Document:

Exhibit
10.25

 

MORTGAGE
SERVICES AGREEMENT

 

dated
as of
             ,
2004

 

by and
among

 

GE
MORTGAGE SERVICES, LLC,

 

GENERAL
ELECTRIC MORTGAGE

HOLDINGS LLC,

 

GE
MORTGAGE CONTRACT SERVICES INC.

 

and

 

GENWORTH FINANCIAL, INC.

 

 

	
  ARTICLE
  I

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Certain Defined
  Terms

  	
   

  
	
  Section
  1.02.

  	
  Other
  Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
  SERVICES
  AND TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  GEMH Services; Scope

  	
   

  
	
  Section 2.02.

  	
  Transition Employees
  Services

  	
   

  
	
  Section 2.03.

  	
  Management of
  Held Loans

  	
   

  
	
  Section
  2.04.

  	
  Reporting;
  Transition; MSR Sale

  	
   

  
	
  Section
  2.05.

  	
  Performance
  and Receipt of Services

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  OTHER ARRANGEMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Computer-Based
  Resources

  	
   

  
	
  Section 3.02.

  	
  Access; Leased
  Premises

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  COSTS
  AND DISBURSEMENTS; PERSONNEL COSTS; PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Costs and
  Disbursements

  	
   

  
	
  Section
  4.02.

  	
  Personnel
  Costs; Right to Hire; Severance

  	
   

  
	
  Section 4.03.

  	
  Loan Acquisition and
  Disposition Costs

  	
   

  
	
  Section
  4.04.

  	
  Payments
  of Service Charges and Employment Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
  STANDARDS;
  COMPLIANCE WITH LAWS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  5.01.

  	
  Standards

  	
   

  
	
  Section
  5.02.

  	
  Compliance
  with Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
  PURCHASE
  OF NEW LOANS AND SALE OF LOANS AND LOAN ASSETS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  6.01.

  	
  Loan
  Schedule

  	
   

  
	
  Section 6.02.

  	
  Loan Purchase
  Agreement

  	
   

  
	
  Section
  6.03.

  	
  Agreement
  to Sell and Purchase the New Loans; Assignment of Claims

  	
   

  
	
  Section
  6.04.

  	
  Loan
  Purchase Price

  	
   

  
	
  Section
  6.05.

  	
  Conditions
  Precedent

  	
   

  
	
  Section 6.06.

  	
  Right of First Refusal

  	
   

  
	
  Section 6.07.

  	
  Repurchase of Loans

  	
   

  
	
  Section 6.08.

  	
  Transition Assistance

  	
   

  
	
  Section 6.09.

  	
  Further Assurances

  	
   

  

 

i

 

	
  ARTICLE VII

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Representations and
  Warranties of Mortgage Services

  	
   

  
	
  Section 7.02.

  	
  Representation and
  Warranties of GEMH Parties

  	
   

  
	
  Section 7.03.

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  INDEMNIFICATION; LIMITATION ON LIABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Limited Liability

  	
   

  
	
  Section
  8.02.

  	
  Indemnification
  by GEMH

  	
   

  
	
  Section
  8.03.

  	
  Indemnification
  by Mortgage Services

  	
   

  
	
  Section
  8.04.

  	
  Loans
  and Loan Assets Indemnification

  	
   

  
	
  Section 8.05.

  	
  Indemnification
  Procedures.

  	
   

  
	
  Section 8.06.

  	
  Limitation on
  Liability

  	
   

  
	
  Section
  8.07.

  	
  Liability
  for Payment Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
  DISPUTE
  RESOLUTION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  9.01.

  	
  Applicable
  Law

  	
   

  
	
  Section
  9.02.

  	
  Dispute
  Resolution

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X

  	
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Termination

  	
   

  
	
  Section 10.02.

  	
  Effect of
  Termination

  	
   

  
	
  Section 10.03.

  	
  Survival

  	
   

  
	
  Section
  10.04.

  	
  Business
  Continuity; Force Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI

  	
  GUARANTY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Guaranty

  	
   

  
	
  Section 11.02.

  	
  Guaranty Absolute

  	
   

  
	
  Section
  11.03.

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.01.

  	
  GEMH Manager

  	
   

  
	
  Section
  12.02.

  	
  Mortgage
  Services Manager; Functional Leaders

  	
   

  
	
  Section 12.03.

  	
  Independent Contractors

  	
   

  
	
  Section 12.04.

  	
  Subcontractors

  	
   

  
	
  Section
  12.05.

  	
  Additional
  Services; Books and Records; Mortgage Services Property

  	
   

  
	
  Section 12.06.

  	
  Confidential
  Information

  	
   

  
	
  Section 12.07.

  	
  Notices

  	
   

  
	
  Section
  12.08.

  	
  Taxes.

  	
   

  
	
  Section 12.09.

  	
  Regulatory Approval
  and Compliance

  	
   

  

 

ii

 

	
  Section 12.10.

  	
  Severability

  	
   

  
	
  Section 12.11.

  	
  Entire Agreement

  	
   

  
	
  Section 12.12.

  	
  Assignment; No Third-Party
  Beneficiaries

  	
   

  
	
  Section 12.13.

  	
  Amendment

  	
   

  
	
  Section 12.14.

  	
  Rules of
  Construction

  	
   

  
	
  Section 12.15.

  	
  Counterparts

  	
   

  
	
  Section 12.16.

  	
  No Right to Set-Off

  	
   

  
	
  Section 12.17.

  	
  Existing Agreements

  	
   

  
	
  Section 12.18.

  	
  Further Assurances

  	
   

  

 

SCHEDULES AND EXHIBITS

 

	
  Schedule A

  	
  GEMH Services

  	
   

  
	
  Schedule B

  	
  Scheduled Loans

  	
   

  
	
  Schedule C-1

  	
  Fully Dedicated
  Transition Employees

  	
   

  
	
  Schedule C-2

  	
  Partially Allocated
  Transition Employees

  	
   

  
	
  Schedule D

  	
  Cost Allocation

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Loan Purchase
  Agreement

  	
   

  

 

iii

 

THIS MORTGAGE SERVICES AGREEMENT, dated as of
          , 2004, is made by
and among GE MORTGAGE SERVICES, LLC, a North Carolina limited liability company
(“Mortgage Services”), GENERAL ELECTRIC MORTGAGE HOLDINGS LLC, a North
Carolina limited liability company (“GEMH”), GE MORTGAGE CONTRACT
SERVICES INC., a Delaware corporation (“Contract Services”) and GENWORTH
FINANCIAL, INC., a Delaware corporation (“Genworth”, and together with
Mortgage Services, GEMH and Contract Services, the “Parties”).

 

RECITALS

 

WHEREAS, Affiliates of the Parties, General Electric Company (“General
Electric”), General Electric Capital Corporation (“GE Capital”),
GEI, Inc. (“GEI”), GE Financial Assurance Holdings, Inc. (“GEFAHI”),
GNA Corporation (“GNA”) and Genworth entered into that certain Master
Agreement, dated as of
          , 2004 (the “Master
Agreement”);

 

WHEREAS, pursuant
to the terms of the Master Agreement, General Electric, GE Capital, GEI, GNA,
GEMH and Genworth entered into that certain Transitional Services Agreement
dated as of           , 2004;

 

WHEREAS, GE
Capital Mortgage Services, Inc., a predecessor in interest to Mortgage
Services, and General Electric Mortgage Insurance Corporation (“GEMICO”)
entered into that certain Service Agreement dated as of January 1, 2001 (the “Existing
Servicing Agreement”);

 

WHEREAS, Mortgage
Services and GEMICO entered into that certain Shared Services Agreement dated
as of January 1, 2002 (the “Existing Shared Services Agreement”);

 

WHEREAS, Mortgage
Services and GEMICO desire to terminate the Existing Servicing Agreement and
the Existing Shared Services Agreement;

 

WHEREAS, pursuant
to the terms of the Master Agreement, it is contemplated that GEMH will
provide, or cause to provide, certain services to Mortgage Services and its
Subsidiaries, including services previously provided by GEMICO and its
Affiliates pursuant to the Existing Servicing Agreement and Existing Shared
Services Agreement;

 

WHEREAS, Mortgage
Services and GEMICO entered into that certain Lease Agreement (the “Lease
Agreement”), effective as of October 1, 2002, with respect to approximately
1,100 square feet of office space located at 6601 Six Forks Road, Raleigh,
North Carolina  27615 (the “Leased
Premises”);

 

WHEREAS, Mortgage
Services and GEMICO desire to terminate the Lease Agreement and Mortgage
Services desires to continue to use the Leased Premises on the terms set forth
herein;

 

WHEREAS, GE
Capital Residential Connection Corporation and Mortgage Services entered into
that certain Indemnification Agreement dated as of May 1, 2003 (as assigned to
Contract Services effective as of January 1, 2004, the “Indemnification
Agreement”);

 

 

WHEREAS, Mortgage
Services and Contract Services desire to terminate the Indemnification
Agreement and Mortgage Services desires for Contract Services to indemnify
Mortgage Entities with respect to any and all Liabilities incurred by Mortgage
Services with respect to the Scheduled Loans (as defined below);

 

WHEREAS, Contract
Services has requested that, from time to time, Mortgage Services purchase certain
New Loans and the related Loan Assets (as defined below) and Mortgage Services
has agreed to (i) make such purchases on the terms and conditions set forth
herein and (ii) account for such New Loans and related Loan Assets on its
financial statements; and

 

WHEREAS, Mortgage
Services desires that Genworth guarantee the obligations of Contract Services
under this Agreement and Genworth has agreed to provide such guaranty;

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual agreements contained herein and
for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE
I

 

DEFINITIONS

 

SECTION 1.01.                 Certain Defined Terms.

 

The following
capitalized terms used in this Agreement shall have the meanings set forth
below:

 

“Affiliate”
means Affiliate as defined in the Master Agreement; provided  however,
that for the purposes of this Agreement the Closing Date as used in such
definition shall be deemed to have occurred.

 

“Agreement”
means this Mortgage Services Agreement, including all schedules and exhibits
hereto, as amended, restated, supplemented or otherwise modified from time to
time in accordance with the terms hereof.

 

“Bona Fide
Offer” means, with respect to any Held Loan, a written offer made by any
Person, other than Mortgage Services, Contract Services or any of their
respective Affiliates, in good faith to purchase such Held Loan, coupled with
evidence reasonably satisfactory to Contract Services that (i) the offeror has
the present financial ability to pay the offered price or has available
financing to enable it to pay the offered price and (ii) the offered price is
consistent with the sale price Mortgage Services would seek to obtain for a
loan of substantially similar type held by Mortgage Services for its own
account.

 

“Credit
Enhancement” means any (i) security deposit, (ii) investment certificate,
certificate of deposit, authorization to hold funds, hypothecation of account
or like instrument, (iii) letter of credit, repurchase agreement, agreement of
indemnity, guarantee or postponement agreement, (iv) recourse agreement, (v)
security agreement, (vi) all property and assets of whatever nature, including
personal property, whether tangible or intangible, and claims, rights

 

2

 

and
choses in action, (vii) certificate representing shares or the right to
purchase capital of or interests in, any Person, or (viii) bond or debenture,
or (ix) any and all insurance policies (including mortgage and title
insurance), in each case pledged, assigned, mortgaged, made, delivered or
transferred as security for the performance of any obligation under or with
respect to any Loan by an obligor thereunder.

 

“Deficiency Amount”
means, with respect to any Loan, in the event that the amount set forth in
clause (ii) below is less than the amount set forth in clause
(i) below, an amount that equals the absolute value of the difference
between (i) the amount paid by Mortgage Services as purchase price with respect
to such Loan minus the amount of all payments of principal received by
Mortgage Services with respect to such Loan and (ii) the Disposition Purchase
Price.

 

“Disposition
Purchase Price” means, with respect to any Loan, the amount of proceeds
(with respect to principal payable under such Loan) received by Mortgage
Services from the disposition of such Loan and the related Loan REO (including
pursuant to Sections 6.06 and 6.07) after the date hereof.

 

“Employee
Matters Agreement” means that certain Employee Matters Agreement dated as
of the date of the Master Agreement by and among General Electric, GEFAHI, GEI
and Genworth.

 

“Employment
Costs” means costs and expenses described in Section 4.02(b)(i) and
4.02(d)(i).

 

“Environmental
Law” means any domestic or foreign, federal, state or local statute, rule,
regulation or ordinance pertaining to the protection of human health and safety
or the environment, including but not limited to the Comprehensive
Environmental Response, Compensation, and Liability Act (“CERCLA”) (42
U.S.C. § 9601 et seq.), the Hazardous Material Transportation Act (49
U.S.C. § 1801 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
§ 1251 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.),
the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act
(15 U.S.C. § 2601 et seq.) and the Occupational Safety and Health Act (29
U.S.C. § 651 et seq.), all as now or hereafter amended or supplemented,
and the regulations promulgated pursuant thereto, and judicial interpretations
thereof, as well as common law rights of action under theories of nuisance,
trespass and strict liability.

 

“Fair Market
Value” means, with respect to any Loan, the fair market value of such Loan
determined, by Contract Services, on the basis that such Loan is sold on an
arm’s length basis between a willing seller and a willing buyer.

 

“Finance Laws”
means the U.S.A. Patriot Act, the Truth in Lending Act, Laws prohibiting
deceptive, misleading and unfair acts and practices, the Gramm-Leach-Bliley
Act, the Real Estate Settlement Procedures Act, the Home Mortgage Disclosure
Act, the Consumer Credit Protection Act, the Right to Financial Privacy Act,
the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Homeowners
Ownership and Equity Protection Act, the Federal

 

3

 

Trade
Commission Act, the Fair Debt Collection Practices Act and other state or
federal Laws regulating lending and all rules and regulations promulgated
pursuant to any of the foregoing.

 

“GEMH Parties”
means, collectively, GEMH, Contract Services and Genworth.

 

“GE Services”
means any and all services provided by General Electric and its Affiliates to
Mortgage Entities prior to the date hereof through the corporate functions of
General Electric, including tax, treasury, capital markets, legal, finance and
information technology services but excluding any services provided by GEMH or
its Affiliates to Mortgage Entities at any time prior to the date hereof after
General Electric has terminated the provision of such services to Mortgage
Entities.

 

“Held Loan”
means any Loan that has not been sold, transferred or assigned by Mortgage
Services to any Person (other than another Mortgage Entity).

 

“Information
Systems” means computing telecommunications or other digital operating or
processing systems or environments, including, without limitation, computer
programs, data, databases, computers, computer libraries, communications
equipment, networks and systems.  When
referenced in connection with GEMH Services, Information Systems shall mean the
Information Systems accessed and/or used in connection with the GEMH Services.

 

“Intellectual
Property” means all of the following, whether protected, created or arising
under the laws of the United States or any other foreign jurisdiction: (i)
patents, patent applications and statutory invention registrations, including
divisions, continuations, continuations-in-part, substitute application of the
foregoing and any extensions, reissues, restorations and reexaminations
thereof, and all rights therein provided by international treaties or
conventions, (ii) copyrights and mask work rights, whether or not registered,
published or unpublished, and registrations and applications for registration
thereof, and all rights therein whether provided by international treaties or
conventions or otherwise, (iii) trademarks, service marks, trade dress, logos
and other identifiers of source, including all goodwill associated therewith
and all common law rights, registrations and applications for registration
thereof, and all rights therein provided by international treaties or
conventions, and all reissues, extensions and renewals of any of the foregoing,
(iv) intellectual property rights arising from or in respect of domain names,
domain name registrations and reservations, (v) trade secrets, (vi)
intellectual property rights arising from or in respect of Technology, and
(vii) all other applications and registrations related to any of the
intellectual property rights set forth in the foregoing clauses (i) – (vi)
above.

 

“Lender”
means with respect to a Loan, a lender under such Loan.

 

“Liens”
means any title defect, conflicting or adverse claim of ownership, mortgage,
security interest, lien, pledge, claim, right of first refusal, option, charge,
covenant, restriction, reservation, lease, order, decree, judgment,
stipulation, settlement, attachment, restriction, objection or any other
encumbrance of any nature whatsoever, whether or not perfected.

 

“Loans”
means, collectively, Scheduled Loans and New Loans.

 

4

 

“Loan Agreement”
means with respect to any Loan, any agreement or instrument evidencing the
obligations of an obligor with respect to such Loan, including any loan
agreement or note, and all amendments, addenda, riders and modifications
thereto and thereof.

 

“Loan Assets”
means with respect to any Loan, (i) any agreement or instrument evidencing the
obligation of an obligor with respect to such Loan, including any loan
agreement, note or other evidence of indebtedness of an obligor, any and all
amendments, addenda, riders and modifications thereto and thereof and any and
all documents executed in connection therewith (including (A) any and all
mortgages, deeds of trust and other instruments or agreements including any and
all amendments, addenda, riders, modifications thereto and thereof, in each
case of this clause (i)(A) securing the obligations of the obligor under such
Loan, and (B) any and all assignments of the instruments and agreements set
forth in clause (i)(A) above, notices of transfer and equivalent instruments),
(ii) any and all Credit Enhancements related to such Loan, (iii) any and all
rights, interest and title of the applicable Lender with respect to such Loan
including any and all rights to service such Loan and any and all other rights,
benefits and proceeds arising from or in connection with such Loan, and (iv)
any and all correspondence and documents of Contract Services and its
Affiliates to the extent related to such Loan and other books and records,
documents and agreements related to such Loan that the applicable Lender and
Mortgage Services agree, pursuant to the applicable Loan Purchase Agreement,
are to be sold, transferred and assigned to Mortgage Services pursuant to such
Loan Purchase Agreement.

 

“Loan Closing”
means the consummation of the sale and purchase transactions contemplated by
Sections 6.03(a)(i), 6.04 and 6.05.

 

“Loan Closing
Date” means the date on which the applicable Loan Closing occurs.

 

“Loan File”
means, with respect to any Loan, any agreements, instruments, documents and
correspondence described in clauses (i), (ii) and (iv) of the definition of the
Loan Assets.

 

“Loan Purchase
Agreement” means  (i) with
respect to any New Loan, an industry standard purchase and sale agreement
between Mortgage Services and the applicable Lender substantially in the form
of Exhibit A and otherwise in form and substance reasonably satisfactory to
Mortgage Services and (ii) with respect to any Scheduled Loan, a purchase
and sale agreement entered into by Mortgage Services and the applicable Lender
with respect to the sale by such Lender and the purchase by Mortgage Services
of such Scheduled Loan.

 

“Loan Purchase
Price” means, with respect to a New Loan, the purchase price agreed upon by
Mortgage Services and the applicable Lender.

 

“Loan REO”
means any Mortgaged Property that Mortgage Services has acquired as a result of
a foreclosure in connection with the applicable Loan.

 

“Loan Schedule”
means a written schedule delivered from time to time by Contract Services to
Mortgage Services setting forth all of the New Loans which Contract Services
wishes to present to Mortgage Services for purchase pursuant to the terms of
this

 

5

 

Agreement
on a Loan Closing Date, which schedule sets forth the following information for
each Loan: name of obligor, name of Lender, account number and the outstanding
principal balance as of the most recent reporting period.

 

“Mortgage
Entities” means Mortgage Services and its Subsidiaries.

 

“Mortgaged
Property” means any real property that secures the obligations of the
obligor under a Loan.

 

“Mortgage
Servicing Rights” means assets designated as Mortgage Servicing Rights on
the books and records of Mortgage Entities.

 

“MS Services”
means the services provided by Mortgage Services pursuant to Section 2.03.

 

“MS Servicing
Costs” means costs and expenses incurred by Mortgage Services in the
ordinary course of business in connection with the management and servicing of
the Held Loans pursuant to Section 2.03, (i) including fees and other costs
payable by Mortgage Services pursuant to the Wells Fargo Agreement or any other
similar subservicing agreement in connection with such Held Loans but (ii)
excluding in all events any out-of-pocket costs and expenses (other than the
Loan Purchase Price and the purchase price paid by Mortgage Services with
respect to Scheduled Loans and any and all interest expenses incurred by
Mortgage Services in connection with the funding of any Loan) incurred by
Mortgage Services in connection with the acquisition or disposition of any Loan
(including any loan boarding costs payable by Mortgage Services pursuant to the
Wells Fargo Agreement or any other subservicing agreement, attorney costs and
expenses, custodian fees, recording and filing fees and other costs and
expenses customarily incurred in connection with an acquisition or disposition
of residential mortgage loans).

 

“Net Amount”
means, as of any date, an amount equal to the difference between (i) the sum
of:  (A) the aggregate Loan Purchase
Price of the applicable Purchased Loans, (B) the aggregate purchase price paid
by Mortgage Services with respect to the Scheduled Loans held by Mortgage
Services as of such date and (C) the aggregate purchase price paid by Mortgage
Services with respect to the REOs held by Mortgage Services as of such date minus
(ii) the aggregate amount of principal payments received by Mortgage Services
as of such date with respect to the Loans set forth in clauses (i)(A) and
(i)(B).

 

“New Loan”
means any one- to four-family residential mortgage loan that has been
underwritten by an Affiliate of GEMH. 
For the avoidance of doubt, “New Loan” shall exclude any and all
Scheduled Loans.

 

“Permitted Lien”
means (i) any Lien for taxes not yet due and payable, (ii) any mechanic’s or
materialmen’s lien, which an obligor under a Loan is required to remove and
(iii) any other Lien on the obligor’s interest in any Mortgaged Property which
is specifically permitted in accordance with the terms of the related Loan
Agreement or other documents, agreements or instruments that constitute Loan
Assets and which does not materially affect the value of the Mortgaged Property
subject to such Lien.

 

6

 

“Purchased Loan”
means any New Loan purchased by Mortgage Services as required by this Agreement
that has not been sold, transferred or assigned by Mortgage Services to GEMH or
any other Person (other than another Mortgage Entity).

 

“Representative(s)”
of a Person means any director, officer, employee, agent, consultant,
accountant, auditor, financing source, attorney, investment banker or other
representative of such Person.

 

“REO Agreement”
means that certain Agreement for the Purchase and Sale of Property, dated as of
October 3, 1994, among GE Capital Asset Management Corporation (“GECAMC”),
GEMICO, GE Residential Mortgage Insurance Corporation of North Carolina,
General Electric Mortgage Corporation of North Carolina and Verex Assurance,
Inc., as assigned by GECAMC to Mortgage Services pursuant to that certain
Assignment, Assumption and Recognition Agreement dated as of May 1, 1995 and as
modified by that certain Corrective – Restated Amendment to the Purchase and
Sale of Property dated as of September 11, 1998.

 

“REO” means
any Property (as defined in the REO Agreement) purchased by Mortgage Services
pursuant to the REO Agreement.

 

“Scheduled
Loans” means loans set forth on Schedule B.

 

“Service
Termination Date” shall have the meaning specified in Schedule A
hereto, in respect of any GEMH Service, or such earlier date as provided
hereunder.

 

“Software”
means the object and source code versions of computer programs and any
associated documentation therefore.

 

“Technology”
means, collectively, all designs, formulas, algorithms, procedures, techniques,
ideas, know-how, software, programs, models, routines, confidential and
proprietary information, databases, tools, inventions, invention disclosures,
creations, improvements, works of authorship, and all recordings, graphs,
drawings, reports, analyses, other writings, and any other embodiment of the
above, in any form, whether or not specifically listed herein.

 

“Transition
Employees” means, collectively, the Fully Dedicated Transition Employees
and Partially Allocated Transition Employees.

 

“Underwriting/Insurance
Agreement” means an agreement or an insurance policy entered into between
an Affiliate of GEMH and a Lender pursuant to which such Affiliate of GEMH has
an option to purchase a Loan from the Lender upon occurrence of certain events
specified in such agreement or insurance policy.

 

“Virus”
shall mean any computer instructions (i) that adversely affect the operation,
security or integrity of a computing telecommunications or other digital
operating or processing system or environment, including without limitation,
other programs, data, databases, computer libraries and computer and
communications equipment, by altering, destroying, disrupting or inhibiting
such operation, security or integrity; (ii) that without functional purpose,
self-replicate without manual intervention; and/or (iii) that purport to
perform a useful function

 

7

 

but
which actually perform either a destructive or harmful function, or perform no
useful function and utilize substantial computer, telecommunications or memory
resources.

 

“WARN Act” means the Workers Adjustment and Retraining
Notification Act and any state and local “plant closing” or “mass layoff” law.

 

“Wells Fargo”
means Wells Fargo Home Mortgage, Inc.

 

“Wells Fargo
Agreement” shall mean that certain Subservicing Agreement, dated September
30, 2000, by and between Wells Fargo and GE Capital Mortgage Services, Inc.,
presently known as Mortgage Services, as such Subservicing Agreement may be
amended, restated and otherwise modified from time to time in accordance with
the terms thereof.

 

“Wells Fargo
Proceeds” means, with respect to any Liability, any proceeds payable by
Wells Fargo to Mortgage Services pursuant to Section 7.2 of the Wells Fargo
Agreement with respect to such Liability.

 

SECTION 1.02.                 Other Terms.  For purposes of this Agreement, the
following terms have the meanings set forth in the sections or agreements
indicated.

 

	
  Term

  	
   

  	
  Section

  
	
  Affiliate

  	
   

  	
  Master Agreement

  
	
  Bona Fide Purchase Price

  	
   

  	
  Section 6.06

  
	
  Breaching Party

  	
   

  	
  Section 10.01(a)

  
	
  Business Day

  	
   

  	
  Master Agreement

  
	
  Claims

  	
   

  	
  Section 6.03(a)(ii)

  
	
  Closing

  	
   

  	
  Master Agreement

  
	
  Closing Date

  	
   

  	
  Master Agreement

  
	
  Facilities Fee

  	
   

  	
  Section 4.01(b)

  
	
  Force Majeure

  	
   

  	
  Master Agreement

  
	
  Fully Dedicated Transition Employee

  	
   

  	
  Section 2.02

  
	
  GE

  	
   

  	
  Recitals

  
	
  GE Capital

  	
   

  	
  Recitals

  
	
  GE Confidential Information

  	
   

  	
  Master Agreement

  
	
  GEFAHI

  	
   

  	
  Recitals

  
	
  GEI

  	
   

  	
  Recitals

  
	
  GEMH Indemnified Party

  	
   

  	
  Section 8.01(a)

  
	
  GEMH Manager

  	
   

  	
  Section 12.01

  
	
  GEMH Services

  	
   

  	
  Section 2.01(a)

  
	
  GEMH Substitute Service

  	
   

  	
  Section 2.01(a)

  
	
  General Electric

  	
   

  	
  Recitals

  
	
  Genworth

  	
   

  	
  Preamble

  
	
  Genworth Confidential Information

  	
   

  	
  Master Agreement

  
	
  Governmental Approval

  	
   

  	
  Master Agreement

  
	
  Guaranteed Obligations

  	
   

  	
  Section 11.01

  
	
  Guaranty

  	
   

  	
  Section 11.01

  
	
  Indemnification Agreement

  	
   

  	
  Recitals

  
	
  Indemnified Party

  	
   

  	
  Master Agreement

  

 

8

 

	
  Term

  	
   

  	
  Section

  
	
  Indemnifying Party

  	
   

  	
  Master Agreement

  
	
  Indemnity Payment

  	
   

  	
  Master Agreement

  
	
  Identified Costs

  	
   

  	
  Section 4.01(b)

  
	
  Law

  	
   

  	
  Master Agreement

  
	
  Leased Premises

  	
   

  	
  Recitals

  
	
  Liabilities

  	
   

  	
  Master Agreement

  
	
  Loan Closing Documents

  	
   

  	
  Section 6.05(b)

  
	
  Master Agreement

  	
   

  	
  Recitals

  
	
  Mortgage Services Indemnified Party

  	
   

  	
  Section 8.01(b)

  
	
  Mortgage Services Manager

  	
   

  	
  Section 12.02

  
	
  MS Standard

  	
   

  	
  Section 5.01(b)

  
	
  Non-Breaching Party

  	
   

  	
  Section 10.01(a)

  
	
  Operating Plan

  	
   

  	
  Schedule A

  
	
  Partially Allocated Transition Employee

  	
   

  	
  Section 2.02

  
	
  Parties

  	
   

  	
  Preamble

  
	
  Person

  	
   

  	
  Master Agreement

  
	
  Service Charges

  	
   

  	
  Section 4.01(b)

  
	
  Standard for Services

  	
   

  	
  Section 5.01(a)

  
	
  Subsidiary

  	
   

  	
  Master Agreement

  
	
  Tax Returns

  	
   

  	
  Master Agreement

  
	
  Term

  	
   

  	
  Section 10.01(a)

  
	
  Transactions

  	
   

  	
  Master Agreement

  
	
  Trigger Date

  	
   

  	
  Master Agreement

  

 

ARTICLE
II

 

SERVICES AND TERMS

 

SECTION 2.01.                 GEMH
Services; Scope

 

(a)                                  During
the period commencing on the date hereof and ending on the relevant Service
Termination Date, subject to the terms and conditions set forth in this
Agreement, GEMH shall provide or cause to be provided to Mortgage Entities all
services provided to any and all Mortgage Entities by GEMH and/or its
Affiliates prior to the date hereof, including the services listed in Schedule
A hereto (the “GEMH Service(s)”). 
The “GEMH Services” also shall include (1) any services to be
provided or cause to be provided by GEMH to Mortgage Entities as agreed
pursuant to Sections 2.02, 2.04, 3.02 and 12.05(a) and (2) any GEMH Substitute
Service; provided, however, that (i) except as set forth in
Section 2.04(b), the scope of each GEMH Service shall be substantially the same
as the scope of such service provided by GEMH and its Affiliates to Mortgage
Services, the predecessor of Mortgage Services or any other Mortgage Entity, as
applicable, on the last day prior to the date hereof and that such service was
provided by GEMH and its Affiliates to Mortgage Services, the predecessor of
Mortgage Services or any other Mortgage Entity, as applicable, in the ordinary
course, (ii) the use of each GEMH Service by Mortgage Entities shall include
use of such GEMH Service contractors by Mortgage Services and/or of any other
Mortgage Entity in substantially

 

9

 

the
same manner as used by the contractors of Mortgage Services, predecessor of
Mortgage Services and other Mortgage Entities, as applicable, prior to the date
hereof (including use by Wells Fargo pursuant to the Wells Fargo
Agreement).  The preceding sentence shall
not be deemed to restrict or otherwise limit the volume or quantity of the GEMH
Services.  If, for any reason, GEMH is
unable to provide, or cause to be provided, any GEMH Service to any Mortgage
Entity pursuant to the terms of this Agreement, GEMH shall provide or cause to
be provided to Mortgage Entities a substantially equivalent service (a “GEMH
Substitute Service”) at or below the cost for the substituted GEMH Service
and otherwise in accordance with the terms of this Agreement, including, the
Standard for Services.

 

(b)                                 The
GEMH Services shall include such maintenance, support, error correction,
training, updates and enhancements normally and customarily provided by GEMH to
its Subsidiaries that receive such services. 
If Mortgage Services requests that GEMH provide a custom modification in
connection with any GEMH Service, Mortgage Services shall be responsible for
the cost of such custom modification, and to the extent such custom
modification constitutes Software, and such Software and all Intellectual
Property therein is owned by Mortgage Services, GEMH hereby assigns such
Software and all Intellectual Property therein to Mortgage Services and
Mortgage Services hereby grants GEMH a perpetual, worldwide, fully paid up,
irrevocable, transferable, royalty-free, non-exclusive license, with the right
to sublicense, to use and modify such Software.  The GEMH Services shall include all functions, responsibilities,
activities and tasks, and the materials, documentation, resources, rights and
licenses to be used, granted or provided by GEMH that are not specifically
described in this Agreement as a part of the GEMH Services, but are incidental
to, and would normally be considered an inherent part of, or necessary subpart
included within, the GEMH Services or are otherwise necessary for GEMH to provide,
or Mortgage Entities to receive, the GEMH Services.

 

(c)                                  For
the avoidance of doubt, GEMH shall have no liability for any variance between
the actual results of operations of Mortgage Services and the estimated results
of operations set forth in the Operating Plan, unless and to the extent such
variance is due to the gross negligence or willful misconduct of GEMH.

 

(d)                                 Notwithstanding
any provision to the contrary in this Agreement, GEMH shall not be obligated to
provide any of the GE Services.

 

(e)                                  During
the Term, GEMH and Mortgage Services shall cooperate with one another and use
their good faith, commercially reasonable efforts to effect the efficient,
timely and seamless provision and receipt of GEMH Services.

 

SECTION 2.02.                 Transition
Employees Services.  GEMH agrees
that during the Term it shall provide, or cause to be provided, to Mortgage
Entities the services of (a) employees of Affiliates of GEMH set forth on
Schedule C-1, or any employees with equivalent or greater skills who replace
such employees in the positions set forth on Schedule C-1, in each case on a
full-time basis (each such employee who performs GEMH Services on a full-time
basis, a “Fully Dedicated Transition Employee”) and (b) employees of
Affiliates of GEMH set forth on Schedule C-2, or any employees with equivalent
or greater skills who replace such employees in the positions set forth on
Schedule C-2, in each case on a part-time basis as set

 

10

 

forth
on Schedule C-2 (each such employee who performs GEMH Services on a part-time
basis as set forth on Schedule C-2, a “Partially Allocated Employee”).

 

SECTION 2.03.                 Management
of Held Loans.

 

(a)                                  During
the Term, Mortgage Services shall manage and service the Held Loans in
accordance with the MS Standard.  For
the avoidance of doubt, such management and servicing shall include
restructuring, modification and disposition of the Held Loans and the related
Loan Assets as well as other loss mitigation activities, such as foreclosure on
the Mortgaged Property that secures the Held Loans, in each case in accordance
with the MS Standard.  In managing and
servicing the Held Loans, Mortgage Services shall utilize the Wells Fargo
Agreement, to the extent permitted by the terms thereof, or a substantially
similar subservicing agreement.

 

(b)                                 Mortgage
Services shall maintain all licenses and other authorizations, in each case
issued by a Governmental Authority, necessary to manage the Held Loans
(including its status as an approved Fannie Mae/Freddie Mac seller/servicer).

 

SECTION 2.04.                 Reporting;
Transition; MSR Sale.

 

(a)                                  During
the Term, GEMH shall provide, or cause to be provided, the following support,
which support shall be in addition to the GEMH Services described in Schedule
A:

 

(i)                                     GEMH
shall provide, or cause to be provided, current and reasonably available
historical data related to the GEMH Services and predecessor services thereto
as reasonably required by Mortgage Services in a manner and within a time
period as mutually agreed upon by the parties; and

 

(ii)                                  GEMH
shall make reasonably available to Mortgage Entities the employees and
contractors of GEMH and its Affiliates whose assistance, expertise or presence
is necessary to (A) assist the transition team of Mortgage Services in
establishing a fully functioning stand-alone environment and the timely
assumption by Mortgage Services, or by a supplier to Mortgage Services, of the
GEMH Services and (B) facilitate the implementation of the Operating Plan.

 

(b)                                 During
the Term, upon request by Mortgage Services, GEMH shall provide, or cause to be
provided, assistance, expertise or presence necessary to assist Mortgage
Services in the sale of Mortgage Servicing Rights, which assistance, expertise
or presence shall be in addition to GEMH Services described in Schedule A; provided,
however, that such services shall be provided to the extent that
provision of such services shall not impose undue burden on the operations of
GEMH and its Affiliates.  Mortgage
Services shall pay for all incremental direct costs and expenses incurred by
GEMH and its Affiliates in connection with the provision of such services,
which costs and expenses would not have been otherwise incurred as a result of
the provision by GEMH and its Affiliates of other GEMH Services; provided
that such costs and expenses have been authorized in writing in advance by the
Mortgage Services Manager (or another authorized representative of Mortgage
Services or its Affiliates). 
Notwithstanding the foregoing, GEMH shall have no obligation to provide
the above mentioned services to the extent

 

11

 

that
Mortgage Services fails to authorize costs and expenses necessary for GEMH and
its Affiliates to incur in order to provide such services.  Notwithstanding the foregoing, this Section
2.04(b) shall not be applicable to the sale of any servicing rights pursuant to
Section 6.07.

 

SECTION 2.05.                 Performance and Receipt of Services.

 

(a)                                  Security.  Each of Mortgage Services and GEMH shall at
all times comply with its own then in-force security guidelines and policies
applicable to the performance, access and/or use of the GEMH Services and
Information Systems.

 

(b)                                 No
Viruses.  Each of Mortgage Services
and GEMH shall take commercially reasonable measures to ensure that no Viruses
or similar items are coded or introduced into the GEMH Services or the
Information Systems of Mortgage Services, GEMH or any of their respective
Affiliates.  If a Virus is found to have
been introduced into the GEMH Services or any Information Systems of any Party
or its Affiliates, Mortgage Services and GEMH shall use their commercially
reasonable efforts to cooperate and to diligently work together to eliminate
the effects of such Virus.

 

(c)                                  Reasonable
Care.  Each of Mortgage Services and
GEMH shall exercise reasonable care in providing and receiving the GEMH
Services and the MS Services to (i) prevent access to the Information Systems
by unauthorized Persons and (ii) not damage, disrupt or interrupt the GEMH
Services, the MS Services or Information Systems of any Party.

 

ARTICLE
III

 

OTHER ARRANGEMENTS

 

SECTION 3.01.                 Computer-Based
Resources.

 

(a)                                  Prior
to the Trigger Date, Mortgage Entities shall continue to have access to the
Information Systems of GEMH and its Subsidiaries.  On and after the Trigger Date, Mortgage Entities shall not have
any right to access all or any part of the Information Systems of GEMH or any
of its Subsidiaries, except to the extent necessary for any Mortgage Entity to
receive the GEMH Services or implement the Operating Plan (in addition and not
in limitation of Section 2.05, subject to Mortgage Services complying with all
reasonable security measures implemented by GEMH as deemed necessary by GEMH to
protect its Information Systems and the Information Systems of its
Subsidiaries, provided, that Mortgage Entities have had a commercially
reasonable period of time to comply with such security measures).

 

(b)                                 Prior
to the Trigger Date, GEMH and its Subsidiaries shall continue to have access to
the Information Systems of the Mortgage Entities.  On and after the Trigger Date neither GEMH nor its Subsidiaries
shall have any right to access all or any part of the Information Systems of
Mortgage Entities, except to the extent necessary for GEMH and its Subsidiaries
to perform the GEMH Services (in addition and not in limitation of Section
2.05, subject to GEMH and its Subsidiaries complying with all reasonable
security measures implemented by the applicable Mortgage Entity as deemed
necessary by Mortgage Entities to protest their respective Information Systems;
provided, that GEMH and its Subsidiaries have had a commercially
reasonable period of time to comply with such security measures).

 

12

 

(c)                                  In
addition but not in limitation of Section 12.06, notwithstanding the foregoing,
Mortgage Services and GEMH acknowledge and agree that any information received
by Mortgage Services, GEMH or any of their respective Subsidiaries through the
access by such Party or by any of its Subsidiaries shall not be used by such
Party and such Party shall cause its Subsidiaries not to use such information,
for purposes other than provisions of GEMH Services hereunder, in case of GEMH
and its Subsidiaries, and receipt of the GEMH Services and provision of MS
Services, in case of Mortgage Entities.

 

SECTION 3.02.                 Access;
Leased Premises.

 

(a)                                  Mortgage
Services will allow GEMH and its Representatives reasonable access to the
facilities of Mortgage Services necessary for the performance by GEMH and its
Representatives of the GEMH Services and for GEMH to fulfill its obligations
under this Agreement.

 

(b)                                 GEMH
will allow Mortgage Services and its Representatives reasonable access to the
facilities of GEMH necessary for Mortgage Services to fulfill its obligations
under this Agreement, to implement the Operating Plan and to transition GEMH
Services to Mortgage Entities or to a supplier designated by Mortgage Services.

 

(c)                                  During
the Term, GEMH shall allow, and shall cause to allow, Mortgage Entities and its
Representatives to access and use the Leased Premises or equivalent premises,
reasonably acceptable to Mortgage Services, in the same manner as such Leased
Premises were used by Representatives of Mortgage Entities prior to the date
hereof.

 

ARTICLE
IV

 

COSTS
AND DISBURSEMENTS; PERSONNEL COSTS; PAYMENTS

 

SECTION 4.01.                 Costs
and Disbursements.

 

(a)                                  Subject
to Section 4.02, all ordinary costs and expenses incurred by Mortgage Services
in connection with performance of its obligations under this Agreement
(including personnel costs and expenses with respect to Mortgage Services’
employees, any amounts payable directly or indirectly by Mortgage Services to
General Electric or its Affiliates with respect to GE Services and the MS
Servicing Costs) shall be payable by Mortgage Services and GEMH shall have no
Liability to Mortgage Services with respect to such costs and expenses.

 

(b)                                 Mortgage
Services shall reimburse GEMH for:

 

(i)                                     all
reasonable costs and expenses incurred by GEMH in connection with GEMH Services
actually provided pursuant to this Agreement and that can be identified as
incurred for the sole benefit of Mortgage Entities or allocated by GEMH to
Mortgage Entities consistent with the basis on which such costs were allocated
by GEMH and its Affiliates immediately prior to the date hereof as reflected on
Schedule D (“Identified Costs”); provided, however, that
(A) any out-of-pocket costs and expenses in the aggregate in excess of $10,000
per any calendar month or in excess of $5,000 per provider per any calendar
month shall only be payable by Mortgage Services, if such Identified Costs have
been authorized in writing

 

13

 

by
the Mortgage Services Manager (or another authorized representative of Mortgage
Services or its Affiliates) prior to having been incurred by GEMH, (B) Mortgage
Services receives from GEMH reasonably detailed data and other documentation
sufficient to support the calculation of amounts due to GEMH as a result of
Identified Costs and (C) Identified Costs shall not include (x) any costs or
expenses described in Section 4.02, which shall be payable pursuant to Section
4.02, (y) any costs or expenses incurred by GEMH or any of its Subsidiaries in
connection with providing Mortgage Entities access and use of facilities
described in Section 3.02 and (z) any costs or expenses incurred by GEMH or any
of its Subsidiaries in connection with providing GEMH Services set forth in
paragraph (j) of Schedule A; and

 

(ii)                                  $10,000
per annum (payable in quarterly installments as set forth in Section 4.04) with
respect to access and use by Mortgage Entities and their respective
Representatives of facilities described in Section 3.02 and provision by GEMH
and its Subsidiaries of GEMH Services set forth in paragraph (j) of Schedule A
(“Facilities Fee”, and together with Identified Costs, the “Service
Charges”).

 

SECTION 4.02.                 Personnel Costs; Right to Hire;
Severance.

 

(a)                                  Mortgage
Services shall pay all actual personnel costs and expenses incurred by Mortgage
Services with respect to its employees providing services under this
Agreement.  All severance and employee
costs, if any, related to the termination of any Mortgage Services employees
(including any amounts payable pursuant to the WARN Act) will be paid entirely
by Mortgage Services.  Mortgage Services
will be responsible for any and all costs and expenses associated with the
transfer of Mortgage Services employees to any Mortgage Services’ Affiliates,
including for any wind down/shut down costs and expenses associated with a wind
down or shut down of one or more of Mortgage Services’ facilities.

 

(b)                                 Subject
to Article IX of the Employee Matters Agreement:

 

(i)                                     During
the Term, Mortgage Services will reimburse GEMH for all compensation and
benefit costs and expenses incurred by GEMH and its Affiliates for all Fully
Dedicated Transition Employees who are providing GEMH Services on full time
basis.  For the avoidance of doubt, at
any one time, Mortgage Services shall not be liable for such costs and expenses
for more than six (6) persons who hold positions set forth on Schedule C-1.

 

(ii)                                  Mortgage
Services will have the right to hire Fully Dedicated Transition Employees at
the Trigger Date, provided that such Fully Dedicated Transition Employees continue
to provide GEMH Services to the extent necessary through the expiration of this
Agreement consistent with GEMH Services provided prior to the Trigger Date.

 

(iii)                               To the extent that
Mortgage Services does not offer employment to such Fully Dedicated Transition
Employees effective as of the Trigger Date, then GEMH and its Affiliates will
retain such Fully Dedicated Transition Employees to continue to provide GEMH
Services to Mortgage Services to the extent necessary through the earlier of
the expiration or termination of this Agreement.  GEMH will make a decision on or prior to the earlier of the
expiration or termination of this Agreement as to whether GEMH or any of its
Affiliates wants to

 

14

 

offer
such Fully Dedicated Transition Employees continued employment with GEMH or any
of its Affiliates.

 

(iv)                              If
neither GEMH, Mortgage Services nor any of their respective Affiliates offers
employment to such Fully Dedicated Transition Employees which is comparable to
the terms of their employment immediately prior to the end of the Term,
Mortgage Services will reimburse GEMH for all severance and employee costs, if
any, related to the termination of such Fully Dedicated Transition Employees.  For the avoidance of doubt, Mortgage
Services shall not be liable for such costs and expenses for more than six (6)
persons who hold positions set forth on Schedule C-1.  If such comparable employment is offered by either GEMH, Mortgage
Services or any of their respective Affiliates and is declined by such
employees, the employee would not be entitled to any severance benefits.  For purposes of this Section 4.02(b),
“comparable” shall be as defined in the applicable employee benefit plan of
GEMH with respect to severance benefits.

 

(c)                                  Neither
GEMH nor any of its Affiliates shall terminate employment of any Transition
Employee who is 60% or more allocated to Mortgage Entities or provision of GEMH
Services without prior written consent of Mortgage Services.

 

(d)                                 (i)                                     During
the Term, Mortgage Services will reimburse GEMH for (A) the pro-rata portion of
compensation and benefit costs and expenses incurred by GEMH and its Affiliates
for the Partially Allocated Transition Employees who are less than 100%
allocated to Mortgage Services based on actual hours worked by such Partially
Allocated Transition Employees providing GEMH Services and (B) an amount of
$500,000 per annum with respect to management oversight of employees of GEMH’s
Affiliates providing GEMH Services hereunder, allocated on pro-rata basis based
on the number of calendar days GEMH Services were actually provided.

 

(ii)                                  At
the earlier of the expiration or termination of this Agreement, Mortgage
Services will pay to GEMH an amount of $641,700 and Mortgage Services shall not
be responsible for any severance costs with respect to any Partially Allocated
Transition Employee.

 

(e)                                  During
the Term, Mortgage Services shall be responsible for all costs and expenses
incurred by GEMH, Mortgage Services and their respective Affiliates in
connection with any retention program instituted with respect to any Transition
Employee; provided that any such retention program has been authorized
in writing by the Mortgage Services Manager (or another authorized
representative of Mortgage Services or its Affiliates).

 

SECTION 4.03.                 Loan
Acquisition and Disposition Costs. 
Subject to receipt by Contract Services of reasonably detailed data and
other documentation sufficient to support the calculation of amounts due to
Mortgage Services, Contract Services shall promptly upon receipt of an invoice
from Mortgage Services (but in no event later than within seventy-five (75)
days of the date of such invoice) reimburse Mortgage Services for all
out-of-pocket costs and expenses incurred by Mortgage Services in connection
with an acquisition of any Loan and/or a disposition of any Loan by Mortgage
Services.  For the avoidance of doubt,
such out-of-pocket costs and expenses (i) shall not include the Loan
Purchase Price, any purchase price paid by

 

15

 

Mortgage
Services with respect to any Scheduled Loan, any interest expense incurred by
Mortgage Services in connection with the funding of Loans or any MS Servicing
Costs but (ii) shall include loan boarding fees payable by Mortgage
Services pursuant to the Wells Fargo Agreement or any other subservicing
agreement pursuant to which such Loan is serviced, attorneys’ fees and
expenses, custodian fees, recording and filing fees and other fees and expenses
customarily incurred in connection with an acquisition or disposition of
residential mortgage loans.  If Contract
Services fails to pay any amount payable pursuant to this Section 4.03
(excluding any amount contested in good faith) by the date specified above,
Contract Services shall be obligated to pay to Mortgage Services, in addition
to the amount due, interest on such amount at the lesser of (i) the three (3)
month London Interbank Offered Rate (LIBOR) plus 100 basis points or (ii) the
maximum rate of interest allowed by applicable Law, from the date the payment
was due through the date of payment. 
Any and all disputes with respect to this Section 4.03 shall be resolved
pursuant to Section 9.02.

 

SECTION 4.04.                 Payments of Service Charges and
Employment Costs.

 

(a)                                  Subject
to Section 4.04(iii):

 

(i)                                     all
Service Charges and Employment Costs shall be invoiced by GEMH on a quarterly
basis in arrears.

 

(ii)                                  Together
with each invoice submitted to Mortgage Services for payment pursuant to this
Section 4.04(a), GEMH shall provide Mortgage Services with reasonably detailed
data and documentation sufficient to support the calculation of any amount due
to GEMH under this Agreement for the purposes of verifying the accuracy of such
calculations.

 

(iii)                               The parties acknowledge
and agree that in the event GEMH does not provide, or cause to be provided,
GEMH Services specified in Section 3.02 and paragraph (j) of Schedule A during
the entire calendar quarter, the amount of the Facilities Fee payable with
respect to such quarterly period shall be pro-rated such that Mortgage Services
shall pay the portion of a quarterly payment that is allocable to the number of
days in such calendar quarter during which such GEMH Services were actually
provided.

 

(b)                                 (i)                                     Prior
to the Trigger Date, Mortgage Services and GEMH shall arrange for the payment
of all Service Charges and Employment Costs through the GE Internal Billing
System (“IBS”).  Mortgage
Services shall have the right to dispute any Service Charges and Employment
Costs settled through the IBS during any calendar quarter by delivering written
notice of such dispute, setting forth in reasonable detail the basis therefor,
to GEMH within, and no later than, 60 days after the end of such quarter.  If the Parties do not promptly resolve such dispute,
the dispute shall be resolved pursuant to Section 9.02.

 

(ii)                                  From
and after Trigger Date, Mortgage Services shall pay the amount of any invoice
submitted to Mortgage Services by GEMH pursuant to Section 4.04(a) in U.S.
dollars within seventy-five (75) days of the date of such invoice.  If Mortgage Services fails to pay such
amount (excluding any amount contested in good faith) by such date, Mortgage
Services shall be obligated to pay to GEMH, in addition to the amount due,
interest on such

 

16

 

amount
at the lesser of (i) the three (3) month London Interbank Offered Rate (LIBOR)
plus 100 basis points or (ii) the maximum rate of interest allowed by
applicable Law, from the date the payment was due through the date of
payment.  If Mortgage Services disputes
GEMH’s calculation of any amount due to GEMH, then the dispute shall be
resolved pursuant to Section 9.02.

 

ARTICLE
V

 

STANDARDS;
COMPLIANCE WITH LAWS

 

SECTION 5.01.                 Standards.

 

(a)                                  GEMH
agrees to perform, and cause to perform, the GEMH Services such that the
nature, quality, standard of care and the service levels at which such GEMH
Services are performed are no less than the nature, quality, standard of care
and service levels at which the substantially same services were performed by
or on behalf of GEMH during the most recent service period prior to the date
hereof in which such services were performed by or on behalf of GEMH in the
ordinary course (the “Standard for Services”).

 

(b)                                 Mortgage
Services agrees to manage and service and, to cause to manage and service the
Held Loans, such that the nature, quality, standard of care and service levels
at which Mortgage Services manages and services such Held Loans are no less
than the nature, quality, standard of care and service levels at which Mortgage
Services manages and services other loans of similar type held by Mortgage
Services for its own account (the “MS Standard”).

 

SECTION 5.02.                 Compliance with Laws.  Each of GEMH and Mortgage Services shall comply,
and shall cause to comply, with all applicable Laws (including all Finance
Laws) when providing or receiving the GEMH Services, managing or servicing the
Loans (in case of Mortgage Services) and when performing other obligations
under this Agreement.

 

ARTICLE
VI

 

PURCHASE
OF NEW LOANS AND SALE OF LOANS AND LOAN ASSETS

 

SECTION 6.01.                 Loan Schedule.  Contract Services shall, from time to time
during the Term, provide to Mortgage Services a Loan Schedule setting forth all
of the New Loans that Contract Services desires for Mortgage Services to
purchase.

 

SECTION 6.02.                 Loan
Purchase Agreement.

 

(a)                                  On
or prior to the date Contract Services delivers a Loan Schedule to Mortgage
Services, Contract Services shall designate, or cause to be designated, Mortgage
Services as a designee for the purchase of New Loans and related Loan Assets
under the applicable Underwriting/Insurance Agreement.

 

(b)                                 Mortgage
Services shall use its commercially reasonable efforts to enter into a Loan
Purchase Agreement.  Contract Services
shall use its commercially reasonable efforts to assist Mortgage Services in
the negotiations of such Loan Purchase Agreement, pursuant to

 

17

 

which
the Lender agrees to sell, transfer and assign to Mortgage Services the
applicable New Loans and the related Loan Assets and Mortgage Services agrees
to purchase and accept such Loans and the related Loan Assets on the terms and
conditions set forth therein.  The Loan
Purchase Agreement shall include (i) representations and warranties, in form
and substance reasonably satisfactory to Mortgage Services, to the effect that
the applicable New Loan and related Loan Assets comply with and do not violate
applicable Laws (including Finance Laws) and (ii) an obligation on the part of
the applicable Lender to repurchase the applicable New Loan from Mortgage
Services in the event that the Lender, inter  alia, has breached
the representation and warranty described in clause (i) above with
respect to such New Loan and the related Loan Assets.

 

SECTION 6.03.                 Agreement
to Sell and Purchase the New Loans; Assignment of Claims.

 

(a)                                  (i)                                     Subject
to the terms and provisions of this Agreement, Mortgage Services agrees to
purchase and accept on a Loan Closing Date from a Lender, the New Loans and the
related Loan Assets set forth on the applicable Loan Schedule and with respect
to which the conditions set forth in Section 6.05 have been satisfied or waived
by Mortgage Services in accordance therewith; provided that the
applicable Lender sells, transfers and assigns to Mortgage Services such Loans
and the related Loan Assets free and clear of all Liens.

 

(ii)                                  Mortgage
Services agrees that upon request of Contract Services on or prior to the
applicable Loan Closing Date, Mortgage Services shall assign, on the Loan
Closing Date, its rights and claims pursuant to the applicable Loan Agreement
(the “Claims”), if any, against any Person other than any Mortgage
Entity, Contract Services or any of their respective Affiliates, solely with respect
to any event, occurrence or circumstance that gave rise to the exercise by
Contract Services of its option to purchase the applicable Loan from the
applicable Lender; provided, however, (A) for the avoidance
of doubt, the Claims shall not include any rights, title or interest of any
Person in any document, agreement, instrument or property that secures the
obligations of the borrower or any guarantor with respect to the Loan or
evidences such security; and (B) Mortgage Services shall not be required to
assign any Claims, the assignment of which to Contract Services, in the
reasonable judgment of Mortgage Services, would violate any applicable Law
(including any Finance Law); (C) during the period that any such Loan is a
Held Loan, (1) Contract Services shall comply with all applicable Laws
(including Finance Laws) in enforcing or pursuing any of its Claims against the
applicable Person, (2) in the event Mortgage Services determines that Contract
Services actions or omissions, with respect to any Claim including enforcement
and exercise thereof do not comply with or violate any applicable Law
(including any Finance Law), upon notice from Mortgage Services, Contract
Services shall cease and desist, or cause to cease and desist, such action or
undertake such action as necessary to comply with applicable Law,
(3) Contract Services shall not undertake any foreclosure action with
respect to any borrower or guarantor under such Loan or Loan Assets;
(4) Contract Services shall not enforce or pursue any of its Claims to any
detriment of any Mortgage Entity or any of its Affiliates, and (5) such
Claims shall not be transferred or assigned by Contract Services to any Person;
and (D) in additional but not in limitation of Section 8.04, Contract
Services shall indemnify, defend and hold harmless Mortgage Services
Indemnified Parties from and against any and all Liabilities incurred or
suffered by any Mortgage Services Indemnified Party relating to, arising out
of, or resulting from

 

18

 

the
assignment of the Claims to Contract Services and any action or omission of
Contract Services or any of its Representatives, including in connection with
enforcement and/or exercise of any such assigned Claims.

 

(iii)                               Contract Services
acknowledges that Mortgage Services would be irreparably harmed by any breach
of Section 6.03(a)(ii) and that there would be no adequate remedy at law or in
damages to compensate Mortgage Services for any such breach.  Contract Services agrees that Mortgage
Services shall be entitled to seek injunctive relief requiring specific
performance by Contract Services of its obligations under Section 6.03(a)(ii).

 

(b)                                 Notwithstanding
any provision of Section 6.03(a) to the contrary, Mortgage Services shall have
no obligation pursuant to this Agreement to purchase:

 

(i)                                     at
a Loan Closing, any New Loan or any Loan Assets other than the New Loans set
forth on the applicable Loan Schedule and the Loan Assets related to such New
Loans, in all cases with respect to which the conditions set forth in Section
6.05 have been satisfied or waived by Mortgage Services in accordance
therewith.

 

(ii)                                  any
New Loan or any related Loan Asset, which New Loan or Loan Asset in the
reasonable judgment of Mortgage Services does not comply with or violates
applicable Law (including any Finance Law);

 

(iii)                               any New Loan or any
related Loan Asset if, after giving effect to such purchase, Mortgage Services
would hold Held Loans and REOs with respect to which the Net Amount exceeds
$100,000,000;

 

(iv)                              any
loan other than the New Loans; and

 

(v)                                 any
New Loan or any related Loan Assets in the event Mortgage Services and the
applicable Lender are unable to enter into the Loan Purchase Agreement within
90 Business Days of receipt by Mortgage Services of the applicable Loan
Schedule (or such other period as the parties thereto may mutually agree).

 

(c)                                  Contract
Services hereby acknowledges and agrees that any and all amounts payable by any
Person (other than Mortgage Services) with respect to, in connection with or
pursuant to the New Loans and the related Loan Assets acquired by Mortgage
Services pursuant to this Agreement (other than amounts payable with respect to
the Claims assigned to Contract Services pursuant to Section 6.03(a)(ii)) with
respect to any period after the applicable Loan Closing and any and all
disposition proceeds with respect to such New Loans and the related Loan Assets
shall be the property of Mortgage Services.

 

(d)                                 All
amounts which are received by Contract Services or any of its Affiliates in
respect of the New Loans and the related Loan Assets (other than with respect
to any amounts received with respect to the Claims assigned to Contract
Services pursuant to Section 6.03(a)(ii)) acquired pursuant to this Agreement
from and after the applicable Loan Closing which are properly allocable to
periods after the applicable Loan Closing shall be received by such Person as
agent, in trust for and on behalf of Mortgage Services, and following the
applicable Loan Closing, on a weekly basis, Contract Services shall transfer,
or cause to be

 

19

 

transferred,
by wire transfer of immediately available funds, and remit (or cause to be
remitted) to Mortgage Services all such amounts received by or paid to Contract
Services or any of its Affiliates as of such date and shall provide Mortgage
Services information as to the nature and source of such payments, including
any invoice related thereto.

 

SECTION 6.04.                 Loan Purchase Price.  On the Loan Closing Date, Mortgage Services
shall pay to the Lender the aggregate amount of the Loan Purchase Price set
forth in the Loan Purchase Agreement with respect to the New Loans being
purchased at such Loan Closing.

 

SECTION 6.05.                 Conditions Precedent.  With respect to any Loan Closing, the
obligations of Mortgage Services under Sections 6.03 and 6.04 shall be subject
to the satisfaction or waiver in writing by Mortgage Services, on or prior to
such Loan Closing of the following conditions:

 

(a)                                  The
obligations of Contract Services required to be performed by it at or prior to
a Loan Closing pursuant to the terms of this Article VI shall have been duly
performed and complied with and all representations and warranties of Contract
Services under this Agreement and all representations and warranties of the
Lender under the Loan Purchase Agreement shall be true and correct as of the
applicable Loan Closing Date with the same force and effect as though such
representations and warranties had been made as of such date.

 

(b)                                 Mortgage
Services shall have received, all of the following documents and instruments
(the “Loan Closing Documents”), duly executed by all signatories other
than Mortgage Services as required pursuant to the respective terms thereof:

 

(i)                                     Loan
Schedule;

 

(ii)                                  Loan
Purchase Agreement; and

 

(iii)                               Loan File.

 

SECTION 6.06.                 Right of First
Refusal.  If at any time during the
Term, Mortgage Services presents to Contract Services a Bone Fide Offer with
respect to any Loan or Loan REO, Contract Services may, by written notice to
Mortgage Services within five (5) Business Days of receipt of such Bona-Fide
Offer, elect to purchase such Loan or Loan REO, as the case may be at the
purchase price offered by the offeror of such Bona Fide Offer (“Bona Fide
Purchase Price”) and (a) upon receipt of the amount equal to the Bone Fide
Purchase Price, Mortgage Services shall sell, transfer and assign to Contract
Services or its designee (i) such Loan and the related Loan Assets or Loan REO,
as the case may be, on “AS-IS, WHERE IS” basis without any representations or
warranties (except for a representation and warranty that such Loans and the
related Loan Assets or Loan REO, as applicable, are being sold, transferred and
assigned free and clear of Liens that have been created by Mortgage Entities
(other than the Permitted Liens)) and (ii) any and all rights of Mortgage
Services under the applicable Loan Purchase Agreement to the extent such rights
are assignable and (b) Contract Services or its designee shall (i) purchase and
accept such Loans and the related Loan Assets or Loan REOs, as the case may be,
and (ii) assume all Liabilities with respect to such Loans and related Loan
Assets or Loan REOs, as the case may be arising from and after such sale,
transfer and assignment.

 

20

 

SECTION 6.07.                 Repurchase of
Loans.  Upon expiration or early
termination of this Agreement or of Article VI pursuant to Section 10.01, (a)
subject to receipt of the payment set forth in clause (b)(iii) below, Mortgage
Services shall sell, transfer and assign, or shall cause its Subsidiaries to
sell, transfer and assign to Contract Services or its designee, (i) any and all
Held Loans and the related Loan Assets and Loan REOs, on “AS-IS, WHERE IS”
basis without any representations or warranties (except for a representation
and warranty that such Loans, related Loan Assets and Loan REOs are being sold,
transferred and assigned free and clear of Liens that have been created by
Mortgage Entities other than the Permitted Liens)) and (ii) any and all rights
of Mortgage Services under the applicable Loan Purchase Agreement to the extent
such rights are assignable and (b) Contract Services or such designee shall (i)
purchase and accept such Loans, related Loan Assets and Loan REOs, (ii) assume
all Liabilities with respect to such Loans, the related Loan Assets and Loan
REOs arising from and after such sale, transfer and assignment and (iii) pay
Mortgage Services an amount equal to the Fair Market Value of such Held Loans
and Loan REOs in immediately available funds to the account designated in
writing by Mortgage Services at least two Business Days prior to such sale,
transfer and assignment.  For the
avoidance of doubt, in connection with any sale, transfer or assignment of any
Loan or Loan REOs, pursuant to this Section 6.07, Mortgage Services shall sell,
transfer and assign any and all rights of Mortgage Services to service such
Loans and Loan REOs.

 

SECTION 6.08.                 Transition
Assistance.  Upon request of
Contract Services, Mortgage Services shall provide, or cause to be provided,
reasonable assistance to Contract Services to transition the management and
servicing of the Loans, the related Loan Assets and Loan REOs that are being
purchased by Contract Services from Mortgage Services pursuant to Sections 6.06
and 6.07; provided, however, that the provision of such
assistance shall not impose undue burden on the operations of Mortgage
Entities.  Contract Services shall pay
for all out-of-pocket costs and expenses incurred by Mortgage Entities and its
Affiliates as a result of the provision by Mortgage Entities and its Affiliates
of such assistance; provided that such costs and expenses have been
authorized in writing in advance by the GEMH Manager (or an authorized representative
of Contract Services).  Notwithstanding
the foregoing, Mortgage Services shall have no obligation to provide, or cause
to be provided, the above mentioned assistance to the extent that GEMH or an
authorized representative of Contract Services fails to authorize such costs
and expenses necessary for Mortgage Entities and its Affiliates to incur in
order to provide such assistance.

 

SECTION 6.09.                 Further
Assurances.  In addition to the
foregoing, Contract Services shall, and shall cause its Subsidiaries and
designees to, whenever and as often as reasonably requested to do so by
Mortgage Services, do, execute, acknowledge and deliver any and all such other
and further acts, assignments, transfers and any instruments of further
assurance, approvals and consents as are necessary or proper in order to
complete, ensure and perfect the sale, transfer and assignment to Mortgage
Services contemplated hereby of the applicable Loans and the related Loan
Assets and the consummation of the other transactions contemplated hereby.

 

21

 

ARTICLE
VII

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 7.01.                 Representations
and Warranties of Mortgage Services. 
Mortgage Services represents and warrants to GEMH Parties that (a)
Mortgage Services has the full corporate power and authority required to enter
into, execute, deliver, and fully perform under, this Agreement and that to do
so will not violate or conflict with any material term or provisions of any
agreement, instrument, order or decree to which it is a party or by which it is
bound and (b) Mortgage Services has obtained all Governmental Approvals and
consents from other Persons, if any, necessary for Mortgage Services to perform
its obligations under this Agreement.

 

SECTION 7.02.                 Representation
and Warranties of GEMH Parties. 
Each GEMH Party represents and warrants to Mortgage Services that (a)
such GEMH Party has the full corporate power and authority required to enter
into, execute, deliver, and fully perform under, this Agreement and that to do
so will not violate or conflict with any material term or provisions of any
agreement, instrument, order or decree to which it is a party or by which it is
bound and (b) such GEMH Party and its Affiliates (as applicable) have obtained
all Governmental Approvals and consents from other Persons, if any, necessary
or required for such GEMH Party or its Affiliates to perform its obligations
under this Agreement.

 

SECTION 7.03.                 Survival.  The representations and warranties set forth
in this Article VII shall survive for a period of eighteen (18) months
after the date hereof.

 

ARTICLE
VIII

 

INDEMNIFICATION; LIMITATION ON LIABILITY

 

SECTION 8.01.                 Limited
Liability.

 

(a)                                  Notwithstanding
the provisions of Section 5.01, neither GEMH nor any of its Affiliates, any of
their respective directors, officers or employees, nor any of the heirs,
executors, successors nor assigns of any of the foregoing (each, a “GEMH
Indemnified Party”) shall have any liability in contract, tort or otherwise
to any Mortgage Services Indemnified Party or its Representatives for or in
connection with (i) any GEMH Services rendered or to be rendered by any GEMH
Indemnified Party pursuant to this Agreement, (ii) the transactions
contemplated by this Agreement or (iii) any GEMH Indemnified Party’s actions or
inactions in connection with any such GEMH Services or such transactions; provided,
however, that such limitation on liability shall not extend to or
otherwise limit any Liabilities that have resulted directly from such GEMH
Indemnified Party’s (A) gross negligence or willful misconduct, (B) improper
use or disclosure of information of, or regarding, a customer or potential
customer of a Mortgage Services Indemnified Party (defined below) or (C)
violation of applicable Law.  Notwithstanding
the foregoing, this Section 8.01(a) shall not be applicable to any
indemnification obligation of GEMH and Contract Services pursuant to Section
6.03(a)(ii) and Section 8.04 and any payment obligations of any GEMH Parties
pursuant to this Agreement, including pursuant to Sections 4.03, 6.03(a)(ii),
6.06, 6.07, 6.08 and Article XI.

 

22

 

(b)                                 Notwithstanding
the provisions of Section 5.01, neither Mortgage Services nor any of its
Affiliates, any of their respective directors, officers or employees, nor any
of the heirs, executors, successors nor assigns of any of the foregoing (each,
a “Mortgage Services Indemnified Party”) shall have any liability in
contract, tort or otherwise to any GEMH Indemnified Party or its
Representatives for or in connection with (i) the MS Services, (ii) the
transactions contemplated by this Agreement or (iii) any Mortgage Services
Indemnified Party’s actions or inactions in connection with any such MS
Services or such transactions; provided,  however, that such
limitation on liability shall not extend to or otherwise limit any Liabilities
that have resulted directly from such Mortgage Services Indemnified Party’s (A)
gross negligence or willful misconduct, (B) improper use or disclosure of
information of, or regarding, a customer or potential customer of a GEMH
Indemnified Party or (C) violation of applicable Law.  Notwithstanding the foregoing, this Section 8.01(b) shall not be
applicable to any payment obligations of Mortgage Services pursuant to this
Agreement, including pursuant to Article IV.

 

SECTION 8.02.                 Indemnification by GEMH.  In addition and not in limitation of Section
8.04:

 

(a)                                  GEMH
shall indemnify, defend and hold harmless each Mortgage Services Indemnified Party
from and against any and all Liabilities incurred or suffered by any Mortgage
Services Indemnified Party relating to, arising out of, or resulting from (i)
the gross negligence or willful misconduct of a GEMH Indemnified Party in
connection with the transactions contemplated by this Agreement or such GEMH
Indemnified Party’s provision of the GEMH Services, (ii) the improper use or
disclosure of information of, or regarding, a customer or potential customer of
a Mortgage Services Indemnified Party in connection with the transactions
contemplated by this Agreement or such GEMH Indemnified Party’s provision of
the GEMH Services, or (iii) any violation of applicable Law by a GEMH
Indemnified Party in connection with the transactions contemplated by this Agreement
or such GEMH Indemnified Party’s provision of the GEMH Services.

 

(b)                                 GEMH
shall indemnify, defend and hold harmless each Mortgage Services Indemnified
Party from and against any and all Liabilities incurred or suffered by any
Mortgage Services Indemnified Party relating to, arising out of, or resulting
from the provision of the MS Services by Mortgage Services or any of its
Subsidiaries, except for (A) any Liabilities that result from a Mortgage
Services Indemnified Party’s negligence in connection with the provision of the
MS Services, (B) any Liabilities that result from a Mortgage Services
Indemnified Party’s breach of this Agreement or (C) any Liabilities for which
Mortgage Services is required to indemnify a GEMH Indemnified Party pursuant to
Section 8.03.

 

(c)                                  Notwithstanding
the foregoing, the aggregate liability of GEMH pursuant to this Section 8.02
shall in no event exceed the aggregate amount of $10,000,000.

 

SECTION 8.03.                 Indemnification by Mortgage
Services.

 

(a)                                  Mortgage
Services shall indemnify, defend and hold harmless each GEMH Indemnified Party
from and against any and all Liabilities incurred or suffered by any GEMH
Indemnified Party relating to, arising out of, or resulting from (i) the gross
negligence or willful misconduct of a Mortgage Services Indemnified Party or
any of its Representatives in

 

23

 

connection
with the transactions contemplated by this Agreement or such Mortgage
Indemnified Party’s provision of the MS Services, (ii) the improper use or
disclosure of information of, or regarding, a customer or potential customer of
a GEMH Indemnified Party in connection with the transactions contemplated by
this Agreement or such Mortgage Services Indemnified Party’s provision of the MS
Services, or (iii) any violation of applicable Law by a Mortgage Services
Indemnified Party in connection with the transactions contemplated by this
Agreement or such Mortgage Services Indemnified Party’s provision of the MS
Services.

 

(b)                                 Mortgage
Services shall indemnify, defend and hold harmless each GEMH Indemnified Party
from and against any and all Liabilities incurred or suffered by any GEMH
Indemnified Party relating to, arising out of, or resulting from the provision
of the GEMH Services by GEMH or any of its Subsidiaries, except for (A) any
Liabilities that result from a GEMH Indemnified Party’s negligence in
connection with the provision of the GEMH Services, (B) any Liabilities that
result from a GEMH Indemnified Party’s breach of this Agreement or (C) any
Liabilities for which GEMH is required to indemnify a Mortgage Services
Indemnified Party pursuant to Section 8.02.

 

(c)                                  Notwithstanding
the foregoing, the aggregate liability of Mortgage Services pursuant to this
Section 8.03 shall in no event exceed the aggregate amount of $10,000,000.

 

SECTION 8.04.                 Loans and Loan Assets
Indemnification.

 

(a)                                  Notwithstanding
any provision to the contrary in this Agreement (including Section 8.01),
Contract Services shall indemnify, defend and hold harmless each Mortgage
Services Indemnified Party from and against any and all Liabilities incurred or
suffered by any Mortgage Services Indemnified Party relating to, arising out
of, or resulting from or in connection with the Loans, the Loan Assets or any
Mortgaged Property (including arising out of or resulting from any
noncompliance or violation of Environmental Laws of any applicable Mortgaged
Property) or any matters set forth in Section 4.03 and Article VI; provided,
however, that GEMH shall not have any liability under this Section 8.04
with respect to Liabilities that have resulted directly from Mortgage Services
Indemnified Party’s (A) gross negligence or willful misconduct, (B) improper
use or disclosure of information of, or regarding, a customer or potential
customer of Mortgage Services Indemnified Party or (C) violation of applicable
Law.  For the avoidance of doubt, (i)
Liabilities for which Contract Services shall indemnify, defend and hold
harmless pursuant to this Section 8.04 shall include (x) any and all
Liabilities resulting from the failure of Mortgage Services to receive any
amounts (including interest and late fees) payable with respect to any Loan
and/or Loan Asset pursuant to the applicable documents, agreements and
instruments that constitute Loan Assets, including failure resulting from any
breach of representation or warranty or covenant made by Contract Services in
this Agreement and/or by the applicable Lender in the applicable Loan Purchase
Agreement, (y) the Deficiency Amount and (z) any and all Liabilities that would
have been payable to Mortgage Services pursuant to the Indemnification
Agreement had such Indemnification not been terminated, except to the extent
Mortgage Services has previously been indemnified for such Liabilities pursuant
to the Indemnification Agreement and (ii) shall exclude any and all MS
Servicing Costs, the Loan Purchase Price, the amounts paid as purchase price
with respect to any

 

24

 

Scheduled
Loan and any and all interest expense incurred by Mortgage Services in
connection with the funding of any of the Loans.

 

SECTION 8.05.                 Indemnification Procedures.

 

(a)                                  The
matters set forth in Sections 5.6 through 5.9 of the Master Agreement shall be deemed incorporated into, and a
made a part of, this Agreement.

 

(b)(i)                      Notwithstanding
any provision to the contrary in this Agreement or in the Master Agreement, any
Liability subject to indemnification or contribution pursuant to this
Article VIII will be net of Wells Fargo Proceeds that actually reduce the
amount of such Liability.  Accordingly,
the amount which any Indemnifying Party is required to pay to any Indemnified
Party will be reduced by any Wells Fargo Proceeds theretofore actually
recovered by or on behalf of the Indemnified Party in respect of the related
Liability.  If an Indemnified Party
receives an Indemnity Payment required by this Agreement from an Indemnifying
Party in respect of any Liability and subsequently receives Wells Fargo
Proceeds with respect to such Liability, then the Indemnified Party will pay to
the Indemnifying Party an amount equal to the excess of the Indemnity Payment
received over the amount of the Indemnity Payment that would have been due if
such Wells Fargo Proceeds had been received, realized or recovered before the
Indemnity Payment was made.

 

(ii)                                  The
Indemnified Party shall use its commercially reasonable efforts to seek to
collect or recover from Wells Fargo the amounts due to such Indemnified Party
pursuant to Section 7.2 of the Wells Fargo Agreement to which the Indemnified
Party is entitled in connection with any Liability for which the Indemnified
Party seeks indemnification pursuant to this Article VIII; provided
that the Indemnified Party’s inability to collect or recover any such amounts
shall not limit the Indemnifying Party’s obligations hereunder.

 

SECTION 8.06.                 Limitation
on Liability.  Notwithstanding any
other provision contained in this Agreement, neither GEMH Parties, on the one
hand, nor Mortgage Services, on the other hand, shall be liable to the other
for any special, indirect, punitive, incidental or consequential losses,
damages or expenses of the other, including loss of profits, arising from any
claim relating to breach of this Agreement or otherwise relating to any of the
GEMH Services or MS Services provided hereunder.  For clarification purposes only, the Parties agree that the
limitation on liability contained in this Section 8.06 shall not apply to (a)
damages awarded to a third party pursuant to a third party claim for which GEMH
is required to indemnify, defend and hold harmless any Mortgage Services
Indemnified Party under Section 8.02, (b) damages awarded to a third party
pursuant to a third party claim for which Mortgage Services is required to
indemnify, defend and hold harmless any GEMH Indemnified Party under Section
8.03, (c) damages awarded to a third party pursuant to a third party claim for
which Contract Services is required to indemnify, defend and hold harmless any
Mortgage Services Indemnified Party under Section 8.04 or that are payable by
Genworth pursuant to Article XI, (d) any and all Liabilities resulting from the
failure of Mortgage Services to receive any amounts (including interest and
late fees) payable with respect to any Loan and/or Loan Asset pursuant to any
document, agreement or instrument that constitutes a Loan Asset, including the
failure resulting from any breach of representation or warranty or covenant
made by GEMH Party in

 

25

 

this
Agreement and/or by the applicable Lender in the applicable Loan Purchase
Agreement and (e) any Deficiency Amount.

 

SECTION 8.07.                 Liability for Payment Obligations.  Nothing in this Article VIII shall be deemed
to eliminate or limit, in any respect, any Party’s payment obligations as
expressly set forth in this Agreement.

 

ARTICLE
IX

 

DISPUTE RESOLUTION

 

SECTION 9.01.                 Applicable Law.  This Agreement shall be governed by and
construed and interpreted in accordance with the Laws of the State of New York
irrespective of the choice of Laws principles of the State of New York other
than Section 5-1401 of the General Obligations Law of the State of New York.

 

SECTION 9.02.                 Dispute Resolution.  To the extent not resolved through
discussions between the GEMH Manager and the Mortgage Services Manager, any
dispute, controversy or claim arising out of, or relating to, the transactions
contemplated by this Agreement, or the validity, interpretation, breach or
termination of any provision of this Agreement, or the calculation or
allocation of the costs of any GEMH Service, shall be resolved in accordance
with Article VII of the Master Agreement.

 

ARTICLE X

 

TERMINATION

 

SECTION 10.01.           Termination.

 

(a)                                  The
term of this Agreement shall commence on the date hereof and, unless earlier
terminated pursuant to this Section 10.01(a), expire on December 31, 2005 (the
“Term”).  This Agreement shall
terminate with respect to each GEMH Service on the applicable Service
Termination Date or other termination date specified in this Agreement or the
Schedules hereto.  In addition, (i)
Mortgage Services may from time to time terminate any GEMH Service, in whole or
in part, upon giving at least sixty (60) days’ (or such shorter period of time
as is mutually agreed upon in writing by the parties) prior written notice to
GEMH specifying which GEMH Service is being so terminated (such termination
will not in any way affect the obligations of the party terminating this
Agreement with respect to such GEMH Service to continue to receive all other GEMH
Services not so terminated and to continue to provide such other GEMH Services
as required by this Agreement); (ii) either party (the “Non-Breaching Party”)
may terminate this Agreement with respect to any GEMH Service, in whole or in
part, at any time upon prior written notice by the Non-Breaching Party to the
other party (the “Breaching Party”) if the Breaching Party has failed to
perform any of its material obligations under this Agreement relating to such
GEMH Service, and such failure shall have continued without cure for a period
of sixty (60) days after receipt by the Breaching Party of a written notice of
such failure from the Non-Breaching Party seeking to terminate such GEMH
Service and (iii) Mortgage Services may terminate this Agreement with respect
to its obligations pursuant to Section 2.03 and Article VI,

 

26

 

in
whole but not in part, at any time upon prior written notice to Contract
Services if Contract Services has failed to perform any of its material
obligations pursuant to Article VI or Section 8.04 or any of its other material
obligations pursuant to this Agreement, in each case relating to the Loans and
the related Loan Assets purchased by Mortgage Services pursuant to this
Agreement and Loan REOs, and such failure shall have continued without cure for
a period of sixty (60) days after receipt by Contract Services of a written
notice of such failure from Mortgage Services seeking to terminate its
obligations pursuant to Section 2.03 and Article VI; provided,  however,
that (x) no GEMH Service may be terminated pursuant to Section 10.01(a)(ii) and
(y) no obligations of Mortgage Services pursuant to Section 2.03 and Article VI
may be terminated pursuant to Section 10.01(a)(iii), until the parties have
completed the dispute resolution process set forth in Section 7.2 of the
Master Agreement.

 

(b)                                 In
addition to and not in limitation of the rights and obligations set forth in
Section 2.01(e), upon the request of Mortgage Services, (i) GEMH will, during
the Term cooperate with Mortgage Services and use its good faith, commercially
reasonable efforts to assist the transition of such GEMH Service to Mortgage
Services (or Affiliate of Mortgage Services or such third-party vendor
designated by the Mortgage Services) by the Service Termination Date for such
GEMH Service and (ii) GEMH will, for a reasonable period of time after the
effective date of any termination (which shall not exceed six months after the
effective date of termination) of any such GEMH Service pursuant to Section
10.01(a)(ii) above, (A) at the written request of Mortgage Services, continue
to provide the terminated GEMH Service (subject to the timely payment, when due
and payable, by Mortgage Services of all Service Charges and Employment Costs
related to such terminated GEMH Service) and (B) cooperate with Mortgage
Services and use its good faith, commercially reasonable efforts to assist the
transition of such GEMH Service to Mortgage Services (or Affiliate of Mortgage
Services or such third-party vendor designated by Mortgage Services) as soon as
reasonably practicable.  The Service
Charges and Employment Costs for a terminated GEMH Service that is continuing
to be provided pursuant to clause (ii)(A) of the preceding sentence shall be
calculated consistent with the basis on which such Service Charges and
Employment Costs were calculated prior to the termination of such GEMH Service.

 

SECTION 10.02.           Effect of Termination.

 

(a)                                  Except
with respect to any GEMH Service that is continuing to be provided pursuant to
Section 10.01(b)(ii)(A) above after the termination of such GEMH Service, upon
termination or expiration of any GEMH Service pursuant to this Agreement, GEMH
will have no further obligation to provide the terminated GEMH Service, and
Mortgage Services will have no obligation to pay any future Service Charges and
Employment Costs relating to any such GEMH Service (other than for GEMH
Services provided in accordance with the terms of this Agreement and received
by Mortgage Services prior to such termination).

 

(b)                                 Upon
termination of this Agreement with respect to the obligations of Mortgage
Services pursuant to Section 2.03 and Article VI, Mortgage Services shall have
no further obligation to undertake the undertaking set forth in Section 2.03
and Article VI, except for the sale, transfer and assignment of the Loans and
Loan REOs as set forth in Section 6.07. 
Upon payment of the amounts set forth in Section 6.07, Contract Services
shall have no further obligation under Article VI (other than the obligation
pursuant Section 6.03(a)(ii)).

 

27

 

SECTION 10.03.           Survival.  Section 3.01 (Computer-Based Resources),
Article IV (Costs and Disbursements), Section 6.03(a)(ii) (Claims), Section 6.07
(Repurchase of Loans), Article VIII (Indemnification; Limitation on Liability),
Article IX (Dispute Resolution), Section 10.01(b) (Termination), Section 10.02
(Effect of Termination), this Section 10.03 (Survival), Article XI (Guaranty),
and Article XII (General Provisions) shall survive the expiration or other
termination of this Agreement and remain in full force and effect.

 

SECTION 10.04.           Business Continuity; Force Majeure.

 

(a)                                  GEMH
shall maintain and comply with reasonable disaster recovery, crisis management
and business continuity plans and procedures designed to help ensure that it
can continue to provide the GEMH Services in accordance with this Agreement in
the event of a disaster or other significant event that might otherwise impact
its operations.  Upon the written
request of Mortgage Services, GEMH shall (i) disclose to Mortgage Services
GEMH’s disaster recovery, crisis management and business continuity plans and
procedures applicable to a GEMH Service and (ii) permit Mortgage Services to
participate in testing of such disaster recovery, crisis management and
business continuity plans and procedures, in each case so that Mortgage
Services may assess such plans and procedures and develop or modify its own
such plans and procedures in connection with the GEMH Service as Mortgage
Services reasonably deems necessary.

 

(b)                                 No
Party (or any Person acting on its behalf) shall have any liability or
responsibility for failure to fulfill any obligation (other than a payment
obligation) under this Agreement so long as and to the extent to which the
fulfillment of such obligation is prevented, frustrated, hindered or delayed as
a consequence of circumstances of Force Majeure; provided that such
party shall have exhausted the procedures described in its disaster recovery,
crisis management, and business continuity plan.  A party claiming the benefit of this provision shall, as soon as
reasonably practicable after the occurrence of any such event:  (i) notify the other party of the nature and
extent of any such Force Majeure condition and (ii) use commercially reasonable
efforts to remove any such causes and resume performance under this Agreement
as soon as feasible.

 

ARTICLE
XI

 

GUARANTY

 

SECTION 11.01.           Guaranty.  Genworth hereby unconditionally and irrevocably
guarantees the full and prompt satisfaction, payment and performance of all
liabilities and obligations of Contract Services pursuant to this Agreement,
including Section 8.04, to any and all of the Mortgage Services Indemnified
Parties, in each case whether such liabilities or obligations are now or
hereafter existing, and any and all reasonable costs and expenses (including
fees and expenses of counsel) incurred by the Mortgage Services Indemnified
Parties in enforcing any of their respective rights under this Agreement with
respect to obligations of Contract Services and Genworth (including in
enforcing any rights under this Article XI) (the “Guaranteed Obligations”).  The guaranty set forth in this Article XI
(the “Guaranty”) is an absolute, present and continuing guaranty of
payment and performance and not

 

28

 

a
guaranty of collection only and is in no way conditional or contingent upon any
attempt to collect from Contract Services or any other guarantor in respect of
the Guaranteed Obligations.

 

SECTION 11.02.           Guaranty Absolute.  Genworth guaranties that the Guaranteed
Obligations will be satisfied strictly in accordance with the terms of this
Agreement, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Mortgage Services Indemnified Parties with respect thereto.  Genworth’s undertakings and obligations
hereunder are a derivative of, and not in excess of the Guaranteed
Obligations.  The liability of Genworth
under this Guaranty shall be absolute and unconditional irrespective of:

 

(a)                                  any
lack of validity or enforceability of any provision of this Agreement, any
other agreement or instrument relating to this Agreement, or avoidance or
subordination of any of the Guaranteed Obligations;

 

(b)                                 any
change in or any other amendment or waiver of any term of, or any consent to
departure from any requirement of, this Agreement (other than this Article XI);

 

(c)                                  any
release or amendment or waiver of any term of any other guaranty of, or any
consent to departure from any requirement of any other guaranty of, all or any
of the Guaranteed Obligations;

 

(d)                                 the
absence of any attempt to collect any of the Guaranteed Obligations from
Contract Services or from any other guarantor or any other action to enforce
the same or the election of any remedy by any of Mortgage Services Indemnified
Parties;

 

(e)                                  any
waiver, consent, extension, forbearance or granting of any indulgence by any of
Mortgage Services Indemnified Parties with respect to any provision of this
Agreement (other than this Article XI);

 

(f)                                    the
election by any of Mortgage Services Indemnified Parties in any proceeding
under chapter 11 of Title 11 of the United States Code (together with any
successor thereto, the “Bankruptcy Code”) of the application of section
1111(b)(2) of the Bankruptcy Code;

 

(g)                                 the
disallowance, under section 502 of the Bankruptcy Code, of all or any portion
of the claims of any of the Mortgage Services Indemnified Parties for payment
or performance of any of the Guaranteed Obligations; or

 

(h)                                 any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.

 

SECTION 11.03.           Waiver.

 

(a)                                  Genworth
hereby (i) waives (A) promptness, diligence, notice of acceptance and any and
all other notices with respect to any of the Guaranteed Obligations or this
Article XI, (B) any requirement that any of the Mortgage Services Indemnified
Parties exhaust any right or take any action against Contract Services or any
other Person, (C) the filing

 

29

 

of
any claim with a court in the event of receivership or bankruptcy of Contract
Services, (D) protest or notice of protest with respect to nonpayment or
non-performance of all or any of the Guaranteed Obligations, and (E) all
demands whatsoever (and any requirement that same be made on any Person as a
condition precedent to Genworth’s obligations hereunder); and (ii) covenants and
agrees that, this Guaranty will not be discharged except by complete
performance of the Guaranteed Obligations and any other obligations of Genworth
contained herein.

 

(b)                                 If,
in the exercise of any of its rights and remedies, any of the Mortgage Services
Indemnified Parties shall forfeit any of its rights or remedies, including its
right to enter a deficiency judgment against Contract Seller or any other
Person, whether because of any applicable law pertaining to “election of
remedies” or similar doctrine, Genworth hereby consents to such action by such
Mortgage Services Indemnified Party and waives any claim based upon such
action.  Any election of remedies which
results in the denial or impairment of the right of such Mortgage Services
Indemnified Party to seek a deficiency judgment against Contract Services shall
not impair the obligation of Genworth to pay the full amount of the Guaranteed
Obligations or any other obligation of Genworth contained herein.

 

(c)                                  Genworth
consents and agrees that the Guarantied Parties shall be under no obligation to
marshall any assets in favor of the Guarantor or otherwise in connection with
obtaining payment of any or all of the Guaranteed Obligations from any Person
or source.

 

Until
the indefeasible payment in full in cash and the full performance of all of the
Guaranteed Obligations, Genworth waives and relinquishes any and all rights
which it may acquire against Contract Services by way of subrogation,
contribution or reimbursement by reason of this Guaranty or by any payment made
hereunder.

 

ARTICLE
XII

 

GENERAL PROVISIONS

 

SECTION 12.01.           GEMH Manager.  Promptly after the date hereof, GEMH will
designate a dedicated services account manager (the “GEMH Manager”) who
will be directly responsible for coordinating and managing the delivery of the
GEMH Services and will have authority to act on GEMH Party’s behalf with
respect to the GEMH Services and other obligations of GEMH under this
Agreement.  The GEMH Manager will work
with Mortgage Services Manager to address the Mortgage Services’ issues and the
Parties’ relationship under this Agreement.

 

SECTION 12.02.           Mortgage Services Manager; Functional
Leaders.

 

(a)                                  Promptly
after the date hereof, Mortgage Services will identify an employee of Mortgage
Services or of its Affiliates (the “Mortgage Services Manager”) who will
be the transition leader and have authority to act on Mortgage Services behalf
with respect to the GEMH Services and obligations of Mortgage Services under
this Agreement.  The Mortgage Services
Manager will work with the GEMH Manager to address GEMH’s issues and the
Parties’ relationship under this Agreement.

 

30

 

(b)                                 On
or prior to June 30, 2005, Mortgage Services shall identify functional leaders
who will commence the transition of GEMH Services from GEMH to Mortgage
Services or a supplier designated by Mortgage Services.

 

SECTION 12.03.           Independent
Contractors.  Each Party shall act
solely as independent contractor and nothing in this Agreement shall constitute
or be construed to be or create a partnership, joint venture, or
principal/agent relationship between GEMH Parties, on the one hand, and
Mortgage Services, on the other.  Except
as set forth in Section 4.02, all Persons employed by GEMH or any of its
Affiliates in the performance of its obligations under this Agreement shall be
the sole responsibility of GEMH and all Persons employed by Mortgage Services
in performance of its obligations under this Agreement shall be the sole
responsibility of Mortgage Services.

 

SECTION 12.04.           Subcontractors.  Any Party may hire or engage one or more
subcontractors to perform any or all of its obligations under this Agreement; provided
that (a) GEMH shall in all cases remain liable for all its obligations under
this Agreement, including with respect to the scope of the GEMH Services, the
Standard for Services and the content of the GEMH Services provided to Mortgage
Services and (b) Mortgage Services shall in all cases remain liable for all its
obligations under this Agreement, including with respect to the scope and
content of its management and servicing of the Loans and the MS Standard.  Under no circumstances shall Mortgage
Services be responsible for making any payments directly to any subcontractor
engaged by any GEMH Party or any GEMH Party be responsible for making any
payments directly to any subcontractor engaged by Mortgage Services.

 

SECTION 12.05.           Additional Services; Books and Records;
Mortgage Services Property.

 

(a)                                  If,
during the Term, Mortgage Services identifies a need for additional or other
services to be provided by or on behalf of GEMH, the Parties agree to negotiate
in good faith to provide such requested services (provided that such services
are of a type generally provided by GEMH or any of its Affiliates at such time)
and the applicable service fees, payment procedures, and other rights and
obligations with respect thereto.  To
the extent practicable, such additional or other services shall be provided on terms
substantially similar to those applicable to GEMH Services of similar types and
otherwise on terms consistent with those contained in this Agreement.

 

(b)                                 All
books, records and data maintained by GEMH for Mortgage Services with respect
to the provision of a GEMH Service to Mortgage Services shall be the exclusive
property of Mortgage Services.  Mortgage
Services, at its sole cost and expense, shall have the right to inspect, and
make copies of, any such books, records and data during regular business hours
upon reasonable advance notice to GEMH. 
At the sole cost and expense of GEMH, upon termination of the provision
of any GEMH Service, the relevant books, records and data relating to such
terminated Service shall be delivered by GEMH to Mortgage Services in a
mutually agreed upon format to the address of Mortgage Services set forth in
Section 12.07 or any other mutually agreed upon location; provided, however,
that GEMH shall be entitled to retain one copy of all such books, records and
data relating to such terminated GEMH Service for archival purposes and for
purposes of responding to any dispute that may arise with respect thereto.

 

31

 

Upon
the termination of this Agreement, at the sole cost and expense of GEMH, GEMH
shall deliver to Mortgage Services any and all other property of Mortgage
Services or any other Mortgage Entity in GEMH’s possession to Mortgage
Services.

 

SECTION 12.06.           Confidential
Information.  Each Party agrees that
Section 6.2 of the Master Agreement is hereby incorporated by reference into, and a made a part of, this
Agreement; provided, however, that for the purposes of this
Agreement (i) references in Section 6.2 of the Master Agreement to “GE
Parties” shall be deemed to refer to “Mortgage Entities”, (ii) references
in Section 6.2 of the Master Agreement to “Genworth” shall be deemed to refer
to “GEMH Parties”, and (iii) references in Section 6.2 of the Master
Agreement to “Genworth Business” shall be deemed to refer to “the business of
GEMH Parties”.

 

SECTION 12.07.           Notices.  All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
given or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service, by facsimile with
receipt confirmed (followed by delivery of an original via overnight courier
service) or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such other
address for a party as shall be specified in a notice given in accordance with
this Section 12.07):

 

32

 

if to
Mortgage Services:

 

GE Mortgage Services, LLC

6601 Six Forks Road

Raleigh, North Carolina  27615

Attention:  General Manager

 

with a copy to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY  10153

Attention:  Howard Chatzinoff, Esq.

 

if to
GEMH Parties

 

General Electric Mortgage Holdings LLC

6601 Six Forks Road

Raleigh, North Carolina  27615

Attention:  President

 

with a copy to

 

General Electric Mortgage Holdings LLC

6601 Six Forks Road

Raleigh, North Carolina  27615

Attention:  General Counsel

 

and

 

Hunton &
Williams LLP

Riverfront Plaza, East Tower

951 E Byrd Street

Richmond, VA  23219-4074

Attention:  Allen C. Goolsby, Esq.

 

SECTION 12.08.           Taxes.

 

(a)                                  Each
Party shall be responsible for any personal property taxes on property it owns
or leases, for franchise and privilege taxes on its business, and for taxes
based on its net income or gross receipts.

 

(b)                                 Each
of the parties agrees that if reasonably requested by the other party, it will
cooperate with such other party to enable the accurate determination of such
other party’s tax liability and assist such other party in minimizing its tax
liability to the extent legally permissible. 
GEMH invoices shall separately state the amounts of any taxes the GEMH
is proposing to collect from Mortgage Services.

 

33

 

SECTION 12.09.           Regulatory Approval and
Compliance.  Each of Mortgage
Services and each GEMH Party shall be responsible for its own compliance with
any and all Laws applicable to its performance under this Agreement; provided,
however, that each of Mortgage Services and GEMH shall, subject to
reimbursement of out-of-pocket expenses by the requesting party, cooperate and
provide one another with all reasonably requested assistance (including, the
execution of documents and the provision of relevant information) required by
the requesting party to ensure compliance with all applicable Laws in
connection with any regulatory action, requirement, inquiry or examination
related to this Agreement, the GEMH Services or the MS Services.

 

SECTION 12.10.           Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any Law or
as a matter of public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
to this Agreement shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated by this
Agreement be consummated as originally contemplated to the greatest extent
possible.

 

SECTION 12.11.           Entire Agreement.  Except as otherwise expressly provided in
this Agreement, this Agreement (including the Schedules and Exhibits hereto)
constitutes the entire agreement of the Parties with respect to the subject
matter of this Agreement and supersedes all prior agreements and undertakings,
both written and oral, between or on behalf of the Parties with respect to the
subject matter of this Agreement.

 

SECTION 12.12.           Assignment; No
Third-Party Beneficiaries.  This
Agreement shall not be assigned by any Party without the prior written consent
of the other party.  Except as provided
in Article VIII with respect to GEMH Indemnified Parties and Mortgage Services
Indemnified Parties, this Agreement is for the sole benefit of the parties to
this Agreement and their permitted successors and assigns and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person any legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.

 

SECTION 12.13.           Amendment.  No provision of this Agreement may be
amended or modified except by a written instrument signed by all the parties to
such agreement.  No waiver by any party
of any provision hereof shall be effective unless explicitly set forth in
writing and executed by the party so waiving. 
The waiver by either Party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other subsequent
breach.

 

SECTION 12.14.           Rules of
Construction.  Interpretation of
this Agreement shall be governed by the following rules of construction:  (a) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (b) references to the terms
Article, Section, Exhibit, paragraph, and Schedule are references to the
Articles, Sections, Exhibits, paragraphs, and Schedules to this Agreement
unless otherwise specified, (c) the word “including” and words of similar
import shall mean “including, without limitation,” (d) provisions shall apply,
when appropriate, to

 

34

 

successive
events and transactions, (e) the headings contained herein are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement and (f) this Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.  Unless specifically stated in the Master Agreement that a particular
provision of the Master Agreement should be given effect in lieu of a
conflicting provision in this Agreement, to the extent that any provision
contained in this Agreement conflicts with, or cannot logically be read in
accordance with, any provision of the Master Agreement, the provision contained
in this Agreement shall prevail.

 

SECTION 12.15.           Counterparts.  This Agreement may be executed in one or
more counterparts, and by the different parties to each such agreement in
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.  Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be as
effective as delivery of a manually executed counterpart of any such Agreement.

 

SECTION 12.16.           No Right to Set-Off.  No Party shall set-off, counterclaim or
otherwise withhold any amount owed by such Party to another Party on account of
any obligation owed to such Party by another Party.

 

SECTION 12.17.           Existing Agreements.

 

(a)                                  The
Parties acknowledge and agree that from and after the date hereof the Existing
Servicing Agreement and the Existing Shared Services Agreement shall be deemed
terminated and shall be of no further force and effect.

 

(b)                                 The
Lease Agreement is hereby terminated and shall be of no further force and
effect; provided, however, that the indemnification provisions
set forth in Sections 6 and 7 of the Indemnification Agreement shall survive
such termination.

 

(c)                                  The
Indemnification Agreement is hereby terminated and shall be of no further force
and effect.

 

SECTION 12.18.           Further
Assurances.  Each Party agrees that
upon request of another Party, at any time after the date hereof such first
Party will forthwith execute and deliver to the requesting Party or its
designee such further instruments of assignment, transfer, conveyance,
endorsement, direction or authorization and other documents as the requesting
Party or its counsel may reasonably request in order to effectuate the purposes
of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

35

 

IN WITNESS
WHEREOF, the parties have caused this Agreement to be executed on the date
first written above by their respective duly authorized officers.

 

	
   

  	
  GE MORTGAGE SERVICES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC MORTGAGE

  HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GE MORTGAGE CONTRACT SERVICES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENWORTH FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Acknowledged
and agreed:

GENERAL ELECTRIC MORTGAGE 

INSURANCE CORPORATION, 

solely with respect to Section 12.17

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 

Schedule A

 

GEMH Services

 

	
  GEMH Services

  	
   

  	
  Service
  Termination Date

  
	
   

  	
   

  	
   

  
	
  (a)                                  Finance, including Accounting, Financial
  Planning and Analysis, Cash Management/Treasury Services

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (b)                                 Legal

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (c)                                  Information Technology and Data Processing

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (d)                                 Risk

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (e)                                  Vendor Management

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (f)                                    Quality

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (g)                                 Loss Mitigation, including restructuring of
  loans and foreclosure

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (h)                                 Asset Management

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (i)                                     Operating Plan.

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  GEMH shall use its best efforts to assist
  in the execution of an operating plan of Mortgage Entities (the “Operating
  Plan”) with respect to mortgage loan sales and purchases by Mortgage
  Entities.  For the avoidance of doubt,
  the Operating Plan shall not include any income/loss, incremental time,
  effort or expenses associated with the sale of Mortgage Servicing Rights.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (j)                                     Facilities, including access to and
  management of facilities described in Section 3.02.

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (k)                                  Tax Services

  	
   

  	
  December 31, 2004

  
	
   

  	
   

  	
   

  
	
  For the avoidance of doubt, GEMH shall
  prepare and file, subject to prior review and approval by Mortgage Services,
  all Tax Returns with respect to Mortgage Entities and their respective assets
  required to be filed in 2004.  Mortgage
  Services shall prepare and file all Tax Returns with respect to Mortgage
  Entities and their respective assets required to be filed on or after January
  1, 2005 and complete all audit examinations in process as of January 1, 2005.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
               
2004

 

 

GEFA International
Holdings, Inc.

 

and

 

GE Capital Corporation

 

 

Framework Agreement

 

 

Linklaters

 

One Silk Street 

London EC2Y 8HQ

 

 

Telephone (44-20) 7456 2000

 

 

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

  	
   

  

 

i

 

	
  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

  	
   

  

 

ii

 

Facsimile (44-20) 7456 2222

 

Ref

 

2

 

THIS AGREEMENT is made the
                             
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,

 

 

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

 

2

 

(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;

 

3

 

“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;

 

4

 

“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 

 

5

 

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;

 

6

 

“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;

 

7

 

“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 

 

8

 

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

 

9

 

(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;

 

10

 

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.

 

11

 

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.

 

12

 

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.

 

13

 

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;

 

14

 

(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

 

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.

 

16

 

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.

 

17

 

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.

 

18

 

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;

 

19

 

(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:

 

20

 

(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 

 

21

 

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.

 

22

 

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;

 

23

 

(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

 

(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.

 

25

 

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,

 

26

 

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 

 

27

 

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.

 

28

 

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:

 

29

 

(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.

 

30

 

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.

 

31

 

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.

 

32

 

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 

 

33

 

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.

 

34

 

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;

 

35

 

(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

 

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

 

	
  Signed by

  	
  )

  
	
   

  	
   

  
	
  for and on behalf of

  	
  )

  
	
   

  	
   

  
	
  GEFA INTERNATIONAL HOLDINGS, INC.

  	
  )

  
	
   

  	
   

  
	
  in the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signed by

  	
  )

  
	
   

  	
   

  
	
  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)

 

 

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

 

61

 

(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.

 

62

 

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.

 

63

 

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 

  

 

64

 

	
  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

  	
   

  	
   

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  

 

65

 

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.

 

66

 

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.

 

67

 

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.

 

68

 

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 

 

69

 

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.

 

70

 

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 

 

71

 

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:

 

72

 

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;

 

73

 

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;

 

74

 

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.

 

75

 

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 

 

76

 

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;

 

77

 

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;

 

78

 

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;

 

79

 

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 

 

80

 

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 

 

81

 

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).

 

82

 

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.

 

83

 

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.

 

84

 

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:

 

85

 

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.

 

86

 

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

 

87

 

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.

 

88

 

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

 

89

 

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.

 

90

 

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

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  

 

91

 

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;

 

92

 

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

 

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.

 

94

 

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

 

(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

 

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

 

GE Consumer Finance

 

•                                          Due Diligence

 

Detailed Plan

 

98

 

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

 

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

 

100

 

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

 

101

 

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

 

102

 

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?
                    

 

103

 

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

 

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

 

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

 

	
  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

 

	
  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

 

	
  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

 

	
  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

 

	
  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

 

	
  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

  	
   

  	
   

  	
   

  	
   

  

 

112

 

	
  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.

  	
   

  	
   

  	
   

  	
   

  

 

113

 

	
  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?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

114

 

	
  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?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

115

 

	
  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?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

116

 

	
  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?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

117

 

	
  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?

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

118

 

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:

 

119

 

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

 

120

 

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

 

121

 

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 

  

 

122

 

	
  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

  	
   

  	
   

  

 

123

 

	
  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.

  

 

124

 

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 

 

125

 

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 

 

126

 

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.

 

127

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