Exhibit 10.2

SHAREHOLDER AGREEMENT

dated July 7, 2009

among

GENWORTH MI CANADA INC.

and

BROOKFIELD LIFE ASSURANCE COMPANY LIMITED

and

GENWORTH FINANCIAL, INC.

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TABLE OF CONTENTS

 

          Page

ARTICLE I     DEFINITIONS

  

SECTION 1.01

   Certain Defined Terms    1

SECTION 1.02

   Other Terms    4

SECTION 1.03

   Beneficial Ownership    4

ARTICLE II     CORPORATE GOVERNANCE

  

SECTION 2.01

   Genworth Financial Approval Rights    5

SECTION 2.02

   Special Share and Board Composition    6

SECTION 2.03

   Director Elections    7

SECTION 2.04

   Director Nomination Rights    8

SECTION 2.05

   Board Committees    9

ARTICLE III     PRE-EMPTIVE RIGHTS OF GENWORTH FINANCIAL

  

SECTION 3.01

   Definitions    9

SECTION 3.02

   General Provisions    11

SECTION 3.03

   Exercise of Pre-Emptive Right    12

SECTION 3.04

   No Obligations Unless Pre-Emptive Right Exercised    14

SECTION 3.05

   No Rights As Holder of Pre-Emptive Right Securities    14

ARTICLE IV     FINANCIAL AND OTHER INFORMATION

  

SECTION 4.01

   Annual and QuarterlyFinancial Information    14

SECTION 4.02

   Tax Information    15

SECTION 4.03

   Operating Reviews    16

SECTION 4.04

   General Requirements    16

SECTION 4.05

   Additional Requirements    16

SECTION 4.06

   Fifty Percent Threshold    18

SECTION 4.07

   Auditor Consultation    19

SECTION 4.08

   Disclosure of Information    19

SECTION 4.09

   Privilege    19

ARTICLE V     INDEMNIFICATION, DISPUTE RESOLUTION AND EXPENSES

  

SECTION 5.01

   Indemnification    20

SECTION 5.02

   Dispute Resolution    20

 

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TABLE OF CONTENTS

(continued)

 

          Page

SECTION 5.03

   Expenses    20

ARTICLE VI     TERMINATION

  

SECTION 6.01

   Termination    20

SECTION 6.02

   Survival    20

ARTICLE VII     GENERAL PROVISIONS

  

SECTION 7.01

   Governing Law    20

SECTION 7.02

   Co-operation    21

SECTION 7.03

   Notices    21

SECTION 7.04

   Severability    22

SECTION 7.05

   Entire Agreement    22

SECTION 7.06

   Assignment; No Third-Party Beneficiaries    22

SECTION 7.07

   Amendment; Waiver    23

SECTION 7.08

   Rules of Construction    23

SECTION 7.09

   Currency    23

SECTION 7.10

   Counterparts    23

 

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This Shareholder Agreement, dated July 7, 2009 (this “Agreement”), is made by
and among GENWORTH MI CANADA INC., a corporation existing under the laws of
Canada (“Genworth Canada”), GENWORTH FINANCIAL, INC., a corporation existing
under the laws of the State of Delaware (“Genworth Financial”), and BROOKFIELD
LIFE ASSURANCE COMPANY LIMITED, a corporation existing under the laws of Bermuda
(“Brookfield”).

RECITALS

A. Genworth Canada has undertaken an initial public offering (the “Initial
Public Offering”) of its common shares pursuant to a prospectus filed with
Canadian securities regulatory authorities.

B. In connection with the Initial Public Offering, Genworth Financial, Genworth
Canada and Genworth Financial Mortgage Insurance Company Canada have entered
into a Master Agreement, dated as of the date hereof (the “Master Agreement”).

C. Genworth Canada, Genworth Financial and Brookfield have entered into this
Agreement to set out certain key provisions relating to the provision of
information and certain of their respective rights, duties and obligations
following completion of the Initial Public Offering (the “Closing”).

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 hereto 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:

“Applicable Law” means, with respect to any Person, property, transaction, event
or other matter, (i) any foreign or domestic constitution, treaty, law, statute,
regulation, code, ordinance, principle of common law or equity, rule, municipal
by-law, Order or other requirement having the force of law, (ii) any policy,
practice, protocol, standard or guideline of any Governmental Authority which,
although not necessarily having the force of law, is regarded by such
Governmental Authority as requiring compliance as if it had the force of law
(collectively, the “Law”) relating or applicable to such Person, property,
transaction, event or other matter and also includes, where appropriate, any
interpretation of the Law (or any part thereof) by any Person having
jurisdiction over it, or charged with its administration or interpretation.

“Applicable GNW Shareholder” means, at any time with respect to any Common
Shares or the Special Share, as applicable, the member of the Genworth Financial
Group that is the holder of such share or shares, which shall initially be
Brookfield in the case of both the Special Share and the Common Shares deemed to
be beneficially owned by Genworth Financial pursuant to this Agreement.

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“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in Toronto, Ontario or New York, NY are authorized or required
by Law to close. Any event the scheduled occurrence of which would fall on a day
that is not a Business Day shall be deferred until the next succeeding Business
Day.

“Board” means the board of directors of Genworth Canada from time to time.

“Business Plan” has the meaning set forth in Section 2.01(b).

“Canadian GAAP” means generally accepted accounting principles in Canada, as in
effect from time to time, including, for greater certainty, International
Financial Reporting Standards from and after such time as, and to the extent
that, they become applicable in Canada.

“Closing” means completion of the Initial Public Offering.

“Closing Date” means the date on which the Closing takes place.

“Common Shares” means the common shares in the capital of Genworth Canada or
such other shares or other securities into which such common shares are
converted, exchanged, reclassified or otherwise changed from time to time.

“Genworth Financial Designee” means a director of Genworth Canada elected by the
member of the Genworth Financial Group holding the Special Share from time to
time pursuant to the terms of the Special Share.

“Genworth Financial Group” means, collectively, Genworth Financial and all of
its direct and indirect Subsidiaries now or hereafter existing, other than
Genworth Canada and its direct and indirect Subsidiaries.

“Governmental Authority” means:

 

  (i) any domestic or foreign government, whether national, federal, provincial,
state, territorial, municipal or local (whether administrative, legislative,
executive or otherwise);

 

  (ii) any agency, authority, ministry, department, regulatory body, court,
central bank, bureau, board or other instrumentality having legislative,
judicial, taxing, regulatory, prosecutorial or administrative powers or
functions of, or pertaining to, government;

 

  (iii) any court, commission, individual, arbitrator, arbitration panel or
other body having adjudicative, regulatory, judicial, quasi-judicial,
administrative or similar functions; and

 

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  (iv) any other body or entity created under the authority of or otherwise
subject to the jurisdiction of any of the foregoing, including any stock or
other securities exchange or professional association.

“Order” means any order, directive, judgment, decree, injunction, decision,
ruling, award or writ of any Governmental Authority.

“OSFI” means the Office of the Superintendent of Financial Institutions (Canada)
or any successor agency or regulatory authority thereof.

“outstanding Common Shares” means, at any time, the number of Common Shares
issued and outstanding at the relevant time as reflected on the share register
of Genworth Canada.

“Person” means any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
Governmental Authority or other entity.

“Registration Rights Agreement” means the Registration Rights Agreement dated as
of the date hereof, entered into concurrently herewith by and between Brookfield
and Genworth Canada.

“SEC” means the United States Securities and Exchange Commission.

“Securities Commissions” means, collectively, the securities regulatory
authority in each of the Provinces and Territories of Canada.

“Share Incentive Plan” means any plan of Genworth Canada in effect from time to
time pursuant to which Common Shares may be issued, or options or other
securities convertible or exercisable into or exchangeable for Common Shares may
be granted, to directors, officers and/or employees of, and/or consultants to,
Genworth Canada and/or its subsidiaries;

“Special Share” means the one authorized special share in the capital of
Genworth Canada.

“Subsidiary” or “subsidiary” means, with respect to any Person, any corporation,
limited liability company, joint venture or partnership of which such Person
(a) beneficially owns, either directly or indirectly, more than fifty percent
(50%) of (i) the total combined voting power of all classes of voting securities
of such entity, (ii) the total combined equity interests, or (iii) the capital
or profit interests, in the case of a partnership; or (b) otherwise has the
power to vote, either directly or indirectly, sufficient securities to elect a
majority of the board of directors or similar governing body.

“US GAAP” means generally accepted accounting principles in the United States,
including specific requests or requirements of the SEC, as in effect from time
to time, including, for greater certainty, International Financial Reporting
Standards from and after such time as, and to the extent that, they become
applicable in the United States.

 

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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

Agreement

   Preamble

Brookfield

   Preamble

Business Plan

   Section 2.01(b)

Convertible Security

   Section 3.01

Director Election

   Section 2.03(a)

Dispute

   Section 8.02(a)

Exercise Notice

   Section 3.01

Genworth Canada

   Preamble

Genworth Canada Auditors

   Section 4.05(b)

Genworth Canada Information

   Section 4.05(c)

Genworth Financial

   Preamble

Genworth Financial Auditors

   Section 4.05(b)

Genworth Financial Nominees

   Section 2.03(c)

Incentive Security

   Section 3.01

Initial Public Offering

   Recitals

Master Agreement

   Recitals

MD&A

   Section 4.01(b)

Original Percentage

   Section 3.01

Pre-Emptive Right

   Section 3.01

Pre-Emptive Right Closing

   Section 3.01

Pre-Emptive Right Securities

   Section 3.01

Privilege

   Section 4.09

Purchase Price

   Section 3.01

Right

   Section 3.01

Special Option

   Section 3.01

Triggering Event

   Section 3.01

Triggering Event Closing Date

   Section 3.01

Triggering Event Notice

   Section 3.01

Triggering Event Price

   Section 3.01

SECTION 1.03 Beneficial Ownership. Solely for purposes of this Agreement,
Genworth Financial shall be deemed to beneficially own shares which are
beneficially owned by its direct or indirect Subsidiaries, other than Genworth
Canada and its direct or indirect Subsidiaries.

 

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ARTICLE II

CORPORATE GOVERNANCE

SECTION 2.01 Genworth Financial Approval Rights.

(a) For so long as Genworth Financial beneficially owns not less than
thirty-three and one-third percent (33 1/3%) of the outstanding Common Shares,
Genworth Canada shall not (either directly or indirectly through a Subsidiary)
take any of the following actions without the prior written consent of Genworth
Financial:

(i) consolidate or merge into or with another Person or enter into any other
similar business combination, including pursuant to any amalgamation,
arrangement, recapitalization or reorganization, other than a consolidation,
merger or other similar business combination of any wholly-owned Subsidiary of
Genworth Canada into or with Genworth Canada or into or with another
wholly-owned Subsidiary of Genworth Canada;

(ii) acquire any shares or similar equity interests, instruments convertible
into or exchangeable for shares or similar equity interests, assets, business or
operations (in a single transaction or a series of related transactions) in the
aggregate with a value of more than $50 million (excluding, for purposes of this
Section 2.01(a)(ii), investments made in the ordinary course of business by the
licensed insurance company subsidiary of Genworth Canada in accordance with
Applicable Law and the investment policy approved by the board of directors of
such subsidiary);

(iii) adopt any plan or proposal for a complete or partial liquidation,
dissolution or winding up of Genworth Canada or any of its Subsidiaries or any
reorganization or recapitalization of Genworth Canada or any of its Subsidiaries
or commence any case, proceeding or action seeking relief under any existing or
future laws relating to bankruptcy, insolvency, conservatorship or relief of
debtors;

(iv) sell, transfer, lease, pledge or otherwise dispose of any of its or any of
its Subsidiaries’ assets, business or operations (in a single transaction or a
series of related transactions) in the aggregate with a value of more than $100
million (excluding, for purposes of this Section 2.01(a)(iv), sales or
dispositions of investments made in the ordinary course of business by the
licensed insurance company subsidiary of Genworth Canada in accordance with
Applicable Law and the investment policy approved by the board of directors of
such subsidiary);

(v) make any reductions in Genworth’s Canada’s policy with respect to the
declaration and payment of any dividends on any Common Shares, except if and to
the extent that a reduction in the dividend is required by Applicable Law or by
requirements imposed by OSFI); or

(vi) issue new debt securities or incur or enter into debt or guarantees that
would result in Genworth Canada having (on a consolidated basis) a ratio
(expressed as a percentage) of debt to total capital (the sum of debt and
shareholders’ equity) of greater than 20%.

(b) For so long as Genworth Financial beneficially owns not less than fifty
percent (50%) of the outstanding Common Shares, Genworth Canada shall not
(either directly or indirectly through a Subsidiary) take any of the following
actions without the prior written consent of Genworth Financial:

(i) approve any annual business plan of Genworth Canada and its Subsidiaries on
a consolidated basis (a “Business Plan”) and any material amendments to, or any
material departure from, such Business Plan;

 

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(ii) appoint or remove any Chief Executive Officer; or

(iii) issue Common Shares or other equity securities or securities convertible
into or exerciseable or exchangeable for Common Shares or other equity
securities of Genworth Canada, other than pursuant to a Share Incentive Plan
that has been approved by the Board.

(c) If at any time Genworth Financial beneficially owns less than fifty percent
(50%) of the outstanding Common Shares, then, for so long as Genworth Financial
beneficially owns not less than thirty-three and one-third percent (33 1/3%) of
the outstanding Common Shares, Genworth Canada shall consult with Genworth
Financial with respect to the matters set forth in Section 2.01(b), but Genworth
Financial shall have no right to approve or deny approval of such matters.

(d) For so long as Genworth Financial beneficially owns not less than fifteen
percent (15%) of the outstanding Common Shares, Genworth Canada shall not
implement or adopt any shareholder rights plan without the prior written consent
of Genworth Financial, unless the plan includes an exception that would permit a
purchase of all or part of the Common Shares beneficially owned by Genworth
Financial from Genworth Financial and/or its Subsidiaries without causing the
rights thereunder to separate from the Common Shares or become exerciseable or
otherwise triggering the plan.

SECTION 2.02 Special Share and Board Composition.

(a) The Parties acknowledge and agree that Genworth Canada has issued the
Special Share to Brookfield and Brookfield has paid a subscription price
therefor of $1.00 to Genworth Canada.

(b) The Applicable GNW Shareholder shall cause the appropriate number of
Genworth Financial Designees to resign or be removed promptly at any time when
the number of Genworth Financial Designees on the Board exceeds the number of
Genworth Financial Designees which the Applicable GNW Shareholder is entitled,
as the holder of the Special Share, to elect pursuant to the rights attaching to
the Special Share. Notwithstanding the foregoing, Genworth Canada may request
that any one or more of the Genworth Financial Designees that would otherwise be
required to resign or be removed pursuant to this Section 2.02(b) to remain a
director, in which case any such Genworth Financial Designee shall no longer be
considered to be a Genworth Financial Designee.

 

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(c) With respect to the Special Share:

(i) The Applicable GNW Shareholder holding the Special Share agrees that it will
not transfer, and Genworth Financial agrees that it will not permit the
transfer, of the Special Share except (1) subject to Section 2.02(c)(ii), to a
member of the Genworth Financial Group; or (2) as the Board may otherwise
approve.

(ii) Prior to any transfer of the Special Share to a member of the Genworth
Financial Group, Genworth Financial or the Applicable GNW Shareholder shall
obtain and deliver to Genworth Canada an agreement or undertaking of such member
of the Genworth Financial Group, in form satisfactory to Genworth Canada, acting
reasonably, agreeing to become party to and be bound by this Agreement, and
agreeing to transfer such Special Share to Genworth Financial or another member
of the Genworth Financial Group immediately prior to such member ceasing to be a
member of the Genworth Financial Group.

(d) If a proposed amendment to the articles of incorporation of Genworth Canada
or other matter required to be voted on by shareholders of Genworth Canada
(i) would, under the Canada Business Corporations Act, give rise to a class vote
for the holder of the Special Share, and (ii) would not prejudicially affect the
rights, privileges, restrictions and conditions attached to the Special Share,
then the Applicable GNW Shareholder agrees to cause the Special Share to be
voted in respect of such proposed amendment in the manner directed by Genworth
Canada.

SECTION 2.03 Director Elections.

(a) Genworth Canada shall give written notice to the Applicable GNW
Shareholder(s) and Genworth Financial of any meeting of shareholders of Genworth
Canada at which directors are to be elected (a “Director Election”) at least 20
days and not more than 30 days prior to the record date for the meeting, which
notice shall specify the record date and the proposed meeting date.

(b) Following receipt of such notice, Genworth Financial and the Applicable GNW
Shareholder(s) shall choose whether to (i) exercise, or cause to be exercised,
the rights to elect directors attached to the Special Share, or instead
(ii) exercise, or cause to be exercised, the voting rights attached to the
Common Shares beneficially owned by Genworth Financial in respect of the
election of directors, in each case at or in connection with such Director
Election, and shall notify Genworth Canada of such choice not later than five
Business Days before the record date for the meeting; provided, however that if
Genworth Financial and the Applicable GNW Shareholder(s) do not notify Genworth
Canada of any choice, they shall be deemed to have chosen to exercise the voting
rights attached to the Common Shares beneficially owned by Genworth Financial in
respect of the election of directors. In respect of any particular Director
Election, (i) if Genworth Financial and the Applicable GNW Shareholder(s) choose
to exercise, or cause to be exercised, the rights to elect directors attached to
the Special Share, Genworth Financial and the Applicable GNW Shareholder(s)
agree not to vote, or to cause not to be voted, the Common Shares beneficially
owned by Genworth Financial in connection with such Director Election, and
(ii) if Genworth Financial and the Applicable GNW Shareholder(s) choose to
exercise, or cause to be exercised, the voting rights attached to the Common
Shares beneficially owned by Genworth Financial in respect such Director
Election, Genworth Financial and the Applicable GNW Shareholder(s) agree not to
exercise, or to cause not to be exercised, the rights to elect directors
attached to the Special Share in connection with such Director Election.

 

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(c) If Genworth Financial and the Applicable GNW Shareholder(s) have chosen to
exercise, or cause to be exercised, the voting rights attached to the Common
Shares beneficially owned by Genworth Financial in respect of a Director
Election, Genworth Canada agrees to nominate for election as directors of
Genworth Canada in such Director Election a number of persons specified by the
Applicable GNW Shareholder(s) holding Common Shares equal to the number of
directors the holder of the Special Share would have been entitled to elect, had
Genworth Financial and the Applicable GNW Shareholder(s) chosen to exercise, or
cause to be exercised, the rights to elect directors attached to the Special
Share. In such event, the Applicable GNW Shareholder(s) holding Common Shares
shall notify Genworth Canada of such nominees (the “Genworth Financial
Nominees”) in the notice provided pursuant to Section 2.03(b) and Genworth
Canada shall (i) disclose the choice of Genworth Financial and the Applicable
GNW Shareholder(s) in the management information circular relating to the
applicable Director Election, (ii) include the Genworth Financial Nominees in
the management information circular and form of proxy relating to the applicable
Director Election as nominees of management, and (iii) solicit proxies from
shareholders of Genworth Canada in favour of the election of the Genworth
Financial Nominees.

(d) The covenants in this Section 2.03 shall exist only for so long as the
Special Share is outstanding.

SECTION 2.04 Director Nomination Rights.

(a) If the Special Share is redeemed upon demand by the holder, thereafter
Genworth Canada agrees to nominate for election as directors of Genworth Canada
at any meeting of shareholders at which directors are to be elected a number of
persons designated by the Applicable GNW Shareholder(s) holding Common Shares as
follows:

(i) for so long as Genworth Financial beneficially owns fifty percent (50%) or
more of the outstanding Common Shares, the Applicable GNW Shareholder(s) holding
Common Shares shall be entitled to designate a number of persons to be nominated
for election as directors equal to 5/9 of the total number of directors (rounded
to the nearest whole number) comprising the Board;

(ii) for so long as Genworth Financial beneficially owns less than fifty percent
(50%) but not less than forty percent (40%) of the outstanding Common Shares,
the Applicable GNW Shareholder(s) holding Common Shares shall be entitled to
designate a number of persons to be nominated for election as directors equal to
4/9 of the total number of directors (rounded to the nearest whole number)
comprising the Board;

(iii) for so long as Genworth Financial beneficially owns less than forty
percent (40%) but not less than thirty percent (30%) of the outstanding Common
Shares, the Applicable GNW Shareholder(s) holding Common Shares shall be
entitled to designate a number of persons to be nominated for election as
directors equal to 3/9 of the total number of directors (rounded to the nearest
whole number) comprising the Board;

 

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(iv) for so long as Genworth Financial beneficially owns less than thirty
percent (30%) but not less than twenty percent (20%) of the outstanding Common
Shares, the Applicable GNW Shareholder(s) holding Common Shares shall be
entitled to designate a number of persons to be nominated for election as
directors equal to 2/9 of the total number of directors (rounded to the nearest
whole number) comprising the Board; and

(v) for so long as Genworth Financial beneficially owns less than twenty percent
(20%) but not less than ten percent (10%) of the outstanding Common Shares, the
Applicable GNW Shareholder(s) holding Common Shares shall be entitled to
designate a number of persons to be nominated for election as directors equal to
1/9 of the total number of directors (rounded to the nearest whole number)
comprising the Board.

(b) Genworth Canada shall (i) include the director nominees designated under
this Section 2.04 in the management information circular and form of proxy
relating to the applicable shareholder meeting as nominees of management, and
(ii) solicit proxies from shareholders of Genworth Canada in favour of the
election of such nominees.

SECTION 2.05 Board Committees. For so long as Genworth Financial beneficially
owns not less than thirty-three and one-third percent (33 1/3%) of the
outstanding Common Shares, Genworth Financial shall have the right to designate
one member of each committee established by the Board.

ARTICLE III

PRE-EMPTIVE RIGHTS OF GENWORTH FINANCIAL

SECTION 3.01 Definitions.

In this Article III, the following terms shall have the following meanings:

(a) “Convertible Security” means a security of Genworth Canada that is
convertible or exercisable into or exchangeable for Common Share(s), but
excludes (i) an Incentive Security, (ii) a Special Option, (iii) a Right, and
(iv) the Pre-Emptive Right;

(b) “Exercise Notice” has the meaning set forth in Section 3.03(b);

(c) “Incentive Security” means an option or other security of Genworth Canada
convertible or exercisable into or exchangeable for Common Share(s) granted
pursuant to any Share Incentive Plan;

(d) “Original Percentage” means the percentage of outstanding Common Shares
beneficially owned by Genworth Financial immediately prior to a Triggering
Event;

(e) “Pre-Emptive Right” means the right of Genworth Financial to purchase the
Pre-Emptive Right Securities from Genworth Canada in accordance with this
Article III;

(f) “Pre-Emptive Right Closing” means the closing from time to time of the issue
of the Pre-Emptive Right Securities under the Pre-Emptive Right;

 

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(g) “Pre-Emptive Right Securities” has the meaning set forth in Section 3.02(a);

(h) “Purchase Price” means the purchase price for the Pre-Emptive Right
Securities referred to in Section 3.02(c);

(i) “Right” means a right granted by Genworth Canada to holders of Common Shares
to purchase additional Common Shares and/or other securities of Genworth Canada;

(j) “Special Option” means an option or other security granted by Genworth
Canada which is convertible or exercisable into or exchangeable for Common
Share(s) granted by Genworth Canada for nominal or indeterminate consideration,
and includes an over-allotment option or similar option granted to one or more
underwriters in connection with a public offering of securities of Genworth
Canada, but excludes (i) an Incentive Security, (ii) a Right, and (iii) the
Pre-Emptive Right;

(k) “Triggering Event” means the issue of Common Shares and/or Convertible
Securities by Genworth Canada and, for greater certainty, includes any issue of
Common Shares on the exercise, conversion or exchange of any Special Option, but
excludes any issue of Common Shares:

(i) on the exercise, conversion or exchange of any previously issued Convertible
Securities;

(ii) on the exercise, conversion or exchange of any Incentive Security;

(iii) pursuant to any Share Incentive Plan;

(iv) on the exercise of any Right;

(v) on any exercise of the Pre-Emptive Right; or

(vi) pursuant to any stock dividend, stock split, consolidation, amalgamation,
share reclassification, reorganization, merger involving Genworth Canada or
other similar event that affects all holdings of Common Shares in the same
manner, on a per share basis;

(l) “Triggering Event Closing Date” means the date on which a Triggering Event
occurs;

(m) “Triggering Event Notice” has the meaning set forth in Section 3.03(a); and

(n) “Triggering Event Price” means, in respect of an issue of Common Shares
and/or Convertible Securities by Genworth Canada pursuant to a Triggering Event,
the purchase price per Common Share and/or Convertible Security to be paid for
such Common Shares and/or Convertible Securities and means, in respect of an
issue of Common Shares and/or Convertible

 

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Securities for consideration other than money, the price per Common Share and/or
Convertible Security, as determined by the Board acting in good faith, that
would have been received by Genworth Canada had such Common Shares and/or
Convertible Securities been issued for money.

SECTION 3.02 General Provisions.

(a) Grant of Pre-Emptive Right. Subject to the provisions of this Agreement and
Applicable Law, Genworth Canada hereby grants to Genworth Financial the right,
exercisable for so long as Genworth Financial beneficially owns not less than
thirty-three and one-third percent (33 1/3%) of the outstanding Common Shares,
to purchase on the Triggering Event Closing Date directly, or indirectly by
another member of the Genworth Financial Group, from time to time upon the
occurrence of any Triggering Event up to such number of Common Shares and/or
Convertible Securities issuable in connection with the Triggering Event on the
same terms and conditions as those issuable in connection with the Triggering
Event (the “Pre-Emptive Right Securities”) which will, when added to the Common
Shares beneficially owned by Genworth Financial immediately prior to the
Triggering Event, result in Genworth Financial beneficially owning the Original
Percentage of outstanding Common Shares after giving effect to the issue of all
Common Shares to be issued or issuable (pursuant to the exercise, conversion or
exchange of Convertible Securities) in connection with the Triggering Event. In
the event that a Triggering Event consists of an issue of both Common Shares and
Convertible Securities, the Pre-Emptive Right Securities shall be allocated to
Genworth Financial between Common Shares and Convertible Securities on the same
pro rata basis as are allocated to subscribers of the Triggering Event.

(b) Pre-Emptive Right Not Applicable to the Initial Public Offering. The
Pre-Emptive Right shall not be exercisable by Genworth Financial with respect to
the Initial Public Offering.

(c) Purchase Price. In respect of each exercise of the Pre-Emptive Right, the
purchase price per Pre-Emptive Right Security (the “Purchase Price”) shall be
equal to the greater of the Triggering Event Price and such price as may be
prescribed by any securities regulator or stock exchange having jurisdiction
over the issue of the Pre-Emptive Right Securities to Genworth Financial or a
member of the Genworth Financial Group hereunder.

(d) Stock Exchange and Other Consents. Each of the Parties shall use all
reasonable commercial efforts to take, or cause to be taken, all actions, and to
do, or cause to be done as promptly as practicable, all things necessary, proper
or advisable under Applicable Law to consummate and make effective the
transactions contemplated by this Article III, including obtaining any
governmental, regulatory, stock exchange or other consents, transfers, orders,
qualifications, waivers, authorizations, exemptions and approvals, providing all
notices and making all registrations, filings and applications necessary or
desirable for the consummation of the transactions contemplated by this Article
III, including any filings with governmental or regulatory agencies. Genworth
Canada shall forthwith notify Genworth Financial if as a condition of obtaining
any applicable regulatory approvals, including securities regulatory and stock
exchange approval, the Purchase Price must be an amount greater than the
Triggering Event Price and shall keep Genworth Financial fully informed and
allow Genworth Financial to participate in any communications with such stock
exchange regarding the exercise of the Pre-Emptive Right.

 

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(e) Expenses. Except as otherwise specifically provided in this Article III,
each Party shall bear its own expenses incurred in connection with this Article
III and in connection with all obligations required to be performed by each of
them under this Article III.

(f) Publicity. The Parties shall, subject to their respective legal obligations
and Applicable Law, consult with each other, and use reasonable efforts to agree
upon the text of any written press release relating to this Article III or the
transactions contemplated hereby, before issuing any such press release.

(g) Pre-Emptive Right Not Exercisable if Registration Rights Exercised. Genworth
Financial shall not be entitled to exercise the Pre-Emptive Right in respect of
any offering in which Genworth Financial exercises its rights under Section 2.2
of the Registration Rights Agreement.

SECTION 3.03 Exercise of Pre-Emptive Right.

(a) Genworth Canada shall give Genworth Financial notice (a “Triggering Event
Notice”) as soon as practicable (i) following a determination by Genworth Canada
to effect a Triggering Event other than a Triggering Event that arises as a
result of the exercise of a Special Option and (ii) following the exercise of a
Special Option. Each Triggering Event Notice shall include the number of
Pre-Emptive Right Securities which Genworth Financial shall be entitled to
purchase as a result of the applicable Triggering Event, a calculation
demonstrating how such number was determined, the Triggering Event Price and the
anticipated Triggering Event Closing Date and the terms and conditions of the
Pre-Emptive Right Securities, if other than Common Shares. Genworth Canada shall
also give Genworth Financial notice as soon as practicable following the grant
of a Special Option.

(b) Subject to the provisions hereof, the Pre-Emptive Right shall, in each
instance, be exercisable by Genworth Financial at any time during a period of
five (5) Business Days following receipt in accordance with Section 3.03(a) of a
Triggering Event Notice, provided that Genworth Financial shall make its
determination as to whether to exercise the Pre-Emptive Right in respect of such
Triggering Event as soon as practicable and shall promptly deliver an
irrevocable notice (an “Exercise Notice”) in writing addressed to Genworth
Canada confirming that it will exercise the Pre-Emptive Right in respect of such
Triggering Event, specifying the number of Pre-Emptive Right Securities that it
will purchase and the member(s) of the Genworth Financial Group to whom such
Pre-Emptive Right Securities are to be issued, if other than Genworth Financial.
If Genworth Canada does not receive an Exercise Notice in respect of a
Triggering Event Notice within such five (5) Business Day period, Genworth
Financial shall be deemed to have not exercised the Pre-Emptive Right in respect
of the Triggering Event to which such Triggering Event Notice relates and the
Pre-Emptive Right shall be deemed to have expired in respect of such Triggering
Event.

 

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(c) Subject to Applicable Law, Pre-Emptive Right Closing of the issue of the
Pre-Emptive Right Securities shall occur on the Triggering Event Closing Date or
such later date as the Parties may agree upon.

(d) The obligation of Genworth Canada to consummate the sale of the Pre-Emptive
Right Securities under this Article III is subject to the fulfilment, prior to
or at the Pre-Emptive Right Closing, of each of the following conditions, any of
which may be waived by Genworth Canada in writing:

(i) Genworth Financial shall have performed and complied in all material
respects with the agreements and covenants required by this Article III to be
performed or complied with by Genworth Financial prior to or at the Pre-Emptive
Right Closing;

(ii) there shall not be in effect any injunction or restraining order issued by
a court of competent jurisdiction which prohibits the consummation of the
transactions contemplated by this Article III nor shall there be any
investigation or proceeding pending before any court or governmental authority
seeking to prohibit the consummation of the transactions contemplated by this
Article III;

(iii) no Applicable Law shall have been enacted by any governmental authority
which prohibits the consummation of the transactions contemplated by this
Article III or makes such consummation illegal;

(iv) the closing of the issue and sale of the securities constituting the
Triggering Event shall have occurred prior to, or shall occur concurrently with,
the Pre-Emptive Right Closing;

(v) any stock exchange upon which the Common Shares shall then be listed and any
other securities regulator having jurisdiction and whose approval is required
shall have approved the issue and sale of such Pre-Emptive Right Securities; and

(vi) Genworth Financial shall have provided evidence satisfactory to Genworth
Canada and its counsel, acting reasonably, that the issue and sale of the
Pre-Emptive Right Securities is exempt from the prospectus and registration
requirements, or the equivalent thereof, in all applicable jurisdictions.

(e) The obligation of Genworth Financial to consummate the purchase of the
Pre-Emptive Right Securities under this Article III is subject to the
fulfilment, prior to or at the Pre-Emptive Right Closing, of each of the
following conditions, any of which may be waived by Genworth Financial in
writing:

(i) Genworth Canada shall have performed and complied in all material respects
with the agreements and covenants required by this Article III to be performed
or complied with by it prior to or at the Pre-Emptive Right Closing;

(ii) there shall not be in effect any injunction or restraining order issued by
a court of competent jurisdiction which prohibits the consummation of the
transactions contemplated by this Article III, nor shall there be any
investigation or proceeding pending before any court or governmental authority
seeking to prohibit the consummation of the transactions contemplated by this
Article III;

 

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(iii) no Applicable Law shall have been enacted by any governmental authority
which prohibits the consummation of the transactions contemplated by this
Article III or makes such consummation illegal; and

(iv) any stock exchange upon which the Common Shares shall then be listed and
any other securities regulatory having jurisdiction and whose approval is
required shall have approved of the issue and sale of such Pre-Emptive Right
Securities.

(f) At or prior to the time of the Pre-Emptive Right Closing,

(i) Genworth Canada shall deliver, or cause to be delivered, to Genworth
Financial the Pre-Emptive Right Securities registered in the name of or
otherwise credited to Genworth Financial or such member of the Genworth
Financial Group as is designated in writing by it;

(ii) Genworth Financial shall deliver or cause to be delivered to Genworth
Canada payment of the Purchase Price by certified cheque or wire or other
electronic funds transfer; and

(iii) the Parties shall deliver any documents required to evidence the
requirements set out in Sections 3.03(d)
and 3.03(e).

SECTION 3.04 No Obligations Unless Pre-Emptive Right Exercised. Nothing herein
contained or done pursuant hereto shall obligate Genworth Financial to purchase
or pay for, or shall obligate Genworth Canada to issue, the Pre-Emptive Right
Securities except upon the exercise by Genworth Financial of the Pre-Emptive
Right in accordance with the provisions of this Article III and compliance with
all other conditions precedent to such issue and purchase contained in this
Article III.

SECTION 3.05 No Rights As Holder of Pre-Emptive Right Securities. Genworth
Financial shall not have any rights whatsoever as a holder of any of the
Pre-Emptive Right Securities (including any right to receive dividends or other
distributions therefrom or thereon) until Genworth Financial shall have duly
acquired the Pre-Emptive Right Securities.

ARTICLE IV

FINANCIAL AND OTHER INFORMATION

SECTION 4.01 Annual and Quarterly Financial Information.

(a) Genworth Canada agrees that, with respect to any fiscal quarter or fiscal
year during which, at any time, Genworth Financial beneficially owns not less
than twenty percent (20%) of the outstanding Common Shares, Genworth Canada
shall deliver to Genworth Financial the financial data and other information set
forth on Schedule 4.01 for such fiscal period. Genworth Canada shall deliver
such financial data and other information within such

 

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reasonable time periods as are specified by Genworth Financial, together with a
certificate of the Chief Executive Officer and Chief Financial Officer of
Genworth Canada certifying to the accuracy and completeness of such information.

(b) All financial data delivered to Genworth Financial hereunder shall be
prepared in accordance with US GAAP and applicable SEC financial reporting
requirements and shall be consistent with the level of detail provided in
comparable financial data furnished by Genworth Canada or its Subsidiaries prior
to the Closing Date. All annual and quarterly consolidated financial statements
of Genworth Canada and its Subsidiaries shall set forth in each case in
comparative form the consolidated figures for the previous fiscal year or the
equivalent quarter and year-to-date period in the previous fiscal year, as
applicable, shall be prepared in accordance with US GAAP and applicable SEC
financial reporting requirements and shall be consistent with the level of
detail provided in comparable financial statements furnished by Genworth Canada
or its Subsidiaries prior to the Closing Date. The financial data and other
information provided hereunder shall include management’s discussion and
analysis and all statistical information necessary for inclusion in any Genworth
Financial earnings press release or any financial statements, management’s
discussion and analysis of financial condition and results of operations
(“MD&A”) or other public filing required to be made by Genworth Financial, along
with appropriate supporting documentation.

(c) Genworth Canada agrees that at any time Genworth Financial beneficially owns
not less than twenty percent (20%) of the outstanding Common Shares, Genworth
Canada shall deliver to Genworth Financial, on or before the third day, to the
extent reasonably practicable, but in no event later than the day prior to the
day Genworth Canada publicly files its Annual Information Form and annual and
quarterly financial statements and MD&A with the Securities Commissions, the
final form of its Annual Information Form and annual or quarterly financial
statements and MD&A, as applicable, together with all certifications required by
Applicable Law by each of the chief executive officer and chief financial
officer of Genworth Canada and, in the case of audited annual financial
statements, an opinion on the audited annual financial statements by Genworth
Canada’s independent certified public accountants.

SECTION 4.02 Tax Information. Genworth Canada agrees that, with respect to any
taxation period during which, at any time, Genworth Financial beneficially owns
not less than ten percent (10%) of the outstanding Common Shares, Genworth
Canada shall deliver to Genworth Financial the tax data and other information
reasonably required by Genworth Financial to prepare and file its tax returns,
as referenced on Schedule 4.02 for such period. Genworth Canada shall deliver
such tax data and other information within such reasonable time periods as are
specified by Genworth Financial, and will promptly notify Genworth Financial of
any changes in the information previously provided, particularly changes
resulting from filing amended tax returns or examinations by any Governmental
Authority. In addition, Genworth Canada will retain documentation necessary to
support the information furnished under Schedule 4.02 for at least five years
following the calendar year to which the information requested relates, or such
longer time as Genworth Financial reasonably requests.

 

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SECTION 4.03 Operating Reviews. Genworth Canada agrees that, for so long as
Genworth Financial beneficially owns not less than twenty percent (20%) of the
outstanding Common Shares, Genworth Canada shall deliver to Genworth Financial
the financial, risk and other information, reports and plans set forth on
Schedule 4.03 in respect of each fiscal quarter or fiscal year, as applicable,
within such reasonable time periods as are specified by Genworth Financial.
Genworth Canada shall provide Genworth Financial with an opportunity to meet
with management of Genworth Canada to discuss such information, reports and
plans upon reasonable notice.

SECTION 4.04 General Requirements. The parties acknowledge and agree that
financial reporting requirements and prudent risk management practices and
procedures will change over time. Accordingly, the parties agree that all
information provided by Genworth Canada or any of its Subsidiaries to Genworth
Financial pursuant to this Article IV shall be consistent in terms of format and
detail and otherwise with the procedures and practices in effect prior to the
Closing Date with respect to the provision of such financial and other
information by Genworth Canada or its Subsidiaries to Genworth Financial (and
where appropriate, as presently presented in financial and other reports
delivered to the board of directors of Genworth Financial), with such changes
therein as may be reasonably requested by Genworth Financial from time to time,
including any changes resulting from changes in accounting procedures,
processes, methodologies or practices that are required in order to comply with
Applicable Law, including the rules, regulations and requirements of the SEC, as
applicable.

SECTION 4.05 Additional Requirements. Genworth Canada agrees that, for so long
as, and with respect to any financial year during which, Genworth Financial
beneficially owns not less than twenty percent (20%) of the outstanding Common
Shares:

(a) Cooperation. Genworth Canada will provide to Genworth Financial on a timely
basis all information that Genworth Financial or any of its Subsidiaries
reasonably requires for the preparation, printing, filing, and public
dissemination of any required public filing by Genworth Financial. Without
limiting the generality of the foregoing, Genworth Canada will provide all
required financial information with respect to it and its consolidated
Subsidiaries to Genworth Financial’s independent certified public accountants
(the “Genworth Financial Auditors”) and management in a sufficient and
reasonable time and in sufficient detail to permit such auditors to take all
steps and perform all review necessary with respect to information to be
included or contained in financial statements, MD&A and other public filings by
Genworth Financial.

(b) Coordination of Auditors’ Opinions. Genworth Canada will use its
commercially reasonable efforts to enable its independent certified public
accountants (the “Genworth Canada Auditors”) to complete their audit such that
they will date their opinion on Genworth Canada’s audited annual financial
statements on the same date that the Genworth Financial Auditors date their
opinion on the audited annual financial statements of Genworth Financial, and to
enable Genworth Financial to meet its timetable for the printing, filing and
public dissemination of the audited annual financial statements of Genworth
Financial.

(c) Earnings Releases. Genworth Financial agrees that, unless required by Law or
unless Genworth Canada shall have consented thereto, no member of the Genworth
Financial Group will publicly release any quarterly, annual or other financial
information of Genworth Canada or any of its Subsidiaries (“Genworth Canada
Information”) delivered to

 

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Genworth Financial pursuant to this Article IV prior to the time that Genworth
Financial publicly releases financial information of Genworth Financial for the
relevant period. Genworth Financial will consult with Genworth Canada on the
timing of their annual and quarterly earnings releases and Genworth Financial
and Genworth Canada will give each other an opportunity to review the
information therein relating to Genworth Canada and its Subsidiaries and to
comment thereon; provided that Genworth Financial shall have the sole right to
determine the timing of all such releases if Genworth Financial and Genworth
Canada disagree. Genworth Canada shall publicly release its financial results
for each annual and quarterly period concurrently with or immediately (and in no
event later than four hours) following Genworth Financial’s release of its
financial results for the corresponding period. If any member of the Genworth
Financial Group is required by Law to publicly release such Genworth Canada
Information prior to the public release of Genworth Financial’s financial
information, Genworth Financial will give Genworth Canada notice of such release
of Genworth Canada Information as soon as practicable but no later than two days
prior to such release of Genworth Canada Information.

(d) Meetings with Financial Analysts. Genworth Canada shall notify Genworth
Financial reasonably in advance of the date of all meetings to be held between
Genworth Canada and any financial analyst, and shall consult with Genworth
Financial as to the appropriate timing for all such meetings.

(e) Risk, Capital and Investment and Compliance Information.

(i) Risk, Capital and Investment Reporting. Genworth Canada shall deliver to
Genworth Financial the risk, risk management, capital and investment information
set forth on Schedule 4.05(e)(i) as directed by Genworth Financial from time to
time, with such information to be in accordance with the administrative and risk
management practices, policies and processes (including with respect to content
of information and timing) of Genworth Financial in effect from time to time and
communicated to Genworth Canada.

(ii) Compliance. Genworth Canada shall undertake the activities and deliver to
Genworth Financial the compliance information set forth on Schedule 4.05(e)(ii)
as directed by Genworth Financial from time to time, with such activities and
information to be in accordance with the administrative and compliance
practices, policies and processes (including with respect to content of
information and timing) of Genworth Financial in effect from time to time and
communicated to Genworth Canada.

(f) Access to Personnel and Working Papers. Genworth Canada will request the
Genworth Canada Auditors to make available to the Genworth Financial Auditors
both the personnel who performed or are performing the annual audit of Genworth
Canada and, consistent with customary professional practice and courtesy of such
auditors with respect to the furnishing of work papers, work papers related to
the annual audit of Genworth Canada, in all cases within a reasonable time, so
that the Genworth Financial Auditors are able to perform the procedures they
consider necessary to take responsibility for the work of the Genworth Canada
Auditors as it relates to the Genworth Financial Auditors’ report on the audited
annual financial statements of Genworth Financial, all within sufficient time to
enable Genworth Financial to meet its timetable for the printing, filing and
public dissemination of the annual financial results of Genworth Financial.

 

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SECTION 4.06 Fifty Percent Threshold. Genworth Canada agrees that, for so long
as, and with respect to any financial year during which, Genworth Financial
beneficially owns not less than fifty percent (50%) of the outstanding Common
Shares:

(a) Monthly and Other Financial Information. Genworth Canada shall deliver to
Genworth Financial the monthly financial, risk and other information, reports
and plans set forth on Schedule 4.06(a) in respect of each month within the time
periods specified by Genworth Financial. Genworth Canada shall provide Genworth
Financial with an opportunity to meet with management of Genworth Canada to
discuss such information, reports and plans upon reasonable notice.

(b) Internal Auditors. Genworth Canada shall provide Genworth Financial, the
Genworth Financial Auditors or other representatives of Genworth Financial
reasonable access upon reasonable notice during normal business hours to
Genworth Canada’s and its Subsidiaries’ books and records and personnel so that
Genworth Financial may conduct reasonable audits relating to the financial
statements and data provided by Genworth Canada pursuant to this Article IV, as
well as to the internal accounting controls and operations of Genworth Canada
and its Subsidiaries.

(c) Maintenance of Internal Controls. Genworth Canada shall, and shall cause
each of its consolidated Subsidiaries to, (i) make and keep books, records and
accounts, which, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of Genworth Canada and such
Subsidiaries and (ii) devise and maintain a system of internal controls over
financial reporting sufficient to provide reasonable assurances that:
(x) transactions are executed in accordance with management’s general or
specific authorization, (y) transactions are recorded as necessary (1) to permit
preparation of financial statements in conformity with US GAAP and Canadian GAAP
or any other criteria applicable to such statements and (2) to maintain
accountability for assets and (z) access to assets is permitted only in
accordance with management’s general or specific authorization.

(d) Management Certification. Genworth Canada’s chief executive officer and
chief financial or accounting officer shall submit quarterly representations,
substantially in the form furnished to Genworth Financial by Genworth Canada or
its Subsidiaries prior to the Closing Date (with such changes thereto prescribed
by Genworth Financial consistent with representations furnished to Genworth
Financial by other Subsidiaries of Genworth Financial or as otherwise required
by changes to Applicable Law or stock exchange requirements) attesting to the
accuracy and completeness of the financial statements or financial and
accounting records referred to therein in all material respects.

(e) Accountants’ Reports. Promptly, but in no event later than five Business
Days following the receipt thereof, Genworth Canada shall deliver to Genworth
Financial copies of all reports submitted to Genworth Canada or any of its
Subsidiaries by their independent certified public accountants, including,
without limitation, each report submitted to Genworth Canada or any of its
subsidiaries concerning its accounting practices and systems and any comment
letter submitted to management or the board of directors (or any committee
thereof) in connection with their annual audit and all responses to such reports
and letters.

 

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(f) Accounting Policies and Principles – US GAAP. Genworth Financial will notify
Genworth Canada from time to time of changes to US GAAP or SEC financial
reporting requirements. In connection with any such changes or any proposed
material change in US GAAP accounting policies, principles, processes or
methodologies from those in effect immediately prior to the Closing Date,
Genworth Canada will consult with Genworth Financial and, if requested by
Genworth Financial, Genworth Canada will consult with the Genworth Financial
Auditors with respect to such changes and their implementation by Genworth
Canada; provided, however that Genworth Canada shall not make or implement any
such changes without Genworth Financial’s prior written consent. Genworth
Financial will use its reasonable best efforts to promptly respond to any
request by Genworth Canada to make a change in accounting policies, principles,
processes or methodologies and, in any event, in sufficient time to enable
Genworth Canada to comply with its obligations under Section 4.01.

(g) Accounting Policies and Principles – Canadian GAAP. Genworth Canada will
give Genworth Financial reasonable prior notice of any proposed material change
in Canadian GAAP accounting policies, principles, processes or methodologies
from those in effect immediately prior to the Closing Date, and will give
Genworth Financial notice immediately following adoption of any such changes
that are mandated or required under Canadian GAAP or requirements of the
Securities Commissions. In connection therewith, Genworth Canada will consult
with Genworth Financial and, if requested by Genworth Financial, Genworth Canada
will consult with the Genworth Financial Auditors with respect thereto. As to
material changes in accounting principles that could affect Genworth Financial,
Genworth Canada will not make any such changes without Genworth Financial’s
prior written consent, excluding changes that are mandated or required under
Canadian GAAP or requirements of the Securities Commissions. If Genworth
Financial so requests, Genworth Canada will be required to obtain the
concurrence of the Genworth Canada Auditors as to such material change prior to
its implementation.

SECTION 4.07 Auditor Consultation. Genworth Canada agrees that, for so long as
Genworth Financial beneficially owns less than fifty percent (50%) but not less
than twenty percent (20%) of the outstanding Common Shares, Genworth Canada
shall consult with Genworth Financial in advance regarding the selection of the
audit firm to be proposed by management to be appointed as auditor of Genworth
Canada by its shareholders.

SECTION 4.08 Disclosure of Information. Information provided pursuant to this
Article IV may be disclosed by Genworth Financial in its public filings as
required by any Governmental Authority or pursuant to Applicable Law as
contemplated in
Article V of the Master Agreement.

SECTION 4.09 Privilege. The provision of any information pursuant to this
Article IV shall not be deemed a waiver of any privilege, including privileges
arising under or related to the attorney-client privilege or any other
applicable privileges (a “Privilege”). Following the Closing Date, neither
Genworth Canada nor its Subsidiaries nor Genworth Financial nor its Subsidiaries
will be required to provide any information pursuant to this Article IV if the
provision of such information would serve as a waiver of any Privilege afforded
such information.

 

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ARTICLE V

INDEMNIFICATION, DISPUTE RESOLUTION AND EXPENSES

SECTION 5.01 Indemnification. The parties shall indemnify each other in
connection with this Agreement in accordance with Article VI of the Master
Agreement, which shall be the sole and exclusive procedures for indemnification
relating to this Agreement.

SECTION 5.02 Dispute Resolution. Any dispute, controversy or claim arising out
of, or relating to this Agreement (a “Dispute”) shall be resolved in accordance
with Article VII of the Master Agreement, which shall be the sole and exclusive
procedures for the resolution of any such Dispute.

SECTION 5.03 Expenses. Except as otherwise specifically provided in this
Agreement, each party hereto shall bear any costs and expenses incurred in
connection with exercising its rights and performing its obligations under this
Agreement.

ARTICLE VI

TERMINATION

SECTION 6.01 Termination. The term of this Agreement shall commence on the date
hereof and expire on the first date on which Genworth Financial beneficially
owns less than ten percent (10%) of the Common Shares of Genworth Canada.

SECTION 6.02 Survival. Article V (Indemnification, Dispute Resolution and
Expenses), Section 6.02 (Survival) and Article VII (General Provisions) shall
survive the expiration or other termination of this Agreement and remain in full
force and effect. Section 4.01 (Annual and Quarterly Financial Information)
shall survive the expiration or other termination of this Agreement and remain
in full force and effect until Genworth Canada has provided the required
information and Genworth Financial has prepared and publicly filed its financial
statements for the applicable period. Section 4.02 (Tax Information) shall
survive the expiration or other termination of this Agreement and remain in full
force and effect until the 15th of September following the taxable year in which
expiration or termination occurs.

ARTICLE VII

GENERAL PROVISIONS

SECTION 7.01 Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the Laws of the Province of Ontario
irrespective of the choice of Laws principles.

 

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SECTION 7.02 Co-operation. The requirements of Section 8.02 of the Master
Agreement are and shall be deemed to be incorporated and made an integral part
of this Agreement.

SECTION 7.03 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 7.03):

if to Genworth Canada:

Genworth MI Canada Inc.

2060 Winston Park Drive

Suite 300

Oakville, ON L6H 5R7

Attention: General Counsel

Phone: 905.287.5484

Fax: 905.287.5472

if to Genworth Financial:

Genworth Financial, Inc.

6620 West Broad Street

Richmond, VA 23230

Attention: General Counsel

Phone: 804.662.2574

Fax: 804.662.2414

if to Brookfield:

Brookfield Life Assurance Company Limited

c/o Aon Insurance Managers (Bermuda) Ltd.

Craig Appin House

8 Wesley Street

Hamilton HM JX

Bermuda

Attention: President

Phone: 441-295-2220

Fax: 441-292-0217

 

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with a copy to:

Brookfield Life Assurance Company Limited

c/o Genworth Financial, Inc.

6620 West Broad Street

Richmond, VA 23230

Attention: President

Phone: 804-662-2560

Fax: 804-662-2414

SECTION 7.04 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any Applicable 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 7.05 Entire Agreement. Except as otherwise expressly provided in this
Agreement, this Agreement (including the Schedules hereto and the herein
referenced provisions of the Master Agreement) constitutes the entire agreement
of the parties hereto 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 hereto with respect to the subject matter of this
Agreement.

SECTION 7.06 Assignment; No Third-Party Beneficiaries.

(a) A member of the Genworth Financial Group (including, for greater certainty,
Brookfield) may assign this Agreement to any member of the Genworth Financial
Group to whom Common Shares or the Special Share are transferred and who agrees
to become party hereto and to be bound by this Agreement (whereupon such
transferee shall become an Applicable GNW Shareholder in respect of such Common
Shares or the Special Share, as applicable), provided, however that such
transferor must remain party hereto in respect of any Common Shares or the
Special Share, as applicable, remaining held by it, and Genworth Canada hereby
consents and agrees to any such assignment. Except as aforesaid, this Agreement
shall not be assigned by any party hereto without the prior written consent of
the other party.

(b) Except as provided in Article V with respect to indemnification, 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.

 

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SECTION 7.07 Amendment; Waiver. No provision of this Agreement may be amended or
modified except by a written instrument signed by all the parties hereto. 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 hereto of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any other subsequent breach.

SECTION 7.08 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, paragraph, and Schedule are references to the Articles,
Sections, 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 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 7.09 Currency. All references in this Agreement to “dollars” or “$” are
expressed in Canadian currency, unless otherwise specifically indicated.

SECTION 7.10 Counterparts. This Agreement may be executed in one or more
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 or electronic transmission shall be as effective as delivery of a
manually executed counterpart of this Agreement.

[SIGNATURE PAGE FOLLOWS]

 

23

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

 

GENWORTH MI CANADA INC. By:   /s/ Peter Vukanovich   Name:   Peter Vukanovich  
Title:   President and Chief Operating Officer GENWORTH FINANCIAL, INC. By:  
/s/ Joseph J. Pehota   Name:   Joseph J. Pehota   Title:   Senior Vice President
– Corporate Development BROOKFIELD LIFE ASSURANCE COMPANY LIMITED By:   /s/ Ward
Bobitz   Name:   Ward Bobitz   Title:   President

 

24

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SCHEDULES

Schedule 4.01 Annual and Quarterly Financial Data and Other Information

 

          GNW Ownership Interest

Schedule Name(s)

  

Description (Contents)

   50% or Greater    20% or Greater, but
Less than 50% Production Metrics          Insurance and risk in force   
Segregated by (i) product, (ii) loan size, (iii) age, (iv) province and (v)
policy year with supporting documentation    ü    ü New insurance written   
Segregated by product with supporting documentation    ü    ü Policies in force
   Segregated by product with supporting documentation    ü    ü Delinquent
loans    Segregated by product and High LTV and Low LTV insurance with
supporting documentation    ü    ü Average primary loan size    Segregated by
product with supporting documentation    ü    ü LTV ratio    Segregated by
product and ranges with supporting documentation    ü    ü Financial Statements
         Trended SEC US GAAP Balance Sheet    Trended for last 8 quarters    ü
   ü Trended SEC US GAAP Income Statement    Trended for last 8 quarters    ü   
ü SEC US GAAP Balance Sheet    Versus (i) prior quarter, (ii) same quarter of
prior year and (iii) prior year end, with fx adjusted variance explanations    ü
   ü SEC US GAAP Income Statement    Versus prior quarter and same quarter of
prior year, with fx adjusted variance explanations    ü    ü Supporting
Documentation          4 Blocker/Significant and Unusual Items    Describes
changes to business relationships, processes, systems, asset/liability valuation
methodologies and other items that impact financial statement results    ü    ü
Accounting memoranda    Support for conclusions reached on accounting matters
during the quarter    ü    ü Actuarial review report    Support for conclusions
reached on actuarial matters    ü    ü Deferred Acquisition Cost study       ü
   ü US GAAP trial balance ledger feed    Prepared for all SEC required reported
accounts    ü    ü Balance Sheet account rollforwards    Rollforward (i)
Deferred Acquisition Cost, (ii) Intangibles (PVFP, software and licenses), (iii)
Loss Reserve, (iv) Goodwill and (v) Unearned Premiums for last 8 quarters and
Equity year-to-date    ü    ü Written and Earned Premium rollforward    For last
8 quarters    ü    ü Other Assets and Other Liabilities    Detailed by
subcategories with variance explanations versus same quarter of prior year and
prior year end    ü    ü Schedule of Commitment and Contingencies       ü    ü
Auditor Questionnaire       ü    ü Financial Statement Representation Letter   
Management representation letter signed by CEO, CFO and Controller    ü    ü
Account reconciliations in Genworth reconciliation system    For all accounts   
ü    ü

 

25

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Schedule 4.02 Tax Data and Other Information

 

          GNW Ownership Interest

Schedule Name(s)

  

Description (Contents)

   50% or Greater    10% or Greater, but
Less than 50% Annual US Tax Reporting Package for Form 5471       ü    ü
Canadian Tax Returns    Including all provincial tax returns    ü    ü Canadian
Tax Liability Estimates    Including all provinces    ü    ü

Schedule 4.03 Financial, Risk and Other Information

 

          GNW Ownership Interest

Schedule Name(s)

  

Description (Contents)

   50% or Greater    20% or Greater, but
Less than 50%

Quarterly Reports

         Short Range Forecast Submission to TM1    Forecast of current quarter
US GAAP earnings by SEC line item and key metrics with variance explanations
versus Operating Plan    ü    ü Finance Reviews    Review of US GAAP income
statement, loss drivers and expense drivers for the quarter with variance
explanations versus (i) prior quarter, (ii) same quarter of prior year and (iii)
Operating Plan    ü    ü Operating Reviews    Review of economic environment and
trends, portfolio metrics, production metrics, US GAAP income statement, loss
drivers, expense drivers and strategy for the quarter with variance explanations
versus (i) prior quarter, (ii) same quarter of prior year and (iii) Operating
Plan    ü    ü Preparation of Earnings Release       ü    ü

Annual Planning

         Multi-Year Plan submission to TM1    5 Year forecast of Company
performance, capital needs and dividend plans    ü    ü Operating Plan Expense
Budgeting Submission to TM1    1 Year forecast of Company’s expenses for
subsequent year    ü    ü Operating Plan Submission to TM1    1 Year forecast of
Company performance, capital needs and dividend plan used to set targets for
subsequent year    ü    ü

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Schedule 4.05(e)(i) Risk, Capital and Investment Information

 

          GNW Ownership Interest

Schedule Name(s)

  

Description (Contents)

   50% or Greater    20% or Greater, but
Less than 50%

Risk Management

         Economic / Housing Market Indicators    Home Price Appreciation, GDP
and Unemployment Rate at national and regional level    ü    ü Ever-To-Date Loss
Ratios    Loss Ratios by (i) book year, (ii) product, (iii) region and (iv)
lender    ü    ü Delinquency Drill Down    Delinquency Count and Rate by (i)
book year, (ii) region and (iii) product    ü    ü Loss Analysis    Representing
(i) Total Losses, (ii) dollars of Paid Claims, (iii) Change In Reserves, (iv)
Loss Ratio and (v) Other Loss Metrics    ü    ü Loss Tracking    Actual loss
development versus Operating Plan    ü    ü Delinquency Trends    Delinquency
Rate Trends by book year and region (graphs)    ü    ü Monthly Cure Rates (High
LTV)    Trends at (i) national, (ii) regional and (iii) book year levels
(graphs)    ü    ü New Delinquency Rates    Trends at (i) national, (ii)
regional and (iii) book year levels (graphs)    ü    ü Portfolio Trends    In
Force and New Insurance Written by (i) geographic region, (ii) LTV, (iii) credit
score, (iv) OmniScore and (v) product    ü    ü Delinquency And Claim
Performance By Development Year    Delinquency and Claim Triangles by book year
   ü    ü Original and Effective LTV    Original and Effective LTV and
Cumulative Home Price Appreciation by book year    ü    ü Loss Forecasts    Base
Case and Stress Scenario Loss forecasts with key assumptions    ü    ü RADAR
Report    Portfolio composition and performance versus targets    ü    ü ERM
Metrics    Including (i) Earnings and Earnings at Risk, (ii) ROE, (iii) MCT
Ratio, (iv) Liquidity Ratio, (v) VaR, (vi) BE VNB and (vii) MC VNB    ü    ü In
Force Review Information    In Force Review Package including (i) portfolio
performance, (ii) risk issues and (iii) ROE performance    ü    ü Bulk Deal
Summary    Summary of Bulk Deals including (i) NIW, (ii) geographic and product
dispersion and (iii) pricing and ROE    ü    ü Underwriting Audit Reports   
Summary of Underwriting Audits including Error Rates and Findings    ü    ü

Capital Management

         Capital Management Report    Summary of capital available versus OSFI
minimum required capital for current quarter (MCT ratio) and forecast for the
subsequent four quarters, including impacts of dividend plans, stress scenarios,
and unrealized gain/loss positions    ü    ü Dividend Plans    Details of
dividend plan for current period and forecast for remainder of year    ü    ü

Investment Management

         Monthly Investment Portfolio Holdings Report       ü    ü Monthly
Investment Snapshot Report       ü    ü

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Schedule 4.05(e)(ii) Compliance Activities and Reporting

 

          GNW Ownership Interest

Schedule Name(s)

  

Description (Contents)

   50% or Greater    20% or Greater, but
Less than 50% Annual Compliance Review    Annual compliance review of Genworth
Canada utilizing the Genworth One Compliance self-assessment process    ü    ü
Code of Ethics    Adopt the Genworth Financial Integrity First Code of Ethics
(as it may be amended or modified from time to time). Require, as a condition of
employment, that (i) employees of Genworth Canada provide a written
acknowledgement of the Code of Ethics at least once each year (or such other
frequency as Genworth Financial requires of its employees generally from time to
time) and (ii) employees of Genworth Canada undertake training in the Code of
Ethics, in such manner as Genworth Financial requires of its employees generally
from time to time, at least once every two years (or such other frequency as
Genworth Financial requires of its employees generally from time to time).
Provide confirmation to Genworth Financial of the foregoing as reasonably
requested by Genworth Financial from time to time.    ü    ü Conflict of
Interest Questionnaires    Annually, circulate and obtain completed conflict of
interest questionnaires from directors and officers, such questionnaires to be
in the form provided by Genworth Financial from time to time. Provide
information about or copies of such completed questionnaires to Genworth
Financial upon request.    ü    ü Customer Complaints    Quarterly, provide a
report of customer complaints received    ü    ü Regulatory Updates    Quarterly
or as otherwise reasonably requested by Genworth Financial, provide briefings or
updates to Genworth Financial on legal and regulatory affairs reflecting changes
and developments applicable to or affecting Genworth Canada and/or the Canadian
mortgage insurance business.    ü    ü Ombudsperson Reports    Maintain an
ombudsperson and, quarterly or as otherwise reasonably requested by Genworth
Financial, provide reports of complaints, concerns or issues raised with the
Genworth Canada ombudsperson.    ü    ü Notification of Material Ombudsperson
Contacts    Provide reports of significant or material complaints, concerns or
issues raised with the Genworth Canada ombudsperson within 5 Business Days of
the complaint, concern or issue being raised.    ü    ü Notification of Material
Concerns Raised with Directors    Provide reports of significant or material
complaints, concerns or issues raised directly with the Genworth Canada board of
directors or audit committee of the board of directors, within 5 Business Days
of the complaint, concern or issue being raised.    ü    ü Notification of
Material Regulatory Matters    Provide reports of significant or material
regulatory inquiries, examinations, audits or requests for information (whether
from OSFI, provincial insurance regulatory authorities, securities regulatory
authorities or other applicable regulatory bodies) within 5 Business Days of
becoming aware of the matter. Provide prompt reports of other significant or
material regulatory matters. Provide copies of correspondence and other relevant
materials as reasonably requested by Genworth Financial.    ü    ü

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

Schedule 4.05(e)(ii) Compliance Activities and Reporting

 

          GNW Ownership Interest

Schedule Name(s)

  

Description (Contents)

   50% or Greater    20% or Greater, but
Less than 50% Quarterly Compliance Dashboard/Metric Reporting    Quarterly,
provide compliance dashboard/metric reporting to Genworth Financial in the
format provided prior to the date of this Agreement, as reasonably modified from
time to time by Genworth Financial.    ü    ü Risk, Capital and Investment
Committee    Provide copies of all documents and materials provided to or
reviewed by the Risk, Capital and Investment Committee of Genworth Canada (or
any successor committee or committee with equivalent function) promptly after
delivery of such materials to committee members.    ü    ü Other    Copies of
regulatory compliance policies, procedures and processes and other materials and
information related to regulatory matters and compliance by Genworth Canada, as
reasonably requested by Genworth Financial from time to time.    ü    ü

The foregoing information and materials shall be provided to the Chief
Compliance Officer and such other persons at Genworth Financial as Genworth
Financial may designate from time to time.

For purposes of this Schedule 4.05(e)(ii), references to Genworth Canada include
Genworth MI Canada Inc. and its subsidiaries from time to time, including
Genworth Financial Mortgage Insurance Company Canada.

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Schedule 4.06(a) Monthly Financial, Risk and Other Information

 

          GNW Ownership Interest

Schedule Name(s)

  

Description (Contents)

   50% or Greater    20% or Greater, but
Less than 50%

Financial Data

         US GAAP trial balance ledger feed    Prepared for all SEC required
reported accounts    ü    Account reconciliations in Genworth reconciliation
system    For high risk accounts    ü   

Monthly Reports

         Headcount    Name and function of Company employees, contractors and
open positions    ü    Production    Actual monthly results and total quarter
forecast with variance explanations to Operating Plan    ü    Loss Mitigation   
Details on loss mitigation efforts and results during the period along with
quarterly forecast for remainder of year    ü    Driver Based Forecast   
Business leading indicator trends and quarterly forecast of net operating income
for the current year and subsequent year    ü    Short Range Forecast Submission
to TM1    Forecast of current quarter US GAAP earnings by SEC line item and key
metrics with variance explanations versus Operating Plan    ü    Monthly Metric
Submission to TM1    Key metrics for the current month and forecast of key
metrics and US GAAP SEC income statement and balance sheet for current year and
subsequent year    ü    Operating Reviews    Review of economic environment and
trends, portfolio metrics, production metrics, US GAAP income statement, loss
drivers and expense drivers for the current quarter forecast with variance
explanations versus (i) prior quarter, (ii) same quarter of prior year and (iii)
Operating Plan    ü