trust and lending services, including deposit-taking, consumer and commercial lending,including mortgage loans, and related services;

• insurance and annuities sales; and

• research across the following disciplines: global equity strategy and economics, global fixedincome and equity-linked research, global fundamental equity research, and global wealthmanagement strategy.

Merrill Lynch & Co., Inc. may act as Swap Guarantor under the Swap Guarantee where the Issuerenters into a Swap Agreement and/or as issuer of the Securities and/or as guarantor of the Securities.The Notes will not be obligations of and will not be guaranteed by Merrill Lynch & Co., Inc.

The common stock of Merrill Lynch & Co., Inc. is listed on the New York Stock Exchange, ChicagoStock Exchange, Pacific Exchange, London Stock Exchange and Tokyo Stock Exchange and is subjectto the information and reporting requirements of the U.S. Securities Exchange Act of 1934, asamended, and is required to file annual, quarterly and special reports and other information with the

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U.S. Securities and Exchange Commission (“SEC”). Required filings include: annual reports on Form10-K; quarterly reports on Form 10-Q and current reports on Form 8-K. All filings are made in English.The filings of Merrill Lynch & Co., Inc. with the SEC can be assessed on the SEC’s website athttp://www.sec.gov. Please refer to the paragraph on “References to websites” on page ii of thisBase Prospectus for a warning statement and a disclaimer relating to the usage of informationcontained in the website referred to above.

As at the date of this base prospectus, Merrill Lynch & Co., Inc. has a long term unsecured debt ratingof Aa3, A+ and AA- from Moody’s, Standard & Poor’s and Fitch respectively.

Legal Proceedings

Merrill Lynch & Co., Inc., certain of its subsidiaries, and other persons have been named as parties invarious legal actions and arbitration proceedings arising in connection with the operation of MerrillLynch & Co., Inc.’s businesses. In most cases, plaintiffs seek unspecified damages and other relief.These actions include the following:

IPO Allocation Litigation

In re Initial Public Offering Antitrust Litigation: Merrill Lynch is named as one of ten underwritingdefendants in this consolidated class action filed in the United States District Court for the SouthernDistrict of New York. The complaint alleges that the defendants and unnamed co-conspirators violatedantitrust laws by conspiring to “require from customers consideration in addition to the underwriters’discount for allocation of shares of initial public offerings of certain technology companies . . and toinflate the aftermarket prices for such securities.” On 3 November 2003, the district court granted thedefendants’ motions to dismiss the complaint. On 28 September 2005, the Second Circuit reversed thedistrict court’s decision dismissing the case, holding that the alleged conduct was not immune from theantitrust laws. On 11 January 2006, the Second Circuit denied defendants’ petition for rehearing andrehearing en banc. The defendants are seeking a stay of further proceedings while they petition forSupreme Court review of the Second Circuit’s decision. On 6 March 2006, defendants filed a petitionfor certiorari with the United States Supreme Court seeking review of the Second Circuit’s 28September 2005 decision reversing the dismissal of this action. On 19 June 2006, the Supreme Courtrequested the government to submit its views on whether the defendants’ petition for certiorari shouldbe granted. The petition seeks review of an appellate court decision reversing the district court’sdismissal of the action. The government has not yet submitted its views to the Supreme Court, and theSupreme Court has not yet decided whether to grant the petition for certiorari.

In re Initial Public Offering Securities Litigation: Merrill Lynch has been named as one of the defendantsin approximately 110 securities class action complaints alleging that dozens of underwritingdefendants, including Merrill Lynch, artificially inflated and maintained the stock prices of the relevantsecurities by creating an artificially high aftermarket demand for shares. On 13 October 2004, thedistrict court, having previously denied defendants’ motions to dismiss, issued an order allowing certainof these cases to proceed against the underwriters as class actions. On 30 June 2005, the UnitedStates Court of Appeals for the Second Circuit entered an order agreeing to review the district court’sorder granting plaintiffs’ motion for class certification. The matter has now been fully briefed, and theparties are awaiting a decision from the Court of Appeals.

IPO Underwriting Fee Litigation

In re Public Offering Fee Antitrust Litigation and In re Issuer Plaintiff Initial Public Offering Fee AntitrustLitigation: Merrill Lynch is one of approximately two dozen defendants that have been named inpurported class actions filed in the United States District Court for the Southern District of New Yorkalleging that underwriters conspired to fix the “fee” paid to purchase certain initial public offeringsecurities at 7% in violation of antitrust laws. These complaints have been filed by both investors andcertain issuers in initial public offerings. On 25 September 2002, the court denied defendants’ motion

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to dismiss the issuer claims. On 24 February 2004, the court granted defendants’ motion to dismiss theinvestor claims for damages and penalties, and permitted the case to proceed only with regard to claimfor injunctive relief. The parties are awaiting a decision on plaintiffs’ motions for class certification inboth the investor and issuer class actions. On 18 April 2006, the United States District Court for theSouthern District of New York issued a decision denying class certification in the issuer class action.With regard to the investor action, which the court previously held could only proceed with respect toclaims for non-monetary relief, the court asked the plaintiffs to set forth the reasons why they wouldwish to proceed as a class action without any prospect of recovering any damages. On 1 May 2006,plaintiff filed an appeal of the district court’s decision declining to certify a class with the United StatesCourt of Appeals for the Second Circuit. On 1 August 2006, the court of appeals agreed to hear theappeal.

Enron Litigation

Newby v. Enron Corp. et al.: On 8 April 2002, Merrill Lynch was added as a defendant in a consolidatedclass action filed in the United States District Court for the Southern District of Texas against 69defendants purportedly on behalf of the purchasers of Enron’s publicly traded equity and debt securitiesduring the period 19 October 1998 through 27 November 2001. The complaint alleges, among otherthings, that Merrill Lynch engaged in improper transactions in the fourth quarter of 1999 that helpedEnron misrepresent its earnings and revenues in the fourth quarter of 1999. The complaint also allegesthat Merrill Lynch violated the securities laws in connection with its role as an underwriter of Enronstock, its research analyst coverage of Enron stock, and its role as placement agent for and limitedpartner in an Enron-controlled partnership called LJM2. On 19 December 2002 and 29 March 2004, thecourt denied Merrill Lynch’s motions to dismiss. On 27 July 2005, Merrill Lynch filed a Motion forJudgment on the Pleadings based, in part, on the Supreme Court’s 19 April 2005, decision in DuraPharmaceuticals v. Broudo, which addressed the standards for pleading and proving loss causation.On 3 August 2005, plaintiff filed a Motion for Partial Summary Judgment against Merrill Lynch, whichseeks a judgment that Merrill Lynch knowingly committed deceptive acts in furtherance of a scheme todefraud. Merrill Lynch is opposing that motion. On 5 July 2006, the district court issued an ordercertifying the case as a class action. On 19 July 2006, Merrill Lynch and other defendants appealed thatorder to the United States Court of Appeals for the Fifth Circuit. Merrill Lynch’s appeal, which plaintiffopposes, challenges the district court’s rulings on 1) the standards for determining whether conductamounts to a primary violation of the federal securities laws (which is actionable) or aiding and abetting(which is not actionable), 2) defendants’ potential liability for the conduct of others who allegedly causedlosses to Enron’s investors, and 3) whether the so-called fraud-on -the-market theory, which isimportant to class certification, applies to the allegations against Merrill Lynch. On 31 July 2006, thedistrict court denied plaintiff’s 3 August 2005 motion for partial summary judgment against Merrill Lynch.On 2 August 2006, plaintiff and certain defendants, including Merrill Lynch, requested that the start ofthe trial be postponed from 16 October 2006 to 9 April 2007.

In re Enron Corp.: On 24 September 2003, Enron Corporation filed an adversary proceeding in theUnited States Bankruptcy Court for the Southern District of New York against a large collection offinancial institutions, including Merrill Lynch. An amended complaint was filed on 5 December 2003.The complaint alleges that the conduct of Merrill Lynch and other bank defendants contributed toEnron’s bankruptcy. On 6 July 2006, Enron Corp. announced that it had reached an agreement withMerrill Lynch to settle litigation in the Enron bankruptcy case. Pursuant to the terms of the settlement,Merrill Lynch will pay Enron $29.5 million and subordinate (and thus receive no distribution on) claimsMerrill Lynch has asserted against Enron in the bankruptcy proceedings. In addition, under the termsof the settlement, Enron has agreed not to object to claims by a third party that acquired Enron debtfrom Merrill Lynch.

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Following Enron’s bankruptcy, Merrill Lynch had previously written the value of the claims that will nowbe subordinated down to zero in light of the uncertainties associated with recovering in the bankruptcyproceeding. As a result, the total impact of the settlement on Merrill Lynch’s pre-tax expenses for thesecond quarter of 2006 will be the $29.5 million that is being paid under the settlement.

The settlement is subject to the execution of definitive agreements and the approval of the UnitedStates Bankruptcy Court for the Southern District of New York. The settlement does not contain anyadmission of liability or wrongdoing by Merrill Lynch, and the settlement does not affect otherEnron-related litigation in which Merrill Lynch is a defendant.

United States v. Brown, et al.: On 1 August 2006, the United States Court of Appeals for the Fifth Circuitvacated the conviction of four former Merrill Lynch employees for conspiracy and wire fraud related toEnron’s alleged misrepresentations of its financial condition. The court affirmed the conviction of oneof those former employees for perjury and obstruction of a Grand Jury investigation.

Other Litigation: Dozens of other actions have been brought against Merrill Lynch and other investmentfirms in connection with their Enron-related activities, including actions by state pension plans and otherstate investment entities that purchased Enron securities and actions by other purchasers of Enronsecurities. There has been no adjudication of the merits of these claims.

Research Litigation

In re Merrill Lynch & Co., Inc. Research Reports Securities Litigation: Beginning in 2001, Merrill Lynchwas named in dozens of class actions that challenged the objectivity of Merrill Lynch’s researchrecommendations related to securities of Internet companies. As a result of the dismissal orabandonment of many of these cases and the 16 February 2006 settlements in principle of others(which settlements are subject to further documentation and court approvals), only two of these classactions are actively being litigated. Merrill Lynch is vigorously defending these two remaining actions,one of which, Dabit v. Merrill Lynch, is now before the United States Supreme Court, and the other ofwhich, In re Merrill Lynch & Co., Inc. Shareholders Litigation, was settled in July 2006 for an amountthat did not have a material impact on Merrill Lynch’s financial condition or results of operations. Thesettlement is subject to documentation and court approval.

In re Merrill Lynch Tyco Research Securities Litigation: On 4 June 2003, shareholders of TycoInternational filed a class action in the United States District Court for the Southern District of New Yorkalleging that a former Merrill Lynch research analyst engaged in a variety of improper practices inconnection with research analysis on Tyco International. On 18 February 2004, the court granted MerrillLynch’s motion to dismiss the claims related to Tyco. Plaintiffs have appealed the dismissal of theiraction to the United States Court of Appeals for the Second Circuit.

Tyco-Related Arbitration

On 25 July 2005, arbitration hearings began on a claim by a group of persons who allege that as a resultof allegedly misleading research issued by Merrill Lynch, they were induced not to sell Tyco stock thatthey had acquired in connection with the sale of their business. They sought damages of over $90million. On 10 October 2005, the arbitration panel unanimously rejected all of the claims against MerrillLynch and held that the claimants were not entitled to any relief.

Global Crossing Litigation

In re Global Crossing Ltd. Securities Litigation: On or about 28 January 2003, several dozen entities,including Merrill Lynch, were named as defendants in a class action filed in the United States DistrictCourt for the Southern District of New York. Plaintiffs asserted claims against Merrill Lynch inconnection with a March 1999 fairness opinion that Merrill Lynch issued to the Board of Directors ofGlobal Crossing in connection with its acquisition of Frontier Corporation, and in connection with twoGlobal Crossing securities offerings that took place in April 2000 in which Merrill Lynch was a member

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of the underwriting syndicate. On 18 December 2003, the court granted Merrill Lynch’s motion todismiss the claims related to the issuance of the fairness opinion but denied Merrill Lynch’s motion todismiss with regard to its role as an underwriter for the April 2000 offerings. In March 2006, this matterwas settled for an amount that did not have a material effect on Merrill Lynch’s financial condition orresults of operations. The settlement is subject to appropriate documentation and court approval.

Allegheny Energy Litigation

Merrill Lynch v. Allegheny Energy, Inc.: On 24 September 2002, Merrill Lynch filed an action in theUnited States District Court for the Southern District of New York against Allegheny Energy, Inc. Thecomplaint alleges that Allegheny owes Merrill Lynch the final $115 million payment due in connectionwith Allegheny’s purchase of Merrill Lynch’s energy trading business and assets in 2001. The followingday, Allegheny filed an action against Merrill Lynch in the Supreme Court of the State of New Yorkclaiming misrepresentations in connection with Merrill Lynch’s sale of the energy trading business toAllegheny. On 18 July 2005, following a bench trial, the court issued a decision holding that Alleghenyis required to pay Merrill Lynch $115 million plus interest and that Allegheny is not entitled to anyrecovery against Merrill Lynch. On 22 September 2005, Allegheny appealed the court’s 18 July 2005decision awarding Merrill Lynch $115 million plus interest on its claim and denying Allegheny any reliefon its claim. That appeal is pending.

Boston Chicken Litigation

BCI Trustee Litigation: The Plan Trustee, appointed by the Boston Chicken Inc. (“BCI”) Plan ofReorganization, has filed claims against numerous defendants, including Merrill Lynch and otherunderwriters, alleging damages to BCI resulting from debt and equity offerings in which theunderwriters participated between 1993 and 1997. The Plan Trustee’s suit is pending in federal districtcourt in Phoenix, Arizona. In January 2006, this matter was settled (subject to court approval) for anamount that did not have a material effect on Merrill Lynch & Co., Inc.’s financial condition or results ofoperations. The detailed terms and conditions of the settlement are confidential.

Sale of Mutual Fund Shares

Since May 2004, four putative class actions have been filed in the United States District Court for theSouthern District of New York against Merrill Lynch. These cases allege that Merrill Lynch failed todisclose incentives to mid-level managers to maximise the sale of mutual funds carrying the MerrillLynch brand name and that these mid-level managers pressured financial advisers to maximise thesale of these funds. Merrill Lynch is seeking the dismissal of these actions. In addition, Merrill Lynch isa defendant in a putative class action captioned Thomas J. DeBenedictis v. Merrill Lynch & Co., et al.,which was filed in the United States District Court for the District of New Jersey. This putative classaction alleges that the registration statements and prospectuses for the Merrill Lynch Funds shouldhave stated, but omitted to state, that for certain investors Class B shares are inherently inferior toClass A, C, and D shares. On 21 February 2006, the court granted Merrill Lynch’s motion to dismiss theaction.

Market Timing Class Action

In October 2004, a securities class action was filed against a large number of defendants, includingMerrill Lynch, in the United States District Court for the District of Maryland and was subsequentlyconsolidated as part of In re Mutual Funds Investment Litigation, MDL 1586. With regard to MerrillLynch, the complaint alleges that between 1 November 1998 and 3 September 2003, Merrill Lynchviolated federal securities laws in connection with serving as a broker-dealer intermediary on behalf ofcertain other defendants who allegedly engaged in market timing trading strategies in mutual fundshares. On 3 November 2005, the court granted Merrill Lynch’s motion to dismiss these actions.

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McReynolds v. Merrill Lynch

On 18 November 2005, a purported class action was filed in the United States District Court for theNorthern District of Illinois seeking to certify a class of current and former African American Merrill Lynchemployees, as well as African Americans who applied for employment. Plaintiff alleges that the firm hasengaged in a pattern and practice of discrimination against African Americans in violation of federal CivilRights statutes. Merrill Lynch is vigorously contesting these claims.

Parmalat

Merrill Lynch Capital Markets Bank Limited is one of dozens of defendants sued in Italy by Dr. EnricoBondi, the specially appointed administrator of Parmalat Finanziaria S.p.A. (“Parmalat”). Parmalat wasadmitted into insolvency proceedings in Italy on 27 December 2003. The claim against Merrill LynchCapital Markets Bank Limited is that in 2003 it wrongfully helped Parmalat stay in business, and thuscontinue to lose money, by buying options from Parmalat prior to Parmalat being admitted intoinsolvency proceedings. The first hearing on this claim is scheduled for May 2006. In addition, theParmalat Administrator has charged Merrill Lynch International with wrongfully facilitating the sale of anote to Parmalat that was linked to Parmalat’s credit in 1999. The first hearing on this claim isscheduled for April 2006. Merrill Lynch is vigorously contesting these claims.

Short Sales

Electronic Trading Group, LLC v. Banc of America Securities LLC, et al: On 12 April 2006, a purportedclass action was filed against eleven financial services firms, including Merrill Lynch, in the UnitedStates District Court for the Southern District of New York. The case alleges that the defendantsviolated federal antitrust laws by charging unearned fees on short sales by their clients even when theyfailed to borrow and/or deliver stock in support of those short sales. Merrill Lynch intends to vigorouslydefend itself against these charges. Plaintiffs have advised the defendants that they intend to file anamended complaint on or before 5 September 2006. The defendants, including Merrill Lynch, will thenhave until 8 November 2006, to move to dismiss the amended complaint.

Avenius v. Banc of America Securities LLC, et al: On 22 June 2006, 37 purchasers of securities of NovaStar Financial filed an action against eleven financial services firms, including Merrill Lynch, in theCalifornia Superior Court in San Francisco. The case alleges that the defendants improperly depressedthe price of Nova Star Financial shares by facilitating short sales that did not comply with regulatoryrequirements. The case was removed to federal court on 21 July. Merrill Lynch intends to vigorouslydefend itself against these charges.

SwissAir

Merrill Lynch Capital Markets Bank AG (“MLCMB AG”) is one of several defendants sued in Zurich,Switzerland by the Liquidator of SAirGroup (“SwissAir”). The Liquidator claims that SwissAir lackedauthority to enter into certain transactions with MLCMB AG in 1999 and 2000 pursuant to whichSwissAir received an economic interest in additional SwissAir shares, and that MLCMB AG should paythe Liquidator losses on those shares. On 1 March 2006, the commercial court of Zurich declined todismiss the case on procedural grounds, but did not rule on the substance of any of the claims. MLCMBAG is vigorously defending itself against these claims. On 24 July 2006, MLCMB AG filed its defenseto the claims of the Liquidator of SwissAir in the commercial court of Zurich. The first hearing thatconsiders the merits of the claims is likely to take place in late 2006 or early 2007.

Other

Merrill Lynch has been named as a defendant in various other legal actions, including arbitrations, classactions, and other litigation arising in connection with its activities as a global diversified financialservices institution. The general decline of equity securities prices between 2000 and 2003 resulted inincreased legal actions against many firms, including Merrill Lynch.

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Some of the legal actions include claims for substantial compensatory and/or punitive damages orclaims for indeterminate amounts of damages. In some cases, the issuers that would otherwise be theprimary defendants in such cases are bankrupt or otherwise in financial distress. Merrill Lynch is alsoinvolved in investigations and/or proceedings by governmental and self-regulatory agencies. Thenumber of these investigations has also increased in recent years with regard to many firms, includingMerrill Lynch.

Merrill Lynch believes it has strong defenses to, and where appropriate, will vigorously contest, manyof these matters. Given the number of these matters, some are likely to result in adverse judgments,penalties, injunctions, fines, or other relief. Merrill Lynch may explore potential settlements before acase is taken through trial because of the uncertainty and risks inherent in the litigation process. Inaccordance with Statement of Financial Accounting Standards No. 5, Merrill Lynch will accrue a liabilitywhen it is probable that a liability has been incurred and the amount of the loss can be reasonablyestimated. In many lawsuits and arbitrations, including most of the class action lawsuits disclosed inMerrill Lynch & Co., Inc.’s public filings, it is not possible to determine whether a liability has beenincurred or to estimate the ultimate or minimum amount of that liability until the case is close toresolution, in which case no accrual is made until that time. In view of the inherent difficulty of predictingthe outcome of such matters, particularly in cases in which claimants seek substantial or indeterminatedamages, Merrill Lynch cannot predict what the eventual loss or range of loss related to such matterswill be. Subject to the foregoing, Merrill Lynch continues to assess these cases and believes, based oninformation available to it, that the resolution of these matters will not have a material adverse effect onthe financial condition of Merrill Lynch as set forth in the consolidated financial statements, but may bematerial to Merrill Lynch’s operating results or cash flows for any particular period and may impactMerrill Lynch & Co., Inc.’s credit ratings.

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DESCRIPTION OF THE SWAP COUNTERPARTY

It is expected that Merrill Lynch International will be a Swap Counterparty pursuant to the Programme.Each Pricing Statement will state whether or not the Issuer is to enter into a Swap Agreement with theSwap Counterparty in connection with the relevant issue of Notes.

Merrill Lynch International was incorporated in the United Kingdom on 2 November 1988. Merrill LynchInternational is an indirect, wholly-owned, subsidiary of Merrill Lynch & Co., Inc. The registered officeand principal place of business of Merrill Lynch International is at Merrill Lynch Financial Centre, 2 KingEdward Street, London, EC1A 1HQ England.

The principal activities of Merrill Lynch International are to provide a wide range of financial services,to act as broker and dealer in financial instruments and to provide corporate finance services. It alsoprovides post trade related services to third party clients, including settlement and clearing activities.

As at the date of this Base Prospectus, Merrill Lynch International does not have any credit rating. Itspayment obligations under the Swap Agreement (if any) in respect of a relevant Series of Notes are,as stated in the section “Description of the Swap Agreement and the Swap Guarantee”, guaranteed bythe Swap Guarantor.

The Notes will not be obligations of and will not be guaranteed by Merrill Lynch International.

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DESCRIPTION OF THE PROGRAMME ARRANGER

Merrill Lynch (Singapore) Pte. Ltd., the Programme Arranger, is a wholly-owned indirect subsidiary ofMerrill Lynch & Co., Inc., and is incorporated under the laws of Singapore. The principal office of MerrillLynch (Singapore) Pte. Ltd. is located at 1 Temasek Avenue, #28-01 Millenia Tower Singapore 039192.

Merrill Lynch (Singapore) Pte. Ltd. is a securities dealer and investment adviser. As the ProgrammeArranger of the Programme, it has arranged the establishment of the Programme and it may from timeto time assist the Issuer by managing the issuance of each Series of Notes (although the Issuer mayalso appoint in future other persons as local arrangers and/or dealers in respect of one or moreparticular Series of Notes which may be offered in countries outside Singapore).

This is the first retail structured note programme that Merrill Lynch (Singapore) Pte. Ltd. has establishedin Singapore and for which it is engaged as Programme Arranger. Merrill Lynch (Singapore) Pte. Ltd.was previously engaged as the Singapore dealer under a retail structured note programme inSingapore. Merrill Lynch (Singapore) Pte. Ltd. and its affiliates have also engaged in a similar retail noteprogramme in Hong Kong since early 2006.

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THE ISSUING AND PAYING AGENT

The Issuing and Paying Agent, The Hongkong and Shanghai Banking Corporation Limited, is part of theHSBC Group and is a provider of personal financial services, consumer finance, commercial bankingservices, corporate, investments banking and markets services. It has experience in being an issuingand paying agent for a variety of different entities in a variety of transactions.

Pursuant to the Agency Agreement between, amongst others, the Issuer and the Issuing and PayingAgent, the Issuing and Paying Agent is obliged to pay or cause to be paid on behalf of the Issuer onand after each due date, the amounts due in respect of the Notes, including interest and principal, andto also perform certain administrative functions, such as publishing any notice to Noteholders inconnection with any redemption or exercise of an Issuer’s option (if applicable). The Issuing and PayingAgent will receive the amounts due in respect of the Notes from the Issuer and will pay out suchamounts to the Noteholders on the payment due date. The Issuing and Paying Agent has no ability towaive or modify any fees and payments in relation to the Notes, does not manage the Reference Assetsand has no custodial responsibility, in its capacity as Issuing and Paying Agent, for the Securities. TheCustodian will be The Hongkong and Shanghai Banking Corporation Limited, in a separate capacityunder the Agency Agreement.

The Issuing and Paying Agent shall be obliged to perform only such duties as are specifically set outin the Agency Agreement, the Master Conditions and any duties necessarily incidental to them. Noimplied duties or obligations shall be read into any such documents and the Issuing and Paying Agentshall not be obliged to perform additional duties set out in any Pricing Statement and therebyincorporated into the Master Conditions, unless it shall have previously agreed in writing to performsuch duties. The Issuing and Paying Agent shall not be under any obligation to take any action underthe Agency Agreement that it expects, and has so notified the Issuer in writing, will result in its expenseor liability, the payment of which is not, in its opinion, assured to it within a reasonable time.

In relation to any Series, the Issuer may at any time terminate the appointment of the Issuing andPaying Agent by giving at least 15 days’ notice which shall expire at least 7 days before or after any duedate for payment in respect of the Notes of that Series. The Issuing and Paying Agent may also resignby giving at least 30 days’ notice which shall expire at least 15 days before or after any due date forpayment in respect of the Notes of that Series. In the case of termination, the replacement issuing andpaying agent can be appointed by a letter of appointment being executed by or on behalf of the Issuer.

No termination or resignation may take effect until a successor Issuing and Paying Agent is appointed.If the Issuer fails to appoint a successor within the 30 days’ notice period, the Issuing and Paying Agentmay select a leading international bank of recognised good standing and repute acceptable to theTrustee to act as Issuing and Paying Agent and the Issuer shall appoint that bank as successor Issuingand Paying Agent.

The appointment of the Issuing and Paying Agent will also automatically terminate on the occurrenceof certain specified insolvency events.

As disclosed in the section headed “Fees and Expenses” above, Merrill Lynch International or anaffiliate of Merrill Lynch International will pay, on our behalf, an upfront acceptance fee to the Issuingand Paying Agent for the Programme, the annual fees and also the Issuing and Paying Agent’s fees,in relation to the issuance of each Series of Notes, such as administrative fees, each in an amountwhich shall be separately agreed between the Issuer and the Issuing and Paying Agent.

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SETTLEMENT, CLEARANCE AND CUSTODY

The following is a summary of the settlement, clearance and custody arrangements for the Notes.

Introduction

The relevant Pricing Statement will specify the clearing system(s) applicable for each Series of Notes.

Clearance and Settlement through CDP

In respect of Notes which are accepted for clearance by CDP, the entire series of the Notes is to be heldby CDP in the form of Global Notes for persons holding the Notes in Securities Accounts with CDP (the“Depositors”). Delivery and transfer of the Notes between Depositors is by electronic book-entries inthe records of CDP only, as reflected in the Securities Accounts of Depositors. Although CDPencourages settlement on the third Business Day following the trade date of debt securities, marketparticipants may mutually agree on a different settlement period if necessary.

Settlement of over-the-counter trades in the Notes through an electronic book-entry clearance andsettlement system for the trading of debt securities maintained by CDP (“Depository System”) mayonly be effected through certain corporate depositors approved by CDP under the Companies Act (asdefined herein), to maintain securities sub-accounts (“Depository Agents”) and to hold the Notes insuch securities sub-accounts for themselves and their clients. Accordingly, the Notes for which tradesettlement is to be effected through the Depository System must be held in securities sub-accounts withDepository Agents. Depositors holding the Notes in direct Securities Accounts with CDP, and who wishto trade such Notes through the Depository System, must transfer such Notes to be traded from suchdirect Securities Accounts to a securities sub-account with a Depository Agent for trade settlement.

General

CDP is not involved in money settlement between Depository Agents (or any other persons) as CDPis not a counterparty in the settlement of trades of debt securities. However, CDP will make paymentof interest and repayment of principal and any dividends on behalf of issuers of debt securities.

Although CDP has established procedures to facilitate transfer of interests in the Notes in global formamong Depositors, it is under no obligation to perform or continue to perform such procedures, andsuch procedures may be discontinued at any time. None of the Issuer, the Agents for the Notes or anyother agents will have the responsibility for the performance by CDP of its obligations under the rulesand procedures governing its operations.

Euroclear and Clearstream, Luxembourg

Each of Euroclear and Clearstream, Luxembourg holds securities for participating organisations andfacilitates the clearance and settlement of securities transactions between their respective participantsthrough electronic book-entry changes in accounts of such participants. Euroclear and Clearstream,Luxembourg provide to their respective participants, among other things, services for safekeeping,administration, clearance and settlement of internationally-traded securities and securities lending andborrowing. Euroclear and Clearstream, Luxembourg participants are financial institutions throughoutthe world, including underwriters, securities brokers and dealers, banks, trust companies, clearingcorporations and certain other organisations. Indirect access to Euroclear or Clearstream, Luxembourgis also available to others, such as banks, brokers, dealers and trust companies which clear through ormaintain a custodial relationship with a Euroclear or Clearstream, Luxembourg participant, eitherdirectly or indirectly.

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Distributions of principal with respect to book-entry interests in the Notes held through Euroclear orClearstream, Luxembourg will be credited, to the extent received by the Issuing and Paying Agent, tothe cash accounts of Euroclear or Clearstream, Luxembourg participants in accordance with therelevant system’s rules and procedures.

Custody Arrangements with Distributors

Definitive Notes, or certificates representing Notes, will not be issued to individual holders of Notes(except in very limited circumstances as described in the section headed “Summary of the SecuredNote Programme — Form of Notes” in this Base Prospectus). Global Notes or Global Certificates, eachrepresenting the total principal amount of each Series of Notes will, instead on the Issue Date of theNotes (in the case of Global Notes) be deposited with CDP, Euroclear or Clearstream, Luxembourgand/or any alternative clearing system or will (in the case of Global Certificates) be registered in thename of CDP or a nominee for, a common depositary for Euroclear and Clearstream, Luxembourgand/or any alternative clearing system, as the case may be.

Notes, in the form of interests in a Global Note or as represented by the Global Certificate, will becredited to the accounts of the Noteholders with CDP, Euroclear and/or Clearstream, Luxembourgand/or any alternative clearing system. For so long as any of the Notes are represented by a GlobalNote or a Global Certificate held through a clearing system, the Distributors, as participants in theclearing system or (in the case of CDP) Distributors who are Depository Agents for Noteholders andindividual Noteholders with direct Securities Accounts, will be treated as holders of the Notes for allpurposes other than with respect to the payment of principal or interest on the Notes, the right to whichshall be vested solely in the bearer of the Global Note or the registered holder of the Global Certificate,as the case may be.

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TAXATION OF NOTES

The statements below are general in nature and are based on certain aspects of current tax laws inSingapore, announced budget measures in the 2006 Budget and administrative guidelines issued bythe Authority and the Inland Revenue Authority of Singapore (“IRAS”) in force as at the date of thisBase Prospectus and are subject to enactment of such budget measures and to any changes in suchlaws or administrative guidelines, or the interpretation of those laws, or guidelines, occurring after suchdate, which changes could be made on a retroactive basis. Neither these statements nor any otherstatements in this Base Prospectus are to be regarded as advice on the tax position of any holder ofthe Notes or of any person acquiring, selling or otherwise dealing with the Notes or on any taximplications arising from the acquisition, sale or other dealings in respect of the Notes. The statementsdo not purport to be a comprehensive description of all the tax considerations that may be relevant toa decision to purchase, own or dispose of the Notes and do not purport to deal with the taxconsequences applicable to all categories of investors, some of which (such as dealers in securities)may be subject to special rules. Holders or prospective holders of the Notes who are in doubt abouttheir respective tax positions or any such tax implications of the purchase, ownership or transfer ofNotes or who may be subject to tax in a jurisdiction other than Singapore should consult their ownprofessional advisers.

Singapore

1. Interest and Other Payments

As the Notes are issued under a programme which is arranged as a whole by Merrill Lynch(Singapore) Pte. Ltd., a financial institution who has the status of Financial Sector Incentive (BondMarket) Company (as defined in the Income Tax Act of Singapore (Chapter 134) (“ITA”)), anytranche of Notes issued on or before 31 December 2008 (“Relevant Notes”) would be “qualifyingdebt securities” for the purposes of the ITA to which the following treatments apply.

Subject to certain prescribed conditions having been fulfilled (including the submission of a returnon debt securities to the Comptroller of Income Tax in Singapore within one month (excludingSaturdays) from the date of issue of the Relevant Notes), interest and discount income (excludingdiscount income from secondary trading) on the Relevant Notes received by any company orbody of persons (as defined in the ITA) in Singapore is subject to a concessionary tax rate of 10%.

However, notwithstanding the foregoing:

(i) if during the primary launch of the Relevant Notes, the Relevant Notes are issued to lessthan four persons and 50% or more of the principal amount of the Relevant Notes isbeneficially held or funded, directly or indirectly, by related parties of the Issuer, the RelevantNotes would not qualify as “qualifying debt securities”; and

(ii) even though the Relevant Notes are “qualifying debt securities”, if at any time during thetenor of the Relevant Notes, 50% or more of the principal amount of the Relevant Notes isbeneficially held or funded, directly or indirectly, by any related party(ies) of the Issuer,interest or discount income derived from the Relevant Notes held by (1) any related party ofthe Issuer; or (2) any other person where the funds used by such person to acquire theRelevant Notes are obtained, directly or indirectly, from any related party of the Issuer, shallnot be eligible for the concessionary tax rate of 10%.

All foreign-sourced income received in Singapore on or after 1 January 2004 by Singaporetax-resident individuals will be exempted from tax, provided such foreign-sourced income is notreceived through a partnership in Singapore.

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2. Capital Gains

Any gains considered to be in the nature of capital made from the sale of the Notes will not betaxable in Singapore. However, any gains from the sale of Notes which are gains from any trade,business, profession or vocation carried on by that person, if accruing in or derived fromSingapore, may be taxable as such gains are considered revenue in nature.

3. Estate Duty

Singapore estate duty is imposed on the value of immovable property situated in Singapore andmovable property, wherever it may be situated, passing on the death of an individual domiciled inSingapore.

Accordingly, Notes passing upon the death of an individual domiciled in Singapore are subject toSingapore estate duty upon such individual’s death. Singapore estate duty is payable to the extentthat the value of the Notes aggregated with any other assets subject to Singapore estate dutyexceeds S$600,000. Unless other exemptions apply to the other assets, for example, theseparate exemption limit for residential properties, any excess beyond S$600,000 will be taxed at5 per cent. on the first S$12 million of the individual’s Singapore chargeable assets and thereafterat 10 per cent.

Estate duty, however, is not imposed on movable properties passing on the death of persons whoare not domiciled in Singapore. Accordingly, where an individual holder of the Notes is notdomiciled in Singapore at the time of the individual’s death, the Notes will not be subject toSingapore estate duty.

Prospective purchasers of the Notes who are individuals, whether or not domiciled in Singapore,should consult their own tax advisors regarding the Singapore estate duty consequences of theirinvestment and ownership of such Notes.

The Cayman Islands

The Cayman Islands currently have no exchange control restrictions and no income, corporate orcapital gains tax, estate duty, inheritance tax, gift tax or withholding tax applicable to the Issuer or toany holder of the Notes. Accordingly, payment of principal of and interest on, and any transfer of, theNotes will not be subject to taxation in the Cayman Islands. No Cayman Islands withholding tax will berequired on payments of principal or interest to any holder of a Note. Gains derived from the sale ofNotes will not be subject to Cayman Islands capital gains tax. The Cayman Islands are not party to anydouble taxation treaties.

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SELLING RESTRICTIONS

The following section contains the selling restrictions on the offering of the Notes and the distributionof offering materials in various jurisdictions.

General

This Base Prospectus does not constitute an offer, solicitation or invitation to subscribe for and/orpurchase the Notes in any jurisdiction in which such offer, solicitation or invitation is unlawful or is notauthorised or to any person to whom it is unlawful to make such offer, solicitation or invitation. No actionhas been or will be taken under the requirements of the legislation or regulation of, or of the legalregulatory requirements of any jurisdiction, except for the filing and/or registration of this BaseProspectus and the relevant Pricing Statement in Singapore in order to permit a public offering of theNotes and the public distribution of this Base Prospectus and the relevant Pricing Statement inSingapore. The distribution of this Base Prospectus and the relevant Pricing Statement and the offeringof the Notes in certain jurisdictions may be restricted by the relevant laws in such jurisdictions. Personswho may come into possession of the Base Prospectus and the relevant Pricing Statement are requiredby the Issuer and the Dealer to inform themselves about, and to observe and comply with, any suchrestrictions.

United States

The Notes have not been and will not be registered under the Securities Act. The Notes may not beoffered, sold or delivered within the U.S. or to, or for the account or benefit of, U.S. persons except inaccordance with Regulation S under the Securities Act or pursuant to an exemption from theregistration requirements of the Securities Act. Each Distributor has agreed that it will not offer, sell ordeliver any Notes within the United States.

In addition, until 40 days after the commencement of the offering of any identifiable tranche of suchNotes, an offer or sale of Notes within the United States by any Distributor (whether or not participatingin the offering) may violate the registration requirements of the Securities Act. Terms used in thisparagraph have the same meaning as set out in Regulation S issued pursuant to the Securities Act.

The Notes are subject to U.S. tax law requirements and may not be offered, sold or delivered within theUnited States or its possessions or to a United States person, except in certain transactions permittedby U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the U.S.Internal Revenue Code and regulations thereunder.

Each Distributor understands that the Notes have not been and will not be registered under theSecurities Act, and may not be offered or sold within the United States or to, or for the account or benefitof, U.S. persons except in accordance with Regulation S under the Securities Act or pursuant to anexemption from the registration requirements of the Securities Act. Each Distributor has representedand agreed that it has offered and sold any Notes, and will offer and sell any Notes of any Tranche (a)as part of their distribution at any time and (b) otherwise until 40 days after the completion of thedistribution of all Notes of the Tranche of which such Notes are a part, as determined and notified bythe Issuing and Paying Agent to such Distributor, as provided below, only in accordance with Rule 903of Regulation S under the Securities Act. Accordingly, each Distributor has further represented andagreed that neither it nor its affiliates nor any person acting on its or their behalf have engaged nor willengage in any directed selling efforts with respect to the Notes; and it and they have complied and willcomply with the offering restrictions requirement of Regulation S under the Securities Act. EachDistributor who has purchased Notes of a Tranche (or in the case of a sale of a Tranche of Notes issuedto or through more than one Distributor, each of such Distributor as to the Notes of such Tranchepurchased by or through it or, in the case of a syndicated issue, the Dealer) shall determine and notifyto the Issuing and Paying Agent the completion of the distribution of the Notes of such Tranche. On thebasis of such notification or notifications, the Issuing and Paying Agent will notify the Dealer of the end

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of the distribution compliance period with respect to such Tranche. Each Distributor has also agreedthat, at or prior to confirmation of sale of Notes, it will have sent to each distributor, dealer or personreceiving a selling concession, fee or other remuneration that purchases Notes from it during thedistribution compliance period a confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, asamended (the “Securities Act”), and may not be offered or sold within the United States or to, or forthe account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until40 days after the completion of the distribution of an identifiable tranche of the Securities as determinedand certified by each Distributor, except in either case in accordance with Regulation S under theSecurities Act.Terms used above have the meanings given to them by Regulation S under theSecurities Act.”

Terms used in this section have the meanings given to them by Regulation S under the Securities Act.

In addition,

(a) except to the extent permitted under U.S. Treas. Reg. § 1.163-5(c)(2)(i)(D) (the “D Rules”), (i)each Distributor has represented that it has not offered or sold, and agreed that it during the40-day distribution compliance period will not offer or sell, Notes to a person who is within theUnited States or its possessions or to a United States person, and (ii) each Distributor hasrepresented that it has not delivered and agreed that it will not deliver within the United States orits possessions Notes that are sold during the distribution compliance period;

(b) each Distributor has represented and agreed that it has and throughout the distributioncompliance period will have in effect procedures reasonably designed to ensure that itsemployees or agents who are directly engaged in selling Notes are aware that such Notes maynot be offered or sold during the distribution compliance period to a person who is within theUnited States or its possessions or to a United States person, except as permitted by the D Rules;

(c) if the Distributor is a United States person, it represents that it is acquiring the Notes for purposesof resale in connection with their original issuance and if it retains Notes for its own account, it willonly do so in accordance with the requirements of U.S. Treas. Reg. § 1.163-5(c)(2)(i)(D)(6);

(d) with respect to each affiliate that acquires Notes from a Distributor for the purpose of offering orselling such Notes during the distribution compliance period, the Distributor has agreed that it willobtain from such affiliate for the Issuer’s benefit the representations and agreements contained insub-paragraphs (a), (b) and (c) above; and

(e) each Distributor has agreed that it will obtain from any distributor (within the meaning of U.S.Treas. Reg. Section 1.163-5(c)(2)(i)(D)(4)(ii)) that purchases any Notes from it pursuant to awritten contract with such Distributor (except a distributor that is one of its affiliates or is anotherDistributor), for the benefit of the relevant Issuer and each other Distributor, the representationscontained in, and such distributor’s agreement to comply with, the provisions of sub-clauses (a),(b), (c) and (d) of this paragraph insofar as they relate to the D Rules, as if such distributor werea Distributor hereunder.

Terms used in this section have the meanings given to them by the U.S. Internal Revenue Code andregulations thereunder, including the D Rules.

Notes will be issued in accordance with the provisions of the D Rules, unless the Pricing Supplement(attached to the Pricing Statement) specifies that Notes will be issued in accordance with the provisionsof the U.S. Treas. Reg. § 1.163-5(c)(2)(i)(C) (the “C Rules”). If Notes are issued pursuant to the CRules, Notes in bearer form must be issued and delivered outside the United States and itspossessions in connection with their original issuance. In relation to each such Tranche, eachDistributor has represented and agreed that it has not offered, sold or delivered, and shall not offer, sellor deliver, directly or indirectly, Notes in bearer form within the United States or its possessions inconnection with their original issuance. Further, in connection with its original issuance of Notes in

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bearer form, it has not communicated, and shall not communicate, directly or indirectly, with aprospective purchaser if either such purchaser or it is within the United States or its possessions orotherwise involve its U.S. office in the offer or sale of Notes in bearer form. Terms used in this paragraphhave the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder,including the C Rules.

United Kingdom

Each Distributor of the Notes has represented, warranted and agreed or will represent, warrant andagree that:

(i) in relation to any Notes which have a maturity of less than a year, (a) it is a person whose ordinaryactivities involve it in acquiring, holding, managing or disposing of investments (as principal oragent) for the purposes of its business and (b) it has not offered or sold and will not offer or sellany Notes other than to persons whose ordinary activities involve them in acquiring, holding,managing or disposing of investments (as principal or agent) for the purposes of their businessesor who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principalor agent) for the purposes of their businesses where the issue of the Notes would otherwiseconstitute a contravention of section 19 of the Financial Services and Markets Act 2000 (the“FSMA”) by the Issuer;

(ii) it has only communicated or caused to be communicated and will only communicate or cause tobe communicated any invitation or inducement to engage in investment activity (within themeaning of section 21 of the FSMA) received by it in connection with the issue or sale of anyNotes in circumstances in which section 21(1) of the FSMA does not apply to the Issuer; and

(iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anythingdone by it in relation to such Notes in, from or otherwise involving the United Kingdom.

European Economic Area

In relation to each Member State of the European Economic Area which has implemented theProspectus Directive (each, a “Relevant Member State”) each Distributor of the Notes hasrepresented, warranted and agreed or will represent, warrant and agree that with effect from andincluding 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 thepublic (where the Notes have a denomination of less than C50,000 (or its equivalent in any othercurrency as at the date of issue of the Notes)) in that Relevant Member State, except that it may, witheffect from and including the Relevant Implementation Date, make an offer of Notes to the public in thatRelevant Member State:

(i) in (or in Germany, where the offer starts within) the period beginning on the date of publication ofa prospectus in relation to those Notes which has been approved by the competent authority inthat Relevant Member State or, where appropriate, approved in another Relevant Member Stateand notified to the competent authority in that Relevant Member State or final terms in relation tosuch offer, as applicable, all in accordance with the Prospectus Directive and ending on the datespecified in such prospectus or final terms, as applicable;

(ii) at any time to legal entities which are authorised or regulated to operate in the financial marketsor, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(iii) at any time to any legal entity which has two or more of (1) an average of at least 250 employeesduring the last financial year; (2) a total balance sheet of more than C43,000,000 and (3) anannual net turnover of more than C50,000,000, as shown in its last annual or consolidatedaccounts;

(iv) to fewer than 100 natural or fewer persons (other than qualified investors as defined in theProspectus Directive) subject to obtaining the prior consent of the relevant dealer or dealersnominated by the Issuer for any such offer; or

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(v) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer shall result in a requirement for the publication by the Issuer of a prospectuspursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of Notes to the public” in relation to anyNotes in any Relevant Member State means the communication in any form and by any means ofsufficient information on the terms of the offer and the Notes to be offered so as to enable an investorto decide to purchase or subscribe the Notes, as the same may be varied in that Member State by anymeasure implementing the Prospectus Directive in that Member State and the expression ProspectusDirective means Directive 2003/71/EC and includes any relevant implementing measure in eachRelevant Member State.

Hong Kong

In relation to each Tranche of Notes issued by the Issuer, each Distributor has represented and agreed,and each further Distributor appointed under the Programme will be required to represent, warrant andagree, that:

(i) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, anyNotes other than (a) to “professional investors” as defined in the Securities and Futures Ordinance(Cap. 571) of Hong Kong (the “SFO”) and any rules made under the SFO; or (b) in othercircumstances which do not result in the document being a “prospectus” as defined in theCompanies Ordinance (Cap. 32) of Hong Kong (the “Companies Ordinance”) or which do notconstitute an offer to the public within the meaning of the Companies Ordinance; and

(ii) it has not issued or had in its possession for the purposes of issue, and will not issue or have inits possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement,invitation or document relating to the Notes, which is directed at, or the contents of which are likelyto be accessed or read by, the public of Hong Kong (except if permitted to do so under thesecurities laws of Hong Kong) other than with respect to Notes which are or are intended to bedisposed of only to persons outside Hong Kong or only to “professional investors” as defined inthe SFO and any rules made under the SFO.

Cayman Islands

No invitation may be made to the public in the Cayman Islands to subscribe for any of the Notes.

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GENERAL AND STATUTORY INFORMATION

GENERAL INFORMATION

1. The registered office of the Issuer is P.O. Box 1984GT, Elizabethan Square, George Town, GrandCayman, Cayman Islands and its telephone and facsimile numbers are +1-345-949-8244 and+1-345-949-5223 respectively.

2. The Issuer was registered and incorporated on 13 October 2006 as an exempted company in theCayman Islands with limited liability under the Companies Law (2004 Revision) of the CaymanIslands, registration number DB-175608. There is no limit as to the duration for which the Issueris to exist.

3. The Securities will be administered by the Custodian and the Paying Agents will be responsiblefor making payments to Noteholders. Ths Issuer has no discretion with regard to theadministration of the Securities.

4. The Calculation Agent will be responsible for making all determinations under the MasterConditions, including the calculation of the amount of interest payable under the Notes. TheCalculation Agent has sole and absolute discretion in making its determinations and exercising itsdiscretions under the legal documentation. Any decision it makes is final and binding on theIssuer, the Noteholders and the other parties involved in the Notes.

The Calculation Agent must make its determinations and exercise its discretions in accordancewith the criteria set out in Master Conditions. In practice, the Calculation Agent will ensure that itsdecisions under the Master Conditions are consistent with the decisions made under thecorresponding terms of the Swap Agreement in respect of each Series of Notes. This is to ensurethat the Issuer’s rights under the Swap Agreement in respect of each Series of Notes continue tomatch the Issuer’s obligations under the Notes.

The Calculation Agent is the agent of the Issuer and owes no duty to the Noteholders.

5. As of the date of this Base Prospectus, there are no reciprocal tax treaties between the CaymanIslands and Singapore.

6. Deutsche Bank (Cayman) Limited of P.O. Box 1984GT, Elizabethan Square, George Town, GrandCayman, Cayman Islands, is responsible for the management and administration of the Issuerpursuant to a corporate administration agreement dated 16 October 2006 (the “AdministrationAgreement”) made between the Issuer and Deutsche Bank (Cayman) Limited.

The Administration Agreement may be terminated:

(i) by either party giving at least three months’ written notice to the other party; or

(ii) upon one party giving the other party at least 14 days’ notice in writing at any time within 12months of the happening of any of the following events:

(a) the other party goes into liquidation or is dissolved (except as a voluntary liquidation ordissolution for the purposes of reconstruction or amalgamation upon terms previouslyapproved in writing by the party otherwise entitled to serve notice) or commits anyother act of bankruptcy under applicable laws; or

(b) the other party committing any breach of its obligations under this Agreement and (ifsuch breach shall be capable of remedy) fails within 30 days of notice served on it tomake good such breach.

There is no requirement contained within the Administration Agreement for a replacementadministrator to be appointed upon the termination of the appointment of Deutsche Bank(Cayman) Limited.

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7. A summary of the main provisions in the Trust Deed governing the functions, rights andobligations of the Trustee is set out below. Should more information be required, please refer tothe Trust Deed, a copy of which may be inspected as set out in paragraph 5 of the sub-sectionon “Statutory Information” below:

7.1 The Trustee, HSBC Institutional Trust Services (Singapore) Limited, has been appointedas the trustee for the Noteholders and will carry out its duties and functions in accordancewith the provisions of the Trust Deed.

7.2 Pursuant to the Trust Deed, the Trustee will hold the benefit of the security created by theIssuer over the Mortgaged Property in favour of the Trustee as trustee for itself and/or theholders of Notes, Coupons and Receipts, the Custodian, the Issuing and Paying Agent andthe Other Creditors.

7.3 Only the Trustee may at its discretion and without further notice, institute such proceedingsagainst the Issuer as it may think fit to enforce the rights of the holders of Notes, Coupons,Receipts and Talons, the Custodian, the Issuing and Paying Agent and/or Other Creditorsagainst the Issuer, but it need not take any such proceedings unless, inter alia, it is directedby an Extraordinary Resolution or requested in writing by relevant Noteholders holding atleast one-fifth of the aggregate nominal amount of the Notes outstanding and isindemnified to its satisfaction. In the event that the Trustee, for any reason, fails to takeaction against the Issuer when so directed or requested and indemnified, the Noteholdersmay institute proceedings against the Issuer to enforce their rights against the Issuer.

7.4 At any time after any Security shall have become enforceable, on receipt of, amongst otherthings, an Extraordinary Resolution or requested in writing by Noteholders of at leastone-fifth of the aggregate nominal amount of the Notes outstanding, the Trustee shall, andotherwise in its discretion may (in each case subject to it having been indemnified to itssatisfaction against any loss, liability, cost, claim, action, demand or expense which may beincurred or made against it in connection therewith) enforce the Security. In doing so, theTrustee has the power to take possession of the Mortgaged Property and convert it intomoney as it deems fit when the Security over it becomes enforceable.

7.5 The Trustee may in writing appoint a receiver of all or part of the Mortgaged Property overwhich any Security shall have become enforceable and may remove any receiver soappointed and appoint another in his place.

7.6 The Trustee may raise and borrow money on the security of the Mortgaged Property or anypart of it in order to defray moneys, costs, charges, losses and expenses paid or incurredby it in relation to the Trust Deed (including the costs of realising any security and theremuneration of the Trustee) or in exercise of any of its functions pursuant to the TrustDeed. The Trustee may raise and borrow such money on such terms as it shall think fit andmay secure its repayment with interest by mortgaging or otherwise charging all or part ofthe Mortgaged Property whether or not in priority to the Security constituted by or pursuantto the Supplemental Trust Deed and generally in such manner and form as the Trusteeshall think fit and for such purposes may take such action as it shall think fit.

7.7 Neither the Trustee nor any receiver or any attorney or agent of the Trustee shall by reasonof taking possession of any Mortgaged Property or any other reason and whether or not asmortgagee in possession be liable to account for anything except actual receipts or beliable for any loss or damage arising from the realisation of such Mortgaged Property orfrom any act or omission in relation to such Mortgaged Property or otherwise unless suchloss or damage shall be caused by its own fraud.

7.8 If the amount of the moneys available for payment at any time in respect of the Notes isless than 10 per cent. of the nominal amount of Notes then outstanding, the Trustee may,at its discretion, invest such moneys. The Trustee may retain such investments andaccumulate the resulting income until the investments and the accumulations, togetherwith any other funds for the time being under its control and available for such payment,amount to at least 10 per cent of the nominal amount of the Notes then outstanding.

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7.9 The Issuer shall indemnify the Trustee in respect of all liabilities and expenses properlyincurred by it or by anyone appointed by it or to whom any of its functions may be delegatedby it in the carrying out of its functions and against any loss, liability, cost, claim, action,demand or expense (including, but not limited to, all costs, charges and expenses properlypaid or incurred in disputing or defending any of the foregoing) that any of them may incuror that may be made against any of them arising out of or in relation to or in connectionwith, its appointment or the exercise of its functions.

7.10 In acting as the Trustee under the Trust Deed, the Trustee shall not assume any duty orresponsibility to any Credit Support Provider, Swap Counterparty, Swap Guarantor,Beneficiary, Counterparty, Custodian or Issuing and Paying Agent (other than to pay to anysuch party any moneys received and payable to it and to act in accordance with theprovisions of Condition 4 and, in respect of Notes, the Trust Deed) and shall have regardsolely to the interests of the Noteholders of any Series or, as the case may be, all Series.The Trustee, subject to certain exceptions, shall not be obliged to act on any directions ofany Other Creditor, the Issuing and Paying Agent or the Custodian if this would in theTrustee’s opinion be contrary to the interests of the Noteholders.

7.11 If the Trustee fails to show the degree of care and diligence required of it as trustee underthe terms of the Trust Deed, the Trust Deed shall not relieve or indemnify it from or againstany liability that would otherwise attach to it in respect of any negligence, default, breachof duty or breach of trust of which it may be guilty.

7.12 The Trustee may, without the consent of the Noteholders or Couponholders and withoutprejudice to its rights in respect of any subsequent breach, from time to time and at anytime, if in its opinion the interests of the Noteholders will not be materially prejudicedthereby, waive or authorise, on such terms as seem expedient to it, any breach or proposedbreach by the Issuer of the Trust Deed or the Master Conditions or the relevant CreditSupport Document or other Secured Agreement or determine that an Event of Default orPotential Event of Default shall not be treated as such provided that the Trustee shall notdo so in contravention of an express direction given by an Extraordinary Resolution. Nosuch direction or request shall affect a previous waiver, authorisation or determination. Anysuch waiver, authorisation or determination shall be binding on the Noteholders and theCouponholders and, if the Trustee so requires, shall be notified to the Noteholders as soonas practicable.

7.13 The Trustee may agree without the consent of the Noteholders or Couponholders to anymodification to the Trust Deed or any Supplemental Trust Deed, Credit Support Documentor Secured Agreement of a formal, minor or technical nature or to correct a manifest error.The Trustee may also so agree to any modification (subject to certain exceptions) to theTrust Deed or any Supplemental Trust Deed, Credit Support Document or SecuredAgreement that is in its opinion not materially prejudicial to the interests of the Noteholders.

8. Noteholders will not be receiving periodic reports on their investments. The Issuer is required bySingapore law to provide a quarterly report to the Authority and the Trustee stating, amongst otherthings, whether the limitations on the amount that the Issuer may borrow has been exceeded andwhether or not any event has happened which has caused or could cause the Notes to becomeenforceable.

9. The Issuer has not prepared financial statements or annual reports since the date of itsincorporation and it is not required to do so by Cayman Islands law. However, the Issuer isrequired by Singapore law to lodge a profit and loss account and balance sheet for the first sixmonths of, and for, every financial year with the Authority and the Trustee. Such profit and lossaccount and balance sheet must be audited unless this requirement is dispensed with in writingby the Trustee. The Trustee has agreed in writing to dispense with this requirement andaccordingly, the Issuer would not be appointing any auditors. After the registration of this Base

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Prospectus with the Authority, the Issuer will lodge such half-yearly and yearly financialstatements with the Authority and with the Trustee. The Issuer will not be publishing financialstatements or annual reports.

10. There is no intention or requirement for the Issuer to accumulate surpluses. The Issuer will usethe proceeds of each Series of Notes to purchase the Securities for each Series as furtherdescribed in the relevant Pricing Statement. The Issuer reserves the right to create and issuemore Notes of a particular Series in a follow-on offering after the initial offering has closed. Thefurther Notes will be issued so that they are fungible with the originally issued Notes of thatparticular Series — the only difference will be the purchase price and, possibly, the amount of thefirst payment of interest. A proportionate amount of additional Securities will be purchased by theIssuer for these additional Notes. This means that the Noteholders of such additional Notes willhave the same rights and entitlements as the existing Noteholders to the Securities. Subject to theterms and conditions of the Notes, the prior approval of the existing Noteholders is not requiredfor such follow-on offerings.

11. Apart from the Mortgaged Property, the Issuer will not own any assets or have any liabilities apartfrom the Notes, rights under Swap Agreement, the Credit Support Documents (if applicable), theContracts (if applicable), the Securities Agreement (if applicable) and/or exposure to theReference Assets.

12. As at the date of this Base Prospectus, the Issuer has not issued any Series of Notes under theProgramme. Any future Series of Notes are and will be “limited recourse” in nature. Accordingly,the liability incurred for each Series of Notes will not affect the Notes of each separate Series ofNotes issued by the Issuer.

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STATUTORY INFORMATION

1. SHARE CAPITAL

The authorised share capital of the Issuer is U.S.$50,000 divided into 50,000 shares of U.S.$1.00each. The issued share capital of the Issuer as at the date of this Base Prospectus is U.S.$1,000,fully paid-up in cash.

2. DIRECTORS AND COMPANY SECRETARY OF THE ISSUER

The Board of Directors is entrusted with the responsibility of the overall management of the Issuer.The directors are professional company directors supplied by Deutsche Bank (Cayman) Limited.

The directors of the Issuer are as follows:

Name Occupation

David Dyer Head of Corporate Services,Deutsche Bank (Cayman) Limited

Alan Corkish Manager, Corporate Services,Deutsche Bank (Cayman) Limited

Tim Fitzgerald Manager, Corporate Services,Deutsche Bank (Cayman) Limited

The business address of the directors is Deutsche Bank (Cayman) Limited, PO Box 1984GT,Elizabethan Square, George Town, Grand Cayman, Cayman Islands. The Issuer has notestablished a place of business in Singapore.

The directors are independent from Merrill Lynch.

The company secretary of the Issuer is Deutsche Bank (Cayman) Limited.

3. ARTICLES OF ASSOCIATION

The Issuer is established with unrestricted objects and with full power and authority to carry outany object not prohibited by any law as provided by Section 7(4) of the Companies Law (2004Revision) of the Cayman Islands.

Under the Issuer’s articles of association, its directors may exercise all powers of the Issuer toborrow money and to mortgage or charge its undertaking, property and uncalled capital or anypart thereof, to issue debentures, debenture stock, mortgages, bonds and such other securitieswhether outright or as security for any of its debts, liabilities or obligations or those of any thirdparty.

There are no provisions in the Issuer’s articles of association which limit its ability to modify theMaster Conditions, to issue additional Notes, to create exposure to Reference Assets, or toborrow or lend money. Therefore, the Issuer has the corporate capacity to do any of the above.However, the Issuer will be subject to the restrictions on these activities set out in the MasterConditions as well as the main legal documents which make up the Programme.

Subject to the Companies Law (2004 Revision) of the Cayman Islands and the rights attaching tothe various classes of shares, the Issuer may at any time and from time to time by specialresolution alter or amend its articles of association in whole or in part.

The Issuer’s business is limited to issuing Notes under the Programme. All the Notes are issuedfully paid for cash. The Issuer has no bank overdrafts (or other similar indebtedness), other

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borrowings, indebtedness in the nature of borrowings, loan capital outstanding or created butunissued (including term loans), hire purchase commitments, guarantees or material contingentliabilities.

4. LITIGATION

Neither the Issuer nor the Trustee is engaged in any litigation or arbitration proceedings, includingthose which are pending or known to be contemplated, which may have or have had in the last12 months preceding the date of lodgment of this Base Prospectus, a material effect on thefinancial position or profitability of the Issuer or the Trustee, as the case may be. Please see thesection headed “Description of the Swap Guarantor” for details on the litigation which the SwapGuarantor is involved in.

5. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the registered office of theProgramme Arranger at 1 Temasek Avenue #28-01 Millenia Tower Singapore 039192, duringnormal business hours on any weekday (Saturdays, Sundays and public holidays excepted) foras long as offers are made under the Programme and while any Note is still outstanding:

• the Base Prospectus, and any supplements thereto;

• the Trust Deed, and each Supplemental Trust Deed for which Notes are still outstanding;

• the Agency Agreement;

• the Master Agreement;

• the Swap Guarantee;

• the Depository Services Agreement;

• the Deed of Covenant in favour of CDP;

• the Dealer Agreement;

• the declaration of trust over the shares of the Issuer;

• for each Series of Notes:

— information relating to the Mortgaged Property; and

— copies of the Swap Agreement;

• the up-to-date memorandum and articles of association of the Issuer; and

• copies of any notices given by the Issuer in accordance with the Master Conditions.

Photocopies of any of these documents may be made at a reasonable photocopying fee.

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MASTER TERMS AND CONDITIONS OF THE NOTES

The following is the text of the terms and conditions that, subject to completion and amendment and assupplemented or varied in accordance with the provisions of the relevant Pricing Supplement, shall beapplicable to the Notes in definitive form (if any). Either (i) the full text of these terms and conditionstogether with the relevant provisions of the Pricing Supplement or (ii) these terms and conditions as socompleted, amended, supplemented or varied (and subject to simplification by the deletion ofnon-applicable provisions), shall be endorsed on such Bearer Notes or on the Certificates relating toRegistered Notes. All capitalised terms that are not defined in these Master Conditions will have themeanings given to them in the Principal Trust Deed and/or the relevant Supplemental Trust Deed.Those definitions will be endorsed on the definitive Notes or Certificates, as the case may be.References in the Master Conditions to “Notes” are to the Notes of one Series only, not to all Notes thatmay be issued under the Programme, to the “Pricing Supplement” are to the relevant PricingSupplement and to the “Securities” are to any relevant Underlying Securities.

The Notes are constituted and secured by a supplemental trust deed dated the Issue Date (the“Supplemental Trust Deed”) and made between the Issuer, the Trustee and, if applicable, the otherpersons specified therein, supplemental to a trust deed (as amended or supplemented as at the IssueDate, the “Principal Trust Deed”) dated 15 November 2006 and made between the Issuer and HSBCInstitutional Trust Services (Singapore) Limited (the “Trustee”, which expression shall include allpersons for the time being the trustee or trustees under the Trust Deed (as defined below)), as trusteefor the holders of the Notes. The Principal Trust Deed and the Supplemental Trust Deed are referredto together as the “Trust Deed”. These terms and conditions (the “Conditions”) include summariesof, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the BearerNotes, Certificates, Receipts, Coupons and Talons referred to below. An Agency Agreement (asamended or supplemented as at the Issue Date, the “Agency Agreement”) dated 15 November 2006has been entered into in relation to the Notes between the Issuer, the Trustee, The Hongkong andShanghai Banking Corporation Limited as initial issuing and paying agent, transfer agent, custodianand registrar and Merrill Lynch International as calculation agent. The issuing and paying agent, thecustodian, the paying agents, the registrar, the transfer agents and the calculation agent(s) for the timebeing (if any) are referred to below respectively as the “Issuing and Paying Agent”, the “Custodian”,the “Paying Agents”, the “Registrar”, the “Transfer Agents” and the “Calculation Agent(s)” andcollectively as the “Agents”. Copies of the Trust Deed and the Agency Agreement are available forinspection during usual business hours at the specified office of the Trustee and at the specified officesof the Paying Agents and the Transfer Agents.

The Noteholders (as defined below), the holders of the interest coupons (the “Coupons”) relating tointerest bearing Notes in bearer form and, where applicable in the case of such Notes, talons for furtherCoupons (the “Talons”) (the “Couponholders”) and the holders of the receipts for the payment ofinstalments of principal (the “Receipts”) relating to Notes in bearer form of which the principal ispayable in instalments are entitled to the benefit of, are bound by, and are deemed to have notice of,all the provisions of the Trust Deed and are deemed to have notice of those provisions applicable tothem of the Agency Agreement.

All capitalised terms that are not defined in these Conditions will have the meanings given to them inthe Principal Trust Deed and/or the relevant Supplemental Trust Deed, the absence of any suchmeaning indicating that such term is not applicable to the Notes. References in these Conditions to (i)“principal” shall be deemed to include any premium payable in respect of the Notes, all InstalmentAmounts, Final Redemption Amounts, Early Redemption Amounts Optional Redemption Amounts,Amortised Face Amounts and all other amounts in the nature of principal payable pursuant to Condition7 or any amendment or supplement to it and (ii) “interest” shall be deemed to include all InterestAmounts and all other amounts payable pursuant to Condition 6 or any amendment or supplement toit.

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1. Form, Specified Denomination and Title

The Notes are issued in bearer form (“Bearer Notes”, which expression includes Notes that arespecified to be Exchangeable Bearer Notes), in registered form (“Registered Notes”) or inbearer form exchangeable for Registered Notes (“Exchangeable Bearer Notes”) in each casein the Specified Denomination(s) shown hereon.

All Registered Notes shall have the same Specified Denomination. Where Exchangeable BearerNotes are issued, the Registered Notes for which they are exchangeable shall have the sameSpecified Denomination as the lowest denomination of Exchangeable Bearer Notes.

This Note is a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note, an Index LinkedInterest Note, an Index Linked Redemption Note, an Instalment Note, a Dual Currency Note or aPartly Paid Note, a combination of any of the foregoing or any other kind of Note, depending uponthe Interest and Redemption/Payment Basis shown hereon.

Bearer Notes are serially numbered and are issued with Coupons (and, where appropriate, aTalon) attached, save in the case of Zero Coupon Notes in which case references to interest(other than in relation to default interest), Coupons and Talons in these Conditions are notapplicable. Instalment Notes are issued with one or more Receipts attached.

Registered Notes are represented by registered certificates (“Certificates”) and, save asprovided in Condition 2(c), each Certificate shall represent the entire holding of Registered Notesby the same holder.

Title to the Bearer Notes and the Receipts, Coupons and Talons shall pass by delivery. Title to theRegistered Notes shall pass by registration in the register that the Issuer shall procure to be keptby the Registrar in accordance with the provisions of the Agency Agreement (the “Register”).Except as ordered by a court of competent jurisdiction or as required by law, the holder (as definedbelow) of any Note, Receipt, Coupon or Talon shall be deemed to be and may be treated as itsabsolute owner for all purposes whether or not it is overdue and regardless of any notice ofownership, trust or an interest in it, any writing on it (or on the Certificate representing it) or its theftor loss (or that of the related Certificate) and no person shall be liable for so treating the holder.

In these Conditions, “Noteholder” means the bearer of any Bearer Note and the Receiptsrelating to it or the person in whose name a Registered Note is registered (as the case may be)and “holder” (in relation to a Note, Receipt, Coupon or Talon) means the bearer of any BearerNote, Receipt, Coupon or Talon or the person in whose name a Registered Note is registered (asthe case may be).

2. Exchanges of Exchangeable Bearer Notes and Transfers of Registered Notes

(a) Exchange of Exchangeable Bearer Notes: Subject as provided in Condition 2(f),Exchangeable Bearer Notes may be exchanged for the same aggregate nominal amount ofRegistered Notes at the request in writing of the relevant Noteholder and upon surrender ofeach Exchangeable Bearer Note to be exchanged, together with all unmatured Receipts,Coupons and Talons relating to it, at the specified office of any Transfer Agent; provided,however, that where an Exchangeable Bearer Note is surrendered for exchange after theRecord Date (as defined in Condition 8(b)) for any payment of interest, the Coupon inrespect of that payment of interest need not be surrendered with it. Registered Notes maynot be exchanged for Bearer Notes. Bearer Notes of one Specified Denomination may notbe exchanged for Bearer Notes of another Specified Denomination. Bearer Notes that arenot Exchangeable Bearer Notes may not be exchanged for Registered Notes. Where anExchangeable Bearer Note is surrendered for exchange by a person who is already a holderof Registered Notes, a new certificate representing the exchanged holding shall only beissued against surrender of the Certificate representing the existing holding.

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(b) Transfer of Registered Notes: One or more Registered Notes may be transferred upon thesurrender (at the specified office of the Registrar or any Transfer Agent) of the Certificaterepresenting such Registered Notes to be transferred, together with the form of transferendorsed on such Certificate, (or other forms of transfer in substantially the same form andcontaining the same representations and certificates (if any), unless otherwise agreed by theIssuer), duly completed and executed and any other evidence which the Registrar orTransfer Agent may reasonably require. In the case of a transfer of part only of a holding ofRegistered Notes represented by one Certificate, a new Certificate shall be issued to thetransferee in respect of the part transferred and a further new Certificate in respect of thebalance of the holding not transferred shall be issued to the transferor provided that in thecase of a transfer of Registered Notes to a person who is already a holder of RegisteredNotes, a new Certificate representing the enlarged holding shall only be issued againstsurrender of the Certificate representing the existing holding.

(c) Exercise of Options or Partial Redemption in Respect of Registered Notes: In the caseof an exercise of an Issuer’s or Noteholders’ option in respect of, or a partial redemption of,a holding of Registered Notes represented by a single Certificate, a new Certificate shall beissued to the holder to reflect the exercise of such option or in respect of the balance of theholding not redeemed. In the case of a partial exercise of an option resulting in RegisteredNotes of the same holding having different terms, separate Certificates shall be issued inrespect of those Notes of that holding that have the same terms. New Certificates shall onlybe issued against surrender of the existing Certificates to the Registrar or any TransferAgent. In the case of a transfer of Registered Notes to a person who is already a holder ofRegistered Notes, a new Certificate representing the enlarged holding shall only be issuedagainst surrender of the Certificate representing the existing holding.

(d) Delivery of New Certificates: Each new Certificate to be issued pursuant to Conditions2(a), (b) or (c) shall be available for delivery within three business days of receipt of a dulycompleted request for exchange or form of transfer or Exercise Notice (as defined inCondition 7(f)) or the surrender of the Certificate for exchange together with satisfaction ofany other requirements imposed by these Conditions. Delivery of the new Certificate(s) shallbe made at the specified office of the Transfer Agent or of the Registrar (as the case maybe) to whom delivery or surrender of such request for exchange, form of transfer, ExerciseNotice or Certificate shall have been made or, at the option of the holder making suchdelivery or surrender as aforesaid and as specified in the relevant request for exchange,form of transfer, Exercise Notice or otherwise in writing, be mailed by uninsured post at therisk of the holder entitled to the new Certificate to such address as may be so specified,unless such holder requests otherwise and pays in advance to the relevant Transfer Agentthe costs of such other method of delivery and/or such insurance as it may specify. In thisCondition (d), “business day” means a day, other than a Saturday or Sunday, on whichbanks are open for business in the place of the specified office of the relevant Transfer Agentor the Registrar (as the case may be).

(e) Exchange Free of Charge: Exchange and transfer of Notes and Certificates on registration,transfer, exercise of an option or partial redemption shall be effected without charge by or onbehalf of the Issuer, the Registrar or the Transfer Agents, but upon payment of any tax orother governmental charges that may be imposed in relation to it (or the giving of suchindemnity as the Registrar or the relevant Transfer Agent may require).

(f) Closed Periods: No Noteholder may require the transfer of a Registered Note to beregistered or an Exchangeable Bearer Note to be exchanged for one or more RegisteredNote(s) (i) during the period of 15 days ending on the due date for redemption of, or paymentof any Instalment Amount in respect of, that Note, (ii) during the period of 15 days prior toany date on which Notes may be called for redemption by the Issuer at its option pursuant

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to Condition 7(e), (iii) after any such Note has been called for redemption or (iv) during theperiod of seven days ending on (and including) any Record Date. An Exchangeable BearerNote called for redemption may, however, be exchanged for one or more Registered Note(s)in respect of which the Certificate is simultaneously surrendered not later than the relevantRecord Date.

3. Status, Collateral, Obligations and Non-applicability

(a) Status of Notes: The Notes are secured, limited recourse obligations of the Issuer, at alltimes ranking pari passu and without any preference among themselves, secured in themanner described in Condition 4 and recourse in respect of which is limited in the mannerdescribed in Condition 4(e) and Condition 11.

(b) Securities and other transactions: In connection with the issue of the Notes the Issuermay acquire, or may acquire interests in, one or more transferable securities (the“Securities”) issued by or representing obligations of one or more persons and there maybe executed:

(i) one or more letters of credit, guarantees, loan agreements evidencing loans advancedby the Issuer, options in favour of the Issuer or other credit support documents (eacha “Credit Support Document”) made by a credit support provider (each a “CreditSupport Provider”) in favour of the Issuer

(ii) one or more swap transactions (including any applicable guarantee, each a “Swap”)with one or more swap counterparties (each a “Swap Counterparty”) guaranteed, ifapplicable, by one or more swap guarantors (each a “Swap Guarantor”) with aneffective date as of the Issue Date

(iii) one or more agreements (each a “Contract”) between the Issuer and one or morepersons (each a “Beneficiary”) under which the Issuer may incur indebtedness, grantoptions or incur other obligations, in each case, on a secured basis and/or

(iv) one or more agreements (each a “Securities Agreement”) between the Issuer andone or more persons (each a “Counterparty”) under which the Issuer may agree tobuy or sell securities or enter into other contractual relations

each as further described in the Supplemental Trust Deed.

A summary of the terms of each Credit Support Document, Swap, Contract and SecuritiesAgreement will be set out in the Pricing Supplement.

(c) Collateral and Obligations: In these Conditions:

(i) “Collateral” means the rights, title and interest (if any) of the Issuer in and under theSecurities, each Credit Support Document, each Swap and each Securities Agreement

(ii) “Creditor” means each person that is entitled to the benefit of Obligations and “OtherCreditor” means each person that is entitled to the benefit of Other Obligations

(iii) “Obligations” means the obligations and duties of the Issuer under the Trust Deedand each Note, Swap, Contract and Securities Agreement and “Other Obligations”means the obligations and duties of the Issuer under each Swap, Contract andSecurities Agreement

(iv) “Obligor” means each person that has an obligation to the Issuer pursuant to theCollateral.

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(d) Non-applicability: Where no reference is made in the Supplemental Trust Deed to anyCollateral or Obligation, references in these Conditions to any such Collateral or Obligationand to any related Obligor or Creditor, as the case may be, shall not be applicable.

4. Security

(a) Security: Unless otherwise specified in the Supplemental Trust Deed, the Obligationstogether with claims (if any) of the Custodian (for reimbursement in respect of paymentsproperly made to any person of sums receivable in respect of the Collateral in discharge ofan Obligation) and the Issuing and Paying Agent (for reimbursement in respect of paymentsproperly made to any person in discharge of an Obligation) are secured in favour of theTrustee, pursuant to the Trust Deed, by:

(i) an assignment by way of security of all the Issuer’s rights attaching to or relating to theSecurities and all sums or assets derived therefrom including without limitation anyright to delivery thereof or to an equivalent number or nominal value thereof whicharises in connection with any such assets being held in a clearing system or througha financial intermediary

(ii) an assignment by way of security of the Issuer’s rights, title and interest against theCustodian, to the extent that they relate to the Securities

(iii) an assignment by way of security of the Issuer’s rights, title and interest under theAgency Agreement, to the extent that they relate to the Notes

(iv) an assignment by way of security of the Issuer’s rights, title and interest under eachrelevant Credit Support Document, Swap and/or Securities Agreement

(v) a first fixed charge over (a) all sums held by the Issuing and Paying Agent and/or theCustodian to meet payments due in respect of any Obligation and (b) any sumsreceived by the Issuing and Paying Agent under any Credit Support Document, Swapand/or Securities Agreement,

save that no Obligor under the Swap or the Securities Agreement nor the Issuing and PayingAgent or the Custodian shall benefit from the Security in respect of which it is itself anobligor.

Additionally, the Obligations of the Issuer may be secured pursuant to a security documentother than the Trust Deed as specified in the relevant Supplemental Trust Deed.

References in these Conditions to “Security” are to the security constituted by theSupplemental Trust Deed.

Full details of the relevant Collateral and Mortgaged Property will be set out in the relevantSupplemental Trust Deed and the relevant Pricing Supplement for the relevant Series.

(b) Application of Security: The Trustee shall (subject to the provisions of the SupplementalTrust Deed and to Clause 6 of the Principal Trust Deed) apply all moneys received by itunder the provisions of the Trust Deed in connection with the realisation or enforcement ofthe Security as follows:

(i) first, rateably in payment or satisfaction of (i) the fees, costs, charges, expenses andliabilities incurred by the Trustee or any receiver in preparing and executing the trustsunder the Trust Deed (including any taxes required to be paid, the costs of realising anysecurity and the Trustee’s remuneration) and, (ii) the fees, costs, charges andexpenses due to Euroclear and/or Clearstream, Luxembourg and/or CDP; and

(ii) next, in meeting the claims in the order set out in the Supplemental Trust Deed.

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Any Creditor that has a claim in respect of more than one Obligation may rank differently inrespect of each Obligation.

If the moneys received by the Trustee are not enough to pay in full all amounts to personswhose claims rank rateably, the Trustee shall apply the moneys pro rata on the basis of theamount due to each party entitled to such payment.

For these purposes and unless otherwise provided, references in the Supplemental TrustDeed to:

(i) “Beneficiary Claim” means the claims of each Beneficiary under the relevantContract

(ii) “Counterparty Claim” means the claims of each Counterparty under the relevantSecurities Agreement

(iii) “Custodian Claim” means the claims of the Custodian for reimbursement ofpayments properly made by it to any person of sums receivable in respect of theCollateral

(iv) “Issuing and Paying Agent Claim” means the claims of the Issuing and Paying Agentfor reimbursement of payments properly made by it to any person in discharge of anObligation

(v) “Noteholder Claim” means the claims of the Noteholders and Couponholdersrateably in respect of the Notes, Coupons and Receipts

(vi) “Swap Counterparty Claim” means the claims of each Swap Counterparty under therelevant Swap

(vii) any person by name are to the claims of that person as a Creditor in the capacity orcapacities identified in the Supplemental Trust Deed.

If “Pari Passu Ranking” is stated in the Supplemental Trust Deed in respect of any claimsreferred to in (i) to (vii) above, such claims shall rank rateably inter se.

(c) Enforcement of Security: The Security over the Mortgaged Property shall becomeenforceable if payment in respect of the Notes is not made when due and payable.

(d) Realisation of Security: If any Security becomes enforceable, the Trustee may at itsdiscretion and shall, on receipt of whichever of a Holder Request, Extraordinary ResolutionDirection, Creditor A Direction or Creditor B Direction as shall be specified in theSupplemental Trust Deed, enforce the Security constituted by the Trust Deed.

To do this it may at its discretion take possession of and/or realise the Securities (providedthat if some only of the Notes have become repayable then the Trustee shall takepossession of or realise only that proportion of the Securities equal to the proportion of thenominal amount of the Notes that are subject to acceleration) and/or take action against anyperson liable in respect of any Repayable Assets to enforce repayment of such RepayableAssets, enforce, terminate and/or realise any Credit Support Document, Swap and/orSecurities Agreement in accordance with its or their terms, and/or take action against anyObligor but without any liability as to the consequence of such action and without havingregard to the effect of such action on individual Noteholders or Couponholders and providedthat the Trustee shall not be required to take any action that would involve any personalliability or expense without first being indemnified to its satisfaction.

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In this Condition 4(d):

Holder Request shall mean

a request in writing by the holders of at least one-fifth in aggregate nominal amount of theNotes then outstanding (as defined in the Trust Deed)

Extraordinary Resolution Direction shall mean a direction by Extraordinary Resolution (asdefined in the Trust Deed) of the Noteholders

Creditor A Direction shall mean where sums are due to the Beneficiary and/or theCounterparty and/or the Swap Counterparty and/or the Custodian and/or the Issuing andPaying Agent (the claims in respect of which are secured) a direction in writing by any suchparty (unless this would in the Trustee’s opinion be contrary to the interests of the holdersof Notes, Coupons or Receipts

and

Creditor B Direction shall mean where sums are due to the Beneficiary and/or theCounterparty and/or the Swap Counterparty and/or the Custodian and/or the Issuing andPaying Agent (the claims in respect of which are secured) a direction in writing by any suchparty.

(e) Shortfall after application of proceeds: If the net proceeds of the realisation of theSecurity under paragraph (d) above (the “Net Proceeds”) are not sufficient to make allpayments which but for the effect of this provision would then be due in respect of theObligations or claims of the Custodian and/or the Issuing and Paying Agent (if any), then theobligations of the Issuer in respect of them will be limited to such Net Proceeds and the otherassets of the Issuer (including, in the case of a mandatory partial redemption, the Collateralother than the Repayable Assets, which will remain available to those Creditors whoseObligations have not become payable or repayable), will not be available for payment of anyShortfall arising therefrom. Any such Shortfall shall be borne by the Creditors, the Custodianand the Issuing and Paying Agent according to the priorities specified in the SupplementalTrust Deed. The Issuer will not be obliged to make any further payment in excess of the NetProceeds and accordingly no debt shall be owed by the Issuer in respect of any Shortfallremaining after realisation of the Security under Condition 4(d) and application of theproceeds in accordance with the Trust Deed. None of the Trustee, any Creditor, theCustodian and the Issuing and Paying Agent (nor any person acting on behalf of any ofthem) may take any further action to recover such Shortfall. Failure to make any payment inrespect of any Shortfall shall in no circumstances constitute an Event of Default underCondition 10.

In this Condition “Shortfall” means the difference between the amount of the Net Proceedsand the amount which would but for this Condition 4(e) have been due under the Obligationsor in respect of claims of the Custodian and/or the Issuing and Paying Agent.

(f) Substitution of Mortgaged Property: The Issuer may from time to time upon agreementwith all the Noteholders or if so directed by an Extraordinary Resolution or, where theTrustee is satisfied that such substitution is not materially prejudicial to the interests of theNoteholders, upon agreement with the Trustee, and, in either case, with the prior writtenconsent of each Other Creditor, substitute alternative Security for such of the MortgagedProperty as it may deem appropriate. Any such alternative Mortgaged Property shall be heldsubject to such Security in favour of the Trustee and the Issuer shall execute such furtherdocumentation as the Trustee may require in order to constitute such Security as a conditionto such substitution. If the Noteholders or the Trustee (where satisfied as stated above) andeach Other Creditor agree to the substitution, the Issuer shall notify the Noteholders thereofin accordance with Condition 16 and, if the Notes are listed on any stock exchange, theIssuer shall also notify such stock exchange of such substitution.

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(g) Issuer’s rights as beneficial owner of Collateral: The Issuer may exercise any rights inits capacity as beneficial owner of the Collateral only with the consent of the Trustee or asdirected by an Extraordinary Resolution of the Noteholders and, if such direction is given, theIssuer will act only in accordance with such direction. In particular, the Issuer will not attendor vote at any meeting of holders of the Securities, or give any consent or notification ormake any declaration in relation to the Collateral, unless the Trustee shall so direct or bydirection of any Extraordinary Resolution of the Noteholders.

5. Restrictions

So long as any of the Notes remain outstanding, the Issuer shall not, without the consent of theTrustee, incur any other indebtedness for borrowed moneys or engage in any business (otherthan acquiring and holding the Mortgaged Property, entering into any Credit Support Documentand/or Other Obligations and entering into related agreements and transactions (as describedbelow)), declare any dividends, have any subsidiaries or employees, purchase, own, lease orotherwise acquire any real property (including office premises or like facilities), consolidate ormerge with any other person or convey or transfer its properties or assets substantially as anentity to any person (otherwise than as contemplated in these Conditions and the Trust Deed) orissue any shares (other than such shares as were in issue on 9 January 2006).

The Issuer may from time to time (without the consent of the Noteholders or any Other Creditorbut provided that the Trustee is satisfied that the restrictions of this Condition will be compliedwith) issue further notes (which may form a single series with the Notes) and create or incurfurther obligations relating to such notes, provided that such further notes and obligations:

(a) are secured (save in the case of such further notes forming a single series with the Notes)on assets of the Issuer other than the Mortgaged Property, the assets on which any otherobligations of the Issuer are secured and the Issuer’s share capital

(b) are issued or created on terms substantially in the form contained in Conditions 4(e) and 11are, in the case of such further notes forming a single series with the Notes, secured paripassu upon the Mortgaged Property and such further assets of the Issuer upon which suchfurther notes are secured, all in accordance with Condition 14.

6. Interest and other Calculations

(a) Interest on Fixed Rate Notes: Each Fixed Rate Note bears interest on its outstandingnominal amount from the Interest Commencement Date at the rate per annum (expressedas a percentage) equal to the Rate of Interest, such interest being payable in arrear on eachInterest Payment Date.

If a Fixed Coupon Amount or a Broken Amount is specified hereon, the amount of interestpayable on each Interest Payment Date will amount to the Fixed Coupon Amount or, ifapplicable, the Broken Amount so specified and in the case of the Broken Amount will bepayable on the particular Interest Payment Date(s) specified hereon.

(b) Interest on Floating Rate Notes and Index Linked Interest Notes:

(i) Interest Payment Dates: Each Floating Rate Note and Index Linked Interest Notebears interest on its outstanding nominal amount from the Interest CommencementDate at the rate per annum (expressed as a percentage) equal to the Rate of Interest,such interest being payable in arrear on each Interest Payment Date. Such InterestPayment Date(s) is/are either shown hereon as Specified Interest Payment Dates or,if no Specified Interest Payment Date(s) is/are shown hereon, Interest Payment Dateshall mean each date which falls the number of months or other period shown hereonas the Interest Period after the preceding Interest Payment Date or, in the case of thefirst Interest Payment Date, after the Interest Commencement Date.

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(ii) Business Day Convention: If any date referred to in these Conditions that is specifiedto be subject to adjustment in accordance with a Business Day Convention wouldotherwise fall on a day that is not a Business Day, then, if the Business Day Conventionspecified is (A) the Floating Rate Business Day Convention, such date shall bepostponed to the next day that is a Business Day unless it would thereby fall into thenext calendar month, in which event (x) such date shall be brought forward to theimmediately preceding Business Day and (y) each subsequent such date shall be thelast Business Day of the month in which such date would have fallen had it not beensubject to adjustment, (B) the Following Business Day Convention, such date shall bepostponed to the next day that is a Business Day, (C) the Modified Following BusinessDay Convention, such date shall be postponed to the next day that is a Business Dayunless it would thereby fall into the next calendar month, in which event such date shallbe brought forward to the immediately preceding Business Day or (D) the PrecedingBusiness Day Convention, such date shall be brought forward to the immediatelypreceding Business Day.

(iii) Rate of Interest for Floating Rate Notes: The Rate of Interest in respect of FloatingRate Notes for each Interest Accrual Period shall be determined in the mannerspecified hereon and the provisions below relating to either ISDA Determination orScreen Rate Determination shall apply, depending upon which is specified hereon.

(A) ISDA Determination for Floating Rate Notes:

Where ISDA Determination is specified hereon as the manner in which the Rateof Interest is to be determined, the Rate of Interest for each Interest AccrualPeriod shall be determined by the Calculation Agent as a rate equal to therelevant ISDA Rate plus or minus (as indicated hereon) the Margin (if any). Forthe purposes of this sub-paragraph (iv), “ISDA Rate” for an Interest AccrualPeriod means a rate equal to the Floating Rate that would be determined by theCalculation Agent under a Swap Transaction under the terms of an agreementincorporating the ISDA Definitions and under which:

(x) the Floating Rate Option is as specified hereon;

(y) the Designated Maturity is a period specified hereon; and

(z) the relevant Reset Date is the first day of that Interest Accrual Period unlessotherwise specified hereon.

For the purposes of this sub-paragraph (A), “Floating Rate”, “CalculationAgent”, “Floating Rate Option”, “Designated Maturity”, “Reset Date” and“Swap Transaction” have the meanings given to those terms in the ISDADefinitions.

(B) Screen Rate Determination for Floating Rate Notes

Where Screen Rate Determination is specified hereon as the manner in which theRate of Interest is to be determined, the Rate of Interest for each Interest AccrualPeriod shall be determined by the Calculation Agent at or about the RelevantTime on the Interest Determination Date in respect of such Interest AccrualPeriod in accordance with the following:

(x) if the Primary Source for Floating Rate is a Page, subject as provided below,the Rate of Interest shall be:

I the Relevant Rate (where such Relevant Rate on such Page is acomposite quotation or is customarily supplied by one entity) or

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II the arithmetic mean of the Relevant Rates of the persons whoseRelevant Rates appear on that Page,

in each case appearing on such Page at the Relevant Time on theInterest Determination Date

(y) if the Primary Source for the Floating Rate is Reference Banks or ifsub-paragraph (x)(I) applies and no Relevant Rate appears on the Page atthe Relevant Time on the Interest Determination Date or if sub-paragraph(x)(II) above applies and fewer than two Relevant Rates appear on the Pageat the Relevant Time on the Interest Determination Date, subject asprovided below, the Rate of Interest shall be the arithmetic mean of theRelevant Rates that each of the Reference Banks is quoting to leadingbanks in the Relevant Financial Centre at the Relevant Time on the InterestDetermination Date, as determined by the Calculation Agent and

(z) if paragraph (y) above applies and the Calculation Agent determines thatfewer than two Reference Banks are so quoting Relevant Rates, subject asprovided below, the Rate of Interest shall be the arithmetic mean of the ratesper annum (expressed as a percentage) that the Calculation Agentdetermines to be the rates (being the nearest equivalent to the Benchmark)in respect of a Representative Amount of the Specified Currency that atleast two out of five leading banks selected by the Calculation Agent in theprincipal financial centre of the country of the Specified Currency or, if theSpecified Currency is euro in those member states that are participating inEuropean Economic and Monetary Union (the “Euro-zone”) as selected bythe Calculation Agent (the “Principal Financial Centre”) are quoting at orabout the Relevant Time on the date on which such banks wouldcustomarily quote such rates for a period commencing on the Effective Datefor a period equivalent to the Specified Duration (I) to leading banks carryingon business in Europe, or (if the Calculation Agent determines that fewerthan two of such banks are so quoting to leading banks in Europe) (II) toleading banks carrying on business in the Principal Financial Centre; exceptthat, if fewer than two of such banks are so quoting to leading banks in thePrincipal Financial Centre, the Rate of Interest shall be the Rate of Interestdetermined on the previous Interest Determination Date (after readjustmentfor any difference between any Margin, Rate Multiplier or Maximum orMinimum Rate of Interest applicable to the preceding Interest AccrualPeriod and to the relevant Interest Accrual Period).

(iv) Rate of Interest for Index Linked Interest Notes: The Rate of Interest in respect of IndexLinked Interest Notes for each Interest Accrual Period shall be determined in themanner specified hereon and interest will accrue by reference to an Index or Formulaas specified hereon.

(c) Zero Coupon Notes: Where a Note the Interest Basis of which is specified to be ZeroCoupon is repayable prior to the Maturity Date and is not paid when due, the amount dueand payable prior to the Maturity Date shall be the Early Redemption Amount of such Note.As from the Maturity Date, the Rate of Interest for any overdue principal of such a Note shallbe a rate per annum (expressed as a percentage) equal to the Amortisation Yield (asdescribed in Condition 7(b)(i)).

(d) Dual Currency Notes: In the case of Dual Currency Notes, if the rate or amount of interestfalls to be determined by reference to a Rate of Exchange or a method of calculating a Rateof Exchange, the rate or amount of interest payable shall be determined in the mannerspecified hereon.

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(e) Partly Paid Notes: In the case of Partly Paid Notes (other than Partly Paid Notes which areZero Coupon Notes), interest will accrue as aforesaid on the paid-up nominal amount ofsuch Notes and otherwise as specified hereon.

(f) Accrual of Interest: Interest shall cease to accrue on each Note on the due date forredemption unless, upon due presentation, payment is improperly withheld or refused, inwhich event interest shall continue to accrue (as well after as before judgment) at the Rateof Interest in the manner provided in this Condition 6 to the Relevant Date (as defined inCondition 6(k)).

(g) Margin, Maximum/Minimum Rates of Interest, Instalment Amounts and RedemptionAmounts, Rate Multipliers and Rounding:

(i) If any Margin or Rate Multiplier is specified hereon (either (x) generally, or (y) in relationto one or more Interest Accrual Periods), an adjustment shall be made to all Rates ofInterest, in the case of (x), or the Rates of Interest for the specified Interest AccrualPeriods, in the case of (y), calculated in accordance with Condition 6(b) above byadding (if a positive number) or subtracting the absolute value (if a negative number)of such Margin or multiplying by such Rate Multiplier, subject always to the nextparagraph.

(ii) If any Maximum or Minimum Rate of Interest, Instalment Amount or RedemptionAmount is specified hereon, then any Rate of Interest, Instalment Amount orRedemption Amount shall be subject to such maximum or minimum, as the case maybe.

(iii) For the purposes of any calculations required pursuant to these Conditions (unlessotherwise specified), (x) all percentages resulting from such calculations shall berounded, if necessary, to the nearest one hundred-thousandth of a percentage point(with halves being rounded up), (y) all figures shall be rounded to seven significantfigures (with halves being rounded up) and (z) all currency amounts that fall due andpayable shall be rounded to the nearest unit of such currency (with halves beingrounded up), save in the case of yen, which shall be rounded down to the nearest yen.For these purposes “unit” means the lowest amount of such currency that is availableas legal tender in the country of such currency.

(h) Calculations: The amount of interest payable in respect of any Note for any period shall becalculated by multiplying the product of the Rate of Interest and the outstanding nominalamount of such Note by the Day Count Fraction, unless an Interest Amount (or a formula forits calculation) is specified in respect of such period, in which case the amount of interestpayable in respect of such Note for such period shall equal such Interest Amount (or becalculated in accordance with such formula). Where any Interest Period comprises two ormore Interest Accrual Periods, the amount of interest payable in respect of such InterestPeriod shall be the sum of the amounts of interest payable in respect of each of thoseInterest Accrual Periods.

(i) Determination and Publication of Rates of Interest, Interest Amounts, FinalRedemption Amounts, Early Redemption Amounts, Optional Redemption Amountsand Instalment Amounts: As soon as practicable after the relevant time on each InterestDetermination Date or such other time on such date as the Calculation Agent may berequired to calculate such rate or amount, obtain any quotation or make any determinationor calculation, it shall determine such rate and calculate the amount of interest payable (the“Interest Amounts”) in respect of each Specified Denomination of the Notes for the relevantInterest Accrual Period, calculate the Final Redemption Amount, Early Redemption Amount,Optional Redemption Amount or Instalment Amount, obtain such quotation or make suchdetermination or calculation, as the case may be, and cause the Rate of Interest and the

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Interest Amounts for each Interest Period and the relevant Interest Payment Date and, ifrequired to be calculated, the Final Redemption Amount, Early Redemption Amount,Optional Redemption Amount or any Instalment Amount to be notified to the Trustee, theIssuer, each of the Paying Agents, the Noteholders, any other Calculation Agent appointedin respect of the Notes that is to make a further calculation upon receipt of such informationand, if the Notes are listed on a stock exchange and the rules of such exchange or otherrelevant authority so require, such exchange or other relevant authority as soon as possibleafter their determination but in no event later than (i) the commencement of the relevantInterest Period, if determined prior to such time, in the case of notification to such exchangeof a Rate of Interest and Interest Amount, or (ii) in all other cases, the fourth Business Dayafter such determination. Where any Interest Payment Date or Interest Period Date issubject to adjustment pursuant to Condition 6(b)(ii), the Interest Amounts and the InterestPayment Date so published may subsequently be amended (or appropriate alternativearrangements made with the consent of the Trustee by way of adjustment) without notice inthe event of an extension or shortening of the Interest Period. If the Notes become due andpayable under Condition 10, the accrued interest and the Rate of Interest payable in respectof the Notes shall nevertheless continue to be calculated as previously in accordance withthis Condition but no publication of the Rate of Interest or the Interest Amount so calculatedneed be made unless the Trustee otherwise requires. The determination of any rate oramount, the obtaining of each quotation and the making of each determination or calculationby the Calculation Agent(s) shall (in the absence of manifest error) be final and binding uponall parties.

(j) Determination or Calculation by Trustee: If the Calculation Agent does not at any time forany reason determine or calculate the Rate of Interest for an Interest Period or any InterestAmount, Instalment Amount, Final Redemption Amount, Early Redemption Amount orOptional Redemption Amount, the Trustee shall do so (or shall appoint an agent on its behalfto do so) and such determination or calculation shall be deemed to have been made by theCalculation Agent. In doing so, the Trustee shall apply the foregoing provisions of thisCondition, with any necessary consequential amendments, to the extent that, in its opinion,it can do so, and, in all other respects it shall do so in such manner as it shall deem fair andreasonable in all the circumstances.

(k) Definitions: In these Conditions, unless the context otherwise requires, the followingdefined terms shall have the meanings set out below:

“Business Day” means:

(i) in the case of a currency other than euro, a day (other than a Saturday or Sunday) onwhich commercial banks and foreign exchange markets settle payments in theprincipal financial centre for such currency and/or

(ii) in the case of euro, a day on which the TARGET system is operating (a “TARGETBusiness Day”) and/or

(iii) in the case of a currency and/or one or more Business Centres, a day (other than aSaturday or a Sunday) on which commercial banks and foreign exchange marketssettle payments in such currency in the Business Centre(s) or, if no currency isindicated, generally in each of the Business Centres.

“Day Count Fraction” means, in respect of the calculation of an amount of interest on anyNote for any period of time (from and including the first day of such period to but excludingthe last) (whether or not constituting an Interest Period, the “Calculation Period”):

(i) if “Actual/365” or “Actual/Actual-ISDA” is specified hereon, the actual number ofdays in the Calculation Period divided by 365 (or, if any portion of that CalculationPeriod falls in a leap year, the sum of (A) the actual number of days in that portion of

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the Calculation Period falling in a leap year divided by 366 and (B) the actual numberof days in that portion of the Calculation Period falling in a non-leap year divided by365)

(ii) if “Actual/365 (Fixed)” is specified hereon, the actual number of days in theCalculation Period divided by 365

(iii) if “Actual/360” is specified hereon, the actual number of days in the Calculation Perioddivided by 360

(iv) if “30/360”, “360/360” or “Bond Basis” is specified hereon, the number of days in theCalculation Period divided by 360 (the number of days to be calculated on the basis ofa year of 360 days with 12 30-day months (unless (a) the last day of the CalculationPeriod is the 31st day of a month but the first day of the Calculation Period is a dayother than the 30th or 31st day of a month, in which case the month that includes thatlast day shall not be considered to be shortened to a 30-day month, or (b) the last dayof the Calculation Period is the last day of the month of February, in which case themonth of February shall not be considered to be lengthened to a 30-day month)) and

(v) if “30E/360” or “Eurobond Basis” is specified hereon, the number of days in theCalculation Period divided by 360 (the number of days to be calculated on the basis ofa year of 360 days with 12 30-day months, without regard to the date of the first dayor last day of the Calculation Period unless, in the case of a Calculation Period endingon the Maturity Date, the Maturity Date is the last day of the month of February, inwhich case the month of February shall not be considered to be lengthened to a 30-daymonth) and

(vi) if “Actual/Actual-ISMA” is specified hereon,

(a) if the Calculation Period is equal to or shorter than the Determination Periodduring which it falls, the number of days in the Calculation Period divided by theproduct of (x) the number of days in such Determination Period and (y) thenumber Determination Periods normally ending in any year; and

(b) if the Calculation Period is longer than one Determination Period, the sum of:

(a) the number of days in such Calculation Period falling in the DeterminationPeriod in which it begins divided by the product of (1) the number of days insuch Determination Period and (2) the number of Determination Periods inany year; and

(b) the number of days in such Calculation Period falling in the nextDetermination Period divided by the product of (1) the number of days insuch Determination Period and (2) the number of Determination Periodsnormally ending in any year.

where:

“Determination Period” means the period from and including a DeterminationDate in any year to but excluding the next Determination Date.

“Effective Date” means, with respect to any Floating Rate to be determined onan Interest Determination Date, the date specified as such hereon or, if none isso specified, the first day of the Interest Accrual Period to which such InterestDetermination Date relates.

“Euro-zone” means the region comprised of member states of the EuropeanUnion that adopt the single currency in accordance with the Treaty establishingthe European Community, as amended.

“Interest Accrual Period” means the period beginning on (and including) theInterest Commencement Date and ending on (but excluding) the first Interest

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Period Date and each successive period beginning on (and including) an InterestPeriod Date and ending on (but excluding) the next succeeding Interest PeriodDate.

“Interest Amount” means the amount of interest payable, in the case of FixedRate Notes, means the Fixed Coupon Amount or Broken Amount, as the casemay be, and in the case of Index Linked Interest Notes, includes the Coupon.

“Interest Commencement Date” means the Issue Date or such other date asmay be specified hereon.

“Interest Determination Date” means, with respect to a Rate of Interest andInterest Accrual Period, the date specified as such hereon or, if none is sospecified, (i) the first day of such Interest Accrual Period if the Specified Currencyis Sterling or (ii) the day falling two Business Days in London for the SpecifiedCurrency prior to the first day of such Interest Accrual Period if the SpecifiedCurrency is neither Sterling nor euro or (iii) the day falling two TARGET BusinessDays prior to the first day of such Interest Accrual Period if the Specified Currencyis euro.

“Interest Period” means the period beginning on (and including) the InterestCommencement Date and ending on (but excluding) the first Interest PaymentDate and each successive period beginning on (and including) an InterestPayment Date and ending on (but excluding) the next succeeding InterestPayment Date.

“Interest Period Date” means each Interest Payment Date unless otherwisespecified hereon.

“ISDA Definitions” means the 2000 ISDA Definitions, as published by theInternational Swaps and Derivatives Association, Inc., unless otherwise specifiedhereon.

“Page” means such page, section, caption, column or other part of a particularinformation service (including, but not limited to, the Reuters Markets 3000(“Reuters”) and the Telerate (“Telerate”)) as may be specified for the purposeof providing a Relevant Rate, or such other page, section, caption, column orother part as may replace it on that information service or on such otherinformation service, in each case as may be nominated by the person ororganisation providing or sponsoring the information appearing there for thepurpose of displaying rates or prices comparable to that Relevant Rate.

“Rate of Interest” means the rate of interest payable from time to time in respectof this Note and that is either specified or calculated in accordance with theprovisions hereon.

“Reference Banks” means the institutions specified as such hereon or, if none,four major banks selected by the Calculation Agent in the interbank market (or, ifappropriate, money, swap or over-the-counter index options market) that is mostclosely connected with the Benchmark (which, if EURIBOR is the relevantBenchmark, shall be Europe.

“Relevant Date” in respect of any Note, Receipt or Coupon means the date onwhich payment in respect of it first becomes due or (if any amount of the moneypayable is improperly withheld or refused) the date on which payment in full of theamount outstanding is made or (if earlier) the date seven days after that on whichnotice is duly given to the Noteholders that, upon further presentation of the Note(or relative Certificate), Receipt or Coupon being made in accordance with theConditions, such payment will be made, provided that payment is in fact madeupon such presentation.

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“Relevant Financial Centre” means, with respect to any Floating Rate to bedetermined in accordance with a Screen Rate Determination on an InterestDetermination Date, the financial centre as may be specified as such hereon or,if none is so specified, the financial centre with which the relevant Benchmark ismost closely connected (which, in the case of EURIBOR shall be Europe) or, ifnone is so connected, London.

“Relevant Rate” means the Benchmark for a Representative Amount of theSpecified Currency for a period (if applicable or appropriate to the Benchmark)equal to the Specified Duration commencing on the Effective Date.

“Relevant Time” means, with respect to any Interest Determination Date, thelocal time in the Relevant Financial Centre specified hereon or, if no time isspecified, the local time in the Relevant Financial Centre at which it is customaryto determine bid and offered rates in respect of deposits in the Specified Currencyin the interbank market in the Relevant Financial Centre or, if no such customarylocal time exists, 11.00 hours in the Relevant Financial Centre and, for thepurpose of this definition “local time” means, with respect to Europe as a RelevantFinancial Centre, Brussels time.

“Representative Amount” means, with respect to any Floating Rate to bedetermined in accordance with a Screen Rate Determination on an InterestDetermination Date, the amount specified as such hereon or, if none is specified,an amount that is representative for a single transaction in the relevant market atthe time.

“Specified Currency” means the currency specified as such hereon or, if noneis specified, the currency in which the Notes are denominated.

“Specified Duration” means, with respect to any Floating Rate to be determinedin accordance with a Screen Rate Determination on an Interest DeterminationDate, the duration specified hereon or, if none is specified, a period of time equalto the relative Interest Accrual Period, ignoring any adjustment pursuant toCondition 6(b)(ii).

“TARGET System” means the Trans-European Automated Real-Time GrossSettlement Express Transfer (TARGET) System or any successor thereto.

(l) Calculation Agent and Reference Banks: The Issuer shall procure that there shall at alltimes be four Reference Banks (or such other number as may be required) with offices in theRelevant Financial Centre and one or more Calculation Agents if provision is made for themhereon and for so long as any Note is outstanding. If any Reference Bank (acting throughits relevant office) is unable or unwilling to continue to act as a Reference Bank, then theIssuer shall (with the prior approval of the Trustee) appoint another Reference Bank with anoffice in the Relevant Financial Centre to act as such in its place. Where more than oneCalculation Agent is appointed in respect of the Notes, references in these Conditions to theCalculation Agent shall be construed as each Calculation Agent performing its respectiveduties under the Conditions. If the Calculation Agent is unable or unwilling to act as such orif the Calculation Agent fails duly to establish the Rate of Interest for an Interest Period orInterest Accrual Period or to calculate any Interest Amount, Instalment Amount, FinalRedemption Amount, Early Redemption Amount or Optional Redemption Amount, as thecase may be, or to comply with any other requirement, the Issuer shall (with the priorapproval of the Trustee) appoint a leading bank or investment banking firm engaged in theinterbank market (or, if appropriate, money, swap or over-the-counter index options market)that is most closely connected with the calculation or determination to be made by theCalculation Agent (acting through its principal London office or any other office activelyinvolved in such market) to act as such in its place. The Calculation Agent may not resignits duties without a successor having been appointed as aforesaid.

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7. Redemption, Purchase and Options

(a) Redemption by Instalments and Final Redemption:

(i) Unless previously redeemed, purchased and cancelled as provided in this Condition 7or the relevant Instalment Date (being one of the dates so specified hereon) isextended pursuant to any Issuer’s or Noteholder’s option in accordance with Condition7(e) or 7(f), each Note that provides for Instalment Dates and Instalment Amounts shallbe partially redeemed on each Instalment Date at the related Instalment Amountspecified hereon. The outstanding nominal amount of each such Note shall be reducedby the Instalment Amount (or, if such Instalment Amount is calculated by reference toa proportion of the nominal amount of such Note, such proportion) for all purposes witheffect from the related Instalment Date, unless payment of the Instalment Amount isimproperly withheld or refused on presentation of the related Receipt, in which case,such amount shall remain outstanding until the Relevant Date relating to suchInstalment Amount.

(ii) Unless previously redeemed, purchased and cancelled as provided below or itsmaturity is extended pursuant to any Issuer’s or Noteholder’s option in accordance withCondition 7(e) or 7(f), each Note shall be finally redeemed on the Maturity Datespecified hereon at its Final Redemption Amount (which, unless otherwise providedhereon, is its nominal amount) or, in the case of a Note falling within paragraph (i)above, its final Instalment Amount.

(b) Early Redemption:

(i) Zero Coupon Notes:

A The Early Redemption Amount payable in respect of any Zero Coupon Note priorto the Maturity Date and the Early Redemption Amount of which is not linked toan index and/or a formula, upon redemption of such Note pursuant to Condition7(c) or 7(d) or upon it becoming due and payable as provided in Condition 10,shall be the Amortised Face Amount (calculated as provided below) of such Noteunless otherwise specified hereon.

B Subject to the provisions of sub-paragraph (C) below, the Amortised Face Amountof any such Note shall be the scheduled Final Redemption Amount of such Noteon the Maturity Date discounted at a rate per annum (expressed as a percentage)equal to the Amortisation Yield (which, if none is shown hereon, shall be such rateas would produce an Amortised Face Amount equal to the issue price of theNotes if they were discounted back to their issue price on the Issue Date)compounded annually.

C If the Early Redemption Amount payable in respect of any such Note upon itsredemption pursuant to Condition 7(c) or 7(d) or upon it becoming due andpayable as provided in Condition 10 is not paid when due, the Early RedemptionAmount due and payable in respect of such Note shall be the Amortised FaceAmount of such Note as defined in sub-paragraph (B) above, except that suchsub-paragraph shall have effect as though the date on which the Note becomesdue and payable were the Relevant Date. The calculation of the Amortised FaceAmount in accordance with this sub-paragraph shall continue to be made (as wellafter as before judgment) until the Relevant Date, unless the Relevant Date fallson or after the Maturity Date, in which case the amount due and payable shall bethe scheduled Final Redemption Amount of such Note on the Maturity Datetogether with any interest that may accrue in accordance with Condition 6(c).

Where such calculation is to be made for a period of less than one year, it shall bemade on the basis of the Day Count Fraction shown hereon.

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(ii) Other Notes: The Early Redemption Amount payable in respect of any Note (otherthan Notes described in (i) above), upon redemption of such Note pursuant toCondition 7(c) or 7(d) or upon it becoming due and payable as provided in Condition10, shall be the Final Redemption Amount unless otherwise specified hereon.

(c) Mandatory Redemption: If any of the Securities becomes payable or repayable orbecomes capable of being declared due and payable or repayable prior to its stated date ofmaturity for whatever reason or (unless the Trustee otherwise agrees) there is a paymentdefault in respect of any of the Securities, all such Securities which have become so payableor repayable or in respect of which there has been a payment default together with any orall remaining Securities, as specified in the relevant Supplemental Trust Deed (which mayor may not form obligations of the same person as those which have become repayable orin respect of which there has been such a payment default), shall be deemed to havebecome immediately repayable (the “Repayable Assets”). The Issuer shall then forthwithgive notice as soon as reasonably practicable (unless otherwise specified in the relevantSupplemental Trust Deed) to the Trustee and the Noteholders and upon the giving of suchnotice shall redeem each Note at its Early Redemption Amount either in whole or, as thecase may be, in part on a pro rata basis in a proportion of its Final Redemption Amount equalto the proportion that the nominal amount of the Repayable Assets bears to the nominalamount of all the Securities (including the Repayable Assets). Interest shall continue toaccrue on the part of the nominal amount of Notes becoming due for redemption untilpayment thereof has been made to the Trustee and notice is given in accordance withCondition 15 that such amount is available for payment. Failure to make any payment duein respect of a mandatory redemption under this Condition 7(c) of part of the nominal amountof the Notes or interest thereon shall not constitute an Event of Default under Condition 10.

In the event of Notes becoming mandatorily due for redemption and the Security becomingenforceable (i) the Trustee may take such action as is provided in Condition 4(d) and (ii) theEarly Redemption Amount may be less than the principal amount of the Notes beingredeemed.

(d) Redemption for Taxation and other Reasons:

(i) If:

A the Issuer, on the occasion of the next payment due in respect of the Notes, wouldbe required by Cayman Islands law to withhold or account for tax or would suffertax in respect of its income in respect of the Mortgaged Property or receipt ofpayments under a Swap (including the deductions of tax from such payments) sothat it would be unable to make payment of the full amount due without recourseto further sources of funding or

B the Issuer, on the occasion of the next payment due in respect of any Swap,would be required by law to withhold or account for tax or would suffer tax inrespect of its income in respect of the Mortgaged Property (including thedeductions of tax from such payments) so that it would be unable to makepayment of the full amount payable under such Swap without recourse to furthersources of funding or

C the cost to the Issuer of complying with its obligations under the Trust Deed ormeeting its operating or administrative expenses would, in the opinion of theIssuer, be materially increased compared to such cost as of the Issue Date(including, without limitation, as a result of any adverse change in tax rulings inrespect of the Issuer or any adverse change of law or practice (or interpretationor administration of the same) which applies to the Issuer) or

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D the Issuer would be required to account for any tax or suffer tax in respect of itsincome in respect of the Mortgaged Property or receipt of payments (whetheractual or deemed) under any Swap as a result of the then accounting treatment,as certified by the Issuer’s auditors,

then the Issuer shall so inform the Trustee, the Principal Paying Agent, the CalculationAgent and the Swap Counterparty.

The date on which any such withholding or deduction is suffered or increased amountis payable is referred to as the “Shortfall Date”. The Issuer shall use all reasonableendeavours to arrange the substitution as the principal obligor of a company, approvedbeforehand in writing by the Trustee, incorporated in another jurisdiction wherein (inrespect of Conditions 7(d)(i)(A), 7(d)(i)(B) and 7(d)(i)(D)) such withholding would not beapplicable, or such tax would not be accountable or suffered, or (in respect of Condition7(d)(i)(C)) such costs or operating or administrative expenses would not materiallyexceed the Issuer’s costs or operating or administrative expenses prior to the increaseand the company concerned would not be in any worse position following thesubstitution than the Issuer was in before the event occurred which resulted in theIssuer being obliged to use reasonable endeavours to substitute in accordance withthis provision.

(ii) If the Issuer is unable to arrange such substitution before the relevant Shortfall Date,in the case of Condition 7(d)(i)(A) where there is a Swap, the Swap Counterparty shallhave the right, but not the obligation, in its sole discretion, under any Swap to pay tothe Issuer such amounts as will enable it (after any such withholding, accounting orsuffering) to pay (and in such event, the Issuer will be obliged to pay) to theNoteholders the amounts which they would have received in the absence of suchwithholding, accounting or suffering.

If the Issuer is unable to arrange such substitution before the relevant Shortfall Date inthe case of Condition 7(d)(i)(B), the Swap Counterparty shall have the right, but not theobligation, in its sole discretion, under any such Swap to accept a lesser payment fromthe Issuer in respect of the Mortgaged Property (after any such withholding oraccounting or suffering of tax by the Issuer in respect of the Mortgaged Property).

If the event referred to in Condition 7(d)(i)(C) or 7(d)(i)(D) has occurred and there is aSwap, the Swap Counterparty shall have the right, but not the obligation, before theShortfall Date, to make additional payments to the Issuer so that the Issuer would notbe in any worse position as a result of the occurrence of such event.

(iii) If the Swap Counterparty does not exercise such right as referred to in paragraph (ii)above, any such Swap will be terminated and the Notes redeemed as follows. TheAgents shall arrange for, and administer the sale of, the Mortgaged Property inaccordance with the Agency Agreement. Upon the sale of the Mortgaged Property andreceipt of the proceeds of sale of the collateral, the Issuer shall give notice as soon asreasonably practicable to the Trustee and the Noteholders (which notice shall beirrevocable) of the date on which the Notes will be redeemed at the Early RedemptionAmount.

(iv) Notwithstanding the foregoing, if any of the taxes referred to in paragraph (d)(i) abovearises by reason of:

A any Noteholder’s connection with the Cayman Islands otherwise than by reasononly of the holding of any Note or receiving or being entitled to any RedemptionAmount or interest in respect thereof or

B the failure by the relevant Noteholder to comply with any applicable proceduresrequired to establish non-residence or other similar claim for exemption fromsuch tax or

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C a withholding or deduction imposed on a payment by or on behalf of the Issuer toan individual required to be made pursuant to European Council Directive2003/48/EC or any other European Union Directive implementing the conclusionsof the ECOFIN Council meeting of 26–27 November 2000 on the taxation ofsavings income or any law implementing or complying with, or introduced in orderto conform to, such Directive or

D the presentation for payment of any Bearer Note, Receipt or Coupon by or onbehalf of a holder who would have been able to avoid such withholding ordeduction by presenting the relevant Bearer Note, Receipt or Coupon to anotherPaying Agent in a Member State of the European Union,

then Conditions 7(d)(i), 7(d)(ii) and 7(d)(iii) shall not apply. The Issuer shall, to theextent it is able to do so, deduct such taxes from the amounts payable to suchNoteholder, all other Noteholders shall receive the due amounts payable to them andthe Notes shall not be redeemed. Any such deduction shall not constitute an Event ofDefault under Condition 10.

(e) Redemption at the Option of the Issuer and Exercise of Issuer’s Options: If Call Optionis specified in the Pricing Supplement, the Issuer may, on giving not less than 15 nor morethan 30 days’ irrevocable notice to the Noteholders (or such other notice period as may bespecified), redeem, or exercise any Issuer’s option (as may be described hereon) in relationto, all or, if so provided, some of the Notes on any Optional Redemption Date or OptionExercise Date, as the case may be. Any such redemption of Notes shall be at their OptionalRedemption Amount together with interest accrued to the date fixed for redemption. Anysuch redemption or exercise must relate to Notes of a nominal amount at least equal to theminimum nominal amount to be redeemed specified in the Pricing Supplement and nogreater than the maximum nominal amount to be redeemed specified hereon.

All Notes in respect of which any such notice is given shall be redeemed, or the Issuer’soption shall be exercised, on the date specified in such notice in accordance with thisCondition.

In the case of a partial redemption or a partial exercise of an Issuer’s option, the notice toNoteholders shall also contain the certificate numbers of the Bearer Notes, or in the case ofRegistered Notes shall specify the nominal amount of Registered Notes drawn and theholder(s) of such Registered Notes, to be redeemed or in respect of which such option hasbeen exercised, which shall have been drawn in such place as the Trustee may approve andin such manner as it deems appropriate, subject to compliance with any applicable laws andstock exchange or other relevant authority requirements.

In the event of an early redemption of Notes pursuant to this Condition 7(e), the OptionalRedemption Amount may be less than the principal amount of the Notes being redeemed.

(f) Redemption at the Option of Noteholders and Exercise of Noteholders’ Options: If PutOption is specified in the Pricing Supplement, the Issuer shall, at the option of the holder ofany Note, upon the holder of such Note giving not less than 15 nor more than 30 days’ noticeto the Issuer (or such other notice period as may be specified in the hereon) redeem suchNote on the Optional Redemption Date(s) at its Optional Redemption Amount together withinterest accrued to the date fixed for redemption. To exercise such option or any otherNoteholders’ option that may be set out in the Pricing Supplement (which must be exercisedon an Option Exercise Date) the holder must deposit (in the case of Bearer Notes) such Note(together with all unmatured Receipts and Coupons and unexchanged Talons) with anyPaying Agent or (in the case of Registered Notes) the Certificate representing such Note(s)with any Transfer Agent at its specified office, together with a duly completed option exercisenotice (the “Exercise Notice”) in or substantially in the form set out in the Agency Agreement,

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copies of which are obtainable from any Paying Agent or any Transfer Agent (as applicable)within the notice period. No Note or Certificate so deposited and option exercised may bewithdrawn (except as provided in the Agency Agreement) without the prior consent of theIssuer.

In the event of an early redemption of Notes pursuant to this Condition 7(e), the OptionalRedemption Amount may be less than the principal amount of the Notes being redeemed.

(g) Partly Paid Notes: Partly Paid Notes will be redeemed, whether at maturity, earlyredemption or otherwise, in accordance with the provisions of this Condition and theprovisions specified in the Pricing Supplement.

(h) Exchange of Notes:

(i) If the Supplemental Trust Deed specifies that the Notes are Exchangeable Notes, uponthe occurrence of an event (the “Exchange Event”), as specified in the SupplementalTrust Deed, the Issuer shall deliver, or cause to be delivered, to the Clearance System(as defined below) for credit to the respective accounts of entitled Noteholders on theSettlement Date (as defined below) the Securities Entitlement (as defined below)relating to the Notes presented and surrendered in accordance with this Condition inlieu of redeeming the Notes. Notes presented and surrendered by a Noteholder shallbe aggregated for the purpose of determining the aggregate Securities Entitlement ofthat Noteholder. If the aggregate Securities Entitlement of a Noteholder does notcomprise a nominal amount of Securities equal to an integral multiple of the minimumdenomination of the Securities, the Issuer shall not deliver Securities in a nominalamount equal to a fraction of the minimum denomination of the Securities but shallaccount to each affected Noteholder for the net cash value (if any) of any such fraction,as determined by the Calculation Agent.

(ii) The Issuer shall not deliver, or cause to be delivered, the Securities Entitlement inrespect of any Exchangeable Notes unless such Note has been presented andsurrendered together with a notification in writing (a “Delivery Notice”) specifying anaccount in the Clearance System for delivery of Securities (in or substantially in theform set out in the Agency Agreement, copies of which are available at the specifiedoffice of each of the Paying Agents) to the Issuing and Paying Agent on any businessday in London during the period (the “Notice Delivery Period”) specified in theSupplemental Trust Deed. The Issuer shall procure that upon presentation andsurrender of a Note pursuant to this paragraph the Paying Agent shall issue to theholder thereof a receipt in respect of such Note. The Notes shall cease to beoutstanding on the first day on or after the Settlement Date upon which the Issuermakes the aggregate Securities Entitlement available for delivery in accordance withthese Conditions.

(iii) If there is a Settlement Disruption Event (as defined below) that prevents settlement onthe Settlement Date (as defined below), then settlement shall be on the firstsucceeding day on which settlement can take place through the Clearance Systemunless a Settlement Disruption Event prevents settlement on each day that theClearance System is (or, but for the Settlement Disruption Event, would have been)open for business during the period ending 30 calendar days after the original date onwhich, but for the Settlement Disruption Event, settlement would have occurred. Ifsettlement does not occur during such 30 calendar day period, the Issuer shall usebest efforts to deliver the Securities comprising the aggregate Securities Entitlementpromptly thereafter to a nominee selected by the Trustee.

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(i) Purchases: If the Issuer has satisfied the Trustee that it has made arrangements for therealisation of no more than the equivalent proportion of the Securities, for the reduction in thenotional amount of any Other Obligation and for the purchase of the Notes, whichtransactions will leave the Issuer with no assets or net liabilities in respect thereof, it maypurchase Notes (provided that all unmatured Receipts and Coupons and unexchangedTalons appertaining thereto are attached or surrendered therewith) in the open market orotherwise at any price.

(j) Cancellation: All Notes purchased by or on behalf of the Issuer shall be surrendered forcancellation, in the case of Bearer Notes, by surrendering each such Note together with allunmatured Receipts and Coupons and all unexchanged Talons to or to the order of theIssuing and Paying Agent and, in the case of Registered Notes, by surrendering theCertificate representing such Notes to the Registrar and, in each case, shall, together withall Notes redeemed by the Issuer, be cancelled forthwith (together with all unmaturedReceipts and Coupons and unexchanged Talons attached thereto or surrendered therewith).Any Notes so surrendered for cancellation may not be reissued or resold and the obligationsof the Issuer in respect of any such Notes shall be discharged.

(k) Definitions: As used in this Condition:

“Clearance System” means each of CDP, Clearstream Banking, societe anonyme andEuroclear Bank S.A./N.V., or such other clearance system specified as the ClearanceSystem for delivery of Securities in the Supplemental Trust Deed;

“Securities Entitlement” means, in respect of each Exchangeable Note, the nominalamount of Securities specified in the Supplemental Trust Deed to which a holder of suchNote may be entitled upon the occurrence of an Exchange Event;

“Settlement Date” means the date specified in, or determined in accordance with theprovisions of, the Supplemental Trust Deed or, if such date is not a day on which theClearance System is open for business, the next following day that is; and

“Settlement Disruption Event” means an event beyond the control of the Issuer and therelevant Noteholder as a result of which the Clearance System cannot clear transfers of theSecurities comprising the Securities Entitlement of such Noteholder.

8. Payments and Talons

(a) Bearer Notes: Payments of principal and interest in respect of Bearer Notes shall, subjectas mentioned below, be made against presentation and surrender of the relevant Receipts(in the case of payments of Instalment Amounts other than on the due date for redemptionand provided that the Receipt is presented for payment together with its relative Note), Notes(in the case of all other payments of principal and, in the case of interest, as specified inCondition 8(f)(vi)) or Coupons (in the case of interest, save as specified in Condition 8(f)(vi)),as the case may be, at the specified office of any Paying Agent outside the United States bya cheque payable in the relevant currency drawn on, or, at the option of the holder, bytransfer to an account denominated in such currency with, a bank in the principal financialcentre for such currency or in the case of euro in a city in which banks have access to theTARGET System.

(b) Registered Notes:

(i) Payments of principal (which for the purposes of this Condition 8(b) shall include finalInstalment Amounts but not other Instalment Amounts) in respect of Registered Notesshall be made against presentation and surrender of the relevant Certificates at the

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specified office of any of the Transfer Agents or of the Registrar and in the mannerprovided in paragraph (ii) below.

(ii) Interest (which for the purpose of this Condition 8(b) shall include all InstalmentAmounts other than final Instalment Amounts) on Registered Notes shall be paid to theperson shown on the Register at the close of business on the fifteenth day before thedue date for payment thereof (the “Record Date”). Payments of interest on eachRegistered Note shall be made in the relevant currency drawn on a bank in theprincipal financial centre of the country of such currency concerned, subject asprovided in paragraph (a) above, and mailed to the holder (or to the first named of jointholders) of such Note at its address appearing in the Register. Upon application by theholder to the specified office of the Registrar or any Transfer Agent before the RecordDate and, subject as provided in paragraph (a) above, such payment of interest maybe made by transfer to an account in the relevant currency maintained by the payeewith a bank in the principal financial centre of the country of such currency.

(c) Payments in the United States: Notwithstanding the foregoing, if any Bearer Notes aredenominated in U.S. dollars, payments in respect thereof may be made at the specifiedoffice of any Paying Agent in New York City in the same manner as aforesaid if (i) the Issuershall have appointed Paying Agents with specified offices outside the United States with thereasonable expectation that such Paying Agents would be able to make payment of theamounts on the Notes in the manner provided above when due, (ii) payment in full of suchamounts at all such offices is illegal or effectively precluded by exchange controls or othersimilar restrictions on payment or receipt of such amounts and (iii) such payment is thenpermitted by United States law, without involving, in the opinion of the Issuer, any adversetax consequence to the Issuer.

(d) Payments subject to Fiscal Laws: All payments are subject in all cases to any applicablefiscal or other laws, regulations and directives in the place of payment. No commission orexpenses shall be charged to the Noteholders or Couponholders in respect of suchpayments.

(e) Appointment of Agents: The Issuing and Paying Agent, the Paying Agents, the Registrar,the Transfer Agents and the Calculation Agent initially appointed by the Issuer and theirrespective specified offices are listed below. The Issuing and Paying Agent, the PayingAgents, the Registrar, the Transfer Agents, the Custodian and the Calculation Agent actsolely as agents of the Issuer and do not assume any obligation or relationship of agency ortrust for or with any Noteholder or Couponholder. The Issuer reserves the right at any timewith the approval of the Trustee to vary or terminate the appointment of the Issuing andPaying Agent, any other Paying Agent, the Registrar, any Transfer Agent, the Custodian orthe Calculation Agent(s) and to appoint additional or other Paying Agents or Transfer Agentsor Custodians or Calculation Agent(s), provided that the Issuer shall at all times maintain (i)an Issuing and Paying Agent, (ii) a Registrar in relation to Registered Notes, (iii) a TransferAgent in relation to Registered Notes, (iv) one or more Calculation Agent(s) where theConditions so require, (v) a Custodian, (vi) such other agents as may be required by anystock exchange on which the Notes may be listed in each case, as approved by the Trusteeand (vii) a Paying Agent with a specified office in a European Union member state that willnot be obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/ECor any other European Union Directive implementing the conclusions of the ECOFIN Councilmeeting of 26–27 November 2000 on the taxation of savings income or any lawimplementing or complying with, or introduced in order to conform to, such Directive.

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In addition, the Issuer shall forthwith appoint a Paying Agent in New York City in respect ofany Bearer Notes denominated in U.S. dollars in the circumstances described in Condition8(c) above.

Notice of any such change or any change of any specified office shall promptly be given tothe Noteholders.

(f) Unmatured Coupons and Receipts and unexchanged Talons:

(i) Unless the Notes provide that the relative Coupons are to become void upon the duedate for redemption of those Notes, Bearer Notes should be surrendered for paymenttogether with all unmatured Coupons (if any) relating thereto, failing which an amountequal to the face value of each missing unmatured Coupon (or, in the case of paymentnot being made in full, that proportion of the amount of such missing unmaturedCoupon that the sum of principal so paid bears to the total principal due) shall bededucted from the Final Redemption Amount, Early Redemption Amount or OptionalRedemption Amount, as the case may be, due for payment. Any amount so deductedshall be paid in the manner mentioned above against surrender of such missingCoupon within a period of 10 years from the Relevant Date for the payment of suchprincipal (whether or not such Coupon has become void pursuant to Condition 9).

(ii) If the Notes so provide, upon the due date for redemption of any Bearer Note,unmatured Coupons relating to such Note (whether or not attached) shall become voidand no payment shall be made in respect of them.

(iii) Upon the due date for redemption of any Bearer Note, any unexchanged Talon relatingto such Note (whether or not attached) shall become void and no Coupon shall bedelivered in respect of such Talon.

(iv) Upon the due date for redemption of any Bearer Note that is redeemable ininstalments, all Receipts relating to such Note having an Instalment Date falling on orafter such due date (whether or not attached) shall become void and no payment shallbe made in respect of them.

(v) Where any Bearer Note that provides that the relative unmatured Coupons are tobecome void upon the due date for redemption of those Notes is presented forredemption without all unmatured Coupons, and where any Bearer Note is presentedfor redemption without any unexchanged Talon relating to it, redemption shall be madeonly against the provision of such indemnity as the Issuer may require.

(vi) If the due date for redemption of any Note is not a due date for payment of interest,interest accrued from the preceding due date for payment of interest or the InterestCommencement Date, as the case may be, shall only be payable against presentation(and surrender if appropriate) of the relevant Bearer Note or Certificate representing it,as the case may be. Interest accrued on a Note that only bears interest after itsMaturity Date shall be payable on redemption of such Note against presentation of therelevant Note or Certificate representing it, as the case may be.

(g) Talons: On or after the Interest Payment Date for the final Coupon forming part of a Couponsheet issued in respect of any Bearer Note, the Talon forming part of such Coupon sheetmay be surrendered at the specified office of the Issuing and Paying Agent in exchange fora further Coupon sheet (and if necessary another Talon for a further Coupon sheet) (butexcluding any Coupons that may have become void pursuant to Condition 9).

(h) Non-Business Days: If any date for payment in respect of any Note, Receipt or Coupon isnot a business day, the holder shall not be entitled to payment until the next followingbusiness day nor to any interest or other sum in respect of such postponed payment. In thisparagraph, “business day” means a day (other than a Saturday or a Sunday) on which

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banks and foreign exchange markets are open for business in the relevant place ofpresentation, in such jurisdictions as shall be specified as “Financial Centres” hereon and:

(i) (in the case of a payment in a currency other than euro) where payment is to be madeby transfer to an account maintained with a bank in the relevant currency, on whichforeign exchange transactions may be carried on in the relevant currency in theprincipal financial centre of the country of such currency or

(ii) (in the case of a payment in euro) which is a TARGET Business Day.

9. Prescription

Claims against the Issuer for payment in respect of the Notes, Receipts and Coupons (which, forthis purpose, shall not include Talons) shall be prescribed and become void unless made within10 years (in the case of principal) or five years (in the case of interest) from the appropriateRelevant Date in respect of them.

10. Events of Default

If any of the following events (“Events of Default”) occurs the Trustee at its discretion may, andif so requested by holders of at least one-fifth in nominal amount of the Notes then outstandingor if so directed by an Extraordinary Resolution shall (provided that the Trustee shall have beenindemnified to its satisfaction), give notice to the Issuer that the Notes are, and they shallimmediately become, due and payable at their Early Redemption Amount and the Collateral shallbecome enforceable (as provided in the Trust Deed) and the proceeds of realisation of theCollateral shall be applied as specified in Condition 4(b):

(i) default is made for more than 14 days in the payment of any sum due in respect of the Notesor any of them or

(ii) the Issuer does not perform or comply with any one or more of its other obligations under theNotes or the Trust Deed which default is in the opinion of the Trustee materially prejudicialto the interests of the Noteholders and incapable of remedy or, if in the opinion of the Trusteecapable of remedy, is not in the opinion of the Trustee remedied within 30 days (or suchlonger period as the Trustee may permit) after notice requiring remedy of such default shallhave been given to the Issuer by the Trustee or

(iii) an administrator shall be appointed or any order shall be made by any competent court orany resolution passed for the winding-up or dissolution of the Issuer save for the purposesof amalgamation, merger, consolidation, reorganisation or other similar arrangement onterms previously approved in writing by the Trustee or by an Extraordinary Resolution or

(iv) without prejudice to Condition 7(c):

(i) the Mortgaged Property (or amounts due pursuant thereto) become capable of beingdeclared due and payable (without taking into account for this purpose any graceperiod under any terms in effect) prior to their stated date of maturity or other date ordates for their repayment by reason of any event of default (howsoever described)thereunder or

(ii) any obligor under the Mortgaged Property stops or threatens to stop payment of, or isunable to, or admits inability to, pay, its debts (or any class of its debts) as they fall due,or is deemed unable to pay its debts pursuant to or for the purposes of any applicablelaw, or if any order is made by any competent court or any resolution passed for thewinding-up or dissolution of such obligor or if proceedings are initiated against suchobligor under any applicable liquidation, insolvency, composition, reorganisation orother similar laws or any analogous proceedings or such obligor is adjudicated or foundbankrupt or insolvent.

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The Issuer has undertaken in the Principal Trust Deed that, in September of each year and alsowithin 14 days after any request by the Trustee, it will send to the Trustee a certificate signed bya Director to the effect that as at a date not more than five days prior to the date of the certificateno Event of Default or event or circumstance that could with the giving of notice, lapse of timeand/or issue of a certificate become an Event of Default has occurred.

11. Restrictions

So long as any of the Notes remains outstanding, the Issuer will not, without the written consentof the Trustee:

(a) engage in any activity or do anything whatsoever, except:

(i) to issue Notes subject to a maximum aggregate principal amount outstanding at anytime of U.S.$8,000,000,000 (or its equivalent in other currencies);

(ii) acquire and own Mortgaged Property and exercise its rights and perform its obligationsin respect thereof;

(iii) enter into and perform its obligations under the Transaction Documents;

(iv) enforce any of its rights under the Transaction Documents, any Notes or the Collateralrelating to any Series; and

(v) perform any act incidental to or necessary in connection with any of the above,including without limitation, entering into any swap, option or forward foreign exchangeagreement in connection with the issue of Notes;

(b) have any subsidiaries;

(c) subject to sub-paragraph (a) above, dispose of any of its property or other assets or any partthereof or interest therein (otherwise than in accordance with Condition 7(i));

(d) create or permit within its control to subsist any charge, mortgage, lien or otherencumbrance over the Collateral other than the security granted in favour of the trustee overthe assets which back all Series of Notes of the Issuer;

(e) have any employees;

(f) declare any dividends or make any distributions of any other kind;

(g) issue any further shares;

(h) take any action which would lead to the dissolution, liquidation or winding up of itself or tothe amendment of its constitutional documents; or

(i) perform such other activities as are expressly restricted in the Trust Deed.

Definitions as used in this Condition:

“Transaction Documents” means, in relation to a Series of Notes, all agreements entered intoin relation to such Notes and all agreements incidental to the issue to such Notes.

12. Enforcement

Only the Trustee may pursue the remedies available under the Trust Deed to enforce the rightsof the Noteholders, Couponholders, the Custodian, the Issuing and Paying Agent and none of theNoteholders, Couponholders, the Custodian or the Issuing and Paying Agent is entitled to proceedagainst the Issuer unless the Trustee, having become bound to proceed in accordance with theterms of the Trust Deed, fails or neglects to do so.

The Trustee, the Noteholders, the Couponholders, the Custodian and the Issuing and PayingAgent shall have recourse only to the Mortgaged Property in respect of the Notes and the Trustee

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having realised the same or, in the case of a partial redemption pursuant to Condition 7(c), theRepayable Assets together with a corresponding part of the Security, and distributed the NetProceeds in accordance with Condition 4, none of the Trustee, the Noteholders, theCouponholders, the Custodian or the Issuing and Paying Agent or anyone acting on behalf of anyof them shall be entitled to take any further steps against the Issuer to recover any further sumand no debt shall be owed by the Issuer in respect of such sum. In particular, none of the Trustee,any Noteholder or Couponholder, the Custodian or the Issuing and Paying Agent, nor any otherparty to the Supplemental Trust Deed shall be entitled to institute, or join with any other personin bringing, instituting or joining, insolvency proceedings (whether court based or otherwise) inrelation to the Issuer and none of them shall have any claim in respect of any sum arising inrespect of any assets secured for the benefit of any other obligations of the Issuer.

13. Meetings of Noteholders, Modification, Waiver and Substitution

(a) Meetings of Noteholders: The Trust Deed contains provisions for convening meetings ofNoteholders to consider any matter affecting their interests, including the sanctioning byExtraordinary Resolution of a modification of any of these Conditions or any provisions of theTrust Deed. Such a meeting may be convened by Noteholders holding not less than 10 percent in nominal amount of the Notes for the time being outstanding. The quorum for anymeeting convened to consider an Extraordinary Resolution shall be two or more personsholding or representing a clear majority in nominal amount of the Notes for the time beingoutstanding, or at any adjourned meeting two or more persons being or representingNoteholders whatever the nominal amount of the Notes held or represented, unless thebusiness of such meeting includes consideration of proposals, inter alia, (i) to amend thedates of maturity or redemption of the Notes, any Instalment Date or any date for paymentof interest or Interest Amounts on the Notes, (ii) to reduce or cancel the nominal amount of,or any Instalment Amount of, or any premium payable on redemption of, the Notes, (iii) toreduce the rate or rates of interest in respect of the Notes or to vary the method or basis ofcalculating the rate or rates or amount of interest or the basis for calculating any InterestAmount in respect of the Notes, (iv) if a Minimum and/or a Maximum Rate of Interest,Instalment Amount or Redemption Amount is shown hereon to reduce any such Minimumand/or Maximum, (v) to vary any method of, or basis for, calculating the Final RedemptionAmount, the Early Redemption Amount or the Optional Redemption Amount including themethod of calculating the Amortised Face Amount, (vi) to vary the currency or currencies ofpayment or denomination of the Notes, (vii) to take any steps that as specified hereon mayonly be taken following approval by an Extraordinary Resolution to which the special quorumprovisions apply, (viii) to modify the provisions concerning the quorum required at anymeeting of Noteholders or the majority required to pass the Extraordinary Resolution, (ix) tomodify the provisions of the Trust Deed concerning this exception or (x) to modify certainprovisions of Condition 4, in which case the necessary quorum shall be two or more personsholding or representing not less than 75 per cent. or at any adjourned meeting not less than25 per cent. in nominal amount of the Notes for the time being outstanding. AnyExtraordinary Resolution duly passed shall be binding on Noteholders (whether or not theywere present at the meeting at which such resolution was passed) and on allCouponholders.

These Conditions may be amended, modified or varied in relation to the Notes by the termsof the relevant Supplemental Trust Deed in relation to such Notes.

(b) Modification of the Trust Deed: The Trustee may agree, without the consent of theNoteholders or Couponholders, to (i) any modification of any of the provisions of the TrustDeed, Credit Support Document, Swap, Contract or Securities Agreement that is of a formal,minor or technical nature or is made to correct a manifest error, and (ii) any othermodification (except as mentioned in the Trust Deed), and any waiver or authorisation of anybreach or proposed breach, of any of these Conditions or any of the provisions of the Trust

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Deed, Credit Support Document, Swap, Contract or Securities Agreement that is in theopinion of the Trustee not materially prejudicial to the interests of the Noteholders. Any suchmodification, authorisation or waiver shall be binding on the Noteholders and theCouponholders and, if the Trustee so requires, such modification shall be notified to theNoteholders as soon as practicable.

(c) Substitution: The Trust Deed contains provisions permitting the Trustee to agree, subjectto such amendment of the Trust Deed and such other conditions as the Trustee may require,without the consent of the Noteholders or the Couponholders, to the substitution of any othercompany in place of the Issuer, or of any previous substituted company, as principal debtorunder the Trust Deed and all of the Notes then outstanding. In the case of such a substitutionthe Trustee may agree, without the consent of the Noteholders or the Couponholders, to achange of the law governing the Notes, the Receipts, the Coupons, the Talons and/or theTrust Deed provided that such change would not in the opinion of the Trustee be materiallyprejudicial to the interests of the Noteholders. Under the Trust Deed, the Trustee may agreeor require the Issuer to use all reasonable endeavours to procure the substitution asprincipal debtor under the Trust Deed and all of the Notes then outstanding of a companyincorporated in some other jurisdiction in the event of the Issuer becoming subject to anyform of tax on its income or payments in respect of the Notes.

(d) Entitlement of the Trustee: In connection with the exercise of its functions (including butnot limited to those referred to in this Condition) the Trustee shall have regard to the interestsof the Noteholders as a class and shall not have regard to the consequences of suchexercise for individual Noteholders or Couponholders and the Trustee shall not be entitledto require, nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer anyindemnification or payment in respect of any tax consequence of any such exercise uponindividual Noteholders or Couponholders.

14. Replacement of Notes, Certificates, Receipts, Coupons and Talons

If a Note, Certificate, Receipt, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, itmay be replaced, subject to applicable laws, regulations and stock exchange or other relevantauthority regulations, at the specified office of the Issuing and Paying Agent (in the case of BearerNotes, Receipts, Coupons or Talons) and of the Registrar (in the case of Certificates) or suchother Paying Agent or Transfer Agent, as the case may be, as may from time to time bedesignated by the Issuer for the purpose and notice of whose designation is given to Noteholders,in each case on payment by the claimant of the fees and costs incurred in connection therewithand on such terms as to evidence, security and indemnity (which may provide, inter alia, that if theallegedly lost, stolen or destroyed Note, Certificate, Receipt, Coupon or Talon is subsequentlypresented for payment or, as the case may be, for exchange for further Coupons, there shall bepaid to the Issuer on demand the amount payable by the Issuer in respect of such Notes,Certificates, Receipts, Coupons or further Coupons) and otherwise as the Issuer may require.Mutilated or defaced Notes, Certificates, Receipts, Coupons or Talons must be surrenderedbefore replacements will be issued.

15. Further Issues

The Issuer may from time to time without the consent of the Noteholders or Couponholders butsubject to Condition 5 create and issue further notes either having the same terms and conditionsas the Notes in all respects (or in all respects except for the first payment of interest on them) andso that such further issue shall be consolidated and form a single series with the Notes or uponsuch terms as the Issuer may determine at the time of their issue. Any such further notes shall onlyform a single issue with the Notes (unless otherwise approved by an Extraordinary Resolution) ifthe Issuer provides additional assets as security for such further notes which are fungible with,and have the same proportionate composition as, those forming part of the Mortgaged Property

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for the Notes and in the same proportion that the nominal amount of such new notes bears to theNotes and the Issuer enters into, or has the benefit of, additional or supplemental Credit SupportDocuments, Swaps and Securities Agreements extending the terms of any existing Credit SupportDocuments, Swaps and Securities Agreements to the new notes on terms no less favourable thansuch existing documents and agreements. Any new notes forming a single series with the Notesshall be constituted and secured by a deed supplemental to the Trust Deed, such further securityshall be added to the Mortgaged Property so that the new notes and the existing Notes shall besecured by the same Mortgaged Property and references in these Conditions to “Notes”,“Collateral”, “Mortgaged Property”, “Credit Support Documents”, “Swaps”, “Contracts”, “SecuritiesAgreements”, “Obligations”, “Other Obligations” and “Creditors” shall be construed accordingly.The Trust Deed contains provisions for convening a single meeting of the holders of the Notes andthe holders of notes of other specified series in certain circumstances where the Trustee sodecides.

16. Notices

Notices to the holders of Registered Notes shall be mailed to them at their respective addressesin the Register and deemed to have been given on the fourth weekday (being a day other thana Saturday or a Sunday) after the date of mailing. Notices to the holders of Bearer Notes shall bevalid if published in a daily newspaper of general circulation in Singapore (which is expected tobe The Business Times). If in the opinion of the Trustee any such publication is not practicable,notice shall be validly given if published in another leading daily English language newspaper withgeneral circulation in Singapore. Any such notice shall be deemed to have been given on the dateof such publication or, if published more than once or on different dates, on the first date on whichpublication is made, as provided above.

Couponholders shall be deemed for all purposes to have notice of the contents of any notice givento the holders of Bearer Notes in accordance with this Condition.

17. Indemnification and Obligations of the Trustee

The Trust Deed contains provisions for the indemnification of the Trustee, for its relief fromresponsibility including for the exercise of any voting rights in respect of the Securities and for thevalidity, sufficiency and enforceability (which the Trustee has not investigated) of the Securitycreated over the Mortgaged Property. The Trustee is not obliged or required to take any actionunder the Trust Deed which may involve it in incurring any personal liability or expense unlessindemnified to its satisfaction. The Trustee and any affiliate are entitled to enter into businesstransactions with the Issuer, any Obligor, any Credit Support Provider, Beneficiary, Counterparty,Swap Counterparty or Swap Guarantor or any of their subsidiary, holding or associatedcompanies without accounting to the Noteholders for profit resulting therefrom.

The Trustee is exempted from liability with respect to any loss or theft or reduction in value of theSecurities, from any obligation to insure or to procure the insuring of the Securities and from anyclaim arising from the fact that the Securities will be held in safe custody by the Custodian or anycustodian selected by the Trustee (in each case, if applicable). The Trustee is not responsible formonitoring or supervising the performance by any other person of its obligations to the Issuer andmay assume these are being performed unless it shall have actual knowledge to the contrary.

The Trust Deed provides that in acting as Trustee under the Trust Deed the Trustee shall notassume any duty or responsibility to the Custodian or the Issuing and Paying Agent (other thanto pay to any of such parties any moneys received and repayable to it and to act in accordancewith the provisions of Condition 4) and shall have regard solely to the interests of the Noteholders.

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18. Contracts (Rights of Third Parties) Act 1999

No person shall have any right to enforce any term or condition of the Notes under the Contracts(Rights of Third Parties) Act 1999.

19. Governing Law and Jurisdiction

(a) Governing Law: The Trust Deed, the Notes, the Receipts, the Coupons and the Talons aregoverned by, and shall be construed in accordance with, English law.

(b) Jurisdiction: The courts of England are to have jurisdiction to settle any disputes that mayarise out of or in connection with any Notes, Receipts, Coupons or Talons and accordinglyany legal action or proceedings arising out of or in connection with any Notes, Receipts,Coupons or Talons (“Proceedings”) may be brought in such courts. The Issuer has in theTrust Deed irrevocably submitted to the jurisdiction of such courts.

(c) Service of Process: The Issuer has irrevocably appointed an agent in England to receive,for it and on its behalf, service of process in any Proceedings in England.

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SUMMARY OF PROVISIONS RELATING TOTHE NOTES WHILE IN GLOBAL FORM

The Master Conditions in respect of the Programme, as set out in the section “Master Terms andConditions of the Notes”, contemplate Notes issued pursuant to the Programme being issued indefinitive form. However, the Notes will instead be represented on their issue by interests in a GlobalNote or (as the case may be) a Global Certificate which will be deposited, or registered in the name ofa nominee for, and deposited on the relevant Issue Date with CDP or a common depositary on behalfof, Euroclear and Clearstream, Luxembourg and/or any alternative clearing system. Due to the statusof the Notes being in global form, definitive Notes will not be issued to Noteholders (except in the verylimited circumstances described below). The following paragraphs describe certain arrangements andsummarise certain provisions relating to the Notes for so long as they are represented by interests inthe Global Note or Global Certificate.

Initial Issue of Notes

Upon the initial deposit of a Global Note with CDP or a common depositary for Euroclear andClearstream International (the “Common Depositary”) or registration of Registered Notes in the nameof CDP or any nominee for Euroclear and Clearstream International and delivery of the relative GlobalCertificate to CDP or the Common Depositary, CDP or, as the case may be, Euroclear or ClearstreamInternational, will credit each subscriber with a nominal amount of Notes equal to the nominal amountthereof for which it has subscribed and paid.

Notes that are initially deposited with CDP or the Common Depositary may also be credited to theaccounts of subscribers with (if indicated in the relevant Pricing Statement) other clearing systemsthrough direct or indirect accounts with CDP or Euroclear and Clearstream International held by otherclearing systems. Conversely, Notes that are initially deposited with any other clearing system maysimilarly be credited to the accounts of subscribers with CDP or Euroclear, Clearstream Internationalor other clearing systems.

Relationship of Accountholders with Clearing Systems

Each of the persons shown in the records of CDP, Euroclear, Clearstream International, or any otherclearing system as the holder of a Note represented by a Global Note or a Global Certificate must looksolely to CDP, Euroclear, Clearstream International or such clearing system (as the case may be) forhis share of each payment made by the Issuer to the bearer of such Global Note or the holder of theunderlying Registered Notes, as the case may be, and in relation to all other rights arising under theGlobal Notes or Global Certificates, subject to and in accordance with the respective rules andprocedures of CDP, Euroclear, Clearstream International or such clearing system (as the case may be).Such persons shall have no claim directly against the Issuer in respect of payments due on the Notesfor so long as the Notes are represented by such Global Note or Global Certificate and such obligationsof the Issuer will be discharged by payment to the bearer of such Global Note or the holder of theunderlying Registered Notes, as the case may be, in respect of each amount so paid.

Exchange

1. Bearer Notes: Temporary Global Notes. Each Temporary Global Note will be exchangeable, freeof charge to the holder, on or after its Exchange Date (as defined below):

1.1 if the relevant Pricing Statement indicates that such Global Note is issued in compliance withthe C Rules or in a transaction to which TEFRA is not applicable, in whole, but not in part,for the Definitive Notes defined and described below; and

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1.2 otherwise, in whole or in part upon certification as to non-U.S. beneficial ownership in theform set out in the Trust Deed for interests in a Permanent Global Note or, if so provided inthe relevant Pricing Statement, for Definitive Notes.

Each Temporary Global Note that is also an Exchangeable Bearer Note will be exchangeable forRegistered Notes in accordance with the Conditions in addition to any Permanent Global Note orDefinitive Notes for which it may be exchangeable and, before its Exchange Date, will also beexchangeable in whole or in part for Registered Notes only.

2. Bearer Notes: Permanent Global Notes. Each Permanent Global Note will be exchangeable, freeof charge to the holder, on or after its Exchange Date in whole but not in part for Definitive Notesor, in the case of 2.3 below, Registered Notes:

2.1 unless principal in respect of any Notes is not paid when due, by the Issuer giving notice tothe Noteholders, the Issuing and Paying Agent and the Trustee of its intention to effect suchexchange;

2.2 if the relevant Pricing Statement provides that such Permanent Global Note is exchangeableat the request of the holder, by the holder giving notice to the Issuing and Paying Agent ofits election for such exchange;

2.3 if the Permanent Global Note is an Exchangeable Bearer Note, by the holder giving noticeto the Issuing and Paying Agent of its election to exchange such Global Note for RegisteredNotes;

2.4 otherwise, if the Permanent Global Note is held on behalf of Euroclear or ClearstreamInternational or any other clearing system (an “Alternative Clearing System”) and any suchclearing system is closed for business for a continuous period of 14 days (other than byreason of holidays, statutory or otherwise) or announces an intention permanently to ceasebusiness or in fact does so; and

2.5 otherwise, if the Permanent Global Note is held by or on behalf of CDP and (a) an event ofdefault (as defined in the Master Conditions) has occurred and is continuing, (b) CDP hasclosed for business for a continuous period of 14 days (other than by reason of holiday,statutory or otherwise), (c) CDP has announced an intention to permanently cease businessand no alternative clearing system is available or (d) CDP has notified the Issuer that it isunable or unwilling to act as depository for the Notes and to continue performing its dutiesset out in the Depository Services Agreement and no alternative clearing system is available.

3. Registered Notes: Global Certificates. If the Pricing Statement states that the Notes are to berepresented by a Global Certificate on issue, the following will apply in respect of transfers ofNotes held in CDP, Euroclear or Clearstream International or an Alternative Clearing System.These provisions will not prevent the trading of interests in the Notes within a clearing systemwhilst they are held on behalf of such clearing system, but will limit the circumstances in which theNotes may be withdrawn from the relevant clearing system.

Transfers of the holding of Notes represented by any Global Certificate pursuant to Condition 2(b)may only be made in part:

3.1 if the Notes represented by the Global Certificate are held on behalf of Euroclear orClearstream, Luxembourg or an Alternative Clearing System and any such clearing systemis closed for business for a continuous period of 14 days (other than by reason of holidays,statutory or otherwise) or announces an intention permanently to cease business or does infact do so; or

3.2 if the Notes represented by the Global Certificate are held by or on behalf of CDP and (a)an event of default (as defined in the Conditions) has occurred and is continuing, (b) CDPhas closed for business for a continuous period of 14 days (other than by reason of holiday,statutory or otherwise), (c) CDP has announced an intention to permanently cease business

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and no alternative clearing system is available or (d) CDP has notified the Issuer that it isunable or unwilling to act as depository for the Notes and to continue performing its dutiesset out in the Depository Services Agreement dated 15 November 2006 made between theIssuer and CDP and no alternative clearing system is available; or

3.3 with the consent of the Issuer,provided that, in the case of the first transfer of part of aholding pursuant to 3.1 above, the Registered Holder has given the Registrar not less than30 days’ notice at its specified office of the Registered Holder’s intention to effect suchtransfer. Where the holding of Notes represented by a Global Certificate is only transferablein its entirety, the Certificate issued to the transferee upon transfer of such holding shall bea Global Certificate. Where transfers are permitted in part, Certificates issued to transfereesshall not be Global Certificates unless the transferee so requests and certifies to theRegistrar that it is, or is acting as a nominee for, Clearstream International, Euroclear and/oran Alternative Clearing System.

4. Delivery of Notes. On or after any due date for exchange the holder of a Global Note maysurrender such Global Note or, in the case of a partial exchange of a Temporary Global Note fora Permanent Global Note, present it for endorsement to or to the order of the Issuing and PayingAgent. In exchange for any Global Note, or the part thereof to be exchanged, the Issuer will (i) inthe case of a Temporary Global Note exchangeable for a Permanent Global Note, deliver, orprocure the delivery of, a Permanent Global Note in an aggregate nominal amount equal to thatof the whole or that part of a Temporary Global Note that is being exchanged or, in the case of asubsequent exchange, endorse, or procure the endorsement of, a Permanent Global Note toreflect such exchange or (ii) in the case of a Global Note exchangeable for Definitive Notes orRegistered Notes, deliver, or procure the delivery of, an equal aggregate nominal amount of dulyexecuted and authenticated Definitive Notes and/or Certificates, as the case may be. In this BaseProspectus, “Definitive Notes” means, in relation to any Global Note, the definitive Bearer Notesfor which such Global Note may be exchanged (if appropriate, having attached to them allCoupons and Receipts in respect of interest or Instalment Amounts that have not already beenpaid on the Global Note and a Talon). Definitive Notes will be security printed and Certificates willbe printed in accordance with any applicable legal and stock exchange requirements in orsubstantially in the form set out in the Schedules to the Trust Deed. On exchange in full of eachPermanent Global Note, the Issuer will, if the holder so requests, procure that it is cancelled andreturned to the holder together with the relevant Definitive Notes.

5. Exchange Date. “Exchange Date” means, in relation to a Temporary Global Note, the day fallingafter the expiry of 40 days after its issue date and, in relation to a Permanent Global Note, a dayfalling not less than 60 days, or in the case of an exchange for Registered Notes five days, or inthe case of failure to pay principal in respect of any Notes when due 30 days, after that on whichthe notice requiring exchange is given and on which banks are open for business in the city inwhich the specified office of the Issuing and Paying Agent is located and in the city in which therelevant clearing system is located.

Amendment to Master Conditions

The Temporary Global Notes, Permanent Global Notes and Global Certificates contain provisions thatapply to the Notes that they represent, some of which modify the effect of the terms and conditions ofthe Notes set out in this Base Prospectus. The following is a summary of those provisions:

1. Payments. No payment falling due after the Exchange Date will be made on any Global Noteunless exchange for an interest in a Permanent Global Note or for Definitive Notes or RegisteredNotes is improperly withheld or refused. Payments on any Temporary Global Note issued incompliance with the D Rules before the Exchange Date will only be made against presentation ofcertification as to non-U.S. beneficial ownership in the form set out in the Agency Agreement. Allpayments in respect of Notes represented by a Global Note will be made against presentation forendorsement and, if no further payment falls to be made in respect of the Notes, surrender of that

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Global Note to or to the order of the Issuing and Paying Agent or such other Paying Agent as shallhave been notified to the Noteholders for such purpose. A record of each payment so made willbe endorsed on each Global Note, which endorsement will be prima facie evidence that suchpayment has been made in respect of the Notes.

2. Prescription. Claims against the Issuer in respect of Notes that are represented by a PermanentGlobal Note will become void unless it is presented for payment within a period of ten years (inthe case of principal) and five years (in the case of interest) from the appropriate Relevant Date(as defined in the Master Conditions).

3. Meetings. The holder of a Permanent Global Note or of the Notes represented by a GlobalCertificate shall (unless such Permanent Global Note or Global Certificate represents only oneNote) be treated as being two persons for the purposes of any quorum requirements of a meetingof Noteholders and, at any such meeting, the holder of a Permanent Global Note shall be treatedas having one vote in respect of each minimum Specified Denomination of Notes for which suchGlobal Note may be exchanged. (All holders of Registered Notes are entitled to one vote inrespect of each Note comprising such Noteholder’s holding, whether or not represented by aGlobal Certificate.)

4. Cancellation. Cancellation of any Note represented by a Permanent Global Note that is requiredby the Master Conditions to be cancelled (other than upon its redemption) will be effected byreduction in the nominal amount of the relevant Permanent Global Note.

5. Purchase. Notes represented by a Permanent Global Note may only be purchased by the Issuerif they are purchased together with the rights to receive all future payments of interest andInstalment Amounts (if any) thereon.

6. Issuer’s Option. Any option of the Issuer provided for in the Master Conditions of any Notes whilesuch Notes are represented by a Permanent Global Note shall be exercised by the Issuer givingnotice to the Noteholders within the time limits set out in and containing the information requiredby the Master Conditions, except that the notice shall not be required to contain the certificatenumbers of Notes drawn in the case of a partial exercise of an option and accordingly no drawingof Notes shall be required. In the event that any option of the Issuer is exercised in respect ofsome but not all of the Notes of any Series, the rights of accountholders with a clearing systemin respect of the Notes will be governed by the standard procedures of Euroclear, ClearstreamInternational or any other clearing system (as the case may be).

7. Noteholders’ Options. Any option of the Noteholders provided for in the Master Conditions of anyNotes while such Notes are represented by a Permanent Global Note may be exercised by theholder of the Permanent Global Note giving notice to the Issuing and Paying Agent within the timelimits relating to the deposit of Notes with a Paying Agent set out in the Master Conditionssubstantially in the form of the notice available from any Paying Agent, except that the notice shallnot be required to contain the certificate numbers of the Notes in respect of which the option hasbeen exercised, and stating the nominal amount of Notes in respect of which the option isexercised and at the same time presenting the Permanent Global Note to the Issuing and PayingAgent, or to a Paying Agent acting on behalf of the Issuing and Paying Agent, for notation.

8. Trustee’s Powers. In considering the interests of Noteholders while any Global Note is held onbehalf of, or Registered Notes are registered in the name of any nominee for, a clearing system,the Trustee may have regard to any information provided to it by such clearing system or itsoperator as to the identity (either individually or by category) of its accountholders withentitlements to such Global Note or Registered Notes and may consider such interests as if suchaccountholders were the holders of the Notes represented by such Global Note or GlobalCertificate.

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9. Notices. So long as any Notes are represented by a Global Note and such Global Note is held onbehalf of a clearing system, notices to the holders of Notes of that Series may be given by deliveryof the relevant notice to that clearing system for communication by it to entitled accountholders insubstitution for publication as required by the Master Conditions or by delivery of the relevantnotice to the holder of the Global Note except that if the Notes are cleared through CDP, there maybe no prior arrangements with CDP for notices to be delivered though CDP to the entitledaccountholders. In such instances, notices may be sent by the Trustee or by publication in aleading newspaper having general circulation in Singapore. If the Notes are listed on a stockexchange, for so long as the Notes are listed on that stock exchange and the rules of that stockexchange so require, notices shall also be published in a leading newspaper having generalcirculation in the city in which such other exchange is located or in such other manner as isrequired by that stock exchange.

Partly Paid Notes

The provisions relating to Partly Paid Notes are not set out in this Base Prospectus, but if Partly PaidNotes are to be issued, the provisions relating thereto will be contained in the relevant PricingStatement and in the Global Notes. While any instalments of the subscription moneys due from theholder of Partly Paid Notes are overdue, no interest in a Global Note representing such Notes may beexchanged for an interest in a Permanent Global Note or for Definitive Notes (as the case may be). Ifany Noteholder fails to pay any instalment due on any Partly Paid Notes within the time specified, theIssuer may forfeit such Notes and shall have no further obligation to their holder in respect of them.

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GLOSSARY

For the purpose of this Base Prospectus, the following definitions have, where appropriate, been used:

“Agency Agreement” : means the agency agreement dated 15 November 2006made between, (i) the Issuer, (ii) the Trustee, (iii) TheHongkong and Shanghai Banking Corporation Limited, asIssuing and Paying Agent, Paying Agent, Registrar, TransferAgent and Custodian and (iv) the Calculation Agent, relatingto the appointment of Agents in respect of the Programme

“Agents” : means the Issuing and Paying Agent, the other PayingAgents, the Calculation Agent, the Registrar, the otherTransfer Agents and the Custodian or any of them

“Approved Securities Exchange” : means the Australian Stock Exchange Limited, Borsa ItalianaSpA, Deutsche Borse AG, Euronext N.V., Helsinki StockExchange, Hong Kong Exchanges and Clearing Limited,Jakarta Stock Exchange, Korea Stock Exchange, KualaLumpur Stock Exchange, London Stock Exchange plc,Luxembourg Stock Exchange, National Association ofSecurities Dealers, Inc., New York Stock Exchange, Inc., NewZealand Stock Exchange, Philippine Stock Exchange,Shanghai Stock Exchange, Shenzhen Stock Exchange,Singapore Exchange Limited, SWX Swiss Exchange, TaiwanStock Exchange, The American Stock Exchange LLC, TheStock Exchange of Thailand, Tokyo Stock Exchange, Inc.,Toronto Stock Exchange,

“Authority” : means The Monetary Authority of Singapore

“Bearer Note” : means a Note that is in bearer form, and includes anyreplacement Bearer Note issued pursuant to the MasterConditions and any Temporary Global Note or PermanentGlobal Note

“Calculation Agent” : means Merrill Lynch International or such party named assuch in the Master Conditions and as described in therelevant Pricing Statement

“CDP” : means The Central Depository (Pte) Limited

“Certificates” : means the registered certificates representing RegisteredNotes and, unless the context indicates otherwise, includesany Global Certificate representing such Registered Notes

“Certification” : means a registered certificate representing one or moreRegistered Notes of the same Series and, save as provided inthe Conditions, comprising the entire holding by a Noteholderof his Registered Notes of that Series

“Clearstream, Luxembourg” : means Clearstream Banking, societe anonyme

“Companies Act” : means the Companies Act, Chapter 50 of Singapore, asamended from time to time

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“Coupons” : means the bearer coupons relating to interest bearing BearerNotes or, as the context may require, a specific number ofthem and includes any replacement Coupons issuedpursuant to the Conditions

“Custodian” : means The Hongkong and Shanghai Banking CorporationLimited, as Custodian under the Agency Agreement asamended, supplemented or modified by the SupplementalAgency Agreement (or such other Custodian as may beappointed thereunder from time to time either generallyhereunder or in relation to a specific Series of Notes)

“Definitive Note” : means a Bearer Note in definitive form having, whereappropriate, Coupons, Receipt(s) and/or a Talon attached onissue and, unless the context requires otherwise, means aCertificate (other than a Global Certificate) and includes anyreplacement Note or Certificate issued pursuant to theConditions

“Depositor” : means a person being a Depository Agent or a holder of adirect Securities Account maintained with CDP but does notinclude a holder of an account maintained with a DepositoryAgent

“Depository Agent” : means an entity registered as a depository agent with CDP forthe purpose of maintaining securities sub-accounts for its ownaccount and the account of others

“Depository Services Agreement” : means the Master Depository Services Agreement dated 15November 2006 made between (i) the Issuer and (ii) CDPrelating to the terms and conditions for the clearing andsettlement of the Notes through the CDP book-entry system

“Distributors” : means any of the distributors as described in the relevantPricing Statement

“Distributor AppointmentAgreement”

: means each Distributor Appointment Agreement entered or tobe entered into between (i) the Issuer, (ii) the Dealer, (iii) theMarket Agent and (iv) each relevant Distributor, relating to thedistribution of the Notes

“Extraordinary Resolution” : means a resolution passed at a meeting of the Noteholdersduly convened and held in accordance with the Trust Deed bya majority of at least 75 per cent of the votes cast

“Euroclear” : means Euroclear Bank, S.A./N.V., as operator of theEuroclear System

“Event of Default” : means an event described in Condition 10 of the MasterConditions in relation to which the Trustee has given notice tothe Issuer resulting in the Notes becoming due and payable

“Fitch” : means Fitch Ratings Ltd.

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“Global Certificate” : means a Certificate representing Registered Notes of one ormore Tranches of the same Series that are registered in thename of a nominee for Euroclear, Clearstream, Luxembourg,CDP and/or any other clearing system

“Global Note” : means a Temporary Global Note and/or, as the context mayrequire, a Permanent Global Note

“Income Tax Act” or “ITA” : means the Income Tax Act, Chapter 134 of Singapore, asamended from time to time

“Individual Certificate” : means Certificates in definitive form

“Issue Date” : means, in relation to each Tranche, the date on which theNotes of that Tranche have been issued or, if not yet issued,the date agreed for their issue between the Issuer and theProgramme Arranger

“Issue Price” : means, in relation to any Note, the price at which such Notewill be issued by the Issuer

“Issuer” : means Jubilee Global Finance Limited

“Issuing and Paying Agent” : means in respect of the Notes, The Hongkong and ShanghaiBanking Corporation Limited, or such other Issuing andPaying Agent as may be appointed from time to time underthe Agency Agreement

“Market Agent” : means Merrill Lynch (Singapore) Pte. Ltd. or such other partyor parties as specified and defined in the relevant PricingStatement

“Maturity Date” : means the date on which the Notes will mature

“Merrill Lynch” : means the Programme Arranger, the Calculation Agent, theMarket Agent, the Swap Counterparty, the Swap Guarantorand/or their affiliates, as the context requires

“Moody’s” : means Moody’s Investors Services, Inc.

“Notes” : means the notes constituted by the Trust Deed which areissued or to be issued by the Issuer under the Programme

“%” or “per cent.” : means per centum or percentage

“Paying Agent” : means the Issuing and Paying Agent and/or such otherpaying agent, as the context requires, as may be appointedunder the Agency Agreement (as amended, supplemented ormodified by the Supplemental Agreement) from time to time

“Permanent Global Note” : means a Global Note representing Bearer Notes of one ormore Tranches of the same Series, either on issue or uponexchange of a Temporary Global Note, or part of it

“Pricing Statement” : means in relation to any Tranche or Series of Notes issued orto be issued under the Programme, a pricing statementsupplemental to the Base Prospectus specifying the relevantissue details in relation to each Tranche or Series

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“Potential Events of Default” : means an event or circumstance that could with the giving ofnotice, lapse of time and/or issue of a certificate become anEvent of Default

“Programme” : means the U.S.$8,000,000,000 retail secured noteprogramme for the issuance of Notes established by theIssuer

“Ratings Agencies” : means Fitch, Moody’s and/or Standard & Poor’s

“Receipts” : means the receipts for the payment of instalments of principalin respect of Bearer Notes of which the principal is repayablein instalments or, as the context may require, a specificnumber of them and includes any replacement Receiptsissued pursuant to the Master Conditions

“Reference Assets” : means the assets being linked to the Notes and as describedin the relevant Pricing Statement

“Register” : means the register maintained by the Registrar for eachSeries of Registered Notes in accordance with the MasterConditions and the regulations promulgated by the Issuer asprovided for in the Agency Agreement

“Registered Notes” : means Notes issued in registered form

“Registrar” : means The Hongkong and Shanghai Banking CorporationLimited

“Secured Agreement” : means each Contract, Swap and/or Securities Agreemententered into in relation to a Series of Notes

“Securities Act” : means the United States Securities Act of 1933, as amended

“Securities Account” : means a securities account maintained by a Depositor withCDP

“Security” : means the security constituted by the Supplemental TrustDeed

“SFA” or “Securities and FuturesAct”

: means the Securities and Futures Act, Chapter 289 ofSingapore, as amended from time to time

“Share Trustee” : means Deutsche Bank (Cayman) Limited

“Singapore Dollar”, “S$” or “$” : means the lawful currency of the Republic of Singapore

“Standard & Poor’s” : means Standard & Poor’s, a division of The McGraw-HillCompanies, Inc.

“Supplemental Trust Deed” : means the relevant supplemental trust deed supplemental tothe Trust Deed and dated the Issue Date between the Issuer,the Trustee and (if applicable) the other parties named in itand which may constitute one or more Series of Notes

“Swap Counterparty” : means Merrill Lynch International

“Swap Guarantor” : means Merrill Lynch & Co., Inc.

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“Talons” : mean talons for further Coupons or, as the context mayrequire, a specific number of them and includes anyreplacement Talons issued pursuant to the Master Conditions

“Temporary Global Note” : means a Global Note representing Bearer Notes of one ormore Tranches of the same Series on issue

“Transfer Agent” : means in relation to the Notes, The Hongkong and ShanghaiBanking Corporation Limited

“Trust Deed” : means the principal trust deed dated 15 November 2006made between (1) the Issuer and (2) the Trustee, constitutingthe Notes

“Trustee” : means HSBC Institutional Trust Services (Singapore) Limitedin its capacity as trustee under the Trust Deed, and includessuch company and all other persons or companies for thetime being acting in the capacity of trustee or trustees underthe Trust Deed

“U.S. Dollars”, “USD” or “US$” : means the lawful currency of the United States

Words importing the singular shall, where applicable, include the plural and vice versa and wordsimporting the masculine gender shall, where applicable, include the feminine and neuter genders andvice versa. References to persons shall include corporations.

Any reference in this Base Prospectus to any enactment is a reference to that enactment as for the timebeing amended or re-enacted. Any word defined under the Companies Act or the Securities andFutures Act or any statutory modification thereof and used in this Base Prospectus shall, unlessotherwise defined herein, have the meaning ascribed to it under the Companies Act or the Securitiesand Futures Act or statutory modification, as the case may be.

Unless otherwise specified, a reference to a time of day in this Base Prospectus shall be a referenceto Singapore time.

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Issuer

Jubilee Global Finance LimitedPO Box 1984GT

Elizabethan SquareGeorge Town

Grand CaymanCayman Islands

Trustee

HSBC Institutional Trust Services (Singapore) Limited21 Collyer Quay

#14-01HSBC Building

Singapore 049320

Issuing and Paying Agent, Paying Agent,Transfer Agent and Registrar

The Hongkong and Shanghai BankingCorporation Limited

21 Collyer Quay#14-01 HSBC Building

Singapore 049320

CustodianThe Hongkong and Shanghai Banking

Corporation Limited1 Queen’s Road Central

Hong Kong

Legal advisers

to the Issuer and Arrangerin respect of Singapore law

Allen & GledhillOne Marina Boulevard, #28-00

Singapore 018989

to the Issuer in respect ofCaymans Islands law

Maples & Calder1504 One International Finance Centre

1 Harbour View StreetHong Kong

Arranger

Merrill Lynch (Singapore) Pte. Ltd.1 Temasek Avenue

#28-01 Millenia TowerSingapore 039192

Calculation Agent

Merrill Lynch InternationalMerrill Lynch Financial Centre

2 King Edward StreetLondon EC1A 1HQ

England

SNP Security Printing Pte Ltd 6660283