Exhibit 10.47


 


 


 


 


 


 


 


 


 


 


 


CANADIAN TAX MATTERS AGREEMENT


 


AMONG


GENERAL ELECTRIC COMPANY


GENERAL ELECTRIC CAPITAL CORPORATION


GECMIC HOLDINGS INC.


GE CAPITAL MORTGAGE INSURANCE COMPANY (CANADA)


AND


GENWORTH FINANCIAL, INC.


MADE AS OF


MAY 24, 2004


 


 


 


 


 


 


 


 


 


 


 


 

















 


CANADIAN TAX MATTERS AGREEMENT


 


 


AMONG                                                                                                                                                                                                GENERAL ELECTRIC COMPANY, a
company incorporated under the laws of the State of New York,


                                                                                                                                                                                                                                                                                (hereinafter referred to as “GE”)


 


AND                                                                                                                                                                                                                     GENERAL ELECTRIC CAPITAL CORPORATION,
a company incorporated under the laws of the State
of Delaware,


 


                                                                                                                                                                                                                                                                                (hereinafter referred to as “GECC”)


 


AND                                                                                                                                                                                                                     GECMIC HOLDINGS INC., a company incorporated under
the laws of Canada,


 


                                                                                                                                                                                                                                                (hereinafter referred to as “GECMIC Holdings”)


 


 


AND                                                                                                                                                                                                                     GE CAPITAL MORTGAGE INSURANCE COMPANY
(CANADA),
a company duly incorporated under the laws of Canada,


 


(hereinafter
referred to as the “Company”)


 


AND                                                                                                                                                                                                                     GENWORTH FINANCIAL, INC., a company incorporated under
the laws of Delaware,


 


(hereinafter
referred to as “Genworth”).


 


RECITALS:


 


 


A.                                   Pursuant
to the Master Agreement (“Master Agreement”) dated May 24, 2004 among GE, GECC,
GEI, Inc., a company incorporated under the laws of the State of Delaware
(“GEI”), GE Financial Assurance Holdings, Inc., a company incorporated under
the laws of the State of Delaware (“GEFAHI”), and Genworth, Genworth has
agreed, inter alia, to acquire
the outstanding shares of stock of certain subsidiaries of GE.


B.                                     Pursuant
to the US Tax Matters Agreement dated May 24, 2004 between GE, GECC, GEI,
GEFAHI, and Genworth, GE and Genworth have entered into an arrangement
governing the US tax affairs of the subsidiaries and businesses acquired
pursuant to the Master Agreement.


 

















 


C.                                     GECMIC
Holdings has agreed to sell, and Genworth has agreed to acquire (through a
Canadian subsidiary) all of the issued and outstanding shares of the Company ,
for fair market value consideration (the “Share Transfer”), such Share Transfer
to occur immediately before a proposed initial public offering of Genworth
shares.


D.                                    In
connection with the Share Transfer, the parties wish to set out their agreement
with respect to certain tax matters relating to the Company.


 


 


NOW, THEREFORE, IN CONSIDERATION OF THE SHARE TRANSFER, THE PARTIES
HERETO AGREE AS FOLLOWS:


 


1.                                      Definitions


1.1           “Taxes” means all federal,
provincial, municipal, territorial, foreign or other taxes, imposts, levies,
rates, assessments and government fees, charges or dues lawfully assessed,
levied, or imposed against the Company, including all income, capital gains,
excise, sales, use, property, capital, goods and services, business transfer,
value added, compensation, social security, payroll, employment, privilege,
franchise, licence and school taxes and custom and import duties, and includes
all interest, fines, and penalties with respect thereto.


1.2           “Tax Returns” means all reports,
returns, and other documents filed or required to be filed by the Company in
respect of Taxes or in respect of or pursuant to any domestic or foreign
federal, provincial, state, municipal, territorial or other taxing statute.


2.                                       Tax
Return Filing


2.1                                 The
Company shall be responsible for preparing and filing of the Company’s Tax
Return for the taxation year of the Company ended December 31, 2004 (the “2004
Return”).  The 2004 Return will be
subject to review, adjustment and approval by GE, which approval may not be
unreasonably withheld.  The Company
shall prepare a draft 2004 Return in sufficient time to enable GE to review the
draft 2004 Return and resolve any outstanding issues, so that the final 2004
Return may be filed on or before its due date.


2.2                                 Subject
to section 2.3, GE has the right to cause the Company to claim less than the
maximum allowable deduction in respect of reserves (the “Under-Reserve”) in its
2004 Canadian Tax Returns.  The
Under-Reserve shall not exceed the amount that will generate an excess of CAD
$72,000,000 of Canadian federal and provincial income tax over the Canadian
federal and provincial income tax the Company would pay absent the
Under-Reserve.


 


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GE shall notify the Company
and Genworth of its decision to exercise its right sufficiently in advance of
the time the Company is required to deliver the draft Tax Return.


2.3


a)                                      In
order for GE to be able to assert its right under section 2.2 the Company must
reasonably determine that after having paid the Taxes resulting from the
Under-Reserve, the Company will be able to comply with the Insurance Companies Act and have adequate
regulatory capital to carry on its business in a manner consistent with
applicable regulatory guidelines, overall prudence based on the in force
business, the Company’s reasonable growth expectations, volatility in the
investment portfolio, and capital efficiency.


b)                                     If the
Company reasonably determines that it cannot pay the Taxes resulting from the
Under-Reserve and meet the obligations in a), then before GE can exercise its
rights in section 2.2, the Company and Genworth shall consult and agree on a
method for Genworth to supply the required additional regulatory capital to the
Company or for the Company to otherwise satisfy the obligations in a) in
sufficient time to facilitate timely payment of such Taxes and filing of Tax
Returns.


c)                                      If
Genworth reasonably determines that it does not have sufficient liquidity to
supply the additional regulatory capital required in b), then GE shall lend or
otherwise provide to Genworth an amount up to the required additional
regulatory capital without interest or other cost to Genworth, but no more than
is required for Genworth to maintain sufficient liquidity after supplying the
required additional regulatory capital.


d)                                     To the
extent Genworth uses funds not lent or provided to it by GE to supply
additional regulatory capital to enable the Company to pay any or all of the
Taxes resulting from the Under-Reserve, GE shall reimburse Genworth for
Genworth’s opportunity cost of foregone investment.  To the extent the Company pays any or all of the Taxes resulting
from the Under-Reserve without additional regulatory capital from Genworth, GE
shall reimburse the Company for the Company’s opportunity cost of foregone
investment.  In determining the amount
of these reimbursements from time to time the foregone investment shall be
reduced as the Company recovers Taxes as a result of reinstating maximum
reserve claims for taxation years after 2004, which the Company undertakes to
do as soon as practicable.


 


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e)                                      If GE
disagrees with the determinations in b) or c), any party can send the matter to
arbitration for a decision.  Section VII
of the Master Agreement shall govern these arbitrations.


2.4                                 The
Company agrees that it shall take no actions outside of the ordinary course of
business that would result in a reduction in the Company’s regulatory capital,
unless GE is notified of and approves such action.


2.5                                 Unless
otherwise agreed by GE, until any loan or other funding made by GE to Genworth
pursuant to Section 2.3c) hereof has been repaid to GE, the Company shall claim
the maximum allowable deduction in respect of its reserves in its Canadian Tax
Returns for taxation years ending after 2004, to the extent of its taxable
income before reserve deductions. 
Genworth shall repay any loan or other funding received from GE pursuant
to Section 2.3c) hereof as soon as is reasonably possible.  In all events, Genworth shall repay such
loan or other funding no later than the date by which the Company recovers the
excess Canadian tax described in Section 2.2 hereof (as a result of reinstating
maximum reserve claims for taxable years after 2004).


2.6                                 The
Company shall not amend or re-file any Tax Return in respect of any taxation
period ending on or before December 31, 2004 without the prior written consent
of GE, which consent shall not be unreasonably withheld.


 


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3.                                       Further Assurances


The parties
agree that they shall, from time to time and at all reasonable times hereafter,
do and execute or cause to be done and executed, all such further acts as may
reasonably be required to give effect to this Agreement.


4.                                       The
preamble to this Agreement shall form an integral part of this Agreement.


5.                                       This
Agreement shall be governed by and will be construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.


 


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IN
WITNESS WHEREOF, the parties hereto have
signed this Agreement on •, 2004.


	
  GENERAL ELECTRIC COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Per:

  	
  /s/ Dennis
  D. Dammerman

  
	
   

  	
  Dennis D.
  Dammerman

  
	
   

  	
  Vice
  Chairman and Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  GENERAL ELECTRIC CAPITAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Per:

  	
  /s/ James A.
  Parke

  
	
   

  	
  James A.
  Parke

  
	
   

  	
  Vice
  Chairman and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   GECMIC HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Per:

  	
  /s/

  
	
   

  	
   

  
	
   

  	
   

  
	
  GE CAPITAL MORTGAGE INSURANCE
  COMPANY (CANADA)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Per:

  	
  /s/

  
	
   

  	
   

  
	
   

  	
   

  
	
  GENWORTH FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Per:

  	
  /s/ Joseph
  J. Pehota

  
	
   

  	
  Joseph J.
  Pehota

  
	
   

  	
  Senior Vice
  President

  



 


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