Ring-fencing Transfer Scheme

Transcription

1 IN THE HIGH COURT OF JUSTICE CLAIM NO: FS BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES BUSINESS LIST (ChD) Financial Services and Regulatory LLOYDS BANK PLC - and - BANK OF SCOTLAND PLC as Transferors - and - LLOYDS BANK CORPORATE MARKETS PLC as Transferee Ring-fencing Transfer Scheme Pursuant to Part VII of the Financial Services and Markets Act 2000 pursuant to which part of the banking business of each of Lloyds Bank plc and Bank of Scotland plc is to be transferred to Lloyds Bank Corporate Markets plc 1

2 Table of Contents Contents Page PART A INTRODUCTION Proposed Scheme Authorisation, Eligibility and Application Interpretation... 4 PART B THE TRANSFER Transfer of the Transferring Business Transfer of Assets and Liabilities Declaration of trust by the Transferors and retention of Residual Liabilities... 7 PART C FURTHER PROVISIONS RELATING TO THE TRANSFER Specific provisions in respect of the Transferring Assets, Transferring Liabilities and Duplicated Agreements Security Trust Specific provisions in respect of Master Agreements and ancillary documents Specific provisions in respect of OGSAs and Reservation of Rights Letters Terms of Business Consequences of the Scheme Conduct of proceedings References Confidentiality, Data Protection and Access to Records Marketing Preferences Subject Access Requests Evidence: books and documents PART D UNDERTAKINGS BY THE PARTIES AND FURTHER AMENDMENTS TO TERMS AND CONDITIONS Recovery Limits under Omnibus Guarantee and Set-off Agreements Fees Know your customer information

3 22 Exclusion of recalculation of principal amount Additional agency fees Account Bank PART E WRONG POCKETS Wrong Pockets PART F MISCELLANEOUS PROVISIONS Effective Date Modification Governing law Evidence of transfer Schedule 1: Definitions and Interpretation Schedule 2: Identification Numbers

4 PART A INTRODUCTION 1 Proposed Scheme 1.1 The Transferors undertake retail and commercial banking business, including dealing in investments as principal, deposit taking and lending. Among other things, they carry on the Transferring Business. 1.2 It is proposed that the Transferring Business be transferred from the Transferors to the Transferee by way of a ring-fencing transfer scheme under Part VII of the Act and that the transfers should take effect on the Relevant Date, in accordance with the terms of this Scheme. This Scheme also provides for other matters in connection with the transfer of the Transferring Business. 2 Authorisation, Eligibility and Application 2.1 Each of the Transferors is an authorised person in the United Kingdom within the meaning of the Act and each of the Transferors has the necessary permissions to carry out regulated activities pursuant to Part 4A of the Act, including permission to deal in investments as principal, in order to lawfully carry on the Transferring Business. 2.2 The Transferee will by the Effective Date be an authorised person in the United Kingdom within the meaning of the Act (with no restrictions connected to its authorised status) and will have by the Effective Date the necessary permissions to carry out regulated activities pursuant to Part 4A of the Act in order to lawfully carry on the Transferring Business once transferred pursuant to this Scheme. 2.3 The purpose of the Scheme is to enable the Transferors to carry on core activities as ringfenced bodies in compliance with the ring-fencing provisions pursuant to Sections 106B(1)(b) and 106B(3)(a) of the Act. 2.4 For the purposes of Section 106B(1)(c) of the Act, the Scheme is neither an excluded scheme under Section 106B(4) of the Act nor an insurance business transfer scheme under Section 105 of the Act. 2.5 The PRA (in consultation with the FCA) has reviewed the Scheme Report, has approved the form of the Scheme Report for the purposes of Section 109A(3) of the Act and, having regard to the Scheme Report, has consented to the making of an application to the Court for this Scheme for the purposes of Section 107(2A) of the Act. 3 Interpretation The definitions and principles of interpretation set out in Schedule 1 to this document shall apply in this Scheme. 4

5 4 Transfer of the Transferring Business PART B THE TRANSFER 4.1 On, and with effect from, the Effective Time and in accordance with the terms of this Scheme the Transferring Business shall by this Scheme, and without further act or instrument, be transferred from the Transferors to the Transferee. 4.2 On, and with effect from, the Relevant Date any Transferring Derivative Transaction transferred from a Transferor to the Transferee shall cease to be governed by and form part of the relevant Existing Master Agreement and shall instead be governed by and form part of the relevant Duplicated Master Agreement that shall be created with effect from the Effective Time on the terms set out in paragraph 9. The Existing Master Agreement under which any Transferring Derivative Transaction was entered into, or currently exists, shall not be transferred as part of the Transferring Business but shall remain with the relevant Transferor. 4.3 On, and with effect from, the Relevant Date, any Existing Terms of Business between a Customer and the relevant Transferor applicable to any part of the Transferring Business shall cease to apply in respect of that Transferring Business, and instead the relevant Duplicated Terms of Business that shall be created with effect from the Effective Time on the terms set out in paragraph 11 shall apply in respect of that Transferring Business as between the Customer and the Transferee. The Existing Terms of Business relating to that Transferring Business shall not be transferred as part of the Transferring Business, but shall remain in place between the relevant Transferor and the Customer. 5 Transfer of Assets and Liabilities 5.1 The provisions of this paragraph 5 are without prejudice to the generality of paragraph On, and with effect from the Effective Date, in accordance with the terms of this Scheme: the Transferring Assets shall, by this Scheme and without any further act or instrument, be transferred to, and legal and beneficial title in respect of such Transferring Assets shall vest in, the Transferee; and the Transferring Liabilities shall, by this Scheme and without any further act or instrument, be transferred to, and shall become Liabilities of, the Transferee and shall cease to be Liabilities of either of the Transferors. 5.3 On, and with effect from, each Subsequent Transfer Date, in accordance with the terms of this Scheme: 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 legal and beneficial title (where such beneficial title has not previously transferred pursuant to the creation of the trust described in paragraph 6.1 below (if applicable) or pursuant to any other agreement or arrangement between either of the Transferors and the Transferee) in respect of such Residual Asset shall vest in the Transferee and cease to be an asset of either of the Transferors; and 5

6 5.3.2 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 shall become a Liability of, the Transferee and shall cease to be a Liability of either of the Transferors. 5.4 The Scheme shall not operate to transfer or have the effect of transferring, or be construed to operate to transfer or have the effect of transferring, to the Transferee any of the Excluded Assets or the Excluded Liabilities. 5.5 Each Transferring Asset, Transferring Liability, Residual Asset and Residual Liability (as applicable) shall be transferred to, and vested in, the Transferee subject to all Encumbrances (if any), and with the benefit of all Rights in Security (if any), that affect it. 5.6 Unless otherwise agreed by the relevant Transferor and the Transferee, or otherwise provided for pursuant to the arrangements described in paragraphs 8 or 12 below, any Business Asset or Assumed Liability in respect of which an Encumbrance or Right in Security has been granted by, or in favour of, the Transferors, shall only transfer to the Transferee if the relevant Encumbrance or Right in Security transfers at the same time, and any Encumbrance or Right in Security shall only transfer to the Transferee if the relevant Business Asset or Assumed Liability (as applicable) transfers at the same time. 5.7 Subject to paragraph 7.5, every Customer shall, as and with effect from the Relevant Date in respect of that Customer s Customer Agreement, Transferring Guarantee/Security and/or Duplicated Agreement (but only insofar as it relates to the Transferring Business), become entitled (in succession to, and to the exclusion of, any rights which that Customer may have had against the Transferors under the relevant Customer Agreement, Transferring Guarantee/Security and/or corresponding Existing Agreement (but only insofar as it relates to the Transferring Business)), to the same rights against the Transferee as were available to that Customer against the Transferors under such Customer Agreement, Transferring Guarantee/Security or corresponding Existing Agreement (insofar as it relates to the Transferring Business). 5.8 Each of the Transferors and the Transferee shall each take all such reasonable steps and do all such reasonable things (including the execution and delivery of any documents) as may be necessary or desirable to give effect to this Scheme including, without limitation, the transfer to the Transferee of the Transferring Business in accordance with this paragraph 5 and the creation of the Duplicated Agreements in accordance with paragraphs 9 and 10, save to the extent that the Transferee notifies the Transferors that it shall not require such steps to be taken. 5.9 The transfer of the Transferring Assets and the Transferring Liabilities, together with, to the extent applicable, any Residual Assets and/or Residual Liabilities to the Transferee, and the creation of the Duplicated Agreements, shall take effect, notwithstanding any provision to the contrary in any contract or arrangement with any Customer or any other person, and such transfer shall be deemed to take effect on the basis that: there is no requirement upon either of the Transferors or the Transferee, or any other person or party, to (a) obtain the consent of any person or consult with any person, (b) provide any written or other notifications to any person, (c) execute any new or additional documentation, or accede to any existing documentation to which the Transferor is party, (d) deliver any legal opinion, tax opinion, report, certificate, 6

7 evidence or other document, (e) provide any representations, warranties, undertakings, confirmations or information to any person, (f) comply with or conform to any and all eligibility criteria or other condition, howsoever described or defined, which would otherwise restrict the ability of the Transferee to acquire the Transferring Assets and Transferring Liabilities together with, to the extent applicable, any Residual Assets and/or Residual Liabilities or to be or become a party to the associated documentation, including, but without limitation, any requirement to transfer an asset or liability which is an Excluded Asset or Excluded Liability under the Scheme along with such Transferring Asset, Transferring Liability, Residual Asset or Residual Liability (as the case may be), any requirement as to a minimum credit rating of the Transferee or any requirement to obtain confirmation from the relevant rating agency that the credit rating of any securities or other financial instruments is not affected by the transfer, (g) pay any fees, costs and/or expenses of any Customer, or any other party to a Customer Agreement or a Duplicated Agreement or any other agreement forming part of the Transferring Business, or of any other person or party whatsoever, save only as provided in paragraph 20, (h) comply with any restrictions on the transfer of confidential information (howsoever described or defined) as between the Transferor and the Transferee (or vice versa), or (i) otherwise comply with any provision which has the effect of restricting or prohibiting such transfer; and there is no contravention of, liability arising out of or interference with any interest or right The Scheme shall not operate to prevent any Customer exercising or enforcing, and the Court shall, for the purposes of Section 112A (2)(b) of the Act, permit the exercise and enforcement of, any Preserved Rights Without prejudice to paragraphs 8, 9 and 10, nothing in this Scheme shall have the effect of conferring on the Transferee any rights or obligations in respect of the Transferring Business which the relevant Transferor did not have prior to the Relevant Date The transfer of the Transferring Business shall have effect whether or not the Transferors would, apart from the terms of this Scheme, have capacity to effect the same. 6 Declaration of trust by the Transferors and retention of Residual Liabilities 6.1 If any Business Asset of a Transferor is not transferred to, and vested in, the Transferee by this Scheme on the Effective Date because such asset is a Residual Asset or for any other reason, then (without prejudice to any other arrangements between the relevant Transferor and the Transferee in relation to such Residual Asset) the relevant Transferor shall, on and from the Effective Date: hold any such asset, together with any proceeds of sale, income or other accrual or return in respect thereof, on trust for the Transferee absolutely; except to the extent that: (i) (ii) the entry into, or creation of such an arrangement would itself be outside the jurisdiction of the Court; the entry into, or creation of such an arrangement would require a consent or waiver which has not been obtained, cause a breach of, or default under, 7

8 the terms and conditions of any Transferring Asset or Transferring Liability or would give rise to any right of acceleration of any obligation or any right of termination pursuant to any such arrangement; (iii) (iv) such arrangement cannot be entered into, or be created, for any other reason; or there is a close-out netting provision or set-off provision which applies to such Residual Asset and a related Residual Liability; and retain any related Residual Liability. 6.2 The relevant Transferor shall be subject to the Transferee s reasonable directions in respect of any Residual Asset and any related Residual Liability until the relevant Residual Asset and any related Residual Liability is transferred or otherwise vested in the Transferee or is disposed of (whereupon the relevant Transferor shall account to the Transferee for the proceeds thereof) and the Transferee shall have authority to act as the agent and attorney of the relevant Transferor in respect of such Residual Asset and any related Residual Liability for all purposes. 6.3 In the event of any payment being made to, or right or benefit being conferred upon or accruing to, a Transferor in respect of any of the Transferring Assets or Transferring Liabilities after the Relevant Date, the relevant Transferor shall hold such sums on trust and shall, as soon as is reasonably practicable after its receipt, pay over the amount of such payment or transfer or assign such right or benefit to, or in accordance with the directions of, the Transferee. 8

9 PART C FURTHER PROVISIONS RELATING TO THE TRANSFER 7 Specific provisions in respect of the Transferring Assets, Transferring Liabilities and Duplicated Agreements 7.1 On and with effect from the Relevant Date and in accordance with the terms of this Scheme, each Customer Agreement, each Transferring Guarantee/Security (except for any Shared Guarantee/Security) and each Duplicated Agreement shall have effect as if it had always been entered into by, made or placed with, or accepted or issued by, the Transferee (or on behalf of the Transferee) instead of the relevant Transferor (or on behalf of the relevant Transferor) and: in respect of any Transferring Derivative Transactions (other than those entered into pursuant to a Long Form Confirmation), each such transaction (and the relevant Transferring Derivative Transaction Confirmation) shall have effect as if it had always been governed by the corresponding Duplicated Agreement; and in respect of any Transferring Asset and/or Transferring Liability: (i) (ii) any relevant person who, immediately prior to the Relevant Date, has rights against any Transferor, or is subject to obligations to any Transferor, in respect of the relevant Transferring Asset and/or Transferring Liability shall have the same rights against, and be subject to the same obligations to, the Transferee; and the Transferee shall have the same rights, powers, remedies, and Rights in Security in its favour and be subject to the same obligations and Encumbrances (and without affecting the enforceability, priority or ranking of any such Right in Security or Encumbrance) as the relevant Transferor had or to which it was subject, immediately prior to the Relevant Date, and accordingly, but without prejudice to paragraph 8, any provisions of this Scheme relating to Preserved Rights or any other provision of this Scheme expressly providing to the contrary, such rights that were available to (i) the relevant Transferor on the one hand, or (ii) any Customer (or any third party) on the other, as between or against each other in respect of the relevant Transferring Asset and/or Transferring Liability shall be extinguished. For the avoidance of doubt, this provision shall not operate to extinguish rights between a Customer and any third party that are unrelated to any Transferor. 7.2 With effect from the Relevant Date and subject to the terms of this Scheme, the following provisions shall apply to any Transferring Asset and/or Transferring Liability: any instruction, direction, mandate (including, but not limited to, any direct debit mandate and any general mandates to manage client accounts), standing order, indemnity, power of attorney, authority, undertaking, declaration or consent (a Mandate ) given to, or by, any Transferor in the course of carrying out the Transferring Business or in relation to any Guarantee/Security or any Existing Agreement and which relates, whether in whole or in part, to any such Transferring Asset and/or Transferring Liability (whether in writing or not) shall have effect as if it had always been given to or, as the case may be, by the Transferee (and in particular, any such Mandate providing for the payment of any sum under or in respect of any of the Customer Agreements, Guarantee/Security or Duplicated 9

10 Agreements to or by any Transferor shall, from and after the Relevant Date, take effect as if it had provided for and authorised such payment to or by the Transferee). For the avoidance of doubt: (i) (ii) the Transferee may rely on each such Mandate in respect of any instructions given to the Transferee pursuant to such Mandate after the Relevant Date; and each such Mandate shall continue to have effect in respect of the relevant Transferor to the extent that the relevant Transferor holds or continues to hold any assets or liabilities in respect of which such Mandate was given to, or by (as the case may be), the relevant Transferor the Transferee shall have the same rights, defences, powers and remedies for ascertaining, perfecting, enforcing or resisting any such Transferring Asset and/or Transferring Liability, as if it had at all times been an asset or liability of the Transferee; the Transferee shall be entitled to rely on and enforce any consent, waiver, representation, warranty, statement or estoppel given, made or otherwise available to the relevant Transferor by, or against, a person in relation to any such Transferring Asset and/or Transferring Liability prior to the Relevant Date, as if such consent, waiver, representation, warranty, statement or estoppel had been given, made or been available to the Transferee and to the same extent that the relevant Transferor would have been able to rely on and enforce the same; and as regards any such Transferring Asset or Transferring Liability under which interest, principal or other sums attributable or referable thereto are payable: (i) (ii) to the extent that such interest, principal or other sums were payable or repayable by any Transferor immediately prior to the Relevant Date, such interest, principal or other sums shall be payable by the Transferee; and to the extent that such interest, principal or other sums were payable or repayable to any Transferor immediately prior to the Relevant Date, such interest, principal or other sums shall be payable to the Transferee. 7.3 Subject to paragraph 8, on, and with effect from, a Relevant Date and subject to the terms of this Scheme but without prejudice to paragraphs 19 to 21 (inclusive): any Right in Security attributable to a Transferring Asset or Transferring Liability and held by, or vested in, any Transferor or a nominee of, agent of, attorney of or trustee for and on behalf of, and for the benefit of, any Transferor (each a Transferor Entity ) (whether for any Transferor alone, both Transferors or for any Transferor(s) and other persons), immediately prior to the applicable Relevant Date, shall be held by or vested in the Transferee or, as applicable, that nominee, agent, attorney or trustee for and on behalf of, and for the benefit of, the Transferee (each a Transferee Entity ) as if the Transferee Entity had always held, or had the benefit of, such Right in Security in the same manner as such Right in Security was held by or on behalf of, or for the benefit of, the relevant Transferor Entity (and, if not physically delivered to the Transferee, shall be deemed to be so delivered on the applicable Relevant Date); 10

11 7.3.2 any Right in Security referred to in paragraph shall be available to, and enforceable by, the Transferee Entity, with respect to any Liabilities (including any principal, interest, fees, charges or other sums) to which the Right in Security relates and which either (i) have been incurred or which have arisen prior to the applicable Relevant Date and/or (ii) are incurred or which arise on or after the applicable Relevant Date; and in relation to any Right in Security referred to in paragraph and any Liabilities thereby secured, guaranteed or supported, the Transferee Entity 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 the relevant Transferor Entity was entitled and to which it was subject immediately prior to the applicable Relevant Date and, without prejudice to the generality of the foregoing, all waivers, amendments, conditions, consents, deeds of substitution, deeds of release, intercreditor agreements, priority agreements, ranking agreements, subordination agreements, trust deeds, deeds of charge and other arrangements attributable to any such Rights in Security shall be enforceable by and binding upon the Transferee Entity on and after the Relevant Date, to the same extent to which the same would have been enforceable by and binding upon the relevant Transferor Entity prior to the applicable Relevant Date. 7.4 Subject to paragraph 8, on, and with effect from, a Relevant Date and subject to the terms of this Scheme but without prejudice to paragraphs 19 to 21 (inclusive): any Encumbrance attributable to a Transferring Asset or Transferring Liability to which a Transferor Entity is subject (whether relating to any Transferor alone, both Transferors or for any Transferor(s) and other persons), immediately prior to the applicable Relevant Date, shall be enforceable against the Transferee Entity as if such Encumbrance had always been enforceable against the Transferee Entity in the same manner as such Encumbrance was enforceable against the relevant Transferor Entity; any Encumbrance referred to in paragraph shall be enforceable against the Transferee Entity, with respect to any Liabilities (including any principal, interest, fees, charges or other sums) to which the Encumbrance relates and which either (i) have been incurred or which have arisen prior to the applicable Relevant Date and/or (ii) are incurred or which arise on or after the applicable Relevant Date; and in relation to any Encumbrance referred to in paragraph and any Liabilities thereby secured, guaranteed or supported, the Transferee Entity shall, on, and from, the Relevant Date, be entitled to the same rights and be subject to the same obligations and incidents as those to which the relevant Transferor Entity was entitled and to which it was subject immediately prior to the applicable Relevant Date and, without prejudice to the generality of the foregoing, all waivers, amendments, conditions, consents, deeds of substitution, deeds of release, intercreditor agreements, priority agreements, ranking agreements, subordination agreements, trust deeds, deeds of charge and other arrangements attributable to any such Encumbrances shall be enforceable by and binding upon the Transferee Entity on and after the Relevant Date, to the same extent to which the same would 11

12 have been enforceable by and binding upon the relevant Transferor Entity prior to the applicable Relevant Date. 7.5 Notwithstanding any other provision of this Scheme, on and with effect from the Relevant Date, any rights of any party to a Customer Agreement, a Transferring Guarantee/Security or a Duplicated Agreement to set off: any liabilities owed to a Transferor by that party against any claims or rights of that party against the Transferee or against any other member of the Transferor s Group that is not a Ring-fenced Affiliate; or any liabilities owed to the Transferee by that party against any claims or rights of that party against the Transferor or against any other member of the Transferor s Group that is a Ring-fenced Affiliate, shall cease to have effect, provided that this paragraph 7.5 shall not prevent or cancel the operation of close-out netting provisions between a counterparty and the Transferee under a Duplicated Master Agreement. 7.6 This paragraph 7 shall be without prejudice to the general application of the provisions of this Scheme to Transferring Assets and Transferring Liabilities which are not Customer Agreements, Rights in Security or Encumbrances. 8 Security Trust 8.1 Paragraphs 5, 6 and 7 shall apply to the Transferring Guarantee/Security subject to the provisions of this paragraph Subject to paragraphs 8.3 and 8.4, where any Transferring Guarantee/Security: relates to any Existing Agreement; and/or would from the Relevant Date relate both to (i) any Transferring Asset or Residual Asset and (ii) any Excluded Asset owed or that may become owing to any Transferor, (the Shared Guarantee/Security ), then paragraph 7.3 shall not apply and such Shared Guarantee/Security shall continue to be held by the relevant Transferor Entity as trustee (the Security Trustee ) on trust (or, where relevant, as creditor or Guarantee/Security agent) for the benefit of both the Transferor and the Transferee absolutely (i) in the case where the Transferring Guarantee/Security relates to an Existing Agreement, in order to guarantee and/or secure the payment, discharge and/or performance by an Obligor of its obligations to the relevant Transferor under the Existing Agreement and its obligations to the Transferee under the Duplicated Agreement created pursuant to this Scheme and/or (ii) in order to guarantee and/or secure the payment, discharge and/or performance by an Obligor of its obligations to the relevant Transferor in relation to such Excluded Asset and its obligations to the Transferee in relation to the Transferring Asset or Residual Asset (as the case may be), except, in relation to any Shared Guarantee/Security in respect of which an equivalent trust exists under that Shared Guarantee/Security or related Customer Agreements. The Security Trustee shall hold the Shared Guarantee/Security that is subject to the trust created in this paragraph 8.2 on the Shared Security Trust Terms. 12

13 8.3 Subject to paragraph 8.4, if the transfer of any Guarantee/Security referred to in paragraph 7.3 pursuant to the Scheme is not recognised by the laws of the jurisdiction in which such security or secured property is situated (the Non-Transferring Guarantee/Security ), then paragraph 7.3 shall not apply and such Non-Transferring Guarantee/Security shall continue to be held by the relevant Transferor Entity, on terms that such Transferor Entity shall have the right to enforce such security as Security Trustee (or, where relevant, as creditor or Guarantee/Security agent), on behalf of the Transferee in relation to any liability transferred pursuant to this Scheme and any further liability incurred pursuant to Customer Agreements transferred or Duplicated Agreements created pursuant to the Scheme. 8.4 If the laws of a jurisdiction in which an asset is situated, or which are otherwise relevant to any Guarantee/Security relating to such asset, do not recognise the Security Trust arrangements referred to in paragraphs 8.2 and 8.3 or under such laws the Security Trust arrangements are not sufficient to provide, in all material respects, the rights envisaged as being granted to the relevant Transferor Entity as Security Trustee pursuant to paragraphs 8.2 or 8.3, or the same benefits to the Transferee or relevant Transferor (as the case may be), as were available to the relevant Transferor prior to the Effective Date, the Business Assets or Assumed Liabilities relating to such affected Guarantee/Security, shall be treated as Residual Assets and Residual Liabilities. 8.5 Without prejudice to the generality of paragraph 15, with effect from the Relevant Date, any provision in, or obligation relating to, the Transferring Assets or the Transferring Liabilities or any Duplicated Agreement that has the effect of prohibiting information in relation to a Customer to be shared between the relevant Transferor (or other Security Trustee under paragraphs 8.2 and 8.3) and the Transferee (and for the avoidance of doubt, including if such prohibition operates only if the consent of the relevant Customer is not obtained) shall be deemed to not apply to the extent that the sharing of such information is required or reasonably requested by or on behalf of any of the relevant Transferor, any Security Trustee or Transferee for the purposes of, or in relation to, administering or managing, or enforcing any rights in respect of, the Shared Guarantee/Security or any part thereof. 9 Specific provisions in respect of Master Agreements and ancillary documents 9.1 Paragraph 9.2 applies to a Master Agreement which satisfies any one of the following two conditions: any Master Agreement identified by an agreement identification number (generated by a dedicated database maintained by the LBG Group) which is either (a) listed in Part B of Schedule 2, or (b) (for Master Agreements identified as falling within this scope of this paragraph after the CD Cut-off Date), listed within the database identified by an identification number (generated by the LBG Group) which is listed in Part E of Schedule 2; and to the extent not covered in paragraph 9.1.1, any Master Agreement which relates solely or partly to Business Assets and/or Assumed Liabilities (whether transferring on the Effective Date or a Subsequent Transfer Date), 13

14 (each an Existing Master Agreement ). 9.2 With effect from the Effective Time, and subject to the terms of the Scheme: each Existing Master Agreement shall (i) continue to exist between the relevant Transferor and the other existing parties and (ii) not form part of the Transferring Business, and any existing transactions governed by such Existing Master Agreement that do not form part of the Transferring Business (if any) will continue to be governed by that Existing Master Agreement and a new Master Agreement on the same terms and conditions as the Existing Master Agreement (subject to paragraph 14) shall be deemed to exist between the Transferee and other existing parties (other than the Transferor) to such Existing Master Agreement and shall, unless otherwise agreed in writing between the relevant Transferor and the Transferee, include the benefit of all outstanding rights and causes of action relating to the Transferring Derivative Transactions under the Existing Master Agreement (the Duplicated Master Agreement ), and any Transferring Derivative Transactions governed by an Existing Master Agreement (if any) will (from the Relevant Date as regards that transaction) be governed by the corresponding new Duplicated Master Agreement; each ISDA/FIA Cleared Derivatives Execution Agreement entered into by a Transferor with a person who is also a counterparty to an Existing Master Agreement (an Existing CDEA ) shall (i) continue to exist between the relevant Transferor and the other existing parties and (ii) not form part of the Transferring Business, and any existing transactions governed by such Existing CDEA that do not form part of the Transferring Business (if any) will continue to be governed by that Existing CDEA and a new ISDA/FIA Cleared Derivatives Execution Agreement on the same terms and conditions as the Existing CDEA (subject to paragraph 14) shall be deemed to exist between the Transferee and other existing parties (other than the Transferor) to such Existing CDEA (the Duplicated CDEA ), and any Transferring Derivative Transactions governed by an Existing CDEA (if any) will (from the Relevant Date as regards that transaction) be governed by the corresponding new Duplicated CDEA; each Master Give-Up Agreement entered into in respect of an Existing Master Agreement by a Transferor with a person who is also a counterparty to such Existing Master Agreement (an Existing Master Give-Up Agreement ) shall (i) continue to exist between the relevant Transferor and the other existing parties and (ii) not form part of the Transferring Business, and any existing transactions that are in the process of being given-up pursuant to such Existing Master Give-Up Agreement and that do not form part of the Transferring Business (if any) will continue to be subject to the Existing Master Give-Up Agreement and a new Master Give-Up Agreement on the same terms and conditions as the Existing Master Give-Up Agreement (subject to paragraph 14) shall be deemed to exist between the Transferee and other existing parties (other than the Transferor) to such Existing Master Give-Up Agreement (the Duplicated Master Give-Up Agreement ), and any Transferring Derivative Transactions that are in the process of being given-up pursuant to an Existing Master Give-Up Agreement (if any) will (from the Relevant Date as regards that transaction) be subject to the corresponding new Duplicated Master Give-Up Agreement; 14

15 9.2.4 a duplicate of all documents relating to an Existing Master Agreement, Existing CDEA and Existing Master Give-Up Agreement (including, without limitation, notices issued pursuant to the Securities Financing Transactions Regulation in respect of title transfer collateral arrangements, regulatory status and other questionnaires, representation letters, non-disclosure agreements, delegated reporting agreements, Mandates and suitability assessments, any other notices, side letters, client classification letters, fund client approval letters or other documentation entered into in compliance or connection with applicable regulatory requirements and any other agreement or arrangement the duplication of which is necessary to ensure the Transferee can operate the Transferring Business effectively following the Effective Date but not including any Terms of Business, any Designation Notices in relation to an Existing Master Give-Up Agreement or any Excluded Ancillary Documents) ( Existing Ancillary Documents ) shall be deemed to exist and be separate documents of, and addressed to, the Transferee (such duplicated Existing Ancillary Documents, Duplicated Ancillary Documents ). For the avoidance of doubt, nothing in this paragraph shall be construed as terminating the original versions of any ancillary documents. 9.3 The creation of a Duplicated Master Agreement, Duplicated CDEA, Duplicated Master Give-Up Agreement or Duplicated Ancillary Document in accordance with paragraph 9.2 shall not require the consent of any person or result in the contravention of, liability arising out of or interference with any interest or right, and such Duplicated Master Agreement, Duplicated CDEA, Duplicated Master Give-Up Agreement or Duplicated Ancillary Document shall have effect, notwithstanding any provision to the contrary in any contract or arrangement with any Customer or any other person. 9.4 This paragraph 9.4 applies to any Early Termination Notice validly delivered prior to the Relevant Date in accordance with an Existing Master Agreement (whether by a relevant Transferor or a counterparty) which would from the Relevant Date relate (i) to both a Business Asset and an Excluded Asset or (ii) solely to Business Assets and in respect of which an Early Termination Date has been designated under the Existing Master Agreement as at the Relevant Date but such Early Termination Date has not occurred on or prior to the Relevant Date (an Existing Early Termination Notice ) With effect from the Effective Time: (i) (ii) each Existing Early Termination Notice in existence as at the Effective Time shall (i) continue to exist between the relevant Transferor and the existing counterparty and (ii) not form part of the Transferring Business, and shall continue to have effect as prior to the Effective Time; and a new Early Termination Notice on the same terms and conditions (including the designated Early Termination Date) as the Existing Early Termination Notice shall be deemed to exist between the Transferee and the counterparty to the Existing Master Agreement to which the Existing Early Termination Notice relates (the Duplicated Early Termination Notice ), and shall (from the Effective Time) have the same effect as the Existing Early Termination Notice. Accordingly, the Transferee or the counterparty, as applicable, shall be able to rely on such Duplicated Early Termination Notice to close-out any Transferring Derivative Transactions to 15

16 which the Duplicated Early Termination Notice relates on the designated Early Termination Date In respect of any Existing Early Termination Notice which relates to any Residual Asset or Residual Liability and which is validly delivered at any time during the period immediately after the Effective Time until the Subsequent Transfer Date (both dates inclusive) for the relevant Residual Asset or Residual Liability, with effect from the Subsequent Transfer Date: (i) (ii) each such Existing Early Termination Notice shall (i) continue to exist between the relevant Transferor and the existing counterparty and (ii) not form part of the Transferring Business, and shall continue to have effect as prior to the Subsequent Transfer Date; and a Duplicated Early Termination Notice shall be deemed to exist between the Transferee and the counterparty to the Existing Master Agreement to which the Existing Early Termination Notice relates, and shall (from the Subsequent Transfer Date) have the same effect as the Existing Early Termination Notice. Accordingly, the Transferee or the counterparty, as applicable, shall be able to rely on such Duplicated Early Termination Notice to close-out any Transferring Derivative Transactions to which the Duplicated Early Termination Notice relates on the designated Early Termination Date The creation of a Duplicated Early Termination Notice in accordance with paragraphs or shall not require the consent of any person or result in the contravention of, liability arising out of or interference with any interest or right, and such Duplicated Early Termination Notice shall have effect notwithstanding any provision to the contrary in any contract or arrangement with any Customer or any other person Capitalised terms used in this paragraph 9.4 shall have the following meanings: Early Termination Date has the meaning given to it in the relevant Existing Master Agreement. Early Termination Notice means any notice validly delivered in accordance with an Existing Master Agreement which specifies an Early Termination Date in respect of any Transferring Derivative Transaction. 9.5 This paragraph 9.5 will apply where (i) an ISDA Credit Support Annex has been entered into in relation to an Existing Master Agreement (an Existing CSA ) with the result that on and with effect from the Effective Time an ISDA Credit Support Annex is deemed to exist between the Transferee and the relevant counterparty as part of the Duplicated Master Agreement (a Duplicated CSA ) and (ii) immediately preceding the Effective Time a Credit Support Balance exists in respect of either party under the Existing CSA (for the purposes of this paragraph 9.5, (A) the Credit Support Balance shall be referred to as being held by the party who received the Eligible Credit Support, Distributions or proceeds thereof comprised in the Credit Support Balance notwithstanding the fact that such party is not actually required to hold any of the Eligible Credit Support, Distributions or proceeds thereof comprised in such Credit Support Balance; (B) the party who received the Eligible Credit Support, Distributions or proceeds thereof comprised in the Credit 16

17 Support Balance is referred to as the holder of the Credit Support Balance ; and (C) the other party is referred to as the provider of the Credit Support Balance ) Where any Credit Support Balance is held by the relevant Transferor under the Existing CSA and all Derivative Transactions that are taken into account for the purposes of determining the CSA Exposure under the Existing CSA transfer to the Transferee at the Effective Time, then: (i) (ii) on and with effect from the Effective Time (A) the Credit Support Balance held by the relevant Transferor under such Existing CSA shall be transferred to the Transferee and shall be deemed to be held by the Transferee under the Duplicated CSA and (B) the Credit Support Balance held by the relevant Transferor under the Existing CSA shall be reduced to zero, and the relevant Transferor shall have no further obligations under the Existing CSA in respect of return amounts relating to such transferred Credit Support Balance; if the Eligible Credit Support comprised in the Credit Support Balance held by the Transferor under the Existing CSA immediately preceding the Effective Time includes any cash: I. any Interest Amount payable by the holder of the Credit Support Balance in respect of cash comprised in the Credit Support Balance with respect to the Interest Period in which the Effective Date falls (the Relevant Interest Period ) shall (A) for the period from (and including) the first day of the Relevant Interest Period to (but excluding) the Effective Date, be paid (on the final day of the Relevant Interest Period or if the Existing CSA requires payment on another date, such other date) by the relevant Transferor to the counterparty and (B) for the period from (and including) the Effective Date to (but excluding) the final day of the Relevant Interest Period, be paid (on the final day of the Relevant Interest Period or if the Duplicated CSA requires payment on another date, such other date) by the Transferee to the counterparty; II. any Negative Interest Amount payable by the counterparty in respect of cash comprised in the Credit Support Balance with respect to the Relevant Interest Period shall (A) for the period from (and including) the first day of the Relevant Interest Period to (but excluding) the Effective Date, be paid (on the final day of the Relevant Interest Period or if the Existing CSA requires payment on another date, such other date) by the counterparty to the relevant Transferor and (B) for the period from (and including) the Effective Date to (but excluding) the final day of the Relevant Interest Period, be paid (on the final day of the Relevant Interest Period or if the Duplicated CSA requires payment on another date, such other date) by the counterparty to the Transferee; and (iii) if the Eligible Credit Support comprised in the Credit Support Balance held by the Transferor under the Existing CSA immediately preceding the Effective Time includes any securities and (A) a Distributions Date occurs in respect of such securities (whilst held by the Transferor) prior to the 17

18 Effective Date but (B) the related Settlement Day falls on or after the Effective Date, the Transferor shall transfer any Equivalent Distributions relating to such Eligible Credit Support and Distributions Date to the counterparty no later than the related Settlement Day to the extent that a Delivery Amount under the Existing CSA would not be created or increased by the transfer (notwithstanding that the Credit Support Balance will be transferred to the Transferee on and with effect from the Effective Time) Where any Credit Support Balance is held by the relevant Transferor under the Existing CSA and some but not all Derivative Transactions that are taken into account for the purposes of determining the CSA Exposure under the Existing CSA transfer to the Transferee at the Effective Time, then: (i) (ii) on and with effect from the Effective Time (A) an amount of Eligible Credit Support comprised in the Credit Support Balance held by the relevant Transferor under such Existing CSA as close as practicable to the Relevant Proportion (such amount of Eligible Credit Support to be comprised of a pro rata amount of each item of Eligible Credit Support comprised in the Credit Support Balance held by the relevant Transferor under such Existing CSA rounded, if necessary, down to the nearest whole unit of currency (in the case of cash) or the nearest tradable denomination (in the case of securities)) in each case as determined by the relevant Transferor shall be transferred to the relevant Transferee and shall be deemed to be held by the Transferee under the Duplicated CSA, provided that the aggregate amount of Eligible Credit Support so transferred shall not exceed the Maximum Counterparty Delivery Amount and (B) the Credit Support Balance held by the Transferor under the Existing CSA shall be reduced correspondingly, and the Transferor shall have no further obligations under the Existing CSA in respect of return amounts to the extent it relates to such transferred Credit Support Balance; if the Eligible Credit Support comprised in the Credit Support Balance held by the Transferor under the Existing CSA immediately preceding the Effective Time includes any cash: I. any Interest Amount payable by the holder of the Credit Support Balance in respect of cash comprised in the Credit Support Balance with respect to the Relevant Interest Period shall (A) for the period from (and including) the first day of the Relevant Interest Period to (but excluding) the Effective Date, be paid (on the final day of the Relevant Interest Period or if the Existing CSA requires payment on another date, such other date) by the relevant Transferor to the counterparty and (B) for the period from (and including) the Effective Date to (but excluding) the final day of the Relevant Interest Period, be paid (on the final day of the Relevant Interest Period or if the Existing CSA or the Duplicated CSA, as the case may be, requires payment on another date, such other date) by (I) the relevant Transferor to the counterparty in respect of the cash comprised in the Credit Support Balance held by the Transferor under the Existing CSA for such period and (II) the Transferee to the counterparty in respect of the cash comprised in the Credit 18

19 Support Balance held by the Transferee under the Duplicated CSA for such period; II. any Negative Interest Amount payable by the counterparty in respect of cash comprised in the Credit Support Balance with respect to the Relevant Interest Period shall (A) for the period from (and including) the first day of the Relevant Interest Period to (but excluding) the Effective Date, be paid (on the final day of the Relevant Interest Period or if the Existing CSA requires payment on another date, such other date) by the counterparty to the relevant Transferor and (B) for the period from (and including) the Effective Date to (but excluding) the final day of the Relevant Interest Period, be paid (on the final day of the Relevant Interest Period or if the Existing CSA or the Duplicated CSA, as the case may be, requires payment on another date, such other date) by (I) the counterparty to the relevant Transferor in respect of the cash comprised in the Credit Support Balance held by the Transferor under the Existing CSA for such period and (II) the counterparty to the Transferee in respect of the cash comprised in the Credit Support Balance held by the Transferee under the Duplicated CSA for such period; and (iii) if the Eligible Credit Support comprised in the Credit Support Balance held by the Transferor under the Existing CSA immediately preceding the Effective Time includes any securities and (A) a Distributions Date occurs in respect of such securities (whilst held by the Transferor) prior to the Effective Date but (B) the related Settlement Day falls on or after the Effective Date, the Transferor shall transfer any Equivalent Distributions relating to such Eligible Credit Support and Distributions Date to the counterparty no later than the related Settlement Day to the extent that a Delivery Amount under the Existing CSA would not be created or increased by the transfer (notwithstanding that the securities comprised in the Credit Support Balance may have been transferred in whole or in part to the Transferee on and with effect from the Effective Time) Where any Credit Support Balance is held by the counterparty under the Existing CSA and all Derivative Transactions that are taken into account for the purposes of determining the CSA Exposure under the Existing CSA transfer to the Transferee at the Effective Time, then: (i) (ii) on and with effect from the Effective Time (A) the Credit Support Balance held by the counterparty under such Existing CSA shall be deemed to have been transferred by the Transferee to, and received and held by, the counterparty under the Duplicated CSA and (B) the Credit Support Balance held by the counterparty under the Existing CSA shall be reduced to zero, and the counterparty shall have no further obligations under the Existing CSA in respect of return amounts relating to such transferred Credit Support Balance; if the Eligible Credit Support comprised in the Credit Support Balance held by the counterparty under the Existing CSA immediately preceding the Effective Time includes any cash: 19