Fiscal Agency Agreement



 Exhibit 4.1 

 

			
	



	  	CLIFFORD CHANCE LLP

 UBS AG 
 acting through its Jersey branch 
 USD 2,000,000,000 

TIER 2 SUBORDINATED NOTES DUE 2022 
  

 
 FISCAL AGENCY
AGREEMENT 
  
  







 CONTENTS 

 

							
	Clause	  	 	  	Page	 
			
	1.	  	 Interpretation
	  	 	1	  
			
	2.	  	 Appointment of the Paying Agents
	  	 	3	  
			
	3.	  	 The Notes
	  	 	3	  
			
	4.	  	 Exchange and Delivery of Definitive Notes
	  	 	5	  
			
	5.	  	 Replacement of Notes and Coupons
	  	 	6	  
			
	6.	  	 Payments to the Fiscal Agent
	  	 	7	  
			
	7.	  	 Payments to Noteholders
	  	 	8	  
			
	8.	  	 Miscellaneous Duties of the Paying Agents
	  	 	10	  
			
	9.	  	 Appointment and Duties of the Calculation Agent
	  	 	12	  
			
	10.	  	 Fees and Expenses
	  	 	13	  
			
	11.	  	 Terms of Appointment
	  	 	13	  
			
	12.	  	 Changes in Paying Agents
	  	 	15	  
			
	13.	  	 Notices
	  	 	18	  
			
	14.	  	 Law and Jurisdiction
	  	 	19	  
			
	15.	  	 Rights of Third Parties
	  	 	20	  
			
	16.	  	 Modification
	  	 	20	  
			
	17.	  	 Counterparts
	  	 	20	  
		
	 Schedule 1 Form of Initial Global Note
	  	 	21	  
		
	 Schedule 2 Form of Final Global Note
	  	 	26	  
		
	 Schedule 3 Form of Definitive Note and Coupon
	  	 	31	  
		
	 Schedule 4 Terms and Conditions of the Notes
	  	 	33	  
		
	 Schedule 5 Specified Offices of the Paying Agents
	  	 	61	  








 THIS AGREEMENT is made on 22 February 2012 

 
  
 BETWEEN 
  

	(1)	UBS AG, acting through its Jersey branch (the “Issuer”); and 


 

	(2)	THE BANK OF NEW YORK MELLON, acting through its London Branch as fiscal agent (the “Fiscal Agent”) and as calculation agent (the
“Calculation Agent”) and any other paying agents appointed from time to time (together with the Fiscal Agent and Calculation Agent, the “Paying Agents”). 


WHEREAS 
  

	(A)	The Issuer has authorised the creation and issue of USD 2,000,000,000 in aggregate principal amount of Tier 2 Subordinated Notes due 2022 (the
“Notes”). 

  

	(B)	The Notes will be in bearer form and in the denominations of USD 200,000 and integral multiples of 1,000 in excess thereof. The Notes will initially be represented by
an initial global note (the “Initial Global Note”), interests in which will be exchangeable for interests in a final global note (the “Final Global Note” and, together with the Initial Global Note, the
“Global Notes”) in the circumstances specified herein. The Final Global Note will in turn be exchangeable for notes in definitive form (“Definitive Notes”), with interest coupons (“Coupons”)
attached, only in certain limited circumstances specified in the Conditions (as defined below). 

  

	(C)	The Issuer and the Paying Agents wish to record certain arrangements which they have made in relation to the Notes. 


IT IS AGREED as follows: 
  

	1.	INTERPRETATION 

  

	1.1	Definitions 

 In this
Agreement the following expressions have the following meanings: 
 “Aggregate Principal Amount Issued” has the
meaning ascribed to it in the Final Global Note; 
 “Aggregate Principal Amount Represented by the Final Global
Note” has the meaning ascribed to it in the Final Global Note; 
 “Aggregate Principal Amount Represented by the
Initial Global Note” has the meaning ascribed to it in the Initial Global Note; 
 “Authorised Person”
means any person who is designated in writing by the Issuer from time to time to give Instructions to the Paying Agents under the terms of this Agreement; 

  
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 “Calculation Agent” means the Bank of New York Mellon, acting through its
London Branch, pursuant to Clause 9 (Appointment and Duties of the Calculation Agent) and any successor thereto; 

“Clearstream, Luxembourg” means Clearstream Banking, société anonyme, Luxembourg; 

“Conditions” means the Terms and Conditions of the Notes (as scheduled to this Agreement and as modified from time to
time in accordance with their terms), and any reference to a numbered “Condition” is to the correspondingly numbered provision thereof; 
 “Euroclear” means Euroclear Bank S.A./N.V.; 
 “Exchange
Date” means the first day following the expiry of 40 days after the issue of the Notes; 
 “Fiscal
Agent” and “Paying Agents” include any successors thereto appointed from time to time in accordance with Clause 12 (Changes in Paying Agents) and “Paying Agent” means any one of the Paying Agents;

 “Instructions” means any written notices, written directions or written instructions received by the Paying
Agents in accordance with the provisions of this Agreement from an Authorised Person or from a person reasonably believed by the Paying Agents to be an Authorised Person; 
 “Local Banking Day” means a day (other than a Saturday or a Sunday) on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits)
in the city in which the Fiscal Agent has its Specified Office; 
 “Local Time” means the time in the city in
which the Fiscal Agent has its Specified Office; 
 “Losses” means any and all claims, losses, liabilities,
damages, costs, expenses and judgements (including legal fees and expenses) sustained by either party; 

“Noteholders” means the Holders of the Notes for the time being; 

“Specified Office” means, in relation to any Paying Agent: 

 

	 	(a)	the office specified against its name in the Schedule 5 (Specified Offices of the Paying Agents); or 


 

	 	(b)	such other office as such Paying Agent may specify in accordance with Clause 12.8 (Changes in Specified Offices); 


“USD” or “U.S. dollars” means the lawful currency for the time being of the United States of America.


  
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	1.2	Clauses and Schedules 


Any reference in this Agreement to a Clause, sub-clause or a Schedule is, unless otherwise stated, to a clause or sub-clause hereof or a
schedule hereto. 
  

	1.3	Principal and interest 


In this Agreement, any reference to principal includes premium and any reference to principal or interest includes any additional amounts
payable in relation thereto under the Conditions. 
  

	1.4	Terms defined in the Conditions 

 Terms and expressions used but not defined herein have the respective meanings given to them in the Conditions. 
  

	1.5	Statutes 

 Any reference
in this Agreement to any legislation (whether primary legislation or regulations or other subsidiary legislation made pursuant to primary legislation) shall be construed as a reference to such statute, provision, statutory instrument, order or
regulation as the same may have been, or may from time to time be, amended or re-enacted. 
  

	1.6	Headings 

 Headings and
sub-headings are for ease of reference only and shall not affect the construction of this Agreement. 
  

	2.	APPOINTMENT OF THE PAYING AGENTS 

  

	2.1	Appointment 

 The Issuer
appoints each Paying Agent as its agent in relation to the Notes for the purposes specified in this Agreement and in the Conditions. 
  

	2.2	Acceptance of appointment 


Each Paying Agent accepts its appointment as agent of the Issuer in relation to the Notes and agrees to comply with the provisions of this
Agreement. 
  

	3.	THE NOTES 

  

	3.1	Initial Global Note 

 The
Initial Global Note shall: 
  

	 	3.1.1	be in substantially the form set out in Schedule 1 (Form of Initial Global Note); and 


 

	 	3.1.2	be executed manually by or on behalf of the Issuer and authenticated manually by or on behalf of the Fiscal Agent. 


  
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	3.2	Final Global Note 

 The
Final Global Note shall: 
  

	 	3.2.1	be in substantially the form set out in Schedule 2 (Form of Final Global Note); and 


 

	 	3.2.2	be executed manually by or on behalf of the Issuer and authenticated manually by or on behalf of the Fiscal Agent. 


 

	3.3	Definitive Notes 

 Each
Definitive Note shall: 
  

	 	3.3.1	be in substantially the form set out in Schedule 3 (Form of Definitive Note and Coupon) and have attached to it Coupons in substantially the form set out
therein; 

  

	 	3.3.2	be security printed in accordance with all applicable legal and stock exchange requirements; 


 

	 	3.3.3	have a unique certificate number printed thereon; and 

  

	 	3.3.4	be executed manually or in facsimile by or on behalf of the Issuer and authenticated manually by or on behalf of the Fiscal Agent. 


 

	3.4	Signatures 

 Any signature
on a Note shall be that of a person who is at the time of the creation and issue of the Notes an authorised signatory of the Issuer entered into the Commercial Registry of the Canton of Zurich, Switzerland notwithstanding that such person has for
any reason (including death) ceased to be such an authorised signatory at the time at which such Note is delivered. 
  

	3.5	Availability 

 The Issuer
shall arrange for the unauthenticated Global Notes to be made available to or to the order of the Fiscal Agent not later than the Issue Date. If the Issuer is required to deliver Definitive Notes pursuant to the terms of the Conditions, the Issuer
shall arrange for USD 2,000,000,000 in aggregate principal amount of unauthenticated Definitive Notes to be made available to or to the order of the Fiscal Agent as soon as practicable and in any event not later than 30 days after the bearer of the
Final Global Note has requested its exchange for Definitive Notes in accordance with the Conditions. In the case Definitive Notes are printed, the Issuer shall also arrange for such unauthenticated Definitive Notes and Coupons as are required to
enable the Fiscal Agent to perform its obligations under Clause 5 (Replacement of Notes and Coupons) to be made available to or to the order of the Fiscal Agent from time to time. 

  
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	3.6	Duties of Fiscal Agent 


The Fiscal Agent shall hold in safe custody all unauthenticated Initial Global Notes, Final Global Notes, Definitive Notes and Coupons
delivered to it in accordance with Clause 3.5 (Availability) and shall ensure that they are authenticated (in the case of Initial Global Notes, Final Global Notes and Definitive Notes) and delivered only in accordance with the terms hereof,
of the Conditions and of the Global Notes, as applicable. 
  

	3.7	Authority to authenticate 


The Fiscal Agent is authorised by the Issuer to authenticate the Initial Global Note and the Final Global Note, any replacement therefore,
any Schedule thereto and each Definitive Note by the signature of any of its officers or any other person duly authorised for the purpose by the Fiscal Agent. 
  

	4.	EXCHANGE AND DELIVERY OF DEFINITIVE NOTES 

  

	4.1	Delivery of Global Notes 


Subject to receipt by the Fiscal Agent of the Global Notes in accordance with Clause 3.5 (Availability), the Fiscal Agent shall,
against presentation to it or to its order of the Global Notes and in accordance with the terms hereof, authenticate and deliver to the relevant bearer the relevant Global Note. Upon such delivery and authentication, the Aggregate Principal Amount
Represented by the Initial Global Note shall be equal to the Aggregate Principal Amount Issued and the Aggregate Principal Amount Represented by the Final Global Note shall be equal to USD 0, and the Fiscal Agent shall procure the signature of
each such notation in the relevant Schedules to the Global Notes on its behalf. 
  

	4.2	Exchange of Initial Global Note and Final Global Note 

 On or after the Exchange Date, and against: 
  

	 	(a)	presentation and (in the case of final exchange) surrender of the Initial Global Note to or to the order of the Fiscal Agent; and 


 

	 	(b)	receipt by the Fiscal Agent of a certificate or certificates issued by Euroclear and/or Clearstream, Luxembourg dated not earlier than the Exchange Date for the
purposes of Certification, 

 the Fiscal Agent shall procure that there is noted (x) in the relevant schedule
to the Initial Global Note that the Aggregate Principal Amount Represented by the Initial Global Note is reduced by the aggregate principal amount of Notes for which certificates have so been received (the “relevant principal
amount”), and (y) in the relevant schedule to the Final Global Note that the Aggregate Principal Amount Represented by the Final Global Note is increased by the relevant principal amount, and the Fiscal Agent shall further procure the
signature of each such notation on its behalf. The Fiscal Agent shall cancel or procure the cancellation of the Initial Global Note when and if it has made full exchange thereof for interests in the Final Global Note. The Fiscal Agent shall ensure
that the sum of the Aggregate Principal Amount Represented by the Initial Global Note and the Aggregate Principal Amount Represented by the Final Global Note at no time exceeds the Aggregate Principal Amount Issued. 

  
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	4.3	Delivery of Definitive Notes 

 Subject to receipt by the Fiscal Agent of Definitive Notes in accordance with Clause 3.5 (Availability), the Fiscal Agent shall, against presentation or (as the case may be) surrender to it or to
its order of the Final Global Note and in accordance with the terms thereof, authenticate and deliver Definitive Notes in the required aggregate principal amount to the bearer of the Final Global Note; provided, however, that each Definitive
Note shall at the time of its delivery have attached thereto only such Coupons as shall ensure that neither loss nor gain accrues to the bearer thereof. 
  

	4.4	Exchange of Final Global Note for Definitive Notes 

 On each occasion on which Definitive Notes are delivered in exchange for the Final Global Note, the Fiscal Agent shall procure that there is noted in the schedule to the Final Global Note the aggregate
principal amount of Definitive Notes so delivered (the “relevant principal amount”) and the remaining principal amount of the Final Global Note (which shall be the previous principal amount thereof less the relevant principal
amount) and shall procure the signature of such notation on its behalf. The Fiscal Agent shall cancel or procure the cancellation of the Final Global Note when and if it has made full exchange thereof for Definitive Notes. 

 

	5.	REPLACEMENT OF NOTES AND COUPONS 

  

	5.1	Delivery of Replacements 


Subject to receipt of sufficient replacement Definitive Notes and Coupons in accordance with Clause 3.5 (Availability), the Fiscal
Agent shall, upon and in accordance with the instructions of the Issuer (which instructions may, without limitation, include terms as to the payment of expenses and as to evidence, security and indemnity), authenticate (if necessary) and deliver a
Definitive Note or Coupon as a replacement for any Definitive Note or Coupon which has been mutilated or defaced or which is alleged to have been destroyed, stolen or lost; provided, however, that the Fiscal Agent shall not deliver any
Definitive Note or Coupon as a replacement for any Definitive Note or Coupon which has been mutilated or defaced otherwise than against surrender of the same and shall not issue any replacement Definitive Note or Coupon until the applicant has
furnished the Fiscal Agent with such evidence and indemnity as the Issuer and/or the Fiscal Agent may reasonably require and has paid such costs and expenses as may be incurred in connection with such replacement. 

 

	5.2	Replacements to be numbered 

 Each replacement Definitive Note or Coupon delivered under this Agreement shall bear a unique certificate or (as the case may be) serial number. Under Swiss law, no replacement Notes can be issued for
lost or destroyed Notes until the Issuer has completed a special procedure for invalidation (Kraftloserklärung) of such Notes, unless the Issuer has expressly stated otherwise. 

  
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	5.3	Cancellation of mutilated or defaced Notes 

 The Fiscal Agent shall cancel each mutilated or defaced Initial Global Note, Final Global Note, Definitive Note surrendered to it in respect of which a replacement has been delivered. 

 

	5.4	Notification 

 The Fiscal
Agent shall notify the Issuer and each other Paying Agent of the delivery by it of any replacement Initial Global Note, Final Global Note, Definitive Note or Coupon, specifying the certificate or serial number thereof and the certificate or serial
number (if any and if known) of the Initial Global Note, Final Global Note, Definitive Note or Coupon which it replaces and confirming that the Initial Global Note, Final Global Note, Definitive Note or Coupon which it replaces has been cancelled
and (if such is the case) destroyed in accordance with Clause 8.8 (Destruction). 
  

	6.	PAYMENTS TO THE FISCAL AGENT 

  

	6.1	Issuer to pay Fiscal Agent 


In order to provide for the payment of principal and interest in respect of the Notes as the same becomes due and payable, the Issuer
shall pay to the Fiscal Agent, on or before the date which is one Local Banking Day before the day on which such payment becomes due, an amount equal to the amount of principal and/or (as the case may be) interest falling due in respect of the
Notes on such date. 
  

	6.2	Manner and time of payment 


Each amount payable under Clause 6.1 (Issuer to pay Fiscal Agent) shall be paid unconditionally by credit transfer in U.S.
dollars and in immediately available, freely transferable, cleared funds not later than 10.00 a.m. (Local Time) on the relevant day to such account with such bank as the Fiscal Agent may from time to time by notice to the Issuer specify for
such purpose. The Issuer shall, before 10.00 a.m. (Local Time) on the second Local Banking Day before the due date of each payment by it under Clause 6.1 (Issuer to pay Fiscal Agent), confirm to the Fiscal Agent by email or
authenticated SWIFT message that it has given instructions for the transfer of the relevant funds to the Fiscal Agent and the name and the account of the bank through which such payment is being made. 

 

	6.3	Exclusion of liens and interest 

 The Fiscal Agent shall be entitled to deal with each amount paid to it under this Clause 6 (Payments to the Fiscal Agent) in the same manner as other amounts paid to it as a banker by its
customers; provided, however, that: 
  

	 	6.3.1	it shall not exercise against the Issuer any lien, right of set-off or similar claim in respect thereof; and 


 

	 	6.3.2	it shall not be liable to any person for interest thereon. 


  
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	6.4	Application by Fiscal Agent 

 The Fiscal Agent shall apply each amount paid to it hereunder in accordance with Clause 7 (Payments to Noteholders) and shall not be obliged to repay any such amount. 

 

	7.	PAYMENTS TO NOTEHOLDERS 

  

	7.1	Payments by Paying Agents 


Each Paying Agent acting through its Specified Office shall make payments of principal and interest in respect of the Notes in accordance
with the Conditions; provided, however, that: 
  

	 	7.1.1	if any Definitive Note or Coupon is presented or surrendered for payment to any Paying Agent and such Paying Agent has delivered a replacement therefor or has been
notified that the same has been replaced, such Paying Agent shall forthwith notify the Issuer of such presentation or surrender and shall not make payment against the same until it is so instructed by the Issuer and has received the amount to be so
paid; 

  

	 	7.1.2	a Paying Agent shall not be obliged (but shall be entitled) to make payments of principal or interest in respect of the Notes, if: 


 

	 	(a)	in the case of the Fiscal Agent, it has not received the full amount of any payment due to it under Clause 6.1 (Issuer to pay Fiscal Agent); or


  

	 	(b)	in the case of any other Paying Agent, it is not able to establish that the Fiscal Agent has received (whether or not at the due time) the full amount of any payment
due to it under Clause 6.1 (Issuer to pay Fiscal Agent); 

  

	 	7.1.3	each Paying Agent shall cancel each Definitive Note or Coupon against surrender of which it has made full payment and shall, in the case of a Paying Agent other than
the Fiscal Agent, deliver each Definitive Note or Coupon so cancelled by it to, or to the order of, the Fiscal Agent; 

  

	 	7.1.4	in the case of payment of principal or interest against presentation of the Final Global Note, the relevant Paying Agent shall procure that there is noted in the
schedule to the Final Global Note the amount of such payment and, in the case of payment of principal, the remaining principal amount of the Final Global Note (which shall be the previous principal amount thereof less the amount of principal then
paid) and shall procure the signature of such notation on its behalf; and 

  

	 	7.1.5	notwithstanding any other provision of this Agreement, each Paying Agent shall be entitled to make a deduction or withholding from any payment which it makes under this
Agreement for or on account of any present or future taxes, duties or charges if and to the extent so required by applicable law, in which event such Paying Agent shall make such payment after such withholding or deduction has been made and shall
account to the relevant authorities for the amount so withheld or deducted. 


  
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	7.2	Exclusion of liens and commissions 

 No Paying Agent shall exercise any lien, right of set-off or similar claim against any person to whom it makes any payment under Clause 7.1 (Payments by Paying Agents) in respect thereof, nor shall
any commission or expense be charged by it to any such person in respect thereof. 
  

	7.3	Reimbursement by Fiscal Agent 

 If a Paying Agent other than the Fiscal Agent makes any payment in accordance with Clause 7.1 (Payments by Paying Agents): 

 

	 	7.3.1	it shall notify the Fiscal Agent of the amount so paid by it, the certificate or serial number (if any) of the Definitive Note or Coupon against presentation or
surrender of which payment of principal was made, or of the Definitive Note against presentation or surrender of which payment of interest was made, and the number of Coupons by maturity against presentation or surrender of which payment of interest
was made; and 

  

	 	7.3.2	subject to and to the extent of compliance by the Issuer with Clause 6.1 (Issuer to pay Fiscal Agent) (whether or not at the due time), the Fiscal Agent
shall pay to such Paying Agent out of the funds received by it under Clause 6.1 (Issuer to pay Fiscal Agent), by credit transfer in U.S. dollars and in same day, freely transferable, cleared funds to such account with such bank as such
Paying Agent has by notice to the Fiscal Agent specified for the purpose, an amount equal to the amount so paid by such Paying Agent. 

  

	7.4	Appropriation by Fiscal Agent 

 If the Fiscal Agent makes any payment in accordance with Clause 7.1 (Payments by Paying Agents), it shall be entitled to appropriate for its own account out of the funds received by it under
Clause 6.1 (Issuer to pay Fiscal Agent) an amount equal to the amount so paid by it. 
  

	7.5	Reimbursement by Issuer 


Subject to sub-clauses 7.1.1 and 7.1.2 (Payments by Paying Agents), if a Paying Agent makes a payment in respect of Notes on or
after the due date for such payment under the Conditions at a time at which the Fiscal Agent has not received the full amount of the relevant payment due to it under Clause 6.1 (Issuer to pay Fiscal Agent) and the Fiscal Agent is not
able out of funds received by it under Clause 6.1 (Issuer to pay Fiscal Agent) to reimburse such Paying Agent therefor (whether by payment under Clause 7.3 (Reimbursement by the Fiscal Agent) or appropriation under Clause 7.4
(Appropriation by the Fiscal Agent), the Issuer shall from time to time on demand pay to the Fiscal Agent for account of such Paying Agent: 
  

	 	7.5.1	the amount so paid out by such Paying Agent and not so reimbursed to it; and 


 

	 	7.5.2	interest on such amount from the date on which such Paying Agent made such payment until the date of reimbursement of such amount]; 


  
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 provided, however, that any payment made under sub-clause 7.5.1 shall satisfy pro
tanto the obligations of the Issuer or under Clause 6.1 (Issuer to pay Fiscal Agent). 
  

	7.6	Interest 

 Interest shall
accrue for the purpose of sub-clause 7.5.2 (Reimbursement by Issuer) (as well after as before judgment) on the basis of a year of 360 days and the actual number of days elapsed and at the rate per annum which is the aggregate of one
per cent. per annum and the rate per annum specified by such Paying Agent as reflecting its cost of funds for the time being in relation to the unpaid amount. 

 

	7.7	Partial payments 

 If at
any time and for any reason a Paying Agent makes a partial payment in respect of a Global Note or any Definitive Note or Coupon presented for payment to it, such Paying Agent shall enface thereon a statement indicating the amount and date of such
payment. 
  

	8.	MISCELLANEOUS DUTIES OF THE PAYING AGENTS 

  

	8.1	Records 

 The Fiscal Agent
shall: 
  

	 	8.1.1	maintain a record of the Initial Global Note and the Final Global Note and all Definitive Notes and Coupons delivered hereunder and of their redemption, payment,
cancellation, mutilation, defacement, alleged destruction, theft, loss or replacement (and, in the case of the Initial Global Note, exchange of interests thereof for interests in the Final Global Note and, in the case of the Final Global Note,
exchange thereof for Definitive Notes); provided, however, that no record need be maintained of the serial numbers of Coupons, save for the serial numbers of Coupons for which replacements have been issued under Clause 5 (Replacement of
Notes and Coupons) and unmatured Coupons missing at the time of redemption or other cancellation of the relevant Definitive Notes and for any subsequent payments against such Coupons; 


 

	 	8.1.2	maintain a record of all certifications received by it in accordance with Clause 8.3 (Certifications) or the provisions of the Initial Global Note and all
confirmations received by it in accordance with Clause 8.4 (Cancellation); and 

  

	 	8.1.3	make such records available for inspection at all reasonable times by the Issuer and the other Paying Agents. 


 

	8.2	Information from Paying Agents 

 The Paying Agents shall make available to the Fiscal Agent such information as is reasonably required for the maintenance of the records referred to in Clause 8.1 (Records). 

  
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	8.3	Certifications 

 Each
Paying Agent shall promptly copy to the Issuer and, in the case of a Paying Agent other than the Fiscal Agent, the Fiscal Agent any certification received by it in accordance with this Agreement. 

 

	8.4	Cancellation 

 The Issuer
may from time to time deliver to the Fiscal Agent Definitive Notes and unmatured Coupons relating thereto for cancellation, whereupon the Fiscal Agent shall cancel such Definitive Notes and Coupons. In addition, the Issuer may from time to time
procure the delivery to the Fiscal Agent of the Initial Global Note or the Final Global Note with instructions to cancel a specified aggregate principal amount of Notes represented by it (which instructions shall be accompanied by confirmation from
Euroclear or Clearstream, Luxembourg that Notes having such aggregate principal amount may be cancelled), whereupon the Fiscal Agent shall procure that there is noted on the schedule to the Initial Global Note or (as the case may be) the Final
Global Note the aggregate principal amount of Notes so cancelled and the new Aggregate Principal Amount Represented by the Initial Global Note and the new Aggregate Principal Amount Represented by the Final Global Note, as the case may be, and shall
procure the signature of such notation on its behalf. 
 If a Write-down Notice has been issued, the Issuer may further instruct
the Fiscal Agent to cancel the Global Notes no earlier than 20 days after the Write-down Date, provided that the Fiscal Agent has received any and all interest amounts in respect of the Notes which have become due prior to the Write-down Notice
Date. For the sake of clarify, the effectiveness of any Write-down does not depend on the cancellation of the Global Notes. 
  

	8.5	Definitive Notes and Coupons in issue 

 As soon as practicable (and in any event within three months) after each interest payment date in relation to the Notes, after each date on which Notes are cancelled in accordance with Clause 8.4
(Cancellation) and after each date on which the Notes fall due for redemption in accordance with the Conditions, the Fiscal Agent shall notify the Issuer and the other Paying Agents (on the basis of the information available to it) of the
number of any Definitive Notes or Coupons against surrender of which payment has been made and of the number of any Definitive Notes or (as the case may be) Coupons which have not yet been surrendered for payment. 

 

	8.6	Forwarding of communications 

 The Fiscal Agent shall promptly forward to the Issuer a copy of any notice or communication addressed to the Issuer by any Noteholder which is received by the Fiscal Agent. 

 

	8.7	Publication of notices 


The Fiscal Agent shall, upon and in accordance with instructions of the Issuer received at least 10 days before the proposed publication
date, arrange at the expense of the Issuer for the publication of any notice which is to be given to the Noteholders 

  
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and shall supply a copy thereof to each other Paying Agent, Euroclear, Clearstream, Luxembourg and any competent authority, stock exchange and/or quotation system by which the Notes have been
admitted to listing, trading and/or quotation. 
  

	8.8	Destruction 

 The Fiscal
Agent may destroy the Initial Global Note following its cancellation in accordance with Clause 4.2 (Exchange of Initial Global Note and Final Global Note) and the Final Global Note following its cancellation in accordance with Clause 4.4
(Exchange of Final Global Note for Definitive Notes) and the Initial Global Note and the Final Global Note and each Definitive Note or Coupon delivered to or cancelled by it in accordance with sub-clause 7.1.3 (Payments by Paying
Agents) or cancelled by it in accordance with Clause 5.3 (Cancellation of mutilated or defaced Notes) or Clause 8.4 (Cancellation), in which case it shall furnish the Issuer with a certificate of destruction specifying the
certificate or serial numbers (if any) of the Initial Global Note or (as the case may be) the Final Global Note or Definitive Notes and the number of Coupons so destroyed. 

 

	8.9	Documents available for inspection 

 The Issuer shall provide to each Paying Agent: 
  

	 	8.9.1	conformed copies of this Agreement; and 

  

	 	8.9.2	such other documents as may from time to time be required by the Irish Stock Exchange to be made available at the Specified Office of the Paying Agent.


 Each of the Paying Agents shall make available for inspection during normal business hours at its Specified
Office the documents referred to above and, upon reasonable request, will allow copies of such documents to be taken. 
  

	9.	APPOINTMENT AND DUTIES OF THE CALCULATION AGENT 

  

	9.1	Appointment 

 The Issuer
appoints the Fiscal Agent at its specified office as Calculation Agent in relation to the Notes for the purposes of calculating the rate of interest from time to time applicable to the Notes. 

 

	9.2	Acceptance of appointment 


The Fiscal Agent accepts its appointment as Calculation Agent in relation to the Notes and shall perform all matters expressed to be
performed by it in, and otherwise comply with, the Conditions and the provisions of this Agreement and, in connection therewith, shall take all such action as may be incidental thereto. In particular, the Calculation Agent shall: 

 

	 	9.2.1	Determinations: obtain such quotes and rates and/or make such determinations, calculations, adjustments, notifications and publications as may be required to be
made by it by the Conditions at the times and otherwise in accordance with the Conditions; and 


  
 - 12 -










	 	9.2.2	Records: maintain a record of all quotations obtained by it and of all amounts, rates and other items determined or calculated by it and make such records
available for inspection at all reasonable times by the Issuer. 

  

	10.	FEES AND EXPENSES 

  

	10.1	Fees 

 The Issuer shall
pay to the Fiscal Agent for the account of the Paying Agents such fees as have been agreed between the Issuer and the Fiscal Agent and recorded in a letter dated 20 January 2012 from the Fiscal Agent to the Issuer in respect of the services of
the Paying Agents hereunder (plus any applicable value added tax). 
  

	10.2	Front-end expenses 

 The
Issuer shall on demand reimburse the Fiscal Agent for all expenses incurred by it in the negotiation, preparation and execution of this Agreement, and shall on demand reimburse each Paying Agent for all expenses (including, without limitation, legal
fees and any publication, advertising, communication, courier, postage and other out-of-pocket expenses) properly incurred in connection with its services hereunder (plus any applicable value added tax), other than such costs and expenses as are
separately agreed to be reimbursed out of the fees payable under Clause 10.1 (Fees). 
  

	10.3	Taxes 

 The Issuer shall
pay all stamp, registration and other taxes and duties (including any interest and penalties thereon or in connection therewith) which are payable upon or in connection with the execution and delivery of this Agreement, and the Issuer shall
indemnify each Paying Agent on demand against any claim, demand, action, liability, damages, cost, loss or expense (including, without limitation, legal fees and any applicable value added tax) which it incurs as a result or arising out of or in
relation to any failure to pay or delay in paying any of the same. All payments by the Issuer under this Clause 10 (Fees and Expenses) or Clause 11.4 (Indemnity in favour of the Paying Agents) shall be made free and clear of, and
without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by Jersey and/or Switzerland or any political subdivision or any authority thereof or
therein having power to tax, unless such withholding or deduction is required by law. In that event, the Issuer shall pay such additional amounts as will result in the receipt by the relevant Paying Agent of such amounts as would have been received
by it if no such withholding or deduction had been required. 
  

	11.	TERMS OF APPOINTMENT 

  

	11.1	Rights and powers 

 Each
Paying Agent may, in connection with its services hereunder: 
  

	 	11.1.1	except as ordered by a court of competent jurisdiction or otherwise required by law and regardless of any notice of ownership, trust or any other interest therein, any
writing thereon or any notice of any previous loss or theft thereof, but subject to sub-clause 7.1.1 (Payments by Paying Agents), treat the bearer of any Initial Global Note, Final Global Note, Definitive Note or Coupon as its absolute owner
for all purposes and make payments thereon accordingly; 


  
 - 13 -










	 	11.1.2	assume that the terms of the Initial Global Note, the Final Global Note and each Definitive Note and Coupon as issued are correct; 


 

	 	11.1.3	refer any question relating to the ownership of the Initial Global Note, the Final Global Note or any Definitive Note or Coupon or the adequacy or sufficiency of any
evidence supplied in connection with the replacement of the Initial Global Note, the Final Global Note or any Definitive Note or Coupon to the Issuer for determination by the Issuer and rely upon any determination so made; 


 

	 	11.1.4	rely upon the terms of any notice, communication or other document believed by it to be genuine; and 


 

	 	11.1.5	engage the advice or services of any lawyers or other experts whose advice or services it considers necessary and rely upon any advice so obtained (and such Paying
Agent shall be protected and shall incur no liability as against the Issuer in respect of any action taken, or permitted to be taken, in accordance with such advice and in good faith). 


 

	11.2	Extent of duties 

 Each
Paying Agent shall only be obliged to perform the duties set out herein and such other duties as are necessarily incidental thereto. No Paying Agent shall: 
  

	 	11.2.1	be under any fiduciary duty or other obligation towards or have any relationship of agency or trust for or with any person other than the Issuer; or


  

	 	11.2.2	be responsible for or liable in respect of the legality, validity or enforceability of the Initial Global Note, the Final Global Note or any Definitive Note or Coupon
or any act or omission of any other person (including, without limitation, any other Paying Agent). 

  

	11.3	Freedom to transact 

 Each
Paying Agent may purchase, hold and dispose of Notes and Coupons and may enter into any transaction (including, without limitation, any depository, trust or agency transaction) with any holders of Notes or Coupons or with any other person in the
same manner as if it had not been appointed as the agent of the Issuer in relation to the Notes. 
  

	11.4	Indemnity in favour of the Paying Agents 

 The Issuer shall indemnify each Paying Agent against any claim, demand, action, liability, damages, cost, loss or expense (including, without limitation, legal fees and any applicable value added tax)
which it properly incurs or which may be made against it as a result of or in connection with its appointment or the exercise of its powers and duties under this Agreement except such as may result from its own negligence or wilful misconduct,
wilful default or bad faith or that of its officers, employees or agents or any of them, but shall have no liability whatsoever for any 

  
 - 14 -









 
consequential special, indirect or speculative loss or damages (including, but not limited to, loss of profits, whether or not foreseeable) suffered by each Paying Agent in connection with the
transactions contemplated by and the relationship established by this Agreement, even if such agent has been advised as to the possibility of the same. The indemnity shall survive the termination or expiry of this Agreement and the removal or
resignation of the Paying Agents. 
  

	11.5	Obligations Several 

 The
obligations of the Paying Agents are several and not joint. The Paying Agents shall act solely as agent(s) of the Issuer and will not assume any obligation towards, or relationship of trust towards owners of the Notes. The Paying Agents are not to
assume any obligations other than those stated in this Agreement and shall have no liability whatsoever for any consequential special, indirect or speculative loss or damages (including, but not limited to, loss of profits, whether or not
foreseeable) suffered by the Issuer in connection with the transactions contemplated by and the relationship established by this Agreement, even if such agent has been advised as to the possibility of the same. 

 

	11.6	Monitoring 

 The Paying
Agents have no responsibility to monitor compliance by any other party with the Conditions or provisions of this Agreement and need take no further steps to ascertain whether any relevant event under the Conditions shall have incurred. 

 

	11.7	Illegality 

 No provision
herein shall require any Paying Agent to do anything which may be contrary to applicable law or regulation. 
  

	12.	CHANGES IN PAYING AGENTS 

  

	12.1	Resignation 

 Any Paying
Agent may resign its appointment upon not less than 30 days’ notice to the Issuer (with a copy, in the case of a Paying Agent other than the Fiscal Agent, to the Fiscal Agent); provided, however, that: 

 

	 	12.1.1	if such resignation would otherwise take effect less than 30 days before or after the maturity date or other date for redemption of the Notes or any interest payment
date in relation to the Notes, it shall not take effect until the thirtieth day following such date; and 

  

	 	12.1.2	in the case of the Fiscal Agent, such resignation shall not take effect until a successor has been duly appointed consistently with Clause 12.4 (Additional and
successor agents) or Clause 12.5 (Paying Agents may appoint successors) and notice of such appointment has been given to the Noteholders. 

  

	12.2	Revocation 

 The Issuer
may revoke the appointment of any Paying Agent by not less than 30 days’ notice to such Paying Agent (with a copy, in the case of a Paying Agent other than the 

  
 - 15 -









 
Fiscal Agent, to the Fiscal Agent); provided, however, that, in the case of the Fiscal Agent, such revocation shall not take effect until a successor has been duly appointed consistently
with Clause 12.4 (Additional and successor agents) or Clause 12.5 (Paying Agents may appoint successors) and notice of such appointment has been given to the Noteholders. 

 

	12.3	Automatic termination 


The appointment of any Paying Agent shall terminate forthwith if (a) such Paying Agent becomes incapable of acting, (b) a
secured party takes possession, or a receiver, manager or other similar officer is appointed, of the whole or any part of the undertaking, assets and revenues of such Paying Agent, (c) such Paying Agent admits in writing its insolvency or
inability to pay its debts as they fall due, (d) an administrator or liquidator of such Paying Agent or the whole or any part of the undertaking, assets and revenues of such Paying Agent is appointed (or application for any such appointment is
made), (e) such Paying Agent takes any action for a readjustment or deferment of any of its obligations or makes a general assignment or an arrangement or composition with or for the benefit of its creditors or declares a moratorium in respect
of any of its indebtedness, (f) an order is made or an effective resolution is passed for the winding-up of such Paying Agent or (g) any event occurs which has an analogous effect to any of the foregoing. If the appointment of the Fiscal
Agent is terminated in accordance with the preceding sentence, the Issuer shall forthwith appoint a successor in accordance with Clause 12.4 (Additional and successor agents). 

 

	12.4	Additional and successor agents 

 The Issuer may appoint a successor fiscal agent or calculation agent and additional or successor paying agents and shall forthwith give notice of any such appointment to the continuing Paying Agents and
the Noteholders, whereupon the Issuer, the continuing Paying Agents and the additional or successor fiscal agent or calculation agent or paying agent shall acquire and become subject to the same rights and obligations between themselves as if they
had entered into an agreement in the form mutatis mutandis of this Agreement. 
  

	12.5	Paying Agents may appoint successors 

 If a Paying Agent gives notice of its resignation in accordance with Clause 12.1 (Resignation) and by the tenth day before the expiry of such notice a successor has not been duly appointed in
accordance with Clause 12.4 (Additional and successor agents), such Paying Agent may itself, following such consultation with the Issuer as is practicable in the circumstances, appoint as its successor any reputable and experienced financial
institution and give notice of such appointment to the Issuer, the remaining Paying Agents and the Noteholders, whereupon the Issuer, the remaining Paying Agents and such successor shall acquire and become subject to the same rights and obligations
between themselves as if they had entered into an agreement in the form mutatis mutandis of this Agreement. 

  
 - 16 -










	12.6	Release 

 Upon any
resignation or revocation taking effect under Clause 12.1 (Resignation) or 12.2 (Revocation) or any termination taking effect under Clause 12.3 (Automatic termination), the relevant Paying Agent shall: 

 

	 	12.6.1	be released and discharged from its obligations under this Agreement (save that it shall remain entitled to the benefit of and subject to Clause 10.3 (Taxes),
Clause 11 (Terms of Appointment) and Clause 12 (Changes in Paying Agents)); 

  

	 	12.6.2	in the case of the Fiscal Agent, deliver to the Issuer and to its successor a copy, certified as true and up-to-date by an officer or authorised signatory of the Fiscal
Agent, of the records maintained by it in accordance with Clause 8.1 (Records); 

  

	 	12.6.3	in the case of the Calculation Agent, deliver to the Issuer and to its successor a copy, certified as true and up-to-date by an officer or authorised signatory of the
Calculation Agent, of the records maintained by it in accordance with Clause 9.2.2 (Records); and 

  

	 	12.6.4	forthwith (upon payment to it of any amount due to it in accordance with Clause 9 (Fees and Expenses) or Clause 11.4 (Indemnity in favour of the Paying
Agents) transfer all moneys and papers (including any unissued Notes held by it hereunder and any documents held by it pursuant to Clause 8.9 (Documents available for inspection)) to its successor and, upon appropriate notice, provide
reasonable assistance to its successor for the discharge of its duties and responsibilities hereunder. 

  

	12.7	Merger 

 Any legal entity
into which any Paying Agent is merged or converted or any legal entity resulting from any merger or conversion to which such Paying Agent is a party or any legal entity to which any Paying Agent sells all or substantially all of its corporate trust
and agency business shall, to the extent permitted by applicable law, be the successor to such Paying Agent without any further formality, whereupon the Issuer, the other Paying Agents and such successor shall acquire and become subject to the same
rights and obligations between themselves as if they had entered into an agreement in the form mutatis mutandis of this Agreement. Notice of any such merger or conversion shall forthwith be given by such successor to the Issuer and the other
parties hereto. 
  

	12.8	Changes in Specified Offices 

 If any Paying Agent decides to change its Specified Office (which may only be effected within the same city unless the prior written approval of the Issuer has been obtained), it shall give notice to the
Issuer (with a copy to the other Paying Agents) of the address of the new Specified Office stating the date on which such change is to take effect, which date shall be not less than 30 days after the date of such notice. The Issuer shall at its
own expense not less than 14 days prior to the date on which such change is to take effect (unless the appointment of the relevant Paying Agent is to 

  
 - 17 -









 
terminate pursuant to any of the foregoing provisions of this Clause 12 (Changes in Paying Agents) on or prior to the date of such change) give notice thereof to the Noteholders.

  

	13.	NOTICES 

  

	13.1	Addresses for notices 


All notices and communications hereunder shall be made in writing (by letter or fax) and shall be sent as follows: 

 

	 	13.1.1	if to the Issuer, to it at: 

  

			
	 Durell House
 28
New Street
 St. Helier
 Jersey
JE30XT
 Channel Islands

		
	Fax:	  	+44(0)1534701 199
	Attention:	  	Group Treasury
	
	 With a copy to:
  

UBS AG
 Bahnhofstrasse 45

B001 Zurich
 Switzerland

		
	Fax:	  	+411 239 5009
	Attention:	  	Group Treasury

  

	 	13.1.2	if to a Paying Agent, to it at the address or fax number specified against its name in Schedule 5 (Specified Offices of the Paying Agents) (or, in the case of a
Paying Agent not originally a party hereto, specified by notice to the parties hereto at the time of its appointment) for the attention of the person or department specified therein; 


or, in any case, to such other address or fax number or for the attention of such other person or department as the addressee has by prior
notice to the sender specified for the purpose. 
  

	13.2	Effectiveness 

 Every
notice or communication sent in accordance with Clause 13.1 (Addresses for notices) shall be effective, if sent by letter or fax, upon receipt by the addressee provided, however, that any such notice or communication which would
otherwise take effect after 4.00 p.m. on any particular day shall not take effect until 10.00 a.m. on the immediately succeeding business day in the place of the addressee. 

  
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	13.3	Notices to Noteholders 


Any notice required to be given to Noteholders under this Agreement shall be given in accordance with the Conditions. 

 

	13.4	Notices in English 

 All
notices and other communications hereunder shall be made in the English language or shall be accompanied by a certified English translation thereof. Any certified English translation delivered hereunder shall be certified a true and accurate
translation by a professionally qualified translator or by some other person competent to do so. 
  

	14.	LAW AND JURISDICTION 

  

	14.1	Governing law 

 This
Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law. 
  

	14.2	English courts 

 The
courts of England have exclusive jurisdiction to settle any dispute (a “Dispute”), arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any
non-contractual obligation arising out of or in connection with this Agreement) or the consequences of its nullity. 
  

	14.3	Appropriate forum 

 The
parties agree that the courts of England are the most appropriate and convenient courts to settle any Dispute and, accordingly, that they will not argue to the contrary. 

 

	14.4	Rights of the Paying Agents to take proceedings outside England 

 Clause 14.2 (English courts) is for the benefit of the Paying Agents only. As a result, nothing in this Clause 14 (Law and jurisdiction) prevents the Paying Agents from taking proceedings
relating to a Dispute (“Proceedings”) in any other courts with jurisdiction. To the extent allowed by law, the Paying Agents may take concurrent Proceedings in any number of jurisdictions. 

 

	14.5	Service of process 

 The
Issuer agrees that the documents which start any Proceedings and any other documents required to be served in relation to those Proceedings may be served on it by being delivered to the Issuer at 1 Finsbury Avenue, London EC2M 2PP or at any address
of the Issuer in Great Britain at which service of process may be served on it in accordance with the Companies Act 2006. Nothing in this paragraph shall affect the right of any Paying Agent to serve process in any other manner permitted by law.
This clause applies to Proceedings in England and to Proceedings elsewhere. 

  
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	15.	RIGHTS OF THIRD PARTIES 


A person who is not a party to this Agreement shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any
term of this Agreement. 
  

	16.	MODIFICATION 

 This
Agreement may be amended by further agreement among the parties hereto and without the consent of the Noteholders. 
  

	17.	COUNTERPARTS 

 This
Agreement may be executed in any number of counterparts, each of which shall be deemed an original. Any party may enter into this Agreement by signing any such counterpart. 
 AS WITNESS the hands of the duly authorised representatives of the parties hereto the day and year first before written. 

  
 - 20 -









 SCHEDULE 1 
 FORM OF INITIAL GLOBAL NOTE 
 NOTICE: THIS NOTE IS ISSUED FOR DEPOSIT WITH THE COMMON
DEPOSITARY FOR EUROCLEAR BANK S.A./N.V. AND CLEARSTREAM BANKING, SOCIÉTÉ ANONYME. ANY PERSON BEING OFFERED THIS NOTE FOR TRANSFER OR ANY OTHER PURPOSE SHOULD BE AWARE THAT THEFT OR FRAUD IS ALMOST CERTAIN TO BE INVOLVED. 

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING LIMITATIONS PROVIDED
IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. 
 UBS AG, 

acting through its Jersey branch 
 INITIAL GLOBAL NOTE 
 Maximum USD 2,000,000,000 Tier 2 Subordinated
Notes due 2022 
 This Initial Global Note is issued by UBS AG, acting through its Jersey branch (the “Issuer”), in
respect of its Tier 2 Subordinated Notes (the “Notes”) due 2022 issued in the aggregate principal amount of USD 2,000,000,000 (the “Aggregate Principal Amount Issued”). 

This Initial Global Note is issued subject to, and with the benefit of, the provisions of a Fiscal Agency Agreement dated 22 February 2012 (as
amended, restated or supplemented from time to time, the “Agency Agreement”), between the Issuer and The Bank of New York Mellon, acting through its London Branch, as Fiscal Agent (the “Agent”). 

The rights of the Agent and of the Holders under this Initial Global Note are subject to the Terms and Conditions of the Notes set out in Schedule 1 (the
“Conditions”). In the event of conflict between the Conditions and this Initial Global Note, the Conditions will prevail. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the
Conditions. 
  

	1.	Principal Amount 

 The Aggregate Principal
Amount of the Notes represented by this Initial Global Note from time to time (the “Aggregate Principal Amount Represented by the Initial Global Note”) corresponds to the amount certificated by the Agent in Schedule 2 under the
heading “Remaining Aggregate Principal Amount Represented by the Initial Global Note”. Initially the Aggregate Principal Amount Represented by the Initial Global Note equals the Aggregate Principal Amount Issued. 

Pursuant to the terms of the Agency Agreement, on or after the day following the expiry of 40 days after the date of issue of this Initial Global Note
the Agent is authorised to reduce the Aggregate Principal Amount Represented by the Initial Global Note if and to the extent that (i) appropriate certificates issued by Euroclear Bank SA/NV (“Euroclear”) and/or Clearstream
Banking, Société Anonyme, Luxembourg (“Clearstream, Luxembourg” and, together with Euroclear, the “Intermediaries”) are delivered to the Fiscal Agent for the purpose of Certification in accordance with
the terms of the Agency Agreement; or (ii) cancellations of Notes are made in accordance with the Conditions. 

  
 - 21 -









 As soon as (i) the Aggregate Principal Amount Represented by the Initial Global Note is reduced to zero
or (ii) a Write-down Notice has been given in accordance with Condition 6, this Initial Global Note may be cancelled by the Agent in accordance with terms of the Agency Agreement. 

 

	2.	Promise to Pay 

 The Issuer for value
received promises, all in accordance with and subject to the Conditions, (i) to pay to the bearer upon surrender hereof on 22 February 2022 or on such earlier date as the same may become payable in accordance therewith the Aggregate
Principal Amount Represented by the Initial Global Note or such other redemption amount as may become payable under the Notes represented by this Initial Global Note; and (ii) to pay to the bearer in arrear at the rate or rates and on the dates
specified in the Conditions interest on the Aggregate Principal Amount Represented by the Initial Global as such interest will become payable under the Notes represented by this Initial Global Note, provided, however, that all
claims for payment in respect of Notes represented by the Initial Global Note shall be conditional upon Certification (bedingte Zahlungsverpflichtung). 
  

	3.	Global held by Intermediaries 

 This
Initial Global Note will be deposited by the Agent with the Common Depositary. Once this Initial Global Note is deposited with the Common Depositary and entered into the accounts of one or more participants of the Intermediaries, the Notes will
constitute intermediated securities (Bucheffekten) within the meaning of the Swiss Federal Intermediated Securities Act (Bucheffektengesetz). 
 Each holder of the Notes represented by this Initial Global Note shall have a quotal co-ownership interest (Miteigentumsanteil) in this Initial Global Note to the extent of his or her claim against
the Issuer, provided, however, that, for so long as this Initial Global Note remains deposited with the Common Depositary, the co-ownership interest shall be suspended and the Notes may only be transferred by the entry of the
transferred Notes in a securities account of the transferee. 
 The records of the Intermediaries will determine the number of Notes held
through each participant in the relevant Intermediary. For so long as this Initial Global Note remains deposited with the Common Depositary, the holders of the Notes represented by this Initial Global Note will be the persons holding the Notes in a
securities account (Effektenkonto) that is in their own name, or, in the case of intermediaries (Verwahrungsstellen), the intermediaries (Verwahrungsstellen) holding such Notes for their own account in a securities account
(Effektenkonto) that is in their name. 
 Neither the Issuer nor any holder of Notes represented by this Initial Global Note will at any
time have the right to effect or demand the conversion of this Initial Global Note into, or the delivery of, Notes in uncertificated or definitive form, and no Definitive Notes will be printed at any time for Notes represented by this Initial Global
Note. 

  
 - 22 -










	4.	Governing Law and Jurisdiction 

 This
Initial Global Note is governed by Swiss law. 
 The courts of the city of Zurich (venue being Zurich 1) shall have exclusive jurisdiction to
settle any disputes that may arise out of or in connection with this Initial Global Note. 
  

	5.	Authentication 

 This Initial Global Note
shall not be valid for any purpose until (i) it has been authenticated for and on behalf of the Agent and (ii) a copy of the Conditions has been attached hereto. 
 AS WITNESS the manual signature of a duly authorised officer on behalf of the Issuer, 

UBS AG, acting through its Jersey branch 

By: 
 (duly authorised)

 By: 
 (duly authorised)

 ISSUED in Jersey as of 22 February 2012 
 AUTHENTICATED for and on behalf of 
 THE BANK OF NEW YORK MELLON  

as Fiscal Agent without recourse, warranty or liability 
 By: 
 (duly authorised) 
 ISIN: XS0747231362 
 Common Code: 074723136 

  
 - 23 -









 SCHEDULE 1 
 TERMS AND CONDITIONS OF THE NOTES 

  
 - 24 -









 SCHEDULE 2 
 AGGREGATE PRINCIPAL AMOUNT 
 REPRESENTED BY THE INITIAL GLOBAL NOTE

  

									
	 Date of delivery

of certificate,
 and/or
 Cancellation of

Notes
	 	 Aggregate

Principal

Amount

represented by
 certificates
 then delivered

by or behalf of
 Holder
	 	 Aggregate

Principal

Amount of

Notes then

cancelled
	 	 Remaining

Aggregate

Principal

Amount

Represented by
 the Initial
 Global Note
	 	 Authorised

Signature of

the Agent

		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	
		 		 		 		 	


  
 - 25 -









 SCHEDULE 2 
 FORM OF FINAL GLOBAL NOTE 
 NOTICE: THIS NOTE IS ISSUED FOR DEPOSIT WITH THE COMMON
DEPOSITARY FOR EUROCLEAR BANK S.A./N.V. AND CLEARSTREAM BANKING, SOCIÉTÉ ANONYME. ANY PERSON BEING OFFERED THIS NOTE FOR TRANSFER OR ANY OTHER PURPOSE SHOULD BE AWARE THAT THEFT OR FRAUD IS ALMOST CERTAIN TO BE INVOLVED. 

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING LIMITATIONS PROVIDED
IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. 
 UBS AG, 

acting through its Jersey branch 
 FINAL GLOBAL NOTE 
 Maximum USD 2,000,000,000 Tier 2 Subordinated
Notes due 2022 
 This Final Global Note is issued by UBS AG, acting through its Jersey branch (the “Issuer”), in
respect of its Tier 2 Subordinated Notes (the “Notes”) due 2022 issued in the aggregate principal amount of USD 0 (the “Aggregate Principal Amount Issued”). 
 This Final Global Note is issued subject to, and with the benefit of, the provisions of a Fiscal Agency Agreement dated 22 February 2012 (as amended, restated or supplemented from time to time, the
“Agency Agreement”), between the Issuer and The Bank of New York Mellon, acting through its London Branch, as Fiscal Agent (the “Agent”). 
 The rights of the Agent and of the Holders under this Final Global Note are subject to the Terms and Conditions of the Notes set out in Schedule 1 (the “Conditions”). In the event of
conflict between the Conditions and this Final Global Note, the Conditions will prevail. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Conditions. 

 

	1.	Principal Amount 

 The Aggregate Principal
Amount of the Notes represented by this Final Global Note from time to time (the “Aggregate Principal Amount Represented by the Final Global Note”) corresponds to the amount last certificated by the Agent in Schedule 2 under the
heading “Remaining Aggregate Principal Amount Represented by the Final Global Note”. Initially the Aggregate Principal Amount Represented by the Final Global Note amounts to USD 0. 
 Pursuant to the terms of the Agency Agreement, on or after the day following the expiry of 40 days after the date of issue of this Final Global Note the Agent is authorised to increase the Aggregate
Principal Amount Represented by the Final Global Note if and to the extent that appropriate certificates issued by Euroclear Bank SA/NV (“Euroclear”) and/or Clearstream Banking, Société Anonyme, Luxembourg
(“Clearstream, Luxembourg” and, together with Euroclear, the “Intermediaries”) are delivered to the Fiscal Agent for the purpose of Certificate in accordance with the terms of the Agency Agreement. The Agent is
authorised to reduce the Aggregate Principal Amount Represented by the Initial Global Note if and to the extent that (i) Definitive Notes are delivered in accordance with the Conditions; or (ii) cancellations of Notes are made in
accordance with the Conditions. 

  
 - 26 -










	2.	Promise to Pay 

 The Issuer for value
received promises, all in accordance with and subject to the Conditions, (i) to pay to the bearer upon surrender hereof on 22 February 2022 or on such earlier date as the same may become payable in accordance with the Conditions the
Aggregate Principal Amount Represented by the Final Global Note or such other redemption amount as may become payable under the Notes represented by this Final Global Note; and (ii) to pay to the bearer in arrear at the rate or rates and on the
dates specified in the Conditions interest on the Aggregate Principal Amount Represented by the Final Global as such interest will become payable under the Notes represented by this Final Global Note. 

The bearer of this Final Global Note is entitled to the benefit of the same obligations on the part of the Issuer as if such bearer were the bearer of
the Notes represented hereby. 
  

	3.	Global held by Intermediaries 

 This Final
Global Note will be deposited by the Agent with the Common Depositary. Once this Final Global Note is deposited with the Common Depositary and entered into the accounts of one or more participants of the Intermediaries, the Notes will constitute
intermediated securities (Bucheffekten) within the meaning of the Swiss Federal Intermediated Securities Act (Bucheffektengesetz). 
 Each holder of the Notes represented by this Final Global Note shall have a quotal co-ownership interest (Miteigentumsanteil) in this Final Global Note to the extent of his or her claim against the
Issuer, provided, however, that, for so long as this Final Global Note remains deposited with the Common Depositary, the co-ownership interest shall be suspended and the Notes may only be transferred by the entry of the transferred
Notes in a securities account of the transferee. 
 The records of the Intermediaries will determine the number of Notes held through each
participant in the relevant Intermediary. For so long as this Final Global Note remains deposited with the Common Depositary, the holders of the Notes represented by this Final Global Note will be the persons holding the Notes in a securities
account (Effektenkonto) that is in their own name, or, in the case of intermediaries (Verwahrungsstellen), the intermediaries (Verwahrungsstellen) holding such Notes for their own account in a securities account
(Effektenkonto) that is in their name. 
 Neither the Issuer nor any holder of Notes represented by this Final Global Note will at any
time have the right to effect or demand the conversion of this Final Global Note into, or the delivery of, Notes in uncertificated or definitive form. 
  

	4.	Definitive Notes 

 No physical delivery of
the Notes shall be made unless and until definitive Notes in bearer form (“Definitive Notes”) shall have been printed. Definitive Notes may only be printed in accordance with the terms of the Agency Agreement, provided,
however, that no Definitive Notes shall be printed after the Issuer has given a Write-down Notice in accordance with the Condition 6. 

  
 - 27 -









 The Issuer undertakes to procure that the relevant Definitive Notes will be duly issued and printed in
accordance with the applicable rules and regulations, the Conditions, the provisions hereof and the Agency Agreement. 
  

	5.	Governing Law and Jurisdiction 

 This
Final Global Note is governed by Swiss law. 
 The courts of the city of Zurich (venue being Zurich 1) shall have exclusive jurisdiction to
settle any disputes that may arise out of or in connection with this Final Global Note. 
  

	6.	Authentication 

 This Final Global Note
shall not be valid for any purpose until (i) it has been authenticated for and on behalf of the Agent and (ii) a copy of the Conditions has been attached hereto. 
 UBS AG, acting through its Jersey branch 
 By:  

(duly authorised) 
 By: 

 (duly authorised) 

ISSUED in Jersey as of 22 February 2012 
 AUTHENTICATED for and on behalf of  
 THE BANK OF NEW YORK MELLON 

as Fiscal Agent without recourse, warranty or liability 
 By: 
 (duly authorised) 
 ISIN: XS0747231362 
 Common Code: 074723136 

  
 - 28 -









 SCHEDULE 1 
 TERMS AND CONDITIONS OF THE NOTES 

  
 - 29 -









 SCHEDULE 2 
 AGGREGATE PRINCIPAL AMOUNT 
 REPRESENTED BY THE FINAL GLOBAL NOTE

  

											
	 Date of

delivery of

certificate,

delivery of

Definitive

Notes and/or

Cancellation

of Notes
	 	 Aggregate

Principal

Amount

represented

by

certificates

then

delivered by

or behalf of

Holder
	 	 Aggregate

Principal

Amount of

Definitive

Notes then

delivered
	 	 Aggregate

Principal

Amount of

Notes then

cancelled
	 	 Remaining

Aggregate

Principal

Amount

Represented

by the Final

Global Note
	 	 Authorised

Signature of

the Agent

		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	
		 		 		 		 		 	


  
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 SCHEDULE 3 
 FORM OF DEFINITIVE NOTE AND COUPON 
 THIS OBLIGATION HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN CONTRAVENTION OF THAT ACT. 
 ANY UNITED STATES PERSON WHO
HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE. 

UBS AG, 

acting through its Jersey branch 
 NOTE OF USD [—] 
 No.                  
 Tier 2 Subordinated Notes due 2022 (the “Notes”) 
 UBS AG promises to pay
to the bearer of this Note upon the presentation and surrender at the specified office for the time being of any of the Paying Agents as defined in the Terms and Conditions of the Notes (i) of this Note the amount of USD [—] and (ii) upon presentation and surrender of the relevant interest coupon interest on the amount of USD [—], all in accordance with and subject to
the Terms and Conditions of the Notes printed on the back hereof. 
 This Note and the interest coupons relating hereto shall not be valid for
any purpose until (i) this Notes has been authenticated for and on behalf of The Bank of New York Mellon, acting through its London Branch, as fiscal agent. 
 UBS AG, acting through its Jersey branch 
 By: 

(duly authorised) 
 By: 

(duly authorised) 
 ISSUED in
[Place] as of [Closing Date] 
 AUTHENTICATED for and on behalf of  
 [LEGAL NAME OF AGENT]  
 as Fiscal Agent, without recourse, warranty or
liability 
 By: 
 (duly
authorised) 
 ISIN: [—] 
 Common Code: [—] 

  
 - 31 -









 No.
                 
 INTEREST COUPON

 Front Side 
 THIS
OBLIGATION HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN CONTRAVENTION OF THAT ACT. 
 ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL
REVENUE CODE. 
 UBS AG, 
 acting through its Jersey branch 
 INTEREST COUPON 

Interest due [—] 

Tier 2 Subordinated Notes due 2022 
 ISIN: XS0747231362 
 Common Code: 074723136 

Reverse Side 
 This coupon is
payable solely at the offices outside the United States of America of: 
 [Paying Agents] 

  
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 SCHEDULE 4 
 TERMS AND CONDITIONS OF THE NOTES 
 The terms and conditions of the Tier 2 Subordinated
Notes due 2022 issued by UBS AG, acting through its Jersey branch, are as follows: 
  

	1.	DEFINITIONS 

 “Additional
Amounts” has the meaning assigned to such term in Condition 8 (Taxation). 
 “Agency Agreement” means the
Agency Agreement dated as of the Issue Date, among the Issuer, the Fiscal Agent and the other agents from time to time party thereto, as may be amended, supplemented or otherwise modified from time to time. 

“Alignment Event” has the meaning assigned to such term in Condition 5 (Redemption and Purchase). 

“Amendment Effective Date” has the meaning assigned to such term in Condition 11 (Amendments). 

“Amendment Notice” has the meaning assigned to such term in Condition 11 (Amendments). 

“Auditor” means the accounting firm (i) appointed by the Board of Directors of UBS AG or the shareholders of UBS AG, as the case
may be, to provide, among other things, audit and/or review opinions on UBS AG’s financial statements, and (ii) approved by the FINMA in accordance with the Financial Market Supervisory Act (Finanzmarktaufsichtsgesetz) of
22 June 2007, as amended from time to time. 
 “Balance Sheet Date” means (i) with respect to any Ordinary
Publication Date, the cut-off date for the measurement of the Relevant Capital Ratio in the Quarterly Financial Accounts published on such Ordinary Publication Date, and (ii) with respect to any Extraordinary Publication Date, the cut-off date
for the Reviewed Interim Measurement published upon the instruction of the FINMA on such Extraordinary Publication Date. 
 “Bankruptcy
Event” means any of the following events with respect to UBS AG: (i) the adjudication of bankruptcy (Konkurseröffnung) pursuant to article 171, 189 or 191 DEBA, (ii) the granting of a provisional or definitive stay of
execution (provisorische oder definitive Nachlassstundung) pursuant to article 293 et seq.of the DEBA, (iii) the ordering of restructuring proceedings (Sanierungsverfahren) pursuant to article 28 to 32 FBA, (iv) the ordering
of liquidation proceedings (Liquidation) pursuant to article 33 to 37g FBA and/or (v) the ordering of any proceeding referred to in article 8 (Meaning of bankruptcy) of the Interpretation (Jersey) Law, 1954; provided,
however, that none of the following shall constitute a Bankruptcy Event: (x) mere debt collection proceedings (Betreibungsverfahren) pursuant to article 38 et seq. DEBA, (y) proceedings in connection with a freezing order
(Arrestverfahren) pursuant to article 271 et seq. DEBA, and/or (z) the institution of protective measures (Schutzmassnahmen) pursuant to article 26 FBA, including, in the case of each of clauses (x), (y) and (z), any steps
taken under or in connection therewith. 
 “Basel III Implementation Date” means 1 January 2013. 

  
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 “BIS Regulations” means, at any time, the capital adequacy standards and guidelines
promulgated by the Basel Committee on Banking Supervision, as implemented by the FINMA in Switzerland at such time. 
 “BIS Risk
Weighted Assets” means, as of any Balance Sheet Date, the aggregate amount, in Swiss francs, of risk-weighted assets of the Group as of such Balance Sheet Date, as determined by UBS AG pursuant to the BIS Regulations applicable to UBS AG as
of such Balance Sheet Date, and as (i) disclosed in the Quarterly Financial Accounts published on the relevant Ordinary Publication Date or (ii) may be disclosed as a component of the Reviewed Interim Measurement published upon the
instruction of the FINMA on the relevant Extraordinary Publication Date, as applicable. For the avoidance doubt, the term “risk-weighted assets” as used in this definition shall have the meaning assigned to such term in the BIS Regulations
in effect as of the relevant Balance Sheet Date. 
 “BIS Tier 1 Capital” means, as of any Balance Sheet Date, the aggregate
amount, in Swiss francs, of items that constitute tier 1 capital of the Group as of such Balance Sheet Date, less any deductions from tier 1 capital required to be made, in each case, as determined by UBS AG pursuant to the BIS Regulations
applicable to UBS AG as of such Balance Sheet Date. For the avoidance of doubt, the term “tier 1 capital” as used in this definition shall have the meaning assigned to such term in the BIS Regulations in effect as of the relevant Balance
Sheet Date. 
 “Business Day” means a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange
markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in Jersey, London, Zurich and New York. 
 “Calculation Agent” means The Bank of New York Mellon, acting through its London branch, in its capacity as calculation agent for the Notes, and includes any successor to The Bank of New
York Mellon, acting through its London branch, in its capacity as Calculation Agent. 
 “Call Date” means 22 February
2017. 
 “Certification” means the delivery to the Fiscal Agent of an appropriate confirmation issued by Euroclear and/or
Clearstream, Luxembourg as to non-US beneficial ownership of the relevant Notes. 
 “CET1 Capital” means, as of any Balance
Sheet Date, the aggregate amount, in Swiss francs, of items that constitute common equity tier 1 capital of the Group as of such Balance Sheet Date, less any deductions from common equity tier 1 capital required to be made, in each case as
determined by UBS AG pursuant to the BIS Regulations applicable to UBS AG as of such Balance Sheet Date, and as (i) disclosed in the Quarterly Financial Accounts published on the relevant Ordinary Publication Date or (ii) may be disclosed
as a component of the Reviewed Interim Measurement published upon the instruction of the FINMA on the relevant Extraordinary Publication Date, as applicable. For the avoidance of doubt, the term “common equity tier 1 capital” as used in
this definition shall have the meaning assigned to such term in the BIS Regulations in effect as of the relevant Balance Sheet Date. 

“CET1 Ratio” means, as of any Balance Sheet Date, the CET1 Capital as of such Balance Sheet Date, divided by the BIS Risk Weighted
Assets as of such Balance Sheet Date, 

  
 - 34 -









 
expressed as a percentage, such ratio (or the components thereof) as determined by UBS AG, and (i) as disclosed in the Quarterly Financial Accounts published on the relevant Ordinary
Publication Date or (ii) constituting (or as disclosed in) the Reviewed Interim Measurement published upon the instruction of the FINMA on the relevant Extraordinary Publication Date, as applicable. 

“Change in Progressive Capital Component Requirement” has the meaning assigned to such term in Condition 5 (Redemption and
Purchase). 
 “Clearstream, Luxembourg” means Clearstream Banking, société anonyme, Luxembourg.

 “Common Depositary” means The Bank of New York Mellon, acting through its London branch, or any successor bank duly licensed
in a member state of the European Union, as appointed by the Intermediaries from time to time; 
 “Contingent Write-down” means
the events described in clauses (i) through (iv) of clause (d) of Condition 6 (Contingent Write-down). 
 “Core
Capital” means (i) at any time prior to the Basel III Implementation Date, any item that constitutes tier 1 capital of the Group pursuant to the BIS Regulations applicable to UBS AG at such time, excluding any such item that
constitutes hybrid tier 1 capital of the Group pursuant to the National Regulations at such time, and (ii) at any time on or after the Basel III Implementation Date, any item that constitutes common equity tier 1 capital of the Group pursuant
to the BIS Regulations applicable to UBS AG as of such time. 
 “Core Capital Instrument” means, at any time, any security or
other instrument issued by any member of the Group that qualifies as Core Capital at such time. 
 “Core Tier 1 Capital” means,
as of any Balance Sheet Date, the BIS Tier 1 Capital as of such Balance Sheet Date, less the Hybrid Tier 1 Capital as of such Balance Sheet Date, as determined by UBS AG, and as (i) disclosed as “BIS core tier 1 capital” in the
Quarterly Financial Accounts published on the relevant Ordinary Publication Date or (ii) may be disclosed as a component of the Reviewed Interim Measurement published upon the instruction of the FINMA on the relevant Extraordinary Publication
Date, as applicable. 
 “Core Tier 1 Ratio” means, as of any Balance Sheet Date, the Core Tier 1 Capital as of such Balance
Sheet Date, divided by the BIS Risk Weighted Assets as of such Balance Sheet Date, expressed as a percentage, such ratio (or the components thereof) as determined by UBS AG, and (i) as disclosed in the Quarterly Financial Accounts published on
the relevant Ordinary Publication Date or (ii) constituting (or as disclosed in) the Reviewed Interim Measurement published upon the instruction of the FINMA on the relevant Extraordinary Publication Date, as applicable. 

“Coupon” has the meaning assigned to such term in Condition 2 (Amount and Denomination; Form and Transfer). 

“DEBA” means the Swiss Federal Debt Enforcement and Bankruptcy Act of 11 April 1889, as amended from time to time. 

“Definitive Notes” has the meaning assigned to such term in Condition 2 (Amount and Denomination; Form and Transfer). 


  
 - 35 -









 “Early Redemption Date” has the meaning assigned to such term in Condition 5 (Redemption
and Purchase). 
 “Early Redemption Notice” has the meaning assigned to such term in Condition 5 (Redemption and
Purchase). 
 “EU Savings Tax Directive” means the European Council Directive 2003/48/EC of 3 June 2003, on taxation
of savings income. 
 “Euroclear” means Euroclear Bank S.A./N.V. 
 “Event of Default” has the meaning assigned to such term in Condition 10 (Events of Default). 
 “Exchange Date” has the meaning assigned to such term in Condition 2 (Amount and Denomination; Form and Transfer). 
 “Extraordinary Publication Date” means the Business Day on which a Reviewed Interim Measurement is published upon the instruction of the FINMA, after the FINMA has determined that the
conditions for issuing a Trigger Event Write-down Notice in accordance with Condition 6 (Contingent Write-down) have been met. 

“Extraordinary Trigger Event Notice Date” has the meaning assigned to such term in Condition 6 (Contingent Write-down).

 “FBA” means the Swiss Federal Act on Banks and Savings Institutions of 8 November 1934, as amended from time to time.

 “Final Global Note” has the meaning assigned to such term in Condition 2 (Amount and Denomination; Form and
Transfer). 
 “FINMA” means the Swiss Financial Market Supervisory Authority FINMA or any successor thereof. 

“Fiscal Agent” means The Bank of New York Mellon, acting through its London branch, as fiscal agent for the Notes, and includes any
successor to The Bank of New York Mellon, acting through its London branch, in its capacity as Fiscal Agent appointed in accordance with the terms of the Agency Agreement. 
 “Former Residence” has the meaning assigned to such term in Condition 15 (Substitution). 
 “Global Note” has the meaning assigned to such term in Condition 2 (Amount and Denomination; Form and Transfer). 
 “Group” means, at any time, UBS AG, its consolidated subsidiaries and all other entities that are included in UBS AG’s consolidated adequacy reports prepared pursuant to the capital
adequacy laws and regulations to which it is subject at such time. 
 “High-Trigger Amount” means, as of any Publication Date,
the sum of (i) the maximum portion of the aggregate principal amount, in Swiss francs, of all High-Trigger Contingent Capital, if any, outstanding on the relevant Balance Sheet Date that could be converted into equity or written down if a
High-Trigger Writedown/Conversion Notice were delivered in 

  
 - 36 -









 
accordance with the terms thereof, and (ii) the maximum portion of the aggregate principal amount, in Swiss francs, of all High-Trigger Contingent Capital, if any, issued after the relevant
Balance Sheet Date, but prior to such Publication Date, that could be converted into equity or written down if a High-Trigger Write-down/Conversion Notice were delivered in accordance with the terms thereof, in the case of each of clauses
(i) and (ii), as determined by UBS AG. For purposes of clause (ii) of this definition and, in the case of an Extraordinary Publication Date, clause (i) of this definition, the aggregate principal amount of any High-Trigger Contingent
Capital that is not denominated in Swiss francs shall be converted into Swiss francs at the applicable prevailing exchange rate on the last Business Day preceding the relevant Publication Date, as determined by UBS AG. In the case of an Ordinary
Publication Date, for purposes of clause (i) of this definition, the aggregate principal amount of any High-Trigger Contingent Capital that is not denominated in Swiss francs shall be converted into Swiss francs at the applicable exchange rate
used for such purposes in the relevant Quarterly Financial Accounts. 
 “High-Trigger Contingent Capital” means any capital
instrument issued by any member of the Group that is required pursuant to its terms to be either converted into equity or fully or partially written down when the Relevant Capital Ratio (or similar measure described in the terms and conditions
thereof) falls below a threshold that is higher than the Write-down Threshold (with respect to the relevant High-Trigger Contingent Capital, its “High-Trigger Threshold”), including, but not limited to, capital instruments that,
pursuant to National Regulations, qualify as buffer capital (Eigenmittelpuffer) within the meaning of the TBTF Dispatch. 

“High-Trigger Threshold” has the meaning assigned to such term in the definition of the term “High-Trigger Contingent
Capital”. 
 “High-Trigger Write-down/Conversion Date” has the meaning assigned to such term in the definition of the term
“High-Trigger Write-down/Conversion Notice”. 
 “High-Trigger Write-down/Conversion Notice” means a notice delivered
pursuant to the terms of any High-Trigger Contingent Capital, which notifies the holders thereof that the Relevant Capital Ratio (or similar measure described in the terms and conditions of such High-Trigger Contingent Capital) has fallen below its
High-Trigger Threshold and, consequently, such High-Trigger Contingent Capital will be converted into equity or fully or partially written down, as applicable, as of a particular date (such date, the “High-Trigger Write-down/Conversion
Date”). 
 “Holder” means, with respect to any Note, (i) so long as the Notes are represented by a Global Note
deposited with the Common Depositary for the Intermediaries, the person or persons holding such Note in a securities account (Effektenkonto) that is in its or their name, or, in the case of intermediaries (Verwahrungsstellen), the
intermediary or intermediaries holding the Notes for its or their own account in a securities account (Effektenkonto) that is in its or their name, and (ii) if Definitive Notes are printed, the bearer of the relevant Definitive Note.

 “Hybrid Tier 1 Capital” means, as of any Balance Sheet Date, the aggregate amount, in Swiss francs, of items that constitute
hybrid tier 1 capital of the Group as of such Balance Sheet Date, as determined by UBS AG pursuant to the National Regulations applicable to UBS AG as of such Balance Sheet Date, and as (i) disclosed as “hybrid tier 1 capital” in the
Quarterly Financial Accounts published on the relevant Ordinary Publication Date or (ii) may be disclosed as a component of the Reviewed Interim Measurement published upon the instruction of the FINMA on the relevant Extraordinary Publication
Date, as applicable. 

  
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 “Initial Global Note” has the meaning assigned to such term in Condition 2 (Amount and
Denomination; Form and Transfer). 
 “Interest Payment Date” has the meaning assigned to such term in Condition 4
(Interest). 
 “Interest Rate” means (i) from (and including) the Issue Date to (and excluding) the Call Date,
7.25 per cent. per annum, and (ii) from (and including) the Call Date, the rate per annum equal to the sum of 6.061 per cent. and the Mid Market Swap Rate. 
 “Intermediaries” has the meaning assigned to such term in Condition 2 (Amount and Denomination; Form and Transfer). 
 “Intermediated Securities” has the meaning assigned to such term in Condition 2 (Amount and Denomination; Form and Transfer). 

“Issue Date” means 22 February 2012. 
 “Issuer” means UBS AG, acting through its Jersey branch. 
 “Issuing
Branch Substitution” has the meaning assigned to such term in Condition 15 (Substitution). 
 “Junior
Obligations” means (i) all unsecured, subordinated, direct or indirect, undated obligations of UBS AG, (ii) all other unsecured, subordinated, direct or indirect obligations of UBS AG that are expressed to rank junior to the
Issuer’s obligations under the Notes and (iii) all classes of share capital of UBS AG. 
 “Maturity Date” means
22 February 2022. 
 “Mid Market Swap Rate” means the mid market U.S. dollar swap rate Libor basis having a five-year
maturity appearing on Bloomberg page “ISDA 01” (or such other page as may replace such page on Bloomberg, or such other page as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of
displaying comparable rates) at 11:00 a.m. (New York time) on the date falling two Business Days prior to the Call Date, as determined by the Calculation Agent. If such swap rate does not appear on such page (or such other page or service), the Mid
Market Swap Rate shall instead be determined by the Calculation Agent on the basis of (i) quotations provided by the principal office of each of four major banks in the U.S. dollar swap rate market of the rates at which swaps in U.S. dollars
are offered by it at approximately 11.00 a.m. (New York time) on the date falling two Business Days prior to the Call Date to participants in the U.S. dollar swap rate market for a five-year period and (ii) the arithmetic mean expressed as a
percentage and rounded, if necessary, to the nearest 0.001 per cent. (0.0005 per cent. being rounded upwards) of such quotations. 

“Minimum Progressive Capital Component Requirement” means, at any time, the minimum aggregate amount of capital that is required to be
held by UBS AG as Progressive Capital Component pursuant to the National Regulations at such time. 

  
 - 38 -









 “National Regulations” means, at any time, (i) the Swiss national banking and capital
adequacy laws, and (ii) the capital adequacy regulations promulgated by the FINMA and the interpretation thereof by any competent Swiss authority, in the case of each of clauses (i) and (ii), directly applicable to UBS AG and/or the Group
at such time. 
 “New Residence” has the meaning assigned to such term in Condition 15 (Substitution). 

“Notes” means the USD 2,000,000,000 Tier 2 Subordinated Notes due 2022 issued by the Issuer on the Issue Date. 

“Ordinary Publication Date” means each Business Day on which Quarterly Financial Accounts are published. 

“Ordinary Trigger Event Notice Date” has the meaning assigned to such term in Condition 6 (Contingent Write-down). 

“Parity Obligations” means (i) all unsecured, subordinated, direct or indirect, dated obligations of UBS AG and (ii) all other
unsecured, subordinated, direct or indirect obligations of UBS AG that are expressed to rank pari passu with the Issuer’s obligations under the Notes. 
 “Paying Agents” means the Fiscal Agent and any other paying agent appointed in accordance with the terms of the Agency Agreement. 
 “Permitted Transactions” means: 
 (i) repurchases, redemptions or other
acquisitions of any Core Capital Instruments in connection with (x) any employment contract, benefit plan or similar arrangement with, or for the benefit of, any employees, officers, directors or consultants of any member of the Group,
(y) a dividend reinvestment or shareholder share purchase plan or (z) the issuance of any Core Capital Instruments (or securities convertible into, or exercisable for, Core Capital Instruments) as consideration for an acquisition
consummated by any member of the Group; 
 (ii) market-making in Core Capital Instruments as part of the securities business of any member of
the Group; 
 (iii) purchases of fractional interests in any Core Capital Instruments pursuant to the conversion or exchange provisions of
(x) such Core Capital Instruments or (y) any security convertible into, or exercisable for, Core Capital Instruments; 
 (iv)
redemptions or repurchases of Core Capital Instruments pursuant to any shareholders’ rights plan; and 
 (v) other redemptions or
repurchases of Core Capital Instruments in an aggregate amount not exceeding CHF 250,000,000 during the one-month period ending on the date immediately preceding the relevant Publication Date. 

“Progressive Capital Component” means, at any time, any item that, pursuant to National Regulations at such time, qualifies as
progressive capital component (progressive Komponente) within the meaning of the TBTF Dispatch at such time. 

  
 - 39 -









 “Public Sector” means the government of, or a governmental agency or the central bank in,
UBS AG’s country of incorporation. 
 “Publication Date” means an Ordinary Publication Date or an Extraordinary
Publication Date, as the case may be. 
 “Quarterly Financial Accounts” means the financial statements of the Group (including
the notes thereto) in respect of a calendar quarter reporting period, which have been reviewed by the Auditor in accordance with the International Standard on Auditing and are contained in a customary financial report published by UBS AG.

 “Reduced Minimum Progressive Capital Component Requirement” has the meaning assigned to such term in Condition 5
(Redemption and Purchase). 
 “Reduction Confirmation” has the meaning assigned to such term in Condition 5
(Redemption and Purchase). 
 “Regulatory Event” has the meaning assigned to such term in Condition 5 (Redemption and
Purchase). 
 “Relevant Capital Ratio” means (i) prior to the Basel III Implementation Date, the Core Tier 1 Ratio,
and (ii) on or after the Basel III Implementation Date, the CET1 Ratio. 
 “Relevant Date” means, with respect to any
payment, (i) the date on which such payment first becomes due under these Terms and Conditions (the “Scheduled Due Date”), or (ii) if the full amount of the moneys payable on the Scheduled Due Date has not been received by
the Fiscal Agent on or before the Scheduled Due Date, the date on which notice to the effect that the full amount of the money due on the Scheduled Due Date has been received by the Fiscal Agent is published in accordance with these Terms and
Conditions. 
 “Relevant Swiss Issuer” means, at any time, any bank, or any member of a banking group (including the Group),
that is required to hold a minimum aggregate amount of Progressive Capital Component pursuant to the National Regulations at such time. 

“Relevant Trigger Capital Ratio” means (i) prior to the Basel III Implementation Date, the Trigger Core Tier 1 Ratio, and
(ii) on or after the Basel III Implementation Date, the Trigger CET1 Ratio. 
 “Reviewed Interim Measurement” means an
interim measurement of the Relevant Capital Ratio, with respect to which the Auditor has performed procedures in accordance with the International Standard on Related Services (and relevant Swiss standards and practices) applicable to agreed-upon
procedures engagements. 
 “Scheduled Due Date” has the meaning assigned to such in the definition of the term “Relevant
Date”. 
 “Senior Obligations” means all obligations of UBS AG that do not constitute either Junior Obligations or Parity
Obligations. 
 “Substitute Issuer” has the meaning assigned to such term in Condition 15 (Substitution). 

  
 - 40 -









 “Substitution Documents” has the meaning assigned to such term in Condition 15
(Substitution). 
 “Swiss Code” means the Swiss Code of Obligations, as amended from time to time. 

“Swiss francs” or “CHF” means the lawful currency of Switzerland. 

“Tax Event” has the meaning assigned to such term in Condition 5 (Redemption and Purchase). 

“Tax Jurisdiction” means Jersey and/or Switzerland. 
 “Taxes” has the meaning assigned to such term in Condition 8 (Taxation). 

“TBTF Dispatch” means the dispatch on the legislative proposals adopted by the Federal Council on 20 April 2011, in relation to a
proposed amendment to the Swiss Banking Act concerning “too big to fail” (“Botschaft zur Änderung des Bankengesetzes (Stärkung der Stabilität im Finanzsektor; too big to fail, TBTF)”). 

“Tier 2 Capital” has, at any time, the meaning ascribed to it under the National Regulations at such time. 

“Trigger Breach Determination Date” has the meaning assigned to such term in Condition 6 (Contingent Write-down). 

“Trigger CET1 Ratio” means, as of any Publication Date, (i) the sum of (x) the CET1 Capital as of the relevant Balance Sheet
Date and (y) the High-Trigger Amount as of such Publication Date, divided by (ii) the BIS Risk Weighted Assets as of the relevant Balance Sheet Date, expressed as a percentage. 
 “Trigger Core Tier 1 Ratio” means, as of any Publication Date, (i) the sum of (x) the Core Tier 1 Capital as of the relevant Balance Sheet Date and (y) the High-Trigger
Amount as of such Publication Date, divided by (ii) the BIS Risk Weighted Assets as of the relevant Balance Sheet Date, expressed as a percentage. 
 “Trigger Event” has the meaning assigned to such term in Condition 6 (Contingent Write-down). 
 “Trigger Event Notice Date” means an Ordinary Trigger Event Notice Date or an Extraordinary Trigger Event Notice Date, as the case may be. 

“Trigger Event Write-down Date” has the meaning assigned to such term in the definition of the term “Trigger Event Write-down
Notice”. 
 “Trigger Event Write-down Notice” means, with respect to any Publication Date, a notice (i) stating that
(x) the Relevant Trigger Capital Ratio as of such Publication Date is less than the Write-down Threshold, and (y) a Contingent Write-down will take place and (ii) specifying the date on which the Contingent Write-down will take place,
which date shall, subject to postponement pursuant to clause (b)(ii) of Condition 6 (Contingent Write-down), be no later than 10 Business Days after the date of such notice (the “Trigger Event Write-down Date”). 

  
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 “U.S.$”, “USD”, “U.S. dollars” or “cent”
means the lawful currency of the United States of America. 
 “Viability Event” has the meaning assigned to such term in
Condition 6 (Contingent Write-down). 
 “Viability Event Write-down Date” has the meaning assigned to such term in
Condition 6 (Contingent Writedown). 
 “Viability Event Write-down Notice” has the meaning assigned to such term in
Condition 6 (Contingent Write-down). 
 “Write-down Date” means, with respect to any Contingent Write-down, the
Viability Event Write-down Date or the Trigger Event Write-down Date, as applicable. 
 “Write-down Notice” means, with respect
to any Contingent Write-down, the relevant Trigger Event Writedown Notice or Viability Event Write-down Notice, as applicable. 

“Write-down Notice Date” means, with respect to any Contingent Write-down, the date of the relevant Write-down Notice. 

“Write-down Threshold” means five percent. 
  

	2.	AMOUNT AND DENOMINATION; FORM AND TRANSFER 

  

	 	(a)	Amount and Denomination 


The initial aggregate principal amount of the Notes will be USD 2,000,000,000. The Notes will be issued in minimum denominations of USD
200,000 each and integral multiples of USD 1,000 in excess thereof. 
  

	 	(b)	(b) Global Note in Bearer Form 

 The Notes and all rights in connection therewith will be documented: 
  

	 	(i)	with respect to all Notes in respect of which the Fiscal Agent has not or not yet received Certification, in the form of an initial global note (the “Initial
Global Note”), which shall be in bearer form and deposited on the Issue Date by the Fiscal Agent with the Common Depositary for Euroclear and Clearstream, Luxembourg (the “Intermediaries”) until the earliest of
(x) redemption of the Notes, (y) cancellation of the Initial Global Note following the issuance of a Write-down Notice or (z) cancellation of the Initial Global Note following a reduction of the principal amount of Notes represented
thereby to zero; and 

  

	 	(ii)	with respect to all Notes in respect of which the Fiscal Agent has received Certification, in the form of a final global note (the “Final Global Note”
and, together with the Initial Global Note, the “Global Notes”), which shall be in bearer form and deposited on the Issue Date by the Fiscal Agent with the Common Depositary for the Intermediaries until the earliest of
(x) redemption of the Notes, (y) cancellation of the Final Global Note following the issuance of a Write-down Notice, or (z) printing of Definitive Notes, 


  
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 provided, however, that all Notes shall be represented by the Initial Global Note
until the day following the expiry of 40 days after the date of issue of the Initial Global Note (the “Exchange Date”), after which date and following Certification in relation to the relevant Notes, such Notes will be represented
by the Final Global Note. 
 Once the Initial Global Note is deposited with the Common Depositary for the Intermediaries and
entered into the accounts of one or more participants of the Intermediaries, the Notes will constitute intermediated securities (Bucheffekten) (“Intermediated Securities”) in accordance with the provisions of the Swiss
Federal Intermediated Securities Act (Bucheffektengesetz). 
 Subject to applicable law, each Holder shall have a quotal
co-ownership interest (Miteigentumsanteil) in the relevant Global Note to the extent of its claim against the Issuer; provided, however, that, for so long as the relevant Global Note remains deposited with the Common Depositary for the
Intermediaries, the co-ownership interest shall be suspended and the Notes may only be transferred by the entry of the transferred Notes in a securities account of the transferee. 

The records of the Intermediaries will determine the number of Notes held through each participant in the relevant Intermediary.

 Neither the Issuer nor any holder of Notes shall at any time have the right to effect or demand the conversion of any Global
Note into, or the delivery of, uncertificated securities (Wertrechte) or definitive Notes (Wertpapiere). 
  

	 	(c)	Conditional Payment of Principal and Interest on Notes Represented by Initial Global Note 


All claims for payment in respect of Notes represented by the Initial Global Note shall be conditional upon Certification (bedingte
Zahlungsverpflichtung). Accordingly, payments of principal, interest or other amounts in respect of Notes represented by the Initial Global Note shall only be due or payable upon Certification having been obtained by the Fiscal Agent in relation
to the relevant Notes. 
  

	 	(d)	Definitive Notes in Bearer Form 

 No physical delivery of the Notes shall be made unless and until definitive Notes (Wertpapiere) in bearer form (“Definitive Notes”) are printed. In respect of Notes represented by
the Final Global Note only, Definitive Notes may be printed, in whole, but not in part, at the request of the bearer of the Final Global Note if: 
  

	 	(i)	printing of the Definitive Notes is required by Swiss or other applicable laws or regulations in connection with the enforcement of rights of Holders; or



  
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	 	(ii)	each of the Intermediaries is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention to permanently
cease business; or 

  

	 	(iii)	any of the Global Notes is no longer deposited with the Common Depositary for the Intermediaries, provided, however, that no Definitive Notes shall be printed if
the Issuer has given a Write-down Notice in accordance with Condition 6 (Contingent Write-down). 


Whenever the Final Global Note is to be exchanged for Definitive Notes, the Issuer shall procure the prompt delivery (free of charge to
the bearer) of such Definitive Notes, duly authenticated and with interest coupons (“Coupons”) attached, in an aggregate principal amount equal to the principal amount of the Final Global Note to the bearer of the Final Global Note
against the surrender of the Final Global Note at the Specified Office of the Fiscal Agent within 30 days of the bearer requesting such exchange. Definitive Notes will be issued in denominations of USD 200,000 and integral multiples of USD 1,000 in
excess thereof, up to and including USD 399,000. No Notes in definitive form will be issued with a denomination above USD 399,000. 
 If the Notes are represented by Definitive Notes, title to the Notes and the Coupons will pass by delivery, and any request for payment of any amount due in respect of any Definitive Notes or Coupons
require presentation thereof to the Issuer or a Paying Agent. 
  

	3.	STATUS AND SUBORDINATION 

  

	 	(a)	Status 

 The Notes
constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passu and without any preference among themselves. The rights and claims of the Holders against the Issuer under the Notes are subordinated as described in
Condition 3(b). 
  

	 	(b)	Subordination 

 In the
event of (i) a Bankruptcy Event or (ii) an order being made, or an effective resolution being passed, for the liquidation or winding-up of UBS AG (except, in any such case, a solvent liquidation or windingup of UBS AG solely for the
purposes of a reorganization, reconstruction or amalgamation of UBS AG or the substitution in place of UBS AG of a successor in business to UBS AG, the terms of which reorganization, reconstruction, amalgamation or substitution (x) (except in
the case of any such substitution pursuant to Condition 15 (Substitution) have previously been approved by a resolution of the Holders in accordance with Condition 14 (Meetings of Holders) and (y) do not provide that the Notes
shall become redeemable in accordance with these Terms and Conditions), the rights and claims of the Holders against the Issuer in respect of or arising under (including, without limitation, any damages awarded for breach of any obligation under)
the Notes shall, subject to any obligations that are mandatorily preferred by law, rank (A) junior to the rights and claims of all holders of Senior Obligations, (B) pari passu with the rights and claims of holders of Parity
Obligations and (C) senior to the rights and claims of holders of Junior Obligations. 

  
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	 	(c)	Claims subject to a Contingent Write-down 

 Any claim of any Holder in respect of or arising under the Notes (including, without any limitation, any claim in relation to any unsatisfied payment obligation of the Issuer subject to enforcement by any
Holder pursuant to Condition 10 (Events of Default) or in relation to the occurrence of any other Event of Default) shall be subject to, and superseded by, any Contingent Write-down pursuant to Condition 6 (Contingent Write-down),
irrespective of whether the relevant Write-down Notice has been given prior to or after the occurrence of an Event of Default or any other event. 
  

	4.	INTEREST 

  

	 	(a)	Interest 

 Subject to
Condition 6 (Contingent Write-down), 
  

	 	(i)	the Notes shall bear interest on their principal amount at the applicable Interest Rate from and including the Issue Date (A) if the Notes are early redeemed
pursuant to clause (b), (c), (d) or (e) of Condition 5 (Redemption and Purchase), to and excluding the applicable Early Redemption Date, or (B) otherwise, to and excluding the Maturity Date; provided, however, that if
(upon due presentation thereof where presentation is required) payment with respect to any Note is improperly withheld or refused on such Early Redemption Date or the Maturity Date, as the case may be, interest shall continue to accrue on the
principal amount of such Note (both before and after judgment) at the applicable Interest Rate to (but excluding) the Relevant Date; and 

  

	 	(ii)	interest on the Notes will be payable annually in arrear on 22 February of each year (each, an “Interest Payment Date”), commencing on
22 February 2013. 

 Interest on the Notes shall be computed by the Calculation Agent on the basis of a
360-day year comprised of twelve 30-day months. 
 All U.S. dollar amounts resulting from any of the calculations made pursuant
to this Condition 4 will be rounded to the nearest cent (with one-half cent being rounded upwards). 
  

	 	(b)	Determination and Publication of Rates of Interest, Interest Payment Dates and Interest Amounts 


The Calculation Agent shall cause each Interest Rate, Interest Payment Date and interest amount payable on each Interest Payment Date or
on the Early Redemption Date, as applicable, and such other information as may be determined by it to be notified to the Holders in accordance with Condition 13 (Notices) as soon as practicable after such determination, but in any event not
later than two Business Days after such determination. 

  
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 All determinations made by the Calculation Agent for the purposes of this Condition 4
shall, in the absence of manifest error, be final and binding on the Issuer and the Holders. 
  

	 	(c)	Calculation Agent 

 So
long as any Note is outstanding, the Issuer shall at all times maintain a Calculation Agent. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails to (i) duly establish the Interest Rate,
(ii) duly calculate the interest amount payable on any Interest Payment Date or on the Early Redemption Date or Maturity Date, as the case may be, or (iii) comply with any other requirement in relation to the Notes, the Issuer shall
appoint a leading bank or financial institution engaged in the inter-bank market (or, if appropriate, money, swap or over-the-counter index options market) that is experienced in the calculations or determinations to be made by the Calculation Agent
to act as such in the Calculation Agent’s place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid. Any termination or appointment of the Calculation Agent pursuant to this clause
(c) shall take effect not more than 45 and not less than 30 days’ after the Issuer has notified the Holders of such termination or appointment pursuant to Condition 13 (Notices); provided, however, that, in the case of
insolvency, such termination or appointment shall take immediate effect. 
  

	5.	REDEMPTION AND PURCHASE 

  

	 	(a)	Final Redemption 

 Unless
previously redeemed or purchased and cancelled and subject to Condition 6 (Contingent Writedown), the Notes shall be redeemed on the Maturity Date at their aggregate principal amount, together with accrued and unpaid interest thereon to (but
excluding) the Maturity Date, if any. 
  

	 	(b)	Early Redemption at the Option of the Issuer 

 Subject to clauses (f) and (g) of this Condition 5, the Issuer may elect, in its sole discretion, to redeem the Notes, in whole but not in part, on the Call Date at their aggregate principal
amount, together with accrued and unpaid interest thereon to (but excluding) the Call Date, if any. 
  

	 	(c)	Early Redemption due to a Tax Event 

  

	 	(i)	Upon the occurrence of a Tax Event at any time after the Issue Date and subject to clauses (f) and (g) of this Condition 5, the Issuer may elect, in its sole
discretion, to redeem the Notes, in whole but not in part, on the relevant Early Redemption Date at their aggregate principal amount, together with accrued and unpaid interest thereon to (but excluding) such Early Redemption Date, if any.


  

	 	(ii)	 A “Tax Event” shall be deemed to have occurred if the Issuer in making any payments on the Notes (A) has paid, or will or would
on 



  
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the next payment date be required to pay, Additional Amounts, or (B) has paid, or will or would be required to pay, any additional Tax in respect of the Notes, in the case of each of
subclauses (A) and (B) of this clause (ii), under the laws or regulations of a Tax Jurisdiction or any political subdivision thereof or any authority of or in a Tax Jurisdiction or any political subdivision thereof having the power to
impose, levy, collect, withhold or assess Taxes, including, without limitation, any treaty to which a Tax Jurisdiction is a party, or any generally published application or interpretation of such laws (including, without limitation, a decision of
any court or tribunal, any generally published application or interpretation of such laws by any relevant tax authority or any generally published pronouncement by any relevant tax authority), and the Issuer cannot avoid the foregoing by taking
measures reasonably available to it. 

  

	 	(d)	Early Redemption due to a Regulatory Event 

  

	 	(i)	Upon the occurrence of a Regulatory Event at any time after the Issue Date and subject to clause (f) of this Condition 5, the Issuer may elect, in its sole
discretion, to redeem the Notes, in whole but not in part, on the relevant Early Redemption Date at their aggregate principal amount, together with accrued and unpaid interest thereon to (but excluding) such Early Redemption Date, if any.


  

	 	(ii)	A “Regulatory Event” shall be deemed to have occurred if the FINMA has notified UBS AG in writing that the Notes do not, or will cease to, fully
qualify as (A) Tier 2 Capital and/or (B) Progressive Capital Component; provided, however, that, without prejudice to the Issuer’s right to redeem the Notes pursuant to clause (b), (c) or (e) of this Condition 5, a
Regulatory Event shall not be deemed to have occurred for reasons of partial non-recognition of the Notes as Tier 2 Capital in the five-year period ending on the date immediately preceding the Maturity Date. 


 

	 	(e)	Early Redemption upon a Change in Progressive Capital Component Requirement or an Alignment Event 


 

	 	(i)	Upon the occurrence of a Change in Progressive Capital Component Requirement or an Alignment Event and subject to clauses (f) and (g) of this Condition 5, the
Issuer may, within 60 days after the date on which such Change in Progressive Capital Component Requirement or Alignment Event, as the case may be, occurred, elect, in its sole discretion, to redeem the Notes, in whole but not in part, on the
relevant Early Redemption Date at 101 per cent. of their aggregate principal amount, together with accrued and unpaid interest thereon to (but excluding) such Early Redemption Date, if any; provided, however, that, in the case of an
Alignment Event, the Issuer may not exercise its early redemption right under this clause (e) if it has given the Holders an Amendment Notice pursuant to Condition 11 (Amendments). 


  
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	 	(ii)	A “Change in Progressive Capital Component Requirement” shall be deemed to have occurred if (A) at any time on or after the Issue Date, the
Minimum Progressive Capital Component Requirement in effect at such time is reduced as a direct consequence of a change in the National Regulations (the Minimum Progressive Capital Component Requirement as so reduced, the “Reduced Minimum
Progressive Capital Component Requirement”), (B) UBS AG has received written confirmation from the FINMA that the Minimum Progressive Capital Component Requirement has been so reduced (such confirmation, a “Reduction
Confirmation”), and (C) as a direct consequence of such reduction, the aggregate amount of capital held by the Group as of the first Balance Sheet Date immediately following receipt of the relevant Reduction Confirmation that qualifies
as Progressive Capital Component as of such Balance Sheet Date exceeds the relevant Reduced Minimum Progressive Capital Component Requirement. 

  

	 	(iii)	An “Alignment Event” shall be deemed to have occurred if, as the result of any change in the National Regulations at any time after the Issue Date, any
Relevant Swiss Issuer would be permitted to issue, or has issued, a capital instrument that (A) qualifies as Tier 2 Capital and Progressive Capital Component, and (B) has terms and conditions that (x) include a write-down feature, and
(y) contain one or more provisions that are, in the reasonable opinion of the Issuer, different in any material respect from those in these Terms and Conditions, which provisions, if they had been included in these Terms and Conditions, would
have prevented the Notes from qualifying as Tier 2 Capital and Progressive Capital Component immediately prior to such change in the National Regulations. 

  


	 	(f)	Early Redemption Notice 


If the Issuer elects to redeem the Notes pursuant to clause (b), (c), (d) or (e) of this Condition 5, the Issuer shall give the
Holders not less than 30 and not more than 60 days’ prior notice in accordance with Condition 13 (Notices) (an “Early Redemption Notice”), which notice shall be irrevocable and specify the date on which the Issuer shall
redeem the Notes pursuant to such clause of this Condition 5 (such specified date, the “Early Redemption Date”). 
  

	 	(g)	Conditions for Early Redemption 

 The Issuer may only redeem the Notes pursuant to clause (b), (c) or (e) of this Condition 5 on the relevant Early Redemption Date if (i) the FINMA has approved such redemption in writing on
or prior to such Early Redemption Date and (ii) no Viability Event has occurred prior to such Early Redemption Date. 
  

	 	(h)	Purchases 

 The Issuer or
any other member or the Group or any of its affiliates may at any time purchase Notes at any price in the open market or otherwise, provided 

  
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that (i) such purchase complies with any limits or conditions to which any member of the Group is subject under applicable banking laws and regulations at the time of such purchase,
(ii) the FINMA has approved such purchase in writing on or prior to the date of such purchase and (iii) no Viability Event has occurred prior to the date of such purchase. Any Notes so purchased may, at the option of the Issuer, be held,
reissued, resold or surrendered to the Fiscal Agent for cancellation. 
  

	 	(i)	Cancellation 

 All Notes
redeemed in accordance with this Condition 5 shall be cancelled and may not be reissued or resold. All Notes purchased and surrendered to the Fiscal Agent for cancellation pursuant to clause (h) above shall be immediately cancelled upon
surrender and may not be reissued or resold. 
  

	 	(j)	Early Redemption of Other Instruments 

 For the avoidance of doubt, it is understood that, if, upon the occurrence of a Tax Event, Regulatory Event, Change in Progressive Capital Component Requirement or Alignment Event, the Issuer elects not
to early redeem the Notes pursuant to this Condition 5, nothing in this Condition 5 shall prohibit the Issuer from redeeming any other instruments issued by any member of the Group pursuant to the terms thereof. 

 

	6.	CONTINGENT WRITE-DOWN 

  

	 	(a)	Trigger Event 

  

	 	(i)	Upon the occurrence of a Trigger Event, a Contingent Write-down shall occur on the Trigger Event Write-down Date in accordance with clause (d) of this Condition 6.


  

	 	(ii)	A “Trigger Event” shall be deemed to have occurred if the Issuer gives the Holders a Trigger Event Write-down Notice in accordance with clause
(b) of this Condition 6. 

  

	 	(b)	Trigger Event Write-down Notice 

  

	 	(i)	If, with respect to any Publication Date, 

  

	 	(A)	the Relevant Trigger Capital Ratio as of such Publication Date is less than the Write-down Threshold; and(B) UBS AG has not (x) paid, or proposed to pay, any
distribution in cash or in kind (other than in the form of Core Capital Instruments) on any Core Capital Instruments or (y) repurchased, redeemed or retired for any consideration any Core Capital Instruments, in the case of each of subclauses
(x) and (y) of this clause 

  

	 	(B)	(B), during the one-month period ended on the date immediately preceding such Publication Date, except pursuant to the conversion of a security into, or the exchange of
a security for, any Core Capital Instruments, or as a Permitted Transaction, 


  
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 the Issuer shall, subject to clauses (b)(ii) and (b)(iii) of this Condition 6, give a
Trigger Event Writedown Notice to the Holders (x) if such Publication Date is an Ordinary Publication Date, within five Business Days of such Publication Date (such fifth Business Day, the “Trigger Breach Determination Date”,
and the date of such notice, the “Ordinary Trigger Event Notice Date”), and (y) if such Publication Date is an Extraordinary Publication Date, on such Publication Date (the “Extraordinary Trigger Event Notice
Date”), in each case in accordance with Condition 13 (Notices). 
  

	 	(ii)	If the Issuer is required to give a Trigger Event Write-down Notice pursuant to clause (b)(i) of this Condition 6, and on the relevant Publication Date any High-Trigger
Contingent Capital is outstanding with respect to which either (x) no High-Trigger Write-down/Conversion Notice has been given prior to the Trigger Event Notice Date or (y) a High-Trigger Write-down/Conversion Notice has been given prior
to the Trigger Event Notice Date, but the Trigger Write-down Date is scheduled to occur prior to the relevant High-Trigger Write-down/Conversion Date, 

  

	 	(A)	in the case of clause (x) above, the Issuer shall postpone giving such Trigger Event Write-down Notice until the date on which a High-Trigger Write-down/Conversion
Notice has been given with respect to all such outstanding High-Trigger Contingent Capital and such date shall be deemed to be the Trigger Event Notice Date, and 


 

	 	(B)	in the case of clauses (x) and (y) above, if the Trigger Write-down Date is scheduled to occur prior to the High-Trigger Write-down/Conversion Date (or, in
the case of more than one High-Trigger Write-down/Conversion Date, the latest High-Trigger Write-down/Conversion Date), the Trigger Write-down Date shall be postponed to the High-Trigger Writedown/Conversion Date (or the latest High-Trigger
Write-down/Conversion Date, as applicable) and such postponement shall be specified in such Trigger Event Write-down Notice. 

  

	 	(iii)	 If (A) the Issuer is required to give a Trigger Event Write-down Notice pursuant to clause (b)(i) of this Condition 6 in relation to an Ordinary
Publication Date, and (B) prior to the earlier of the Ordinary Trigger Event Notice Date and the Trigger Breach Determination Date, the FINMA, upon the request of UBS AG, has agreed in writing that a Contingent Write-down is not required as a
result of actions taken by the Group or circumstances or events, in each case, that have had, or imminently will have, the effect of restoring the Relevant Capital Ratio as of the Balance Sheet Date relating to the relevant Ordinary Publication
Date, after giving pro forma effect to such actions, circumstances or events, to a level above the Write-down Threshold 



  
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that the FINMA and UBS AG deem, in their sole discretion, to be adequate at such time, the Issuer (x) shall not give such Trigger Event Write-down Notice pursuant to clause (b)(i) of this
Condition 6 in relation to the relevant Ordinary Publication Date, and (y) shall give notice to the Holders on or prior to the Trigger Breach Determination Date in accordance with Condition 13 (Notices), which notice shall state that no
Contingent Write-down shall occur in relation to the relevant Ordinary Publication Date. 

  

	 	(c)	Viability Event 

  

	 	(i)	Upon the occurrence of a Viability Event, (A) the Issuer shall give notice to the Holders in accordance with Condition 13 (Notices) within three days of the
date on which such Viability Event occurred, which notice shall (x) state that a Viability Event has occurred and a Contingent Write-down will take place and (y) specify the date on which the Contingent Write-down will take place, which
date shall be no later than 10 Business Days after the date of such notice (such specified date, the “Viability Event Write-down Date”, and such notice, a “Viability Event Writedown Notice”), and (B) a
Contingent Write-down shall occur on the Viability Event Write-down Date in accordance with clause (d) of this Condition 6. 

  

	 	(ii)	A “Viability Event” shall be deemed to have occurred if: 

  


	 	(A)	the FINMA has notified UBS AG in writing that it has determined a write-down of the Notes, together with the conversion or write down, as applicable, of holders’
claims in respect of any other capital instruments issued by any member of the Group that, pursuant to their terms or by operation of law, are capable of being converted into equity or written down at that time, is, because customary measures to
improve UBS AG’s capital adequacy are at the time inadequate or unfeasible, an essential requirement to prevent UBS AG from becoming insolvent, bankrupt, unable to pay a material part of its debts as they fall due or unable to carry on its
business; or 

  

	 	(B)	because customary measures to improve UBS AG’s capital adequacy being at the time inadequate or unfeasible, UBS AG has received an irrevocable commitment of direct
or indirect extraordinary support from the Public Sector (beyond customary transactions and arrangements in the ordinary course) that has, or imminently will have, the effect of improving UBS AG’s capital adequacy and without which, in the
determination of (and as notified in writing by) the FINMA, UBS AG would have become insolvent, bankrupt, unable to pay a material part of its debts as they fall due or unable to carry on its business. 


For the avoidance of doubt, it is understood that, a Viability Event may occur irrespective of whether or not a Trigger Event has
occurred or whether any of the conditions to the issuance of a Trigger Event Write-down Notice have been met. 

  
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	 	(d)	Contingent Write-down 


If the Issuer has given a Write-down Notice in accordance with this Condition 6, on the relevant Writedown Date, 

 

	 	(i)	the full principal amount of each Note shall automatically be written down to zero, the Notes shall be cancelled and all references to the principal amount of the Notes
in these Terms and Conditions shall be construed accordingly; 

  

	 	(ii)	the Holders shall be automatically deemed to irrevocably waive their right to receive, and no longer have any rights against the Issuer with respect to, repayment of
the aggregate principal amount of the Notes written down pursuant to clause (i) above (bedingter Forderungsverzicht); 

  

	 	(iii)	the Issuer shall pay (A) any accrued and unpaid interest on the Notes and (B) any Additional Amounts, in the case of each of subclauses (A) and
(B) of this clause (iii), if and only to the extent that such interest or Additional Amount, as applicable, became due and payable to the Holders prior to the relevant Write-down Notice Date; and 


 

	 	(iv)	except as described in clause (iii) above, all rights of any Holder for payment of any amounts under or in respect of the Notes (including, without limitation, any
amounts arising as a result of, or due and payable upon the occurrence of, an Event of Default) shall become null and void, irrespective of whether such amounts have become due and payable prior to the relevant Write-down Notice Date or the
Write-down Date. 

  

	 	(e)	Determination of Relevant Capital Ratio and Relevant Trigger Capital Ratio 


With respect to any Publication Date, (i) the Relevant Capital Ratio as of the relevant Balance Sheet Date, (ii) the Relevant
Trigger Capital Ratio as of such Publication Date and (iii) the components of both of the foregoing, in each case, as published on such Publication Date, shall be final for purposes of this Condition 6, and any revisions, restatements or
adjustments to any of the calculations described in subclauses (i) through (iii) of this clause (e) subsequently published shall have no effect for purposes of this Condition 6. 

 

	7.	PAYMENTS 

  

	 	(a)	 All payments required to be made under the Notes shall be made available in good time in freely disposable U.S. dollars, which will be placed at the
free disposal of the Fiscal Agent on behalf of the Holders. If the scheduled due date for any payment under the Notes does not fall on a Business Day, the Issuer undertakes to effect payment for value on the Business Day immediately following such
scheduled due date, and the Holders shall not be 



  
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entitled to any additional sum in relation to such payment. All payments required to be made under the Notes (including any Additional Amounts) shall be made to the Holders in U.S. dollars
without collection costs (in the case of Definitive Notes, if any, subject to paragraph (c) below, at the specified offices of the Paying Agents upon their surrender), without any restrictions and whatever the circumstances may be, irrespective
of nationality, domicile or residence of the relevant Holder and without certification, affidavit or the fulfilment of any other formality. 
  

	 	(b)	The receipt by the Fiscal Agent of the due and punctual payment of funds in U.S. dollars shall release the Issuer from its obligations under the Notes to the extent of
such payment. 

  

	 	(c)	Any and all payments under the Notes shall be made outside the United States of America and its possessions. 


 

	 	(d)	The Issuer reserves the right to terminate the appointment of the Fiscal Agent or any other Paying Agent and to appoint additional or other Paying Agents. So long as
any Note is outstanding, the Issuer shall at all times maintain (i) a Fiscal Agent that is a participant of the Intermediaries; and (ii) a Paying Agent in an EU member state that will not be obliged to withhold or deduct tax pursuant to
European Council Directive 2003/48/EC or any law implementing or complying with, or introduced to conform to, such Directive. Any such variation, termination or appointment shall only take effect not more than 45 and not less than 30 days’
after the Issuer has notified the Holders of such variation, termination or appointment pursuant to Condition 13 (Notices); provided, however, that, in the case of insolvency, such variation, termination or appointment shall take
immediate effect. 

  

	8.	TAXATION 

  

	 	(a)	All payments to be made by or on behalf of the Issuer pursuant to these Terms and Conditions shall be made without withholding or deduction for, or on account of, any
present or future taxes, duties, assessments or other government charges of any nature (“Taxes”) imposed, levied, collected, withheld or assessed by or on behalf of any Tax Jurisdiction or any political subdivision thereof or any
authority of or in a Tax Jurisdiction or any political subdivision thereof having the power to impose, levy, collect, withhold or assess Taxes, unless such withholding or deduction is required by law. 


 

	 	(b)	In the event that any payment to be made by or on behalf of the Issuer pursuant to these Terms and Conditions is subject to any withholding or deduction for, or on
account of, any Taxes by requirement of law, the Issuer shall pay such additional amounts as will result in the Holders receiving the amounts that they would have received pursuant to these Terms and Conditions if no such withholding or deduction
had been required (“Additional Amounts”). 

  

	 	(c)	The Issuer shall not be required to pay any Additional Amounts pursuant to clause (b) of this Condition 8 in relation to any Note 


  
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	 	(i)	if the relevant Holder is liable for such Taxes on such Note as a result of having some connection with the relevant Tax Jurisdiction other than its mere ownership or
possession of such Note or the receipt of principal or interest in respect thereof; or 

  

	 	(ii)	where such withholding or deduction is required to be made pursuant to the EU Savings Tax Directive, or any law implementing or complying with, or introduced in order
to conform to, the EU Savings Tax Directive; or 

  

	 	(iii)	if the relevant Holder would have been able to avoid such withholding or deduction by presenting such Note to, or arranging to receive payment through, another Paying
Agent in a Member State of the European Union; or 

  

	 	(iv)	more than 30 days after the Relevant Date, except to the extent that the relevant Holder would have been entitled to receive the Additional Amounts if it had presented
such Note for payment on the last day of such 30-day period; or 

  

	 	(v)	with respect to any Tax collected pursuant to the provisions of, or an agreement with any Tax Jurisdiction relating to, Sections 1471 through 1474 of the U.S. Internal
Revenue Code (commonly referred to as “FATCA”); or 

  

	 	(vi)	where such withholding or deduction is required to be made pursuant to laws enacted by Switzerland providing for the taxation of payments according to principles
similar to those set forth in (A) the EU Savings Tax Directive or (B) the draft legislation proposed by the Swiss Federal Council on 24 August 2011, including, without limitation, the requirement that a person other than the Issuer
(such as any paying agent) withhold or deduct tax. 

  

	 	(d)	Any reference in these Terms and Conditions to amounts payable by the Issuer pursuant to these Terms and Conditions includes (i) any Additional Amount payable
pursuant to this Condition 8 and (ii) any sum payable pursuant to an obligation taken in addition to or in substitution for the obligation in this Condition 8. 


 

	9.	STATUTE OF LIMITATIONS 


In accordance with Swiss law, (i) claims for interest payments under the Notes shall become time-barred after the five-year period
and (ii) claims for the repayment or redemption of Notes shall become time-barred after the ten-year period, in each case, commencing on the date on which such payments, repayment or redemption became due and payable. 

 

	10.	EVENTS OF DEFAULT 

  

	 	(a)	If any of the following events shall occur, such occurrence shall constitute an “Event of Default”: 


 

	 	(i)	the Issuer shall fail to pay the principal amount of any Note when and as the same shall become due and payable under these Terms and Conditions, whether at the due
date pursuant to clause (a) of Condition 5 (Redemption and Purchase) or at a date fixed for early redemption pursuant to clause (b), (c), (d) or (e) of Condition 5 (Redemption and Purchase), and such failure shall
continue unremedied for a period of 30 days; or 


  
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	 	(ii)	the Issuer shall fail to pay any interest on the Notes when and as the same shall become due and payable under these Terms and Conditions, whether at the due date
pursuant to Condition 4 (Interest) or at a date fixed for early redemption pursuant to clause (b), (c), (d) or (e) of Condition 5 (Redemption and Purchase), and such failure shall continue unremedied for a period of 30 days;
or 

  

	 	(iii)	the Issuer shall fail to observe or perform any covenant, condition, or agreement contained in these Terms and Conditions and such failure either (A) is incapable
of remedy or (B) shall continue unremedied for a period of 60 days after written notice thereof from any Holder to the Issuer; or 

  

	 	(iv)	a Bankruptcy Event. 

  

	 	(b)	Upon the occurrence of an Event of Default relating to any failure of the Issuer to meet any payment obligation under these Terms and Conditions and subject to
Condition 6 (Contingent Write-down), (i) such payment obligation (and such payment obligation only) shall be immediately deemed a due and payable (fällige) payment obligation of the Issuer, and (ii) if (A) the
relevant Holder has formally requested payment of such payment obligation, (B) such payment obligation has not been fulfilled within the statutory period under Swiss law commencing after the date of such formal request and (C) a writ of
payment (Zahlungsbefehl) has been issued with respect to such payment obligation pursuant to Swiss insolvency laws, the relevant Holder may institute proceedings against the Issuer in Switzerland (but not elsewhere) to enforce its rights with
respect to such payment obligation under Swiss insolvency laws. 

  

	 	(c)	If an insolvency proceeding with respect to the Issuer is instituted in Switzerland in accordance with clause (b) of this Condition 10, the Issuer shall not
(i) after having received the writ of payment (Zahlungsbefehl) relating to the relevant payment obligation, argue or plead that such payment obligation is not due and payable by the Issuer, or (ii) prior to the declaration of
bankruptcy (or similar proceeding under Swiss insolvency laws), make any payment to the relevant Holder under or in connection with the Notes. 

  

	 	(d)	In the case of any Event of Default arising under clause (a)(iii) above and subject to Condition 6 (Contingent Write-down), any Holder may seek specific
performance or damages with respect to such Event of Default pursuant to the Swiss Code if so entitled thereunder. 

  

	 	(e)	 In the case of any Event of Default arising under clause (a)(iv) above and subject to Condition 6 (Contingent Write-down), any Holder may, by
written 



  
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notice to the Fiscal Agent at its specified office, declare the principal amount of any of its Notes, together with any accrued and unpaid interest thereon, immediately due and payable, without
presentment, demand, protest or other notice of any kind. 

  

	 	(f)	No remedy against the Issuer other than those described in this Condition 10 shall be available to the Holders in connection with the Issuer’s obligations under
these Terms and Conditions, whether for the recovery of amounts owing under these Terms and Conditions or in respect of any breach by the Issuer of any of its other obligations under these Terms and Conditions or otherwise. In particular, no Holder
may declare (i) the principal amount of any Notes due and payable prior to the Maturity Date, or (ii) any interest on any Notes due and payable prior to the relevant Interest Payment Date, except, in the case of each of subclauses
(i) and (ii) of this clause (f), pursuant to clause (e) of this Condition 10. 

  

	11.	AMENDMENTS 

  

	 	(a)	If an Alignment Event has occurred and is continuing, the Issuer may, without the consent of the Holders, amend these Terms and Conditions in order to align them (to
the extent possible) with the terms of any outstanding capital instruments that (x) have been issued by any member of the Group, (y) qualify as Tier 2 Capital and Progressive Capital Component and (z) have terms and conditions that
(A) include a write-down feature, and (B) contain one or more provisions that are, in the reasonable opinion of the Issuer, different in any material respect from those in these Terms and Conditions, which provisions, if they had been
included in these Terms and Conditions, would have prevented the Notes from qualifying as Progressive Capital Component immediately prior to the change in the National Regulations related to such Alignment Event, provided that


  

	 	(i)	such amendment, in the reasonable opinion of the Issuer, does not materially adversely affect the rights and claims of the Holders under the Notes;


  

	 	(ii)	the Issuer has given the Holders not less than 30 days’ notice of such amendment in accordance with Condition 13 (Notices), which notice (the
“Amendment Notice”) shall (A) be irrevocable and (B) state the date on which such amendment shall be effective (the “Amendment Effective Date”); 


 

	 	(iii)	the FINMA has approved such amendment in writing; 

  

	 	(iv)	no Viability Event has occurred prior to the applicable Amendment Effective Date; and 


 

	 	(v)	prior to the date of the applicable Amendment Notice, the Issuer has not delivered an Early Redemption Notice, pursuant to which it has notified the Holders that it is
exercising its right of early redemption under clause (e) of Condition 5 (Redemption and Purchase) as the result of the occurrence of the Alignment Event. 


  
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	 	(b)	In addition to its rights under clause (a) of this Condition 11, the Issuer may, without the consent of the Holders, make any amendment to these Terms and
Conditions that it considers to be (i) necessary or desirable to give effect to the provisions of clause (a) of Condition 15 (Substitution) (including, without limitation, (x) if the Substitute Issuer is organised and/or
resident for tax purposes in a jurisdiction other than Switzerland and/or Jersey, any amendments to any references to the jurisdictions of “Switzerland” and/or “Jersey” contained herein, including, without limitation, amendments
to the definition of the term “Bankruptcy Event”, the definition of the term “Business Day”, the governing law of the subordination provisions set forth in Condition 3 (Status and Subordination) and the provisions of
Condition 10 (Events of Default)), and (y) any amendments to reflect UBS AG’s guarantee described in clause (a)(vi) of Condition 15 (Substitution)), or (ii) formal, minor or technical in nature or (iii) necessary to
correct a manifest error. 

  

	 	(c)	The parties to the Agency Agreement may agree without the consent of the Holders to any amendment thereto that is (i) in the reasonable opinion of such parties,
not materially prejudicial to the interests of the Holders, (ii) formal, minor or technical in nature, or (iii) necessary to correct a manifest error. 


 

	 	(d)	The Issuer shall notify the Holders of any amendments made pursuant to clause (b) or (c) of this Condition 11 in accordance with Condition 13
(Notices), which notice shall state the date on which such amendment shall be effective. 

  

	 	(e)	Any amendment made pursuant to this Condition 11 shall be binding on the Holders in accordance with its terms. 


 

	12.	REPLACEMENT 

 If
Definitive Notes have been printed, any Definitive Note that is lost, stolen, mutilated, defaced or destroyed may be replaced, subject to applicable laws and regulations, at the specified office of the Fiscal Agent upon payment by the claimant of
the fees, costs and expenses incurred by the Fiscal Agent and the Issuer in connection therewith and on such terms as to evidence, security and indemnity (which may provide, among other things, that if the Definitive Note allegedly or actually lost,
stolen or destroyed is subsequently presented for payment there shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such Definitive Note subsequently presented) as the Issuer may require. Mutilated or defaced
Definitive Notes must be surrendered before replacements will be issued. 
  

	13.	NOTICES 

  

	 	(a)	So long as the Notes are represented by the Global Notes, which are deposited with the Common Depositary for the Intermediaries, notices to Holders shall be given by
communication through the Fiscal Agent to the Intermediaries for forwarding to the Holders, and any notice so given shall be deemed to be validly given on the date of delivery to the relevant Intermediary. 


 

	 	(b)	 If Definitive Notes have been printed, notices to Holders (including any holders of Coupons) shall be valid if published in a leading English language




  
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daily newspaper published in London (which is expected to be the Financial Times) or, if such publication is not practicable, in a leading English language daily newspaper having general
circulation in Europe. Any such notice shall be deemed to have been given on the date of first publication. 

  

	14.	MEETINGS OF HOLDERS 

 The
provisions on bondholder meetings set forth in article 1157 et seq. of the Swiss Code shall apply in relation to meetings of Holders, irrespective of any substitution of the Issuer or Issuing Branch Substitution pursuant to Condition 15
(Substitution). 
  

	15.	SUBSTITUTION 

  

	 	(a)	The Issuer may, without the consent of the Holders, substitute any entity (whether or not such entity is organised under the laws of Switzerland) (such substitute
entity, the “Substitute Issuer”) for itself as principal debtor under the Notes upon giving no more than 30 and no less than 10 days’ notice to the Holders in accordance with Condition 13 (Notices), provided that:


  

	 	(i)	at least 95 per cent. of the Substitute Issuer’s capital and voting rights are held, directly or indirectly, by UBS AG; 


 

	 	(ii)	the Issuer is not in default in respect of any amount payable under the Notes at the time of such substitution; 


 

	 	(iii)	the Issuer and the Substitute Issuer have entered into such documents (the “Substitution Documents”) as are necessary to give effect to such
substitution and pursuant to which the Substitute Issuer has undertaken in favour of each Holder to be bound by these Terms and Conditions as the principal debtor under the Notes in place of the Issuer; 


 

	 	(iv)	if the Substitute Issuer is resident for tax purposes in a jurisdiction (the “New Residence”) other than that in which the Issuer prior to such
substitution was resident for tax purposes (the “Former Residence”), the Substitution Documents contain an undertaking and/or such other provisions as may be necessary to ensure that each Holder has the benefit of an undertaking in
terms corresponding to the provisions of Condition 8 (Taxation), with the substitution of references to the Former Residence with References to the New Residence; 


 

	 	(v)	the Issuer and the Substitute Issuer have obtained all necessary governmental approvals and consents for such substitution and for the performance by the Substitute
Issuer of its obligations under the Substitution Documents; 

  

	 	(vi)	UBS AG has irrevocably and unconditionally guaranteed to the Holders, on a subordinated basis, the due and punctual payment of all amounts due and payable by the
Substitute Issuer under, or in respect of, the Notes pursuant to article 111 of the Swiss Code; and 

  

	 	(vii)	if applicable, the Substitute Issuer has appointed a process agent as its agent in Switzerland to receive service of process on its behalf in relation to any legal
proceedings arising out of or in connection with the Notes and the Agency Agreement. 


  
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	 	(b)	Upon any substitution pursuant to clause (a) of this Condition 15, the Substitute Issuer shall succeed to, and be substituted for, and may exercise every right and
power of, the Issuer under the Notes with the same effect as if the Substitute Issuer had been named as Issuer in these Terms and Conditions, and the Issuer shall be released from its obligations under the Notes. 


 

	 	(c)	Prior to any substitution pursuant to clause (a) of this Condition 15, UBS AG may, without the consent of the Holders, upon giving no more than 30 and no less than
10 days’ notice to the Holders in accordance with Condition 13 (Notices), at any time after 23 March 2012, (i) cease to make payments of principal, interest and any other amounts due under the Notes and fulfil any of its other
obligations and exercise any of its other rights and powers in respect of, or arising under, the Notes through its Jersey branch and (ii) commence making such payments, fulfilling such other obligations and exercising such powers and rights
through its head offices in Basel and Zurich (an “Issuing Branch Substitution”), provided that, as of the time of giving the relevant notice, (A) the Issuer is not in default in respect of any amount payable under the
Notes and (B) the Issuer would not be required to pay any Additional Amounts under these Terms and Conditions after giving effect to such Issuing Branch Substitution that it would not have been required to pay if such Issuing Branch
Substitution were not to occur. Upon an Issuing Branch Substitution pursuant to this clause (c), references to the “Issuer” in these Terms and Conditions, each Global Note and the Agency Agreement shall be construed accordingly, and
references to “Jersey” in these Terms and Conditions shall, unless the context otherwise requires, be construed as references to “Switzerland”. 


 

	16.	FURTHER ISSUES 

 The
Issuer may from time to time without the consent of the Holders issue further notes and, provided that such notes have the same terms and conditions as the Notes in all respects (or in all respects except for the issue date and/or first date
on which interest is paid), such further notes shall be consolidated and form a single series with the Notes. If the Issuer issues any such further notes pursuant to this Condition 16, references in these Terms and Conditions to
“Notes” shall include such further notes, unless the context otherwise requires. 
  

	17.	CURRENCY INDEMNITY 

 Any
amount received or recovered by any Holder in a currency other than U.S. dollars (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the insolvency, windingup or dissolution of UBS AG or
otherwise) under the Notes shall only constitute a discharge of the Issuer to the extent of the amount in U.S. dollars that such Holder is able to purchase with the amount so received or recovered in such other currency on the date of such receipt
or recovery (or, if it is not practicable to purchase U.S. dollars with such amount on such date, on the first date on which it is practicable to do so). If the amount of U.S. dollars such Holder is able to purchase is less than the amount owed by
the Issuer to such Holder 

  
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under the Notes, the Issuer shall indemnify such Holder against any loss sustained by it as a result. In addition, the Issuer shall indemnify such Holder for the costs of making such purchase.
For purposes of this Condition 17, it is sufficient for the relevant Holder to demonstrate that it would have suffered a loss had an actual purchase been made. The indemnities under this Condition 17 shall (i) constitute a separate and
independent obligation from the Issuer’s other obligations hereunder, (ii) give rise to a separate and independent cause of action, (iii) apply irrespective of any indulgence granted by any Holder and (iv) continue in full force
and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any amount due under the Notes or any other judgment or order. 
  

	18.	NO SET-OFF BY HOLDERS 


Subject to applicable law, no Holder may exercise, claim or plead any right of set-off, compensation or retention with respect to any
amount owed to it by the Issuer in respect of, or arising in connection with, the Notes. 
  

	19.	NO CONVERSION 


Notwithstanding the powers of the FINMA under articles 25 et seq. FBA of Switzerland, the Notes will under no circumstances be converted
into equity of UBS AG, and will only absorb losses pursuant to these Terms and Conditions. 
  

	20.	GOVERNING LAW AND JURISDICTION 

  

	 	(a)	The Notes shall be governed by and construed in accordance with the laws of Switzerland. 


 

	 	(b)	The courts of the city of Zurich (venue being Zurich 1) shall have exclusive jurisdiction to settle any disputes that may arise out of or in connection with the Notes.



  
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 SCHEDULE 5 
 SPECIFIED OFFICES OF THE PAYING AGENTS 
 The Fiscal Agent and Calculation Agent:

 The Bank of New York Mellon London Branch 
 One Canada Square 
 London E14 5AL 

 

			
	Fax:	  	+44 (0)20 7964 2536
		
	Attention:	  	Corporate Trust Administration


  
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 SIGNATURES 
 The Issuer 
  

							
	UBS AG, acting through its Jersey Branch	 	
				
	By:	 	/s/ Stuart Littlewood	 	/s/ Daniel Milton	 	
		 	Executive Director	 	Associate Director	 	

 The Fiscal Agent 
  

			
	THE BANK OF NEW YORK MELLON
		
	By:	 	/s/ Michael Lee
		 	Vice President


  
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