Paragraph 5 Payments to the Treasury and the Bank of England

(1)

The Treasury may direct the Account Holder to make a payment to the Treasury or the Bank of England only where—

(a)

the payment is to be made for the purposes of reimbursing the Treasury or the Bank of England (as the case may be) for any costs (including liability for tax) incurred in relation to, or in consequence of, any of the following—

(i)

the transfer of the Bridge Bank business;

(ii)

the incorporation, authorisation and operation of the Bridge Bank;

(iii)

the sale of the Bridge Bank, or some or all of the property, rights or liabilities of the Bridge Bank, to a purchaser;

(iv)

the winding up of the Bridge Bank;

(b)

the independent valuer has certified, in accordance with paragraph 7, that the costs were properly and reasonably incurred by the Bank of England or the Treasury (as the case may be); and

(c)

the direction is made within 12 months of the date of—

(i)

the completion of the winding up of the Bridge Bank; or

(ii)

if earlier, the sale of shares in the Bridge Bank.

(2)

In the event that the Bank of England (as sole member of the Bridge Bank) passes a resolution to wind up the Bridge Bank, the Bank of England must, as soon as is reasonably practicable after the passing of the resolution, send a copy of the resolution to—

(a)

Dunfermline, and

(b)

the Treasury.