DIGITAL-PROTEIN Protected Participation Notes

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1 Prospectus of 19 July 2007 DIGITAL-PROTEIN Protected Participation Notes on Industrial Metals Basket Aluminium, Copper and Zinc with 100 % Capital protection Issuer Keep-Well Agreement Lead Manager Notional Amount Denomination / Trading Lot Underlying Currency Issue Price Minimum Redemption Digital Coupon Zürcher Kantonalbank Finance (Guernsey) Limited, Guernsey with Zürcher Kantonalbank, Zurich Zürcher Kantonalbank CHF with the right to increase- CHF nominal Industrial Metals Basket EUR Quanto Style 100 % of the nominal value (93.80 % bond part, IRR 3.25 % p.a.) 100 % of the nominal value 14 % (CHF 140) per denomination, according to Redemption Modus Basket Strike Level CHF Initial Fixing 25 June 2007, Fixing levels on London Metal Exchange (LME) Payment Date 2 July 2007 Final Fixing Last Trading Day 25 June 2009, Fixing levels on London Metal Exchange (LME) 24 June 2009, official closing Redemption Date value date 2 July 2009 Redemption Modus see clause 10 on page 6 Listing Form of Deed Sales Restrictions Security No / ISIN / Ticker will be applied for on SWX Swiss Exchange book-entry securities U.S.A. / U.S. persons, United Kingdom, Guernsey / CH / ZKB7C6

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3 Sales Restrictions U.S.A. / U.S. persons The DIGITAL-PROTEIN has not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act ) and may not be offered or sold within the United States, or to or for the account or benefit of U.S. persons except, in certain transactions exempt from the registration requirements of the Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act. The DIGITAL-PROTEIN may be subject to United States tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to a United States person, except in certain transactions permitted by United States tax regulations. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code of 1986, as amended, and regulations hereunder. United Kingdom Zürcher Kantonalbank Finance (Guernsey) Limited (i) has not offered or sold and will not offer or sell to persons in the United Kingdom, any DIGITAL-PROTEIN except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments whether as principal or agent, for the purpose of their business or otherwise, or in circumstances which have not resulted and will not result in an offer to the public within the meaning of the Public Offers of Securities Regulation 1995 or the Financial Services Act 1986 (the Act ); (ii) has complied and will comply with all applicable provisions of the Act with respect to anything done by it in relation to the DIGITAL-PROTEIN in, from or otherwise involving the United Kingdom; and (iii) has only issued or passed on and will only issue or pass on to any person in the United Kingdom any document in connection with the issue of the DIGITAL-PROTEIN other than any document which consists of or any part of listing particulars, supplementary listing particulars or any other document required or permitted to be published by the listing rules under Part IV of the Act if that person is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom such document may otherwise lawfully be issued or passed on. Bailiwick of Guernsey Zürcher Kantonalbank Finance (Guernsey) Limited has not offered or sold and will not offer or sell any DIGITAL-PROTEIN to persons in the Bailiwick of Guernsey

4 Description of the product DIGITAL PROTEIN is a derivative investment which combines the purchase of an at the money Digital-Call option and a bond investment. The Digital Coupon will be paid at maturity if the underlying value trades at or above its initial value. In addition the capital protection guarantees the minimum redemption amount, which is independent of the performance of the underlying value. Risk The risk is limited to the difference between the paid price and the minimum redemption. Nevertheless, during the lifetime of the product, the DIGITAL-PROTEIN may trade at a lower value then the minimum redemption. Notice In Switzerland this financial instrument is considered a structured product. It does not constitute a collective capital investment within the meaning of the Federal Act on Collective Investment Schemes (Bundesgesetz über die kollektiven Kapitalanlagen KAG). Investors in this product are therefore not eligible for investor protection under the KAG. This structured product does not require the approval of the Swiss Federal Banking Commission (SFBC), nor is it supervised by the SFBC. The issuer, Zürcher Kantonalbank (Guernsey) Ltd., is neither a bank nor an insurance company or a securities broker under the relevant legislation of Switzerland or Guernsey, and this financial instrument is not secured by any such companies. Swiss Taxes This product classifies as transparent according to Modifizierte Differenzbesteuerung. The Implied Internal Rate of Return of 3.25 % p.a. (present value of risk free investment at issue %) is subject to income tax for individual persons with tax residence in Switzerland and private assets. All other Swiss and non-swiss investors should consult their legal and tax advisors on the tax implications of buying, holding and selling this product taking into account their particular circumstances. No Swiss withholding tax, no stamp duty at issuance. However, secondary market transactions are subject to federal turnover tax for Swiss resident investors. This tax treatment can change in the future, Zürcher Kantonalbank expressly excludes all liability in respect of any tax implications. Screen information Telekurs: 85,ZKB Reuters: ZKBSTRUCT Bloomberg: ZKBY <go> Internet:

5 Information about the security Legal basis Pursuant to a decision of the Board of Directors of Zürcher Kantonalbank Finance (Guernsey) Limited of 25 June 2007, Zürcher Kantonalbank Finance (Guernsey) Limited shall issue DIGITAL-PROTEIN (Protected Participation Note) Aluminium, Copper and Zinc in the amount of CHF with the right to increase- DIGITAL-PROTEIN Terms and conditions 1. Amount of Issue / Option to Increase Zürcher Kantonalbank Finance (Guernsey) Limited (the Issuer ) shall initially issue CHF (the basic tranche ). It reserves the right to increase the amount of the basic tranche by issuing of further securities ranking equally with the basic tranche (the further tranche ) without the prior agreement of the existing holders of securities. 2. Book-entry Securities The rights associated with the Certificates are created as uncertificated book-entry securities through the registration of holdings by the Issuer with SIS SegaInterSettle AG (the SIS ). In application of Art. 2 (a) of the Federal Act on Stock Exchanges and Securities Trading of 24 March 1995, securities may be issued as bookentry securities. The rights resulting from the issue terms of the DIGITAL-PROTEIN exist vis-à-vis the Issuer and can be asserted against the Issuer with a proof of holdings from SIS. Rights to the book-entry securities cannot be asserted against SIS regardless of their booking. The Issuer agrees to have its holding of book-entry securities maintained by SIS or another central securities depository recognised by the Admission Board of the SWX Swiss Exchange for the entire term of the DIGITAL- PROTEIN. The term DIGITAL-PROTEIN used in these conditions shall stand for the claim to the total holdings of the securities to which the holders are entitled in accordance with the share of securities allotted to them. 3. Issue Price 100 % of the nominal value (93.80 % bond part, IRR 3.25 % p.a.) 4. Initial Fixing Fixing levels on London Metal Exchange (LME): Aluminium USD per metric ton Copper USD per metric ton Zinc USD per metric ton 5. Minimum Redemption 100 % of the nominal value 6. Digital Coupon 14 % (CHF 140) per denomination, according to Redemption Modus 7. Basket Strike Level CHF

6 8. Final Fixing 25 June 2009, Fixing levels on London Metal Exchange (LME) 9. Redemption Date value date 2 July 2009, cash repayment in CHF 10. Redemption Modus If the underlying value on Final Fixing date trades lower then the Basket Strike Level, the redemption amount will be 100 % of the Nominal value. If the underlying value on Final Fixing date trades equal or higher then the Basket Strike Level, the redemption amount will be the sum of 100 % of the Nominal value plus the Digital Coupon payment of 14 % of the Nominal value, independent from the amount of positive performance of the underlying value. 11. Taxes Under the laws of the Bailiwick of Guernsey currently in force all payments by the Issuer will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature ( Taxes ) imposed or levied by or on behalf of the States of Guernsey (the State ) or any political subdivision thereof, or any authority therein or thereof (each of which, a Taxing Jurisdiction ) having power to tax, unless the withholding or deduction of such Taxes is required or permitted by law. In that event, the Issuer will pay such additional amounts as may be necessary in order that the net amounts received by the individual security holder after such withholding or deduction shall equal the respective amounts of principal which would have been receivable in respect of the security in the absence of such Taxes. The obligation of the Issuer to remit such additional amounts shall not be subject to the fulfilment of any disclosure or certification requirement with respect to the nationality, residence, status or identity of the recipient of the payment or the beneficial owner of the security in question. However, no such additional amounts shall be payable with respect to any payment in respect of any security to, or to any person on behalf of, a security holder who is subject to such Taxes by reason of his being connected with a Taxing Jurisdiction otherwise than by the mere holding of the security. If, at any time and as a consequence of changes after 2 July 2007 to by laws or regulations valid in the Bailiwick of Guernsey, the United Kingdom or Switzerland or as a consequence of any, not generally known application or official interpretation of said laws or regulations before the aforementioned date, withholding taxes are due on the payment or/and said withholding taxes are payable by the Issuer either because the Issuer is obliged to pay additional amounts pursuant to the foregoing paragraph or for other reasons, the Issuer shall be empowered to call in all but not some only of the outstanding securities plus amounts accrued to the redemption date, pursuant to the conditions of redemption stated in clause 10 serving a period of notice of at least 30 days commencing at the earliest on the day on which the change to the tax law or implementation thereof was made public by the authorities responsible. Such calling-in may however not occur earlier than 90 days before the date on which the Issuer would have to retain or pay withholding taxes for the first time if payment were made in regard of the securities or coupons. A notice of such calling-in shall be made pursuant to clause 14. Investors will be liable for all current and future taxes and duties. The income tax treatment as described under Swiss Taxes is applicable to individual persons with tax residence in Switzerland and private assets. All other investors should consult their legal and tax advisors on the tax implications of buying, holding and selling DIGITAL-PROTEIN taking into account their particular circumstances. For Swiss paying agents this product is not subject to the EU taxation. This actual tax treatment can change in the future

7 12. Paying agency services a) The solely paying agent for DIGITAL-PROTEIN is Zürcher Kantonalbank, Zurich. b) The Issuer shall credit Zürcher Kantonalbank punctually and for the account of the holders of securities with the funds required for the paying agency services. c) The certificates shall expire ten years after the relevant maturity date. 13. Status The securities shall constitute direct, unsecured and non-subordinated liabilities of Zürcher Kantonalbank Finance (Guernsey) Limited and shall have equal rank with each other and with all current or future unsecured and non-subordinated liabilities of Zürcher Kantonalbank Finance (Guernsey) Limited, other than unsecured mandatory obligations preferred by law. 14. Notifications All announcements relating to the DIGITAL-PROTEIN are published in German and French on the SWX Swiss Exchange website ( 15. Listing Application will be made to list the DIGITAL-PROTEIN at the main segment of the SWX Swiss Exchange until 24 June 2009, official closing. 16. Changes to the DIGITAL-PROTEIN Terms and conditions The Issuer reserves the right to change the Terms and conditions at any time, provided that any changes are of a purely formal or technical nature or are intended to correct an obvious error and thus do not have a substantial impact on the interests of holders of securities. Such changes to the Terms and conditions shall be binding for all holders of securities. All such changes shall be announced in accordance with clause 14 of these Terms and conditions. 17. Applicable law / Place of jurisdiction The DIGITAL-PROTEIN shall be subject to Swiss law. Exclusive place of jurisdiction shall be Zurich

8 Information about the Underlying basket Spot at Initial Fixing Bloomberg Weighting Aluminium USD LOAHDY 33.33% Copper USD LOCADY 33.33% Zinc USD LOZSDY 33.33% LOAHDY LOAHDY LOCADY LOCADY LOZSDY LOZSDY - 8 -

9 Keep-Well Agreement between the Issuer and Zürcher Kantonalbank, Zurich Agreement dated May 2, 2001 between Zürcher Kantonalbank (the Parent) and Zürcher Kantonalbank Finance (Guernsey) Limited (the Subsidiary). WHEREAS the Parent owns directly all the capital stock of the Subsidiary and WHEREAS the Subsidiary plans to incur indebtedness, liabilities and obligations to third parties from time to time for Coupon and currency swap transactions as well as for other financial transactions including but not limited to structured products such as RUNNER and DIGITAL-PROTEIN and others (all such forms of indebtedness, liabilities and obligations being herein referred to as Debt ). NOW, THEREFORE the Subsidiary and the Parent agree as follows: 1. Stock ownership of the Subsidiary. As long as there is any Debt outstanding, the Parent shall directly or indirectly own and hold the legal title to and beneficial interest in all the outstanding shares of stock of the Subsidiary having the right to vote for the election of members of the Board of Directors of the Subsidiary and will not directly or indirectly pledge or in any other way encumber or otherwise dispose of any such shares of stock, unless required to dispose of any or all such shares of stock pursuant to a court decree or order of any governmental authority which, in the opinion of counsel to the Subsidiary, may not be successfully challenged. 2. Maintenance of Tangible Net Worth. The Parent agrees that it shall cause the Subsidiary to have a consolidated tangible net worth, as determined in accordance with generally accepted accounting principles in the Bailiwick of Guernsey of at least CHF or its equivalent in another currency, at all times. If the Subsidiary at any time will run short of cash and other liquid assets to meet any payment obligation on its Debt then or subsequently to mature and shall have insufficient unused commitments then the Subsidiary will promptly notify the Parent of the shortfall and the Parent will make available to the Subsidiary, before the due date of any such payment obligation, funds sufficient to enable it to fulfil any such payment obligation in full as it falls due. The Subsidiary will use the funds made available to it by the Parent solely for the payment at maturity of its Debt. 3. Waiver. The Parent hereby waives any failure or delay on the part of the Subsidiary in asserting or enforcing any of its rights or in making any claims or demands hereunder. 4. Not a guarantee. This agreement is not, and nothing herein contained and nothing done pursuant hereto by the Parent shall be deemed to constitute a guarantee, direct or indirect, by the Parent of any Debt or other obligation arising out of a swap or other transaction, indebtedness or liability, of any kind or character whatsoever, of the Subsidiary. The Subsidiary has undertaken that, whenever it incurs any Debt, it will in advance in the documentation for the borrowing directed to securities holders or other lenders properly refer to this agreement and in particular include information substantially in accordance with Schedule I hereto. 5. Modification amendment or termination. This Agreement may be modified, amended or terminated only by the written agreement of the Parent and the Subsidiary, provided, however, that no such modification, amendment or termination shall have any adverse effect upon any holder of any Debt of the Subsidiary outstanding at the time of such modification, amendment or termination. The Parent and the Subsidiary agree that they shall give written notice to each statistical rating agency that has issued a rating in respect of the Subsidiary or any of its obligations, at least 30 days prior to making any modification, amendment or termination of this Agreement. 6. Bankruptcy, liquidation or moratorium. Any rights and obligations which either of the parties has under this Agreement will remain valid and binding notwithstanding any bankruptcy or liquidation of, or moratorium involving, the Subsidiary. 7. Successors. The agreements herein set forth shall be mutually binding upon, and inure to the mutual benefit of, the Parent and the Subsidiary and their respective successors. 8. Governing law. This agreement shall be governed by the laws of Switzerland. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed and delivered by their respective officers thereunto duly authorised as of the day and year first above written

10 Schedule to the Keep-Well Agreement: General The Subsidiary is directly wholly owned Subsidiary of the Parent. Keep-Well Agreement The Subsidiary and the Parent have entered into a keep-well agreement dated as of May 2, 2001 (the Keep- Well Agreement ) and governed by the laws of Switzerland. The following is a summary of certain of the terms of the Keep-Well Agreement, a copy of which is available for inspection in connection with the prospectus of any issued structured products and or Debt. (i) (ii) The Parent will own, directly or indirectly, all the outstanding capital stock of the Subsidiary so long as the Subsidiary has any indebtedness, liabilities or obligations for Coupon or currency swap transactions or for other financial transactions entered into by the Subsidiary with parties other than the Parent (all such forms of indebtedness, liabilities and obligations being herein referred to as Debt ). The Parent will cause the Subsidiary to have a consolidated net worth as shown on the Subsidiary s most recent balance sheet of at least CHF or its equivalent in another currency. (iii) If the Subsidiary at any time will run short of cash and other liquid assets to meet any payment obligation on its Debt, then or subsequently to mature and shall have insufficient unused commitments then the Subsidiary will promptly notify the Parent of the shortfall and the Parent will make available to the Subsidiary, before the due date of such payment obligation, funds sufficient to enable the Subsidiary to fulfil such payment obligation as it falls due. The Keep-Well Agreement provides that it may be modified, amended or terminated by the written agreement of the Parent and the Subsidiary at any time, provided, however, that no such modification, amendment of termination shall have any adverse effect upon any holder of any Debt of the Subsidiary outstanding at the time of such modification, amendment or termination. The Parent and the Subsidiary have agreed that they shall give written notice to each statistical rating agency that has issued a rating in respect of the Subsidiary or any of its obligations, at least 30 days prior to making any modification, amendment of termination of the Keep-Well Agreement. The Keep-Well Agreement is not a guarantee by the Parent of the payment of any indebtedness, liability or obligation of the Subsidiary. Holders of notes or other Debt are not parties to the Keep-Well Agreement. The only parties to the Keep-Well Agreement are the Subsidiary and the Parent. Consequently, the Keep-Well Agreement does not confer to any securities holders or holders of other Debt any rights or claims against the Parent. The Keep-Well Agreement will not be enforceable against the Parent. The Keep-Well Agreement will not be enforceable against the Parent by anyone other than the Subsidiary (and/or its liquidator or administrator in the event of bankruptcy or, as the case may be, moratorium). In the event of a breach by the Parent in performing a provision of the Keep-Well Agreement and of the insolvency of the Subsidiary while any notes or other Debt were outstanding, the remedies of securities holders or holders of other Debt could include the acceleration of the Debt (if it has not already matured) and (if the Debt remained unpaid and unless such a proceeding had already been commenced by another creditor of the Subsidiary) the filing as a creditor of the Subsidiary of a petition for the winding-up of the Subsidiary, with a view to the liquidator (appointed by the competent court) pursuing the Subsidiary s rights under the Keep-Well Agreement against the Parent. The granting of a winding-up order would be in the discretion of the court and might be delayed by the grant of a moratorium order, in which event the Subsidiary s rights against the Parent would be exercisable by the court-appointed administrator and the managing directors of the Subsidiary jointly. Financial and other information concerning the Parent is provided for background purposes only in view of the importance to the Subsidiary of the Keep-Well Agreement: it should not be treated as implying that the Keep-Well Agreement can be viewed as a guarantee

11 Information about the Issuer and Zürcher Kantonalbank, Zurich For information concerning Zürcher Kantonalbank Finance (Guernsey) Limited and Zürcher Kantonalbank, Zurich, please refer to the Listing Prospectus of 10 % SOFT-RUNNER on Logitech International SA registered share, Security No , dated 17 May 2007, which can be obtained at the Head-office of Zürcher Kantonalbank, P.O. Box, 8010 Zurich, Phone , Fax or documentation@zkb.ch. Negative confirmation There has been no material adverse change in the financial conditions or operations of Zürcher Kantonalbank Finance (Guernsey) Limited and of Zürcher Kantonalbank, Zurich, since 31 December 2006, the latest annual accounting date of both corporates, which would materially affect their ability to carry out their obligations under the Certificates or the Keep-Well Agreement. Responsibility statement Zürcher Kantonalbank Finance (Guernsey) Limited and Zürcher Kantonalbank, Zurich, assume the responsibility for the content of this Prospectus and hereby certify that, to the best of their knowledge and belief, the information contained in this Prospectus is correct and that no material factor has been omitted. 19 July 2007 Zürcher Kantonalbank Finance (Guernsey) Limited Jürg Reichen Chairman Beat Gabathuler Vice Chairman Zürcher Kantonalbank Anna-Marie Sommer Member of the Management Christine Rusterholz Member of the Management

9 % SOFT-RUNNER on worst of

Prospectus of 24 September 2008 9 % SOFT-RUNNER on worst of SMI Index / DJ EURO STOXX 50 Index / S&P 500 Index / Nikkei 225 Index down and in Return Enhanced Security Issuer Keep-Well Agreement Lead Manager