PROMISE-A-2000-1 plc - KfW

Absence of Secondary Market
The Notes have not been registered under the Securities Act and will be subject to significant restrictions
on resale in the United States. There is currently no market for the Notes. There can be no assurance that
a secondary market for any of the Notes will develop, or, if a secondary market does develop, that it will
continue or provide the holders of the Notes with liquidity or that any such liquidity will continue for the
life of the Notes. Moreover, the limited scope of information available to the Issuer, the Trustee and the
Noteholders regarding the Reference Entities, the Reference Obligations and the nature of any Settlement
Amounts, including the delay in the timing of and uncertainty as to the quantum of any reduction to be
applied to the Outstanding Principal Amount of the Notes if a Settlement Amount has occurred, may
affect the liquidity of the market for and the value of the Notes, especially the more junior Classes of the
Notes. Consequently, any purchaser of the Notes must be prepared to hold such Notes until final
redemption or maturity of the Notes.
Priority of Payments
Payment of interest and principal in respect of a Class of Notes will not be made until payments of all
interest and principal due in respect of all of the more senior Classes of Notes and other payments in
priority to the Notes are made.
Taxation – No gross-up
Neither the Notes nor the KfW Securities will provide for gross-up payments in the case that payments
under the Notes, the KfW Securities, the Issuer Cash Account or the Issuer Operating Account become
subject to withholding or deduction of taxes.
If any withholding or deduction on account of taxes is imposed with respect to payments by (a) KfW
under the KfW Securities or the Credit Swap Agreement or in respect of the Issuer Cash Account or (b)
the Custodian in respect of the KfW Securities or (c) the Issuer Operating Account Bank in respect of the
Issuer Operating Account, the amounts payable by the Issuer under the Notes will be reduced by the
amount of such withholding or deduction.
Further, notwithstanding that the Notes are subject to early redemption in the event of such withholding
or deduction on account of taxes on the Interest Payment Date immediately following the occurrence of
such event, such early redemption may not occur until the Final Values of all Reference Obligations that
are Impaired Reference Obligations as at such Interest Payment Date have been verified in accordance
with the Trust Agreement. Accordingly, the Noteholders will be exposed to the risk of the reduction in
the amounts payable by the Issuer under the Notes as a result of any withholding or deduction on account
of taxes and will not have the right to require early redemption of the Notes in such circumstances.
Taxation - Proposed European Directive on the Taxation of Savings
In November 2000 the European Council confirmed proposals to proceed with a new EU Directive on the
taxation of savings income, which is designed to secure that at least a minimum effective rate of tax is
paid on all interest and similar savings income earned by residents of EU member states. The Directive is
intended to come into effect in 2003. The key features of the proposed Directive are:
• where a "paying agent" established in any EU member state makes payments of interest, discount or
premium to an individual resident in another member state, the tax authorities of the paying agent's
member state will be required to supply details of the payment to the tax authorities of the other
member state. For these purposes, the term "paying agent" is widely defined to include both the
principal obligor under a debt obligation; a paying agent in the normal sense of that term; and an
25