Page 1 of 17 Escrow No. PURCHASE CONTRACT AND

Escrow No.: PURCHASE CONTRACT AND ESCROW INSTRUCTIONS THE SUMMIT ON SIXTH Date: SUBJECT PROPERTY: Unit of Lot 2 of Tract No. 65456, with a street address of 3223 West Sixth Street, Los Angeles, California 90020 (“Property”) in the County of Los Angeles (the “County”), State of California, together with easements and other appurtenant interests as set forth in the deed conveying the Property to Buyer, subject to the terms of the Declaration. The Property is part of the The Summit on Sixth condominium development located in the City of Los Angeles and is not a newly constructed dwelling unit but a residence in a former commercial office building previously occupied by tenants. The Property is conveyed subject to the conditions set forth in Section 15 below. THIS CONTRACT AND ESCROW INSTRUCTIONS together with the addenda attached hereto (“Contract” or “Escrow Instructions”) constitutes instructions to Escrow Agent and an agreement by which AZ 3223 6th STREET, LLC, a Delaware limited liability company ("Seller"), agrees to sell, and (“Buyer”) agrees to purchase, the Property upon the terms and conditions herein set forth. Title to the Property shall vest in Buyer as follows: . 1. DEFINITIONS. “Association” means The Summit on Sixth Homeowners Association. “Close of Escrow” means the day that the conveyance called for in this Escrow is recorded or filed in the Office of the County Recorder. “Date of Contract” means the latest of the dates indicated in this Contract of (i) the date indicated above, (ii) the date of execution by Buyer or (iii) the date of acceptance by Seller. “Declaration” means the recorded Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for The Summit on Sixth, as the same may be amended from time to time. “Deposit” shall mean all cash deposits received by Escrow Agent or received by Seller from Buyer as a deposit toward the purchase price of the Property. “Escrow” means the escrow described below. “Escrow Agent” means escrow division of Title Company. “Lender” means the lender from whom Buyer has elected to obtain the Loan which lender shall be a state or federally chartered bank or savings and loan association or any lender which Seller agrees to recognize as an institutional lender for purposes of this Contract. “Preferred Lender” means Countrywide Home Loans. “Loan” shall mean the first trust deed loan, and, if applicable, the second trust deed loan, if any, obtained by Buyer. “Project” means the real estate development within which the Property is located. “Purchase Price” means the amount indicated below as the purchase price of the Property. “Title Company” means Stewart Title Company. Buyer and Seller hereby mutually agree to use the above-designated Title Company and Escrow Agent. PURCHASE PRICE AND CLOSING. The Purchase Price and the payment of such price by Buyer to Seller shall be as follows: A. BASE PURCHASE PRICE: OPTIONS & UPGRADES (if applicable): TOTAL PURCHASE PRICE: B. C. PAYMENT OF DEPOSIT (Cash Deposit received by Seller) PAYMENT OF BALANCE. Buyer hereby elects to pay the balance of the Purchase Price by the method checked below. First Trust Deed Loan. Prior to Close of Escrow, Buyer shall cause to be deposited into Escrow the proceeds of the Loan in the amount of Second Trust Deed Loan. Prior to Close of Escrow, Buyer shall cause to be deposited into Escrow the proceeds of the Loan in the amount of Balance Due at Closing. Prior to Close of Escrow, Buyer shall deposit into Escrow the balance, together with closing costs described herein, in the amount of No change in the method elected by Buyer to pay the Purchase Price Balance shall be permitted without Seller's written consent. Seller may withhold such consent for any reason. .D. THE ESTIMATED MONTHLY INSTALLMENT OF ASSOCIATION ASSESSMENTS applicable to the Property as of the date of this Contract is 2. 3. DEPOSITS. Buyer hereby delivers to Seller the Deposit and agrees that any funds held by Escrow Agent as a deposit under a reservation instrument executed by Buyer shall be credited to the Deposit upon the opening of Escrow as described below. If the Deposit is in the form of a check, Buyer acknowledges that it will not be cashed by Seller until Seller accepts Buyer's offer by executing this Contract. In the event Seller does not execute its acceptance of this Contract, Seller shall return to Buyer the Deposit amount or any check by which the Deposit is paid. Buyer acknowledges and agrees that in the event that the Deposit is given to Seller or Escrow Agent in the form of a check, it shall not be considered delivered and any acceptance of Seller of this Contract shall not be effective and Escrow shall not be considered opened, until such check has cleared and such funds are available on an unrestricted basis. If any check from Buyer is returned to Seller for non-sufficient funds, Buyer shall deliver to Seller a Cashier's check in the amount of the returned check within three (3) days from notification to Buyer. If the Buyer does not deliver the Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 1 of 17 Cashier's check within said three (3) days, this Contract, any additional agreement for options selected by Buyer, and any related Escrow shall be deemed automatically terminated. In the event Seller accepts this offer, Seller shall deliver such Deposit to Escrow Agent. If Seller has previously delivered or hereafter delivers a surety bond to the Department of Real Estate pursuant to the provisions of Title 10 of the California Code of Regulations, Section 2791.2 at least equal in amount to the aggregate of all such funds held by Seller outside of Escrow or to be held by Seller outside Escrow, then Seller shall be permitted to hold such Deposit(s) outside of Escrow provided that a Final Subdivision Public Report has been issued by the Department of Real Estate. Any Deposit funds held in Escrow upon the delivery of such bond or issuance of a Final Subdivision Public Report shall be released by Escrow Agent to Seller at Seller's request without further instruction from Buyer. 4. ESTIMATED CLOSING DATE. A. CLOSING DATE. Except as otherwise provided herein and unless this Contract is earlier terminated, Close of Escrow shall occur on the date (“Closing Date”) which is five (5) business days after the date Buyer has been notified either verbally or in writing by Seller or Escrow Agent at Seller’s instruction that the Property is ready for occupancy. B. ESTIMATED CLOSING DATE. Seller estimates that the Property shall be ready for occupancy on or before (“Estimated Closing Date”). However, the Closing Date may differ substantially from the Estimated Closing Date, and Buyer hereby waives any and all claims related to any such difference between the Closing Date and the Estimated Closing Date. Without limitation of the foregoing, should Seller be delayed in completing the residence on the Property for reasons beyond Seller’s control, including but not limited to strikes, boycotts, unavailability of materials, labor shortages, or delays in receiving materials, the time of such delay shall be added to the time specified for the Estimated Closing Date. C. CHANGES TO CLOSING DATE. Buyer agrees that the Estimated Closing Date is merely Seller's best estimate of the actual Closing Date. Because of the nature of the homebuilding industry, it is generally not practicable to estimate such date with precision. Owing to a variety of factors including Seller's decisions as to the scheduling of work as between different portions of the entire Project, the actual Closing Date could be extended by weeks, or even months. Should Seller be delayed in substantially completing said Property by reason of force majeure events (as defined in 9(iv) below) the time of such delay shall be automatically added to the time specified for the Estimated Closing Date and/or the Closing Date, as applicable. Notwithstanding the foregoing, subject to extensions for delays due to any force majeure events, if Seller does not complete construction of the Condominium Building’s structural framing within twelve (12) months following the Date of Contract (“Framing Completion Date”) for any reason other than Buyer's default of this Contract, this Contract shall, upon Buyer's written request to Escrow Agent, be terminated and any Deposit shall be returned to Buyer within fifteen (15) days and, following such termination, neither party shall have any further obligation to the other under this Contract (unless either Buyer or Seller is otherwise in default hereunder). In no event shall Seller be deemed to be in breach of this Contract or liable in any way for damages to Buyer if the structural framing is not completed by the Framing Completion Date. However, if Seller is not able to complete the structural framing by the deadlines set forth above and Buyer does not provide a written request for termination to Escrow Agent within seven (7) days following the Framing Completion Date, Buyer shall be deemed to have consented to a later date for the Framing Completion Date and Buyer shall no longer have the right to terminate the Contract. In no event shall the Property be delivered to Buyer later than two (2) years from the Date of Contract. If Escrow does not close within two (2) years following the Date of Contract for any reason other than Buyer's default that would entitle Seller to obtain liquidated damages pursuant to Section 13 of this Contract, this Contract shall be terminated and any Deposit shall be returned to Buyer. In no event shall Seller be deemed to be in breach of this Contract or liable in any way for damages to Buyer if the Escrow does not close within two (2) years following the Date of Contract. D. DELAYS DUE TO BUYER. In the event this Escrow does not close upon the Closing Date due to Buyer's failure to timely perform its obligations under this Contract, Buyer acknowledges Seller will be materially harmed due to additional expenses that will be incurred by Seller as carrying costs for the Property (which include, without limitation, loan interest charges, property taxes and insurance costs). Therefore, in such event, Buyer agrees that Seller shall have the right to terminate this Contract and retain all Buyer's Deposit as Liquidated Damages under Section 13; provided, however, that Buyer may make a written request to extend the Closing Date by paying Seller's daily carrying costs applicable to the Property during the period of such delay which Seller and Buyer hereby agree will be in the amount of $300.00 per day ("Extension Payment"), which request may be approved or denied by Seller in its sole and absolute discretion, by written notice to Buyer. In the event Seller approves such request for extension, Buyer shall deposit into Escrow the applicable Extension Payment and shall execute an additional Liquidated Damages agreement and any extension escrow instructions required by Escrow Agent. The payment of such Extension Payment will not constitute a waiver by Seller of any default or breach of the Contract by Buyer in failing to timely perform its obligations to close the Escrow by the extended Closing Date, as extended, and Seller's rights to Liquidated Damages set forth in Section 13 shall not be limited by the terms of this Section 4D. Any such Extension Payment made by Buyer shall not be applicable to the Purchase Price and shall be separate consideration to Seller for Seller's agreement to extend the Closing Date; provided, however, that any disbursement of such amount to Seller should be handled in the same manner as Liquidated Damages under Section 13. E. PRE-SALE CONTINGENCY. Buyer acknowledges and agrees that Seller’s obligations hereunder, including any obligation to proceed with the Close of Escrow, is expressly contingent upon Seller procuring qualified purchase agreements for the sale of at least a minimum number of Units at a minimum gross sale price as required by the terms of Seller’ construction loan for the Project. In the event the above pre-sale requirement is not met within six (6) months from the Date of Contract, Seller shall have the right to terminate this Contract by giving written notice to Buyer and, in the event it exercises that termination right, Seller shall refund all deposits paid hereunder to Buyer. Buyer:_______/________ The Summit on Sixth Purchase Contract 366545 9 001540 0005 4/1/2008 9:25 AM Page 2 of 17 5. FIRST TRUST DEED AND PROCESSING. If the sale of the Property is to be a financed purchase, the sale shall be subject to the following: A. LENDER ELECTION. (i) Buyer elects to make application for the Loan from , (“Lender”) which Buyer certifies to be a Lender as defined in Paragraph 1 of this Contract. Any selection or change of Lender requires the prior written consent of Seller. Seller's consent to Buyer's change of Lender shall not extend the “Loan Approval Date” as defined in Paragraph 5D of this Contract unless Seller in its sole discretion gives separate written consent to such an extension. Failure by Buyer to comply with the provisions of this Subparagraph shall give Seller the right, but not the obligation, to terminate this Contract unilaterally and to retain Buyer’s Deposit as Liquidated Damages as provided in Section 13A hereof. In no way is Seller responsible to obtain financing for Buyer and Seller has made no representations or warranties to Buyer concerning the availability of financing generally or Buyer's qualification therefor. Although Buyer may use any lender to finance the Loan, Seller hereby encourages Buyer to use “Preferred Lender” as their lender since the Preferred Lender is familiar with the Project. (ii) In the event of an all cash transaction, Buyer shall provide Seller within ten (10) calendar days from the Date of Contract, evidence satisfactory to Seller that a sufficient source of funds is available to Buyer to complete the purchase. During the period after Seller’s receipt of the evidence that Buyer has a sufficient source of funds until Close of Escrow, Buyer agrees that Buyer will not take any action that will cause Buyer to have insufficient funds to complete the purchase. Failure by Buyer to comply with the provisions of this Subparagraph shall give Seller the right, but not the obligation, to terminate this Contract unilaterally and to retain Buyer’s Deposit as Liquidated Damages as provided in Section 13A hereof. Buyer acknowledges and agrees that Seller shall have the right to terminate this Contract and refund all deposits made by Buyer at any time, in its sole discretion, until such time as Seller receives evidence satisfactory to Seller that Buyer has a sufficient source of funds to complete the purchase of the Property. If Seller does not provide written objection to Buyer’s source of funds within five (5) days from the date of the Seller’s receipt of such evidence, Seller shall be deemed to have approved of Buyer’s source of funds to complete the purchase. B. PRELIMINARY ACCEPTANCE. Buyer shall complete and forward to the Preferred Lender a complete loan preapproval application and all credit and other information required by Preferred Lender within five (5) calendar days from the Date of Contract. On or before the date which is ten (10) calendar days after the Date of Contract, Buyer shall provide to Seller and deposit or cause to be deposited into Escrow a written statement from the Preferred Lender ("Preliminary Acceptance") stating that Buyer is an acceptable borrower of the Loan amount pursuant to Preferred Lender's normal lending policies and ratios, based only upon (i) Buyer's completed credit report, and (ii) as of the date of the Preliminary Acceptance, Preferred Lender's verification of Buyer's income and of the existence on deposit and ready availability to Buyer of the amount of cash shown in Paragraph 2C of this Contract. Buyer acknowledges and agrees that Seller shall have the right to terminate this Contract and refund all deposits made by Buyer at any time, in its sole discretion, until such time as Seller receives a copy of the Preliminary Acceptance. C. BUYER’S CREDIT. During the period Buyer is obtaining financing until the Close of Escrow, Buyer agrees that Buyer will not take any action including, without limitation, incurring significant debt, to cause Buyer not to qualify for financing or to adversely affect Buyer’s credit. Buyer’s credit is subject to approval by all appropriate lenders and Seller. If Buyer fails to meet the requisite requests and requirements of Seller or any lender within five (5) business days of Seller’s or lender’s request that Buyer meet such requirements, Seller shall have the right in its sole discretion to terminate this Contract in its entirety and Seller shall return to Buyer all of the sums paid under this Contract less the cancellation charges specified in this Contract. D. LOAN APPROVAL. On or before the “Loan Approval Date,” which shall be the date which is 21 calendar days after the Date of Contract, Buyer shall deposit or cause to be deposited into Escrow a final unconditional or qualifying conditional written commitment from Lender to make the Loan to Buyer (“Loan Approval”). A written commitment from Lender which includes conditions (“Conditional Approval”) shall be sufficient to fulfill this obligation of Buyer only if (i) the Conditional Approval is deposited into Escrow on or before the Loan Approval Date, and (ii) Seller in its sole discretion accepts each condition therein. If Seller in its sole discretion rejects any Conditional Approval, Buyer shall thereafter deposit or cause to be deposited into Escrow a Loan Approval or Conditional Approval acceptable to Seller no later than the Loan Approval Date, which date shall not be extended due to Seller's rejection of any Conditional Approval unless Seller in its sole discretion gives separate written consent to such an extension. E. FAILURE TO OBTAIN LOAN. If Buyer fails to perform any of its obligations described in Paragraph 5C or Paragraph 5D of this Contract, Seller shall thereupon have the option to unilaterally terminate this Contract and cancel the Escrow by written notice to Buyer and Escrow Agent. Subject to Paragraph 5A(ii) above, if Buyer's failure to perform is the result of any reason other than those reasons set forth as (aa) through (ee) below, and Seller elects to terminate the Contract, Seller shall refund all sums paid by Buyer to Seller less charges against Buyer's deposit(s) as provided in Paragraph 8B. Buyer's failure to perform shall be a default hereunder and Buyer shall not be entitled to refund of the portion of its deposit designated as liquidated damages in Section 13 if such failure is the result of any of the following: (aa) Buyer's default or breach of any obligation under this Contract or Buyer's misrepresentation, (bb) any voluntary act of Buyer undertaken for the purpose of preventing Lender’s issuance of the Loan Approval, (cc) any request by Buyer that Lender not approve Buyer's Loan, (dd) failure of Buyer to furnish all documents and information required by Lender by the time specified herein, or (ee) any other act of Buyer which prevents Lender approval. F. LOAN TERMS. The Loan shall be evidenced by a promissory note secured by a deed of trust which shall be a first lien (and, if applicable, a second lien) on the Property. The deed of trust and the note shall be in forms Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 3 of 17 designated by the Lender and the note shall provide for payments of principal and interest, the amortization period of the principal and rate of interest as specified by the Lender. The terms and conditions of the Loan are a matter of concern solely between Buyer and the Lender and shall not in any way affect the rights or obligations of the parties under this Contract. Buyer acknowledges that Seller makes no representation that the interest rate prevailing at the Close of Escrow will be the rate quoted by the Lender to the Buyer at the time of Loan Approval. Buyer acknowledges that the sale and purchase of the Property is not contingent upon Buyer's ability to retain the interest rate quoted at the time of Loan Approval and that Buyer will be required to pay the interest rate charged by the Lender at the Close of Escrow. Buyer agrees to make such Impound payments for real property taxes and assessments, Association dues, and fire and other hazard insurance premiums as may be required by the Lender. G. COMMUNICATIONS WITH LENDER. Buyer understands that Seller’s representatives and Escrow Agent may from time-to-time contact Lender concerning the Loan sought by Buyer, and Buyer further authorizes Lender to discuss with Seller and Escrow Agent and its representatives any and all information and/or other matters concerning Buyer’s Loan application. This authorization from Buyer may be reproduced and photocopied and said copy shall be as effective as the original authorization signed by Buyer. BUYER UNDERSTANDS AND ACKNOWLEDGES THAT BY COMMUNICATING WITH LENDER, NEITHER ESCROW AGENT NOR SELLER THEREBY ASSUME ANY RESPONSIBILITY FOR OBTAINING THE FOREGOING DESCRIBED LOAN OR ANY OTHER FINANCING ON BUYER’S BEHALF AND SELLER MAKES NO GUARANTEE OR REPRESENTATION THAT BUYER WILL EITHER QUALIFY FOR OBTAINING THE FOREGOING DESCRIBED LOAN OR ANY OTHER FINANCING. FURTHER, BUYER UNDERSTANDS AND ACKNOWLEDGES THAT SELLER IS NOT AN AGENT OR REPRESENTATIVE OF LENDER AND THAT SELLER WILL BE RETAINING A COPY OF THE LOAN APPLICATION, THE CREDIT REPORT, AND THE UNDERWRITING & TRANSMITTAL SUMMARY EXCLUSIVELY FOR THE PURPOSE OF FACILITATING THE CLOSE OF ESCROW AND, FOR THIS PURPOSE, SELLER’S REPRESENTATIVES ARE ACTING EXCLUSIVELY ON BEHALF OF AND FOR THE BENEFIT OF SELLER. H. NOT A LOAN APPLICATION OR COMMITMENT. Buyer hereby acknowledges that this Contract does not constitute either a loan application to, or loan approval or commitment by, any lending institution. Buyer shall obtain, and shall be solely responsible for obtaining, the Loan. 6. TITLE. Escrow Agent shall provide to Buyer a preliminary title report from the Title Company covering the Property as soon as practicable following the opening of Escrow. The charge for such preliminary title report, if any, shall be paid by Buyer and may be paid from Buyer's Deposit(s) under this Contract in accordance with Paragraph 8B below. At Close of Escrow, title to the Property is to be free of liens and encumbrances other than the following: (A) current property taxes, special taxes, assessments, and bonds; (B) covenants, conditions, restrictions, easements and other matters of record or of which Buyer has actual knowledge; (C) district levies; (D) such reservations, exceptions and easements as are contained in the conveyance documents to be placed of record prior to or concurrent with the Close of Escrow; (E) all other matters approved of in writing or caused by Buyer; and (F) any other matters which do not materially impair the use of the Property for residential purposes. The Property shall be conveyed excepting therefrom all oil, minerals, natural gas and other hydrocarbons, geothermal steam and water rights. Title Company shall furnish Buyer at Buyer's expense a CLTA Owners Policy of Title Insurance, or equivalent (“Title Policy”), issued by the Title Company, showing title vested in Buyer subject only to the above. Buyer shall also pay all the costs of any extended coverage, ALTA lender's or other title policy in excess of the cost of the Title Policy. Subject to the provisions of Paragraph 17E, if the vesting shown on page 1 of this Contract changes during Escrow, Buyer shall notify Escrow Agent of such change by supplemental instructions and, if requested by Seller, Buyer shall cause another copy of this Contract to be executed and notarized by the persons or entity taking title to the Property. ESCROW. Escrow is to be opened promptly upon acceptance of this Contract by Seller. This Contract shall constitute escrow instructions to Escrow Agent. Buyer and Seller shall execute such supplemental escrow instructions as may be reasonably required by Escrow Agent. In the event that there is a conflict between any supplemental escrow instructions and this Contract, the terms of this Contract shall control unless otherwise expressly stated in such supplemental escrow instructions executed by Buyer and Seller. Seller shall deposit with Escrow Agent a grant deed (the “Grant Deed”) and Buyer shall deposit with Escrow Agent or Seller, as provided herein, any documents and funds that may be required to pay the amount of the Purchase Price and to comply with the terms and conditions of this Contract all of which may be used by Escrow Agent when it is in a position to obtain the Title Policy with liability in the amount of the Purchase Price and insuring title to the Property in Buyer's name as provided in Paragraph 6 hereof. CLOSING COSTS AND PRORATIONS. A. CLOSING COSTS. Seller shall pay (i) its portion of the assessments for any assessment districts, (ii) County transfer taxes, (iii) the cost of the Title Policy and all charges and/or costs required to deliver title as hereinabove provided may be deducted from proceeds due the Seller. Buyer shall pay (i) fees and charges of Escrow Agent, (ii) the costs of any extended coverage, ALTA lender’s or other title policy in excess of the cost of the Title Policy provided by Seller, (iii) all City transfer taxes and recording fees in connection with this transaction, and (iv) charges customarily borne by Buyers, including, but not limited to, costs of credit report, expenses and fees connected with the Loan (including, without limitation, the cost and expense of any policy of title insurance required by the Lender, credit reports, Loan fees and impound payments), tax service, prorations and advance payment of assessments, and Association charges, when applicable (including, without limitation, assessments, a contribution to the reserve account or transfer or set-up fees). The Escrow fees and other charges of the Escrow Agent shall be shared as customary by Buyer and Seller. Buyer understands and acknowledges that the fees and charges to be paid by Buyer hereunder are solely Buyer's responsibility, and are in addition to the Purchase Price for the Property. Buyer and Seller acknowledge they are liable to Escrow Agent for all charges incurred by Escrow Agent on their respective behalf regardless of whether Escrow closes pursuant to this Contract and including any balances due after Close of Escrow. 7. 8. Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 4 of 17 B. CHARGES AGAINST BUYER'S DEPOSIT(S). Escrow Agent is hereby authorized to pay from Buyer's Deposit(s) under this Contract all charges and fees due from Buyer to the appropriate third parties who have provided the following services: (i) Credit Reports, (ii) Appraisals, (iii) Escrow Services, (iv) Preliminary Title Reports, (v) Title Insurance (Owner’s & Lender’s coverage), (vi) Loan Processing Services, (vii) all documentary transfer taxes, and (vii) recording fees. C. INTEREST ON DEPOSIT. If Buyer instructs Escrow Agent to place Buyer's Deposit(s) in an interest bearing account, and Buyer supplies all information and documentation requested by Escrow Agent related to such account and agrees to the fee charged by Escrow Agent for providing such service, then Escrow Agent shall place Buyer's Deposit(s) in an interest bearing account and all interest earned thereon shall be paid to Buyer or credited to Buyer's account. After this Contract is fully executed and Escrow is opened, Escrow Agent shall provide Buyer with the information and documentation necessary for Buyer to so instruct Escrow Agent. D. PRORATIONS. Escrow Agent shall prorate (i.e., apportion) between Seller and Buyer as of the Close of Escrow current year real property taxes, special taxes, assessments and bonds, based upon the latest information available to Escrow Agent. Should the Property be part of a larger tax parcel, Escrow Agent shall apportion the charges to the Property based on information provided by Seller, and approval by Buyer of such apportionment shall not be required. Escrow Agent shall also prorate the current Association assessment. All prorations and/or adjustments shall be based on a 30-day month unless otherwise instructed in writing. It is understood by all parties that the Escrow Agent shall have no responsibility for proration and/or payment of any supplemental taxes which result from the transfer of ownership of this Property in accordance with the provisions of Chapter 3.5 (commencing with Section 75) of Part 0.5 of Division of the Revenue and Taxation Code. E. NO WITHHOLDING. Section 1455 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor (i.e., Seller) is a foreign person. To inform Buyer that withholding of tax is not required in connection with this transaction, Seller certifies that Seller is not a foreign corporation, foreign partnership, foreign trust or foreign estate. Sections 18662 and 18668 of the California Revenue and Taxation Code provide that a transferee of California real property interest must withhold tax when the funds are to be disbursed to a transferor with a last known street address outside of California. To inform Buyer that withholding of tax is not required in connection with this transaction, Seller certifies that Seller's last known street address is within the State of California. 9. CLOSE OF ESCROW. CLOSING DATE. As provided in Paragraph 4A, the Escrow shall close on the Closing Date. (i) Failure to Close For Reasons Other Than Seller's Default. If Close of Escrow has not occurred on or before the Closing Date (or a later closing date mutually agreed upon by Seller and Buyer) due to the default of Buyer (“Buyer's Default”) or for any reason other than Buyer’s or Seller's default (“Other Reasons”), Seller may unilaterally terminate this Contract and the Escrow by written notice to Buyer and Escrow Agent, whereupon Buyer's Deposit(s) shall be refunded to Buyer as follows: (a) if terminated due to Buyer's Default, Buyer's Deposit(s) to be refunded shall be reduced by any disbursements made or payable to third parties in accordance with Paragraph 8B above and any amounts to be retained by Seller in accordance with Section 13 below; and (b) if terminated for Other Reasons, then Buyer's Deposit(s) to be refunded. Upon cancellation of this Contract and Escrow, Seller shall have no further obligations to Buyer under this Contract, and Buyer shall have no further right, title, or interest in or to the Property. If Seller, acting in its sole discretion, elects to not terminate this Contract due to Buyer’s Default, and agrees instead to proceed with the sale of the Property to Buyer notwithstanding such default based upon an extended Closing Date, then, in that event and without waiving any of Seller’s rights hereunder, Seller shall be entitled to the Extension Payment set forth in Section 4D for each day that the Close of Escrow is extended as a result of such Buyer's Default. (ii) Failure To Close Due to Seller's Default. If Close of Escrow has not occurred on or before the Closing Date (or a later closing date mutually agreed upon by Seller and Buyer) due to the default of Seller, then Buyer may terminate this Contract and request that Buyer's deposit(s) be refunded to Buyer, Escrow be canceled at Seller's expense, and the amount set forth in Section 13B below be paid to Buyer by Seller. (iii) Cancellation: Effect on Escrow. Upon cancellation of Escrow pursuant to the above provisions, (a) Buyer and Seller shall execute any cancellation instructions required by Escrow Agent, and (b) within ten (10) calendar days of such cancellation, Buyer shall deliver to Seller any documents delivered to Buyer hereunder, and (c) following such cancellation, Buyer shall have no further right, title, or interest in or to the Property. (iv) Force Majeure Events. In the event of any shortages, allocations or rationing by any governmental authority or public or private utility which affects the ability of Seller to perform its obligations under this Contract or in the event of civil riot, labor strike, insurrection, terrorist acts, war, foreign military commitments, flood, fire, earthquake, or act of God resulting in a material economic disruption of the ordinary prices and practices of the building industry (collectively, “force majeure events”), then Seller shall not be responsible for delays caused thereby and (i) Buyer and Seller may mutually agree to cancel the escrow and terminate this Contract and all of Seller's obligations hereunder, in which case all of Buyer's Deposits shall be returned to Buyer, or (ii) Seller may elect to have this Contract remain in full force and effect and modify any proposed construction or refurbishment of the Property to provide reasonable alternatives and/or substitute designs, materials, energy or utility sources, systems or connections as may be required to complete the construction or refurbishment of the Property, providing that said alternatives and substitutes shall not substantially and adversely affect the habitability and quality of the Property. Seller shall not be in breach of this Contract or liable to Buyer for any loss, damage, cost or expense incurred by Buyer arising out of or in any way connected with Seller's failure to complete the Property for occupancy within 1 year following the Date of Contract. Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 5 of 17 10. 11. SELLER'S DUTIES. Seller shall deliver to Escrow Agent on or before the Closing Date an executed and recordable Grant Deed sufficient to convey title to Buyer, subject only to the matters described in Paragraph 6 above. BUYER'S DUTY TO COOPERATE. Buyer understands and acknowledges that as a result of Seller's execution of this Contract, Seller will incur carrying and other costs, including, without limitation, costs attributable to Seller's holding the Property off the market, which costs will increase if Buyer fails to timely perform all actions necessary to close the Escrow. Accordingly, Buyer shall in all respects cooperate with Seller and shall use best efforts and diligently take any action necessary or appropriate to timely close Escrow, including, without limitation, promptly and fully cooperating in good faith with each of Lender, Escrow Agent and Title Company, and promptly and fully disclosing all information requested by Seller, the Lender, Escrow Agent and Title Company. Buyer acknowledges that Buyer's failure to so cooperate shall constitute a material default hereunder. BUYER'S REPRESENTATIONS AND ACKNOWLEDGMENTS. In addition to any other express agreements of Buyer contained herein, the matters set forth in this Section 12 constitute representations and acknowledgments by Buyer which, to the extent known, are true and correct as of the Date of Contract and which in any event shall be true and correct as of the Close of Escrow. If requested, Buyer shall reaffirm these representations and acknowledgments in writing on or near the Close of Escrow. In the event that, during the period between the Date of Contract and the Close of Escrow, Buyer learns, or has reason to believe, that any of the following representations and acknowledgments have ceased or may cease to be true, then Buyer shall give written notice thereof to Seller immediately. A. AVAILABILITY OF PROPERTY. Buyer represents that when Buyer executed this Contract, Buyer understood that certain of Seller's other units may have been on or off the market and may not have been shown to or otherwise made available for purchase by Buyer. Buyer acknowledges that Seller has no obligation to notify Buyer if any unit falls out of Escrow or otherwise becomes available. B. CONFIGURATION AND DIMENSIONS OF THE PROPERTY. Buyer acknowledges and understands that the general configuration, dimensions, and boundaries of the Property may vary in certain ways from those shown on the maps, exhibits or other depictions in the sales office, and that any depictions shown to Buyer are general in nature and for illustrative purposes only. C. PROPERTY DIMENSIONS. Buyer hereby acknowledges and agrees that any square footage designations for the Property, including the residence, balcony and/or deck areas (if any), are approximate only. Any approximate square footage provided by Seller for Units in the Project are calculated based upon the method similar to the method for calculating square footage in single-family detached and attached homes developed and approved by the American National Standards Institute, Inc. (ANSI). The square footage quoted for each Unit is the approximate gross living area square footage of such Unit which is measured from the exterior surfaces of the perimeter walls (i.e., the exterior surface of building or glass and the corridor side of any corridor wall) and the center of the demising walls between Units. Such gross living area square footage include portions of the perimeter walls, beams, ducts, chases, returns, and similar concealed areas of the building which occupy a part of the gross living area of the Unit. Buyer will only have use of the airspace within the Unit up to the interior face of each perimeter wall, which interior airspace will be smaller than the gross living area airspace. The approximate gross living area square footages are provided for sale, pricing and comparison purposes only (as compared to other single-family homes, townhouses and duplexes available on the market) and are not intended to be and shall not be used as a statement of actual usable square footages contained within any Unit or described in any condominium plan. Buyer may not rely upon the Condominium Plan or any written (brochures and other sales documents) or oral statements by Seller or Seller’s sales representatives regarding the exact square footage and dimensions of Buyer’s Property, residence and/or balcony/deck areas. The computation of square footage will vary based upon the criteria used. Buyer hereby agrees to hold Seller harmless in any dispute arising over any representations concerning the dimensions and square footage of Buyer’s Unit, residence and balcony/deck areas. BUYER:_______/________ D. VARYING PRICES. Buyer understands and acknowledges that depending on market and other conditions and circumstances, Seller may, prior to or after the Close of Escrow, raise or lower the price of units in the Project or in the vicinity of the Project, some of which units may be similar to the Property; and that Seller has made no price protection or similar commitment to Buyer regarding the Property or any other unit, and shall not have any obligation or liability to Buyer in the event any such price changes directly or indirectly affect the value of the Property. Buyer further understands and acknowledges that Seller may offer prices and other terms that vary in amount or type to different buyers and that Seller is not obligated to provide Buyer the same price or terms that Seller may offer to another buyer. Buyer finally understands and acknowledges that Seller may choose to market the units through an auction format, a lottery format, or in a variety of other ways and Buyer's obligation hereunder shall not be affected thereby and Buyer shall have no right to object thereto. E. COMMON AREAS. Buyer accepts the common areas in their existing condition. F. FUTURE DEVELOPMENT. BUYER UNDERSTANDS AND ACKNOWLEDGES THAT FUTURE DEVELOPMENT OR USES OF THE REAL PROPERTY ADJOINING OR IN THE VICINITY OF THE PROPERTY MAY OCCUR. SELLER HAS MADE NO WRITTEN OR ORAL REPRESENTATION OR WARRANTY CONCERNING THE NATURE OR EXTENT OF FUTURE DEVELOPMENT OR USES OR THAT ANY FUTURE DEVELOPMENT WILL BE CARRIED OUT. SELLER HAS NOT MADE ANY WRITTEN OR ORAL REPRESENTATION OR WARRANTY CONCERNING THE IMPACT ON THE PROPERTY OF ANY FUTURE DEVELOPMENT OR USES (INCLUDING, WITHOUT LIMITATION, NOISE AND TRAFFIC IMPACTS). Buyer:_______/________ 12. The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 6 of 17 G. VIEW. Buyer understands and so acknowledges that Seller has not made any written or oral representation or warranty concerning any particular view the Property will enjoy at the present or in the future. The evaluation of such view, if any, is highly subjective and a personal matter. Any view from the Property is not guaranteed. Any view may be partially, materially, or totally obstructed. Without limitation, any view may be partially, materially or totally obstructed by (a) the planting of trees, shrubs, plants and other landscaping (collectively, “Landscaping”) by Seller and others, (b) the growth of Landscaping planted by Seller and others, and (c) current and future development and construction by Seller and others within and outside of the Project, including, without limitation, the construction of fences, walls and other improvements. H. CHANGES IN CONSTRUCTION AND MODELS. Buyer acknowledges that none of the units (and appurtenances, if any) within the Project are being remodeled or refurbished to the specifications of any Buyer. Seller reserves and shall have the right to make any changes or substitutions in any of the materials to be used in improving the Property or the Project as Seller deems necessary or desirable. Seller may also from time to time, at its discretion, make minor variations to any recreational amenities or other amenities within the Project, and Seller reserves such continuing right to so modify the Project, and the Buyer shall have absolutely no claim or cause of action against the Seller for any such changes, variances or modifications nor shall the Buyer be entitled to any notice thereof. Consultation with Buyer with respect to any of the foregoing shall not in any case be deemed a waiver of Seller's right to make any such changes herein contemplated or provided. Any model home and appurtenances and furnishings or Project illustration is displayed only for illustration, and shall not be deemed or understood to be an agreement or commitment by Seller to deliver the Property herein purchased by Buyer in exact accordance with any such model home and appurtenances or such illustration. Buyer specifically acknowledges that the Property will not contain any of the optional or upgrade items shown in any model home or illustration unless specifically contracted for by Seller and Buyer pursuant to a separate Addendum to this Contract, and none of the appurtenances and furnishings shown in any depiction, illustration or model home is included in this Contract unless Seller specifically agrees in writing to deliver same as a part of the Purchase Price by way of separate written instrument. If at any time before the Close of Escrow, there is a disagreement between the Buyer and Seller as to the quality, nature, or character of the work on the Property or the Project, or any matter, fact, or thing affecting the Property or the Project, then, without limiting any other remedies available to Seller, Seller may, at its option, cancel this Contract and return the Deposit to Buyer, and, upon such cancellation, Seller shall have no further duties or obligations to Buyer and Buyer shall have no further interest in the Property. ONLY SELLER’S AUTHORIZED SUBCONTRACTORS WILL BE ALLOWED TO MAKE CHANGES OR MODIFICATIONS TO THE DWELLING UNIT OR THE PROPERTY BEFORE CLOSE OF ESCROW. I. ENTRY UPON PROPERTY. Until Escrow closes, Buyer (except for when Buyer is an existing tenant occupying the Property) and Buyer's agents shall not enter upon the Property without Seller's prior written consent, for any purpose. Non-tenant Buyer shall not be entitled to possession of the Property until Escrow closes. Any Buyer’s entry onto the Property prior to the Close of Escrow to perform or complete any work on or to the Property without Seller’s express prior written consent shall constitute a default under this Contract. BUYER REALIZES AND ACKNOWLEDGES THAT ENTRY UPON THE PROPERTY DURING CONSTRUCTION CAN BE DANGEROUS AND THAT HAZARDS MAY EXIST WHICH ARE NOT OBSERVABLE. BUYER’S ENTRY SHALL BE SOLELY AT HIS OR HER OWN RISK. BUYER HEREBY WAIVES ANY AND ALL CLAIMS AGAINST SELLER FOR INJURY OR LOSS TO PERSON OR PROPERTY ARISING OUT OF, OR IN CONNECTION WITH, SUCH ENTRY BY BUYER OR ANY OTHER PERSON ACCOMPANYING HIM OR HER OR ENTERING AT HIS OR HER DIRECTION, AND BUYER SHALL INDEMNIFY, DEFEND AND HOLD SELLER AND ITS AGENTS HARMLESS FROM AND AGAINST ANY INJURY, LOSS, DAMAGE, OR EXPENSE (INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES) ARISING OUT OF, OR IN CONNECTION WITH, ANY SUCH ENTRY. INSPECTION OF PROPERTY. Buyer and Seller will make a joint inspection of the Property before Close of Escrow, at Seller's selected time and date, for the purpose of preparing a list of corrective work (“Punch List”), if any, which may be necessary. Any corrective work agreed to be performed by Seller as a result of an inspection which occurs before Close of Escrow and as set forth on such Punch List shall not cause a delay in the Close of Escrow. If there is a disagreement between the Buyer and Seller as to items or corrective work to be incorporated on the Punch List, then, without limiting any other remedies available to Seller, Seller may, at its option, cancel this Contract and return the deposit to Buyer, and, upon such cancellation, Seller shall have no further duties or obligations to Buyer and Buyer shall have no further interest in the Property. Seller shall use its best efforts to complete all agreed upon corrective work in a reasonably prompt manner after Close of Escrow with Buyer's cooperation. Seller shall have a unilateral right to cancel this Contract and the Escrow if Buyer fails to timely close Escrow due to uncompleted items on the Punch List, and, in that event, Buyer shall be in material breach of this Contract. J. K. PREVENTIVE MAINTENANCE. Buyer acknowledges that Buyer is responsible for proper maintenance of the Property and all manufactured products therein in accordance with any applicable maintenance standards and the Declaration. Buyer understands that it is Buyer’s obligation and responsibility to ensure proper maintenance of the Property and improper or lack of maintenance may cause deterioration of or damage to various systems and improvements within the Property. Buyer acknowledges and agrees that Seller shall not be responsible for any deterioration, damage or defect to any system or improvement at the Property which may arise from Buyer’s improper or lack of maintenance. L. NO FUTURE PROFIT RELIANCE. Buyer acknowledges, warrants and represents that neither Seller nor any of its officers, employees, agents or representatives has made any representation concerning potential for future profit, rental income potential, tax advantages, or investment potential of the Property. Buyer hereby further acknowledges and warrants that it is entering into this Contract based upon its independent assessment of the economic potential of the Property and without reliance upon any representations by or on behalf of Seller with respect to such matters. Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 7 of 17 M. ECONOMIC LOSS WAIVER. BUYER HEREBY IRREVOCABLY WAIVES, RELINQUISHES AND SURRENDERS ANY RIGHT TO SEEK DAMAGES AGAINST SELLER FOR PURELY ECONOMIC LOSSES, INCLUDING ANY DIMINUTION IN VALUE OF THE PROPERTY FOLLOWING THE CLOSE OF ESCROW. N. INTERPRETATION OF LEGAL DOCUMENTS. Buyer understands and acknowledges that sales associates are not authorized to interpret or modify any of the legal documents covering or pertaining to the purchase of the Property including, without limitation, this Contract. O. NO REPRESENTATION. Buyer understands and acknowledges that no salesperson, employee or agent has the authority to make any representation or warranty to Buyer which contradicts the foregoing matters. Buyer further understands and acknowledges that no representation or warranty has been made on which Buyer has relied in connection with the purchase of the Property unless Buyer has set it forth in a writing to Seller at the time made to and relied upon by Buyer, and Seller has acknowledged such representation or warranty in writing. 13. LIQUIDATED DAMAGES. A. IF BUYER FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY BY REASON OF A DEFAULT OF BUYER, SELLER SHALL BE ENTITLED TO BE RELEASED FROM ITS OBLIGATION TO SELL THE PROPERTY TO BUYER, AND SELLER MAY PURSUE ANY REMEDY AT LAW OR IN EQUITY THAT IT MAY HAVE AGAINST BUYER ON ACCOUNT OF SUCH DEFAULT, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO SEEK SPECIFIC ENFORCEMENT OF THIS CONTACT; PROVIDED, THAT BY PLACING THEIR INITIALS HERE, BUYER _______ AND SELLER _______ AGREE THAT: i. IF THERE IS A DEFAULT OR BREACH OF THIS CONTRACT BY BUYER, SELLER WILL BE DAMAGED AND WILL BE ENTITLED TO COMPENSATION FOR THESE DAMAGES, BUT SUCH DAMAGES WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN AND BOTH BUYER AND SELLER WISH TO AVOID THE COSTS AND LENGTHY DELAYS WHICH WOULD RESULT IF THE SELLER FILED A LAWSUIT TO COLLECT ITS DAMAGES FOR BREACH OF THIS CONTRACT. THEREFORE IN THE EVENT OF A DEFAULT OR BREACH OF THIS CONTRACT BY BUYER, SELLER SHALL BE ENTITLED TO RECEIPT, AS ITS LIQUIDATED DAMAGES AND NOT AS A PENALTY, AN AMOUNT EQUAL TO THE AGGREGATE DEPOSITS MADE BY BUYER HEREUNDER, INCLUDING ANY AMOUNTS PAID OR DEPOSITED TO SELLER WITH RESPECT TO OPTIONS AND EXTRAS, OR EXTENSION PAYMENTS AS LIQUIDATED DAMAGES, WHICH AMOUNT SHALL BE DEEMED TO CONSTITUTE A REASONABLE ESTIMATE OF SELLER'S MONETARY DAMAGES, AND SHALL BE DEEMED LIQUIDATED DAMAGES ("LIQUIDATED DAMAGES"). THE LIQUIDATED DAMAGES SHALL CONSTITUTE SELLER'S SOLE MONEY DAMAGES IN THE EVENT OF BUYER'S DEFAULT AND, AS MORE PARTICULARLY SET FORTH BELOW, SELLER MAY INSTRUCT ESCROW AGENT TO RETAIN OUT OF BUYER'S DEPOSIT (INCLUDING ANY OPTION DEPOSITS) THE LIQUIDATED DAMAGES PAYABLE TO SELLER UNDER THIS PARAGRAPH; LIQUIDATED DAMAGES SHALL BE REMITTED TO SELLER IN ACCORDANCE WITH THE FOLLOWING PROCEDURES: (a) SELLER SHALL GIVE WRITTEN NOTICE TO ESCROW AGENT AND TO BUYER IN ANY OF THE MANNERS PRESCRIBED BY SECTION 116.340 OF THE CODE OF CIVIL PROCEDURE FOR SERVICE IN A SMALL CLAIMS ACTION, OF SELLER'S DETERMINATION THAT BUYER IS IN DEFAULT HEREUNDER, AND DEMANDING THAT ESCROW AGENT REMIT THE LIQUIDATED DAMAGES TO SELLER. UNLESS, WITHIN TWENTY (20) DAYS AFTER BUYER RECEIVES SUCH TERMINATION NOTICE (“TERMINATION NOTICE”), BUYER NOTIFIES ESCROW AGENT, IN WRITING, OF ITS OBJECTION TO DISBURSEMENT OF SUCH LIQUIDATED DAMAGES ("OBJECTION NOTICE"), ESCROW AGENT SHALL RELEASE TO SELLER SUCH LIQUIDATED DAMAGES, AND REMIT THE BALANCE OF THE FUNDS IN ESCROW, IF ANY, TO BUYER, AND FOLLOWING RELEASE OF SUCH DAMAGES TO SELLER, SELLER SHALL BE RELEASED FROM ANY FURTHER OBLIGATION TO SELL THE PROPERTY TO BUYER. IF BUYER DELIVERS THE OBJECTION NOTICE TO ESCROW AGENT WITHIN TWENTY (20) DAYS AFTER BUYER’S RECEIPT OF THE TERMINATION NOTICE, ESCROW AGENT SHALL IMMEDIATELY NOTIFY SELLER OF SUCH OBJECTION NOTICE, AND, THEREAFTER, THE DETERMINATION AS TO WHETHER SELLER IS ENTITLED TO THE DISBURSEMENT OF THE LIQUIDATED DAMAGES, AND EVERY OTHER CAUSE OF ACTION THAT HAS ARISEN BETWEEN BUYER AND SELLER UNDER THIS CONTRACT OR ARISING OUT OF THE CONDITION OF THE PROPERTY (INCLUDING, WITHOUT LIMITATION, CLAIMS FOR DAMAGES FOR LATENT AND PATENT CONSTRUCTION OR DESIGN DEFECTS), SHALL BE SETTLED BY THE DISPUTE RESOLUTION PROCEDURE SET FORTH IN SECTION 14 BELOW. FOLLOWING SUCH DISPUTE RESOLUTION Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM ii. (b) Page 8 of 17 PROCEEDING, SELLER SHALL HAVE NO FURTHER OBLIGATION TO BUYER WITH RESPECT TO THE PROPERTY OR UNDER THIS CONTRACT. [NOTE: CIVIL CODE SECTION 1675(d) IS APPLICABLE TO THIS PROVISION. SECTION 1675(d) PROVIDES: “IF THE AMOUNT ACTUALLY PAID PURSUANT TO THE LIQUIDATED DAMAGES PROVISION EXCEEDS 3% OF THE PURCHASE PRICE, THE PROVISION IS INVALID UNLESS THE PARTY SEEKING TO UPHOLD THE PROVISION ESTABLISHES THAT THE AMOUNT ACTUALLY PAID IS REASONABLE AS LIQUIDATED DAMAGES.”] B. BY PLACING THEIR INITIALS HERE, BUYER _______ AND SELLER _______ AGREE THAT: IF THERE IS A DEFAULT OR BREACH OF THIS CONTRACT BY SELLER, BUYER WILL BE DAMAGED AND WILL BE ENTITLED TO COMPENSATION FOR THESE DAMAGES, BUT SUCH DAMAGES WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN AND BOTH BUYER AND SELLER WISH TO AVOID THE COSTS AND LENGTHY DELAYS WHICH WOULD RESULT IF THE BUYER FILED A LAWSUIT TO COLLECT ITS DAMAGES FOR BREACH OF THIS CONTRACT. THEREFORE IN THE EVENT OF A DEFAULT OR BREACH OF THIS CONTRACT BY SELLER, BUYER SHALL BE ENTITLED TO RECEIVE BACK ITS DEPOSIT, AND TO RECEIVE, AS ITS LIQUIDATED DAMAGES AND NOT AS A PENALTY, AN AMOUNT EQUAL TO FIVE PERCENT (5%) OF BUYER’S DEPOSIT. SUCH LIQUIDATED DAMAGES SHALL CONSTITUTE BUYER'S SOLE MONETARY DAMAGE IN THE EVENT OF SELLER'S DEFAULT, AND NEITHER BUYER NOR SELLER SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS UNDER THIS CONTRACT. 14. DISPUTE RESOLUTION. BUYER HEREBY ACKNOWLEDGES THAT THE NON-ADVERSARIAL PROCEDURES SET FORTH IN CALIFORNIA CIVIL CODE SECTIONS 910 THROUGH 938 ARE NOT APPLICABLE TO THIS PROJECT, WHICH IS A CONDOMINIUM CONVERSION PROJECT. BUYER AND SELLER BY THEIR EXECUTION OF THIS CONTRACT AND THEIR ACKNOWLEDGMENT SET FORTH BELOW, AGREE TO USE THE FOLLOWING ALTERNATIVE DISPUTE RESOLUTION PROCESS: A. MEDIATION. EXCEPT FOR ACTIONS IN SMALL CLAIMS COURT OR DISPUTES (AS DEFINED BELOW) THAT HAVE ALREADY BEEN MEDIATED, BUYER AND SELLER HEREBY AGREE TO SUBMIT ALL DISPUTES TO MEDIATION WITH THE JUDICIAL ARBITRATION AND MEDIATION SERVICES (“JAMS”), PRIOR TO COMMENCING ARBITRATION AS SET FORTH BELOW. THE COST OF MEDIATION SHALL BE PAID BY SELLER, BUT EACH PARTY SHALL BEAR ITS OWN ATTORNEYS’ FEES AND COSTS. B. ARBITRATION OF DISPUTES. ANY AND ALL CLAIMS, CONTROVERSIES, BREACHES OR DISPUTES (EACH A "DISPUTE") BY OR BETWEEN THE PARTIES HERETO ARISING FROM OR RELATED TO THIS CONTRACT, THE PROPERTY, THE SALE OF THE PROPERTY BY SELLER, ANY TRANSACTION RELATED HERETO, WHETHER SUCH DISPUTE IS BASED ON CONTRACT, TORT, OR STATUTE, INCLUDING, WITHOUT LIMITATION, ANY DISPUTE OVER (1) THE DISPOSITION OF ANY DEPOSITS HEREUNDER, (2) BREACH OF CONTRACT, (3) NEGLIGENT OR INTENTIONAL MISREPRESENTATION OR FRAUD, (4) NONDISCLOSURE, (5) BREACH OF ANY ALLEGED DUTY OF GOOD FAITH AND FAIR DEALING, (6) ALLEGATIONS OF LATENT OR PATENT CONSTRUCTION DEFECTS, OR (7) ANY OTHER MATTER ARISING FROM OR RELATED TO THE INTERPRETATION OF ANY TERM OR PROVISION OF THIS AGREEMENT, OR ANY DEFENSE GOING TO THE FORMATION OR VALIDITY OF THIS AGREEMENT, OR ANY PROVISION OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALLEGATIONS OF UNCONSCIONABILITY, FRAUD IN THE INDUCEMENT, OR FRAUD IN THE EXECUTION, WHETHER SUCH DISPUTE ARISES BEFORE OR AFTER THE CLOSE OF ESCROW, SHALL BE ARBITRATED (FOLLOWING THE MEDIATION SET FORTH ABOVE) PURSUANT TO THE FEDERAL ARBITRATION ACT AND SUBJECT TO THE PROCEDURES SET FORTH BELOW. ANY DISPUTE CONCERNING THE INTERPRETATION OR THE ENFORCEABILITY OF THE ARBITRATION PROCEDURES SET FORTH HEREIN, INCLUDING, WITHOUT LIMITATION, ITS REVOCABILITY OR VOIDABILITY FOR ANY CAUSE, ANY CHALLENGES TO THE ENFORCEMENT OR THE VALIDITY OF THIS AGREEMENT, OR THE SCOPE OF ARBITRABLE ISSUES UNDER THIS SECTION 14, AND ANY DEFENSE RELATING TO THE ENFORCEMENT OF THIS SECTION 14, INCLUDING, WITHOUT LIMITATION, WAIVER, ESTOPPEL, OR LACHES, SHALL BE DECIDED BY AN ARBITRATOR IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THIS SECTION 14. (i) WAIVER OF TRIAL BY JUDGE OR JURY. THE DISPUTE SHALL BE RESOLVED THROUGH BINDING ARBITRATION. THE BUYER AND SELLER EACH GIVES UP THE RIGHT TO HAVE THEIR RESPECTIVE CLAIMS AND DEFENSES DECIDED BY A JUDGE OR A JURY. INSTEAD ALL CLAIMS AND DISPUTES WILL BE DECIDED BY THE ARBITRATOR. RULES APPLICABLE TO ALL CASES. THE ARBITRATION WILL BE CONDUCTED BY JUDICIAL ARBITRATION AND MEDIATION SERVICES (“JAMS”) IN ACCORDANCE WITH THE JAMS RULES (“JAMS RULES”) THEN APPLICABLE TO THE CLAIMS PRESENTED, AS SUPPLEMENTED BY THIS SECTION. THE FOLLOWING SUPPLEMENTAL RULES SHALL APPLY TO ALL ARBITRATION PROCEEDINGS AND SHALL GOVERN IN THE EVENT OF A CONFLICT BETWEEN THE RULES SET FORTH BELOW AND THE RULES OF JAMS RULES. (a) QUALIFICATIONS OF ARBITRATORS. THE ARBITRATOR SHALL BE NEUTRAL AND IMPARTIAL AND EITHER A RETIRED JUDGE OR A Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM (ii) Page 9 of 17 MEMBER OR FORMER MEMBER OF THE CALIFORNIA STATE BAR WITH AT LEAST 10 YEARS EXPERIENCE AS A PRACTICING LAWYER IN THE AREA OF CONSTRUCTION LAW. (b) APPOINTMENT OF ARBITRATOR. THE ARBITRATOR TO PRESIDE OVER THE DISPUTE SHALL BE SELECTED IN ACCORDANCE WITH THE JAMS RULES, BUT NO LATER THAN SIXTY (60) DAYS AFTER A NOTICE OF CLAIM IS FILED. EXPENSES. ALL FEES CHARGED BY JAMS AND THE ARBITRATOR SHALL BE ADVANCED BY SELLER. IF SELLER IS THE PREVAILING PARTY IN THE ARBITRATION, THE ARBITRATOR MAY, IN HIS OR HER DISCRETION AND ONLY TO THE EXTENT PERMITTED BY LAW AND THE JAMS MINIMUM STANDARDS OF PROCEDURAL FAIRNESS, MAKE A FINAL ALLOCATION IN THE AWARD OF THE COSTS OF THE ARBITRATION, INCLUDING DIRECTING THE BUYER TO REIMBURSE THE SELLER ALL OR PART OF THE JAMS FEE AND ARBITRATOR’S FEE ADVANCED BY THE SELLER; PROVIDED THAT THE ARBITRATOR MAY NOT AWARD AGAINST THE BUYER ANY EXPENSES IN EXCESS OF THOSE THAT WOULD BE RECOVERABLE AS COSTS IF THE DISPUTE HAD BEEN LITIGATED TO FINAL JUDGMENT IN COURT. PRELIMINARY PROCEDURES. IF STATE OR FEDERAL LAW REQUIRES THE BUYER OR SELLER TO TAKE STEPS OR PROCEDURES BEFORE COMMENCING AN ACTION IN COURT, THEN THE BUYER OR SELLER MUST TAKE SUCH STEPS OR FOLLOW SUCH PROCEDURES, AS THE CASE MAY BE, BEFORE COMMENCING THE ARBITRATION. NOTHING CONTAINED HEREIN SHALL BE DEEMED A WAIVER OR LIMITATION OF THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTIONS 1368.5, 1375, 1375.05 OR 1375.1. RULES OF PROCEDURE. THE ARBITRATION SHALL BE ADMINISTERED BY JAMS PURSUANT TO ITS STREAMLINED ARBITRATION RULES AND PROCEDURES WHEN THE AMOUNT IN CONTROVERSY IS $250,000 OR LESS. PARTICIPATION BY OTHER PARTIES. EACH BUYER AND SELLER, TO THE EXTENT EITHER SUCH PARTY IS DEFENDING A CLAIM IN THE ARBITRATION, MAY, IF IT CHOOSES, HAVE ALL NECESSARY AND APPROPRIATE PARTIES INCLUDED AS PARTIES TO THE ARBITRATION. RULES OF LAW. THE ARBITRATOR MUST FOLLOW CALIFORNIA SUBSTANTIVE LAW (INCLUDING STATUTES OF LIMITATIONS) BUT STRICT CONFORMITY WITH THE RULES OF EVIDENCE IS NOT REQUIRED, EXCEPT THAT THE ARBITRATOR SHALL APPLY APPLICABLE LAW RELATING TO PRIVILEGE AND WORK PRODUCT. THE ARBITRATOR SHALL BE AUTHORIZED TO PROVIDE ALL RECOGNIZED REMEDIES AVAILABLE AT LAW OR EQUITY FOR ANY CAUSE OF ACTION. ATTORNEY’S FEES AND COSTS. EACH PARTY SHALL BEAR ITS OWN ATTORNEYS’ FEES AND COSTS (INCLUDING EXPERT WITNESS COSTS) IN THE ARBITRATION. (c) (d) (e) (f) (g) (h) (iii) ADDITIONAL RULES APPLICABLE TO CERTAIN CASES. IN ANY ARBITRATION IN WHICH A CLAIM OF ANY PARTY EXCEEDS $250,000 IN VALUE, THE FOLLOWING ADDITIONAL RULES WILL SUPPLEMENT THE JAMS RULES AND GOVERN IN THE EVENT OF A CONFLICT BETWEEN THE FOLLOWING RULES AND THE RULES SET FORTH ABOVE, THE JAMS RULES, OR BOTH. (a) QUALIFICATIONS OF ARBITRATOR. THE ARBITRATOR SHALL BE NEUTRAL AND IMPARTIAL AND EITHER A RETIRED JUDGE OR A MEMBER OR FORMER MEMBER OF THE CALIFORNIA STATE BAR WITH AT LEAST FIFTEEN (15) YEARS EXPERIENCE AS A PRACTICING LAWYER IN THE AREA OF CONSTRUCTION LAW WITH SUBSTANTIAL EXPERIENCE IN THE RESOLUTION OF COMPLEX CONSTRUCTION DISPUTES. RULES OF PROCEDURE. THE ARBITRATION SHALL BE ADMINISTERED BY JAMS PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES. WRITTEN DECISION. WITHIN THIRTY (30) DAYS AFTER THE HEARING IS CLOSED, THE ARBITRATOR MUST ISSUE A WRITTEN DECISION. IF Buyer:_______/________ (b) (c) The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 10 of 17 ANY PARTY REQUESTS IT, THE ARBITRATOR MUST ISSUE A REASONED AWARD. (iv) FINAL AND BINDING AWARD. THE DECISION OF THE ARBITRATOR SHALL BE FINAL AND BINDING. A PETITION TO CONFIRM, VACATE, MODIFY OR CORRECT AN AWARD MAY BE FILED IN ANY COURT OF COMPETENT JURISDICTION, BUT THE AWARD MAY BE VACATED, MODIFIED OR CORRECTED ONLY AS PERMITTED BY THE FEDERAL ARBITRATION ACT. SEVERABILITY. IF THE ARBITRATOR OR ANY COURT DETERMINES THAT ANY PROVISION OF THIS SECTION IS UNENFORCEABLE FOR ANY REASON, THAT PROVISION SHALL BE SEVERED, AND PROCEEDINGS IN THIS SECTION SHALL BE CONDUCTED UNDER THE REMAINING ENFORCEABLE TERMS OF THIS SECTION. (v) NOTICE: BY INITIALING IN THE SPACE BELOW, BUYER AND SELLER AGREE TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN SECTION 13 ABOVE AND THIS SECTION 14 ENTITLED “DISPUTE RESOLUTION” DECIDED BY NEUTRAL ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT AND THE CALIFORNIA ARBITRATION ACT, TO THE EXTENT THE CALIFORNIA ARBITRATION ACT IS CONSISTENT WITH THE FEDERAL ARBITRATION ACT, AND BUYER AND SELLER ARE GIVING UP ANY RIGHTS BUYER AND SELLER MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW, BUYER AND SELLER ARE GIVING UP THEIR RESPECTIVE JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THIS SECTION 14 ENTITLED “DISPUTE RESOLUTION.” IF BUYER OR SELLER REFUSES TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, BUYER OR SELLER MAY BE COMPELLED TO ARBITRATE UNDER THE FEDERAL ARBITRATION ACT AND THE CALIFORNIA ARBITRATION ACT, TO THE EXTENT THE CALIFORNIA ARBITRATION ACT IS CONSISTENT WITH THE FEDERAL ARBITRATION ACT. THE PARTIES’ AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. I/WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN SECTION 13 ABOVE AND THIS SECTION 14 ENTITLED “DISPUTE RESOLUTION” TO THE ALTERNATIVE DISPUTE RESOLUTION PROCEDURES SET FORTH ABOVE. BUYER:_______/________ SELLER:_____________ 15. EXISTING PROPERTY SALE. Buyer hereby acknowledges and understands that the Property is not a newly constructed dwelling unit but a residence in a former commercial/office building previously occupied by tenants. Buyer further acknowledges and understands that Seller did not develop or construct the original improvements in the Project. As a material inducement to and part consideration for the execution and delivery of this Contract by Seller and the performance by Seller of its duties and obligations hereunder, and notwithstanding any contrary term or provision of this Contract, Buyer does hereby expressly acknowledge, represent, warrant and agree, to and with Seller, that: (i) Buyer is purchasing the Property in its existing condition, with all faults, as of the Closing with respect to any and all known or unknown facts, circumstances, conditions and defects, and without any warranties, representations or guaranties, either express or implied, oral or written, of any kind, nature or type whatsoever from or on behalf of Seller or anyone purporting to act on behalf of or for or at the direction of Seller, except as expressly set forth in this Contract or any addendum attached hereto, including any warranty of condition, merchantability, fitness for occupancy, or fitness for a particular use or purpose or the value, accuracy of information, marketability, prospects for future development, use or occupancy or matters affecting same, and Buyer hereby waives any such warranties or representations relating to the Property or any other matter affecting the Property, including the value of the Property or future income or expenses for the Property; (ii) Seller has no obligation to repair or correct any such facts, circumstances, conditions or defects concerning the Property or compensate Buyer for same; (iii) Buyer has heretofore undertaken and will as of the Closing have made all inquiries and investigations regarding the Property and all matters relating thereto as Buyer deems necessary or appropriate under the circumstances, and that based upon the same, Buyer will be relying strictly and solely upon such inquiries and the advice and counsel of its own agents and not on any information or material supplied by or on behalf of Seller, except as expressly set forth in this Contract and any addendum attached hereto, and Buyer is and will be fully satisfied that the Purchase Price is fair and adequate consideration for the Property; and (iv) by reason of all the foregoing, Buyer shall assume the full risk of any loss or damage occasioned by any fact, circumstance, condition or defect pertaining to the condition or use of all or any part of the Property whether known or unknown. All information, whether written or oral, previously, now, or hereafter made available to Buyer by Seller, its agents, or any other person acting for or on behalf of Seller, whether in the form of appraisals, market studies, projections, brochures, maps, surveys, soil reports, engineering studies, environmental studies, inspection reports, plans and specifications, and all other due diligence items have been or will be furnished by Seller to Buyer solely as an accommodation, and neither Seller nor its agents has verified the accuracy of such information or the qualifications of the persons preparing such information, and Buyer is not relying on, and shall not be entitled to rely on such information in entering into this Contract and completing its purchase of the Property pursuant to this Contract, except as expressly set forth in this Contract. Buyer acknowledges that given the age of the Property and the physical condition of the building it is likely to be such that certain systems may need repairs or replacement now or in the near future. Buyer acknowledges that if Buyer does not have a professional engineering firm perform a thorough inspection of the Property, Buyer may not be aware of information about the physical condition of the improvements which might affect Buyer’s decision to purchase the Property. BUYER:_______________ SELLER:______________ Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 11 of 17 WAIVER OF CLAIMS & ASSUMPTION OF RISK AND RESPONSIBILITIES. Buyer acknowledges and understands that as set forth in Paragraph 15 above, Seller did not develop or construct the original improvements and prior renovations in the Project and hereby releases Seller from and against any and all known or unknown claims, demands, causes of action, losses, damages, liabilities, obligations, cost and expenses at any time by reason of or arising out of any latent or patent construction defects or violations of any applicable statutes, regulations, ordinances, programs or laws and any and all other acts, omissions, events, circumstances or matters regarding construction, repair or renovation of the Project, except for any improvements installed by Seller. In connection with the release set forth in this paragraph, but without expanding such release, Buyer expressly waives all rights under California Civil Code Section 1542, which provides that: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Buyer hereby expressly waives and relinquishes all rights and benefits that Buyer may have had with respect to the releases provided above. Buyer understands and acknowledges the significance and consequences of said specific waiver of Section 1542, and hereby assume full responsibility for any injuries, damages or losses that they may incur as a result of the execution of this waiver. Buyer acknowledges that Buyer is aware that Buyer may hereafter discover facts different from or in addition to those Buyer now knows or believes to be true with respect to the claims, causes of action, rights, obligations, debts, liabilities, accounts, liens, damages, losses and expenses herein released, and each agrees that the within release shall be and remain in effect in all respects as a complete and general release as to all matters released herein, notwithstanding any such different or additional facts. BUYER:_______/________ 16. ESCROW MATTERS. A. CLOSING CONDITIONS. Escrow Agent shall close the Escrow on the Closing Date by filing for record Seller's Grant Deed and such other documents as may be necessary to procure the Title Policy described in Paragraph 6, and delivering funds and documents as required, when each of the following conditions has been satisfied: (i) Blanket Encumbrances. Any and all blanket encumbrances, as defined in Section 11013 of Business and Professions Code against the Property have been fully released and reconveyed. For purposes of compliance with Section 11013.2(a) of Business and Professions Code, a release from a blanket encumbrance resulting from a deed of trust or mortgage against the Property shall require satisfaction of either of the following: (i) an instrument has been duly recorded unconditionally reconveying and releasing the property being sold or leased from the lien or charge of such deed of trust; or (ii) the Buyer is notified that an agreement or demand constituting a release agreement as defined in Regulation 2791.1(b)(2)(A) has been duly deposited with the Escrow Agent and available to the Buyer on request for each such deed of trust, and the Title Company will provide Buyer a policy of title insurance insuring the Buyer against loss by reason of each such deed of trust; Completion of Common Areas. Seller has (i) received a temporary certificate of occupancy for the Project, (ii) recorded a Notice of Completion, as defined in Section 3093 of the Civil Code, for the construction of all common facilities, improvements, landscaping and other structures situated on the Property, if any or (iii) has deposited with Escrow Agent a bond, cash deposit or other financial security in a form and in an amount acceptable to the Department of Real Estate together with appropriate instructions under the provisions of California Business and Professions Code Section 11018.5 to assure lien-free completion of the scheduled improvements which are not completed and paid for as of the date of furnishing the financial security to assure completion; Undivided Interest in Common Area. Buyer's undivided interest in the Common Area (if any) has been or is being conveyed to Buyer with title to Buyer's individual Unit; Mechanic’s Liens. The statutory period for recordation of any mechanic's liens against the Unit has expired, or alternately Buyer is provided with a Title Policy and endorsement, insuring Buyer against future mechanic's liens arising from Seller’s construction of the Condominium Building following the Close of Escrow; Association Property. If applicable, title to any “Association Property” has been conveyed free of liens to the Association; Title and Subordination. Escrow Agent has procured, or is satisfied that it can procure, the Title Policy (a) In an amount equal to the Purchase Price, (b) Insuring that fee title to the Property vests in Buyer subject only to those matters listed in Paragraph 6, as the same may be amended by supplemental escrow instructions, (c) Insuring that any monetary encumbrance of record (including, but not limited to, deeds of trust and mortgages) encumbering all or a portion of the Property is subordinate to any Declaration of Covenants, Conditions and Restrictions and Reservation of Easements encumbering the Property and (d) Insuring Buyer against unrecorded mechanics' liens arising from work performed by Seller or on Seller's behalf (provided, however, that the same shall not be required if the statutory period for recordation of mechanics' lien claims has expired). Except as otherwise provided in this Contract, if Escrow Agent cannot close the Escrow on or before the Closing Date it will, nevertheless, close the same when all conditions have been satisfied or waived, Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM (ii) (iii) (iv) (v) (vi) Page 12 of 17 notwithstanding that one or more of such conditions has not been timely performed, unless Escrow Agent receives a written Cancellation Notice from Buyer or Seller to cancel the Escrow as provided in Paragraph 16B below or Escrow has been canceled pursuant to the provisions of Section 9 above. No delay in the giving of such Cancellation Notice shall affect the rights of the party giving the same; and (vii) B. Funds. All funds required of Buyer under Section 2 and Seller's Grant Deed have been delivered to Escrow Agent. CANCELLATION. Except for the case of mutual cancellation instructions signed by both parties to this Contract, or in the case of unilateral cancellation as provided in this Contract, any party instructing Escrow Agent to cancel the Escrow shall deliver to Escrow Agent two (2) copies of written notice to that effect (the “Cancellation Notice”). Escrow Agent, within three days after receipt, either shall cause to be hand delivered or shall mail one copy of the Cancellation Notice to the other party. Any delivery by mail shall be by registered or certified mail, return receipt requested. Unless written objection to cancellation is filed in Escrow Agent's office by such other party within twenty (20) days after such other party's receipt of such Cancellation Notice (or, in the event of cancellation by Buyer in accordance with Paragraph 4C above, within fifteen (15) days after notice by Buyer to Seller and Escrow Agent in accordance with said Paragraph), Escrow Agent shall comply with the Cancellation Notice and may demand payment of reasonable Escrow cancellation charges. If written objection is so filed, Escrow Agent is authorized to, at its option, hold all money and instruments in Escrow and take no further action until otherwise directed, either by the parties' mutual written instructions, or by a final order of an arbitrator or a court of competent jurisdiction. GENERAL INSTRUCTIONS TO ESCROW AGENT. (i) Provisions with which Escrow Agent Is To Be Concerned. Escrow Agent need be concerned only with those provisions of this Contract instructing it to perform specific acts and setting forth matters with respect to which escrow agents generally and reasonably would be expected to act. Without limiting the generality of the foregoing, Escrow Agent shall have no concern with, or responsibility or liability for, Sections 11 and 12. Preliminary Change in Ownership Report. Escrow Agent shall complete for Buyer a Preliminary Change of Ownership Report pursuant to Section 480.3 of the Revenue and Taxation Code, which Escrow Agent is instructed to submit along with Seller's Grant Deed. Buyer acknowledges that Escrow Agent can only complete the Report with information available from this Escrow transaction and agrees that Buyer bears the responsibility and liability for the correctness, sufficiency and execution of the Report. If the Report is incorrect, an error may affect the real property taxes assessed against the Property. If the County Recorder does not accept the Report as completed by Escrow Agent, Escrow Agent is authorized to collect from Buyer the additional $20.00 fee due to the County Recorder upon recordation of Seller's Grant Deed without such Report. Buyer is aware that if said Report is not submitted with Seller's Grant Deed, a Change of Ownership statement must be filed by Buyer with the County Assessor not later than forty-five (45) days after recordation of Seller's Grant Deed, and that the failure to so file will result in additional penalties. Supplemental Taxes. Buyer and Seller acknowledge that they are aware there is an additional tax amount which will be assessed by the County Assessor following and as a result of the Close of Escrow within the guidelines defined in Chapter 498 of the Statutes of 1983, of the State of California, as supplemented and amended, and agree that the payment of such additional amount shall be Buyer's sole obligation. Seller Authorization. Seller will deliver to Escrow Agent documents necessary to cause title to vest in Buyer, which Escrow Agent is authorized to use for such purpose. Escrow Agent is hereby authorized to pay bonds, assessments and taxes then due and any liens of record, including prepayment penalties and partial release amounts, as instructed by Seller. Certain of such bonds, assessments and taxes may be apportioned between Buyer and Seller pursuant to Paragraph 8D. Escrow Agent is to enter the amount of documentary transfer tax on Seller's Grant Deed in the amount required by law. Deposit of Funds & Disbursements. Escrow Agent shall deposit all funds received in the Escrow in an escrow depository approved by the Real Estate Commissioner, including, but not limited to, banks, trust companies and savings and loans associations which are qualified to do business in the State of California. Such funds may be held in, and transferred between, Escrow Agent's trust account or accounts. All disbursements shall be made by checks of Escrow Agent. Escrow Agent is not authorized to close the Escrow or disburse until good funds have been confirmed in Escrow. Escrow Agent is authorized to disburse funds to any Title Company sub-escrow account or other authorized account as required to close Escrow. Recordation of Instruments. Escrow Agent is authorized to record any documents delivered through the Escrow, the recording of which is necessary to obtain the Title Policy or to comply with the Lender's instructions. Escrow Agent need not be concerned with the content, sufficiency and/or validity of documents not prepared by Escrow Agent. Authorization to Furnish Copies. Escrow Agent shall furnish a copy of these instructions, any supplements or amendments hereto, closing statements and/or any other documents deposited in the Escrow to the Lender and/or the attorney or attorneys involved in this transaction, upon request of such Lender or attorneys. Buyer:_______/________ C. (ii) (iii) (iv) (v) (vi) (vii) The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 13 of 17 (viii) Conflicting Instructions; Action in Interpleader. Unless otherwise provided in this Contract, should Escrow Agent before or after the Close of Escrow receive or become aware of any conflicting demands or claims with respect to the Escrow or the rights of any of the parties hereto, or any money deposited herein or affected hereby, Escrow Agent shall have the right to discontinue any or all further acts on Escrow Agent's part until the conflict is resolved to Escrow Agent's satisfaction. Moreover, Escrow Agent shall have the absolute right at Escrow Agent's election to file an action in Interpleader or to join any arbitration or alternative dispute resolution and to require the parties to answer and litigate or submit to applicable alternative dispute resolution proceeding their several claims and rights among themselves, and Escrow Agent is authorized to deposit with the clerk of the court or the arbitrator, upon mutual written instructions of the parties, all documents and funds held in the Escrow. In the event such action or proceeding is filed, the parties jointly (but not severally) agree to pay Escrow Agent's reasonable cancellation charges and the costs, expenses and reasonable attorney's fees which Escrow Agent expends or incurs in such action or proceeding, the amount thereof to be fixed and judgment therefor to be rendered by the court or the alternative dispute resolution. (ix) Retention of Funds; Termination. If for any reason funds are retained in Escrow following the closing, Escrow Agent may deduct Ten Dollars ($10) therefrom as a monthly charge for its acting as custodian thereof. Except as otherwise provided in this Contract, in the event the Escrow is canceled, whether at the request of one of the parties or otherwise, the fees and charges due Escrow Agent, including expenditures incurred and/or authorized, shall be borne jointly (but not severally) by the parties hereto. Indemnity for Attorneys' Fee. In the event suit or an alternative dispute resolution proceeding as required herein is brought by Buyer, Seller, Escrow Agent or any other party, as against each other, or others, including the Escrow Agent, claiming any right they may have as against each other or against Escrow Agent, then, in that event, the parties agree jointly (but not severally) to indemnify and hold Escrow Agent harmless against any attorneys' fees incurred by it in connection therewith, unless Escrow Agent is found or adjudged to have acted improperly or negligently. Supplemental Instructions. Any amended, supplemental or additional instructions given in connection with the Escrow pursuant to this Contract must be in a writing signed by Buyer and Seller and delivered to Escrow Agent. Escrow Agent may refuse, without liability, to act on any such supplemental instructions delivered after Close of Escrow. Retention of Records. Escrow Agent may destroy any documents in its possession relating to this Contract any time after five (5) years from the Close of Escrow. (x) (xi) (xii) 17. GENERAL PROVISIONS. A. B. TIME IS OF THE ESSENCE. Time is of the essence of each and every term of this Contract. ENFORCEMENT. Seller and Buyer hereby acknowledge and agree that in the event of a breach by either Seller or Buyer, in addition to all other remedies available, the non-breaching party may elect to (i) terminate this Contract and receive the liquidated damages amount set forth in Section 13 above, or (ii) enforce this Contract through an action for specific performance or through any other available equitable remedy. NO WAIVER. The waiver by Seller of any term of or obligation under this Contract shall not be construed as a waiver of any other or subsequent term or obligation or of any subsequent performance required under this Contract. NOTICES. Any notices, demands or other communications given hereunder shall be in writing and shall be deemed delivered or received upon personal delivery or one (1) business day after deposit with overnight courier or three (3) days after they are mailed with postage prepaid, by registered or certified mail, return receipt requested to the party receiving such notice at the address of such party listed herein or in mutual supplemental instructions to Escrow Agent. SUCCESSORS AND ASSIGNS. In view of the credit qualifications and other matters uniquely personal to Buyer which have been considered by Seller and have induced Seller to enter into this Contract, this Contract and the rights of Buyer hereunder may not be assigned, sold, transferred or hypothecated by Buyer voluntarily, involuntarily, or by operation of law without Buyer's first having obtained Seller's written consent, which may be withheld in Seller's sole discretion. This Contract and the rights, duties and obligations of the parties shall be binding upon and shall inure to the benefit of the successors and assigns of Seller and, subject to the preceding sentence, to the heirs, executors, administrators, successors and permitted assigns of Buyer. COUNTERPARTS. This Contract may be signed in one or more counterparts, each of which independently shall have the same effect as if it were the original, and all of which together shall constitute one and the same agreement. SURVIVAL. All obligations referred to herein to be performed at a time or times after the Close of Escrow, all provisions hereof relating to a time after the Close of Escrow, and all representations, warranties and acknowledgments contained herein, shall survive the Close of Escrow and the delivery of Seller's Grant Deed, regardless of whether the same expressly so provide. C. D. E. F. G. Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 14 of 17 H. CONSTRUCTION. The term “party” or “parties” shall mean Buyer and/or Seller, as the context may require. The use herein of (i) the neuter or male gender includes both the masculine and the feminine as appropriate and (ii) the singular number includes the plural as appropriate. Captions in this Contract are inserted for convenience of reference only and do not define, describe or limit the scope or intent of this Contract or any of the terms hereof. Any box checked or otherwise marked to indicate its applicability to a particular provision shall designate that such provision is incorporated into this Contract. This Contract shall be construed and any ambiguities contained herein shall be resolved equally as between the parties, and not against the party responsible for the preparation of this Contract. This Contract shall be construed and enforced in accordance with the laws of the State of California. NO RECORDATION. Neither this Contract, nor any reference to this Contract, nor any short form or memorandum of this Contract, shall be recorded in the official records of any county. ENTIRE AGREEMENT. ALL ADVERTISING MATERIAL AND ALL PRIOR STATEMENTS AND REPRESENTATIONS, IF ANY, WHETHER ORAL OR WRITTEN, ARE HEREBY SUPERSEDED BY THIS CONTRACT. THIS CONTRACT CONTAINS THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND THE ENTIRE ESCROW BETWEEN THE ESCROW AGENT AND THE PARTIES HERETO. THE TERMS OF THIS CONTRACT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR AGREEMENT OR CONTEMPORANEOUS ORAL AGREEMENT. BUYER AND SELLER FURTHER INTEND THAT THIS CONTRACT SHALL CONSTITUTE THE COMPLETE AND EXCLUSIVE STATEMENT OF ITS TERMS AND THAT NO EXTRINSIC EVIDENCE WHATSOEVER MAY BE INTRODUCED IN ANY JUDICIAL ACTION OR ALTERNATE DISPUTE RESOLUTION PROCEEDING, IF ANY, INVOLVING THIS CONTRACT. NO ADDITION OR MODIFICATION OF ANY TERMS OF THIS CONTRACT SHALL BE EFFECTIVE UNLESS SET FORTH IN WRITING AND SIGNED BY BOTH PARTIES. NO SALESPERSON, EMPLOYEE OR AGENT OF SELLER HAS AUTHORITY TO MODIFY THE TERMS OF THIS CONTRACT. BUYER ACKNOWLEDGMENT. BUYER ACKNOWLEDGES THAT BUYER HAS CAREFULLY READ AND UNDERSTANDS EACH AND EVERY PROVISION OF THIS CONTRACT. BY EXECUTION OF THIS CONTRACT BUYER ACKNOWLEDGES BUYER'S INFORMED AND VOLUNTARY CONSENT HERETO, AND BUYER AGREES THAT THE PROVISIONS OF THIS CONTRACT ARE REASONABLE AND EFFECTUATE THE INTENT OF THE PARTIES WITH RESPECT TO THE PROPERTY. BUYER ACKNOWLEDGES THAT BUYER HAS HAD SUFFICIENT OPPORTUNITY TO CONSULT WITH BUYER'S LEGAL COUNSEL WITH RESPECT TO THIS CONTRACT. Buyer understands and agrees that Seller intends to retain some of the condominium units at the Project and Seller reserves the right to lease any or all units remaining unsold from time to time, on either a short term or long term basis. I. J. K. L. 18. COMMON INTEREST DEVELOPMENT. A. B. MEMBERSHIP IN ASSOCIATION. Buyer understands and agrees that, upon accepting Seller's Grant Deed, Buyer will automatically become a member of the Association. APPROVAL OF DOCUMENTS. Buyer acknowledges having read and approved (i) the Final or Conditional Public Subdivision Public Report for the Project, (ii) the General Disclosures, and (iii) the Declaration, the Declaration of Reciprocal Easements, the Articles of Incorporation, the Bylaws and the budget of the Association (and any amendments or supplements to any thereof) (collectively, “Project Management Documents”). BUYER FURTHER ACKNOWLEDGES THAT, PRIOR TO THE CLOSE OF ESCROW, SELLER MAY MAKE CHANGES IN THE PROJECT MANAGEMENT DOCUMENTS AND IN THE SETUP OF THE PROJECT WHICH ARE APPROVED BY THE DEPARTMENT OF REAL ESTATE. IF, PRIOR TO THE CLOSE OF ESCROW, ANY SUCH CHANGES OCCUR, SELLER WILL PROVIDE BUYER WITH WRITTEN NOTICE OF SAME AT THE CLOSING, AND BUYER ACKNOWLEDGES AND AGREES THAT IT WILL BE BOUND THEREBY. ASSOCIATION DUES. Buyer understands and acknowledges that, by accepting Seller's Grant Deed, Buyer will become obligated to pay monthly assessments to the Association in the approximate amount set forth in Paragraph 2D, and that the assessments may be increased by the board of directors of the Association. Escrow Agent shall prorate such monthly assessments between Buyer and Seller at the Close of Escrow, based on the latest information available to Escrow Agent. C. 19. ADDITIONAL TERMS. By including the following terms, Seller and Buyer are making them a part of this Contract: THIS SECTION SHOULD NOT BE LEFT BLANK IF YOU ARE RELYING ON ANY ORAL STATEMENTS OR PROMISES. BUYER:_______/________ SELLER:______________ Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 15 of 17 20. ADDENDA. Any addenda checked below that are executed by Buyer and Seller shall be deemed part of this Contract and are hereby incorporated into this Contract by reference: General Disclosures Mold and Mildew Disclosure Conditional Public Report Addendum Real Estate Agency Disclosure Civil Code §1134 Disclosure Water Conservation Ordinance Covenant to Use as a Residence EACH PARTY SIGNING THIS CONTRACT HAS READ THE TERMS AND CONDITIONS ON EACH OF THE PAGES INITIALED BY BUYER AND THE ADDENDA CHECKED IN THIS SECTION, AND ACCEPTS AND AGREES TO BE BOUND BY SUCH TERMS AND CONDITIONS. EACH PARTY ACKNOWLEDGES RECEIPT OF COPIES OF ALL SUCH PAGES AND ADDENDA. 21. RECEIPT OF DOCUMENTS. Buyer hereby acknowledges receipt of the following documents (check documents delivered to Buyer): Homeowner Documents (CC&R’s, Bylaws, Articles of Incorporation, Declaration of Alternative Dispute Resolution, Declaration of Reciprocal Easements, Condominium Plan, Budget) Maintenance Manual Natural Hazard Report Conditional Public Report Written Statement ALL OF THE ABOVE-MENTIONED DOCUMENTS ARE IMPORTANT TO THE PURCHASE OF THE PROPERTY, SHOULD BE READ BY BUYER AND, AT THE CONFIRMATION DATE, SHALL BE DEEMED TO HAVE BEEN READ AND APPROVED BY BUYER. BUYER IS ADVISED TO RETAIN ALL DOCUMENTS FOR FUTURE REFERENCE. COPIES OF THESE DOCUMENTS SHOULD BE GIVEN TO ANY PERSONS(S) WHO MAY IN THE FUTURE PURCHASE THE PROPERTY FROM BUYER. EXECUTION OF THIS CONTRACT BY BUYER AND BY SELLER'S SALES ASSOCIATE SHALL CONSTITUTE ONLY AN OFFER TO PURCHASE, WHICH SHALL NOT BE BINDING UNLESS ACCEPTED BY SELLER, AS EVIDENCED BY THE EXECUTION OF THIS CONTRACT BY A DULY AUTHORIZED OFFICER OF SELLER, AND SELLER RESERVES THE RIGHT TO REFUSE TO ACCEPT SUCH OFFER FOR ANY REASON WHATSOEVER, AT ITS SOLE AND ABSOLUTE DISCRETION. BUYER ACKNOWLEDGES THAT SELLER'S SALES ASSOCIATE IS NOT AUTHORIZED TO ACCEPT THIS OFFER, AND THAT RECEIPT OF BUYER'S DEPOSIT BY SELLER'S SALES ASSOCIATE SHALL NOT CONSTITUTE AN ACCEPTANCE OF THIS OFFER BY SELLER. SELLER, OR SELLER'S AUTHORIZED AGENT, MAY HOLD BUYER'S DEPOSIT CHECK UNCASHED UNTIL SUCH TIME AS SELLER ACCEPTS THIS OFFER. THE FAILURE OF SELLER TO SO ACCEPT SUCH OFFER WITHIN FOURTEEN (14) DAYS FROM THE DATE OF BUYER'S SIGNATURE TO THIS CONTRACT SHALL AUTOMATICALLY REVOKE SUCH OFFER, WHEREUPON ALL FUNDS DEPOSITED BY BUYER SHALL BE PROMPTLY REFUNDED TO BUYER. [Signatures on next page] Buyer:_______/________ The Summit on Sixth Purchase Contract 366545.9 001540.0005 4/1/2008 - 9:25 AM Page 16 of 17 DEPOSIT(S) RECEIVED ON BUYER (1) (Signature) BUYER (1) (Current Mailing Address) Home Phone: Business Phone: Social Security #: BUYER (2) (Signature) BUYER (2) (Current Mailing Address) Home Phone: Business Phone: Social Security #: The foregoing is hereby accepted by Seller upon the terms and conditions stated. Note: For this Contract to be binding, it must be accepted by an authorized Officer of Seller. SALES REPRESENTATIVE (Acknowledgment of receipt of deposit only) _____________________________________ ACCEPTED BY SELLER: AZ 3223 6th Street, LLC, a Delaware limited liability company By: Name: Title: Date: Date: The Summit on Sixth Purchase Contract 366545.8 001540.0005 Page 17 of 17 4/1/2008 - 9:24 AM