Document:

Exhibit 10.25

 

 

MORTGAGE SERVICES AGREEMENT

 

dated as of
             ,
2004

 

by and among

 

GE MORTGAGE SERVICES, LLC,

 

GENERAL ELECTRIC MORTGAGE

HOLDINGS LLC,

 

GE MORTGAGE CONTRACT SERVICES INC.

 

and

 

GENWORTH FINANCIAL, INC.

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Certain
  Defined Terms

  	
   

  
	
  Section 1.02.

  	
  Other Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  SERVICES AND TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  GEMH
  Services; Scope

  	
   

  
	
  Section 2.02.

  	
  Transition
  Employees Services

  	
   

  
	
  Section 2.03.

  	
  Management
  of Held Loans

  	
   

  
	
  Section 2.04.

  	
  Reporting;
  Transition; MSR Sale

  	
   

  
	
  Section 2.05.

  	
  Performance
  and Receipt of Services

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  OTHER ARRANGEMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Computer-Based
  Resources

  	
   

  
	
  Section 3.02.

  	
  Access;
  Leased Premises

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  COSTS
  AND DISBURSEMENTS; PERSONNEL COSTS; PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Costs and
  Disbursements

  	
   

  
	
  Section 4.02.

  	
  Personnel
  Costs; Right to Hire; Severance

  	
   

  
	
  Section 4.03.

  	
  Loan
  Acquisition and Disposition Costs

  	
   

  
	
  Section 4.04.

  	
  Payments of
  Service Charges and Employment Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  STANDARDS;
  COMPLIANCE WITH LAWS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Standards

  	
   

  
	
  Section 5.02.

  	
  Compliance
  with Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
  PURCHASE
  OF NEW LOANS AND SALE OF LOANS AND LOAN ASSETS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Loan
  Schedule

  	
   

  
	
  Section 6.02.

  	
  Loan
  Purchase Agreement

  	
   

  
	
  Section 6.03.

  	
  Agreement
  to Sell and Purchase the New Loans; Assignment ofClaims

  	
   

  
	
  Section 6.04.

  	
  Loan
  Purchase Price

  	
   

  
	
  Section 6.05.

  	
  Conditions
  Precedent

  	
   

  
	
  Section 6.06.

  	
  Right of
  First Refusal

  	
   

  
	
  Section 6.07.

  	
  Repurchase
  of Loans

  	
   

  
	
  Section 6.08.

  	
  Transition
  Assistance

  	
   

  
	
  Section 6.09.

  	
  Further
  Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Representations
  and Warranties of Mortgage Services

  	
   

  

 

i

 

	
  Section 7.02.

  	
  Representation
  and Warranties of GEMH Parties

  	
   

  
	
  Section 7.03.

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  INDEMNIFICATION;
  LIMITATION ON LIABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Limited
  Liability

  	
   

  
	
  Section 8.02.

  	
  Indemnification
  by GEMH

  	
   

  
	
  Section 8.03.

  	
  Indemnification
  by Mortgage Services

  	
   

  
	
  Section 8.04.

  	
  Loans and
  Loan Assets Indemnification

  	
   

  
	
  Section 8.05.

  	
  Indemnification
  Procedures.

  	
   

  
	
  Section 8.06.

  	
  Limitation
  on Liability

  	
   

  
	
  Section 8.07.

  	
  Liability
  for Payment Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  DISPUTE RESOLUTION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Applicable
  Law

  	
   

  
	
  Section 9.02.

  	
  Dispute
  Resolution

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Termination

  	
   

  
	
  Section 10.02.

  	
  Effect of
  Termination

  	
   

  
	
  Section 10.03.

  	
  Survival

  	
   

  
	
  Section 10.04.

  	
  Business
  Continuity; Force Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  GUARANTY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Guaranty

  	
   

  
	
  Section 11.02.

  	
  Guaranty
  Absolute

  	
   

  
	
  Section 11.03.

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.01.

  	
  GEMH
  Manager

  	
   

  
	
  Section 12.02.

  	
  Mortgage
  Services Manager; Functional Leaders

  	
   

  
	
  Section 12.03.

  	
  Independent
  Contractors

  	
   

  
	
  Section 12.04.

  	
  Subcontractors

  	
   

  
	
  Section 12.05.

  	
  Additional
  Services; Books and Records; Mortgage Services Property

  	
   

  
	
  Section 12.06.

  	
  Confidential
  Information

  	
   

  
	
  Section 12.07.

  	
  Notices

  	
   

  
	
  Section 12.08.

  	
  Taxes.

  	
   

  
	
  Section 12.09.

  	
  Regulatory
  Approval and Compliance

  	
   

  
	
  Section 12.10.

  	
  Severability

  	
   

  
	
  Section 12.11.

  	
  Entire
  Agreement

  	
   

  
	
  Section 12.12.

  	
  Assignment;
  No Third-Party Beneficiaries

  	
   

  

 

ii

 

	
  Section 12.13.

  	
  Amendment

  	
   

  
	
  Section 12.14.

  	
  Rules of
  Construction

  	
   

  
	
  Section 12.15.

  	
  Counterparts

  	
   

  
	
  Section 12.16.

  	
  No Right
  to Set-Off

  	
   

  
	
  Section 12.17.

  	
  Existing
  Agreements

  	
   

  
	
  Section 12.18.

  	
  Further
  Assurances

  	
   

  

 

SCHEDULES AND EXHIBITS

 

	
  Schedule A

  	
  GEMH
  Services

  
	
  Schedule B

  	
  Scheduled Loans

  
	
  Schedule C-1

  	
  Fully Dedicated Transition Employees

  
	
  Schedule C-2

  	
  Partially Allocated Transition Employees

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Loan Purchase Agreement

  

 

iii

 

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

 

RECITALS

 

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

 

WHEREAS, pursuant to the terms of the Master
Agreement, General Electric, GE Capital, GEI, GEFAHI, GNA Corporation, GE Asset
Management Incorporated, GEMH and Genworth entered into that certain Transition
Services Agreement dated as of the date hereof;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

ARTICLE
I

DEFINITIONS

 

SECTION 1.01.                 Certain Defined Terms.

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

“Held Loan” means any Loan with respect to
which Mortgage Services is a lender (whether initially or as assignee) and that
has not been sold, transferred or assigned by Mortgage Services to any Person
(other than another Mortgage Entity).

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

“Mortgage Entities” means Mortgage Services and
its Subsidiaries.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

self-replicate without manual intervention; and/or (iii) that purport
to perform a useful function but which actually perform either a destructive or
harmful function, or perform no useful function and utilize substantial
computer, telecommunications or memory resources.

 

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

 

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

 

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

 

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

 

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

 

	
  Term

  	
   

  	
  Section

  
	
  Affiliate

  	
   

  	
  Master Agreement

  
	
  Bona Fide Purchase Price

  	
   

  	
  Section 6.06

  
	
  Breaching Party

  	
   

  	
  Section 10.01(a)

  
	
  Business Day

  	
   

  	
  Master Agreement

  
	
  Claims

  	
   

  	
  Section 6.03(a)(ii)

  
	
  Closing

  	
   

  	
  Master Agreement

  
	
  Closing Date

  	
   

  	
  Master Agreement

  
	
  Facilities Fee

  	
   

  	
  Section 4.01(b)(iv)

  
	
  Force Majeure

  	
   

  	
  Master Agreement

  
	
  Fully Dedicated Transition Employee

  	
   

  	
  Section 2.02

  
	
  GE

  	
   

  	
  Recitals

  
	
  GE Capital

  	
   

  	
  Recitals

  
	
  GE Confidential Information

  	
   

  	
  Master Agreement

  
	
  GEFAHI

  	
   

  	
  Recitals

  
	
  GEI

  	
   

  	
  Recitals

  
	
  GEMH Indemnified Party

  	
   

  	
  Section 8.01(a)

  
	
  GEMH Manager

  	
   

  	
  Section 12.01

  
	
  GEMH Services

  	
   

  	
  Section 2.01(a)

  
	
  GEMH Substitute Service

  	
   

  	
  Section 2.01(a)

  
	
  General Electric

  	
   

  	
  Recitals

  
	
  Genworth

  	
   

  	
  Preamble

  
	
  Genworth Confidential Information

  	
   

  	
  Master Agreement

  
	
  Governmental Approval

  	
   

  	
  Master Agreement

  
	
  Guaranteed Obligations

  	
   

  	
  Section 11.01

  
	
  Guaranty

  	
   

  	
  Section 11.01

  
	
  Indemnification Agreement

  	
   

  	
  Recitals

  

 

8

 

	
  Term

  	
   

  	
  Section

  
	
  Indemnified Party

  	
   

  	
  Master Agreement

  
	
  Indemnifying Party

  	
   

  	
  Master Agreement

  
	
  Indemnity Payment

  	
   

  	
  Master Agreement

  
	
  Identified Costs

  	
   

  	
  Section 4.01(b)(iii)

  
	
  IT Costs

  	
   

  	
  Section 4.01(b)(ii)

  
	
  Law

  	
   

  	
  Master Agreement

  
	
  Leased Premises

  	
   

  	
  Recitals

  
	
  Liabilities

  	
   

  	
  Master Agreement

  
	
  Loan Closing Documents

  	
   

  	
  Section 6.05(b)

  
	
  Loss Mitigation Costs

  	
   

  	
  Section 4.01(b)(iii)

  
	
  Master Agreement

  	
   

  	
  Recitals

  
	
  Mortgage Services Indemnified Party

  	
   

  	
  Section 8.01(b)

  
	
  Mortgage Services Manager

  	
   

  	
  Section 12.02

  
	
  MS Standard

  	
   

  	
  Section 5.01(b)

  
	
  Non-Breaching Party

  	
   

  	
  Section 10.01(a)

  
	
  Operating Plan

  	
   

  	
  Schedule A

  
	
  Partially Allocated Transition Employee

  	
   

  	
  Section 2.02

  
	
  Parties

  	
   

  	
  Preamble

  
	
  Person

  	
   

  	
  Master Agreement

  
	
  Service Charges

  	
   

  	
  Section 4.01(b)(ivi)

  
	
  Standard for Services

  	
   

  	
  Section 5.01(a)

  
	
  Subsidiary

  	
   

  	
  Master Agreement

  
	
  Tax Returns

  	
   

  	
  Master Agreement

  
	
  Term

  	
   

  	
  Section 10.01(a)

  
	
  Transactions

  	
   

  	
  Master Agreement

  
	
  Trigger Date

  	
   

  	
  Master Agreement

  

 

ARTICLE II

SERVICES AND TERMS

 

SECTION 2.01.                 GEMH Services;
Scope

 

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

 

9

 

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

 

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

 

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

 

(d)                                 Notwithstanding
any provision to the contrary in this Agreement, GEMH shall not be obligated to
provide any of the GE Services and GEMH shall have no liability for any acts or
omissions of any party resulting from instructions given by or at the direction
of the Mortgage Services Manager or in connection with the obligations of the
Mortgage Services Manager pursuant to Section 12.02 hereof.

 

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

 

SECTION 2.02.                 Transition Employees Services.  GEMH agrees that during the Term it shall
provide, or cause to be provided, to Mortgage Entities the services of (a)

 

10

 

employees of Affiliates of GEMH set forth on Schedule C-1, or any
employees with equivalent or greater skills who replace such employees in the
positions set forth on Schedule C-1, in each case on a full-time basis (each
such employee who performs GEMH Services on a full-time basis, a “Fully
Dedicated Transition Employee”) and (b) employees of Affiliates of GEMH set
forth on Schedule C-2, or any employees with equivalent or greater skills who
replace such employees in the positions set forth on Schedule C-2, in each case
on a part-time basis as set forth on Schedule C-2 (each such employee who
performs GEMH Services on a part-time basis as set forth on Schedule C-2, a “Partially
Allocated Transition Employee”).

 

SECTION 2.03.                 Management of
Held Loans.

 

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

 

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

 

SECTION 2.04.                 Reporting;
Transition; MSR Sale.

 

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

 

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

 

(ii)                                  GEMH
shall make reasonably available to the Mortgage Entities the Partially
Allocated Transition Employees and Fully Dedicated Transition Employees (to the
extent of their respective percentage designations on Schedule C-2)  and contractors of GEMH and its Affiliates
with respect to the services covered by the Identified Costs whose assistance,
expertise or presence is necessary to (A) assist the transition team of Mortgage
Services in establishing a fully functioning stand-alone environment and the
timely assumption by Mortgage Services, or by a supplier to Mortgage Services,
of the GEMH Services and (B) facilitate the implementation of the Operating
Plan.

 

(b)                                 The Parties acknowledge and agree that except
as set forth in this Section 2.04(b), GEMH shall have no obligation to provide,
or cause to be provided, services in connection with any sale by any Mortgage
Entity of Mortgage Servicing Rights or other disposition of assets that are not
in ordinary course of business of any Mortgage Entity.  The

 

11

 

Parties further acknowledge and agree that during the Term, upon
request by Mortgage Services, Fully Dedicated Transition Employees and
Partially Allocated Transition Employee shall assist Mortgage Entities in any
such sale or disposition; provided, however, that no Partially
Allocated Transition Employee shall be required to dedicate a greater
percentage of such employee’s time (on full time equivalent basis) to such
assistance and to provision of other GEMH Services than the percentage set
forth in the column headed “Allocated %/FTE” on Schedule C-2 for such employee
or his or her replacement.  GEMH may
further agree, but shall not be obligated, to provide additional assistance in
connection with any such sale or disposition beyond that set forth above in
this Section 2.04(b), in which event Mortgage Services shall reimburse GEMH,
upon the same terms and conditions as apply to other GEMH Services, for the
direct incremental costs and expenses actually incurred by GEMH and its
Affiliates in connection with the provision of such additional service, which
costs and expenses would not have been otherwise incurred as a result of the
provision by GEMH and/or its Affiliates of other GEMH Services; provided
that such costs and expenses have been authorized in writing in advance by the
Mortgage Services Manager (or another authorized representative of Mortgage
Services or its Affiliates). 
Notwithstanding the foregoing, this Section 2.04(b) shall not be
applicable to the sale of any servicing rights pursuant to Section 6.07.

 

SECTION 2.05.                 Performance and Receipt of Services.

 

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

 

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

 

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

 

ARTICLE III

OTHER ARRANGEMENTS

 

SECTION 3.01.                 Computer-Based
Resources.

 

(a)                                  Prior
to the Trigger Date, Mortgage Entities shall continue to have access to the
Information Systems of GEMH and its Subsidiaries.  On and after the Trigger Date, Mortgage Entities shall not have
any right to access all or any part of the Information Systems of GEMH or any
of its Subsidiaries, except to the extent necessary for any Mortgage Entity to

 

12

 

receive the GEMH Services or implement the Operating Plan (in addition
and not in limitation of Section 2.05, subject to Mortgage Services complying
with all reasonable security measures implemented by GEMH as deemed necessary
by GEMH to protect its Information Systems and the Information Systems of its
Subsidiaries, provided, that Mortgage Entities have had a commercially
reasonable period of time to comply with such security measures).

 

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

 

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

 

SECTION 3.02.                 Access; Leased
Premises.

 

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

 

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

 

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

 

13

 

ARTICLE
IV

COSTS AND DISBURSEMENTS; PERSONNEL COSTS; PAYMENTS

 

SECTION 4.01.                 Costs and
Disbursements.

 

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

 

(b)                                 Mortgage
Services shall reimburse GEMH for:

 

(i)                                     all reasonable out of pocket expenses
incurred by GEMH in connection with GEMH Services that can be identified as
actually incurred for the sole benefit of Mortgage Entities; provided, however,
that (other than with respect to the third party support for tax filing and
audit described in paragraph j of Schedule A) (A) any out-of-pocket costs and
expenses in the aggregate in excess of $10,000 per any calendar month or in
excess of $5,000 per provider per any calendar month shall only be payable by
Mortgage Services, if such out of pocket expenses have been authorized in
writing by the Mortgage Services Manager (or another authorized representative
of Mortgage Services or its Affiliates) prior to having been incurred by GEMH,
(B) Mortgage Services receives from GEMH reasonably detailed data and other
documentation sufficient to support the calculation of amounts due to GEMH and
(C) out of pocket expenses shall not include (w) any costs or expenses
described in Section 4.02, which shall be payable pursuant to Section 4.02, (x)
any costs or expenses incurred by GEMH or any of its Subsidiaries in connection
with providing Mortgage Entities access and use of facilities described in
Section 3.02 (y) any costs or expenses incurred by GEMH or any of its
Subsidiaries in connection with providing GEMH Services set forth in paragraph (i) of
Schedule A and (z) Identified Costs described in Section 4.01(b)(ii-iii),
which shall be payable pursuant to Section 4.01(b)((ii-iii) ; and

 

(ii)                                  an
amount of $700,000 per annum (payable in quarterly installments as set forth in
Section 4.04) with respect to information technology and data processing
services, allocated on pro-rata basis based on the number of calendar days such
GEMH Services are actually provided (“IT Costs”); and

 

(iii)                               an
amount of $168,000 per annum (payable in quarterly installments as set forth in
Section 4.04) with respect to loss mitigation services (including restructuring
of loans and foreclosure), allocated on pro-rata basis based on the number of
calendar days such GEMH Services are actually provided (“Loss Mitigation
Costs”, and together with IT Costs, “Identified Costs”); and

 

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

 

14

 

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

 

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

 

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

 

(i)                                     During
the Term, Mortgage Services will reimburse GEMH for the amount per annum set
forth on Schedule C-1 opposite each Fully Dedicated Transition Employee’s name
and the amount per annum set forth on Schedule C-2 opposite each Partially
Allocated Transition Employee’s name. 
The parties acknowledge and agree that in the event Mortgage Services
terminates any GEMH Service pursuant to Section 10.01 hereof or GEMH does not
provide, or cause to be provided, GEMH Services, in each case, with respect to
any Fully Dedicated Transition Employee specified on Schedule C-1 or any
Partially Allocated Transition Employee specified on Schedule C-2 during the
calendar year, the amount payable with respect to such calendar period shall be
pro-rated such that Mortgage Services shall pay the portion of a payment that
is allocable to the number of days in such calendar year during which such GEMH
Services were actually provided by such Fully Dedicated Transition Employee or
such Partially Allocated Transition Employee.

 

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

 

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

 

(iv)                              If
neither GEMH, Mortgage Services nor any of their respective Affiliates offers
employment to such Fully Dedicated Transition Employees which is comparable to
the terms of their employment immediately prior to the end of the Term,
Mortgage Services will reimburse GEMH for all severance costs, if any, related
to the termination of such Fully Dedicated Transition Employees.  For the avoidance of doubt, Mortgage
Services shall not be liable for such costs for more than the number of
positions set forth on Schedule C-1.  If
such comparable employment is offered by either GEMH, Mortgage Services or any
of their respective Affiliates and is declined by such employees, the employee
would not be entitled to

 

15

 

any severance benefits.  For
purposes of this Section 4.02(b), “comparable” shall be as defined in the
applicable employee benefit plan of GEMH with respect to severance benefits.

 

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

 

(d)                                 (i)                                     During
the Term, Mortgage Services will pay GEMH the amount of $250,000 per annum in
consideration of involvement of management of 
GEMH and its Affiliates with the 
GEMH Services provided hereunder, allocated on pro-rata basis based on
the number of calendar days GEMH Services were actually provided.

 

(ii)                                  At
the earlier of the expiration or termination of this Agreement, Mortgage
Services will pay to GEMH an amount of $500,000 and Mortgage Services shall not
be responsible for any severance costs with respect to any Partially Allocated
Transition Employee.

 

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

 

(f)                                    For
the avoidance of doubt, Mortgage Services shall have no Liability with respect
to any costs or expenses related to any employee of GEMH or any of its
Affiliates except as set forth in this Section 4.02.

 

SECTION 4.03.                 Loan Acquisition and Disposition
Costs.  Subject to receipt by
Contract Services of reasonably detailed data and other documentation
sufficient to support the calculation of amounts due to Mortgage Services,
Contract Services shall promptly upon receipt of an invoice from Mortgage
Services (but in no event later than within seventy-five (75) days of the date
of such invoice) reimburse Mortgage Services for all out-of-pocket costs and
expenses incurred by Mortgage Services in connection with an acquisition of any
Loan and/or a disposition of any Loan by Mortgage Services.  For the avoidance of doubt, such
out-of-pocket costs and expenses (i) shall not include the Loan Purchase
Price, any purchase price paid by Mortgage Services with respect to any
Scheduled Loan, any interest expense incurred by Mortgage Services in
connection with the funding of Loans or any MS Servicing Costs but
(ii) shall include loan boarding fees payable by Mortgage Services
pursuant to the Wells Fargo Agreement or any other subservicing agreement
pursuant to which such Loan is serviced, attorneys’ fees and expenses, custodian
fees, recording and filing fees and other fees and expenses customarily
incurred in connection with an acquisition or disposition of residential
mortgage loans.  If Contract Services
fails to pay any amount payable pursuant to this Section 4.03 (excluding any
amount contested in good faith) by the date specified above, Contract Services
shall be obligated to pay to Mortgage Services, in addition to the amount due,
interest on such amount at the lesser of (i) the three (3) month London
Interbank Offered Rate (LIBOR) plus 100 basis points or (ii) the maximum rate
of interest allowed by applicable Law, from the

 

16

 

date the payment was due through the date of payment.  Any and all disputes with respect to this Section
4.03 shall be resolved pursuant to Section 9.02.

 

SECTION 4.04.                 Payments of Service Charges and
Employment Costs.

 

(a)                                  Subject
to Section 4.04(a)(iii):

 

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

 

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

 

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

 

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

 

(ii)                                  From
and after Trigger Date, Mortgage Services shall pay the amount of any invoice
submitted to Mortgage Services by GEMH pursuant to Section 4.04(a) in U.S.
dollars within seventy-five (75) days of the date of such invoice.  If Mortgage Services fails to pay such amount
(excluding any amount contested in good faith) by such date, Mortgage Services
shall be obligated to pay to GEMH, in addition to the amount due, interest on
such amount at the lesser of (i) the three (3) month London Interbank Offered
Rate (LIBOR) plus 100 basis points or (ii) the maximum rate of interest allowed
by applicable Law, from the date the payment was due through the date of
payment.  If Mortgage Services disputes
GEMH’s calculation of any amount due to GEMH, then the dispute shall be
resolved pursuant to Section 9.02.

 

17

 

ARTICLE
V

STANDARDS; COMPLIANCE WITH LAWS

 

SECTION 5.01.                 Standards.

 

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

 

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

 

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

 

ARTICLE
VI

PURCHASE OF NEW LOANS AND SALE OF LOANS AND LOAN ASSETS

 

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

 

SECTION 6.02.                 Loan Purchase
Agreement.

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)                                 All
amounts which are received by Contract Services or any of its Affiliates in
respect of the New Loans and the related Loan Assets (other than with respect
to any amounts received with respect to the Claims assigned to Contract
Services pursuant to Section 6.03(a)(ii)) acquired pursuant to this Agreement
from and after the applicable Loan Closing which are properly allocable to
periods after the applicable Loan Closing shall be received by such Person as
agent, in trust for and on behalf of Mortgage Services, and following the
applicable Loan Closing, on a weekly basis, Contract Services shall transfer,
or cause to be transferred, by wire transfer of immediately available funds, and
remit (or cause to be remitted) to Mortgage Services all such amounts received
by or paid to Contract Services or any of its Affiliates as of such date and
shall provide Mortgage Services information as to the nature and source of such
payments, including any invoice related thereto.

 

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

 

20

 

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

 

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

 

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

 

(i)                                     Loan
Schedule;

 

(ii)                                  Loan
Purchase Agreement; and

 

(iii)                               Loan
File.

 

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

 

SECTION 6.07.                 Repurchase of Loans.  Upon expiration or early termination of this
Agreement or of Article VI pursuant to Section 10.01, (a) subject to receipt of
the payment set forth in clause (b)(iii) below, Mortgage Services shall sell,
transfer and assign, or shall cause its Subsidiaries to sell, transfer and
assign to Contract Services or its designee, (i) any and all Held Loans and the
related Loan Assets and Loan REOs, on “AS-IS, WHERE IS” basis without any
representations or warranties (except for a representation and warranty that
such Loans, related Loan Assets and Loan REOs are being sold, transferred and
assigned free and

 

21

 

clear of Liens that have been created by Mortgage Entities other than
the Permitted Liens)) and (ii) any and all rights of Mortgage Services under
the applicable Loan Purchase Agreement to the extent such rights are assignable
and (b) Contract Services or such designee shall (i) purchase and accept such
Loans, related Loan Assets and Loan REOs, (ii) assume all Liabilities with
respect to such Loans, the related Loan Assets and Loan REOs arising from and
after such sale, transfer and assignment and (iii) pay Mortgage Services an
amount equal to the Fair Market Value of such Held Loans and Loan REOs in
immediately available funds to the account designated in writing by Mortgage
Services at least two Business Days prior to such sale, transfer and
assignment.  For the avoidance of doubt,
in connection with any sale, transfer or assignment of any Loan or Loan REOs,
pursuant to this Section 6.07, Mortgage Services shall sell, transfer and
assign any and all rights of Mortgage Services to service such Loans and Loan
REOs.

 

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

 

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

 

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

 

SECTION 7.01.                 Representations and Warranties of
Mortgage Services.  Mortgage
Services represents and warrants to GEMH Parties that (a) Mortgage Services has
the full corporate power and authority required to enter into, execute,
deliver, and fully perform under, this Agreement and that to do so will not
violate or conflict with its certificate of incorporation (or its equivalent)
or by-laws or any material term or provision of any agreement, instrument,
order or decree to which it is a party or by which it is bound, (b) this
Agreement has

 

22

 

been duly executed and delivered by Mortgage Services and is a valid
and binding obligation of Mortgage Services, enforceable against it in
accordance with its terms and (c) Mortgage Services has obtained all
Governmental Approvals and consents from other Persons, if any, necessary for
Mortgage Services to perform its obligations under this Agreement.

 

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

 

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

 

ARTICLE VIII

INDEMNIFICATION; LIMITATION ON LIABILITY

 

SECTION 8.01.                 Limited
Liability.  

 

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

 

(b)                                 Notwithstanding
the provisions of Section 5.01, neither Mortgage Services nor any of its
Affiliates, any of their respective directors, officers or employees, nor any
of the heirs, executors, successors nor assigns of any of the foregoing (each,
a “Mortgage Services Indemnified Party”) shall have any liability in
contract, tort or otherwise to any GEMH

 

23

 

Indemnified Party or its Representatives for or in connection with (i)
the MS Services, (ii) the transactions contemplated by this Agreement or (iii)
any Mortgage Services Indemnified Party’s actions or inactions in connection
with any such MS Services or such transactions; provided,  however,
that such limitation on liability shall not extend to or otherwise limit any
Liabilities that have resulted directly from such Mortgage Services Indemnified
Party’s (A) gross negligence or willful misconduct, (B) improper use or
disclosure of information of, or regarding, a customer or potential customer of
a GEMH Indemnified Party or (C) violation of applicable Law.  Notwithstanding the foregoing, this Section
8.01(b) shall not be applicable to any payment obligations of Mortgage Services
pursuant to this Agreement, including pursuant to Article IV.

 

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

 

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

 

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

 

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

 

SECTION 8.03.                 Indemnification by Mortgage
Services.

 

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

 

24

 

provision of the MS Services, or (iii) any violation of applicable Law
by a Mortgage Services Indemnified Party in connection with the transactions
contemplated by this Agreement or such Mortgage Services Indemnified Party’s
provision of the MS Services.

 

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

 

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

 

SECTION 8.04.                 Loans and Loan Assets
Indemnification.

 

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

 

25

 

SECTION 8.05.                 Indemnification Procedures.

 

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

 

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

 

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

 

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

 

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

 

26

 

ARTICLE IX

DISPUTE RESOLUTION

 

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

 

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

 

ARTICLE
X

TERMINATION

 

SECTION 10.01.           Termination.

 

(a)                                  The
term of this Agreement shall commence on the date hereof and, unless earlier
terminated pursuant to this Section 10.01(a), expire on December 31, 2005 (the
“Term”).  This Agreement shall terminate
with respect to each GEMH Service on the applicable Service Termination Date or
other termination date specified in this Agreement or the Schedules
hereto.  In addition, (i) Mortgage
Services may from time to time terminate any GEMH Service, in whole or in part,
upon giving at least sixty (60) days’ (or such shorter period of time as is
mutually agreed upon in writing by the parties) prior written notice to GEMH
specifying which GEMH Service is being so terminated (such termination will not
in any way affect the obligations of the party terminating this Agreement with
respect to such GEMH Service to continue to receive all other GEMH Services not
so terminated and to continue to provide such other GEMH Services as required
by this Agreement); (ii) either party (the “Non-Breaching Party”) may
terminate this Agreement with respect to any GEMH Service, in whole or in part,
at any time upon prior written notice by the Non-Breaching Party to the other
party (the “Breaching Party”) if the Breaching Party has failed to
perform any of its material obligations under this Agreement relating to such
GEMH Service, and such failure shall have continued without cure for a period
of sixty (60) days after receipt by the Breaching Party of a written notice of
such failure from the Non-Breaching Party seeking to terminate such GEMH
Service and (iii) Mortgage Services may terminate this Agreement with respect
to its obligations pursuant to Section 2.03 and Article VI, in whole but not in
part, at any time upon prior written notice to Contract Services if Contract
Services has failed to perform any of its material obligations pursuant to
Article VI or Section 8.04 or any of its other material obligations pursuant to
this Agreement, in each case relating to the Loans and the related Loan Assets
purchased by Mortgage Services pursuant to this Agreement and Loan REOs, and
such failure shall have continued without cure for a period of sixty (60) days
after receipt by Contract Services of a written notice of such failure from Mortgage
Services seeking to terminate its obligations pursuant to Section 2.03 and
Article VI;

 

27

 

provided,  however, that (x)
no GEMH Service may be terminated pursuant to Section 10.01(a)(ii) and (y) no obligations
of Mortgage Services pursuant to Section 2.03 and Article VI may be terminated
pursuant to Section 10.01(a)(iii), until the parties have completed the dispute
resolution process set forth in Section 7.2 of the Master Agreement.

 

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

 

SECTION 10.02.           Effect of
Termination.

 

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

 

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

 

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

 

28

 

SECTION 10.04.           Business Continuity;
Force Majeure.

 

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

 

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

 

ARTICLE XI

GUARANTY

 

SECTION 11.01.           Guaranty.  Genworth hereby unconditionally and
irrevocably guarantees the full and prompt satisfaction, payment and
performance of all liabilities and obligations of Contract Services pursuant to
this Agreement, including Section 8.04, to any and all of the Mortgage Services
Indemnified Parties, in each case whether such liabilities or obligations are
now or hereafter existing, and any and all reasonable costs and expenses (including
fees and expenses of counsel) incurred by the Mortgage Services Indemnified
Parties in enforcing any of their respective rights under this Agreement with
respect to obligations of Contract Services and Genworth (including in
enforcing any rights under this Article XI) (the “Guaranteed Obligations”).  The guaranty set forth in this Article XI
(the “Guaranty”) is an absolute, present and continuing guaranty of
payment and performance and not a guaranty of collection only and is in no way
conditional or contingent upon any attempt to collect from Contract Services or
any other guarantor in respect of the Guaranteed Obligations.

 

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

 

29

 

Guaranteed Obligations.  The
liability of Genworth under this Guaranty shall be absolute and unconditional
irrespective of:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 11.03.           Waiver.

 

(a)                                  Genworth
hereby (i) waives (A) promptness, diligence, notice of acceptance and any and
all other notices with respect to any of the Guaranteed Obligations or this
Article XI, (B) any requirement that any of the Mortgage Services Indemnified
Parties exhaust any right or take any action against Contract Services or any
other Person, (C) the filing of any claim with a court in the event of receivership
or bankruptcy of Contract Services, (D) protest or notice of protest with
respect to nonpayment or non-performance of all or any of the Guaranteed
Obligations, and (E) all demands whatsoever (and any requirement that same be
made on any Person as a condition precedent to Genworth’s obligations
hereunder); and (ii) covenants and agrees that, this Guaranty will not be
discharged except by complete performance of the Guaranteed Obligations and any
other obligations of Genworth contained herein.

 

30

 

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

 

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

 

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

 

ARTICLE XII

GENERAL PROVISIONS

 

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

 

SECTION 12.02.           Mortgage Services Manager; Functional
Leaders.

 

(a)                                  Promptly
after the date hereof, Mortgage Services will identify an employee of Mortgage
Services or of its Affiliates (the “Mortgage Services Manager”) who will
be the transition leader and have authority to act on Mortgage Services behalf
with respect to the GEMH Services and obligations of Mortgage Services under
this Agreement.  The Mortgage Services
Manager shall be responsible for the day-to-day supervision of all Mortgage
Services employees and the Fully-Dedicated Transition Employees as well as the
Partially Allocated Transition Employees to the extent pertaining to provision
of GEMH Services. The Mortgage Services Manager will consult with the GEMH
Manager with respect to any other matters in connection with this Agreement
including without limitation with respect to the rights and obligations of the
parties under Section 12.05.  The
Mortgage Services Manager will work with the GEMH Manager to address GEMH’s
issues and the Parties’ relationship under this Agreement.

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

33

 

if to Mortgage Services:

 

GE Mortgage Services, LLC

6601 Six Forks Road

Raleigh, North Carolina  27615

Attention:  General Manager

 

with a copy to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY  10153

Attention:  Howard Chatzinoff, Esq.

 

if to GEMH Parties

 

General Electric Mortgage Holdings LLC

6601 Six Forks Road

Raleigh, North Carolina  27615

Attention:  President

 

with a copy to

 

General Electric Mortgage Holdings LLC

6601 Six Forks Road

Raleigh, North Carolina  27615

Attention:  General Counsel

 

and

 

Hunton &
Williams LLP

Riverfront Plaza, East Tower

951 E Byrd Street

Richmond, VA  23219-4074

Attention:  Allen C. Goolsby, Esq.

 

SECTION 12.08.           Taxes.

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

SECTION 12.17.           Existing Agreements.

 

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

 

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

 

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

 

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

 

[SIGNATURE PAGE FOLLOWS]

 

36

 

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

 

	
   

  	
  GE MORTGAGE SERVICES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC MORTGAGE

  
	
   

  	
  HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GE MORTGAGE CONTRACT SERVICES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENWORTH FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged
  and agreed:

  	
   

  
	
  GENERAL ELECTRIC MORTGAGE

  	
   

  
	
  INSURANCE CORPORATION,

  	
   

  
	
  solely with respect to Sections 7.02 and 12.17

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
								

 

 

Schedule A

 

GEMH Services

 

	
  GEMH Services

  	
   

  	
  Service
  Termination Date

  
	
   

  	
   

  	
   

  
	
  (a)                                  Processing for Accounts Payable,Accounts
  Receivable and Escheats Payable; Processing Related to Bank Account Acitivity
  (including Cash Wiring Services).

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (b)                                 Treasury and Controllership (including
  Transition)

  	
   

  	
  90 Days from the Effective Date

  
	
   

  	
   

  	
   

  
	
  (c)                                  Legal

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (d)                                 Information Technology and Data Processing

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (e)                                  Risk/Vendor Management

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (f)                                    Quality

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

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

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (h)                                 Finanacial Planning and Analysis for Asset
  Management

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

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

  	
   

  	
  December 31, 2005

  
	
   

  	
   

  	
   

  
	
  (j)                                     Tax Services. GEMH shall continue to
  provide global tax related services to the Mortgage Entities and to GE in a
  manner that is consistent with past practices and as required by such
  Mortgage Entities and/or GE to satisfy its global income and other tax
  compliance and reporting responsibilities, including (without limitation) the
  provision of tax data and information to support US federal and state (as
  well as, to the extent applicable, non-US) tax returns or audit examinations
  and the tax aspects or components of any financial and/or statutory
  statements or other similar reports or filings.  GEMH shall, at Mortgage Services’ sole cost and expense, retain
  a third-party provider to prepare and file, subject to prior review and
  approval by Mortgage Services, all Tax Returns to be filed in 2004 and 2005
  in respect of Mortgage Entities and their respective assets and respond to
  any audit examinations through the Service Termination Date.

  	
   

  	
  December 31, 2005

  

 

 

Schedule B — Scheduled Loans

 

	
  Count

  	
   

  	
  Loan Number

  	
   

  	
  Purchase Date

  	
   

  	
  Purchase Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Active Loans @ 4/14/04

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  279868

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  244,926.10

  	
   

  
	
  2

  	
   

  	
  286789

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  257,548.43

  	
   

  
	
  3

  	
   

  	
  4394917

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  57,527.54

  	
   

  
	
  4

  	
   

  	
  279789

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  243,321.99

  	
   

  
	
  5

  	
   

  	
  911715

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  249,162.40

  	
   

  
	
  6

  	
   

  	
  122646961

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  125,949.02

  	
   

  
	
  7

  	
   

  	
  123164469

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  152,724.86

  	
   

  
	
  8

  	
   

  	
  9909369

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  95,417.26

  	
   

  
	
  9

  	
   

  	
  123543498

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  145,231.58

  	
   

  
	
  10

  	
   

  	
  122747264

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  170,675.74

  	
   

  
	
  11

  	
   

  	
  914917

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  201,207.23

  	
   

  
	
  12

  	
   

  	
  832240

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  279,967.27

  	
   

  
	
  13

  	
   

  	
  275787

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  81,199.13

  	
   

  
	
  14

  	
   

  	
  879919

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  132,137.08

  	
   

  
	
  15

  	
   

  	
  9954831

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  112,926.32

  	
   

  
	
  16

  	
   

  	
  9882693

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  323,288.14

  	
   

  
	
  17

  	
   

  	
  123995722

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  58,362.50

  	
   

  
	
  18

  	
   

  	
  9886964

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  77,569.40

  	
   

  
	
  19

  	
   

  	
  4442049

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  118,385.06

  	
   

  
	
  20

  	
   

  	
  4424536

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  135,454.00

  	
   

  
	
  21

  	
   

  	
  262403

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  181,316.28

  	
   

  
	
  22

  	
   

  	
  851176

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  37,403.79

  	
   

  
	
  23

  	
   

  	
  123611576

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  42,089.53

  	
   

  
	
  24

  	
   

  	
  124109851

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  42,284.75

  	
   

  
	
  25

  	
   

  	
  290234

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  44,987.03

  	
   

  
	
  26

  	
   

  	
  970817

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  46,506.63

  	
   

  
	
  27

  	
   

  	
  9960554

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  46,545.93

  	
   

  
	
  28

  	
   

  	
  4431954

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  49,492.72

  	
   

  
	
  29

  	
   

  	
  124149154

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  55,121.41

  	
   

  
	
  30

  	
   

  	
  758204

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  57,780.28

  	
   

  
	
  31

  	
   

  	
  9986840

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  62,253.99

  	
   

  
	
  32

  	
   

  	
  312382

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  66,868.52

  	
   

  
	
  33

  	
   

  	
  9887388

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  67,581.24

  	
   

  
	
  34

  	
   

  	
  123182206

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  94,489.47

  	
   

  
	
  35

  	
   

  	
  124285107

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  116,192.81

  	
   

  
	
  36

  	
   

  	
  123907248

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  116,993.80

  	
   

  
	
  37

  	
   

  	
  796079

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  124,439.12

  	
   

  

 

 

	
  Count

  	
   

  	
  Loan Number

  	
   

  	
  Purchase Date

  	
   

  	
  Purchase Price

  	
   

  
	
  38

  	
   

  	
  123555989

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  124,986.07

  	
   

  
	
  39

  	
   

  	
  123506297

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  127,984.81

  	
   

  
	
  40

  	
   

  	
  8062176

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  140,004.22

  	
   

  
	
  41

  	
   

  	
  123332439

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  143,144.64

  	
   

  
	
  42

  	
   

  	
  4391845

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  158,260.36

  	
   

  
	
  43

  	
   

  	
  123771776

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  169,855.75

  	
   

  
	
  44

  	
   

  	
  743239

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  176,289.04

  	
   

  
	
  45

  	
   

  	
  124838863

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  183,791.08

  	
   

  
	
  46

  	
   

  	
  124839671

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  195,415.81

  	
   

  
	
  47

  	
   

  	
  123592776

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  196,024.29

  	
   

  
	
  48

  	
   

  	
  862688

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  208,912.44

  	
   

  
	
  49

  	
   

  	
  123562233

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  210,025.97

  	
   

  
	
  50

  	
   

  	
  124837352

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  213,955.25

  	
   

  
	
  51

  	
   

  	
  123917973

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  216,975.86

  	
   

  
	
  52

  	
   

  	
  123561508

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  217,726.96

  	
   

  
	
  53

  	
   

  	
  261169

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  246,493.15

  	
   

  
	
  54

  	
   

  	
  912251

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  252,843.69

  	
   

  
	
  55

  	
   

  	
  822878

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  378,366.20

  	
   

  
	
  56

  	
   

  	
  9908647

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  44,526.71

  	
   

  
	
  57

  	
   

  	
  124653957

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  58,674.74

  	
   

  
	
  58

  	
   

  	
  334403

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  80,100.05

  	
   

  
	
  59

  	
   

  	
  9929733

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  117,311.39

  	
   

  
	
  60

  	
   

  	
  250768629

  	
   

  	
  7/14/2003

  	
   

  	
  $

  	
  194,271.82

  	
   

  
	
  61

  	
   

  	
  250768637

  	
   

  	
  1/30/2004

  	
   

  	
  $

  	
  73,854.51

  	
   

  
	
  62

  	
   

  	
  250768645

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  134,791.13

  	
   

  
	
  63

  	
   

  	
  250768652

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  128,304.31

  	
   

  
	
  64

  	
   

  	
  250768678

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  119,731.35

  	
   

  
	
  65

  	
   

  	
  250768686

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  127,828.14

  	
   

  
	
  66

  	
   

  	
  250768694

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  341,366.25

  	
   

  
	
  67

  	
   

  	
  250768702

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  277,405.06

  	
   

  
	
  68

  	
   

  	
  250768728

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  288,555.40

  	
   

  
	
  69

  	
   

  	
  250768736

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  269,688.04

  	
   

  
	
  70

  	
   

  	
  250768744

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  88,287.10

  	
   

  
	
  71

  	
   

  	
  250768751

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  223,306.74

  	
   

  
	
  72

  	
   

  	
  250768769

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  125,284.45

  	
   

  
	
  73

  	
   

  	
  250768785

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  95,393.93

  	
   

  
	
  74

  	
   

  	
  250768793

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  95,353.69

  	
   

  
	
  75

  	
   

  	
  250768801

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  121,264.30

  	
   

  

 

 

	
  Count

  	
   

  	
  Loan Number

  	
   

  	
  Purchase Date

  	
   

  	
  Purchase Price

  	
   

  
	
  76

  	
   

  	
  250768819

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  122,370.18

  	
   

  
	
  77

  	
   

  	
  250768827

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  59,568.06

  	
   

  
	
  78

  	
   

  	
  250768835

  	
   

  	
  2/13/2004

  	
   

  	
  $

  	
  120,324.08

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  11,383,945.35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Liquidated
  Loans @4/14/04

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  79

  	
   

  	
  364501

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  298,893.75

  	
   

  
	
  80

  	
   

  	
  842767

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  130,128.21

  	
   

  
	
  81

  	
   

  	
  122761794

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  148,611.06

  	
   

  
	
  82

  	
   

  	
  123221137

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  259,896.20

  	
   

  
	
  83

  	
   

  	
  123206898

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  159,726.16

  	
   

  
	
  84

  	
   

  	
  284838

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  216,557.07

  	
   

  
	
  85

  	
   

  	
  260764

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  267,396.63

  	
   

  
	
  86

  	
   

  	
  266423

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  111,122.28

  	
   

  
	
  87

  	
   

  	
  122646425

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  127,294.60

  	
   

  
	
  88

  	
   

  	
  122646086

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  131,967.16

  	
   

  
	
  89

  	
   

  	
  773459

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  132,689.29

  	
   

  
	
  90

  	
   

  	
  741780

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  137,561.34

  	
   

  
	
  91

  	
   

  	
  122816465

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  145,853.22

  	
   

  
	
  92

  	
   

  	
  989664

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  149,325.53

  	
   

  
	
  93

  	
   

  	
  260052

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  149,443.75

  	
   

  
	
  94

  	
   

  	
  358469

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  172,243.27

  	
   

  
	
  95

  	
   

  	
  9909916

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  34,720.52

  	
   

  
	
  96

  	
   

  	
  4391856

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  39,612.60

  	
   

  
	
  97

  	
   

  	
  9988032

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  42,825.18

  	
   

  
	
  98

  	
   

  	
  9992164

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  49,807.44

  	
   

  
	
  99

  	
   

  	
  911679

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  51,879.00

  	
   

  
	
  100

  	
   

  	
  910030

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  56,814.32

  	
   

  
	
  101

  	
   

  	
  381419

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  57,928.41

  	
   

  
	
  102

  	
   

  	
  978581

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  63,968.39

  	
   

  
	
  103

  	
   

  	
  123506594

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  66,726.02

  	
   

  
	
  104

  	
   

  	
  753713

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  67,366.90

  	
   

  
	
  105

  	
   

  	
  123403164

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  68,392.37

  	
   

  
	
  106

  	
   

  	
  762893

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  69,876.55

  	
   

  
	
  107

  	
   

  	
  9986530

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  73,557.38

  	
   

  
	
  108

  	
   

  	
  851483

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  74,319.53

  	
   

  
	
  109

  	
   

  	
  9963939

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  74,712.26

  	
   

  
	
  110

  	
   

  	
  821076

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  81,466.58

  	
   

  

 

 

	
  Count

  	
   

  	
  Loan Number

  	
   

  	
  Purchase Date

  	
   

  	
  Purchase Price

  	
   

  
	
  111

  	
   

  	
  8266702

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  84,877.62

  	
   

  
	
  112

  	
   

  	
  879788

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  87,696.80

  	
   

  
	
  113

  	
   

  	
  9923895

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  89,655.14

  	
   

  
	
  114

  	
   

  	
  9991332

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  105,132.93

  	
   

  
	
  115

  	
   

  	
  885322

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  113,263.77

  	
   

  
	
  116

  	
   

  	
  9900767

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  119,037.20

  	
   

  
	
  117

  	
   

  	
  8229650

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  125,875.19

  	
   

  
	
  118

  	
   

  	
  283189

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  127,184.17

  	
   

  
	
  119

  	
   

  	
  123611295

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  142,024.06

  	
   

  
	
  120

  	
   

  	
  9967099

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  144,723.69

  	
   

  
	
  121

  	
   

  	
  744035

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  145,199.03

  	
   

  
	
  122

  	
   

  	
  122645781

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  150,427.50

  	
   

  
	
  123

  	
   

  	
  338534

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  182,712.02

  	
   

  
	
  124

  	
   

  	
  123802597

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  188,978.97

  	
   

  
	
  125

  	
   

  	
  124138827

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  190,156.29

  	
   

  
	
  126

  	
   

  	
  123561904

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  222,627.54

  	
   

  
	
  127

  	
   

  	
  977486

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  224,358.10

  	
   

  
	
  128

  	
   

  	
  9987590

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  258,581.88

  	
   

  
	
  129

  	
   

  	
  296352

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  298,674.01

  	
   

  
	
  130

  	
   

  	
  763180

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  439,448.00

  	
   

  
	
  131

  	
   

  	
  3678232

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  55,930.36

  	
   

  
	
  132

  	
   

  	
  804747

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  62,414.99

  	
   

  
	
  133

  	
   

  	
  755018

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  106,286.07

  	
   

  
	
  134

  	
   

  	
  8281206

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  136,104.06

  	
   

  
	
  135

  	
   

  	
  760949

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  267,237.34

  	
   

  
	
  136

  	
   

  	
  122815863

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  128,427.41

  	
   

  
	
  137

  	
   

  	
  123338188

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  255,351.01

  	
   

  
	
  138

  	
   

  	
  3740032

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  267,248.30

  	
   

  
	
  139

  	
   

  	
  123798043

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  188,978.97

  	
   

  
	
  140

  	
   

  	
  124311234

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  202,977.42

  	
   

  
	
  141

  	
   

  	
  4394898

  	
   

  	
  05/01/03

  	
   

  	
  $

  	
  140,114.02

  	
   

  
	
  142

  	
   

  	
  250768777

  	
   

  	
  1/15/2004

  	
   

  	
  $

  	
  174,726.77

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  9,139,113.59

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Grand Total

  	
   

  	
   

  	
   

  	
  $

  	
  20,523,058.94

  	
   

  

 

 

Schedule C-1

 

Fully Dedicated Transition Employees

 

	
  EMPLOYEE NAME

  	
   

  	
  FUNCTION

  	
   

  	
  $ (000’S)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J. Santucci

  	
   

  	
  Legal

  	
   

  	
  $

  	
  70

  	
   

  
	
  S. Netter

  	
   

  	
  Risk/Vendor Management

  	
   

  	
  $

  	
  70

  	
   

  
	
  C. Smith

  	
   

  	
  Risk/Vendor Management

  	
   

  	
  $

  	
  70

  	
   

  
	
  M. Riggan

  	
   

  	
  Risk/Vendor Management

  	
   

  	
  $

  	
  70

  	
   

  
	
  A. James

  	
   

  	
  Loss Mitigation

  	
   

  	
  $

  	
  70

  	
   

  
	
  S. Whitham

  	
   

  	
  Financial Planning and Analysis for Asset Management

  	
   

  	
  $

  	
  70

  	
   

  
	
  R. Conyers

  	
   

  	
  Financial Planning and Analysis for Asset Management

  	
   

  	
  $

  	
  70

  	
   

  

 

 

Schedule C-2

 

Partially Allocated Transition Employees

 

	
  EMPLOYEE NAME

  	
   

  	
  FUNCTION

  	
   

  	
  ALLOCATED%(FTE)

  	
   

  	
  $ (000’S)

  	
   

  
	
  M. Frye

  	
   

  	
  Finance

  	
   

  	
  10

  	
  %

  	
  $

  	
  7

  	
   

  
	
  M. Bonello

  	
   

  	
  Treasury and Controllership (including Transition).

  	
   

  	
  40

  	
  %

  	
  $

  	
  28

  	
   

  
	
  Processing for Accounts
  Payable, Accounts Receivable and Escheats Payable; Processing Related to Bank
  Account Acitivity (including Cash Wiring Services).

  	
   

  	
  Finance

  	
   

  	
  100

  	
  %

  	
  $

  	
  70

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  T. Kleissler

  	
   

  	
  Legal

  	
   

  	
  25

  	
  %

  	
  $

  	
  17

  	
   

  
	
  P. Holoman

  	
   

  	
  Legal

  	
   

  	
  60

  	
  %

  	
  $

  	
  42

  	
   

  
	
  D. Dodd

  	
   

  	
  Legal

  	
   

  	
  10

  	
  %

  	
  $

  	
  7

  	
   

  
	
  A. Goldberg

  	
   

  	
  Loss Mitigation

  	
   

  	
  10

  	
  %

  	
  $

  	
  7

  	
   

  
	
  N. Fitzpatrick

  	
   

  	
  Loss Mitigation

  	
   

  	
  10

  	
  %

  	
  $

  	
  7

  	
   

  
	
  C. Day

  	
   

  	
  Loss Mitigation

  	
   

  	
  70

  	
  %

  	
  $

  	
  49

  	
   

  
	
  K. Reed

  	
   

  	
  Loss Mitigation

  	
   

  	
  70

  	
  %

  	
  $

  	
  49

  	
   

  
	
  R. Bradley

  	
   

  	
  Loss Mitigation

  	
   

  	
  80

  	
  %

  	
  $

  	
  56

  	
   

  
	
  D. Caudill

  	
   

  	
  Loss Mitigation

  	
   

  	
  15

  	
  %

  	
  $

  	
  10

  	
   

  
	
  R. Hitch

  	
   

  	
  Loss Mitigation

  	
   

  	
  75

  	
  %

  	
  $

  	
  52

  	
   

  
	
  B. Sobczek

  	
   

  	
  Loss Mitigation

  	
   

  	
  40

  	
  %

  	
  $

  	
  28

  	
   

  
	
  E. Townsend

  	
   

  	
  Loss Mitigation

  	
   

  	
  75

  	
  %

  	
  $

  	
  52

  	
   

  
	
  K. Wheeler

  	
   

  	
  Loss Mitigation

  	
   

  	
  75

  	
  %

  	
  $

  	
  52

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J. Eikelberner

  	
   

  	
  Financial Planning and Analysis for Asset Management

  	
   

  	
  5

  	
  %

  	
  $

  	
  3

  	
   

  
	
  R. Steineger

  	
   

  	
  Tax

  	
   

  	
  20

  	
  %

  	
  $

  	
  14

  	
   

  
	
  Quality Team

  	
   

  	
  Quality

  	
   

  	
  50

  	
  %

  	
  $

  	
  35Exhibit
10.28

 

 

DERIVATIVES MANAGEMENT SERVICES
AGREEMENT

 

 

AMONG

 

 

GE LIFE AND ANNUITY ASSURANCE
COMPANY,

 

FEDERAL HOME LIFE INSURANCE COMPANY,

 

FIRST COLONY LIFE INSURANCE COMPANY,

 

GENERAL ELECTRIC CAPITAL ASSURANCE
COMPANY,

 

AND

 

GENWORTH FINANCIAL, INC.

 

AND

 

GNA CORPORATION

 

AND

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

 

DATED AS OF
             ,
2004

 

 

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

 

RECITALS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

ARTICLE I

DEFINITIONS AND USAGE

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE II

SERVICES

 

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

 

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

 

3

 

to such Contract.

 

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

 

2.4                               Covenants
of GECC and GNA.

 

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

 

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

 

2.5                               Recordkeeping
and Reports; Review and Inspection.

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

5

 

ARTICLE III

TERM AND TERMINATION

 

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

 

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

 

ARTICLE IV

COMPENSATION

 

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

 

ARTICLE V

CONFIDENTIALITY

 

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

 

6

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

6.1          By
Client.  Each
Client represents and warrants that:

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE VII

MISCELLANEOUS

 

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

 

7

 

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

 

7.2                               Indemnification.

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

If to GECC:

 

General Counsel —
Treasury

General Electric Capital
Corporation

201 High Ridge Road

Stamford, Connecticut
06927-9400

Facsimile:  (203) 357-3490

 

If to GNA:

 

General Counsel

GNA Corporation

6620 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 662-2414

 

If to GENWORTH:

 

General Counsel

Genworth Financial, Inc.

6620 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 662-2414

 

If to Client #1:

 

General Counsel

GE Life and Annuity
Assurance Company

6610 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 281-6005

 

9

 

If to Client #2:

 

General Counsel

Federal Home Life
Insurance Company

700 Main Street

Lynchburg, Virginia 24504

Facsimile:  (434) 948-5819

 

If to Client #3:

 

General Counsel

First Colony Life
Insurance Company

700 Main Street

Lynchburg, Virginia 24504

Facsimile:  (434) 948-5819

 

If to Client #4

 

General Counsel

General Electric Capital
Assurance Company

6620 West Broad Street

Richmond, Virginia 23230

Facsimile:  (804) 662-2414

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

 

[THE REST OF THIS
PAGE IS LEFT BLANK INTENTIONALLY]

 

11

 

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

 

 

	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENWORTH FINANCIAL,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GNA CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC
  CAPITAL ASSURANCE

  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GE LIFE AND ANNUITY
  ASSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

12

 

	
   

  	
  FEDERAL HOME LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST COLONY LIFE
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

13

 

EXHIBIT 1

 

ADOPTION AGREEMENT

 

(DERIVATIVES MANAGEMENT SERVICES
AGREEMENT)

 

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

 

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

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Name and Address of
  Corporation]

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  Date:

  
				

 

14

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