COMMERZBANK AKTIENGESELLSCHAFT

In addition, the Final Terms may provide for Potential Failure to Pay. A Potential Failure to Pay is not a
Credit Event. However, it occurs if a Failure to Pay threatens to occur because a grace period under
the payment obligation which has not expired by the end of the Observation Period has to be taken
into account in accordance with the Final Terms. If in this case a Failure to Pay eventually occurs upon
expiry of a grace period and/or a corresponding extension period under the Notes (resulting from the
corresponding Potential Failure to Pay), such Failure to Pay, in spite of having occurred only after the
end of the relevant Observation Period is deemed to be a relevant Credit Event which can be notified
to the Noteholders and thus may have effects on the Notes in accordance with the Final Terms. If the
Final Terms do not provide for Potential Failure to Pay, the risk that a Failure to Pay occurs is even
higher since grace periods (if any) under the payment obligation are not taken into account, e.g. a
Failure to Pay would occur immediately if payments of a certain threshold amount are not made as
they become due.
A Trigger Event occurs if during the relevant Observation Period (i) the Credit Default Swap Spread
linked to the Reference Entity or one of the Reference Entities is greater than a certain level, (ii) the
weighted average of the Credit Default Swap Spreads linked to each of the Reference Entities is equal
to or greater than a certain level, or (iii) the market price of the Notes falls below a certain level, each
such level being specified in the Final Terms. The Credit Default Swap Spread is the market offer price
payable for a Hypothetical Credit Default Swap with a certain maturity and nominal amount (as
specified in the Final Terms) providing for the respective credit protection.
Upon the occurrence of a Credit Event and/or Trigger Event, the interest scheduled to accrue in
relation to the current and/or subsequent interest periods may cease to accrue completely or accrue
on a reduced basis. Therefore, the yield of the Notes may be lower than the market yield of
investments having a comparable (remaining) term to maturity.
With respect to Derivative Notes (Notes which do not provide for protection of capital), a Credit
Linkage Event may lead to a redemption at maturity or an early redemption (i) at a Cash Settlement
Amount, a Spread Cash Settlement Amount or a Trigger Cash Settlement Amount (following the
occurrence of Trigger Events), as the case may be or (ii) by delivery of a certain number Deliverable
Obligation of the affected Reference Entity, as specified in the Final Terms. Therefore, if a Credit
Linkage Event occurs investors may only receive a fraction of the invested capital of a Derivative Note
or may suffer a total loss of the capital invested and loss of interest. However, there may be a limit to
the degree in which the Credit Event will affect the Derivative Notes.
In the case of more than one Reference Entity, investors may receive interest payments and/or capital,
as the case may be, only on a reduced basis with respect to each Credit Linkage Event that occurs.
However, if Credit Linkage Events in relation to all of the Reference Entities have occurred, the Notes
may cease to bear interest and/or will be redeemed early.
Risks in case of Redemption in Cash
Notes with respect to which the Final Terms provide for a cash settlement following the occurrence of
only one Credit Event with respect to a single Reference Entity or a Reference Entity portfolio or
following the occurrence of a pre specified number of Credit Events with respect to one of the
Reference Entities in the Reference Entity Portfolio ("Nth Reference Entity"), may be redeemed early
following the occurrence of the relevant Credit Event at the Cash Settlement Amount. Such amount is
determined on the basis of the Final Price (as defined below) of a reference obligation of the affected
Reference Entity after the relevant Credit Event, unless the Final Terms preset the Final Prices with
respect to each Reference Entity. Reference Obligations may be chosen by the Issuer and may be any
kind of non-subordinated, unsecured or subordinated Obligations of the Reference Entity affected by a
Credit Event with a term to maturity of up to 30 years and, e.g. certain nominal amount, if not specified
otherwise in the Final Terms ("Reference Obligations"). Alternatively, the Reference Obligations may
be stipulated and listed in the Final Terms.
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