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Project
1.0 Purpose

The purpose of this document is to provide a more detailed proposal of a high level contract
(the “Joint Venture Contract”) terms for discussion and agreement between X and
[International Partner] (“International Partner”) (together the “Partners).

2.0 Joint Venture Contract terms

2.1 Objectives of the Joint Venture

 International Partner and X wish to establish a separate Joint Venture company (the
“Joint Venture”) with the objective of creating a leading credit card company in
[TERRITORY]. It is the intention that the Joint Venture will also include the credit
card portfolio currently within International Partner (the “Existing Business”).
 Once established, the objective of the Joint Venture will be to target the most
profitable credit card holders in the [TERRITORY] market with credit cards and other
such related products as both partners may agree. Growth will come through organic
means and/or through the acquisition of other credit card portfolios in [TERRITORY].
 The rapid growth and profitability of the Joint Venture will be achieved through the
powerful combination of International Partner’s [leading] [TERRITORY] banking
franchise and first class distribution platform and X unrivalled expertise in the
manufacture, design and marketing of credit card products.

2.2 Ownership
 It is envisaged that there will be [equal 50/50%] shareholdings of the Joint Venture.
 The Partners will inject such capital as is necessary in proportion to their
shareholding, subject to an agreed limit.

2.3 Structure
 The Joint Venture will be a separate incorporated entity in [TERRITORY].

2.4 Customer relationship

 The Joint Venture will have the primary responsibility for managing the relationship
with the Joint Venture customers irrespective of whether they are recruited via
International Partner or directly by the Joint Venture.
 International Partner will transfer all the information and customer ownership of the
Existing Portfolio to the Joint Venture (to the extent that this is permitted under local
Data Protection regulations).
 Both parties will have full access to such data for segmentation and risk assessment
purposes.

2.5 Economic arrangement

 The partners will share the profits of the Joint Venture in proportion to their
shareholdings (see 2.2 above).

2.6 Contributions to the Joint Venture by the Partners

 International Partner will provide access to:
 The Existing Business (see 2.7 below)
 A strong domestic brand
 Extensive processing and customer service capability
 Full usage of the branch distribution network
 The established regulatory support function
 Full access to the Bank customer data base for cross sell activities

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 X will provide access to:

 Recruitment and activation techniques
 Advanced risk management skills
 Customer segmentation and optimisation skills
 Customer optimisation skills
 Competency in score card development
 B&D and Fraud management skills
 Overall marketing and brand management skills
 X brand

2.7 The Existing Business

 International Partner will sell the Existing Business into the Joint Venture.
 A fair value for the Existing Business will be determined in good faith between the
Partners. X will pay [50%] of the fair value to International Partner.

2.8 Exclusivity
 The Joint Venture will be the exclusive credit card provider to International Partner.

2.9 Co-branding / Branding

 Optimal use (together or separately) of International Partner and X brands will be
determined based on business potential for customers recruited through all channels
(including the International Partner branches and the Existing Business).
 Both brands may be used to aid marketing strategies.
 International Partner and X brand guidelines will be adhered to.

2.10 Conditions precedent

 Written approval from the appropriate regulators in India permitting the creation of
the Joint Venture.
 Confirmation by International Partner of the face value of the current card portfolio in
the Existing Business
 Any other legal and regulatory approvals required
 Satisfactory due diligence on International Partner’s existing operations
 X and International Partner internal approvals.

2.11 Duration
 The Joint Venture will operate for a minimum period of [3] years, after which it can
be terminated upon 12 months written notice by either Partner.

2.12 Termination of Joint Venture Contract

Early termination
 The Joint Venture Contract may be terminated by the non-affected party if either
Partner:
 suffers an insolvency event; or
 is acquired by a party which has been subject to criminal, civil or regulatory
proceedings or originates from a country with UN sanctions against it.

Breach of contract
 There will be deemed a breach of Contract if there is any material breach by either
Partner of the Joint Venture agreement or a related agreement, and they fail to remedy
such a breach within 20 days of receipt of notice.

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 The innocent party will then have the first option to purchase the other [50%] of the
Joint Venture from the Joint Venture

Joint Venture Portfolio purchase on termination

 Value of Joint Venture Portfolio shall be determined by an approved valuer.

Wind down period

 If neither party exercises the right to purchase the Joint Venture Portfolio, then no
further cards will be opened, or any further advances made on the accounts.

Closing down the Joint Venture

 Closing accounts will be prepared reflecting assets and liabilities.
 All outstanding debts will be collected.

2.13 Standard legal terms and conditions:

The Joint Venture Contract will also include standard terms relating to:
 Confidentiality
 Force Majeure (termination event in certain circumstances)
 Cession and Assignment (no party has the right to cede or assign or in any way
transfer rights or obligations under this agreement to another party outside its
corporate group.)
 Change in circumstances and other undertakings

3.0 Management/Operation of the Joint Venture

3.1 Establishment of the Joint Venture

 A name for the Joint Venture to be determined by the Partners.
 International Partner will procure such insurance as is required by the Joint Venture.
The Joint Venture will pay an arms length premium for such insurance.
 From the date of establishment of the Joint Venture (the “Effective Date”),
International Partner will provide to pre-agreed service levels and performance
regime resources for the processing of credit approvals, collections and arrears
management functions, banks clearing system, and other activities required in the
servicing of a card account.
 International Partner call centres and bank branches will continue to support the Joint
Venture in terms of card acquisition and servicing to pre-agreed service levels and
performance regime.
 All International Partner customer data, including past rejected data will be passed to
the Joint Venture for data analysis.

3.2 Business Strategy

 The Joint Venture business strategy will be agreed by the Board and Management
Committee (structure of the Board and Management Committee described in 3.3 and
3.4 below).
 An element of the Joint Venture strategy will be acquisition of other credit card
portfolios in [TERRITORY]. In such a circumstance, the Joint Venture will have the
first right of refusal.
 If the Joint Venture does not want to acquire the file due to one side not wanting to
proceed, the other partner can progress individually for the acquisition of the file.

3.3 Management Committee

 The Management Committee will be responsible for the day to day management and
co-ordination of the Joint Venture.

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 The Management Committee will comprise:

 General Manager (appointed by X),
 Financial Manager (appointed by International Partner)
 Risk Manager (appointed by X)
 Marketing Manager (appointed by X or International Partner)
 Operations Manager (appointed by X or International Partner)
 2 further people (appointed by X or International Partner)
 It will be the responsibility of the Management Committee to:
 Prepare draft budget and business plan as required by the Board
 Prepare a draft capital expenditure budget
 Identify future opportunities for the Joint Venture
 Resolve operational issues
 Review existing products, systems, management accounts and operational reports
 Provide the Board with the required reports, and
 Make recommendations to the Board.

3.4 Board of Directors

 The Board will decide all material issues concerning the Joint Venture.
 The Board shall comprise of:
 2 Representatives appointed by International Partner by written notice to X and
the General Manager;
 2 Representatives appointed by X by written notice to International Partner and
the General Manager; and
 The General Manager and the Financial Manager.
 The Board will meet on a quarterly basis
 Quorum is at least one X appointee and one International Partner appointee.

3.5 Board Decision Making

 All decisions will require a simple majority vote to include at least one X and one
International Partner director. Meetings will be held to:
 review and approve draft Budgets and Business Plans (subject to shareholder
consent – see below);
 resolve issues escalated from the Management Committee;
 review the management accounts of the Joint Venture for the immediately
preceding 3 month period;
 monitor and review progress of the Joint Venture as measured against Budgets
and Business Plans;
 identify any opportunities for the Joint Venture;
 agree appropriate strategies to improve the Joint Venture’s performance;
 determine the authority levels delegated to the Management Committee;
 approve branding, logos and trademarks that appear on the cards (subject to each
shareholder consenting to all use of its branding, logo, trade marks and other
intellectual property);

 In the event of a deadlock, the matter will be referred to the respective [Card
Directors].

 If the matter still cannot be resolved, it is escalated to the International Partner

[Director of Retail banking] and CEO of X International.

 If the matter cannot be resolved, it will not take place.

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 Reserved Matters – the following cannot be carried out without both X and
International Partner’s prior written consent [LIST TO BE DISCUSSED]

 Issuing shares in the Joint Venture and granting options over new
shares or other interests
 Reorganising the Joint Venture’s share capital
 Disposing of a material part of the Joint Venture’s undertaking or
assets including its intellectual property
 Altering the Joint Venture’s constitutional documents
 Making any capital commitment in excess of a specified material
amount if not reflected in the agreed business plan
 Altering (including ceasing) the Joint Venture’s agreed business
or commencing any new type of business
 Approving the Joint Venture’s annual business plan and budget
 Forming, acquiring or disposing of any subsidiary or business
 Acquiring or disposing of any subsidiary or business
 Acquiring or disposing of any shares or other investment
 Participating in any partnership or alliance
 Listing any share capital or other securities on any exchange
 Borrowing any money or than normal trade credit
 Creating, issuing or redeeming (i) any mortgage, charge or other
security upon any part of the property or assets or uncalled
capital of the Joint Venture or (ii) any debenture or debenture
stock
 Factoring or assigning any book debts
 Giving any credit outside the ordinary course of the Joint
Venture’s business or granting any guarantee or indemnity to
secure indebtedness
 Changing accounting policy or auditors
 Engaging or dismissing employees earning more than a specified
material sum per annum or amending the terms of any such
person’s employment or engagement
 Appointing a receiver or administrator or passing a resolution to
wind-up the Joint Venture (other than for the purpose of a solvent
reconstruction or amalgamation on terms which does not dilute X
shareholding)
 Entering into any contract with a value of greater than a specified
material sum or a volume greater than a specified material sum
per annum or a term longer than a specified number of years
 Entering into any contract on non arms-length terms or with a
related party
 Initiating or settling material litigation or other disputes
 Payment of dividends or other distributions
 Extending the life or changing the membership of the Joint
Venture
 Altering the Joint Venture’s name or branding
 Granting any power of attorney
 Making any claim, disclaimer, surrender, election or consent for
tax purposes
 Granting any lease or third party rights in respect of Joint
Venture property
 Applying for the registration of any Joint Venture intellectual
property, allowing any registration of Joint Venture intellectual
property to lapse or be cancelled or accepting any restrictions on
the Joint Venture’s use of Joint Venture intellectual property.

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3.6 Scorecards
 Within 12 months, the Joint Venture will develop new scorecards which are driven
from the information and expertise provided by X.
 Data will be freely transferred from X and International Partner to the Joint Venture.

3.7 Regulatory Capital Contribution and Initial Funding Obligations

 The Joint Venture will be provided with sufficient regulatory capital and working
capital in equal proportions by the shareholders, subject to agreed limits.
 The Joint Venture may borrow funding for receivables from International Partner on
an arms-length basis subject to the instructions of the Board.

3.8 Information/Audit Rights

 The Joint Venture will prepare the annual financial statements for the Joint Venture
for approval by the Board
 The Joint Venture will prepare monthly management account reports and provide
them to both parties.
 Financial Statements will be audited by Auditors and costs will be borne by the Joint
Venture.
 Both parties to have the right to be provided with reasonable further information
(including financial) on the Joint Venture and access to the Joint Venture’s personnel
and premises
 X has the right to inspect and audit International Partner premises, employees and
books and records in order to carry out an audit of the services being provided by
International Partner to the Joint Venture.

3.9 Bank account

 The Bank account will be in the name of the Joint Venture and will be held at
International Partner.
 Such an account will be operated in compliance with the Board policies.

3.10 Books and records

 International Partner will keep the proper books of account and records of all
transactions in respect of the Joint Venture.
 Each Partner agrees that the other’s regulators and internal and external auditors and
other employees and agents shall have reasonable access to the personnel (employees,
secondees, consultants and officers), premises, books and records (including
accounting books and records) of the Joint Venture, including for the purposes of an
audit.

3.11 Legal and Regulatory Compliance

 International Partner shall be responsible for compliance with all legal and regulatory
requirements of the Joint Venture, in line with agreed Board policies.