Document:

Exhibit 10.1

 

AGREEMENT OF
PURCHASE AND SALE

 

AND JOINT
ESCROW INSTRUCTIONS

 

1.             Identification
and Parties.  This Agreement of
Purchase and Sale and Joint Escrow Instructions (this “Agreement”), dated for
identification purposes only May 28, 2008, is made and entered into by and
between GRE Warner Califa LLC, a Delaware limited liability company (“Seller”),
and Zenith Insurance Company, a California corporation (“Buyer”).  Seller and Buyer are sometimes referred to
herein collectively as the “parties,” and individually as a “party.”

 

2.             Recitals.

 

2.1         Seller is the owner of the “Property” (defined below) which consists
principally of an office building located at 21155 Califa Street in Woodland
Hills (City of Los Angeles), County of Los Angeles, State of California.

 

2.2         A portion of the Property which consists of approximately 8,667 square
feet (the “Zenith Premises”) is currently leased to Buyer pursuant to that
certain Office Lease dated September 23, 2003 between Buyer, as tenant,
and Kearny Warner Center, LLC, a Delaware limited liability company (as
predecessor-in-interest to Seller), as landlord (the “Zenith Lease”).

 

2.3         Seller desires to sell the Property to Buyer, and Buyer desires to
purchase the Property from Seller, upon and subject to the terms and conditions
set forth below.

 

NOW,
THEREFORE, in consideration of the mutual undertakings of the parties hereto,
it is hereby agreed as follows:

 

3.             Agreement
of Purchase and Sale of Property.  Seller hereby agrees to sell the Property to
Buyer, and Buyer hereby agrees to purchase the Property from Seller, upon and
subject to the terms and conditions set forth below.

 

3.1         As used herein, the “Property” means, collectively, all right, title
and interest of Seller in and to (a) that certain land described in Exhibit “A”,
together with all easements, rights-of-way, and appurtenances benefiting such
land (the “Land”), (b) all improvements, structures and fixtures now or on
the “Closing Date” (as hereinafter defined) located upon the Land (the “Improvements”),
(c) all tangible personal property owned by Seller and now or on the
Closing Date located on and used in connection with the Land and Improvements
(the “Personal Property”), (d) the “Existing Leases” (as hereinafter
defined) and all “Service Contracts” (as hereinafter defined (but only to the
extent Seller’s obligations thereunder are expressly assumed by Buyer pursuant
to this Agreement), and (e) to the extent owned by Seller and assignable: (W) governmental
permits, licenses and approvals, architectural and improvement plans,
warranties and guarantees that Seller has received in connection with any work
or services performed with respect to, or equipment installed in, the
Improvements or the Land, (X) tenant lists, (Y) advertising material,
and (Z) telephone exchange numbers and other intangible personal property
related to the Land, Improvements or Personal Property (the “Intangible
Property”).

 

 

4.             Purchase
Price; Manner of Payment.

 

4.1         The purchase price (the “Purchase Price”) for the Property shall be
Twelve Million Five Hundred Thousand Dollars ($12,500,000), which amount shall
be payable as provided in Section 4.2 below.

 

4.2         The Purchase Price shall be payable in cash at Closing.  Buyer shall deliver the funds on account of
the Purchase Price as follows:

 

4.2(a)      By Buyer delivering to Escrow Holder (as defined below), concurrently
with the delivery of this Agreement to Escrow Holder pursuant to Section 5.1
below, immediately available funds in the amount of Three Hundred Seventy-Five
Thousand Dollars ($375,000) (the “Deposit”). 
In the event that Buyer fails to timely deposit the Deposit with the
Escrow Holder, this Agreement shall be of no force and effect.

 

4.2(b)      By Buyer delivering to Escrow Holder at least one business day prior to
the Closing Date (as defined below), immediately available funds in the amount
of the Purchase Price, as adjusted by the application of the Deposit and by the
prorations and credits specified herein.

 

4.3          Escrow Holder shall deposit all monies deposited with it in an interest-bearing
money-market account in a federally insured financial institution approved by
Buyer.  Interest on all monies deposited
in Escrow prior to the Close of Escrow shall become part of the Deposit.  The Deposit shall be refundable to Buyer in
all events prior to the Contingency Date. 
After Buyer’s approval of Buyer’s Contingencies set forth in Article 8
below, the Deposit shall be nonrefundable to Buyer and paid to Seller in the
event of any termination of this Agreement other than as expressly provided in
Sections 6.3, 10.2, 12.1(e), 12.2, 13.1 and 24. 
If the Seller shall be entitled to retain Buyer’s Deposit as provided
above, such retained deposit shall be liquidated damages to Seller in
accordance with Article 14 below.

 

4.4          At the Close of Escrow, all monies, including interest, held by Escrow
Holder shall be applied against the Purchase Price.

 

5.             Escrow;
Opening Date; Close of Escrow.

 

5.1           An escrow (the “Escrow”) to consummate the
sale and purchase of the Property shall be opened with North American Title
Insurance Company (“Escrow Holder”), whose address is 21800
Burbank Blvd. Suite 100, Woodland Hills, CA 91367,
Attention: Rick Drumm.  Within two (2) days
after the Date of Agreement (as defined below), the parties shall deposit with
Escrow Holder a copy of this Agreement which, in addition to constituting the
agreement of the parties, shall serve as escrow instructions to Escrow
Holder.  The parties shall execute such
additional escrow instructions as Escrow Holder may require to clarify its
duties hereunder, provided that such additional instructions do not impose any
additional obligations on the parties. 
Such further instructions shall not modify the provisions of this
Agreement unless otherwise expressly set forth therein and any inconsistency
between the provisions of such additional instructions and the provisions of
this Agreement shall be resolved in favor of this Agreement.

 

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5.2         As used herein (i) the term “Opening of Escrow” means the date
that the parties shall have delivered to escrow their executed counterparts of
this Agreement; (ii) the term “Close of Escrow” means the recording of the
Deed (as defined below) in the Official Records of Los Angeles County,
California or such earlier date that both parties authorize Escrow Holder to
record the Deed in the Official Records of Los Angeles County, California and
to disburse all funds pursuant to this Agreement; (iii) the term “Closing
Date” means the date of the Close of Escrow; and (iv) the term “Date of
Agreement” means the date upon which Buyer and Seller have executed this
Agreement, as reflected on the Signature Page. 
The Close of Escrow shall occur on July 8, 2008.

 

6.             Representations
and Warranties.

 

6.1         Buyer’s Representations and Warranties. 
Buyer hereby makes the following representations and warranties to
Seller:

 

6.1(a)     Buyer’s Authority.  Buyer has the right, power, legal capacity
and authority to execute, deliver and perform this Agreement.

 

6.1(b)     Due Authorization.  All of the documents to be executed by Buyer
which are to be delivered to Seller or the Escrow Holder will be duly
authorized, executed and delivered by Buyer, and will be the legal, valid and
binding obligations of Buyer enforceable against Buyer in accordance with their
respective terms, and will not violate any provisions of any agreement to which
Buyer is a party, or to which Buyer is subject.

 

6.1(c)     Consents.  All consents required in order for Buyer to
execute, deliver and perform this Agreement have been obtained.

 

6.1(d)     Conflicts and Pending Action.  There is no agreement to which
Buyer is a party or to Buyer’s knowledge binding on Buyer which is in conflict
with this Agreement.  There is no action
or proceeding pending or, to Buyer’s knowledge, threatened against Buyer which
challenges or impairs Buyer’s ability to execute or perform its obligations
under this Agreement.

 

6.1(e)     OFAC.  Neither Buyer nor any of its affiliates (i) is
listed on any Government Lists, (ii) has been determined by competent
authority to be subject to the prohibitions contained in Presidential Executive
Order No. 13244 (September 23, 2001) or in any enabling or
implementing legislation or other Presidential Executive Orders in respect
thereof, (iii) is a person or entity who has been previously indicted for
or convicted of any felony involving a crime or crimes of moral turpitude or
for any violation of the Patriot Act, or (iv) is currently under
investigation by any governmental authority for alleged criminal activity.  Buyer has no reason to believe that this
transaction, including, without limitation, the source of its funds, would
result in a violation by Buyer or Seller of the Patriot Act, OFAC Laws and
Regulations, or any other anti-terrorism or anti-money laundering laws or
regulations, including, without limitation, the Bank Secrecy Act, as amended,
or the Money Laundering Control Act of 1986, as amended.

 

6.2         Seller’s Representations and Warranties. 
Seller hereby makes the following representations and warranties to
Buyer:

 

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6.2(a)     Seller’s Authority.  Seller is a limited liability company duly
organized and validly existing under the laws of the State of Delaware.  Seller has the right, power, legal capacity
and authority to execute, deliver and perform this Agreement.

 

6.2(b)     Due Authorization.  All of the documents to be executed by Seller
which are to be delivered to Buyer or the Escrow Holder will be duly
authorized, executed and delivered by Seller, and will be the legal, valid and
binding obligations of Seller enforceable against Seller in accordance with
their respective terms, and will not violate any provisions of any agreement to
which Seller is a party, or to which Seller or the Property is subject.

 

6.2(c)     Consents.  All consents required in order for Seller to
execute, deliver and perform this Agreement have been obtained or will be
obtained prior to the Close of Escrow.

 

6.2(d)     Tenant Leases; Rent Roll; Income and Expense Statements.  The
rent roll (“Rent Roll”) to be delivered to Buyer pursuant to the provisions of Section 10.4
below includes information regarding all of the tenant leases except the Zenith
Lease (collectively, the “Existing Leases”) which affect the Property.  To Seller’s knowledge, except as set forth in
the Due Diligence Materials and/or in any of the Estoppel Certificates (defined
herein) delivered to Buyer, the Rent Roll to be delivered to Buyer will be
true, complete, and correct in all material respects as of its date.  To Seller’s knowledge, except as set forth in
the Due Diligence Materials, Rent Roll and/or in any of the Estoppel
Certificates (defined herein) delivered to Buyer, the Existing Leases are in
full force and effect, and no monetary default by Seller as landlord or by the
tenants under the Existing Leases exist. 
The income and expense statements to be delivered pursuant to Section 10.4
were prepared by or for Seller in the ordinary course of its business in the
same manner as it prepares or obtains such reports for its other properties and
are the income and expense statements used and relied upon by Seller in
connection with its operation of the Property. 
Other than Permitted Exceptions, there are no leases, licenses or other
agreements permitting any person or entity to occupy any portion of the
Property that will be binding on the Property following Close of Escrow.

 

6.2(e)     OFAC.  Neither Seller nor any of its affiliates (i) is
listed on any Government Lists, (ii) has been determined by competent
authority to be subject to the prohibitions contained in Presidential Executive
Order No. 13244 (September 23, 2001) or in any enabling or
implementing legislation or other Presidential Executive Orders in respect
thereof, (iii) is a person or entity who has been previously indicted for
or convicted of any felony involving a crime or crimes of moral turpitude or
for any violation of the Patriot Act, or (iv) is currently under
investigation by any governmental authority for alleged criminal activity.  Seller has no reason to believe that this
transaction, including, without limitation, the source of its funds, would
result in a violation by Buyer or Seller of the Patriot Act, OFAC Laws and
Regulations, or any other anti-terrorism or anti-money laundering laws or
regulations, including, without limitation, the Bank Secrecy Act, as amended,
or the Money Laundering Control Act of 1986, as amended.

 

6.2(f)      Absence of Claims and Actions.  There are no pending, or to
Seller’s knowledge, threatened legal proceedings or actions of any kind or
character affecting Seller’s ability to perform its obligations under this
Agreement.

 

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6.2(g)     No Government Proceedings.  There are no existing or, to
Seller’s knowledge, pending or threatened 
condemnation proceedings affecting the Property or any part thereof.

 

6.2(h)     Compliance with Laws and Requirements; Hazardous Materials. 
Seller has not received any written notice of any violation of (i) any
federal, state or local law, statute, ordinance, rule or regulation
(including, without limitation, those relating to Hazardous Materials (as
defined below)) (collectively, “Laws”) , except for any such matters which may
have been previously cured by Seller; or (ii) any requirement applicable
to the Property, including, without limitation, requirements imposed under any
recorded covenants, conditions, restrictions, easements or other rights
affecting the Property (collectively, “Requirements”), except for any such
matters which may have been previously cured by Seller.  Except as set forth in the Due Diligence
Materials, to Seller’s knowledge, Seller has not used, generated, manufactured,
stored or disposed of on, under or about the Property or transported to or from
the Property any Hazardous Materials in violation of applicable Laws.  Except as set forth in the Due Diligence
Materials, to Seller’s knowledge, no Hazardous Materials have been or are
located on, under or about the Property in violation of applicable Laws. As
used herein, the term “Hazardous Materials” means any flammable, explosive, or
radioactive materials, hazardous wastes or substances, toxic wastes or
substances and other related materials, including, without limitation, any
substances defined as or included in the definition of “hazardous substances”, “hazardous
wastes”, “hazardous materials” or “toxic substances” under any applicable Laws
or Requirements.

 

6.2(i)      Contracts. The list
of Service Contracts provided to Buyer as part of the Due Diligence Materials
shall be true, correct and complete in all material respects.  Seller has not received any written notice of
termination or monetary default under the Service Contracts which remains
uncured.

 

6.3           Buyer’s Rights. 
Seller shall use good faith efforts to provide Buyer with any
information it obtains that would render any of the representations or
warranties contained herein untrue or incorrect in any material respect.  Buyer’s sole remedy in the event of a breach
of any of the foregoing representations and warranties discovered prior to Close
of Escrow shall be to elect either to terminate this Agreement and obtain the
prompt return of Buyer’s Deposit, following which neither party shall have any
further obligations hereunder, or to proceed to Close of Escrow, waiving any
claim against Seller and releasing Seller from any liability or obligations in
connection therewith.

 

6.4           Warranties Survive Closing; Cap on Seller’s
Liability.  The representations and warranties made in
this Agreement shall not merge into any instrument or conveyance delivered at
the Close of Escrow but shall survive for a period of one (1) year after
the Closing Date; provided, however, that any action, suit or proceeding with
respect to the truth, accuracy or completeness of such representations and
warranties shall be actionable or enforceable if and only if:  (i) notice of such claim is given to the
party which allegedly made such misrepresentation or breached such covenant,
obligation, warranty or agreement within one (1) year after the Closing
Date; and (ii) the amount of damages or losses as a result of such claim
suffered or sustained by the party making such claim exceeds $50,000.00.  Seller’s maximum aggregate liability for
damages arising from all breaches of the foregoing representations 

 

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discovered after Close of
Escrow shall be limited to Buyer’s actual damages (and specifically excluding
consequential, punitive and exemplary damages) not to exceed an amount equal to
the Deposit made by Buyer pursuant to this Agreement.

 

6.5         Seller’s Knowledge.  “Seller’s knowledge,” as used in this
Agreement means the current actual knowledge of Jeff DuChateau of Seller,
without any duty of inquiry or investigation.

 

7.             As-Is
Conveyance; Environmental Release.

 

7.1         AS-IS CONVEYANCE. 
BUYER HEREBY ACKNOWLEDGES THAT IT OCCUPIES A PORTION OF THE PROPERTY
PURSUANT TO THE ZENITH LEASE AND IS FAMILIAR WITH THE PROPERTY, ITS OPERATIONS
AND TENANTS.  BUYER HEREBY AGREES THAT,
UPON THE CLOSE OF ESCROW, BUYER SHALL CONCLUSIVELY BE DEEMED TO HAVE ACCEPTED
THE PROPERTY WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE
WHATSOEVER EXCEPT FOR SELLER’S REPRESENTATIONS AND WARRANTIES IN SECTION 6.2
OF THIS AGREEMENT (“SELLER’S WARRANTIES”). 
AS A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, BUYER
AGREES TO ACCEPT THE PROPERTY ON AN “AS IS” AND “WHERE IS” BASIS, WITH ALL
FAULTS, AND WITHOUT ANY REPRESENTATION OR WARRANTY, ALL OF WHICH SELLER HEREBY
DISCLAIMS, EXCEPT FOR SELLER’S WARRANTIES. 
EXCEPT FOR SELLER’S WARRANTIES, NO WARRANTY OR REPRESENTATION IS MADE BY
SELLER AS TO FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY, DESIGN,
QUALITY, CONDITION, OPERATION OR INCOME, COMPLIANCE WITH DRAWINGS OR
SPECIFICATIONS, ABSENCE OF DEFECTS, ABSENCE OF HAZARDOUS OR TOXIC SUBSTANCES, ABSENCE
OF FAULTS, FLOODING, OR COMPLIANCE WITH LAWS AND REGULATIONS INCLUDING, WITHOUT
LIMITATION, THOSE RELATING TO HEALTH, SAFETY, AND THE ENVIRONMENT.  BUYER ACKNOWLEDGES THAT BUYER HAS ENTERED
INTO THIS AGREEMENT WITH THE INTENTION OF MAKING AND RELYING UPON ITS OWN
KNOWLEDGE OF AND INVESTIGATION OF THE PHYSICAL, ENVIRONMENTAL, ECONOMIC USE,
COMPLIANCE, AND LEGAL CONDITION OF THE PROPERTY AND THAT, OTHER THAN THE SELLER’S
WARRANTIES, BUYER IS NOT NOW RELYING, AND WILL NOT LATER RELY, UPON ANY
REPRESENTATIONS AND WARRANTIES MADE BY SELLER OR ANYONE ACTING OR CLAIMING TO
ACT, BY, THROUGH OR UNDER OR ON SELLER’S BEHALF CONCERNING THE PROPERTY.  THE PROVISIONS OF THIS SECTION 7 SHALL
SURVIVE INDEFINITELY THE CLOSE OF ESCROW OR TERMINATION OF THIS AGREEMENT AND
SHALL NOT BE MERGED INTO THE DEED OR ANY OTHER CLOSING DOCUMENTS.

 

7.2         ENVIRONMENTAL RELEASE. 
BUYER, FOR ITSELF AND ANY ENTITY AFFILIATED WITH BUYER, WAIVES AND
RELEASES SELLER AND SELLER’S AFFILIATES FROM AND AGAINST ANY LIABILITY OR CLAIM
RELATED TO THE PROPERTY ARISING UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION, AND LIABILITY ACT OF 1980, THE SUPERFUND AMENDMENTS AND
REAUTHORIZATION ACT OF 1986, THE RESOURCE CONSERVATION AND

 

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RECOVERY ACT, AND THE TOXIC SUBSTANCE CONTROL ACT, ALL AS AMENDED, OR
ANY OTHER CAUSE OF ACTION BASED ON ANY OTHER STATE, LOCAL, OR FEDERAL
ENVIRONMENTAL LAW, RULE OR REGULATION; PROVIDED, HOWEVER, THAT IF BUYER IS
NAMED AS A RESPONSIBLE PARTY IN ANY LITIGATION BROUGHT BY A PARTY UNRELATED TO
BUYER AND SELLER IS NOT SO NAMED, THEN BUYER MAY INTERPLEAD SELLER IN SUCH
ACTION.  “Seller’s Affiliates”
means (a) any entity that directly or indirectly controls, is controlled
by or is under common control with the Seller, or (b) any entity at least
a majority of whose economic interest is owned by Seller; and the term “control”
means the power to direct the management of such entity through voting rights,
ownership or contractual obligations. 
The provisions of this section shall survive the Close of Escrow or any
earlier termination of this Agreement.

 

7.3       UNKNOWN CLAIMS.  BUYER HEREBY ACKNOWLEDGES THAT IT HAS READ
AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542
(“SECTION 1542”), WHICH IS SET FORTH BELOW:

 

“A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR
HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

BY
INITIALING BELOW, BUYER HEREBY WAIVES THE PROVISIONS OF SECTION 1542 IN
CONNECTION WITH THE MATTERS WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND
RELEASES IN SECTIONS 7.1 AND 7.2:

 

	
   

  	
  MEJ                                        JDM

  	
   

  
	
   

  	
  Buyer’s
  Initials

  	
   

  

 

The foregoing waivers and releases by Buyer
shall survive the Close of Escrow and the recordation of the Deed and shall not
be deemed merged into the Deed upon its recordation.

 

8.             Buyer’s
Contingencies and Approval.

 

8.1        Buyer’s Contingencies.  Notwithstanding any provision of this
Agreement to the contrary, Buyer’s obligation to purchase the Property is
subject to Buyer’s approval of the following contingencies on or before the
Contingency Date, which approval may be given or withheld in the sole and
absolute discretion of Buyer:

 

8.1(a)     Inspections.  Buyer’s physical inspection of the Property
by the date which is June 26, 2008 (the “Contingency Date”).  Buyer’s physical inspection of the Property
may include, at Buyer’s sole risk and expense, without limitation, inspections
regarding the geological condition, existence of active pest infestation or
infection, condition of general structure, roof, heating, air conditioning,
plumbing, sewer or septic system, electrical system, mechanical system,
foundation, location of property lines, size and/or square footage of the
improvements, water and utility restrictions, and the existence of Hazardous
Materials.  Buyer and Buyer’s agents and
representatives shall have the right at reasonable times and upon at least

 

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forty-eight (48) hours’ advance written notice to Seller to enter upon
the Property for the purpose of making any inspections and tests contemplated
by this Section 8.1(a).  Seller or
Seller’s agent shall have the right to accompany Buyer during any activities
performed by Buyer on the Property. 
Buyer shall promptly repair any damage to the Property resulting from
such entry to the same condition existing prior to such entry.  Buyer shall not contact any tenant of the
Property, any employees of Seller, any governmental agency or instrumentality
(except that Buyer may, without Seller’s consent, contact municipal authorities
to confirm the zoning of the Property), or any other third person regarding the
Property without the prior written consent of Seller.  Upon at least 48 hours prior written notice
and request from Buyer, Seller shall notify tenants of the Property and permit
Buyer to view occupied space, subject to the rights of tenants under their
leases and except to the extent specifically prohibited in such tenants’
leases.  At Seller’s request, Buyer shall
provide Seller with a copy of the results of any tests and inspections made by
Buyer, excluding only market and economic feasibility studies.  All such inspections and tests and any other
work conducted or materials furnished with respect to the Property by or for
Buyer shall be paid for by Buyer as and when due.  Buyer’s physical inspection of the Property
is subject to the indemnity provisions set forth in Section 16.1(a) below.   Prior to conducting any testing and prior to
Buyer’s entry onto the Property (other than in its capacity as tenant under the
Zenith Lease), Buyer or its testing consultants, shall deliver to Seller a
certificate of insurance naming Seller as additional insured evidencing
commercial general liability and property damage insurance with limits of not
less than One Million Dollars ($1,000,000) in the aggregate for liability
coverage and not less than Five Hundred Thousand Dollars ($500,000) in the
aggregate for property damage. 
Notwithstanding the foregoing, Buyer shall not be permitted to undertake
any invasive or destructive inspection or sampling of soils, water, air or other
materials, including without limitation construction materials, for analytical
testing, including, without limitation, a “Phase II” environmental assessment
without in each instance first obtaining Seller’s prior written consent
thereto, which may be withheld in its sole and absolute discretion, and if
consented to by Seller, the proposed scope of work and the party who will
perform the work shall be subject to Seller’s review and approval.  Notwithstanding anything herein to the
contrary, nothing in this Section 8.1(a) shall be construed to (i) restrict
Buyer in its ordinary course of business as tenant under the Zenith Lease from
using and accessing the Property in accordance with the terms of the Zenith
Lease or (ii) amend, modify or alter the Zenith Lease.

 

8.1(b)     Title.  A current preliminary title report for the
Property (the “PTR”) no later than the Contingency Date.  Within five (5) days after the Opening
of Escrow, Escrow Holder shall cause North American Title Insurance Company
(the “Title Company”) to deliver to Buyer the PTR along with copies of all
items identified as exceptions in the PTR. 
The specific exceptions (exceptions that are not part of the promulgated
title insurance form) in the PTR that the Title Company has not agreed to
insure over or remove prior to the Contingency Date and that Seller is not
required to remove as provided below; all matters that would be disclosed by an
accurate survey; real estate taxes not yet due and payable; tenants in
possession as tenants only under the Zenith Lease and the Existing Leases; and
matters caused or suffered by Buyer are collectively referred to herein as the “Permitted
Exceptions.”  Buyer shall have until six (6) business
days prior to the Contingency Date (the “Interim Date”) to provide written
notice (the “Title Notice”) to Seller and Escrow Holder of any matters shown by
the PTR which are not satisfactory to Buyer. 
If Seller and Escrow Holder have not received written notice from Buyer
by the Interim Date, that shall be deemed Buyer’s unconditional approval of the
condition of title 

 

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to the Property.  Except as
provided hereinbelow, Seller may have until one (1) business day prior to
the Contingency Date to make such arrangements or take such steps as the
parties shall mutually agree to satisfy Buyer’s objections(s) in the Title
Notice; provided that except with respect to Monetary Liens (defined below),
Seller shall have no obligation to cure or agree to cure any title
objections.  If Seller does not deliver
Seller’s response prior to the Contingency Date, Seller shall be deemed to have
elected not to remove or otherwise cure any exceptions disapproved by
Buyer.  If Seller elects not to remove or
otherwise cure an exception disapproved in Buyer’s Title Notice, Buyer shall
have until the Contingency Date to notify Seller and Escrow Holder, in writing,
of Buyer’s election to either waive the objection or terminate this Agreement
in accordance with Section 8.2 below. 
If Seller and Escrow Holder have not received written notice from Buyer
by the Contingency Date, that shall be deemed Buyer’s disapproval of Seller’s
Response.  Notwithstanding any provision
of this Section 8.1(b) to the contrary, Seller shall, at Seller’s
sole cost and expense, cause all liens secured by deeds of trust securing loans
made to Seller or expressly assumed by Seller, mechanics’ liens relating to
work authorized by Seller, and delinquent taxes (herein “Monetary Liens”)
created or expressly assumed by Seller to be removed as exceptions to title to
the Property on or before the Close of Escrow.

 

8.1(c)     Due Diligence Materials  The Due Diligence Materials (as defined in Section 10.4
below) and any and all other aspects, features and conditions of or related to
the Property that Buyer determines, in Buyer’s sole and absolute discretion,
are necessary or advisable by the Contingency Date.  If Buyer disapproves any Service Contracts
which are terminable as of the Close of Escrow without payment of any
termination fees or penalty, then Seller shall cause such Service Contracts to
be terminated as of the Close of Escrow, and this Agreement shall remain in
full force and effect.

 

8.2           Buyer Approval. 
Buyer shall notify Escrow Holder and Seller in writing whether or not
Buyer has approved or waived the contingencies set forth in Article 8 (the
“Continuation Notice”) on or before the Contingency Date.  BUYER’S FAILURE TO DELIVER TO ESCROW HOLDER
AND SELLER A CONTINUATION NOTICE APPROVING ALL OF SAID CONTINGENCIES WITHIN THE
TIME PROVIDED THEREFOR SHALL BE DEEMED BUYER’S DISAPPROVAL OF SUCH
CONTINGENCIES, then this Agreement shall terminate, and the Deposit shall be
returned to Buyer; and neither party shall have any further obligations under
this Agreement except for those which expressly survive the termination of this
Agreement.  If Buyer provides a
Continuation Notice, this Agreement shall continue in full force and effect,
and the parties shall proceed to Close of Escrow.

 

9.             Brokers.

 

9.1           Each party represents and warrants that it has not employed any brokers
or finders in connection with the transaction contemplated by this Agreement.

 

9.2           Seller shall indemnify, save, defend and hold Buyer free and harmless
from and against any and all obligations or liabilities to pay any real estate
broker’s commission, finder’s fee, or other compensation to any person, firm or
entity arising from or in connection with this Agreement or the Property which
results from any act or agreement of Seller. 
Buyer shall indemnify, save, defend and hold Seller free and harmless
from and against any and all obligations or liabilities to pay any real estate
broker’s commission, finder’s fee, or other

 

9

 

compensation to any person,
firm or entity arising from or in connection with this Agreement or the
Property which results from any act or agreement of Buyer.  The obligations set forth in this Section 9.2
shall survive the termination of this Agreement.

 

10.           Additional
Covenants.

 

10.1       Possession.  Seller shall deliver possession of the
Property to Buyer at the Close of Escrow free of all rights of any party with
respect to possession, use or occupancy of the Property other than the
Permitted Encumbrances.

 

10.2       Estoppel Certificates.  Following the Contingency Date, Seller shall
use good faith efforts to cause the tenants under the Existing Leases to
execute and deliver to Buyer an estoppel certificate in the form attached
hereto as Exhibit “E” or such other form as is required by the applicable
Existing Lease (the “Estoppel Certificates”) not less than two (2) days
before the Closing Date (the “Estoppel Delivery Deadline”).  If Seller is unable to timely delivery to
Buyer the Estoppel Certificates on or before the Closing Date, Seller
may, but shall not be obligated to: (a) provide an estoppel certificate
signed by Seller substantially in the form attached hereto as Exhibit “E”
or such other form as may be allowed under the applicable Existing Lease (“Seller
Estoppel”) in lieu of that to be provided by a particular Tenant; provided,
however, that any represenations and warranties contained in Seller Estoppels
would be subject to the same restrictions, qualifications, and limitations
applicable to similar representations and warranties in Section 6.4 of
this Agreement.  If at any time Seller
obtains and delivers to Purchaser any Estoppel Certificate from a Tenant for
which Seller provided a Seller Estoppel, any related Seller Estoppel shall be
of no further force or effect.  If Seller is unable, despite its good faith efforts, to deliver the
Estoppel Certificates, Seller shall not be in default, but Purchaser shall have
the right, but not the obligation, to terminate this Agreement by giving notice
to Seller within two (2) days after the Estoppel Delivery Deadline, in
which event this Agreement shall terminate and the Deposit and all accrued
interest thereon shall be returned to Purchaser and no party shall have any
further liability under this Agreement.

 

10.3       Operation and Maintenance of Property.  During the pendency of this
Agreement,, Seller shall operate and manage the Property in substantially in
the same manner as it did before the Date of Agreement and Seller will perform
its material obligations under the Leases, Service Contracts, and other
agreements that may affect the Property.

 

10.4       Delivery of Due Diligence Materials by Seller.  Not
later than five (5) days after the Date of Agreement, Seller shall deliver
or make available to Buyer to the extent in Seller’s possession: (i) copies
of all agreements, contracts (including, without limitation, construction
contracts), warranties, permits, approvals, plans, specifications,
certificates, surveys, boundary surveys, site plans, environmental reports
(including, without limitation, any soils and Hazardous Materials reports),
improvement plans, utility plans, building plans, building permits, and
certificates of occupancy; (ii) copies of the Existing Leases and all
amendments thereto and a copy of the Rent Roll; (iii) the Disclosure
Statement (defined below); (iv) a list of all service,maintenance and other
contracts affecting the Property (the “Service Contracts”) along with complete
and accurate copies of the Service Contracts; and (v) copies of operating
statements, budgets, and property tax bills for 2007 and year-to-date 2008
(collectively, “Due Diligence Materials”). 
Seller shall fully cooperate, at no cost or expense to Buyer and subject
to Seller’s 

 

10

 

consent rights in this
Agreement, with the performance by Buyer of the due diligence contemplated
under Article 8 above.

 

10.5       New Service Contracts; New Leases.  During the pendency of this
Agreement, Seller will not (i) enter into any service contract or similar
obligation that will be an obligation affecting the Property subsequent to the
Close of Escrow, except contracts entered into in the ordinary course of
business that are terminable without cause upon no more than 30-days’ notice
and without penalty or cancellation fee. 
Following the Contingency Date, Seller shall not enter into any new
Lease or amend any Existing Lease without the prior written consent of Buyer.

 

10.6       No Encumbrances or Transfers.  Following the Contingency
Date, Seller shall not knowingly permit the execution or recordation of any
agreement or instrument whereby the Property, or any interest in the Property,
will be alienated, liened, encumbered or otherwise transferred.

 

10.7       Natural Hazard Disclosure Statement.  As used herein, the term “Natural
Hazard Area” shall mean those areas identified as natural hazards in the Natural
Hazard Disclosure Act, California Government Code Sections 8589.3, 8589.4, and
51183.5, and California Public Resources Code Sections 2621.9, 2694, and 4136,
and any successor statutes or laws (the “Act”). 
Seller shall provide Buyer with a Natural Hazard Disclosure Statement (“Disclosure
Statement”).  Buyer acknowledges that
Seller has retained the services of an expert (the “Natural Hazard Expert”) to
examine the maps and other information made available to the public by
government agencies for the purpose of enabling Seller to fulfill its
disclosure obligations with respect to the Act and to prepare a written report
of the result of its examination (the “Report”).  Buyer acknowledges that the Report fully and
completely discharges Seller from its disclosure obligations under the Act,
and, for the purpose of this Agreement, the provisions of California Civil Code
Section 1103.4 regarding the non-liability of Seller for errors or
omission not within its personal knowledge shall be deemed to apply and the Natural
Hazard Expert shall be deemed to be an expert dealing within the scope of its
expertise with respect to the examination and Report.  Buyer acknowledges and agrees that nothing
contained in the Disclosure Statement shall release Buyer from its obligation
to fully investigate the condition of the Property, including, without
limitation, whether the Property is located in any Natural Hazard Area.  Buyer further acknowledges and agrees that
the matters set forth in the Disclosure Statement or Report may change on or
prior to the Closing Date and that Seller has no obligation to update, modify,
or supplement the Disclosure Statement or Report.  Buyer shall be solely responsible for
preparing and delivering its own Natural Hazard Disclosure Statement to subsequent
prospective buyers of the Property.  The
provisions of this Section 10.7 shall survive the Close of Escrow.

 

11.           Closing.

 

11.1       Seller Deliveries.  At least one (1) business day prior to
the Closing Date, Seller shall deliver (or caused to be delivered) to Escrow
Holder the following documents, executed and acknowledged where appropriate,
and  such other items as follows:

 

11.1(a)     One (1) original grant deed (“Deed”), executed by Seller,
conveying the Property to Buyer in the form attached hereto as Exhibit “B.”

 

11

 

11.1(b)        Two (2) original assignment and assumption of the Existing Leases
(“Assignment of Leases”), executed by Seller, as assignor, in form attached
hereto as Exhibit “C”.

 

11.1(c)        One (1) original Bill of Sale and Assignment Agreement (“Bill of
Sale”) in the form attached hereto as Exhibit “D”.

 

11.1(d)        Two (2) original assignment and assumption of the approved Service
Contracts and the Intangible Property (“Assignment of Contracts and Intangible
Property), executed by Seller, as assignor, in the form attached hereto as Exhibit “F”.

 

11.1(e)        One (1) original certificate of “non-foreign” status signed by
Seller and a California Form 593-C, both duly executed by Seller.

 

11.1(f)         Such additional documents may be reasonably required by Escrow Holder
in order to consummate the transaction contemplated by this Agreement (provided
the same do not increase in any material respect the costs to, or liability or
obligations of Seller in a manner not otherwise provided for herein, or reduce
Buyer’s obligations or liability hereunder).

 

11.2         Buyer Deliveries.  At
least one (1) business day prior to the Closing Date, Buyer shall deliver
to Escrow Holder (i) immediately available funds in the amount described
in Section 4.2(c) above; (ii) two (2) originals of the
Assignment of Leases executed by Buyer; (iii) two (2) originals of
the Assignment of Contracts and Intangible Property executed by Buyer; (iv) A
Preliminary Change of Ownership Report as required by applicable law, executed
by Buyer, and (v) such additional documents may be reasonably required by
Escrow Holder in order to consummate the transaction contemplated by this
Agreement (provided the same do not increase in any material respect the costs
to, or liability or obligations of Buyer in a manner not otherwise provided for
herein, or reduce Seller’s obligations or liability hereunder).

 

11.3         Prorations.  Rent payable by tenants under
the Existing Leases and by Buyer under the Zenith Lease and all other revenues
and income, and all items of costs and expenses with respect to the Property
shall be prorated as of the end of the day before the Closing Date.  The Closing Date shall be counted as an
income and expense day of Buyer.

 

11.3(a)        Taxes and Assessments.  General real estate taxes and assessments
imposed by governmental authority and any assessments imposed by private
covenant constituting a lien or charge on the Property for the then current
calendar year or other current tax period (collectively, “Taxes”) not yet due
and payable shall be prorated.  If the
Close of Escrow occurs prior to the receipt by Seller of the tax bill for the
calendar year or other applicable tax period in which the Close of Escrow
occurs, Buyer and Seller shall prorate Taxes for such calendar year or other
applicable tax period based upon the most recent ascertainable assessed values
and tax rates.  Any refund or rebate of
Taxes resulting from a tax protest, challenge or appeal filed by Seller (an “Appeal”)
for a tax year ending prior to the Closing Date shall belong to Seller, whether
received before or after Close of Escrow, and Seller shall have the sole
authority to prosecute such Appeals.  Any
refund or rebate of Taxes, less costs incurred in connection therewith,
resulting from an Appeal for the tax year in which the Closing Date occurs
shall be prorated between the parties in the same manner as prescribed above,
whether received

 

12

 

before or after Close of
Escrow, and Seller shall have the sole authority to prosecute any such Appeal
prior to the Closing Date and after the Closing Date Seller and Buyer shall
mutually cooperate in the prosecution of any such Appeal.

 

11.3(b)        Collected Rent.  All collected rent and other collected income
under the Existing Leases and collected and uncollected rent under the Zenith
Lease (and any applicable state or local tax on rent) in effect on the Closing
Date shall be prorated.  Seller shall be
charged with any rent and other income collected by Seller before Close of
Escrow but applicable to any period of time after Close of Escrow.  Uncollected rent, other than with respect to
the Zenith Lease, and other income shall not be prorated.  Buyer shall apply rent and other income from
tenants that are collected after the Close of Escrow first to the obligations
then owing to Buyer for its period of ownership and to costs of collection,
remitting the balance, if any, to Seller. 
Any prepaid rents for the period following the Closing Date shall be
credited by Seller to Buyer at Close of Escrow. 
Buyer will make reasonable efforts, without suit, to collect any rents
applicable to the period before Close of Escrow.  Seller may pursue collection as to any rent
not collected by Buyer within 6 months following the Closing Date provided that
Seller shall have no right to terminate any Lease or any tenant’s occupancy
under any Lease in connection therewith. 
All amounts collected by Seller on account of common area maintenance,
taxes and insurance charges and expenses in excess of the actual operating
expenses incurred by Seller through the Closing Date shall be paid to Buyer at
Close of Escrow.  If all amounts
collected by Seller on account of common area maintenance, taxes and insurance
charges and expenses are less than the actual operating expenses incurred by Seller
through the Closing Date, then the amount of such deficiency shall be paid to
Seller at Close of Escrow.

 

11.3(c)        Utilities.  Utilities, including water, sewer, electric,
and gas, based upon the last reading of meters prior to the Close of Escrow
shall be prorated.  Seller shall endeavor
to obtain meter readings on the day before the Closing Date, and if such
readings are obtained, there shall be no proration of such items.  Seller shall pay at Close of Escrow the bills
therefor for the period to the day preceding the Close of Escrow, and Buyer
shall pay the bills therefor for the period subsequent thereto.  If the utility company will not issue
separate bills, Buyer will receive a credit against the Purchase Price for
Seller’s portion and will pay the entire bill prior to delinquency after Close
of Escrow.  If Seller has paid any
utilities no more than thirty (30) days in advance in the ordinary course of
business, then Buyer shall be charged its portion of such payment at Close of
Escrow.  Recoveries from the
reimbursement of utility expenses collected by Buyer or Seller (or a third
party service provider) shall be prorated based upon, and shall relate back to,
the months in which the billed expenses were incurred.

 

11.3(d)        Fees and Charges under Service Contracts, Licenses and Permits.  Fees
and charges under such of the Service Contracts, licenses and permits as are
being assigned to and assumed by Buyer at the Close of Escrow, on the basis of
the periods to which such Service Contracts, licenses and permits relate shall
be prorated.

 

11.3(e)        Final Adjustment After Closing.  If final prorations cannot be
made at Close of Escrow for any item being prorated under Section 11.3,
including Taxes, then Buyer and Seller agree to allocate such items on a fair and
equitable basis as soon as invoices or bills are available, with final
adjustment to be made as soon as reasonably possible after the Close of Escrow,
to the effect that income and expenses are received and paid by the parties on
an accrual

 

13

 

basis with respect to their
period of ownership.  Payments in
connection with the final adjustment shall be due within thirty (30) days of
written notice.  Seller shall have reasonable
access to, and the right to inspect and audit, Buyer’s books to confirm the
final prorations.

 

11.4         Closing Costs.  Each
party shall pay all attorneys’ fees, accounting fees, and other expenses
incurred by it in connection with the transaction contemplated by this
Agreement.  Seller shall pay (i) one-half
(1⁄2) of all escrow fees, (ii) the premium for the standard coverage portion
of the Title Policy and (iii) all state and county documentary transfer
taxes and fees.  Buyer shall pay (I) one-half
(1⁄2) of all escrow fees, (II) the incremental premium for the extended
coverage portion of the Title Policy and the cost of any endorsements to the
Title Policy, and (III) all city documentary transfer taxes and fees.  Subject to Section 11.6 below, all other
closing costs shall be apportioned in the manner customary in the county where
the Property is located.  Notwithstanding
the foregoing sentence, in the event of a default by Seller or Buyer hereunder,
all cancellation fees and other Escrow charges shall be borne by the defaulting
party.

 

11.5         Estimated Closing Statement. 
Escrow Holder shall provide an estimated closing statement for the
transaction contemplated by this Agreement to Seller and Buyer at least five (5) business
days before the Closing Date.  At least
one business day prior to the Closing Date, Escrow, Seller and Buyer shall
deposit with the Escrow Holder executed closing statements consistent with this
Agreement in the form required by the Escrow Holder.

 

11.6         Escrow Holder Instructions.  On
the Close of Escrow, subject to Escrow Holder having received the documents and
monies required to be deposited into Escrow pursuant to this Agreement, Escrow
shall do each of the following:

 

11.6(a)        Duly record the Deed in the official records of the county in which the
Property is located, and arrange for the delivery to the parties of conformed
copies thereof as soon as available.

 

11.6(b)        Deliver to Buyer (i) an ALTA extended coverage owner’s policy of
title insurance (“Title Policy”) issued by Title Company insuring fee simple
title to the Property vested in Buyer, with a liability limit in the amount of
the Purchase Price, and subject only to the Permitted Exceptions; (ii) an
original counterpart of the Assignment of Leases executed by Seller; and (iii) an
original of the Bill of Sale executed by Seller.

 

11.6(c)        Deliver to Seller the Purchase Price and an original counterpart of the
Assignment of Leases.

 

12.           Conditions
Precedent.

 

12.1         To Buyer’s Obligations.  The
obligation of Buyer to complete the purchase of the Property and to close under
this Agreement is subject to the satisfaction of each of the following
conditions:

 

14

 

12.1(a)        Seller shall have performed or complied with all agreements, covenants
and conditions contained in this Agreement to be performed or complied with by
Seller prior to or at the time of the Close of Escrow.

 

12.1(b)        The representations and warranties of Seller set forth in this
Agreement shall remain true and correct in all material respects on and as of
the Closing Date;

 

12.1(c)        There shall exist no actions, suits, arbitrations, claims, attachments,
proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings, pending or threatened against Seller that
would materially and adversely affect Seller’s ability to perform its
obligations under this Agreement.

 

12.1(d)        Buyer’s receipt of written confirmation from the Title Company that the
Title Company shall upon the Close of Escrow be irrevocably committed to issue
the Title Policy with no exceptions other than the Permitted Exceptions.

 

12.1(e)        So long as Buyer is not in default hereunder, if any of such conditions
is not satisfied (or waived by Buyer in writing), then, without limiting any
other rights or remedies Buyer may have in connection therewith, Buyer shall
have the right to terminate this Agreement by notifying Seller of the same in
writing, or elect to close, notwithstanding the non-satisfaction of such
condition, in which event Buyer shall be deemed to have waived any such
condition.  If Buyer elects to close,
notwithstanding the nonsatisfaction of such condition, there shall be no
liability on the part of Seller for nonsatisfaction of such condition or for
breaches of representations and warranties of which Buyer had knowledge as of
the Close of Escrow.  If Buyer exercises
such termination right, then, without limiting any other rights or remedies of
Buyer, Escrow Holder shall promptly return the Deposit to Buyer.

 

12.2         To Seller’s Obligations.  The
obligation of Seller to complete the sale of the Property and to close under
this Agreement is subject to the satisfaction of each of the following
conditions:

 

12.2(a)        Buyer shall have delivered into Escrow the Purchase Price in accordance
with the provisions of Section 4.2 above.

 

12.2(b)        Buyer shall have performed and complied with all agreements, covenants
and conditions contained in this Agreement to be performed or complied with by
Buyer prior to or at the time of the Close of Escrow.

 

12.2(c)        The representations and warranties of Buyer set forth in this Agreement
shall remain true and correct in all material respects on and as of the Closing
Date.

 

There shall
exist no actions, suits, arbitrations, claims, attachments, proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings, pending or threatened against either party
that would materially and adversely affect Buyer’s ability to perform its
obligations under this Agreement. If any of such conditions is not satisfied
(or waived by Seller in writing), then, without limiting any other rights or
remedies Seller may have in connection therewith, Seller shall have the right
to terminate this Agreement by notifying Buyer of the same in writing, or elect
to close, notwithstanding the non-satisfaction of such

 

15

 

condition, in
which event Seller shall be deemed to have waived any such condition.  If Seller elects to close, notwithstanding
the nonsatisfaction of such condition, there shall be no liability on the part
of Buyer for nonsatisfaction of such condition or for breaches of
representations and warranties of which Seller had knowledge as of the Close of
Escrow.  If Seller exercises such
termination right, then Escrow Holder shall promptly return the Deposit to
Buyer, unless the provisions of Article 14 apply in which case Escrow
Holder shall promptly deliver the Deposit to Seller.

 

13.           Casualty;
Condemnation.

 

13.1         In the event of the occurrence of any of the following prior to the
Close of Escrow:  (i) the
commencement of any eminent domain or condemnation proceedings with respect to
any portion of the Property that would reduce the value of the Property by more
than Two Hundred Fifty Thousand Dollars ($250,000), or (ii) any casualty
which shall cost in excess of Two Hundred Fifty Thousand Dollars ($250,000) to
repair, Buyer shall have the right to terminate this Agreement until the
earlier of ten (10) days after the date Buyer receives written notice of
such damage, taking or condemnation, or the Closing Date.  If Buyer elects to terminate this Agreement,
Escrow Holder shall promptly return the Deposit (included all interest accrued
thereon) to Buyer and both parties shall be relieved of any further obligations
hereunder.

 

13.2         In the event of the occurrence of any casualty to the Property prior to
the Close of Escrow which shall cost Two Hundred Fifty Thousand Dollars
($250,000) or less to repair or if Buyer does not terminate this Agreement
pursuant to Section 13.1, the obligations of the parties hereunder shall
be unaffected and the parties shall proceed to Close of Escrow.  In such case, (i) Seller shall deliver
to Buyer, at the Close of Escrow, an assignment of all of Seller’s right, title
and interest in and to all insurance proceeds and awards applicable thereto;
and (ii) with respect to uninsured losses, Buyer shall receive a credit
against the Purchase Price in an amount equal to the reasonable cost to repair
the interest taken by eminent domain or the damage or destruction caused by
casualty, not to exceed Fifty Thousand Dollars ($50,000).

 

13.3         Seller and Buyer each expressly waive the
provisions of California Civil Code Section 1662 and hereby agree that the
provisions of this Section 13 shall govern the parties’ obligations
in the event of any damage or destruction to the Property or the taking of all
or any part of the Property, as applicable.

 

14.           LIQUIDATED
DAMAGES.  IF ALL OF THE
CONDITIONS TO BUYER’S OBLIGATION TO PURCHASE THE PROPERTY HAVE BEEN SATISFIED
OR WAIVED IN WRITING BY BUYER AND IF BUYER SHOULD FAIL TO CONSUMMATE THIS
TRANSACTION FOR ANY REASON OTHER THAN SELLER’S DEFAULT, FAILURE OF A CONDITION
TO BUYER’S OBLIGATION TO CLOSE, OR THE EXERCISE BY BUYER OF AN EXPRESS RIGHT OF
TERMINATION GRANTED HEREIN, SELLER’S SOLE REMEDY IN SUCH EVENT SHALL BE TO
TERMINATE THIS AGREEMENT AND TO RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES,
SELLER WAIVING ALL OTHER RIGHTS OR REMEDIES IN THE EVENT OF SUCH DEFAULT BY
BUYER.  THE PARTIES ACKNOWLEDGE THAT
SELLER’S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY BUYER UNDER THIS AGREEMENT
WILL BE DIFFICULT TO ASCERTAIN, AND THAT SUCH LIQUIDATED DAMAGES REPRESENT THE
PARTIES’

 

16

 

BEST ESTIMATE OF SUCH DAMAGES.  SUCH RETENTION OF THE DEPOSIT BY SELLER IS
INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO SECTIONS 1671,
1676 AND 1677 OF THE CALIFORNIA CIVIL CODE, AND SHALL NOT BE DEEMED TO
CONSTITUTE A FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTION 3275 OR SECTION 3369
OF THE CALIFORNIA CIVIL CODE OR ANY SIMILAR PROVISION.

 

	
  “SELLER”

  	
   

  	
  “BUYER”

  
	
  JPM

  	
   

  	
  MEJ                                                 JDM

  

 

15.           Notices.

 

Any notice, request, demand or
other communication which is required or may be given under or in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given if mailed by certified or registered mail, return receipt requested, by
personal delivery by overnight delivery service (e.g. Federal Express), or by
fax addressed as follows:

 

	
  (a)

  	
   

  	
  If to Seller:

  	
  GRE Warner Califa LLC

  2450 Mission Street, Suite 100

  San Marino, CA 91108

  Attn: James C. Ewing

  Fax No. (626) 441-9102

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and to:

  	
  Guggenheim Plus Leveraged LLC

  c/o Guggenheim Real Estate LLC

  Four Copley Place

  Boston, Massachusetts 02116

  Attn: Joe Marconi

  Fax Number: 617-536-5455

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  	
  Kennerly, Lamishaw &
  Rossi LLP

  707 Wilshire Blvd., Suite 1400

  Los Angeles, CA 90017

  Attn: Howard Parelskin, Esq.

  Fax No. (213) 596-5791

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  If to Buyer:

  	
  Zenith Insurance Company

  21255 Califa Street

  Woodland Hills, CA 91367-5021

  Attn: Michael Jansen, Executive Vice President &

  General Counsel

  Fax No. (818) 713-1000

  

 

17

 

	
   

  	
   

  	
  with a copy to:

  	
  Greenberg Glusker Fields
  Claman & Machtinger LLP

  1900 Avenue of the Stars, Suite 2100

  Los Angeles, CA 90067

  Attn:  Stephen Claman, Esq.

  Fax No.:  (310) 201-2374

  

 

or to such
other address as such party shall have specified in writing to the other
parties.  Such notice, request, demand or
other communication shall be deemed given when served personally, three (3) days
after the date of deposit thereof in the United States Mail in the manner set
forth above, upon actual delivery if delivered by overnight delivery service or
upon attempted delivery if delivery is attempted on a business day, or upon the
date of fax transmission as indicated on a fax confirmation page if given
by fax.  Any notice, demand or document
not personally delivered, given by registered or certified mail, given by
overnight delivery service or given by fax transmission as aforesaid shall be
deemed to be given, delivered or made upon receipt by the party to whom the
same is to be given or delivered. 
Notices given by counsel to the Buyer shall be deemed given by Buyer,
notices given by counsel to the Seller shall be deemed given by Seller, and
notices given to a party’s counsel shall be deemed given to the party.

 

16.           Miscellaneous.

 

16.1         Indemnification.

 

16.1(a)        BUYER HEREBY AGREES TO PROTECT, INDEMNIFY, DEFEND AND HOLD HARMLESS
SELLER, SELLER’S AFFILIATES, SELLER’S PARTNERS, OFFICERS, TENANTS, AGENTS,
CONTRACTORS AND EMPLOYEES, AND EACH OF THEIR SUCCESSORS AND ASSIGNS AND THE
PROPERTY FROM AND AGAINST ANY AND ALL CLAIMS, COSTS, DAMAGES, LIABILITIES AND
EXPENSES WHATSOEVER (INCLUDING WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES)
(COLLECTIVELY, “CLAIMS”) RESULTING FROM BUYER’S ENTRY UPON THE PROPERTY AND
MAKING OF ANY TESTS OR STUDIES WITH RESPECT TO THE PROPERTY, INCLUDING ANY AND
ALL MECHANICS LIEN CLAIMS; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL BUYER HAVE
ANY OBLIGATIONS UNDER THIS SECTION 16.1(A) WITH RESPECT TO CLAIMS
RESULTING FROM BUYER’S DISCOVERY OF ANY PRE-EXISTING CONDITIONS.

 

16.1(b)        The obligations set forth in Section 16.1(a) shall survive
the termination of this Agreement. 
Notwithstanding anything herein to the contrary, nothing in Section 16.1(a) shall
be construed to (i) restrict Buyer in its ordinary course of business as
tenant under the Zenith Lease from using and accessing the Property in accordance
with the terms of the Zenith Lease or (ii) amend, modify or alter the
Zenith Lease.

 

16.2         Attorneys’ Fees.  In
the event of any action for breach of or to enforce any provision or right
under this Agreement, the unsuccessful party in such action shall pay to the
successful party all costs and expenses including, but not limited to,
reasonable attorneys’ fees incurred by the successful party in connection with
such action.  The successful party shall
be that party who, in light of the issues litigated and the court’s decision on
those issues, was more 

 

18

 

successful in the
action.  The party who was more
successful need not be determined to be the party who recovers a judgment in
the action.

 

16.3         Further Assurances. 
Buyer and Seller agree that at any time, or from time to time after the
execution of this Agreement, and whether before or after the Close of Escrow,
they will, upon request of the other, execute and deliver such other documents
and do such further acts and things as such other party may reasonably request
in order to fully effect the purpose of this Agreement.

 

16.4         Entire Agreement.  This
Agreement is the entire agreement between Buyer and Seller with respect to the
subject matter of this Agreement and supersedes all prior agreements between
Buyer and Seller with respect to the subject matter of this Agreement.  Notwithstanding the foregoing, this Agreement
shall not amend, modify or alter the Zenith Lease.

 

16.5         Modifications in Writing.  This
Agreement may not be altered, amended, changed, terminated or modified in any
respect or particular, unless the same shall be in writing and signed by the
party to be charged.

 

16.6         Time of the Essence.  Time
is of the essence of this Agreement.

 

16.7         Successors and Assigns. 
Neither party may assign this Agreement without the prior written
consent of the other, and any such prohibited assignment shall be void.  No assignment permitted under this Agreement
shall relieve the assigning party of any liability hereunder, whether arising
before or after the date of such assignment.  
Subject to the foregoing, this Agreement shall be binding upon and inure
to the benefit of the respective legal representatives, successors, assigns,
heirs, and devisees of the parties.

 

At Close of Escrow, Buyer
shall be permitted to assign the right to purchase the Property to a Buyer
Affiliate. For purposes of this Agreement, “Buyer’s Affiliate” means (a) any
entity that directly or indirectly controls, is controlled by or is under
common control with Buyer, or (b) any entity at least a majority of whose
economic interest is owned by Buyer; and the term “control” means the power to
direct the management of such entity through voting rights, ownership or
contractual obligations.

 

16.8         Counterparts.  This
Agreement may be executed in duplicate counterparts, each of which shall be
deemed an original, but all of which, when taken together, shall constitute one
and the same instrument.

 

16.9         Exhibits.  All exhibits attached hereto
are hereby incorporated herein by this reference.

 

17.           Cooperation
with Exchange.  Either party may
consummate the purchase or sale (as applicable) of the Property as part of a
so-called like kind exchange (an “Exchange”) pursuant to §1031 of the Internal
Revenue Code of 1986, as amended (the “Code”), provided that:  (a) the Close of Escrow shall not be
delayed or affected by reason of the Exchange nor shall the consummation or
accomplishment of an Exchange be a condition precedent or condition subsequent
to the exchanging party’s obligations under this Agreement; (b) the
exchanging party shall effect its Exchange through an assignment of this
Agreement, or its rights under this 

 

19

 

Agreement,
to a qualified intermediary (c) neither party shall be required to take an
assignment of the purchase agreement for the relinquished or replacement
property or be required to acquire or hold title to any real property for
purposes of consummating an Exchange desired by the other party; and (d) the
exchanging party shall pay any additional costs that would not otherwise have
been incurred by the non-exchanging party had the exchanging party not
consummated the transaction through an Exchange.  Neither party shall by this Agreement or
acquiescence to an Exchange desired by the other party have its rights under
this Agreement affected or diminished in any manner or be responsible for
compliance with or be deemed to have warranted to the exchanging party that its
Exchange in fact complies with §1031 of the Code.

 

18.           Confidentiality.  Except as otherwise provided herein, neither
Buyer nor Seller shall make any disclosure or public announcement of any
information related to this Agreement, before or for one (1) year after
the Close of Escrow, without the prior written specific consent of the other,
except that Buyer shall have the right, without Seller’s consent, to publicly
disclose the fact that it has acquired the Property following the Close of
Escrow.  The foregoing shall not be
deemed to prohibit disclosure of this transaction as required by applicable law
and to Buyer’s and Seller’s respective attorneys, accountants, lenders,
consultants and other professional advisors.

 

19.           WAIVER
OF JURY TRIAL.  TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

 

20.           Limitation
of Liability.  Notice is hereby
given that all persons dealing with Seller shall look to the assets of Seller
for the enforcement of any claim against Seller, as none of the members,
managers, officers, employees and shareholders of Seller assume any personal
liability for obligations entered into by or on behalf of Seller.

 

21.           Procedure
for Indemnity.  The following
provisions govern actions for indemnity under this Agreement.  Promptly after receipt by an indemnitee of
notice of any claim, such indemnitee will, if a claim in respect thereof is to
be made against the indemnitor, deliver to the indemnitor written notice
thereof and the indemnitor shall have the right to participate in such
proceeding and, if the indemnitor agrees in writing that it will be responsible
for any costs, expenses, judgments, damages, and losses incurred by the
indemnitee with respect to such claim, to assume the defense thereof, with
counsel mutually satisfactory to the parties; provided, however, that an
indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnitor, if the indemnitee reasonably believes
that representation of such indemnitee by the counsel retained by the
indemnitor would be inappropriate due to actual or potential differing
interests between such indemnitee and any other party represented by such
counsel in such proceeding.  The failure
of indemnitee to deliver written notice to the indemnitor within a reasonable
time after indemnitee receives notice of any such claim shall relieve such
indemnitor of any liability to the indemnitee under this indemnity only if and
to the extent that such failure is prejudicial to its ability to defend such
action, and the omission so to deliver written notice to the indemnitor will
not relieve it of any other liability that it may have to any indemnitee.  If an indemnitee settles a claim without the
prior written consent of the indemnitor, then the 

 

20

 

indemnitor
shall be released from liability with respect to such claim unless the
indemnitor has unreasonably withheld such consent.

 

22.           Calculation
of Time Periods.  Unless otherwise
specified, in computing any period of time described herein, the day of the act
or event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
such last day is a Saturday, Sunday or legal holiday for national banks in the
location where the Property is located, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday, or legal
holiday.  The last day of any period of
time described herein shall be deemed to end at 5:00 p.m. local time where
the Property is located unless otherwise noted.

 

23.           Governing Law. 
This Agreement shall be construed and enforced in accordance with the
internal laws of the State of California (without regard to conflicts of law).

 

24.           Seller Default. 
If Seller defaults in its obligation to sell and convey the Property to
Buyer pursuant to this Agreement,  Buyer’s
sole remedy shall be to elect one of the following:  (a) to terminate this Agreement, in
which event Buyer shall be entitled to the return by the Escrow Agent to Buyer
of the Deposit, or (b) to bring a suit for specific performance provided
that any suit for specific performance must be brought within 90 days of Seller’s
default, to the extent permitted by law, Buyer waiving the right to bring suit
at any later date.  Buyer agrees not to
file a lis pendens or other similar notice against the Property except in
connection with, and after, the proper filing of a suit for specific
performance.  Notwithstanding the
foregoing, in the event that the remedy of specific performance is unavailable
to Buyer after a Seller default, in addition to the return to Buyer of the
Deposit, Buyer shall be entitled to reasonable damages not to exceed Fifty
Thousand Dollars ($50,000).

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

21

 

IN WITNESS
WHEREOF, Seller and Buyer have entered into this Agreement on the dates and at
the places set forth opposite their respective signatures below.

 

	
   

  	
  “Buyer “

  
	
   

  	
   

  
	
   

  	
  ZENITH
  INSURANCE COMPANY,

  
	
   

  	
  a California
  corporation

  
	
   

  	
   

  	
   

  
	
  Executed
  this 28th day of May, 2008

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Jack D.
  Miller

  
	
   

  	
   

  	
  Name: Jack
  D. Miller

  
	
   

  	
   

  	
  Its:
  President

  
	
   

  	
   

  	
   

  
	
  Executed
  this 28th day of May, 2008

  	
  By:

  	
  /s/Michael
  E. Jansen

  
	
   

  	
   

  	
  Name:
  Michael E. Jansen

  
	
   

  	
   

  	
  Its: EVP and
  General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  “Seller”

  
	
   

  	
   

  
	
   

  	
  GRE WARNER
  CALIFA, LLC,

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  	
   

  
	
  Executed
  this 28th day of May, 2008

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Joseph P.
  Mahoney

  
	
   

  	
   

  	
  Name: Joseph
  P. Mahoney

  
	
   

  	
   

  	
  Its:
  Authorized Signataory

  

 

22

 

EXHIBIT “A”

 

Legal
Description of Property

 

PARCEL 2:            (21155 CALIFA STREET) 2149-002-026

 

PARCEL “D” OF PARCEL MAP L.A. NO 4140, IN THE
CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
FILED IN BOOK 128 PAGES 13 AND 14 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.

 

PARCEL 2A:

 

THE EASEMENTS FOR RECIPROCAL ACCESS, INGRESS,
EGRESS AND PARKING OVER, ON AND ACROSS ALL DRIVEWAYS AND PARKING AREAS GRANTED
UNDER THE TERMS AND PROVISIONS OF THAT CERTAIN DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS AND GRANTS OF CERTAIN PARKING EASEMENTS RECORDED
NOVEMBER 15, 2002 AS INSTRUMENT NO. 02-2766387, OFFICIAL RECORDS.

 

 

EXHIBIT “B”

 

Grant Deed

 

 

RECORDING REQUESTED BY:

 

WHEN RECORDED RETURN TO

AND MAIL TAX STATEMENTS TO:

 

 

(Above Space for Recorder’s

Use Only)

 

GRANT DEED

 

THE UNDERSIGNED GRANTOR declares: 
DOCUMENTARY TRANSFER TAX IS NOT OF PUBLIC RECORD.  R&T Code §11932

 

FOR VALUABLE
CONSIDERATION, receipt of which is hereby
acknowledged,                                                                ,
a                                                 ,
hereby GRANTS to                                                                     ,
a                                               ,
the real property located in the County of Los Angeles, State of California,
and more particularly described in Exhibit “A” attached hereto and made a
part hereof, together with, all and singular, the tenements, hereditaments,
easements, rights-of-way and appurtenances belonging or in anywise appertaining
to the same, and the improvements thereon, subject to all matters of record,
all governmental laws, rules and regulations and any state of facts which
an accurate survey of the real property would show.

 

(Commonly known as
                              )

 

APN:

 

IN WITNESS
WHEREOF, the undersigned hereby executes this instrument as of the
                  
day of                           ,
2008.

 

	
   

  	
                                                                  ,

  
	
   

  	
  a

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
						

 

 

The notarial
acknowledgment for the above signature appears on a separate sheet which is
attached to this GRANT DEED and incorporated into it by reference.

 

 

ACKNOWLEDGMENT

 

STATE OF
                                      
)

                                                           
) ss.

COUNTY OF
                                  
)

 

On
                                             ,
2008, before me,
                                                                                                   ,
Notary Public,
                                                                                             
                                      (here insert name and title
of the officer)

personally appeared                                                                                                                                            ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the
instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of
California that the foregoing paragraph is true and correct.

 

	
  WITNESS my hand and official seal.

  
	
   

  
	
   

  
	
  Signature

  	
   

  	
   

  
	
   

  
	
  (Seal)

  	
   

  
				

 

 

EXHIBIT “A” to GRANT DEED

 

LEGAL DESCRIPTION

 

All that
certain real property situated in the City of Los Angeles, County of Los
Angeles, State of California, described as follows:

 

 

EXHIBIT “C”

 

Assignment and Assumption of Existing Leases

 

 

ASSIGNMENT
AND ASSUMPTION OF LEASES

 

1.                                       Identification
and Parties.  This Assignment and
Assumption of Leases (“Assignment”) is made and entered into this
         day of 
                                ,
2008 by and between
                                                                          
(“Assignor”), and
                                                                          
(“Assignee”).

 

2.                                       Recitals.

 

2.1                                 Assignee and Assignor are parties to that
certain Agreement of Purchase and Sale of Real Property and Joint Escrow
Instructions dated May       , 2008 (“Agreement”)
whereby Assignor, as seller, agreed to sell to Assignee, as buyer, the Property
(as defined in the Agreement).  All
undefined terms used with initial capital letters herein shall have the same
definitions as set forth in the Agreement.

 

2.2                                 The Agreement requires the execution and
delivery of this Assignment in order to convey to Assignee the landlord’s
right, title and interest in, to and under that those certain leases affecting
the Property set forth on Schedule I attached hereto and incorporated by
this reference (the “Leases”).

 

For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to consummate the transaction contemplated by the
Agreement, Assignor and Assignee enter into and execute this Assignment.

 

3.                                       Assignment,
Assumption and Indemnity.

 

3.1                                 Assignor hereby assigns to Assignee all of
the landlord’s right, title and interest in, to and under the Leases.

 

3.2                                 Assignee hereby accepts the assignment of the
Leases and assumes and agrees to perform all obligations of the landlord under
the Lease first arising, and relating solely to the period, from and after the
Close of Escrow.

 

3.3                                 Assignee shall indemnify, defend and hold
Assignor harmless from and against any and all Claims in connection with the
Leases first arising, and relating solely to the period, from and after the
Close of Escrow.

 

3.4                                 Assignor shall indemnify, defend and hold
Assignee harmless from and against any and all Claims in connection with the
Leases first arising, and relating solely to the period, before the Close of
Escrow.

 

 

4.                                       Miscellaneous.

 

4.1                                 Agreement.  As set forth in the Agreement, which provisions are hereby incorporated
by this reference as if herein set out in full, the Leases are conveyed by Seller and accepted by Purchaser AS IS, WHERE IS, AND
WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF WHATSOEVER NATURE, EXPRESS OR
IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENT, IT BEING THE INTENTION
OF SELLER AND PURCHASER EXPRESSLY TO NEGATE AND EXCLUDE ALL WARRANTIES,
INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR ANY PARTICULAR PURPOSE, WARRANTIES CREATED BY ANY AFFIRMATION OF
FACT OR PROMISE OR BY ANY DESCRIPTION OF THE PROPERTY CONVEYED HEREUNDER, AND
ALL OTHER REPRESENTATIONS AND WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY
THE UNIFORM COMMERCIAL CODE OF THE STATE OR STATES WHERE THE REAL PROPERTY
IS LOCATED.

 

4.2                                 Amendments in Writing.  No
amendment or modification of this Assignment shall be valid unless the
amendment or modification is in writing and signed by Assignor and Assignee.

 

4.3                                 Successors and Assigns.  This
Assignment shall inure to the benefit of, and be binding upon, the successors
and assigns of the parties hereto.

 

4.4                                 Counterparts.  This
Assignment may be executed in one or more duplicate counterparts, each of which
shall be deemed an original, but all of which, when taken together, shall
constitute one and the same instrument.

 

IN WITNESS WHEREOF, Assignor
and Assignee have entered into this Assignment effective as of the date first
set forth above.

 

	
   

  	
  “ASSIGNOR”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “ASSIGNEE”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
								

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
							

 

 

SCHEDULE I to EXHIBIT “C”

 

Leases

 

 

EXHIBIT “D”

 

Bill
of Sale and Assignment Agreement

 

 

BILL OF SALE AND ASSIGNMENT AGREEMENT

 

1.                                       Identification
and Parties.  This Bill of Sale
and Assignment Agreement (“Bill of Sale”) is made and entered into this
         day of
                                    ,
2008 by
                                            
(“Seller”), in favor of
                                                          
(“Buyer”).

 

2.                                       Recitals.

 

2.1                                 Seller and Buyer are parties to that certain
Agreement of Purchase and Sale of Real Property and Joint Escrow Instructions
dated May       , 2008 (“Agreement”) whereby
Seller, as seller, agreed to sell to Buyer, as buyer, the Property (as defined
in the Agreement).  All undefined terms
used with initial capital letters herein shall have the same definitions as set
forth in the Agreement.

 

2.2                                 The Agreement requires the execution and
delivery of this Bill of Sale in order to transfer and assign to Buyer all
right, title and interest of Seller in and to all tangible and intangible
personal property associated with the Property.

 

For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to consummate the transaction contemplated by the
Agreement, Seller desires to execute this Bill of Sale in favor of Buyer.

 

3.                                       Bill
of Sale and Assignment Agreement.

 

3.1                                 Seller hereby assigns, sells, transfers,
conveys and delivers to Buyer all of Seller’s right, title and interest in and
to all tangible and, to the extent assignable, intangible personal property
associated with the Property (including, without limitation, any and all plans,
specifications, licenses, permits and certificates of occupancy).

 

3.2                                 By acceptance of this Bill of Sale, Buyer
hereby accepts the assignment, sale, transfer, conveyance and delivery set
forth in Section 3.1 above.

 

4.                                       Miscellaneous.

 

4.1                                 Agreement.  As set forth in the Agreement, which provisions are hereby incorporated
by this reference as if herein set out in full, the property assigned hereinis  conveyed by Seller and accepted by Purchaser
AS IS, WHERE IS, AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF WHATSOEVER
NATURE, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENT, IT
BEING THE INTENTION OF SELLER AND PURCHASER EXPRESSLY TO NEGATE AND EXCLUDE ALL
WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, WARRANTIES CREATED BY
ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION OF THE PROPERTY
CONVEYED HEREUNDER, AND ALL OTHER REPRESENTATIONS AND WARRANTIES WHATSOEVER
CONTAINED IN OR CREATED BY THE UNIFORM COMMERCIAL CODE OF THE STATE OR
STATES WHERE THE REAL PROPERTY IS LOCATED.

 

 

4.2                                 Amendments in Writing.  No
amendment or modification of this Bill of Sale shall be valid unless the
amendment or modification is in writing and signed by Seller and Buyer.

 

4.3                                 Successors and Assigns.  This
Bill of Sale shall inure to the benefit of, and be binging upon, the successors
and assigns of the parties hereto.

 

4.4                                 Counterparts.  This
Bill of Sale may be executed in one or more duplicate counterparts, each of
which shall be deemed an original, but all of which, when taken together, shall
constitute one and the same instrument.

 

4.5                                 Further Assurances. 
Seller shall execute such documents and do such further acts and things
as Buyer reasonably requests in order to fully effect the purposes of this Bill
of Sale.

 

IN WITNESS WHEREOF, Seller has
executed this Bill of Sale effective as of the date first set forth above.

 

	
   

  	
  “SELLER”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  a

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its: 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
										

 

EXHIBIT “E”

 

Estoppel
Certificate

 

 

ESTOPPEL CERTIFICATE

 

TENANT
ESTOPPEL CERTIFICATE

 

	
   

  	
  TO:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Seller:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Buyer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RE:

  	
  Lease dated
                            ,
           (the “Lease”)

  
	
   

  	
   

  	
   

  	
  for
                                          
  (the “Property”)

  
						

 

Ladies and Gentlemen:

 

The undersigned is Tenant
under the Lease.  Tenant certifies to
                              
(“Seller”),
                                                
and their successors, transferees and assigns (collectively, “Buyer”), and
acknowledges and agrees that:

 

1.             The following information concerning the
Lease is true and correct:

 

	
  Landlord:

  	
   

  	
  (“Landlord”)

  
	
   

  
	
  Tenant:

  	
   

  	
  (“Tenant”)

  
	
   

  
	
  Premises:

  	
   

  	
  (“Premises”)

  
	
  containing
                      
  rentable square feet

  
	
   

  
	
  Amendments,
  Modifications, Assignments Assumptions or Subleases after lease execution:

  
	
   

  
	
   

  	
   

  
	
  Commencement
  Date:

  	
   

  
	
   

  
	
  Expiration
  Date of Term:

  	
   

  
	
   

  
	
  Monthly
  payments under the Lease

  	
   

  
	
   

  
	
  Monthly
  Basic Rental:

  	
   

  
	
   

  
	
  Direct
  Costs (Operating Costs and Taxes):

  	
   

  
								

 

 

	
  Base
  Year:

  	
   

  

 

	
  Renewal
  Option:

  	
   

  

 

Amount of Security Deposit:                                                                                                                               

 

2.             The Lease contains the entire agreement
between Landlord and Tenant with respect to the subject matter thereof, has not
been modified or amended except as indicated above, no options to purchase or
rights of first refusal to purchase are contained therein, and there are no
other agreements between them, oral or written, regarding the Premises or the
Property.

 

3.             The Lease (modified as indicated above) is
presently in full force and effect in accordance with its terms and Tenant has
accepted the Premises.

 

4.             All rent and additional rent payable under
the Lease as of the date of this letter has been paid in full except as
follows:                                   .  No rent or additional rent to become payable
under the Lease has been paid more than 30 days in advance except as follows:                                                .

 

5.             To the best of Tenant’s knowledge, no party
to the Lease is in default thereunder, and no event has occurred which, with
the giving of notice or the passage of time, or both, would constitute a
default thereunder.

 

6.             Tenant has no counterclaims, defenses or
offsets to its obligations under the Lease or to the enforcement of any of the
landlord’s rights thereunder.

 

7.             There are no unfinished tenant improvements
required to be completed by Landlord as of the date hereof or any outstanding
and unpaid tenant improvement allowances owing to Tenant as of the date hereof,
except:

 

                                                                                                                                                                                                

8.             There are no rent concessions, rebates, free
rents or similar inducements except as set forth in the Lease.

 

9.             The Lease is subject and subordinate to any
and all existing and future mortgages and any ground lease of the Premises.

 

Tenant acknowledges that Buyer has requested this
letter in connection with a proposed sale of the Premises, and that Buyer may
rely on the information set forth in this letter.

 

 

	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Dated:

  	
   

  

 

 

EXHIBIT “F”

 

Assignment of Contracts and Intangible
Property

 

 

ASSIGNMENT AND ASSUMPTION OF CONTRACTS
AND INTANGIBLE PROPERTY

 

1.             Identification
and Parties.  This Assignment and
Assumption of Contracts and Intangible Property (“Assignment”) is made and
entered into this          day of                                  ,
2008 by and between                                                      
(“Assignor”), and
                                                     
(“Assignee”).

 

2.             Recitals.

 

2.1           Assignee and Assignor are parties to that
certain Agreement of Purchase and Sale of Real Property and Joint Escrow
Instructions dated May       , 2008
(“Agreement”) whereby Assignor, as seller, agreed to sell to Assignee, as
buyer, the Property (as defined in the Agreement).  All undefined terms used with initial capital
letters herein shall have the same definitions as set forth in the Agreement.

 

2.2           The Agreement requires the execution and
delivery of this Assignment in order to convey to Assignee all of Assignor’s
rights, title and interest in and to those certain service and maintenance
contracts, licenses, permits, approvals, and intangibles described on
Exhibit “A” attached hereto (collectively, the “Contracts and
Intangibles”).

 

For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to consummate the transaction
contemplated by the Agreement, Assignor and Assignee enter into and execute
this Assignment.

 

3.             Assignment,
Assumption and Indemnity.

 

3.1           Assignor hereby assigns to Assignee all of
the landlord’s right, title and interest in, to and under the Contracts and
Intangibles.

 

3.2           Assignee hereby accepts the assignment of the
Contracts and Intangibles and assumes and agrees to perform all obligations of
the landlord under the Contracts and Intangibles first arising, and relating
solely to the period, from and after the Close of Escrow.

 

3.3           Assignee shall indemnify, defend and hold
Assignor harmless from and against any and all Claims in connection with the
Contracts and Intangibles first arising, and relating solely to the period,
from and after the Close of Escrow.

 

3.4           Assignor shall indemnify, defend and hold
Assignee harmless from and against any and all Claims in connection with the
Contracts and Intangibles first arising, and relating solely to the period,
before the Close of Escrow.

 

 

4.             Miscellaneous.

 

4.1           Agreement.  As set forth in the Agreement, which provisions are hereby incorporated
by this reference as if herein set out in full, the Contracts and Intangibles are conveyed by Seller and accepted by
Purchaser AS IS, WHERE IS, AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF
WHATSOEVER NATURE, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN THE
AGREEMENT, IT BEING THE INTENTION OF SELLER AND PURCHASER EXPRESSLY TO NEGATE
AND EXCLUDE ALL WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE,
WARRANTIES CREATED BY ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION
OF THE PROPERTY CONVEYED HEREUNDER, AND ALL OTHER REPRESENTATIONS AND
WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE UNIFORM COMMERCIAL
CODE OF THE STATE OR STATES WHERE THE REAL PROPERTY IS LOCATED.

 

4.2           Amendments in Writing.  No
amendment or modification of this Assignment shall be valid unless the
amendment or modification is in writing and signed by Assignor and Assignee.

 

4.3           Successors and Assigns.  This
Assignment shall inure to the benefit of, and be binding upon, the successors
and assigns of the parties hereto.

 

4.4           Counterparts.  This
Assignment may be executed in one or more duplicate counterparts, each of which
shall be deemed an original, but all of which, when taken together, shall
constitute one and the same instrument.

 

IN WITNESS
WHEREOF, Assignor and Assignee have entered into this Assignment effective as
of the date first set forth above.

 

	
   

  	
  “ASSIGNOR”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “ASSIGNEE”

  
	
   

  	
   

  
	
   

  	
   

  

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  

 

 

EXHIBIT A
to Exhibit “F”

 

Contracts
and IntangiblesExhibit 4.1

 

PRICING
INSTRUMENT

 

WHEREAS, the parties named herein desire to enter into
certain Program Documents (as defined herein) contained herein, each such
document (unless otherwise specified in such document) dated as of May 27,
2008, relating to the issuance by Genworth Global Funding Trust 2008-27 (the “Trust”)
of Notes to investors under the secured notes program sponsored by Genworth
Life and Annuity Insurance Company (“GLAIC”), the terms of such Notes as
specified in the pricing supplement attached to this Pricing Instrument as Exhibit C
(the “Pricing Supplement”);

 

WHEREAS, the Trust is a trust and will be organized
under and its activities will be governed by the provisions of the Trust
Agreement (set forth in Section A of this Pricing Instrument), dated as of
May 27, 2008, by and between the parties thereto indicated in Section E
herein;

 

WHEREAS, certain expense and indemnification
arrangements between GLAIC and the Trustee, on behalf of itself and on behalf
of the Trust, are governed pursuant to the provisions of the Expense and
Indemnity Agreement dated as of October 1, 2006 by and between GLAIC and
the Trustee;

 

WHEREAS, certain licensing arrangements between the
Trust and Genworth Financial, Inc. will be governed pursuant to the
provisions of the License Agreement dated as of October 28, 2005, by and
between the Trust and Genworth Financial, Inc.;

 

WHEREAS, certain custodial arrangements for the
Funding Agreement will be governed pursuant to the provisions of the Custodial
Agreement (the “Custodial Agreement”) dated as of December 7, 2005 by and
among SunTrust Bank, acting as custodian (the “Custodian”), the Indenture
Trustee and the Trust;

 

WHEREAS, the Notes will be issued pursuant to the
Indenture (set forth in Section B of this Pricing Instrument), dated as of
the Original Issue Date, by and between the parties thereto indicated in Section E
herein;

 

WHEREAS, the sale of the Notes will be governed by the
Terms Agreement (set forth in Section C of this Pricing Instrument), dated
as of May 27, 2008, by and among the parties thereto indicated in Section E
herein; and

 

WHEREAS, certain agreements relating to the Notes and
the Funding Agreement are set forth in the Coordination Agreement (set forth in
Section D of this Pricing Instrument), dated as of May 27, 2008, by
and among the parties thereto indicated in Section E herein.

 

All capitalized terms used herein and not otherwise
defined will have the meanings set forth in the Indenture.

 

1

 

SECTION A

 

TRUST AGREEMENT

 

This TRUST AGREEMENT (this “Trust Agreement”), dated
as of May 27, 2008, is entered into by and between GSS Holdings II, Inc.,
a Delaware corporation, as trust beneficial owner (the “Trust Beneficial Owner”),
and U.S. Bank National Association, a national banking association, as Trustee
(the “Trustee”).

 

References in the Standard
Trust Terms to JPMorgan Chase Bank, N.A. shall refer to The Bank of
New York Trust Company, N.A. and its permitted successors and assigns.

 

W I T N E S S E T H:

 

WHEREAS, the Trust Beneficial Owner and the Trustee
desire to authorize the issuance of a Trust Beneficial Interest and a series of
Notes in connection with the entry into this Trust Agreement;

 

WHEREAS, all things necessary to make this Trust
Agreement a valid and legally binding agreement of the Trustee and the Trust
Beneficial Owner, enforceable in accordance with its terms, have been done;

 

WHEREAS, the parties intend to provide for, among
other things, (i) the issuance and sale of the Notes (pursuant to the
Indenture, the Distribution Agreement and the related Terms Agreement) and the
Trust Beneficial Interest, (ii) the use of the proceeds of the sale of the
Notes and Trust Beneficial Interest to acquire the Funding Agreement, and (iii) all
other actions deemed necessary or desirable in connection with the transactions
contemplated by this Trust Agreement; and

 

WHEREAS, the parties hereto desire to incorporate by
reference those certain Standard Trust Terms, dated as of December 8,
2005, and attached to the Pricing Instrument as Exhibit A (the “Standard Trust Terms”).

 

NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
sufficiency of which are hereby acknowledged, each party hereby agrees as
follows:

 

ARTICLE 1

 

Section 1.01                  Incorporation by Reference.   All terms, provisions and agreements set
forth in the Standard Trust Terms (except to the extent expressly modified
herein) are hereby incorporated herein by reference with the same force and
effect as though fully set forth herein. 
All capitalized terms not otherwise defined herein (including the
recitals hereof) shall have the meanings set forth in the Standard Trust Terms
(the Standard Trust Terms and this Trust Agreement, collectively, the “Trust
Agreement”).  To the extent that the
terms set forth in Article 2 of this Trust Agreement are inconsistent with
the terms of the Standard Trust Terms, the terms set forth in Article 2
herein shall apply.

 

A-1

 

ARTICLE 2

 

Section 2.01                  Name.   The Trust created and governed by this Trust
Agreement shall be the trust specified in the Pricing Instrument.  The name of the Trust shall be the name
specified in the first paragraph of the Pricing Instrument, as such name may be
modified from time to time by the Trustee following written notice to the Trust
Beneficial Owner.

 

Section 2.02                  Jurisdiction.   The
Trust is hereby organized in, and formed under and pursuant to, the laws of the
jurisdiction specified in the Pricing Supplement.

 

Section 2.03                  Initial Capital Contribution and
Ownership.   The Trust Beneficial Owner has paid or has
caused to be paid to, or to an account at the direction of, the Trustee, on the
date hereof, the sum of $15 (or, in the case of Notes issued with original
issue discount, such amount multiplied by the issue price of the Notes as
specified in the Pricing Supplement). 
The Trustee hereby acknowledges receipt in trust from the Trust
Beneficial Owner, as of the date hereof, of the foregoing contribution, which
shall be used along with the proceeds from the sale of the series of Notes to
purchase the Funding Agreement.  Upon the
creation of the Trust and the registration of the Trust Beneficial Interest in
the Securities Register (as defined in the Trust Agreement) by the Trust
Registrar in the name of the Trust Beneficial Owner, the Trust Beneficial Owner
shall be the sole beneficial owner of the Trust.

 

Section 2.04                  Acknowledgment.   The Trustee, on behalf of the Trust,
expressly acknowledges its duties and obligations set forth in the Standard
Trust Terms incorporated herein by reference.

 

Section 2.05                  Additional Terms.   Section 5.01(a) of the Standard
Trust Terms is hereby replaced with the following: “it is a national banking
association duly organized, validly existing and in good standing under the
laws of the United States of America and it is a “bank” within the meaning of Section 581
of the Code;”.

 

Section 2.06                  Pricing Instrument; Execution and
Incorporation of Terms.

 

The parties hereto will enter into the Trust Agreement
by executing the Pricing Instrument.

 

By executing the Pricing Instrument, the Trustee and
the Trust Beneficial Owner hereby agree that the Trust Agreement will
constitute a legal, valid and binding agreement between the Trustee and the
Trust Beneficial Owner.

 

All terms relating to the Trust or the series of Notes
not otherwise included herein will be as specified in the Pricing Instrument or
Pricing Supplement, as indicated herein.

 

Section 2.07                  Governing Law.   This Trust Agreement will be governed by,
and construed in accordance with, the laws of the jurisdiction specified in the
Pricing Supplement.

 

A-2

 

Section 2.08                  Counterparts.   The
Trust Agreement, through the Pricing Instrument, may be executed in any number
of counterparts, each of which counterparts shall be deemed to be an original,
and all of which counterparts shall constitute but one and the same instrument.

 

A-3

 

SECTION B

 

INDENTURE

 

This INDENTURE (this “Indenture”) is entered into as
of the Original Issue Date by and between the Genworth Global Funding Trust
specified in the Pricing Instrument (the “Trust”) and The Bank of New York
Trust Company, N.A., as the indenture trustee (the “Indenture Trustee”).

 

The Bank of New York Trust Company, N.A., in its
capacity as Indenture Trustee, hereby accepts its role as Registrar, Paying
Agent, Transfer Agent and Calculation Agent hereunder.

 

References herein to “Indenture Trustee,” “Registrar,”
“Transfer Agent,” “Paying Agent” or “Calculation Agent” shall include the
permitted successors and assigns of any such entity from time to time and
references in the Standard Indenture Terms to The Bank of New York shall refer
to U.S. Bank National Association and its permitted successors and assigns.

 

W I T N E S S E T H:

 

WHEREAS, the Trust has duly authorized the execution
and delivery of this Indenture to provide for the issuance of Notes;

 

WHEREAS, all things necessary to make this Indenture a
valid and legally binding agreement of the Trust and the other parties to this
Indenture, enforceable in accordance with its terms, have been done, and the
Trust proposes to do all things necessary to make the Notes, when executed by
the Trust and authenticated and delivered pursuant hereto, valid and legally
binding obligations of the Trust as hereinafter provided; and

 

WHEREAS, the parties hereto desire to incorporate by
reference those certain Standard Indenture Terms, dated as of December 8,
2005, and attached to the Pricing Instrument as Exhibit B (the “Standard Indenture
Terms”).

 

NOW, THEREFORE, for and in consideration of the
premises and the purchase of the Notes by the Holders thereof, it is mutually
covenanted and agreed by each of the parties hereto as follows:

 

ARTICLE 1

 

Section 1.01                  Incorporation by Reference.
  All terms, provisions and agreements
set forth in the Standard Indenture Terms (except to the extent expressly
modified herein) are hereby incorporated herein by reference with the same
force and effect as though fully set forth herein.  All capitalized terms not otherwise defined
herein (including the recitals hereof) shall have the meanings set forth in the
Standard Indenture Terms (the Standard Indenture Terms and this Indenture,
collectively, the “Indenture”).  To the
extent that the terms set forth in Article 2 of this Indenture are
inconsistent with the terms of the Standard Indenture Terms, the terms set
forth in Article 2 herein shall apply.

 

B-1

 

ARTICLE 2

 

Section 2.01                  Agreement to be Bound.   Each
of the Trust, the Indenture Trustee, the Registrar, the Transfer Agent, the
Paying Agent and the Calculation Agent hereby agrees to be bound by all of the
terms, provisions and agreements set forth in the Indenture, with respect to
all matters contemplated in the Indenture, including, without limitation, those
relating to the issuance of the below-referenced Notes.

 

Section 2.02                  Designation of the Trust, the
Notes and the Funding Agreement.   The
Trust created by the Trust Agreement specified in the Pricing Instrument and
referred to herein is the Genworth Global Funding Trust specified in the
Pricing Instrument.  The Notes issued by
the Trust and governed by the Indenture shall be the Notes specified in the
Pricing Supplement.  The Funding
Agreement designated hereby is the Funding Agreement designated in the Pricing
Supplement, effective as of the Original Issue Date, between the Trust and
Genworth Life and Annuity Insurance Company.

 

Section 2.03                  Additional Terms.   Notwithstanding anything to the contrary in Section 2.04(c) of
the Standard Indenture Terms, the Indenture Trustee will give written notice of
redemption to the Holders in accordance with Section 1.06 of the Standard
Indenture Terms not more than seventy-five (75) calendar days and not less than
thirty (30) calendar days prior to the date set for such redemption.
Notwithstanding anything to the contrary in Section 2.04(f) of the
Standard Indenture Terms, the Indenture Trustee shall treat as satisfactory to
it thirty-five (35) calendar days’ notice from the Trust (or from GLAIC on
behalf of the Trust) of a redemption date for the Notes; provided that there
are at least three Business Days between the receipt by it of such notice and
the deadline for giving notice of such redemption under Section 2.04(c);
provided further that the Notes are in the form of Global Notes and the
redemption is in whole.  The initial
principal amount of the Notes shall be $5,790,000.00.

 

Section 2.04                  Pricing Instrument; Execution and
Incorporation of Terms.

 

The parties hereto will enter into this Indenture by
executing the Pricing Instrument.

 

By executing the Pricing Instrument, the Indenture Trustee,
the Registrar, the Transfer Agent, the Paying Agent, the Calculation Agent and
the Trust hereby agree that the Indenture will constitute a legal, valid and
binding agreement between the Indenture Trustee, the Registrar, the Transfer
Agent, the Paying Agent, the Calculation Agent and the Trust.

 

All terms relating to the Trust or the Notes not
otherwise included herein will be as specified in the Pricing Instrument or
Pricing Supplement, as indicated herein.

 

Section 2.05                  Counterparts.   This
Indenture, through the Pricing Instrument, may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute one and the same instrument.

 

[Remainder
of Page Left Intentionally Blank]

 

B-2

 

SECTION C

 

TERMS AGREEMENT

 

This TERMS AGREEMENT (this “Terms Agreement”) is
entered into as of May 27, 2008 by and among Genworth Life and Annuity
Insurance Company (“GLAIC”), the Genworth Global Funding Trust specified in the
Pricing Instrument (the “Trust”) and the Agent specified in the Pricing
Supplement (the “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, GLAIC and the Agent have entered into that
certain Distribution Agreement dated December 9, 2005 (the “Distribution
Agreement”).

 

NOW, THEREFORE, in consideration of the mutual
promises set forth herein and other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, each of the parties
hereby agrees as follows:

 

ARTICLE 1

 

Section 1.01                  Incorporation by Reference.
  The provisions of the Distribution Agreement
and the related definitions (unless otherwise specified herein) are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.

 

ARTICLE 2

 

Section 2.01                  Addition of Trust as Party to
Distribution Agreement.

 

Pursuant to Section 1 of the Distribution
Agreement, each of the undersigned parties hereby acknowledges and agrees that
the Trust, upon execution hereof by the Trust and the other parties to this
Terms Agreement, shall become a Trust for purposes of the Distribution
Agreement in accordance with the terms thereof, in respect of the Notes, with
all the authority, rights, powers, duties and obligations of a Trust under the
Distribution Agreement.  The Trust
confirms that any agreement, covenant, acknowledgment, representation or
warranty under the Distribution Agreement applicable to the Trust is made by the
Trust at the date hereof, unless another time or times are specified in the
Distribution Agreement, in which case such agreement, covenant, acknowledgment,
representation or warranty shall be deemed to be confirmed by the Trust at such
specified time or times.

 

All references to Section 9 (Indemnification) of
the Distribution Agreement to “solely with respect to the applicable 

Agent(s) or Co-Agent(s)” will include all of such Agent’s or Co-Agent’s
directors and officers and each person, if any, who controls such Agent or
Co-Agent within the meaning of Section 15 of the Securities Act of 1933,
as amended or Section 20 of the Securities Exchange Act of 1934, as
amended.  All references in the
Distribution Agreement to the “Registration Statement”, the “Institutional Base
Prospectus”, the “Retail Base Prospectus”, any “preliminary prospectus”, the “Time
of Sale Prospectus” and the “Prospectus” shall also be deemed to include all
documents incorporated by reference therein.

 

C-1

 

Section 2.02                  Purchase of Notes as Principal.

 

(a)                                  Subject
in all respects to the terms and conditions of the Distribution Agreement, the
Trust hereby agrees to sell to the Agent and the Agent hereby agrees to
purchase the Notes having the terms specified in the Pricing Supplement
relating to such Notes. The initial principal amount of the Notes is
$5,790,000.00.

 

(b)                                 In
connection with any purchase of Notes from the Trust by the Agent as principal,
the parties agree that the items specified on Schedule I of the Pricing Instrument
will be delivered as of the Settlement Date.

 

Section 2.03                  Termination.   Upon
the termination of this Terms Agreement pursuant to Section 13(b) of
the Distribution Agreement the undersigned parties hereby agree to allocate the
expenses reasonably incurred prior to or in connection with such termination as
follows:

 

The expenses will be borne by GLAIC.

 

Section 2.04                  Applicable
Time.   For purposes of the
Distribution Agreement, the Applicable Time shall be 2:35 pm EST, May 27,
2008.

 

Section 2.05                  Governing Law.   This
Terms Agreement shall be governed by and construed in accordance with the laws
of the State of New York without regard to the principles of conflicts of laws
thereof.

 

Section 2.06                  Notices.   For
purposes of Section 14 of the Distribution Agreement, the Trust’s
communications details are as set forth in Section D of the Pricing
Instrument.

 

Section 2.07                  Additional Terms.   The
Agent represents, warrants and covenants with or to (as the case may be) the
Trust and the Company that it has not offered, sold or delivered and it will
not offer, sell or deliver, any of the Notes, in or from any jurisdiction
except under circumstances that are reasonably designed to result in compliance
with the applicable securities laws and regulations thereof.

 

Section 2.08                  Pricing Instrument; Execution and
Incorporation of Terms.

 

The parties hereto will enter into this Terms
Agreement by executing the Pricing Instrument.

 

By executing the Pricing Instrument, each party hereto
agrees that this Terms Agreement will constitute a legal, valid and binding
agreement by and among such parties.

 

All terms relating to the Trust or the Notes not
otherwise included in this Terms Agreement will be as specified in the Pricing
Instrument or Pricing Supplement, as indicated herein.

 

Section 2.09                  Counterparts.   This Terms Agreement, through the Pricing
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

 

C-2

 

SECTION D

 

COORDINATION
AGREEMENT

 

This COORDINATION AGREEMENT (this “Coordination
Agreement”), dated as of May 27, 2008, is entered into by and among
Genworth Life and Annuity Insurance Company (“GLAIC”), the Genworth Global
Funding Trust specified in the Pricing Instrument (the “Trust”), SunTrust Bank,
in its capacity as custodian of the Funding Agreement (“Custodian”) and The
Bank of New York Trust Company, N.A., as the indenture trustee (the “Indenture
Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Trust will enter into the Funding
Agreement with GLAIC, effective as of the Original Issue Date specified in the
Pricing Supplement;

 

WHEREAS, the Agents (as defined in the Distribution
Agreement) will sell the Notes in accordance with the Registration Statement;

 

WHEREAS, the Trust intends to issue the Notes in
accordance with the Indenture, to collaterally assign to, and grant a security
interest in, the Funding Agreement to and in favor of the Indenture Trustee in
accordance with the Indenture to secure payment of the Notes; and

 

WHEREAS, the Custodian will hold the Funding Agreement
on behalf of the Indenture Trustee pursuant to the terms of the Custodial
Agreement.

 

NOW, THEREFORE, to give effect to the agreements and
arrangements established under the Terms Agreement included in the Pricing
Instrument, as applicable, the Trust Agreement, the Indenture and the Notes,
and in consideration of the agreements and obligations set forth herein and for
other good and valuable consideration, the sufficiency of which are hereby
acknowledged, each party hereby agrees as follows:

 

ARTICLE 1

 

Section 1.01                  Delivery of the Funding Agreement.   The
Trust hereby authorizes the Custodian, on behalf of the Indenture Trustee, to
receive the Funding Agreement from GLAIC pursuant to the assignment of the
Funding Agreement (the “Assignment”), to be entered into on the Original Issue
Date, included in the closing instrument dated as of the Original Issue Date
(the “Closing Instrument”).

 

Section 1.02                  Issuance and Purchase of the Notes.

 

(a)                                  Delivery
of the Funding Agreement to the Custodian, on behalf of the Indenture Trustee,
pursuant to the Assignment or execution of the cross-receipt contained in the
Closing Instrument shall be confirmation of payment by the Trust for the
Funding Agreement.

 

(b)                                 The
Trust hereby directs the Indenture Trustee, upon receipt of the Funding
Agreement by the Custodian, on behalf of the Indenture Trustee and pursuant to
the Assignment, 

 

D-1

 

(i) to
authenticate the certificates representing the Notes (the “Certificates”) in
accordance with the Indenture and (ii) to (A) deliver each relevant
Certificate to the clearing system or systems identified in each such
Certificate, or to the nominee of such clearing system, or the custodian
thereof, for credit to such accounts as the Agent may direct, or (B) deliver
each relevant Certificate to the purchasers thereof as identified by the Agent.

 

ARTICLE 2

 

Section 2.01                  Directions Regarding Periodic
Payments.   As registered owner of the Funding Agreement
as collateral securing payments on the Notes, the Indenture Trustee will
receive payments on the Funding Agreement on behalf of the Trust.  The Trust hereby directs the Indenture
Trustee to use such funds to make payments on behalf of the Trust pursuant to
the Trust Agreement and the Indenture.

 

Section 2.02                  Maturity of the Funding Agreement.   Upon
the maturity of the Funding Agreement and the return of funds thereunder, the
Trust hereby directs the Indenture Trustee to set aside from such funds an
amount sufficient for the repayment of the outstanding principal on the Notes
and Trust Beneficial Interest when due.

 

ARTICLE 3

 

Section 3.01                  Officer’s Certificates.   GLAIC
hereby agrees to deliver an Officer’s Certificate, a copy of which is attached
hereto as Exhibit D,
on a quarterly basis to any rating agency currently rating the Program.  The Trust hereby agrees to deliver an Officer’s
Certificate, a copy of which is attached to the Pricing Instrument as Exhibit E, on a
quarterly basis to any rating agency currently rating the Program.

 

Section 3.02                  Filings.   GLAIC
hereby covenants to file, or cause to be filed, in a timely manner on behalf of
the Trust all reports, certifications or similar filings required under the
Securities Exchange Act of 1934, as amended.

 

ARTICLE 4

 

Section 4.01                  No Additional Liability.   Nothing
in this Coordination Agreement shall impose any liability or obligation on the
part of any party to this Coordination Agreement to make any payment or
disbursement in addition to any liability or obligation such party has under
the Program Documents, except to the extent that a party has actually received
funds which it is obligated to disburse pursuant to this Coordination
Agreement.

 

Section 4.02                  No Conflict.   This
Coordination Agreement is intended to be in furtherance of the agreements
reflected in the documents related to the Program Documents, and not in
conflict.  To the extent that a provision
of this Coordination Agreement conflicts with the provisions of one or more
Program Documents, the provisions of such Program Documents shall govern.

 

Section 4.03                  Governing Law.   This
Coordination Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to the principles of conflicts
of laws thereof.

 

D-2

 

Section 4.04                  Severability.   If any
provision in this Coordination Agreement shall be invalid, illegal or
unenforceable, such provision shall be deemed severable from the remaining
provisions of this Coordination Agreement and shall in no way affect the
validity or enforceability of such other provisions of this Coordination Agreement.

 

Section 4.05                  Notices.   All demands, notices and communications under
this Coordination Agreement shall be in writing and shall be deemed to have
been duly given upon receipt at the addresses set forth below:

 

To the Trust:

 

Genworth Global Funding Trust 2008-27

c/o U.S. Bank National Association

Corporate Trust Services

209 S. LaSalle Street, Suite 300

Chicago, Illinois 60604

Attention:  Patricia Child, VP

Facsimile: (312) 325-8905

 

To the Indenture Trustee:

 

The
Bank of New York Trust Company, N.A.

2 North LaSalle Street, Suite 1020

Chicago, Illinois 60602

Attention: Corporate Finance

Facsimile: (312) 827-8542

 

To GLAIC:

 

Genworth
Life and Annuity Insurance Company

6610 West Broad Street

Richmond, Virginia 23230

Attention: Treasurer

Facsimile: (804) 662-7777

 

with a
copy to:

 

Genworth
Life and Annuity Insurance Company

6610 West Broad Street

Richmond, Virginia 23230

Attention: Heather Harker, Esq.

Facsimile: (804) 281-6005

 

To the Custodian:

 

SunTrust
Bank

919 East Main Street

Richmond, Virginia 23219

Attention: Retirement Services

Facsimile: (804) 782-7439

 

D-3

 

or at
such other address as shall be designated by any such party in a written notice
to the other parties.

 

ARTICLE 5

 

Section 5.01                  Pricing Instrument; Execution and
Incorporation of Terms.

 

The parties to this Coordination Agreement will enter
into this Coordination Agreement by executing the Pricing Instrument.

 

By executing the Pricing Instrument, each party hereto
agrees that this Coordination Agreement will constitute a legal, valid and
binding agreement by and among the Trust, GLAIC, the Custodian and the
Indenture Trustee.

 

All terms relating to the Trust or the Notes not
otherwise included in this Coordination Agreement will be as specified in the
Pricing Instrument or Pricing Supplement, as indicated herein.

 

Section 5.02                  Counterparts.   This Coordination Agreement, through the
Pricing Instrument, may be executed in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.

 

Section 5.03                  Capitalized Terms.   All
capitalized terms used herein and not otherwise defined in this Coordination
Agreement will have the meanings set forth in the Indenture.

 

[Remainder
of Page Left Intentionally Blank]

 

D-4

 

SECTION E

 

MISCELLANEOUS AND
EXECUTION PAGES

 

This Pricing Instrument may be executed by each of the
parties hereto in any number of counterparts, and by each of the parties hereto
on separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

 

Each signatory, by its execution hereof, does hereby
become a party to each of the agreements or indenture identified for such party
as of the date specified in such agreements or indenture.

 

IN WITNESS WHEREOF, the undersigned have executed this
Pricing Instrument with respect to the Notes as of the date first written
above.

 

 

	
   

  	
  GENWORTH LIFE AND ANNUITY INSURANCE COMPANY (in executing below
  agrees and becomes a party to (i) the Terms Agreement set forth in
  Section C herein and (ii) the Coordination Agreement set forth in
  Section D herein)

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
         /s/
  Pamela C. Asbury

  
	
   

  	
   

  	
  Name: Pamela C. Asbury

  
	
   

  	
   

  	
  Title: Vice President

  

 

[Execution Page 1 of 3]

 

E-1

 

	
   

  	
  THE GENWORTH GLOBAL FUNDING TRUST DESIGNATED IN THIS PRICING
  INSTRUMENT (in executing below agrees and becomes a party to (i) the
  Indenture set forth in Section B herein, (ii) the Terms Agreement
  set forth in Section C herein and (iii) the Coordination Agreement
  set forth in Section D herein)

  
	
   

  	
   

  	
   

  
	
   

  	
  By: U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity
  but solely in its capacity as Trustee of the Trust

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Patricia M. Child

  
	
   

  	
   

  	
  Name: Patricia M. Child

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION (in executing below agrees and becomes
  a party to the Trust Agreement set forth in Section A herein), as
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Patricia M. Child

  
	
   

  	
   

  	
  Name: Patricia M. Child

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION (in executing below acknowledges and agrees to Section 5.01
  of the Trust Agreement as set forth in and amended by Section A herein),
  in its individual capacity

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
          /s/
  Patricia M. Child

  
	
   

  	
   

  	
  Name: Patricia M. Child

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  GSS HOLDINGS II, INC. (in executing below agrees and becomes a party
  to the Trust Agreement set forth in Section A herein), as Trust
  Beneficial Owner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Bernard J. Angelo

  
	
   

  	
   

  	
  Name: Bernard J. Angelo

  
	
   

  	
   

  	
  Title: Vice President

  
					

 

[Execution Page 2 of 3]

 

E-2

 

	
   

  	
  THE BANK OF NEW YORK TRUST COMPANY, N.A. (in executing below agrees
  and becomes a party to (i) the Indenture set forth in Section B
  herein, as Indenture Trustee, Registrar, Transfer Agent, Paying Agent and
  Calculation Agent and (ii) the Coordination Agreement set forth in
  Section D herein), as Indenture Trustee, Registrar, Transfer Agent,
  Paying Agent and Calculation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  R. Tarnas 

  
	
   

  	
   

  	
  Name: R. Tarnas

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SUNTRUST BANK (in executing below agrees and becomes a party to the
  Coordination Agreement set forth in Section D herein), as Custodian

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Richard J. Owens, III

  
	
   

  	
   

  	
  Name: Richard J.
  Owens, III

  
	
   

  	
   

  	
  Title: VP/Trust Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  INCAPITAL,
  LLC (in executing below agrees and becomes a party to the Terms Agreement set
  forth in Section C herein)

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Brian Walker

  
	
   

  	
   

  	
  Name: Brian Walker

  
	
   

  	
   

  	
  Title: Managing
  Director

  

 

[Execution Page 3 of 3]

 

E-3

 

EXHIBIT A

Standard Trust Terms

 

As
filed as Exhibit 4.5 to the Registration Statement on Form S-3 (File No. 333-128718),
filed by Genworth Life and Annuity Insurance Company with the Securities and
Exchange Commission (the “Commission”) on September 30, 2005, as amended
by Amendment No. 1, filed with the Commission on December 8, 2005.

 

A-1

 

EXHIBIT B

Standard Indenture Terms

 

As filed as Exhibit 4.1
to the Registration Statement on Form S-3 (File No. 333-128718),
filed by Genworth Life and Annuity Insurance Company with the Securities and
Exchange Commission (the “Commission”) on September 30, 2005, as amended
by Amendment No. 1, filed with the Commission on December 8, 2005.

 

B-1

 

EXHIBIT C

Pricing Supplement

 

As
filed with the Securities and Exchange Commission pursuant to Rule 424(b) under
the Securities Act, dated as of April 21, 2008, with respect to the Notes
to be issued by the Trust.

 

C-1

 

EXHIBIT D

Genworth Life and Annuity
Insurance Company

 

Officer’s Certificate

 

The undersigned, an officer of Genworth Life and
Annuity Insurance Company, a stock life insurance company operating under a
charter granted by the Commonwealth of Virginia (“GLAIC”), does hereby certify
to Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., in such capacity and on behalf of GLAIC, to the knowledge
of the undersigned and after reasonable inquiry, that:

 

1.                                      each
of the representations and warranties of GLAIC contained in each Expense and
Indemnity Agreement entered into in connection with the Registration Statement
(defined below), and each Funding Agreement issued in connection with the
Program (the “Specified Agreements”) (other than any representation or warranty
expressly made as of a date prior to the date hereof) are true and correct on
and as of the date hereof, with the same effect as though such representation
or warranty had been made on and as of the date hereof;

 

2.                                      no
default under any of the Specified Agreements and no event or any condition
which, with notice or lapse of time or both, would become a default, has
occurred and is continuing as of the date hereof;

 

3.                                      GLAIC
has performed and complied with, in all material respects, all of the
agreements, covenants, obligations and conditions applicable to GLAIC required
by the Specified Agreements to be performed or complied with by GLAIC on or
before the date hereof;

 

4.                                      the
Registration Statement filed on Form S-3 (File No. 333-128718) (the “Registration
Statement”) by GLAIC has been declared effective by the Securities and Exchange
Commission (the “Commission”) under the Securities Act of 1933, as amended (the
“Act”) and no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been commenced
by or are pending before or contemplated by the Commission;

 

5.                                      all
filings, if any, required by Rule 424 and Rule 430A under the Act
have been made in a timely manner;

 

6.                                      since
[·](1),
the Trusts organized in connection with the program contemplated by the
Registration Statement have issued the following series of Notes:

 

[List each series of Notes] 
[(collectively, the “Designated Notes”)]; and

 

7.                                      the
Funding Agreements issued in connection with the Designated Notes have been
executed and delivered by GLAIC in accordance with the terms and conditions of
the Program Documents.

 

(1) This
certificate to be signed quarterly.

 

D-1

 

Capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Standard Indenture
Terms attached as Exhibit 4.1 to the Registration Statement.

 

IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of the [·] day of [·]
200[·].

 

	
   

  	
  [Name], in [his/her]
  capacity as an authorized officer of

  Genworth Life and Annuity Insurance Company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

D-2

 

EXHIBIT E

Genworth Global Funding
Trusts

 

Trustee Officer’s
Certificate

 

U.S. Bank National Association, not in its individual
capacity but solely in its capacity as trustee acting on behalf of each common
law trust organized under the laws of the State of Illinois (in such capacity,
the “Trustee,” and each such common law trust being referred to herein as a “Trust”)
in connection with the program contemplated by the Registration Statement filed
on Form S-3 (File No. 333-128718) by Genworth Life and Annuity
Insurance Company with the Securities and Exchange Commission (the “Commission”)
on September 30, 2005, as amended by Amendment No. 1, filed with the
Commission on December 8, 2005 (the “Registration Statement”), does hereby
certify to Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., in such capacity and on behalf of each Trust,
to the knowledge of the Trustee without any independent investigation, that; as
of October 1, 2006:

 

1.                                      each
of the representations and warranties of each Trust contained in the Notes
issued in connection with the Program, each Indenture entered into in
connection with the Registration Statement and the Expense and Indemnity
Agreement concerning the Trusts (the “Specified Agreements”) (other than any
representation or warranty expressly made as of a date prior to the date
hereof) are true and correct on and as of the date hereof, with the same effect
as though such representation or warranty had been made on and as of the date
hereof;

 

2.                                      no
default under any of the Specified Agreements and no event or any condition
which, with notice or lapse of time or both, would become a default, has
occurred and is continuing as of the date hereof;

 

3.                                      each
Trust has performed and complied with, in all material respects, all of the
agreements, covenants, obligations and conditions applicable to such Trust
required by the Specified Agreements to be performed or complied with by such
Trust on or before the date hereof;

 

4.                                      the
Notes issued in connection with the Program have been issued, in all material
respects, in accordance with the terms and conditions of the Program Documents;
and

 

5.                                      each
Funding Agreement has been executed and delivered by the related Trust in
accordance with the terms and conditions of the Program Documents.

 

Capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Standard Indenture
Terms attached as Exhibit 4.1 to the Registration Statement. In no event
shall U.S. Bank National Association in its personal corporate capacity (or any
officer of the Trustee in his or her personal capacity) have any liability for
any of the certifications or statements contained in this Trustee Officer’s
Certificate, such liability being solely that of each Trust.

 

E-1

 

IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of the [·] day of [·],
200[·].

 

	
   

  	
  U.S. Bank National
  Association, not in its individual capacity but solely in its capacity as
  Trustee acting on behalf of each Trust

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-2

 

SCHEDULE I

 

Terms Agreement
Specifications

 

In
connection with Section 3(a)(iv) of the Distribution Agreement, the
Program under which the Notes are issued is rated Aa3 by Moody’s Investors
Service, Inc. (“Moody’s”) and AA- by Standard & Poor’s Rating
Services, a division of The McGraw-Hill Companies, Inc. (“S&P”).  Genworth Life and Annuity Insurance Company (“GLAIC”)
expects that the Notes will be rated Aa3 by Moody’s and AA- by S&P.  GLAIC’s financial strength rating is Aa3 by
Moody’s and AA- by S&P.

 

In
accordance with Section 2.02(b) of the Terms Agreement and in
connection with the purchase of Notes from the Trust by the Agent, the
following items will be delivered on or prior to the Settlement Date to the
Agent:  None.

 

All capitalized terms used herein and not otherwise
defined herein will have the meanings set forth in the Distribution Agreement.

 

I-1

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