Vorarlberger Landes- und Hypothekenbank Aktiengesellschaft

Substitution of the Issuer
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The Terms and Conditions of the Notes provide that the Issuer may, at any time, without the consent of
the Noteholders, substitute for itself any wholly-owned subsidiary in which the Issuer in aggregate holds a
majority of the capital as principal debtor in respect of all obligations arising from or in connection with the
Notes in the circumstances and subject to the conditions set out in Condition 10 of the Terms and
Conditions of the Notes.
Financial Crisis
Starting in the middle of 2007 due to the sub-prime mortgage crisis in the United States and in Great
Britain the credit risk of market participants has been reassessed leading to a world-wide negative effect
on the financial markets. The current financial crisis is characterised by a drastic limitation of lending
activities between banks but also to third parties. The duration and further consequences and the impact
of the crisis are not foreseeable so far. Risk can especially be seen in an increased volatility and widening
of credit-spreads in the financial markets as well as a shortage of liquidity on the financial markets. In case
of a continuous deterioration in the international financial markets a further limitation of lending activities
and a general decline in the demand for bonds is anticipated thus creating a negative impact on the
assets, the financial situation and the profitability of the Issuer.
Resolutions of Holders
Since the Terms and Conditions of the Notes provide for resolutions of Holders, either to be passed in a
meeting of Holders or by vote taken without a meeting, a Holder is subject to the risk of being outvoted. As
resolutions properly adopted are binding on all Holders, certain rights of such Holder against the Issuer
under the Terms and Conditions may be amended or reduced or even cancelled.
Holders' Representative
If the Terms and Conditions of the Notes provide for the appointment of a Holders' Representative, it is
possible that a Holder may be deprived of its individual right to pursue and enforce its rights under the
Terms and Conditions against the Issuer, such right passing to the Holders' Representative who is then
responsible to claim and enforce the rights of all Holders.