Document:

Exhibit
10.28

 

 

DERIVATIVES
MANAGEMENT SERVICES AGREEMENT

 

 

AMONG

 

 

GE
LIFE AND ANNUITY ASSURANCE COMPANY,

 

FEDERAL
HOME LIFE INSURANCE COMPANY,

 

FIRST
COLONY LIFE INSURANCE COMPANY,

 

GENERAL
ELECTRIC CAPITAL ASSURANCE COMPANY,

 

AND

 

GENWORTH
FINANCIAL, INC.

 

AND

 

GNA
CORPORATION

 

AND

 

GENERAL
ELECTRIC CAPITAL CORPORATION

 

 

DATED
AS OF MAY 24, 2004

 

 

THIS
DERIVATIVES MANAGEMENT SERVICES AGREEMENT (the “Agreement”) is made and entered into as of the
24th day of May, 2004 (the “Effective Date”), by and among GE LIFE AND ANNUITY
ASSURANCE COMPANY, an insurance company domiciled in the Commonwealth of
Virginia (“GELAAC”), FEDERAL HOME LIFE INSURANCE COMPANY, an insurance company
domiciled in the Commonwealth of Virginia (“FHL”), FIRST COLONY LIFE INSURANCE
COMPANY, an insurance company domiciled in the Commonwealth of Virginia
(“FCL”), GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY, an insurance company
domiciled in the State of Delaware (“GECA”; GECA, GELAAC, FHL and FCL are
individually a “Client” and collectively, the “Clients”), Genworth Financial,
Inc., a Delaware corporation (“GENWORTH”), GNA CORPORATION, a Washington
corporation (“GNA”) and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (“GECC”).

 

RECITALS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

ARTICLE
I

DEFINITIONS
AND USAGE

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE
II

SERVICES

 

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

 

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

 

3

 

to such Contract.

 

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

 

2.4                              
Covenants of GECC and GNA.

 

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

 

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

 

2.5                              
Recordkeeping and Reports; Review and Inspection.

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

5

 

ARTICLE
III

TERM
AND TERMINATION

 

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

 

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

 

ARTICLE
IV

COMPENSATION

 

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

 

ARTICLE
V

CONFIDENTIALITY

 

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

 

6

 

ARTICLE
VI

REPRESENTATIONS
AND WARRANTIES

 

6.1         
By Client. 
Each Client represents and warrants that:

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE
VII

MISCELLANEOUS

 

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

 

7

 

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

 

7.2                              
Indemnification.

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

If to GECC:

 

General Counsel--Treasury

General Electric Capital Corporation

201 High Ridge Road

Stamford, Connecticut 06927-9400

Facsimile:  (203) 357-3490

 

If to GNA:

 

General Counsel

GNA Corporation

6620 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 662-2414

 

If to GENWORTH:

 

General Counsel

Genworth Financial, Inc.

6620 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 662-2414

 

If to Client #1:

 

General Counsel

GE Life and Annuity Assurance Company

6610 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 281-6005

 

9

 

If to Client #2:

 

General Counsel

Federal Home Life Insurance Company

700 Main Street

Lynchburg, Virginia 24504

Facsimile:  (434) 948-5819

 

If to Client #3:

 

General Counsel

First Colony Life Insurance Company

700 Main Street

Lynchburg, Virginia 24504

Facsimile:  (434) 948-5819

 

If to Client #4

 

General Counsel

General Electric Capital Assurance Company

6620 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 662-2414

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

 

[THE REST OF THIS
PAGE IS LEFT BLANK INTENTIONALLY]

 

11

 

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

 

 

	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Parke

  
	
   

  	
   

  	
  Name:  James
  A. Parke

  
	
   

  	
   

  	
  Title:  Vice
  Chairman and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENWORTH FINANCIAL,
  INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gary Prizzia

  
	
   

  	
   

  	
  Name:  Gary
  Prizzia

  
	
   

  	
   

  	
  Title:  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GNA CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gary Prizzia

  
	
   

  	
   

  	
  Name:  Gary
  Prizzia

  
	
   

  	
   

  	
  Title:  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL
  ASSURANCE COMPANY

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gary Prizzia

  
	
   

  	
   

  	
  Name:  Gary
  Prizzia

  
	
   

  	
   

  	
  Title:  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GE LIFE AND ANNUITY
  ASSURANCE COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary Prizzia

  
	
   

  	
   

  	
  Name:  Gary
  Prizzia

  
	
   

  	
   

  	
  Title:  Treasurer

  

 

 

12

 

 

	
   

  	
  FEDERAL HOME LIFE INSURANCE
  COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gary Prizzia

  
	
   

  	
   

  	
  Name:  Gary Prizzia

  
	
   

  	
   

  	
  Title:  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FIRST COLONY LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gary Prizzia

  
	
   

  	
   

  	
  Name:  Gary Prizzia

  
	
   

  	
   

  	
  Title:  Treasurer

  

 

 

13

 

EXHIBIT
1

 

ADOPTION
AGREEMENT

 

(DERIVATIVES
MANAGEMENT SERVICES AGREEMENT)

 

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

 

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

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Name and Address of
  Corporation]

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  Date:

  
	
   

  	
   

  	
   

  	
   

  

 

14Exhibit 10.29

 

 

AGREEMENT REGARDING

CONTINUED
REINSURANCE OF INSURANCE PRODUCTS

 

THIS AGREEMENT REGARDING CONTINUED REINSURANCE OF
INSURANCE PRODUCTS (this “Agreement”) is dated as of this 24th day of
May, 2004, by and between General Electric Capital Company, a Delaware
corporation (“GECC”), and Viking Insurance Company Ltd., a Bermuda
insurance company (“Viking”).

 

RECITALS 

 

                

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

 

WHEREAS, such Credit Insurance is reinsured by
Viking;

 

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

 

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

 

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

 

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

AGREEMENTS 

1.               Agreements Relating to Card Services.

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

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

 

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

 

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

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

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

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

 

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

 

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

 

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

 

2

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

4

 

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

 

 

	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James A. Parke

  
	
   

  	
   

  	
  Name:
  James A. Parke

  
	
   

  	
   

  	
  Title:  Vice Chairman and Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VIKING INSURANCE COMPANY LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  T. Burt Hazelwood

  
	
   

  	
   

  	
  Name:
  T. Burt Hazelwood

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  

 

 

5

 

 

Schedule A to

Agreement Regarding

Continued Reinsurance
of Insurance Products 

 

 

 

PAYMENTS

 

Section 1.01                           Payments by GECC to Viking.

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

Section 1.02                           Payments by Viking to GECC.

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

 

6

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

 

DISPUTE RESOLUTION

                Section 2.01                           General Provisions.

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

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

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

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

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

                Section 2.02                           Consideration
by Senior Executives.

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

 

7

 

Section 2.03                           Mediation.

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

                Section 2.04                           Arbitration.

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

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

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

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

 

8

 

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

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

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

 

 

9

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