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| ## Comptroller of the Currency                                        |
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| > Administrator of National Banks                                     |
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Washington, DC 20219

#### Conditional Approval #565

December 23, 2002 **January 2003**

Thomas J. Delaney, Esq.

ShawPittman LLP

2300 N Street, NW

Washington, DC 20037-1128

Re: Applications by UBS AG to: convert two state branches located in New
York, NY to Federal branches; convert a state agency in Miami, FL to a
limited Federal branch; establish an additional limited Federal branch
in New York, NY; and exercise fiduciary powers.

ACN: 2002-IB-10-0003, 0004, 0005, 0006, and 2002-IB-12-0006

Dear Mr. Delaney:

The Office of the Comptroller of the Currency (OCC) has reviewed UBS
AG's applications to convert the state licensed branches located at 101
Park Avenue and 299 Park Avenue, New York, NY to Federal branches and to
convert a state licensed agency located at 701 Brickel Avenue, Miami, FL
into a limited Federal branch (hereinafter "the branches"). Permission
was also requested to exercise all permissible fiduciary powers at 101
Park Avenue. UBS AG also requested permission to establish a limited
Federal branch with the title of UBS AG to be located at 1285 Avenue of
the Americas, New York, NY (hereinafter "the new branch"). The subject
applications to convert the branches are hereby conditionally approved;
and this approval constitutes a permit to conduct fiduciary powers
requested in your application to convert the branch located at 101 Park
Avenue. Preliminary conditional approval also is granted for the
establishment of the new branch.

UBS AG also has requested our confirmation that the new branch may
operate an administrative office located at 135 West 50^th^ Street as a
unit of the new branch. We have reviewed your proposal and hereby
confirm that the proposed administrative office may be operated pursuant
to 12 U.S.C. § 3102(b) and 12 U.S.C. § 24(Seventh) as a unit of the new
branch.

This approval is granted based on a thorough review of all information
available including the representations and commitments made in the
application and by UBS AG's representatives. It is understood that UBS
AG will maintain a combined Capital Equivalency Deposit (CED) for the
branches located in New York and a separate CED for the limited Federal
branch located in Florida. The CEDs shall be maintained in a bank
consistent with OCC regulations and pursuant to a letter-agreement in
such form and containing such limitations and conditions as prescribed
by the OCC. It is also understood that UBS AG will submit an
after-the-fact notice of conversion to the Board of Governors of the
Federal Reserve System (FRB).

These approvals are subject to the following conditions:

1.  In addition to compliance with other applicable requirements under
    U.S. law, UBS AG will make available to the OCC such information on
    the operations and activities of UBS AG and any of its affiliates
    that the OCC deems necessary to determine and enforce compliance by
    the branches and the new branch with applicable Federal laws. If the
    disclosure of any required information is prohibited by law or
    otherwise, UBS AG will cooperate with the OCC including seeking
    timely waivers of or exemptions from any applicable confidentiality
    or secrecy restrictions or requirements in order to enable UBS AG to
    make such information available to the OCC. However, if any
    restrictions on access to information on the operations or
    activities of UBS AG or its affiliates interfere with the OCC's
    ability to obtain information to determine and enforce compliance
    with applicable federal laws, the OCC may require termination of any
    offices licensed by the OCC or take other appropriate actions.

2.  UBS AG consents to the jurisdiction of the Federal courts of the
    United States and of all United States government agencies,
    departments and divisions for purposes of any and all claims made
    by, proceedings initiated by, or obligations to, the United States,
    the Office of the Comptroller and any other United States government
    agency, department or division, in any matter arising under the
    National Bank Act, the International Banking Act, and other
    applicable Federal banking laws.

3.  For two years following conversion, in the case of the branches, and
    commencement of operations, in the case of the new branch, UBS
    AG: (i) shall give the OCC's New York Field Office at least
    sixty (60) days prior written notice of its intent to significantly
    deviate or change the business plans or operations of the branches
    or the new branch, and (ii) shall obtain the OCC's written
    determination of no objection before the branches and the new branch
    engage in any significant deviation or change from their business
    plans or operations.

The conditions of this approval are conditions "imposed in writing by
the agency in connection with the granting of any application or other
request" within the meaning of 12 USC §1818. As such, the conditions are
enforceable under 12 USC §1818.

In connection with the granting of trust powers, the board of directors
are responsible for the proper exercise of the Federal branch's
fiduciary powers pursuant to 12 CFR §9.4. The board is encouraged to
become fully familiar with the requirements and responsibilities
enumerated in 12 CFR Part 9 as are the trust officers and staff.

The OCC has no objection to Messrs. Gerard Cella and Ronald W. Fleming
serving as Trust Officers.

You must notify the OCC within 10 days after commencing trust
activities. If fiduciary powers are not commenced within six months from
the decision date, approval is withdrawn. Should you cease these
activities, you must notify the OCC and complete the procedural steps
located in the Fiduciary Powers section of the "Federal Branches and
Agencies" booklet (Federal Branch booklet) of the [Comptroller's
Licensing Manual]{.underline}.

Additionally, you are reminded of the following standard requirements,
which must be met before the branches convert:

-   The branches must have adequate fidelity bond coverage.

-   It is the responsibility of the board of directors to adopt, review,
    and modify as appropriate, those policies, practices, and procedures
    necessary to ensure the safe and sound operation of the branches and
    to ensure compliance with them. Enclosed are minimum policies and
    procedures applicable to national banks, which are also applicable
    to Federal branches and agencies.

-   The branches will maintain their accounts, books, and records as
    prescribed by 12 CFR Part 28 and in such a manner as to facilitate
    the complete and accurate presentation of financial statements and
    other reports in form and content as required by the OCC.

-   UBS AG must comply with all representations and commitments
    contained in any approval order or letter issued by the FRB in
    connection with the branches.

-   UBS AG must notify the OCC's New York Field Office when it has
    completed all steps required to convert and of the effective date.
    You may refer to the Change of Status section of the Federal Branch
    booklet for more information.

-   If the conversion is not effected within six months from the
    decision date, approval will be withdrawn. The OCC is opposed to
    granting extensions except under the most extenuating circumstances
    and expects the conversion to occur as soon as possible.

In connection with preliminary conditional approval to establish the new
Federal branch, final approval will not be granted until the applicant
has met the following procedural requirements and the OCC determines
that the new branch is ready to commence operations.

-   The new branch must have adequate fidelity insurance coverage.

-   The new branch must open within eighteen (18) months of the date the
    OCC granted preliminary approval; otherwise, the approval is
    withdrawn.

-   The new branch will maintain its accounts, books, and records as
    prescribed by 12 CFR 28 and in such a manner as to facilitate the
    complete and accurate presentation of financial statements and other
    reports in form and content as required by the OCC.

-   UBS AG must comply with all representations and commitments
    contained in any approval order or letter issued by the FRB in
    connection with the new branch.

Management must ensure that the applicable policies and procedures
(enclosed) are established and adopted by the board of directors before
the new branch commences business. Also enclosed are standard
requirements that must be met, as applicable, before the new branch will
be allowed to commence business.

Please notify us at least 45 days prior to the date the new branch will
open for business so that we may schedule a pre-opening examination and
issue the license granting final approval to its establishment and
operation.

The OCC poses no objection to the following persons serving as
management as proposed in the applications.

-   Robert B. Mills, General Manager of 101 Park Avenue and 1285 Avenue
    of the Americas Branches, Managing Director, Chief Financial Officer
    and Regional Operating Officer Americas

-   Christopher Rowland, General Manager of 299 Park Avenue Branch,
    Managing Director, Chief Operating Officer Americas -- Private
    Banking International

-   Eli Butnaru, Agency Manager, Miami Agency

-   Ruedi Burri, Managing Director, Head of Marketing for Latin America

-   Gerard Cella, Executive Director and Head of Active Advisory, USA,
    UBS Wealth Management & Business Banking

-   Per Dyrvik, Controller of the Americas, UBS Warburg

-   Ronald W. Fleming, Executive Director, Head of Portfolio Management

-   Philip J. Lofts, Managing Director and Chief Credit Officer,
    Americas, UBS Warburg

-   Ernest A. Pittarelli, Chief Operations Officer for the Americas, UBS
    Warburg

-   Michael Quinn, Chief Finanical Officer, Executive Director, Head of
    Risk Management and Financial Control -- Private Banking
    International

-   Raymond Simon-Vermot, Managing Director, Head of Marketing,
    Europe/Far East

All other executive officers or directors are subject to the OCC's
*prior* review and clearance. You are also reminded that for a period of
two years after the branches and new branch are opened for business, the
OCC must review and have no objection to any new executive officer or
director *prior* to that person assuming such position.

This approval, and the activities and communications by OCC employees in
connection with the filing, do not constitute a contract, express or
implied, or any other obligation binding upon the OCC, the United
States, any agency or entity of the United States or any officer or
employee of the United States, and do not affect the ability of the OCC
to exercise its supervisory, regulatory and examination authorities
under applicable law and regulations. The foregoing may not be waived or
modified by any employee or agent of the OCC or the United States.

The OCC will send to you under separate cover an appropriate set of OCC
handbooks, issuances, and other selected publications. The
[Comptroller's Licensing Manual]{.underline} can be located at
www.occ.treas.gov/corpapps/corpapplic.htm.

If you have questions, please contact Senior Licensing Analyst Sandya
Reddy at (212) 790-4055 or me at (202) 874-5060.

Sincerely,

**/s/ J. Greg Parvin**

**for**

Beverly Evans

Senior Licensing Analyst

Enclosures: Standard Requirements

> Minimum Policies and Procedures