Document:

Exhibit 10.24

 

	
   

  

 

 

REINSURANCE AGREEMENT

 

between

 

VIE PLUS

 

and

 

R.D PLUS

 

Dated as of [         ] 2004

 

 

	
   

  

 

 

This Agreement, dated as of
                       2004
(the “Agreement”) is made and entered into by and between VIE PLUS, an
insurance company organised under French law (the “Company”), and R.D PLUS, an
insurance company organised under French law (the “Reinsurer”).

 

The Company and the Reinsurer mutually agree
to reinsure the risks described in this Agreement under the terms and
conditions stated herein.  This
Agreement is solely between the Company and the Reinsurer, and the performance
of the obligations of each party under this Agreement shall be rendered solely
to the other party. In no instance shall anyone other than the Company or the Reinsurer
have any rights under this Agreement. The Company shall be and shall remain the
only party that is liable to any insured, policyholder, claimant or beneficiary
under any insurance policy or contract reinsured hereunder.

 

ARTICLE  1 
-  DEFINITIONS

 

As used in this Agreement, the following
terms shall have the following meanings:

 

“Accounting Period” means each period
of a quarter the first such period commencing at 00.01 Paris time on 1 January
2004 and the last such period commencing on the first day of the quarter in
which the Termination Date falls and ending on the Termination Date.

 

“Affiliate” means any other Person
that directly or indirectly controls, is controlled by, or is under common
control with, the first Person. “Control” (including the terms, “controlled by”
and “under common control with”) means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
credit arrangement, as trustee or executor, or otherwise.

 

“Ceded Reinsurance” means all
reinsurance ceded by the Company pursuant to contracts, binders, certificates,
treaties or other evidence of reinsurance relating to the Reinsured Risks in
effect on or prior to the Inception Date, except the reinsurance provided
pursuant to this Agreement.

 

“Ceded Reinsurance Agreements” means
all of the contracts, binders, certificates, treaties or other evidence for
Ceded Reinsurance.

 

“Commutation”
means, with respect to any portion of the Ceded Reinsurance, a commutation or
other similar transaction that results in the termination of such Ceded
Reinsurance with respect to the Reinsured Risks.

 

“Direct Commission” means all
commissions and other consideration now or hereafter accrued or payable to the
brokers and other intermediaries for the Reinsured Risks, which are composed of
a fixed commission based on the net earned premiums and a variable commission
based on a profit sharing mechanism. 
For the avoidance of doubt, it is intended that the Agreement have no
impact on the calculation of the profit sharing in any arrangement with a
broker or an intermediary.

 

“EURIBOR” means the European
InterBank Offered Rate.

 

2

 

“Extra Contractual Liabilities” means
all liabilities of the Company for damages (including compensatory,
consequential, exemplary, punitive, bad faith or similar or other damages)
which relate to the marketing, sale, underwriting, issuance, delivery,
cancellation or administration of contracts under which the Company assumes
Reinsured Risks, including liability arising out of or relating to any alleged
or actual act, error or omission by the Company or its agents, whether
intentional or otherwise, with respect to any of such contracts, including (A)
any alleged or actual reckless conduct or bad faith in connection with the
handling of any claim arising out of or under Reinsured Risks, or (B) the
marketing, sale, underwriting, issuance, delivery, cancellation or
administration of any of such contracts.

 

“Inception Date” means 00.01 Paris
time on 1 January 2004.

 

“Negative Settlement Amount” means
with respect to each Accounting Period the amount of any net deficit set forth
in the Quarterly Settlement for such Accounting Period as provided in Article
7.

 

“Person” means any natural person,
firm, limited liability company, general partnership; limited partnership,
joint venture, association, corporation, trust, Governmental Authority or other
entity.

 

“Portfolio Transfer” means the
transfer by the Company to FINCL of the Reinsured Risks in application of the
provisions of article L.324-1 of the French Insurance Code.

 

“Positive Settlement Amount” means
with respect to each Accounting Period the amount of any net surplus set forth
in the Quarterly Settlement for such Accounting Period as provided in Article
7.

 

“Reinsured Liabilities” means all insurance liabilities and
obligations arising under the Reinsured Risks including, without limitation (i)
benefits, surrender amounts and other amounts payable to policyholders under
the terms of the Reinsured Risks, (ii) other consideration paid on or after the
Inception Date with respect to the Reinsured Risks, (iii) all amounts payable
on or after the Inception Date for returns or refunds of premiums under the
Reinsured Risks and (iv) all Extra Contractual Liabilities.

 

“Reinsured Risks” means the whole or, as the case may be, such
part of the insurance risks related to payment protection insurance business as
are assumed or borne by the Company under or in connection with any and all
insurance policies and contracts to which it is a party and which are in force
at any time on or prior to the Termination Date.

 

“Reinsurance Recoverables” means the
amount of reinsurance recoverables that is actually collected under Ceded
Reinsurance.

 

“Reserves” means the sum of all
reserves and liabilities required to be maintained by the Company for the
Reinsured Liabilities including any reserve for any Extra Contractual
Liability, calculated consistent with the reserve requirements, statutory
accounting rules and actuarial principles under the French laws.

 

“Termination Date” means the effective
date of any termination of this Agreement as provided in Article 8.

 

3

 

ARTICLE 2  - 
COVERAGE

 

Coverage. Upon the terms and subject to the
conditions and other provisions of this Agreement, as of the Inception Date,
the Reinsurer agrees to reinsure the Reinsured Liabilities by way of the Reinsurer
indemnifying the Company in respect of each Negative Settlement
Amount.  As consideration for the
reinsurance by the Reinsurer under this Agreement, the Company shall pay to the
Reinsurer each Positive Settlement Amount.

 

Conditions.  Except as otherwise set forth
or contemplated herein, no changes, amendments or modifications made on or
after the Inception Date to the terms and conditions of the Reinsured Risks
in-force as of the Inception Date which adversely affect the liability of the
Reinsurer hereunder shall be covered hereunder without the prior written
approval of such changes, amendments or modifications by the Reinsurer, which
approval shall not be unreasonably withheld or delayed.  In the event that any such changes,
amendments or modifications are made in any such Reinsured Risk without the
prior written approval of the Reinsurer, this Agreement will cover liability
incurred by the Company for Reinsured Risks as if the unapproved changes,
amendments or modifications had not been made.

 

Territory.  The territorial limits of the
Agreement shall be identical to those of the Reinsured Risks.

 

Commutation of Ceded Reinsurance. 
The Company shall not, without the Reinsurer’s prior written approval,
in its sole discretion, take any action to amend or terminate any Ceded
Reinsurance under any Ceded Reinsurance Agreement or enter into any Commutation
of Ceded Reinsurance.

 

New reinsurance covers. 
Subsequent to the Inception Date, the Company will not enter into any
reinsurance arrangements with respect to the Reinsured Risks without the prior
written consent of the Reinsurer, in its sole discretion.

 

ARTICLE 3  - 
ADMINISTRATION - GENERAL PROVISIONS

 

Contract Administration. 
The Company shall procure that the Reinsured Risks are administered in
accordance with their terms, in good faith and with the care, skill, prudence,
and diligence of a person experienced in administering insurance business.

 

Sub-contracting of Contract Administration.  The Company may subcontract the performance
of any service or services which the Company is required to procure in
connection with the administration of the Reinsured Risks to (i) an Affiliate,
(ii) a service provider utilized by the Company with respect to the Reinsured
Risks or its other business as of the date hereof, (iii) any Person to whom
such subcontracting is required to be effected under the terms of any
distribution agreement or (iv) with the prior written consent of the Reinsurer,
any other Person, such consent not to be unreasonably withheld; provided,
that no such subcontracting shall relieve the Company from any of its
obligations or liabilities hereunder, and the Company shall remain responsible
for all obligations or liabilities of such subcontractor with regard to the
provision of such advice or services as if provided by the Company.

 

4

 

Ceded Reinsurance Agreements: 
The Company shall manage and administer the Ceded Reinsurance
Agreements. Without limiting the forgoing, the Company shall promptly pay when
due all reinsurance premiums due to reinsurers under the Ceded Reinsurance
Agreements and use all commercially reasonable efforts to collect from such
reinsurers all Reinsurance Recoverables due thereunder, it being understood
that the Reinsurer will bear the risk of collectability of any Reinsurance
Recoverable.

 

Reinsured Policy Terms. 
The Company shall set all insurance rates and underwriting criteria in
respect of the Reinsured Risks from and after the Inception Date consistently
with the manner in which it has done so in the past, consulting with the
Reinsurer on any issue which is expected to have a material adverse impact on
any amounts which the Reinsurer reasonably expects to become payable to it
under the terms of this Agreement.

 

Claims Settlements. 
The Company agrees that if so requested by the Reinsurer it will provide
notice to the Reinsurer as soon as is reasonably practicable of its intention
to commence litigation proceedings in respect of a claim in excess of €100,000
with respect to a Reinsured Policy along with (if requested by the Reinsurer)
copies of all pleadings and reports of investigation with respect to that
claim.  The Reinsurer shall have the
right, at its own expense, to participate jointly with the Company in the
investigation, adjustment or defence of such claims.

 

Inspection. 
The Company shall keep accurate and complete records, files and accounts
of all transactions and matters with respect to the Reinsured Risks in
accordance with its record management practices in effect from time to
time.  The Reinsurer or its designated
representative may upon reasonable notice inspect and copy, at the offices of
the Company where such records are located, the papers and any and all other
books or documents of the Company reasonably relating to the Reinsured Risks
and the administration thereof, during normal business hours for such period as
this Agreement is in effect or for as long thereafter as the Company seeks
performance by the Reinsurer pursuant to the terms of this Agreement or the
Reinsurer reasonably needs access to such records for regulatory, tax or
similar purposes.  The information
obtained shall be used only for purposes relating to reinsurance under this
agreement.

 

Co-operation. 
Each party hereto shall co-operate fully with the other in all
reasonable respects in order to accomplish the objectives of this Agreement
including making available to each their respective officers and employees for
interview and meetings with governmental authorities and furnishing any additional
assistance, information and documents as may be reasonably requested by either
party from time to time.

 

Errors and Omissions. 
If any delay, omission, error or failure to pay amounts due or to
perform any other act required by this Agreement is unintentional and caused by
misunderstanding or oversight, the Company and the Reinsurer will adjust the
situation to what it would have been had the misunderstanding or oversight not
occurred.  The party first discovering
such misunderstanding or oversight, or an act resulting from such
misunderstanding or oversight, will notify the other party in writing promptly
upon discovery thereof, and the parties shall act to correct such
misunderstanding or oversight within twenty (20) business days of such other
party’s receipt of such notice. 
However, this section shall not be construed as a waiver by either party
of its right to enforce strictly the terms of this Agreement.

 

5

 

Age, Sex and Other Adjustments.  The liability of the Reinsurer shall follow
that of the Company including in circumstances where the Company’s liability
under any of the Reinsured Risks is changed because of a misstatement of age or
sex or any other material fact, and the Company and the Reinsurer will make all
appropriate adjustments to amounts due to each other under this Agreement in
such circumstances.

 

Setoff. 
Any debts or credits, matured or unmatured, liquidated or unliquidated,
regardless of when they arose or were incurred, in favour of or against either
the Company or the Reinsurer with respect to this Agreement between the Company
and the Reinsurer, are deemed mutual debts or credits, as the case may be, and
shall be set off from any amounts due to the Company or the Reinsurer hereunder,
as the case may be, and only the net balance shall be allowed or paid.

 

ARTICLE 4 
- REINSURANCE PREMIUM

 

The reinsurance premium due as of the day the
parties enter into this Agreement by the Company to the Reinsurer shall be
equal to the Reserves as of December 31, 2003 (the “Reinsurance Premium”).

 

The amount of the Reinsurance Premium and the
amount of the Deposit referred to in article 5 hereafter being equal as of the
day the parties enter into this Agreement, the Company shall not make any
payment in cash of the Reinsurance Premium and shall retain such Reinsurance
Premium to constitute the Reinsurer’s Deposit as of the day the parties enter
into this Agreement.

 

ARTICLE 5  - 
DEPOSIT

 

In order to allow the Company to take credit
in its balance sheet of this quota share reinsurance, the Reinsurer will
deposit in the Company’s accounts as of the day  the parties enter into this Agreement an amount equal to the
Reserves as of December 31, 2003 in accordance with article R332.17 of the
French Insurance Code (the “Deposit”).

 

The amount of the Deposit will be increased
or decreased every quarter, in the framework of the Quarterly Settlements until
the Termination of this Agreement, such adjustment(s) being equal to the
increase or decrease in the Reserves referred to in Article 7.

 

The Deposit will bear an interest equal to
five point two per cent (5.2%) per annum that will be computed every quarter
through the Quarterly Settlements.

 

ARTICLE 6 
-  CEDING COMMISSION

 

The Reinsurer shall pay a ceding commission
(the “Ceding Commission”) to the Company for each Accounting Period in an
amount equal to four point four per cent (4.4%) of the earned premiums that
will be paid through the Quarterly Settlements.

 

6

 

ARTICLE 7 -
ACCOUNTING AND SETTLEMENT

 

(a) Quarterly Settlement

 

As soon as feasible but no more than fifteen
(15)] days after the end of each Accounting Period, the Company shall supply
the Reinsurer with a report that shall compute the following financial data for
such Accounting Period:

 

•                  The earned premiums plus other income excluding any investment income
and realized and/or unrealised capital gains, related to the Reinsured Risks
net of any insurance taxes and of any guarantee fund contribution related to
these premiums and net of any reinsurance cost related to the Ceded
Reinsurance;

 

•                  Minus the claims paid on the Reinsured Liabilities, net of any
reinsurance received under the Ceded Reinsurance;

 

•                  Minus the Direct Commission net of any portion thereof actually paid
under Ceded Reinsurance;

 

•                  Minus any increase in the Reserves;

 

•                  Plus any decrease of the Reserves;

 

•                  Plus interest on the Deposit
calculated in reference to Article 5 hereof;

 

•                  Minus the Ceding Commission.

 

Payments.

 

For each Accounting Period as to which there
is a Negative Settlement Amount, the Reinsurer shall pay to the Company an
amount equal to such Negative Settlement Amount within ten (10) days of the
delivery of the Quarterly Report by the Company.

 

For each Accounting Period as to which there
is a Positive Settlement Amount the Company shall pay to the Reinsurer an
amount equal to such Positive Settlement Amount within ten (10) days of the
delivery of the Quarterly Report by the Company.

 

Delayed Payments.  In the event that all or any portion of any payment due to either
party pursuant to this Agreement becomes overdue the portion of the amount
overdue shall bear interest at an annual rate equal to 3 Month EURIBOR on the
date that the payment becomes overdue plus 200 basis points per annum, for the
period that the amount is overdue.

 

(b) Other Report

 

Annual Reports. 
Within forty-five (45) days after the end of each calendar year the
Company shall supply the Reinsurer with a report that shall provide the
financial data specified in the previous section for such calendar year.

 

Additional Reports and Updates. 
For so long as this Agreement remains in effect, each of the parties
shall periodically furnish to the other such other reports and information as
is reasonably available to it and as may be reasonably requested by such other
party for regulatory, tax or similar purposes.

 

7

 

(c) Actual Data

 

In preparing all reports required under this
Agreement, the Company shall use all commercially reasonable efforts to supply
the actual data. If the actual data cannot be supplied with the appropriate
report, the Company shall produce best estimates and shall provide amended
reports based on actual data no more than ten (10) days after the actual data
becomes available and the parties will settle any additional amounts due within
five (5) days thereafter, together with interest as provided in the last
paragraph of Article 7 (a) hereof.

 

ARTICLE 8  - 
DURATION AND TERMINATION

 

8.1                                 Duration. 
Except as otherwise provided herein, this Agreement shall be unlimited
in duration.

 

8.2                                 Reinsurer’s Liability. 
The Reinsurer’s liability with respect to the Reinsured Risks under this
Agreement will terminate on the earlier of: (i) the date that all amounts
due  under this Agreement have been paid
; (ii) the date this Agreement is terminated at the option of the Reinsurer or
the Company in accordance with Article 8.3 hereof; and (iii) the date this
Agreement is terminated upon the written agreement of the parties.

 

8.3                                 Optional Termination: Final Payment
Obligations.  Either the Reinsurer or the Company may
terminate this Agreement and the reinsurance hereunder upon at least 3 business
days prior written notice of its intent to terminate this Agreement upon the
execution of the Portfolio Transfer by the Company of the Reinsured Risks.

 

8.4                                 Consequence of Termination

 

a)                                      In the event that this Agreement is
terminated pursuant to section 8.3, this Agreement shall terminate as of the
end of the quarter in which the notice of termination pursuant to the previous
section is received by the non-terminating party and a net accounting and
settlement as to any balance due under this Agreement shall be undertaken by
the parties for such Accounting Period (the “Final Settlement”).

 

b)                                     In
the event that, subsequent to the Final Settlement but not later than eighteen
(18) months after the Termination Date, the Company receives any amount, or is
required to pay any amount, which was not taken into account in calculating any
Positive or Negative Settlement Amount but which would have been so taken into
account had it been received or paid prior to the Termination Date or the Final
Settlement, the Company or (as the case may be) the Reinsurer shall make such
payment or payments to the other as is required to reflect as nearly as
possible the position that would have prevailed had such amount been so taken
into account.

 

ARTICLE 9  - 
DISPUTE RESOLUTION

 

9.1                                 General
Provisions.

 

(a)                                 Any dispute,
controversy or claim arising out of or relating to this Agreement or the
validity, interpretation, breach or termination thereof (a “Dispute”), shall be
resolved

 

8

 

in accordance
with the procedures set forth in this Article 9, which shall be the sole and
exclusive procedure for the resolution of any such Dispute.

 

(b)                                Commencing with the
request contemplated by Section 9.2, 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 9.3, shall
be deemed to have been delivered in furtherance of a Dispute settlement 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)                                  The present
arbitration clause does not exclude the right of recourse to the courts in
respect of any measure which the Code of Civil Procedure permits to be taken by
court order (“ordonnance”), including, without limitation, any measure ordered
in proceedings “en référé”, where such order does not prejudge the legal
determination of the substance of any issue submitted to arbitration.

 

(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)                                  The parties agree and
accept that the commencement of arbitration proceedings hereunder will
interrupt any prescription which may at the relevant time be running in respect
of any right which is the object of, or is otherwise affected by, such
proceedings.

 

9.2                                 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 hold, in respect of each of the business entities
involved in the Dispute, at a minimum, the office of President, Chief Executive
Officer or Chief Financial Officer. 
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 30 days of the initial
notice to seek a resolution.

 

9.3                               Mediation.  If a Dispute is not resolved by negotiation
as provided in Section 9.2 within forty-five (45) days from the initial notice,
then either party may submit the Dispute for resolution by mediation pursuant
to the Center for Public Resources (“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 reinsurance experience either as a lawyer or as a present or former
officer or management employee of a reinsurance company, but not of the
Company, or the Reinsurer, 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.

 

9.4                                 Arbitration.  If a Dispute is not resolved by mediation as
provided in Section 9.3 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

 

9

 

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.

 

(a)                                 The neutral
organisation for purposes of the CPR rules will be the CPR.  the arbitral tribunal shall be composed of
three arbitrators who are each experienced in the 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 French
reinsurance experience as a present or former officer or management employee of
a reinsurance company, but not of the Company, or the Reinsurer, or any of
their respective affiliates.  The
arbitration shall be conducted in Paris. 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 French law, 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.

 

(b)                                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 may be entered and enforced in any court having
jurisdiction thereof.

 

(c)                                  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 9.4(b) above, (ii) to restrict or vacate
an arbitral decision based on the grounds specified under French Law, or (iii)
for interim relief as provided in paragraph (e) below.  For the purposes of the foregoing the
parties hereto submit to the non-exclusive jurisdiction of the French courts.

 

(d)                                 Each party will bear
its own attorneys’ fees and costs.

 

ARTICLE 10  -  MISCELLANEOUS
PROVISIONS

 

Notices. 
All notices, requests, demands and other communications under this
Agreement must be in writing and will be deemed to have been duly given or made
as follows: (a) if sent by registered or certified mail in France with return
receipt requested, upon receipt; (b) if sent by reputable overnight air
courier, four business days after mailing; (c) if sent by facsimile
transmission, with a copy mailed on the same day in the manner provided in (a)
or (b) above, when transmitted and receipt is confirmed by telephone; or (d) if
otherwise actually personally delivered, when delivered, and shall be delivered
as follows.

 

If to the Company:

 

To the
Reinsurer:

 

10

 

or to such other address or to such other
person as either party may have last designated by notice to the other party.

 

Successors and Assigns. 
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, permitted assigns and legal
representatives.  Neither this
Agreement, nor any right or obligation hereunder, may be assigned by any party
without the prior written consent of the other party hereto. Any assignment in
violation of this section shall be void and shall have no force and
effect.  Nothing in this section shall
be construed to prohibit the Reinsurer from retroceding all or any portion of
the business reinsured hereunder.

 

Amendments. 
This Agreement may not be changed, altered or modified unless the same
shall be in writing executed by the Company and the Reinsurer.

 

Governing Law. 
This Agreement will be construed, performed and enforced in accordance
with the French laws without giving effect to its principles or rules of
conflict of laws thereof to the extent such principles or rules would require
or permit the application of the laws of another jurisdiction.

 

Entire
Agreement: Severability.  This Agreement constitutes the entire agreement between the
parties hereto relating to the subject matter hereof and supersedes all prior
and contemporaneous agreements, undertakings, statements, representations and
warranties, negotiations and discussions, whether oral or written of the
parties and there are no general or specific warranties, representations or
other agreements by or among the parties in connection with the entering into
of this Agreement or the subject matter hereof except as specifically set forth
or contemplated herein.

 

Survival. 
Section 8.4(b) and Articles 9 and 10 shall survive the termination of
this Agreement but shall, in the case of Section 8.4(b), terminate no later
than eighteen (18) months after the Termination Date.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives.

 

 

	
   

  	
  VIE PLUS

  
	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  R.D PLUS

  
	
   

  	
  By  

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

11Exhibit
10.25

 

MORTGAGE
SERVICES AGREEMENT

 

dated
as of
             ,
2004

 

by and
among

 

GE
MORTGAGE SERVICES, LLC,

 

GENERAL
ELECTRIC MORTGAGE

HOLDINGS LLC,

 

GE
MORTGAGE CONTRACT SERVICES INC.

 

and

 

GENWORTH FINANCIAL, INC.

 

 

	
  ARTICLE
  I

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Certain Defined
  Terms

  	
   

  
	
  Section
  1.02.

  	
  Other
  Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
  SERVICES
  AND TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  GEMH Services; Scope

  	
   

  
	
  Section 2.02.

  	
  Transition Employees
  Services

  	
   

  
	
  Section 2.03.

  	
  Management of
  Held Loans

  	
   

  
	
  Section
  2.04.

  	
  Reporting;
  Transition; MSR Sale

  	
   

  
	
  Section
  2.05.

  	
  Performance
  and Receipt of Services

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  OTHER ARRANGEMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Computer-Based
  Resources

  	
   

  
	
  Section 3.02.

  	
  Access; Leased
  Premises

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  COSTS
  AND DISBURSEMENTS; PERSONNEL COSTS; PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Costs and
  Disbursements

  	
   

  
	
  Section
  4.02.

  	
  Personnel
  Costs; Right to Hire; Severance

  	
   

  
	
  Section 4.03.

  	
  Loan Acquisition and
  Disposition Costs

  	
   

  
	
  Section
  4.04.

  	
  Payments
  of Service Charges and Employment Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
  STANDARDS;
  COMPLIANCE WITH LAWS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  5.01.

  	
  Standards

  	
   

  
	
  Section
  5.02.

  	
  Compliance
  with Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
  PURCHASE
  OF NEW LOANS AND SALE OF LOANS AND LOAN ASSETS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  6.01.

  	
  Loan
  Schedule

  	
   

  
	
  Section 6.02.

  	
  Loan Purchase
  Agreement

  	
   

  
	
  Section
  6.03.

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

  	
   

  
	
  Section
  6.04.

  	
  Loan
  Purchase Price

  	
   

  
	
  Section
  6.05.

  	
  Conditions
  Precedent

  	
   

  
	
  Section 6.06.

  	
  Right of First Refusal

  	
   

  
	
  Section 6.07.

  	
  Repurchase of Loans

  	
   

  
	
  Section 6.08.

  	
  Transition Assistance

  	
   

  
	
  Section 6.09.

  	
  Further Assurances

  	
   

  

 

i

 

	
  ARTICLE VII

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Representations and
  Warranties of Mortgage Services

  	
   

  
	
  Section 7.02.

  	
  Representation and
  Warranties of GEMH Parties

  	
   

  
	
  Section 7.03.

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  INDEMNIFICATION; LIMITATION ON LIABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Limited Liability

  	
   

  
	
  Section
  8.02.

  	
  Indemnification
  by GEMH

  	
   

  
	
  Section
  8.03.

  	
  Indemnification
  by Mortgage Services

  	
   

  
	
  Section
  8.04.

  	
  Loans
  and Loan Assets Indemnification

  	
   

  
	
  Section 8.05.

  	
  Indemnification
  Procedures.

  	
   

  
	
  Section 8.06.

  	
  Limitation on
  Liability

  	
   

  
	
  Section
  8.07.

  	
  Liability
  for Payment Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
  DISPUTE
  RESOLUTION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  9.01.

  	
  Applicable
  Law

  	
   

  
	
  Section
  9.02.

  	
  Dispute
  Resolution

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X

  	
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Termination

  	
   

  
	
  Section 10.02.

  	
  Effect of
  Termination

  	
   

  
	
  Section 10.03.

  	
  Survival

  	
   

  
	
  Section
  10.04.

  	
  Business
  Continuity; Force Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI

  	
  GUARANTY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Guaranty

  	
   

  
	
  Section 11.02.

  	
  Guaranty Absolute

  	
   

  
	
  Section
  11.03.

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.01.

  	
  GEMH Manager

  	
   

  
	
  Section
  12.02.

  	
  Mortgage
  Services Manager; Functional Leaders

  	
   

  
	
  Section 12.03.

  	
  Independent Contractors

  	
   

  
	
  Section 12.04.

  	
  Subcontractors

  	
   

  
	
  Section
  12.05.

  	
  Additional
  Services; Books and Records; Mortgage Services Property

  	
   

  
	
  Section 12.06.

  	
  Confidential
  Information

  	
   

  
	
  Section 12.07.

  	
  Notices

  	
   

  
	
  Section
  12.08.

  	
  Taxes.

  	
   

  
	
  Section 12.09.

  	
  Regulatory Approval
  and Compliance

  	
   

  

 

ii

 

	
  Section 12.10.

  	
  Severability

  	
   

  
	
  Section 12.11.

  	
  Entire Agreement

  	
   

  
	
  Section 12.12.

  	
  Assignment; No Third-Party
  Beneficiaries

  	
   

  
	
  Section 12.13.

  	
  Amendment

  	
   

  
	
  Section 12.14.

  	
  Rules of
  Construction

  	
   

  
	
  Section 12.15.

  	
  Counterparts

  	
   

  
	
  Section 12.16.

  	
  No Right to Set-Off

  	
   

  
	
  Section 12.17.

  	
  Existing Agreements

  	
   

  
	
  Section 12.18.

  	
  Further Assurances

  	
   

  

 

SCHEDULES AND EXHIBITS

 

	
  Schedule A

  	
  GEMH Services

  	
   

  
	
  Schedule B

  	
  Scheduled Loans

  	
   

  
	
  Schedule C-1

  	
  Fully Dedicated
  Transition Employees

  	
   

  
	
  Schedule C-2

  	
  Partially Allocated
  Transition Employees

  	
   

  
	
  Schedule D

  	
  Cost Allocation

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Loan Purchase
  Agreement

  	
   

  

 

iii

 

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

 

RECITALS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

ARTICLE
I

 

DEFINITIONS

 

SECTION 1.01.                 Certain Defined Terms.

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

“Mortgage
Entities” means Mortgage Services and its Subsidiaries.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  Term

  	
   

  	
  Section

  
	
  Affiliate

  	
   

  	
  Master Agreement

  
	
  Bona Fide Purchase Price

  	
   

  	
  Section 6.06

  
	
  Breaching Party

  	
   

  	
  Section 10.01(a)

  
	
  Business Day

  	
   

  	
  Master Agreement

  
	
  Claims

  	
   

  	
  Section 6.03(a)(ii)

  
	
  Closing

  	
   

  	
  Master Agreement

  
	
  Closing Date

  	
   

  	
  Master Agreement

  
	
  Facilities Fee

  	
   

  	
  Section 4.01(b)

  
	
  Force Majeure

  	
   

  	
  Master Agreement

  
	
  Fully Dedicated Transition Employee

  	
   

  	
  Section 2.02

  
	
  GE

  	
   

  	
  Recitals

  
	
  GE Capital

  	
   

  	
  Recitals

  
	
  GE Confidential Information

  	
   

  	
  Master Agreement

  
	
  GEFAHI

  	
   

  	
  Recitals

  
	
  GEI

  	
   

  	
  Recitals

  
	
  GEMH Indemnified Party

  	
   

  	
  Section 8.01(a)

  
	
  GEMH Manager

  	
   

  	
  Section 12.01

  
	
  GEMH Services

  	
   

  	
  Section 2.01(a)

  
	
  GEMH Substitute Service

  	
   

  	
  Section 2.01(a)

  
	
  General Electric

  	
   

  	
  Recitals

  
	
  Genworth

  	
   

  	
  Preamble

  
	
  Genworth Confidential Information

  	
   

  	
  Master Agreement

  
	
  Governmental Approval

  	
   

  	
  Master Agreement

  
	
  Guaranteed Obligations

  	
   

  	
  Section 11.01

  
	
  Guaranty

  	
   

  	
  Section 11.01

  
	
  Indemnification Agreement

  	
   

  	
  Recitals

  
	
  Indemnified Party

  	
   

  	
  Master Agreement

  

 

8

 

	
  Term

  	
   

  	
  Section

  
	
  Indemnifying Party

  	
   

  	
  Master Agreement

  
	
  Indemnity Payment

  	
   

  	
  Master Agreement

  
	
  Identified Costs

  	
   

  	
  Section 4.01(b)

  
	
  Law

  	
   

  	
  Master Agreement

  
	
  Leased Premises

  	
   

  	
  Recitals

  
	
  Liabilities

  	
   

  	
  Master Agreement

  
	
  Loan Closing Documents

  	
   

  	
  Section 6.05(b)

  
	
  Master Agreement

  	
   

  	
  Recitals

  
	
  Mortgage Services Indemnified Party

  	
   

  	
  Section 8.01(b)

  
	
  Mortgage Services Manager

  	
   

  	
  Section 12.02

  
	
  MS Standard

  	
   

  	
  Section 5.01(b)

  
	
  Non-Breaching Party

  	
   

  	
  Section 10.01(a)

  
	
  Operating Plan

  	
   

  	
  Schedule A

  
	
  Partially Allocated Transition Employee

  	
   

  	
  Section 2.02

  
	
  Parties

  	
   

  	
  Preamble

  
	
  Person

  	
   

  	
  Master Agreement

  
	
  Service Charges

  	
   

  	
  Section 4.01(b)

  
	
  Standard for Services

  	
   

  	
  Section 5.01(a)

  
	
  Subsidiary

  	
   

  	
  Master Agreement

  
	
  Tax Returns

  	
   

  	
  Master Agreement

  
	
  Term

  	
   

  	
  Section 10.01(a)

  
	
  Transactions

  	
   

  	
  Master Agreement

  
	
  Trigger Date

  	
   

  	
  Master Agreement

  

 

ARTICLE
II

 

SERVICES AND TERMS

 

SECTION 2.01.                 GEMH
Services; Scope

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

SECTION 2.03.                 Management
of Held Loans.

 

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

 

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

 

SECTION 2.04.                 Reporting;
Transition; MSR Sale.

 

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

 

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

 

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

 

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

 

11

 

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

 

SECTION 2.05.                 Performance and Receipt of Services.

 

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

 

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

 

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

 

ARTICLE
III

 

OTHER ARRANGEMENTS

 

SECTION 3.01.                 Computer-Based
Resources.

 

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

 

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

 

12

 

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

 

SECTION 3.02.                 Access;
Leased Premises.

 

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

 

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

 

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

 

ARTICLE
IV

 

COSTS
AND DISBURSEMENTS; PERSONNEL COSTS; PAYMENTS

 

SECTION 4.01.                 Costs
and Disbursements.

 

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

 

(b)                                 Mortgage
Services shall reimburse GEMH for:

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

SECTION 4.04.                 Payments of Service Charges and
Employment Costs.

 

(a)                                  Subject
to Section 4.04(iii):

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

ARTICLE
V

 

STANDARDS;
COMPLIANCE WITH LAWS

 

SECTION 5.01.                 Standards.

 

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

 

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

 

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

 

ARTICLE
VI

 

PURCHASE
OF NEW LOANS AND SALE OF LOANS AND LOAN ASSETS

 

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

 

SECTION 6.02.                 Loan
Purchase Agreement.

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

(i)                                     Loan
Schedule;

 

(ii)                                  Loan
Purchase Agreement; and

 

(iii)                               Loan File.

 

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

 

20

 

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

 

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

 

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

 

21

 

ARTICLE
VII

 

REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

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

 

ARTICLE
VIII

 

INDEMNIFICATION; LIMITATION ON LIABILITY

 

SECTION 8.01.                 Limited
Liability.

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

SECTION 8.03.                 Indemnification by Mortgage
Services.

 

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

 

23

 

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

 

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

 

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

 

SECTION 8.04.                 Loans and Loan Assets
Indemnification.

 

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

 

24

 

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

 

SECTION 8.05.                 Indemnification Procedures.

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

ARTICLE
IX

 

DISPUTE RESOLUTION

 

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

 

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

 

ARTICLE X

 

TERMINATION

 

SECTION 10.01.           Termination.

 

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

 

26

 

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

 

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

 

SECTION 10.02.           Effect of Termination.

 

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

 

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

 

27

 

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

 

SECTION 10.04.           Business Continuity; Force Majeure.

 

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

 

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

 

ARTICLE
XI

 

GUARANTY

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 11.03.           Waiver.

 

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

 

29

 

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

 

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

 

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

 

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

 

ARTICLE
XII

 

GENERAL PROVISIONS

 

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

 

SECTION 12.02.           Mortgage Services Manager; Functional
Leaders.

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

32

 

if to
Mortgage Services:

 

GE Mortgage Services, LLC

6601 Six Forks Road

Raleigh, North Carolina  27615

Attention:  General Manager

 

with a copy to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY  10153

Attention:  Howard Chatzinoff, Esq.

 

if to
GEMH Parties

 

General Electric Mortgage Holdings LLC

6601 Six Forks Road

Raleigh, North Carolina  27615

Attention:  President

 

with a copy to

 

General Electric Mortgage Holdings LLC

6601 Six Forks Road

Raleigh, North Carolina  27615

Attention:  General Counsel

 

and

 

Hunton &
Williams LLP

Riverfront Plaza, East Tower

951 E Byrd Street

Richmond, VA  23219-4074

Attention:  Allen C. Goolsby, Esq.

 

SECTION 12.08.           Taxes.

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

SECTION 12.17.           Existing Agreements.

 

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

 

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

 

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

 

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

 

[SIGNATURE PAGE FOLLOWS]

 

35

 

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

 

	
   

  	
  GE MORTGAGE SERVICES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC MORTGAGE

  HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GE MORTGAGE CONTRACT SERVICES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENWORTH FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Acknowledged
and agreed:

GENERAL ELECTRIC MORTGAGE 

INSURANCE CORPORATION, 

solely with respect to Section 12.17

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 

Schedule A

 

GEMH Services

 

	
  GEMH Services

  	
   

  	
  Service
  Termination Date

  
	
   

  	
   

  	
   

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

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (b)                                 Legal

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (c)                                  Information Technology and Data Processing

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (d)                                 Risk

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (e)                                  Vendor Management

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (f)                                    Quality

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

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

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (h)                                 Asset Management

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (i)                                     Operating Plan.

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (k)                                  Tax Services

  	
   

  	
  December 31, 2004

  
	
   

  	
   

  	
   

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

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