Document:

Exhibit
10.28

 

 

DERIVATIVES MANAGEMENT SERVICES
AGREEMENT

 

 

AMONG

 

 

GE LIFE AND ANNUITY ASSURANCE
COMPANY,

 

FEDERAL HOME LIFE INSURANCE COMPANY,

 

FIRST COLONY LIFE INSURANCE COMPANY,

 

GENERAL ELECTRIC CAPITAL ASSURANCE
COMPANY,

 

AND

 

GENWORTH FINANCIAL, INC.

 

AND

 

GNA CORPORATION

 

AND

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

 

DATED AS OF
             ,
2004

 

 

THIS DERIVATIVES MANAGEMENT SERVICES AGREEMENT
(the “Agreement”) is made and entered into as of the
           day of
            , 2004
(the “Effective Date”), by and among GE LIFE AND ANNUITY ASSURANCE COMPANY, an
insurance company domiciled in the Commonwealth of Virginia (“GELAAC”), FEDERAL
HOME LIFE INSURANCE COMPANY, an insurance company domiciled in the Commonwealth
of Virginia (“FHL”), FIRST COLONY LIFE INSURANCE COMPANY, an insurance company
domiciled in the Commonwealth of Virginia (“FCL”), GENERAL ELECTRIC CAPITAL
ASSURANCE COMPANY, an insurance company domiciled in the State of Delaware
(“GECA”; GECA, GELAAC, FHL and FCL are individually a “Client” and
collectively, the “Clients”), Genworth Financial, Inc., a Delaware corporation
(“GENWORTH”), GNA CORPORATION, a Washington corporation (“GNA”) and GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation (“GECC”).

 

RECITALS

 

WHEREAS, the Clients are
subsidiaries of GENWORTH, and the Clients and GENWORTH are all majority-owned
subsidiaries of GECC; and

 

WHEREAS, each Client,
from time to time, has desired and may in the future desire to hedge certain
risks, including but not limited to interest rate risk, associated with its
assets through the use of instruments commonly referred to as derivatives; and

 

WHEREAS, resolutions
adopted by the GECC Board and related policy statements require that GECC’s
Treasury Operation (“GECC Treasury”) executes, manages and administers all
derivative transactions on behalf of GECC and its subsidiaries; and

 

WHEREAS, GNA performs
certain investment management services for the Clients, including oversight of
derivatives transactions; and

 

WHEREAS, GECC Treasury may
from time to time, at the request of GNA, appoint certain individuals at GNA as
representatives of GECC Treasury with limited authority to execute, manage and
administer certain derivative transactions on behalf of the Clients; and

 

WHEREAS, each of the Clients
has or shall enter into ISDA Master Agreements together with related schedules
and confirmations (the “Contracts”) with various unaffiliated counterparties
(individually, a “Counterparty” and collectively, the “Counterparties”); and

 

WHEREAS, each of the
Clients, GENWORTH, GECC and GNA desire to enter into this Agreement to set
forth the services that each of GENWORTH, GECC and GNA will provide to the
Clients in connection with the Contracts;

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein, the
Clients, GENWORTH, GECC and GNA hereby agree as follows:

 

 

ARTICLE I

DEFINITIONS AND USAGE

 

1.1                               Definitions.  The following capitalized terms, as used in
this Agreement, have the following meanings:

 

“Affiliate”
of a Person means a Person who, directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
such Person.

 

“Applicable
Law” or “Applicable Laws” means any domestic or foreign federal, state or local
statute, law, ordinance or code, including the insurance code of the
domiciliary state of each Client (as applicable to such Client), or any rules,
regulations, administrative interpretations or orders issued by any
Governmental Authority, including any Insurance Authority, pursuant to any of
the foregoing, and any order, writ, injunction, directive, judgment or decree
of a court of competent jurisdiction applicable to the parties hereto.

 

“Board”
means the Board of Directors of a Client as the same may be elected from time
to time by the shareholders of such Client.

 

“Contracts”
shall have the meaning set forth in the recitals to this Agreement.

 

“Effective
Date” shall have the meaning set forth in the introductory paragraph.

 

“GAAP”
means generally accepted accounting principles in effect, from time to time, in
the United States.

 

“Governmental
Authority” means any Insurance Authority or any court, tribunal, arbitrator,
authority, agency, commission, official or other instrumentality of the United
States or any federal, national, state, municipal, county, city or other
political subdivision.

 

“Insurance
Authority” means the department, bureau, commission or other agency responsible
for overseeing insurance matters within any state that a Client is authorized to
do business (as applicable to such Client).

 

“Investment
Committee” means, with respect to any Client, a committee designated by such
Client’s Board to oversee such Client’s investment activities, including the
execution and management of derivative transactions.

 

“Investment
Guidelines” shall, with respect to each Client, mean the resolutions pertaining
to derivatives transactions adopted by the Board of such Client.

 

2

 

 “Person” means an individual, corporation,
partnership, limited liability company, association, trust or any other entity
or organization, including governmental or political subdivision or an agency
or instrumentality thereof.

 

“Records”
shall have the meaning set forth in Section 2.5.

 

“Representatives”
means, as applicable, a Client’s or GENWORTH’s directors, officers, employees,
accountants and legal and financial advisors.

 

“Representer”
shall have the meaning set forth in Section 6.2.

 

“SAP”
means statutory accounting procedures and principles prescribed or permitted by
Applicable Law.

 

1.2                               Headings;
Rules of Construction.  The
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.  Except as otherwise expressly provided in
this Agreement, the following rules of interpretation apply to this Agreement:
(i) the singular includes the plural and the plural includes the singular; (ii)
“or” and “any” are not exclusive and “include” and “including” are not limiting;
(iii) a reference to any agreement or other contract includes permitted
supplements and amendments; (iv) a reference to a law includes any amendment or
modification to such law and any rules or regulations issued thereunder; (v) a
reference to a person includes its successors and permitted assigns; and (vi) a
reference in this Agreement to an article, section, annex, exhibit or schedule
is to the article, section, annex, exhibit or schedule of this Agreement.

 

ARTICLE II

SERVICES

 

2.1                               Execution
and Management.  As to each
Client, subject to the provisions of this Section 2.1, GECC Treasury will
establish and confirm the terms of derivative transactions from time to time in
the name of such Client and shall execute and deliver or otherwise enter into
from time to time one or more derivatives confirmations or agreements
evidencing such derivative transactions on behalf of and in the name of such
Client as requested by such Client.  In
its performance of the foregoing obligations, GECC Treasury may appoint, from
time to time, at the request of GNA, certain employees of GNA as
representatives of GECC Treasury with authority to execute, manage and
administer certain derivative transactions on behalf of the Clients in
accordance with the terms of such appointment; provided, however, that
such appointment shall be in writing and any action taken by any such GNA
employee shall be in accordance with GECC’s policies with respect to
derivatives transactions as in effect from time to time.

 

2.2                               Credit
Support.  With respect to each
Contract, unless otherwise agreed by GECC and the applicable client, GENWORTH
will provide a guaranty in favor of the Counterparty

 

3

 

to such Contract.

 

2.3                               Administrative
Services.  With respect to the
Contracts, GECC will provide certain administrative services, including without
limitation certain legal services and paying agent services, on behalf of each
Client, as set forth in the Administrative Services Agreement (in the form attached
as Exhibit A hereto), dated as of the date hereof, among GECC and the
Clients.  In its performance of the
foregoing obligations, GECC may appoint, from time to time, certain employees
of GNA as representatives of GECC Treasury with authority to execute, manage
and administer certain derivative transactions on behalf of the Clients in
accordance with the terms of such appointment; provided, however, that
any such appointment shall be in writing and any action taken by any such GNA
employee shall be in accordance with GECC’s policies with respect to
derivatives transactions as in effect from time to time.

 

2.4                               Covenants
of GECC and GNA.

 

(a)                                  Each
of GECC and GNA shall discharge its duties with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person, acting
in a like capacity and familiar with such matters should use in the conduct of
an enterprise of a like character and with like aims.  Further, each of GECC and GNA shall use the same skill and care
in the management of each Client’s derivative transactions and in its other
duties hereunder as it uses in the administration of other similar matters for
which it has comparable responsibility.

 

(b)                                 In
the performance of its duties and obligations to each Client under this
Agreement, each of GECC and GNA shall act in conformity with (i) the
Articles/Certificate of Incorporation and Bylaws of the Client, (ii) the
Client’s Investment Guidelines or other written instructions of the Client’s
Board, (iii) the Client’s Investment Committee or Representatives of Client, as
applicable, (iv) GECC’s policies, including with respect to derivatives
transactions, as in effect from time to time, and (v) all Applicable Laws.

 

2.5                               Recordkeeping
and Reports; Review and Inspection.

 

(a)                                  GENWORTH,
GECC and GNA shall, unless such parties agree otherwise with one or more of the
Clients, maintain all records, memoranda, instructions or authorizations
(collectively, “Records”) relating to the execution, management and
administration of derivative transactions on behalf of each Client as required
by Applicable Laws, GAAP or SAP.  Such
Records will be the property of the applicable Client.  On a timely basis, GENWORTH, GECC and GNA
shall make available to a Client, at its administrative offices or such other
location as may be designated by such Client, copies or originals of such
Records upon reasonable request and, as necessary, to comply with Applicable
Laws.

 

4

 

(b)                                 All
Records, both internal and external with third parties, to the extent within
the control of GENWORTH, GECC and GNA, will clearly specify the ownership
interest of the applicable Client with respect to the relevant derivative
transactions.

 

(c)                                  Records
concerning derivative transactions executed or managed on behalf of a Client
that are not maintained physically on such Client’s premises or in such
Client’s care, custody and control shall be subject to review and audit at any
time by such Client, its Representatives, any Insurance Authority and any other
Governmental Authority, or any other entity designated by such Client, and
GENWORTH, GECC and GNA shall cooperate with and provide reasonable assistance
to any such person, including any auditor appointed by such Client to conduct an
audit of or for the Client.  Such
Records shall be maintained for the time periods and in a format required by
Applicable Law.  GENWORTH, GECC and GNA
shall notify the applicable Client prior to destruction of such Client’s
Records (in order that such Client may request transfer of such Records to such
Client as an alternative to destruction); provided that GENWORTH, GECC
and GNA may not, in any event, destroy such Records prior to expiration of all
applicable statutes of limitation.

 

(d)                                 GENWORTH,
GECC and GNA shall provide to each Client such other documents and information
pertaining to this Agreement and the derivative transactions executed or
managed on behalf of such Client at such times as such Client may reasonably
request including, but not limited to, information required to prepare reports
to any Insurance Authority or any other entity designated by such Client or as
may be required to comply with GAAP, SAP or Applicable Law.

 

(e)                                  GENWORTH,
GECC and GNA will fully cooperate with each Client with respect to unsettled or
unreconciled transactions and daily transmission of trading activity.

 

2.6                               Information
Furnished to GENWORTH, GECC or GNA. 
Each Client shall furnish to GENWORTH, GECC or GNA in a timely manner
any information that GENWORTH, GECC or GNA may reasonably request with respect
to the services performed under this Agreement for such Client.  In determining the requirements of
Applicable Laws with respect to a Client, GENWORTH, GECC and GNA may rely on an
interpretation of law by legal counsel to such Client.  In determining the requirements of
applicable accounting rules with respect to a Client, GENWORTH, GECC and GNA
may rely on an interpretation of such rules by accountants for such Client.

 

5

 

ARTICLE III

TERM AND TERMINATION

 

3.1                               This Agreement shall
continue in effect for an initial term beginning on the Effective Date and
ending December 31, 2004.  Unless
earlier terminated, this Agreement shall automatically renew on January 1, 2005
and on each January 1 thereafter for successive periods of one (1) year.  This Agreement may be terminated (i) at any
time during the initial term or any renewal term by GENWORTH, GECC or any
Client (but only with respect to such Client’s participation in the Agreement)
without payment of any penalty upon sixty (60) days prior written notice to the
other parties (which notice shall specify the effective date of termination),
and (ii) immediately for cause by any Client, but only with respect to such
Client’s participation in the Agreement (cause being understood as any material
breach, action or omission by GENWORTH, GECC or GNA that, in the reasonable
belief of such Client, is inconsistent with the terms of this Agreement).  This Agreement also shall automatically
terminate in the event of its unauthorized assignment by any party or, unless
otherwise agreed, if any party ceases to be a majority-owned direct or indirect
subsidiary of General Electric Company. 
Termination in any manner shall not affect the rights of any party,
including the status of any guarantees issued pursuant to Section 2.2 of this
Agreement that accrued prior to termination.

 

3.2                               Within
sixty (60) days of the termination of this Agreement, GENWORTH, GECC and GNA
shall transfer all Records of a Client to such Client or its designee.  All reasonable costs to transfer a Client’s
Records shall be paid by such Client.

 

ARTICLE IV

COMPENSATION

 

Each of GENWORTH,
GNA and GECC agree that if services are performed under this agreement, the
parties will determine appropriate compensation at the time the services are
rendered, provided, that such compensation shall be fair and reasonable.  Such agreement, however, shall not extend to
reimbursement of losses, damages and other expenses contemplated under Section
7.2 and for reimbursement of out-of pocket expenses incurred on behalf of a
Client.

 

ARTICLE V

CONFIDENTIALITY

 

Subject to the
duty of GENWORTH, GECC, GNA or a Client to comply with Applicable Laws, each
party hereto shall treat as confidential all information with respect to any
other party received pursuant to this Agreement.  No party shall use or disclose another party’s confidential
information except as contemplated by this Agreement.

 

6

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

6.1          By
Client.  Each
Client represents and warrants that:

 

(a)                                  It
is an insurance company duly organized, validly existing and in good standing
under the laws of its state of incorporation and has the power and authority
(including approval from the relevant Insurance Authority, if required) to
execute, deliver and perform this Agreement; and

 

(b)                                 This
Agreement is the valid and binding obligation of the Client enforceable against
it in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting creditors’
rights generally or by the principles governing the availability of equitable
remedies.

 

6.2                               By
GENWORTH, GECC and GNA.  Each of
GENWORTH, GECC and GNA (each a “Representer”) represents and warrants with
respect only to itself that:

 

(a)                                  It
is a corporation duly organized, validly existing and in good standing under
the laws of its domiciliary state, has the power and authority to execute, deliver
and perform this Agreement;

 

(b)                                 This
Agreement is the valid and binding obligation of the Representer enforceable
against it in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
creditors’ rights generally or by the principles governing the availability of
equitable remedies; and

 

(c)                                  Neither
the execution and delivery nor the performance of this Agreement by the
Representer will violate any law, statute, order, rule or regulation or
judgment, order or decree by any federal, state, local or foreign court or
governmental authority, domestic or foreign, to which the Representer is
subject nor will the same constitute a breach of, or default under, provisions
of any agreement or contract to which it is a party or by which it is bound.

 

ARTICLE VII

MISCELLANEOUS

 

7.1                               Limitation
of Liability.  In furnishing
each Client with services as provided herein, none of GENWORTH, GECC or GNA nor
any officer, director or agent thereof shall be held liable to such Client, its
creditors or the holders of its securities for good faith errors of judgment or
for anything except willful misfeasance, bad faith or negligence in the
performance of its duties, or reckless disregard of its obligations and duties
under the terms of this Agreement.  It
is further understood and agreed that GENWORTH, GECC

 

7

 

and GNA may rely upon
information furnished to it by a Client that GENWORTH, GECC or GNA (as
applicable) reasonably believes to be accurate and reliable.  Certain federal laws, including federal
securities laws, impose liabilities under certain circumstances on persons who
act in good faith and therefore nothing contained herein shall in any way constitute
a waiver or limitation of any rights that a Client may have under any such
federal laws.

 

7.2                               Indemnification.

 

(a)                                Notwithstanding
any limitation of liability contained in Section 7.1, GENWORTH, GECC and GNA
shall indemnify and hold each Client harmless from and against any losses,
damages, expenses (including reasonable attorneys’ fees), liabilities,
penalties, demands and claims of any nature whatsoever with respect to or
arising out of the breach or violation by GENWORTH, GECC or GNA of any agreement,
covenant, representation or warranty made by GENWORTH, GECC or GNA herein.

 

(b)                                 Each
Client shall indemnify and hold GENWORTH, GECC or GNA harmless from and against
any losses, damages, expenses (including reasonable attorneys’ fees),
liabilities, penalties, demands and claims of any nature whatsoever with
respect to or arising out such Client’s breach or violation of any agreement,
covenant, representation or warranty made by such Client herein.

 

7.3                               Assignment.  No assignment (by operation of law or
otherwise) of this Agreement, in whole or in part, nor any of the rights,
interests or obligations under this Agreement by any party shall be effective
without the prior written consent of the other parties and any necessary
approvals from the relevant Insurance Authority.  Subject to the provisions of this Section 7.3, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by the
parties and their respective successors and permitted assigns.

 

7.4                               Independent
Contractor.  GENWORTH, GNA and
GECC shall be deemed to be independent contractors and, except as expressly
provided or authorized in this Agreement, shall have no authority to act for or
represent any Client.  Each Client shall
always retain the ultimate authority to make decisions regarding the execution
or management of derivative transactions on its own behalf.

 

7.5                               Right
to Contract with Third Parties. 
Nothing herein shall be deemed to grant to GENWORTH, GNA or GECC an
exclusive right to provide the services described herein to a Client, and each
Client retains the right to contract with any third party, affiliated or
unaffiliated, for the performance of services or for the use of facilities as
are available to or have been requested by such Client pursuant to this Agreement;
provided, however, GECC Treasury shall exclusively execute all
derivatives transactions of any subsidiary with which GECC has direct or
indirect voting control in accordance with the GECC Derivatives Policy.

 

8

 

7.6                               Governing
Law.  With respect to each
Client, this Agreement shall be governed by the laws of the state in which such
Client is domiciled, without giving effect to its conflict of laws principles.

 

7.7                               Notices.  Any notice under this Agreement shall be
given in writing, addressed, and delivered by hand or facsimile, or mailed
postpaid by U.S. Mail or overnight courier service, to the party to this
Agreement entitled to receive such notice, at such party’s principal place of
business as set out here:

 

If to GECC:

 

General Counsel —
Treasury

General Electric Capital
Corporation

201 High Ridge Road

Stamford, Connecticut
06927-9400

Facsimile:  (203) 357-3490

 

If to GNA:

 

General Counsel

GNA Corporation

6620 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 662-2414

 

If to GENWORTH:

 

General Counsel

Genworth Financial, Inc.

6620 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 662-2414

 

If to Client #1:

 

General Counsel

GE Life and Annuity
Assurance Company

6610 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 281-6005

 

9

 

If to Client #2:

 

General Counsel

Federal Home Life
Insurance Company

700 Main Street

Lynchburg, Virginia 24504

Facsimile:  (434) 948-5819

 

If to Client #3:

 

General Counsel

First Colony Life
Insurance Company

700 Main Street

Lynchburg, Virginia 24504

Facsimile:  (434) 948-5819

 

If to Client #4

 

General Counsel

General Electric Capital
Assurance Company

6620 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 662-2414

 

or to such other address
as each party may designate in writing mailed to the other parties.  Unless otherwise permitted by the terms
hereof, whenever any notice is required to be given hereunder, such notice
shall be deemed given and such requirement satisfied only when such notice is
delivered by hand, or, if delivered by facsimile, overnight courier or mail,
when received.

 

7.8                               Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

7.9                               Amendments.  No term or provision of this Agreement may
be modified, amended, waived, discharged or terminated except by an agreement
in writing, executed by each of the parties hereto; provided that any
material amendment shall be subject to the approval, if required, of the
relevant Insurance Authority.  Any
amendment that is applicable only to certain Clients or to a single Client need
not be executed by any Client to which the amendment does not apply.

 

10

 

7.10                        Entire
Agreement.  This Agreement
supersedes any and all oral or written agreements or understandings heretofore
made, and contains the entire agreement of the parties, with respect to the
subject matter hereof.

 

7.11                        Counterparts.  This Agreement may be executed in one or
more counterparts, and such counterparts together shall constitute one and the
same agreement.

 

7.12                        Additional
Parties.   Additional insurance
company subsidiaries of Genworth Financial, Inc. may become party to and bound
by the provisions of this Agreement subject only to executing the Adoption
Agreement attached hereto as Exhibit 1 and obtaining any necessary regulatory
approvals.  Each such additional
insurance company becoming a party to this Agreement shall be deemed a “Client”
hereunder.

 

 

[THE REST OF THIS
PAGE IS LEFT BLANK INTENTIONALLY]

 

11

 

IN WITNESS WHEREOF, the
parties hereto have caused this instrument to be duly executed by their
respective officers thereunto duly authorized as of the day and year first
above written.

 

 

	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENWORTH FINANCIAL,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GNA CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC
  CAPITAL ASSURANCE

  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GE LIFE AND ANNUITY
  ASSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

12

 

	
   

  	
  FEDERAL HOME LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST COLONY LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

13

 

EXHIBIT 1

 

ADOPTION AGREEMENT

 

(DERIVATIVES MANAGEMENT SERVICES
AGREEMENT)

 

By executing this
Adoption Agreement, the undersigned corporation, an insurance company
subsidiary of General Electric Capital Corporation, hereby adopts and agrees to
be bound by the terms and provisions of the Derivatives Management Services
Agreement between General Electric Capital Corporation, Genworth Financial,
Inc., GNA Corporation, General Electric Capital Assurance Company, GE Life and
Annuity Assurance Company, Federal Home Life Insurance Company and First Colony
Life Insurance Company dated as of
                
, 2004 (the “Agreement”), as provided in Section 7.12 of the Agreement.

 

This Adoption Agreement
shall become effective on the date executed unless otherwise noted.

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Name and Address of
  Corporation]

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  Date:

  
				

 

14Exhibit 10.29

 

AGREEMENT
REGARDING

CONTINUED REINSURANCE OF INSURANCE PRODUCTS

 

THIS AGREEMENT REGARDING CONTINUED
REINSURANCE OF INSURANCE PRODUCTS (this “Agreement”) is dated as of this
   day of          ,
200  , by and between General Electric Capital Company, a Delaware
corporation (“GECC”), and Viking Insurance Company Ltd., a Bermuda
insurance company (“Viking”).

 

RECITALS

 

WHEREAS, certain credit card customers of
GECC’s GE Consumer Finance-Americas Unit (“GECFA”) in the United States
and Canada are provided and/or offered credit insurance underwritten by
American Bankers Insurance Company of Florida, American Bankers Life Assurance
Company of Florida, First Fortis Life Insurance Company and Financial Insurance
Exchange (collectively “ABIG”), covering the GECFA credit card accounts
of such customers (“Credit Insurance”);

 

WHEREAS, such Credit Insurance is reinsured
by Viking;

 

WHEREAS, GECC’s Vendor Financial Services
Unit (“VFS”) purchases from ABIG, on behalf of lessees, property and
casualty insurance covering certain equipment leased by VFS to lessees (“Collateral
Protection Insurance”);

 

WHEREAS, such Collateral Protection Insurance
is reinsured by Viking; and

 

WHEREAS,
GECC and Viking desire to make certain agreements with respect to the continued
use of Viking as the reinsurer for Credit Insurance and Collateral Protection
Insurance.

 

NOW, THEREFORE, in
consideration of the premises and the covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:

 

AGREEMENTS

 

1.               Agreements Relating to Card Services.

 

(a)           GECC agrees that it shall cause GECFA to take all
commercially reasonable efforts to maintain the following contractual
relationships: (i) ABIG as the insurer for any Credit Insurance provided or
offered by GECFA and (ii) Viking as the reinsurer of such Credit Insurance.

 

(b)           GECC shall provide
incentives, as appropriate, to GECFA to maintain the arrangements described in
clause (a) above, including

 

 

“management reporting” of credit
for profits Viking earns on reinsurance contracts relating to Credit Insurance.

 

(c)           Viking acknowledges and agrees that GECC and GECFA
maintain the right to agree to any changes in underwriting standards proposed
by ABIG that GECFA deems appropriate, consistent with past practice, to
maximize the profitability of the reinsurance.

 

(d)           Notwithstanding clause (a) above, GECC and GECFA may, at
any time, in whole or in part, terminate Credit Insurance, replace Credit
Insurance with another product and/or terminate new Credit Insurance
enrollments; provided, however, that in the event of the termination or
replacement of existing Credit Insurance by GECC or GECFA, GECC shall pay
Viking, in accordance with the terms set forth in Schedule A hereto, an amount
equal to the net underwriting income Viking was projected to receive as the
reinsurer of the terminated or replaced Credit Insurance during the period
beginning on the date of termination or replacement through December 31, 2008;
provided, however, that terminations (i) initiated by someone other than GECC
or GECFA, (ii) required by the terms of the Credit Insurance or (iii) pursuant
to a sale or transfer of the underlying credit card accounts shall not trigger
any such payments from GECC to Viking.

 

2.     Agreements Relating to VFS.   Except to the extent inconsistent with that
certain Final Approval Order and Judgment dated December 11, 2003 entered by the
Circuit Court of Mobile County, Alabama (Docket Number CV- 02-1133):

 

(a)           GECC agrees that
until March 1, 2004, to the extent that Collateral Protection Insurance is
placed with respect to certain equipment leased by VFS to third parties, GECC
shall cause VFS to continue to use ABIG as insurer and Viking as reinsurer.

 

(b)           GECC shall provide
incentives, as appropriate, to VFS to maintain the arrangements described in
clause (a) above, including “management reporting” of credit for profits Viking
earns on reinsurance contracts relating to Collateral Protection Insurance.

 

3.     Agreements Relating to Viking.  Viking
shall report to GECC, no less frequently than monthly, the net underwriting
profits earned by Viking on reinsurance contracts relating to Credit Insurance
and Collateral Protection Insurance.

 

4.     Records and Audits.  Viking shall maintain such books
and records related to this Agreement as are reasonably necessary for an
accurate audit and verification of Viking’s duties and obligations under this
Agreement for at least two (2) years following termination of this Agreement
and shall provide GECC or its designees who are authorized to view such records
with access to such records upon request.

 

2

 

5.     Compliance with Law.  Each party shall comply with all
laws applicable to such party’s performance under this Agreement.

 

6.     Assignment.  This Agreement may not be assigned, in whole or in part, whether by
operation of law or otherwise.

 

7.     Confidentiality.   This
Agreement, any of the terms thereof and all non-public information exchanged by
the parties pursuant to this Agreement are confidential (“Confidential
Information”) and no party shall disclose any Confidential Information of
the other party, except as otherwise required by law, or pursuant to a subpoena
or order issued by a court of competent jurisdiction, or to enforce their
rights under this Agreement.  In the
event that a party receives a request to disclose any Confidential Information
of the other party under such subpoena or order, such party shall
(i) notify such other party within ten (10) days after receipt of such
request; (ii) consult with that party on the advisability of taking steps
to resist or narrow such request; and (iii) if disclosure is required or
deemed advisable, cooperate with that party in any attempt that such party may
make to obtain an order or other reliable assurance that confidential treatment
will be accorded to designated portions of the Confidential Information.  Information will not be deemed Confidential
Information if (a) the information is already in the possession of or was
independently developed by the party with respect to which the Confidential
Information is not concerned and is not otherwise subject to an agreement as to
confidentiality; (b) the information becomes generally available in the
public domain other than as a result of a disclosure by such party in breach of
this Agreement; or (c) the information is not acquired from any party
known to be in breach of an obligation of secrecy.

 

8.     Severability.  The
provisions of this Agreement are severable and if any clause or provision of
this Agreement shall be held to be invalid, illegal or unenforceable in whole
or in part under any rule of law or public policy, all other provisions of this
Agreement shall nevertheless remain in full force and effect.

 

9.     Captions.  The captions
in this Agreement are used for means of reference only and shall not affect in
any way the interpretation or construction of this Agreement.

 

10.   Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to principles of conflicts of laws.

 

11.   Counterparts.  This
Agreement may be executed in several counterparts, each of which shall be
deemed an original, but such counterparts together shall constitute one and the
same instrument.

 

12.   Exclusions.  For
purposes of clarity, the term “Credit Insurance” does not mean mortgage
insurance, debt cancellation contracts or debt suspension contracts.

 

3

 

13.   Termination.   Except
as otherwise provided in Section 4 above and in this Section 13, the parties’
obligations under this Agreement shall terminate on the earlier of (i) December
31, 2008 or (ii) after termination of all Viking reinsurance contracts relating
to Credit Insurance and/or Collateral Protection Insurance, the date of final
payment of any amounts due to GECC or Viking under this Agreement.  Notwithstanding the foregoing, if Viking
continues to reinsure Credit Insurance and/or Collateral Protection Insurance
after December 31, 2008: (a) Viking shall pay to GECC, in accordance with the
terms set forth in Schedule A hereto, an amount equal to 90% of any net
underwriting income on such reinsured business; and (b) GECC shall pay to
Viking, in accordance with the terms set forth in Schedule A hereto, an
amount equal to 110% of any net underwriting loss on such reinsured business.

 

14.   Dispute Resolution.  The parties agree to the dispute resolution procedures
set forth in Schedule A attached hereto.

 

4

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.

 

 

	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VIKING
  INSURANCE COMPANY LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

5

 

Schedule A to

Agreement Regarding

Continued Reinsurance of Insurance Products

 

PAYMENTS

 

Section 1.01           Payments by GECC to Viking.

 

With respect to payments to be made by GECC to
Viking pursuant to Sections 1(d) or 13 of the Agreement, GECC shall deliver to
Viking on each April 30, July 31, October 31 and January 31, commencing April
30, 2004, a quarterly statement in arrears with respect to the immediately
preceding calendar quarter detailing payments due to Viking.  GECC shall pay to Viking the amount set
forth in each quarterly statement within thirty (30) days of the date of such
statement.  In the event that all or any
portion of any payment due Viking pursuant to the Agreement becomes overdue,
the portion of the amount overdue shall bear interest at an annual rate equal
to the then current thirty (30) day U.S. Treasury Bill discount rate on the
date that the payment becomes overdue plus 200 basis points, for the period
that the amount is overdue.  As soon as
practicable after receipt by GECC of any reasonable written request by Viking,
GECC shall provide Viking with reasonably detailed data and documentation sufficient
to support the calculation of any amount due to Viking under Sections 1(d) or
13 of the Agreement for the purpose of verifying the accuracy of such
calculation.  If, after reviewing such
data and documentation, Viking disputes GECC’s calculation of any amount due to
Viking, then the dispute shall be resolved pursuant to the dispute resolution
procedure set forth in Sections 2.01 through 2.05 below.

 

Section 1.02           Payments by Viking to GECC.

 

With respect to payments to be made by Viking to
GECC pursuant to Section 13 of the Agreement, Viking shall deliver to GECC on
each each April 30, July 31, October 31 and January 31, commencing April 30,
2004, a quarterly statement in arrears with respect to the immediately
preceding calendar quarter detailing payments due to GECC.  Viking shall pay to GECC the amount set
forth in each quarterly statement within thirty (30) days of the date of such
statement.  In the event that all or any
portion of any payment due GECC pursuant to the Agreement becomes overdue, the
portion of the amount overdue shall bear interest at an annual rate equal to
the then current thirty (30) day U.S. Treasury Bill discount rate on the date
that the payment becomes overdue plus 200 basis points, for the period that the
amount is overdue.  As soon as
practicable after receipt by Viking of any reasonable written request by GECC,
Viking shall provide GECC with reasonably detailed data and documentation
sufficient to support the calculation of any amount due to GECC under Section
13 of the Agreement for the purpose of verifying the accuracy of such
calculation.  If, after reviewing such
data and documentation, GECC disputes Viking’s calculation of

 

6

 

any amount due to GECC, then the dispute shall be resolved pursuant to
the dispute resolution procedure set forth in Sections 2.01 through 2.05 below.

 

DISPUTE
RESOLUTION

 

Section 2.01           General Provisions.

 

(a) Any dispute, controversy or claim arising out
of or relating to the Agreement or the validity, interpretation, breach or
termination thereof (a “Dispute”), shall be resolved in accordance with
the procedures set forth in this Schedule A, which shall be the sole and
exclusive procedures for the resolution of any such Dispute unless otherwise specified
below.

 

(b) Commencing with the request contemplated by
Section 2.02, all communications between the parties or their representatives
in connection with the attempted resolution of any Dispute, including any
mediator’s evaluation referred to in Section 2.03, shall be deemed to have been
delivered in furtherance of a Dispute settlement and shall be exempt from
discovery and production, and shall not be admissible in evidence for any
reason (whether as an admission or otherwise), in any arbitral or other
proceeding for the resolution of the Dispute.

 

(c) In connection with any Dispute, the parties
expressly waive and forego any right to (i) punitive, exemplary,
statutorily-enhanced or similar damages in excess of compensatory damages, and
(ii) trial by jury.

 

(d) The specific procedures set forth below,
including but not limited to the time limits referenced therein, may be
modified by agreement of the parties in writing.

 

(e) All applicable statutes of limitations and
defenses based upon the passage of time shall be tolled while the procedures
specified in this Schedule A are pending. 
The parties will take such action, if any, required to effectuate such
tolling.

 

Section 2.02           Consideration
by Senior Executives.

 

If a Dispute is not resolved in the normal course
of business at the operational level, the parties shall attempt in good faith
to resolve any Dispute by negotiation between executives who are officers of
the respective business entities involved in the Dispute.  Either party may initiate the executive
negotiation process by written notice to the other.  Fifteen (15) days after delivery of the notice, the receiving
party shall submit to the other a written response. The notice and response
shall include (i) a statement of the Dispute and of each party’s position, and
(ii) the name and title of the executive who will represent that party and of
any other person who will accompany the executive. Such executives will meet in
person or by telephone within thirty (30) days of the initial notice to seek a
resolution of the Dispute.

 

7

 

Section 2.03           Mediation.

 

If a Dispute is not resolved by negotiation as
provided in Section 2.02 within forty-five (45) days from the delivery of the
initial notice, then either party may submit the Dispute for resolution by
mediation pursuant to the CPR Institute for Dispute Resolution (“CPR”)
Model Mediation Procedure as then in effect. The parties will select a mediator
from the CPR Panels of Distinguished Neutrals,
but such mediator must have prior U.S. reinsurance experience either as a
lawyer or as a present or former officer or management employee of a
reinsurance company, but not of Viking or GECC, or any of their respective
affiliates.  Either party at
commencement of the mediation may ask the mediator to provide an evaluation of
the Dispute and the parties’ relative positions.

 

Section 2.04           Arbitration.

 

(a)  If a
Dispute is not resolved by mediation as provided in Section 2.03 within thirty
(30) days of the selection of a mediator (unless the mediator chooses to
withdraw sooner), either party may submit the Dispute to be finally resolved by
arbitration pursuant to the CPR Rules for Non-Administered Arbitration as then
in effect.  The parties consent to a
single, consolidated arbitration for all known Disputes existing at the time of
the arbitration and for which arbitration is permitted.

 

(b)  The
neutral organization for purposes of the CPR Arbitration Rules will be the CPR.
The arbitral tribunal shall be composed of three arbitrators who are each
experienced in the U.S. reinsurance business, of whom each party shall appoint
one in accordance with the “screened” appointment procedure provided in Rule
5.4 of the CPR Rules.  The non-party
appointed arbitrator must have prior U.S. reinsurance experience as a present
or former officer or management employee of a reinsurance company, but not of
Viking or the GECC, or any of their respective affiliates.  The arbitration shall be conducted in New
York City.  Each party shall be
permitted to present its case, witnesses and evidence, if any, in the presence
of the other party. A written transcript of the proceedings shall be made and
furnished to the parties. The arbitrators shall determine the Dispute in
accordance with the law of the State of New York, without giving effect to any
conflict of law rules or other rules that might render such law inapplicable or
unavailable, and shall apply this Agreement according to its terms, provided
that the provisions relating to arbitration shall be governed by the Federal
Arbitration Act, 9 U.S.C. §§ 1 et seq.

 

(c)  The
parties agree to be bound by any award or order resulting from any arbitration
conducted hereunder and further agree that judgment on any award or order
resulting from an arbitration conducted under this Section 2.04 may be entered
and enforced in any court having jurisdiction thereof.

 

(d)  Except
as expressly permitted by this Agreement, no party will commence or voluntarily
participate in any court action or proceeding concerning a Dispute, except (i)
for enforcement as contemplated by Section 2.04(c) above, (ii) to restrict or
vacate an arbitral decision based on the grounds specified under

 

8

 

applicable law, or (iii) for interim relief as provided in paragraph (e)
below.  For purposes of the foregoing
the parties hereto submit to the non-exclusive jurisdiction of the courts of
the State of New York.

 

(e)  In
addition to the authority otherwise conferred on the arbitral tribunal, the
tribunal shall have the authority to make such orders for interim relief,
including injunctive relief, as it may deem just and equitable.  Notwithstanding paragraph (d) above, each
party acknowledges that in the event of any actual or threatened breach of
certain of the provisions of this Agreement, the remedy at law would not be
adequate, and therefore injunctive or other interim relief may be sought
immediately to restrain such breach.  If
the tribunal shall not have been appointed, either party may seek interim
relief from a court having jurisdiction if the award to which the applicant may
be entitled may be rendered ineffectual without such interim relief. Upon
appointment of the tribunal following any grant of interim relief by a court,
the tribunal may affirm or disaffirm such relief, and the parties will seek
modification or rescission of the court action as necessary to accord with the
tribunal’s decision.

 

(f) Each party will bear its own attorneys fees and
costs incurred in connection with the resolution of any Dispute in accordance
with this Schedule A.

 

9

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