Exhibit 10.26

 

CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND NOTED WTH “**”.  AN UNREDACTED VERSION OF THIS
DOCUMENT HAS ALSO BEEN PROVIDED TO THE SECURITIES AND EXCHANGE COMMISSION.

 

 

Dated 28 April 2004

 

 

GEFA International Holdings, Inc.

 

and

 

GE Capital Corporation

 

 

Framework Agreement

 

 

Linklaters

 

One Silk Street

London EC2Y 8HQ

 

 

Telephone (44-20) 7456 2000

 

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TABLE OF CONTENTS

 

1

Definitions And Interpretation

 

 

 

 

2

Local Agreements

 

 

 

 

3

Exclusive Appointment

 

 

 

 

4

Regulatory Requirements

 

 

 

 

5

Financial Terms

 

 

 

 

6

Pricing - Profit Share and Financial Performance

 

 

 

 

7

Marketing

 

 

 

 

8

Non Solicit

 

 

 

 

9

Service Levels, Service Credits, Product Development and Good Industry Practice

 

 

 

 

10

Intellectual Property, Data and Data Protection

 

 

 

 

11

Data Protection

 

 

 

 

12

Gross Written Premiums and Collection

 

 

 

 

13

Cancellations and Cancellation Fees

 

 

 

 

14

Default Interest

 

 

 

 

15

Relationship Managers, and Informal Dispute Resolution and Arbitration

 

 

 

 

16

Performance Meetings And Report Outs

 

 

 

 

17

Accounts, Records and Access to Information

 

 

 

 

18

Assignment, Agents and Sub-Contracting

 

 

 

 

19

Warranty of Authority

 

 

 

 

20

Commencement, Term and Termination

 

 

 

 

21

Consequences of Termination

 

 

 

 

22

Force Majeure

 

 

 

 

23

Confidential Information

 

 

 

 

24

Waiver

 

 

 

 

25

Entire Agreement

 

 

 

 

26

Costs and Expenses

 

 

 

 

27

No Partnership

 

 

 

 

28

Notices

 

 

 

 

29

Invalidity and Severability

 

 

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30

Governing Law and Jurisdiction and Appointment of Process Agent

 

 

 

 

31

Exclusion of Third Party Rights

 

 

 

Schedule 1 Existing Business

 

 

 

Schedule 2 GE Financial Insurance Service Level Standards

 

 

 

Schedule 3 New Local Agreement Profit Share Provisions

 

 

 

Schedule 4 Product Performance Monitoring

 

 

 

Schedule 5 Potential New Business and Payment Protection Products Set-up Process

 

 

 

Schedule 6 Part A: Framework Agreement Performance Meetings

 

 

 

Schedule 7 Supplemental Sales Commission

 

 

 

Schedule 8 Local Agreements

 

 

 

Schedule 9 GEFA Group Companies

 

 

 

Schedule 10 EXCHANGE RATES

 

 

 

Schedule 11 Form of Local Addendum

 

 

 

Schedule 12 Form of New Local Agreement

 

 

 

Schedule 13 APPROVED SUBCONTRACTORS

 

 

 

Schedule 14 Benchmarking

 

 

 

Schedule 15 Potential Substitute Business

 

 

 

Schedule 16 Business Proposal Pricing Process

 

 

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Facsimile (44-20) 7456 2222

 

Ref

 

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THIS AGREEMENT is made the 28 April 2004

 

BETWEEN:

 

(1)                                 GEFA INTERNATIONAL HOLDINGS, INC. whose
registered office is at 6604 West Broad Street, Richmond, VA 23230, USA
(“GEFA”); and

 

(2)                                 GE CAPITAL CORPORATION whose registered
office is at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
(“GECC”).

 

Collectively GEFA and GECC shall be referred to as “the Parties” and each as a
“Party”.

 

RECITALS:

 

(A)                              GEFA is or will become the holding company of
each GEFA Company.

 

(B)                                GECF is the holding company of each GECF
Group Company who is party to existing insurance arrangements with GEFA
Companies.

 

(C)                                As at the date of this agreement certain GEFA
Companies provide Existing Payment Protection Products to certain GECF Group
Companies under the Existing Local Agreements.

 

(D)                               GECC intends to appoint the GEFA Companies as
the exclusive provider of Payment Protection Products to the GECF Group
Companies in the Territories subject to the terms and conditions of this
agreement and in return GEFA has agreed to provide market leading products and
services and to deliver its services hereunder to a world class standard.

 

(E)                                 The Parties have entered into this agreement
to give effect to their intention in relation to the Existing Local Agreements
and in relation to New Local Agreements and New Territories.

 

THE PARTIES AGREE AS FOLLOWS:

 

1                                         Definitions And Interpretation

 

1.1                               Definitions

 

The following words and expressions shall, unless the context otherwise
requires, have the following meanings:

 

“Acquired GECF Business” has the meaning given to it in Clause 3.2.6;

 

“Amended New Business Proposal” has the meaning given to it in paragraph 8.1 of
Part A of Schedule 5;

 

“Applicable Laws” means any of the following in force from time to time in any
of the Territories: any common law, statute, statutory instrument, treaty, rule,
regulation,

 

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directive, guideline, guidance, decision, bylaw, code, order, notice, demand,
decree, resolution or judgement or licence conditions, or anything similar to
any of the above in each case of a Governmental Authority and which is binding
on GECC or any GECF Group Company or GEFA or any GEFA Company;

 

“Approved Subcontractor” means any of (i) the existing sub-contractors used by
GEFA or a GEFA Company in connection with the provision of services to GECC or a
GECF Group Company at the Commencement Date; (ii) the persons, from time to
time, listed on the General Electric Group’s list of approved subcontractors; or
(iii) any other person who in the reasonable opinion of the parties meets the
due diligence requirements set out in Schedule 13 of this agreement;

 

“Benchmarking Pool” means any company or organisation that offers Payment
Protection Products to consumers in one or more Territories;

 

“Best in Class” means service levels, product development and related services
that are in the top 10 per cent. of Payment Protection Product providers in the
relevant Territory;

 

“Business” means the provision, selling or distribution of Payment Protection
Products by the GECF Group Companies provided by the GEFA Companies under this
agreement;

 

“Business Day” means a day (other than a Saturday, Sunday or public holiday) on
which banks are open for business in London and, in relation to a GEFA Company
or GECF Group Company, a day (other than a Saturday, Sunday or public holiday)
on which banks are open for business in the place of business of that GEFA
Company or GECF Group Company;

 

“Claims Frequency” means number of claims with a date of loss in the period
under investigation divided by Earned Exposure in the same period;

 

“Claims Incurred” means claim payments plus Claims Reserves at the end of the
period under investigation minus Claims Reserves at the beginning of the period
under investigation;

 

“Claims Performance Statement” means the statement to be prepared by GEFA in
accordance with clause 6.2 and Schedule 4;

 

“Claims Reserves” means the provisions held in GEFA’s US GAAP balance sheet in
respect of all future payments on claims with a date of loss before the balance
date;

 

“Commencement Date” means 1 January, 2004;

 

“Committed Payments Product” means any of the following:

 

(a)                                  a product which protects regular financial
commitments due to a third party including gas, electricity, water and
telecommunications companies; and

 

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(b)                                 an extension of or variation to any other
Payment Protection Product distributed by GECF to protect payment obligations
due to persons other than GECF Group Companies;

 

“Comparable GWP” means the aggregate GWP accruing to GEFA and the GEFA Companies
during the Previous Relevant Period in respect of all Policies in all
Territories sold during the Previous Relevant Period (excluding GWP which
accrued to GEFA and the GEFA Companies in relation to any Local Agreements which
were terminated pursuant to clause 20.4 during the course of the Previous
Relevant Period);

 

“Confidential Information” means:

 

(a)                                  in relation to GEFA, all information
relating to GEFA’s or to any GEFA Company’s business, customers or financial or
other affairs which is not publicly known including information relating to:

 

(i)                                     customer and supplier names and other
details of customers and suppliers, sales targets, sales statistics, market
share statistics, prices, market research reports and surveys; and

 

(ii)                                  future projects, business development or
planning, commercial relationships and negotiations or any insurance product
concepts, ideas or proposals of GEFA or any GEFA Company; and

 

(iii)                               designs, formulae, inventions or
improvements relating to products or prospective products designed or sold by
GEFA or any GEFA Company  or any other trade secrets or know-how or financial
information in relation to the businesses, finances, dealings or affairs of GEFA
or any GEFA Company;

 

(b)                                 in relation to GECC, all information
relating to any GECF Group Company’s business or financial or other affairs
which is not publicly known including information relating to:

 

(i)                                     customer and supplier names and other
details of customers and suppliers, sales targets, sales statistics, market
share statistics, prices, market research reports and surveys; and

 

(ii)                                  future projects, business development or
planning, commercial relationships and negotiations or any insurance product
concepts, ideas or proposals of any GECF Group Company; and

 

(iii)                               designs, formulae, inventions or
improvements relating to products or prospective products designed or sold by
any GECF Group Company or any other trade secrets or know-how or financial
information in relation to the businesses or finances of any GECF Group Company;

 

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“Contract Year” means each consecutive 12 month period from the Commencement
Date or its anniversary (as the case may be) until the next anniversary;

 

“Control” means:

 

(a)                                  in relation to a body corporate, the
ability of a person (either alone or in conjunction with another person pursuant
to some agreement, arrangement or understanding) to ensure that the activities
and business of that body corporate are conducted in accordance with the wishes
of that person, and, without limitation, a person shall be deemed to have
“Control” of a body corporate if:

 

(i)                                     that person (either alone or in
conjunction with another person pursuant to some agreement, arrangement or
understanding) is entitled to exercise 50 per cent. or more of the voting rights
which are ordinarily exercisable in a general meeting of that body corporate;

 

(ii)                                  that person (either alone or in
conjunction with another person pursuant to some agreement, arrangement or
understanding) is entitled to appoint a majority of the board of directors of
the body corporate;

 

(iii)                               in the case of a body corporate whose shares
are not listed, quoted or dealt in on any securities or investment exchange or
quotation system that person (either alone or in conjunction with another person
pursuant to some agreement, arrangement or understanding) has the right to
receive the majority of the income of that body corporate on any distribution by
it of all of its income or the majority of its assets on a winding-up; or

 

(b)                                 in relation to an entity not being a body
corporate, the power (either alone or in conjunction with another person
pursuant to some agreement, arrangement or understanding) to direct the
management or policies of such person, whether by operation of law, by contract
or otherwise;

 

“Data Protection Legislation” means the Data Protection Act 1998 (UK), all
applicable legislation implementing European Community Directives 95/46 and
97/66 for EU countries and all applicable data protection legislation in any of
the Territories;

 

“Dispute” has the meaning given to it in clause 15.3;

 

“Earned Claims Fund” means Gross Earned Premium less Sales Commission incurred
less Earned Retention;

 

“Earned Exposure” means the number of equivalent annual Policies in the period
under investigation;

 

“Eligible GWP” means the aggregate GWP accruing to GEFA and the GEFA Companies
during the Relevant Period in respect of all Policies in all Territories  sold
during the Relevant Period;

 

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“Earned Retention” means an amount withheld by GEFA to cover the cost of
underwriting the Business expressed as a percentage of Gross Earned Premium (the
“Retention Rate”) to be subtracted from the Gross Earned Premium when
calculating the underwriting profit;

 

“Existing Business” means the Existing Direct Business and Existing Reinsured
Business at the rates in existence at the Commencement Date to include any
renaming, rebranding, product change or variation thereto (including any
Substitute Business);

 

“Existing Direct Business” means the Schemes in existence at the Commencement
Date as identified in Schedule 1 Part A;

 

“Existing Local Agreements” means the agreements in place in each Existing
Territory at the Commencement Date, including any addendum thereto, and as
listed in Schedule 8;

 

“Existing Payment Protection Products” means the payment protection insurance
policies and schemes in the Existing Territories as set out in parts A and B of
Schedule 1;

 

“Existing Reinsured Business” means the Schemes in existence at the Commencement
Date as identified in Schedule 1 Part B;

 

“Existing Territories” means Italy, Spain, Portugal, Norway, Denmark, Sweden,
United Kingdom, Ireland, Switzerland, Germany and France;

 

“Exit Phase” means:

 

(a)                                  in the context of expiry of this agreement
or a Local Agreement, the period of 12 months prior to the date on which this
agreement or the relevant Local Agreement (as the case may be) expires; and

 

(b)                                 in any other case, the period (with a
minimum of 90 days) stipulated in the relevant notice of termination of this
agreement or the relevant Local Agreement (as the case may be);

 

“Exit Plan” has the meaning given to that term in clause 21.3.1;

 

“Financial Services Regulator” means the Financial Services Authority in the
United Kingdom or any successor or replacement thereof or, in the case of a
Territory other than the United Kingdom, its equivalent;

 

“GECF Captive” means a captive insurance company to be established by GECC;

 

“GECF Group” means any subsidiary of GECC from time to time (other than Acquired
GECF Business or GEFA Companies) who, from time to time, distributes Payment
Protection Products in conjunction with entering into consumer financing
agreements or arrangements where the relevant GECF Group Company (or a member of
its Group) acts as the provider of finance. “GECF Group Company” shall be
construed accordingly;  Where GECF is successful in procuring that Acquired GECF
Business appoints a GEFA

 

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Company as its exclusive provider of Payment Protection Products pursuant to
Clause 3.2.3, then this definition shall automatically include such Acquired
GECF Business;

 

“GECF Marks” means the marks owned by the GECF Group or another member of the
General Electric Group which are used by the GEFA Group as at the Commencement
Date to fulfil their obligations under this agreement or any Local Agreement and
any additional marks agreed in writing between the Parties from time to time;

 

“GEFA Company” means each of the companies listed in Schedule 9 and any
additional company as notified in writing to GECC by GEFA from time to time;

 

“GEFA Group” means GEFA and each of the GEFA Companies;

 

“GEFA Marks” means the marks owned by Genworth Financial, Inc. or a member of
its Group which are used by the GECF Group as at the Commencement Date to fulfil
their obligations under this agreement or any Local Agreement and any additional
marks agreed in writing between the parties from time to time;

 

“GEFI Guernsey” means Financial Insurance Guernsey PCC Limited;

 

“Good Industry Practice” means, in relation to any particular circumstances, the
degree of skill, diligence, prudence, foresight and operating practice which
would reasonably and ordinarily be expected from a reasonably skilled and
experienced provider of Payment Protection Products and related services of a
similar type to the Payment Protection Products  and related services provided
pursuant to this agreement under the same or similar circumstances;

 

“Governmental Authority” means any court, government, regulatory agency or
regulatory authority (in each case whether international, national or local and
in any jurisdiction), including the Financial Services Regulator;

 

“Group” means, in relation to any person, that person, its holding companies and
the subsidiaries and subsidiary undertakings from time to time of such holding
companies, all of them and each of them as the context admits including any
joint venture companies, business relationships or any other business
relationship;

 

“Gross Earned Premium” means the earning of the Gross Written Premium according
to the GEFA balance sheet for US GAAP results reporting purposes;

 

“Gross Loss Ratio” means Ultimate Claims Cost  divided by Gross Earned Premium;

 

“Gross Written Premium” (or “GWP”) means, in relation to any Policy, the total
premium payable by an Insured Customer in respect thereof less any Tax/levy and
cancellations/refunds;

 

“Identified New Business” means the Schemes as identified in Schedule 1 Part C;

 

“Incentive Threshold” has the meaning given to it in clause 5.3;

 

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“Insolvent” means in the case of any party the appointment of, the application
for the appointment of or any step taken with a view to the appointment of, a
liquidator, provisional liquidator, administrator, administrative receiver or
receiver or equivalent officer, the entering into or the taking of any step with
a view to the entering into of a scheme of arrangement or composition for the
benefit of creditors generally (including a voluntary arrangement under Part 1
of the Insolvency Act 1986), any re-organisation, moratorium or other
administration involving its creditors or any class of its creditors, the
proposal or passing of a resolution or the convening of a meeting to consider a
proposal to wind it up (other than a voluntary winding-up as part of a
reorganisation) or the company becoming unable or being deemed to be unable to
pay its debts as and when they fall due within the meaning of section  123 of
the Insolvency Act 1986 or anything equivalent or analogous to any of the
foregoing occurring in any jurisdiction;

 

“Insured” and “Insured Customer” means any GECF Group Company customer who has
entered into a Policy provided:

 

(i)                                     by GEFA or a GEFA Company as the primary
insurer; or

 

(ii)                                  by a primary insurer for which GEFA or a
GEFA Company acts as a reinsurer;

 

“Key Service Levels” means the Service Levels specified in Table B of
Schedule 2;

 

“Key Territories” means United Kingdom, Germany and France and any other
Territory which accounts for more than 21,900,000 Euros of GWP in a Relevant
Period;

 

“Local Addendum” means the addendum in the form set out in Schedule 11 to be
entered into by the relevant GECF Group Companies with the relevant GEFA
Companies in accordance with clause 2.1 or 5.4.3 (as the case may be);

 

“Local Agreements” means the Existing Local Agreements and the New Local
Agreements;

 

“Local Comparable GWP” means the aggregate GWP accruing to a GEFA Company during
the Previous Relevant Period in respect of all Policies sold during the Previous
Relevant Period which relate to a particular Local Agreement the “Relevant Local
Agreement”;

 

“Local Eligible GWP” means the aggregate GWP accruing to a GEFA Company during
the Relevant Period in respect of all Policies sold during the Relevant Period
which relate to the Relevant Local Agreement;

 

“Local Material Change” has the meaning given to it in clause 20.4.4;

 

“Loss Ratio” means either Claims Incurred divided by the Earned Claims Fund as
calculated from the Profit Share Account or Ultimate Claims Cost divided by
Earned Claims Fund, as calculated in the Claims Performance Statement;

 

“Material Change” has the meaning given to it in clause 20.2.3;

 

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“Net Premium” means Gross Written Premium less any Sales Commission;

 

“New Business” has the meaning given to it in clause 3.2.2 and, for the
avoidance of doubt, shall exclude Substitute Business;

 

“New Business Proposal” has the meaning given to it in paragraph 5 of Part A of
Schedule 5;

 

“New Captive” means any entity forming part of an Acquired GECF Business which
is the captive insurer of the Acquired GECF Business;

 

“New Direct Business” means all New Business that is not New Reinsurance
Business and as agreed from time to time between the parties pursuant to
clause 5.4.1;

 

“New Local Agreement” has the meaning given to it in clause 5.4.2;

 

“New Payment Protection Products” means products within the definition of
Payment Protection Products but which are not Existing Payment Protection
Products;

 

“New Reinsurance Business” means any New Business as agreed to be New
Reinsurance Business from time to time between the parties pursuant to clause 5;

 

“New Territories” means **, and such other countries as may be agreed in writing
between the Parties from time to time;

 

“Payment Protection Products” means any of the following:

 

(a)                                  any insurance, guarantee or waiver style
product (howsoever described) which assists consumers in meeting some or all of
their payment obligations under financial commitments  (including without
limitation mortgages, personal and car loans and credit cards) which is linked
to, or forms part of or is financed under any underlying financing or credit
agreement  or is a Committed Payments Product but excluding mortgage indemnity
insurance, GAP insurance, long term care insurance and free-standing term life
products and investment products, warranty, auto insurance covering damage to
car or property, personal accident, travel insurance, and health cash plan; or

 

(b)                                 any product (howsoever described) which
provides for the suspension or forgiveness either temporarily or permanently of
any sort of debt owing by a consumer,

 

in each case including any derivatives or variations of any such products and/or
the administration and management of any such products.

 

“Policies” means the Payment Protection Products provided by GEFA Companies as
either the primary insurer or provider or the reinsurer (including the existing
product details set out in Schedule 1) and such Payment Protection Products
which GECF Group Companies are authorised to market and sell and which are
brought within the scope of

 

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this agreement from time to time by the execution of an addendum and “Policy”
shall be construed accordingly;

 

“Potential New Business” has the meaning given to it in clause 3.2.1;

 

“Potential Substitute Business” means any Potential New Business which falls
within the criteria set out in Schedule 15 Substitute Business Criteria;

 

“Previous Relevant Period” means the period of 12 calendar months immediately
preceding the Relevant Period;

 

“Profit Share” means the share (if any) of Underwriting Profits payable to or by
a GECF Group Company in accordance with clause 6.1;

 

“Profit Share Account” has the meaning given to it in paragraph 1 of Schedule 3;

 

“Quarterly Performance Meeting” has the meaning given to it in Paragraph 1 of
Part A of Schedule 6;

 

“Regulatory Event” means the receipt by a GEFA Company (the “Affected GEFA
Company”) of a notice, from the Financial Services Regulator of the Territory in
which the relevant GEFA Company operates, in which the Financial Services
Regulator gives notice that it intends to revoke or suspend any authorisation
required by the relevant GEFA Company to perform any of its obligations under
this agreement or any Local Agreement to which it is a party;

 

“Relevant Period” means any period of 12 months during the Term starting on the
first day of a calendar month and ending on the last day of the calendar month
12 months later;

 

“Replacement Supplier” means any entity succeeding a GEFA Company in the
provision of Payment Protection Products substantially similar to those provided
under this agreement;

 

“Risk Loss Ratio” means Ultimate Claims Cost divided by Earned Claims Fund;

 

“Risk Rate” means that part of a premium which covers the expected costs of
claims;

 

“Run-Off Period” means the period commencing on the effective date of
termination or expiration of this agreement and ending when GEFA certifies to
GECF in writing that all risks under all Policies have expired and all valid
claims under all Policies have been finalised, and no further Claims Reserves
are required;

 

“Sales Commission” means in relation to:

 

(a)                                  Existing Business and Identified New
Business, the proportion of Gross Written Premium payable by GEFA or a GEFA
Company to GECC as shown in Schedule 1; and

 

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(b)                                 New Direct Business and New Reinsurance
Business, the proportion of Gross Written Premium as agreed between the relevant
GECF Group Companies and the relevant GEFA Companies from time to time;

 

“Scheme” means a type or category of Policy marketed and sold by a GECF Group
Company pursuant to this agreement and/or any Local Agreement;

 

“Service Credits” means the credits payable to the GECF Group in accordance with
Schedule 2;

 

“Service Levels” means the service levels described in Schedule 2 as amended or
varied in accordance with this agreement;

 

“Substitute Business” means Potential Substitute Business which following the
procedure set out in Clause 9 and Schedule 16 becomes Substitute Business.

 

“Supplemental Sales Commission” shall have the meaning given to it in clause 5.3
and shall be calculated in accordance with Schedule 7;

 

“Tax/levy” means any tax, levy or stamp duty or any charge payable in respect of
insurance premiums levied by any tax authority in any jurisdiction covered by
this agreement to be charged to Insured Customers at the applicable rate from
time to time including any similar, equivalent, additional or replacement tax,
levy or charge which may be imposed on or in relation to insurers or insurance
transactions from time to time;

 

“Term” means the period of 5 (five) years following the Commencement Date;

 

“Territories” means the countries comprising the Existing Territories and the
New Territories, and the term “Territory” shall mean any one of these;

 

“Ultimate Claims Cost” means claims payments plus Claims Reserves for future
claims payments under the relevant Policies as at the date the Claims
Performance Statement described in Schedule 4 is calculated; and

 

“Underwriting Profits” shall have the meaning given to it in Schedule 3,
paragraph 3(c).

 

1.2                               Interpretation

 

The following rules apply unless the context requires otherwise:

 

1.2.1                     “holding company” and “subsidiary” shall be construed
in accordance with section  736 of the Companies Act 1985, “subsidiary
undertaking” shall be construed in accordance with section  258 of the Companies
Act 1985 and “associated company” shall be construed in accordance with section 
416 of the Income and Corporation Taxes Act 1988;

 

1.2.2                     the Interpretation Act 1978 shall apply to this
agreement in the same way as it applies to an enactment;

 

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1.2.3                     the words “including”, “include” and “includes” shall
mean “including without limitation”, “include without limitation” and “includes
without limitation”, as the case may be;

 

1.2.4                     a “person” includes any person, individual, company,
firm, corporation, government, state or agency of a state or any undertaking or
organisation (whether or not having separate legal personality and irrespective
of the jurisdiction in or under the law of which it was incorporated or exists);

 

1.2.5                     any reference to a party to this agreement includes
its successors in title and permitted assignees;

 

1.2.6                     words denoting the singular shall include the plural
and vice versa and words denoting any gender shall include all genders;

 

1.2.7                     references to any statute or statutory provision shall
be construed as a reference to the same as it may have been, or may from time to
time be, amended, modified or re-enacted;

 

1.2.8                     references to recitals, clauses, paragraphs or
schedules are to recitals, clauses and paragraphs of and schedules to this
agreement. The schedules form part of the operative provisions of this agreement
and references to this agreement shall, unless the context otherwise requires,
include references to the recitals and the schedules;

 

1.2.9                     references to any agreement shall be construed as a
reference to that agreement as amended, varied, supplemented or assigned from
time to time;

 

1.2.10              if there is any inconsistency between the schedules or any
Addendum and the main body of this agreement, then to the extent necessary to
resolve such inconsistency the main body of this agreement shall prevail;

 

1.2.11              the index to and the headings in this agreement are for
information only and are to be ignored for the purposes of construing the same;

 

1.2.12              references to a statutory provision include any subordinate
legislation made from time to time under that provision; and

 

1.2.13              if a word or phrase is defined, its other grammatical forms
have a corresponding meaning.

 

General Procurement Obligation

 

1.2.14              GECC shall procure that the GECF Group Companies fulfil
their obligations under this agreement and comply with its terms.

 

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2                                         Local Agreements

 

2.1                               Local Addendums

 

The GECF Group Companies party to an Existing Local Agreement shall, and GEFA
shall procure that the relevant GEFA Companies party to an Existing Local
Agreement shall, promptly enter into a Local Addendum to amend their Existing
Local Agreement to give effect to the provisions of this agreement mutatis
mutandis (subject only to including amendments or further provisions necessary
to ensure compliance with Applicable Laws), including:

 

2.1.1                     clause 2.3;

 

2.1.2                     clause 3.1 and 3.2 (in respect of Existing Business,
Substitute Business and Potential Substitute Business);

 

2.1.3                     clause 4;

 

2.1.4                     clause 6.1.1;

 

2.1.5                     clause 8;

 

2.1.6                     clause 9.1, 9.2, 9.4 and Schedule 2;

 

2.1.7                     clause 10.2;

 

2.1.8                     clause 11;

 

2.1.9                     clause 12.1;

 

2.1.10              clause 13;

 

2.1.11              clause 15;

 

2.1.12              clause 16.2 and Schedule 6 Part B;

 

2.1.13              clause 17;

 

2.1.14              clause 18;

 

2.1.15              clause 20.4;

 

2.1.16              clause 21.3;

 

2.1.17              clause 22;

 

2.1.18              clause 23; and

 

2.1.19              clause 24.

 

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2.1.20              In respect of each Local Addendum, the assignment and
subcontracting provisions incorporated by virtue of clause 2.1.14 above shall be
supplemented by the addition of the following sub-clause:

 

“Notwithstanding anything in this Clause [Assignment Clause], all of the rights
and obligations of the Financial Assurance Company Limited under this Agreement
shall automatically transfer to Financial New Life Company Limited upon the
transfer scheme for the transfer of all or substantially all of Financial
Assurance Company Limited’s business to Financial New Life Company Limited
pursuant to section  105 Financial Services and Markets Act 2000 becoming
effective (with such amendments, deletions or additions to the scheme as the
parties to the scheme may approve).”

 

2.1.21              GECC and GEFA shall procure that each Existing Local
Agreement shall be amended to delete any provision which confers on any GECF
Group Company which is a party to such Local Agreement any right to terminate
such Local Agreement on a sale or disposal affecting the whole of or any part of
any party to that Local Agreement (in either case, whether such sale or disposal
is effected by way of an asset or business sale or a share sale or otherwise
(including by the sale of a portfolio or by a change of the identity of the
financing provider)).

 

2.2                               Inconsistency between this Agreement and Local
Agreements

 

Without prejudice to Clause 2.1, where there is a conflict or inconsistency
between this agreement and a Local Agreement, the terms of this agreement shall
prevail, except in relation to:

 

(a)                                  provisions in Local Agreements that are
necessary to ensure compliance with Applicable Laws; and

 

(b)                                 provisions in Existing Local Agreements
relating to sales commission, Retention Rates and the calculation of Profit
Share,

 

and accordingly, GEFA will procure that each GEFA Company shall, to the extent
relevant, comply with the provisions of this agreement and GECF will procure
that each GECF Group Company shall, to the extent relevant, comply with the
provisions of this agreement.

 

2.3                               Term of Local Agreements

 

The Parties hereby agree and shall procure that notwithstanding the expiry dates
specified in the Local Agreements, the term of each Local Agreement will be
extended until close of business on the day preceding the fifth anniversary of
the Commencement Date and shall not be varied during the Term unless both
Parties agree otherwise.

 

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3                                         Exclusive Appointment

 

3.1                               Exclusive Appointment in respect of Existing
Business

 

With effect from no later than the Commencement Date the GECF Group Companies
shall appoint GEFA or the relevant GEFA Companies as their exclusive provider of
Existing Payment Protection Products in the Existing Territories.

 

3.2                               Exclusive Appointment in respect of Identified
New Business and New Business and Substitute Business

 

3.2.1                     Potential New Business shall consist of a GECF Group
Company’s requirements for, in the case of an Existing Territory or New
Territory:

 

(a)                                  New Payment Protection Products;

 

(b)                                 Payment Protection Products to be provided
to an Acquired GECF Business; or

 

(c)                                  Identified New Business,

 

and any related services.

 

3.2.2                     Potential New Business shall become New Business in
accordance with and subject to the provisions of Clauses 9.4 and Schedule 5.
Potential Substitute Business shall become Substitute Business in accordance
with and subject to the provisions of Clauses 9.4 and Schedule 16.

 

3.2.3                     Subject to clause 3.2.6, 20.4.1 and Schedule 5 and
Schedule 15 (Potential Substitute Business), the relevant GECF Group Company
shall appoint GEFA or the relevant GEFA Company as its exclusive provider of
Payment Protection Products in the Territories in respect of New Business and
Substitute Business.

 

3.2.4                     During the Term and in respect of Territories covered
by a Local Agreement, GECC will ensure that no GECF Group Company other than in
accordance with this agreement will offer to any third party or GECF Group
Company customer any Payment Protection Product in any Territory which is in
competition with, or interferes with or restricts the sale or provision of any
Payment Protection Product provided by GEFA or any GEFA Company pursuant to the
relevant Local Agreement;

 

provided that nothing in this Clause 3.2.4 shall prevent:

 

(i)                                     the GECF Captive from providing Payment
Protection Products in the Territory provided that it does so in accordance with
the terms of clause 5.2 of this agreement;

 

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(ii)                                  any New Captive from providing on an
ongoing basis Payment Protection Products in the relevant Territory to third
parties and customers of the Acquired GECF Business of which it forms part. 
Save as provided in this agreement, the New Captive shall not supply Payment
Protection Products to GECF Group Companies other than the Acquired GECF
Business of which it forms part; and

 

(iii)                               GECF Group Companies from concluding
arrangements pursuant to Clause 9.4.6.

 

3.2.5                     Schedule 1C sets out in respect of all Identified New
Business production estimates and whether premiums are single or monthly **.

 

(i)                                     In respect of Potential New Business
(where an addendum to a Local Agreement or a New Local Agreement in respect of
such Potential New Business has been agreed pursuant to Schedule 5):

 

(a)                                  The GECF Group Companies shall not **
relating to the provision of Payment Protection Products (where such ** would be
in breach of an addendum to a Local Agreement or a New Local Agreement as agreed
pursuant to Schedule 5); and

 

(b)                                 The GECF Group Companies shall not unless
GEFA requests be required to ** any ** the ** of their **. If GEFA requests a
relevant GECF Group Company to ** relating to the provision of Payment
Protection Products other than upon **, such relevant GECF Group Company shall
do so in accordance with the terms of the relevant arrangement and on condition
that:

 

(I)                                    if such ** relates to Identified New
Business, GEFA ** the relevant GECF Group Company for ** of which GEFA was aware
at the Commencement Date ** by the relevant GECF Group Company specifically in
relation to such **; or

 

(II)                                if such ** relates to New Business (not
being Identified New Business), GEFA ** the relevant GECF Group Company for **
incurred by the relevant GECF Group Company as a consequence of ** and any **
pursuant to the relevant agreement.

 

(ii)                                  In respect of Potential New Business
(where an addendum to a Local Agreement or a New Local Agreement in respect of
such Potential New Business has been agreed pursuant to Schedule 5), the
relevant GECF Group Company agrees that subject to Clause 3.2.5(i)(b), where
expressly permitted in the relevant arrangement, it shall use all

 

15

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reasonable endeavours to **, and the GECF Group Companies shall use all
reasonable endeavours to **, any and all ** relating to the provision of Payment
Protection Products.

 

3.2.6                     Where GECC or a GECF Group Company acquires a business
or establishes any joint venture or partnership or any other business
relationship in a Territory (an “Acquired GECF Business”) GECC shall, and GECC
or the relevant GECF Group Company shall, use its reasonable efforts to ensure
that the terms of the acquisition or establishment of the Acquired GECF Business
neither **:

 

(a)                                  GECC from ** that the Acquired GECF
Business appoint a ** as its **; and

 

(b)                                 the Acquired GECF Business from ** as its
**.

 

In the event that GECC or the relevant GECF Group Company is, notwithstanding
their reasonable efforts, unable to negotiate the terms of the acquisition or
establishment of the Acquired GECF Business without the inclusion of ** which
fall within paragraphs (a) and/or (b) above, GECC shall, and shall procure that
the relevant GECF Group Company shall, use its reasonable efforts to procure
that the terms of the acquisition or establishment ** as closely as reasonably
possible ** as set out in this agreement that ** shall be appointed ** to the
**.  Such efforts shall include ** to the maximum extent reasonably possible the
terms of the acquisition or establishment which relate to:

 

(i)                                     the ** to which such arrangements apply;

 

(ii)                                  the ** of such arrangements; and

 

(iii)                               the ** of such arrangements.

 

3.2.7                     GECC undertakes that it shall not acquire an interest
in or establish, or take any steps to acquire an interest in or establish, any
joint venture or partnership or any other business relationship (or permit any
GECF Group Company to do any such thing) with the intention of avoiding any of
its obligations under this agreement.

 

3.2.8                     GECC represents and warrants to GEFA that all
Identified New Business is owned as to 100 per cent. by GECC or the relevant
GECF Group Company.

 

3.2.9                     In the event of a termination of a Local Agreement,
the relevant GECF Group Company which was party to such Local Agreement shall no
longer be required to appoint, a GEFA Company as its exclusive provider of
Payment Protection Products provided under that Local Agreement in a Territory.
Where as a result of such termination there are no Local Agreements in the
Territory then the requirements of this Clause 3 on GECC and the GECF Group
Companies shall no longer apply in respect of that Territory.

 

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4                                         Regulatory Requirements

 

4.1                               GEFA shall, and shall procure that each GEFA
Company shall, and each GECF Group Company shall, have in place appropriate
policies and procedures to ensure observation of and compliance with all
Applicable Laws (including, all current and any future regulatory requirements,
all applicable accounting rules and all codes of practice applicable to its
Business activities in each relevant Territory) in the performance of their
respective obligations, or the exercise of its rights, under or in connection
with this agreement or Local Agreement, as the case may be, from time to time.

 

4.2                               In the event that there are any changes to an
applicable regulatory regime within a Territory which will impact on the sale or
distribution of Payment Protection Products under this agreement or the ability
of GEFA or a GEFA Company to meet its Service Level obligations, GEFA shall
inform GECC, as soon as reasonably practicable after such change, and the
Parties shall work together to agree a plan to enable the Parties to continue to
perform their obligations under this agreement (the “Remediation Plan”). If the
parties cannot agree a Remediation Plan within 10 Business Days of notice by
GEFA, then the matter will be referred to the dispute resolution procedure in
Clause 15.

 

4.3                               The Parties agree that if as a result of any
changes in applicable law, regulation or regulatory requirements or GECC
re-organisation:

 

(a)                                  the Tax/ levy in a Territory increases, any
such increase shall be absorbed by the relevant GECF Group Company in that
Territory; and/or

 

(b)                                 any GEFA Company is required to vary the
level of regulatory capital maintained by it in respect of any Payment
Protection Products underwritten and/or provided by GEFA pursuant to this
agreement or any Local Agreement then GECC shall send to GEFA a written proposal
setting out the steps to be taken so as to ensure that the relevant GEFA
Company’s regulatory capital requirement is the same as it was before any such
changes.  Within 5 Business Days of the date of issue of such proposal, the
Parties shall commence working together with each using its best efforts to
implement the proposal unless, before the expiry of such period of 5 Business
Days, GEFA informs GECC in writing that, in its reasonable opinion, GEFA
considers that the proposal will not have the effect of ensuring that the
relevant GEFA Company’s regulatory capital requirement is the same as it was
before such changes, in which case the Parties shall negotiate in good faith
such amendments to the proposal as are necessary to achieve this effect. If the
Parties fail to agree the necessary amendments to the proposal within 30
Business Days of the date of commencement of the negotiations, the changes to
pricing shall be effected by the application of the provisions of Schedule 4.

 

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4.4                               Benefits of Changes

 

If the parties jointly devise a method (whether under clause 4.3 above or
otherwise) which improves GEFA’s and/or a GEFA Company’s regulatory capital
requirement as regards Payment Production Products provided pursuant to this
agreement, GECC shall be entitled to the financial benefit of such improvement
in regulatory capital requirement.

 

5                                         Financial Terms

 

5.1                               Existing Direct Business and Substitute
Business

 

Subject to clause 2, the Parties agree that all Existing Direct Business and
Substitute Business shall continue to be underwritten on the terms set out in
the Existing Local Agreements, as detailed in Part A of Schedule 1.

 

5.2                               Existing Reinsured Business

 

5.2.1                     Subject to clauses 2 and 5.2.2 the Parties agree that
the Existing Reinsured Business shall continue on the terms set out in Part B of
Schedule 1.

 

5.2.2                     When GECC has established the GECF Captive and the
necessary arrangements are in place to allow the primary reinsurer to cede to
GEFI Guernsey, the Existing Reinsured Business shall be migrated to become New
Reinsurance Business (in accordance with Clause 5.6).  Each Scheme to be
migrated, and the timetable for such migration, shall take effect according to
the terms of proposals which shall be issued in writing from GECC to GEFA
promptly upon the necessary arrangements being put in place, unless GEFA within
10 Business Days of the issue of any such proposal sends notice in writing to
GECC that it, in its reasonable opinion, considers the terms or timetable for
the relevant migration to be impractical, in which case the Parties shall
negotiate in good faith such amendments to the relevant proposal as are
necessary to allow the relevant Existing Reinsured Business to be migrated to
the New Reinsurance Business to the satisfaction of the Parties, such Schemes
continuing on the terms of Existing Business until the Parties reach agreement.
Those Schemes that are not migrated will continue on the terms of Existing
Reinsured Business in Schedule 1. For the avoidance of doubt, once any Existing
Reinsured Business has been migrated it will still form part of the volume
incentive calculations referred to in clause 5.3 below.

 

5.2.3                     The Parties agree and acknowledge that, in some of the
Existing Business, GEFA or a GEFA Company acts as either the direct insurer or
as a reinsurer to a primary insurer selected by GECC (the “Existing Reinsurance
Arrangements”). GECC agrees that following termination of the Existing
Reinsurance Arrangements with the primary insurer in accordance with
clause 5.2.1, it will ensure that GEFA’s or a GEFA Company’s quota share is the
same as that which existed under the previous primary insurer arrangements.

 

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5.3                               Volume Incentive

 

If the aggregate of the Gross Written Premium attributable to the Existing
Direct Business,  the Gross Written Premium for the Existing Reinsured Business
and the Gross Written Premium attributable to any Substitute Business is in
excess of Euro ** million (the “Incentive Threshold”) per calendar year as
calculated in accordance with Schedule 7, then GEFA shall pay, or procure
payment by the relevant GEFA Company, to GECC or its nominee as notified by GECC
to GEFA from time to time a supplemental sales commission calculated on the
amount of Gross Written Premium attributable to the Existing Direct Business in
excess of the Incentive Threshold in accordance with Schedule 7 (the
“Supplemental Sales Commission”). Any Supplemental Sales Commission due to GECC
under this clause shall be paid annually in arrears within 100 days of the
calendar year-end, with the first such payment being due to GECC within 100 days
of 31st December 2004.  For the avoidance of doubt, no Supplemental Sales
Commission shall be payable in respect of Gross Written Premium for the calendar
year ending 31st December 2003.

 

5.4                               New Business

 

5.4.1                     New Business may be New Direct Business or New
Reinsurance Business as determined in accordance with Schedule 5.

 

5.4.2                     Any New Local Agreement entered into relating to New
Business in a Territory where there is no Local Agreement shall be in the form
set out in Schedule 12 and shall give effect to the following provisions of this
agreement, subject to the Applicable Laws:

 

(a)                                  the term of the New Local Agreement shall
be from the date of the New Local Agreement and expire on 31 December 2008;

 

(b)                                 clause 3.2;

 

(c)                                  clause 4;

 

(d)                                 clause 5.5 or 5.6 (as applicable);

 

(e)                                  clause 6.1.2 and Schedule 3;

 

(f)                                    clause 8;

 

(g)                                 clause 9.1, 9.2, 9.4 and Schedule 2;

 

(h)                                 clause 10.2;

 

(i)                                     clause 11;

 

(j)                                     clause 12.2;

 

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(k)                                  clause 13;

 

(l)                                     clause 15;

 

(m)                               clause 16.2 and Schedule 6 Part B;

 

(n)                                 clause 17;

 

(o)                                 clause 18;

 

(p)                                 clause 20.4;

 

(q)                                 clause 21.3;

 

(r)                                    clause 22;

 

(s)                                  clause 23; and

 

(t)                                    clause 24.

 

(u)                                 In respect of each New Local Agreement, the
assignment and subcontracting provisions incorporated by virtue of
clause 5.4.2(q) above shall be supplemented by the addition of the following
sub-clause:

 

“Notwithstanding anything in this Clause [Assignment Clause], all of the rights
and obligations of the Financial Assurance Company Limited under this Agreement
shall automatically transfer to Financial New Life Company Limited upon the
transfer scheme for the transfer of all or substantially all of Financial
Assurance Company Limited’s business to Financial New Life Company Limited
pursuant to section  105 Financial Services and Markets Act 2000 becoming
effective (with such amendments, deletions or additions to the scheme as the
parties to the scheme may approve).”

 

(v)                                 For the avoidance of doubt, no New Local
Agreement shall contain any provision which confers on the GECF Group Company
which is a party to such Local Agreement any right to terminate such Local
Agreement on a sale or disposal affecting the whole of or any part of any party
to that Local Agreement (in either case, whether such sale or disposal is
effected by way of an asset or business sale or a share sale or otherwise
(including by the sale of a portfolio or by a change of the identity of the
financing provider)).

 

Once executed, this shall become a “New Local Agreement”.

 

5.4.3                     The Parties agree that in respect of Identified New
Business and New Business in Territories subject to a Local Agreement, the
relevant GECF Group Company shall, and GEFA shall procure that the relevant GEFA
Company shall, either:

 

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(i)                                     enter into an addendum or variation to
the Local Agreement and that, subject to Clauses 5.5 and 5.6 below, such
Identified New Business or New Business shall be subject to the terms of that
Local Agreement; or

 

(ii)                                  enter into a New Local Agreement.

 

5.5                               New Direct Business

 

Subject to Paragraph 5.2.2 of Part A of Schedule 5, New Direct Business will be
subject to a GEFA Retention Rate of ** per cent. of Gross Written Premium and a
** GECC: GEFA Profit Share split.

 

5.6                               New Reinsurance Business

 

5.6.1

 

(a)                                  Subject to Paragraph 5.2.2 of Part A of
Schedule 5, when all necessary arrangements are in place with the primary
reinsurer GECC will ensure that all Net Premium is duly ceded to GEFI Guernsey
and that GEFI Guernsey receives a Retention Rate of **% of Gross Written
Premium.

 

(b)                                 In respect of all New Reinsurance Business,
GEFA will pay the primary reinsurer **% Profit Share.  It is GECC’s
responsibility to ensure that all necessary arrangements are in place with the
primary reinsurer to ensure GECC receives any monies owing to GECC from the
primary reinsurer under any arrangement or agreement between the primary
reinsurer and GECC.  Neither GEFA or any GEFA Company shall have any liability
or responsibility in respect of any monies owing between the primary reinsurer
and GECC or to ensure any payments are made to GECC.

 

(c)                                  In the event that the New Reinsurance
Business arrangements are not capable of being established in accordance with
this clause 5.6 or cease to be effective for any reason during the Term,
including for legal or regulatory prohibitions, then all New Reinsurance
Business shall revert to either the Existing Business terms or New Direct
Business terms, at the discretion of GECC which shall be communicated in writing
to GEFA promptly following any such failure and which decision shall be binding
upon GEFA unless, within 20 Business Days of the notice from GECC,  GEFA (acting
reasonably) objects in writing to the decision of GECC, in which case the matter
shall be referred to the next Quarterly Performance Meeting for good faith
negotiations between the Parties. Where, in the process of any good faith
negotiations, the Parties agree a structure substantially similar to the current
structure whereby the relevant GEFA Company acts as a reinsurer (whether
primary, secondary or other), the Retention Rate will be that referred to in
Clause 5.6.1(a). If any other structure is proposed then the Parties will enter
into good faith negotiations to agree the pricing structure, taking into account
all relevant

 

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factors including any capital adequacy requirements of the relevant GEFA Company
and GECF Group Company.

 

6                                         Pricing - Profit Share and Financial
Performance

 

6.1                               Profit Share - calculation and payment

 

6.1.1                     The Parties agree that in respect of Existing
Business, the calculation, payment and treatment of Profit Share during the term
of and after termination or expiry of the Local Agreement shall continue in
accordance with the terms of the relevant Local Agreement.

 

6.1.2                     The Parties agree that in respect of New Business, the
relevant GECF Group Companies shall and GEFA shall procure that the relevant
GEFA Companies shall incorporate terms for the calculation, payment and
treatment of Profit Share in respect of the New Business in the relevant New
Local Agreements in accordance with Schedule 3.

 

6.2                               Financial Performance

 

The Parties agree to monitor the performance of the Payment Protection Products
provided under this agreement in each Territory in accordance with the
procedures set out in Schedule 4.

 

7                                         Marketing

 

Any marketing expenditure shall be determined between the Parties at a Territory
level based on a cost / benefit analysis.

 

8                                         Non Solicit

 

During the Term, GEFA will ensure that no GEFA Company or member of Genworth
Financial Inc.’s Group (with the exception of any GECF Group Companies) will
directly canvass or solicit the custom of any customer of a GECF Group Company
in any Territory in respect of any Payment Protection Product without the
express written consent of GECC. GECC accepts that GEFA and any GEFA Company may
notwithstanding this Clause 8 or any other provision of this agreement
indirectly provide Payment Protection Products to a customer of a GECF Group
Company via GEFA or a GEFA Company client or customer.

 

9                                         Service Levels, Service Credits,
Product Development and Good Industry Practice

 

9.1                               Service Levels and Service Credits

 

9.1.1                     The Parties hereby agree that GEFA shall procure that
the GEFA Companies comply with the Service Levels  in accordance with
Schedule 2.

 

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9.1.2                     Without prejudice to GECC’s or any GECF Group
Company’s other rights or remedies under this agreement, GEFA shall procure that
if a GEFA Company fails to meet the Key Service Levels, Service Credits shall be
applied in accordance with Schedule 2.

 

9.1.3                     The provisions of clause 9.1.2 shall not apply in
respect of breaches of Key Service Levels that occur within the first 6 months
of the Term.

 

9.2                               Good Industry Practice

 

9.2.1                     GEFA shall, and shall procure that the GEFA Companies
shall, carry out their respective obligations under this agreement and the Local
Agreements in accordance with Good Industry Practice.

 

9.2.2                     GEFA shall, and shall procure that the GEFA Companies
shall, ensure that in the performance of their obligations they remain Best in
Class throughout the Term.  Any productivity gains or costs associated with
remaining Best In Class shall be for the account of GEFA or the relevant GEFA
Company.

 

9.3                               Service Level Review

 

9.3.1                     Without limiting any other obligations under this
agreement, on or before 90 days prior to each anniversary of the Commencement
Date, the Parties shall review the Service Levels and shall amend them to ensure
the Service Levels are and remain Best in Class.  Where such amendments are
required, they shall be implemented by GEFA with effect from the anniversary of
the Commencement Date.

 

9.3.2                     GECC may engage a third party for the purposes of
conducting a review of the kind described in Clause 9.3.1. GECC shall procure
that the third party (the “Independent Consultant”) executes a confidentiality
agreement in a form reasonably acceptable to GEFA.

 

9.3.3                     GEFA must make available a suitably qualified and
experienced employee for up to ten days per annum to provide all necessary data
and other information to GECC and any Independent Consultant engaged by GECC for
the purposes of completing the review under Clause 9.3.1.

 

9.3.4                     If the Parties are not able to reach agreement on
amendments required to the Service Levels in accordance with Clause 9.3.1, then
that issue may be referred by either party to the Dispute procedure set out in
Clause 15 for resolution.

 

9.4                               Product Development and Marketing

 

9.4.1                     GEFA shall, or shall procure that the GEFA Companies
shall, offer to the GECF Group Companies all:

 

(a)                                  Payment Protection Products;

 

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(b)                                 features of such Payment Protection
Products; and

 

(c)                                  related marketing services,

 

that are offered to consumers in the relevant Territory.

 

9.4.2                     GEFA shall, or shall procure that the GEFA Companies
shall, produce a quarterly report advising the GECF Group Companies on the
latest market developments in respect of Payment Protection Products and
advising the GECF Group Companies on new products, new product features and new
marketing channels and methods that GECF Group Companies should consider
adopting in order to be a market leading provider of Payment Protection
Products.

 

9.4.3                     Any GECF Group Company may at any time request that
GEFA or a GEFA Company provide any Payment Protection Products, features of
Payment Protection Products (provided that such features are not mutually
exclusive) and/or related marketing services whether or not contained in the
reports prepared by any GEFA Company pursuant to Clause 9.4.2 (together
“Offering(s)”) that any GECF Group Companies wish GEFA or any GEFA Company to
provide.

 

9.4.4                     In respect of each Offering(s) requested by any GECF
Group Company, GEFA will as soon as reasonably practicable and in any event not
later than 20 Business Days after receiving the request either:

 

(a)                                  provide the relevant GECF Group Company
with a product development plan (“Product Development Plan”) for the creation
and delivery of the relevant Offering(s).  The Product Development Plan will:

 

(i)                                     identify (with an explanation and
reference to Schedule 15) whether the Offering will be considered as Potential
New Business or Potential Substitute Business for the purpose of this agreement;

 

(ii)                                  include a detailed specification of the
Payment Protection Product, the features of the Payment Protection Product
and/or related marketing services (as the case may be) that the relevant GECF
Group Company wants included in the Offering and/or GEFA would be prepared to
develop (the “GEFA Proposal”);

 

(iii)                               provide a reasonable timeframe for the
creation and delivery of the Offering and/or the GEFA Proposal as the case may
be, taking into consideration the complexity of the products and services, the
regulatory environment in the relevant Territory, and the need for the GECF
Group Companies to maintain their position as a market leading provider of
Payment Protection Products.  The relevant GECF Group Company shall not
unreasonably withhold or delay its agreement to such timeframe; or

 

24

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(b)                                 decline to develop the Offering in which
case they will also provide detailed written reasons for declining to develop
the Offering.

 

The relevant GECF Group Company shall provide such information as the relevant
GEFA Group Company shall reasonably request in order for the relevant GEFA
Company to formulate its response pursuant to this Clause 9.4.4.  Such
information shall be deemed to form part of the Offering.

 

9.4.5                     If GEFA provides the relevant GECF Group Company with
a  Product Development Plan which includes a GEFA Proposal pursuant to
Clause 9.4.4(a)(ii) then:

 

(i)                                     the relevant GECF Group Company may
accept the GEFA Proposal in which case it shall then notify GEFA that it intends
to substitute the GEFA Proposal for the relevant Offering(s) and proceed in
accordance with Clause 9.4.9; or

 

(ii)                                  the relevant GECF Group Company may reject
the GEFA Proposal and then proceed in accordance with Clause 9.4.6.

 

9.4.6                     Where the relevant GECF Group Company rejects the GEFA
Proposal or GEFA declines to develop any Offering(s), subject to 9.4.14, GECC
and the relevant GECF Group Company shall have no obligation to appoint GEFA or
any GEFA Company as its exclusive provider in respect of the relevant Local
Agreement in respect of the Offering(s) and GECC and the relevant GECF Group
Company shall be free to enter into discussions, tenders, negotiations,
arrangements and agreements with third parties and/or other GECF Group Companies
in respect of the relevant Offering(s). The relevant GECF Group Company shall
invite GEFA to take part in any subsequent tender process conducted by the
relevant GECF Group Company in respect of the Offering(s) provided that GEFA
agrees and shall procure that the relevant GEFA Company agrees that the
provisions for determining the Retention Rate and the Risk Rate for the Offering
as set out in Part II or Part III (as the case may be) of Schedule 16 (Business
Proposal Pricing Process) shall apply to their submission save that, if an
Actuary were to determine the Risk Rate pursuant to Paragraphs 5 or 9.2 of
Schedule 16 (as the case may be), then the relevant GECF Group Company or the
relevant GEFA Company would be entitled to reject the proposed Risk Rate. In
either case, the relevant GECF Group Company would be entitled to award the
tender to any third party.

 

9.4.7                     GEFA’s submission in accordance with Clause 9.4.4
shall be considered to be the creation of a “Product Development Plan” for the
purpose of GEFA’s compliance with Paragraph 6.3 of Part A of Schedule 5;

 

9.4.8                     If the Parties cannot agree whether the Offering
constitutes Potential New Business or Potential Substitute Business then the
Parties shall refer the matter to the dispute resolution procedure set out in
Clause 15.

 

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9.4.9                     The relevant GECF Group Company will then review the
Product Development Plan and where the Offering constitutes:

 

(a)                                  Potential New Business the Parties will
initiate the process set out in Schedule 5 (for New Business); or

 

(b)                                 Potential Substitute Business, the Parties
will initiate the process set out in Schedule 16 (for Substitute Business).

 

9.4.10              Where Potential Substitute Business is determined through
the Schedule 16 process to be Substitute Business or Potential New Business is
determined pursuant to the process in Schedule 5 to be New Business (as the case
may be) GEFA shall, or shall procure that the relevant GEFA Company shall, make
the Offering (including any amendments thereto agreed between the Parties)
available to the relevant GECF Group Company in accordance with the terms of the
Local Addendum or New Local Agreement agreed between the Parties.

 

9.4.11              Where the relevant GEFA Company and GECF Group Company are
unable to agree on whether the timetable set out in the Product Development Plan
is reasonable, having regard to the factors set out in Clause 9.4.4(a)(iii),
either Party may refer the matter to the dispute resolution procedure set out in
Clause 15.

 

9.4.12              Where the Offering is (i) Potential Substitute Business and
is determined not to be Substitute Business pursuant to Schedule 16; or (ii)
Potential New Business and is determined not to be New Business pursuant to the
process set out in Schedule 5 then (subject to Clause 9.4.13 and 9.4.14) GECC
and the relevant GECF Group Company shall have no obligation to appoint GEFA or
any GEFA Company as its provider, whether exclusive or otherwise, in respect of
the relevant Local Agreement in respect of the Offering and GECC shall be free
to enter into discussions, tenders, negotiations, arrangements and agreements
with third parties and/or other companies in the GECF Group in respect of the
relevant Offering.

 

9.4.13              If GEFA or a GEFA Company make a GEFA Proposal in accordance
with Clause 9.4.4 and the relevant GECF Group Company at any time during the
Term of the relevant Local Agreement pursuant to which the GEFA Proposal was
made decides to implement the GEFA Proposal with a third party, then the
relevant GECF Group Company shall be required to make a request pursuant to
Clause 9.4.3 of the agreement.

 

9.4.14              Where a tender process results pursuant to Clause 9.4.6 or
9.4.12, if:

 

(i)                                     a change is proposed to the Offering(s)
during the tender process; and

 

(ii)                                  the result of such change is that the
reason GEFA declined to develop the Offering no longer applies,

 

then the relevant GECF Group Company shall notify the relevant GEFA Company and
both Parties shall be obliged to follow the procedure in Clause 9.4.3,

 

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save that Clause 9.4.4(b) shall not apply and the GEFA Company shall not have
the option of providing a GEFA Proposal pursuant to Clause 9.4.4(a)(ii).  For
the avoidance of doubt, the tender process shall not be reactivated until such
time as the GECF Group Company would be entitled to proceed to tender pursuant
to Schedule 5 or Schedule 16.

 

9.4.15              The Parties shall from time to time throughout the term of
this agreement conduct a benchmarking exercise in respect of the Payment
Protection Products and related marketing services provided pursuant to this
agreement and GEFA’s obligations pursuant to Clauses 9.4.1 and 9.4.2.

 

9.4.16              Any benchmarking exercise must be initiated and conducted in
accordance with Schedule 14.

 

9.4.17              The first benchmarking exercise shall be completed by 30
September 2004 and subsequent benchmarking exercises shall be carried out at six
month intervals thereafter.

 

9.5                               In the event that GECC or a GECF Group Company
considers that GEFA or a GEFA Company is failing to comply with its obligations
under clauses 9.2, 9.4.1 and 9.4.2, the Parties shall discuss the issue at the
next following monthly meeting held in the relevant Territory pursuant to
paragraph 2 of part B of Schedule 6.  If the relevant representatives attending
such meeting are unable to agree the action to be taken to resolve the issue,
the matter shall, within 10 Business Days of such failure to agree, be referred
to the Relationship Managers of GECC and GEFA who shall negotiate in good faith
to resolve the matter.

 

10                                  Intellectual Property, Data and Data
Protection

 

10.1                        Licence of Intellectual Property

 

10.1.1              GECC licenses the GECF Marks to GEFA and the GEFA Companies
for the Term and during the Run-Off Period for the purposes of this agreement in
the Territories. All use of GECF Marks pursuant to this clause shall be subject
to and in accordance with any trade mark use guidelines notified to GEFA by GECC
in writing from time to time.

 

10.1.2              GEFA licenses the GEFA Marks to GECC and the GECF Group
Companies for the Term and during the Run-Off Period for the purposes of this
agreement in the Territories. All use of the GEFA Marks pursuant to this
clause shall be subject to and in accordance with any trade mark use guidelines
notified to GECF by GEFA from time to time in writing. For the avoidance of
doubt, GECC has no obligation to use the GEFA Marks.

 

10.1.3              GECC shall indemnify GEFA and each member of the GEFA Group
(each an “Indemnified Person”) in respect of any loss, cost, damage, liability
or expense (including reasonable legal fees) suffered or incurred by an
Indemnified Person in connection with any claim or action brought against that
Indemnified Person to

 

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the effect that the use of the GECF Marks infringes the intellectual property
rights of any third party, provided that (i) notice is given of any such claim
or action so as to permit the person who owns the GECF Marks to assume and
control the defence thereof and (ii) the person seeking to be indemnified under
this clause does not enter into any settlement with respect to or compromise any
such claim or action without the indemnifying party’s prior written consent.

 

10.1.4              GEFA shall indemnify GECC and each member of the GECF Group
(each an “Indemnified Person”) in respect of any loss, cost, damage, liability
or expense (including reasonable legal fees) suffered or incurred by an
Indemnified Person in connection with any claim or action brought against that
Indemnified Person to the effect that the use of the GEFA Marks infringes the
intellectual property rights of any third party, provided that (i) notice is
given of any such claim or action so as to permit the person who owns the GEFA
Marks to assume and control the defence thereof and (ii) the person seeking to
be indemnified under this clause does not enter into any settlement with respect
to or compromise any such claim or action without the indemnifying party’s prior
written consent.

 

10.1.5              Each Party (each individually a “Using Party”) acknowledges
that all goodwill associated with the use by it of each of the GECF Marks or the
GEFA Marks (as applicable) vests and shall vest in the owner of such mark and
that the Using Party has no, and shall not by virtue of this agreement obtain
any, rights in any of the GECF Marks or the GEFA Marks (as applicable) other
than (to the extent owned by or licensed to the Using Party) as is necessary to
fulfil its obligations hereunder.  The Using Party undertakes that it shall make
no claim to such goodwill and shall make no use of any of the GECF Marks or the
GEFA Marks (as applicable) save as necessary to fulfil its obligations
hereunder.

 

10.1.6              Without prejudice to clause 10.1.5, if any goodwill or
proprietary right in relation to any of the GECF Marks or the GEFA Marks (as
applicable) vests in the Using Party, the Using Party shall, immediately upon
becoming aware of the vesting of such goodwill or right, assign, or procure the
assignment of, such goodwill or right to the owner of such mark.

 

10.1.7              The Using Party shall within a reasonable time notify the
other party (such notification to be accompanied by all relevant information
which is in its possession) if at any time during the  term of this agreement
the Using Party is aware that any passing-off, infringement or act of unfair
competition in relation to, or challenge to the validity of or proceedings for
rectification in respect of, any of the GECF Marks or GEFA Marks (as applicable)
is occurring, threatened or likely.  The Using Party shall not have any right to
take proceedings in respect of any infringement of the GECF Marks or GEFA Marks
(as applicable) and neither shall the owner of any of the relevant marks be
obliged to bring such proceedings.

 

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10.2                        Ownership of Intellectual Property Rights

 

10.2.1              GEFA acknowledges and shall procure that the GEFA Companies
acknowledge that intellectual property rights arising in materials created by a
GEFA Company specifically for a GECF Group Company in connection with the
provision of the Payment Protection Products pursuant to this agreement shall
vest in the relevant GECF Group Company. GEFA shall assign and shall procure
that the GEFA Companies shall assign all rights in and to such intellectual
property rights to the relevant GECF Group Company.

 

10.2.2              On the relevant GECF Group Company’s request, GEFA shall and
shall procure that the GEFA Companies shall execute any formal assignment or
document required to give effect to Clause 10.2.1 and shall provide all
reasonable assistance required by the relevant GECF Group Company to perfect,
protect, defend or assert its interests in such intellectual property rights.

 

10.3                        Ownership of Data

 

10.3.1              Save where expressly agreed otherwise in this agreement, all
intellectual property rights (including database rights) and any other rights of
whatever nature in the personal data and proprietary information of GEFA or any
member of the GEFA Group (whether or not personal data as defined in the
applicable data protection legislation in each Territory) disclosed by GEFA or
any member of the GEFA Group to GECC or any member of the GECF Group under or in
relation to this agreement shall remain at all times the property of GEFA or the
relevant member of the GEFA Group.

 

10.3.2              Save where expressly otherwise agreed, all intellectual
property rights (including database rights) and any other rights of whatever
nature in the personal data and proprietary information of GECC  or any member
of the GECF Group (whether or not personal data as defined in the applicable
data protection legislation in each Territory) disclosed by GECC or any member
of the GECC Group to GEFA or any member of the GEFA Group under or in relation
to this agreement shall remain at all times the property of GECC or the relevant
member of the GECF Group.

 

10.3.3              During the Term and following termination or expiry of this
agreement, GEFA undertakes and shall procure that the GEFA Companies undertake
not to use data or information supplied by a GECF Group Company or received
under the terms of this agreement or a Local Agreement other than for the
purposes of performing their obligations under this agreement or the relevant
Local Agreement (as the case may be) and for risk modelling and profiling
purposes. GEFA shall not, and shall procure that the GEFA Companies shall not,
use any data or information supplied by a GECF Group Company or received under
the terms of this agreement or a Local Agreement:

 

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(a)                                  for marketing purposes including, without
limitation, producing marketing information containing information concerning
GECF Group Company clients (even if anonymised); or

 

(b)                                 for the purposes of directly or indirectly
canvassing or soliciting the custom of any customer of the GECF Group.

 

11                                  Data Protection

 

11.1                        For the purposes of this clause 11, where terms and
expressions used are not defined in this agreement they shall have the meaning
assigned to them in the Data Protection Act 1998.

 

11.2                        GEFA shall, and shall procure that the GEFA
Companies shall and GECC and the GECF Group Companies shall, in performing their
obligations under this agreement, comply in all respects with the Data
Protection Legislation and otherwise in accordance with this clause 11.

 

11.3                        Where either a GEFA Company or a GECF Group Company
Processes Personal Data under this agreement GEFA or GECF, as appropriate, shall
procure that the relevant GEFA Company or GECF Group Company shall:

 

(i)                                     take appropriate technical and
organisational measures against the unauthorised or unlawful processing of the
Personal Data and against actual loss or destruction of, or damage to, the
Personal Data, having regard to the state of technological development and the
cost of implementing any measures, the measures must ensure a level of security
appropriate to the harm that might result from unauthorised or unlawful
processing or accidental loss, destruction or damage and the nature of the
Personal Data;

 

(ii)                                  process the Personal Data only in
accordance with this agreement, the relevant GECF Group Company’s or GEFA
Company’s instructions and having regard to the provisions of the Data
Protection Legislation, or as is required by law or any relevant regulatory body
in each Territory;

 

(iii)                               notify the relevant GECF Group Company or
GEFA Company if it breaches its obligations under the Data Protection
Legislation in connection with this agreement or a Local Agreement and such
breach is investigated by the data protection regulator in the relevant
Territory; and

 

(iv)                              refrain from disclosing the Personal Data in
respect of individuals with the EEA to any third party or transferring the
Personal Data obtained or processed within the EEA, outside the EEA (other than
to such jurisdiction as GECF or GEFA may agree, such agreement not to be
unreasonably withheld or delayed, or as otherwise required by Applicable Law)
except in accordance with the written instructions of the relevant GECF Group
Company or GEFA Company.

 

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11.4                        The relevant GEFA Company or GECF Group Company may
disclose the Personal Data to those of its employees and others (including
contractors) as it reasonably considers necessary for the performance of its
obligations under this agreement. The relevant GEFA Company or GECF Group
Company shall take reasonable steps to ensure the reliability of employees who
have access to the Personal Data and ensure that such employees and contractors
are aware of the relevant GEFA Company’s or GECF Group Company’s obligations
under this agreement and the Data Protection Legislation.

 

12                                  Gross Written Premiums and Collection

 

12.1                        Existing Business

 

The Parties agree that the determination of and collection of Gross Written
Premiums in respect of the Policies sold in the Existing Business shall continue
in accordance with the terms of the relevant Existing Local Agreement.

 

12.2                        New Business

 

The Parties agree that, in respect of Identified New Business and New Business,
the relevant GECF Group Companies shall, and GEFA shall procure that the
relevant GEFA Companies shall, agree and incorporate terms in the relevant New
Local Agreement for the determination and collection of Gross Written Premiums
in respect of the Policies sold in the New Business. Such terms shall include a
provision to the effect that, where the GECF Group Company collects Gross
Written Premiums, it shall collect from the Insured Customers the Tax/levy
element thereof.

 

13                                  Cancellations and Cancellation Fees

 

13.1                        The Party responsible for calculating and making
refunds to Insured Customers in respect of each sales channel shall be specified
in the Local Agreements.

 

13.2                        The relevant GECF Group Companies shall, and GEFA
shall procure that the relevant GEFA Companies shall, have good faith
discussions to agree a cancellation fee (other than any cancellation fees due in
the event of re-financing) to be charged to Insured Customers in the event of a
cancellation of their Policy by the Insured Customer (provided cancellation fees
are not prohibited by the Applicable Laws of the relevant Territory) in order to
reflect the increased administration charges incurred by both the relevant GECF
Group Company and the relevant GEFA Company and the cancellation terms on which
they will share such cancellation fee (subject to local Applicable Laws).

 

14                                  Default Interest

 

If any Party fails to pay any amount payable by it under this agreement, the
other shall be entitled to interest on the overdue amount, payable forthwith
upon demand from the due date until the date of actual payment, both before and
after judgment, at the rate of 2 per cent. per annum above the base rate from
time to time of Barclays Bank plc. Such interest shall accrue on a daily basis
and shall be compounded quarterly. All sums payable under this agreement shall
be paid in Euros.

 

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15                                  Relationship Managers, and Informal Dispute
Resolution and Arbitration

 

15.1                        GEFA on the one hand and GECC on the other shall
each appoint a representative (the “Relationship Managers”) who shall be
primarily responsible for the day to day co-ordination and management of this
agreement and the Business relationship between the Parties.  Each Party shall
notify the other in writing of the identity of its Relationship Manager. The
Relationship Managers may delegate any and all of their responsibilities to
appropriate representatives. Each Party shall procure that its Relationship
Manager and/or representative shall devote sufficient time and attention to his
or her duties and responsibilities and shall be available to the other at all
reasonable times.

 

15.2                        It is the intention of the Parties that any Dispute
(as defined below), shall be settled amicably between the Parties as quickly as
possible and accordingly:

 

15.2.1              where a Dispute arises in relation to a Local Agreement, the
relevant GECF Group Company shall, and GEFA shall procure that the relevant GEFA
Company shall, first refer such Dispute to the respective representatives of the
relevant GECF Group Company and the relevant GEFA Company.  If such Dispute
cannot be settled amicably within 5 Business Days, it shall be referred to the
Relationship Managers of GECC and GEFA; and

 

15.2.2              where a Dispute arises in relation to this agreement which
cannot be settled amicably within 3 Business Days, such Dispute shall first be
referred to the respective Relationship Managers of the Parties or such other
appropriate persons as the Relationships Managers shall nominate.

 

If the Relationship Managers (or their nominees) are unable to resolve a Dispute
within 5 Business Days after such referral, the Dispute shall be referred (upon
the application of either Party or its Relationship Manager) for resolution to
the respective Managing Director or Chief Executive Officer (or the person of
equivalent seniority) of each of the Parties.

 

15.3                        For the purposes of this clause 15, “Dispute” means
a difference or dispute of whatever nature between the Parties (or the parties
to a Local Agreement) arising under, out of or in connection with this agreement
or a Local Agreement (including any question of interpretation of this agreement
or a Local Agreement).

 

15.4                        Save as otherwise provided in this agreement, any
Dispute which is not resolved pursuant to Clause 15.2 within 5 Business Days of
referral to the Parties’ respective Managing Directors or Chief Executives (or
such other period as is specified in this agreement) shall be resolved by
arbitration in London conducted in the English language by a single arbitrator
pursuant to the rules of the London Court of International Arbitration (“LCIA”).
The appointing authority shall be the LCIA. For the avoidance of doubt, the
terms of the Arbitration Act 1996 shall apply to such arbitration and neither
Party shall be prevented from exercising any rights available to the Parties
under the Arbitration Act 1996 including, without limitation, the right to apply
for injunctive relief.

 

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16                                  Performance Meetings And Report Outs

 

16.1                        Framework Agreement Performance Meetings

 

The Parties shall hold performance meetings in accordance with the terms of Part
A of Schedule 6 and each Party shall ensure that the meetings are attended by
its appropriate relevant personnel, to include the Relationship Managers and/or
their representatives, and appropriate members of their respective finance, risk
and operations teams.

 

16.2                        Local performance meetings

 

The relevant GECF Group Companies shall, and GEFA shall procure that the
relevant GEFA Companies shall, hold performance meetings in accordance with Part
B of Schedule 6.

 

17                                  Accounts, Records and Access to Information

 

17.1                        The Parties will keep, and shall procure that the
GECF Group Companies and the GEFA Companies (as the case may be) will keep, true
and accurate accounts and records in connection with this agreement, such
accounts and records to comply with all Applicable Laws including any applicable
requirements of the relevant Financial Services Regulator or any other
applicable regulator.

 

17.2                        Subject to Applicable Laws and the confidentiality
provisions of Clause 23, the Parties shall and shall procure that the GEFA
Companies, in the case of GEFA, and the GECF Group Companies, in the case of
GECF, shall permit (but not more often than twice in any Contract Year in a
Territory unless required by the relevant Governmental Authority) authorised
representatives, officers or employees of the other (at the cost of the
requesting party) at all reasonable times on ten Business Days notice to carry
out an audit of the GECF Group Company’s obligations in relation to Profit Share
[or any regulatory requirements or dependencies on the relevant GECF Group
Company] under any Local Agreements, or any provision of services by GEFA or a
GEFA Company, or GEFA’s or a GEFA Company’s pricing methodology for Schemes and
claims reserving policy, including when relevant those accounts and records and
any papers which can legally be disclosed relating in whole or in part to the
subject matter of this agreement or any Local Agreement.

 

17.3                        Without prejudice to any other right of either Party
under this agreement and subject to Applicable Laws and the confidentiality
provisions of clause 23, if any material complaint, claim or allegation is made
(whether to or by any regulatory authority or by any Insured Customer or to any
ombudsman or otherwise) or any proceedings (whether civil, criminal,
investigative or administrative) shall be instituted against a Party or, any
GEFA Company or any GECF Group Company (the “Affected Party”) or any of their
agents or sub-contractors which in any way relates to any Payment Protection
Product comprising the Business or the marketing, sale, administration and
fulfilment thereof or to any Insured Customer or prospective Insured Customer
(or if a Party reasonably believes that any such claim or allegation may be made
or such proceedings instituted), the other Party shall promptly make available
(on the written request of the Affected

 

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Party or its legal advisers), and procure that any relevant GEFA Company or GECF
Group Company (as the case may be) shall promptly make available, such
documentation, information, files and papers and copies thereof as shall be in
the possession of the other Party, GEFA Company or GECF Group Company (as the
case may be) or any of its agents or sub-contractors which may relate in any way
to the subject matter of such complaint, claim, allegation or proceedings and
which it is not prevented from disclosing by virtue of any Applicable Law or any
obligation of confidentiality.

 

18                                  Assignment, Agents and Sub-Contracting

 

18.1                        GECC shall not be entitled to and shall not, in each
case without the prior written consent of GEFA (such consent not to be
unreasonably withheld or delayed), assign, novate or otherwise transfer this
agreement in whole or in part.

 

18.2                        GEFA may at any time assign all or any part of the
benefit of, or its rights or benefits under, this agreement to a purchaser of
all or a substantial part of the business of the GEFA Group but shall otherwise
not be entitled to and shall not, in each case without the prior written consent
of GECC (such consent not to be unreasonably withheld or delayed), assign,
novate or otherwise transfer this agreement in whole or in part.

 

18.3                        Notwithstanding clauses 18.1 and 18.2 above, both
Parties shall be entitled to assign, novate or otherwise transfer this agreement
in whole or in part without the consent of the other Party to another Group
company in the context of a solvent restructuring.

 

18.4                        Notwithstanding anything contained in this
Clause 18, GEFA shall not assign all or any part of the benefit of, or its
rights or benefits under, this agreement without the written consent of GECC to
all or any of Citibank, HSBC, Cetelem or any other entity engaged in a
multinational consumer lending business which is a competitor of the GECF Group.

 

18.5                        In respect of Existing Business, Substitute
Business, Identified New Business and New Business in an Existing Territory:

 

(i)                                     GEFA and the GEFA Companies shall have
the right to sub-contract any of their rights or obligations under this
agreement or the relevant Local Agreement to an Approved Subcontractor; and

 

(ii)                                  if GEFA or any of the GEFA Companies
wishes to sub-contract any of its rights or obligations under this agreement or
the relevant Local Agreement to a third party which does not fall within
paragraph (i) above, GEFA shall seek the prior written consent of GECC (such
consent not to be unreasonably withheld or delayed).

 

18.6                        In respect of New Business in a New Territory GEFA
and the GEFA Companies shall not, without GECC’s prior written consent (such
consent not to be unreasonably withheld or delayed), sub-contract any of their
rights or obligations under this agreement other than to an Approved
Subcontractor.

 

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18.7                        For the purposes of this agreement, any act or
omission or failure to carry out any obligation under this agreement of any
third party or GECF Group Company or GEFA Company (as the case may be) to whom a
Party to this agreement has sub-contracted or otherwise delegated its
obligations shall be deemed to be an act or omission or failure of the Party
which appointed that third party or delegated to such Group company. The
appointing Party shall not be relieved from its liability for any failure by
that Party or any of its appointees to perform any obligation which it
sub-contracts or otherwise delegates to any third party or Group company and
shall remain liable for such failures, acts or omissions.

 

18.8                        Without prejudice to clause 18.5, each Party shall
act prudently in relation to the outsourcing of any functions under or relating
to this agreement and shall comply with any Financial Services Regulator’s
provisions or any Territory-specific provisions relating to the outsourcing of
any functions, duties or responsibilities under or in connection with this
agreement.

 

19                                  Warranty of Authority

 

Each Party warrants to the other that it has full authority and power to execute
this agreement and to perform all of its duties and obligations under this
agreement and any document to be executed pursuant hereto. Each Party shall
provide evidence of such authority if and when required by the other.

 

20                                  Commencement, Term and Termination

 

20.1                        Commencement and Term

 

20.1.1              This agreement shall commence on the Commencement Date and,
subject to clauses 20.2 and 20.3, shall continue in force until 31
December 2008.

 

20.1.2              Any terms for extension of this agreement shall be agreed on
or by 30 June 2008 failing which this agreement shall expire on 31
December 2008.

 

20.2                        Termination Rights of GECC

 

20.2.1              GECC may terminate this agreement at any time by written
notice to GEFA if:

 

(a)                                  GEFA becomes Insolvent;

 

(b)                                 GEFA commits an irremediable material breach
of this agreement;

 

(c)                                  GEFA commits a material breach of this
agreement and fails to remedy such breach within 30 days of being required to do
so by written notice given by GECC;

 

(d)                                 subject to Clause 20.2.2, GEFA commits a
series of persistent breaches which when taken together constitute a material
breach of this agreement;

 

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(e)                                  the number of Local Agreements which have
been terminated pursuant to clause 20.4 or its equivalent in the Local Agreement
represents 50 per cent. or more of the total number of Local Agreements in
existence from time to time;

 

(f)                                    Genworth Financial, Inc. ceases to have a
financial strength rating of BBB or better according to Standard & Poor’s;

 

(g)                                 a Material Change has occurred and paragraph
12 of the procedure set out in Part C of Schedule 5 applies (such procedure
having been initiated pursuant to Clause 20.2.3);

 

(h)                                 50 per cent. or more of the maximum
available Service Credits in a month have been accumulated for each of nine
months or more in any Relevant Period;

 

(i)                                     any one of Citibank, HSBC, Cetelem or
any other entity engaged in a multi-national consumer lending business which is
a competitor of the GECF Group has acquired Control of GEFA or any holding
company of GEFA,

 

such notice shall set out the length of any required Exit Phase and the date the
termination takes effect.

 

20.2.2              GECC shall not provide a notice to terminate pursuant to
Clause 20.2.1(d) without first referring the matter to the dispute resolution
procedure referred to in Clause 15.  If the dispute resolution procedure: (i)
does not lead to the parties agreeing a remediation plan in respect of the
breaches then GECF may terminate this agreement in accordance with
Clause 20.2.1(d) or (ii) produces an agreed resolution plan but GEFA fails to
comply with such plan, then the persistent breaches shall be deemed to be a
material breach and GECC may terminate this agreement in accordance with
Clause 20.2.1(c).

 

20.2.3              If in any Relevant Period Eligible GWP is in excess of 20
per cent. lower than Comparable GWP in two or more Territories (a “Material
Change”), GECC shall, have the right, by notice in writing to GEFA, within 10
Business Days of the occurrence of such Material Change, to initiate the
procedure set out in Part C of Schedule 5. For the avoidance of doubt, if a
Material Change results or may be reasonably said to result from a general
reduction in the amount of financing or other activity or a reduction due to any
specific management decision of GECC or a GECF Group Company which results in a
reduction in production in the relevant Territories, then the procedure in Part
C of Schedule 5 shall not be initiated and a Material Change shall be deemed not
to have occurred.

 

20.3                        Termination Rights of GEFA

 

GEFA may terminate this agreement at any time by written notice to GECC if GECC
becomes Insolvent.

 

36

--------------------------------------------------------------------------------

 

20.4                        Termination Rights under Local Agreements

 

20.4.1              The Parties agree that the relevant GECF Group Companies
shall, and GEFA shall procure that the relevant GEFA Companies shall, in respect
of Existing Business, amend the terms of their Existing Local Agreements, or in
respect of Identified New Business and New Business, enter into New Local
Agreements, which grant the relevant GECF Group Company and the relevant GEFA
Company as applicable the right to terminate such Local Agreement by written
notice to the relevant counterparty if (and only if):

 

(i)                                     the relevant GECF Group Company or GEFA
Company is Insolvent;

 

(ii)                                  the relevant GEFA Company commits an
irremediable material breach of the Local Agreement;

 

(iii)                               the relevant GEFA Company commits a material
breach of the Local Agreement and fails to remedy such breach within 30 days of
being required to do so by written notice given by GECC;

 

(iv)                              subject to Clause 20.4.3, the relevant GEFA
Company commits a series of persistent breaches which when taken together
constitute a material breach of the Local Agreement;

 

(v)                                 a Local Material Change has occurred and
paragraph 12 of the procedure set out in part C of Schedule 5 applies (such
procedure having been initiated pursuant to Clause 20.4.4);

 

(vi)                              subject to 20.4.2 if, in respect of the
relevant Local Agreement, GEFA accumulates at least 27.5 per cent. of the
maximum available Service Credits in any four consecutive months or for any nine
months in a Relevant Period provided that if such period ends after 31
December 2005 the reference to 27.5 per cent. above shall be replaced by a
reference to 25 per cent. ; or

 

(vii)                           a Regulatory Event has occurred and
sub-paragraph (ix) of the procedure set out in clause 20.4.5 applies,

 

such notice shall set out the length of any required Exit Phase and the date the
termination takes effect.

 

20.4.2              GECC shall not exercise its right to terminate any Local
Agreement pursuant to Clause 20.4.1(vi) at any time (i) within 12 calendar
months from the Commencement Date and (ii) in respect of a New Local Agreement
within 6 calendar months from the commencement date of the relevant Local
Agreement.

 

20.4.3              GECC shall not provide a notice to terminate pursuant to
Clause 20.4.1(iv) without first referring the matter to the dispute resolution
procedure referred to in Clause 15.  If the dispute resolution procedure: (i)
does not lead to the Parties

 

37

--------------------------------------------------------------------------------

 

agreeing a remediation plan in respect of the breaches then GECC may terminate
this agreement pursuant to Clause 20.4.1(iv) or (ii) produces an agreed
resolution plan but GEFA fails to comply with such plan, then the breach(es)
shall be deemed to be material and GECC may terminate the Local Agreement in
accordance with Clause 20.4.1(iii).

 

20.4.4              If in any Relevant Period, Local Eligible GWP is in excess
of 50 per cent. lower than Local Comparable GWP (a “Local Material Change”) GECC
shall within 10 Business Days of the occurrence of such Local Material Change
have the right, by notice in writing to GEFA, to initiate the procedure set out
in Part C of Schedule 5 with respect to the Local Agreement in question,
provided that in respect of each Local Agreement in a Key Territory the figure
of 50 per cent. above shall be replaced with 20 per cent. For the avoidance of
doubt, if a Local Material Change results or may be reasonably said to result
from a general reduction in the amount of financing activity or a reduction due
to any specific management decision of GECF Group Companies which results in a
reduction in production in the relevant Territory, then the procedure in Part C
of Schedule 5 shall not be initiated and a Local Material Change shall be deemed
not to have occurred.

 

20.4.5              The Parties agree that following the occurrence of a
Regulatory Event, the following shall apply.

 

(i)                                     Within 5 Business Days of the occurrence
of a Regulatory Event, the Affected GEFA Company shall give notice in writing of
the Regulatory Event to each counterparty of each Local Agreement to which it is
a party.  Such notice shall include:

 

(a)                                  details of the matter which gave rise to
the Regulatory Event;

 

(b)                                 details of any remedial action stipulated by
the Financial Services Regulator which may be taken in order to avoid the
threatened revocation or suspension of authorisation; and

 

(c)                                  details of any deadlines by which such
action must be taken.

 

(ii)                                  Upon receipt of the notice referred to in
clause (i) above the relevant GECF Group Company may begin contingency planning
to change to a Replacement Supplier in respect of those Payment Protection
Products which the Affected GEFA Company will be unable to provide in the event
that its authorisation is revoked or suspended.  Such contingency planning may
include contacting potential replacement suppliers for the purposes of agreeing
terms of supply but, for the avoidance of doubt, any such agreement shall be
conditional on the revocation or suspension of the Affected GEFA Company’s
authorisation.

 

(iii)                               Within 15 Business Days of the occurrence of
the Regulatory Event, the Affected GEFA Company shall produce and provide to the
relevant GECF

 

38

--------------------------------------------------------------------------------

 

Group Company a proposal updated from time to time as appropriate setting out
the action which the Affected GEFA Company intends to take in order to comply
with the terms of the notice from the Financial Services Regulator and the
timetable within which such action shall be taken.

 

(iv)                              Promptly after the provision of the proposal
pursuant to clause (iii) above, the Affected GEFA Company and the relevant GECF
Group Company shall discuss the adequacy of the proposed action and timetable.

 

(v)                                 If the Affected GEFA Company and the
relevant GECF Group Company, each acting reasonably, agree that the steps set
out in the proposal will be sufficient to resolve the problem, the Affected
Company shall implement the proposal in accordance with the agreed timetable. 
The Affected GEFA Company shall keep the relevant GECF Group Company regularly
informed as to progress and shall promptly inform the relevant GECF Group
Company of any further relevant communications from the Financial Services
Regulator.

 

(vi)                              If the relevant GECF Group Company, acting
reasonably, considers that the proposal will not adequately address the problem
identified by the Financial Services Regulator, the parties shall negotiate in
good faith to make such amendments as they agree are necessary to resolve the
problem.

 

(vii)                           If at any time the Affected GEFA Company, in its
reasonable opinion, considers that it will be unable to take the necessary
action to avoid the revocation or suspension of its authorisation, it shall
immediately inform the relevant GECF Group Company and the provisions of
clause (ix) shall apply.

 

(viii)                        If at any time the Financial Services Regulator
notifies the Affected GEFA Company that is authorisation has been revoked or
suspended, the provisions of clause (ix) shall apply.

 

(ix)                                In the event that this clause (ix) applies,
the relevant GECF Group Company shall have the right to terminate the relevant
Local Agreement to the extent that it relates to Payment Protection Products in
respect of which the Affected GEFA Company is or shall be unable to meet its
obligations and shall have the right to enter arrangements for the supply of
such Payment Protection Products with a Replacement Supplier.

 

21                                  Consequences of Termination

 

21.1                        Termination of this Agreement

 

21.1.1              Upon the termination or expiration of this agreement
pursuant to clauses 20.1, 20.2 or 20.3 the Local Agreements shall automatically
terminate.

 

39

--------------------------------------------------------------------------------

 

21.1.2              GECC and each GECF Group Company shall not during the Term
or during the Run-Off Period, by way of any act or omission, encourage, induce
or persuade any Insured Customer to terminate any Payment Protection Product
which such Insured Customer has entered into with GEFA or a GEFA Company.

 

21.2                        Surviving Clauses

 

21.2.1              Termination or expiry of this agreement for whatever reason
shall be without prejudice to the rights, obligations and liabilities of either
Party then accrued due and shall not affect the coming into force or the
continuation in force of this clause 21.2.1 or of any provision of this
agreement which is expressly stated to continue in force at or after termination
or expiry including , 10.3, 11, 15, 17, 21.3, 23, 30 and 31.

 

21.2.2              During the Run-Off Period the following additional clauses
shall remain in force: 5.3, 6, 9.1, 9.2, 12, 13, 14, 16, 18.

 

21.3                        Exit Plan and Termination Assistance

 

21.3.1              If GECC so requests promptly following the commencement of
an Exit Phase, GEFA shall and shall procure that the GEFA Companies shall as
soon as reasonably practicable submit to GECC and the relevant GECF Companies a
plan (the “Exit Plan”) which shall describe the activities and tasks to be
performed by the Parties in order to facilitate the smooth transfer of the
responsibility for the provision of Payment Protection Products to a Replacement
Supplier.

 

21.3.2              During the Exit Phase, the Parties shall perform their
respective obligations as stated in the Exit Plan.

 

21.3.3              Subject to the provisions of the Exit Plan, each Party shall
and shall procure that the GEFA Companies or the GECF Group Companies (as
applicable) shall during the Exit Phase provide to the other Party any
assistance reasonably requested to allow the provision of Payment Protection
Products to continue without material interruption or material adverse effect
and to facilitate the transfer of, responsibility for and conduct of the
provision of Payment Protection Products to a Replacement Supplier in accordance
with the provisions of the Exit Plan.  GEFA shall be responsible for any
reasonable additional costs incurred by GEFA as a result of the provision of
termination assistance services to GECC or GECF Group Companies.

 

21.3.4              Except as otherwise stated in the Exit Plan, the obligations
stated in Clauses 21.3.2 and 21.3.3 above shall be in addition to and not in
substitution for the provision of the Payment Protection Products during the
Exit Phase on the terms and conditions of this agreement.

 

40

--------------------------------------------------------------------------------

 

22                                  Force Majeure

 

22.1                        “Event of Force Majeure” means, in relation to any
Party or a GECF Group Company or a GEFA Company (as the case may be), an event
or circumstance beyond the reasonable control of that person (the “Claiming
Party”) including, without limitation, strikes, lock-outs and other industrial
disputes (in each case, whether or not relating to the Claiming Party’s
workforce) but excluding any event under clause 4.

 

22.2                        The Claiming Party shall not be deemed to be in
breach of this agreement or otherwise liable to any other party (the
“Non-claiming Party”) for any delay in performance or any non-performance of any
obligations under or pursuant to this agreement (and the time for performance
shall be extended accordingly) if and to the extent that the delay or
non-performance is due to an Event of Force Majeure provided that:

 

(i)                                     the Claiming Party could not have
avoided the effect of the Event of Force Majeure by taking precautions,
including disaster recovery arrangements, which, having regard to all matters
known to it before the occurrence of the Event of Force Majeure and all relevant
factors, it ought reasonably to have taken but did not take; and

 

(ii)                                  the Claiming Party has used reasonable
endeavours to mitigate the effect of the Event of Force Majeure and to carry out
its obligations under this agreement in any other way that is reasonably
practicable.

 

22.3                        The Claiming Party shall promptly notify the
Non-claiming Party of the nature and extent of the circumstances giving rise to
the Event of Force Majeure.

 

22.4                        If the Event of Force Majeure in question prevails
for a continuous period in excess of two months after the date on which it
began, the Non-claiming Party may require that the issue be included on the
agenda of the next local performance meeting held pursuant to clause 16.2.  At
such meeting the Parties shall discuss in good faith the continued provision of
the affected service or obligation and any necessary amendments to this
agreement or the relevant Local Agreement.

 

23                                  Confidential Information

 

23.1                        Each Party undertakes to each other and each member
of the other party’s Group that it will not, and will ensure that its directors,
officers, employees and agents do not, without the prior written consent of the
other Party:

 

23.1.1              make available or disclose any Confidential Information of
the other party which is provided to it by that other Party pursuant to this
agreement to any person other than those of its directors, officers or employees
or other persons (including subcontractors) who are necessarily required in the
course of their duties to receive and consider the same for the purposes of
performing its obligations or exercising its rights under this agreement and for
risk modelling and profiling purposes, but not for marketing purposes or for the
purposes of directly or indirectly canvassing or soliciting the custom of any
customer of the GECF Group

 

41

--------------------------------------------------------------------------------

 

(including for the avoidance of doubt using anonymised information on clients of
GECF Group Companies) (the “Permitted Purposes”); or

 

23.1.2              use any Confidential Information of that other Party which
is provided to it by the other Party pursuant to this agreement other than for
the Permitted Purposes.

 

23.2                        The provisions of clause 23.1 shall not apply to the
extent that any Confidential Information:

 

23.2.1              is at the date of this agreement or any time thereafter
becomes publicly known, other than as a result of any breach of this agreement
or any other duty of confidence;

 

23.2.2              can be shown by the receiving Party to the disclosing
Party’s reasonable satisfaction to have been known by the receiving Party before
disclosure by the disclosing Party, other than as a result of any breach of this
agreement or any other duty of confidence;

 

23.2.3              is required to be disclosed by any court or governmental,
administrative or regulatory authority competent to require such disclosure; or

 

23.2.4              is required to be disclosed by any Applicable Law.

 

23.3                        Notwithstanding clause 23.1:

 

23.3.1              a Party may disclose Confidential Information relating to
another to its professional advisers for the purposes of obtaining professional
advice provided that the disclosing Party shall advise any such person to whom
such information is disclosed of the confidentiality obligations contained in
this agreement and shall procure that such person complies with such obligations
as if it were a party to this agreement; and

 

23.3.2              no Party shall be prevented from using or disclosing any
information which is independently developed without reference to or which does
not refer to any Confidential Information of the other Party.

 

23.4                        Each Party shall, forthwith upon termination or
expiry of this agreement for any reason or upon the receipt by it of written
demand from the other, return all written Confidential Information provided to
it by the other Party.

 

24                                  Waiver

 

24.1                        A waiver of any term, provision or condition of this
agreement shall be effective only if given in writing and signed by the waiving
Party and then only in the instance and for the purpose for which it is given.

 

24.2                        No failure or delay on the part of any Party in
exercising any right, power or privilege under this agreement shall operate as a
waiver thereof, nor shall any single or partial

 

42

--------------------------------------------------------------------------------

 

exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

 

24.3                        No breach of any provision of this agreement shall
be waived or discharged except with the express written consent of the Parties.

 

25                                  Entire Agreement

 

25.1                        This agreement constitutes the entire and only
agreement between the Parties relating to the subject matter of this agreement
and (to the extent permissible by law) supersedes and extinguishes any and all
prior drafts, agreements, writings, negotiations, understandings, undertakings,
representations, warranties and arrangements of any nature whatsoever, whether
or not in writing, relating to or in connection with the subject matter of this
agreement provided that neither Party is attempting to exclude any liability for
fraudulent statements (including fraudulent pre-contractual misrepresentations)
on which the other Party can be shown to have relied. All terms, conditions and
warranties not stated expressly in this agreement, and which would in the
absence of this provision be implied into this agreement by statute, common law,
equity, trade, custom or usage or otherwise, are excluded to the maximum extent
permitted by law.

 

25.2                        Each Party acknowledges that it has not been induced
to enter into this agreement in reliance upon, nor has it been given, any
warranty, representation, statement, assurance, covenant, agreement,
undertaking, indemnity or commitment of any nature whatsoever other than as
expressly set out in this agreement and, to the extent it has been, it
unconditionally and irrevocably waives any claims, rights and remedies which it
might otherwise have had in relation thereto.

 

25.3                        The provisions of this clause shall not exclude any
liability which a Party would otherwise have to the other or any right which
either of them may have to rescind this agreement in respect of any statements
made fraudulently by the other prior to the execution of this agreement or any
rights which either of them may have in respect of fraudulent concealment by the
other.

 

25.4                        This agreement may be varied only by a document
signed by both Parties.

 

25.5                        Any claim brought by either Party in respect of a
breach by the other Party of the terms of this agreement may include a claim for
actual or potential loss of profits.

 

26                                  Costs and Expenses

 

26.1                        Except as expressly provided in this agreement each
of the Parties shall bear its own legal, accountancy and other costs, charges
and expenses connected with the negotiation, preparation and implementation of
this agreement and any other agreement incidental to or referred to in this
agreement.

 

26.2                        Except as expressly provided in this agreement, GECC
shall not be entitled to any other remuneration or to be reimbursed for any
cost, charge or expense incurred by it in each case in connection with this
agreement or the performance of its obligations hereunder.

 

43

--------------------------------------------------------------------------------

 

For the avoidance of doubt, this clause shall not operate to exclude or limit
any liability of GEFA for breach of contract or its negligence.

 

27                                  No Partnership

 

Nothing in this agreement and no action taken by the Parties pursuant to this
agreement shall constitute, or be deemed to constitute, a partnership,
association, joint venture or other co-operative entity.

 

28                                  Notices

 

28.1                        Any notice, demand or other communication given or
made under or in connection with the matters contemplated by this agreement
shall be in writing and shall be delivered personally or sent by fax or prepaid
first class post (air mail if posted to or from a place outside the United
Kingdom):

 

In the case of GEFA to:

 

Address: Vantage West, Great West Road, Brentford, Middlesex TW8 9AG
Fax: 44 20 8380 3300
Attention: European Legal Director

 

In the case of GECC to:

 

GE Consumer Finance, Malvern House, Croxley Green Business Park, Watford, Herts,
WD18 8YF

 

Fax: 44 1923  426871

 

Attention: General Counsel, Europe

 

and shall be deemed to have been duly given or made as follows:

 

28.1.1              personally delivered, upon delivery at the address of the
relevant Party;

 

28.1.2              if sent by first class post, two Business Days after the
date of posting;

 

28.1.3              if sent by air mail, five Business Days after the date of
posting; and

 

28.1.4              if sent by fax, when sent provided that the sender receives
a satisfactory transmission confirmations,

 

provided that if, in accordance with the above provision, any such notice,
demand or other communication would otherwise be deemed to be given or made
after 5.00 p.m., such notice, demand or other communication shall be deemed to
be given or made at 9.00 a.m. on the next Business Day.

 

44

--------------------------------------------------------------------------------

 

28.2                        A Party may notify the other party to this agreement
of a change to its name, relevant addressee and address for the purposes of
clause 28.1 provided that such notification shall only be effective on:

 

(i)                                     the date specified in the notification
as the date on which the change is to take place; or

 

(ii)                                  if no date is specified or the date
specified is less than five Business Days after the date on which notice is
given, the date falling five Business Days after notice of any such change has
been given.

 

29                                  Invalidity and Severability

 

29.1                        If any provision of this agreement is or becomes
(whether or not pursuant to any judgement or otherwise) invalid, illegal or
unenforceable in any respect under the law of any jurisdiction:

 

29.1.1              the validity, legality and enforceability under the law of
that jurisdiction of any other provision; and

 

29.1.2              the validity, legality and enforceability under the law of
any other jurisdiction of that or any other provision,

 

shall not be affected or impaired in any way thereby.

 

29.2                        If any provision of this agreement shall be held to
be void or declared illegal, invalid or unenforceable for any reason whatsoever,
such provision shall be divisible from this agreement and shall be deemed to be
deleted from this agreement and the validity of the remaining provisions shall
not be affected. In the event that any such deletion materially affects the
interpretation of this agreement then the Parties shall negotiate in good faith
with a view to agreeing a substitute provision which as closely as possible
reflects the commercial intention of the Parties.

 

30                                  Governing Law and Jurisdiction and
Appointment of Process Agent

 

30.1                        Governing Law and Jurisdiction

 

This agreement (and any dispute, controversy, proceedings or claim of whatever
nature arising out of or in any way relating to this agreement or its formation)
shall be governed by and construed in accordance with English law.

 

30.2                        Appointment of Process Agent

 

30.2.1              GEFA hereby irrevocably appoints (Marked for the attention
of Company Secretary) Financial Insurance Company Limited, [Vantage West, Great
West Road, Brentford, Middlesex TW8 9AG], as its agent to accept service of
process in England in any legal action or proceedings arising out of this
agreement,

 

45

--------------------------------------------------------------------------------

 

service upon whom shall be deemed completed whether or not forwarded to or
received by GEFA.

 

30.2.2              GEFA agrees to inform GECC in writing of any change of
address of such process agent within 28 days of such change.

 

30.2.3              If such process agent ceases to be able to act as such or to
have an address in England, GEFA irrevocably agrees to appoint a new process
agent in England acceptable to GECC and to deliver to GECC within 14 days a copy
of a written acceptance of appointment by the process agent.

 

30.2.4              GECC hereby irrevocably appoints (Marked for the attention
of General Counsel, Europe) GE Capital Bank, [GE Consumer Finance, Malvern
House, Croxley Green Business Park, Watford, Herts WD18 8YF], as its agent to
accept service of process in England in any legal action or proceedings arising
out of this agreement, service upon whom shall be deemed completed whether or
not forwarded to or received by GECC.

 

30.2.5              GECC agrees to inform GEFA in writing of any change of
address of such process agent within 28 days of such change.

 

30.2.6              If such process agent ceases to be able to act as such or to
have an address in England, GECC irrevocably agrees to appoint a new process
agent in England acceptable to GEFA and to deliver to GEFA within 14 days a copy
of a written acceptance of appointment by the process agent.

 

30.2.7              Nothing in this agreement shall affect the right to serve
process in any other manner permitted by law or the right to bring proceedings
in any other jurisdiction for the purposes of the enforcement or execution of
any judgment or other settlement in any other courts.

 

31                                  Exclusion of Third Party Rights

 

The Parties to this agreement do not intend that any term of this agreement
should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act
1999, by any person who is not a Party to this agreement.

 

46

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IN WITNESS whereof this agreement has been executed on the date first above
written.

 

Signed by /s/  William C. Goings

)

 

 

for and on behalf of

)

 

 

GEFA INTERNATIONAL HOLDINGS, INC.

)

 

 

in the presence of:

 

 

 

 

 

Signed by /s/  George Awad

)

 

 

for and on behalf of

)

 

 

GE CAPITAL CORPORATION

)

 

in the presence of:

 

47

--------------------------------------------------------------------------------

 

Schedule 1
Existing Business

 

Part A – Existing Direct Business

 

Territory

 

Product

 

**

 

**

 

**

 

UK (GCF)

 

Bank Card Account Cover 3

 

**

%

**

%

**

%

UK (GCF)

 

Bank Card Account Cover 3 over 70’s

 

**

%

**

%

**

%

UK (GCF)

 

Store Card Account Cover 3

 

**

%

**

%

**

%

UK (GCF)

 

Store Card Account Cover 3 over 70’s

 

**

%

**

%

**

%

UK (GCF)

 

Monsoon Account Cover 3

 

**

%

**

%

**

%

UK (GCF)

 

Monsoon Account Cover 3 over 70’s

 

**

%

**

%

**

%

UK (GCF)

 

3335 Comet, B&Q Revolving

 

**

%

**

%

**

%

UK (GCF)

 

3334 Comet, B&Q fixed

 

**

%

**

%

**

%

UK (GCF)

 

3303 Toys R Us

 

**

%

**

%

**

%

UK (GCF)

 

3358 DFS

 

**

%

**

%

**

%

UK (GCF)

 

3644 Kwik Fit

 

**

%

**

%

**

%

UK (GCF)

 

Store Credit Card Beagle

 

**

%

**

%

**

%

UK (GCF)

 

Matrix

 

**

%

**

%

**

%

Sweden

 

NA0

 

**

%

**

%

**

%

Sweden

 

NA1

 

**

%

**

%

**

%

Sweden

 

RD1

 

**

%

**

%

**

%

Sweden

 

RD2

 

**

%

**

%

**

%

Sweden

 

RR1

 

**

%

**

%

**

%

Sweden

 

GC1-6

 

**

%

**

%

**

%

Sweden

 

GD9

 

**

%

**

%

**

%

Sweden

 

RD3

 

**

%

**

%

**

%

Denmark

 

G36

 

**

%

**

%

**

%

Denmark

 

G37

 

**

%

**

%

**

%

Denmark

 

G38

 

**

%

**

%

**

%

Denmark

 

G39

 

**

%

**

%

**

%

Denmark

 

G35 Compulsory Life

 

**

%

**

%

**

%

Denmark

 

G34 Compulsory Life

 

**

%

**

%

**

%

Denmark

 

G29 Compulsory Life

 

**

%

**

%

**

%

Denmark

 

G2B Compulsory Life

 

**

%

**

%

**

%

Denmark

 

G40 Compulsory Life

 

**

%

**

%

**

%

Denmark

 

G41 Compulsory Life

 

**

%

**

%

**

%

Denmark

 

G56 Xtra Tryghed

 

**

%

**

%

**

%

Denmark

 

G57 Xtra Tryghed

 

**

%

**

%

**

%

Denmark

 

G58 Xtra Tryghed

 

**

%

**

%

**

%

Denmark

 

G59 Xtra Tryghed

 

**

%

**

%

**

%

Denmark

 

AC1 AcceptCard

 

**

%

**

%

**

%

Norway

 

6604

 

**

%

**

%

**

%

Norway

 

6602

 

**

%

**

%

**

%

 

 

6612

 

**

%

**

%

**

%

Norway

 

6701, 6801, 6702, 6802, 6901, 6902, 6712

 

**

%

**

%

**

%

Norway

 

6812

 

**

%

**

%

**

%

Norway

 

6703, 6803, 6903

 

**

%

**

%

**

%

 

48

--------------------------------------------------------------------------------

 

Territory

 

Product

 

**

 

**

 

**

 

Norway

 

6603

 

**

%

**

%

**

%

Norway

 

6613

 

**

%

**

%

**

%

Norway

 

6913, 6914,6915

 

**

%

**

%

**

%

Norway

 

6813

 

**

%

**

%

**

%

Norway

 

6601

 

**

%

**

%

**

%

Norway

 

6611

 

**

%

**

%

**

%

Norway

 

6811

 

**

%

**

%

**

%

Norway

 

6504a,6504b

 

**

 

**

 

**

 

Switzerland

 

GC4 ProKredit

 

**

%

**

%

**

%

Switzerland

 

GC5 Prolimit

 

**

%

**

%

**

%

Switzerland

 

GC6 Unileasing

 

**

%

**

%

**

%

Switzerland

 

GC7Sales Finance

 

**

%

**

%

**

%

Italy

 

GE4 Finanziamento Sereno

 

**

%

**

%

**

%

Italy

 

GE5 Finanziamento Sereno Plus

 

**

%

**

%

**

%

Italy

 

GE6 Lease & Life

 

**

%

**

%

**

%

Italy

 

GE7 Lease & Life Plus

 

**

%

**

%

**

%

Italy

 

GEB Resolicitation

 

**

%

**

%

**

%

France

 

Auto

 

**

%

**

%

**

%

France

 

Vie 3011

 

**

%

**

%

**

%

France

 

Vie 0007

 

**

%

**

%

**

%

France

 

Vie 0011

 

**

%

**

%

**

%

France

 

Vie 0029

 

**

%

**

%

**

%

France

 

Vie 0039

 

**

%

**

%

**

%

France

 

Vie 0052

 

**

%

**

%

**

%

France

 

Vie 0091

 

**

%

**

%

**

%

France

 

RD 0022

 

**

%

**

%

**

%

France

 

RD 0029

 

**

%

**

%

**

%

France

 

RD 0074

 

**

%

**

%

**

%

France

 

RD 0116

 

**

%

**

%

**

%

France

 

RD 0045

 

**

%

**

%

**

%

France

 

RD 0057

 

**

%

**

%

**

%

France

 

RD 0075

 

**

%

**

%

**

%

France

 

RD 0120

 

**

%

**

%

**

%

France

 

Mortgage

 

**

%

**

%

**

%

France

 

0001

 

**

%

**

%

**

%

France

 

0022

 

**

%

**

%

**

%

France

 

0019

 

**

%

**

%

**

%

France

 

1995

 

**

%

**

%

**

%

France

 

0024

 

**

%

**

%

**

%

France

 

0054

 

**

%

**

%

**

%

France

 

0055

 

**

%

**

%

**

%

France

 

0089

 

**

%

**

%

**

%

France

 

0090

 

**

%

**

%

**

%

France

 

0030

 

**

%

**

%

**

%

France

 

3595

 

**

%

**

%

**

%

France

 

0003

 

**

%

**

%

**

%

 

49

--------------------------------------------------------------------------------

 

Territory

 

Product

 

**

 

**

 

**

 

France

 

0087

 

**

%

**

%

**

%

France

 

0088

 

**

%

**

%

**

%

France

 

0118

 

**

%

**

%

**

%

France

 

0119

 

**

%

**

%

**

%

France

 

0069

 

**

%

**

%

**

%

France

 

0056

 

**

%

**

%

**

%

France

 

GE branded

 

**

%

**

%

**

%

France

 

Co-branded

 

**

%

**

%

**

%

Germany

 

SG1-2

 

**

%

**

%

**

%

 

Part B – Existing Reinsured Business

 

Territory

 

Product

 

**

 

**

 

**

 

UK (Woodchester)

 

BU, BU2 Cap care Premier HP

 

**

%

**

%

**

%

UK (Woodchester)

 

BUR, 2BU Cap care Premier PCP

 

**

%

**

%

**

%

UK (Woodchester)

 

CUB, 2CB Custom Finance

 

**

%

**

%

**

%

UK (Woodchester)

 

K1B, K2B Keyman Basic

 

**

%

**

%

**

%

UK (Woodchester)

 

K3B, K4B Keyman Standard

 

**

%

**

%

**

%

UK (Woodchester)

 

K5B, K6B Keyman Premier

 

**

%

**

%

**

%

UK (Woodchester)

 

BA, BA2 Cap Care Standard

 

**

%

**

%

**

%

UK (Woodchester)

 

BL, BL2 Cap Care Basic HP

 

**

%

**

%

**

%

UK (Woodchester)

 

BLR 2BL Cap care Basic PCP

 

**

%

**

%

**

%

UK (Woodchester)

 

BAR, 2BA Cap care Standard PCP

 

**

%

**

%

**

%

Ireland

 

PA – PN, TA –TR Auto business

 

**

%

**

%

**

%

Ireland

 

WB – WY, XB – XY Consumer business

 

**

%

**

%

**

%

Ireland

 

KA – KF Equipment business

 

**

%

**

%

**

%

Germany

 

SPA-B

 

**

%

**

%

**

%

Germany

 

SPG-J

 

**

%

**

%

**

%

Germany

 

SPC-F

 

**

%

**

%

**

%

Spain

 

BF20

 

**

%

**

%

**

%

Spain

 

BF22

 

**

%

**

%

**

%

Spain

 

Super PPI

 

**

%

**

%

**

%

Spain

 

resolicitation

 

**

%

**

%

**

%

Portugal

 

WAA, WNA, WFA

 

**

%

**

%

**

%

Portugal

 

WAB – WAM, WNB – WNM, WFB - WFM

 

**

%

**

%

**

%

 

50

--------------------------------------------------------------------------------

 

Part C

 

 

**

 

51

--------------------------------------------------------------------------------

 

Schedule 2
GE Financial Insurance Service Level Standards

 

1                                         Glossary

 

Business Day – means, for the purposes of this Schedule 2 only, a day (other
than a Saturday, Sunday or public holiday) on which banks are open for business
in the relevant Territory;

 

Confirmed/Confirmation – New business and cancellation records accepted and made
live on to the GEFA administration system.

 

Decision Accuracy – Accuracy of the decision to pay/reject a claim based on the
terms and conditions of the policy against the detail put forth in the claim.
The measure of the accuracy is Yes or No.

 

Notification of Insurance Processing – Electronic files, or other medium agreed
between the Parties, in agreed format containing new business, cancellations,
mid-term adjustments, premium payments and customer details for bulk premium,
periodic premium, single premium and reinsurance products. Notification of
Insurance Processing also includes correction of errors passed back to GECC for
resolution.

 

Processing Month End – The period within the GEFA Group for which Insurance
Processing is Confirmed.  This follows a predefined accounting schedule of month
ends, normally occurring on the last or second to last Friday in the calendar
month, which GEFA will notify to GECC annually at the beginning of the year for
the whole year.

 

Pending – Unconfirmed new business and cancellation records, which suffer
validation errors and warning messages.

 

Pending List – A list of Notification of Insurance Processing that was not
confirmed and put live on the GEFA administration system as at the Processing
Month End.

 

Processed – The Notification of Insurance Processing has been Confirmed or
Rejected or is Pending and Pending and Rejected data have been passed to GECC
for correction.

 

Processing Month – The month GEFA has received the Notification of Insurance
Processing from GECC to process.

 

Reconciled/Reconciliation – Notification of Insurance Processing which is
allocated to one of the following categories (and communicated back to the
client within agreed Service Levels) – Confirmed, Pending and Rejected –and
reconciled with cash received.

 

Rejected – New business and cancellation records which result in a severe error
as part of the interface validation process.

 

52

--------------------------------------------------------------------------------

 

Selling Month – The month in which GECC sells the insurance to the customer.

 

2                                         Hours Of Service

 

Hours of service availability will be no less than 8 hours per day Monday to
Friday excluding public holidays. Hours of service will vary in line with local
working practices.

 

3                                         Notification and Reconciliation of
Insurance Processing

 

GEFA will process bulk premium, periodic premium, single premium and reinsurance
premium in respect of which collection is effected either by GECC or by GEFA.

 

The Service Levels in paragraph 3 are dependent on paragraph 12 and the
dependencies set out in Table A in paragraph 17 below.

 

3.1                               Chart 1 (Operating Reconciliation Process)
outlines the process flow for processing the insurance records notified. The
process includes the processing of all new business records, cancellation
records and the Pending and Rejected records that arise from the process.

 

Operating Reconciliation Process (Chart 1)

 

[ex1026image002.gif]

 

The Service Levels that apply are:

 

(i)                                     100% of Notifications of Insurance
Processing notified to GEFA shall be Processed by GEFA within 5 Business Days of
file receipt;

 

(ii)                                  Notifications of Insurance Processing
notified by GECC to GEFA at least 5 Business Days prior to the end of the
Processing Month will be Processed by GEFA in the month in which the
notification occurred unless the terms of an Existing Local Agreement provide
otherwise;

 

53

--------------------------------------------------------------------------------

 

(iii)                               subject to paragraph 3.1(ii), reasonable
efforts will be made to Process Notifications of Insurance Processing received
fewer than 5 Business Days before Processing Month End,  but for the avoidance
of doubt this is not guaranteed within the terms of the Service Levels;

 

(iv)                              reconciliation between the number of
Notifications of Insurance Processing received by GEFA and the number of
Notifications of Insurance Processing Processed will be completed by the tenth
Business Day following the Processing Month End; and

 

(v)                                 provided that GECC has complied with its
obligations to respond within five Business Days to all Pending Notifications of
Insurance Processing,

 

(a)                                  at the end of a Processing Month,
Notifications of Insurance Processing classified as Pending shall not exceed 1%
of total Notifications of Insurance Processing notified to GEFA in that
Processing Month (excluding Notifications of Insurance Processing notified to
GEFA fewer than 5 Business Days from the end of the relevant Processing Month);
and

 

(b)                                 by the end of the next Processing Month
there shall be no Pending Notifications of Insurance Processing which were
notified to GEFA in the preceding Processing Month (excluding Notifications of
Insurance Processing notified to GEFA fewer than 5 Business Days from the end of
the previous Processing Month).

 

3.2                               Financial Control Reconciliation Process

 

(i)                                     The financial control reconciliation
process begins when the operating reconciliation process set out in paragraph
3.1 ends. The Reconciliation can only happen once all the policies have been
Processed. The procedure for invoicing and settlement shall be as follows:

 

(a)                                  Premium Invoiced - GEFA shall supply to
GECC invoice and Pending List 10 Business Days after Processing Month End.

 

(b)                                 Premium & Cash - GEFA shall supply to GECC
statement, commission settlement (where applicable) and Pending List 10 Business
Days after Processing Month End.

 

(c)                                  Cancellations - GEFA shall supply to GECC
credit note or cheque 10 Business Days after Processing Month End (if
cancellation amount owed exceeds premium in the relevant Processing Month).

 

(d)                                 Payment of Invoices/Statements - Each party
shall make payment within 7 Business Days of the issue of an invoice in respect
of premium by the other Party unless the terms of an Existing Local Agreement
provide otherwise.

 

54

--------------------------------------------------------------------------------

 

(ii)                                  The Service Level for Financial Control
Reconciliation is: 100% of all Notifications of Insurance Processing to be
Reconciled by GEFA each month by the 10th Business Day following the Processing
Month End.  For the avoidance of doubt, the cash reconciliation shall occur by
the tenth Business Day following the end of the subsequent Processing Month.

 

4                                         Management Information associated with
Processing

 

(i)                                     Dashboards by Local Agreement will be
created monthly by GEFA and reviewed at the monthly joint management meetings
that will show clearly the percentage of data Confirmed, Pending and Rejected
for a given month.

 

(ii)                                  Dashboards by Local Agreement will be
created monthly by GEFA reflecting the age of Notifications of Processing which
are classified as Pending or Rejected.

 

(iii)                               Dashboards by Local Agreement will be
created monthly by GEFA in respect of cancellation data including number of
policies cancelled, value of refunds, average expired term and average remaining
term, in each case by policy year.

 

(iv)                              Dashboards will be delivered by GEFA within 10
Business Days of the Processing Month End.

 

5                                         New Policy Fulfilment

 

Where GEFA is responsible for new policy fulfilment, policy certificates and/or
policy documentation as applicable will be issued by GEFA within 3 Business Days
of the date of Confirmation unless an Existing Local Agreement or Applicable Law
provides otherwise.

 

6                                         Telephony

 

6.1                               In-Bound

 

(i)                                     A dedicated GECC line will be in place
in respect of each Local Agreement.

 

(ii)                                  All calls shall be answered in the locally
agreed format.

 

(iii)                               80% of calls will be answered within 20
seconds in any Processing Month. Where the required technology is not in place
to provide metrics, an audit will be carried out by GEFA in respect of an
appropriate number of calls relative to the volume normally received in respect
of the relevant Local Agreement.

 

(iv)                              In respect of calls to a GECC dedicated line
and where the required telephony systems are in place for the purposes of
measurement, the abandonment rate will not exceed 5% during any Processing
Month.

 

(v)                                 Dashboards will be created monthly by GEFA
and reviewed at the Monthly Performance Meetings.  Such dashboards will show
clearly the volume of calls,

 

55

--------------------------------------------------------------------------------

 

the percentage answered within the Service Level, the average response time and
the abandon rate where applicable.

 

(vi)                              GECC will monitor the average response time
and, if it trends towards 20 seconds, the Parties will discuss at the next
Monthly Performance Meeting the implementation of an improvement plan.

 

6.2                               Out-Bound

 

(i)                                     In the event of an out-bound call being
required and where the initial attempt fails, two further attempts will be
scheduled prior to falling back on written communication. The second attempt
will be within 24 hours. The third attempt will be the next Business Day.

 

(ii)                                  Addressing the customer - the manner and
format of the customer interaction (including greeting & company name) will be
agreed at a local level.

 

7                                         General Queries & Correspondence

 

(i)                                     GEFA shall date stamp 100% of incoming
correspondence on the day of receipt or, if such day is not a Business Day (or
if received after the end of the hours of service on a Business Day), on the
next Business Day. In the event of uncertainty as to the date of receipt, the
date of receipt shall be deemed to be the fourth Business Day after the mean
date on which the envelopes containing such correspondence (including claims)
were franked.

 

(ii)                                  GEFA will respond to 100% of
correspondence within 5 Business Days of receipt by GEFA.

 

(iii)                               Unless otherwise stated in this agreement,
GEFA will answer 100% of requests from GECC received by telephone, e-mail or
post by the end of the next Business Day.

 

7.2                               Claims Queries and Notification

 

7.2.1                     Telephone Requests

 

(i)                                     GEFA will respond to requests received
by telephone for information regarding individual policies or claims during the
call or by the end of the next Business Day if further investigation is
required.

 

(ii)                                  If the attempt to contact the customer is
unsuccessful, 2 further attempts will be made. If these are unsuccessful, the
response will be sent by post.

 

(iii)                               Claim forms requested by telephone will be
dispatched by the end of the next Business Day unless printing of name and
address is required, in which case the claim form shall be dispatched within 3
Business Days of the request.

 

56

--------------------------------------------------------------------------------

 

7.3                               Claim Notification by Mail

 

(i)                                     GEFA shall respond within 3 Business
Days to 100% of all incoming new claim form requests received by mail.

 

(ii)                                  GEFA shall respond within 3 Business Days
to 100% of all incoming continuing claim form requests received by mail.

 

7.4                               Claim Handling

 

(i)                                     95% of all claims registration forms and
continuing claims forms received will be assessed and the proper response issued
by GEFA within 5 Business Days of receipt. 100% of all claims registration forms
and continuing claims forms received will be assessed and the proper response
issued by GEFA within 10 Business Days of receipt.

 

(ii)                                  The average elapsed time for assessing and
responding to claims registration forms and continuing claims forms will be not
more than 3 Business Days from receipt.

 

(iii)                               At the end of a Processing Month, no more
than 5% of claims which have not been assessed shall be claims which were
received by GEFA more than 10 Business Days prior to the end of that Processing
Month.

 

(iv)                              GEFA will respond to 100% of all incoming
claims correspondence within 5 Business Days of receipt.

 

(v)                                 Claims assessment shall result in one of the
following:

 

(a)                                  decision to decline;

 

(b)                                 decision to accept/pay; or

 

(c)                                  decision to request further information
from a customer/third party,

 

and, where appropriate, GEFA shall generate any documentation associated with
the assessment.

 

(vi)                              Decline process:

 

A system generated letter is issued explaining the decision as part of the
assessment process.

 

(vii)                           Decision to accept/pay process:

 

(a)                                  A letter will be sent to the customer
confirming the acceptance of the claim and the payment to be made, clarifying
any continuing duty on the customer (e.g. monthly provision of evidence) and
including a continuing claim form.

 

57

--------------------------------------------------------------------------------

 

(b)                                 A payment run will be executed at least
weekly, unless otherwise stated in an Existing Local Agreement.

 

(viii)                        Further information required:

 

(a)                                  Where further information is required from
a third party it will be notified to that third party by mail with a pre-paid
business reply envelope. A letter informing the customer of this action will be
issued at the same time.

 

(b)                                 Where further information is required from a
customer he/she will be notified by mail with a pre-paid business reply
envelope.

 

(c)                                  21-day follow up will occur if there is no
response received back from the third party.

 

8.                                      Management Information associated with
managing claims

 

8.1                               The monthly dashboard for claims will show as
a minimum:

 

(i)                                     the claims activity for the month
comprising new claims registered, continuing claims, claims accepted, claims
declined and pending duration (comprising number of claims pending and maximum,
median and mean number of days pending);

 

(ii)                                  number and percentage of claims processed
within the Service Level criteria for the period and average claim resolution
time;

 

(iii)                               number of outstanding claims to be assessed
and outlook for following month;

 

(vi)                              percentage of correspondence responded to
within the Service Level; and

 

(v)                                 report on the results of the Claims Accuracy
Audit.

 

The monthly dashboard will be delivered to GECC within 10 Business Days of
Processing Month End.

 

9                                         Claims Accuracy Audit

 

9.1                               Claims accuracy will be measured through an
audit mechanism operated  by GEFA and on an ad-hoc basis by GECC. Claims
Decision Accuracy is based on the decision to pay/reject the claim based on the
terms and conditions of the policy against the criteria set out in the claim
form.

 

9.2                               The Service Levels for Claims Decision
Accuracy shall be:

 

(i)                                     GEFA shall allocate 100% of claims with
a classification code (Redundancy/Disability/Critical illness etc).

 

(ii)                                  Accuracy of classification code allocated
by GEFA shall exceed 99%.

 

58

--------------------------------------------------------------------------------

 

(iii)                               Decision Accuracy shall be:

 

(a)                                  97% or greater in calendar year 2004;

 

(b)                                 98% or greater in calendar year 2005; and

 

(c)                                  99% or greater in calendar year 2006,

 

on all GECC claims audited within the monthly audit period,

 

provided that, in respect of New Territories, Decision Accuracy shall be 97% or
greater on all GECC claims audited within each monthly audit period in the 12
months following launch and thereafter shall be 99% or greater on all GECC
claims audited within the monthly audit period.

 

10                                  Customer Satisfaction Surveys

 

10.1                        Twice in every 12 months GECC will have the right to
commission or carry out customer surveys in order to gauge the overall customer
satisfaction level of the customer base. The aspirational target will be 80%
satisfaction.  GECC and GEFA shall run base line surveys in respect of all Local
Agreements in the first 12 months after the Commencement Date.  The costs of
such surveys shall be shared equally by the Parties.  A mutually agreed action
plan will be implemented and shall include a target for surveys conducted in the
next period on the basis of the results of the base line surveys.

 

10.2                        Each Party, at the request of the other, shall on an
ad hoc basis (but, save as otherwise provided below, in any event no more
frequently than once in any 12 month period) conduct a satisfaction survey on
the basis of a mutually agreed set of questions which shall seek to establish
the degree to which the requesting party is satisfied with the performance by
the other party of its obligations under this schedule. On the basis of such
survey the Parties shall implement a mutually agreed action plan which shall
include a target for the next survey.  If the requesting Party is unhappy with
the results of any survey, a further survey shall be conducted within six months
of the results of the previous survey or such other period of time as the
Parties shall agree.

 

11                                  Complaints Handling Process

 

11.1                        The definition of a complaint is “any expression of
dissatisfaction whether justified or not”. Complaints shall, for the avoidance
of doubt, include disputes in relation to claims decisions.

 

11.2                        A complaint must be dealt with to the customer’s
satisfaction upon receipt of the phone call or the letter.  If this is not
possible, GEFA shall endeavour to provide the customer with a solution by close
of business on next Business Day following receipt.  Within 5 Business Days of
receipt by GEFA of the complaint , the customer must be sent an acknowledgement
letter advising them of a specific timeframe in which GEFA expects to resolve
the problem.  This should be recorded on a complaints log.

 

59

--------------------------------------------------------------------------------

 

11.3                        If the complaint remains unresolved by the end of
the 10th Business Day following receipt by GEFA of the claim, GEFA must escalate
the complaint to Level 2, escalate to the Claims Manager or equivalent and
reflect this on the log. If the complaint is still not resolved by Business Day
19, the complaint must be passed to Level 3.

 

11.4                        In Level 3 the complaint shall be escalated to the
Operations Manager or equivalent.  GEFA will endeavour to resolve the complaint
within 8 weeks following initial receipt.  If this is not achieved, the team
will issue a holding response.  If a solution is still not reached, the
complaint handler will issue a final response. This will confirm to the customer
that GEFA’s complaints procedure has been exhausted, and advise the complainant
that he or she may refer the complaint to the Financial Ombudsman Service within
6 months of the date of the issue of this response.

 

11.5                        Where the Financial Ombudsman Service (or its
equivalent in a Territory outside the UK) adheres to different guidelines than
those outlined above at a local level then the local guidelines will be the
service standard.

 

11.6                        GEFA shall notify to GECC all complaints on reaching
Level 3 and in the case of  complaints which are sensitive or controversial GEFA
shall notify GECC immediately.

 

11.7                        Dashboard of Complaints showing volume, status and
escalation level by type of complaint to be discussed at Monthly Performance
Meetings with focus on root cause analysis.

 

12                                  IT Services

 

12.1                        New scheme launches in Existing Territories,
re-pricing, rate changes and interface programme amendments shall be in place in
time for GECC deadline. Such deadline will always be at least 5 Business Days
after GECC has notified GEFA.

 

12.2                        Performance of the obligation at paragraph 12.1
above shall be dependent on the following:

 

(i)                                     final product specifications including
rates shall be provided as part of notification and at least  45 Business Days
before implementation deadline;

 

(ii)                                  mutually agreed file format for new Scheme
launches in all Territories shall be agreed and finalised at least  45 Business
Days before implementation deadline; and

 

(iii)                               representative and accurate test data which
reflects the ‘to be’ file, in the previously agreed file format and with a
sufficient level of detail to enable testing shall be provided by GECC 20
Business Days prior to commencement.

 

12.3                        Ad hoc requests for IT work will be assessed on
their merits.

 

60

--------------------------------------------------------------------------------

 

13                                  Pricing Requests

 

13.1                        GEFA will deliver a response to pricing requests
within 7 Business Days of receipt of a full product specification.

 

13.2                        The full product specification supplied by GECC
shall comprise the information set out at paragraph 4 of Part A of Schedule 5,
to the extent applicable and, in addition, clarification of any change in the
customer base characteristics and miscellaneous detail when compared with other
products in the appropriate Territory, if available.

 

14                                  Finance Requests

 

14.1                        GEFA shall achieve 100% accuracy on profit share
statements.  Accuracy shall be measured by reference to the data used in GEFA’s
US GAAP accounts and subsequently entered into the GECC profit share accounts
and the structure of such profit share accounts.

 

14.2                        GEFA shall deliver profit share statements within 90
days of the end of each quarter.

 

14.3                        In the event of a financial query arising, GEFA will
communicate to GECC a proposed course of action (including proposed timescales
for resolution) by the end of the following Business Day

 

15                                  Legal Requests

 

15.1                        Representatives of the Parties’ legal and compliance
teams shall meet at appropriate intervals to discuss the prioritisation and
targets for delivery of the work to be performed by the Parties’ legal and
compliance teams pursuant to this agreement.

 

15.2                        GEFA shall, subject to paragraphs 15.1, 15.3, 15.4
and 15.5, deliver:

 

(i)                                     initial comments on new policy documents
or proposed changes to existing policy documents (in each case relating to
Payment Protection Products provided pursuant to Existing Direct Business) by
the later of:

 

(a)                                  10 Business Days after receipt by the GEFA
legal and compliance team of the request to provide such comments and all of the
relevant draft documents and information requested in relation thereto
(including documents and/or information requested from GECC or any GECF Group
Company); and

 

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(b)                                 the date by which the relevant GECF Group
Company requests such comments to be provided;

 

(ii)                                  initial comments on new fulfilment and
marketing documents or proposed changes to existing fulfilment and marketing
documents (in each case relating to Payment Protection Products provided
pursuant to Existing Direct Business) by the later of:

 

(a)                                  10 Business Days after receipt by the GEFA
legal and compliance team of the request to provide such comments and all of the
relevant draft documents and information requested in relation thereto
(including documents and/or information requested from GECC or any GECF Group
Company); and

 

(b)                                 the date by which the relevant GECF Group
Company requests such comments to be provided;

 

(iii)                               subject to acceptance by GECC or the
relevant GECF Group Company of a New Business Proposal (or Amended New Business
Proposal) pursuant to paragraph 10 of Part A of Schedule 5 (if applicable), a
first draft of a Local Addendum by the later of:

 

(a)                                  15 Business Days after receipt by the GEFA
legal and compliance team of the request to provide such first draft and all of
the relevant information requested in relation thereto (including information
requested from GECC or any GECF Group Company); and

 

(b)                                 the date by which the relevant GECF Group
Company requests such draft to be provided,

 

subject in each case, to such Local Addendum being substantially in the form set
out in Schedule 11; and

 

(iv)                              subject to acceptance by GECC or the relevant
GECF Group Company of a New Business Proposal (or Amended New Business Proposal)
pursuant to paragraph 10 of Part A of Schedule 5, a first draft of a New Local
Agreement by the later of:

 

(a)                                  20 Business Days after receipt by the GEFA
legal and compliance team of the request to provide such first draft and all of
the relevant information requested in relation thereto (including information
requested from GECC or any GECF Group Company); and

 

(b)                                 the date by which the relevant GECF Group
Company requests such draft to be provided,

 

subject in each case, to such New Local Agreement being substantially in the
form set out in Schedule 12.

 

15.3                        GECC agrees and acknowledges that if any of the
documents requested or provided from or to the GEFA legal and compliance team
pursuant to paragraph 15.2 are not, or not required to be in English, the
timescales set out in paragraph 15.2 for delivery of comments or draft documents
(as the case may be) will, in each such case, be increased by 10 Business Days
or such longer period as is reasonably required to obtain an English translation
of all relevant  documents.

 

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15.4                        If changes are required to any Local Agreement or
any documents relating to the Payment Protection Products provided by GEFA
pursuant to this Agreement as a result of any proposed changes to any Applicable
Law, GEFA will provide GECC with details of the proposed changes to the relevant
documents at least 90 days before the implementation date of the proposed change
to the relevant Applicable Law unless otherwise agreed by the parties (each
acting in good faith), subject to receipt by the GEFA legal and compliance team
of all of the relevant information requested in relation thereto (including
information requested from GECC or any GECF Group Company).

 

15.5                        The period for the production or review of documents
by the GEFA legal and compliance team for a GECF Group Company in all other
circumstances not contemplated in sub-paragraphs 15.2-15.4 above will be agreed
by the parties at the time (each acting in good faith).

 

16                                  Business Continuity

 

16.1                        GEFA shall maintain a business recovery plan to make
provision for the prompt and efficient handling of any incident which impairs
GEFA’s ability to perform the obligations required of it by this schedule.

 

(i)                                     GECC shall be made aware of the details
of the business recovery plan and be kept advised of any significant changes to
those details.

 

(ii)                                  The business recovery plan shall be
subject to testing and review for effectiveness once a year.

 

16.2                        A major disruption in service that impairs GEFA’s
ability to achieve a Service Level shall  be notified to the agreed GECC
escalation point if reasonably practicable on the Business Day on which the
event occurs and otherwise within one Business Day of such event.

 

17                                  Dependencies

 

GEFA shall not be liable for, and Service Credits shall not accrue in respect
of, any failure by GEFA to meet its obligations in relation to Service Levels,
where such failure results in whole or in part from:

 

(i)                                     any failure by GECC to perform its
obligations under this schedule, including those obligations set out in the
third column of Table A below; or

 

(ii)                                  any other act or omission of GECC.

 

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Table A

 

GECF Dependencies

 

GEFA Key
Service Levels

 

MEASUREMENT

 

GECF DEPENDENCY

Paragraphs 3.1(v) and 3.2(ii) of this Schedule

 

Monthly Dashboards of NIP - Confirmed, Pending and Rejected.

 

NIP file must be received in the agreed format by GEFA at least 5 Business Days
prior to Processing Month End and be relevant to the previous selling month. Any
files received less than 5 Business Days prior to Processing Month End will be
included in the following processing month.

 

 

 

 

Pending list sent by GEFA to GECC must be reviewed, amended and sent back to
GEFA within 5 Business Days of initial receipt by GECC.  NIP which is missing
information or information which is contrary to agreed parameters will be
rejected and fall back in to the Pending process loop.

Paragraph 3.2(ii) of this Schedule

 

[   ]

 

The cash reconciliation is subject to receipt by GEFA of all relevant cash
amounts payable by GECC pursuant to paragraph 3.2(i) by the end of the
Processing Month subsequent to the Processing Month in respect of which the
Reconciliation is performed.

Paragraph 3 of this Schedule

 

[   ]

 

GEFA’s Service Level obligations under paragraph 3 of this schedule shall
commence on or shall be suspended until (as the case may be) the later of:

 

 

 

 

(i)(a) in respect of New Scheme launches in Existing Territories, the expiry of
45 Business Days from the date on which the file format is agreed pursuant to
paragraph 12.2(ii) above or, if later, the expiry of 45

 

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GEFA Key
Service Levels

 

MEASUREMENT

 

GECF DEPENDENCY

 

 

 

 

Business Days from the date on which GECC notifies GEFA of the final product
specification pursuant to paragraph 12.2(i) above; or (i)(b) in respect of
re-pricing, rate changes and interface amendments, the expiry of 45 Business
Days from the date on which GECC notifies GEFA of the final product
specification pursuant to paragraph 12.2(i) above; and (ii) the expiry of 20
Business Days from the date on which GECC complies with its obligation in
paragraph 12.2(iii) above.

Paragraphs 7.3(i) and 7.3(iii) of this Schedule

 

Monthly Dashboards/ Sampling as required.

 

GECC response required within one Business Day for claims against bulk business
where input from GECC will be required.

 

18                                  Key Service Levels

 

Service Credits shall be weighted to the Key Service Levels as set out in Table
B below:

 

Table B

 

19                                  Primary Operational Metrics and Service
Credits

 

Primary Operational Metrics -
Service Standards

 

 

**

 

**

**

 

**

**

 

**

**

 

**

**

 

**

**

 

**

**

 

**

 

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20                                  Service Credit regime

 

20.1                        If GEFA fails to deliver the service as indicated by
any of the above Key Service Level metrics in respect of a Local Agreement then
GEFA shall reimburse GECC for the Service Credits.

 

20.2                        Service Credits are applied to the specific Local
Agreement that is in breach of Key Service Level.

 

20.3                        One Service Credit equals **% of the Retention Fee
in respect of the relevant Local Agreement in that month:

 

20.4                        Service Credits start accumulating in the same
Processing Month in which a Key Service Level miss occurs.

 

20.5                        Service Credits shall be paid in respect of a Key
Service Level until such Key Service Level returns to agreed Service Levels.

 

20.6                        No Service Credits shall accrue or be payable in
respect of failures to meet Key Service Levels in the first six months of the
Term.

 

20.7                        Service Credits relate to new business going forward
and not retrospectively to feeds received prior to the expiry of the period
referred to in paragraph 19.6 above.

 

20.8                        For the avoidance of doubt, clause 15 of the
agreement shall apply to this schedule.

 

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Schedule 3
New Local Agreement Profit Share Provisions

 

1                                         GEFA shall draw up a profit and loss
account in accordance with this Schedule and GEFA’s standard US GAAP accounting
policies and practices from time to time (the “Profit Share Account”) including
all Schemes grouped as agreed by the Parties in each Local Agreement separately
(or, if only one Scheme has been in operation since the Commencement Date, for
that Scheme only):

 

•                                          as at the last day of each quarter of
the term of the Local Agreement and annually during the Run-Off Period; or

 

•                                          as at the end of the Run-Off Period,

 

(each a “Relevant Date”).

 

2                                          GEFA shall deliver a copy of the
Profit Share Account to GECC within 90 days (or as otherwise agreed between the
Parties pursuant to Schedule 2) of the last day of each quarter of the term of
this agreement and annually during the Run-Off Period and within 90 days of the
last day of the Run-Off Period (as the case may be).

 

3                                          The Profit Share Account will be
prepared to include all Business written since inception to date in each Scheme
in each Territory as follows:

 

1.                                       For each individual Scheme, GEFA shall
calculate the Gross Earned Premiums

 

2.                                       From the total calculated under
paragraph (a) above, the following shall be deducted:

 

1.                                       the Sales Commission incurred;

 

2.                                       Earned Retention;

 

3.                                       all claims payments made under the
relevant Policies and related expenses incurred;

 

4.                                       Claims Reserves as held on the GEFA
balance sheet for future claims payments under the relevant Policies as at the
date to which Profit Share is being calculated;

 

5.                                       all applicable Tax/levies;

 

6.                                       all statutory, governmental or
regulatory fees arising from or relating to a complaint made by an Insured
Customer; and

 

7.                                       agreed extraordinary expenses incurred.

 

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3.                                       The resultant figure shall be the
underwriting profits (the “Underwriting Profits”) for the individual Scheme
concerned. The Underwriting Profits for any individual Scheme may be positive or
negative.

 

4.                                       Subject to this Schedule 3, the Profit
Share for the individual Scheme concerned shall be calculated by multiplying the
Underwriting Profits for that Scheme by the relevant GECC Profit Share
Percentage pursuant to Clause 5. The Profit Share for any individual Scheme may
also be positive or negative.

 

5.                                       If more than one Scheme qualifying for
Profit Share calculation purposes has been in operation, GEFA shall calculate
the consolidated profit or loss for all such Schemes within each Local Agreement
by aggregating together all and any positive and negative Profit Shares for all
relevant individual Schemes calculated under paragraphs (a) to (d) above.

 

6.                                       The Profit Share calculated as at the
relevant date (which may be positive or negative) shall be the amount calculated
under paragraphs (a) to (d) above (or, if more than one Scheme has been in
operation, paragraphs (a) to (e) above):

 

1.                                       less an amount equal to any payments
made by GEFA to GECC under paragraph 4 below in respect of previous Profit Share
calculations;

 

2.                                       plus an amount equal to any payments
made by GECC to GEFA under paragraph 5 below in respect of previous Profit Share
calculations;

 

3.                                       less an amount equal to any previous
Profit Share payments made by GEFA to GECC which GECC has repaid or is due to
repay to GEFA for any reason.

 

4                                         If the Profit Share calculation is **
then GEFA shall ** thereof to GECC within 30 Business Days of delivery of the
Profit Share Account (which for the avoidance of doubt shall include the Profit
Share Account at the end of the Run-Off Period).

 

5                                         If the Profit Share calculation in
respect of any Local Agreement in any calendar year is ** then the ** amount
shall be ** years. If at the termination of this agreement the Profit Share
Calculation is **, then ** shall be made and the ** amount shall be ** the end
of the Run-Off Period.  If at the end of the Run-Off Period the Profit Share
calculation is still ** then GECC shall ** amount thereof to GEFA within 30
Business Days of delivery of the Profit Share Account. In no event will this sum
** Profit Share payment has been made.

 

6                                         For the avoidance of doubt, ** shall
be ** to GECC or to GEFA in respect of any period ending after the end of the
last day of the Run-Off Period.

 

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Schedule 4
Product Performance Monitoring

 

1.                                      The Claims Performance Statement

 

GEFA will provide to GECC a Claims Performance Statement on a quarterly basis to
show the following information for each Scheme, product and cover type in
respect of each Local Agreement. The following information will be shown for
each quarter for the last two years (the most recent quarter to be included will
be that which ended six months prior to the date of the quarterly Profit Share
Account):

 

•                                          Earned Exposure in the quarter;

 

•                                          Gross Earned Premium;

 

•                                          Earned Claims Fund;

 

•                                          Number of claims (including an
estimate for claims which have occurred in that quarter but have not yet been
reported);

 

•                                          Claims paid;

 

•                                          Claims reserved by type;

 

•                                          Claims Frequency;

 

•                                          Average duration of claims where
relevant (e.g. for Accident and Sickness and Involuntary Unemployment claims);

 

•                                          Gross Loss Ratio; and

 

•                                          Risk Loss Ratio.

 

GEFA will include the data from the two quarters immediately preceding the end
of the quarterly Profit Share Account, but the Parties acknowledge that the
performance reflected by such data will not be mature because the development of
reported claims takes two quarters and the detailed analysis will not yet be
available.

 

Each claim will be allocated to a quarter in accordance with the date in which
the claim occurred.

 

GEFA shall provide the first Claims Performance Statement to GECC based on data
as at 31st December 2003 on or by 31st March 2004.

 

GECC and GEFA hereby agree that discussions relating to individual Schemes shall
be restricted to those Schemes which are agreed to be of a size where the claims
performance has stabilised but in determining whether or not such stabilisation
has

 

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occurred the Parties shall have regard to the performance of the relevant
Schemes before they become subject to a Local Agreement as well as after.

 

In respect of Existing Business, GECC hereby agrees that if a Local Agreement,
product or individual Scheme is identified at the Quarterly Performance Meeting
as running at Loss Ratio greater than ** per cent., the Parties shall as soon as
reasonably practicable hold good faith discussions to attempt to agree a plan
and timetable for actions to bring any such Scheme or product to a Loss Ratio of
** per cent. Such plan shall include one or more of the following:

 

•                                          Make changes to the amount of premium
allocated to a particular cover;

 

•                                          Increase the Claims Fund as a
percentage of the Gross Written Premium;

 

•                                          Make a change to the terms and
conditions of the Policies in a particular scheme; or

 

•                                          Such other mechanism as agreed
between the Parties.

 

In respect of New Business, GEFA hereby agrees that if a Local Agreement or
individual Scheme is identified at the Quarterly Performance Meeting as running
at a Loss Ratio less than ** per cent or more than ** per cent, the Parties
shall as soon as reasonably practicable hold good faith discussions to attempt
to agree a plan and timetable for actions to bring any such Scheme or product or
cover to a Loss Ratio of ** per cent. Such plan shall include one or more of the
following:

 

•                                          Make changes to the amount of premium
allocated to a particular cover;

 

•                                          Decrease the Claims Fund as a
percentage of the Gross Written Premium;

 

•                                          Make a change to the terms and
conditions of the Policies in a particular scheme; or

 

•                                          Such other mechanism as agreed
between the Parties.

 

Any losses not previously notified by the date of this agreement or in the
relevant quarter will not be carried forward and shall be borne ** per cent. by
the relevant GEFA Company.

 

If a Loss Ratio in respect of a Local Agreement is greater than **% and Parties
agree such plan and if GECC fails to implement the plan in accordance with the
timetable agreed at the Quarterly Performance Meeting, the current profit share
split and arrangements shall continue to apply in accordance with the relevant
Local Agreement but GECC will carry forward GEFA’s **% share of such
underwriting loss.

 

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Schedule 5
Potential New Business and Payment Protection
Products Set-up Process

 

The processes for determining whether Potential New Business shall be New
Business and the set-up of New Business in a Territory are set out below in
Parts A and B.  The processes for addressing Material Change and Local Material
Change referred to in Clauses 20.2.3 and 20.4.4 are set out in Part C below.

 

PART A Potential New Business in New Territories where there is no Local
Agreement

 

In relation to Potential New Business in New Territories where a Local Agreement
is not in place (the following shall also apply to Potential New Business in
Existing Territories or in Territories in which a Local Agreement is in place,
subject to the provisions of Part B of this Schedule 5):

 

1                                         Notification

 

(i)                                     GECC shall, or shall procure that the
relevant GECF Group Company shall, notify in writing the relevant Country
Manager, relevant Regional Manager and GECC Relationship Manager, as soon as
reasonably practicable of any Potential New Business required, with details of
the Payment Protection Product or package of Payment Protection Products
required and related services together with details of the proposed
implementation timetable (which is to be reasonable and have regard to all
circumstances).  Notification shall be deemed to be given upon receipt of the
notice by GEFA.

 

(ii)                                  If GEFA or a GEFA Company shall advise
GECC or the relevant GECF Group Company in writing of its intention to submit a
New Business Proposal to GECC in respect of Potential New Business, this will
initiate the process described from paragraph 4 below onwards.

 

2                                         GEFA will then undertake basic fact
finding on the insurance market, legal and regulatory systems in the prospective
New Territory.

 

3                                         Within 7 Business Days of notification
pursuant to paragraph 1 by GECC, or the relevant GECF Group Company, to GEFA, or
the relevant GEFA Company,  the relevant GEFA Company may provide in writing to
the relevant GECF Group Company an expression of interest in providing the
Potential New Business.

 

4                                         If the relevant GEFA Company has
provided the expression of interest within 7 Business Days in accordance with
paragraph 3 above, the relevant GECF Group Company will provide the relevant
GEFA Company as soon as reasonably practicable with the following information in
its or any GECF Group Company’s possession or control on the Payment Protection
Products and related services as set out in the notification given

 

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pursuant to paragraph 1, subject to Applicable Laws and any confidentiality
obligations on it:

 

•                                          Size, age, statistics, male/female
split, average term (actual and written) and interest charged on loans

 

•                                          Description of the required Payment
Protection Products which is as complete as is possible or a copy of the
existing policy wording(s)

 

•                                          Projected finance volumes and the
projected insurance penetration rates over 3 years

 

•                                          Historic gross premium volumes or
historic finance volumes and insurance penetration rates

 

•                                          Existing gross premium rates

 

•                                          Location of GECC, GECF Group Company
or Acquired GECF Business offices in country

 

•                                          Existing method of reporting (i.e.
paper application, electronic file)

 

•                                          Method of premium collection

 

•                                          Number of insured customers

 

•                                          Method of policy fulfilment (GECC or
Insurer)

 

•                                          Staffing levels and facilities costs
per associate to locate in existing GECC or Acquired GECF Business offices per
country and general GECC Human Resources support/advice (if available)

 

•                                          Historic loss ratios and definition
of loss ratios

 

•                                          Any other pertinent information
(including any renewal, termination or expiry dates of agreements with third
parties)

 

Upon providing the above information to the relevant GEFA Company, the relevant
GECF Group Company shall certify that, subject to confidentiality obligations
and Applicable Laws, it has provided all such information.

 

5                                         Within 20 Business Days of the date of
certification provided by the relevant GECF Group Company pursuant to paragraph
4 above, GEFA shall procure that the relevant GEFA Company shall prepare and
submit to the relevant GECF Group Company a written proposal (the “New Business
Proposal”) setting out its proposed terms and conditions for the provision of
Payment Protection Products and related services for the Potential New Business,
which shall include the following:

 

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5.1                               confirmation that the New Business Proposal is
for the provision of the totality of the required Payment Protection Products
and related services required for the relevant GECF Group Company or Acquired
GECF Business as notified by GECC pursuant to paragraph 1;

 

5.2                               the commercial terms for the provision of the
Potential New Business which shall be:

 

5.2.1                     in accordance with clause 5 of this agreement (for the
avoidance of doubt, if the Potential New Business involves a New Channel, the
Retention Rate may be altered pursuant to Paragraphs 7.1-7.3 of Part III of
Schedule 16); and

 

5.2.2                     in relation to Potential New Business required for an
** (provided that the terms disclosed to GEFA pursuant to paragraph 4 above are
the bona fide terms);

 

5.3                               confirmation that, where the relevant GECF
Group Company or Acquired GECF Business has existing arrangements or agreements
with a third party or another company in its Group, the relevant GEFA Company
will ** the relevant GECF Group Company or Acquired GECF Business in accordance
with the terms of clause 3.2.5(i)(b) for ** (which have been disclosed pursuant
to paragraph 4 by GECC or a GECF Group Company and which would be incurred in
**;

 

5.4                               the proposed implementation timetable for
providing the Payment Protection Products and related services;

 

5.5                               confirmation that the relevant GEFA Company
has obtained the required regulatory or other licences to provide the required
Payment Protection Products and related services in the Territory to the
relevant GECF Group Company or Acquired GECF Business or, if the relevant GEFA
Company does not hold the required regulatory or other licences, the proposed
steps and timetable for obtaining such licences;

 

5.6                               details of:

 

5.6.1                     a plan setting out the various steps, tasks and
resources required to implement the Potential New Business with a timetable and
responsibilities;

 

5.6.2                     any (i) branch set up with GEFA office &
administration in the Territory; or (ii) office & administration set up in a
neighbouring Territory; or (iii) partnership with local companies to provide
administration and related services;

 

5.6.3                     GEFA IT & Operations support;

 

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5.6.4                     GEFA Legal support on legal and regulatory issues in
the Territory in relation to the provision of Payment Protection Products and
related services;

 

5.6.5                     GEFA Finance and Risk support in relation to finance
and risk issues in the Territory in relation to the provision of Payment
Protection Products and related services;

 

5.6.6                     confirmation of applicable GEFA internal risk
approval; and

 

5.6.7                     GECC HR support/advice required; and

 

5.7                               whether it wishes the relevant GECF Group
Company or Acquired GECF Business to host GEFA start up offices within their
premises at a cost equivalent to GECF Group Companies or Acquired GECF Business
** from the Commencement Date of the relevant Local Agreement and the terms of
such arrangement.

 

6                                         Upon receipt of the New Business
Proposal, the relevant GECF Group Company shall assess the New Business Proposal
according to the requirements of the Potential New Business and whether the
following criteria have, in its reasonable opinion, in all material respects
been met:

 

6.1                               the New Business Proposal covers all of the
Payment Protection Products and related services as set out in the notification
made pursuant to paragraph 1 above;

 

6.2                               the New Business Proposal will be able to
operate within the Loss Ratio target of ** per cent.;

 

6.3                               Subject to Clause 9.4.7, GEFA is in compliance
with its obligations in respect of the Product Development Plan set out in
Clause 9.4.4 in the relevant Territory and, where GECC has informed GEFA that
GECC intends to provide the relevant Offering in an Existing Territory, GEFA
must have created and be implementing a Product Development Plan in respect of
the Existing Territory.  Where GECC has informed GEFA that it intends to provide
the Offering in a New Territory as well as Existing Territories, GEFA must have:

 

6.3.1                     created a Product Development Plan in respect of the
New Territory; and

 

6.3.2                     created and be implementing a Product Development Plan
in respect of ** per cent. of the Existing Territories in which GECC has
informed GEFA that it intends to provide the Offering;

 

6.4                               the relevant GEFA Company will be able to
provide all of the Payment Protection Products and related services as set out
in the notification made pursuant to paragraph 1 above in compliance with the
Service Levels;

 

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6.5                               the relevant GEFA Company will be able to
commence provision of the Payment Protection Products and related services
within the timetable set out in the notification made pursuant to paragraph 1
above;

 

6.6                               the relevant GEFA Company has obtained or will
have obtained the required regulatory or other licensing to provide the required
Payment Protection Products and related services in the Territory in accordance
with paragraph 5.5;

 

6.7                               in relation to an Existing Territory or a
Territory where a Local Agreement is in place, the relevant GEFA Company has a
system and infrastructure in place which will be able to administer and support
the Potential New Business;

 

6.8                               in relation to a New Territory where there is
no Local Agreement in place:

 

6.8.1                     the relevant GEFA Company will have a system and
infrastructure in place which will be able to administer and support the
Potential New Business within the timetable set out in the notification made
pursuant to paragraph 1 above; and

 

6.8.2                     in at least one of the previous two months from the
date of GEFA’s proposal the relevant GEFA Companies shall either:

 

(i)                                     not have accrued Service Credits; or

 

(ii)                                  (in the first six months of the Term) are
and have been complying with the Key Service Levels,

 

in at least 75 per cent. of the Territories where a Local Agreement is in place
including all of the Key Territories; and

 

6.9                               in relation to an Existing Territory, in at
least one of the previous two months, the relevant GEFA Company shall either (i)
not have accrued Service Credits or (ii) (in the first six months of the Term) 
is and has been complying with all the Key Service Levels; and

 

6.10                        the New Business Proposal has been priced in
accordance with the provisions of Paragraph 3 of Part II of Schedule 16 (if the
New Business Proposal does not involve a New Channel) and Paragraphs 7.1-7.3 of
Part III of Schedule 16 (if the New Business Proposal does involve a New
Channel).

 

7

 

7.1                               If the New Business Proposal satisfies the
criteria set out in paragraph 6 above, the relevant GECF Group Company shall
within 10 Business Days of receipt of such New Business Proposal, give written
notice to the relevant GEFA Company of its acceptance of the New Business
Proposal, subject to the relevant GEFA Company obtaining all necessary
regulatory approvals.

 

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7.2                               If the relevant GECF Group Company rejects the
New Business Proposal, it shall provide detailed written reasons for such
rejection setting out the criteria that have not been satisfied. Where the
relevant GECF Group Company rejects the New Business Proposal, the relevant GEFA
Company shall have the right within 5 Business Days of receipt of notification
of such rejection to:

 

(i)                                     propose amendments to the New Business
Proposal, in which case paragraph 8.2 shall apply; and/or

 

(ii)                                  refer the matter to the dispute resolution
procedure set out in clause 15.2, in which case the Parties shall resolve the
Dispute within 5 Business Days of the date of receipt by the relevant GEFA
Company of the notice rejecting the New Business Proposal (or such longer period
as the Parties may agree).

 

7.3                               If the requirements of paragraph 6 have not
been satisfied the relevant GECF Group Company may propose to accept the New
Business Proposal, subject to such amendments as it sees fit, in which case it
shall inform the relevant GEFA Company in writing of such amendments together
with the reasons for such amendments, and paragraph 8 shall apply.

 

8                                         If the relevant GECF Group Company
proposes amendments to the New Business Proposal:

 

8.1                               the relevant GEFA Company may, within 5
Business Days of the date of the notice of such proposed amendments, resubmit an
amended proposal in writing (the “Amended New Business Proposal”); and

 

8.2                               upon receipt of the Amended New Business
Proposal, the relevant GECF Group Company shall assess such Amended New Business
Proposal according to the criteria set out in paragraph 6 above and shall
provide detailed written notice to the relevant GEFA Company of its decision to
accept or reject the Amended New Business Proposal (in the case of rejection,
with detailed written reasons) within 5 Business Days .

 

9

 

9.1                               Where the relevant GECF Group Company rejects
a New Business Proposal or Amended New Business Proposal according to the
criteria set out in paragraphs 6 above (other than on the basis of the Risk
Rate), GECC and the relevant GECF Group Company shall have no obligation to
appoint GEFA or any GEFA Company as its provider, whether exclusive or
otherwise, in the relevant Territory in respect of the New Business Proposal and
GECC shall be free to enter into discussions, tenders, negotiations,
arrangements and agreements with third parties and/or other GECF Group Companies
in respect of the relevant New Business Proposal. The relevant GECF Group
Company shall invite GEFA to take part in any subsequent tender process
conducted by the relevant GECF Group Company in respect of the New Business
Proposal provided that the relevant GEFA

 

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Company agrees that the provisions for determining the Retention Rate and the
Risk Rate for the New Business Proposal as set out in Parts II and Part III (as
the case may be) of Schedule 16 (Business Proposal Pricing Process) shall apply
to their submission save that, if an Actuary were to determine the Risk Rate
pursuant to Paragraphs 5 or 9.2 of Schedule 16 (as the case may be), then the
relevant GECF Group Company or the relevant GEFA Company would be entitled to
reject the proposed Risk Rate. In either case, the relevant GECF Group Company
would be entitled to award the tender to any third party.

 

9.2                               Where the relevant GECF Group Company rejects
a New Business Proposal or Amended New Business Proposal on the basis of the
proposed Risk Rate, then the procedure commencing in Paragraph 5 of Part II of
Schedule 16 (if the Business Proposal does not involve a New Channel) or the
procedure commencing in paragraph 9.2 of Part III of Schedule 16 (if the
Business Proposal does involve a New Channel) shall be implemented.

 

10                                  If pursuant to paragraph 7 or 8 or 9.2 above
the relevant GECF Group Company and the relevant GEFA Company agree the terms of
the New Business Proposal (or the Amended New Business Proposal), the relevant
GECF Group Company and the relevant GEFA Company shall finalise the terms of the
addendum to the Local Agreement or, where relevant, the terms of a New Local
Agreement, provided that:

 

(i)                                     in relation to single premium Potential
New Business, whether such Potential New Business shall be ** shall be
determined by the relevant GECF Group Company in its absolute discretion
provided that Identified New Business shall be determined in accordance with
Schedule 1C; and

 

(ii)                                  in relation to monthly premium Potential
New Business, such Potential New Business shall be ** unless the relevant GEFA
Company, in its absolute discretion, consents to it being New **.

 

The parties shall make available suitably senior representatives to finalise
such terms.

 

11                                  Once the Local Addendum or New Local
Agreement (as the case may be) has been finalised pursuant to paragraph 10 above
then, subject to the relevant GEFA Company having obtained and providing written
evidence to the relevant GECF Group Company that it has obtained the required
regulatory or other licences to provide the required Payment Protection Products
and related services in the relevant Territory, the relevant GECF Group Company
and the relevant GEFA Company shall promptly enter into the addendum to the
Local Agreement or New Local Agreement (as the case may be) at which point the
Potential New Business shall be New Business for the purposes of this agreement.

 

12                                  If:

 

12.1                        the relevant GEFA Company has not provided written
notification of its expression of interest to the relevant GECF Group Company
within the 7 Business Day period in accordance with paragraph 3 above;

 

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12.2                        the relevant GEFA Company has not provided the New
Business Proposal to the relevant GECF Group Company within the 20 Business Day
period in accordance with paragraph 5 above;

 

12.3                        where applicable, the relevant GEFA Company has not
provided the Amended New Business Proposal to the relevant GECF Group Company
within the 5 Business Day period in accordance with paragraph 8.1 above; or

 

12.4                        where applicable, the relevant GECF Group Company
has rejected the Amended New Business Proposal in accordance with paragraph 8.2
above,

 

12.5                        and provided GECC or the relevant GECF Group
Companies have properly rejected the New Business Proposal or Amended New
Business Proposal (as the case may be), for the remainder of the Term of this
agreement, the relevant GECF Group Company or Acquired GECF Business shall have
no obligation to appoint, GEFA or any GEFA Company as its provider, whether
exclusive or otherwise, in the relevant Territory in respect of the relevant
Potential New Business the subject of the notification pursuant to paragraph 1
and the relevant GECF Group Company or Acquired GECF Business shall have no
obligation to terminate or give notice of termination in relation to any
existing arrangements or agreements relating to the relevant Potential New
Business and shall be free to enter into discussions, tenders, negotiations,
arrangements and agreements with third parties and/or other companies in its
Group in respect of the relevant Potential New Business.

 

Part B Potential New Business in Existing Territories or Territories where a
Local Agreement is in place

 

In relation to Potential New Business in Existing Territories or Territories
where a Local Agreement is in place, the following paragraphs of Part A shall
apply as amended below:

 

13                                  paragraph 1;

 

14                                  paragraph 3;

 

15                                  paragraph 4;

 

16                                  paragraph 5 provided that references to “20
Business Days” shall be read as references to “10 Business Days”

 

17                                  paragraph 6;

 

18                                  paragraph 7;

 

19                                  paragraph 8;

 

20                                  paragraph 9;

 

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21                                  paragraph 10 ;

 

22                                  paragraph 11; and

 

23                                  paragraph 12 provided that  references to
“20 Business Days” in paragraph 12.2 shall be read as references to “10 Business
Days”;

 

Part C: Material Change Process

 

If, pursuant to clause 20.2.3 or 20.4.4, GECC has issued a written notice to
GEFA, the procedure to be followed shall be as follows:

 

24                                  GECC shall, or shall procure that the
relevant GECF Group Company shall, and GEFA shall, or shall procure that the
relevant GEFA Company shall, enter into good faith discussions for a period of
30 Business Days commencing on the date of the notice issued pursuant to clause
20.2.3 or clause 20.4.4 (the “Consultation Period”) to seek to agree an
appropriate solution to the Material Change or Local Material Change (as the
case may be).

 

25                                  On or by the date falling 20 Business Days
after the end of the Consultation Period, GEFA shall, or GEFA shall procure that
the relevant GEFA Company shall, prepare and submit to GECC or the relevant GECF
Group Company a written proposal (the “Material Change Proposal”) setting out
its proposed or amended terms and conditions for the provision of Payment
Protection Products and related services in response to the Material Change or
Local Material Change (as the case may be) (the “Material Change Business”),
which shall include the following:

 

25.1                        confirmation that the Material Change Proposal is
for the provision of all of the required Payment Protection Products and related
services required by GECC or the relevant GECF Group Company as notified by GECC
pursuant to clause 20.2.3 or clause 20.4.4;

 

25.2                        the commercial terms for the provision of the
Material Change Business which shall be in accordance with clause 5 of this
agreement;

 

25.3                        the proposed timetable for providing the Payment
Protection Products and related services in response to the Material Change or
Local Material Change (as the case may be);

 

25.4                        in relation to each relevant Territory, confirmation
that the relevant GEFA Company holds the required regulatory or other licences
to provide the required Payment Protection Products and related services in
response to the Material Change or Local Material Change (as the case may be) to
the relevant GECF Group Company or Acquired GECF Business or, if the relevant
GEFA Company does not hold the required regulatory or other licences, the
proposed steps and timetable for obtaining such licences;

 

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25.5                        details of its infrastructure in the Territory which
shall be able to administer and support the Material Change Business;

 

26                                  Upon receipt of the Material Change
Proposal, GECC or the relevant GECF Company shall assess the Material Change
Proposal according to whether in its reasonable opinion the Material Change
Proposal provides a solution to the Material Change or Local Material Change (as
the case may be) and whether, in its reasonable opinion, the Material Change
Proposal satisfies in all material respects in each relevant Territory the
following criteria:

 

26.1                        the Material Change Proposal covers all of the
Payment Protection Products and related services as notified by GECC or the
relevant GECF Group Company pursuant to clause 20.2.3 or clause 20.4.4;

 

26.2                        the relevant GEFA Company will be in a position to
provide the Payment Protection Products and related services as notified by GECC
or the relevant GECF Group Company pursuant to clause 20.2.3 or clause 20.4.4 in
compliance with applicable Service Levels;

 

26.3                        the relevant GEFA Company will be able to commence
provision of the Payment Protection Products and related services in response to
the Material Change or Local Material Change (as the case may be) within the
timetable as notified by GECC or the relevant GECF Group Company pursuant to
clause 20.2.3 or clause 20.4.4;

 

26.4                        the relevant GEFA Company has obtained or is in the
process of obtaining the required regulatory or other licences to provide the
required Payment Protection Products and related services in response to the
Material Change or Local Material Change (as the case may be) pursuant to
paragraph 2.4;

 

27                                  Within 10 Business Days of receipt of the
Material Change Proposal, the relevant GECF Group Company shall give written
notice of its decision to GEFA or the relevant GEFA Company to accept or reject
the Material Change Proposal. If GECC or the relevant GECF Group Company rejects
the Material Change Proposal, it shall provide detailed written reasons for such
rejection. GECC or the relevant GECF Group Company may propose to accept the
Material Change Proposal subject to such amendments as it sees fit in which case
it shall inform GEFA or the relevant GEFA Company in writing of such amendments
together with the reasons for such amendments.

 

28                                  If GECC or the relevant GECF Group Company
rejects the Material Change Proposal or proposes amendments to the Material
Change Proposal:

 

28.1                        GEFA or the relevant GEFA Company may, within 5
Business Days of the date of the notice of such rejection or proposed
amendments, resubmit an amended proposal in writing (the “Amended Material
Change Proposal”); and

 

28.2                        upon receipt of the Amended Material Change
Proposal, GECC or the relevant GECF Group Company shall assess such Amended
Material Change Proposal and

 

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shall provide written notice to GEFA or the relevant GEFA Company of its
decision to accept or reject the Amended Material Change Proposal (in the case
of rejection, with detailed written reasons) within 5 Business Days.

 

29                                  If pursuant to paragraph 4 or 5 above, GECC
or the relevant GECF Group Company and GEFA or the relevant GEFA Group Company
agree the terms of the Material Change Proposal (or the Amended Material Change
Proposal), GECC or the relevant GECF Group Company and GEFA or the relevant GEFA
Company shall finalise the terms of the addendum to the relevant Local
Agreement, and the parties shall make available representatives to finalise such
terms.

 

30                                  Once the Local Addendum has been finalised
pursuant to paragraph 6 above, then subject in each relevant Territory to the
relevant GEFA Company having obtained and providing written evidence to the
relevant GECF Group Company that it has obtained the required regulatory or
other licences to provide the required Payment Protection Products and related
services in response to the Material Change or Local Material Change (as the
case may be), the relevant GECF Group Company and the relevant GEFA Company
shall enter into the addendum to the Local Agreement.

 

31                                  If:

 

31.1                        GEFA or the relevant GEFA Company has not provided
the Material Change Proposal to GECC or the relevant GECF Group Company within
the 20 Business Day period in accordance with paragraph 2 above;

 

31.2                        GEFA or the relevant GEFA Company has not provided
the Amended Material Change Proposal to GECC or the relevant GECF Group Company
within the 5 Business Day period in accordance with paragraph 5.1 above; or

 

31.3                        GECC or the relevant GECF Group Company has rejected
the Amended Material Change Proposal in accordance with paragraph 5.2 above;

 

31.4                        then paragraph 9 shall apply.

 

27                                  Where this paragraph 9 applies GECC or the
relevant GECF Group Company shall have the right to contact, potential
Replacement Suppliers in each relevant Territory, to agree terms for the
provision of the Payment Protection Products provided by the relevant GEFA
Company as at the date of the notice pursuant to clause 20.2.3 or 21.4.4 (as the
case may be), any such agreements being conditional on the termination of the
relevant Local Agreement.

 

28                                  If GECC or the relevant GECF Group Company
is able to agree such terms with a potential Replacement Supplier in a Territory
it shall ** by the potential Replacement Supplier in all material respects.

 

29                                  GEFA or the relevant GEFA Company shall
within 20 Business Days of the date of the offer in paragraph 10 accept or
reject the terms of the offer.  In the event that the offer is accepted, the
relevant parties shall promptly agree an addendum to the relevant Local

 

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Agreement which reflects the terms of the offer and the relevant GEFA Company
shall continue to be the exclusive supplier to the relevant GECF Group Company
of Payment Protection Products in the relevant Territory.  If:

 

29.1                        GEFA or the relevant GEFA Company rejects the offer;
or

 

29.2                        GEFA or the relevant GEFA Company does not respond
within the timescale set out above,

 

paragraph 12 shall apply.

 

30                                  Where this paragraph 12 applies, GECC or the
relevant GECF Group Company shall have the right to terminate this agreement (in
the case of a Material Change) or the relevant Local Agreement (in the case of a
Local Material Change).

 

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Schedule 6
Part A: Framework Agreement Performance Meetings

 

1                                         Quarterly Performance Meetings

 

On a quarterly basis, or as otherwise agreed between the parties, a formal
review of the overall relationship between GECC and GEFA will take place. This
will be attended by the Relationship Managers of GECC and GEFA, GEFA Regional
Managers, GECC Regional Insurance Managers, and further representatives of GEFA
and GECC as appropriate. Key agenda items for the quarterly meeting will
include:

 

(a)                                  Profit Share Account - to be provided by
GEFA to GECC in accordance with Schedule 3 and timeframe;

 

(b)                                 Scheme performance including the Claims
Performance Statement to be provided by GEFA to GECC in accordance with
Schedule 4 at least 10 Business days prior to the quarterly meeting;

 

(c)                                  Loss Ratio and action plans to ensure that
the Loss Ratio is maintained at an adequate level in accordance with Schedule 4;

 

(d)                                 New Payment Protection Product development
and penetration/growth initiatives;

 

(e)                                  Service Credits; and

 

(f)                                    Claims Reserve methodology and
calculation.

 

2                                         Monthly Performance Meetings

 

On a monthly basis, or as otherwise agreed between the Parties, a formal review
of the overall relationship between GECC and GEFA will take place. This will be
attended by the Relationship Managers of GECC and GEFA, GEFA Regional Managers,
GECC Regional Insurance Managers, and further representatives of GEFA and GECC
(including finance, risk and operations) as appropriate. Key agenda items for
the monthly meeting will include:

 

(a)                                  Service Levels (to include premium
reconciliation, issues/risk log and escalated items);

 

(b)                                 Service Credits; and

 

(c)                                  Potential New Business opportunities.

 

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Part B: Local Agreement Performance Meetings

 

3                                         Weekly Meetings

 

On a weekly basis, or as otherwise agreed between the Parties, a formal review
will be held in each Territory. This may take place either by telephone or on a
‘face-to-face’ basis. As a minimum the attendees will include the GEFA Account
Manager for the Territory and the local GECC Insurance Leader.

 

The results of the meeting will be recorded in a ‘Meeting Log’. All issues/tasks
relevant to the country concerned will be entered into this log and on a weekly
basis the position will be updated. Specific reference will be made to parties
responsible for actions and applicable deadlines.

 

At the end of each week, a joint communication is to be distributed to
appropriate individuals within GECC and GEFA. This will update progress on key
projects.

 

4                                         Monthly Meetings

 

On a monthly basis, or as otherwise agreed between the Parties, a formal review
will take place for each country on a regional basis. This will be attended by
the GEFA Regional Manager and GECC Regional Insurance Manager, and will be held
in one of the Territories within the region on a rotation basis. The local GEFA
Account Managers and GECC Insurance Leaders will attend either by telephone or
in person depending on the location of the meeting.

 

Key Agenda Items for this meeting will include: Service Levels, Scheme
Performance by way of Management Information Reports, New Product Development
and Penetration/Growth Initiatives.

 

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Schedule 7
Supplemental Sales Commission

 

1                                         From 1st January, 2004, if in
accordance with clause 5.3, the total Gross Written Premium for Existing Direct
Business and Existing Reinsured Business exceeds the Incentive Threshold in a
calendar year then GECC will receive a supplemental sales commission (the
“Supplemental Sales Commission”).  The Supplemental Sales Commission applies to
the element of Existing Direct Business Gross Written Premium in excess of the
Incentive Threshold and  comprises:

 

(a)                                  Additional Sales Commission; and

 

(b)                                 Additional Profit Share.

 

2                                         GEFA shall calculate the Incentive
Threshold in accordance with the following procedure:

 

2.1                               At the end of each calendar month the Gross
Written Premium for Existing Business in each Territory will, subject to
paragraph 2.2 below, be converted to Euro using the exchange rates set out at
Schedule 10.

 

2.2                               The sum total of the 12 months will be the
calendar year total for each Territory, and then the overall total Gross Written
Premium for Existing Business is calculated as:

 

(a)                                  Gross Written Premiums on Existing
Reinsured Business in the calendar year (including GWP in respect of any
Existing Reinsured Business which has been migrated to New Reinsurance
Business); plus

 

(b)                                 Gross Written Premiums on Existing Direct
Business in the calendar year for single premium up-front policies; plus

 

(c)                                  Gross Written Premiums on Existing Direct
Business in the calendar year for monthly premium policies.

 

3                                         If the total Gross Written Premium for
Existing Business is ** than the Incentive Threshold then the Supplemental Sales
Commission is payable on the Existing Direct Business Gross Written Premium **
of the Incentive Threshold (“Excess”).

 

4                                         The Supplemental Sales Commission
payable to GECC is then determined as:

 

(a)                                  Additional Sales Commission at the rate of
**% of the Excess and shall be reviewed annually by the Parties on the basis of
any change to the mix of Retention Rates in respect of Existing Business ; and

 

(b)                                 Additional Profit Share at the rate of **%
of the Underwriting Profits relating to the Excess calculated as:

 

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Underwriting Profits in the calendar year for all Existing Business ** by the
total Gross Earned Premium for all Existing Business ** by the Gross Earned
Premium on the Excess.

 

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Schedule 8
Local Agreements

 

DENMARK

 

PARTIES: FINANCIAL ASSURANCE COMPANY LIMITED and FINANCIAL INSURANCE COMPANY
LIMITED, acting through their Danish branches: GE LIVSFORSIKRING and GE
SKADESFORSIKRING and GE CAPITAL BANK, DENMARK, a Danish branch of GE CAPITAL
BANK AB.

 

Addendum - 47

 

COMMENCEMENT DATE - 1 JANUARY 2001

 

NORWAY

 

PARTIES: FINANCIAL INSURANCE COMPANY LIMITED and FINANCIAL ASSURANCE COMPANY
LIMITED and GE CAPITAL BANK AS.

 

COMMENCEMENT DATE - 1 JANUARY 2001

 

SWEDEN

 

PARTIES: FINANCIAL ASSURANCE COMPANY LIMITED and FINANCIAL INSURANCE COMPANY
LIMITED represented by GE Financial Insurance Sverige and GE CAPITAL BANK AB

 

Addendum - TBC

 

COMMENCEMENT DATE - 1 AUGUST 2000

 

UK

 

PARTIES: FINANCIAL ASSURANCE COMPANY LIMITED and FINANCIAL INSURANCE COMPANY
LIMITED and GE CAPITAL BANK LIMITED

 

Addendum - TBC

 

COMMENCEMENT DATE - 2000

 

UK AUTO

 

PARTIES: COMBINED LIFE ASSURANCE COMPANY LIMITED and LONDON GENERAL INSURANCE
LIMITED and FINANCIAL ASSURANCE COMPANY LIMITED and FINANCIAL INSURANCE COMPANY
LIMITED (Reinsurance Agreement). Corresponding Fronting insurance agreement in
place with GECC.

 

Addendum - 1

 

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COMMENCEMENT DATE - 1 JANUARY 2000

 

IRELAND

 

PARTIES: COMBINED LIFE ASSURANCE COMPANY OF EUROPE LIMITED and LONDON GENERAL
INSURANCE COMPANY LIMITED and FINANCIAL ASSURANCE COMPANY LIMITED and FINANCIAL
INSURANCE COMPANY LIMITED (Reinsurance Agreement). Corresponding Fronting
insurance agreement in place with GECC.

 

Addendum - 1

 

COMMENCEMENT DATE - 1 JANUARY 2000

 

GERMANY

 

PARTIES: COMBINED LIFE ASSURANCE COMPANY LIMITED and LONDON GENERAL INSURANCE
COMPANY LIMITED acting through its German branch: London General Insurance
Company Limited, Niederlassung Deutschland and FINANCIAL ASSURANCE COMPANY
LIMITED and FINANCIAL INSURANCE COMPANY LIMITED acting through their German
branches: Financial Assurance Company Limited, Lebensversicherung, Niederlassung
Deutschland and Financial Insurance Company Limited, Niederlassung Deutschland.
(Reinsurance Agreement). Corresponding Fronting insurance agreement in place
with GECC.

 

Addendum - 6

 

COMMENCEMENT DATE - 1 DECEMBER 2000

 

SWITZERLAND

 

PARTIES: GE CAPITAL BANK and FINANCIAL INSURANCE COMPANY LIMITED

 

Addendum - 5

 

COMMENCEMENT DATE - 1 APRIL 2000

 

SPAIN

 

PARTIES: COMBINED LIFE ASSURANCE COMPANY OF EUROPE LIMITED acting through its
Spanish branch: COMBINED LIFE ASSURANCE COMPANY OF EUROPE, SUCURSAL EN ESPAÑA
and LONDON GENERAL INSURANCE COMPANY LIMITED acting through its Spanish branch:
LONDON GENERAL INSURANCE COMPANY LIMITED, SUCURSAL EN ESPAÑA and GE Financial
Assurance, Compañía de Seguros y Reaseguros de Vida, S.A. and GE Financial
Insurance, Compañía de Seguros y Reaseguros, S.A. (Reinsurance Agreement).
Corresponding Fronting insurance agreement in place with GECC.

 

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Addendum - TBC

 

COMMENCEMENT DATE - 1 JANUARY 2000

 

PORTUGAL

 

PARTIES: COMBINED LIFE ASSURANCE COMPANY LIMITED and LONDON GENERAL INSURANCE
COMPANY LIMITED acting through its Portuguese Branch: LONDON GENERAL INSURANCE
COMPANY LIMITED, SUCURSAL EM PORTUGAL and Financial Insurance Company Limited
(Company No. 1515187) and Financial Assurance Company Limited, acting through
their Portuguese branches: Financial Insurance Company Limited, C.R.C.L and
Financial Assurance Company Limited. (Reinsurance Agreement). Corresponding
Fronting insurance agreement in place with GECC.

 

Addendum - TBC

 

COMMENCEMENT DATE - 1 MAY 2000

 

ITALY

 

PARTIES: Financial Insurance Company Limited and Financial Assurance Company
Limited and GE Capital Servizi Finanziari S.r.l.

 

Addendum - TBC

 

COMMENCEMENT DATE - 1 JULY 2001

 

FRANCE

 

TBC

 

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Schedule 9
GEFA Group Companies

 

•                                          GEFA International Holdings Inc.

 

•                                          GEFA UK Finance Limited

 

•                                          GEFA UK Holdings Limited

 

•                                          CFI Administrators Limited

 

•                                          Financial Insurance Guernsey PCC
Limited

 

•                                          FIG Ireland Limited

 

•                                          RD Plus SA

 

•                                          Financial Insurance Group Services
Limited

 

•                                          Financial Assurance Company Limited

 

•                                          Financial New Life Company Limited

 

•                                          Consolidated Insurance Group Limited

 

•                                          Financial Insurance Company Limited

 

•                                          GE Financial Insurance Compania de
Seguros y Reaseguros S.A.

 

•                                          GE Financial Assurance Compania de
Seguros y Reaseguros de vida S.A.

 

•                                          Vie Plus S.A.

 

•                                          UK Group Holding Company Limited

 

•                                          Assocred S.A.

 

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Schedule 10
EXCHANGE RATES

 

Exchange rates

 

 

 

Currency

 

$1=

 

1 Euro =

Existing

 

 

 

 

 

 

UK

 

UKP

 

0.630

 

0.720

Ireland

 

EUR

 

0.876

 

1.000

Germany

 

EUR

 

0.876

 

1.000

Spain

 

EUR

 

0.876

 

1.000

Portugal

 

EUR

 

0.876

 

1.000

Sweden

 

SEK

 

8.132

 

9.287

Denmark

 

DKK

 

6.525

 

7.452

Norway

 

NOK

 

7.334

 

8.375

Switzerland

 

CHF

 

1.340

 

1.530

Italy

 

EUR

 

0.876

 

1.000

France

 

EUR

 

0.876

 

1.000

 

 

 

 

 

 

 

New

 

 

 

 

 

 

**

 

**

 

0.876

 

1.000

**

 

**

 

**

 

**

**

 

**

 

**

 

**

**

 

**

 

**

 

**

 

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Schedule 11
Form of Local Addendum

 

This Addendum is made on [  ] between:

 

(1)                                 [•] whose registered office is at [•] (the
“Insurer”); and

 

(2)                                 [•] whose registered office is at [•] (the
“GECF Bank”).

 

Recitals

 

(A)                              The Insurer and the GECF Bank are parties to a
Master Agreement dated [•] (as amended) in relation to the provision of PPI
Cover (the “Master Agreement”).

 

(B)                                The Insurer and the GECF Bank wish to amend
the Master Agreement in accordance with the terms of this Addendum.

 

It is agreed as follows:

 

1                                         Interpretation

 

In this Addendum words and expressions defined in the Master Agreement and the
Framework Agreement have the same meanings herein unless the content otherwise
requires or specifically defined below.

 

2                                         Definitions

 

“Framework Agreement” means the framework agreement dated [•] between GE
Financial Assurance Holdings Inc. and [GE Consumer Finance].

 

Amendment

 

The parties agree that the terms of the Master Agreement will be amended in
accordance with the provisions of this Addendum with effect from the date of
this Addendum and references in the Master Agreement to “this Agreement” or
otherwise to the agreement between the parties for the provision of PPI shall be
deemed to be references to the Master Agreement as amended by this Addendum.

 

Provisions of the Framework Agreement to apply to the Master Agreement

 

The parties agree that the Master Agreement shall be amended to give effect to
the Framework Agreement including the following clauses:

 

4.1                               clause 2.3;

 

4.2                               clause 3.1 and 3.2 (in respect of Existing
Business, Substitute Business and Potential Substitute Business);

 

4.3                               clause 4;

 

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4.4                               clause 6.1.1;

 

4.5                               clause 8;

 

4.6                               clause 9.1, 9.2, 9.4 and Schedule 2;

 

4.7                               clause 10.2;

 

4.8                               clause 11;

 

4.9                               clause 12.1;

 

4.10                        clause 13;

 

4.11                        clause 15;

 

4.12                        clause 16.2 and Schedule 6 Part B;

 

4.13                        clause 17;

 

4.14                        clause 18;

 

4.15                        clause 20.4;

 

4.16                        clause 21.3;

 

4.17                        clause 22;

 

4.18                        clause 23; and

 

4.19                        clause 24.

 

4.20                        In respect of each Local Addendum, the assignment
and subcontracting provisions incorporated by virtue of clause 4.14 above shall
be supplemented by the addition of the following sub-clause:

 

4.21                        “Notwithstanding anything in this Clause [Assignment
Clause], all of the rights and obligations of the Financial Assurance Company
Limited under this Agreement shall automatically transfer to Financial New Life
Company Limited upon the transfer scheme for the transfer of all or
substantially all of Financial Assurance Company Limited’s business to Financial
New Life Company Limited pursuant to section 105 Financial Services and Markets
Act 2000 becoming effective (with such amendments, deletions or additions to the
scheme as the parties to the scheme may approve).”

 

4.22                        GECC and GEFA shall procure that each Existing Local
Agreement shall be amended to delete any provision which confers on any GECF
Group Company which is a party to such Local Agreement any right to terminate
such Local Agreement on a sale or disposal affecting the whole of or any part of
any party to that Local Agreement (in either case, whether such sale or disposal
is effected by way of an asset or business sale or a share

 

93

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sale or otherwise (including by the sale of a portfolio or by a change of the
identity of the financing provider)).

 

[The parties should also include further provisions, or amendments to existing
provisions, to the extent required to give effect to Applicable Laws]

 

5                                         Governing Law

 

This Addendum shall be governed by and construed in all respects in accordance
with [English] law.

 

In witness whereof this Addendum has been entered into on the date stated at the
beginning.

 

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Schedule 12
Form of New Local Agreement

 

Pro forma New Local Agreement to be inserted to give effect to the following
provisions of this agreement:

 

(i)                                     the term of the New Local Agreement
shall be from the date of the New Local Agreement and expire on [31
December 2008];

 

(ii)                                  clause 3.2;

 

(iii)                               clause 4;

 

(iv)                              clause 5.5 or 5.6 (as applicable);

 

(v)                                 clause 6.1.2 and Schedule 3;

 

(vi)                              clause 8;

 

(vii)                           clause 9.1, 9.2, 9.4 and Schedule 2;

 

(viii)                        clause 10.2;

 

(ix)                                clause 11;

 

(x)                                   clause 12.2;

 

(xi)                                clause 13;

 

(xii)                             clause 15;

 

(xiii)                          clause 16.2 and Schedule 6 Part B;

 

(xiv)                         clause 17;

 

(xv)                            clause 18;

 

(xvi)                         clause 20.4;

 

(xvii)                      clause 21.3;

 

(xviii)                   clause 22;

 

(xix)                           clause 23; and

 

(xx)                              clause 24.

 

95

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(xxi)                           In respect of each New Local Agreement, the
assignment and subcontracting provisions incorporated by virtue of clause (xv)
above shall be supplemented by the addition of the following sub-clause:

 

(xxii)                        “Notwithstanding anything in this Clause
[Assignment Clause], all of the rights and obligations of the Financial
Assurance Company Limited under this Agreement shall automatically transfer to
Financial New Life Company Limited upon the transfer scheme for the transfer of
all or substantially all of Financial Assurance Company Limited’s business to
Financial New Life Company Limited pursuant to section 105 Financial Services
and Markets Act 2000 becoming effective (with such amendments, deletions or
additions to the scheme as the parties to the scheme may approve).”

 

(xxiii)                     For the avoidance of doubt, no New Local Agreement
shall contain any provision which confers on the GECF Group Company which is a
party to such Local Agreement any right to terminate such Local Agreement on a
sale or disposal affecting the whole of or any part of any party to that Local
Agreement (in either case, whether such sale or disposal is effected by way of
an asset or business sale or a share sale or otherwise (including by the sale of
a portfolio or by a change of the identity of the financing provider)).

 

[Others].

 

[Please note the pro forma will need to cater for delay in the provision of PPP
by agreed deadlines, acceptance testing of the relevant GEFA Company’s ability
to provide the PPP in accordance with the Service Levels and the criteria of
Schedule 6]

 

96

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Schedule 13
APPROVED SUBCONTRACTORS

 

Due Diligence from GECF On Subcontractors

 

Both Parties acting reasonably shall assess the responses of the relevant
subcontractor to the questions set out in (i) the Due Diligence Detailed Plan
and (ii) the Due Diligence Detailed List below and shall together determine
whether they have satisfied the necessary criteria. If the Parties cannot agree
whether the criteria have been satisfied, then the matter shall be referred to
the dispute resolution procedure in Clause 15.

 

97

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GE Consumer Finance

 

•                                          Due Diligence

 

Detailed Plan

 

98

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ICT Group - Due Diligence for GE Consumer Finance

 

Index and Assigned Responsibilities

 

Page

 

Area

 

Owner

 

Completed

 

Reviewed

 

 

 

 

 

 

 

 

 

 

 

Pg.

 

Personnel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pg.

 

Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pg.

 

Sales and Marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pg.

 

Quality Control

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pg.

 

Facilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pg.

 

Information Systems

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Some areas or portions of areas may not apply to all vendors and /or
products.

 

99

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Personnel

 

Discuss with appropriate management the following items:

 

1.                                       Are employees issued
badges?                                                                         
Are photos included?

 

2.                                       Are visitors issued
badges?                                                                                          
Logged
in?                                                                                   
Escorted?

 

3.                                       Are employees restricted to certain
areas of the plant?

 

4.                                       If so, how?

 

5.                                       Are the various work areas partitioned
off?           

 

6.                                       Are background checks made on new
employees?
If so,

 

a)                                      Drug tests:
b)                                     Credit check:
c)                                      Criminal history: 
d)                                     Other:

 

Operations

 

Team member should tour a facility and processing center with company management
and determine the following:

 

1.                                       Customer Service

 

a)                                      Hours of operation, # of Shifts, # of
employees:

 

b)                                     Obtain and review the status and
operational reports of customer service levels. These are produced specifically
for a client’s program since desired hours and service levels vary.

 

c)                                      Review of complaint resolution
procedures.

 

d)                                     Cancellation process:

 

e)                                      Customer complaint process:

 

f)                                        A copy of the company disaster
recovery plan is needed: We will forward a copy under separate cover?  Plan in
place:                                                Yes 
                       No              

 

g)                                     Tenure of CSRs:

 

h)                                     Training:

 

i)                                         Monitoring

 

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i.                                          Tapes available to observe customer
service:

 

ii.                                       Samples of monitoring criteria/forms:

 

iii.                                    Review process for evaluating reps:

 

iv.                                   Disciplinary procedure for reps:

 

v.                                      Review process for handling customer
service center complaints:

 

vi.                                   Monitoring standards:

 

2.                                       Describe operations of
subsidiaries/divisions and connections between local, national and headquarter
offices:

 

Sales and Marketing

 

1.                                       Obtain the following information
pertaining to:

 

a)                                      Description, penetration, and
geographical location of served markets.  Also, describe any seasonal or
cyclical aspects of these markets.

 

b)                                     Summary of product offerings including
principal product features such as quality, price design, delivery channels,
install requirements, strengths and weaknesses

 

c)                                      Customer satisfaction results.

 

d)                                     General terms of sales, terms, and any
unusual financing or payment deferral arrangements offered to customers.

 

2.                                       Describe the pricing and discounting
policies.  Have there been any significant changes in recent years?  Are their
Performance Related Telemarketing Programs in place? If so, explain.

 

3.                                       Describe the List Control strategy.

 

4.                                       Can there be separation from other
client’s campaign activity?

 

5.                                       For channels used, address the
following:

 

a)                                      Number of campaigns a year

 

b)                                     Capacity to develop and deliver per day

 

c)                                      Fulfillment of channel

 

d)                                     Quality control procedures for above

 

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Telemarketing (Inbound/Outbound and customer service):

 

a)                                      Turnaround time for script development,
implementation and legal review:

 

b)                                     Sales verification process-
describe/timing:

 

c)                                      Key performance standards (handling of
poor performers):

 

d)                                     Telemarketing Representative Incentive
Plan - describe:

 

e)                                      Telemarketing Reports -  (Daily sales &
service level performance, weekly performance by TSR, Monthly summary analysis,
etc.)

 

f)                                        Monitoring process and procedures -
please provide:

 

g)                                     VRU/IVR capabilities (changes &
turnaround time):

 

h)                                     Long distance carriers:

 

i)                                         Call routing capabilities:

 

j)                                         How do you prioritize jobs/clients

 

k)                                      How long do changes take to implement:

 

l)                                         How do you plan/forecast & how
quickly can you add reps:

 

m)                                   System constraints:

 

Quality Control

 

1.                                       Are any employees assigned solely to
Quality Control?

 

2.                                       Copy of quality control plans for
detailing methodology and process for:

 

a.                                       Marketing (development and delivery)

 

b.                                      Enrollment –

 

c.                                       Customer Service/Sales Verification:

 

d.                                      Is quality checked during every stage of
production?

 

3.                                       Copy of management reports utilized to
manage turnaround time of third party service providers.

 

4.                                       Copy of quality control reports and
audits of work provided on all third party providers related to products

 

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Facilities:

 

1.                                       Type of construction:

 

2.                                       Number of Stories:

 

3.                                       Window
Locations:                                                                                                                                      
Are they alarmed?

 

4.                                       Only
Occupant?                                                                                                                                                                                                        
If Not:

 

Describe how Separated from other Tenants:

 

5.                                       Fire Detection Alarms?

 

6.                                       Automatic Sprinkler
System?                                      Yes                         No 
        

 

Flotation
Alarms?                                                                                                
Yes                         No          

 

Heat
Detectors?                                                                                                         
Yes                         In IT area             

 

7.                                       Location of Parking Area:

 

a)                                      Is access controlled by fencing, gate or
guard?

 

8.                                       Entrances: Number and locations of
people doors:

 

i.)                                      Are they double doored (man traps)?:

 

ii.)                                   Can the exterior or the building,
adjacent to all entrances, be observed from within?
Yes                         No                           How?

 

iii.)                                Are doors electrically alarmed?        
                                                If so, where:              

 

iv.)                               Is a receptionist protected from an armed
intruder?                    Yes                         No          

 

How?

 

b.                                      How many freight doors?

 

i.)                                      Are they double doored (man and/or
truck trap?)

 

ii.)                                   Can the exterior of the building,
adjacent to the freight door be observed from within? 
                                       How?

 

iii.)                                Does a delivery truck have to pass through
a gate or check point before entering premises?                      How?
                    

 

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iv.)                               What procedure is followed before a trucker
will be allowed access to plant’s interior.

 

v.)                                  Are doors electrically alarmed?
To where?

 

vi.)                               Are loading docks raised above ground level?

 

vii.)                            Could a truck gain access to interior of the
building by ramming a door?

 

9.                                       Does firm utilize more than one
building?

 

10.                                 Is plant owned or leased?

 

Security

 

1.                                       Does the plant have a vault for secure
storage?
If so,

 

a)                                      Type of construction:

 

b)                                     Size in square feet:

 

c)                                      Type of door:

 

d)                                     Is vault
alarmed?                                                                                                     
To where?

 

e)                                      Are Tapes and Checks awaiting use stored
there?

 

f)                                        Who has access to vault?

 

g)                                     Is it entered under dual control?

 

h)                                     Is access logged?

 

i)                                         How often are logs audited & by whom?

 

2.                                       Does the plant have a shredder?

 

a)                                      Is waste shredded daily?

 

b)                                     Are precautions taken to ensure all waste
is destroyed?

 

3.                                       Does the plant employ security guards?

 

If so,

 

a)                                      Are they armed?

 

104

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b)                                     How many per shift?

 

c)                                      Are they present when plant is not in
operation?

 

d)                                     Are they company employees or those from
a private guard force?

 

e)                                      Do they have radio contact?

 

f)                                        Is there ever a period when the plant
is unoccupied?

 

4.                                       Are tapes, printouts, etc., containing
cardholder information kept in secure place?

 

 

 

5.                                       Does plant utilize a log, work order,
audit form or other similar method to account for all products during the
printing and inserting process?

 

If yes, does audit form provide ability to identify production status of a given
piece or account?

 

6.                                       Are employees bonded?

 

Explain process

 

7.                                       Describe the procedure for allowing
employees to enter building when reporting for work

 

 

How would an intruder be detected?

 

8.                                       Are there any precautions taken to
prevent employees from removing Tapes, Checks, or any Cardholder Information
from the premises?

 

Alarm Devices

 

1.                                       Does plant have any electric alarm
alert systems?
If so,

 

a)                                      Is it monitored by a private security
firm?

 

b)                                     Does alarm go directly to local police
departments?

 

c)                                      Distance to local police department?

 

d)                                     Are all doors
alarmed?                                                                                                                        
All windows alarmed?

 

e)                                      Does the building have panic or holdup
alarms?

 

If so, where does the signal go?

 

105

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f)                                        Does building have motion detectors?

 

g)                                     Are heat or smoke detectors utilized?

 

If so, who monitors?

 

h)                                     Does fire alert go directly to fire
departments?

 

i)                                         Distance to local fire station?

 

j)                                         Are TV cameras utilized?

 

If so, do they cover

 

i.)                                        Parking
Lot                                                                         
Yes                                                                                   
No

ii.)                                     Exterior of
Entrance                              
Yes                                                                                   
No

iii.)                                 
Vault                                                                                                          
Yes                                                                                   
No

iv.)                                 Interior Work
Space                           
Yes                                                                                   
No

v.)                                   
Other                                                                                                        
Yes                                                                                   
No

 

k)                                      In the event of a power outage, will
alarms operate?  Yes        No      

 

l)                                         Alternate power source is?

 

Does vault have a separate alarm?

 

Information Systems

 

1.                                       Forms of connectivity:

 

2.                                       Data Processing- Describe the internal
and external handling of the data.

 

3.                                       Schedule of systems limitations,
constraints, expandability and capacity:

 

Backup procedures and disaster recovery plans:

 

106

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

General Information

 

 

 

 

 

 

 

 

The objective of this section is to gather general information relating to your
business that applies to the products or services you may provide to GE Consumer
Finance - Americas (GECF)

 

 

 

 

 

 

1.

 

What is the name of each company and/or division that may be providing products
or services for GECF?

 

 

 

 

 

 

2.

 

Please provide the address of the site(s) from which products or services may be
provided to GECF?

 

 

 

 

 

 

3.

 

What is the name, position & email address of the primary contact for GECF?

 

Primary Contact:  The employee within your business that is responsible for
managing the relationship between your company & GECF

 

 

 

 

4.

 

The responses in this document must be reviewed & approved by an executive
within your company.

 

Executive Level: (Company Officer)

 

 

 

 

 

 

Please list the name, position & email address of the Executive, that will be
certifying this document (see question 90)

 

 

 

 

 

 

5.

 

What are the names, positions & email addresses of the privacy & security
leaders for your business?

 

 

 

 

 

 

 

 

All questions below apply to each company and/or division that may be providing
products or services for GECF.

 

 

 

 

 

 

6.

 

How many employees does your company have?

 

 

 

 

 

 

7.

 

Are any of your locations outside the United States?

 

Examples of a Location: Sales offices, warehouses, manufacturing, etc.

 

 

 

 

8.

 

(If yes to question 7) Please list all locations outside the United States.

 

 

 

 

 

 

9.

 

What is the name of your parent company, if applicable?

 

 

 

 

 

 

 

107

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

Information Security & Privacy

 

 

 

 

 

 

 

 

The objective of this section is to determine how  a 3rd-party provider will
protect GECF information.

 

GECF Information:

•                  Personally identifiable consumer information

•                  Non-public customer information

•                  Intellectual property

•                  Confidential GECF business information

•                  Confidential GECF employee data

 

 

 

 

10.

 

Do you provide services to financial institutions?

 

 

 

 

 

 

11.

 

(If yes to question 10) For your financial institution clients, does your
company have a documented privacy program that supports requirements to protect
your clients’ customer information?

 

This question does not assume that your company, itself, is subject to state &
federal privacy & security regulations. Documented Privacy Program:  A
documented privacy program would include written policies and procedures
covering:  (i) ownership of the privacy program; (ii) protecting against
impermissible sharing of data (i.e., use of information for anything other than
customer’s approved purposes); (iii) use and maintenance of customer information
in accordance with privacy and security laws;  and (iv) reasonable security
controls for systems and facilities (including segregation of data, access
controls).

 

 

 

 

12.

 

Do you have documented policies that limit system access to a client’s
information to only those resources that require access to service that client?

 

 

 

 

 

 

 

108

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

13.

 

Do your existing systems provide tiered system access levels that limit access
to confidential client information?

 

Tiered System Access Levels:  Access rights to customer data fields generally
should include more than 1 level of access.  Depending on the services being
performed, different users might have read, write/update, and delete access to
specific data fields.

 

 

 

 

14.

 

Are there documented controls/procedures in place to ensure you will not reuse
or share restricted GECF information with other parties or use for any purpose
other than providing the goods or services to GECF?

 

Documented Controls/Procedures: The use of: (1) technology, (2) assignment of
job responsibilities, (3) deployment of controls and (4) training in items
(1)-(3) to ensure systematic compliance with the limits on use and disclosure of
restricted GECF information.

 

 

 

 

15.

 

Can you systematically label / flag GECF information that you cannot reuse or
share with other parties?

 

Label / Flag:  System codes, special databases, special filing arrangements or
other methods to label data with the relevant restrictions on use and disclosure

 

 

 

 

16.

 

Do you have a documented security risk assessment process?

 

Security Risk Assessment Process:  A process to identify threats,
vulnerabilities, attacks, probabilities of occurrence and outcomes.

 

 

 

 

 

109

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

17.

 

Do you have a documented security incident management process?

 

Documented Process:  A set of written instructions on how to report a security
incident, including who to contact and what information is needed. Incident
Management Process:  A process for responding to security incidents that
includes initial notification methods, escalation procedures, client
notification, and incident response and investigation. Security Incident
Examples:

•                  Facilities break-ins

•                  System intrusions

•                  Theft of data

•                  Internal fraud

 

 

 

 

Laws, Regulations and Litigation

 

 

 

 

 

 

 

 

The objective of this section is to determine that all 3rd-party providers have
a process for identifying & complying with legal & regulatory requirements. 
(PRIMARY CONTACT MUST CONSULT WITH LEGAL COUNSEL IN ANSWERING THESE QUESTIONS)

 

 

 

 

 

 

18.

 

Does your business have a documented process to maintain a current list of legal
& regulatory requirements that govern the services to be provided to GECF?

 

Examples of requirements:

•                  Telemarketing Laws

•                  Privacy Laws

•                  Fair Practices Acts

•                  Collections Laws

•                  Truth in Advertising

 

 

 

 

19.

 

Does your business have a documented process to communicate legal & regulatory
updates to all employees, contractors, subcontractors and temporary personnel?

 

Communicate:  Communication can be by one or more of several means, including
regular training, newsletters, e-mails, etc…

 

 

 

 

20.

 

Is your business required to have a license to provide the proposed products or
services to GECF?

 

License:  registration with one or more state regulatory agencies, such as a
state banking or finance department, to perform customer service operations
(such as payment processing, collections, customer service inquiries).

 

 

 

 

 

110

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

21.

 

(If yes to question 20) Is your company licensed in all necessary jurisdictions
to provide the proposed products or services to GECF?

 

All Necessary Jurisdictions:  certain states, including CA, CT, FL, MD, RI,
require state licenses for certain types of entities to perform certain customer
service operations

 

 

 

 

22.

 

Is your company currently involved in any pending or threatened litigation that
could have an adverse impact on the ability to provide products or services to
GECF or how those service would be provided?

 

 

 

 

 

 

23.

 

Is your company currently involved in any regulatory inquiries that could have
an adverse impact on the ability to provide products or services to GECF or how
those products or services would be provided?

 

Regulatory Inquiries:  Investigations, complaints or inquiries by federal or
state agencies, including attorney general offices and regulatory agencies such
as the FTC.

 

 

 

 

24.

 

Does your company have a documented process to proactively investigate & monitor
intellectual property (IP) rights of technologies that your company either owns
or uses?

 

There should be a process by which the service provider can meaningfully
represent in the contract that it has all necessary rights to the intellectual
property being used in the provision of products or services to GECF.

 

 

 

 

25.

 

Is your company currently involved in any pending or threatened intellectual
property disputes that could have an adverse impact on the ability to provide
products or services to GECF or how those products or services would be
provided?

 

Pending or Threatened IP Disputes:  Pending litigation or a threat that alleges
that you do not have the right to use certain intellectual property which will
be used in the provision of services to GECF.

 

 

 

 

26.

 

Is your company subject to any governmental consent orders, consent decrees or
enforcement actions?

 

 

 

 

 

 

Disaster Recovery

 

 

 

 

 

 

 

 

The objective of this section is to determine that all 3rd-party providers have
plans in place to mitigate service disruptions for all products and services
that may be provided to GECF.

 

Service disruption: A break in the scheduled delivery of the product or service

 

 

 

 

 

111

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

27.

 

Do you have a completed & documented disaster recovery plan (DRP) in effect that
mitigates any potential service disruptions as related to products or services
that may be provided to GECF?

 

DRP: Actions taken to mitigate the disruption across the entire business that
enables a 3rd-party provider to deliver products or service to their customers. 
(The scope must cover the entire business process across all business functions
as related to products or services that may be provided to GECF.) Completed:  A
plan that has been approved by executive level management & implemented.

 

 

 

 

28.

 

Is your DRP based on an industry accepted risk assessment methodology?

 

Industry Accepted Risk Assessment: (ISO 9000, FMEA, Mission Critical
Applications)

 

 

 

 

29.

 

Do you electronically store your data related to products or services that may
be provided to GECF?

 

Example: (Tapes, 3290, Fiche) Your Data:  For questions (27-32) specifically
references Your internal business process data.

 

 

 

 

30.

 

(If yes to question 29) Does your DRP include backup & recovery strategies for
your data related to products or services that may be provided to GECF?

 

Backup & Recovery Strategies:  Backup & recovery process that supports your
company’s internal business process.

 

 

 

 

31.

 

(If yes to question 29) Are electronic backups of your data stored with a
3rd-Party data storage company?

 

 

 

 

 

 

32.

 

Do you have hard copy files of your data related to products or services that
may be provided to GECF?

 

 

 

 

 

 

33.

 

(If Yes to question 32) Does your DRP include backup & recovery strategies for
hard copy files of your data related to products or services that may be
provided to GECF?

 

Hard Copy File:  A physical document

 

 

 

 

34.

 

(If yes to question 32) Are hard copy files of your data stored with a 3rd-Party
data storage company?

 

 

 

 

 

 

35.

 

Will you electronically store GECF information?

 

Example: (Tapes, 3290, Fiche) For questions (33-38) “Will” means effective upon
engagement as a GECF product or service provider

 

 

 

 

 

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

36.

 

(If yes to question 35) Will your DRP include backup & recovery strategies for
GECF information?

 

Backup & Recovery Strategies:  Backup & recovery process that supports your
company’s internal business process.

 

 

 

 

37.

 

(If yes to question 35) Will your electronic backups of GECF information stored
with a 3rd-Party data storage company?

 

 

 

 

 

 

38.

 

Will you have hard copy files of GECF information?

 

 

 

 

 

 

39.

 

(If yes to question 38) Will your DRP include backup & recovery strategies for
hard copy files of GECF information?

 

Hard Copy File:  A physical document

 

 

 

 

40.

 

(If yes to question 38) Will hard copy files of GECF information be stored with
a 3rd-Party data storage company?

 

 

 

 

 

 

41.

 

Does your DRP include alternative suppliers that are pre-qualified & can
promptly be engaged in the event of a service disruption?

 

Alternative Suppliers: Suppliers capable of providing similar products or
services. Pre-qualified:  Suppliers’ capability already assessed by your company
to be acceptable

 

 

 

 

42.

 

Does your DRP include redundant systems or processes that can be promptly
enabled in the event of a service disruption?

 

Redundant Systems/Processes: a back up system/process with capacity and
functionality to deliver the product or service to GECF, in the absence of the
primary system.

 

 

 

 

43.

 

Does your DRP include a communication plan for regular communication to your
affected customers during a service disruption?

 

 

 

 

 

 

44.

 

Do you have a dedicated resource assigned as the DRP owner?

 

 

 

 

 

 

45.

 

Does the DRP owner report on DRP to an executive level employee or executive
level committee?

 

Executive Level: reports directly to the President or CEO of your company

 

 

 

 

46.

 

Do you have a documented process as part of your DRP to review and update your
plan for changes to your business processes?

 

Documented: written document that includes the key requirements for the process,
how you execute the process and who is the owner of the process.

 

 

 

 

 

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

47.

 

Do you test changes to your DRP?

 

Test: a simulation of a service disruption in which you execute your DRP to meet
or exceed you established performance criteria.

 

 

 

 

48.

 

If there are no changes to your DRP within a year (12 month period), do you test
your disaster recovery plans annually?

 

 

 

 

 

 

Facilities

 

 

 

 

 

 

 

 

The objective of this section is to determine that 3rd-party providers have
reasonable measures in place to physically secure confidential information.

 

Reasonable Measures:  Systems & processes that protect access to facilities that
contain confidential information.

 

 

 

 

49.

 

Do you have a physical facilities security program for all locations that will
process or house GECF information?

 

Physical Facilities Security Program:  To includes access control for employees,
contractors, subcontractors, temporary personnel & visitors

 

 

 

 

50.

 

Does your business use or intend to use subcontractors to provide products or
services to GECF?

 

Subcontractors:  a 3rd-party provider that your company has engaged to deliver
products & services to GECF.

 

 

 

 

51.

 

(If yes to question 50) Do your subcontractors have a physical facilities
security program for all locations that will process or house GECF information?

 

 

 

 

 

 

52.

 

Do you have restricted access to internal data rooms which will process or house
GECF information?

 

Data room: Server room or hard copy file archive

 

 

 

 

53.

 

Do you have restricted access to phone closets which will process or house GECF
information?

 

Phone Closet:  A closet which houses telecommunication wiring & telecom wiring
equipment (Voice & Data)

 

 

 

 

54.

 

Do you have access control processes which require employees, contractors,
subcontractors & temporary personnel to physically present badges to obtain
access to all locations that will process or house GECF information?

 

 

 

 

 

 

 

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

55.

 

Do you have a visitor access control process?

 

Visitor:  Anyone who is not an employee, or a contractor, subcontractor,
temporary resource employed at the site Visitor Access Control Process: 
Visitors are escorted in your facilities, & a visitor reconciliation process
exists

 

 

 

 

56.

 

Is access to your facilities revoked for all terminated employees, contractors,
subcontractors & temporary personnel within a 48 hour period?

 

 

 

 

 

 

57.

 

Do you have a documented process to destroy all physical media that contains
your confidential information & the confidential information of your clients
after it is no longer actively used or actively archived?

 

Examples of Physical Media:

•                  Paper

•                  Tapes

•                  Fiche

•                  Embossing Foil…..

Destroy: To make unreadable & unusable

 

 

 

 

58.

 

Do you utilize a 3rd-party provider for physical media destruction?

 

 

 

 

 

 

59.

 

Do you have a documented process to destroy all electronic media that contains
your confidential information & the confidential information of your clients
after it is no longer actively used or actively archived?

 

Examples of Electronic Media:

•                  Chip Sets

•                  Electronic storage devices

 

 

 

 

60.

 

Do you utilize a 3rd-party provider for electronic media destruction?

 

 

 

 

 

 

61.

 

Do you audit your 3rd-party providers for electronic & physical media
destruction?

 

 

 

 

 

 

Personnel

 

 

 

 

 

 

 

 

The objective of this section is to determine that the 3rd-party provider has
appropriate processes & procedures for hiring, training & monitoring employees.

 

 

 

 

 

 

62.

 

Are all new hires subject to Federal Criminal background checks covering the
last 10 years?

 

New Hires:  All employees, contractors & Temporary personnel

 

 

 

 

63.

 

Are all new hires subject to State Criminal background checks covering the last
10 years?

 

State Criminal Background Requirements:  Must be executed for all states &
counties in which the individual has resided and / or worked

 

 

 

 

64.

 

Are all new hires subject to credit bureau checks?

 

 

 

 

 

 

 

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

65.

 

Are all new hires subject to employment verification?

 

 

 

 

 

 

66.

 

Are all new hires subject to education verification?

 

 

 

 

 

 

67.

 

Are all US based new hire employees subject to drug tests?

 

 

 

 

 

 

68.

 

Do you provide services to financial institutions?

 

 

 

 

 

 

69.

 

(If yes to question 68) For your financial institution clients, Do you require
formal privacy & security training for your employees with access to their
confidential information?

 

Privacy & Security Training:  Classroom or Computer Based Training covering
privacy laws & appropriate handling of confidential information

 

 

 

 

70.

 

(If yes to question 68) Do you require annual privacy & security training?

 

 

 

 

 

 

71.

 

Will your employees, contractors or temporary personnel directly interact with
GECF customers?

 

GECF Customers: Cardholders & / or clients of GECF

 

 

 

 

72.

 

(If yes to question 71) Are employees, contractors & Temporary personnel who
will directly interact with GECF customers subject to quality assurance
monitoring for compliance & service level requirements?

 

Examples of Monitoring:

•                  Call monitoring

•                  Mystery shopping

•                  Customer satisfaction surveys

 

 

 

 

73.

 

Does your company comply with the Fair Labor Standards Act (FLSA) or equivalent
Employment standards acts if not based in the US?

 

 

 

 

 

 

74.

 

Does your company have a documented policy & process that complies with
environmental health & safety regulations

 

 

 

 

 

 

Subcontracting

 

 

 

 

 

 

 

 

The objective of this section is to determine that the 3rd-party provider has
appropriate processes & procedures for engaging, training & monitoring
contractors, subcontractors & temporary personnel.

 

 

 

 

 

 

75.

 

Does your business use or intend to use subcontractors to provide products or
services to GECF?

 

Subcontractors:  a 3rd-party provider that your company has engaged to deliver
products & services to GECF. Note:  If the answer to this question is “No”, you
may skip to the finance section

 

 

 

 

76.

 

(If yes to question 75) Are any of your subcontracted service providers on the
OFAC list?

 

 

 

 

 

 

 

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

77.

 

(If yes to question 75) Do you have a documented security incident management
process for subcontractors?

 

 

 

 

 

 

78.

 

Will your subcontractors have access to GECF information?

 

 

 

 

 

 

79.

 

(If yes to question 78) Are subcontractors who will access to GECF information
subject to the same background checks as your permanent employees who have
access to GECF information?

 

 

 

 

 

 

80.

 

(If yes to question 78) Do you require formal privacy & security training for
contractors, subcontractors and temporary personnel who will have access to GECF
information?

 

 

 

 

 

 

81.

 

(If yes to question 78) Do you require annual privacy & security training?

 

 

 

 

 

 

82.

 

Will GECF information be passed to a 3rd-party managed IT system?

 

3rd-Party Managed IT System:  Database or other technology systems that are
maintained by a contracted supplier

 

 

 

 

83.

 

(If yes to question 82) Will you actively monitor the security of outsourced IT
systems?

 

 

 

 

 

 

84.

 

(If yes to question 82) Will you actively monitor the transfer, storage &
disposal of GECF information?

 

 

 

 

 

 

85.

 

Will your subcontractors directly interact with GECF customers?

 

 

 

 

 

 

86.

 

(If yes to question 85) Are subcontractors who will directly interact with GECF
customers subject to quality assurance monitoring for compliance & service level
requirements?

 

 

 

 

 

 

Finance

 

 

 

 

 

 

 

 

The objective of this section is to determine if there are sound financial
practices & controls in place?

 

 

 

 

 

 

87.

 

Does your company prepare stand-alone financial statements?

 

Stand-Alone:  Separate set of financial statements for your division,
subsidiary, company or enterprise

 

 

 

 

88.

 

(If yes to question 87)  Have you received an unqualified audit opinion letter
from your independent accounting firm in each of the last 3 years?

 

 

 

 

 

 

 

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Question

 

Operational Definitions

 

Answer

 

Service
Provider
Comments

89.

 

Do you have a parent company?

 

 

 

 

 

 

90.

 

(If yes to question 89) Does your parent company prepare stand-alone financial
statements?

 

 

 

 

 

 

91.

 

(If yes to question 90)  Have you received an unqualified audit opinion letter
from your independent accounting firm in each of the last 3 years?

 

 

 

 

 

 

92.

 

Does either your company or your parent company prepare a SAS70 or have an
independent 3rd-party review of internal controls?

 

 

 

 

 

 

Certification

 

 

 

 

 

 

93.

 

Are the responses provided in this document accurate & complete to the best
knowledge of the 3rd-party provider executive (listed above), based upon
investigation & review with those management individuals who have responsibility
for the business processes & issues evaluated in this questionnaire?

 

 

 

 

 

 

 

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Schedule 14
Benchmarking

 

1                                         The first benchmarking exercise shall
be undertaken by an organisation recognised as having benchmarking capability
(the “Benchmarking Adviser”). The following provisions shall apply in respect of
the selection of the Benchmarking Adviser:

 

1.1                               GECC shall identify three potential candidates
to act as the Benchmarking Adviser. GEFA shall then eliminate one of the three
choices and GECC shall choose which of the remaining candidates shall become the
Benchmarking Adviser.

 

2                                         The Parties shall bear the costs of
the first benchmarking exercise in equal shares and GEFA shall bear the costs of
all subsequent benchmarking exercises.

 

3                                         The Benchmarking Adviser shall be
required to submit to the parties the name(s) and curriculum vitae of its
personnel proposed to be deployed on this matter and the estimated costs (which
shall be reasonable). Each Party shall have the right to object to the
deployment of proposed personnel and to require the Benchmarking Adviser to
propose (and submit particulars of) alternative personnel, provided that the
reasons for its objections are reasonable, and are supplied to the other Party
and the Benchmarking Adviser in writing within five Business Days of the parties
receiving the particulars of the personnel. GEFA shall have the right to object
to the estimated costs and to negotiate such costs. The Benchmarking Adviser
shall be required to enter into a confidentiality agreements with GECF and GEFA
on no less onerous terms than those which apply to the Parties under this
agreement.

 

4                                         In order that there are no ambiguities
in relation to each Party’s understanding of how the benchmarking activity is to
be undertaken, its findings interpreted and any resulting actions taken, the
Benchmarking Adviser will be instructed to conduct the benchmarking activity in
accordance with a set of instructions (the “Benchmarking Terms of Reference”).
GECC will prepare the first draft of the Benchmarking Terms of Reference and
deliver it to GEFA. GECC and GEFA shall endeavour to agree the Benchmarking
Terms of Reference (acting reasonably and in good faith). If GECC and GEFA are
unable to agree the Benchmarking Terms of Reference within 10 Business Days of
the date on which the first draft was delivered to GEFA, either party may
request the Benchmarking Adviser to prepare a draft Terms of Reference. Neither
party shall unreasonably withhold or delay its approval of the draft
Benchmarking Terms of Reference prepared by the Benchmarking Adviser. Following
agreement of the Benchmarking Terms of Reference, a representative of each Party
shall sign the Benchmarking Terms of Reference, which shall then be delivered to
the Benchmarking Adviser.

 

5                                         As a minimum, the Benchmarking Terms
of Reference will instruct the Benchmarking Adviser to gather in each Territory,
using generally accepted benchmarking processes, the following information in
respect of at least five members of the Benchmarking Pool (or where there are
not five members of the Benchmarking Pool, then as many as is reasonably
practicable) in the relevant Territory at that time:

 

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5.1                               types of Payment Protection Products offered
to consumers;

 

5.2                               features of Payment Protection Products
offered to consumers including:

 

(a)                                  marketing channels (including direct mail,
inbound and outbound telemarketing, email and internet campaigns);

 

(b)                                 details of types of cover;

 

(c)                                  details of benefit;

 

(d)                                 consumer price and mechanism for charging
consumer;

 

(e)                                  length of time on the market; and

 

(f)                                    such other information as agreed between
the Parties.

 

5.3                               The Benchmarker shall set out the information
gathered in a report (the “Benchmarking Report”).

 

6                                         In respect of each six-monthly
benchmarking exercise carried out after the first benchmarking exercise, GEFA
shall gather the information set out in paragraphs 5.1 and 5.2 above. For the
avoidance of doubt, the Benchmarking Adviser shall not be involved in any
Benchmarking Exercise subsequent to the first Benchmarking Exercise. If the
Parties agree to involve the Benchmarking Adviser in a Subsequent Benchmarking
Exercise, the Parties shall bear the costs equally.

 

7                                         The Parties shall, within a reasonable
time, assess, in the light of the information provided in accordance with
paragraph 5 or paragraph 6 as appropriate, whether there are any Payment
Protection Products or features of Payment Protection Products that are offered
by GECF Group Companies’ Competitors to consumers in the relevant Territory but
that the relevant GEFA Company does not offer to the relevant GECF Group
Company.

 

8                                         For the avoidance of doubt the
information specific to GECC in any and all Benchmarking Reports and Product
Development Plans produced under this agreement shall be treated in the same way
as if it were Confidential Information disclosed by a party under the agreement.

 

9                                         If:

 

9.1                               GECC considers that the information provided
by GEFA in accordance with paragraph 6 does not provide an accurate view of the
market for Payment Protection Products in the relevant Territory; or

 

9.2                               the Parties are not able to agree on the
assessment carried out under paragraph 7; or

 

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9.3                               the Parties are not able to agree a Product
Development Plan in accordance with Clause 9.4.4,

 

then Clause 15 of this agreement shall apply

 

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Schedule 15
Potential Substitute Business

 

Criteria for determining when Potential Substitute Business becomes Substitute
Business

 

The Parties agree that any substitute Payment Protection Products which directly
replace the Existing Business will be Substitute Business and will be subject to
the existing terms, both the Retention Rate and Profit Share as set out in
Schedule 1 and the Local Agreements.

 

The Parties agree that the following scenarios shall fall within or outside the
definition of Substitute Business, as set out below.  This is not an exhaustive
list and any additional scenarios that may arise from time to time will be
agreed between the senior management of GEFA and GECC centrally.

 

Furthermore, if the senior management of GEFA and GECC centrally agree a Payment
Protection Product is partly Substitute Business and partly New Business, they
will agree terms based on a weighted average of the Existing Business and New
Business terms.

 

Scenario

 

Type of Business

 

Exceptions

Any modification to Existing Business its terms, conditions or exclusions
whether a minor change is made or a change in benefits to meet GECC finance
agreements by modification to cover or an addition or removal of a cover
section or sections.

 

Is Substitute Business

 

 

Resolicitation activity GEFA currently does not offer on the back of Existing
Business. “Resolicitation” means resolicitation activity in the marketing of a
Payment Protection Product by mail or phone to uninsured GECC finance customers
who have not opted to purchase the GEFA Payment Protection Product at the point
of sale of the finance agreement.

 

Is New Business

 

If GECC intends to replace the Existing Business provided at initial point of
sale of the finance agreement with a Resolicitation Payment Protection Product
it will be Substitute Business and GECC will advise GEFA of its intent. If GECC
stops actively promoting the Existing Business provided at the initial point of
sale of the finance agreement by means of training or account management or

 

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Scenario

 

Type of Business

 

Exceptions

 

 

 

 

incentives or other method which adversely impacts on the Existing Business
performance, measured by insurance penetration of the Existing Business, then
any Resolicitation Scheme will be restructured as Substitute Business with the
appropriate Retention Rate and Profit Share terms applied.

A joint borrower cover Payment. Protection Product where GEFA currently only
offers a single cover Payment Protection Product.

 

Is Substitute Business for the first named principal borrower. Is New Business
for the second named borrower.

 

As GEFA cannot split terms within one Payment Protection Product, aggregate
terms will be provided combining the proportion of the Risk Rate allocated to
the first named principal borrower and the second named borrower.

New GECC business partnership. This shall include new partnerships with
retailers, dealers or broker groups.

 

Is New Business

 

It is not intended to include individual additions of a retailer, dealer or
broker which will be provided with terms as Substitute Business, unless a
separate Scheme is required.

A Payment Protection Product offered to an age range excluded from Existing
Business or other Payment Protection Product targeting another specific group of
customers not currently provided under Existing Business.

 

Is New Business

 

 

Committed Payments Products designed to protect in whole or in part GECC finance
commitments if they are in replacement of Existing Business.

 

Is Substitute Business

 

 

 

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Scenario

 

Type of Business

 

Exceptions

Committed Payments Products not designed to protect GECC finance commitments.

 

Is New Business

 

 

A Payment Protection Product provided for a new and distinct GECC finance
activity including any new and distinct loan product, which does not replace an
existing loan product, offered by GECC.

 

Is New Business

 

Any Payment Protection Product provided to a new or distinct loan product, which
replaces an existing loan product, will be Substitute Business.  If the new loan
product increases the volume of Existing Business’s Gross Written Premium then
blended terms will be agreed.

Acquired GECF Business.

 

Is New Business

 

If Existing Business is transferred to the Acquired GECF Business, the terms for
the Existing Business will remain unchanged.

 

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Schedule 16
Business Proposal Pricing Process

 

Part I

 

1                                         Where:

 

1.1                               GECC or any GECF Group Company request an
Offering pursuant to Clause 9.4.4 and such an Offering described in the relevant
Product Development Plan constitutes Potential Substitute Business; or

 

1.2                               paragraph 9.2 of Part A of Schedule 5 applies
and the Parties need to determine the pricing of a New Business Proposal or
Amended New Business Proposal,

 

the procedure set out in this Schedule shall apply.

 

2                                         Where the Offering, New Business
Proposal or Amended Business Proposal as appropriate (in any case the “Business
Proposal”):

 

2.1                               does not include the establishment of a new
form of distribution channel for the relevant Payment Protection Product (a “New
Channel”), the process set out in Part II of this Schedule shall apply; or

 

2.2                               does involve a New Channel for the relevant
Payment Protection Product then the process set out in Part III of this
Schedule shall apply.

 

PART II

 

3                                         Where the Business Proposal does not
include a New Channel, GEFA or the relevant GEFA Company will provide GECC or
the relevant GECF Group Company with a pricing proposal for the Business
Proposal. The pricing proposal shall comprise two elements (i) the Retention
Rate as has already been agreed by the Parties for the relevant Payment
Protection Product as set out in Schedule 1 of this agreement (for Potential
Substitute Business) or Clause 5 of this agreement (for Potential New Business)
as the case may be; and (ii) the Risk Rate.

 

4                                         Where GECC or the relevant GECF Group
Company agrees to the pricing proposal, then the Parties shall proceed to
implement the Product Development Plan.

 

5                                         Where GECC or the relevant GECF Group
Company does not agree to the pricing proposal, then the dispute shall be
referred to the dispute resolution process set out in Clauses 15.2 of the
agreement. If the Parties are not able to resolve the dispute within 10 Business
Days of the matter being referred to the dispute resolution process then either
Party may refer the pricing proposal to Watson Wyatt or other independent
actuary as agreed by the Parties (the “Actuary”). The Actuary shall determine
the price by calculating the Risk Rate. The Actuary shall act as an Expert and
not as an arbitrator and the Actuary’s decision shall be final and binding on
the parties. The Actuary shall then determine his own pricing proposal for the
Business Proposal. Either Party shall be

 

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entitled to receive a copy of the assumptions upon which the Actuary determined
the Risk Rate.

 

6                                         Where the Parties refer the matter to
the Actuary, the price shall be calculated by adding the Risk Rate as determined
by the Actuary to the Retention Rate. Where:

 

6.1                               the Parties agree to the price, then the
Parties will proceed to implement the Business Proposal and (where the New
Business Proposal is a New Business Proposal or Amended Business Proposal) the
terms of Paragraphs 10 and 11 of Part A of Schedule 5 shall apply; or

 

6.2                               GECC or the relevant GECF Company does not
accept the price, then the Product Development Plan will be abandoned; or

 

6.3                               GEFA or the relevant GEFA Company does not
accept the price, then (i) GECC and the relevant GECF Group Company shall have
no obligation to appoint GEFA or any GEFA Company as its provider, whether
exclusive or otherwise, for the relevant Local Agreement in respect of the
Business Proposal and (ii) GECC shall be free to enter into discussions,
tenders, negotiations, arrangements and agreements with third parties and/or
other companies in the GECF Group in respect of the Business Proposal and (iii)
the relevant GECF Group Company shall not be obliged to invite the relevant GEFA
Company to participate in the tender process but shall provide the relevant GEFA
Company with a copy of the tender documentation.

 

Part III

 

7                                         Where:

 

7.1                               The Business Proposal does include a New
Channel and **.

 

7.2                               Any increase in the Retention Rate set out in
the relevant Local Agreement must **. GEFA shall provide substantiation for the
revised Retention Rate based on a proposed pricing unit for each premium sold
via the New Channel.

 

7.3                               GEFA shall also provide:

 

7.3.1                     (if the New Channel is to be provided by GEFA or a
GEFA Company directly) the benchmarked costings of the New Channel; or

 

7.3.2                     (if the New Channel is to be provided by an outsourced
supplier) the relevant tender documentation for such outsourcing.

 

The pricing and capabilities offered by GEFA must be competitive with the
benchmarked or tender costings identified.

 

7.4                               If the pricing and capabilities offered by
GEFA pursuant to paragraph 7.3 are competitive and the Risk Rate is accepted by
GECC, then the Parties shall finalise the terms of the

 

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addendum to the Local Agreement or, where relevant, the terms of a New Local
Agreement.

 

8                                         Where GECC or the relevant GECF Group
Company does not agree to the proposed revised Retention Rate then the matter
will be referred to the dispute resolution process set out in Clause 15.

 

9                                         Where:

 

9.1                               GECC or the relevant GECF Group Company agrees
to the revised Retention Rate and the Risk Rate proposed by GEFA, then the
Parties shall proceed to implement the Product Development Plan, or

 

9.2                               GECC or the relevant GECF Group Company does
not agree to the Risk Rate, then the dispute shall be referred to the dispute
resolution process set out in Clause 15.2 of the agreement. If the Parties are
not able to resolve the dispute within 10 Business Days of the matter being
referred to the dispute resolution process then either Party may refer the
dispute to the Actuary. The Actuary shall determine the price by calculating the
Risk Rate. The Actuary shall act as an Expert and not as an arbitrator and the
Actuary’s decision shall be final and binding on the parties. The Actuary shall
then determine his own pricing proposal for the Business Proposal. Either Party
shall be entitled to receive a copy of the assumptions upon which the Actuary
determined the Risk Rate.

 

10                                  Where the Parties refer the matter to the
Actuary, the price shall be calculated by adding the Risk Rate as determined by
the Actuary to the revised Retention Rate.

 

Where:

 

10.1                        the Parties agree to the price, then the Parties
will proceed to implement the Business Proposal and (where the Business Proposal
is a New Business Proposal or Amended Business Proposal) the terms of Paragraphs
10 and 11 of Part A of Schedule 5 shall apply; or

 

10.2                        GECC or the relevant GECF Company does not accept
the price, then the Product Development Plan will be abandoned; or

 

10.3                        GEFA or the relevant GEFA Company does not accept
the price, then (i) GECC and the relevant GECF Group Company shall have no
obligation to appoint GEFA or any GEFA Company as its provider, whether
exclusive or otherwise, for the relevant Local Agreement in respect of the
Business Proposal and (ii) GECC and the relevant GECF Group Company shall be
free to enter into discussions, tenders, negotiations, arrangements and
agreements with third parties and/or other companies in the GECF Group in
respect of the Business Proposal and (iii) the relevant GECF Group Company shall
not be obliged to invite the relevant GEFA Company to participate in the tender
process but shall provide the relevant GEFA Company with a copy of the tender
documentation.

 

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