Document:

Exhibit
10.4

 

This LIABILITY AND
PORTFOLIO MANAGEMENT AGREEMENT, dated as of January 1, 2004 (this “Agreement”),
between [Subsidiary], a New York limited liability company (the “Company”)
and GENWORTH FINANCIAL ASSET MANAGEMENT, LLC, a Virginia limited liability
company (the “Manager” and together with the Company, the “Parties”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS, FGIC MRCA Corp.
(“MRCA Corp.”) and the Company entered into that certain Investment
Administration Agreement, dated as of June 23, 1997 (as subsequently amended,
the “Investment Administration Agreement”); and

 

WHEREAS, the Manager is
an investment adviser registered with the United States Securities and Exchange
Commission that will be engaged by the Company to provide the services
described herein; and

 

WHEREAS, MRCA Corp. has
provided the Company a written notice of resignation pursuant to Section 3.05
of the Investment Administration Agreement and the Company, by executing this
Agreement, accepts such resignation and waives the requirement for sixty (60)
days’ notice thereof; and

 

WHEREAS,  the
Investment Administration Agreement will be terminated and replaced by this
Agreement; and

 

WHEREAS, the Manager and
the Company wish to establish and define certain obligations set forth in Exhibit
C and Exhibit D (the “Listed Obligations”) that the Manager
is required to undertake in connection with the services it will provide to the
Company under this Agreement;

 

NOW, THEREFORE, in
consideration of the mutual promises made herein and upon the terms and subject
to the conditions set forth herein, the Parties hereby agree as follows:

 

ARTICLE
I

Definitions

 

SECTION 1.01.                                         Terms
Defined in the Security Agreement. 
Capitalized terms used in this Agreement that are not defined herein
shall have the respective meanings specified in the Collateral Trust and
Security Agreement, dated as of June 23, 1997, among the Company, General
Electric Capital Corporation (“GE Capital”), as LOC Agent, and Bankers
Trust Company (predecessor-in-interest to Deutsche Bank Trust Company
Americas), as Security Trustee (as amended, the “Security Agreement”).

 

SECTION 1.02.                                         Terms
Defined in this Agreement.  As used
in this Agreement, the following capitalized terms have the following meanings:

 

“Accounts” shall
have the meaning specified in Section 2.01.

 

 

 

 

CONFIDENTIAL
TREATMENT REQUESTED

 

CONFIDENTIAL TREATMENT
REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATEMENT HAS BEEN REQUESTED IS
OMITTEED AND IS NOTED WITH “**”.

AN UNREDACTED VERSION OF
THIS DOCUMENT HAS BEEN FILED

SEPARATELY WITH THE
SECURITIES AND

EXCHANGE COMMISSION.

 

 

 

“Agreement” means
this Liability and Portfolio Management Agreement, including all provisions of
the Security Agreement incorporated by reference herein, which shall have the
same effect as if those provisions were set forth in full herein.

 

“Company” shall
have the meaning specified in the preamble of this Agreement.

 

“Cure Period”
means (i) with respect to the Listed Obligations set forth in Exhibit C,
the respective cure periods set forth therein, and (ii) with respect to Listed
Obligations in Exhibit D or other obligations set forth in this
Agreement that do not appear in Exhibit C, one hundred twenty (120) days
during the initial term of this Agreement and sixty (60) days thereafter; in
each case such Cure Period to commence upon receipt of notice by the Manager
from any party to a Contract entitled to give notice of default, GE Capital or
the Company.

 

“Dispute Resolution”
shall have the meaning specified in Section 4.05(b).

 

“Failure Notice
Recipients” shall have the meaning specified in Section 4.05(b) or
such other recipients as are designated from time to time.

 

“Final Cure Period”
shall have the meaning specified in Section 4.05(b).

 

“GE Capital” shall
have the meaning specified in Section 1.01.

 

“GE Note Option”
means an option of GE Capital, which, if exercised, permits the debt of GE
Capital to be included in the Facility Account of the Company without limit,
subject to (i) the provision by GE Capital of a full guarantee of the Contracts
and Hedge Contracts, (ii) GE Capital’s being rated at least “AAA”/”Aaa” by the
Rating Agencies, and (iii) the retirement in full of the outstanding Preferred
Securities issued by the Company.

 

“Impossibility”
shall have the meaning specified in Section 4.05(b).

 

“Indemnified Party”
shall have the meaning specified in Section 2.12.

 

“Investment
Administration Agreement” shall have the meaning specified in the first
recital of this Agreement.

 

“Listed Obligations”
shall have the meaning specified in the fifth recital of this Agreement.

 

“Management Fee”
shall have the meaning specified in Section 2.06.

 

“Manager” shall
have the meaning specified in the preamble to this Agreement.

 

“Maximum Permitted
Program Size” shall have the meaning specified in Section 2.06.

 

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“MCRA Corp.” shall
have the meaning specified in the first recital of this Agreement.

 

“Notice of Failure”
shall have the meaning specified in Section 4.05(b).

 

“Operating Costs”
shall have the meaning specified in Section 2.07(b).

 

“Operations,
Procedures and Controls Manual” means the Operations, Procedures and
Controls Manual of the Company dated as of July 2, 2003, as the same may be
amended from time to time.  The Rating
Agencies shall receive notice and a copy of any amendments or modifications to
the Operations, Procedures and Controls Manual on a biennial basis.

 

“Parties” shall
have the meaning specified in the preamble to this Agreement.

 

“Policy 5.0” means
the policy which sets forth certain risk management guidelines that the Company
is required to observe, as the same may be amended from time to time by the
Company with the approval of GE Capital. 
The Rating Agencies shall receive notice and copy of any amendments or
modifications to Policy 5.0 on a quarterly basis.

 

“Policy 6.0” means
the policy which sets forth certain risk management parameters that the Company
is required to observe, as the same may be amended from time to time by the
Company with the approval of GE Capital. 
The Rating Agencies shall receive notice and copy of any amendments or
modifications to Policy 6.0 on a quarterly basis.

 

“Portfolio” shall
have the meaning specified in Section 2.01.

 

“Remediation Plan”
shall have the meaning specified in Section 4.05(b).

 

“Security Agreement”
shall have the meaning specified in Section 1.01.

 

“Senior Management”
shall have the meaning specified in Section 4.05(b).

 

“Submission” shall
have the meaning specified in Section 4.05(b).

 

SECTION 1.03.                                         Other
Definitional Provisions.  Section
1.02 of the Security Agreement is incorporated herein by reference.

 

ARTICLE
II

Engagement; Powers and Duties

 

SECTION 2.01.                                         Engagement
of Manager.

 

(a)                                  The
Company hereby retains the Manager:

 

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(i)                                     to
advise the Company as to the investment of its Assets, including recommending
specific Permitted Investments, Permitted Collateral Investments and Hedge
Contracts to the Company;

 

(ii)                                  to
administer the Company’s Assets maintained in the Facility Account, the Collateral
Accounts, and the LOC Reimbursement Account and such other accounts as the
Company may maintain from time to time (the “Accounts”), which are
identified (to the extent established by the effective date hereof) by account
number in Exhibit A, as the same may be amended from time to time, with
such deposits thereto and withdrawals therefrom as are from time to time
permitted under the Security Agreement;

 

(iii)                               for
as long as the revocable power of attorney granted pursuant to Section 2.02
is in effect, to arrange the purchase and sale through registered
broker-dealers of bonds, pass-through certificates, stocks, and other
securities relating to the Accounts;

 

(iv)                              for
as long as the revocable power of attorney granted pursuant to Section 2.02
is in effect, to arrange the purchase and sale and otherwise to effect
transactions in Hedge Contracts relating to the Accounts;

 

(v)                                 to
advise the Company in the issuance of and to assist the Company in the
preparation of (and, for so long as the revocable power of attorney granted
pursuant to Section 2.02 is in effect, to execute and to deliver on
behalf of the Company) Investment Orders and Disposition Orders, as may be
required from time to time pursuant to the terms of Sections 2.04 and 2.05 of
the Security Agreement;

 

(vi)                              to
prepare reports and to perform valuation tests as specified in Section 2.06 of
the Security Agreement;

 

(vii)                           to take
such action as is necessary and proper on behalf of the Company for the
preservation of Company Collateral pursuant to Section 2.07 of the Security
Agreement;

 

(viii)                        to assist
the Company in the preparation and filing of financing statements or amendments
of financing statements, as may be required in connection with any change in
the Company’s name or location as contemplated by Section 2.08 of the Security
Agreement;

 

(ix)                                to
advise the Company in the granting or effecting of and to assist the Company in
the preparation of (and, for so long as the revocable power of attorney granted
pursuant to Section 2.02 is in effect, to execute and to deliver on
behalf of the Company) any consents, waivers, extensions, or modifications in
respect of any item of Company Collateral or Contract Collateral as
contemplated by Section 2.10 of the Security Agreement;

 

(x)                                   to
advise the Company in the delivery of and to assist the Company in the
preparation of (and, for so long as the revocable power of attorney granted
pursuant to Section 2.02 is in effect, to execute and to deliver on
behalf of the

 

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Company) any instrument
of transfer or release in respect of any item of Company Collateral or Contract
Collateral as contemplated by Section 2.11 of the Security Agreement;

 

(xi)                                to
notify the Security Trustee and other specified parties as may be required from
time to time, pursuant to the terms of the Security Agreement, of a Credit
Event or a Program Event of Default;

 

(xii)                             to
advise the Company as to the allocation of Company Collateral to particular
Contracts pursuant to Article V of the Security Agreement and the terms of the
relevant Contract;

 

(xiii)                          to
notify the Security Trustee as may be required from time to time, pursuant to
the terms of the Security Agreement, of an LOC Draw Event;

 

(xiv)                         to
designate persons who are registered representatives of a registered
broker-dealer which is a member of the National Association of Securities
Dealers to execute and deliver Contracts on behalf of the Company in their
capacity as such pursuant to a power of attorney granted by the Company from time
to time to registered representatives designated and notified to the Company by
the Manager from time to time;

 

(xv)                            to
engage a registered broker-dealer which is a member of the National Association
of Securities Dealers to assist the Company in connection with the offering,
issuance and sale of Contracts and, in connection therewith, to make such other
arrangements with such broker-dealer as may be necessary or advisable to ensure
that such broker-dealer supervises its registered representatives who will
effect such transactions and takes responsibility for such offering, issuance
and sale; and

 

(xvi)                         to take
any other action deemed necessary or advisable to write Contracts on behalf of
the Company, subject to the limitations set forth in the Security Agreement.

 

The Manager shall
administer all of the Company’s Assets in the Accounts (all of such Assets
together, the “Portfolio”) in accordance with the terms and conditions
and shall otherwise observe in all material respects the requirements of the
Security Agreement and other Program Documents, the Operations, Procedures and
Controls Manual, Policy 5.0 and Policy 6.0, this Agreement and all other
documents, policies, laws and regulations applicable to the Company from time
to time.  The Company shall provide
copies of the Security Agreement, the Operations, Procedures and Controls
Manual, Policy 5.0 and Policy 6.0 to the Manager no later than the time that
this Agreement is entered into and shall provide copies of all amendments,
supplements and revisions to such documents as soon as they are available to
the Company.

 

(b)                                 Performance.  The Parties hereby agree that the Manager
shall perform the specific Listed Obligations set forth in Exhibit C and
Exhibit D during the term of this Agreement and, subject to Section
2.10, such other functions as are set forth in this Agreement or as are
generally required to operate the business of the Company in

 

5

 

accordance with
applicable laws, regulations, documents and Company policy.  The Manager acknowledges that it will take
all reasonable steps to continue to conduct the business of the Company in a
manner substantially similar to that in which it had been conducted prior to
the Parties’ entry into this Agreement and in a manner reasonably satisfactory
to the Company.  The Manager shall
perform its duties pursuant to this Agreement (i) exercising the same diligence
and care applied to manage its own property; (ii) consistent with the practices
used by it (and its Affiliates) to manage portfolios of similar assets for
other customers and (iii) consistent with the diligence and care applied by
other professional managers of similar stature.  Notwithstanding the foregoing, if the Company does not consent,
affirmatively or otherwise, to any proposed action by the Manager pursuant to
this Section 2.01(b), the Manager’s failure to take such proposed action
shall not be deemed a breach of its standard of care hereunder.

 

SECTION 2.02.                                         Power
of Attorney.  The Company hereby provides
the Manager with a revocable power of attorney with full power and authority:

 

(i)                                     to
evaluate and appraise the Portfolio;

 

(ii)                                  to
arrange the purchase and sale through registered broker-dealers of bonds,
pass-through certificates, stocks, and other securities in connection with
making Investments for the Portfolio;

 

(iii)                               to
arrange the purchase and sale and otherwise to effect transactions in Hedge
Contracts in connection with making Investments for the Portfolio through
registered broker-dealers;

 

(iv)                              to
execute and to deliver on behalf of the Company any Investment Orders and
Disposition Orders, as may be required from time to time pursuant to the terms
of Section 2.04 and 2.05 of the Security Agreement;

 

(v)                                 to
execute and to deliver on behalf of the Company any consents, waivers,
extensions, or modifications in respect of any item of Company Collateral or
Contract Collateral as contemplated by Section 2.10 of the Security Agreement;

 

(vi)                              to
execute and to deliver on behalf of the Company any instrument of transfer or
release in respect of any item of Company Collateral or Contract Collateral;

 

(vii)                           to
engage a broker-dealer acceptable to the Company to assist the Company in the
origination, issuance and sale of Contracts in accordance with all applicable
securities laws and regulations; and

 

(viii)                        subject to
the limitations set forth in the Operations, Procedures and Controls Manual,
Policy 5.0 and Policy 6.0, to take any other action, including executing
agreements and any other documents on behalf of the Company that the Manager
deems necessary or advisable to purchase, sell, or otherwise effect investment
transactions relating to the Portfolio.

 

6

 

All Investments made, and
transactions entered into, by the Manager on behalf of the Company shall be
entered into in the name of the Company. 
All actions contemplated above shall be performed in accordance with
applicable laws, regulations, documents and applicable Company policy.  The Manager shall not be under an obligation
to keep the Portfolio fully invested if, in its sole discretion, it shall
determine that market and/or economic conditions make it imprudent or
disadvantageous to do so at any time or funds should be made available for
distributions and other payments pursuant to the Security Agreement.  The Company represents that it has the
authority to make the appointment set forth in this paragraph.  In the event the Manager fails to perform a
Listed Obligation and this Agreement is terminated pursuant to Section
4.05(a) or (b), or if this Agreement is terminated pursuant to Sections
4.05(c) or (d), this power of attorney may be revoked by the Company
by written notice to the Manager.

 

SECTION 2.03.                                         Valuation.  The Manager shall value the Portfolio from
time to time as required by Section 2.06 of the Security Agreement in order to
prepare the reports required thereunder, using the portfolio valuation methods
set forth in the Market Valuation Addendum attached as Schedule 1.01 to the
Security Agreement, in order to determine whether a Coverage Shortfall, a
Program Shortfall or a Net Worth Deficit has occurred and is continuing and
whether the Market Sensitivity Limit has been exceeded.  The Manager shall also value Permitted
Collateral Investments on deposit in Collateral Accounts as required under the
terms of each Collateralized Contract.

 

SECTION 2.04.                                         Reports.  As more particularly specified in the
applicable Program Documents and in Exhibit C and Exhibit D, the
Manager shall:

 

(a)                                  prepare
the Company’s annual financial statements and, unless otherwise specified by
the Company, arrange to have such statements audited by a firm of independent
accountants acceptable to the Company and GE Capital;

 

(b)                                 timely
prepare and provide to the Security Trustee, the Company and the Rating
Agencies such reports as are required to be provided to each of such Persons
pursuant to Section 2.06 of the Security Agreement and in accordance with
Exhibit 2.06 of the Security Agreement;

 

(c)                                  give
prompt written notice to the Company, the Security Trustee, the Broker-Dealers
and the Rating Agencies of (i) the existence of a Coverage Shortfall, Program
Shortfall, or Net Worth Deficit or (ii) the exceeding of a Market Sensitivity
Limit; and

 

(d)                                 notify
the Company and GE Capital immediately upon learning of any Credit Event,
Program Event of Default or other material default or breach of the Listed
Obligations set forth in Exhibit C.

 

SECTION 2.05.                                         Confidential
Relationships.  All information and
recommendations furnished by the Manager to the Company shall be treated by the
Company as confidential.  The Manager
shall, in turn, treat as confidential all information concerning the affairs of
the Company.  Nothing in this Section
2.05 shall be deemed to

 

7

 

preclude any such
information or recommendations from being disclosed by either Party to such
Party’s Affiliates or to the directors, officers, employees, representatives,
agents, or advisers of such Affiliates [, or pursuant to applicable law,
regulation or court order]; provided, that any such recipients are
advised of the confidential nature of such information or recommendations.

 

SECTION 2.06.                                         Fees.  The Company hereby agrees to pay to the
Manager a fee (the “Management Fee”) at an annual rate of sixteen and
one-half (16.5) basis points (0.165%) of the Maximum Permitted Program Size of
the Company as of the date hereof, payable quarterly in arrears; provided,
however, that the Management Fee shall be pro rated to the date of termination
in the event the Agreement is terminated pursuant to Article IV.  For the purposes hereof, “Maximum
Permitted Program Size” means nine billion dollars ($9,000,000,000) or such
larger amount as shall be approved in writing by GE Capital.  In no event shall the Management Fee that is
payable to the Manager be an amount less than fourteen million, eight hundred
fifty thousand dollars ($14,850,000) per annum, pro rated to reflect the period
of time during which this Agreement was in effect during each year.

 

SECTION 2.07.                                         Expenses
Reimbursed.

 

(a)                                  The
Company shall reimburse the Manager for all out-of-pocket expenses incurred and
approved pursuant to Section 2.09(e) in connection with the performance
of its duties hereunder, except for any expenses arising out of the Manager’s
willful misfeasance, bad faith, gross negligence in the performance of or
reckless disregard of its obligations and duties hereunder.

 

(b)                                 The
Company shall reimburse the Manager for all appropriate Operating Costs of the Company.  Such reimbursement shall be made, upon
receipt by the Company from the Manager of a schedule detailing Operating Costs
(substantially in the form of Exhibit B hereof), within thirty (30) days
following the end of each quarter.  For
the purposes hereof, “Operating Costs” means all costs incurred by the
Manager in connection with the performance of its obligations under this
Agreement that have been submitted and approved in writing as part of the
annual budget approval process described in Section 2.09(e).  For the avoidance of doubt, it is hereby
agreed that certain expenses will not be paid by the Manager and do not
constitute reimbursable Operating Costs. 
Such expenses, which are directly attributable to the Company, include
fees payable to: (i) each rating agency that assigns a rating to the
Company, (ii) external auditors of the Company, (iii) external legal counsel
engaged by the Company for services rendered thereto and not in connection with
duties of the Manager which are unrelated to the management services it renders
to the Company, (iv) certain third-party providers of accounting services to
the Company, (v) providers of credit research services required by the Company
and (vi) any provider of goods or services for costs incurred in connection
with requirements imposed by regulatory authorities, the applicable rating
agencies, or any applicable law, rule, regulation, administrative
interpretation, ordinance, code issued by a Governmental Authority or
regulatory body, or any order, writ, injunction, directive, judgment or decree
of a court of competent jurisdiction; each such expense shall be paid by the
Company.

 

8

 

SECTION 2.08.                                         Execution
of Securities Transactions.

 

(a)                                  In
connection with the offering and sale of Contracts, the Manager shall engage a
registered broker-dealer approved by the Company that provides services with
respect to the origination, issuance and sale of Contracts that the Manager
believes to be of value.  The Company
shall pay all costs associated with the retention of such broker-dealer and
shall bear all indemnification costs relating thereto.

 

(b)                                 Except
as otherwise specifically directed by the Company, the Manager shall have
complete discretion to select any registered broker-dealer in all securities
transactions affecting the Portfolio not described in Section 2.08(a).  The Manager is expressly authorized to
select such brokers-dealers who provide brokerage and research services that
the Manager believes to be of value. 
The Manager is expressly authorized to pay from the Assets in the
Portfolio commissions on such transactions in amounts that the Manager
determines in good faith to be reasonable in relation to the value of such
brokerage and research services, viewed in terms either of the particular
transaction or the overall responsibilities of the Manager with respect to the
Portfolio.

 

SECTION 2.09.                                         Administrative
Responsibilities.  The Manager shall
have the following administrative responsibilities:

 

(a)                                  The
Manager shall submit the budget for reimbursable Operating Costs to the Company
and GE Capital by no later than January 31 of each year and such budget shall
be approved by the Manager of Finance of Corporate Treasury and Global Funding
Operations (or such other representative as shall be designated from time to
time in a notice to the Manager executed by the Company and GE Capital) by
February 15 of such year.  Operating
Costs incurred in excess of the aggregate amounts approved in the annual budget
must be separately approved by the Company and GE Capital in order to be
considered for reimbursement.

 

(b)                                 Custody
of the Assets comprising the Portfolio will be maintained by the Security
Trustee or the applicable Collateral Agent as specified in Article II of the
Security Agreement.  The Manager shall
not have custody of any of the Assets in the Portfolio.

 

(c)                                  The
Manager shall keep such books and records relating to all transactions that it
effects pursuant to this Agreement, including without limitation all books and
records necessary (in addition to books and records available from the Security
Trustee pursuant to Section 2.09(c) or otherwise) for preparing the
reports required by Section 2.04.

 

(d)                                 The
Manager on behalf of the Company shall instruct the Security Trustee and each
Collateral Agent:  (i) to send copies of
all statements relating to the Accounts to the Manager; (ii) to permit the
Manager, on behalf of the Company, to inspect the Company Collateral or Contract
Collateral, as the case may be, in the possession or otherwise under the
control of the Security Trustee and the books and records maintained by the
Security Trustee or such Collateral Agent, as the case may be,

 

9

 

relating thereto (and to
allow the Manager to make extracts and copies thereof) as the Manager may
reasonably request pursuant to Section 2.03(b) of the Security Agreement; and
(iii) to report to the Manager, concurrently with reporting to the Company
pursuant to Section 2.03(a) of the Security Agreement, any failure on the part
of the Security Trustee or such Collateral Agent, as the case may be, to hold
the Company Collateral as provided in Section 2.03(a) of the Security
Agreement.

 

(e)                                  For
the avoidance of doubt, the Manager shall provide no services to the Company in
respect of tax planning or tax compliance of any kind.

 

(f)                                    The
Manager shall submit presentations relating to the offering of Contracts to the
Company and GE Capital for approval prior to external use.

 

(g)                                 The
Manager shall maintain its status as an “investment adviser” under the
Investment Advisers Act of 1940, as amended, and shall follow all applicable
laws and regulations relating to its status as such and to its performance
hereunder, including all applicable laws and regulations relating to bidding
for Contracts.

 

SECTION 2.10.                                         Other
Duties as Reasonably Requested.  The
Manager shall also perform such other duties or shall modify existing duties as
the Company may reasonably request or that the Manager shall recommend to the
Company from time to time relating to the management of a business involved in
the issuance of guaranteed investment contracts and similar debt obligations
issued by providers rated “AAA”/”Aaa” and the management of the proceeds of the
issuance of such contracts and obligations. 
If any additional or modified duties are required of Manager under this
Agreement, Manager shall have the reasonable time and opportunity to procure
such additional resources as may, in Manager’s good faith judgment, be required
to perform such duties.  Manager also
agrees that it will cease to perform the requirements of certain obligations
specified hereunder if the Company so directs in writing.  Any such changes or additions shall be
deemed for all purposes to be amendments or supplements to this Agreement.  The Company shall pay such costs as have
been mutually agreed to by the Parties and as may from time to time be required
to enable the Manager to perform any additional or changed Listed Obligations
contemplated herein and other obligations not listed in this Agreement for
which additional resources are required or additional costs are reasonably
incurred by the Manager.

 

SECTION 2.11.                                         Limitation
of Liability.  Neither the Manager
nor any of its Affiliates nor any of their respective directors, officers, or
employees shall be liable to the Company for any error of judgment or mistake
of law or for any loss arising out of any Investment, Hedge Contract, or any
other commitment of funds on behalf of the Company or for any act or omission
in the administration of the Portfolio except for willful misfeasance, bad
faith, gross negligence in the performance of or reckless disregard of its
obligations and duties hereunder, other than as may be provided under
applicable law.

 

SECTION 2.12.                                         Indemnification.  (a) The Company shall (i) indemnify and
hold harmless the Manager and any Affiliate of the Manager and each of their

 

10

 

respective directors,
officers, employees and agents (each, an “Indemnified Party”) from and
against all losses, claims, damages, expenses or liabilities to which such
Indemnified Party may become subject (except in respect of the broker-dealer
engaged by the Manager in respect of placement of Contracts, which shall be the
sole liability of the Manager), insofar as such losses, claims, damages,
expenses or liabilities (or actions, suits or proceedings including any inquiry
or investigation or claims in respect thereof) arise out of, in any way relate
to, or result from the transactions contemplated by, this Agreement, and (ii)
reimburse each of the Indemnified Parties upon its demand for any reasonable
legal or other expenses incurred in connection with investigating, preparing to
defend or defending any such loss, claim, damage, liability, action or claim,
in each case only to the extent that funds are available therefor in accordance
with the Security Agreement; provided, however, that none of the
Indemnified Parties shall have the right to be so indemnified hereunder for
losses, claims, damages, expenses or liabilities to the extent resulting from
its own negligence or willful misconduct or for losses, claims, damages,
expenses or liabilities that it is required to pay to any broker-dealer that it
has engaged in connection with the Contracts or other liabilities.  If any action is brought against an
Indemnified Party indemnified or intended to be indemnified pursuant to this Section
2.12, the Company shall, if requested by such Indemnified Party, resist and
defend such action, suit or proceeding or cause the same to be resisted and
defended by counsel reasonably satisfactory to such Indemnified Party, but
shall not be empowered to compromise or settle such action, suit or proceeding
unless such Indemnified Party has been fully indemnified for any loss, claim,
damage, expense or liability it thereby suffers.  Each Indemnified Party shall, unless the Indemnified Party has
made the request described in the preceding sentence and such request has been
complied with, have the right to employ its own counsel to investigate and
control the defense of any matter covered by such indemnity and the reasonable
fees and expenses of such counsel shall be at the expense of the Company.  Any obligations of the Company pursuant to
this Section 2.12 are Deferred Expenses and the Manager shall have
recourse solely to the LOC Reimbursement Account for such obligations of the
Company (and not to any other assets of the Company) and shall be paid in the
priority specified in the applicable sections of Article VII of the Security
Agreement.  The Manager hereby expressly
consents to such limited recourse to the LOC Reimbursement Account and to such
priorities of distributions set forth in Article VII of the Security Agreement.

 

ARTICLE
III

Representations and Warranties

 

SECTION 3.01.                                         Valid
Existence; Authorization; Enforceability. 
Each of the Parties represents and warrant to the other as follows:

 

(a)                                  such
Party is a limited liability company duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power, legal right and authority to execute and deliver this
Agreement and all other documents to be executed and delivered by such Party in
connection herewith and to perform its obligations hereunder and thereunder;
and

 

11

 

(b)                                 this
Agreement and all the documents to be executed and delivered by such Party in
connection herewith and therewith has been duly authorized by all necessary
actions on the part of such Party.

 

ARTICLE
IV

Miscellaneous Provisions

 

SECTION 4.01.                                         No
Assignment Without Consent.  This
Agreement, and the obligations and rights arising under this Agreement, may not
be assigned or otherwise transferred by either Party (including any assignment
or transfer in connection with any Person succeeding to any part of the
business of either Party) without the prior written consent of the other Party.

 

SECTION 4.02.                                         Counterparts.  This Agreement may be executed in one or
more counterparts and, as so executed, shall constitute one agreement binding
upon the Parties.

 

SECTION 4.03.                                         No
Third Party Beneficiaries.  Nothing
expressed or implied in this Agreement is intended or shall be construed to
confer upon any person (other than the Parties and their permitted assigns),
any right, remedy or claim by reason of this Agreement or any term hereof, and
all terms contained herein shall be for the sole and exclusive benefit of the
Parties and their successors and permitted assigns.

 

SECTION 4.04.                                         Interpretation.  The headings of the Articles and Sections
hereof are for convenience of reference only and shall not affect the meaning
or construction of any provision hereof.

 

SECTION 4.05.                                         Term;
Termination.

 

(a)                                  The
Manager’s appointment hereunder shall continue in effect for an initial term
commencing on the date hereof and ending on December 31, 2006, with extensions
for additional one (1) year periods commencing automatically upon each
anniversary thereof, unless either Party notifies the other Party in writing at
least ninety (90) days before such anniversary that such extension shall not be
effective.

 

(b)                                 If
the Manager fails to perform any of its obligations set forth in this
Agreement, Exhibit C or Exhibit D, the Manager (or if the failure
is first discovered by the Company, then the Company) shall give prompt written
notice (such notice, a “Notice of Failure”) to the persons identified in
Exhibit E (the “Failure Notice Recipients”) specifying the nature
of the failure.  In the event such
Notice of Failure is given, then either the Manager or the Company may elect to
submit the matter for review (a
“Submission”) and resolution (“Dispute Resolution”),
which may include the establishment of a plan of remediation (a “Remediation
Plan”), to (i) with respect to the Manager, the Business Leader of the
Retirement Income and Investment Segment of Genworth Financial Inc. (or such
person or persons as such Business Leader may designate) and (ii) with respect
to the Company, the Senior Vice President – Corporate Treasury and Global
Funding Operation of GE Capital (or such person or persons as such

 

12

 

Senior Vice President may
designate) ((i) and (ii) together, “Senior Management”).  The Manager and the Company agree (x) to
cooperate in good faith and in a reasonable manner to reach an agreement with
respect to any Remediation Plan; (y) to be bound by the results of any such
Dispute Resolution agreed to by Senior Management including any Remediation
Plan (the timing and content of which shall be at the sole discretion of Senior
Management) and (z) that the Manager will implement any such Remediation Plan
within the period mandated by Senior Management (the “Final Cure Period”).  The result of any such Dispute Resolution
shall be in writing signed by Senior Management, shall be deemed part of this
Agreement and, with the respect to the failure involved, shall supersede any
conflicting or different terms of this Agreement.

 

If Senior Management
fails to reach an agreement with respect to a Dispute Resolution and the Cure
Period has not expired, the matter in dispute shall be resolved solely and
exclusively in accordance with the arbitration procedures set forth in Exhibit F.

 

If (i) Senior Management
or an arbitral tribunal described in Exhibit F fails to reach agreement
with respect to a Dispute Resolution and the Cure Period has expired or (ii)
the Manager fails to correct the failure by the end of the applicable Final
Cure Period, then this Agreement may, subject to Section 4.05(e), be
terminated by the Company upon two (2) Business Days’ prior written notice to
the Manager and each Failure Notice Recipient specifying the basis for and the
effective date of the termination.

 

Notwithstanding the
foregoing, the payment obligations of the Company during the initial term of
this Agreement shall not be terminated if any such failure and the continuation
thereof are caused by Impossibility. 
For the purposes hereof “Impossibility” means loss or malfunction
of electric power, transportation or communication services; general inability
to obtain or retain labor, material, equipment or transportation, or a delay in
mails or services; the Company’s, GE Capital’s or their Affiliates’ (i) failure
to take an action on which the Manager’s performance of an obligation or any
Listed Obligation depends or (ii) taking an action which renders the Manager’s
performance of an obligation or any Listed Obligation impossible; governmental
or exchange action, statute, ordinance, ruling, regulation, administrative
interpretation or directive; acts of terror, vandalism, explosions, tornados,
acts of God or public enemy, acts of any civil or military authority,
revolutions, insurrections, strike, emergency, riots or civil commotions,
freezes, fires, floods, embargoes, wars, sabotage, explosions or other
unforeseen or unexpected occurrences, which unforeseen or unexpected
occurrences render the performance of any obligations by the Manager
impossible.  In the event of any such
occurrence, the Manager shall use all reasonable efforts to remediate the
disruption and resume its performance of the obligations.

 

(c)                                  The
Company shall have the right to terminate this Agreement at an earlier time
than that specified in Section 4.05(a) in the event of continuing
nonperformance due to Impossibility of any obligation hereunder beyond the
applicable Cure Period or Final Cure Period, or upon the exercise of the GE
Note Option with respect to all or substantially all of the Assets of the
Company held in the Facility Account (except Contract Collateral), upon thirty
(30) Business Days’ prior written

 

13

 

notice to the
Manager.  Upon termination of this
Agreement pursuant to this Section 4.05(c), the Manager shall be paid a
termination fee by the Company equal to the product of (i) sixteen and one-half
(16.5) basis points (0.165%), multiplied by (ii) the Program Size, multiplied
by (iii) the percentage derived by dividing the number of days remaining in the
initial term by 365.  In addition, the
termination fee shall include any actual cost incurred and agreed upon and
reasonably associated with terminating the operations set forth in this
Agreement, including but not limited to employment severance costs as
determined by the standard practices of the Manager.

 

(d)                                 The
Manager may resign upon not less than ninety (90) days’ prior written notice to
the Company.

 

(e)                                  Notwithstanding
any provision to the contrary, including the expiration of any term of this
Agreement, so long as the Portfolio is still outstanding, this Agreement shall
remain in full force and effect and no termination or resignation of the
Manager shall be effective until the Company has entered into an agreement with
a successor manager.  Upon receiving a
notice of resignation from the Manager, the Company shall use its best efforts
to enter into such an agreement unless it elects to terminate this Agreement as
provided in Section 4.05(c), above. 
Except as set forth in Exhibit F, nothing in this Agreement shall
be deemed a waiver of any Party’s rights to pursue remedies at law or in
equity, which shall be available in accordance with applicable law in addition
to any remedies provided for in this Agreement.

 

SECTION 4.06.                                         Independent
Contractor.                                     The
Manager is being engaged pursuant to this Agreement as an independent
contractor and the Parties expressly disclaim any intention to enter into a
joint venture, partnership, or any other form of association pursuant to this
Agreement.

 

SECTION 4.07.                                         GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE RULES OF CONFLICTS OF LAWS OF THE STATE OF NEW YORK OR
ANY OTHER JURISDICTION.

 

SECTION 4.08.                                         Notices.  All notices, instructions, and advice with
respect to any transactions or other matters contemplated by this Agreement
shall be deemed duly given only when actually received at such Party’s
principal place of business as set forth below.  Return receipt or courier record of delivery shall be deemed
conclusive evidence of receipt.  Notices
may be made by fax or other electronic means shall be deemed given upon
electronic evidence of receipt at applicable recipient’s fax or computer
station.  A copy of all notices given
shall be provided to GE Capital.

 

If to the Manager:

 

Genworth Financial Asset
Management, LLC

6620 West Broad Street

Richmond, Virginia  23230

 

14

 

Attention:  Pamela Schutz

Phone:  (804) 291-6533

Fax:  (804) 281-6165

E-mail:  pamela.schutz@ge.com

 

with a copy to:

 

335 Madison Avenue

Mezz4

New York, New York  10017

Attention:  Shailesh Shah

Phone:  (212) 389-2575

Fax:  (212) 389-2591

E-mail:  shailesh.shah@ge.com

 

If to the Company:

 

[Subsidiary]

[Address]

 

If to General Electric
Capital Corporation:

 

General Electric
Capital Corporation

260 Long Ridge Road

Stamford, Connecticut  06927

Attention:  Senior Vice President –
Corporate

Treasury and Global Funding Corporation

Phone:  [(203)
961-5077]

Fax:  [(203) 357-3490]

E-mail:  [alan.green1@ge.com]

 

SECTION 4.09.                                         Entire
Agreement; All Amendments in Writing. 
This Agreement embodies the entire understanding of the Parties
concerning the subject matter hereof and supersedes any and all other previous
agreements, written or oral, concerning the same subject matter.  This Agreement cannot be amended except by
written agreement of the Parties, except that any amendment to any provision of
the Security Agreement that is incorporated by reference in this Agreement
(including, without limitation, any amendment to any of the capitalized terms
incorporated by reference herein), so long as such amendment is made as
permitted under the terms of the Security Agreement, shall constitute an
amendment to this Agreement unless the Parties agree in writing that such
amendment shall not be effective under this Agreement.

 

SECTION 4.10.                                         Waiver.  No waiver of any provision of this Agreement
nor consent to any departure therefrom shall in any event be effective unless
the same shall be in writing and signed by the Party from whom such waiver or
consent is sought, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

 

15

 

SECTION 4.11.                                         Further
Assurances.  Each Party hereby
agrees to execute and deliver such additional documents, instruments or
agreements as may be reasonably necessary and appropriate to effectuate the
purposes of this Agreement.

 

SECTION 4.12.                                         Successors
and Assigns.  This Agreement shall
be binding upon the Parties and their respective successors and assigns.

 

SECTION 4.13.                                         Severability.  Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other
jurisdiction.  If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.

 

SECTION 4.14.                                         Limited
Recourse.  The obligations of the
Company under this Agreement are solely the obligations of the Company.  No recourse shall be had for any obligation
or claim arising out of or based upon this Agreement against any Member,
manager, officer organizer, agent or employee of the Company or any
shareholder, officer, director, employee, agent or incorporator of any
Member.  Any accrued obligations owing
by the Company shall be payable by the Company solely to the extent that funds
are available therefor form time to time in accordance with the provisions of
Article VII of the Security Agreement (and such accrued obligations shall not
be extinguished until paid in full.)

 

SECTION 4.15.                                         Termination
of the Investment Administration Agreement; Release.  Effective as of the date hereof, the Company
does hereby, for itself and its successors and assigns, waive the sixty (60)
days’ notice requirement of Section  3.05 of the Investment
Administration Agreement and accepts the resignation of MRCA Corp. as the
Portfolio Adviser thereunder and fully and unconditionally release and forever
discharge MRCA Corp. (and any officer, director, employee or agent of MRCA
Corp.) from any and all present and future (i) obligations and liabilities
under the Investment Administration Agreement and (ii) causes of action, suits,
claims, demands, liabilities and obligations whatsoever, whether at law or in
equity, arising from or related to the Investment Administration Agreement,
arising from and after the date hereof.

 

16

 

 

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

 

	
   

  	
  [Subsidiary]

  
	
   

  	
  a New York
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  [       ]

  
	
   

  	
   

  	
  a
  Delaware corporation,

  
	
   

  	
   

  	
  as
  its Controlling Common Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  GENWORTH
  FINANCIAL ASSET

  MANAGEMENT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  ACKNOWLEDGED
  AND

  CONSENTED TO BY:

  	
   

  
	
   

  	
   

  
	
  FGIC MRCA CORP.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  AGREED AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  GENERAL ELECTRIC CAPITAL

  CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

[LIABILITY AND PORTFOLIO
MANAGEMENT

AGREEMENT (TRINITY PLUS)]

 

 

Exhibit
A

 

Accounts
Comprising the Portfolio

 

	
  Account

  	
   

  	
  Custodian Bank

  	
   

  	
  Account Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facility Account

  	
   

  	
  Deutsche Bank
  Trust

  Company Americas,

  New York, NY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LOC Reimbursement
  Account

  	
   

  	
  Deutsche Bank
  Trust

  Company Americas,

  New York, NY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
            Account

  	
   

  	
  Deutsche Bank
  Trust

  Company Americas,

  New York, NY

  	
   

  	
   

  

 

A-1

 

Exhibit
B

 

Form
of Schedule of Operating Costs

 

Operating Costs for the
first calendar year, commencing on January 1, 2004, shall be $** and thereafter
shall be equal to **% of the Operating Costs of the Manager, subject to the
Company’s approval, as provided in Section 2.07(b) and shall consist of
the following (allocated **% with respect to the Company):

 

	
   

  	
   

  	
  2004

  	
   

  	
  2004

  TY

  	
   

  
	
  CMS

  	
   

  	
  1Q

  	
   

  	
  2Q

  	
   

  	
  3Q

  	
   

  	
  4Q

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Comp & Benefits:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Salaries

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  
	
  Savings Plan 401k

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Bonuses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Employee Insurance

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Payroll Taxes

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Comp & Benefits

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Purchase Base:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Travel & Living
  Expenses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Business Meetings

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Education

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Employment Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Tuition Reimbursement

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Relocation Maintenance

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Dues & Associations

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Consulting Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Outside Services

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Rent/ Utilities

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Legal Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Audit Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Recreation

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Telephone/Cellular

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Printing & Office
  Supplies

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Postage\Courier Service

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Subscriptions

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Information Services

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Advertising / Marketing

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Temporary Help

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Equipment Maintenance

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Hardware Expense

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Software Expense

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Fiscal Agent Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Investment Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Organizational Misc

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Total Purchase Base

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Total Controllable

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
																	

 

B-1

 

	
   

  	
   

  	
  2004

  	
   

  	
  2004

  TY

  	
   

  
	
  CMS

  	
   

  	
  1Q

  	
   

  	
  2Q

  	
   

  	
  3Q

  	
   

  	
  4Q

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Property Insurance

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Corporate Assessments

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Total Other

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  SG&A Expenses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rating Agency Fee

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Loss On Other Assets

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Insurance And Licensing

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  State And Local Taxes

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Goodwill Amortization

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Change in DAC

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Ceding Commission

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Non-SG&A Expenses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
  Op & Admin Expense

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Depreciation

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Total Direct Expenses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  *

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Broker Fees Amortization

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Total Expenses (including Broker
  Fees)

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  
																	

 

B-2

 

Exhibit
C

 

Priority
Manager Functions

 

	
  Listed
  Obligation

  	
   

  	
  Cure Period

  
	
   

  	
   

  	
   

  
	
  Payments

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Manager shall cause
  payments to be made as required under any Contracts, Hedge Contracts or other
  agreement to which the Company is a party.

  	
   

  	
  Five (5) Business Days
  from the date a notice of nonpayment received by Manager under the applicable
  Contract, Hedge Contract or agreement (or such shorter period as exists prior
  to such nonpayment being an actionable default thereunder); provided, however,
  that if the Manager or the Company gives notice to the other party requesting
  Dispute Resolution within one (1) Business Day of notice, the cure period
  hereunder shall be extended to three (3) Business Days from the date the
  notice of nonpayment is received (it being understood that in no event shall
  this section supersede the contractual payment obligations in the respective
  Contracts or Hedge Contracts).

  
	
   

  	
   

  	
   

  
	
  Risk Matters

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Manager shall comply
  with all requirements of GE Capital’s Policy 5.0 and 6.0 relating to the
  Company and related “strike zones,” as such policies and strike zones are
  amended from time to time, and all requirements relating to Permitted
  Investments and the portfolio in the Security Agreement; provided,
  that in the event that a trigger has been tripped under Policy 6.0 by virtue
  of a change in the market or pursuant to the action of a rating agency, GE
  Capital shall provide direction on remediation on a case-by-case basis if not
  otherwise provided for in Policy 6.0 and, if the Manager takes the
  appropriate corrective action (whether as prescribed by the Policy or as
  directed by GE Capital), no failure to perform an obligation under this
  Agreement shall be deemed to have occurred.

  	
   

  	
  Five (5) Business Days.

  
	
   

  	
   

  	
   

  
	
  Rating Agency Requirements

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Manager shall prepare
  all reports on the dates specified by each rating agency currently rating
  obligations of the Company and shall meet all requirements specified by any
  such agency for continuation or reinstatement of their highest long-term and
  short-term ratings.

  	
   

  	
  Thirty (30) days or
  such shorter or longer period as is specified for compliance by the rating
  agencies.

  

 

C-1

 

	
  Listed
  Obligation

  	
   

  	
  Cure Period

  
	
   

  	
   

  	
   

  
	
  Financial
  Reporting

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Manager shall comply
  with Section 2.04 hereof and the Listed Obligations and shall prepare
  all reports relating to the Company as are necessary or desirable for
  compliance with the Sarbanes-Oxley Act of 2002 and any other financial
  reporting requirements of the Company under applicable law and external
  regulation.

  	
   

  	
  Thirty (30) days or
  such shorter or longer period as is specified by the applicable accounting
  firm or regulatory body to allow for compliance with the applicable
  regulatory or disclosure requirement.

  
	
   

  	
   

  	
   

  
	
  Legal Compliance

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Manager shall prepare disclosure
  documentation annually or more frequently as is necessary or desirable in
  connection with its offering of Contracts and Preferred Securities and shall
  otherwise comply with the requirements of contracts to which it is a party,
  and all applicable laws and regulations.

  	
   

  	
  Thirty (30) days or
  such other period as is specified in the applicable agreement or regulation
  or as is directed by the applicable regulatory body.

  

 

C-2

 

Exhibit
D

 

Listed
Obligations

 

Business

 

•                                          Manager will
use its best efforts to maintain an Average Program Size of thirteen billion
dollars ($13,000,000,000) or such other amount reasonably specified by the
Company from time to time for the combined portfolios of the Company and [Subsidiary].

 

•                                          For the
purposes hereof, the term “Average” means a rolling 3-month average of
end-of-day balances, computed daily.

 

•                                          Manager will
review the Portfolio Quality Review with GE Capital on a monthly basis on such
dates as Manager and GE Capital shall agree to in advance.

 

Compliance/Legal

 

•                                          Manager will
maintain the corporate and limited liability company minutebooks and records of
the Company and its non-controlling common members and any successors thereto,
and take all actions required to maintain their valid existence and good
standing in the jurisdictions in which they are organized or qualified.

 

•                                          Manager will
comply with applicable law in respect of the Company’s issuance of Contracts
and Preferred Securities, including with respect to rules promulgated under
federal securities laws that restrict certain forms of advertising and
solicitation.

 

•                                          Manager will
prepare updated versions of the Confidential Information Memorandum of the
Company (i) on an annual basis to reflect then-current audited financial
information of the Company or (ii) at such other times as may be required by
the Company.

 

•                                          Manager will,
as required from time to time, prepare updated versions of the Private
Placement Memorandum of the Company relating to the Company’s issuance of
Preferred Securities.

 

•                                          Manager will
use its best efforts to take all actions required in connection with obtaining
the appropriate authority with respect to the extension of the Liquidity
Commitment and/or the Letter of Credit commitment and any required increase of
the Liquidity Commitment and/or the Letter of Credit commitment (it being
understood that no failure to perform a Listed Obligation shall be deemed to
have occurred if either such commitment is not extended or increased after a request
has been submitted).

 

D-1

 

•                                          Manager will
consult with and obtain approval from the Company in connection with proposed
material modifications to the terms or the form of Contracts.

 

•                                          Manager will maintain
its status as an “investment adviser” under the Investment Advisers Act of
1940, as amended, and will take all reasonable steps to comply with all
applicable laws and regulations relating to its status as such.

 

•                                          Manager will
cause its legal staff to draft and prepare all Contracts, Hedge Contracts and
other contracts entered into by the Company. 
The in-house counsel of Manager may, to the extent required, engage
outside counsel in connection with the preparation of such contracts if such
engagement is approved verbally or in writing by the General Counsel – Treasury
Operation of GE Capital and otherwise approved under Section 2.09.  Nothing in this Agreement will preclude
Manager from engaging its own outside counsel for any purpose it deems necessary
or advisable, and Manager need not obtain any separate approval therefore.

 

•                                          Manager will
comply with all applicable laws and all applicable policies and procedures as
the same may be provided to Manager by the Company, including but not limited
to the USA Patriot Act and Anti-Money Laundering policies and laws.

 

•                                          Manager will
take all reasonable actions required to assist the Company or GE Capital in
connection with changes to the corporate structure of the Company and its
common members.

 

•                                          Manager will
take all reasonable steps to provide prompt responses to GE Capital in
connection with requests from regulatory or other governmental authorities for
documentation or data relating to the operation of the Company.

 

•                                          Manager will
comply with all applicable laws, regulations, policies, management procedures
and other requirements of the Company, GE Capital and Genworth, including but
not limited to the GE Capital Information Security Procedure and, to the extent
applicable, the policies contained in “Integrity:  The Spirit and the Letter of Our Commitment.”

 

Liability/Contract
Bidding Process

 

•                                          Manager shall
ensure that transactions in Contracts are effected in accordance with the
following general procedure: (i) a registered representative of a broker-dealer
(each, a “GIC Salesperson”) shall receive bid specifications (“Bid
Specs”) provided by prospective Contract customers or their agents (“Customers”);
(ii) the GIC Salesperson shall analyze the Bid Specs and respond to Customers,
indicating to such Customers, where appropriate, the requirements to maintain
the Company’s exemption from registration under the Investment Company Act of

 

D-2

 

1940, as amended;
(iii) the GIC Salesperson shall submit all Bid Specs for review and comment to
the designated member of the Manager’s legal staff and will note on any bid
acceptance form that is delivered to the Customer all appropriate comments
received from the legal staff; (iv) the GIC Salesperson shall price transactions
in which the Company has an interest in bidding and communicate such pricing to
the applicable Customer; and (v) the Manager’s legal staff shall provide
counsel to the GIC Salesperson in connection with the preparation, negotiation
and closing of all Contracts for transactions that the Company wins.

 

Financial Controls

 

•                                          Manager will
perform its accounting responsibilities in compliance with GE’s internal
accounting policies and U.S. GAAP.

 

•                                          Manager will
maintain accounting polices currently in place and all changes to accounting
policies must be approved in advance by GE Capital.  For new accounting standards, GE Capital will provide Manager
with the accounting policy to be adopted by the Company.

 

•                                          Manager will
perform accounting in accordance with FAS 133 and obtain approval from GE
Capital for the following FAS 133 activities:

 

•                  Changes to existing hedge
documentation

•                  Changes in existing methodology used
to assess and measure hedge effectiveness

•                  Application of “fair value” hedging
as defined in FAS 133

•                  Economic hedges that do not qualify
for FAS 133 hedge treatment

 

•                                          Manager will
provide a monthly variance analysis of:

 

•                  Changes in the fair market value of
derivatives

•                  Hedge ineffectiveness

•                  Amounts excluded from the measure of
effectiveness

 

•                                          Manager will
reconcile all general ledger accounts in accordance with GE’s account
reconciliation criteria.  Manager will
provide a quarterly dashboard of account reconciliations and open items (in an
agreed upon format) on dates to be provided to Manager.

 

•                                          Manager is
responsible for establishing and maintaining a system of internal controls
adequate to ensure that Assets are appropriately safeguarded and that the
financial statements and related disclosures and schedules fairly present the
financial condition of the Company.

 

D-3

 

•                                          Manager and
GE Capital will agree upon and execute a plan to minimize profit and loss
volatility associated with FAS 133.

 

•                                          Manager will
deliver monthly unaudited financial results including any adjustments to the
monthly financials to be included in the next month’s accounting period.  These financials should include an
explanation of significant items of variance to the Operating Plan.  Such financial statements will be delivered
within 15 days of the close as defined by GE Capital.

 

•                                          Manager will
deliver quarterly unaudited financial reports and schedules in accordance with
GE Capital’s closing instructions.  Such
financials statement will include variance and profitability analysis suitable
for the closing of the books.  Closing
instruction to be provided by the 15th of the month of the quarterly close.

 

•                                          Manager will
provide the Company with financial projections in accordance with GE Capital’s
SI, SII and OP process.  GE Capital will
provide the Manager with SI, SII and OP timing and assumptions where needed to
make such forecasts.

 

•                                          Manager will
deliver annual audited financial statements (balance sheet and income
statement) upon completion of the annual audit by GE Capital’s external
auditors.

 

•                                          Manager will
conduct annual reviews in compliance with applicable provisions of the
Sarbanes-Oxley Act of 2002, in a manner acceptable to GE Capital.

 

•                                          Manager will
report detailed profit and loss results and details of expenses within fifteen
(15) days following the end of each quarterly period, including comparisons of
actual versus plan, in a format reasonably agreeable to both parties.  Profit and loss reports will be included in
the monthly Portfolio Quality Review, substantially in the format attached as Schedule
D.

 

Risk

 

•                                          Manager will
comply with the Permitted Investments guidelines provided in Schedule 4.01(h)
of the Security Agreement.

 

•                                          Manager will
value the Portfolio from time to time, as required by Section 2.06 of the
Security Agreement in order to prepare the reports required by such Section of
the Security Agreement, using the portfolio valuation methods set forth in the
Market Valuation Addendum attached as Schedule 1.01 to the Security Agreement, in
order to determine whether a Coverage Shortfall, a Program Shortfall or a Net
Worth Deficit has occurred and is continuing and whether the Market Sensitivity
Limit has been exceeded.  The Manager
shall also value Permitted Collateral investments on deposit in Collateral
Accounts as required under the terms of each Collateralized Contract.

 

D-4

 

•                                          Manager will
comply with all applicable terms set forth in Policy 5.0 and Policy 6.0 and all
“strike zones” defined by GE Capital with respect to assets, liabilities and
derivatives (as each may be amended from time to time by GE Capital).  Manager will deliver the following reports
on a monthly basis for monitoring such compliance:

 

•                  Portfolio Quality Review

•                  Credit Limit Watch

•                  Credit Risk Rating

•                  Stop Loss

•                  Month End Credit

•                  Counterparty Exposure

 

•                                          Except
as otherwise specified in this Exhibit F, Manager will deliver risk
reports to GE Capital on a monthly basis and will include, at a minimum, the
following:

 

•                  Portfolio Quality Review

•                  Supplemental Program Shortfall

•                  Liquidity Report (provided on a daily
basis)

•                  Summary Hedge Analysis Report
(provided on a daily basis)

•                  REM (electronic submission)

 

•                                          Manager will
provide other available reports required from time to time by GE Capital as
they are requested.

 

•                                          Manager will
participate, on a monthly and quarterly basis, in in-force reviews with
Genworth senior management and GE Capital senior management.

 

•                                          Manager will
from time to time provide GE Capital with data feeds relating to the Portfolio,
the content, format and timing of the delivery of which feeds will be agreed
upon by Manager and GE Capital.

 

•                                          Manager will
(i) comply with applicable requirements as to hedge counterparty ratings, as
set forth in the Security Agreement and as provided in the applicable policies
of GE Capital, (ii) comply with the applicable requirements to provide
information to GE Capital with respect to hedge counterparty exposure, (iii)
deliver a Counterparty Exposure report for monitoring such compliance and (iv)
comply with such restrictions as to hedge counterparty that may from time to
time be imposed by GE Capital.

 

•                                          Manager will
from time to time provide GE Capital with such available additional risk
analyses as GE Capital may request, including but not limited to, stress tests
and value at risk analyses.  In each
case, the content, format and timing of the delivery of such analyses will be
agreed upon, prior to delivery, by GE Capital and Manager.

 

D-5

 

•                                          Manager will
comply with all applicable requirements relating to the Company’s maintenance
of the “AAA”/”Aaa”  ratings assigned
thereto by the applicable rating agencies.

 

Customer

 

•                                          Manager will
ensure delivery by mail or e-mail, or will make available on the Company’s
website, to the Company’s customers in accordance with such customers’
respective Contracts, Customer Statements in respect of customers’ investments
with the Company.

 

•                                          Manager will
ensure the timely remittance of payments required under each Contract or other
agreement of the Company.

 

•                                          When
requested by the Company and GE Capital, Manager will deliver to the Company
and GE Capital customer service metrics (e.g., call volume by customer
complaint type by date) and deal closing customer survey results (if and to the
extent the same is provided by customers).

 

Information Technology

 

•                                          Manager
will maintain the current systems environment to fully support the business
requirements and the services to be performed under this Agreement for the
Company.

 

Continuous Service
(Disaster Recovery)

 

A disaster recovery site
shall be maintained as follows:

 

•                                          Backup copies
of critical servers shall be maintained at an off-premises Disaster Recovery
Site (locations to be determined from time to time by the Parties hereto).  The critical servers are as follows:
Principia PAS server, Oracle Data Warehouse Server,  File Server, Oracle GL Server, and FileNET CM Server.  In the event of a major disaster where
access to production servers and 335 Madison Avenue’s assets (or those of a
successor location from which the Company’s business is operated) is lost,  service will be restored on the following
schedule: PAS and Oracle Data warehouse systems will be within twenty-four (24)
hours.  GL and FileNET server will be
available within forty-eight (48) hours. 
The Parties will work with GE Capital Treasury on a best effort basis to
establish and implement an adequate Disaster Recovery plan.

 

D-6

 

•                                          Software
refreshes to synchronize the DR systems with the production systems shall be
done within twenty-four (24) hours of the update of the production system to
coincide with production system updates.

 

•                                          Backups of
the production PAS database shall be copied to the DR PAS server nightly.

 

Data Management (Backups
and Retention)

 

•                                          Full data
backups are performed daily on all production and Quality Assurance systems.

 

•                                          Full data
backups of all Network files are performed daily.

 

•                                          Backup tapes
shall be stored offsite at Iron Mountain. 
Tapes are picked up by 10:30 a.m. daily.

 

•                                          An authorized
list of personnel may recall tapes from Iron Mountain (an agreement exists to
deliver backup tapes to any location, including the home of IT personnel).

 

•                                          Tapes shall
be cycled on a rolling eight (8) week rotation.  All Financial close and Month End tapes shall be marked permanent
and retained indefinitely.

 

Change Management:  Notification and Approval Process on 

Changes to IT Infrastructure and Application Software

 

•                                          GE Capital
Treasury shall have the right to approve the Company’s Change Management
Process.

 

•                                          All change
requests shall be reported to GE Capital Treasury on a weekly basis.

 

•                                          Emergency
changes to the IT Environment shall be reported to GE Capital Treasury as they
occur.

 

•                                          In the event
of a major System Failure GE Capital Treasury shall be notified and required to
approve required changes.

 

Performance and Capacity
Planning Reporting and Reviews

 

•                                          In general,
monthly business reports shall be available by 9:00 a.m. the last
[day][Business Day] of the month.  The
IT team will communicate all exceptions by 8:30 a.m. on the day such exceptions
occur.  The communication will include

 

D-7

 

the anticipated
delivery time.  The following
performance tracking processes exist:

 

•                  Monthly report of nightly batch
completion times.

•                  Monthly report of nightly batch
completion times.

•                  Monthly report of exceptions and
violations of the 9:00 a.m. report delivery times and cures employed.

•                  Monthly report on system loading and
projected performance bottlenecks and issues and resolutions.

•                  Monthly report of license denials.

 

•                                          GE Capital
Treasury shall perform a quarterly review of systems and access rights to those
systems.  IT shall prepare the report to
be reviewed, deliver a copy to GE Capital Treasury and will remediate issues
discovered.  An updated access matrix
will be added to the “CMS Operational Procedures and Controls” document
quarterly.

 

Personnel

 

•                                          Manager will
maintain a staff of qualified employees sufficient to support the business
requirements of the Company and to perform the services required under this
Agreement.

 

Other Obligations

 

•                                          Manager will
comply in all material respects with all other obligations provided under this
Agreement.

 

D-8

 

Schedule
D

 

Format
of P&L Included with

Monthly Portfolio Quality Review

 

	
  CMS P&L ($millions)

  	
   

  	
  Actual

  	
   

  	
  Operating Plan

  	
   

  	
  Variance from

  Operating Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Revenue:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity Gross Spread
  Income

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Trinity Broker Fees
  Amortization

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity Hedge
  Ineffectiveness

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity  Net Interest Margin

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity Realized Gains
  (Losses)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subtotal Trinity  Net Revenue

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GE Book

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total CMS Net Revenue

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating Expenses:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CMSI

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Trinity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MRCA

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Operating Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total CMS Pre-tax Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tax (Benefit)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity Average Liability
  Balance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Spread (including
  Broker Fees)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Spread (Including
  Hedge Ineffectiveness)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Memo: Net Income Sharing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Genworth (Management Fee
  + GE Book)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GEI Other

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

D-9

 

Exhibit
E

 

Failure
Notice Recipients

 

 

	
  Recipient

  	
   

  	
  Address

  	
   

  	
  Telephone

  	
   

  	
  Facsimile

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Manager

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pamela
  Schutz

  	
   

  	
  6610 West Broad Street

  Richmond, Virginia  23230

  	
   

  	
  (804) 281-6533

  	
   

  	
  (804) 281-6165

  	
   

  
	
  Kelly
  Groh

  	
   

  	
  6610 West Broad Street

  Richmond, Virginia  23230

  	
   

  	
  (804) 281-6321

  	
   

  	
  (804) 281-6310

  	
   

  
	
  Toni
  Ness

  	
   

  	
  6610 West Broad Street

  Richmond, Virginia  23230

  	
   

  	
  (804) 289-3594

  	
   

  	
  (804) 281-6005

  	
   

  
	
  Shailesh
  Shah

  	
   

  	
  335 Madison Avenue

  Mezz4

  New York, New York  10017

  	
   

  	
  (212) 389-2575

  	
   

  	
  (212) 839-2591

  	
   

  
	
  Grant
  Lineberry

  	
   

  	
  335 Madison Avenue

  Mezz4

  New York, New York  10017

  	
   

  	
  (212) 389-2570

  	
   

  	
  (212) 389-2591

  	
   

  
	
  Colin
  Burrell

  	
   

  	
  335 Madison Avenue

  Mezz4

  New York, New York  10017

  	
   

  	
  (212) 389-2640

  	
   

  	
  (212) 389-2590

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kathy
  Cassidy

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6199

  	
   

  	
  (203) 585-1191

  	
   

  
	
  Brian
  Wenzel

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6774

  	
   

  	
  (203) 316-7601

  	
   

  
	
  Alan
  Green

  	
   

  	
  201 High Ridge Road
  Stamford, Connecticut  06927

  	
   

  	
  (203) 961-5077

  	
   

  	
  (203) 357-3490

  	
   

  
	
  Johan
  Fogelberg

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6072

  	
   

  	
  (203) 357-4975

  	
   

  
	
  Robert
  Ceske

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 602-8337

  	
   

  	
  (203) 585-1361

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General
  Electric Capital Corporation

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kathy
  Cassidy

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6199

  	
   

  	
  (203) 585-1191

  	
   

  
	
  Brian
  Wenzel

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6774

  	
   

  	
  (203) 316-7601

  	
   

  
	
  Alan
  Green

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 961-5077

  	
   

  	
  (203) 357-3490

  	
   

  
	
  Johan
  Fogelberg

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6072

  	
   

  	
  (203) 357-4975

  	
   

  
	
  Robert
  Ceske

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 602-8337

  	
   

  	
  (203) 585-1361

  	
   

  

 

E-1

 

Exhibit
F

 

Arbitration
Procedures

 

If Senior Management
fails to reach agreement with respect to a Dispute Resolution within forty-five
(45) days of a Submission and the Cure Period has not expired, either Party may
submit the matter to be finally resolved by arbitration pursuant to the CPR
Institute for Dispute Resolution (the “CPR”) Rules for Non-Administered
Arbitration as then in effect (the “CPR Arbitration Rules”).  The Parties consent to a single,
consolidated arbitration for all known matters under dispute existing at the
time of the arbitration and for which arbitration is permitted.

 

The neutral organization
for purposes of the CPR Arbitration Rules will be the CPR.  The arbitral tribunal shall be composed of
three arbitrators, of whom each Party shall appoint one in accordance with the
“screened” appointment procedure provided in Rule 5.4 of the CPR Arbitration
Rules.  The arbitration shall be
conducted in New York City.  Each Party
shall be permitted to present its case, witnesses and evidence, if any, in the
presence of the other Party.  A written
transcript of the proceedings shall be made and furnished to the Parties.  The arbitrators shall determine the matter
in dispute in accordance with the law of the State of New York, without giving
effect to any conflict of law rules or other rules that might render such law
inapplicable or unavailable, and shall apply this Agreement according to its
terms, provided that the provisions relating to arbitration shall be governed
by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.

 

The Parties agree to be
bound by any award or order resulting from any arbitration conducted in
accordance with this provision and further agree that judgment on any award or
order resulting from an arbitration conducted under this provision may be
entered and enforced in any court having jurisdiction thereof.

 

Except as expressly
permitted by this Agreement, no Party will commence or voluntarily participate
in any court action or proceeding concerning a matter in dispute, except (i)
for enforcement, (ii) to restrict or vacate an arbitral decision based on the
grounds specified under applicable law, or (iii) for interim relief as provided
in paragraph (e) below.  For purposes of
the foregoing, the parties hereto submit to the non-exclusive jurisdiction of
the courts of the State of New York.

 

In addition to the
authority otherwise conferred on the arbitral tribunal, the tribunal shall have
the authority to make such orders for interim relief, including injunctive
relief, as it may deem just and equitable.

 

Each
Party will bear its own attorneys’ fees and costs incurred in connection with
the resolution of any matter in dispute in accordance with this provision.

 

F-1Exhibit
10.5

 

This LIABILITY AND
PORTFOLIO MANAGEMENT AGREEMENT, dated as of January 1, 2004 (this “Agreement”),
among FGIC CAPITAL MARKET SERVICES, INC., a Delaware corporation (the “Company”),
GENWORTH FINANCIAL ASSET MANAGEMENT, LLC, a Virginia limited liability company
(the “Manager”) and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (“GE Capital,” and together with the Company and the
Manager, the “Parties”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS, the Manager is
an investment adviser registered with the United States Securities and Exchange
Commission that will be engaged by the Company to provide the services
described herein; and

 

WHEREAS, the Manager and
the Company wish to establish and define certain obligations set forth in Exhibit
C and Exhibit D (the “Listed Obligations”) that the Manager
is required to undertake in connection with the services it will provide to the
Company under this Agreement;

 

NOW, THEREFORE, in
consideration of the mutual promises made herein and upon the terms and subject
to the conditions set forth herein, the Parties hereby agree as follows:

 

ARTICLE I

Definitions

 

SECTION 1.01.              Terms Defined in this Agreement.  As used in this Agreement, the following
capitalized terms have the following meanings:

 

“Accounts” shall
have the meaning specified in Section 2.01(a).

 

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

 

“Agreement” means
this Liability and Portfolio Management Agreement.

 

“Assets” shall
have the meaning specified in Section 2.01(a).

 

“Business Day”
means [a day other than Saturday, Sunday or a day on which banks in New York,
New York are not open for the conduct of regular banking activities.]

 

“Company” shall
have the meaning specified in the preamble of this Agreement.

 

“Contract Value”
shall have the meaning specified in Section 2.06.

 

 

 

 

CONFIDENTIAL
TREATMENT REQUESTED

 

CONFIDENTIAL TREATMENT
REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATEMENT HAS BEEN REQUESTED IS
OMITTEED AND IS NOTED WITH “**”.

AN UNREDACTED VERSION OF
THIS DOCUMENT HAS BEEN FILED

SEPARATELY WITH THE
SECURITIES AND

EXCHANGE COMMISSION.

 

 

 

“Contracts” means
the investment agreements and similar contracts issued by the Company to
trustees, municipalities and to other parties engaged in municipal finance
transactions and other transactions.

 

“Cure Period”
means (i) with respect to the Listed Obligations set forth in Exhibit C,
the respective cure periods set forth therein, and (ii) with respect to Listed
Obligations in Exhibit D or other obligations set forth in this
Agreement that do not appear in Exhibit C, one hundred twenty (120) days
during the initial term of this Agreement and sixty (60) days thereafter; in
each case such Cure Period to commence upon receipt of notice by the Manager
from any party to a Contract entitled to give notice of default, GE Capital or
the Company.

 

“Dispute Resolution”
shall have the meaning specified in Section 4.05(b).

 

“Failure Notice
Recipients” shall have the meaning specified in Section 4.05(b) or
such other recipients as are designated from time to time.

 

“Final Cure Period”
shall have the meaning specified in Section 4.05(b).

 

“GE Capital” shall
have the meaning specified in the preamble to this Agreement.

 

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

 

“Holdings” means
FGIC Holdings, Inc., an indirect wholly-owned subsidiary of GE Capital.

 

“Impossibility”
shall have the meaning specified in Section 4.05(b).

 

“Indemnified Party”
shall have the meaning specified in Section 2.12.

 

“Listed Obligations”
shall have the meaning specified in the second recital of this Agreement.

 

“Management Fee”
shall have the meaning specified in Section 2.06.

 

“Manager” shall
have the meaning specified in the preamble to this Agreement.

 

“Notice of Failure”
shall have the meaning specified in Section 4.05(b).

 

“Operating Costs”
shall have the meaning specified in Section 2.07(b).

 

“Operations,
Procedures and Controls Manual” means the Operations, Procedures and
Controls Manual of the Company dated as of July 2, 2003, as the same may be
amended from time to time.

 

2

 

“Parties” shall
have the meaning specified in the preamble to this Agreement.

 

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

 

“Policy 5.0” means
the policy which sets forth certain risk management [guidelines][parameters]
that the Company is required to observe, as the same may be amended from time
to time by the Company with the approval of GE Capital.

 

“Policy 6.0” means
the policy which sets forth certain risk management [guidelines][parameters]
that the Company is required to observe, as the same may be amended from time
to time by the Company with the approval of GE Capital.

 

“Portfolio” shall
have the meaning specified in Section 2.01(a).

 

“Prior Transfer
Pricing Amounts” shall have the meaning specified in Section 2.06.

 

“Remediation Plan”
shall have the meaning specified in Section 4.05(b).

 

“Senior Management”
shall have the meaning specified in Section 4.05(b).

 

“Submission” shall
have the meaning specified in Section 4.05(b).

 

ARTICLE II

Engagement; Powers and Duties

 

SECTION 2.01.              Engagement of Manager.

 

(a)           The Company hereby retains the
Manager:

 

(i)            to advise the Company as to the
investment of the proceeds of its issuance of Contracts which proceeds have
been on-lent to Holdings (the “Assets”), including recommending specific
investment and hedging thereof to the Company;

 

(ii)           to administer the Assets maintained
in an account or accounts established in the name of Holdings (the “Accounts”),
each of which is identified (to the extent established by the effective date
hereof) in Exhibit A, as the same may be amended from time to time, with
such deposits thereto and withdrawals therefrom as are from time to time
permitted by the Company;

 

(iii)          for as long as the revocable power of
attorney granted pursuant to Section 2.02 is in effect, to arrange the
purchase and sale through registered broker-dealers of bonds, pass-through
certificates, stocks, and other securities for deposit in the Accounts;

 

3

 

(iv)          for as long as the revocable power of
attorney granted pursuant to Section 2.02 is in effect, to arrange the
purchase and sale and otherwise to effect transactions in hedge contracts
relating to the Assets;

 

(v)           to prepare reports and to perform
valuation tests as specified in Exhibit D or as are required from time
to time by the Company;

 

(vi)          to advise the Company in the issuance
of and to assist the Company in the preparation of (and, for so long as the
revocable power of attorney granted pursuant to Section 2.02 is in
effect, to execute and to deliver on behalf of the Company) investment orders
and disposition orders in connection with the management of the Assets;

 

(vii)         to take such action as is necessary and
proper on behalf of the Company for the preservation of the Assets;

 

(viii)        to advise the Company in the granting or
effecting of and to assist the Company in the preparation of (and, for so long
as the revocable power of attorney granted pursuant to Section 2.02 is
in effect, to execute and to deliver on behalf of the Company) any consents,
waivers, extensions or modifications in respect of any item of the Assets;

 

(ix)           to designate persons who are
registered representatives of a registered broker-dealer which is a member of
the National Association of Securities Dealers to execute and deliver Contracts
on behalf of the Company in their capacity as such pursuant to a power of
attorney granted by the Company from time to time to registered representatives
designated and notified to the Company by the Manager from time to time;

 

(x)            to advise the Company in the
delivery of and to assist the Company in the preparation of (and, for so long
as the revocable power of attorney granted pursuant to Section 2.02 is
in effect, to execute and to deliver on behalf of the Company) any instrument
of transfer or release in respect of any item of the Assets;

 

(xi)           to engage a registered broker-dealer
which is a member of the National Association of Securities Dealers to assist
the Company in connection with the offering, issuance and sale of Contracts
and, in connection therewith, to make such other arrangements with such
broker-dealer as may be necessary or advisable to ensure that such
broker-dealer supervises its registered representatives who will effect such
transactions and takes responsibility for such offering, issuance and sale; and

 

(xii)          to take any other action deemed
necessary or advisable to execute and deliver Contracts on behalf of the
Company.

 

The Manager shall
administer the Assets in the Accounts (all of such Assets together, the “Portfolio”)
in accordance with the terms and conditions hereof and shall otherwise observe
in all material respects the requirements of the Operations, Procedures and
Controls Manual, Policy 5.0 and Policy 6.0, this Agreement and all other
documents,

 

4

 

policies, laws and
regulations applicable to the Company from time to time.  The Company shall provide copies of the
Operations, Procedures and Controls Manual, Policy 5.0 and Policy 6.0, to the
Manager no later than the time that this Agreement is entered into and shall
provide copies of all amendments, supplements and revisions to such documents
as soon as they are available to the Company.

 

(b)           Performance.  The Parties hereby agree that the Manager
shall perform the specific Listed Obligations during the term of this Agreement
and, subject to Section 2.10, such other functions as are set forth in
this Agreement or as are generally required to operate the business of the
Company in accordance with applicable laws, regulations, documents and Company
policy.  The Manager acknowledges that
it will take all reasonable steps to continue to conduct the business of the
Company in a manner substantially similar to that in which it had been
conducted prior to the Parties’ entry into this Agreement and in a manner
reasonably satisfactory to the Company.

 

SECTION 2.02.              Power of Attorney.  The Company hereby provides the Manager with
a revocable power of attorney with full power and authority:

 

(i)            to evaluate and appraise the
Portfolio;

 

(ii)           to arrange the purchase and sale
through registered broker-dealers of bonds, pass-through certificates, stocks,
and other securities in connection with making investments for the Portfolio;

 

(iii)          to arrange the purchase and sale of
and otherwise to effect transactions in hedge contracts, as directed by GE
Capital, in connection with making investments for the Portfolio through
registered broker-dealers;

 

(iv)          to execute and to deliver on behalf of
the Company any investment orders and disposition orders as may be required
from time to time in connection with the management of the Portfolio;

 

(v)           to execute and to deliver on behalf
of the Company any consents, waivers, extensions, or modifications in respect
of any item of the Assets;

 

(vi)          to execute and to deliver on behalf of
the Company any instrument of transfer or release in respect of any item of the
Assets;

 

(vii)         to engage a broker-dealer acceptable to
the Company to assist the Company in the origination, issuance and sale of
Contracts in accordance with all applicable securities laws and regulations;
and

 

(viii)        subject to the limitations set forth in
the Operations, Procedures and Controls Manual, Policy 5.0 and Policy 6.0, to
take any other action, including executing agreements and any other documents
on behalf of the Company that the Manager deems necessary or advisable to
purchase, sell, or otherwise effect investment transactions relating to the
Portfolio.

 

5

 

All investments made and
transactions entered into by the Manager on behalf of the Company shall be
entered into in the name of the Company. 
All actions contemplated above shall be performed in accordance with
applicable laws, regulations, documents and applicable Company policy.  The Manager shall not be under an obligation
to keep the Portfolio fully invested if, in its sole discretion, it shall
determine that market and/or economic conditions make it imprudent or
disadvantageous to do so at any time or that funds should be made available for
distributions and other payments pursuant to the terms of a Contract.  The Company represents that it has the
authority to make the appointment set forth in this paragraph.  In the event the Manager fails to perform a
Listed Obligation and this Agreement is terminated pursuant to Section
4.05(a) or (b), or if this Agreement is terminated pursuant to Sections
4.05(c) or (d), this power of attorney may be revoked by the Company
by written notice to the Manager.

 

SECTION 2.03.              Valuation.  The Manager shall value the Portfolio from
time to time in order to prepare such reports relating to the Assets as may
reasonably be requested by the Company.

 

SECTION 2.04.              Reports.  As more particularly specified in Exhibit
C and Exhibit D, the Manager shall:

 

(a)           prepare entries for accounts in,
together with applicable schedules and exhibits for, financial statements that
relate to the origination, issuance and sale of Contracts by the Company;

 

(b)           timely prepare and provide to the
Company and GE Capital underlying data for accounting entries, schedules,
exhibits and reports as the Company or GE Capital reasonably requests or is
required to obtain by applicable laws, regulations or accounting rules;

 

(c)           prepare such other reports as GE
Capital and the Company may reasonably agree upon from time to time; and

 

(d)           notify the Company and GE Capital
immediately upon learning of any material default or breach of the Listed
Obligations.

 

SECTION 2.05.              Confidential Relationships.  All information and recommendations
furnished by the Manager to the Company shall be treated by the Company as
confidential.  The Manager shall, in
turn, treat as confidential all information concerning the affairs of the
Company.  Nothing in this Section
2.05 shall be deemed to preclude any such information or recommendations
from being disclosed by any Party to such Party’s Affiliates or to the
directors, officers, employees, representatives, agents or advisers of such
Affiliates [, or pursuant to applicable law, regulation or court order]; provided,
that any such recipients are advised of the confidential nature of such
information or recommendations.

 

SECTION 2.06.              Fees.  GE Capital, on behalf of the Company, hereby
agrees to pay to the Manager quarterly in arrears a fee (the “Management Fee”)
at an annual rate of ten (10) basis points (0.10%) multiplied by the book value
of Contracts

 

6

 

issued by the Company
after January 1, 2003 (the “Contract Value”).  For the avoidance of doubt, the Management Fee shall not reduce
or otherwise alter GE Capital’s obligation to make certain payments to the
Manager with respect to transfer pricing to be paid in respect of Contracts
issued prior to January 1, 2003 (“Prior Transfer Pricing Amounts”),
which obligation shall remain in full force and effect in respect of such
Contracts.  The Manager shall, on a date
prior to that on which a Prior Transfer Pricing Amount is due and payable to
the Manager, provide the Company and GE Capital with a list of all Contracts to
which the Prior Transfer Pricing Amounts apply, a form of which list is
attached as Exhibit G.  As of the
effective date of this Agreement, all Prior Transfer Pricing Amounts shall be
paid to the Manager quarterly in arrears.

 

SECTION 2.07.              Expenses Reimbursed.

 

(a)           GE Capital, on behalf of the Company,
shall reimburse the Manager for all out-of-pocket expenses incurred and
approved pursuant to Section 2.09(e) in connection with the performance
of its duties hereunder, except for any expenses arising out of the Manager’s
willful misfeasance, bad faith, gross negligence in the performance of or
reckless disregard of its obligations and duties hereunder.

 

(b)           GE Capital, on behalf of the Company,
shall reimburse the Manager for all appropriate Operating Costs of the
Company.  Such reimbursement shall be
made, upon receipt by the Company from the Manager of a schedule detailing
Operating Costs (substantially in the form of Exhibit B hereof), within
thirty (30) days following the end of each quarter.  For the purposes hereof, “Operating Costs” means all costs
incurred by the Manager in connection with the performance of its obligations
under this Agreement that have been submitted and approved in writing as part of
the annual budget approval process described in Section 2.09(e).  For the avoidance of doubt, it is hereby
agreed that certain expenses will not be paid by the Manager and do not
constitute reimbursable Operating Costs. 
Such expenses, which are directly attributable to the Company, include
fees payable to: (i) external legal counsel engaged by the Company for
services rendered thereto and not in connection with duties of the Manager,
which are unrelated to the management services it renders to the Company, (ii)
certain third-party providers of accounting services to the Company, (iii)
providers of credit research services required by the Company and (iv) any
provider of goods or services for costs incurred in connection with
requirements imposed by regulatory authorities, rating agencies, or any
applicable law, rule, regulation, administrative interpretation, ordinance,
code issued by a Governmental Authority or regulatory body, or any order, writ,
injunction, directive, judgment or decree of a court of competent jurisdiction;
each such expense shall be paid by the Company.

 

SECTION 2.08.              Execution of Securities
Transactions.

 

(a)           In connection with the offering and
sale of Contracts, the Manager shall engage a registered broker-dealer approved
by the Company that provides services with respect to the origination, issuance
and sale of Contracts that the Manager believes to be of value.  The Company shall pay all costs associated
with the retention of such broker-dealer and shall bear all indemnification
costs relating thereto.

 

7

 

(b)           Except as otherwise specifically
directed by the Company, the Manager shall have complete discretion to select
any registered broker-dealer in all securities transactions affecting the
Portfolio not described in Section 2.08(a).  The Manager is expressly authorized to select such
brokers-dealers who provide brokerage and research services that the Manager
believes to be of value.  The Manager is
expressly authorized to pay from the Assets in the Portfolio commissions on
such transactions in amounts that the Manager determines in good faith to be
reasonable in relation to the value of such brokerage and research services,
viewed in terms either of the particular transaction or the overall
responsibilities of the Manager with respect to the Portfolio.

 

SECTION 2.09.              Administrative Responsibilities.  The Manager shall have the following
administrative responsibilities:

 

(a)           The Manager shall submit the budget
for reimbursable Operating Costs to the Company and GE Capital by no later than
January 31 of each year and such budget shall be approved by the Manager of
Finance of Corporate Treasury and Global Funding Operations (or such other
representative as shall be designated from time to time in a notice to the
Manager executed by the Company and GE Capital) by February 15 of such
year.  Operating Costs incurred in
excess of the aggregate amounts approved in the annual budget must be
separately approved by the Company and GE Capital in order to be considered for
reimbursement.

 

(b)           Custody of the Assets comprising the
Portfolio will be maintained in the Accounts. 
The Manager shall not have custody of any of the Assets in the
Portfolio.

 

(c)           The Manager shall keep such books and
records relating to all transactions that it effects pursuant to this
Agreement, including without limitation all books and records necessary for
preparing the reports required by Section 2.04.

 

(d)           For the avoidance of doubt, the
Manager shall provide no services to the Company in respect of tax planning or
tax compliance of any kind.

 

(e)           The Manager shall submit
presentations relating to the offering of Contracts to the Company and GE
Capital for approval prior to external use.

 

(f)            The Manager shall maintain its status
as an “investment adviser” under the Investment Advisers Act of 1940, as
amended, and shall follow all applicable laws and regulations relating to its
status as such and to its performance hereunder, including all applicable laws
and regulations relating to bidding for Contracts.

 

SECTION 2.10.              Other Duties as Reasonably
Requested.  The Manager shall also
perform such other duties or shall modify existing duties as the Company may
reasonably request or that the Manager shall recommend to the Company from time
to time relating to the management of a business involved in the issuance of
guaranteed investment contracts and similar debt obligations issued by
providers rated “AAA”/”Aaa” and the management of the proceeds of the issuance
of such contracts and obligations.  If
any additional or modified duties are required of Manager under this Agreement,

 

8

 

Manager shall have the
reasonable time and opportunity to procure such additional resources as may, in
Manager’s good faith judgment, be required to perform such duties.  Manager also agrees that it will cease to
perform the requirements of certain obligations specified hereunder if the
Company so directs in writing.  Any such
changes or additions shall be deemed for all purposes to be amendments or
supplements to this Agreement.  The
Company shall pay such costs as have been mutually agreed to by the Parties and
as may from time to time be required to enable the Manager to perform any
additional or changed Listed Obligations contemplated herein and other
obligations not listed in this Agreement for which additional resources are
required or additional costs are reasonably incurred by the Manager.

 

SECTION 2.11.              Limitation of Liability.  Neither the Manager nor any of its
Affiliates nor any of their respective directors, officers, or employees shall
be liable to the Company for any error of judgment or mistake of law or for any
loss arising out of any investment or any other commitment of funds on behalf
of the Company or Holdings or for any act or omission in the administration of
the Portfolio except for willful misfeasance, bad faith, gross negligence in
the performance of or reckless disregard of its obligations and duties
hereunder, other than as may be provided under applicable law.

 

SECTION 2.12.              Indemnification.  (a) The Company shall (i) indemnify and
hold harmless the Manager and any Affiliate of the Manager and each of their
respective directors, officers, employees and agents (each, an “Indemnified
Party”) from and against all losses, claims, damages, expenses or
liabilities to which such Indemnified Party may become subject (except in
respect of the broker-dealer engaged by the Manager in respect of placement of
Contracts, which shall be the sole liability of the Manager), insofar as such
losses, claims, damages, expenses or liabilities (or actions, suits or
proceedings including any inquiry or investigation or claims in respect
thereof) arise out of, in any way relate to, or result from the transactions
contemplated by, this Agreement, and (ii) reimburse each of the Indemnified
Parties upon its demand for any reasonable legal or other expenses incurred in
connection with investigating, preparing to defend or defending any such loss,
claim, damage, liability, action or claim; provided, however,
that none of the Indemnified Parties shall have the right to be so indemnified
hereunder for losses, claims, damages, expenses or liabilities to the extent
resulting from its own negligence or willful misconduct or for losses, claims,
damages, expenses or liabilities that it is required to pay to any
broker-dealer that it has engaged in connection with the Contracts or other
liabilities.  If any action is brought
against an Indemnified Party indemnified or intended to be indemnified pursuant
to this Section 2.12, the Company shall, if requested by such
Indemnified Party, resist and defend such action, suit or proceeding or cause
the same to be resisted and defended by counsel reasonably satisfactory to such
Indemnified Party, but shall not be empowered to compromise or settle such
action, suit or proceeding unless such Indemnified Party has been fully
indemnified for any loss, claim, damage, expense or liability it thereby
suffers.  Each Indemnified Party shall,
unless the Indemnified Party has made the request described in the preceding
sentence and such request has been complied with, have the right to employ its
own counsel to investigate and control the defense of any matter covered by
such indemnity and the reasonable fees and expenses of such counsel shall be at
the expense of the Company.

 

9

 

ARTICLE III

Representations and Warranties

 

SECTION 3.01.              Valid Existence; Authorization;
Enforceability.  Each of the Parties
represents and warrant to the other as follows:

 

(a)           such Party is a company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite power, legal right and
authority to execute and deliver this Agreement and all other documents to be
executed and delivered by such Party in connection herewith and to perform its
obligations hereunder and thereunder; and

 

(b)           this Agreement and all the documents
to be executed and delivered by such Party in connection herewith and therewith
has been duly authorized by all necessary actions on the part of such Party.

 

ARTICLE IV

Miscellaneous Provisions

 

SECTION 4.01.              No Assignment Without Consent.  This Agreement, and the obligations and
rights arising under this Agreement, may not be assigned or otherwise
transferred by any Party (including any assignment or transfer in connection
with any Person succeeding to any part of the business of any Party) without
the prior written consent of the other Parties.

 

SECTION 4.02.              Counterparts.  This Agreement may be executed in one or
more counterparts and, as so executed, shall constitute one agreement binding
upon the Parties.

 

SECTION 4.03.              No Third Party Beneficiaries.  Nothing expressed or implied in this Agreement
is intended or shall be construed to confer upon any person (other than the
Parties and their permitted assigns), any right, remedy or claim by reason of
this Agreement or any term hereof, and all terms contained herein shall be for
the sole and exclusive benefit of the Parties and their successors and
permitted assigns.

 

SECTION 4.04.              Interpretation.  The headings of the Articles and Sections
hereof are for convenience of reference only and shall not affect the meaning
or construction of any provision hereof.

 

SECTION 4.05.              Term; Termination.

 

(a)           The Manager’s appointment hereunder
shall continue in effect for an initial term commencing on the date hereof and
ending on December 31, 2006, with extensions for additional one (1) year
periods commencing automatically upon each anniversary thereof, unless the
Manager notifies the Company and GE Capital, or the

 

10

 

Company and GE Capital
notify the Manager in writing at least ninety (90) days before such anniversary
that such extension shall not be effective.

 

(b)           If the Manager fails to perform any
of its obligations set forth in this Agreement, Exhibit C or Exhibit
D, the Manager (or if the failure is first discovered by the Company, then
the Company) shall give prompt written notice (such notice, a “Notice of
Failure”) to the persons identified in Exhibit E (the “Failure
Notice Recipients”) specifying the nature of the failure.  In the event such Notice of Failure is
given, then either the Manager or the Company may elect to submit the matter for review (a
“Submission”) and resolution (“Dispute Resolution”),
which may include the establishment of a plan of remediation (a “Remediation
Plan”) to (i) with respect to the Manager, the Business Leader of the Retirement
Income and Investment Segment of Genworth Financial Inc. (or such person or
persons as such Business Leader may designate) and (ii) with respect to the
Company, the Senior Vice President — Corporate Treasury and Global Funding
Operation of GE Capital (or such person or persons as such Senior Vice
President may designate) ((i) and (ii) together, “Senior Management”).  The Manager and the Company agree (x) to
cooperate in good faith and in a reasonable manner to reach an agreement with
respect to any Remediation Plan; (y) to be bound by the results of any such
Dispute Resolution agreed to by Senior Management including any Remediation
Plan (the timing and content of which shall be at the sole discretion of Senior
Management) and (z) that the Manager will implement any such Remediation Plan
within the period mandated by Senior Management (the “Final Cure Period”).  The result of any such Dispute Resolution
shall be in writing signed by Senior Management, shall be deemed part of this
Agreement and, with the respect to the failure involved, shall supersede any
conflicting or different terms of this Agreement.

 

If Senior Management
fails to reach an agreement with respect to a Dispute Resolution and the Cure
Period has not expired, the matter in dispute shall be resolved solely and
exclusively in accordance with the arbitration procedures set forth in Exhibit
F.

 

If (i) Senior Management
or an arbitral tribunal described in Exhibit F fails to reach agreement
with respect to a Dispute Resolution and the Cure Period has expired or (ii)
the Manager fails to correct the failure by the end of the applicable Final
Cure Period, then this Agreement may, subject to Section 4.05(e), be
terminated by the Company upon two (2) Business Days’ prior written notice to
the Manager and each Failure Notice Recipient specifying the basis for and the
effective date of the termination.

 

Notwithstanding the
foregoing, the payment obligations of the Company during the initial term of
this Agreement shall not be terminated if any such failure and the continuation
thereof are caused by Impossibility. 
For the purposes hereof, “Impossibility” means loss or
malfunction of electric power, transportation or communication services;
general inability to obtain or retain labor, material, equipment or
transportation, or a delay in mails or services; the Company’s, GE Capital’s or
any of their Affiliates’ (i) failure to take an action on which the Manager’s
performance of an obligation or any Listed Obligation depends or (ii) taking an
action which renders the Manager’s performance of an obligation or any Listed
Obligation impossible;

 

11

 

governmental or exchange
action, statute, ordinance, ruling, regulation, administrative interpretation
or directive; acts of terror, vandalism, explosions, tornados, acts of God or
public enemy, acts of any civil or military authority, revolutions,
insurrections, strike, emergency, riots or civil commotions, freezes, fires,
floods, embargoes, wars, sabotage, explosions or other unforeseen or unexpected
occurrences, which unforeseen or unexpected occurrences render the performance
of any obligations by the Manager impossible. 
In the event of any such occurrence, the Manager shall use all
reasonable efforts to remediate the disruption and resume its performance of
the obligations.

 

(c)           The Company shall have the right to
terminate this Agreement at an earlier time than that specified in Section 4.05(a)
in the event of continuing nonperformance due to Impossibility of any
obligation hereunder beyond the applicable Cure Period or Final Cure Period
upon thirty (30) Business Days’ prior written notice to the Manager.

 

(d)           The Manager may resign upon not less
than ninety (90) days’ prior written notice to the Company.

 

(e)           Notwithstanding any provision to the
contrary, including the expiration of any term of this Agreement, so long as
the Portfolio is still outstanding, this Agreement shall remain in full force
and effect and no termination or resignation of the Manager shall be effective
until the Company has entered into an agreement with a successor manager.  Upon receiving a notice of resignation from
the Manager, the Company shall use its best efforts to enter into such an
agreement unless it elects to terminate this Agreement as provided in Section
4.05(c), above.  Except as set forth in Exhibit
F, nothing in this Agreement shall be deemed a waiver of any Party’s rights
to pursue remedies at law or in equity, which shall be available in accordance
with applicable law in addition to any remedies provided for in this Agreement.

 

SECTION 4.06.              Independent Contractor.            The Manager is being engaged
pursuant to this Agreement as an independent contractor and the Parties
expressly disclaim any intention to enter into a joint venture, partnership, or
any other form of association pursuant to this Agreement.

 

SECTION 4.07.              GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE RULES OF CONFLICTS OF LAWS OF THE STATE OF NEW YORK OR
ANY OTHER JURISDICTION.

 

SECTION 4.08.              Notices.  All notices, instructions, and advice with
respect to any transactions or other matters contemplated by this Agreement
shall be deemed duly given only when actually received at such Party’s
principal place of business as set forth below.  Return receipt or courier record of delivery shall be deemed
conclusive evidence of receipt.  Notices
may be made by fax or other electronic means shall be deemed given upon electronic
evidence of receipt at applicable recipient’s fax or computer station.  A copy of all notices given shall be
provided to GE Capital.

 

12

 

If to the Manager:

 

Genworth Financial Asset
Management, LLC

6620 West Broad Street

Richmond, Virginia  23230

Attention:  Pamela Schutz

Phone:  (804) 291-6533

Fax:  (804) 281-6165

E-mail:  pamela.schutz@ge.com

 

with a copy to:

 

335 Madison Avenue

Mezz4

New York, New York  10017

Attention:  Shailesh Shah

Phone:  (212) 389-2575

Fax:  (212) 389-2591

E-mail:  shailesh.shah@ge.com

 

If to the Company:

 

FGIC Capital Market
Services, Inc.

335 Madison Avenue

Mezz4

New York, New York  10017

Attention:  Shailesh Shah

Phone:  (212) 389-2575

Fax:  (212) 389-2591

E-mail:  shailesh.shah@ge.com

 

If to General Electric
Capital Corporation:

 

General Electric
Capital Corporation

260 Long Ridge Road

Stamford, Connecticut  06927

Attention:  Senior Vice President –
Corporate

Treasury and Global Funding Corporation

Phone:  [(203)
961-5077]

Fax:  [(203) 357-3490]

E-mail:  [alan.green1@ge.com]

 

SECTION 4.09.              Entire Agreement; All
Amendments in Writing.  This
Agreement embodies the entire understanding of the Parties concerning the
subject matter hereof and supersedes any and all other previous agreements,
written or oral, concerning the same subject matter.  This Agreement cannot be amended except by written agreement of
the Parties.

 

13

 

SECTION 4.10.              Waiver.  No waiver of any provision of this Agreement
nor consent to any departure therefrom shall in any event be effective unless
the same shall be in writing and signed by the Party from whom such waiver or
consent is sought, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

 

SECTION 4.11.              Further Assurances.  Each Party hereby agrees to execute and
deliver such additional documents, instruments or agreements as may be
reasonably necessary and appropriate to effectuate the purposes of this
Agreement.

 

SECTION 4.12.              Successors and Assigns.  This Agreement shall be binding upon the
Parties and their respective successors and assigns.

 

SECTION 4.13.              Severability.  Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other
jurisdiction.  If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.

 

SECTION 4.14.              Limited Recourse.  The obligations of the Company under this
Agreement are solely the obligations of the Company.  No recourse shall be had for any obligation or claim arising out
of or based upon this Agreement against any, 
manager, officer, organizer, agent or employee of the Company.

 

 

[signature page
follows]

 

14

 

 

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

 

	
   

  	
  FGIC
  CAPITAL MARKET SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  GENWORTH FINANCIAL
  ASSET MANAGEMENT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[LIABILITY AND PORTFOLIO
MANAGEMENT

AGREEMENT (GFIC)]

 

 

Exhibit
A

 

Accounts
Comprising the Portfolio

 

	
  Account

  	
   

  	
  Custodian
  Bank

  	
   

  	
  Account
  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

[No Accounts as of
January 1, 2004.]

 

A-1

 

Exhibit
B

 

Form
of Schedule of Operating Costs

 

Operating Costs for the
first calendar year, commencing on January 1, 2004, shall be
$[                    ]
and thereafter shall be equal to [   ]% of the Operating Costs
of the Manager, subject to the Company’s approval, as provided in Section
2.07(b) and shall consist of the following (allocated [   ]%
with respect to the Company):

 

	
   

  	
   

  	
  2004

  	
   

  	
  2004

  	
   

  
	
  CMS

  	
   

  	
  1Q

  	
   

  	
  2Q

  	
   

  	
  3Q

  	
   

  	
  4Q

  	
   

  	
  TY

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Comp & Benefits:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Salaries

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  
	
  Savings Plan 401k

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Bonuses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Employee Insurance

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Payroll Taxes

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Total Comp & Benefits

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Purchase Base:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Travel & Living
  Expenses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Business Meetings

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Education

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Employment Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Tuition Reimbursement

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Relocation Maintenance

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Dues & Associations

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Consulting Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Outside Services

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Rent/ Utilities

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Legal Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Audit Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Recreation

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Telephone/Cellular

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Printing & Office
  Supplies

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Postage\Courier Service

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Subscriptions

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Information Services

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Advertising / Marketing

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Temporary Help

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Equipment Maintenance

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Hardware Expense

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Software Expense

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Fiscal Agent Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Investment Fees

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Organizational Misc

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Total Purchase Base

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Total Controllable

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
																	

 

B-1

 

	
   

  	
   

  	
  2004

  	
   

  	
  2004

  	
   

  
	
  CMS

  	
   

  	
  1Q

  	
   

  	
  2Q

  	
   

  	
  3Q

  	
   

  	
  4Q

  	
   

  	
  TY

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Property Insurance

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Corporate Assessments

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Total Other

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  SG&A Expenses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rating Agency Fee

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Loss On Other Assets

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Insurance And Licensing

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  State And Local Taxes

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Goodwill Amortization

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Change in DAC

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Ceding Commission

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Non-SG&A Expenses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Op & Admin Expense

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Depreciation

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Total Direct Expenses

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Broker Fees Amortization

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  
	
  Total Expenses (including Broker
  Fees)

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  	
  $

  	
  **

  	
   

  
																	

 

B-2

 

Exhibit
C

 

Priority
Manager Functions

 

	
  Listed
  Obligation

  	
   

  	
  Cure
  Period

  
	
   

  	
   

  	
   

  
	
  Payments

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Manager shall cause
  payments to be made as required under any Contracts or other agreements to
  which the Company is a party.

  	
   

  	
  Five (5) Business Days
  from the date a notice of nonpayment received by Manager under the applicable
  Contract or agreement (or such shorter period as exists prior to such
  nonpayment being an actionable default thereunder); provided, however,
  that if the Manager or the Company gives notice to the other party requesting
  Dispute Resolution within one (1) Business Day of the notice, the cure period
  hereunder shall be extended to three (3) Business Days from the date the
  notice of nonpayment is received (it being understood that in no event shall
  this provision supersede the contractual payment obligations in the
  respective Contract or agreement).

  
	
   

  	
   

  	
   

  
	
  Risk Matters

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Manager shall comply
  with all requirements of GE Capital’s Policy 5.0 and 6.0 relating to the
  Company and related “strike zones,” as such policies and strike zones are
  amended from time to time; provided, that in the event that a trigger
  has been tripped under Policy 6.0 by virtue of a change in the market or
  pursuant to the action of a rating agency, GE Capital shall provide direction
  on remediation on a case-by-case basis if not otherwise provided for in
  Policy 6.0 and, if the Manager takes the appropriate corrective action
  (whether as prescribed by Policy 6.0 or as directed by GE Capital), no
  failure to perform an obligation under this Agreement shall be deemed to have
  occurred.

  	
   

  	
  Five (5) Business Days.

  
	
   

  	
   

  	
   

  
	
  Financial
  Reporting

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Manager shall comply
  with Section 2.04 hereof and the Listed Obligations and shall prepare
  all reports relating to the Company as are necessary or desirable for
  compliance with the Sarbanes-Oxley Act of 2002 and any other financial
  reporting requirements of the Company under applicable law and external
  regulation.

  	
   

  	
  Thirty (30) days or
  such shorter or longer period as is specified by the applicable accounting
  firm or regulatory body to allow for compliance with the applicable
  regulatory or disclosure requirement.

  

 

C-1

 

	
  Listed
  Obligation

  	
   

  	
  Cure
  Period

  
	
   

  	
   

  	
   

  
	
  Legal Compliance

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Manager shall comply
  with the requirements of contracts to which it is a party, and all applicable
  laws and regulations.

  	
   

  	
  Thirty (30) days or
  such other period as is specified in the applicable agreement or regulation
  or as is directed by the applicable regulatory body.

  

 

C-2

 

Exhibit
D

 

Listed
Obligations

 

Business

 

•                                          Manager will
review the [Portfolio Quality Review] with GE Capital on a monthly basis on
such dates as Manager and GE Capital shall agree to in advance.

 

Compliance/Legal

 

•                                          Manager will
maintain the corporate and limited liability company minutebooks and records of
the Company, and take all actions required to maintain the Company’s valid
existence and good standing in the jurisdictions in which it is organized or
qualified.

 

•                                          Manager will
comply with applicable law in respect of the Company’s issuance of Contracts,
including with respect to rules promulgated under federal securities laws that
restrict certain forms of advertising and solicitation.

 

•                                          Manager will
consult with and obtain approval from the Company in connection with proposed
material modifications to the terms or the form of Contracts.

 

•                                          Manager will
maintain its status as an “investment adviser” under the Investment Advisers
Act of 1940, as amended, and will take all reasonable steps to comply with all
applicable laws and regulations relating to its status as such.

 

•                                          Manager will
cause its legal staff to draft and prepare all Contracts and other contracts
entered into by the Company.  The
in-house counsel of Manager may, to the extent required, engage outside counsel
in connection with the preparation of such contracts if such engagement is
approved verbally or in writing by the General Counsel — Treasury Operation of
GE Capital and otherwise approved under Section 2.09.  Nothing in this Agreement will preclude
Manager from engaging its own outside counsel for any purpose it deems
necessary or advisable, and Manager need not obtain any separate approval
therefore.

 

•                                          Manager will
comply with all applicable laws and all applicable policies and procedures as
the same may be provided to Manager by the Company, including but not limited
to the USA PATRIOT Act of 2001 and anti-money laundering policies and laws.

 

•                                          Manager will
take all reasonable actions required to assist the Company or GE Capital in
connection with changes to the corporate structure of the Company.

 

D-1

 

•                                          Manager will
take all reasonable steps to provide prompt responses to GE Capital in
connection with requests from regulatory or other governmental authorities for
documentation or data relating to the operation of the Company.

 

•                                          Manager will
comply with all applicable laws, regulations, policies, management procedures
and other requirements of the Company, GE Capital and the Manager’s Affiliates,
including but not limited to the GE Capital Information Security Procedure and,
to the extent applicable, the policies contained in “Integrity:  The Spirit & the Letter of Our Commitment.”

 

Liability/Contract
Bidding Process

 

•                                          Manager shall
ensure that transactions in Contracts are effected in accordance with the
following general procedure: (i) a registered representative of a broker-dealer
(each, a “GIC Salesperson”) shall receive bid specifications (“Bid
Specs”) provided by prospective Contract customers or their agents (“Customers”);
(ii) the GIC Salesperson shall analyze the Bid Specs and respond to Customers,
indicating to such Customers, where appropriate, the requirements to maintain
the Company’s exemption from registration under the Investment Company Act of
1940, as amended; (iii) the GIC Salesperson shall submit all Bid Specs for
review and comment to the designated member of the Manager’s legal staff and
will note on any bid acceptance form that is delivered to the Customer all
appropriate comments received from the legal staff; (iv) the GIC Salesperson
shall price transactions in which the Company has an interest in bidding and
communicate such pricing to the applicable Customer; and (v) the Manager’s
legal staff shall provide counsel to the GIC Salesperson in connection with the
preparation, negotiation and closing of all Contracts for transactions that the
Company wins.

 

Financial Controls

 

•                                          Manager will
periodically deliver the following financial reports:

 

Monthly:

 

•                  Transfer Pricing

•                  Income Sheet

•                  Book Value

•                  Accrued Interest

 

Quarterly:

 

•                  Debt Roll-Forward
(    days following the GE fiscal close period)

•                  Cash Reconciliation (3 days following
the GE fiscal close period)

 

D-2

 

•                                          Manager will
e-mail net withdrawals and deposits to GE Treasury Cash Desk by 10:00 a.m. on
each Business Day.

 

•                                          Manager will
e-mail projected settlements on newly issued Contracts to GE Treasury Cash Desk
by 4:00 p.m. one (1) Business Day prior to closing.

 

•                                          Manager will
perform its accounting responsibilities in compliance with GE’s internal
accounting policies and U.S. GAAP.

 

•                                          Manager will
maintain accounting polices currently in place and all changes to accounting
policies must be approved in advance by GE Capital.  For new accounting standards, GE Capital will provide Manager
with the accounting policy to be adopted by the Company.

 

•                                          Manager will
reconcile all general ledger accounts in accordance with GE’s account
reconciliation criteria.  Manager will
provide a quarterly dashboard of account reconciliations and open items (in an
agreed-upon format) on dates to be provided to Manager.

 

•                                          Manager is
responsible for establishing and maintaining a system of internal controls
adequate to ensure that Assets are appropriately safeguarded and that the
financial statements and related disclosures and schedules fairly present the
financial condition of the Company.

 

•                                          Manager will
deliver monthly unaudited financial results including any adjustments to the
monthly financials to be included in the next month’s accounting period.  These financials should include an
explanation of significant items of variance to the Operating Plan.  Such financial statements will be delivered
within 15 days of the close as defined by GE Capital.

 

•                                          Manager will
deliver quarterly unaudited financial reports and schedules in accordance with
GE Capital’s closing instructions.  Such
financials statement will include variance and profitability analysis suitable
for the closing of the books.  Closing
instruction to be provided by the 15th of the month of the quarterly close.

 

•                                          Manager will
provide the Company with financial projections in accordance with GE Capital’s
SI, SII and OP process.  GE Capital will
provide the Manager with SI, SII and OP timing and assumptions where needed to
make such forecasts.

 

•                                          Manager will
deliver annual audited financial statements (balance sheet and income
statement) upon completion of the annual audit by GE Capital’s external
auditors.

 

•                                          Manager will
conduct annual reviews in compliance with applicable provisions of the
Sarbanes-Oxley Act of 2002, in a manner acceptable to GE Capital.

 

D-3

 

•                  Manager will report detailed profit
and loss results and details of expenses within fifteen (15) days following the
end of each quarterly period, including comparisons of actual versus plan, in a
format reasonably agreeable to both parties. 
Profit and loss reports will be included in the monthly Portfolio
Quality Review, substantially in the format attached as Schedule F.

 

Risk

 

•                                          Manager will
comply with all applicable terms set forth in Policy 5.0 and Policy 6.0 and all
“strike zones” defined by GE Capital with respect to assets and liabilities (as
each may be amended from time to time by GE Capital).  Manager will deliver the following reports on a monthly basis for
monitoring such compliance:

 

•                  [Portfolio Quality Review

•                  Credit Limit Watch

•                  Credit Risk Rating

•                  Stop Loss

•                  Month End Credit

•                  Counterparty Exposure]

 

•                                          Except
as otherwise specified in this Exhibit D, Manager will deliver risk
reports to GE Capital on a monthly basis and will include, at a minimum, the
following:

 

•                  [Portfolio Quality Review

•                  Supplemental Program Shortfall

•                  Liquidity Report (provided on a daily
basis)

•                  Summary Hedge Analysis Report
(provided on a daily basis)

•                  REM (electronic submission)]

 

•                                          Manager will
provide other available reports required from time to time by GE Capital as
they are requested.

 

•                                          Manager will
participate, on a monthly and quarterly basis, in in-force reviews with
Genworth senior management and GE Capital senior management.

 

•                                          Manager will
from time to time provide GE Capital with data feeds relating to the Portfolio,
the content, format and timing of the delivery of which feeds will be agreed
upon by Manager and GE Capital.

 

•                                          [Manager will
from time to time provide GE Capital with such available additional risk
analyses as GE Capital may request, including but not limited to, stress tests
and value at risk analyses.  In each
case, the content, format and timing of the delivery of such analyses will be
agreed upon, prior to delivery, by GE Capital and Manager.]

 

D-4

 

•                                          Manager will
comply with all applicable requirements relating to the Company’s maintenance
of the “AAA”/”Aaa” ratings assigned thereto by the applicable rating agencies.

 

Customer

 

•                                          Manager will
ensure delivery by mail or e-mail, or will make available on the Company’s
website, to the Company’s customers in accordance with such customers’
respective Contracts, Customer Statements in respect of customers’ investments
with the Company.

 

•                                          Manager will
ensure the timely remittance of payments required under each Contract or other
agreement of the Company.

 

•                                          When
requested by the Company and GE Capital, Manager will deliver to the Company
and GE Capital customer service metrics (e.g., call volume by customer
complaint type by date) and deal closing customer survey results (if and to the
extent the same is provided by customers).

 

Information Technology

 

•                                          Manager
will maintain the current systems environment to fully support the business
requirements and the services to be performed under this Agreement for the
Company.

 

Continuous Service
(Disaster Recovery)

 

A disaster recovery site
shall be maintained as follows:

 

•                                          Backup copies
of critical servers shall be maintained at an off-premises Disaster Recovery
Site (locations to be determined from time to time by the Parties hereto).  The critical servers are as follows:
Principia PAS server, Oracle Data Warehouse Server, File Server, Oracle GL
Server, and FileNET CM Server.  In the
event of a major disaster where access to production servers and 335 Madison
Avenue’s assets (or those of a successor location from which the Company’s
business is operated) is lost, service will be restored on the following
schedule: PAS and Oracle Data warehouse systems will be within twenty-four (24)
hours.  GL and FileNET server will be
available within forty-eight (48) hours. 
The Parties will work with GE Capital Treasury on a best effort basis to
establish and implement an adequate Disaster Recovery plan.

 

D-5

 

•                                          Software
refreshes to synchronize the DR systems with the production systems shall be
done within twenty-four (24) hours of the update of the production system to
coincide with production system updates.

 

•                                          Backups of
the production PAS database shall be copied to the DR PAS server nightly.

 

Data Management (Backups
and Retention)

 

•                                          Full data
backups are performed daily on all production and Quality Assurance systems.

 

•                                          Full data
backups of all Network files are performed daily.

 

•                                          Backup tapes
shall be stored offsite at Iron Mountain. 
Tapes are picked up by 10:30 a.m. daily.

 

•                                          An authorized
list of personnel may recall tapes from Iron Mountain (an agreement exists to
deliver backup tapes to any location, including the home of IT personnel).

 

•                                          Tapes shall
be cycled on a rolling eight (8) week rotation.  All Financial close and Month End tapes shall be marked permanent
and retained indefinitely.

 

Change Management:  Notification and Approval Process on 

Changes to IT Infrastructure and Application Software

 

•                                          GE Capital
Treasury shall have the right to approve the Company’s Change Management
Process.

 

•                                          All change
requests shall be reported to GE Capital Treasury on a weekly basis.

 

•                                          Emergency
changes to the IT Environment shall be reported to GE Capital Treasury as they
occur.

 

•                                          In the event
of a major System Failure GE Capital Treasury shall be notified and required to
approve required changes.

 

D-6

 

Performance and Capacity
Planning Reporting and Reviews

 

•                                          In general,
monthly business reports shall be available by 9:00 a.m. the last
[day][Business Day] of the month.  The
IT team will communicate all exceptions by 8:30 a.m. on the day such exceptions
occur.  The communication will include
the anticipated delivery time.  The
following performance tracking processes exist:

 

•                  Monthly report of nightly batch
completion times.

•                  Monthly report of nightly batch
completion times.

•                  Monthly report of exceptions and
violations of the 9:00 a.m. report delivery times and cures employed.

•                  Monthly report on system loading and
projected performance bottlenecks and issues and resolutions.

•                  Monthly report of license denials.

 

Personnel

 

•                                          Manager will
maintain a staff of qualified employees sufficient to support the business
requirements of the Company and to perform the services required under this
Agreement.

 

Other Obligations

 

•                                          Manager will
comply in all material respects with all other obligations provided under this
Agreement.

 

D-7

 

Schedule
D

 

Format
of P&L Included with

Monthly Portfolio Quality Review

 

	
  CMS P&L ($millions)

  	
   

  	
  Actual

  	
   

  	
  Operating Plan

  	
   

  	
  Variance from

  Operating Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Revenue:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity Gross Spread
  Income

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Trinity Broker Fees
  Amortization

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity Hedge Ineffectiveness

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity  Net Interest Margin

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity Realized Gains
  (Losses)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subtotal Trinity  Net Revenue

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GE Book

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total CMS Net Revenue

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating Expenses:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CMSI

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
  Trinity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MRCA

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Operating Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total CMS Pre-tax Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tax (Benefit)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trinity Average Liability
  Balance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Spread (including
  Broker Fees)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Spread (Including
  Hedge Ineffectiveness)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Memo: Net Income Sharing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Genworth (Management Fee
  + GE Book)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GEI Other

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

D-8

 

Exhibit
E

 

Failure
Notice Recipients

 

	
  Recipient

  	
   

  	
  Address

  	
   

  	
  Telephone

  	
   

  	
  Facsimile

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Manager

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pamela
  Schutz

  	
   

  	
  6610 West Broad Street

  Richmond, Virginia  23230

  	
   

  	
  (804) 281-6533

  	
   

  	
  (804) 281-6165

  	
   

  
	
  Kelly
  Groh

  	
   

  	
  6610 West Broad Street

  Richmond, Virginia  23230

  	
   

  	
  (804) 281-6321

  	
   

  	
  (804) 281-6310

  	
   

  
	
  Toni
  Ness

  	
   

  	
  6610 West Broad Street

  Richmond, Virginia  23230

  	
   

  	
  (804) 289-3594

  	
   

  	
  (804) 281-6005

  	
   

  
	
  Shailesh
  Shah

  	
   

  	
  335 Madison Avenue

  Mezz4

  New York, New York  10017

  	
   

  	
  (212) 389-2575

  	
   

  	
  (212) 839-2591

  	
   

  
	
  Grant
  Lineberry

  	
   

  	
  335 Madison Avenue

  Mezz4

  New York, New York  10017

  	
   

  	
  (212 389-2570

  	
   

  	
  (212) 389-2591

  	
   

  
	
  Colin
  Burrell

  	
   

  	
  335 Madison Avenue

  Mezz4

  New York, New York  10017

  	
   

  	
  (212) 389-2640

  	
   

  	
  (212) 389-2590

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kathy
  Cassidy

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6199

  	
   

  	
  (203) 585-1191

  	
   

  
	
  Brian
  Wenzel

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6774

  	
   

  	
  (203) 316-7601

  	
   

  
	
  Alan
  Green

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 961-5077

  	
   

  	
  (203) 357-3490

  	
   

  
	
  Johan
  Fogelberg

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6072

  	
   

  	
  (203) 357-4975

  	
   

  
	
  Robert
  Ceske

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 602-8337

  	
   

  	
  (203) 585-1361

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General
  Electric Capital Corporation

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kathy
  Cassidy

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6199

  	
   

  	
  (203) 585-1191

  	
   

  
	
  Brian
  Wenzel

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6774

  	
   

  	
  (203) 316-7601

  	
   

  
	
  Alan
  Green

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 961-5077

  	
   

  	
  (203) 357-3490

  	
   

  
	
  Johan
  Fogelberg

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 357-6072

  	
   

  	
  (203) 357-4975

  	
   

  
	
  Robert
  Ceske

  	
   

  	
  201 High Ridge Road

  Stamford, Connecticut  06927

  	
   

  	
  (203) 602-8337

  	
   

  	
  (203) 585-1361

  	
   

  

 

E-1

 

Exhibit
F

 

Arbitration
Procedures

 

If Senior Management
fails to reach agreement with respect to a Dispute Resolution within forty-five
(45) days of a Submission and the Cure Period has not expired, either Party may
submit the matter to be finally resolved by arbitration pursuant to the CPR
Institute for Dispute Resolution (the “CPR”) Rules for Non-Administered
Arbitration as then in effect (the “CPR Arbitration Rules”).  The Parties consent to a single,
consolidated arbitration for all known matters under dispute existing at the
time of the arbitration and for which arbitration is permitted.

 

The neutral organization
for purposes of the CPR Arbitration Rules will be the CPR.  The arbitral tribunal shall be composed of
three arbitrators, of whom each Party shall appoint one in accordance with the
“screened” appointment procedure provided in Rule 5.4 of the CPR Arbitration
Rules.  The arbitration shall be conducted
in New York City.  Each Party shall be
permitted to present its case, witnesses and evidence, if any, in the presence
of the other Party.  A written
transcript of the proceedings shall be made and furnished to the Parties.  The arbitrators shall determine the matter
in dispute in accordance with the law of the State of New York, without giving
effect to any conflict of law rules or other rules that might render such law
inapplicable or unavailable, and shall apply this Agreement according to its
terms, provided that the provisions relating to arbitration shall be governed
by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.

 

The Parties agree to be
bound by any award or order resulting from any arbitration conducted in
accordance with this provision and further agree that judgment on any award or
order resulting from an arbitration conducted under this provision may be
entered and enforced in any court having jurisdiction thereof.

 

Except as expressly
permitted by this Agreement, no Party will commence or voluntarily participate
in any court action or proceeding concerning a matter in dispute, except (i)
for enforcement, (ii) to restrict or vacate an arbitral decision based on the
grounds specified under applicable law, or (iii) for interim relief as provided
in paragraph (e) below.  For purposes of
the foregoing, the parties hereto submit to the non-exclusive jurisdiction of
the courts of the State of New York.

 

In addition to the
authority otherwise conferred on the arbitral tribunal, the tribunal shall have
the authority to make such orders for interim relief, including injunctive
relief, as it may deem just and equitable.

 

Each
Party will bear its own attorneys’ fees and costs incurred in connection with
the resolution of any matter in dispute in accordance with this provision.

 

F-1

 

Exhibit
G

 

Prior
Transfer Pricing Transaction

 

Prior Transfer
Pricing Amounts are calculated as follows:

 

 

[to be supplied]

 

G-1

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