INDICATIVE TERMS OF THE CREDIT LINKED NOTES

Transcription

1 INDICATIVE TERMS OF THE CREDIT LINKED NOTES PLEASE READ AND CONSIDER CAREFULLY THE DISCLAIMERS ON THIS COVER PAGE AND UNDER THE SECTION "IMPORTANT WARNINGS" AND "IMPORTANT INFORMATION" BELOW PRIOR TO INVESTING IN THE NOTES CREDIT LINKED NOTES Reference Entity: Lebanese Republic Maturity: 10 October 2017 Single Name/Physical Settlement/American/No Accrued Interest upon Credit Event/Not Capital Guaranteed TRADE Trade 14 September 2012 Société Générale ( SG ) is arranging the issue of credit linked notes (the Notes ) linked to the credit risk of the Reference Entity. Under the terms of the Notes, if no Credit Event occurs on or prior to the fourth Business Day before the Scheduled Maturity, the Notes will be redeemed at par and bear interests on a nominal equal to par. The Notes are issued under and subject to the terms and conditions in English language set out in the SG/SGA/SGOE Debt Issuance Programme (the Programme ) base prospectus dated 20 April 2012 as supplemented by any supplement(s) to the base prospectus (together the Base Prospectus ) and by the related Final Terms. Capitalised terms used but not defined herein shall have the meaning ascribed to them in the Credit Technical Annex of the Base Prospectus. For the purposes of interpreting these indicative terms, in case of conflict between the definitions contained in this document and in the Credit Technical Annex of the Base Prospectus, those contained in this document shall prevail. The final terms and conditions of the Notes will be set out in the Final Terms. In case of conflict between the terms contained in this document and in the Final Terms, those contained in the Final Terms shall prevail. The Base Prospectus is available on the website or simply on request. The legally binding terms and conditions of the Notes shall be contained in the Final Terms supplementing the general conditions contained in the Base Prospectus. All terms and conditions contained herein should be read in conjunction with the Important Information section below. Société Générale will issue the Notes. The Notes are not Capital Guaranteed. Given the characteristics of the Notes, such Notes should not represent more than 5% of the portfolio of securities of a Noteholder. PERMANENTLY RESTRICTED NOTES: «The Notes described herein are designated as Permanently Restricted Notes. As a result, they may not be legally or beneficially owned at any time by any U.S. Person (as defined in Regulation S) and accordingly are being offered and sold outside the United States to persons that are not U.S. Persons in reliance on Regulation S. By its purchase of a Note, each purchaser will be deemed or required,as the case may be, to have agreed that it may not resell or otherwise transfer any Note held by it except outside the United States in an offshore transaction to a person that is not a U.S. Person.» Purchase Nominal Amount TBD Purchase Price [100.00%] Settlement Amount TBD PART 1 - TERMS ISSUE Issuer Aggregate Nominal Amount Issue Price Specified Denomination(s) or Nominal Amount Société Générale TBD Issue [28 September 2012] Scheduled Maturity 10 October % of the Aggregate Nominal Amount USD 10,000 (subject to the occurrence of one or more Credit Event Determination (s) as more fully described in the Credit Technical Annex, the "Nominal Amount"). Final Redemption Amount In respect of each Note, the Issuer will redeem 100% of the Nominal Amount of each Note then outstanding on the Scheduled Maturity, provided that if one or more Credit Event Determination (s) occur(s), the Issuer will, on the Maturity, deliver the Physical 1

2 Delivery Amount to the Noteholders, subject to the provisions of the Credit Technical Annex. Listing None Type of Credit Linked Single Name Notes Notes INTEREST PROVISIONS Interest Rate [%] per annum TBD (with a minimum of 6.00 %) Day Count Fraction 30/360 Interest Commencement 28 September 2012 Interest Payment (s) 10 January, 10 April, 10 July, 10 October in each year from and including 10 October 2012 to and including the Scheduled Maturity subject to Accrual of Interest upon Credit Event provisions. No Accrued Interest upon Credit Event Accrual of Interest upon Credit Event REFERENCE ENTITIES Reference Entity(ies) The Reference Entity (or its Successor) specified in Annex A. Multiple Successors Applicable Reference Obligation As specified in Annex A for a Reference Entity. Transaction Type As specified in Annex A for a Reference Entity. CREDIT EVENTS Notice of Publicly As specified in Annex B for each Reference Entity Available Information Credit Events In respect of a Reference Entity, the Credit Event(s) specified as applicable in Annex B. A Credit Event may occur from and including the First Credit Event Occurrence to and including the Last Credit Event Occurrence. First Credit Event Occurrence SETTLEMENT Settlement Type Settlement Method Trade minus 60 Business Days American Settlement Physical Settlement subject to the Cash Settlement provisions PART 2 - DEFINITIONS All terms used in this terms sheet are defined in the Credit Technical Annex, a summary of such definitions is set out below for ease of reference. Maturity Physical Settlement (i) The Scheduled Maturity, or (ii) the Physical Settlement if a Credit Event Notice is delivered during the Notice Delivery Period, or (iii) the later of (x) the date falling four Business Days after the Repudiation/Moratorium Evaluation (if applicable) if (a) a Potential Repudiation / Moratorium occurs on or prior to the fourth Business Day preceding the Scheduled Maturity (b) the Repudiation/Moratorium Extension Condition is satisfied, (c) such Repudiation/Moratorium Evaluation falls after the Scheduled Maturity and (d) no related Credit Event Notice is delivered during the Notice Delivery Period, and (y) the date falling four Business Days after the Grace Period Extension (if applicable) if (a) a Potential Failure to Pay occurs on or prior to the fourth Business Day preceding the Scheduled Maturity, (b) such Grace Period Extension falls after the Scheduled Maturity and (c) no related Credit Event Notice is delivered during the Notice Delivery Period. In all cases, subject to other provisions contained in the Credit Technical Annex if a Notice of Pending Credit Event is delivered. The date on which the Issuer Delivers the Physical Delivery Amount to the Noteholders, or, if the Issuer does not Deliver on the same date all the portfolio of Deliverable Obligations comprised in the Physical Delivery Amount, the date on which the Issuer has completed the Delivery thereof for all the Notes to all the Noteholders. Provided that (a) the Physical Settlement shall fall on or prior to the Latest Permissible Physical Settlement and (b) may occur after the Scheduled Maturity. Latest Permissible Physical Settlement Notice of Physical Settlement Latest Notification The day that is 60 Business Days after the date on which a Notice of Physical Settlement is delivered to the Clearing System. An irrevocable notice that is effective no later than the Latest Notification (included) from or on behalf of the Issuer to the Noteholders specifying the Specified Deliverable Obligations the Issuer reasonably expects to Deliver or procure the Delivery of to the Noteholders. The Issuer is not bound to Deliver the Specified Deliverable Obligations referred to in the Notice of Physical Settlement. However, it will, to the extent possible, give the Noteholders notice of any subsequent change in the Specified Deliverable Obligations referred to in the Notice of Physical Settlement (the term Specified Deliverable Obligation is deemed to include such change). The 30th Business Day following the Exercise Cut-off (as defined in the Credit Technical Annex) provided that it will be no later than the 180th Business Day after the Credit Event Determination. Physical Delivery Amount Credit Event Determination Credit Event Resolution Request For each Note, Specified Deliverable Obligations with an outstanding principal balance, excluding accrued interest, equal to the Nominal Amount adjusted for any unwinding cost of the hedging arrangements entered into by the Issuer or, if applicable, the Partial Redemption Amount in case of the occurrence of a Restructuring. In relation to a Credit Event with respect to which a Credit Event Notice has been delivered, the earlier of the Credit Event Resolution Request and the day on which the Credit Event Notice is delivered to the Relevant Clearing System for the information of the Noteholders. The date, as publicly announced by ISDA, that the relevant Credit Derivatives Determinations Committee Resolves to be the first date on which the notice requesting to Resolve that a Credit Event has occurred with respect to the Reference Entity is effective, and on which the relevant Credit Derivatives Determinations Committee was in possession, of Publicly 2

3 Credit Event Notice Notice Delivery Period Last Credit Event Occurrence Interest Periods Notice of Pending Credit Event Obligations Deliverable Obligation(s) Specified Deliverable Obligations Successor Cash Settlement Available Information with respect to the Credit Event. A notice to be delivered by or on behalf of the Issuer to the Relevant Clearing System for the Noteholders information together with Publicly Available Information evidencing the Credit Event. The period from and including the Issue to and including the fourth Business Day following the Last Credit Event Occurrence. The latest of : (a) the fourth Business Day immediately preceding the Scheduled Maturity, (b) the Repudiation/Moratorium Evaluation (if applicable) if (i) the Credit Event that is the subject of a Credit Event Notice is a Repudiation/Moratorium, (ii) the Potential Repudiation/Moratorium with respect to such Repudiation/Moratorium has occurred on or prior to the fourth Business Day immediately preceding the Scheduled Maturity and (iii) the Repudiation/Moratorium Extension Condition is satisfied, and (c) the Grace Period Extension (if applicable) if (i) the Credit Event that is the subject of a Credit Event Notice is a Failure to Pay and (ii) the Potential Failure to Pay with respect to such Failure to Pay has occurred on or prior to the to the fourth Business Day immediately preceding the Scheduled Maturity. No Accrued Interest upon Credit Event applicable hence: Each period from and including an Interest Payment to but excluding the next Interest Payment. Provided that (i) the first Interest Period will begin on and include the Interest Commencement and (ii) upon the occurrence of a Credit Event Determination, the last Interest Period shall end on but exclude the earlier of (i) the Interest Payment immediately preceding the Credit Event Determination and (ii) the Scheduled Maturity. No interest shall accrue nor be payable from and including the Interest Payment preceding the Credit Event Determination to the Maturity. In the event that the Maturity falls after the Scheduled Maturity, no interest will be payable from and including the Scheduled Maturity until the Maturity. If a Notice of Pending Credit Event is delivered to the Noteholders, payment of interest on the Notes will be deferred as more fully described in the Credit Technical Annex. A notice delivered, on a date which is expected to be no later than 10 Business Days following the relevant Credit Event Resolution Request, by or on behalf of the Issuer that (a) informs the Noteholders of the occurrence of a Credit Event Resolution Request and (b) states that payment of amounts due and payable under the Notes shall be suspended pending the publication of a resolution by the Credit Derivatives Determinations Committee. In respect of a Reference Entity, the Reference Obligation or any obligation (either directly or as a provider of a Qualifying Guarantee or a Qualifying Affiliate Guarantee as applicable) belonging to the Obligation Category and bearing the Obligation Characteristics specified as Applicable in Annex B. In respect of a Reference Entity, the Reference Obligation or (i) any obligation (either directly or as a provider of a Qualifying Guarantee or a Qualifying Affiliate Guarantee as applicable), or (ii) any Sovereign Restructured Deliverable Obligation (as defined in the Credit Technical Annex) as applicable, both belonging to the Deliverable Obligation Category and bearing the Deliverable Obligation Characteristics specified as Applicable in Annex for Credit Linked Notes, subject to the conditions described in the Credit Technical Annex. Deliverable Obligations of the Reference Entity as specified in the Notice of Physical Settlement. The entity or entities succeeding to a Reference Entity, as more fully described in the Credit Technical Annex. If Physical Settlement is illegal or impossible, the Deliverable Obligation(s) which could not be delivered to a particular Noteholder will be valued by the Calculation Agent (on behalf of the Issuer) in accordance with the provisions of the Credit Technical Annex and the Noteholder will receive a cash payment equal to the value of such Deliverable Obligation which could not be delivered. PART 3 - MISCELLANEOUS Public Offer Not Applicable Relevant Clearing Euroclear/Clearstream System US Selling Restrictions Permanent Restriction Governing Law English Law Capital Guarantee No Rating of the Notes None Eusipa Product Code 1299 Miscellaneous Yield Enhancement ISIN Code TBD on or after the Trade Common Code TBD Business Day Following, Unadjusted Convention Business Days Paris, London and New York Business Days for the Paris, London and New York purpose of the Credit Technical Annex Minimum Primary Trading Size USD 100,000 The Notes are not offered to the public in the European Economic Area. Any resale of the Notes on the secondary market must fulfill at least one of the exemptions set out in Article 3.2 of the Directive 2003/71/EC (the Prospectus Directive) (as amended by Directive 2010/73/eu to the extent that such amendments have been implemented in a Member State), or should be qualified as a public offer. Minimum Secondary USD 100,000 Trading Size Secondary Market Calculation Agent SG Option Europe shall, under normal market conditions, ensure a secondary market daily until the 4th Business Day preceding the Scheduled Maturity, with a maximum bid-offer spread of 2% on dirty valuations, up to USD 100,000. The secondary market conditions of the Notes will primarily depend on the liquidity of the underlying Reference Entity. The bid price of the Notes may fall below 100% of the Denomination during the life of the Notes. Société Générale, Paris 3

4 IMPORTANT WARNINGS Investors must read carefully the information provided in the section "Important information" below and the section of the Base Prospectus entitled "Risk Factors". Each of such factors may affect the ability of Société Générale to fulfill its obligations under the Notes. In particular, the attention of the investors is drawn to the following: As payments under the Notes are due by Société Générale (or any successor), investors are exposed to the credit risk of Société Générale (or its successor). In addition, given that the Notes are credit linked notes, investors will also be exposed to the credit risk of the Reference Entity(ies). The redemption value of the Notes described herein may be inferior to the amount initially invested. In a worst case scenario, investors could sustain the loss of their entire investment. IMPORTANT INFORMATION The terms and conditions are indicative and may change with market fluctuations. Investors must proceed, prior to any investment, to their own analysis by seeking, as the case may be, the advice of their own advisors. Société Générale may not be held responsible for any consequences, including financial consequences, resulting from the investment in this product. Information on products benefiting from a guarantee For the products benefiting from a guarantee by Société Générale or by any other entity of the Société Générale group (hereinafter referred to as the Guarantor ), the due and punctual payment by the principal debtor of any sums owed in respect of these products is guaranteed by the Guarantor, according to the terms and subject to the conditions set forth in such a guarantee, available at the Guarantor s office on request. Consequently, the investor bears a credit risk on the Guarantor. Credit risk By acquiring the product, the investor takes a credit risk on the issuer and its guarantor (if any). For credit derivative transactions or credit linked notes, investors will also be exposed to the credit risk of the reference entity(ies) mentioned in such product. Information when products offer a full or partial capital protection at maturity For products whose payment or redemption formula includes a full or partial capital protection, such protection is only valid at the maturity date. The attention of investors is drawn to the fact that, before the maturity date, the price or value of such products may be lower than the level of this capital protection. Information when products offer a full or partial conditional capital protection at maturity If, for a given product, the full or partial capital protection at its maturity date is subject to certain market conditions being met, such as conditions relating to the value or performance of one or more underlying instrument(s), investors should be aware that such capital protection shall only apply at the maturity date of the product, if such market conditions are met in accordance with the terms and conditions of the relevant product. In a worst case scenario, investors could sustain the loss of their entire investment. Information when products do not offer full capital protection For products which do not offer full capital protection, the redemption value of such products may be less than the amount initially invested. In a worst case scenario, investors could sustain the loss of their entire investment. Risk of volatility - Leverage Market risk: the product may at any time be subject to significant volatility which may in certain cases lead to the loss of the entire amount invested. Certain products may include embedded leverage, which amplifies the variation, upwards or downwards, in the value of the underlying instrument(s). Risks relating to unfavourable market conditions The fluctuations in the marked-to-market value of certain products may require the investor to make provisions or resell the products in whole or in part before maturity, in order to enable the investor to comply with its contractual or regulatory obligations. As a consequence, the investor may have to liquidate these products under unfavourable market conditions. This risk will be even higher if these products include leverage. Liquidity risk For certain products, there is no liquid market on which such products can be easily traded, and this may have a material adverse effect on the price at which such products might be sold. Certain exceptional market circumstances may also have a negative effect on the liquidity of the product, and even render the product entirely illiquid. Information in the event of a buy back by Société Générale or of an early termination of the product Although there is no general undertaking from Société Générale to buy back, terminate early or propose prices for products during the life of such products, Société Générale may expressly commit to do so on a case by case basis. The performance of this commitment shall depend on (i) general market conditions and (ii) the liquidity conditions of the underlying instrument(s) and, as the case may be, of any other hedging transactions. The price of such products (in particular, the bid/offer spread that Société Générale may propose from time to time for the repurchase or early termination of such products) will include, inter alia, the hedging and/or unwinding costs generated by such a buy back for Société Générale. Société Générale and/or its subsidiaries cannot assume any responsibility for such consequences and for their impact on the transactions relating to, or investment into, the relevant products. Adjustment or substitution Early redemption of the product Société Générale reserves the right to make adjustments or substitutions, or even redeem the product early, in particular upon the occurrence of events affecting the underlying instrument(s). The early redemption of the product may result in the total or partial loss of the amount invested. Information on data and/or figures drawn from external sources The accuracy, completeness or relevance of the information which has been drawn from external sources is not guaranteed although it is drawn from sources reasonably believed to be reliable. Société Générale shall not assume any liability in this respect. Information on simulated past performance and/or on future performance and/or on past performance When simulated past performance or past performance is displayed, the figures relating thereto refer or relate to past periods and are not a reliable 4

5 indicator of future results. This also applies to historical market data. When future performance is displayed, the figures relating to future performance are a forecast and are not a reliable indicator of future results. Furthermore, where past performance or simulated past performance relies on figures denominated in a currency other than that of the country of residence of an investor, the return for such investor may increase or decrease as a result of currency fluctuations. Finally, when past or future performance or simulated past performance is displayed, the potential return may also be reduced by the effect of commissions, fees or other charges borne by the investor. General selling restrictions It is each investor s responsibility to ascertain that it is authorised to subscribe, or invest into, this product. The underlying instrument(s) of certain products may not be authorised to be marketed in the country(ies) where such products are offered. The attention of investors is drawn to the fact that the offering of these products in this (these) country(ies) in no way constitutes an offer to subscribe to, or purchase, the underlying instrument(s) in such country(ies). Public offering / private placement The product may not be offered to the public in countries that are not expressly referred to, in this document, as countries in which the public offer of the product is authorised. Any investor in the product is therefore invited to refer to this document in order to determine whether the product may be offered to the public in the country where the investor is located. If France is not expressly referred to, in this document, as a country in which a public offer of the product is authorised, the product shall not be allowed to be offered to the public (or through démarchage) in France. As a consequence, no prospectus will be approved by the Autorité des Marchés Financiers for this product. The persons or entities listed in article L II 2 of the French financial and monetary code will only be able to invest in this product for their own account in France in compliance with the provisions of articles D , D , D , D and D of the French financial and monetary code; the direct or indirect offer or sale to the public in France of these securities will be possible only if the provisions of articles L , L , L and L to L of the French financial and monetary code are complied with. If France is expressly referred to in this document as a country in which a public offer of the product is authorised, the product shall be allowed to be offered to the public in France. A prospectus for this product will either be approved by the Autorité des Marchés Financiers or approved by another EEA competent authority and passported into France in accordance with applicable regulations. For any country within the European Economic Area not expressly referred to, in this document, as a country in which a public offer of the product is authorised, no prospectus has been approved in that country by the local regulator and the product may not be distributed in that country by way of an offer of securities to the public, as defined in Article 2.1 (d) of Directive 2003/71, as amended from time to time (the Prospectus Directive ), save in those circumstances (commonly called private placement ) set out in Article 3.2 of the Prospectus Directive. For any country outside the European Economic Area not expressly referred to, in this document, as a country in which a public offer of the product is authorised, no prospectus has been approved in that country by the local regulator and the product cannot be distributed in that country by way of an offer of securities to the public. Information on commissions, remunerations paid to, or received from third parties If, under applicable laws and regulations, any person (the Interested Party ) is required to disclose to prospective investors in the product any commission or remuneration that Société Générale pays to, or receives from, such Interested Party in respect of the product, the Interested Party shall be solely responsible for compliance with such laws and regulations. Information on products with underlying(s) in foreign currency(ies) or multi-currency products without protection against currency exchange risk When the underlying asset(s) is/are quoted and/or expressed in a foreign currency and/or, in the case of an index or an asset basket, it contains components expressed and/or quoted in one or several foreign currency(ies), the product will be sensitive to the value of such currency(ies) against the euro or any other currency in which the product is expressed, unless the product includes a currency exchange guarantee. This document is issued in the U.K. by the London Branch of Société Générale. Société Générale is a French credit institution (bank) authorised by the Autorité de Contrôle Prudentiel (the French Prudential Control Authority). Société Générale is subject to limited regulation by the Financial Services Authority in the U.K. Details of the extent of our regulation by the Financial Services Authority are available from us on request. U.S. permanent selling restrictions THE NOTES DESCRIBED HEREIN ARE DESIGNATED AS PERMANENTLY RESTRICTED NOTES. AS A RESULT, THEY MAY NOT BE LEGALLY OR BENEFICIALLY OWNED AT ANY TIME BY ANY U.S. PERSON (AS DEFINED IN REGULATION S) AND ACCORDINGLY ARE BEING OFFERED AND SOLD OUTSIDE THE UNITED STATES TO PERSONS THAT ARE NOT U.S. PERSONS IN RELIANCE OF REGULATION S. BY ITS PURCHASE OF A NOTE, EACH PURCHASER WILL BE DEEMED OR REQUIRED, AS THE CASE MAY BE, TO HAVE AGREED THAT IT MAY NOT RESELL OR OTHERWISE TRANSFER ANY NOTE HELD BY IT, ECEPT OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION TO A PERSON THAT IS NOT A U.S. PERSON. Confidentiality This document is confidential and may be neither communicated to any third party (with the exception of external advisors on the condition that they themselves respect this confidentiality undertaking) nor copied in whole or in part, without the prior written consent of Société Générale. Credit exposures to Reference Entity (ies) Limited liquidity of obligations The Notes will reference the credit(s) of the Reference Entity(ies). The redemption amount of the Notes will depend on whether (a) Credit Event(s) has(ve) occurred in respect of such Reference Entitiy(ies). If between the First Credit Event Occurrence and the Last Credit Event Occurrence, (a) Credit Event(s) occur(s) with respect to one or more of the Reference Entity(ies), the Notes will be adversely affected by an actual loss of principal. Consequently, the Notes create significantly leveraged exposure to the credit of such Reference Entity(ies). Noteholders may lose, in part or in whole, amounts invested in the Notes as the result of Credit Event(s) occurring with respect to the Reference Entity(ies). Some of the Obligations, Deliverable Obligations or Selected Obligations may have no, or only a limited, trading market. The liquidity of these will vary generally with, among other things, general economic conditions, domestic and international political events, developments or trends in one or more particular industries. The financial markets have experienced periods of volatility and reduced liquidity which may reoccur and reduce the market value of the Obligations, Deliverable Obligations or Selected Obligations. Some of the Obligations, Deliverable Obligations or Selected Obligations may also be subject to restrictions on transfer and maybe considered illiquid. Any such event may have a negative impact on the market value and/or liquidity of Notes. Credit Rating Noteholders should be aware that credit ratings do not constitute a guarantee of the quality of the Notes or the 5

6 Reference Entity(ies). The rating assigned to the Notes by the rating agencies, if any, is based on the Reference Entity(ies) s current financial condition (or, as the case may be, the Reference Entity(ies) s long term unsubordinated debt rating) and reflects only the rating agencies opinions. In respect of the Reference Entity(ies), rating agencies do not evaluate the risks of fluctuation in market value but attempt to assess the likelihood of principal and/or interest payments being made. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning agency. Nevertheless, the rating agencies may fail to make timely changes in credit ratings in response to subsequent events so that a Reference Entity(ies)'s current financial condition may be better or worse than a rating indicates. Accordingly a credit rating may not fully reflect the true risks under the Notes. Annex A Reference Entity Transaction Type Reference Obligation Reference Price Status Lebanese Republic Standard Emerging S % Senior European & Middle Eastern Sovereign Annex B In the tables hereunder, shall mean applicable Credit Events Bankruptcy Failure to Pay Grace Period Extension Notice of Publicly Available Information Payment Requirement (USD 1,000,000) Obligation Default Obligation Acceleration Repudiation/Moratorium Restructuring Restructuring Maturity Limitation and Fully Transferable Obligation Modified Restructuring Maturity Limitation and Conditionally Transferable Obligation Multiple Holder Obligation Default Requirement (USD 10,000,000) All Guarantees Obligation Category Payment Borrowed Money Reference Obligations Only Bond Bond or Loan Obligation Characteristics Not Subordinated Standard Specified Currency Standard Specified Currencies and Domectic Currency Not Sovereign Lender Not Domestic Currency Not Domestic Law Listed Not Domestic Issuance Deliverable Obligation Category Payment Borrowed Money Reference Obligations Only Bond Loan Bond or Loan Deliverable Obligation Characteristics Not Subordinated Standard Specified Currency Standard Specified Currencies and Domestic Currency Not Sovereign Lender Not Domestic Currency Not Domestic Law Listed Not Contingent Assignable Loan Consent Required Loan Transferable Not Bearer Maximum Maturity : 30 years Not Domestic Issuance 6

7 Purchase Application Investor Information Investor Name: Investor ) Address: (Street) (City) (Country) Telephone Number: Facsimile Number: Jurisdiction of Organization/Country of Residence: (If signing on behalf of a corporation or other legal entity) Authorized Signatory: Application to Purchase 5-Year Credit Linked Note to Republic of Lebanon The Investor acknowledges having received the Term Sheet related to 5-Year Credit Linked Note to Republic of Lebanon the Notes dated September 14, 2012 and hereby represents that he/she/it has carefully reviewed and fully understands and signed on the contents thereof. The Investor further acknowledges that neither the Issuer nor BLOMINVEST BANK S.A.L or any other person, is acting as an advisor to the Investor in connection with its application to purchase the Notes or has made any recommendation, representation or warranty, expressed or implied, regarding the Notes or the advisability of an investment therein. Subject to all other terms and conditions set forth herein, the Investor hereby offers to purchase the number of Notes indicated below with a denomination, at the issue price and for a total amount specified below (fill as appropriate): Notes. Notes [Insert number of notes] [Insert number of notes in letters] Denomination: USD 10,000.- (Ten Thousand United States Dollars) Minimum Investment: USD 100, (One Hundred Thousand United States Dollars) Total Amount: USD ( United States Dollars) Issue Price: 100% The Investor irrevocably authorizes BLOMINVEST BANK S.A.L The Bank to debit Account N Beneficiary: with the above mentioned Total Amount subscribed. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR 1. The Investor is a sophisticated investor with sufficient knowledge and experience in business and financial matters in general and is capable of independently investigating and evaluating the risks involved in purchasing and owning investments such as the Notes. 2. The Investor is purchasing Notes as contemplated by this Purchase Application solely on the basis of its own independent appraisal of the information set forth in the Term Sheet and has carefully reviewed and considered, and/or will carefully review and consider, all such other information and matters as the Investor deems appropriate in determining whether to purchase Notes, without relying upon any representation or warranty, expressed or implied, made to it by the Issuer, BLOMINVEST BANK S.A.L or any other person with respect thereto, except as set forth in the Term Sheet; and the Investor shall continue to be solely responsible for making its own independent appraisal of all such matters in the future and will not hereafter rely on the Issuer, the Bank or any other person to confirm or inquire on its behalf as to the adequacy or completeness of any information or to assess or keep under review on its behalf any such information or the status of the Notes. 3. The Investor understands that the Notes may be redeemed at any time after the Trade and prior to the Maturity, at the option of the Investor at the Note s market price. The Investor is subject to exit fees (3% Year 1, 2% Year 2 and 1% Year 3). The Investor acknowledges that the Notes are not Capital Guaranteed and that he might face the risk of losing 100% of the capital invested. 4. The Investor understands that the Notes may be cancelled (i) at the option of the Investor, at any time after the Issue and prior to the Maturity, provided that such cancellation shall only take place at least 5 business days after the notification of the Bank of the Investor s request for cancellation. The Investor shall not be entitled to the Bank for any guarantee of the execution price.

8 5.. The Investor understands that neither the Issuer nor BLOMINVEST BANK S.A.L is making any representation as to the profitability of any financial instrument or economic measure. Past performance is not indicative of future results. 6. Proceeds from this transaction will be deposited at the Issuer Account and as such the client is exposed to the Issuer default risk. 7. The Investor understands that it is not the intention of the Issuer to list the Notes on any stock exchange. 8. There s likely to be little or no secondary market for this type of transaction. Acceptance, Termination, Etc. The Investor acknowledges and agrees that: i) This Purchase Application shall be deemed accepted only upon execution by the Investor, payment of the Total Amount (as defined below) and acceptance by the Issuer and BLOMINVEST S.A.L, such acceptance to be evidenced by delivery of a fullyexecuted copy of this Purchase Application to the Investor. ii) The Issuer may, at its sole discretion, reject this Purchase Application in whole or in part and/or terminate the offering of the Notes at any time and for any reason whatsoever. In addition, if this Purchase Application has been accepted, the Issuer retains the right to reduce, at its sole discretion, the number of Notes allocated to the Investor. iii) The coupon payment of this Credit Linked Note is subject to change and may vary upon the execution date. The Note will not be issued for a coupon of less than 6.00% p.a. The Coupon rate will be determined on September 17, Representations and Undertakings. (i) The Investor hereby makes the representations and warranties set forth in page one of the purchase application hereto to, and for the benefit of, the Issuer and BLOMINVEST BANK S.A.L. on the date hereof and on and as of the Issue. The Investor understands that the Notes will be sold to the Investor in reliance on such representations and warranties. (ii) In addition, upon exercise of the redemption right by the Investor the Issuer shall be authorized to take any and all action necessary to affect the redemption of the Notes, which are the subject of such exercise, and to cancel such Notes. General a. Modification: This Purchase Application may not be modified, discharged or terminated orally, but only by an instrument in writing, signed by the party against which enforcement is sought. b. Defined Terms Capitalized terms used herein without otherwise being defined shall have the meanings set forth in the Term Sheet. c. Counterparts This Purchase Application may be executed in multiple counterpart copies, each of which shall be considered an original and all of which shall constitute one and the same instrument, binding on all parties hereto, notwithstanding that all the parties are not signatories to the same counterpart. d. Successors and Assigns Except as otherwise provided herein, this Purchase Application shall be enforceable by and against the successors and assigns of the parties hereto, and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. This Purchase Application is not transferable or assignable by the Investor. e. Applicable Law This Purchase Application shall be governed by and construed in accordance with the laws of the Republic of Lebanon. Investor s Signature and Authentication 5,000 Stamp