Standard Mortgage Conditions for residential mortgages in Scotland Mortgages provided by the Royal Bank of Scotland Plc

February 2009

The Royal Bank of Scotland plc Standard Mortgage Conditions

Contents Your information Definitions Interpretation

Part A

Part B

1. 2. 3.

The Offer of Loan Lapse of Offer Our Right to Withdraw

15. 16. 17.

Monthly Payments Undertaking To Pay

4.

Mortgage Deed

18.

Property Insurance

5.

Occupation of the Property

19.

Interest Rate Changes

6.

Property Valuation

20.

Costs, Fees and Expenses

7.

Use of the Loan and Retentions

21

Early Repayment

22

Our Rights and Powers

General Undertakings

8.

Existing Mortgages

23

Buy to Let Loans

9.

Property Insurance

24.

Protection of Third Parties

10. 11. 12. 13. 14.

Interest Costs Fees and Expenses

25. 26. 27. 28. 29. 30. 31.

Further Assurance Power of Attorney

Direct Debit Other Borrowing Changes in Circumstances

Continuing Security and other provisions Notices Miscellaneous Transfer of Mortgage By Us Governing Law & Changes to Conditions

This document is to be read in conjunction with the Special Conditions and any other conditions contained or referred to in the Offer of Loan and sets out the legal position between You and Us. These Standard Mortgage Conditions shall apply to all Offers of Loan made by Us to You except as specifically amended by the Special Conditions or otherwise varied in writing by Us. Part A of the Standard Mortgage Conditions contains the conditions which have to be complied with before the Loan can be made available to You although some of these conditions will continue in effect after the funds have been released and Part B governs the legal position between You and Us during the lifetime of the Mortgage. Your attention is drawn to Our right to transfer the Mortgage contained in Condition 30.

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Your information Who we are Your account is with The Royal Bank of Scotland plc. We are a member of the Royal Bank of Scotland Group (the Group). For information about our Group of companies please visit www.rbs.com and click on “About us “, or for similar enquiries please telephone 0131 556 8555 or Textphone 0845 900 5960.

How we use your information and who we share it with Your information comprises all the details we hold about you and your transactions, and includes information obtained from third parties. We may use and share your information with other members of the Group to help us and them: • • • • •

assess financial and insurance risks; recover debt; prevent and detect crime; understand our customers’ requirements; develop and test products and services.

We do not disclose your information to anyone outside the Group except: • • • •

where we have your permission; or where we are required or permitted to do so by law; or to credit reference and fraud prevention agencies and other companies that provide a service to us or you; or where we may transfer rights and obligations under this agreement.

We may transfer your information to other countries on the basis that anyone to whom we pass it provides an adequate level of protection. However, such information may be accessed by law enforcement agencies and other authorities to prevent and detect crime and comply with legal obligations. From time to time we may change the way we use your information. Where we believe you may not reasonably expect such a change we shall write to you. If you do not object to the change within 90 days, you consent to that change. If you would like a copy of the information we hold about you, please write to: The Manager, Documentation Advisory & Compliance Team, The Royal Bank of Scotland plc, Mortgage Centre, PO Box 123, Greenock PA 15 1EF. A fee may be payable.

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Credit reference agencies We may make periodic searches at credit reference agencies and will provide information to the Group to manage and take decisions about your accounts. This may include information about how you manage your account including your account balance, credit limit and any arrears. We will also provide this information to credit reference agencies who may make this information available to other organisations so that they can take decisions about you, your associates and members of your household. The information may also be used for tracing purposes.

Fraud prevention agencies If false or inaccurate information is provided and fraud is identified or suspected, details may be passed to fraud prevention agencies. Law enforcement agencies may access and use this information. We and other organisations may also access and use this information to prevent fraud and money laundering, for example when: • checking applications for, and managing credit or other facilities and recovering debt; • checking insurance proposals and claims; • checking details of job applicants and employees. We, and other organisations that may access and use information recorded by fraud prevention agencies, may do so from other countries.

We can provide the names and addresses of the credit reference and fraud prevention agencies we use if you would like a copy of your information held by them. Please contact The Manager, Documentation Advisory & Compliance Team, The Royal Bank of Scotland plc, Mortgage Centre, PO Box 123, Greenock PA 15 1EF. The agencies may charge a fee.

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Definitions In both parts A and B of these Conditions the following definitions shall apply unless the context otherwise requires and the interpretation also applies throughout the Conditions. “2004 Act” means the Antisocial Behaviour etc (Scotland) Act 2004. “Act” means the Conveyancing and Feudal Reform (Scotland) Act 1970. “We/Us/Our” means The Royal Bank of Scotland plc and its successors in title as more fully defined in the Mortgage. “You/Your” means the person or persons named as such in the Mortgage and that person’s successors.

“Business Day” means a day on which banks in the City of London generally are open for the transaction of business of the nature required for the purpose of the Loan. “Buy to Let Mortgage” means a Mortgage so designated in the Offer of Loan. “Cleared Funds” means money available for Our immediate use. “Conditions” means these Standard Mortgage Conditions, the Offer of Loan and the Special Conditions. “Interest Rate” means the rate or rates of interest as specified as such in the Offer of Loan or such other interest rate, or rates, as may be notified to You in terms of the Conditions. “Loan” means the amount described as such in the Mortgage and shall include any further loan or loans made by Us to You secured over the Property. “Month” means a calendar month and “Monthly Payment” means the monthly repayment stipulated in any Offer of Loan as varied by Us in accordance with the Conditions. “Mortgage” means the Standard Security granted by You over the Property in Our favour (including any amendment and/or supplement). “Offer of Loan” or “Offer” means any offer of loan made by Us to You relating to the Property. “Payment Day” means the day in each Month specified to You in the Offer of Loan or as varied by Us during the Loan Term.

“Property” means the heritable subjects over which the Loan is secured (including all fittings and fixtures) now or at any time during the Term.

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“Redemption” means repayment in full by You of the Secured Amounts. “Related Rights” means and shall include (i) sums which (under any statute or law or contract and whether as of right or ex gratia or otherwise) may be or become payable in respect of the Property or any damage or injury to it or depreciation of it, and (ii) the benefit of any other obligation, security right or indemnity affecting or concerning the Property. “Release of Loan” means the date on which We release the Loan (less any retention) to the solicitor acting for Us in connection with the Loan, who may not be the solicitor acting for You (whether by telegraphic transfer, banker’s draft, cheque or such other way as We shall reasonably deem appropriate). “Repayment Mortgage” means any Loan where throughout the duration of the Loan You make monthly repayments of capital as well as interest. “Secured Amounts” means the Loan or the balance from time to time unpaid and interest as provided in the Conditions and all other amounts which are or may become payable by You to Us under the provisions of the Mortgage and the Conditions or any other document creating any Security Interest or in any other way arising. “Security Interest” means any mortgage, charge, right of set-off, lien, or other security interest whatsoever including any that may arise or be imposed by operation of law or any enactment. “Settlement” means the day on which the purchase price of the Property is released to the seller’s solicitor by Our solicitor.

“Special Conditions” means conditions applying specifically to Your Loan as shown under this heading in the Offer of Loan. “Tenancy Agreement” means an agreement between You and a tenant allowing the tenant to occupy a Property charged by a Buy to Let Mortgage. “Term” has the meaning ascribed to it in the Offer of Loan or as subsequently agreed in writing between We and Borrower.

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Interpretation References to the “You” include Your personal representatives and where applicable Your permitted assignees or successors and other persons deriving title under You. If there is more than one of You the Conditions apply to all of You together and each of You on Your own. This means that each of You is liable for the whole of the Secured Amounts, not just a part of them,and can be held fully responsible if You do not keep to the Conditions. Any reference to legislation shall be deemed to include any subordinate legislation and any amendment or re-enactment with or without modification. References to the “Mortgage” include (so far as applicable) the Conditions and the Offer of Loan. References to the masculine include the feminine and to the singular include the plural and vice versa. Headings in the Conditions shall not affect their interpretation.

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PART A 1. THE OFFER OF LOAN 1.1

The Offer of Loan is subject to:1.1.1 the title to the Property being acceptable to Us 1.1.2 Our being satisfied that all information supplied to Us by You in support of the application for loan being complete and accurate 1.1.3 Our being satisfied with the results of the investigations carried out by Us or Our representatives in respect of You and the Property. 1.2

You must not alter the Offer of Loan. The terms of the Offer of Loan may only be changed by agreement with Us, and a new Offer of Loan will be sent to You in such a case. Only the most recent Offer of Loan, which will contain any revised terms, should be signed by You on the acceptance page.

2. LAPSE OF OFFER 2.1

Unless We agree otherwise the Offer of Loan shall automatically lapse if the Release of Loan does not take place within three months of the date of the Offer.

2.2

If the Release of Loan is likely to be delayed and an extension of the Offer is sought You must contact Us as soon as possible. In such circumstances We may raise such further enquiries or impose such further conditions as We, in Our sole discretion, deem necessary.

3. OUR RIGHT TO WITHDRAW 3.1

We may withdraw the Offer of Loan at any time prior to Release of Loan if doubts arise subsequent to the making of the Offer as to Your ability to repay, Your identity and/or any information supplied by You, or if We become aware of any information which, if known earlier, may have resulted in Our not issuing an Offer of Loan.

4. MORTGAGE DEED You are required to execute a first ranking Standard Security over the Property and any ancillary documents required by Us prior to Release of Loan. The Standard Security and ancillary documents will be in Our preferred form. 5. OCCUPATION OF THE PROPERTY 5.1

You must have full vacant possession of the whole of the Property on or before Settlement.

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5.2

You are required to supply to Us details of any person who will or may occupy the Property with You.

5.3

No tenancy is to be created (either of the whole or part) of the Property without Our prior written consent.

6. PROPERTY VALUATION 6.1

Delivery of a valuation report on the Property in terms and format acceptable to Us shall be a pre-condition of the Loan, unless otherwise agreed by Us.

6.2

Any valuation or re-inspection of the Property carried out on Our behalf is solely for Our purposes and We accept no responsibility for its accuracy.

6.3

Neither the issue of the Offer of Loan nor the making of the Loan by Us implies:6.3.1 that any report given to Us by Our appointed valuer is complete or accurate, or 6.3.2 that the Property is free from any defect, or 6.3.3 that the Property is worth the amount of the Loan or that any purchase price proposed to be paid by You is reasonable.

6.4

All valuation and re-inspection fees in respect of the Property shall be paid by You unless otherwise detailed in the Offer of Loan.

7.USE OF THE LOAN AND RETENTIONS 7.1

The Loan will normally be made available by one single payment by debiting the mortgage account in Your name. However where We agree with You that the circumstances require it, more than one drawing may be made.

7.2

We shall be entitled to pay the amount of the Loan less any retention referred to in the Offer of Loan to Your solicitor.

7.3

Unless written instructions to the contrary are received any sum or sums to be retained from the Loan will be released directly to You once We have confirmation from Our valuer that work or works have been completed satisfactorily.

7.4

Any repairs referred to in the Offer of Loan which are not subject to a retention or an undertaking must be carried out as soon as possible after the Release of Loan.

8. EXISTING MORTGAGES Unless We otherwise agree in writing, Your existing mortgage(s), if any, must be redeemed on or before Settlement.

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9. PROPERTY INSURANCE 9.1

The Property must be insured:9.1.1 where being acquired by You, from the date You concluded missives for the purchase of the Property, or 9.1.2 where the Property is already owned by You, on or before the Release of Loan with an insurer acceptable to Us against fire and all other risks (including subsidence, heave and landslip) normally covered by a comprehensive householder’s insurance policy in a sum equal to the full reinstatement cost (including costs of demolition, professional fees and Value Added Tax and subject to automatic index adjustment). The sum insured shall in any event not be less than the reinstatement amount (the estimated cost of total rebuilding) referred to under the heading of Property Insurance in the valuation report, delivered to Us in terms of Condition 6.1. Where We have waived the requirement for a valuation report, insurance companies will usually be able to provide guidance on reinstatement value. The website of the Association of British Insurers (www.abi.org.uk) may also provide information to assist.

9.2

We require evidence of insurance cover and in certain instances will require the original policy (with in some cases Our interest specifically endorsed) to be placed with the title deeds.

9.3

If the Property forms part of larger subjects which have the benefit of a common insurance policy (“common policy”), We shall at Our discretion accept such common policy in lieu of a separate insurance policy for the Property provided that Our interest is notified to the insurer under the common policy and that the terms of the common policy are at all times throughout the currency of the Mortgage satisfactory to Us. If We at any time throughout the currency of the Loan are not satisfied with the common policy We reserve the right to arrange insurance in terms of Condition 18.

10. INTEREST 10.1 We may change the Interest Rate at any time (whether before or after Release of Loan) except during a period in which the Offer of Loan states that the rate of interest is fixed, or tracks another rate, to reflect one or more of the following circumstances:(a) an actual or anticipated change in interest rates generally; (b) an actual or anticipated change in the cost to Us of funding the Loan; (c) a change in the law or decision by a court; (d) a decision or recommendation by an ombudsman, regulator or similar body. We shall notify You in writing of each change which affects You.

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!0.2

If the Interest Rate tracks another rate it will only change if that rate changes and We will change your rate on the first day of the Month following the the change. The Interest Rate will not be reduced below any minimum rate stated in the Offer of Loan.

10.3

Interest will be charged from the Release of Loan and will be calculated on the daily balance of the Secured Amounts unless otherwise stated in the Offer of Loan.

10.4

Other than as provided in Condition 10.5 interest on the Loan will be charged and collected in arrears one Month from Release of Loan and on the same day of each Month thereafter during the Loan Term. Regardless of which date in the Month Completion takes place, each Monthly Payment throughout the Loan Term, including the first Monthly Payment, will be for equal amounts, unless varied by Us in accordance with the Conditions.

10.5

We will accept a request from You both before and after Release of Loan for the Monthly Payment to be collected on a specified day of each Month. If You ask Us to vary the date of the Monthly Payment at any time either before or after Release of Loan the date of collection of the Monthly Payment will be amended with effect from a date to be agreed between You and Us, but interest will continue to be charged on the Loan each Month on the original date of the Monthly Payment.

10.6

Whenever a request by You to specify or vary the date of the Monthly Payment is received, interest for a complete Month will be charged in the Month in which the variation becomes effective, irrespective of the revised date of the Monthly Payment.

11. COSTS, FEES AND EXPENSES 11.1

You are responsible for all costs and outlays incurred by Us whether or not the Loan is completed including (but not limited to) valuation fees and legal costs.

11.2

Our fees and their method of collection will be advised to You prior to Release of Loan, annually on the anniversary of Release of Loan, and on request from You.

12. DIRECT DEBIT We must receive a signed and properly completed direct debit mandate before We will release the Loan. Each Monthly Payment shall be made by You to Us by direct debit upon a suitable account maintained by You throughout the Term PROVIDED ALWAYS that if any direct debit payment is refused by Your bank then We shall be entitled to charge an administration fee for each unsuccessful application for payment at such amount as We shall determine and such fee shall be payable by You on demand and, until paid, shall be added to the Secured Amounts and will be included in the Monthly Payment unless otherwise agreed.

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13. OTHER BORROWING 13.1

If the Loan is to be used for the purchase of the Property then the Loan is subject to You providing the balance of the purchase price from Your own resources and without recourse to other borrowing unless specifically agreed in writing by Us.

13.2

No further mortgage or charge is to be created over the Property without Our prior written consent.

14. CHANGES IN CIRCUMSTANCES If, prior to the Release of Loan, there are any changes to Your personal circumstances or matters arise which are likely to affect Our decision to proceed with the Release of Loan, You must communicate these to Us without delay.

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PART B 15. MONTHLY PAYMENTS 15.1

Unless You have been notified in writing by Us, the Monthly Payment will be calculated by Us so as to incorporate:15.1.1 the interest payable by You in each Month 15.1.2 any interest which shall have accrued and remains unpaid in accordance with Condition 16.3 15.1.3 in the case of a Repayment Mortgage such repayment of capital as is required to achieve repayment of the Secured Amounts by the expiration of the Term 15.1.4 in the case of an Interest Only Mortgage You must repay the capital at the end of the Term. It is Your responsibility to ensure that You have the means to do so.

16. UNDERTAKING TO PAY 16.1

You undertake to pay to Us the Secured Amounts as and when they become due in accordance with the Conditions.

16.2

You are required to make the Monthly Payment on the due date as specified in the Conditions or on any amended date as may be agreed with Us in terms of Condition 10.5. Failure to do so will result in You being in default of the Loan.

16.3

If the Monthly Payment is not made on the due date for whatever reason We reserve the right to charge and accrue interest at the Interest Rate on such unpaid amount until paid.

16.4

If any payment due (or part thereof) is in arrears We shall be entitled to charge an administration fee which shall be payable by You on demand and until paid shall be added to the Secured Amounts and bear interest at the Interest Rate.

16.5 We may at any time or times (but shall not be obliged to) accept payments other than those payable under the Conditions or give further time for the payment of any of the Secured Amounts or generally make any other arrangement as to the mode of and/or time for payment of any money (whether in the nature of capital, interest or otherwise) and any such arrangement shall not in any way prejudice or affect the power of sale or other powers conferred on Us. 16.6

If on the realisation of Our security by Us the net proceeds shall be insufficient to discharge the Secured Amounts in full, You will forthwith pay the amount of the deficiency with interest at the Interest Rate until repaid in full.

16.7

Nothing in the Conditions shall prejudice Our rights to call up the Mortgage whether in terms of Section 19 of the Act or otherwise.

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16.8

Interest shall be charged at the Interest Rate on the Secured Amounts in accordance with the Offer of Loan and the Conditions and is payable from and including the Release of Loan and is payable at the Interest Rate after as well as before any judgement or decree.

16.9

For the avoidance of doubt, interest shall be charged on any retention from the Loan with effect from the date on which it is released by Us.

16.10 You shall make each payment due without set-off or counterclaim. 16.11 Each payment made by You to Us shall be applied towards satisfying the Secured Amounts due to Us in such order or in such proportion between more than one liability or as between capital and interest as We reasonably think fit, except where otherwise agreed in writing between You and Us. 17. GENERAL UNDERTAKINGS 17.1

You further undertake with Us as follows:17.1.1 not without Our prior written consent to create or permit to exist any Security Interest upon the Property which will rank before, equal with or after the Mortgage 17.1.2 not to transfer the Property while still subject to the Mortgage without Our prior written consent upon such terms and conditions (if any) as We may impose 17.1.3 not without Our prior written consent to share, part with possession of or grant any lease, licence or right to occupy the whole or any part of the Property 17.1.4 not without Our prior written consent to negotiate, waive or settle any claim for the Related Rights or compensation (whether payable under any enactment or otherwise) in respect of the compulsory acquisition, loss of or damage to or reduction in the value of the Property 17.1.5 not without Our prior written consent to make any change in the use of the Property or to apply to any planning authority for consent to the same and not to make any structural alterations or additions to the Property 17.1.6 not to do or omit to do to the Property anything which shall result in a contravention of any legislation from time to time in force relating to town and country planning 17.1.7 not without our prior written consent to use the Property other than as a domestic dwelling house for the occupation of one family

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17.1.8 not without Our prior written consent to apply for or to obtain an improvement grant or other similar grants 17.1.9 not to do or omit to do or permit or suffer to be done any act or thing whereby the Property may become subject to any statutory charge which is or may be or may become binding upon Us 17.1.10 to notify Us immediately in writing of any notice or information received by or served on You concerning any proposal for the compulsory acquisition of the Property or any other matter which might adversely affect the value of the Property and (at Your expense) to take any action regarding the same as We may require 17.1.11 to put and keep all buildings on the Property and all roads, passageways, pipes, wires, cables, drains and sanitary and water apparatus and all plant, fixtures, fittings and equipment in or upon the Property in good and substantial repair and in good working order and condition and when necessary renew or replace the same and not demolish or remove any of the same without Our prior written consent except in the ordinary course of use, repair, maintenance or improvement 17.1.12 to perform and observe the burdens, conditions, stipulations, regulations and agreements affecting the Property including the provisions of the title deeds of the Property 17.1.13 to comply with all statutory and other requirements of all competent authorities which affect or relate to the Property 17.1.14 to pay on demand (and indemnify Us against) all existing and future feu duties, ground burdens, rates, taxes, duties, charges, assessments, impositions and outgoings (whether imposed by agreement, statute or otherwise and whether in the nature of capital or revenue) now or at any time payable in respect of the Property or any part of it or by the owner or occupier, during the continuance of the Mortgage 17.1.15 to allow Us (and any persons authorised by Us) to have access to the Property at all reasonable times to carry out any survey or inspection which We may reasonably deem necessary and to do any work which You have failed to do in accordance with Your obligations under the Conditions 17.1.16 where any retention has been made from the Loan pending the completion by You of specified works to the Property, to effect those works within the period of time required by Us to the satisfaction of Our valuer and to pay any reinspection fee 17.2

If You fail to observe or perform punctually any of Your obligations

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under the Mortgage and the Conditions We shall have the power on Your behalf and at Your expense to perform the obligations and to take any steps which We may reasonably consider appropriate to remedy the failure but so that the exercise of such power shall not prejudice Our rights under Condition 22. 18. PROPERTY INSURANCE 18.1

You must keep the Property insured with an insurer acceptable to Us against fire and all other risks (including subsidence, heave and landslip) normally covered by a comprehensive householders insurance policy in a sum equal to the full reinstatement cost (including costs of demolition, professional fees and Value Added Tax and subject to automatic index adjustment) in terms satisfactory to Us.

18.2

You must pay punctually all premiums and other sums necessary to keep the insurance on risk and We may call for evidence that the premiums and other sums have been paid.

18.3

If You fail to pay the insurance premiums We may (but are not obliged to) pay such sums on Your behalf and may also change the terms of the policy or increase the sum insured or effect a new policy as We deem necessary. You will repay such sums on demand and if unpaid they will be added to the Secured Amounts and interest thereon will be charged at the Interest Rate.

18.4

All rights and claims under any policies effected or deemed to have been effected under the Conditions are assigned by You to Us and any monies received from any insurance of the Property (whether effected by You or Us or otherwise) shall be applied at Our reasonable discretion in making good the loss or damage in respect of which the monies are received or in or towards the repayment of the Secured Amounts. Any monies received by You under such insurance shall be held by him in trust for Us and shall be paid to Us (or as We shall otherwise direct) on demand.

18.5

We shall have power to settle and adjust with the insurers of the Property all questions with respect to the amount of the monies payable under the policy of insurance and with respect to the liability of the insurers.

19. INTEREST RATE CHANGES 19. 1 Except as detailed in the Offer of Loan the Interest Rate may be varied to reflect the following circumstances:(e) an actual or anticipated change in interest rates generally; (f) an actual or anticipated change in the cost to Us of funding the Loan; (g) a change in the law or decision by a court; (h) a decision or recommendation by an ombudsman, regulator or similar body. We shall notify You in writing of each change which affects You.

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20. COSTS, FEES AND EXPENSES 20.1

You hereby undertake to Us to pay on demand all costs, charges and expenses (including legal and other professional fees, administration costs and overhead expenses) in connection with the Mortgage, the Offer of Loan and the Conditions including (but not limited to):20.1.1 the investigation of title to or the re-inspection or valuation of the Property 20.1.2 the exercise or attempted or purported exercise or consideration of the exercise by Us of any of Our powers or any other action taken by Us with a view to or in connection with the recovery by Us of the Secured Amounts 20.1.3 the carrying out or consideration of any other act or matter which We may consider to be for the benefit or preservation of the Property, any Security Interest, or Our interest 20.1.4 any variation or redemption of the Mortgage 20.1.5 any application for any form of consent from Us whether or not such consent is granted 20.1.6 any breach by You of any of the terms contained in the Conditions, the Offer of Loan or any other agreement between You and Us 20.1.7 the production of the title deeds or any deed or document or copy or copies including delivery on loan 20.1.8 the making of any further loan.

20.2

The costs charges and expenses payable under Condition 20.1 above shall be:20.2.1 payable by You in full, provided they are reasonable in amount and that We acted reasonably in incurring them; 20.2.2 charged together with any Value Added Tax, insurance premium tax, or similar taxes properly chargeable in respect of the same and the amount of all Our costs, charges and expenses which may be recovered from You under the Conditions shall be increased by the amount of any taxes charged (other than taxes on Our net profits) except to the extent that We consider these to be recoverable by Us 20.2.3 payable by You on demand and until paid shall be added to the Secured Amounts and interest thereon will be charged at the Interest Rate from the dates on which they are paid, incurred or charged by or to Us.

20.3

For the purposes of this Condition 20 Our costs charges and expenses include not only the money which We must pay to other people in connection with the Mortgage, but also the internal administration costs We incur when carrying out work or providing a service in connection with the Mortgage Ourselves. Where We incur administration costs, these 16

may be recovered by charging You an administration fee. The administration fees charged will be based on Our reasonable assessment of the cost of doing the work or providing the service in question. This means that We can change the fees charged to reflect a change in the cost of doing the work or providing the service. A tariff of administration fees was sent with these Conditions and a current tariff will be sent each year, if there have been any changes to it.

21. EARLY REPAYMENT 21.1

You may repay the Secured Amounts in whole or in part on any Business Day subject to the terms of this Condition 21, and any Special Conditions regarding early repayment set out in the Offer of Loan.

21.2

The minimum amount that We will accept by way of partial repayment will be £1,000 or such other sum as may be notified to You from time to time.

22. OUR RIGHTS AND POWERS 22.1

The Loan shall be in default on the occurrence of any of the following events:22.1.1 if You shall fail to pay in full any Monthly Payment or other payment due under the Mortgage 22.1.2 if there is any breach of any other obligation on Your part which shall not have been remedied within such period of time as We shall specify by notice requiring the remedying of the same served in accordance with Condition 28 22.1.3 if You shall become apparently insolvent, be sequestrated or be adjudicated bankrupt or if circumstances arise which will permit the presentation of a petition for bankruptcy against You or You shall enter into any composition or arrangement with or for the benefit of his creditors 22.1.4 if any judgement, decree or order made against You is not complied with within seven days, or if any diligence, execution, distress, sequestration, adjudication or other process is levied or enforced upon the Property 22.1.5 if You default under any loan agreement or other agreement or obligation relating to borrowing with Us or under any guarantee (which expression includes all contingent liabilities undertaken in respect of the obligations or liabilities of any third party) 22.1.6 if the Property shall be compulsorily purchased or requisitioned or if any order for such becomes effective as a result of any procedure 22.1.7 if any necessary consent to the user of the Property for its existing use is revoked or withdrawn

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22.1.8 if the Property has been destroyed or abandoned or in Our reasonable opinion is likely to suffer damage or destruction or maltreatment or some other event is likely to occur which will impair the value of Our security whether such event be caused by Your act or otherwise 22.1.9 if any part of the security created by the Mortgage or any guarantee, indemnity or other security for any money, obligation or liability secured or held as security for the Loan fails or ceases in any respect to have full force and effect or to be continuing or is terminated or disputed or becomes in jeopardy, invalid or unenforceable 22.1.10 if We become aware of any material misrepresentation in or any material omission from any information supplied to Us 22.1.12 if You die. On the occurrence of any of the events detailed in Condition 22.1 above and at any time thereafter while such event is continuing, We may by written notice to You declare the Secured Amounts to be immediately due and payable and/or terminate Our obligations under the Conditions. 22.2

In addition to the powers contained in the Act We may on entering into possession of the Property where We reasonably think fit:22.2.1 sell or otherwise dispose of the Property or any part of it for a cash price payable either as a lump sum or by instalments and either immediately or at a future date or dates (with or without interest and with or without security in the meantime) or for such other consideration of whatever description and generally in such manner and upon such terms and conditions as We may reasonably think fit 22.2.2 in addition or as an alternative to selling any fixtures subject to the Mortgage together with the land or buildings to which they are affixed, sell the same separately or detached from such land or buildings 22.2.3 on or in connection with any sale or disposal of the Property to enter into any agreement (including an option or pre-emption agreement) in relation to the Property, grant or reserve any right over the Property and repair, replace and develop the Property and apply for any appropriate permission, licence or approval and do any other act or thing whatever in relation to the Property or any part of it which We reasonably think fit 22.2.4 insure the Property at Your expense against such risks (in addition to loss or damage by fire) and for such amounts as We may consider prudent.

22.3

If upon entry by Us into possession of the Property it shall contain any furniture, moveables, livestock or any item whatever (whether of a trade or domestic nature) which You shall have failed to or refused to remove then and in every such case:-

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22.3.1 We shall have full authority (at Your expense and risk and acting as Your agent) to remove, store, sell or dispose of the same in such manner as We shall think fit but nothing contained in the Mortgage shall confer on Us any charge or rights in respect of such furniture, moveables or livestock or to the proceeds of sale 22.3.2 We will take reasonable care to avoid damage or loss to Your belongings but shall be under no liability whatever for any loss or damage by any third party occasioned by the exercise or purported exercise of such authority and You must repay Us if We incur any liability by the sale or purported or attempted sale or disposal in good faith by Us of any such furniture, moveables or livestock which are not Your sole unencumbered property. 22.4

We shall not be liable for any loss or damage (however caused) which arises out of the exercise (or the attempted or purported exercise) or the failure to exercise any of Our powers.

22.5

Subject to the terms of the Act and without prejudice to the generality of Condition 22.4 entry into possession of the Property shall not render Us liable to account as heritable creditor in possession. If We enter into possession of the Property We shall be entitled at any time to relinquish possession.

23. BUY TO LET 23.1

The terms of this Condition 23 apply only to Buy to Let Mortgages.

23.2

The following Conditions do not apply to Buy to Let Mortgages: Condition 5, 17.1.3 and 17.1.7.

23.3. You further undertake with Us as follows:

23.3.1 any Tenancy Agreement will be a Short Assured Tenancy under the Housing (Scotland) Act 1988 and a valid Ground 2 Notice will be properly served on the tenant or tenants 23.3.2 the term certain stated in the Tenancy Agreement will be for not less than 6 months and not more than 12 months and must prohibit any subletting of the Property 23.3.3 the Tenancy Agreement does not contain a clause extending or conferring an option to extend the term certain referred to in Condition 23.3.2 23.3.4 if the Property is a house in multiple occupation under the terms of the Civic Government (Scotland) Act 1982 (Licensing of Houses in Multiple Occupation) Order 2000 You will ensure that the Property meets the requirements of the said Order and where the relevant authority requires the Property to be licensed You

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will ensure that they hold such a licence and that they comply with the terms of the licence whilst the Property is let 23.3.5 the Property must be let as a whole and no alterations may be made such that it may be let as separate self-contained units 23.3.6 You will obtain any registration required by the 2004 Act and ensure that You remain registered whilst the Property is let 23.3.7 You will ensure that any letting agency engaged by You in respect of the Property will be registered by the relevant authority under the 2004 Act and that the Agent will remain registered whilst the Property is let 23.3.8 whilst the Property is let You will comply with all the provisions of the 2004 Act imposed on registered private landlords and will ensure that any letting agency engaged by You will comply with all provisions of the 2004 Act imposed on letting agents 23.3.9 You must keep the Property insured in accordance with the provisions of Condition 18 and must ensure that the insurer is notified of the existence of any Tenancy Agreement 23.4

You will seek possession of the Property under the Housing (Scotland) Act 1988 if required by Us to do so.

23.5

On the occurrence of any of the following events, We will be deemed to have revoked Our consent to the Property being let with immediate effect: 23.5.1 if any of Your obligations in Condition 23.3 are not met or cease to be met (and in such circumstances You must contact Us immediately to explain the matter) 23.5.2 service on You or any letting agency engaged by You of an Antisocial Behaviour Notice in respect of the Property under section 68 of the 2004 Act 23.5.3 the making of a Management Control Order in respect of the Property under section 74 of the 2004 Act 23.5.4 the making of a Rent Penalty Order in respect of the Property under section 71 of the 2004 Act 23.5.5 You ceasing for any reason to be registered under the 2004 Act 23.5.6 any letting agent engaged by You ceasing for any reason to be registered under the 2004 Act and You failing to appoint a suitable replacement within 28 days of becoming aware of this. 23.5.7 You ceasing for any reason to hold a licence for the Property in terms of Condition 23.3.4

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24. PROTECTION OF THIRD PARTIES Any purchaser of the Property from, or other person dealing with Us shall not be concerned to enquire whether any of the powers exercised or purported to be exercised have arisen or become exerciseable or as to the propriety or validity of the exercise or purported exercise of any such power.

25. FURTHER ASSURANCE You shall at any time if and when required by Us (notwithstanding that Our power of sale may not have become exerciseable) immediately execute such further legal or other mortgages, charges, assignations or securities in Our favour as We shall from time to time require over the Property and all rights and remedies relating thereto both present and future to secure the Secured Amounts, such further mortgages, charges, assignations or securities to be prepared by or on Our behalf at Your cost.

26. POWER OF ATTORNEY You irrevocably and by way of security appoint Us to be Your attorney subject to the redemption of the Loan (with full power to appoint substitutes and to delegate on Our behalf and in Our name or otherwise) to execute any document or do any act or thing which You are obliged to execute or do under the Mortgage or the Conditions or which We (or Our substitute or delegate) may reasonably consider appropriate in connection with the exercise of any of Our powers. Any person appointed as Our substitute or delegate shall in exercise of the said Power of Attorney be Your agent who alone shall be responsible for the acts and defaults of such substituted person or delegate and We shall not be responsible for any misconduct, negligence or default of such substituted person or delegate.

27. CONTINUING SECURITY AND OTHER PROVISIONS 27.1

The security constituted by the Mortgage shall be a continuing security to Us notwithstanding any settlement of account or other matter or thing and is in addition to and shall not be merged in or in any way prejudice or be prejudiced by any other Security Interest document or right which We may now or at any time hereafter hold or have (or would apart from the Mortgage hold or have) as regards You or any other person in respect of the same Secured Amounts.

27.2

The powers conferred on Us under the Mortgage are cumulative without prejudice to Our powers under the general law and may be exercised as often as We think appropriate.

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27.3

No failure or delay by Us in exercising any right or remedy shall operate as a waiver of such right or remedy nor shall any single or any partial exercise or waiver of any right or remedy preclude its further exercise or the exercise of any other right or remedy.

27.4

So far as You are able (but subject to redemption) You:27.4.1 assign all Related Rights to Us, and 27.4.2 will hold all Related Rights in trust for Us.

27.5

Money arising in respect of Related Rights (unless, with Our agreement expended in restoring or improving the Property) shall be applied by Us in reduction of the Secured Amounts.

27.6 The powers available to Us under the Mortgage are in addition to and without prejudice to and not in substitution for all other powers and remedies competent to Us by statute or at common law. 28. NOTICES We will send statements, notices or other correspondence to You (with a joint loan addressed to You jointly) at the Property or any other address of which You have given us notice. Notices and correspondence from Us will be effective two days after We have posted them, or if We send them by hand, when delivered. We will communicate with You in English. 29. MISCELLANEOUS 29.1

For all purposes in connection with the Conditions and the arrangements between You and Us, no sums shall be deemed to have been received by Us until We have received the value in Cleared Funds.

29.2

Where You comprise two or more persons, none of such persons shall be entitled, as against Us, to any of the rights or remedies, legal or equitable, of a guarantor as regards the indebtedness or liabilities of any other such person.

30. TRANSFER OF MORTGAGE BY US 30.1 We may without Your consent assign all Our rights and benefits in and/or transfer all Our obligations embodied in the Mortgage and any related interests under insurance policies together with any securities or other property of Yours charged to or held by Us in support to any person or persons whatever. We will notify You of any such assignment and/or transfer if We will no longer be responsible for setting interest rates and charges on the Mortgage.

30.2

You agree that, to the extent that We agree to assign or transfer Our rights and benefits to any person, You shall be bound to any such assignee or transferee and any subsequent assignee or transferee in the same manner and to the same extent as You are bound to Us under the Mortgage (either wholly or to the extent of the obligation so transferred as the

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case may be), and to the extent that We agree with any person to transfer Our obligations to that person We shall be released from further obligations to You under the Mortgage, and such transferee shall assume obligations towards You which are identical to such released obligations except only in so far as such assumed obligations are owed by such transferee and not the transferor. 30.3

By executing a Mortgage, You consent to Us disclosing or passing to any proposed assignee, transferee or delegate or to any person proposing to enter into other contractual arrangements with Us in relation to the Mortgage any information contained in the application for the Loan and any supporting documentation which may hereafter be provided or any other information or documents relating to You, the Property, the Mortgage or the history of the conduct of the mortgage account.

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31. GOVERNING LAW AND CHANGES TO THE CONDITIONS 31.1

The Conditions are governed by and shall be construed in accordance with Scottish Law.

31.2

The Conditions may be amended, replaced and/or supplemented from time to time by Us for any of the following reasons:

(a) to reflect a change in the law, or a decision by a court or ombudsman; (b) to reflect a change in any requirements or guidance from the Financial Services Authority or any other regulatory authority; (c) to enable Us to make reasonable changes to the way We run your account as a result of changes in technology, changes in the banking or financial system, or changes in the systems We use; (d) to provide for the improvement of any services or facilities We offer in connection with your account, or the introduction of any new services or facility; (e) to make the Conditions clearer or fairer to You. If We make a change to the Conditions, We will notify you personally of the change not less than 30 days before the change comes into effect. Each time We make a change to the Conditions, We will supply You with either a summary of the changes or a copy of the new Conditions.

The Royal Bank of Scotland plc Registered in Scotland No. 90312. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB

February 2009

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