attachment b - docs.sandiego.gov

ATTACHMENT B

TABLE OF CONTENTS

Page

1. Purchase and Sale

2

2.

Purchase Price

2

3. Payment of Purchase Price

3

4. Condition of Title

3

5. Opening of Escrow

3

6.

Conditions to the Close of Escrow.

3

7.

Deliveries to Escrow Holder

9

8.

Deliveries to Buyer Upon Close of Escrow

11

9.

Title Insurance

11

10. Costs and Expenses

12

11. Prorat ions

12

12.

Disbursements and Other Actions by Escrow Holder

13

13.

Seller's Representations and Warranties

14

14.

Seller's Covenants Regarding Operation of the Property Through the Close of Escrow

16

15.

Buyer's Representations and Warranties

17

16.

Condemnation and Destruction.

18

17. Indemnificat ion

19

18. Notices

19

19.

No Real Estate Brokers or Commissions

20

20.

Required Actions of Buyer and Seller

21

21. Entry

22

22.

Legal and Equitable Enforcement of this Agreement

22

23. Miscellaneous.

23

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[Property Acquisition Agreement and Joint Escrow Instruction

PROPERTY ACQUISITION AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

California Health & Safety Code section 33391(a)

Centre City Redevelopment Project Area

Redevelopment Agency of the City of San Diego

To:

Lawyers Title Insurance Company

Escrow No.

11609909-909-LM

5898 Copley Drive, Third Floor

Escrow Officer: Linda L. McLain, CSEO

San Diego, California 91211

Tel. No. (858) 650-3946 — Fax No. (619) 209-3449

THIS PROPERTY ACQUISITION AGREEMENT AND JOINT ESCROW INSTRUCTIONS

("Agreement")

by and between WAKELAND HOUSING & DEVELOPMENT CORPORATON, a

California corporation

("Seller"),

and the REDEVELOPMENT AGENCY OF THE CITY OF SAN DIEGO,

a public body, corporate and politic,

("Buyer")

is made and entered into as of the date the Agreement is

signed by the Buyer

("Execution Date").

R E C IT A L S :

A.

Seller entered into an agreement for purchase and sale of real property with D&A Semi-

Annual Mortgage Fund III, L.P., ("D&A") dated April 22, 2009, as amended by that certain amendment to

agreement for purchase and sale of real property dated as of July 1, 2009

("Initial D&A-Wakeland

Contract").

The parties to the Initial D&A-Wakeland Contract subsequently amended and restated the

agreement for purchase and sale of real property in a contract dated January 26, 2010 (the

"D&A-Wakeland

Contract")

concerning that certain real property commonly described as 1453 Fourth Avenue and 1446 Fifth

Avenue, San Diego, California 92101 in the City of San Diego ("City"), County of San Diego

("County"),

State of California ("State")

and legally described on Exhibit "A" and the property described therein shall be

referred to as the "Property."

B.

Capitalized terms shall have the meanings set forth in connection with the use of such terms.

If no definition is so set forth, such capitalized terms shall have the meanings set forth in the Glossary of

Terms attached hereto.

C.

The Property was excavated for a failed development and abandoned with exposed shoring as

depicted on that certain Review and Evaluation Report for Former Atmosphere Site Shoring bearing project

number 09076 prepared by Flores Lund Consultants, as amended November 16, 2009.

D.

Among other conditions precedent to closing the D&A-Wakeland Contract, D&A agrees to

provide tie-back easement agreements as set forth in Section 4.2(e) of the D&A-Wakeland Contract. Pursuant

to Section 11.19 of the D&A-Wakeland Contract, upon D&A's request, Seller will provide assistance to D&A

in obtaining signatures of adjoining property owners to the tie-back easement agreement.

E.

Following review of the D&A-Wakeland Contract and consideration of conditions precedent

to the Close of Escrow herein, Buyer indicates it would approve tie-back easement agreements so long as they

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are in substantially in the same form attached hereto as Exhibit "F" and delivered by all property owners

adjoining the Property (the

"Tie-Back Condition").

F.

Among other conditions precedent to closing the D&A-Wakeland Contract, D&A agrees to

fill the Property to a finish grade and compact the soil according to permits issued by the City as set forth in

Section 4.2(f) of the D&A-Wakeland Contract. Pursuant to Section 11.19 of the D&A-Wakeland Contract,

upon D&A's request, Seller will provide assistance to D&A in identifying contractors and obtaining

approvals of the work by Buyer. At or around the Execution Date, Seller believes D&A will not request

assistance from Seller

G.

Following further review of the D&A-Wakeland Contract and consideration of conditions

precedent to the Close of Escrow herein, Buyer indicates it desires the Property be delivered at the Close of

Escrow filled, compacted and graded according to certain requirements of the City; to facilitate delivery of the

Property at the Close of Escrow according to its desires, Buyer proposes an engineer involved in filling,

compacting, and grading the Property complete a form of certification of engineer, substantially in the form

attached hereto as Exhibit "G," certifying completion and delivery of the Property (the

"Fill Condition").

H.

Seller acknowledges receipt of that certain Review and Evaluation Report for Former

Atmosphere Site Shoring bearing project number 09076 prepared by Flores Lund Consultants, as amended

November 16, 2009 which contains further information concerning Buyer's due diligence concerning the

Property and Buyer's expectations concerning satisfaction of the Fill Condition.

I.

After completing discussions on proposed terms for an exclusive negotiations agreement,

Buyer has provided Seller the terms under which Buyer would enter into an exclusive negotiation agreement

with Seller concerning the future development of a mixed-use project predominately comprised of affordable

housing on the Property wherein Seller would be the sole negotiating party with Buyer for a period of up to

two years after the Close of Escrow.

J.

In furtherance of Health and Safety Code sections 33334.2 and 33334.3 and in contemplation

of the transactions described herein, Buyer proposes to utilize funds from its low and moderate income

housing fund to purchase and devote the Property to increase the community's supply of low and moderate

income housing at an affordable housing cost.

K.

Buyer and Seller desire to enter into this Agreement subject to the closing of the D&A-

Wakeland Contract. The Closing Date of this Agreement is to be concurrent and back-to-back with the

closing of the D&A-Wakeland Contract, recordation of the tie-back agreements provided in satisfaction of the

Tie-Back Condition, and the recordation of that certain grant deed from D&A to Seller.

A G R E EM EN T :

NOW THEREFORE, incorporating the foregoing recitals, and for other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree

as follows.

1.

Purchase and Sale. Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller,

Seller's entire undivided interest in the Property upon the terms and conditions set forth in this Agreement.

2.

Purchase Price. The Purchase Price for the Property shall be Four Million Nine Hundred

Fifty Thousand Dollars ($4,950,000.00) (the

"Purchase Price").

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3.

Payment of Purchase Price. Subject to the terms of this Agreement, the Purchase Price shall

be paid by Buyer at the Close of Escrow, as follows:

3.1 On or before the Closing Date, Buyer shall deposit with Escrow Holder the Purchase

Price (the

"Closing Funds");

Escrow Holder shall place the Closing Funds in an interest-bearing account in

favor of Buyer.

3.2

On the Closing Date, interest accrued on deposits shown in Paragraph 3.1 shall be

shown as a credit by Escrow Holder in favor of Buyer.

4.

Condition of Title. At the Close of Escrow, the entire undivided fee simple title to the

Property shall be conveyed to Buyer by Seller by the Grant Deed, as defined hereinbelow, with a legal

description approved by the Buyer, subject only to the following matters

("Approved Title Conditions"):

(A) a lien for general real property taxes, not then delinquent; (B) matters of title respecting the Property

approved by Buyer in accordance with Paragraph 6.1.1 below; and (C) matters affecting the condition of title

to the Property created by or with the written consent of Buyer.

5.

Opening of Escrow. Buyer and Seller shall promptly cause the Opening of Escrow by

delivering a fully executed copy of this Agreement to Escrow Holder and such other supplemental escrow

instructions among D&A, Seller, and Buyer, if and as appropriate. The Close of Escrow shall occur on the

Closing Date.

6.

Conditions to the Close of Escrow.

6.1 Conditions Precedent to Buyer's Obligations. Buyer shall have the entire period

commencing upon the Opening of Escrow through the Contingency Date within which to make all reviews,

inspections, audits, or investigations desired by Buyer with respect to the satisfaction of the Fill Condition.

Seller has previously furnished all results of Seller's reviews, inspections, audits, and investigations

prosecuted by Seller under the D&A-Wakeland Contract to Buyer, including any and all due diligence

material concerning D&A, Asset Managers, Inc., and any documentation obtained by Seller concerning the

interests of D&A and Asset Managers, Inc. in the Property. Seller agrees to furnish to Buyer any and all

reports and documents produced by the consultants and third-parties retained under Section 4.2 of the D&A-

Wakeland Contract. Pursuant to Section 4.2(f)(viii) of the D&A-Wakeland Contract, D&A has agreed to,

among other things, cooperate with Centre City Development Corporation, a California corporation

("CCDC"), Buyer's agent, and its authorized representatives, with monitoring of the repairs being performed

on the Property. The Close of Escrow and Buyer's obligations with respect to the transaction contemplated

by this Agreement are subject to the satisfaction of the following conditions precedent, not later than the

Contingency Date, unless extended through the Closing Date as specifically noted in Paragraphs 6.1.1 through

6.1.8, inclusive:

6.1.1 Title. Buyer received a third amended preliminary report issued by the Title

Company dated as of February 2, 2010 (the

"Title Report")

and certain underlying documents referenced

therein (the "Title Documents").

Buyer notifies the Seller and Escrow Holder of the Buyer's approval,

conditional approval and disapproval of the Title Documents as follows: (1) Buyer

approves the following

Schedule B Section B exceptions in the Title Report: A, 2, 5, 6, 7, 11, and 14; Buyer

conditionally approves

the following Schedule B Section B exceptions in the Title Report and requests Seller and Title Company

advise if the conditions for approval may be satisfied prior to the Closing Date: H (revised to add the phrase

"after the date of policy" before the period), 1 (provided CLTA 103.5 endorsement affirmative insurance is

issued by Title Company in connection with the Title Policy), 3 (provided CLTA 100.6 affirmative insurance

over this exception is issued in connection with the Title Policy), 4 (provided CLTA 100.6 affirmative

insurance over this exception is issued in connection with the Title Policy), 8 through 10, inclusive (provided

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CLTA 100.6 affirmative insurance over these exceptions are issued in connection with the Title Policy), 12

(provided modified CLTA 100 affirmative insurance is provided for an owner and regarding existing and

future improvements and issued in connection with the Title Policy), 13 (provided modified CLTA 100

affirmative insurance is provided for an owner and regarding existing and future improvements and issued in

connection with the Title Policy), 22 (provided the Title Company performs their inspection, discloses the

results, if any, and maintains only the following exception language "The fact that there is a pedestrian

stairway which accesses adjoining property to the east" or such other exception mutually agreed upon

between Buyer and Title Company), 24 (provided the Title Company acknowledges reports of the Seller and

D&A concerning the duty of inquiry, discloses the results, if any, and deletes this exception entirely in

exchange for the revised exception 27), and 27 (provided the Title Company limits this exception to

"Discrepancies, conflicts in boundary lines, shortage in area, e exception to "Matters which may be disclosed

by a survey."); Buyer

disapproves

the following Schedule B Section B exceptions in the Title Report: 15

through 22, inclusive, 25 and 26. The foregoing shall constitute

"Buyer's Title Notice."

Seller shall have

the right, but not the obligation, to indicate which items Seller shall eliminate from the Title Policy (and as

exceptions to title to the Property), and the manner in which Seller shall do so, by delivering written notice

thereof to Buyer

("Seller's Title Notice")

within thirty (30) days after execution of this Agreement. If Seller

fails to timely deliver Seller's Title Notice, then Seller shall be deemed to have elected to correct all of the

matters disclosed in Buyer's Title Notice. Buyer shall have the right, in its sole and absolute discretion, to

approve or disapprove Seller's Title Notice, or Seller's election not to cure any matters disclosed in Buyer's

Title Notice, as applicable, by delivering written notice thereof to Seller on or before the Contingency Date;

and Buyer's election to terminate this Agreement in accordance with Paragraph 6.1.2 below. If Buyer

approves Seller's Title Notice, then by the Closing Date Seller shall eliminate those disapproved matters set

forth in Seller's Title Notice (or Buyer's Title Notice, if Seller is deemed to have elected to correct such

matters) from the Title Policy and as exceptions to title to the Property in the manner indicated therein.

Notwithstanding the foregoing, Buyer hereby objects to all liens evidencing monetary encumbrances

(including liens for non-delinquent general real property taxes and assessments) and Seller agrees to cause all

such liens to be eliminated at Seller's sole cost (including all prepayment penalties and charges) prior to the

Closing Date. Seller agrees to provide the Title Company with all such documents as may be reasonably

required by Title Company to confirm the validity of transfer of title to Seller from the D&A-Wakeland

Contract. Seller further agrees to provide the Title Company with all such releases, evidence of payment, or

like documentation to confirm and remove all monetary encumbrances and any standard nonspecific

exceptions, including, but not limited to, any owner's statements or lien affidavits from the Title Policy.

6.1.2 Review and Approval of Documents and Materials. Buyer confirms receipt

of pages 7 and 10 of certain temporary shoring plans prepared by Flores Lund Consultants under work order

number 421558, a June 22, 2009 letter from Earth Support Systems, and a phase I environmental report from

the Seller delivered to Buyer in connection with the Initial D&A-Wakeland Contract (the

"Prior Due

Diligence").

Buyer has also independently obtained and provided to Seller that certain Review and

Evaluation Report for Former Atmosphere Site Shoring bearing project number 09076 prepared by Flores

Lund Consultants, as amended November 16, 2009. To the extent there exists additional due diligence

material obtained by Seller since the Initial D&A-Wakeland Contract, within five (5) days of the Execution

Date, Seller shall deliver to Buyer for Buyer's review and approval any other documents and materials

respecting the Property set forth below. In addition, and with respect to the Fill Condition, Seller shall

delivery all other documents and materials Seller receives in connection with the D&A-Wakeland Contract

concerning the Fill Condition. Buyer shall have until the Contingency Date to review and approve the

documents and materials concerning the Fill Condition delivered by Seller to Buyer. At any time on or before

the Contingency Date, Buyer shall have the right, in its sole and absolute discretion, to terminate this

Agreement should there be a failure to satisfy the Fill Condition or failure to permit Buyer, CCDC, Buyer's

agents, contractors, or consultant's access to the Property to monitor the satisfaction of the Fill Condition.

Buyer's delivery of written notice to Seller of Buyer's disapproval of the repair work performed to satisfy the

Fill Condition shall constitute an election by Buyer to terminate this Agreement in accordance with this

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Paragraph 6.1.2. Notwithstanding the foregoing, Seller agrees to provide any and all documents and materials

concerning the Property, the Fill Condition and the D&A-Wakeland Contract through the Close of Escrow

despite the passage of the Contingency Date. In the event any documents or materials are delivered by Seller

to Buyer after the Contingency Date and the information set out in such documents or materials would have

permitted Buyer to terminate the Agreement on or before the Contingency Date, Buyer shall have the right, in

its sole and absolute discretion, to terminate this Agreement up until the Closing Date notwithstanding such

earlier election to the contrary.

(A)

Soils and Geological Reports. Buyer confirms receipt of the Prior Due

Diligence. To the extent any additional applicable documents and materials under this category are received

in connection with the Fill Condition, Seller shall deliver such additional applicable documents and materials,

including without limitation, any and all soils, geological, geophysical, biological, anthropological, cultural or

paleontological surveys, reports, or studies it has commissioned, ordered, or received relating to the Property,

reports confirming only Clean Soil is brought onto the Property or other reports or documents concerning the

Repair of the Property as described in Section 4.2 of the D&A-Wakeland Contract that are obtained by Seller.

Seller's duty to provide these surveys, reports, studies, or documents is an ongoing duty through the Closing

Date. In the event any documents or materials are delivered by Seller to Buyer after the Contingency Date

and the information set out in such documents or materials would have permitted Buyer to terminate the

Agreement on or before the Contingency Date, Buyer shall have the right, in its sole and absolute discretion,

to terminate this Agreement up until the Closing Date notwithstanding such earlier election to the contrary.

(B)

Environmental Reports. Buyer confirms receipt of the Prior Due Diligence.

To the extent any additional applicable documents and materials under this category are received in

connection with the Fill Condition, Seller shall deliver such additional applicable documents and materials,

including, without limitation, any and all environmental surveys, reports, or studies it has commissioned,

ordered, or received relating to the Property, reports confirming only Clean soil is brought onto the Property

or other reports or documents concerning the Repair of the Property as described in Section 4.2 of the D&A-

Wakeland Contract that are obtained by Seller. Seller's duty to provide these surveys, reports, studies, or

documents is an ongoing duty through the Closing Date. In the event any documents or materials are

delivered by Seller to Buyer after the Contingency Date and the information set out in such documents or

materials would have permitted Buyer to terminate the Agreement on or before the Contingency Date, Buyer

shall have the right, in its sole and absolute discretion, to terminate this Agreement up until the Closing Date

notwithstanding such earlier election to the contrary.

(C)

Personal Property Inventory. Seller certifies herein to the Buyer that there is

no personal property or like listing or description of inventory

("Inventory")

included in the D&A-Wakeland

Contract and to the best of Seller's knowledge there is no Inventory to report herein to convey to the Buyer in

this transaction. The parties agree that the General Assignment and Bill of Sale that Seller shall deliver to

Buyer on or before the Closing Date will convey any Inventory on the Property after the Execution Date and

before the Closing Date acquired by Seller at Close of Escrow whether or not expressly contained or

identified in the D&A-Wakeland Contract.

(D)

Records and Plans. Seller shall deliver to Buyer a list and complete copies

of all Records and Plans and Licenses and Permits including, but not limited to, any concerning the Repair of

the Property as described in Section 4.2 of the D&A-Wakeland Contract that are obtained by Seller. Seller

acknowledges satisfaction of the Fill Condition requires certain permits. To the extent D&A delivers actual

copies of any applications or like documents concerning Records and Plans obtained in satisfaction of the Fill

Condition, Seller shall deliver all documents received from D&A. Seller agrees to provide any and all other

such documentation received by Seller in connection with the fill of the Property and satisfaction of the Fill

Condition and related materials, including copies of any and all draw requests signed by Seller in connection

with satisfaction of the Fill Condition and the D&A-Wakeland Contract. This condition is an ongoing duty

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through the Closing Date. In the event any documents or materials are delivered by Seller to Buyer after the

Contingency Date and the information set out in such documents or materials would have permitted Buyer to

terminate the Agreement on or before the Contingency Date, Buyer shall have the right, in its sole and

absolute discretion, to terminate this Agreement up until the Closing Date notwithstanding such earlier

election to the contrary.

(E)

Claims. Seller shall deliver to Buyer a list of all pending or threatened

claims, proceedings, regulatory or legal actions instituted against Seller or in connection with the D&A-

Wakeland Contract, including, but not limited to the Repair of the Property as described in Section 4.2 of the

D&A-Wakeland Contract. Seller agrees to provide this information to the best of Seller's knowledge and this

duty to provide this information concerning pending or threatened claims, proceedings, regulatory or legal is

an ongoing duty through the Closing Date. In the event any documents or materials are delivered by Seller to

Buyer after the Contingency Date and the information set out in such documents or materials would have

permitted Buyer to terminate the Agreement on or before the Contingency Date, Buyer shall have the right, in

its sole and absolute discretion, to terminate this Agreement up until the Closing Date notwithstanding such

earlier election to the contrary.

(F)

Tenant Leases. To the best of Seller's knowledge, Seller certifies herein to

the Buyer that there are no Tenant Leases affecting the Property and agrees to demonstrate such confirmation

through the Close of Escrow by delivering the attached the Estoppel Certificate on the Closing Date. The

parties agree the Property is to be conveyed to Buyer without any tenants, licensees, or occupants on the

Property.

(G)

Service Contracts. To the best of Seller's knowledge, Seller certifies herein

to the Buyer that there are no Service Contracts affecting the Property and agrees to demonstrate such

confirmation through the Close of Escrow by delivering the attached Estoppel Certificate on the Closing Date.

The parties agree the Property is to be conveyed to Buyer without any Service Contracts affecting the

Property, other than those entered into by D&A in connection with Section 4.2(f) of the D&A-Wakeland

Contract and disclosed to the Buyer on the Estoppel Certificate. Unless otherwise agreed upon by the Buyer,

there shall be no other Service Contracts affecting the Property on the Closing Date.

(H)

D&A-Wakeland Contract. Buyer confirms receipt of the D&A-Wakeland

Contract. Within the time periods provided in the D&A-Wakeland Contract, Seller shall deliver to Buyer any

and all other documents and materials pertaining to the D&A-Wakeland Contract, including, but not limited

to, all amendments, supplements, exhibits, closing statements, estimated closing statements, as well as any

and all due diligence material, including but not limited to all deliveries Sections 7.3 and 7.4 received by the

Seller under the D&A-Wakeland Contract or like documents concerning the Tie-Back Condition and Fill

Condition in connection therewith. In the event any documents or materials are delivered by Seller to Buyer

after the Contingency Date and the information set out in such documents or materials would have permitted

Buyer to terminate the Agreement on or before the Contingency Date, Buyer shall have the right, in its sole

and absolute discretion, to terminate this Agreement up until the Closing Date notwithstanding such earlier

election to the contrary.

(I)

Relevant Information. Seller certifies to Buyer that the Prior Due Diligence

constitutes all of Seller's relevant information with respect to the condition of the Property as of the date of

this Agreement. Buyer confirms receipt of the Prior Due Diligence. To the extent any additional applicable

documents and materials under this Paragraph 6 are received in connection with satisfaction of the Fill

Condition, Seller shall deliver to Buyer such other information which would be relevant to Buyer's analysis of

the Property, including, but not limited to any other material from the parties to the D&A-Wakeland Contract,

including how D&A acquired its interest in the Property, the Tie-Back Condition, the Fill Condition, or any

developments concerning the transactions contemplated therein. In the event any documents or materials are

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delivered by Seller to Buyer after the Contingency Date and the information set out in such documents or

materials would have permitted Buyer to terminate the Agreement on or before the Contingency Date, Buyer

shall have the right, in its sole and absolute discretion, to terminate this Agreement up until the Closing Date

notwithstanding such earlier election to the contrary.

With respect to and limited to the satisfaction of the Fill Condition and Tie-Back Condition, on or

before the Contingency Date, Buyer shall have approved the results of any and all inspections, investigations,

tests and studies (including, without limitation, investigations with regard to zoning, building codes and other

government regulations, architectural inspections, engineering tests, economic feasibility studies and soils,

seismic, environmental contamination and geologic reports) with respect to satisfaction of the Fill Condition

and Tie-Back Condition concerning the Property (including all structural and mechanical systems and

equipment) provided to Buyer by Seller and those separately and independently obtained by Buyer at its

election—the cost of any such inspections, tests and studies shall be borne by Buyer.

6.1.3 Representations, Warranties and Covenants of Seller. Seller shall have duly

performed each and every agreement to be performed by Seller in the D&A-Wakeland Contract and

hereunder and Seller's representations, warranties and covenants set forth in this Agreement shall be true and

correct in all material respects as of the date hereof and as of the Closing Date with the same force and effect

as if remade by Seller in a separate certificate at that time.

6.1.4 Seller's Deliveries. Seller shall have delivered the items described in

Paragraph 6.1.2, Paragraph 7.1 and Paragraph 8.

6.1.5 No Material Changes. At the Closing Date, there shall have been no material

adverse changes in the physical or financial condition of any portion of the Property.

6.1.6 Title Insurance. As of the Close of Escrow, the Title Company shall have

issued or shall have committed to issue the Title Policy, as defined hereinbelow, to Buyer.

6.1.7 Estoppel Certificate. Buyer shall have received prior to the Closing Date an

estoppel certificate with respect to the Tenant Leases or Service Contracts, if any, in the form of, and upon the

terms contained in, Exhibit "B" attached hereto

("Estoppel Certificate"),

dated not more than thirty (30) days

prior to the Closing Date, duly executed by Seller. Seller hereby approves the form of Exhibit "B" attached

hereto, and shall deliver the original fully executed Estoppel Certificate to Buyer prior to the Closing Date.

6.1.8 Expected Condition of Property on the Closing Date. As a condition to the

Close of Escrow, the repair work performed by D&A on the Property shall be sufficient to bring the Property

to the following condition to the satisfaction of Buyer: (i) all soil brought to the Property and used for re-

filling the excavated Property shall be Clean Soil as certified by a soils engineer acceptable to Buyer; (ii) to

at-grade elevation of all property surrounding the Property within 1/10 of a foot of the at-grade level of

average elevation of all surrounding property and approximately at the level or close to the natural state prior

to the excavation of the Property by the prior owners of the Property and in strict compliance with all

Licenses and Permits issued in connection with the Fill Condition and approved by the appropriate Authority,

and generally in adherence to the refill, fill, and compacting plan established by a licensed soils engineer or

like professional and within reasonable scope of a refilling plan certified by such engineer or professional

much like that contained in the Review and Evaluation Report for Former Atmosphere Site Shoring bearing

project number 09076 prepared by Flores Lund Consultants, as amended November 16, 2009; (iii) with

agreements, substantially in the same form as attached in Exhibit "F," signed by all surrounding property

owners confirming that tie-backs beneath the surface of adjoining land to the Property may remain in place

beneath surrounding property with such temporary licenses to enter and monitor the land adjacent to the

Property during the satisfaction of the Fill Condition. The re-filling of the Property shall be completed with

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licensed and bonded contractors with all insurance requirements required by the Licenses and Permits and the

Authorities and completed in such a fashion that installation of temporary rental perimeter fencing to be

installed by Seller at such time mutually agreed upon by the parties but in no event leaving the Property in

such a state that may constitute an unattended nuissance or public health and safety hazard. Further, the

parties agree that the condition of the Property is to be such that Buyer may contract for installation of all

necessary public improvements and paving for a parking lot with all necessary and appropriate public

improvements and lighting without having to grade for stormwater drainage or provide for erosion control in

the interim. The condition of the Property at the Close of Escrow shall be certified by Seller's engineer and

identify satisfaction of all necessary Licenses and Permits and requirements of Buyer using a certification, in

substantially the same form of Certification of Engineer attached hereto as Exhibit "G." For information, and

as an illustrative example only and subject to Paragraph 20 and its subparagraphs, the Review and Evaluation

Report for Former Atmosphere Site Shoring bearing project number 09076 prepared by Flores Lund

Consultants, as amended November 16, 2009, contains a refilling plan showing the same grad east to west

next to an adjacent publicly-owned structure with a slight grading westerly towards Fourth Avenue showing

positive drainage and to prevent ponding on the Property. Buyer shall have the right, prior to the Close of

Escrow, to inspect and verify that the work performed by D&A satisfies the requirements of this Paragraph

6.1.8. Buyer's Executive Director will provide Seller and Escrow Holder with written notice, in the form of a

closing estoppel certificate, confirming that, Buyer determined, in its discretion, that the Fill Condition and

Tie-Back Condition have been satisfied pursuant to the terms of this Agreement.

The conditions set forth in this Paragraph 6.1 are solely for the benefit of Buyer and may be waived

only by Buyer in writing to Seller. Buyer shall at all times have the right to waive any condition. The waiver

by Buyer of any condition shall not relieve Seller of any liability or obligation with respect to any

representation, warranty, covenant or agreement of Seller. All approvals or disapprovals given by Buyer

under this Paragraph 6.1 shall be in Buyer's sole and absolute discretion and in writing and the failure of

Buyer to approve any matter requiring its approval under this Paragraph 6.1 by the time therefor shall be

deemed approval thereof by Buyer, except as otherwise expressly provided. Neither Seller nor Buyer shall

act or fail to act for the purpose of permitting or causing any condition to fail (except to the extent Buyer, in

its own discretion, exercises its right to disapprove any such items or matters). Seller also agrees to comply

with any and all provisions of the D&A-Wakeland Contract and diligently perform to assure a prompt closing

of the same to assure a concurrent closing on the Closing Date. Buyer acknowledges Seller does not have

possession of the Property but expects Seller to exercise the diligence of a future developer proposing an

exclusive negotiation agreement for up to two years concerning a development on the Property.

6.2 Conditions Precedent to Seller's Obligations. The Close of Escrow and Seller's

obligations with respect to the transaction contemplated by this Agreement are subject to (A) consummation

and closing of the D&A-Wakeland Contract, (B) Buyer's delivery to Escrow Holder on or before the Closing

Date, for disbursement as provided herein, of the Purchase Price, and the documents and materials described

in Paragraph 7.2, (C) satisfaction of the Fill Condition, and (D) satisfaction of the Tie-Back Condition.

6.3 Concurrent C losing Date and Close of Escrow with the D&A-W akeland

Contract. The Closing Date and Close of Escrow in this Agreement shall occur immediately following

conveyance of the Property to the Seller under the D&A-Wakeland Contract. The Closing Date shall coincide

with the closing date, as defined in paragraph 4.1(d) of the D&A-Wakeland Contract. The Close of Escrow of

this Agreement shall coincide with the close of escrow defined in paragraph 2.5 of the D&A Wakeland

Contract. If and as appropriate, the parties hereto agree to enter into such supplemental joint escrow

instructions with D&A to facilitate a back-to-back concurrent closing of this Agreement with the D&A-

Wakeland Contract. Notwithstanding the foregoing, the Close of Escrow shall not be after the Closing Date.

6.4

Prohibition Against Amending, Supplementing , or Delaying Consummation of

D&A-Wakeland Contract without Buyer Consent. Seller shall not amend, supplement, or otherwise alter the

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D&A-Wakeland Contract without the written consent of the Buyer. Seller further agrees to take all necessary

steps to close the escrow in the D&A-Wakeland Contract and refrain from any activity which would delay the

close of the D&A-Wakeland Contract. Buyer would agree to review proposals for any revision to the D&A-

Wakeland Contract that are necessary to comply with Paragraph 6.1.8 of this Agreement.

6.5 Failure of Conditions to Close of Escrow. In the event any of the conditions set forth

in Paragraphs 6.1 or Paragraph 6.2 are not timely satisfied or waived, for a reason other than the default of

Buyer or Seller under this Agreement:

6.5.1 This Agreement, the Escrow and the rights and obligations of Buyer and

Seller shall teiminate, except as otherwise provided herein;

6.5.2 Escrow Holder is hereby instructed to promptly return to Buyer all funds,

accrued interest, and documents deposited by Buyer into Escrow which are held by Escrow Holder on the

date of said termination; and

6.5.3 Escrow Holder is hereby instructed to promptly return to Seller all funds and

documents deposited by Seller into Escrow which are held by Escrow Holder on the date of said termination.

6.6 Cancellation Fees and Expenses. In the event the Escrow terminates because of the

nonsatisfaction of any condition precedent for a reason other than the default of Buyer or Seller under this

Agreement, the cancellation charges required to be paid by and to Escrow Holder and the Title Company shall

be shared equally by Buyer and Seller.

7.

Deliveries to Escrow Holder.

7.1 By Seller. Seller hereby covenants and agrees to deliver or cause to be delivered to

Escrow Holder on or prior to the Closing Date the following instruments and documents, the delivery of each

of which shall be a condition precedent to the Close of Escrow for the benefit of Buyer.

7.1.1 Grant Deed. Seller shall deliver to Escrow Holder a Grant Deed

("Grant

Deed"),

duly executed and acknowledged in recordable form by Seller, conveying the Property to Buyer

subject only to the Approved Title Conditions. The Grant Deed shall be in the form of, and upon the terms

contained in Exhibit "C" attached hereto.

7.1.2 General Assignment and Bill of Sale. Seller shall deliver to Escrow Holder

an assignment and bill of sale

("General Assignment"),

duly executed by Seller, assigning to Buyer all of

Seller's right, title and interest in and to all Licenses and Plans and Records and Plans, all Personal Property

and all Service Contracts, if any, approved by Buyer on or before the Contingency Date. The General

Assignment shall be in the form of, and upon the terms contained in, Exhibit "D" attached hereto.

7.1.3 Non-Foreign Certification. Seller shall deliver to Escrow Holder a

certification duly executed by Seller under penalty of perjury in the form attached hereto as Exhibit "E"

("Non-Foreign Entity Certification")

certifying that Seller is not a "foreign person" as defined in

Section 1445 of the Internal Revenue Code of 1986, as amended.

7.1.4 Form 593-C. Seller shall deliver to Escrow Holder a Withholding Exemption

Certificate, Form 593-C, or in the event that the Seller is a non-California resident, a certificate issued by the

California Franchise Tax Board, pursuant to Revenue and Taxation Code Sections 18662, stating either the

amount of withholding required from Seller's proceeds or that Seller is exempt from such withholding

requirement (the "Form

593") duly executed by Seller.

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7.1.5 Proof of Authority of Seller. Seller shall deliver to Escrow Holder such

proof of Seller's authority and authorization to enter into this Agreement and the D&A-Wakeland Contract

and consummate the transactions contemplated thereby, and such proof of the power and authority of the

individual(s) executing and/or delivering any instruments, documents or certificates on behalf of Seller to act

for and bind Seller as may be reasonably required by Title Company and/or Buyer. Such proof includes, but

is not limited to receipt by Buyer of the following foimation or organizational documents of Seller:

(A)

All articles, bylaws, resolutions, and consents, and amendments thereto of

Seller

("Corporate Formation Documents"),

including evidence of domestic incorporation and good

standing certificates with the California Secretary of State;

(B)

All other Corporate Formation Documents, partnership agreements, limited

partnership agreements, limited liability operating agreements, and the respective evidence of formation from

the appropriate Secretary of State for any entity signing on behalf of the Seller; and

(C)

Evidence of authority, by way of corporate resolution or unanimous written

consent, or otherwise, indicating the Seller has authorized the transaction contemplated in this Agreement.

7. 1 .6 Proof of Authority of D&A Semi-Annual Mortgage Fund III, L.P. It shall be

a condition to closing that D&A shall have delivered to Escrow Holder such evidence of authority of D&A

Semi-Annual Mortgage Fund III, L.P., or its authorized agent(s), including but not limited to Asset Managers,

Inc., and authorization to enter into the D&A-Wakeland Contract and give the grant deed to Seller to enable

consummation of the transaction contemplated by this Agreement, and such proof of the power and authority

of the individual(s) executing and/or delivering any instruments, documents or certificates on behalf of D&A

Semi-Annual Mortgage Fund III, L.P. to act for and bind D&A Semi-Annual Mortgage Fund III, L.P. as may

be reasonably required by Title Company.

7.1.7 Lien Affidavits. Seller shall deliver to Escrow Holder any owner's

statements or lien affidavits as may be reasonably requested by the Title Company to issue the Title Policy.

7.1.8 Tie-Back Condition documentation. It shall be a condition to closing that

D&A shall have delivered to Escrow Holder, or as agreed upon with Buyer, all tie-back agreements, in

substantially the same foi

in as approved by Buyer as attached in Exhibit "F," and obtained for satisfaction of

the Tie-Back Condition.

7.1.9 Certification of Engineer and Fill Condition. It shall be a condition to

closing that D&A shall have delivered to Escrow Holder, or as agreed upon with Buyer, the Certification of

Engineer, in substantially the same form as approved by Buyer as attached in Exhibit "G," and obtained for

satisfaction of the Fill Condition.

7.2 By Buyer. Buyer hereby covenants and agrees to deliver or cause to be delivered to

Escrow Holder on or prior to the Closing Date the following instruments and documents, the delivery of each

of which shall be a condition precedent to the Close of Escrow for the benefit of Seller.

7.2.1 Purchase Price. Buyer shall deliver to Escrow Holder the Purchase Price in

accordance with Paragraph 3;

7.2.2 Grant Deed. Buyer shall deliver to Escrow Holder a counterpart acceptance

of the Grant Deed, duly executed and acknowledged in recordable form by Buyer, acknowledging and

accepting the conveyance of the Property from Seller subject only to the Approved Title Conditions. The

Grant Deed shall be in the form of, and upon the terms contained in, Exhibit "C" attached hereto.

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7.2 .3 General Assignment. Buyer shall deliver to Escrow Holder the General

Assignment duly executed by Buyer;

7.2.4 Prorations. Buyer shall deliver to Escrow Holder the amount due to Seller, if

any, after the prorations are computed in accordance with Paragraph 11; and

7.2 .5 Preliminary Change of Ownership Report. Buyer shall deliver to Escrow

Holder a completed Preliminary Change of Ownership Report

("PCOR")

duly executed by Buyer.

7.2 .6 Proof of Authority. Buyer shall deliver to Escrow Holder such proof of

Buyer's authority and authorizat ion to enter into this Agreement and consummate the transact ion

contemplated hereby, and such proof of the power and authority of the individual(s) executing and/or

delivering any instruments, documents or certificates on behalf of Buyer to act for and bind Buyer as may be

reasonably required by Title Company and/or Seller.

8.

Deliveries to Buyer Upon Close of Escrow. Seller shall deliver possession of the Property to

Buyer upon the Close of Escrow (unless otherwise provided). Further, Seller hereby covenants and agrees to

deliver to Buyer, on or prior to the Closing Date, the following items, the delivery of each of which shall be a

condition to the performance by Buyer of its obligations under the terms of this Agreement:

8.1 Records and Plans and Licenses and Permits. Seller shall deliver to Buyer originals

of the Records and Plans and Licenses and Permits, including any concerning the Tie-Back and Fill Condition

received by the Seller or Seller's counsel;

8.2

Tenant Leases. Originals of all of the Tenant Leases, if any, or confirmation on an

Estoppel Certificate that none exist on the Closing Date.

8.3

Service Contracts. Originals of all Service Contracts, if any, or confirmation on an


8.4

Personal Property. Possession of the Personal Property, if any, or confirmation on an


8.5 Keys. Seller shall deliver to Buyer keys, if any, to all locks, deadbolt gate entry

doors, or like entrance doors or temporary rental fencing to the Property and any Improvements, which keys

shall be properly tagged for identification;

9.

Title Insurance. At the Close of Escrow, Seller shall cause the Title Company to issue to

Buyer an ALTA Extended Coverage 1992 or 2006 Form Owner's Policy of Title Insurance with the

following CLTA endorsements, 100 (comprehensive, modified for owners and covering future

improvements), 100.6 (encroachment loss, concerning covenants on land and identified in Paragraph 6.1.1),

101.1 (mechanic's lien, assuring no such liens under the Fill Condition exist), 103.5 (water rights), 103.7

(abutting public street, modified to assure access), and 116.4 (contiguity) or as subsequently agreed upon

between Title Company and Buyer showing fee title to the Property vested in Buyer subject only to the

Approved Title Conditions, which may include the conditionally approved exceptions under Paragraph 6.1.1

so long as the conditions identified by Buyer therein are satisfied

("Title Policy").

The Title Policy shall be

issued with liability in an amount equal to the Purchase Price insuring fee title in the Property to Buyer. The

Property is described as parcels 1 through 3 inclusive of the Title Report. Seller shall be responsible for

paying the Title Policy premium associated with the Title Policy.

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10.

Costs and Expenses. If the transaction contemplated by this Agreement is consummated,

then upon the Close of Escrow Seller shall pay (A) all recordation, transfer or sales tax, including without

limitation, taxes on the Grant Deed, taxes required to be paid in connection with the recording of the Grant

Deed, and documentary stamp or transfer taxes, (B) all costs of recording any documents needed to clear

title, and all costs related to the release of disapproved title matters pursuant to Paragraph 6.1.1 above, (C)

fifty percent of all escrow fees and costs, and (D) Seller's share of prorations. If the transaction contemplated

by this Agreement is consummated, then upon the Close of Escrow Buyer shall pay (i) fifty percent of all

escrow fees and costs and (ii) Buyer's share of prorations. Buyer and Seller shall each pay all legal and

professional fees and fees of other consultants incurred by Buyer and Seller, respectively. All other costs and

expenses shall be allocated between Buyer and Seller in accordance with the customary practice in the

County. Seller confirms Buyer has no obligation and no responsibility for payment of any costs or expenses

related to the D&A-Wakeland Contract. Seller further confirms that Buyer is not responsible for any other

payment other than the Purchase Price, fifty percent of all escrow fees and costs, and Buyer's share of costs,

expenses and prorations approved by the Buyer on an estimated settlement statement dated on or about the

Closing Date.

11. Prorat ions.

11.1 General. All "rentals" (defined below), revenues and other income, if any, from the

Property, and real property taxes and operating expenses, if any, affecting the Property shall be prorated as of

the Close of Escrow. To the best of Seller's knowledge, there are no revenues or other income generated

from the Property; should this be the case on the Closing Date, Seller shall confirm this statement on the

Estoppel Certificate effective as of the Close of Escrow. For purposes of calculating prorations, Buyer shall

be deemed to be in title to the Property, and therefore entitled to the income and responsible for the expenses,

for the entire day of the Close of Escrow.

"Rentals",

as used herein, includes fixed monthly rentals,

additional rentals, percentage rentals, escalation rentals, retroactive rentals, operating cost pass throughs and

other sums and charges payable by Tenants under the Tenant Leases or any other entity required to issue

payment to the fee owner of the Property. Buyer acknowledges that it has no expectation that there will be

any Rentals, revenue or other income from the Property at the Close of Escrow.

11.2

Reserved.

11.3 Reserved.

11.4

Reserved.

11.5 Taxes and Assessments. All non-delinquent real estate taxes on the Property shall be

prorated as of the Close of Escrow based on the actual current tax bill obtained by Seller, but if such tax bill

has not yet been received by Seller by the Close of Escrow then the current year's taxes shall be deemed to be

one hundred two percent (102%) of the amount of the previous year's tax bill. All delinquent taxes and all

assessments, if any, on the Property shall be paid at the Close of Escrow from funds accruing to Seller. All

supplemental taxes billed after the Close of Escrow for periods prior to the Close of Escrow shall be paid

promptly by Seller.

11.6 Operating Expenses. All costs for operation of the Property, if any, including all

utility service charges for electricity, water, other utilities, common area maintenance, costs for temporary

rental fencing, or other expenses incurred in operating the Property that Seller customarily pays, and any other

costs incurred in the ordinary course of operation of the Property and not covered elsewhere in this Paragraph

11 shall be prorated on an accrual basis. Seller shall pay all such expenses that accrue prior to the Close of

Escrow and Buyer shall pay all such expenses accruing on the Close of Escrow and thereafter. To the extent

possible, Seller and Buyer shall obtain billings and meter readings as of the Close of Escrow to aid in such

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prorations. To the best of Seller's knowledge, there are no operations on the Property as of the Execution

Date; should this be the case on the Closing Date, Seller shall confirm this statement on the Estoppel

Certificate effective as of the Close of Escrow.

11.7

Reserved.

11.8 Service Contracts. Amounts payable under the Service Contracts approved by Buyer

pursuant to Paragraph 6.1.2(G), if any, above shall be prorated on an accrual basis. Seller shall pay all

amounts due thereunder which accrue prior to the Close of Escrow and Buyer shall pay all amounts accruing

on the Close of Escrow and thereafter. To the best of Seller's knowledge, there are no service contracts

affecting the Property; should this be the case on the Closing Date, Seller shall confirm this statement on the

Estoppel Certificate effective as of the Close of Escrow. The parties acknowledge temporary rental fencing

and ancillary service contracts in connection with the satisfaction of the Fill Condition may impact the

Seller's statement in the Estoppel Certificate.

11.9 Method of Proration. All prorations shall be made in accordance with customary

practice in the County, except as expressly provided herein. Escrow Holder shall be instructed by Buyer and

Seller to prepare a schedule of prorations prior to the Closing Date. Such prorations, if and to the extent

known and agreed upon as of the Close of Escrow, shall be paid by Buyer to Seller (if the prorations result in

a net credit to the Seller) or by Seller to Buyer (if the prorations result in a net credit to the Buyer) by

increasing or reducing the cash to be paid by Buyer at the Close of Escrow. Any such prorations not

determined or not agreed upon as of the Close of Escrow shall be paid by Buyer to Seller, or by Seller to

Buyer, as the case may be, in cash as soon as practicable following the Close of Escrow. A copy of the

schedule of prorations as agreed upon by Buyer and Seller shall be delivered to Escrow Holder at least three

(3) business days prior to the Closing Date.

12.

Disbursements and Other Actions by Escrow Holder. Escrow Holder shall promptly

undertake all of the following in the manner hereinbelow indicated.

12.1 Fund Distribution prior to the Close of Escrow. At or near the Contingency Date, the

Agreement will terminate under Paragraph 6 or Buyer will elect to deliver notice to Seller of approval of the

conditions set forth in Paragraph 6. In the event the Agreement terminates under the terms of Paragraph 6

prior to the Closing Date, Escrow Agent is instructed to return any and all funds deposited by the Buyer

including the Purchase Price along with any and all Closing Funds to Buyer without any consent required

from Seller.

12.2 Fund Distribution at the Close of Escrow. Unless superseded by such supplemental

joint escrow instructions given by D&A, Seller and Buyer, at the Close of Escrow, Escrow Holder shall

disburse the Closing Funds deposited with Escrow Holder by Buyer in payment of the Purchase Price as

follows:

12.2.1 deduct all items chargeable to the account of Seller pursuant to Paragraphs 9

and 10;

12 .2 .2 if, as the result of the prorations and credits pursuant to Paragraph 11,

amounts are to be charged to account of Seller, deduct the total amount of such charges;

12.2.3 disburse the balance of the Purchase Price to Seller promptly upon the Close

of Escrow; and

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12 .2 .4 disburse the remaining balance of the Closing Funds, if any, to Buyer

promptly upon the Close of Escrow.

12 .3 Recording. Escrow Holder shall deliver a completed PCOR to the appropriate

representative of the Official Records and cause the Grant Deed (with documentary transfer tax information to

be affixed after recording), the Deed of Trust and any other documents which the parties hereto may mutually

direct to be recorded in the Official Records and obtain conformed copies thereof for distribution to Buyer

and Seller.

12.4

Title Policy. Escrow Holder shall direct the Title Company to issue the Title Policy

to Buyer.

12.5 Disbursement of Documents to Buyer. Escrow Holder shall disburse to Buyer along

with a copy to Buyer's counsel, the General Assignment, the Estoppel Certificate, the Non-Foreign Entity

Certification, the Form 593, and any other documents (or copies thereof) deposited into Escrow by Seller

pursuant hereto.

12.6 Disbursement of Documents to Seller. Escrow Holder shall disburse to Seller copies

of the General Assignment, the Non-Foreign Entity Certification, the Form 593, along with copies of the

Grant Deed showing conformation of recording in the Official Records and any other documents (or copies

thereof) deposited into Escrow by Seller pursuant hereto.

13.

Seller's Representations and Warranties. In addition to any express agreements of Seller

contained herein, the following constitute representations and warranties of Seller to Buyer:

13.1

Representations Regarding Seller's Authority and Diligence.

13.1.1 Power. Following the closing of the D&A-Wakeland Contract and on the

Closing Date, Seller will be the owner in fee simple of the Property under the terms of the D&A-Wakeland

Contract and has the legal power, right and authority to enter into this Agreement and the instruments

referenced herein, and to consummate the transaction contemplated hereby.

13.1.2 Requisite Action. All requisite action (corporate, trust, partnership or

otherwise) has been taken by Seller in connection with the entering into this Agreement and the instruments

referenced herein, and the consummation of the transaction contemplated hereby. No consent of any partner,

shareholder, creditor, investor, judicial or administrative body, Authority or other party is required.

13.1.3 Individual Authority. The individuals executing this Agreement and the

instruments referenced herein on behalf of Seller and the partners, officers or trustees of Seller, if any, have

the legal power, right, and actual authority to bind Seller to the terms and conditions hereof and thereof.

13.1.4 Validity. This Agreement and all documents required hereby to be executed

by Seller are and shall be valid, legally binding obligations of and enforceable against Seller in accordance

with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or

similar laws or equitable principals affecting or limiting the rights of contracting parties generally.

13.1.5 Tie-Back and Fill Condition Diligence. To the extent Seller had obligations

under the D&A-Wakeland Contract concerning the Tie-Back Condition and Fill Condition, that Seller

complied with and diligently worked towards satisfaction of those obligations.

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13.2

Representations and Warranties Pertaining to Real Estate, Legal Matters and

Documents.

13.2.1 Adverse Claims. To the best of Seller's knowledge, there are no pending,

threatened or contemplated actions, suits, arbitrations, claims or proceedings, at law or in equity, affecting the

Property or in which the Seller or D&A Semi-Annual Mortgage Fund III, L.P. are, or will be, a party by

reason of the ownership or former ownership of the Property, including, but not limited to, judicial, municipal

or administrative proceedings in eminent domain, alleged building code, health and safety or zoning

violations, personal injuries or property damages alleged to have occurred at the Property or by reason of the

condition or use of the Property.

13.2.2 Insolvency. No attachments, execution proceedings, assignments for the

benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened

against the Seller or, to the best of Seller's knowledge, D&A Semi-Annual Mortgage Fund III, L.P., nor are

any of such proceedings contemplated by the Seller or, to the best of Seller's knowledge, D&A Semi-Annual

Mortgage Fund III, L.P.

13.2.3 Governmental Regulations. To the best of Seller's knowledge, there are no

violations of Governmental Regulations relating to the Property. To the best of Seller's knowledge, the

Property was filled and compacted with all required Licenses and Permits. To the best of Seller's knowledge,

the condition of the Property and the Improvements, if any, on the Closing Date, are in conformance with all

Licenses and Permits and under applicable zoning and building laws and ordinances and the present uses

thereof are permitted conforming uses under applicable zoning and building laws and ordinances. To the best

of Seller's knowledge, the conveyance of the Property to Buyer will not violate any Governmental

Regulations and will include all rights necessary to permit continued compliance by the Property and

Improvements, if any, with all Governmental Regulations.

13.2 .4 Approvals. To the best of Seller's knowledge, all licenses, approvals,

permits and certificates, including any agreements in satisfaction of the Tie-Back Condition, from the

Authorities and private parties necessary for the fill, compacting, construction, development, alteration or

rehabilitation of the Property and any Improvements, or for the use and operation of the Property as it is

currently being used and operated were obtained prior to such fill, compacting, construction, development,

alteration, rehabilitation, use and operation, and are currently possessed by the Seller, and any Improvements

have been constructed, completed or modified in accordance with (A) all such approvals, licenses, permits

and certificates, (B) all Governmental Regulations, (C) all covenants, conditions, restrictions, easements and

agreements of any kind or nature affecting the Property, and (D) the plans and specifications delivered by

Seller to Buyer.

13.2.5 Assessments. Other than the amounts disclosed by the tax bills delivered to

Buyer by Seller and possible supplemental or escape assessments which may be levied by the County

Assessor after the date hereof, Seller has no knowledge of any other real property taxes which have been or

will be assessed against the Property for the current tax year. Seller has no knowledge of any special

assessments or charges which have been levied against the Property or which results from work, activities or

improvements done to the Property.

13.2.6 Mechanic's Liens. To the best of Seller's knowledge, Seller has no

knowledge of any liens, encumbrances, claims, covenants, conditions, restrictions, easements, rights of way,

options, judgments or other matters affecting the Property, except as disclosed by the Title Documents.

13.2 .7 Accuracy of Materials. All instruments, documents, lists, schedules and

items delivered to Buyer by Seller pursuant to this Agreement will fairly present the information set forth in a

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manner that is not misleading and will be true, complete and correct in all respects on the date of delivery and

upon the Close of Escrow, as they may be updated, modified or supplemented in accordance with this

Agreement.

13.2.8 Personal Property. If there is any Personal Property listed in the Inventory,

such Personal Property is located at the Property or with Seller and is all of the personal property used in the

operation of the Property and the Improvements, other than personal property owned by Tenants, if any

Tenants exist, or under any Service Contract, if any Service Contracts exist.

13.2.9 Occupancy Agreements. To the best of Seller's knowledge, there are no

leases, licenses, subleases, occupancies or tenancies in effect pertaining to the Property and Seller has no

knowledge of any oral agreements with anyone, including Tenants, if any Tenants exist, with respect to the

occupancy of the Property.

13.2.10 D&A-Wakeland Contract. Seller has provided true, correct, and complete

copies of all documents pertaining to the D&A-Wakeland Contract in Seller's possession, including, but not

limited to all documents in satisfaction of the Fill Condition and Tie-Back Condition, as amended, and all due

diligence materials provided to and obtained by Seller in connection therewith.

13.2.11 Tie-Back and Fill Condition Diligence. Seller assures Buyer that Seller will

deliver true, correct, and complete copies of all documents Seller receives from D&A pertaining to

satisfaction of the Tie-Back Condition and Fill Condition.

Seller's representations and warranties made in this Paragraph 13 shall be continuing and shall be true

and correct as of the Close of Escrow with the same force and effect as if remade by Seller in a separate

certificate at that time. The truth and accuracy of Seller's representations and warranties made herein shall

constitute a condition for the benefit of Buyer to the Close of Escrow (as elsewhere provided herein) and shall

survive and shall not merge into, the Close of Escrow and the recording of the Grant Deed in the Official

Records for five years after the Closing Date with the same force and effect as if remade by Seller in a

separate certificate at that time.

14.

Seller's Covenants Regarding Operation of the Property Through the Close of Escrow.

14.1 Existing Operations. Seller hereby agrees, through and including the Close of

Escrow and at the Seller's sole cost and expense, to keep Buyer timely advised concerning the satisfaction of

the Tie-Back and Fill Conditions to the extent permitted under the D&A-Wakeland Contract.

14.2 New Leases. Seller will not hereafter enter into nor modify, extend or otherwise

change any of the terms, covenants or conditions of the Tenant Leases, if any, or enter into new leases or any

other obligations or agreements affecting the Property, without the prior written consent of Buyer.

14.3 Service Contracts. Seller will not hereafter enter into nor extend, renew, modify or

replace any of the Service Contracts or enter into new Service Contracts or any other obligations or

agreements affecting the Property. The temporary rental fencing entered into in connection with the Fill

Condition will not be a violation of this provision.

14.4 Additional Liens. Seller will not, without the prior written consent of Buyer, convey

any interest in the Licenses and Permits, the Records or Plans or any of the other Property, and Seller will not

subject the Property to any additional liens, encumbrances, covenants, conditions, easements, rights of way or

similar matters after the date of this Agreement which will not be eliminated prior to the Close of Escrow.

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14.5

Alterations. Seller will not make any alterations to the Property. Alterations by

D&A necessary to satisfy the Fill Condition will not be a violation of this Covenant.

14.6 Invoices. Seller has paid or will pay in full, prior to the Close of Escrow, all bills and

invoices that are received by Seller prior to the Close of Escrow for labor, goods, materials and services of

any kind relating to the Property incurred by Seller, provided however, that nothing in this Paragraph 14.6

shall obligate Seller to pay any charges, bills, invoices or costs related to the Property that are not the

obligation of the Seller under the D&A-Wakeland Contract. Seller acknowledges Buyer is not responsible for

payment of any invoices for labor, goods, materials and services of any kind relating to the Property,

including utility charges or temporary rental fencing, relating to the period prior to the Close of Escrow.

14.7 Changes in Circumstances. Seller shall promptly notify Buyer of any change in any

condition with respect to the Property of which Seller has knowledge other than changes to satisfy the Fill

Condition and will promptly notify Buyer of any event or circumstance which makes any representation or

warranty of Seller under this Agreement or the D&A-Wakeland Contract untrue or misleading in any material

respect, or any covenant of Buyer under this Agreement incapable or less likely of being performed, it being

understood that the Seller's obligation to provide notice to Buyer shall in no way relieve Seller of any liability

for a breach by Seller of any of its representations, warranties or covenants under this Agreement.

14.8 Monitoring. To the maximum extent possible under the D&A-Wakeland Contract,

Seller shall permit Buyer, CCDC or any of Buyer's representatives, assigns, agents, consultants, or

subconsultants to accompany Seller or any of Seller's representatives, assigns, agents, consultants, or

subconsultants to monitor and inspect the manner in which the Tie-Back and Fill Conditions are satisfied.

The parties acknowledge Section 4.2(f)(viii) permits, among other things, CCDC monitoring of Property

during satisfaction of the Fill Condition.

15.

Buyer's Representations and Warranties. In addition to any express agreements of Buyer

contained herein, the following constitute representations and warranties of Buyer to Seller:

15.1

Power. Buyer has the legal power, right and authority to enter into this Agreement

and the instruments referenced herein, and to consummate the transaction contemplated hereby.

15.2 Requisite Action. All requisite action (corporate, trust, partnership or otherwise) has

been taken by Buyer in connection with the entering into this Agreement and the instruments referenced

herein, and the consummation of the transaction contemplated hereby. No other consent of any partner,

shareholder, creditor, investor, judicial or administrative body, Authority or other party is required.

15.3 Authority. The individuals executing this Agreement and the instruments referenced

herein on behalf of Buyer have the legal power, right and actual authority to bind Buyer to the terms and

conditions hereof and thereof.

15.4 Validity. This Agreement and all documents required hereby to be executed by

Buyer are and shall be valid, legally binding obligations of and enforceable against Buyer in accordance with

their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar

laws or equitable principals affecting or limiting the rights of contracting parties generally.

15.5 Prohibited Transactions. Seller is not a person or entity described by Section 1 of the

Executive Order (No. 13,224) Blocking Property and Prohibiting Transactions With Persons Who Commit,

Threaten to commit, or support Terrorism, 66 Fed. Reg. 49,079 (September 24, 2001), and, to the best of

Seller's knowledge, Seller does not engage in any dealings or transactions, and is not otherwise associated,

with any such person or entities.

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Buyer's representations and warranties made in this Paragraph 15 shall be continuing and shall be

true and correct as of the Close of Escrow with the same force and effect as if remade by Buyer in a separate

certificate at that time. The truth and accuracy of Buyer's representations and warranties made herein shall

constitute a condition for the benefit of Seller to the Close of Escrow and shall survive and shall not merge

into the Close of Escrow or the recordation of the Grant Deed in the Official Records for five years after the

Closing Date with the same force and effect as if remade by Buyer in a separate certificate at that time.

16. Condemnation and Destruction.

16.1 Eminent Domain or Taking. If, prior to the Close of Escrow, any material portion of

the Property is taken or if the access thereto or available parking area therefor is materially reduced or

restricted or reduced such that the Property as it is currently used is not in compliance with zoning

requirements or if any of the rentable square footage of the Improvements is taken, by eminent domain or

otherwise (or is the subject of a pending, threatened or contemplated taking which has not been

consummated) by any governmental body other than the Buyer, Seller shall, as soon as Seller has knowledge

of such fact, notify Buyer, in writing, of such fact. In such event, Buyer shall have the option, in its sole and

absolute discretion, to terminate this Agreement upon written notice to Seller given not later than ten (10)

days after receipt of Seller's notice. If this Agreement is so terminated, the provisions of Paragraph 6.5 and

6.6 shall govern. If Buyer does not exercise this option to terminate this Agreement, or if there has not been a

material taking by eminent domain or otherwise to give rise to such option, neither party shall have the right

to terminate this Agreement, but the Seller shall assign and turn over, and the Buyer shall be entitled to

receive and keep, all awards for the taking by eminent domain which accrue to Seller and the parties shall

proceed to the Close of Escrow pursuant to the terms hereof, without modification of the terms of this

Agreement and without any reduction in the Purchase Price. Unless or until this Agreement is terminated,

Seller shall take no action with respect to any eminent domain proceeding without the prior written consent of

Buyer.

16.2 Fire or Casualty. Prior to the Close of Escrow, and notwithstanding the pendency of

this Agreement, the entire risk of loss or damage by earthquake, flood, landslide, fire or other casualty shall

be borne and assumed by Seller, except as otherwise provided in this Paragraph 16.2. If, prior to the Close of

Escrow, any part of the Improvements is damaged or destroyed by earthquake, flood, landslide, fire or other

casualty, Seller shall, as soon as Seller has knowledge of such fact, notify Buyer in writing of such fact.

If such damage or destruction is "material", Buyer shall have the option to terminate this Agreement

upon written notice to the Seller given not later than ten (10) days after receipt of Seller's notice. For

purposes hereof, "material"

shall be deemed to be (A) any uninsured damage or destruction to the Property

or (B) any insured damage or destruction where the cost of repair or replacement is estimated to be Fifty

Thousand and No/100 Dollars ($50,000.00) or more or shall take more than one hundred twenty (120) days to

repair, in Buyer's good faith judgment, provided, however, in the case of uninsured damage or destruction,

Seller may, but shall not be obligated to, at Seller's option, elect to repair such damage and destruction and

keep this Agreement in full force and effect so long as such repair can be and is completed by Seller prior to

the Closing Date. If this Agreement is terminated pursuant to this Paragraph 16.2 , the provisions of

Paragraphs 6.5 and 6.6 shall govern. If Buyer does not exercise this option to terminate this Agreement, or if

the casualty is not material, neither party shall have the right to terminate this Agreement but Seller shall

assign and turn over, and Buyer shall be entitled to receive and keep, all insurance proceeds payable to it with

respect to such destruction (which shall then be repaired or not at Buyer's option and cost), plus Seller shall

pay over to Buyer an amount equal to the deductible amount with respect to the insurance and the parties shall

proceed to the Close of Escrow pursuant to the terms hereof without modification of the terms of this

Agreement and without any reduction in the Purchase Price. If Buyer does not elect to terminate this

Agreement by reason of any casualty, Buyer shall have the right to participate in any adjustment of the

insurance claim. Seller acknowledges Buyer may terminate this Agreement for Seller's failure to procure

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insurance for the Property. Buyer acknowledges that as of the time of execution of this Agreement Seller

does not yet have fee title to the Property. Buyer acknowledges that Seller has no insurance covering the

Property, and Seller acknowledges that the foregoing provisions of this Paragraph 16.2 give Buyer the right to

terminate this Agreement in the event of uninsured damage or destruction unless Seller elects to repair the

damage or destruction.

17. Indemnificat ion.

17.1 Claims Against Seller and Indemnification of Buyer. Seller hereby agrees to protect,

indemnify and defend Buyer, its agent, CCDC, the City, and their respective officers, employees, contractors,

and agents against, and to hold Buyer, CCDC, the City, and their respective officers, employees, contractors,

and agents harmless from, all claims, demands, losses, damages, costs and expenses, including without

limitation actual legal fees and disbursements, incurred by Buyer, CCDC, the City, and their respective

officers, employees, contractors, and agents relating to the Property which (A) result from the gross

negligence or willful misconduct of Seller; (B) result from acts, occurrences or matters the existence or

occurrence of which constitute a violation of one or more representations, warranties or covenants of Seller

hereunder, and are not a breach by Buyer of obligations or liabilities expressly assumed by Buyer hereunder;

provided, however, nothing contained herein shall obligate Seller with respect to, or negate or modify any

liability of Buyer for, any breach of Buyer's representations, warranties and covenants in this Agreement; (C)

result or arise from any claim or allegation for any real estate brokerage commission, referral fees, or like

commission or service fees due brokers or consultants in the D&A-Wakeland Contract or this Agreement; or

(D) arise or result from a breach by Seller of any of its agreements or covenants herein or in the D&A-

Wakeland Contract.

17.2 Hazardous Materials Indemnification. To the fullest extent permitted bylaw, Seller

covenants and agrees with the Buyer that neither Buyer nor its officers, elected and/or appointed officials,

employees, agents or counsel shall be liable for any damage or liability of any kind or for any injury to or

death of persons or damage to property of Buyer, its successors or assigns or any other person from any cause

whatsoever directly or indirectly related to or arising out of or proximately caused by any action or failure to

act by Seller or its officers, members, employees, agents, consultants, contractors, representatives, or counsel

with respect to the presence or clean-up of Hazardous Materials on, in or under the Property on the Close of

Escrow. Seller shall, on a joint and several basis, pay for, defend (with counsel approved by the Buyer),

indemnify and save Buyer, its officers, elected and/or appointed officials, employees, agents, counsel,

successors or assigns harmless against and from any real or alleged claims, costs, liabilities and expense

(including court costs and reasonable attorneys' fees) directly or indirectly arising out of, or proximately

caused by any action, failure to act or condition in connection with the presence or clean-up of Hazardous

Materials on, in or under the Property on the Close of Escrow.

17.3 Indemnification of Seller. Buyer hereby agrees to protect, indemnify and defend

Seller against, and to hold Seller harmless from, all losses, damages, costs and expenses, including without

limitation actual legal fees and disbursements, incurred by Seller relating to the Property which (A) arise or

result from acts, occurrences or matters that take place after the Close of Escrow; provided, however, nothing

contained herein shall obligate Buyer with respect to, or negate or modify any liability of Seller for, any

breach of Seller's representations, warranties and covenants in this Agreement, or (B) arise or result from a

breach by Buyer of its agreements, covenants, representations or warranties herein, or (C) arise after the Close

of Escrow under Approved Title Conditions or other obligations expressly assumed by Buyer.

18.

Notices. Unless otherwise expressly provided herein, all notices or other communications

required or permitted hereunder shall be in writing, and shall be personally delivered (including by means of

professional messenger service) or sent by nationally recognized overnight courier or by facsimile (when

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promptly followed by notice sent by deposit in the United States mail), and shall be deemed received upon

the date of receipt thereof.

To Buyer:

With a copy to:

With a copy to:

To Seller:

With a copy to:

REDEVELOPMENT AGENCY OF THE CITY OF

SAN DIEGO c/o Centre City Development Corporation

Attn: Mr. Jeff Graham and Ms. En

i Kameyama

401 B Street, Suite 400


Office of General Counsel

1200 Third Avenue, Suite 1100


Attn: Krishna Jayaram, Esq.

Kane, Ballmer & Berkman

515 South Figueroa Street, Suite 1850

Los Angeles, California 90071

Attn: Murray 0. Kane, Esq. and Gustavo Lamanna, Esq.

Facsimile No.: (213) 625-0931

Wakeland Housing & Development Corp.

1230 Columbia Street, Suite 950


Attn: Mr. Kenneth L. Sauder, President

Facsimile No.: (619) 235-5386

Pillsbury Winthrop Shaw Pittman LLP

12255 El Camino Real, Suite 300


Attn: Linda K. Stanwood, Esq.

Facsimile No.: (619) 819-4082

Notice of change of address shall be given by written notice in the manner detailed in this Paragraph 18.

19. No Real Estate Brokers or Commissions. Seller represents and warrants to Buyer and Buyer

represents to Seller there are no real estate brokers entitled to a brokerage fee in connection with the

Agreement. Buyer shall not be liable for any real estate commissions, brokerage fees, finders fees, referral

fees to any broker, sales representative, or claimant in connection with the Agreement or the D&A-Wakeland

Contract. The Seller agrees to defend and hold the Buyer harmless from any claim by any broker, sales

representative, agent, or finder claimant retained by Seller or any party to the D&A-Wakeland Contract.

Buyer represents and warrants to Seller, that no broker, sales person, agent or finder has been engaged by

Buyer in connection with any of the transactions contemplated by this Agreement, or to its knowledge is in

any way connected with any of such transactions. In the event of any such claims for brokers' or finders'

fees or commissions in connection with the negotiation, execution or consummation of this Agreement, then

Buyer shall indemnify, save harmless and defend Seller from and against claims for brokers' or fmders' fees

or commissions from Buyer if they shall be based upon any statement, representation or agreement made by

Buyer, and Seller shall indemnify, save harmless and defend Buyer if such claims shall be based upon any

statement, representation or agreement made by Seller. Seller represents and warrants to Buyer, that no

broker, sales person, agent or finder has been engaged by Seller in connection with any of the transactions

contemplated by the Agreement, D&A-Wakeland Contract, or ancillary contract involving the Property. In

the event any employee or agent of Seller is licensed by the California Department of Real Estate, Seller

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confirms Seller, employee or their agents, are not entitled to any real estate brokerage commissions from

Buyer.

20. Required Actions of Buyer and Seller. Buyer and Seller agree to execute all such instruments

and documents and to take all actions pursuant to the provisions hereof in order to consummate the purchase

and sale herein contemplated and shall use their commercially reasonable best efforts to accomplish the Close

of Escrow in accordance with the provisions hereof. Seller further agrees to execute all such instruments and

documents pertaining to the D&A-Wakeland Contract and to take all actions pursuant to the provisions

thereof in order to consummate the purchase and sale contemplated therein and shall use their commercially

reasonable best efforts to accomplish the close of escrow described in Section 2.5 of the D&A-Wakeland

Contract .

20.1 Requests for Approval or Action by Buyer from Seller. Seller is in the process of

proposing the future development of the Property as a mixed-use development predominantly comprised of

affordable housing under the provisions of the Centre City Redevelopment Plan, as amended. Buyer has

furnished certain due diligence performed on its behalf, the Flores Lund Consultant's Review and Evaluation

Report amended as of November 16, 2009 as well as the Wade & Associates report dated October 6, 2009.

20.2 Buyer approves the (i) form of tie-back easement agreement with temporary license

attached hereto as Exhibit "F" to be procured by D&A under Section 4.2(e) of the D&A-Wakeland Contract

concerning the Tie-Back Condition and (ii) form of certification by engineer attached hereto as Exhibit "G" to

be procured by D&A under Section 11.19(iii) of the D&A-Wakeland Agreement concerning the Fill

Condition. So long as the documents submitted in satisfaction of the Tie-Back and Fill Conditions are in

substantially the same form as Exhibits "F" and "G," respectively, Buyer will approve the proposed tie-back

easement agreement and temporary license and certificate of engineer. The Executive Director of the Buyer

has discretion to approve changes to Exhibits "F" and "G" that do not substantially change the form of tie-

back easement agreement with temporary license and certification of engineer attached to this Agreement on

the Execution Date. Buyer's Executive Director will provide Seller and Escrow Holder with written notice, in

the form of a closing estoppel certificate, confirming that, Buyer determined, in its discretion, that the Fill

Condition and Tie-Back Condition have been satisfied pursuant to the terms of this Agreement.

20.3 Approvals to such forms, whether provided or not, represent reasonable measures to

assure the proper refilling of the previous excavation of the Property and abatement of a public health and

safety condition on the Property as well as a prudent and reasonable due diligence measures under this

Agreement. Seller further agrees, to the greatest extent possible under the D&A-Wakeland Contract, to

permit Buyer, its agents, consultants, or assigns to monitor the progress of the Repair of the Property

described in Section 4.2(f) of the D&A-Wakeland Contract and assure satisfaction of the Fill and Tie-Back

Conditions are prosecuted under the terms agreed upon under the D&A-Wakeland Contract.

20.4 Such actions or approvals, whether or not provided or undertaken, by Buyer: (a) do

not constitute an endorsement, requirement or even suggestion that the parties to the D&A-Wakeland

Contract use any consultants of Buyer or CCDC or accept any of the work product generated by consultants

to Buyer or CCDC; (b) do not represent a warranty or guarantee of any consultant reports generated for or on

behalf of Buyer or CCDC, including the reports disclosed and referenced above; (c) are not a statement of

accuracy or reliability of any reports generated by Buyer, CCDC or their consultants or agents; (d) are not an

approval of the City or its agents, employees, or assigns; (e) do not provide any approval under the Centre

City Redevelopment Project or Plan, as amended; (f) do not confer any rights to the Seller under the Centre

City Redevelopment Project, Plan, as amended; or (g) do not contain any statement by Buyer, CCDC, or the

City with respect to the cure, abatement, or removal of any public health and safety condition present on the

Property.

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20.5 Permits sought and discussed in this Agreement are to be sought from the City and

not Buyer or CCDC. Buyer neither undertakes nor assumes nor will have any responsibility or duty under

this Agreement to review, inspect, supervise, pass judgment upon or infoim the Seller or parties to the D&A-

Wakeland Contract of any matter in connection with the transaction and Repair of the Property contemplated

in Section 4.2(f) of the D&A-Wakeland Contract, whether regarding the quality, adequacy or suitability of the

soils, plans, any labor, service, engineering work product, equipment or material furnished to the Property,

any person furnishing the same, or otherwise. Seller and all third parties in agency with Seller shall rely upon

its or their own judgment regarding such matters, and any review, inspection, supervision, exercise of

judgment or information supplied to Seller or to any third party by the Buyer in connection with such matter

is for the public purpose of redeveloping the Property, abating the public health and safety condition on the

Property and neither Seller or any third party is entitled to rely thereon. Neither Buyer nor CCDC shall be

responsible for the Repair of the Property or any of the work, construction, excavation, engineering,

improvement or development of the Property.

20.6 Notwithstanding the foregoing, when the Seller to this Agreement requests approval

of any form of tie-back easement agreement with temporary license or certification by engineer that is not in

substantial form to those attached hereto as Exhibits "F" and "G," respectively, Seller shall make such request

in writing addressed to Buyer and transmitted pursuant to Section 18. Buyer shall seek approval from its

governing board for such requests within fifteen (15) calendar days of written request for approval of any

form of agreement or certification not substantially in the form of Exhibits "F" and "G."

21.

Entry. Buyer acknowledges Seller does not have fee title to the Property but has rights to

inspect the Property pursuant to Section 8.1 of the D&A-Wakeland Contract. From and after the Opening of

Escrow and to the greatest extent permissible under the D&A-Wakeland Contract, Buyer and Buyer's

representatives, agents and designees shall have the right, without prior written notice, to enter upon the

Property, at Buyer's sole cost, for any purpose in connection with its proposed purchase, development or

operation of the Property, monitoring of the satisfaction of the Fill and Tie-Back Conditions, including,

without limitation, the right to make such inspections, investigations and tests (including all mechanical

systems) as Buyer may elect to make or obtain, including without limitation, environmental (Phase I and/or

Phase II), soils, seismic, hydrogeologic and engineering tests, analyses and studies. From and after the

Opening of Escrow, Buyer shall be entitled to communicate directly with the Authorities in connection with

Buyer's proposed purchase, development or operation of the Property. The exercise by Buyer of any of the

preceding or any other act of Buyer shall not negate any representation, warranty or covenant of Seller or

modify any of Buyer's rights or Seller's obligations in the event of any breach by Seller of any of its

representations, warranties or covenants under this Agreement. Buyer hereby fully indemnifies Seller from

any and all personal injury or damage to tangible personal property and mechanics' liens arising out of any

such entry by Buyer or its agents, designees or representatives including attorneys' fees incurred by Seller

under this Agreement or D&A Semi-Annual Mortgage Fund III, L.P. under the D&A-Wakeland Contract, as

a result of any claim of personal injury or damage.

22.

Legal and Equitable Enforcement of this Agreement.

22 .1 Default by Seller. In the event the Close of Escrow and the consummation of the

transactions herein contemplated do not occur by reason of any default by Seller, Buyer shall be entitled to the

return of the Closing Funds (if deposited with Escrow), all of its out-of-pocket expenses incurred in

connection with the transaction, and shall have the right to pursue any other remedy available to it at law or in

equity, including the specific performance of this Agreement.

22.2 Default by Buyer. In the event the Close of Escrow and the consummation of the

transactions herein contemplated do not occur by reason of any default by the Buyer, Seller's sole remedy

shall be to pursue an action for specific performance of Buyer's obligations under this Agreement.

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23.

Miscellaneous.

23.1 Partial Invalidity. If any term or provision of this Agreement or the application

thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this

Agreement, or the application of such term or provision to persons or circumstances other than those as to

which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of

this Agreement shall be valid and be enforced to the fullest extent permitted by law.

23.2 Waivers. No waiver of any breach of any covenant or provision herein contained

shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or

provision herein contained. No extension of time for performance of any obligation or act shall be deemed an

extension of the time for performance of any other obligation or act.

23.3

Successors and Assigns. This Agreement shall be binding upon and shall inure to the

benefit of the permitted successors and assigns of the parties hereto.

23.4 Professional Fees. In the event of the bringing of any action or suit by a party hereto

against another party hereunder by reason of any breach of any of the covenants, agreements or provisions on

the part of the other party arising out of this Agreement, or any matter related to or arising out of the sale and

purchase of the Property, then in that event the prevailing party shall be entitled to have and recover from the

other party all costs and expenses of the action or suit, including actual attorneys' fees, accounting and

engineering fees, and any other professional fees resulting therefrom.

23.5 Entire Agreement. This Agreement (including all Exhibits attached hereto) is the

final expression of, and contains the entire agreement between, the parties with respect to the subject matter

hereof and supersedes all prior understandings with respect thereto. This Agreement may not be modified,

changed, supplemented or terminated, nor may any obligations hereunder be waived, except by written

instrument signed by the party to be charged or by its agent duly authorized in writing or as otherwise

expressly permitted herein. The parties do not intend to confer any benefit hereunder on any person, firm or

corporation other than the parties hereto.

23.6 Time of Essence. Seller and Buyer hereby acknowledge and agree that time is

strictly of the essence with respect to each and every term, condition, obligation and provision hereof and that

failure to timely perform any of the terms, conditions, obligations or provisions hereof by either party shall

constitute a material breach of and a non-curable default under this Agreement by the party so failing to

perform. If the last day upon which performance would otherwise be required or permitted is a Saturday,

Sunday or holiday, then the time for performance shall be extended to the next day which is not a Saturday,

Sunday or holiday. The term

"holiday"

shall mean all and only mandatory federal holidays including which

deliveries by the United States Postal Services are suspended.

23.7 Construction. Headings at the beginning of each paragraph and subparagraph are

solely for the convenience of the parties and are not a part of the Agreement. Whenever required by the

context of this Agreement, the singular shall include the plural and the masculine shall include the feminine

and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but

rather as if both parties had prepared the same. Unless otherwise indicated, all references to paragraphs and

subparagraphs are to this Agreement. All exhibits referred to in this Agreement and the Glossary of Terms

are attached and incorporated by this reference. In the event the date on which Buyer or Seller is required to

take any action under the terms of this Agreement is not a business day, the action shall be taken on the next

succeeding business day.

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23.8 Governing Law. The parties hereto acknowledge that this Agreement has been

negotiated and entered into in the State of California. The parties hereto expressly agree that this Agreement

shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State

of California.

23.9 Counterparts. This Agreement may be executed in any number of counterparts, each

of which shall be deemed an original, and all of which, together, shall constitute one and the same instrument.

23.10 No Joint Venture. This Agreement shall not create a partnership or joint venture

relationship between Buyer and Seller.

23.11 No Conflicts of Interest. No member, official, or employee of Buyer shall have any

personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee

participate in any decision relating to the Agreement which affects his or her personal interests or the interests

of any corporation, partnership, or association in which he or she is, directly or indirectly, interested. Seller

warrants that it has not paid or given, and will not pay or give, directly or indirectly, any Buyer, CCDC, or

City employee or official, any money or other consideration at all, whether or not connected in any way with

the subject matter of this Agreement. Further, Seller warrants that it has no knowledge of any financial

interest of any Buyer, CCDC or City employee or official in Seller, directly or indirectly, or in any person or

entity affiliated with Seller, or in any transaction in which Seller or its affiliates or subsidiaries have been

involved.

23.12 Executive Director Discretion. The Executive Director of the Buyer or designee is

authorized to approve and or make such further changes to the documents and instruments attached to this

Agreement, including but not limited to the Buyer's requirements for the Title Policy, any required tie-back

easement agreement and temporary licenses in substantially the same form as Exhibit "F" and the certificate

of engineer in substantially the same form as Exhibit "G," as may be necessary or appropriate to effectuate the

Agreement, provided the Purchase Price is not changed without the approval of the Buyer's board of

directors. With respect to the proposed tie-back easement agreement and temporary licenses to be presented

in substantial form as Exhibit "F," the Executive Director of Buyer or designee is authorized to approve such

further changes in his or her discretion, provided that after any and all changes to the proposed document,

there is still an easement for the tie-backs to remain as identified in paragraph 1 of Exhibit "F" and a

temporary license as identified in paragraph 2 of the Exhibit "F." The Executive Director of Buyer or

designee is authorized to execute such further instruments required by this Agreement, including but not

limited to supplemental joint escrow instructions, Buyer closing estoppel certificate, the general assignment

and bill of sale, grant deed, estimated settlement statements, and similar closing documents, as may be

necessary or appropriate to effectuate this Agreement.

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Joan Edelman

Director of Finance and

Assistant Board Secretary

By:

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year

beside their signatures and that this Agreement shall be dated as of the date signed by the Buyer.

"SELLER"

Wakeland Housing & Development Corp.,

a California corporat ion

Date:

319

t-D

"BUYER"

REDEVELOPMENT AGENCY

OF THE CITY OF SAN DIEGO

By:

Date:

APPROVED AS TO FORM AND LEGALITY:

JAN I. GOLDSMITH

Agency General Counsel

By:

Assistant/Deputy General Counsel

KANE, BALLMER & BERKMAN

Agency Special Counsel

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ACCEPTANCE BY ESCROW HOLDER

Lawyers Title Commercial Services acknowledges that it has received a fully executed original or

original executed counterparts of this Agreement and agrees to act as Escrow Holder under this Agreement

and to be bound by and strictly perform the terms thereof as such terms apply to Escrow Holder.

Dated as of:

LAWYERS TITLE COMMERCIAL SERVICES

B y :

Linda L. McLain, CSEO

Escrow Officer

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GLOSSARY OF TERMS

1) "Authorities"

means any governmental or quasi-governmental body or agency having jurisdiction

over the Property and/or Seller including, without limitation, the State, the City and the County.

2) "Cash Equivalent"

means a wire transfer of funds or a bank cashier's check drawn on a reputable

bank licensed to do business in the State.

3) "Clean Soil"

means soil that is documented by analytical laboratory testing to contain levels of

metals below the San Diego Regional Water Quality Control Board (SD-RWQCB) Tier 1 soil screening

levels as outlined in Resolution R9-2007-0104, Conditional Waiver No. 8, 8.II.E. In addition to the

foregoing, Clean Soil is also not known or reasonably suspected to contain detectable concentrations of any

other Hazardous Material (as defined below, including, but not limited to hazardous substance as defined at

California Health & Safety Code Section 33459(c)), including but not limited to petroleum hydrocarbons,

volatile organic compounds, semi-volatile organic compounds, pesticides, or polychlorinated biphyenyls.

Lastly, Clean Soil is soil that is not subject to waste classification, disposal, or reuse regulations

4) "Close of Escrow"

means the date the Grant Deed is recorded in the Official Records.

5) "Closing Date"

means the Close of Escrow as defined in Section 2 .5 of the D&A-Wakeland

Contract. The parties estimate the date is to be the later to occur of (i) the date that is ten (10) business days

following the satisfaction (or waiver in writing by Buyer) of all conditions precedent set forth in Paragraph

6.1 of the Agreement or (ii) June 30, 2010; at any time, by mutual consent of the Seller and Buyer, the

June 30, 2010 date herein may be extended to October 31, 2010, or such other prior date necessary to

accommodate a concurrent back-to-back Close of Escrow with the D&A-Wakeland Contract. In no event

shall the Closing Date extend beyond October 31, 2010.

6) "Contingency Date"

means 5:00 p.m. Pacific Time on the date that is the earlier of: (i) the date

Buyer provides its written notice of satisfaction of the Fill Condition, (ii) thirty (30) days prior to the Closing

Date, or (iii) October 1, 2010.

7) "Escrow"

means the above-referenced escrow opened with Escrow Holder for the consummation of

the transaction described in this Agreement.

8) "Escrow Holder"

means Lawyers Title Commercial Services, a division of Fidelity National Title

Insurance Company.

9)

"Governmental Regulations"

means any laws, ordinances, rules, requirements, resolutions, policy

statements and regulations (including, without limitation, those relating to land use, subdivision, zoning,

environmental, toxic or hazardous waste, occupational health and safety, water, earthquake hazard reduction,

disabled persons and building and fire codes) of the Authorities bearing on the construction, alteration,

rehabilitation, maintenance, use, operation or sale of the Property.

10) "Hazardous Material"

means any radioactive, hazardous or toxic substance, material or waste which

is or becomes regulated by any local governmental authority, the State of California or the United States

Government. The term "Hazardous Material"

includes, without limitation, any material or substance which

is (i) defined as a "hazardous waste," "acutely hazardous waste," "restricted hazardous waste," or "extremely

hazardous waste" under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the

California Health and Safety Code; (ii) defined as a "hazardous substance" under Sections 25316 and

33459(c) of the California Health and Safety Code; (iii) defined as a "hazardous material," "hazardous

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[G lossary of Terms]

substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code; (iv) defined

as a "hazardous substance" under Section 25281 of the California Health and Safety Code; (v) petroleum; (vi)

asbestos; (vii) lead; (viii) a polychlorinated biphenyl; (ix) listed under Article 9 or defined as "hazardous" or

"extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20;

(x) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section

1317); (xi) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and

Recovery Act (42 U. S.C. Section 6903); (xii) defined as a "hazardous substance" pursuant to Section 101 of

the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601);

(xiii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, with

respect to which any governmental regulations or requirements provide for special handling in its use,

transportation, generation, collection, storage, treatment or disposal; _(xiv) any substance, product, waste, or

other material of any nature whatsoever which may give rise to liability under any of the above statutes or

under any statutory or common law theory based on negligence, trespass, intentional tort, nuisance or strict

liability or under any reported decisions of a state or federal court; (xv) petroleum or crude oil other than

petroleum and petroleum products which are contained within regularly operated motor vehicles; and (xvi)

asbestos.

11)

"Improvements"

means all buildings, fixtures, structures, parking areas, landscaping and other

improvements constructed and located on the Property, including shoring systems described in that certain

Review and Evaluation Report for Former Atmosphere Site Shoring bearing project number 09076 prepared

by Flores Lund Consultants, as amended November 16, 2009, together with all machinery and mechanical,

electrical, HVAC and plumbing systems (other than Personal Property) used in the operation thereof, but

excluding any such items owned by public or private utilities.

12)

"Licenses and Permits"

means (A) all licenses, permits, certificates of occupancy, approvals,

dedications, subdivision maps and entitlements issued, approved or granted by Authorities or otherwise in

connection with the Property or the Improvements, including, without limitation, those necessary to satisfy

the Fill Condition and certified as completed in compliance by the Authority and attached to the certification

of engineer, a form of which is attached hereto as Exhibit "G," or any materials prepared and/or approved or

disapproved pursuant to the provision of the California Environmental Quality Act

("CEQA") (California

Public Resources Code §§ 21000 et. seq.) (B) any and all development rights and other intangible rights,

titles, interests, privileges and appurtenances owned by Seller and in any way related to or used in connection

with the Property or the Improvements or their respective operation; (C) licenses, permits, maps, certificates

of occupancy, building inspection approvals and unrecorded covenants, conditions and restrictions, reciprocal

easement agreements, area easement agreements and other common or planned development agreements or

documents affecting the Property or the Improvements ; and

(D)

all licenses, consents, easements, rights of

way and approvals required from private parties, including such agreements concerning satisfaction of the

Tie-Back Condition which are in substantially the same fowl as attached hereto as Exhibit "F," to make use of

subterranean tie-backs, support structures, and like shoring systems, as well as utilities and to insure vehicular

and pedestrian ingress and egress to the Property or the Improvements.

13) "Official Records"

means the Official Records of the San Diego County Recorder.

14) "Opening of Escrow"

means the date on which a fully executed copy of this Agreement is delivered

to Escrow Holder by Buyer and Seller.

15) "Personal Property"

means all equipment, appliances, tools, machinery, supplies, building materials

and other personal property of every kind and character owned by Seller and attached to, appurtenant to,

located in or used in connection with the operation of the Property or the Improvements and the Records and

Plans.

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16) "Records and Plans"

means (A) all City permits required to satisfy the Fill Condition, (B) all

preliminary, final and proposed building plans and specifications (including "as-built" drawings), if any,

respecting the Improvements„ including any obtained in connection with satisfaction of the Fill or Tie-Back

Conditions, and (C) all surveys, including ALTA or ACSM surveys, structural reviews, grading plans,

topographical maps, architectural drawings and engineering, soils, seismic, geologic, environmental

contamination and architectural reports, studies and certificates and other documents pertaining to the

Property or any Improvements, including any obtained in connection with satisfaction of the Fill or Tie-Back

Condit ions.

17)

"Service Contracts"

means any and all service contracts, including, but not limited to, maintenance

contracts, operating contracts, management contracts, listing agreements, parking contracts and like contracts

and agreements relating to the Property or the Improvements, together with all supplements, amendments and

modifications thereto, including any obtained in connection with satisfaction of the Fill Condition.

18) "Tenant Leases"

means all leases, licenses, rental agreements or occupancy agreements, and all

amendments and supplements thereto, relating to all or any portion of the Property or the Improvements

(together with all rents, issues and profits thereunder).

19) "Title Company"

means Lawyers Title Commercial Services, a division of Fidelity National Title

Insurance Company.

20)

"To the best of Seller's knowledge"

or other references herein to Seller's knowledge mean the

knowledge a party involved with the Property would be expected to have by reason of being an experienced

affordable housing developer that selected the Property as a future affordable housing development site and

would have continued involvement with the Property as a proposed buyer and potentially future developer

and operator proposing an exclusive negotiation agreement for a period of up to two years.

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SCHEDULE OF EXHIBITS

EXHIBIT

TITLE

A

Legal Description of the Property (Fee Parcel)

· Estoppel Certificate

· Form of Grant Deed

·

General Assignment and Bill of Sale

·

Non-Foreign Entity Certification

·

Tie-Back Easement Agreement With Temporary License

· Certification of Engineer

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[Schedule of Exhibits]

EXHIBIT "A"

LEGAL DESCRIPTION OF THE PROPERTY

THE LAND REFERRED TO HEREIN BELOW IN SITUATED IN THE COUNTY OF SAN DIEGO,

STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PARCEL 1:

(APN: 533-451-02-00)

LOT B IN BLOCK 201 HORTON'S ADDITION, IN THE CITY OF SAN DIEGO, COUNTY OF SAN

DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED IN THE OFFICE OF THE COUNTY

RECORDER OF SAN DIEGO COUNTY.

PARCEL 2:

(APN: 533-451-16-00)

LOTS C AND D, BLOCK 201, HORTON' S ADDITION, IN THE CITY OF SAN DIEGO, COUNTY OF

SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF MADE BY L.L.

LOCKLING ON FILE IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY.

PARCEL 3:

(APN: 533-451-11-00)

THE NORTH HALF OF LOT "J" AND ALL OF LOT "K" IN BLOCK 201 OF HORTON' S ADDITION,

IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING

TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO

COUNTY, CALIFORNIA.

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EXHIBIT "A"

[Legal Description of Property]

EXHIBIT "B"

ESTOPPEL CERTIFICATE

To:

Redevelopment Agency of the City of San Diego

do Centre City Development Corporation

401 B Street, Fourth Floor


Attention: Ms. Eni Kameyama

Date: [INSERT DATE]

Re:

1453 Fourth Avenue and 1446 Fifth Avenue, San Diego, California 92101

The undersigned hereby certifies to the Redevelopment Agency of the City of San Diego

("Buyer") as of the date hereof as follows, to the best of the undersigned's knowledge:

1.

There are no contracts, licenses, leases, service contracts or rights of entry affecting the

Property other than the following which the undersigned, or predecessor-in-interest to Seller, granted

affecting the Property: [IDENTIFY SUCH CONTRACT, LICENSE, OR LEASE IF APPLICABLE] [NAME

OF LICENSEE OR TENANT IF APPLICABLE] under the above-referenced covering the above-referenced

Premises. A true, correct and complete copy of the [NAME OF CONTRACTS, LICENSES OR LEASES, IF

APPLICABLE] (including all addenda, riders, amendments, modifications and supplements thereto) is

attached hereto as Attachment "A".

2.

. [If applicable] The [NAME OF CONTRACTS, LICENSES OR LEASES, IF APPLICABLE]

constitutes the entire agreement between [OR NAME OF LICENSEE OR TENANT IF APPLICABLE] and

the undersigned.

3. [If applicable] The term of the

commenced on March 1, 2006, and, including any

presently exercised option or renewal term, will expire on

4.

[If applicable] There exists no breach or default, nor state of facts nor condition which, with

notice, the passage of time, or both, would result in a breach or default on the part of either Buyer [OR

NAME OF LICENSEE OR TENANT IF APPLICABLE] or the undersigned. To the best of Seller's

knowledge, no claim, controversy, dispute, quarrel or disagreement exists involving said document.

5.

[If applicable] There are no other leases, licenses, rental agreements or like interests

conferred by the undersigned unless otherwise disclosed to Buyer. [CORRECT IF APPROPRIATE]

SELLER


a California corporation

By:

Kenneth L. Sauder

President & CEO

By:

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[3-1-10]

EXHIBIT "B"

[Form of Grant Deed ]

EXHIBIT "C"

FORM OF GRANT DEED

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

Redevelopment Agency

of the City of San Diego

c/o Centre City Development Corporation



Attention: Mr. David Allsbrook

MAIL TAX STATEMENTS TO:

Centre City Development Corporation



Attention: Mr. David Allsbrook

Assessor Parcel Nos:

533-451-02

533-451-16

533-451-11

(Space Above For Recorder's Use)

GRANT DEED

State of California

County of San Diego

THIS GRANT DEED is made this

day of

, 2010 by WAKELAND HOUSING &

DEVELOPMENT CORP., a California corporation ("Grantor"), to the REDEVELOPMENT AGENCY OF

THE CITY OF SAN DIEGO, a public body, corporate and politic (the "Grantee").

WHEREAS, Grantor holds legal title to an undivided interest in that certain real property located

in the City of San Diego, County of San Diego, State of California, described as follows:

PARCEL 1:

LOT B IN BLOCK 201 HORTON' S ADDITION, IN THE CITY OF SAN DIEGO, COUNTY OF SAN




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EXHIBIT "C"

-1-


PARCEL 2:

LOTS C AND D, BLOCK 201, HORTON' S ADDITION, IN THE CITY OF SAN DIEGO, COUNTY OF



PARCEL 3:

THE NORTH HALF OF LOT "J" AND ALL OF LOT "K" IN BLOCK 201 OF HORTON' S ADDITION,


TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO

COUNTY, CALIFORNIA.

WHEREAS, Grantor desires to convey to Grantee in fee simple all of its right, title and interest in and

to the aforesaid parcels of real property (the "Real Property").

NOW THEREFORE, IN CONSIDERATION of good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged by Grantor, the Grantor does hereby grant, bargain, sell and

convey unto the Grantee in fee simple the Real Property with all and singular the ways, easements, rights,

privileges and appurtenance thereto or in any way appertaining, all improvements thereon and all the estate,

right, title, interest and claim, either at law or in equity, of the Grantor as to Grantor's entire undivided interest

in the said Real Property.

IN WITNESS WHEREOF, Grantor has caused this Grant Deed to be executed by its representative

thereunto duly authorized as of the day and year first above written.

"GRANTOR"



By:

Kenneth L. Sauder

President & CEO

By:

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EXHIBIT "C"

-2-


Certificate of Acceptance

This is to certify that the interest in Real Property conveyed by this grant dated from WAKELAND

HOUSING & DEVELOPMENT CORP., a California corporation, to THE REDEVELOPMENT AGENCY

OF THE CITY OF SAN DIEGO, a public body, corporate and politic, is hereby accepted by order of the

on

, and the Grantee consents to recordation thereof by its duly

authorized officer.

"GRANTEE"

REDEVELOPMENT AGENCY OF THE CITY OF

SAN DIEGO

By:

APPROVED AS TO FORM FOR THE

REDEVELOPMENT AGENCY OF THE CITY

OF SAN DIEGO

JAN I. GOLDSMITH

AGENCY GENERAL COUNSEL

By:


ICANE, BALLMER & BERKMAN

Special Counsel

By:

Murray 0. Kane


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EXHIBIT "C"

-3-


State of California

)

)

County of

)

On

before me,

, a Notary Public, 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)

State of California

)

)

County of

)

On

before me,


appeared





instrument.



Signature

(Seal)

State of California

)

)

County of

)

On

before me,


appeared





instrument.



Signature

(Seal)

EXHIBIT "D"

GENERAL ASSIGNMENT AND BILL OF SALE

THIS GENERAL ASSIGNMENT AND BILL OF SALE ("Assignment") is made this

day of

, 2010 by and between Wakeland Housing & Development Corp., a California corporation

("Assignor"), and the REDEVELOPMENT AGENCY OF THE CITY OF SAN DIEGO, a public agency,

corporate and politic ("Assignee"), with respect to the following matters.

W ITN E S SETH :

Assignor and Assignee entered into that certain Agreement of Purchase and Sale and Joint Escrow

Instructions, dated as of

("Agreement"), respecting the sale of Assignor's entire

undivided interest in the "Property" (as defined in the Agreement), including the real property located in the

City of San Diego, County of San Diego, described as follows:

PARCEL 1: (APN: 533-451-02)

LOT B IN BLOCK 201

HORTON'S ADDITION, IN THE CITY OF SAN DIEGO,

COUNTY OF SAN



PARCEL 2:

(APN: 533-451-15)

LOTS C AND D, BLOCK 201, HORTON'S ADDITION, IN THE CITY OF SAN DIEGO, COUNTY OF



PARCEL 3:

(APN: 533-451-11)

THE NORTH HALF OF LOT "J" AND ALL OF LOT "K" IN BLOCK 201 OF HORTON'S ADDITION,


TO MAP THEREOF ON FILE IN THE OFFICE OF THE

COUNTY RECORDER OF SAN DIEGO

COUNTY,

CALIFORNIA.

Unless otherwise indicated herein, all capitalized terms in this Assignment shall have the meaning

ascribed to them in the Agreement.

Under the Agreement, Assignor is obligated to assign to Assignee any and all of its right, title and

interest in and to: (i) the Records and Plans, (ii) the Licenses and Permits, (iii) the Personal Property and (iv)

the Service Contracts in existence on the Close of Escrow.

NOW, THEREFORE incorporat ing the foregoing recitals and for other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, as of the Close of Escrow,

Assignor hereby assigns, sells, transfers, sets over and delivers unto Assignee all of Assignor's estate, right,

title and interest in and to, and Assignee hereby accepts such assignment, with respect to any of the following

provided, however, that this Assignment shall only be effective to assign sell, transfer, set over and deliver

such interest as Assignor shall have as of the Close of Escrow with respect to any of the following:

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EXHIBIT "D"

-1-

[General Assignment and Bill of Sale]

(i)

all records, plans, licenses, contracts, permits and personal property issued in connection with

or used in the operation, maintenance or repair of the Property, including but not limited to all materials

received by Assignor in satisfaction of the Fill Condition or such personal property remaining on or about the

Property on the Close of Escrow whether or not a itemized under the D&A-Wakeland Contract,

(ii)

all assignable warranties, indemnities and guarantees (express or implied) issued in

connection with or arising out of the purchase and repair of the Personal Property; and

(iii)

any other tangible personal property and all intangible rights in connection with the complete

and comfortable use, enjoyment, occupancy or operation of the Property.

Assignor hereby covenants that Assignor will, at any time and from time to time, upon written request

therefor, execute and deliver to Assignee, Assignee's successors, nominees and assigns, any new or

confirmatory instruments which Assignee, Assignee's successors, nominees and assigns may reasonably

request in order to fully assign and transfer to and vest in Assignee, or Assignee's successor, nominee and

assigns, and to protect Assignee's or Assignee's successors', nominees' and assigns' right, title and interest in

and to the Records and Plans, Licenses and Permits, Personal Property, Service Contracts and all related

warranties, indemnities and guarantees, and all other tangible property and intangible rights in connection

with the Property, or to otherwise realize upon or enjoy such rights in such assigned rights and properties.

In the event of the bringing of any action or suit by a party hereto against another party hereunder by

reason of any breach of any of the covenants, conditions, agreements or provisions on the part of the other

party arising out of this Assignment, then in that event the prevailing party shall be entitled to have and

recover of and from the other party all costs and expenses of the action or suit, including actual attorneys' fees

and costs.

This Assignment maybe executed simultaneously in counterparts, each of which shall be deemed an

original, but all of which, together, shall constitute one and the same instrument.

This Assignment shall be binding upon and inure to the benefit of the successors, assignees, personal

representatives, heirs and legatees of all the respective parties hereto.

This Assignment shall be governed by, interpreted under, and construed and enforceable in

accordance with, the laws of the State of California.

[CONTINUED ON PAGE 3]

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E X H IB I T "D "

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IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment as

of the day and year first above written.

"ASSIGNEE":

REDEVELOPMENT AGENCY

OF THE CITY OF SAN DIEGO

By:

APPROVED AS TO FORM:

Jan I. Goldsmith

Agency General Counsel

By:


KANE, BALLMER & BERKMAN

Special Counsel

By:

Murray 0. Kane

"ASSIGNOR":



By:

Kenneth L. Sauder

President & CEO

By:

ATTEST:

By:

Corporate Secretary

APROVED AS TO FORM FOR

WAKELAND HOUSING &

DEVELOPMENT CORP.,


By:

Counsel to Assignor

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EXHIBIT "D"

-3-


EXHIBIT "E"

NON-FOREIGN ENTITY CERTIFICATION

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest

must withhold tax if the transferor is a foreign person. For U.S. tax purposes (including Section 1445), the

owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the

transferor of the property and not the disregarded entity. To inform the transferee that withholding of tax is

not required upon the disposition of a U.S. real property interest by WAKELAND HOUSING &

DEVELOPMENT CORP., a California corporation (the "Transferor"), the undersigned hereby certifies the

following on behalf of the Transferor:

1.

Transferor is not a foreign person, foreign corporation, foreign partnership, foreign trust or

foreign estate (as those temis are defined in the Internal Revenue Code and Income Tax Regulations);

2.

Transferor/seller is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii);

3.

Transferor's U.S. Social Security number is

; and

4.

Transferor's address is:

Transferor understands that this certification may be disclosed to the Internal Revenue Service and

that any false statement made within this certification could be punished by fine, imprisonment, or both.

Under penalties of perjury the undersigned declares that he has examined this certification and that to

the best of his knowledge and belief it is true, correct and complete, and the undersigned further declares that

he has the authority to sign this document on behalf of the Transferor.

TRANSFEROR:



By:

Kenneth L. Sauder

President & CEO

By:

1(...

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EXHIBIT "E"

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[Non-Foreign Entity Certification]

ATTEST:

By:

Corporate Secretary

APROVED AS TO FORM FOR

WAKELAND HOUSING &

DEVELOPMENT CORP.,


By:

Counsel to Seller

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E X H IB IT "E "

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[Non-Foreign Entity Certification]

EXHIBIT "F"

FORM OF TIE-BACK EASEMENT AGREEMENT WITH TEMPORARY LICENSE

(Limited Executive Director discretion requested for approval of changes to this form)

RECORDING REQUESTED BY AND

WHEN RECORDED MAIL TO:

Gustavo Lamanna, Esq.

Kane, Ballmer & Berkman

515 South Figueroa Street, Suite 1850

Los Angeles, California 90071

Space above for Recorder's Use

TIE-BACK EASEMENT AGREEMENT WITH TEMPORARY LICENSE

THIS TIE-BACK EASEMENT AGREEMENT WITH TEMPORARY LICENSE ("Agreement") is

m a d e e f f e c t iv e th is

d a y o f

2 0 1 0 b y a n d b e tw e e n

("Owner")

and

a

("Landowner").

WHEREAS, Owner is performing certain fill and compaction work to eliminate an existing

excavation and certain grading work to provide a level graded surface (collectively, the"Work") on certain

real property owned by Owner, which property is described on Exhibit "A" hereto (the Property"). The

Property is adjacent to certain real property described on Exhibit "B" hereto owned by Landowner (the

"Landowner Property"); and

WHEREAS, in connection with the prior excavation performed on the Property, certain tie-backs,

shoring or other earth-supporting structures were installed on, adjacent to and beneath the Landowner

Property ("Tie-Backs") and certain excavations were made beneath the Landowner Property; and

WHEREAS, the parties have attached shoring system drawings on Exhibit "C" depicting, among

other things, the location of the Tie-Backs emanating from excavated D&A Property into and beneath the

surface of the adjacent Landowner Property ("Tie-Back Location"); and

WHEREAS, Owner requests approval of Landowner to perform the Work which will include fill and

compaction of the Property, the corresponding existence of the Tie-Backs in the Tie-Back Location incident

to the re-filling of the excavation on the Property, and monitoring of the Work from various vantage points,

including on or about the surface of the Landowner Property. Landowner's signature herein shall be deemed

their approval of same; and

WHEREAS, to accomplish the foregoing, Landowner agrees to the grant of (1) an underground

easement to permit the Tie-Backs to remain in place in and beneath the Landowner Property in the Tie-Back

Location (the "Easement") and (2) a temporary license through the completion of the Work permitting entry

onto, over, on or about the surface of Landowner Property in connection with monitoring the progress of the

Work (the "Temporary License"); and

KACG \SD CCDC \Atmosphere \Wakeland Agency Acquisition K \Atmosphere Prop Acq

EXHIBIT "F"

Agrmt v9a.doc

[3-1-10]

[Tie-Back Easement Agreement with Temporary License]

WHEREAS, the parties agree to the Easement and Temporary License, as further described below,

subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE„ the parties hereto agree as follows:

1.

Easement. Landowner, as current owner of the Landowner Property, and on behalf of all

future owners of the Landowner Property, grants the underground Easement to all future owners of the

Property, and their successors and assigns. Pursuant to the Easement, the Tie-Backs will remain in place

beneath the Landowner Property in the Tie-Back Location. Landowner acknowledges that it would not be

practical for Owner to remove the Tie-Backs from the Tie-Back Location. The parties hereto agree that the

Easement permits the Tie-Backs to be left in place in perpetuity or removed by a subsequent owner of the

Property; in addition, the Easement also permits the replacement, re-installation, and installation of such

replacement and/or additional tie-back, shoring or other earth-supporting structures beneath the Landowner

Property for the mutual benefit of the Property and Landowner Property at no expense to the Landowner..

2.

Temporary License. Landowner, as current owner of the Landowner Property, and on behalf

of all future owners of the Landowner Property, grants the Temporary License to D&A, as current owner of

the Property, all future owners of the Property, their successors and assigns, and their respective contractors,

subcontractors, agents and employees performing the Work (collectively, the "Licensee"). Pursuant to the

Temporary License, from the commencement of the Work through the completion of the Work when the

Property is filled to at-grade level, Landowner grants permission to the Licensee to enter into and monitor the

Landowner Property incident to the construction, installation, and maintenance of the Work and any related

construction activity.

3. In the performance of the Work, Owner shall cause all those performing said Work to take

appropriate steps to preserve and protect the Landowner Property, and all improvements thereon, from

damage to and to avoid any unreasonable interference with the conduct and operation of the improvements of

the Landowner Property.

4.

Landowner agrees to execute such additional documents as are reasonably requested by

Owner in connection with obtaining permits or other necessary or required approvals or the Easement

provided that Landowner shall incur no costs or liability in connection with such additional documents,

permits or approvals.

5. To the maximum extent permitted by law, Owner agrees to and shall defend, indemnify and

hold harmless Landowner and its officers, employees, contractors and agents from and against all claims,

liability, loss, damage, costs or expenses (including reasonable attorneys' fees and court costs) arising from or

as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person

or the property of any person resulting or arising from or in any way connected with the Work or any

mechanics' liens, stop notices or other liens or encumbrances filed or recorded against the Landowner's

Property in connection with the Work, provided Owner shall not be responsible for (and such indemnity shall

not apply to) any negligence or willful misconduct of the Landowner or its officers, employees, contractors or

agents. Owner may carry liability insurance in connection with the foregoing. In the event of a transfer of the

Property by Owner after the completion of the Work, this indemnity shall bind the successors of Owner and

all future owner(s) of the Property.

6. The Tie Backs will remain in place beneath the Landowner Property. Landowner

acknowledges that it would not be practical for Owner to remove the Tie Backs. The parties hereto agree that

the Tie Backs may be left in place or may be removed by a subsequent owner of the Property at its option. In

the event of any litigation or dispute between the parties hereto or the institution of any action or proceeding

K:\CG\SD\CCDC\Atmosphere\Wakeland Agency Acquisition K \Atmosphere Prop Acq

E X H IB IT "F "

Agmt v9a.doc

[3-1-10]

-2 -


to interpret or enforce this Agreement, or arising out of the subject matter of this Agreement or the

transactions contemplated hereby, the prevailing party shall be entitled to recover its actual expenses and its

actual attorneys' fees and costs, including professional or expert consultation or testimony.

7.

Landowner hereby appoints Owner its true attorney in fact to execute on its behalf all

permits, including without limitation building permits, required for the Work. This power of attorney is

coupled with an interest and may be exercised from time to time by Owner's's officers and employees, the

future owners of the Property, their officers, agents, or employees, or any of them.

8.

This Agreement is a covenant running with the land and shall bind and inure to the benefit of

the current and future owner(s) of the Property, Landowner and future owner(s) of the Landowner Property,

and their respective successors and assigns.

9.

This Agreement shall be governed by the laws of California (but not including the choice of

laws thereof).

10.

This Agreement may be executed in one or more counterparts, each of which when so

executed and delivered shall be deemed an original, all of which taken together shall constitute one and the

same original.

IN WITNESS WHEREOF, this Agreement has been signed as of the date first above written.

"Owner"

D&A Semi-Annual Mortgage Fund III, L.P.,

a California limited partnership

By:

Asset Managers, Inc., a California corporation, its general partner

By:

"LANDOWNER"

a

By:

Name:

Tit le:

K: \CG \SD CCDC \ Atmosphere\Wakeland Agency Acquisition K \ Atmosphere Prop Acq

E X H IB I T "F "

Agrint v9a.doc

[3-1-101

-3 -


ACKNOWLEDGEMENTS

STATE OF CALIFORNIA

) SS

COUNTY OF

O n

, before m e,

, a Notary Public,

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.


paragraph is true and correct.

Witness my hand and official seal.

[Seal]

(Signature)

STATE OF CALIFORNIA

) SS

COUNTY OF

O n

, before m e,

, a Notary Public,

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.


paragraph is true and correct.

Witness my hand and official seal.

[Seal]

(Signature)

EXHIBIT A

D&A PROPERTY

EXHIBIT B

LANDOWNER PROPERTY

EXHIBIT C

TIE-BACK LOCATION

EXHIBIT "G"

FORM OF CERTIFICATION OF ENGINEER

(Limited Executive Director discretion requested for approval of changes to this form)

CERTIFICATION OF ENGINEER

CONFIRMING REFILLING OF EXCAVATED SITE

AND SATISFACTORY COMPLETION OF SITE PREPARATION

1453 Fourth Avenue and 1446 Fifth Avenue, San Diego, California 92101

The undersigned certify the real property located at 1453 Fourth Avenue and 1446 Fifth Avenue

(the "Property") as further described in that certain Amended and Restated Agreement for Purchase and

Sale of Real Property dated January 26, 2010 between D&A Semi-Annual Mortgage Fund III, L.P., as

seller, and Wakeland Housing & Development Corp., as buyer.(the "Agreement").was refilled in

satisfaction of Section 4.2(f) of the Agreement. This Certification of Engineer certifies the following

have been completed in satisfaction of that condition to the Agreement of the parties:

A.

Completion of Refilling and Compacting of Property

1.

Clean Soil and Monitoring Certification by Registered Soils Engineer. The

undersigned and the parties to the Agreement have received a true, correct and complete registered soils

engineer certificate, or separate letter or report certifying same, that includes a statement indicating the

soil meets or exceeds the requirements of the applicable permit issued and approved by the City of San

Diego and contains the following certification, in substantial conformity of the following, concerning the

soil and monitoring:

(a)

Soil. The registered soils engineer confirms that soil used in the refilling was tracked

from its origin, tested, and analyzed to confirm it is "Clean Soil". "Clean Soil" is defined as soil that is

documented by analytical laboratory testing to contain levels of metals below the San Diego Regional

Water Quality Control Board (SD-RWQCB) Tier 1 soil screening levels as outlined in Resolution R9-

2007-0104, Conditional Waiver No. 8, 8.II.E. Clean Soil is also not known or reasonably suspected to

contain detectable concentrations of any other Hazardous Substances (as defined at California Health &

Safety Code Section 33459(c)), or other hazardous materials, including, but not limited to petroleum

hydrocarbons, volatile organic compounds, semi-volatile organic compounds, pesticides, or

Polychlorinated Biphyenyls. Clean Soil is soil that is not subject to waste classification, disposal, or reuse

regulations. Testing results confirming the soil used is Clean Soil are attached hereto as Exhibit A. 1(a)

(b)

Monitoring. In addition to the confirmation that soil was tested and confirmed as

Clean Soil, as defined above, the statement shall certify that monitoring took place at all times during the

refilling of the Property and that only Clean Soil was brought onto the Property. The statement shall

confirm that at no times was the Property unattended during the fill process to allow for soil other than

Clean Soil to be brought on, about, or onto the Property. Soils manifests, reports, and documentation

supporting this monitoring shall be attached as Exhibit A. 1(b) to the certification of registered soils

engineer along with said statement.

2.

Preliminary Soils Report issued and approved by City of San Diego. In addition to the

foregoing, and not to replace or supplement any other portion of this certificate, this certificate must

include a statement demonstrating satisfaction of this additional requirement of the City of San Diego.

The undersigned and the parties to the Agreement have applied for and met all the requirements of the

Preliminary Soils Report required by the City of San Diego. In response to satisfying all requirements,

the City of San Diego approved and issued the appropriate permit for all work required for Section 4.2(f)

of the Agreement. Evidence of satisfaction and approval of the Preliminary Soils Report is attached

hereto as Exhibit A.2.

3.

As Graded Soils Report with Compaction Testing issued approved by City of San

Diego. In addition to the foregoing, and not to replace or supplement any other portion of this certificate,

this certificate must include a statement demonstrating satisfaction of this additional requirement of the

City of San Diego. The undersigned and the parties to the Agreement have applied for and met all the

requirements of the As Graded Soils Report with Compaction Testing required by the City of San Diego.

In response to satisfying all requirements, the City of San Diego approved and issued the appropriate

permit for all work required for Section 4.2(f) of the Agreement. Evidence of satisfaction and approval of

the As Graded Soils Report with Compaction Testing is attached hereto as Exhibit A.3.

4.

Refilling Complete According to City Permit. In addition to the foregoing, and not to

replace or supplement any other portion of this certificate, this certificate must include a statement

demonstrating satisfaction of this additional requirement of the City of San Diego. The undersigned and

the parties to the Agreement have applied for and met all the requirements of the refilling permit, or such

related permit or permits necessary and required by the City of San Diego for refilling the excavated

Property. In response to satisfying all requirements, the City of San Diego approved and issued the

appropriate permit for all work required for Section 4.2(f) of the Agreement. Evidence of satisfaction and

approval of this or these permits is/are attached hereto as Exhibit A.4.

5.

Refilling of Property According to Agreed Upon Plan. In addition to the foregoing,

and not to replace or supplement any other portion of this certificate, this certificate or separate letter or

report must include a statement demonstrating satisfaction and substantial compliance with the fill plan

designated by an engineer who has inspected, reviewed and evaluated the Property and developed a plan

for refilling the Property. The fill plan endeavored by the parties may be in substantial form and content

to the one described in the Review and Evaluation Report for Former Atmosphere Site Shoring prepared

by Flores Lund Consultants, as amended November 16, 2009. A directional plan from Appendix C to

said report, modified to show positive drainage to the west, is attached reflecting the fill plan and

suggested condition of the Property desired at the Close of Escrow, as defined in the Agreement. The

certificate shall confirm the Property was filled in conformity with a fill plan designed by a registered

engineer after inspection, review, and evaluation of the Property.

B.

Vertical and Horizontal Survey

The parties to the Agreement agree to measure conduct a vertical and horizontal survey of the

points Al through A22 depicted in the attached modified Topographical Survey prepared by San Diego

Land Surveying & Engineering, Inc. The parties agree to add any additional vertical and/or horizontal

points required by the City of San Diego or shown in applications of the parties to the City for permits

issued and approved by the City of San Diego in connection with satisfaction of Section 4.2(f) of the

Agreement. The certificate shall include a table in the form shown below reflecting (1) measurements of

all vertical and horizontal points as of a date within 24 to 72 hours prior to the commencement of refilling

work; (2) measurements of all vertical and horizontal points as of a date that is 24 to 72 hours after the

completion of the refilling work; (3) the change, if any, following the refill; and (4) an explanation if the

change between any start and finish measurements exceed the "not to exceed" limits shown below and, if

applicable, a corresponding mitigation measure(s), if any, exist concerning the event.

Vertical Vertical

Vert ical Vert ical Change Horizontal Horizontal Change

Point 09/20/05 09/17/09

Change Start Finish NTE Start Finish NTE

Al

0 .43 '

N TBD TBD

A2 0.34' 0.31'

TBD TBD

A3 N 0.34'

TBD TBD

A4 0.33'

0.31'

TBD

TBD

A5 0.38'

0.36' TBD TBD

A6 0.35'

0.32'

TBD TBD

A7

N 0.29' TBD TBD

A8 0.39'

0.38'

TBD TBD

A9

N 0.40' TBD TBD

A10 0.27' 0.26' TBD TBD

A ll 0.30' 0.28'

TBD TBD

Al2

0.24'

0.22'

TBD TBD

A13 0.19' 0.17'

TBD TBD

A14 N/A N/A N/A TBD TBD

Al5

N/A

N/A N/A TBD TBD

A16 N/A N/A N/A

TBD TBD

A17 N/A N/A N/A TBD

TBD

Al8

N/A

N/A N/A TBD TBD

A19 N/A N/A N/A

TBD TBD

A20

N/A

N/A

N/A

TBD

TBD

A21 N/A N/A N/A

TBD TBD

A22 N/A N/A N/A

TBD TBD

C. Positive Drainage Systems and Erosion Control

In addition to compliance with paragraphs A.3. and A.5, above, concerning the at-grade soils

report and refilling plan by an engineer, the undersigned and the parties to the Agreement confirm that the

design and implementation of the refilling of the Property incorporate positive drainage systems and

erosion control as may be necessary under the permits required for satisfaction of Section 4.2(f) of the

Agreement. The directional plan from Appendix C of the Review and Evaluation Report for Former

Atmosphere Site Shoring prepared by Flores Lund Consultants, as amended November 16, 2009, was

modified to show positive drainage to the west. In addition to that suggested modification for positive

drainage and pooling of water on the Property after grading, the contractors have incorporated best

management practices in erosion control as determined by the City of San Diego and required on the City

erosion plans and grading permit. The undersigned certifies that the design, grading and refilling of the

Property accounts for and incorporates positive drainage and includes best management practices for

erosion control.

D.

Installation of Temporary Rental Fencing Around Perimeter of Property

At the time the Property was completely refilled in conformance with the foregoing, the parties

agree to install temporary fencing at the time the existing barricade surrounding the Property is removed.

At no time has the Property been left open without a barricade or gate. The parties agree to install such

temporary rental fencing around the perimeter of the Property to assure it does not constitute an attractive

nuisance or like public safety hazard. The costs for temporary rental fencing shall be considered a

Service Contract and be transferable on the Close of Escrow.

The undersigned engineer attaches photographs depicting the Property in the current state as of the time

of signing this Certificate.

Certified this

day of

, 2010

By:

Name:

Tit le:

[Seal]

[Attachments (1) Flores Lund Consultants directional plan with modification showing positive

drainage towards west and (2) San Diego Land Surveying & Engineering, Inc. Topographical

Survey, modified, to show locations Al through A22 for vertical and horizontal measurements]

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