IN THE HIGH COURT OF JUSTICE

NO:

OF 2011

CHANCERY DIVISION

COMPANIES COURT

LLOYDS TSB BANK PLC (company number 2065) - and BANK OF SCOTLAND PLC (company number SC 327000)

________________________________________________________ SCHEME for the transfer of part of the corporate banking business of Bank of Scotland plc to Lloyds TSB Bank plc pursuant to Part VII of the Financial Services and Markets Act 2000 _________________________________________________________

Ref: C4/EHR/2368666 Hogan Lovells International LLP, Atlantic House, Holborn Viaduct, London EC1A 2FG

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CONTENTS PART A - THE TRANSFER 1. 2. BACKGROUND INTERPRETATION 1 1 1 2 2 6 6 10 10 11 12 12 13 13 14 16 16 16 16 17 17 17 18 18 20 20 20 20 21 21 21 22

PART B - THE TRANSFER 3. TRANSFER OF THE BUSINESS

PART C - FURTHER PROVISIONS RELATING TO THE TRANSFER 4. 5. 6. 7. 8. 9. 10. 11. 12. CONTINUITY IN AGREEMENTS AND ELSEWHERE CONTINUITY OF PROCEEDINGS ADDITIONAL PROVISIONS RELATING TO THE TRANSFER PRIVACY, CONFIDENTIALITY AND DATA PROTECTION SUBJECT ACCESS REQUESTS EVIDENCE: BOOKS AND DOCUMENTS ACCESS TO RECORDS DECLARATION OF TRUST BY BANK OF SCOTLAND INDEMNITIES

PART D - PROVISIONS RELATING TO CUSTOMERS 13. 14. 15. 16. 17. 18. 19. 20. CHANGES TO CUSTOMER AGREEMENTS SET-OFF RIGHTS OF LLOYDS TSB ALL MONIES RIGHTS CONSOLIDATION RIGHTS OTHER RIGHTS OF LLOYDS TSB ENTIRE AGREEMENT CLAUSES CROSS DEFAULT SAVINGS TO RIGHTS

PART E - MISCELLANEOUS PROVISIONS 21. 22. 23. 24. 25. 26. RELEVANT DATE MODIFICATIONS AND ADDITIONS EVIDENCE OF TRANSFER LEGAL OPINIONS THIRD PARTY RIGHTS GOVERNING LAW

SCHEDULE 1 - DEFINITIONS AND INTERPRETATION

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PART A - THE TRANSFER

1. 1.1

BACKGROUND It is proposed that subject to and in accordance with Part VII of the FSMA each Customer Relationship shall by the Order transfer from Bank of Scotland to Lloyds TSB on and with effect from the relevant Customer Effective Date or on and with effect from the Final Transfer Date in accordance with the terms of this Scheme.

1.2

The Customer Relationships comprise the entire business of Bank of Scotland in respect of Customers.

1.3

As at 22 March 2011, the entire issued ordinary share capital of Bank of Scotland is legally and beneficially owned by HBOS plc and the entire issued ordinary share capital of HBOS plc is legally and beneficially owned by Lloyds TSB.

2.

INTERPRETATION The definitions and principles of interpretation set out in Schedule 1 shall apply in this Scheme.

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-2PART B - THE TRANSFER

3.

TRANSFER OF THE BUSINESS Transfer of business

3.1

On and with effect from the relevant Customer Effective Date or on and with effect from the Final Transfer Date each Customer Relationship shall be transferred by Bank of Scotland to and vest in Lloyds TSB in accordance with the terms of this Scheme.

3.2

In respect of each of the Customers and whether before or after the date of the Order Lloyds TSB shall endeavour to agree with such Customer a Customer Effective Date which shall be no earlier than the date of the Order and no later than that business day which is 2 days before the Final Transfer Date. Where a Customer and Lloyds TSB shall agree a Customer Effective Date, Lloyds TSB shall by notice in writing despatched no less than 10 business days before such date, notify the Customer of such date and this Scheme shall take effect in respect of such Customer on that Customer Effective Date.

3.3

On and with effect from each Customer Effective Date, each Customer Relationship shall be transferred from Bank of Scotland to and vest in Lloyds TSB in accordance with, but subject to, the Scheme.

3.4

Where and for whatever reason any Customer Relationship shall not have been transferred to Lloyds TSB pursuant to a Customer Effective Date by close of business on that day which is 2 days before the Final Transfer Date, such Customer Relationship shall be transferred from Bank of Scotland to Lloyds TSB and the Scheme shall take effect in respect of such Customer Relationship at close of business on the Final Transfer Date. Transferred Assets

3.5

On and with effect from each Relevant Date, the relevant Transferred Assets to which such Relevant Date applies shall, by this Scheme and without any further act or instrument, be transferred to and vest in Lloyds TSB subject to all Encumbrances (if any) affecting such assets in accordance with the terms of this Scheme. Residual Assets

3.6

On and with effect from each Subsequent Transfer Date, each Residual Asset to which such Subsequent Transfer Date applies shall, by this Scheme and without any further act or instrument, be transferred to and vest in Lloyds TSB subject to all Encumbrances (if any) affecting such Residual Asset in accordance with the terms of this Scheme. Title to assets

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-33.7 Lloyds TSB shall accept without investigation or requisition such title as Bank of Scotland shall have at each Relevant Date to the Transferred Assets to which such Relevant Date applies and at each Subsequent Transfer Date to the Residual Asset then transferred to it. Transferred Liabilities 3.8 On and with effect from each Relevant Date, the Transferred Liabilities to which such Relevant Date applies shall, by this Scheme and without any further act or instrument, be transferred to and become liabilities of Lloyds TSB subject to all Encumbrances (if any) affecting such liabilities and shall cease to be liabilities of Bank of Scotland in accordance with the terms of this Scheme. Residual Liabilities 3.9 On and with effect from each Subsequent Transfer Date, each Residual Liability to which such Subsequent Transfer Date applies shall, by this Scheme and without any further act or instrument, be transferred to and become a liability of Lloyds TSB subject to all Encumbrances (if any) affecting such Residual Liability and shall cease to be a liability of Bank of Scotland in accordance with the terms of this Scheme. Transfer of assets and liabilities with associated Encumbrance and transfer of Related Agreements 3.10 Unless otherwise agreed by Bank of Scotland and Lloyds TSB, any Customer Asset (including any asset arising under a Customer Agreement and any associated credit or other facility, loan, letter of credit, bond, note, derivative, guarantee, indemnity or other right or benefit) in respect of which an Encumbrance has been granted by or in favour of Bank of Scotland shall only transfer to Lloyds TSB if the relevant Encumbrance transfers at the same time, and any Encumbrance granted by or in favour of Bank of Scotland in respect of any Customer Asset shall only transfer to Lloyds TSB if the relevant Customer Asset transfers at the same time. 3.11 Unless otherwise agreed by Bank of Scotland and Lloyds TSB, any Customer Liability (including any liability arising under a Customer Agreement and any associated credit or other facility, loan, letter of credit, bond, note, derivative, guarantee, indemnity or other liability) in respect of which an Encumbrance has been granted by or in favour of Bank of Scotland shall only transfer to Lloyds TSB if the relevant Encumbrance transfers at the same time, and any Encumbrance granted by or in favour of Bank of Scotland in respect of any Customer Liability shall only transfer to Lloyds TSB if the relevant Customer Liability transfers at the same time.

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-43.12 Unless otherwise agreed by Bank of Scotland and Lloyds TSB any Related Agreement shall only transfer to Lloyds TSB if the Customer Agreement to which it is related transfers at the same time and any Customer Agreement shall only transfer to Lloyds TSB if each of its Related Agreements transfer at the same time. Residual Assets and Residual Liabilities 3.13 Any Customer Assets or Customer Liabilities, including any related Encumbrance granted by or in favour of Bank of Scotland, which do not transfer on a Customer Effective Date or the Final Transfer Date as a result of paragraphs 3.10 to 3.12 shall be held by Bank of Scotland until the Relevant Date as Residual Assets or Residual Liabilities. 3.14 Residual Assets and Residual Liabilities may be transferred to Lloyds TSB pursuant to this Scheme or by any other process or procedure. Consequences of the transfer 3.15 Neither the transfer of a Customer Relationship nor this Scheme nor anything done or omitted to be done in connection with the transfer of a Customer Relationship or this Scheme shall, in respect of a Customer Relationship, or any Transferred Asset, Transferred Liability, Residual Asset, Residual Liability or any asset, property or liability of or the business of any member of the Lloyds Banking Group including the business of Lloyds TSB, whether before or after the Effective Date: (a) invalidate, discharge or result in the termination of any agreement, instrument, trust deed, indenture, Encumbrance, right, interest, benefit, power, obligation or title; (b) constitute a breach of or default, event of default, potential event of default, termination event, mandatory prepayment event, enforcement event, perfection event or other similar event or condition (however described) under, or allow any person to terminate, any agreement, instrument, trust deed, indenture, Encumbrance, right, interest, benefit, power, obligation or title; (c) require any registration, re-registration or filing or any amendment to any existing registration or filing in respect of any agreement, instrument, trust deed, indenture, Encumbrance, right, interest, benefit, power, obligation or title; (d) require any person to perform any new or additional obligation or to take any new or additional step or action, including the giving of any notice, the obtaining of any consent, approval or determination, the accession to any agreement, the payment of any fee, cost, expense, interest or other amount, the granting of any new or additional Encumbrance or the transfer of any asset or property;

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-5(e) entitle or require any person to exercise any right or remedy, to reduce, suspend, delay, alter or discharge its rights or obligations, to accelerate, terminate, suspend, delay, alter or discharge the performance of any rights or obligations or otherwise to vary, amend, disclaim, repudiate or terminate any agreement, instrument or Encumbrance; or (f) affect the enforceability, priority or ranking of any Encumbrance.

On and with effect from the Relevant Date, Lloyds TSB shall succeed to each Customer Relationship as if in all respects, but subject to the terms of this Scheme, Lloyds TSB were the same person in law as Bank of Scotland with such assets, property and liabilities as Bank of Scotland had immediately prior to the Relevant Date with respect to each Customer Relationship. 3.16 Amendment of contracts and title Subject to paragraph 3.15 and Part D, nothing in this Scheme shall prejudice any right which Lloyds TSB or any other person may have on the Relevant Date or subsequently to vary, terminate or perfect any agreement, instrument, trust deed, indenture,

Encumbrance, right, interest, benefit, power, obligation or title whether under its terms as amended by this Scheme, by law or otherwise. 3.17 Capacity of Bank of Scotland and Lloyds TSB The transfers made pursuant to this Scheme shall have effect notwithstanding any provision to the contrary in any agreement, instrument, trust deed, indenture or arrangement and whether or not either Bank of Scotland or Lloyds TSB has capacity to effect the same.

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-6PART C - FURTHER PROVISIONS RELATING TO THE TRANSFER

4. 4.1

CONTINUITY IN AGREEMENTS AND ELSEWHERE On and with effect from the Relevant Date and subject to the terms of this Scheme, each agreement relating to a Customer Relationship, whether in writing or not, shall have effect as if Lloyds TSB had always been a party to it instead of Bank of Scotland and, subject to the terms of this Scheme, each agreement shall be subject to the same terms and conditions and Encumbrances as applicable immediately prior to the Relevant Date, and accordingly the rights and obligations of Bank of Scotland in respect of any such agreement shall be extinguished.

4.2

On and with effect from the Relevant Date and subject to the terms of this Scheme: (a) any credit or other facility, loan, mortgage, bond, note, derivative, guarantee, indemnity, letter of credit or other assurance available to any person from Bank of Scotland in respect of a Customer Relationship immediately prior to the Relevant Date shall become a credit or other facility, loan, mortgage, bond, note, derivative, guarantee, indemnity, letter of credit or other assurance available to such person from Lloyds TSB, and, subject to the terms of this Scheme, Lloyds TSB shall have all rights, powers, remedies and Encumbrances in its favour, and shall be subject to the same obligations and Encumbrances against it and without affecting the enforceability, priority or ranking of any such Encumbrance, in respect of such credit or other facility, loan, mortgage, bond, note, derivative, guarantee, indemnity, letter of credit or other assurance as Bank of Scotland immediately prior to the Relevant Date; (b) any deposit, senior, subordinated or other loan or loan facility, bond, note, derivative, guarantee, indemnity, letter of credit or other assurance available to Bank of Scotland from any person in respect of a Customer Relationship immediately prior to the Relevant Date shall become a deposit, senior, subordinated or other loan or loan facility, bond, note, derivative, guarantee, indemnity, letter of credit or other assurance available to Lloyds TSB from such person, and, subject to the terms of this Scheme, Lloyds TSB shall have the same rights, powers, remedies and Encumbrances in its favour and shall be subject to the same obligations and Encumbrances against it and without affecting the enforceability, priority or ranking of any such Encumbrance, in respect of such deposit, senior, subordinated or other loan or loan facility, bond, note, derivative, guarantee, indemnity, letter of credit or other assurance as Bank of Scotland immediately prior to the Relevant Date;

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-7(c) any shares, loan notes, debt instruments or other securities held by Bank of Scotland, in respect of a Customer Relationship immediately prior to the Relevant Date shall become shares, loan notes, debt instruments or other securities held by Lloyds TSB, and, subject to the terms of this Scheme, Lloyds TSB shall have the same rights, powers, remedies and Encumbrances in its favour and shall be subject to the same obligations and Encumbrances against it, in respect of such shares, loan notes, debt instruments or other securities held by Bank of Scotland immediately prior to the Relevant Date; (d) any account between Bank of Scotland and any other person in respect of a Customer Relationship shall become an account between Lloyds TSB and such person and, subject to the terms of this Scheme, shall be subject to the same terms and conditions and Encumbrances as applicable to it immediately prior to the Relevant Date, and such account shall be deemed for all purposes to be a single continuing account irrespective of any re-designation or change in reference to that account by sort code and account number or otherwise made on or after the Relevant Date, and any Encumbrance over such account immediately prior to the Relevant Date shall continue to be an Encumbrance over the account on and after the Relevant Date, including in circumstances where the account is re-designated or re-referenced, without the giving of any notice or the taking of any other steps; (e) as regards agreements in respect of a Customer Relationship under which interest, principal or other sums attributable or referable thereto are payable: (i) to the extent that interest, principal or other sums were payable by Bank of Scotland immediately prior to the Relevant Date, such interest, principal or other sums shall be payable by Lloyds TSB; (ii) to the extent that interest, principal or other sums were payable to Bank of Scotland immediately prior to the Relevant Date, such interest, principal or other sums shall be payable to Lloyds TSB; and (iii) Bank of Scotland shall account to Lloyds TSB for any interest or principal or other sums to the extent that the same are received by Bank of Scotland. 4.3 On and with effect from the Relevant Date: (a) subject to the terms of this Scheme, any Encumbrance in respect of or constituting part of a Customer Relationship held by or vested in Bank of Scotland, or a nominee or agent of or trustee for Bank of Scotland (whether for

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-8Bank of Scotland alone or for Bank of Scotland and other persons), immediately prior to the Relevant Date shall be held by or vested in Lloyds TSB or, as applicable, that nominee, agent or trustee for Lloyds TSB as if Lloyds TSB or that nominee, agent or trustee had always held such Encumbrance or had the benefit of such Encumbrance and be available to and enforceable by Lloyds TSB, or the relevant nominee, agent or trustee, both with respect to (i) any liabilities and indebtedness (including any principal, interest, fees, charges or other sums) to which the Encumbrance relates which has been incurred or which has arisen prior to the Relevant Date and (ii) any liabilities and indebtedness (including any principal, interest, fees, charges or other sums) to which the Encumbrance relates which is incurred or which arises on or after the Relevant Date; and (b) in respect of any Encumbrance referred to in paragraph 4.3(a) and any liabilities thereby secured, Lloyds TSB, or the relevant nominee, agent or trustee, shall on and from the Relevant Date be entitled to the same rights, ranking and priorities and be subject to the same obligations and incidents as those to which Bank of Scotland, or the relevant nominee, agent or trustee, was entitled and subject immediately prior to the Relevant Date and, without prejudice to the generality of the foregoing, all waivers, amendments, conditions, consents, deeds of substitution, deeds of release, ranking agreements and priority agreements relating to any such Encumbrance shall be enforceable by and binding upon Lloyds TSB, or the relevant nominee, agent or trustee, on and after the Relevant Date to the same extent to which the same would have been enforceable by and binding upon Bank of Scotland, or the relevant nominee, agent or trustee, prior to the Relevant Date. 4.4 On and with effect from the Relevant Date and subject to the terms of this Scheme, any asset relating to a Customer Relationship transferred to and vesting in Lloyds TSB and which was held by Bank of Scotland, whether alone or jointly with others, as a trustee, custodian or in a similar fiduciary capacity shall be held by Lloyds TSB alone or jointly, as the case may be, and in the capacity of a trustee, custodian or in a similar fiduciary capacity, as the case may be, with and subject to the rights, powers, discretions, duties and obligations previously applicable to Bank of Scotland. 4.5 On and with effect from the Relevant Date and subject to the terms of this Scheme, any asset relating to a Customer Relationship transferred to and vesting in Lloyds TSB and in which Bank of Scotland was interested, whether alone or jointly with others, as a beneficiary or in a similar capacity shall vest in Lloyds TSB alone or jointly, as the case may be, and in the capacity of a beneficiary or in a similar capacity, as the case may be,

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-9with and subject to the rights, powers, duties and obligations previously applicable to Bank of Scotland. 4.6 On and with effect from the Relevant Date and subject to the terms of this Scheme, all references in respect of a Customer Relationship, whether in an agreement to which Bank of Scotland is party, an agreement to which Bank of Scotland is not a party or elsewhere (including references in insurance policies for any purpose and interests noted on such policies) and whether in writing or not, to Bank of Scotland, the Bank of Scotland Group, the Bank of Scotland Board or any director, officer, employee or agent of Bank of Scotland shall be read as references to Lloyds TSB, the Lloyds Banking Group, the Lloyds TSB Board or any director, officer, employee or agent of Lloyds TSB respectively. In addition, all rights and/or duties exercisable or expressed to be exercisable or responsibilities to be performed by Bank of Scotland, the Bank of Scotland Board or any director, officer, employee or agent of Bank of Scotland, whether in an agreement between Bank of Scotland and any other person or elsewhere and whether in writing or not, shall, on and with effect from the Relevant Date and subject to the terms of this Scheme, be exercisable or required to be performed by Lloyds TSB, the Lloyds TSB Board or any director, officer, employee or agent of Lloyds TSB as appropriate. 4.7 On and with effect from the Relevant Date and subject to the terms of this Scheme, all references in respect of a Customer Relationship, whether in an agreement to which Bank of Scotland is party, an agreement to which Bank of Scotland is not a party or elsewhere (including references in insurance policies for any purpose and interests noted on such policies) and whether in writing or not, to the sort code and account numbers allocated by Bank of Scotland for a particular Customer account which is a continuing account following the Relevant Date shall be read as references to the sort code and account numbers allocated by Lloyds TSB for that particular Customer account following the Relevant Date. 4.8 Without prejudice to the generality of paragraph 4.6, on and with effect from the Relevant Date: (a) any offer or invitation to treat relating to a Customer Relationship made to or by Bank of Scotland prior to the Relevant Date in respect of the Pipeline Business shall be construed and have effect as an offer or invitation to treat made to or by Lloyds TSB; (b) if a person executes an agreement, undertaking, mortgage instrument, Encumbrance or other document as a result of any offer or invitation to treat referred to in paragraph 4.8(a) which would, when completed, on its face be an agreement with or undertaking, mortgage instrument, Encumbrance or document

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- 10 in favour of Bank of Scotland, such agreement, undertaking, mortgage instrument, Encumbrance or other document shall operate as if with or in favour of Lloyds TSB; and (c) paragraph 4.6 shall apply in respect of any references to Bank of Scotland, the Bank of Scotland Group, the Bank of Scotland Board or any director, officer, employee or agent of Bank of Scotland in or relating to such offer, invitation to treat, agreement, undertaking, mortgage instrument, Encumbrance or other document and any further document relating thereto including any insurance policy. 5. 5.1 CONTINUITY OF PROCEEDINGS On and with effect from the Relevant Date, any Proceedings issued, served, pending, threatened or otherwise in connection with a Customer Relationship in respect of which Bank of Scotland is plaintiff, claimant, applicant, defendant, respondent or other party shall be continued by, against or with Lloyds TSB and Lloyds TSB shall be entitled to all defences, claims, counterclaims, defences to counterclaims and (subject to paragraph 14) rights of set-off that were or would have been available to Bank of Scotland in respect of those Proceedings. 5.2 On and with effect from the Relevant Date, any judgment, settlement, order or award obtained by or against Bank of Scotland in respect of a Customer Relationship and not fully satisfied before the Relevant Date shall, to the extent to which it was enforceable by or against Bank of Scotland immediately prior thereto, become enforceable by or against Lloyds TSB. 6. 6.1 ADDITIONAL PROVISIONS RELATING TO THE TRANSFER On and with effect from the Relevant Date and subject to the terms of this Scheme: (a) any negotiable instrument, cheque, warrant, draft, letter of credit or order for payment of money relating to a Customer Relationship drawn on or by, or given to or by, or accepted or endorsed by, Bank of Scotland, or payable at any place of business of Bank of Scotland, whether so drawn, given, accepted, endorsed or payable before, on or after the Relevant Date, shall have the same effect as if it had been drawn on or by, or given to or by or accepted or endorsed by, Lloyds TSB or, as the case may be, as if the place of business at which it is payable were a place of business of Lloyds TSB; (b) the custody of any document, record, goods or other thing held by Bank of Scotland as bailee or chargee in respect of a Customer Relationship shall pass to

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- 11 Lloyds TSB and the rights and obligations of Bank of Scotland under any agreement or bailment relating to any such document, record, goods or thing shall on that day become rights and obligations of Lloyds TSB; and (c) any instruction, standing order, direct debit, direction, mandate, indemnity, power of attorney, authority, undertaking, declaration or consent given to or by Bank of Scotland in respect of a Customer Relationship (whether in writing or not and whether or not in respect of an account) shall have effect as if given to or, as the case may be, by Lloyds TSB. 6.2 Lloyds TSB shall have the same rights, powers and remedies (and in particular the same rights and powers as to taking or resisting legal proceedings or making or resisting applications to any authority) for ascertaining, perfecting or enforcing any asset or liability of a Customer Relationship as if it had at all times been an asset or liability of Lloyds TSB. 6.3 Lloyds TSB shall be entitled to rely on and enforce any consent, waiver, representation, warranty, statement or estoppel given or made to Bank of Scotland by a person in respect of a Customer Relationship prior to the Relevant Date as though such consent, waiver, representation, warranty, statement or estoppel had been given or made to Lloyds TSB and to the same extent that Bank of Scotland would have been able to rely on and enforce the same. 6.4 Lloyds TSB shall have the same rights under any agreement relating to a Customer Relationship as Bank of Scotland had immediately prior to the Relevant Date to publish, determine, ascertain, vary or amend any rates, charges, tariffs, scale of fees or other terms. Any such rates, charges, tariffs, scale of fees or other terms published,

determined, ascertained, varied or amended by Lloyds TSB on or from the Relevant Date shall apply in place of those published, determined, ascertained, varied or amended by Bank of Scotland. 7. 7.1 PRIVACY, CONFIDENTIALITY AND DATA PROTECTION On and with effect from each Relevant Date, Lloyds TSB shall, in respect of a Customer Relationship to which that Relevant Date applies, owe to any person the same duties of confidentiality and privacy as those which Bank of Scotland owed in respect of a Customer Relationship immediately prior to the Relevant Date. 7.2 Without prejudice to the other provisions of this Scheme, in respect of the Personal Data Consents, Lloyds TSB shall, with effect from each Relevant Date: (a) succeed to all rights, liabilities and obligations of Bank of Scotland in respect of those Consents;

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- 12 (b) become the Data Controller in respect of those Consents in place of Bank of Scotland and shall be deemed to have been the Data Controller at all material times when the Personal Data was processed pursuant to those Consents; and (c) be under the same duty by virtue of any law to which Bank of Scotland was subject to respect the confidentiality and privacy of any person in respect of the Personal Data processed pursuant to those Consents and shall be bound by any specific notice or Consent given, or request made, by the Data Subject which was binding on Bank of Scotland, and in any such Consent, any reference to Bank of Scotland shall be deemed to be a reference to Lloyds TSB. 8. 8.1 SUBJECT ACCESS REQUESTS Where Personal Data has been provided about individuals in connection with any application for or operation of a Customer Agreement and any such individual has made a Subject Access Request to Bank of Scotland before the Relevant Date and Bank of Scotland has not responded with a copy of the Personal Data held by it in accordance with the DPA before the Relevant Date, Lloyds TSB may respond to the request, in accordance with the DPA, by providing copies of Personal Data held by Bank of Scotland immediately before the Relevant Date. 8.2 Where a Data Subject has made a Subject Access Request to Lloyds TSB before the Relevant Date and Lloyds TSB has not responded with a copy of the Personal Data held by it in accordance with the DPA before the Relevant Date, Lloyds TSB may exclude Personal Data forming part of a Customer Relationship from its response thereafter. 9. 9.1 EVIDENCE: BOOKS AND DOCUMENTS All books and other documents which would, before the applicable Relevant Date, have been evidence in respect of any matter for or against Bank of Scotland at the Relevant Date shall be admissible in evidence in respect of the same matter for or against Lloyds TSB on or after the Relevant Date. In this paragraph "documents" has the same meaning as in section 13 of the Civil Evidence Act 1995. 9.2 On and from the applicable Relevant Date, the Bankers' Books Evidence Act 1879 shall apply to any books of Bank of Scotland transferred to, and vested in, Lloyds TSB by virtue of this Scheme, and to entries made in those books before the Relevant Date, as if such books were the books of Lloyds TSB. 9.3 For the purpose of section 4 of the Bankers' Books Evidence Act 1879, books so transferred to, and vested in, Lloyds TSB shall be deemed to have been the ordinary

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- 13 books of Lloyds TSB at the time of the making of any entry therein which purports to have been made before the Relevant Date, and any such entry shall be deemed to have been made in the usual and ordinary course of business. 9.4 In this paragraph "books" shall be construed in accordance with section 9(2) of the Bankers' Books Evidence Act 1879. 10. 10.1 ACCESS TO RECORDS Subject to the same being treated as confidential information and being kept confidential by the persons provided access under this paragraph 10, from the Relevant Date: (a) Bank of Scotland shall allow Lloyds TSB and any persons authorised by Lloyds TSB access on reasonable notice to the Statutory Records and the VAT Records; and (b) Lloyds TSB shall allow Bank of Scotland and any persons authorised by Bank of Scotland access on reasonable notice to the Business Records, in each case, save to the extent that Bank of Scotland or Lloyds TSB (as appropriate) is prevented from doing so by any obligation in law (including any obligation as to confidentiality), regulation, judgment or order of any court or any competent judicial, governmental, regulatory or supervisory body. 11. 11.1 DECLARATION OF TRUST BY BANK OF SCOTLAND If: (a) any asset of Bank of Scotland is not transferred to and vested in Lloyds TSB by this Scheme on the Customer Effective Date by reason of such asset being a Residual Asset or for any other reason; or (b) any Residual Asset is not transferred to and vested in Lloyds TSB by this Scheme on the Subsequent Transfer Date applicable thereto, then Bank of Scotland shall, on and from the Relevant Date (but save to the extent that giving effect to such a trust would require a consent or waiver which has not been obtained or that such a trust would not be recognised by any applicable law or unless otherwise agreed by Bank of Scotland and Lloyds TSB) hold any asset referred to in paragraphs 11.1(a) and (b), together with any proceeds of sale or income or other right accrued or return arising in respect thereof (including, any payment, property or right within paragraph 11.3 below), as trustee for Lloyds TSB.

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- 14 11.2 Unless otherwise agreed by Bank of Scotland and Lloyds TSB, Bank of Scotland shall be subject to directions from Lloyds TSB in respect of any asset referred to in paragraphs 11.1(a) and (b) on and from the Relevant Date until the relevant property is transferred to or otherwise vested in Lloyds TSB or is disposed of (whereupon Bank of Scotland shall account to Lloyds TSB for the proceeds thereof), and Lloyds TSB shall have authority to act as the attorney of Bank of Scotland in respect of such property. 11.3 In the event of any payment being made to, asset being received by, or right being conferred upon Bank of Scotland on or after the Relevant Date in respect of a Customer Relationship or any Relevant Asset, and unless otherwise agreed by Bank of Scotland and Lloyds TSB, Bank of Scotland shall, as soon as is reasonably practicable after its receipt, pay over the full amount of such payment or (to the extent to which it is able to do so) transfer such asset or right to, or in accordance with the directions of, Lloyds TSB and Lloyds TSB shall indemnify Bank of Scotland on demand against any reasonable costs or liability incurred in making any such payment or transfer. 12. 12.1 INDEMNITIES Subject to paragraph 12.2, on and from each Customer Effective Date, Lloyds TSB shall discharge on Bank of Scotland's behalf or indemnify Bank of Scotland against charges, costs, liabilities and claims arising in respect of all Transferred Liabilities and Residual Liabilities which are payable by Bank of Scotland. 12.2 Unless otherwise agreed by Bank of Scotland and Lloyds TSB, Lloyds TSB shall not indemnify Bank of Scotland against and shall not be obliged to discharge Bank of Scotland from: (a) any liability of Bank of Scotland to the extent that it is entitled to recover the same from any person (including, without limitation, by way of insurance), unless, and then only to the extent that, Bank of Scotland shall have failed to recover any such amount pursuant to rights it may have against any person (including, without limitation, under any applicable contract of insurance), having used reasonable endeavours to do so; or (b) 12.3 any liability which would fall on Bank of Scotland by virtue of paragraph 12.4.

Lloyds TSB shall discharge on Bank of Scotland's behalf or indemnify Bank of Scotland against any costs and/or expenses which it may incur in pursuing any claim against any such person as is referred to in paragraph 12.2(a) (including under any applicable contract of insurance). Subject thereto, Bank of Scotland shall take such steps as Lloyds TSB shall require in order to pursue the rights it may have against any such person (including under any applicable contract of insurance). Lloyds TSB shall be entitled to

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- 15 have conduct of all litigation or other proceedings in respect of any such claim (including taking such action in the name of and on behalf of Bank of Scotland as Lloyds TSB shall determine). In that connection, Bank of Scotland shall give all such assistance as Lloyds TSB may reasonably require in conducting all proceedings. 12.4 Subject to paragraph 12.5, Bank of Scotland shall indemnify Lloyds TSB against all liabilities, losses, claims and expenses in respect of a Customer Relationship: (a) to the extent they are otherwise recoverable by Bank of Scotland from any person; or (b) in connection with any defect (whether in title or otherwise) in respect of, or any other diminution in the value of, any property transferred to Lloyds TSB under this Scheme to the extent that the loss resulting therefrom is otherwise recoverable from any person. 12.5 The indemnity in paragraph 12.4 shall be limited to such amounts as Bank of Scotland shall recover pursuant to the rights it may have against any person (including, without limitation, under any applicable contract of insurance).

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- 16 PART D - PROVISIONS RELATING TO CUSTOMERS

13. 13.1

CHANGES TO CUSTOMER AGREEMENTS Where a Customer Agreement for a Corporate, Currency or Deposit account contains: (a) a provision permitting notices to be given to Bank of Scotland by fax, that provision will be deleted on and with effect from the Relevant Date, and the relevant Customer Agreement shall be read and construed as if it excluded any provision permitting notices to be given by fax; (b) a reference to cut-off times and clearing cycles, on and with effect from the Relevant Date, such references shall be read and construed as it they were references to the cut-off times and clearing cycles of Lloyds TSB available to Customers on www.lloydsbankcorporatemarkets.com; (c) a clause permitting interest earned on deposit accounts to be paid into any account of the Customer, such clause shall on and with effect from the Relevant Date be read and construed as if it required interest on deposit accounts only to be paid into an account of the Customer with Lloyds TSB; (d) a provision governing the payment or calculation of interest, such provision shall be read and construed as if it stated that interest on credit and debit balances will be calculated up to the 9th of each month and will be debited or credited to the account on the 10th of each month.

14. 14.1

SET-OFF RIGHTS OF LLOYDS TSB Lloyds TSB shall not be entitled on and with effect from the Relevant Date to apply any Set-Off Rights which might otherwise be exercisable by Lloyds TSB by virtue of this Scheme to reduce or discharge any liability arising from time to time: (a) under any Existing Lloyds TSB Agreement, using credit balances held pursuant to any BoS Agreement; or (b) under any BoS Agreement, using credit balances held pursuant to any Existing Lloyds TSB Agreement.

15.

ALL MONIES RIGHTS Lloyds TSB shall not be entitled on and from the Relevant Date to apply any All Monies Rights which might otherwise be exercisable by Lloyds TSB by virtue of this Scheme:

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- 17 (a) under any Existing Lloyds TSB Agreement, to secure any liability arising from time to time under any BoS Agreement; or (b) under any BoS Agreement, to secure any liability arising from time to time under any Existing Lloyds TSB Agreement. 16. CONSOLIDATION RIGHTS Lloyds TSB shall not be entitled on and from the Relevant Date to apply any Consolidation Rights which might otherwise be exercisable by Lloyds TSB by virtue of this Scheme to prevent the release of any Encumbrance given in respect of: (a) any Existing Lloyds TSB Agreement, until any obligations have been satisfied under any BoS Agreement; or (b) any BoS Agreement, until any obligations have been satisfied under any Existing Lloyds TSB Agreement. 17. OTHER RIGHTS OF LLOYDS TSB Lloyds TSB shall not be entitled on and from the Relevant Date to apply any other right, benefit, interest, discretion, authority or power which might otherwise be exercisable by Lloyds TSB by virtue of this Scheme under or in respect of any: (a) Existing Lloyds TSB Agreement, to terminate, reduce, suspend, delay, alter, discharge or otherwise secure any liability arising from time to time under any BoS Agreement; or (b) BoS Agreement, to terminate, reduce, suspend, alter, discharge or otherwise secure any liability arising from time to time under any Existing Lloyds TSB Agreement. 18. 18.1 ENTIRE AGREEMENT PROVISIONS Where a BoS Agreement contains an Entire Agreement Provision, on and with effect from the Relevant Date, the relevant clause shall be read and construed as if it referred only to products or services comprised in the Customer Relationship, and shall not apply to, and the BoS Agreement shall not supersede, any Existing Lloyds TSB Agreements. 18.2 Where an Existing Lloyds TSB Agreement contains an Entire Agreement Provision, on and with effect from the Relevant Date, the relevant clause shall be read and construed as if it referred only to products or services of Lloyds TSB not comprised in the Customer Relationship, and shall not apply to, and the Existing Lloyds TSB Agreement shall not supersede, any BoS Agreements.

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- 18 18.3 Where a New Lloyds TSB Agreement contains an Entire Agreement Provision, the relevant clause shall, unless expressly stated to the contrary, be read and construed as if it referred only to products or services of Lloyds TSB not comprised in the Customer Relationship, and shall not apply to, and the New Lloyds TSB Agreement shall not supersede, any BoS Agreement. 19. CROSS DEFAULT Lloyds TSB shall not be entitled on and from the Relevant Date to apply any Cross Default Rights which might otherwise be exercisable by Lloyds TSB by virtue of this Scheme to accelerate or alter any rights or obligations: (a) under any Existing Lloyds TSB Agreement, as a result of the breach of any BoS Agreement; or (b) under any BoS Agreement, as a result of the breach of any Existing Lloyds TSB Agreement. 20. 20.1 SAVINGS TO RIGHTS The provisions of paragraphs 14 to 19 shall not apply to diminish any right, benefit, interest, discretion, authority or power which: (a) immediately prior to the Relevant Date, Lloyds TSB or its counterparty has in respect of agreements entered into by Bank of Scotland, including any rights of Lloyds TSB to use credit balances on accounts held with Lloyds TSB to pay debts owed to Bank of Scotland; (b) immediately prior to the Relevant Date, Bank of Scotland or its counterparty has in respect of Existing Lloyds TSB Agreements; or (c) Lloyds TSB, Bank of Scotland or a Customer may acquire other than as a result of the Scheme, including as a result of the variation on or after the Relevant Date of a BoS Agreement, Existing Lloyds TSB Agreement or New Lloyds TSB Agreement. 20.2 If, on or after the Relevant Date, Lloyds TSB acquires any rights to exercise any of the rights, benefits, interests, discretions, authorities or powers referred to in paragraphs 14 to 19 in respect of agreements entered into with other Lloyds Banking Group companies ("Acquired Rights") either: (a) (b) as a result of any contractual variation; or through other means, other than as a result of the Scheme,

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- 19 paragraphs 14 to 19 shall not apply to restrict Lloyds TSB's rights to exercise the Acquired Rights.

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- 20 PART E - MISCELLANEOUS PROVISIONS

21. 21.1

RELEVANT DATE Subject to paragraph 21.2, this Scheme shall become effective in respect of each Customer Relationship at 00.01 hrs on the relevant Customer Effective Date or, if no Customer Effective Date is agreed for a particular Customer, at close of business on the Final Transfer Date or such other time and date as the Court may allow on the application of Bank of Scotland and Lloyds TSB provided that the first Customer Effective Date shall not be before the date of the Order or after the Final Transfer Date.

21.2

Unless this Scheme shall become effective in respect of any Customer Relationship on or before the Final Transfer Date or such other date and/or time as the Court may allow on the application of Bank of Scotland and Lloyds TSB, it shall lapse.

22. 22.1

MODIFICATIONS AND ADDITIONS Bank of Scotland and Lloyds TSB may consent for and on behalf of themselves and all other persons concerned to any modification of or addition to this Scheme or to any further condition or provision affecting the same which, in each case prior to its sanction of this Scheme, the Court may approve or impose.

22.2

At any time after the sanction of this Scheme, Lloyds TSB may apply to the Court for consent to amend its terms to the extent that they apply to a Customer Relationship, provided that in any such case the FSA shall be notified of, and have the right to be heard at, any hearing of the Court at which such application is considered. If such consent is granted, Lloyds TSB may amend the terms of this Scheme in accordance with such consent.

22.3

At any time after the sanction of this Scheme, in the case of any minor or technical amendment to the terms of this Scheme, or any amendment to correct any manifest error in its terms, the amendment may be made without the consent of the Court provided that in any such case the FSA shall have been notified of the proposed amendment and shall have approved the same.

23. 23.1

EVIDENCE OF TRANSFER The production of a copy of the Order and of this Scheme, with any modifications made under paragraph 22, for all purposes shall be conclusive evidence of the transfer to, and vesting in, Lloyds TSB of a Customer Relationship, the Transferred Assets, the Transferred Liabilities, the Residual Assets and the Residual Liabilities.

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- 21 23.2 In order to enable Lloyds TSB to complete any title to any property or interest in land transferred to, and vested in, it by virtue of this Scheme and, without prejudice to paragraphs 3 to 19 inclusive and 23.1, by notice of title or otherwise, or to deduce title, this Scheme and/or the Order, with any modifications made under paragraph 22, together with any document ancillary thereto (including a certificate of any officer or employee of Lloyds TSB identifying the relevant property or interest in land) shall be deemed to be, and may be used as, a general disposition, conveyance or as the case may be, assignation, of such property or interest in favour of Lloyds TSB. 24. LEGAL OPINIONS Where an opinion letter has been provided to Bank of Scotland which covers forms of agreement which have been used in creating both Customer Agreements and agreements with customers to be retained by Bank of Scotland, Lloyds TSB may with effect from the Relevant Date rely on such opinion letters in relation to the Customer Agreements to the same extent as if such opinion letters had been addressed to Lloyds TSB in addition to Bank of Scotland. 25. THIRD PARTY RIGHTS A person who is not a party to this Scheme may not enforce any term of this Scheme pursuant to the Contracts (Rights of Third Parties) Act 1999. 26. GOVERNING LAW This Scheme is governed by, and shall be construed in accordance with, English law.

Dated: [

] 2011.

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- 22 SCHEDULE 1 DEFINITIONS AND INTERPRETATION

1.

In this Scheme, the following defined terms have the meanings set out opposite them: "All Monies Rights" rights providing for a charge, debenture, mortgage or standard security or any other security given in respect of an agreement to secure, in addition, obligations arising under other agreements;

"assets" or "property"

assets, property, title, claims, benefits, rights, interests, authorities, discretions and powers of any description, whether present or future or actual or contingent, including any interest (legal or equitable) in real or personal property, any thing in action, any right in contract, tort or otherwise, any asset held on trust or in a fiduciary capacity, any interest under or by virtue of a trust (howsoever arising), any interest arising under any Encumbrance and any right in respect of a judgment, order or award made in any Proceedings and any power under or by virtue of a power of attorney (howsoever arising);

"Bank of Scotland"

Bank of Scotland plc, a company registered in Scotland, registered number SC327000 and whose registered office is at The Mound, Edinburgh, EH1 1YZ ;

"Bank of Scotland Board" "Bank of Scotland Group" "BoS Agreement"

the board of directors of Bank of Scotland; Bank of Scotland and its subsidiaries; a Customer Agreement or an agreement between Bank of Scotland and a person who has provided an Encumbrance in respect of a Customer;

"Consent"

consent for the purposes of paragraph 1 of Schedule 2 to the DPA;

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- 23 "Consolidation Rights" rights providing for any Encumbrance given in respect of an agreement not to be released or discharged until obligations have been satisfied in respect of any other agreement; "Court" "Cross Default Rights" the High Court of Justice in England; rights providing for, or which (if exercised) might result in, the acceleration or alteration of payment obligations or other obligations under an agreement as a result of a default under another agreement; "Customer" a customer of the major corporate or financial institution business units of Bank of Scotland which has been notified that its banking relationship is to be transferred from Bank of Scotland to Lloyds TSB pursuant to the Scheme, which either alone or jointly with others has entered into a Customer Agreement; "Customer Agreement" an agreement, other than an Excluded Agreement, with any Customer under which Bank of Scotland has agreed to provide products or services; Customer Assets the assets and property of Bank of Scotland in respect of a Customer as at the Customer Effective Date, other than assets and property arising under an Excluded Agreement, whether or not governed by the laws of England and Wales or Scotland and whether or not situated in England and Wales or Scotland including: (a) (b) (c) (d) (e) the Customer Agreements, the Pipeline Business; the Customer Records; the Personal Data Consents; all other assets and property of Bank of Scotland attributable to the Customer including: (i) all rights, interests, benefits and powers of Bank of Scotland against valuers in respect

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- 24 of valuation of properties and related activities; and (ii) all rights, interests, benefits and powers of Bank of Scotland against solicitors, licensed conveyancers and qualified conveyancers in respect of entry into any mortgage or loan (and the taking and perfecting of any Encumbrance); (iii) all rights and claims of Bank of Scotland (whether present or future, any actual or and

contingent)

against

person,

proceedings to which Bank of Scotland is a party, which relate to the Customer; (iv) all shares, share warrants, loan notes or similar rights provided to Bank of Scotland in connection with a Customer Agreement; and (v) all legal opinions in respect of a BoS Agreement and all rights, interests, benefits and powers of Bank of Scotland against the person providing a such legal opinion in respect thereof; Customer Effective Date the date on or after the date of the Order and before the Final Transfer Date which is agreed with the Customer as the date on which the Scheme is to become effective in respect of a particular Customer; Customer Liabilities all liabilities whatsoever of Bank of Scotland in respect of a Customer as at the Customer Effective Date other than liabilities arising under an Excluded Agreement, whether or not governed by the law of England and Wales or Scotland and whether or not situated in England and Wales or Scotland, including liabilities of Bank of Scotland relating to any including liabilities arising under the Customer Agreements;

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- 25 "Customer Records" the books and records which are in the possession or under the control of Bank of Scotland to the extent containing information and records (whether current or historic and whether in physical, electronic or machine readable form) relating to the Customer, information and documents or copies thereof collected by Bank of Scotland pursuant to its obligations under the Money Laundering Regulations 2007, and accounting, financial, marketing, sales, management and technical information and correspondence, but

excluding the Statutory Records and the VAT Records; "Customer Relationship" the relationship of Bank of Scotland relating to a Customer and arising under one or more Customer Agreements which comprises the Customer Assets and the Customer Liabilities; "Data Controller" "Data Subject" "DPA" "Encumbrance" has the meaning given under section 1 of the DPA; has the meaning given under section 1 of the DPA; the Data Protection Act 1998; (a) any mortgage (including for the avoidance of doubt those registered at the Land Registry or those registered in Scotland), charge, pledge, assignment in security, lien or any other security interest or encumbrance of any kind, whether legal or equitable, securing any obligation of any person or any other agreement or agreement having a similar effect including (i) any indemnity, guarantee, letter of credit, letter of comfort, letter of support, insurance, warranty, representation or other assurance and (ii) any fixed or floating charge, standard security or right of set-off; (b) any title transfer financial collateral arrangement or security financial collateral arrangement within the meaning of regulation 3 of the Financial Collateral Arrangements (No 2) Regulations 2003; (c) any intercreditor agreement, subordination agreement, postponement agreement or other ranking agreement in respect of the rights and/or obligations of any

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- 26 person or any security interest; (d) any equalisation agreement, standstill agreement or similar agreement or arrangement; (e) any third party right or interest, whether legal or equitable, including in any real or personal property; and (f) any option, restriction, right of first refusal, right of preemption or any other type of preferential arrangement (including title transfer and retention agreements) having a similar effect; "Entire Agreement Provision" (a) a clause contained in a Customer Agreement, Existing Lloyds TSB Agreement or New Lloyds TSB

Agreement; or (b) another Customer Agreement;

which provides it represents the entire agreement between the parties in respect of all or some of the accounts or services of the type that are the subject matter of the agreement or that are referred to in the agreement, or otherwise states that the relevant Customer Agreement, Existing Lloyds TSB Agreement or New Lloyds TSB Agreement (as applicable) will apply to all accounts or services provided by Bank of Scotland or Lloyds TSB as appropriate; Excluded Agreement unless a Related Agreement: (a) any agreement between Bank of Scotland and a Customer for a fixed term deposit which is not subject to an Encumbrance; (b) all foreign exchange option agreements and other foreign exchange agreements, forward rate

agreements and other interest rate agreements, bond futures agreements and any other derivatives entered into by Bank of Scotland for its own account in respect of its business including, but not limited

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- 27 to, the Customer Relationships; (c) all loans made and other funding available to Bank of Scotland, including any senior, subordinated or other debt and capital instruments issued or assumed by, or any securitisations entered into, by Bank of Scotland for its own account in respect of its business including, but not limited to, the Customer Relationships; (d) all stock borrowing agreements, stock lending agreements, repurchase agreements or reverse repurchase agreements entered by Bank of

Scotland for its own account in respect of its business including, but not limited to, the Customer Relationships; (e) any ISDA Master Agreement or Treasury Master Agreement between Bank of Scotland and a Customer where the relevant Customer also has an ISDA Master Agreement or Treasury Master

Agreement with Lloyds TSB at the Customer Effective Date; (f) any long form confirmation between Bank of Scotland and a Customer in relation to a derivative which incorporates amendments to an ISDA Master Agreement in the form published by the

International Swaps and Derivatives Association Inc., which are overlapping or inconsistent with an ISDA Master Agreement between Lloyds TSB and such Customer as at the Customer Effective Date; and (g) any agreement for a product or service which Lloyds TSBs IT systems are unable to support following the Relevant Date including account pooling and share settlement services;

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- 28 "Existing Lloyds TSB Agreement" any agreement between Lloyds TSB and (i) a Customer or (ii) a person who has provided an Encumbrance in respect of a Customer to the extent in force immediately prior to the Relevant Date; Final Transfer Date "FSA" 30 December 2011; the Financial Services Authority or such successor governmental department, regulatory authority or other official body from time to time exercising supervisory powers in respect of banks under the FSMA; "FSMA" "ISDA Master Agreement" the Financial Services and Markets Act 2000; a master agreement in the form or substantially in the form published from time to time by the International Swaps and Derivatives Association Inc.; "liabilities" debts, liabilities, duties and obligations of any description, whether present or future or actual or contingent, including any obligations in respect of any judgment, order or award made in any Proceedings; "Lloyds Banking Group" Lloyds TSB, any subsidiary of Lloyds TSB, any holding company of Lloyds TSB and any subsidiary of any such holding company; "Lloyds TSB" Lloyds TSB Bank plc, a company incorporated in England and Wales with registered number 2065 whose registered office is at 25 Gresham Street, London EC2V 7HN; "Lloyds TSB Board" New Lloyds TSB Agreement the board of directors of Lloyds TSB; any agreement entered into between Lloyds TSB and (i) a Customer or (ii) a person who has provided an

Encumbrance in respect of a Customer after the Customer Effective Date;

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- 29 "Order" the order of the Court sanctioning this Scheme pursuant to Part VII of FSMA and any order (including any subsequent order) in respect of this Scheme made by the Court under section 112 of FSMA; "Personal Data" "Personal Data Consent" has the meaning given under section 1 of the DPA; any Consent provided by a Data Subject to Bank of Scotland in connection with a Customer Agreement; "Pipeline Business" any application made by a Customer to Bank of Scotland, whether or not accepted by Bank of Scotland, and any offer or invitation made by Bank of Scotland to a Customer, in each case made prior to the relevant Customer Effective Date, which may result in the execution of a Customer Agreement after the relevant Customer Effective Date; "Proceedings" any claim, counterclaim, complaint, petition, suit, appeal or other legal process, whether intended to have interim or final legal effect in respect of its subject matter, before any court, governmental authority, regulatory authority, tribunal, arbitration panel, ombudsman or other body subsisting or empowered by law or regulation or by the provisions of an agreement; "Related Agreement" means in relation to any Customer Agreement any other agreement entered into by Bank of Scotland which is intended to give effect to the commercial objectives of Bank of Scotland and the relevant Customer and/or other parties to that Customer Agreement in relation to the transactions contemplated by such Customer Agreement; "Relevant Asset" "Relevant Date" a Transferred Asset or a Residual Asset as appropriate; in respect of; (a) a Customer Asset or a Customer Liability, the Customer Effective Date or, if no Customer Effective Date has been agreed, the Final Transfer Date; and (b) a Residual Asset or a Residual Liability, the applicable Subsequent Transfer Date;

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- 30 "Relevant Liability" "Residual Asset" a Transferred Liability or a Residual Liability as appropriate; (a) any property or assets of Bank of Scotland, including any Encumbrance in favour of Bank of Scotland, whether or not governed by the laws of England and Wales or Scotland and whether or not situated in England and Wales or Scotland, which would be a Transferred Asset but: (i) which the Court does not have jurisdiction to transfer; (ii) which, despite having such jurisdiction, the Court determines not so to transfer; (iii) the transfer of which requires but does not have recognition by the laws of any relevant jurisdiction; or (iv) which Bank of Scotland and Lloyds TSB agree in writing prior to the Customer Effective Date or the Final Transfer Date would more conveniently be, or which pursuant to the terms of this Scheme is to be, transferred after the Customer Effective Date or the Final Transfer Date; and (b) any proceeds of sale or income or other accrual or return whatsoever, whether or not in any case in the form of cash, or other asset earned or received from time to time after the Customer Effective Date or the Final Transfer Date in respect of any property referred to in paragraph (a); "Residual Liability" any liability or obligation of Bank of Scotland, whether or not governed by the laws of England and Wales or Scotland and whether or not situated in England and Wales or Scotland, which would be a Transferred Liability but: (a) which the Court does not have jurisdiction to transfer;

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- 31 (b) which, despite having such jurisdiction, the Court determines not so to transfer; (c) the transfer of which requires but does not have recognition by the laws of any relevant jurisdiction; (d) which Bank of Scotland and Lloyds TSB agree in writing prior to the Customer Effective Date or the Final Transfer Date would more conveniently be, or which pursuant to the terms of this Scheme is to be, transferred after the Customer Effective Date or the Final Transfer Date; or (e) which relates to a Residual Asset and arises at any time before the Subsequent Transfer Date applicable to that Residual Asset; "Scheme" this scheme in its original form or with or subject to any modification, addition or condition that may be approved or imposed by the Court; "Set-Off Rights" rights arising under, or in respect of, any Customer Agreement or Existing Lloyds TSB Agreement providing for credit balances on one account to be used as payment towards a liability arising on, or in respect of, another account or facility; "Statutory Records" all books, files, registers, documents, correspondence, papers and other records that are required, by any applicable legal or regulatory requirement or corporate governance requirement (whether or not having the force of law), to be kept by Bank of Scotland and retained in its possession; "Subject Access Request" a request for information made pursuant to section 7 of the DPA; "Subsequent Transfer Date" in respect of any Residual Asset or Residual Liability, the time and date after the date of the Order on which such Residual Asset or Residual Liability is to be transferred to Lloyds TSB, namely:

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- 32 (a) in respect of any Residual Asset falling within paragraph (a)(i) to (iii) of the definition of Residual Asset, and of any Residual Liability falling within paragraph (a) to (c) of the definition of Residual Liability, the time and date on which the requisite order or recognition to enable the same to be transferred to Lloyds TSB upon the terms of this Scheme is: (i) (ii) (b) obtained; or no longer required;

in respect of any Residual Asset falling within paragraph (a)(iv) of the definition of Residual Asset and of any Residual Liability which falls within paragraph (d) of the definition of Residual Liability, the time and date on which Bank of Scotland and Lloyds TSB agree that the transfer shall take effect or on which the Residual Asset or Residual Liability becomes capable of being transferred under the terms of this Scheme; and

(c)

in the case of any Residual Asset falling within paragraph (b) of the definition of Residual Asset and of any Residual Liability falling within paragraph (e) of the definition of Residual Liability, the time and date on which such Residual Asset or Residual Liability is received, earned or incurred by Bank of Scotland, to the extent that such transfer is possible under this Scheme and Bank of Scotland and Lloyds TSB agree that such transfer should take place;

"Tax"

all forms of tax, levy, impost, contribution, duty, liability and charge in the nature of taxation and all related withholdings or deductions of any nature (including, for the avoidance of doubt, National Insurance contribution liabilities in the United Kingdom and corresponding obligations elsewhere) whether of the United Kingdom or elsewhere and all

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- 33 related fines, penalties, charges, costs and interest; "Transferred Assets" the Customer Assets except to the extent that they are Residual Assets; "Transferred Liabilities" the Customer Liabilities except to the extent that they are Residual Liabilities; "Treasury Master Agreement" a master agreement entered into between Lloyds TSB and Bank of Scotland and a Customer governing swaps and derivative products entered into from time to time; "VAT Records" all records that are referred to in section 49(1)(b) VATA and that have been kept by Bank of Scotland in respect of Customers; and "VATA" the Value Added Tax Act 1994.

2.

In this Scheme: (a) References to the Scheme and to paragraphs, Parts or Schedules Any reference to the Scheme shall include any Schedules to it and references in the Scheme to paragraphs, Parts or Schedules are, except where the context otherwise requires, to paragraphs of, Parts of and Schedules to this Scheme. (b) Headings Headings are inserted for convenience only and shall not affect the construction of this Scheme. (c) Singular and plural, and gender Any reference to the singular shall include a reference to the plural and vice versa and any reference to the masculine shall include a reference to the feminine and neuter and vice versa. (d) Reference to an agreement Reference to an agreement includes an agreement or undertaking effected by contract, deed or any other instrument.

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- 34 (e) Reference to a person Any reference to a person shall include a reference to any individual, company, firm, partnership, association, organisation, trust or agency, whether or not having a separate legal personality. (f) References to securities Any reference to securities includes debentures, debenture, stocks, loan stock, bonds, certificates of deposit or any other instrument creating or acknowledging a debt, warrants or other instruments that entitle the holder to acquire any of the foregoing. (g) References to services Any reference to services provided or agreed to be provided by Bank of Scotland includes the accepting of deposits, the provision of credit or other facilities, the making of loans or any other form of finance, whether secured or unsecured, or the provision of any guarantee, indemnity, letter of credit, performance bond or other assurance, or acting as a settlement bank for a customer in the CREST system operated by Euroclear UK & Ireland Limited or in any other clearing or settlement system. (h) References to writing Any reference to writing shall include any modes of reproducing words in a legible and non-transitory form. (i) References to transfer The expression "transfer" includes (as the context may require) "vest", "assign", "assignation" "conveyance". (j) References to variation The expression "variation" includes any amendment, modification, variation, supplement, deletion, replacement or termination (as the context requires), however effected. (k) References to holding company, subsidiary and wholly-owned subsidiary The expressions "holding company", "subsidiary" and "wholly-owned or "assignment", "dispose" or "disposal" or "convey" or

subsidiary" shall have the same meanings as in the Companies Act 2006.

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- 35 (l) References to enactments or statutory provisions Any reference to an enactment or a statutory provision shall include a reference to (i) that enactment or statutory provision as amended, consolidated, modified, replaced or re-enacted from time to time and (ii) any subordinate legislation, instrument or order made under the relevant enactment or statutory provision as itself amended, consolidated, modified, replaced or re-enacted from time to time and, for the avoidance of doubt, subordinate legislation shall include provisions of the FSA Handbook of rules and guidance made pursuant to the FSMA. (m) References to "including and "in particular" References to "including" and "in particular" shall not be construed restrictively but shall mean "including without prejudice to the generality of the foregoing and without limitation" and "in particular but without prejudice to the generality of the foregoing and without limitation". (n) Exercise of powers of control Where any obligation pursuant to this Scheme is expressed to be undertaken or assumed by any person, such obligation shall be construed as including a requirement on that person to exercise all rights and powers of control over the affairs of any other person which that person is properly able to exercise (whether directly or indirectly) in order to secure performance of such obligation. (o) English law concepts Reference to any process or concepts of English law shall include all equivalent processes or concepts under the laws of any other applicable jurisdiction.

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