Tier 2

Prior to any insolvency, dissolution or liquidation of the Issuer, under bank resolution laws applicable to the Issuer from time to time, the competent resolution authority may write down (including to zero) the obligations of the Issuer under the Notes, convert them into equity (e.g. ordinary shares of the Issuer) or apply any other resolution measure, including (but not limited to) any transfer of the obligations to another entity, an amendment of the Terms and Conditions or a cancellation of the Notes.

Risks in connection with the implementation of a resolution regime for banks

The BRRD was also implemented in Germany through the Recovery and Resolution Act (Sanierungs- und Abwicklungsgesetz – "SAG"). In November 2020 the so-called risk reduction act (Risikoreduzierungsgesetz) has been adopted to implement BRRD II in Germany, which led to, inter alia, amendments to the SAG. For credit institutions established in the eurozone, such as the Issuer, that are supervised within the framework of the Single Supervisory Mechanism ("SSM"), Regulation (EU) No 806/2014, as amended from time to time, in particular by Regulation (EU) 2019/877 ("SRM Regulation") provides for a coherent application of the resolution provisions across the SSM.

Under the SRM Regulation, the Issuer is subject to the resolution decisions that might be taken by the European Single Resolution Board and in close cooperation with the European Central Bank, the European Commission and the national resolution authorities. The SRM's decisions are executed by the competent German authority, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – "BaFin"). The SRM Regulation includes inter alia potential loss participation of creditors of credit institutions. Pursuant to the SRM Regulation, the competent resolution authorities shall be given the authority to write down the claims of unsecured creditors of a failing institution and to convert debt claims into equity (so-called "bail-in tool"), transfer assets, rights and liabilities to a bridge bank or an asset management vehicle, sell the credit institution or its business to a third party or change the maturity or the interest rate of the instruments if certain requirements are met ("Resolution Tools").

Under the bail-in tool the competent resolution authority shall have the power, upon certain trigger events, to cancel existing shares, to write down liabilities eligible for bail-in (i.e. own funds instruments such as the Subordinated Notes and other subordinated debt and even non-subordinated debt (such as the Preferred Senior Notes and the Non-Preferred Senior Notes), subject to exceptions in respect of certain liabilities) of a failing credit institution or to convert such eligible liabilities of a failing credit institution into shares or other instruments of ownership at certain rates of conversion in order to strengthen the credit institution's financial position and allow it to continue as a going concern subject to appropriate restructuring.-

Pursuant to the SRM Regulation, any write-down (or conversion into equity) shall not result in an early redemption. Consequently, any amounts so written down would be irrevocably lost and the holders of such instruments would cease to have any claims thereunder, regardless whether or not the bank's financial position is restored.