STATER BROS HOLDINGS INC
EXHIBIT 10.35
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<TYPE>EX-10.35
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<DESCRIPTION>EXHIBIT 10.35
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>&#151;Final Execution Copy&#151;</B>
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    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><B>EXHIBIT 10.35</B></TD>
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<P align="center" style="font-size: 10pt"><B>OWNER PARTICIPATION AGREEMENT</B>



<P align="center" style="font-size: 10pt"><B>(Stater Bros. Markets)</B>



<P align="center" style="font-size: 10pt"><B>Inland Valley Redevelopment Project Area</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS OWNER PARTICIPATION AGREEMENT </B>(the &#147;Agreement&#148;) is dated as of
&nbsp;&nbsp;&nbsp;, 2004, by and between Stater Bros. Markets, Inc., a
California corporation (the &#147;Owner&#148;), and the Inland Valley Development Agency,
a joint powers authority established under the laws of the State of California
(the &#147;Agency&#148;). This Agreement is entered into in reliance on certain facts
set forth in the following Recitals:


<P align="center" style="font-size: 10pt">&#151;RECITALS&#151;



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The Agency is a public entity established by the County of San
Bernardino, the City of Colton, the City of Loma Linda and the City of San
Bernardino to acquire and develop portions of the former Norton Air Force Base
(&#147;NAFB&#148;) for civilian uses. Among other goals, the Agency desires to increase
employment opportunities in the community to replace jobs that were lost with
the closure of NAFB, which is located within the municipal boundaries of the
City of San Bernardino.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The Agency has determined that the redevelopment of the Project Site
described in this Agreement, in accordance with the terms of this Agreement,
shall assist the Agency and provide for the redevelopment of portions of the
former NAFB.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;The Agency has previously approved a certain Master Disposition and
Development Agreement with Hillwood/San Bernardino, LLC (as the &#147;Master
Developer&#148;), dated as of November&nbsp;6, 2002 (the &#147;Master DDA&#148;) for the
acquisition by the Master Developer of upwards of 415 acres of land owned by
the Agency on the former NAFB. Such land that is the subject of the Master
DDA, except for the County 44 Acre Parcel (as defined in the Master DDA), was
acquired by the Agency pursuant to an Economic Development Conveyance Agreement
by and between the Agency and the United States Air Force (&#147;USAF&#148;), dated as of
March&nbsp;7, 1995, as amended.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;The Owner has entered into certain agreements with the Master Developer
for the acquisition of those properties identified as Parcels I-2
(approximately 70.96 acres; exclusive of Building 518), K-2 remainder
(approximately 2.56 acres) and K-4 (approximately 16.74 acres) in the Master
DDA (collectively, the &#147;Master DDA Property&#148;) which qualifies the Owner to be
an Owner Participant in accordance with the Community Redevelopment Law (&#147;CRL&#148;)
of the State. The Owner shall acquire such Master DDA Property directly from
the Agency under such terms and conditions as may be agreed to by and between
the Owner and the Master Developer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;It is intended that the Owner shall also enter into a certain Ground
Lease with Option to Purchase Agreement with the San Bernardino International
Airport Authority


<P align="center" style="font-size: 10pt">1
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<P align="left" style="font-size: 10pt">(&#147;SBIAA&#148;) for approximately 46.6 acres of additional land (the &#147;SBIAA
Property&#148;) required for the Project as hereinafter described. SBIAA is not a
party to this Agreement and the Agency has made no representation or commitment
as to the terms and conditions of such acquisition of the SBIAA Property or as
to the other conditions and restrictions, including, but not limited to, runway
setbacks and building height limitations and radio transmission interference
issues and the price and terms of such acquisition, that may be imposed by the
FAA with respect thereto.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;The Owner shall also acquire those parcels as hereinafter described,
which are presently owned by private parties (collectively, the &#147;Third Party
Parcels&#148;), through negotiations to be conducted by the Owner directly with such
other parties. It shall be the responsibility of the Owner to accomplish the
acquisition of all such Third Party Parcels, and in the event after exercise by
the Owner of all reasonable due diligence and good faith efforts to acquire
such Third Party Parcels the Owner is unable to acquire any or all of such
Third Party Parcels, the Owner may submit a written request to the Agency
seeking the assistance of the Agency to acquire such Third Party Parcels in the
manner as hereinafter provided as a Condemnation Parcel.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;It is the intent of the Agency and the Owner that the Agency directly,
or through the efforts of the Owner, shall cause the relocation of the existing
tenants presently occupying the Master DDA Property with funds for relocation
and loss of business goodwill to be provided by the Owner to the Agency on an
as needed basis so that all such relocation of the tenants occupying the Master
DDA Property can be relocated in a timely manner to provide for the demolition
of existing structures by the Owner and the commencement of the construction of
the Project.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;The Agency shall also exercise best faith efforts to acquire the Parcel
D-1 on the former NAFB, which is also known as Building S-2 (referred to
commonly as the former Air Force Headquarters Building) through negotiations
with the USAF and the United States Forest Service and the Department of
Agriculture. No assurances can be given as to if and when such Parcel D-1 will
be ultimately acquired by the Agency or at what consideration. The Owner has
been advised that the acquisition of Building S-2 on Parcel D-1 will likely
require special federal legislation to authorize such transfer to the Agency
for the purposes of this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;The Owner intends to relocate and consolidate all of its food
warehousing and distribution facilities into a single integrated facility at
the former NAFB on the property as hereinafter described together with its
corporate headquarters, truck maintenance facilities and other appurtenant
facilities required for the consolidation of all of its Southern California
office, maintenance and warehousing and distribution operations with an
investment in the Project that will produce an assessed valuation for real
estate property tax purposes of not less than $160,000,000 upon completion of
the construction thereof (herein defined as the &#147;Project&#148;). The Owner
presently operates 158 grocery stores in Central and Southern California and
will employ approximately 1,700 at the Project Site.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW THEREFORE, THE OWNER AND THE AGENCY AGREE AS FOLLOWS:


<P align="center" style="font-size: 10pt"><B>ARTICLE I</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 1.1. Scope of the Redevelopment Project. </B>The Owner intends to
relocate and consolidate all of its food warehousing and distribution
facilities into a single integrated facility at the former NAFB on certain
lands (the &#147;Project Site&#148;) as hereinafter described together with its corporate
headquarters, truck maintenance facilities and other appurtenant facilities
required for the consolidation of all of its Southern California office,
maintenance and warehousing and distribution operations. The Owner, a grocery
retailer, presently operates 158 supermarkets in Southern California and will
employ approximately 1,700 employees at the Project Site.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The redevelopment project activities to be undertaken by the Owner shall
consist of the development of approximately 1,929,578 square feet of gross
interior industrial distribution and warehousing space structures and offices
to be situated on the Project Site which consists of approximately 161 acres of
land located at the northeast corner of the Mill Street extension and
Tippecanoe Avenue north to Harry Sheppard Boulevard and then easterly to a line
that is east of Del Rosa Avenue and then southerly of Harry Sheppard Boulevard
to the Building Restriction Line (&#147;BRL&#148;) for the San Bernardino International
Airport on the former NAFB in San Bernardino, California. The Owner&#146;s
improvements on the Project Site will consist of the following:

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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Distribution and Warehousing Structures -
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">approximately 1,734,500 square
feet with expansion area of 443,750 square feet;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Office Building -
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">approximately 80,000 square feet;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Store Construction Building -
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">approximately 32,000 square feet;</TD>
</TR>

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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Truck Garage -
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">approximately 41,800 square feet;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Salvage Dispatch Building -
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">approximately 41,278 square feet.</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:50px; text-indent:-10px">Total -
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">approximately 1,929,578 square feet</TD>
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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 1.2. Demolition Activities on the Project Site.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Owner recognizes and agrees that it shall be the sole duty and
responsibility of the Owner to cause all above and below ground structures to
be demolished and removed from the Project Site at the sole cost and expense of
the Owner. The Owner has been advised by the Agency and the Master Developer
that there exists many unknown physical conditions and below ground structures
that are not identified on any official engineering drawings of the USAF and
which likely will be discovered as the excavation of the Project Site
commences. Numerous infrastructure components, both currently utilized and
abandoned utilities, and previously used foundations and below ground
structures may be present on the Project Site which are composed


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<P align="left" style="font-size: 10pt">of asbestos containing materials or other Hazardous Substances.
Underground storage tanks (&#147;USTs&#148;) may also be found although the USAF is of
the view that all such USTs have been properly removed.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Pursuant to Section&nbsp;2.10(d) hereof and pursuant to the applicable
provisions of the Master DDA, the Owner agrees to accept all portions of the
Project Site in the &#147;as is&#148;, &#147;where is&#148; condition with all known faults and
defects including the existence of asbestos containing materials and lead-based
paint which shall be the sole obligation and responsibility, both physical and
financial, of the Owner to remove and remediate in such manner as is
appropriate under applicable law. The Owner recognizes that additional costs
and expenses and time delays will result due to the presence of such asbestos
containing materials and lead-based paint. In the event Hazardous Substances
are located on the Project Site, the USAF has warranted and is required by
current federal law to remediate such Hazardous Substances at the sole cost and
expense of the USAF. However, neither the Agency nor the Owner are entitled to
any consequential damages or other losses sustained in the event such Hazardous
Substances are found on the Project Site which cause harm or damage or any
construction delays to the Project or otherwise cause the Project to be
infeasible to be developed. As further provided in Section&nbsp;6.13 hereof, the
Agency will cooperate with the Owner to submit any claims that the Owner may
have as against the USAF with regard to the discovery of any previously unknown
Hazardous Substances.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 1.3. Project Site Acquisition and Redevelopment Project
Environmental Impact Report. </B>An Environmental Impact Report was prepared by
the Agency in connection with the adoption of the Redevelopment Plan in July
1990. A further environmental analysis was undertaken by the Agency at the
time of the approval of the Master DDA in November, 2002, and the parties
recognize and agree that all applicable environmental proceedings pursuant to
CEQA for the approval and execution of this Agreement have been duly taken by
all parties. The Owner recognizes and agrees that additional CEQA compliance
work will be separately required to be undertaken by the Owner in furtherance
of the processing of the development of the Project on the Project Site by the
Owner, and that any CEQA compliance obtained by the Agency does not in and of
itself allow for the development of any phase of the Project by the Owner.
Further CEQA compliance for the Project shall be accomplished as a condition to
the close of any Site Parcel Escrow or the Site Transfer Escrow as further
provided in Section&nbsp;2.8.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 1.4. Defined Terms. </B>In addition to the usage of certain terms
which have defined meanings as set forth in the preceding paragraphs of this
Agreement, or in other sections of this Agreement, certain other words and
phrases are used in this Agreement to refer to the following unless the
particular context of usage of a word or phrase may otherwise require:


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    <TD>&#147;Agency&#148; means and refers to the Inland Valley Development
Agency, a joint powers authority established under Health and Safety
Code Section&nbsp;33492.40, et seq., and is comprised of the governmental
entities of the County of San Bernardino, the City of Colton, the
City of Loma Linda and the City of San Bernardino. None of the
governmental entities as members of the Agency are</TD>
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    <TD>liable or responsible for any debts of other obligations or
responsibilities of the Agency in any manner whatsoever.</TD>
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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Airport&#148; means and refers to the San Bernardino
International Airport as owned and controlled by SBIAA on a portion
of the former NAFB properties.</TD>
</TR>

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    <TD colspan="5">&nbsp;</TD>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;CEQA&#148; means and refers to the California Environmental
Quality Act, Section&nbsp;21000, et seq. of the Public Resources Code and
the CEQA Guidelines set forth at 14 California Code of Regulations
Section&nbsp;15000, et seq.</TD>
</TR>

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    <TD colspan="5">&nbsp;</TD>
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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Certificate of Completion&#148; means the written confirmation of
the Agency as more fully described in Section&nbsp;3.7, which evidences
that the Owner has satisfactorily completed the redevelopment of the
Project in accordance with this Agreement.</TD>
</TR>

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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Certificate of Subdivision Compliance&#148; means and refers to
the one or more certificates of subdivision compliance which shall
be issued by the City to the Owner at the time or times when
required by the City for the processing of the Project development
entitlements.</TD>
</TR>

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    <TD colspan="5">&nbsp;</TD>
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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;City&#148; means City of San Bernardino. The City is not a party
to this Agreement.</TD>
</TR>

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    <TD colspan="5">&nbsp;</TD>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Condemnation Parcel&#148; means and refers to a Third Party
Parcel which has been referred to the Agency for acquisition by the
Owner and for which the Agency has been unable to satisfactorily
complete a negotiated purchase with the owner thereof within a
reasonable period of time following the transmittal by the Agency of
an appropriate offer to purchase to such owner.</TD>
</TR>

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    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Condemnation Parcel Acquisition Costs&#148; mean and refer to the
costs as may be incurred by the Agency in connection with the
acquisition of a Condemnation Parcel or a Condemnation Parcel
(Possessory Interest), as applicable, as those costs are identified
in subparagraphs (i)&nbsp;through (vii), inclusive of Section&nbsp;2.3(d).</TD>
</TR>

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    <TD colspan="5">&nbsp;</TD>
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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Condemnation Parcel (Possessory Interest)&#148; means and refers
to a possessory interest in a Site Parcel for which the Agency has
not been able to obtain a termination of possession from the tenant
in lawful possession prior to the end of the current term of such
possessory interest within a reasonable period of time following
termination in writing of the leasehold estate by the Agency or the
submittal by the Agency of an appropriate offer to acquire the
remaining term of such possessory interest by the Agency.</TD>
</TR>

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    <TD colspan="5">&nbsp;</TD>
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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;CRL&#148; means and refers to the Community Redevelopment Law of
the State of California found at Health &#038; Safety Code Section&nbsp;33000,
et seq.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Development Project Application&#148; means and refers to the
completed application or applications of the Owner for the review
and discretionary approval by the City</TD>
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    <TD>of the plan of improvement of the Project to be undertaken by the
Owner. Each Development Project Application shall include all of
the information necessary for the City to issue its development
project approvals for the Project, including all development
compliance conditions and mitigation measures. At the time of its
submittal to the City, the Development Project Application shall be
substantially consistent with the Owner Improvement Concept.
Promptly following the approval of the Development Project
Application by the City, the Owner shall prepare and complete the
Project-related development improvement plans and specifications,
including without limitation exterior sign and lighting plans and
landscape plans in sufficient detail to obtain the issuance of all
necessary Development Project Permits from the City.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Development Project Permits&#148; means and refers to all of the
regulatory and building permits which the Owner shall obtain from
the City (and each of the other agencies with regulatory
jurisdiction over the Project) for the construction and improvement
of the Project by the Owner.</TD>
</TR>

<TR>
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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Environmental Laws&#148; means all federal, state, local, or
municipal laws, rules, orders, regulations, statutes, ordinances,
codes, or decrees, regulating, relating to, or imposing liability of
standards of conduct concerning any Hazardous Substance (as defined
below), or pertaining to occupational health or industrial hygiene
(and only to the extent that the occupational health or industrial
hygiene laws, ordinances, or regulations relate to Hazardous
Substances on, under, or about the Property), occupational or
environmental conditions on, under, or about the Property, as now or
may at any later time be in effect, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (&#147;CERCLA&#148;) &#091;42 USC Section&nbsp;9601 et seq.&#093;; the Resource
Conservation and Recovery Act of 1976 (&#147;RCRA&#148;) &#091;42 USC Section&nbsp;6901
et seq.&#093;; the Clean Water Act, also known as the Federal Water
Pollution Control Act (&#147;FWPCA&#148;) &#091;33 USC Section&nbsp;1251 et seq.&#093;; the
Toxic Substances Control Act (&#147;TSCA&#148;) &#091;15 USC Section&nbsp;2601 et seq.&#093;;
the Hazardous Materials Transportation Act (&#147;HMTA&#148;) &#091;49 USC Section
1801 et seq.&#093;; the Insecticide, Fungicide, Rodenticide Act &#091;7 USC
Section&nbsp;6901 et seq.&#093; the Clean Air Act &#091;42 USC Section&nbsp;7401 et
seq.&#093;; the Safe Drinking Water Act &#091;42 USC Section&nbsp;300f et seq.&#093;;
the Solid Waste Disposal Act &#091;42 USC Section&nbsp;6901 et seq.&#093;; the
Surface Mining Control and Reclamation Act &#091;30 USC Section&nbsp;101 et
seq.&#093; the Emergency Planning and Community Right to Know Act &#091;42 USC
Section&nbsp;11001 et seq.&#093;; the Occupational Safety and Health Act &#091;29
USC Section&nbsp;655 and 657&#093;; the California Underground Storage of
Hazardous Substances Act &#091;H &#038; S C Section&nbsp;25288 et seq.&#093;; the
California Hazardous Substances Account Act &#091;H &#038; S C Section&nbsp;25300
et seq.&#093;; the California Safe Drinking Water and Toxic Enforcement
Act &#091;H &#038; S C Section&nbsp;24249.5 et seq.&#093; and the Porter-Cologne Water
Quality Act &#091;Water Code Section&nbsp;13000 et seq.&#093; together with any
amendments of or regulations promulgated under the statutes cited
above and any other federal, state, or local law, statute,
ordinance, or regulation now in effect or later enacted that
pertains to occupational health or industrial hygiene, and only to</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the extent the occupational health or industrial hygiene laws,
statutes, ordinances, or regulations relate to Hazardous Substances
on, under, or about the Property, or the regulation or protection
of the environment, including ambient air, soil, soil vapor,
groundwater, surface water, or land use.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;EPA&#148; means the Federal Environmental Protection Agency.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Escrow Agent&#148; means and refers to the escrow department of
the Title Company, or such successor escrow agent as may be mutually
designated by the Owner and the Agency. The Escrow Agent shall
administer the Site Transfer Escrow.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;FAA&#148; means and refers to the Federal Aviation
Administration, a federal governmental agency which has jurisdiction
over the flight activities and the land use and land disposal
activities of SBIAA for the Airport.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;F&#038;WS&#148; means the United States Fish &#038; Wildlife Service.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Hazardous Substances&#148; includes without limitation:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>those substances included within the definitions
of &#147;hazardous substance,&#148; &#147;hazardous waste,&#148; &#147;hazardous
material,&#148; &#147;toxic substance,&#148; &#147;solid waste,&#148; or &#147;pollutant or
contaminant&#148; in CERCLA, RCRA, TSCA, HMTA (as said terms are
defined in the definition of &#147;Environmental Laws&#148; contained
herein), or under any other environmental law; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>those substances listed in the United States
Department of Transportation (DOT)&nbsp;Table &#091;49 CFR 172.101&#093;, or
by the EPA, or any successor agency, as hazardous substances
&#091;40 CFR Part&nbsp;302&#093;; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other substances, materials, and wastes that are
or become regulated or classified as hazardous or toxic under
federal, state, or local laws or regulations; and any
material, waste, or substance that is:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a petroleum or refined petroleum product,</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>asbestos,</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>polychlorinated biphenyl,</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>designated as a hazardous substance
pursuant to 33 USC Section&nbsp;1321 or listed pursuant to 33
USC Section&nbsp;1317,</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" nowrap align="right">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a flammable explosive, or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" nowrap align="right">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a radioactive material.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Owner Improvement Plan Concept&#148; means and refers to the
concept plan for the Project as depicted on Attachment No.&nbsp;2.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Owner Investigations&#148; means and refers to the Owner&#146;s due
diligence investigation of each Site Parcel to determine the
suitability of such lands for development. The Owner Investigations
shall include an investigation of environmental and geotechnical
suitability of such lands as determined at the sole discretion of
the Owner.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Parcel D-1&#148; means and refers to that approximately 3.74
acres parcel located on the east side of Tippecanoe north of Mill
Street upon which is located the former USAF S-2 Headquarters
Building. Such Parcel D-1 is presently in the ownership of the
federal government through the Department of Agriculture for the
benefit of the United States Forest Service. Such Parcel D-1 was a
federal-to-federal transfer as part of the closure of the former
NAFB and disposal of property by the USAF.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Project&#148; means and refers to the development project to be
undertaken by the Owner on the Project Site in accordance with the
Schedule of Performance attached hereto as Attachment No.&nbsp;6 and as
additionally set forth in Section&nbsp;1.1.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Project Site&#148; means and refers to collectively the (i)
Master DDA Property, (ii)&nbsp;the SBIAA Property, (iii)&nbsp;the Third Party
Parcels, and (iv)&nbsp;Parcel D-1. The various plat maps and legal
descriptions of the lands included in the Project Site are annexed
to this Agreement as Attachment No.&nbsp;1A through Attachment No.&nbsp;1E.
The IVDA shall have the exclusive right to move any parcels in the
Foreign Trade Zone on about 20 acres of the Project Site to another
site within the NAFB boundaries without any cost to Owner. Owner
shall have no property right to receive the Foreign Trade Zone
designation. If necessary, in the future, IVDA will cooperate with
Owner to obtain an amendment to the Foreign Trade Zone or add
additional property at the request Owner.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;SBIAA Property&#148; means and refers to the Airport parcels
consisting of approximately 46.6 acres as presently owned by SBIAA
which are intended to be the subject of the Ground Lease and Option
to Purchase Agreement subject in all case to the approval by the FAA
as to the execution of such long-term ground lease and the intended
transfer of title from SBIAA to the Owner. The term &#147;SBIAA
Property&#148; shall also include the approximately 1.3 acre remnant
parcel that is presently owned by the USAF located north of the
northerly BRL. Said remnant parcel is a part of the Palm Meadows
Golf Course which is subject to a lease agreement between the USAF
and the Agency and is intended for fee title transfer to the Agency
during the latter half of calendar year 2004 after the USAF has
completed all environmental restoration activities on the Palm
Meadows Golf Course.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Schedule of Performance&#148; means and refers to the time
schedule for the performance of key steps for the assembly of the
Project Site by the Owner and the Agency and the construction and
the redevelopment of the Project by the Owner. The Schedule of
Performance is included as Attachment No.&nbsp;6, and is</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">8
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>deemed approved by the parties concurrently upon the approval of
this Agreement by the governing board of the Agency.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Site Parcel&#148; means and refers to each of the parcels of land
which comprise the Project Site as described on the plot plan of the
Site Project included as part of Attachment No.&nbsp;1A through and
including Attachment No.&nbsp;1E, which such parcels conform to the
Project Site boundaries depicted on the plot plan. As of the date
of this Agreement the Agency holds title only to the Master DDA
Property subject to the Master DDA and the rights and privileges of
the Master Developer with respect to the Master DDA Property. The
Agency does not own or possess any equitable interest in the SBIAA
Property, the Third Party Parcels or the Parcel D-1. A legal
description of all of the Site Parcels which comprise the Project
Site is included as Attachment No.&nbsp;1A through Attachment No.&nbsp;1E.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Site Parcel Acquisition Agreement&#148; means and refers to the
general form of the real estate purchase agreement by and between
the Owner and each owner of a Third Party Parcel. The general form
of the Site Parcel Acquisition Agreement is included as Attachment
No.&nbsp;7.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Site Parcel Escrow&#148; means and refers to any escrow
transaction by and between the Owner and third party for the
acquisition of any Site Parcel. The Agency shall not be a party to
a Site Parcel Escrow; provided however, that the Owner may assign
its interest in any Site Parcel Escrow to the Agency, whereupon the
close of such Site Parcel Escrow as assigned to the Agency shall
occur concurrently with the close of the Site Transfer Escrow.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Site Transfer Escrow&#148; means and refers to the escrow
transaction account established by the Owner and the Agency for the
transfer by the Agency of: (i)&nbsp;Site Parcels which are then owned by
the Agency exclusion of the Master DDA Property, (ii)&nbsp;Site Parcels
which the Owner has referred to the Agency for acquisition either as
Condemnation Parcels or otherwise, (iii)&nbsp;Site Parcels which the
Agency may hereafter acquire from the Air Force or third party
public agencies, as applicable, and (iv)&nbsp;Condemnation Parcels
(Possessory Interest). Site Parcels acquired by the Owner from the
Master Developer, specifically the Master DDA Property, the Third
Party Parcels and the SBIAA Property, will not be subject to the
provisions for the Site Transfer Escrow, unless the Owner has
assigned its interest to acquire such a Site Parcel under a fully
executed Site Parcel Acquisition Agreement to the Agency, in which
case, the Agency shall transfer such a Site Parcel to the Owner
concurrently upon the close of the Site Transfer Escrow.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Site Transfer Escrow Closing&#148; means and refers to the time
when the conditions for the transfer of title and/or possession of
any portion of the Project Site, if applicable, from the Agency to
the Owner have been satisfied by the parties and the applicable form
of the Agency Quit Claim Deed and other necessary documents are
recorded.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;State DTSC&#148; means the Department of Toxic Substances Control
of the State of California which has jurisdiction over certain
environmental conditions and on the former NAFB due to its previous
designation as a NPL site.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Third Party Parcels&#148; means and refers to those several
parcels of land within the Project Site which are owned by parties
not under the control of the Agency and include (i)&nbsp;the Smart Start
Child Development Center Parcel, (ii)&nbsp;the Norton Community Credit
Union Parcel, (iii)&nbsp;the LOC Investments Parcel, and (iv)&nbsp;the Coast
Paper Box Company Parcel.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Title Company&#148; means and refers to Stewart Title Insurance
Company or such successor title insurance company as may be mutually
designated by the Owner and the Agency.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Vehicle Trip Credits&#148; means and refers to those vehicle
capacity credits as intended to be estimated pursuant to the IVDA
Specific Plan and the Traffic Impact Analysis conducted and included
as a part of the Environmental Impact Report that accompanied the
City approval of the IVDA Specific Plan. The City has subsequently
adopted a Resolution which approved a certain Implementation Plan
which established additional guidelines and criteria for the use of
all Vehicle Trip Credits within the IVDA Specific Plan Area.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 1.5. Parties to the Agreement</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The parties to this Agreement are the Owner and the Agency. Neither
the City, the SBIAA, nor any other governmental member of the Agency nor the
Master Developer are parties to this Agreement nor are such entities
responsible in any manner for the representations contained herein or for any
performance or financial obligations set forth in this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Owner is as identified above. The principal corporate office of
the Owner for purposes of this Agreement is currently located at 21700 Barton
Road, Colton, California 92324. The Owner has provided the Agency with
satisfactory evidence of the legal formation and existence of the Owner and the
good standing of the Owner to transact business within the State, to hold title
to the Project Site and to develop the Project.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Agency is a joint powers authority established under the laws of
the State of California and exercises certain governmental functions and powers
under the provisions of Health and Safety Code Section&nbsp;33492.40, et seq.,
including those powers and functions of a redevelopment agency pursuant to the
Community Redevelopment Law of the State of California, Health and Safety Code
Section&nbsp;33000, et seq., and other special provisions of the CRL that pertain to
the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 1.6. &#091;RESERVED &#151; NO TEXT&#093;</B>


<P align="center" style="font-size: 10pt">10
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 1.7. Change in Ownership Management and Control of the
Owner&#151;Assignment and Transfer</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Transfer as used in this Section&nbsp;1.7, the term &#147;Transfer&#148; means:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any total or partial sale, assignment or conveyance, or any
trust or power, or any transfer in any other mode or form by the
Owner of more than 49% interest (or series of such sales,
assignments and the like which in the aggregate exceed a disposition
of more than a 49% interest) with respect to its interest in this
Agreement, the Project Site or any part thereof or any interest
therein or of the improvements constructed thereon, or any contract
or agreement to do any of the same; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any total or partial sale, assignment, conveyance, or
transfer in any other mode or form, of or with respect to any
ownership interest in Owner (or series of such sales, assignments
and the like which in the aggregate exceeded a disposition of more
than a 49% interest); or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any merger, consolidation, sale or lease of all or
substantially all of the assets of the Owner in the Agreement, the
Project Site or any part thereof or any interest therein or the
improvements construction thereon (or series of such sales,
assignments and the like which in the aggregate exceeded a
disposition of more than a 49% interest) for the construction of a
portion of the Project; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The leasing of part or all of the Project Site or any part
thereof or any interest therein except for the lease of a portion of
the Project Site for retail or other commercial uses in the
corporate headquarters building.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;This Agreement is entered into solely for the purpose of the
redevelopment of the Project Site and the improvement of the Project. The
Owner recognizes that the qualifications and identity of Owner are of
particular concern to the Agency, in view of:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The importance of the redevelopment of the Project Site to
the general welfare of the community; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The fact that a Transfer by the Owner of the Project Site is
for all practical purposes a transfer or disposition of the
responsibilities of the Owner, with respect to the Project Site.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Owner further recognizes and acknowledges that it is because of the
qualifications and identity of the Owner that the Agency is entering into this
Agreement with the Owner, and, as a consequence, Transfers are permitted only
as provided in this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The limitations on a Transfer as set forth in this Section&nbsp;1.7 by the
Owner shall apply until such time as the Project has been completed as forth in
Section&nbsp;3.7 and a Certificate of Completion is approved by the Agency for the
Project. Except as expressly permitted in this


<P align="center" style="font-size: 10pt">11
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Agreement, the Owner represents and agrees that it has not made or will create
or suffer to be made or created, any Transfer, either voluntarily or by
operation of law without the prior written approval of the Agency until such
time as a Certificate of Completion has been recorded. After the date of
recordation of a Certificate of Completion, certain other provisions of this
Agreement shall nonetheless be applicable to subsequent conveyances of interest
in the Project Site, or portions thereof, as provided in Article&nbsp;IV of this
Agreement. Any Transfer made in contravention of this Section&nbsp;1.7 shall be
deemed to be a default under this Agreement whether or not the Owner knew of or
participated in such Transfer, and shall be voidable at the election of the
Agency.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The following types of a Transfer shall be permitted and approved by
the Agency and are referred to herein as a &#147;Permitted Transfer&#148;:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Transfer by the Owner following the Site Transfer Escrow
Closing creating a &#147;Security Financing Interest&#148; in the Project
which conform to the provisions of Section&nbsp;3.2 and 3.3;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Transfer directly resulting from the foreclosure of a
Security Financing Interest created by the Owner in the Project or
the granting of a deed in lieu of foreclosure of a Security
Financing Interest;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A Transfer under (1)&nbsp;or (2)&nbsp;above, involving the Project
Site;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Transfer of stock or equity of the Owner which does not
change management or operational control of the Project;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Transfer of any interest in Owner to any affiliate of or
other entity related to the Owner.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;No Permitted Transfer of this Agreement or any interest in the Project
Site or the Project Site, or the Project by the Owner (other than a Permitted
Transfer created pursuant to a Security Financing Interest under Section&nbsp;3.3)
shall be effective unless, at the time of the Permitted Transfer, the person or
entity to which such Transfer is made, shall expressly assume the obligations
of Owner under this Agreement and such person or entity also agrees to be
subject to the conditions and restrictions to which Owner is subject under this
Agreement. Such an assumption of obligation shall be evidenced by a written
instrument delivered to the Agency in a recordable form which is satisfactory
to the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Provided the particular transaction satisfies the applicable
provisions of Section&nbsp;1.7(d), the Owner is not required to give the Agency
advance notice of such a Permitted Transfer. The Agency may, in its reasonable
discretion, approve in writing any other Transfer as requested by the Owner
provided such proposed transferee can demonstrate successful and satisfactory
experience in the ownership, operation, and management of regional shopping
center facility comparable in size and quality to the Project. Any such
transferee for itself and its successors and assigns, and for the benefit of
the Agency shall expressly assume all of the obligations of the Owner to the
Agency under this Agreement. There shall be submitted to the


<P align="center" style="font-size: 10pt">12
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Agency for review all instruments and other legal documents proposed to effect
any such other Transfer; and the approval or disapproval of the Agency shall be
provided to the Owner in writing within thirty (30)&nbsp;days of receipt by the
Agency of Owner&#146;s request, and the Agency approval of a transfer and shall not
be unreasonably withheld or delayed.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Following the completion of the Project and the issuance of a
Certificate of Completion, the Owner shall be released by the Agency from any
liability under this Agreement which may arise from a default of a successor in
interest occurring after the date of such a Transfer; provided, however that
the covenants of the Owner as set forth in Article&nbsp;IV of this Agreement shall
run with the land for the term as provided in the Agency Quit Claim Deed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 1.8. &#091;RESERVED&#093;</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 1.9. &#091;RESERVED&#093; SECTION 1.10. List of Attachments to Agreement.</B>
Each of the following items or documents are hereby deemed to be approved by
the parties as of the date of approval of this Agreement by the governing board
of the Agency and each such item or document is incorporated into the text of
this Agreement by this reference:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;1A
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Plat Map of the Project Site</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;1B
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Legal Description and Plat Map for the Master DDA Property</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;1C
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tentative Legal Description and Plat Map of the SBIAA Property</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;1D
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tentative Legal Descriptions and Plat Maps of the Third Party Parcels</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;1E
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Legal Description and Plat Map of the Parcel D-1</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Owner Improvement Plan Concept</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Site Parcel Identification List</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Description of the Project</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Required Tenant Relocations</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Schedule of Performance</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Site Parcel Acquisition Agreement (general form for use by Owner)</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reimbursement Agreement and Promissory Note</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Agency Quit Claim Deed</TD>
</TR>

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</DIV>



<P align="center" style="font-size: 10pt">13
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;RESERVED&#093;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Completion</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attachment No.&nbsp;12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;RESERVED&#093;</TD>
</TR>

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</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><B>ARTICLE II</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.1. Acquisition of the Project Site by the Owner for
Redevelopment. </B>The Project Site is comprised of all or part of approximately
ten (10)&nbsp;separate legal parcels of land and approximately 161 acres in area.
Each such separate legal parcel of land is referred to as a &#147;Site Parcel&#148;
regardless of whether the acquisition of such parcel is intended to occur by
the Agency or the Owner, as applicable. As of the date of approval of this
Agreement by the governing board of the Agency, the Agency has ownership only
of the Master DDA Property subject to the restrictions and limitations
contained in the Master DDA. A major portion of the Site Parcels have been
improved for former military office and distribution purposes and are presently
occupied by owners or industrial, warehousing or office tenants.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is the intent of the Owner and the Agency that the Owner shall use best
efforts to acquire each of the Site Parcels comprising the Third Party Parcels
directly from the current owners thereof by negotiated purchase, subject to the
terms and conditions of this Agreement. Nothing contained in this Agreement
shall require the Agency to pay any amount for the acquisition of any Third
Party Parcel from its owner. The obligation of the Owner to construct and
complete the Project shall not arise until such time as the Site Transfer
Escrow is in a condition to close in accordance with the terms of this
Agreement. If the necessary Site Parcels for the Project cannot be assembled,
and the Site Transfer Escrow placed in a condition to close on or before
January&nbsp;1, 2005, subject to such extensions of time as may be approved by the
Owner and the Agency as set forth in Section&nbsp;2.3(f), this Agreement shall be
subject to termination by either party as provided in Section&nbsp;5.10.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Separate and apart from any obligation of the Agency pursuant to this
Agreement, the Owner shall negotiate with and enter into the Ground Lease and
Option to Purchase Agreement with SBIAA for the SBIAA Property upon such terms
and conditions as the Owner and SBIAA may agree. The Owner recognizes that as
of the date of this Agreement, SBIAA has not obtained the written approval from
the FAA to allow for either a long-term lease of the SBIAA Property to the
Owner for the construction of the Project or for the sale of such property to
the Owner nor is either the Agency or SBIAA aware of the precise price, terms
and conditions that may be imposed upon such transfer by the FAA. As of the
date of this Agreement no formal application has been submitted to the FAA by
either the Agency or SBIAA requesting such transfer authorization for the SBIAA
Property by either lease or sale to the Owner although preliminary discussions
with the FAA have be initiated.


<P align="center" style="font-size: 10pt">14
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.1.1. Payment of Tenant Relocation Expenses and Certain Tenant
Occupancies</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Unless otherwise undertaken directly by the Owner as part of the
obligation of the Owner under a Site Parcel Acquisition Agreement, subject to
the provisions of Section&nbsp;2.1.1(e), the Agency shall cause to be relocated all
tenants in lawful possession of any Site Parcel as set forth in Attachment No.
5 (Required Tenant Relocations). The Agency, or the Owner, as applicable,
shall enter into negotiations with all such tenants for the early termination
any lease that has a stated term which extends for more than four (4)&nbsp;months
after the date of this Agreement in accordance with the time schedule for the
tenant relocation program set forth in Attachment No.&nbsp;5; provided however, that
no tenant shall be issued a notice of displacement by the Agency under such
tenant relocation program except on the Master DDA Property until the
conditions of Section&nbsp;2.8 have been satisfied. Once the Agency begins the
tenant relocation program, the Agency shall diligently prosecute such
relocation program to completion. As part of the tenant relocation program to
be undertaken by the Agency, the Agency shall obtain the surrender of
possession of all tenant occupancies on the Master DDA Property at the earliest
feasible time.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Owner shall be financially responsible for all relocation costs
and claims payable by the Agency in connection with the Project. The Agency
shall invoice the Owner on a monthly basis for all costs and expenses incurred
by the Agency for such tenant relocation related expenses, including, but not
limited to the third party costs of the Agency related to relocation
consultants, real property and business goodwill appraisers, relocation
appraisal consultants, legal and court costs, expert witness testimony, real
estate consultants, and all other similar expenses. The Agency shall not
invoice for any time expended by Agency employees but only for third party
independent contractors. All such invoices shall be payable by the Owner to
the Agency within ten (10)&nbsp;days after receipt thereof by the Owner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Owner recognizes that the presence of Northrop-Grumman in the
northern portion of the 500 Series&nbsp;Buildings on Parcel &#147;I-2&#148; which is situated
within the Master DDA Property, may present a delay in obtaining possession of
the approximately 140,000 square feet of building space for assembly in the
Project Site even after the Owner has acquired title to the Master DDA
Property. The Owner will acquire the Master DDA Property subject to the
applicable lease agreement which permits Northrop-Grumman to remain as a tenant
in the 500 Series&nbsp;Buildings through February&nbsp;28, 2006, unless the Agency at its
sole discretion and election, relocates said tenant earlier or unless the Owner
negotiates with Northrop-Grumman for a satisfactory relocation and early
termination of the applicable lease agreement. All such relocation expenses
incurred, whether by the Agency or the Owner in connection with
Northrop-Grumman, shall be the sole financial obligation of the Owner. Any
such relocation expenses incurred by the Agency shall be payable to the Agency
under Section&nbsp;2.1.1.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Owner further recognizes that in the event the Owner elects to
proceed with any aspect of the Project that requires any of the SBIAA Property
east of Del Rosa Avenue and south of Harry Sheppard Boulevard, the Owner shall
be responsible for all relocation costs of the tenant or subtenant or
subtenants then occupying Building 701 pursuant to that certain Lease Agreement
by and between SBIAA and Kelly Space Technologies dated as of October&nbsp;15, 2003


<P align="center" style="font-size: 10pt">15
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">(the &#147;KST Lease Agreement&#148;). The Owner shall comply with all financial
performance conditions required for the relocation of such tenant and
subtenants and the construction of a new facility or the renovation of an
existing facility as may be required by SBIAA to comply with the conditions of
the KST Lease Agreement for the relocation of the office space providing the
functions that are anticipated pursuant to the KST Lease Agreement for Building
701. Owner shall pay IVDA, for the benefit of SBIAA, an amount not to exceed
of $750,000 to cause IVDA to relocate the tenants and/or subtenants to another
adjacent building and to pay for further physical improvements to any such
adjacent building.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;The Owner is responsible for compliance with all applicable relocation
law in connection with its displacement of any person, occupant and interest
from each Third Party Parcel, whether such person is displaced from a Third
Party Parcel at the close of a Site Parcel Escrow under a Site Acquisition
Parcel Agreement, or at the close of the Site Transfer Escrow. No person or
business shall be displaced from any Site Parcel except upon ninety (90)&nbsp;days
prior written notice (a &#147;notice of displacement&#148; as defined below) from the
Owner or the Agency, as applicable. The Owner agrees to indemnify, defend and
hold the Agency harmless, pursuant to Section&nbsp;6.8, from any claim for
relocation assistance arising under Government Code Section&nbsp;7260, et seq., that
may be asserted against the Agency by any person, business or entity claiming
to be displaced from the Project Site as a result of the Owner&#146;s acquisition of
the Project Site or any portion thereof, or from the planning, approval or
operation of the Project or from the execution of this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each person or business who is proposed to be displaced from the a Third
Party Parcel as a result of the Owner&#146;s acquisition of such Third Party Parcel,
shall be given a notice of displacement at least ninety (90)&nbsp;days prior to the
date when such person shall have his/her possessory interest in such Third
Party Parcel, or portion thereof terminated by either action of the Owner, or
by subsequent action of the Agency. The form of each such notice of
displacement shall be prepared by the Owner and submitted to the Agency for its
review and approval prior to the date on which the notice of displacement may
be transmitted to the person or business to be displaced. Each notice of
displacement shall contain the appropriate information required by applicable
law and such other information as the Agency may direct. The Agency shall
approve, disapprove or conditionally approve each such notice of displacement
submitted to it for approval within ten (10)&nbsp;days following its receipt from
the Owner, and such approval by the Agency shall not be unreasonably
conditioned, withheld or denied.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Each person or business who may receive a notice of displacement or
who may otherwise claim to be displaced from the Project Site as a result of
the Owner&#146;s acquisition of the Project Site or any portion, the planning,
approval, construction or operation of the Project or the execution of this
Agreement, may submit its claim for relocation assistance for review by the
Executive Director of the Agency or his/her designee, in accordance with the
provisions of Title 25 California Code of Regulations, Division 1, Subchapter
1, Article&nbsp;5, commencing with Section&nbsp;6152. The determination by the Executive
Director of the Agency with respect to such a claim shall be final and
conclusive, subject to the timely submission of an appeal of such a
determination to the governing board of the Agency in accordance with Title 25
California Code of Regulations Division 1, Subchapter 1, Article&nbsp;5.


<P align="center" style="font-size: 10pt">16
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.2. Acquisition of Third Party Parcels By Owner.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Owner hereby agrees to exercise commercially reasonable efforts to
assemble the Third Party Parcels and the other Site Parcels as necessary or
appropriate for the Project, and acquire title to the Project Site, on such
terms as the owners of the Third Party Parcels and the Owner may mutually agree
subject to the terms and conditions of this Agreement. The Owner shall include
in each Site Acquisition Agreement appropriate releases as to the Agency and
the waiver by each Owner of any claims against the Agency for any relocation
costs, loss of goodwill or other claim of compensation that each such tenant
may have against the Agency in connection with the Project.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In the event that the Owner may determine that it is necessary or
appropriate to refer the acquisition of one or more Third Party Parcels (or any
possessory interest therein) to the Agency for consideration as provided in
Section&nbsp;2.3(d), the Owner shall prepay a portion of the Condemnation Parcel
Acquisition Cost with respect to such Third Party Parcel to the Agency as
provided in Section&nbsp;2.2(d). Upon submittal of such written request of the
Owner to the Agency which identifies the particular Site Parcel referred to the
Agency for acquisition as a &#147;Condemnation Parcel&#148; or &#147;Condemnation Parcel
(Possessory Interest)&#148;, the Owner shall pay to the Agency the just compensation
amount which corresponds to such property or possessory interest therein;
provided however, that the Owner shall have first determined in its sole
discretion that such payment for a Condemnation Parcel is required for the
assembly of the Project Site. In the event that any such payment is made by
the Owner to the Agency under this subsection, and thereafter the Agency may
fail to initiate eminent domain proceedings for the acquisition of such
Condemnation Parcel, or later, the Agency may fail to obtain an order for
prejudgment possession for any one or more of such Condemnation Parcels under
applicable law, then the Agency shall immediately return to the Owner the sums
paid by the Owner to the Agency pursuant to this Section&nbsp;2.2(d) plus such
interest as may have accrued on the purchase price as deposited with the Agency
or a court, as applicable, upon the written request of the Owner. The Agency
shall not commence the acquisition procedures for any such Condemnation Parcel
until the Owner has provided the Agency with the portion of the purchase price
which corresponds to such Condemnation Parcel.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Promptly following the referral by the Owner of a Third Party Parcel
to the Agency, the Agency shall initiate the preparation of an appraisal of
such interest in property in accordance with Government Code Section&nbsp;7260 et
seq. The Agency shall retain the services of such appraisers and related
consultants to prepare such an appraisal as the Agency may in its sole
discretion select.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Owner shall remit to the Agency within thirty (30)&nbsp;days following
receipt of an invoice the estimated amount of the just compensation, as may be
payable by the Agency for each Site Parcel referred to it as a Condemnation
Parcel. The estimated amount as invoiced shall be based upon the Agency&#146;s
approved appraisal report for the particular Condemnation Parcel. In addition
to the indicated amount of just compensation based upon such appraisal report,
the Owner shall also be responsible for paying for all the Condemnation Parcel
Acquisition Costs for each such Condemnation Parcel, as actually incurred by
the Agency. The Agency shall transmit invoices to the Owner for the payment of
such additional sums from time-to-time and the Owner


<P align="center" style="font-size: 10pt">17
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">shall pay such amounts within thirty (30)&nbsp;days of receipt of such invoice from
the Agency. The Agency shall instruct the Escrow Agent to credit the Owner for
all Condemnation Parcel Acquisition Costs paid by the Owner to the Agency
outside of the Site Transfer Escrow.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.3. Site Parcel Assembly Consultations and Site Parcel Assembly
Program.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Commencing upon the approval of this Agreement by the governing board
of the Agency and the execution of this Agreement by the authorized officers of
the parties, and thereafter during the Site Parcel Assembly Program through the
close of the final escrow for the Project Site, the Owner and Agency staff
shall conduct regular meetings at the Agency offices to review the status of
each of the following matters of mutual interest as applicable:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all pending offers of the Owner to purchase Third Party
Parcels and other Site Parcels from the owners thereof and the
status of all relocation activities by the Agency or the Owner of
the tenants remaining in possession on the Master DDA Property;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner Investigations;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the preparation by the Owner of the Development Project
Application and the submission of such application to the City, and
consultations with the City as the lead agency under CEQA for the
Project, and following the submission to the City by the Owner of
the completed Development Project Application, the initiation of the
public street closure and vacation proceedings by the City as
necessary or appropriate to accommodate the Development Project
Application, and the submission of an application to the City for
the issuance of one or more Certificates of Subdivision Compliance
at the time of close of the Site Transfer Escrow;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>consideration and approval by the City of the matters
included in (iii), above such as any General Plan Amendment of the
City, modifications to the Circulation Element of the General Plan
of the City and the amendments to the IVDA Specific Plan as
applicable to the Project Site;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>review by the Owner and the Agency of the conditions of
approval by the City of matters covered in (iii)&nbsp;and (iv), above;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(vi)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>administration of the Site Parcel Escrows and the Site
Transfer Escrow;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(vii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>administration of the acquisition of the Condemnation
Parcels as referred by the Owner to the Agency, if any;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(viii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>administration of the tenant relocation program following the
issuance of notices of displacement to such tenants; and</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" nowrap align="right">(ix)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>review and confirmation of the dates and times set forth in
the Schedule of Performance for the performance of certain
obligations and satisfaction of various conditions precedent with
respect to the redevelopment of the Project Site, and within ninety
(90)&nbsp;days following the approval of this Agreement, review the
Schedule of Performance for conformity with this Agreement and such
adjustment as may then be indicated to the dates set forth in the
Schedule of Performance in light of the status of items (ii)&nbsp;through
and including (viii), above; provided however, that any adjustment
of more than sixty (60)&nbsp;days to a particular date as set forth in
the Schedule of Performance shall require the concurrence of the
governing board of the Agency, in its reasonable discretion as
provided in Section&nbsp;2.3(f).</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Agency shall issue appropriate notices of termination of leases
and issue appropriate notices of eligibility to claim relocation assistance and
commence the relocation of tenants on the Agency owned Site Parcels (except as
set forth in Section&nbsp;2.1.1(c)) following the approval of this Agreement by the
governing board of the Agency and its execution by the parties upon the
confirmation by the Executive Director that each of the following conditions
has been satisfied:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has delivered its written request that the Agency
proceed with the Site Parcel Assembly Program;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Executive Director has accepted the evidence provided by
the Owner that the Owner has the funds necessary to pay the
relocation costs to be incurred by the Agency;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Executive Director has confirmed that the funds then
estimated by the Executive Director to be required and necessary to
pay for Agency acquisition costs under items Section&nbsp;2.4(a)(i),(ii)
and (iv)&nbsp;inclusive, are available to the Agency;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has provided the Agency with the evidence of
insurance as set forth in Section&nbsp;2.20;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the governing board of the Agency has approved a relocation
cost estimate and, if applicable, suitable appraisal reports
pertaining to the possessory interest of the tenants the Site
Parcel;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(vi)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the City has accepted as complete the Development Project
Application for the Project;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(vii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the City has certified and approved the appropriate CEQA
review for the Project;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(viii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the IVDA Specific Plan has been amended or other waivers have been
obtained from the City to allow for the commencement of construction
for the Project; and</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">19
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(ix)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the City has taken appropriate action to initiate the public
street vacation proceedings as necessary or appropriate and General
Plan amendments and IVDA Specific Plan amendments to accommodate the
redevelopment of the Site in substantial accordance with the
Development Improvement Plan Concept through the elimination of the
Mill Street Extension easterly to the proposed connection with Del
Rosa Avenue south of Harry Sheppard Boulevard</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the Executive Director may fail to confirm that each of
the foregoing items has been accomplished by no later than January&nbsp;1, 2005,
either party may terminate this Agreement as provided in Section&nbsp;5.10, unless
at least ten (10)&nbsp;days prior to such date, the parties agree, as provided by
Section&nbsp;2.3(f), to a specific extension of the date by which the Executive
Director may confirm the satisfaction of one or more specific conditions as set
forth above.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Within thirty (30)&nbsp;days following the Executive Director&#146;s
confirmation of satisfaction of the matters described in Section&nbsp;2.3(b), the
Agency shall issue appropriate notices of termination of leases and notices of
eligibility to tenants on the Agency-owned Site Parcels as necessary or
appropriate for the Project. Each such written notice of eligibility to claim
relocation assistance shall be based upon a relocation cost estimated prepared
by the Agency for the subject Site Parcel which has been approved by the
Agency. The Agency reserves the discretion to engage in discussions and
negotiations with the tenant of each Agency-owned Site Parcel regarding the
terms and conditions of each notice of displacement and offer of relocation
assistance of the Agency, and the Agency further reserves the discretion to
modify or withdraw any pending offer of the Agency to provide relocation
assistance or other compensation for an early termination of a lease at any
time prior to acceptance by the tenant of each Agency-owned Site Parcel. As
part of the termination of each possessory interest of any tenant on an
Agency-owned Site Parcel, the Agency shall promptly open a relocation program
file affecting such tenant occupancy and tenant relocation. In the event that
under a particular lease, a tenant&#146;s occupancy is not subject to a
month-to-month term the Agency shall offer such tenant a sum in compensation of
an early termination of such lease. In the event that an Agency offer or early
termination of a lease is either rejected or no response is forthcoming from
the tenant in possession of an Agency-owned Site Parcel within thirty (30)&nbsp;days
following the date of transmittal of the Agency offer, or in the event the
Executive Director determines that further discussion, negotiation or
modification of a pending Agency offer is unlikely to be accepted by the tenant
in possession of an Agency-owned Site Parcel, then in such event the Executive
Director may refer the acquisition of such a possessory interest of such tenant
to the governing board of the Agency for its disposition as a Condemnation
Parcel (Tenant Possessory Interest) under Section&nbsp;2.3(d).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Agency may consider the initiation of proceedings to acquire a
Condemnation Parcel (and any Condemnation Parcel (Possessory Interest)) in
accordance with the terms and provisions of this Agreement and all applicable
law, including the provisions of the Redevelopment Plan and the CRL. The Owner
and the Agency each acknowledge and agree that the Agency reserves the sole and
absolute discretion to approve the terms of any condemnation proceeding and
that the Agency shall for itself reserve the discretion to consider whether
evidence supports the basis of each of the findings set forth at Code of Civil
Procedures Sections&nbsp;1240.030 and 1245.230 with respect to its consideration of
the referral of any Condemnation


<P align="center" style="font-size: 10pt">20
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Parcel (or Condemnation Parcel (Tenant Possessory Interest)) for acquisition by
exercise of the power of eminent domain. The Agency shall consider the
acquisition of each Condemnation Parcel (or Condemnation Parcel (Tenant
Possessory Interest), as applicable) an exercise of the eminent domain powers
of the Agency, if necessary, after the Executive Director has determined that
an Agency offer has been rejected or that further discussion, negotiation or
modification of a pending Agency offer is unlikely to be accepted by the owner
of a particular Site Parcel or the tenant in possession of a Site Parcel, as
applicable. Upon its acquisition of each Condemnation Parcel or Condemnation
Parcel (Tenant Possessory Interest), as applicable, (by judgment of
condemnation or otherwise), the Agency shall transfer all of its right, title
and interest in such Condemnation Parcel (or terminate the possessory interest
of the tenant in the case of a Condemnation Parcel (Tenant Possessory
Interest)) to the Owner under the Site Transfer Escrow for redevelopment
purposes in accordance with this Agreement. The Owner shall be responsible for
the payment and reimbursement of all of the following costs (e.g., Condemnation
Parcel Acquisition Costs) incurred by the Agency in connection with the
consideration and acquisition by the Agency of any Condemnation Parcel and/or
Condemnation Parcel (Tenant Possessory Interest):



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all amounts of just compensation payable to the owner of the
Condemnation Parcel or to the tenant in possession in the case of a
Condemnation Parcel (Tenant Possessory Interest);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expert witnesses and real property appraisal fees of the
Agency;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>escrow agent costs, title insurance and civil engineering
expenses of the Agency;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>trial costs and expenses, including attorney fees of the
Agency;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>interest and other sums payable by the Agency to the owner of
each Condemnation Parcel or to the tenant in possession in the case
of a Condemnation Parcel (Tenant Possessory Interest) as a court may
direct;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(vi)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>relocation benefits and expenses of persons in lawful
possession of such property as provided by applicable law;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(vii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all costs and expenses allocated by a court or payable by
the Agency in the event of an abandonment or dismissal of any
condemnation proceeding, relating to an Condemnation Parcel or to a
Condemnation Parcel (Tenant Possessory Interest).</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&#091;RESERVED&#151;NO TEXT&#093;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;The Schedule of Performance sets forth various dates and times
relating to the Site Parcel assembly program and the accomplishment of the
various tasks assigned to the responsible party and the satisfaction of the
conditions precedent for the Close of the Site Transfer Escrow for the Project
Site. The parties agree and declare that time is of the essence in the
performance of such tasks and the satisfaction of conditions precedent in view
of the large investment of resources which both parties recognize will be
required for the redevelopment of


<P align="center" style="font-size: 10pt">21
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">the Site and the undertaking of the Project. In the event that the date or
time for the performance of a task or the satisfaction of a condition relating
to the Site Parcel assembly program and/or the close of the Site Transfer
Escrow as set forth either in the text of this Agreement or in the Schedule of
Performance may not be achieved, then prior to such date or time set forth in
the Schedule of Performance the parties shall, as part of their consultations
under Section&nbsp;2.3(a), consider whether a modification to the Schedule of
Performance may be indicated. Any decision to approve a modification to a time
or date as provided in either this Agreement or the Schedule of Performance
shall be subject to the sole discretion of each party. A modification of a
time or date for performance of a particular matter relating to the Site Parcel
assembly program and/or the close of the Site Transfer Escrow which does not
result in a change of more than sixty (60)&nbsp;days may be approved on behalf of
the Agency by the Executive Director in his or her reasonable discretion. A
modification of a time or date for performance (or a series of such
modifications) relating to the Site Parcel assembly program and/or the close of
the Site Transfer Escrow which results in a change of more than sixty (60)&nbsp;days
shall be subject to the approval of the governing board of the Agency in its
reasonable discretion.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.4. Evidence of Funds Sufficient to Initiate Assembly of the
Project Site</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;A preliminary Site Assembly Budget is set forth in this Section&nbsp;2.4(a)
and is an estimate of the various costs and expenses for the assembly of the
Project Site and the disposition of the Master DDA Property to the Owner, which
the Owner and the Agency believe to be reasonable in light of the facts and
assumptions known to each of them as of the date of approval of this Agreement
by the governing board of the Agency. The anticipated amount of the funds
necessary for the assembly of the Project Site for the commencement of the
development of the Project are as follows:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="69%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(i)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Site acquisition costs for Master DDA Property
of 90.26 acres at $0.75 per square foot
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">$</TD>
    <TD align="right" valign="bottom">2,948,794</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(ii)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Site acquisition costs for the acquisitions of the
SBIAA Property of 46.6 acres at $0.75 per square
foot (estimated per square foot price)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">$</TD>
    <TD align="right" valign="bottom">1,522,422</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(iii)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Site acquisition costs for the acquisitions of the
Third Party Parcels by the Owner (estimated)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">$</TD>
    <TD align="right" valign="bottom">11,000,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(iv)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agency relocation assistance payments to tenants
and occupants of portions of the Master DDA
Property, including early lease termination payments
(estimated)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">$</TD>
    <TD align="right" valign="bottom">6,000,000</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Total net estimated site acquisition<BR>
costs for the Project Site
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">$</TD>
    <TD align="right" valign="bottom">21,471,216</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">22
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The obligation of the Agency to exercise its best efforts to complete
the assembly of those Site Parcels which the Owner cannot acquire through its
separate negotiations with the owners thereof, and to cause the Site Transfer
Escrow to be in a condition to close, is contingent upon and subject to
confirmation by the Agency that the funds necessary for the Agency to pay all
acquisition costs in connection with the close of the Site Transfer Escrow,
including all Condemnation Parcel Acquisition Costs and all tenant relocation
costs payable by the Agency, are available to the Agency from the Owner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;As of the date of this Agreement the Owner has provided the Agency
with satisfactory evidence that the Owner is financially qualified to undertake
the Project and to provide all funds through current cash available to the
Owner and loan commitments sufficient to acquire all of the Site Parcels.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;As a condition precedent to the transmittal of any offer of the Agency
to purchase a Site Parcel, the Owner shall submit to the Agency evidence
reasonably satisfactory to the Executive Director that the Owner: (i)&nbsp;has
obtained sufficient equity capital for the payment of the purchase price,
including any prepayment of a portion (or such portions) of the applicable
purchase price as may be requested by the Agency under Section&nbsp;2.2(d) with
respect to one or more Condemnation Parcels; (ii)&nbsp;either has obtained or can
obtain, as evidenced by a letter of intent or similar instrument, sufficient
equity capital and firm and binding commitments for construction financing for
the Project; and (iii)&nbsp;either has obtained or can obtain, as evidenced by a
letter of intent or similar instrument, sufficient equity capital and firm and
binding commitments for permanent financing; all as may be necessary for the
payment of the full amount of the applicable purchase price, to the Agency and
the construction of the Project in accordance with this Agreement. In lieu of
the foregoing, the Owner may submit evidence to the Agency that it has
sufficient funds of its own for the purposes set forth in this Section, which
evidence shall be acceptable to the Agency in its sole discretion.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Any and all Owner financing for the redevelopment of the Project shall
be obtained by the Owner from reputable, recognized and well-established
financial institutions or lending sources including, but not limited to, banks,
savings and loan institutions, insurance companies, real estate investment
trusts, pension programs and the like. Whenever the source of financing for
all or part of the development is from other than the Owner, the Owner shall
promptly submit the following to the Agency:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Copies of all construction and/or Site Parcel purchase
financing commitments received by the Owner; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Proof of acceptance of each such loan commitment by the Owner
and proof of payment of all up-front loan commitment fees, if any.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;The Executive Director shall approve or disapprove such documents
and/or financing commitments or sources within fifteen (15)&nbsp;business days of
receipt by the Agency of the documents and information required hereunder;
provided, however, that the failure of the Executive Director to disapprove any
of the foregoing matters in writing within said fifteen (15)&nbsp;business day
period shall be deemed to constitute approval thereof.


<P align="center" style="font-size: 10pt">23
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;In the event that by the latest date set forth in the Schedule of
Performance, the Owner may not have submitted to the Agency the evidence of
each of the financing commitments as set forth in this Section&nbsp;2.4, then in
such event either party may terminate this Agreement as provided in Section
5.10.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.5. Site Transfer Escrow.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Agency and the Owner shall establish with the Escrow Agent the
Site Transfer Escrow. The Owner and the Agency shall exchange the appropriate
documents through the Site Transfer Escrow and the Owner shall pay the Agency
the indicated amount of the acquisition costs for such portion of the Project
Site as may be transferred to the Owner at the close of the Site Transfer
Escrow. Such title as the Agency may acquire in a Condemnation Parcel shall be
transferred to the Owner through the Site Transfer Escrow. The Owner and the
Agency shall execute such additional escrow instructions as consistent with the
assembly, transfer and conveyance of any portion of the Project Site to the
Owner. The Escrow Agent is hereby empowered to act under this Agreement, and
upon indicating its acceptance of this Section&nbsp;2.5 in writing, shall carry out
its duties as Escrow Agent hereunder.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Agency and Owner each agree to deliver to the Escrow Agent all
documents necessary for the transfer of the indicated portions of the Site to
the Owner at the time of closing of the Site Transfer Escrow in conformity and,
within the times, as provided in this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Owner also shall pay the Escrow Agent (separate and apart from and in
addition to the applicable acquisition cost for each Site Parcel and/or
Condemnation Parcel and/or Condemnation Parcel (Possessory Interest) as may be
transferred by the Agency to the Owner upon the close of the Site Transfer
Escrow): (i)&nbsp;one half (1/2) of cost of the applicable Site Transfer Escrow
fees, including the escrow fees, costs and expenses of the Escrow Agent,
recording fees, messenger fees and the like, promptly after the Escrow Agent
has notified the Owner of the amount of such escrow fees, charges and costs
allocated to the Owner; (ii)&nbsp;all of the escrow costs allocated to the Agency,
if any, under Section&nbsp;2.7 at the close of each Site Parcel Escrow; and (iii)
the Owner shall also pay the documentary transfer taxes due upon the
recordation of the Agency Quit Claim Deed for the transfer of such portions of
the Project Site as are conveyed by the Agency to the Owner upon the close of
the Site Transfer Escrow.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Escrow Agent is authorized to:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>serve concurrently as the escrow agent under each of the Site
Parcel Escrows;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pay and charge the Owner and the Agency for their respective
shares of the applicable Site Transfer Escrow fees, charges and
costs payable under the Agreement; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>record any instruments delivered through the Site Transfer
Escrow at the instruction of the parties.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">24
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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Site Transfer Escrow shall close when the conditions set forth in
Section&nbsp;2.8 have been satisfied; provided however that such Site Transfer
Escrow shall be in a condition to close and shall close by a date not later
than January&nbsp;1, 2005, unless at least thirty (30)&nbsp;days before such date, the
parties agree to an extension of the date for the close of the Site Transfer
Escrow as provided in Section&nbsp;2.3(f).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Notwithstanding any other provision of this Section&nbsp;2.5 to the
contrary, if a Site Parcel has been referred by the Owner to the Agency for
acquisition as a Condemnation Parcel, the Owner shall deliver a portion of the
Condemnation Parcel Acquisition Cost for such Condemnation Parcel to the Agency
in immediately available funds outside of the Site Transfer Escrow within ten
(10)&nbsp;days following the written request of the Agency as provided in Section
2.2(d). The Agency shall use and apply such funds to cause the acquisition of
such Condemnation Parcel as provided in Section&nbsp;2.2(d).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;The Master DDA Property shall be transferred to the Owner in the
manner required pursuant to the Master DDA either upon the close of the Site
Transfer Escrow, subject to the consent and instructions of the Owner and the
Master Developer, or upon the close of a Site Parcel Escrow by and between the
Owner and the Master Developer. The purchase price to be paid by the Owner for
all portions of the Master DDA Property transferred to the Owner pursuant to
this Agreement shall be equal to $0.75 per square foot multiplied by the number
of Net Square Feet contained in the particular parcel of the Master DDA
Property to be transferred by the Agency to the Owner. The term &#147;Net Square
Feet&#148; as used herein shall mean the gross area of a parcel less only the
portion thereof situated in any public street right-of-way. Subject to the
separate consent and instructions of the Owner and the Master Developer, the
Escrow Agent is hereby authorized to establish a sub-escrow within the Site
Transfer Escrow for the transfer of the Master DDA Property by the Agency to
the Owner upon the payment to the Agency of the indicated amount of the
purchase price for the Master DDA Property and the satisfaction of the other
terms and conditions of the Master DDA Property transfer agreement by and
between the Owner and the Master Developer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Within ten (10)&nbsp;days following Agency notification to the Owner that a
Site Parcel which is subject to the Site Transfer Escrow is available for
inspection, the Owner may request the Agency to schedule and conduct an on-site
inspection of such Site Parcel within thirty (30)&nbsp;days thereafter, at a time
which is reasonably convenient for the owners and occupants of each Site
Parcel. The Owner may accompany the Agency staff during an inspection, and the
Owner or its agents may take intrusive samples of the soils and any structure
thereon to conduct such tests as its may deem appropriate for the detection of
any hazardous waste or substance and the characteristics of the geotechnical
condition of the soils of each such Site Parcel. Within thirty (30)&nbsp;days
following the date on which the Owner accompanies the Agency staff on any such
inspection of such a Site Parcel, the Owner shall confirm in writing to the
Agency whether:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner accepts the environmental and geotechnical
condition of the particular Site Parcel; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner requires additional time to conduct further testing
or analysis; or</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">25
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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner rejects the environmental or soil condition of the
Site Parcel.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;All Site Parcels that abut either Tippecanoe Avenue or Harry Sheppard
Boulevard shall be conveyed to the Owner to the centerline of Tippecanoe Avenue
and Harry Sheppard Boulevard, as applicable, and for purposes of determining
the purchase price thereof, the acreage of such Site Parcels shall be
calculated to the centerline of the right-of-way on Tippecanoe Avenue and Harry
Sheppard Boulevard, as applicable. All such Site Parcels that contain any
other street or driveway, including, but not limited to Memorial Drive, Paul
Villasenor Boulevard, and Del Rosa Avenue south of Harry Sheppard Boulevard,
shall have the net acreage calculated to include all such internal streets and
other driveways for purposes of calculating the purchase price amount and
acreage.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Promptly following the opening of the Site Transfer Escrow, the Agency
shall cause the Title Company to deliver to the Owner a preliminary title
report for the Site Parcels to be transferred to the Owner at the close of the
Site Transfer Escrow (together with legible copies of the recorded exceptions
to title noted in such report) for the Owner&#146;s review and approval as provided
in Section&nbsp;2.9. The Owner shall acquire lien-free merchantable title from the
Agency with respect to the Site Parcels to be transferred to the Owner at the
close of the Site Transfer Escrow, subject only to utility service easements
and other matters approved by the Owner (or approved by the Owner in
consultation with the Agency) and the Permitted, which shall be provided ninety
(90)&nbsp;days after close of escrow, Description of Permitted Title Exceptions
(Site Transfer Escrow)&#148;. For the purposes hereof permitted Title Exceptions
shall include the environmental and other covenants imposed on the Project Site
by the USAF, the effect of the LLMD and the other matters noted in Attachment
No.&nbsp;10. The Owner shall have twenty (20)&nbsp;days from its receipt of a
preliminary title report for such Site Parcels to be transferred to the Owner
at the close of the Site Transfer Escrow, to approve or reject the condition of
title in such Site Parcels. In the event that the Owner may not confirm its
acceptance or rejection of the condition of the title in such Site Parcels
within such period of time, the condition of title in such Site Parcels shall
be deemed rejected by the Owner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.6. Agency Relocation Assistance Program.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The relocation of each occupant of the Site shall be accomplished in
accordance with the provisions of Government Code Section&nbsp;7260, et seq., the
relocation assistance plan for the Project Site as approved by the governing
board of the Agency and other applicable law. The Agency shall take all
necessary and appropriate steps to provide for the relocation of tenants of
each affected Site Parcel that comprise the Master DDA Property except to the
extent as provided in Section&nbsp;2.6(e) in the case of a Third Party Parcel which
may be directly acquired by the Owner. In all cases, the Owner shall pay
directly or reimburse the Agency for all relocation costs and expenses legally
required to be paid by the Agency or the Owner to persons and businesses who
are displaced by the Project. The Agency shall have the sole discretion to
select and retain the services of consultants to assist the Agency with the
evaluation, processing and administration of each relocation assistance
transaction.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Prior to the time of the close of Site Transfer Escrow and the
subescrow for the Master DDA Property, the occupant or occupants of the
affected Site Parcels shall be given an


<P align="center" style="font-size: 10pt">26
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">appropriate written notice of displacement by the Agency, or the Owner if the
Owner has undertaken the Project Site assembly responsibilities, which
instructs the occupant to vacate the premises and surrender possession thereof
to the Agency (or to the Owner, if applicable), within the following times: (i)
ninety (90)&nbsp;days following the date of such notice of displacement, or (ii)
ninety (90)&nbsp;days following the close of the Site Transfer Escrow; or (iii)&nbsp;such
other date designated by the Agency. Each notice of displacement shall advise
the occupant that the Agency shall pay relocation assistance benefits to each
qualifying occupant in accordance with applicable law.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;In the event that the escrow for the Master DDA Property may close
with one or more occupants still in possession of any affected Site Parcel
within the Master DDA Property, then in such event, the Agency shall be
responsible for enforcing its notice of termination of lease and notice of
displacement against each such occupant, including without limitation, the
payment of all costs associated with either the Agency or the Owner obtaining a
writ of possession against such occupant in any case where such occupant may
not comply with the notice of displacement or otherwise be in breach of the
occupants lawful right of possession of such Site Parcel.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Notwithstanding anything in this Section&nbsp;2.6 or this Agreement to the
contrary, no occupant of the Site shall be deemed to be a beneficiary of any
obligation of the Agency to pay relocation assistance benefits until such time
as the Agency has issued its written notice of displacement to such occupant.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;With respect to any of Third Party Parcel acquired directly by the
Owner, the Owner shall pay all relocation amounts required under law and shall
obtain a waiver for the benefit of the Agency as to any subsequent claims that
may be filed by such property owners or occupants against the Agency. In the
event any owner or tenant of a Third Party Parcel files a relocation claim
against the Agency, regardless of the whether appropriate language was included
in the owner&#146;s purchase agreement for such Third Party Parcel, the Owner shall
be liable for any and all reimbursement payments to the Agency for those valid
claims that are paid by the Agency and other costs of the Agency related
thereto including third party consultants, appraisers, real estate advisers and
counsel to the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;The Owner acknowledges and agrees that no work of improvement of the
Project, other than on-site geotechnical testing and survey work, shall occur
on a Site Parcel (or a Condemnation Parcel, as applicable) until the occupants
thereof have surrendered possession of such Site Parcel under a notice of
displacement or otherwise.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.7. Site Parcel Escrows.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Escrow Agent shall serve as the escrow agent only for each Site
Parcel Escrow for those Site Parcels that will be transferred directly by the
third party owner thereof to the Owner. The Owner and the third party owner
shall be jointly responsible for paying for all of the customary and reasonable
costs, fees and charges of the Escrow Agent in connection with the performance
of its duties as escrow agent for each Site Parcel Escrow.


<P align="center" style="font-size: 10pt">27
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Promptly following the opening of each Site Parcel Escrow the Escrow
Agent shall cause the Title Company to deliver to the Owner a preliminary title
report for the particular Site Parcel (together with legible copies of the
recorded exceptions to title noted in such report), for the Owner&#146;s review and
approval as provided in Section&nbsp;2.9. The Owner shall acquire lien-free
merchantable title from the owner of each such Site Parcel, subject only to
utility service easements and other matters approved by the Owner (or approved
by the Owner in consultation with the Agency, as applicable) and the possessory
interests of month-to-month tenants in lawful possession of such Site Parcel.
Any Site Parcel acquired through the federal government shall be in such
condition of title as is typically transferred by the federal government which
is customarily in the form of a quit claim deed. The Owner shall have twenty
(20)&nbsp;days from its receipt of a preliminary title report for a particular Site
Parcel (together with copies of each tenant rental agreement, if applicable) to
approve or reject the condition of title in such Site Parcel. In the event
that the Owner may not confirm its acceptance or rejection of the condition of
title in a particular Site Parcel within such period of time, the condition of
title in such Site Parcel shall be deemed rejected by the Owner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;In connection with the Site Parcel Escrows, the Escrow Agent is
authorized to:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>serve concurrently as the escrow agent for the Owner and the
Agency under Section&nbsp;2.5 for the Site Transfer Escrow with respect
to such Site Parcel;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>follow the instructions of the Owner and such third party
owner as set forth in the applicable Site Parcel Purchase Agreement
for such Site Parcel; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>record any instruments delivered through a Site Parcel Escrow
as instructed by the Agency.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Unless otherwise instructed by the Agency, the Escrow Agent shall
coordinate and schedule the close of each Site Parcel Escrow to occur
concurrently when the conditions set forth in Section&nbsp;2.8 have been satisfied;
provided however, that each Site Parcel Escrow as necessary or appropriate for
the initiation of the improvement of the Project by the Owner shall be in a
condition to close and shall close by a date not later than January&nbsp;1, 2005, or
such later date as confirmed in writing to the Escrow Agent by the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;The Owner shall cause to be conducted an engineering survey of the
precise size and location of each Site Parcel at the sole cost and expense of
the Owner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.8. Conditions For Close of Site Parcel Escrows.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Owner shall have no obligation to the Agency to complete the
acquisition of any Third Party Parcel or to pay the purchase price for any
other Site Parcel and accept the transfer of any Site Parcel from the Agency,
the Master Developer and/or the SBIAA, as applicable, and cause the close of
the Site Transfer Escrow to occur until the following conditions have been
satisfied:


<P align="center" style="font-size: 10pt">28
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has approved the environmental condition of each
Site Parcel as set forth in Section&nbsp;2.10(b);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has approved the environmental condition of each
Condemnation Parcel or Condemnation Parcel (Possessory Interest), as
applicable, as set forth in Section&nbsp;2.10(c);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has approved the condition of title of each Site
Parcel, including each Condemnation Parcel except as to the effect
on insurable title of the pending Condemnation proceedings, as set
forth in Section&nbsp;2.9(e);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has confirmed within 110&nbsp;days following the date of
the order for prejudgment possession for each such particular
Condemnation Parcel or Condemnation Parcel (Possessory Interest), as
applicable, that the Title Company has agreed to provide insurable
title in favor of the Owner for each such Condemnation Parcel or
Condemnation Parcel (Possessory Interest), as applicable, on terms
reasonably acceptable to the Owner as set forth in Section&nbsp;2.9(e);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has obtained the approval from the City of its
Development Project Application for the Project on terms and
conditions reasonably acceptable to the Owner by not later than the
date indicated in the Schedule of Performance;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has obtained the final CEQA determination and other
related CEQA documentation from the City after the filing of all
required notices which, in the sole discretion of the Owner,
provides for the Project to be undertaken with such mitigation
measures that the Owner accepts as an exaction to be imposed against
the Project;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(7)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Title Company shall be in a position to deliver its
policy of title insurance in favor of the Owner as provided in
Section&nbsp;2.9 at the close of the Site Transfer Escrow and the Site
Transfer Escrow is otherwise in a condition to close;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(8)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>each Site Parcel Escrow is in a condition to close and the
third party owner of each such Site Parcel subject to a Site Parcel
Escrow is not in material default thereunder;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(9)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Agency has confirmed to the Owner the satisfaction of its
conditions under Section&nbsp;2.8(b); and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(10)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Agency is not then in default under this Agreement.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Agency shall not be obligated to transfer all or any portion of
the Project Site to the Owner and cause the close of the Site Transfer Escrow
to occur until the following conditions have been satisfied:


<P align="center" style="font-size: 10pt">29
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Site Parcel Escrow for the Master DDA Property (or the
subescrow for such transfer in the Site Transfer Escrow under
Section&nbsp;2.5(e))is in a condition to close concurrently with the
close of the Site Transfer Escrow;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Agency has provided for the transfer of each Condemnation
Parcel or Condemnation Parcel (Possessory Interest), as applicable,
either in fee or subject to a entry of a final judgment in
condemnation;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has confirmed to the Agency the satisfaction of its
conditions under Section&nbsp;2.8(a);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has obtained the approval from the City of its
Development Project Application for the Project on terms and
conditions reasonably acceptable to the Owner by not later than the
date indicated in the Schedule of Performance subject to
verification by the Executive Director that such approval is
complete in all respects to allow for the commencement of
construction of the Project upon transfer of title of the Master DDA
Property to the Owner;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Agency has obtained written verification from the City
that the Development Project Permits will be issued by the City not
later than thirty (30)&nbsp;days after the close of escrow for the Master
DDA Property;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Agency has received the Disposition Request (as defined
in the Master DDA) from the Master Developer stating that all
conditions precedent to the Agency transfer of the Master DDA
Property to the Owner has occurred with respect to all agreements
and obligations by and between the Owner and the Master Developer,
and that the Agency may transfer title in the Master DDA Property to
the Owner in accordance with such Disposition Request;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(7)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has received final approvals from the appropriate
City department or City entity for one or more parcel maps for the
entirety of the Project Site in compliance with the Subdivision Map
Act of the State of California, and the City has issued a
Certificate of Subdivision Compliance with respect to said parcel
map or parcel maps;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(8)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has obtained the necessary CEQA approvals and
documentation from the City with respect to the approval of the
Project by the City;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(9)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has received the necessary written approvals from
the Design Review Committee established pursuant to the CC&#038;Rs, as
the same may be applicable to the Project Site for the Project
demonstrating compliance with the Design Guidelines;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(10)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has delivered to the City all requested consents,
waivers and affirmative votes required for the inclusion of the
entire Project Site within the LLMD;</TD>
</TR>

</TABLE>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" nowrap align="right">(11)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner has delivered the applicable purchase price for the
Site Parcels in immediate funds to the Escrow Agent in the case of
each of the Site Parcel Escrows and to the Escrow Agent in the case
of the Site Parcels and/or Condemnation Parcels to be transferred to
the Owner at the close of the Site Transfer Escrow;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(12)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner is not then in default under this Agreement; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(13)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the governing board of the Agency shall have ratified and
confirmed the written finding of the Executive Director, that each
of the conditions identified above in Section&nbsp;2.8(b)(1) through
(b)(12), inclusive have been satisfied by the Owner. The Executive
Director shall prepare such a written finding and submit a written
request to the governing board of the Agency to ratify and confirm
such a finding within fifteen (15)&nbsp;days following the receipt by the
Executive Director of a written certification by the Owner that the
Owner reasonably believes that each of the conditions identified in
Section&nbsp;2.8(b)(1) through (b)(12), inclusive, have been satisfied,
or shall be satisfied upon the date of such ratification and
confirmation by the governing board of the Agency.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.9. Obligation of the Agency to Provide Title Insurance at Time
of Close of Site Transfer Escrow</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;As of the date of this Agreement, the Agency does not own fee title or
have any other equitable interest to any portion of the Project Site except for
the Master DDA Property which is encumbered by the Master DDA with the Master
Developer. The parties intend that the Agency shall exercise its best effort
to cause the condition of title in the Master DDA Property and such other
portions of the Project Site to be transferred to the Owner upon the close of
the Site Transfer Escrow to be in a marketable condition for the purposes of
the redevelopment of the Project by the Owner subject to the conditions
required by the USAF to be contained in the Agency Quit Claim Deed and the
other conditions required under applicable federal and State law.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In addition to the preliminary title report information as shall be
delivered to the Owner under Section&nbsp;2.5(h) and Section&nbsp;2.7(b), within sixty
(60)&nbsp;days following the approval of this Agreement by the governing board of
the Agency and subject to the cooperation of the Owner in completing a survey
for the Project Site in a form tentatively acceptable to the Title Company for
purposes of this Section&nbsp;2.9(b), the Agency shall cause to be delivered to the
Owner a preliminary title report for an Extended Coverage ALTA Owner&#146;s Policy
(Form&nbsp;B 1970) for each parcel of land, or portion thereof, included in the
Project Site, together with legible copies of all instruments referred to in
the title report as a title exception. Within thirty (30)&nbsp;days following its
receipt of either the preliminary title report information delivered to the
Owner under Section&nbsp;2.5(h) and Section&nbsp;2.7(b), or the title survey information
set forth in Section&nbsp;2.5(g) and Section&nbsp;2.9(f), the Owner shall specifically
identify and give notice in writing to the Agency as part of its Owner
Investigations of each exception or disapproval of any matter relating to title
in the Project Site which the Owner may in its reasonable discretion take (each


<P align="center" style="font-size: 10pt">31
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">referred to as a &#147;Title Exception&#148;). Each Title Exception shall reference the
particular Site Parcel or Condemnation Parcel, to which it corresponds, and
describes in suitable detail the action which the Owner believes is indicated
to cure or correct such Title Exception. If the Owner fails to disapprove a
title matter in writing delivered to the Agency as a Title Exception within
thirty (30)&nbsp;days following receipt, then each Title Exception shall remain and
be deemed a Title Exception. The Agency shall have no obligation to cure any
title defect nor shall the Agency be considered in default for failure to cure
any title defect for any of the Project Site as further provided in subsection
(c)&nbsp;below. The sole remedy of the Owner shall be to either accept such defect,
cure such defect or to terminate this Agreement as provided in subsection (d)
below.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Within twenty (20)&nbsp;days following its receipt of notice of a Title
Exception from the Owner under Section&nbsp;2.9(b), the Agency may, but is under no
obligation to do so, confirm in writing to the Owner whether each such Title
Exception shall be cured, at the time of the close of the Site Transfer Escrow;
provided however that for the purposes of this Section&nbsp;2.9, a month-to-month
possessory interest of an occupant in lawful possession of a Site Parcel shall
be deemed cured by the Agency as provided in Section&nbsp;2.6 and Section&nbsp;2.8, if
the Agency has issued its notice of displacement to such occupant prior to or
concurrently upon the close of the Site Transfer Escrow. If the Agency may
fail to confirm whether one or more of such Title Exceptions shall be cured by
the Agency, within such twenty (20)&nbsp;day period of time, then the Title
Exception shall remain, and the Agency shall have no further duty to cure such
Title Exception, and the Owner may, within five (5)&nbsp;days thereafter in writing
addressed to the Agency and the Escrow Agent, elect to waive its objection to
such Title Exception.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;If by the date set forth in the Schedule of Performance, any Title
Exception that may remain which has not been cured by the Agency under Section
2.9(c), or which has not been expressly waived in writing by the Owner, or
otherwise not resolved to the mutual satisfaction of the parties, then the
Owner may upon thirty (30)&nbsp;days written notice to the Agency which references
this Section&nbsp;2.9, terminate this Agreement and cancel the Site Transfer Escrow.
In the event of a termination of the Agreement and cancellation of the Site
Transfer Escrow on the grounds set forth in this Section&nbsp;2.9, the Agency shall
be responsible for paying for all of the reasonable and customary escrow
cancellation and preliminary title report costs of the Title Company, if any,
and the parties shall each be released from any further responsibility or
liability hereunder, except as may arise under Section&nbsp;2.10 or Section&nbsp;6.8.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;For the purpose hereof, the Agency&#146;s lis pendens in its condemnation
proceeding and order, or proposed order of prejudgment possession which affects
a Condemnation Parcel, shall be deemed to be a &#147;Title Exception&#148; whether or not
such a Title Exception may have been identified in the preliminary title report
under Section&nbsp;2.9(b). With respect to any Condemnation Parcel, the provisions
of Sections&nbsp;2.9(c) and 2.9(d) shall be applicable to the best efforts
responsibility of the Agency to cure any Title Exception affecting such a
Condemnation Parcel.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;As part of its Owner Investigation, the Owner shall prepare a survey
of the Project Site by a civil engineer selected by the Owner to enable the
Title Company to issue at the time of either the close of the Site Transfer
Escrow such additional items of survey title insurance coverage or title
insurance survey endorsements as the Owner may require; provided however that
no exception to title as may be indicated by such survey shall be deemed to be
a Title


<P align="center" style="font-size: 10pt">32
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Exception for the purposes of Section&nbsp;2.9(c) unless the Owner delivers written
notice of such title survey exception to the Agency by no later than ninety
(90)&nbsp;days following the opening of the Site Transfer Escrow. Such survey shall
comply with the requirements set forth in Section&nbsp;2.5(g) regarding the size of
each Site Parcel and the net acreage calculation for purposes of determining
the applicable purchase price payable to the Agency.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;The purchase price payable by the Owner for those Site Parcels either
owned by the Agency or to be transferred to the Owner at the close of the Site
Transfer Escrow shall be subject to a final confirmation prior to the close of
the applicable escrow based upon the area of the lands to be transferred to the
Owner as confirmed by the ALTA title survey in accordance with the provisions
of Section&nbsp;2.5(g).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Provided the Title Company is prepared to issue its policy of title
insurance to the Owner in a form reasonably acceptable to the Owner, the Agency
shall pay the cost of the premium of title insurance in favor of the Owner for
the Master DDA Property and such other Site Parcels transferred to the Owner at
the close of the Site Transfer Escrow at the time of the close of the Site
Transfer Escrow in an amount equal to the premium payable under a standard CLTA
Owner&#146;s Policy. The Owner shall be responsible for paying the additional cost
of the title insurance premium charged by the Title Company to issue the final
form of the policy of title insurance in favor of the Owner described in the
first sentence of this subsection in excess of the amount of a standard CLTA
Owner&#146;s Policy premium payable by the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.10. Due Diligence Period and Owner Investigations</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Within ten (10)&nbsp;days following the date on which the Agreement is
fully executed by the parties, the Agency shall make available for inspection
and copying by the Owner all of the public record documents requested by the
Owner pertaining to the redevelopment of the Project Site then in possession of
the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Owner shall have sixty (60)&nbsp;days following the later of the date
of the opening of the last of the Site Parcel Escrows or the Site Transfer
Escrow to complete all of its Owner Investigations at its sole cost and expense
subject to the provisions of Section&nbsp;2.5(f); provided however, that all such
Owner Investigations shall have been completed by a date not later then
November&nbsp;1, 2004, unless at least ten (10)&nbsp;days prior to such date, the parties
agree, as provided in Section&nbsp;2.3(f), to a specific extension of the date by
when the Owner shall have completed its Owner Investigations. Any work, review
or analysis relating to Owner Investigations of the condition and suitability
of a Third Party Parcel for the Project including any intrusive testing,
sampling or engineering study shall be subject to the applicable provisions of
the Site Parcel Acquisition Agreement for the particular Site Parcel. The
Agency makes no representation or warranty to the Owner relating to the
suitability of the Project Site for use by the Owner. The Owner shall rely
solely and exclusively upon the results of its Owner Investigations of the
Project Site including geotechnical soil conditions and compliance with
applicable laws pertaining to the use of the Project Site by the Owner and any
other matters relevant to or arising from the suitability of the Project Site
for the Project, including without limitation, a construction loan commitment
in favor of the Owner from a third party construction lender on terms
satisfactory to the Owner, as the Owner may deem necessary and proper.


<P align="center" style="font-size: 10pt">33
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Within thirty (30)&nbsp;days following the date on which a Condemnation
Parcel is made available by the Agency for inspection by the Owner, the Owner
shall complete its Owner Investigations and confirm whether:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner accepts the environmental condition and
geotechnical condition of the particular Condemnation Parcel; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner rejects the environmental conditions or the
geotechnical condition of the particular Condemnation Parcel.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the case of a Condemnation Parcel, the conduct of any such Owner
Investigations on such lands shall be subject to the appropriate order of the
Court and the concurrence of the Agency. The Agency shall exercise best
efforts to assist and cooperate with the Owner to undertake such investigation
one or more Condemnation Parcels upon written request of the Owner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Owner shall give the Agency and the Escrow Agent written notice of
its satisfaction of the condition of each Site Parcel, or portion thereof
included in the Project Site, which references this Section&nbsp;2.10 within the
period of time set forth in Section&nbsp;2.10(b) for each Site Parcel to be acquired
by the Owners at the close of a Site Parcel Escrow, within sixty (60)&nbsp;days for
each Site Parcel to be acquired by the Owner at the close of the Site Transfer
Escrow and within thirty (30)&nbsp;days following the date on which the Condemnation
Parcel is made available by the Agency for inspection by the Owner in the case
of a Condemnation Parcel. In the event that the Owner, in its sole and
absolute discretion, is not satisfied with any aspect of the condition of a
Site Parcel, or a Condemnation Parcel, as applicable, then the Owner shall
deliver to the Agency and the Escrow Agent a rejection notice which references
this Section&nbsp;2.10 and describes the particular matter which the Owner rejects.
If such notice of rejection is delivered, then the parties shall confer about
the means by which such rejection may be withdrawn by the Owner for particular
Site Parcel, and thereafter, until such time as the rejection may be withdrawn
by the Owner at its option, the Agency shall have no further obligation to
proceed with the Site assembly program. If the Owner does not accept the
condition of one or more Site Parcels (or Condemnation Parcels, as applicable)
by the end of the Due Diligence Period as evidenced by the appropriate written
notice to Agency and the Escrow Agent, the Owner shall be deemed to have
rejected the condition of the Project Site.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Owner acknowledges that there is a high probability that the Project
Site contains structures which have been improved with asbestos containing
materials (&#147;ACM&#148;) and lead-based paint (&#147;LBP&#148;) and that if the Owner delivers
its notice of acceptance of the Project Site, and later the Site Transfer
Escrow closes, that the Owner shall be solely responsible, at no cost to the
Agency, for abating and transporting such ACM and/or LBP-containing demolition
wastes for disposal off-site at a lawful waste disposal facility in the manner
required by law. The Owner acknowledges that the Agency assumes no liability
for damages for personal injury, illness, disability, or death to the Owner, or
any person, including members of the general public, arising from or incident
to the use, abatement, handling, removal, transportation or disposal of any ACM
or LBP from or in any structure on the Project Site. The Owner further
acknowledges that there


<P align="center" style="font-size: 10pt">34
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD>is a high probability that the Project Site contains buried vaults, subsurface
debris and non-native soils as previously imported by unknown third persons
from off-site locations, abandoned infrastructure and utilities and other
man-made materials associated with the prior improvement and use of the Site.
The Owner shall accept all such conditions of the Project Site without any
liability to the Agency whatsoever upon delivery of its written notice of
acceptance of condition. The written notice of acceptance of condition of the
Project Site shall evidence the acceptance of the Project Site in its existing
&#147;AS IS&#148;, &#147;WHERE IS&#148; and &#147;SUBJECT TO ALL FAULTS&#148; condition as of the last day of
the Due Diligence Period. At its sole option and discretion, the Owner may
elect to accept the Project Site in its &#147;AS IS&#148;, &#147;WHERE IS&#148; and &#147;SUBJECT TO ALL
FAULTS&#148; condition at any time before the end of the Due Diligence Period;
provided however that the Owner may not commence the improvement of the Project
including the demolition of any structure thereon, until all of the other
conditions for the occurrence of the close of the Site Transfer Escrow have
been satisfied. Nothing herein shall limit the rights of the Owner and
obligations of the Agency as set forth in 6.13(b) below.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Owner recognizes that the Project Site was a part of the former NAFB
which was a National Priority List (&#147;NPL&#148;) site as designated by the EPA. The
Project Site contains Hazardous Substances which were remediated by the USAF
pursuant to the Environmental Laws and substantial portions of the Project Site
contained ground water contamination which has been partially remedied by the
USAF as of the date of this Agreement. The Owner further recognizes and agrees
that the Agency Quit Claim Deed will contain further restrictions and
impositions regarding the restrictive uses of the Project Site.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.11. Access to Site for Owner Investigations</B>. During the
applicable Due Diligence Period for the Project Site, the Agency shall provide
the Owner and the Owner&#146;s agents with access to all Agency-owned Site Parcels
within the Project Site during normal business hours in order to conduct the
Owner Investigations as may be indicated. Such entry shall be subject to the
terms and conditions of a property inspection license agreement as customarily
used by the Agency in connection with due diligence investigations of its lands
by third-party developers. The performance of any work of the Owner
Investigations on the Project Site shall not unreasonably disrupt the use or
occupancy of each owner of the applicable Site Parcel or the business
operations of Agency. The Owner shall be liable for any damage or injury to
any person occasioned by the acts of the Owner, its employees, agents or
representatives during the course of performance of any Owner Investigations on
the Project Site, and the Owner shall, and does hereby, indemnify and hold
harmless Agency and its officers, directors, agents and employees from any and
all liens, claims, demands or liability resulting therefrom. Owner access to a
Condemnation Parcel shall be subject to an appropriate order of the Court, as
set forth in Section&nbsp;2.10. Prior to commencing any Owner Investigation, the
Owner shall deliver evidence of insurance to the Agency as provided by Section
2.20 hereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.12. Master DDA Requirements.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Owner is aware of and has obtained and reviewed a copy of the
Master DDA of the Agency with the Master Developer which includes the Project
Site in addition to other properties included within the Master DDA. Upon
acquisition by the Owner of any of the Project Site, all properties that
comprise the Project Site will be subject to those terms and


<P align="center" style="font-size: 10pt">35
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">conditions required by the Master DDA as shall be contained in this Agreement
and in the Agency Quit Claim Deed. The Owner shall have no duty or obligation
for any provisions contained in the Master DDA which are not specifically set
forth either in this Agreement, the Agency Quit Claim Deed or any other
ancillary agreement by and between the Owner and the Agency. The Owner shall
agree to record covenants or other reasonably satisfactory instruments against
all Third Party Parcels or any other Site Parcel that is not conveyed by the
Agency to the Owner under the Site Transfer Escrow to comply with this
requirement that the provisions of this Agreement shall apply to the entire
Project Site.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Owner shall comply with the provisions of the CC&#038;Rs, the Design
Guidelines, the LLMD as the same are applicable to the Project Site.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.13. &#091;RESERVED&#151;NO TEXT&#093;</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.14. &#091;RESERVED&#151;NO TEXT&#093;</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.15. &#091;RESERVED&#151;NO TEXT&#093;</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.16. &#091;RESERVED&#151;NO TEXT&#093;</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.17. &#091;RESERVED&#151;NO TEXT&#093;</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.18. Acquisition Costs in Excess of Line Item&nbsp;Set Forth In
Section&nbsp;2.</B><B>4(a)</B><B> for the Project Site.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;In the event that at any time before the Agency transmits an offer to
acquire any Site Parcel for the Project Site, the Executive Director determines
that the actual acquisition costs of the Agency for one or more such Site
Parcels, as payable by the Owner, may materially exceed the estimate of such
acquisition cost as shown in Section&nbsp;2.4 as of the date of approval of this
Agreement by the governing board of the Agency, then in such event, the
Executive Director shall notify the Owner that such actual acquisition costs
may likely be exceeded. Failure to so notify the Owner shall not be a default
under this Agreement. The parties recognize that the dollar amounts set forth
in Section&nbsp;2.4 are only estimates and that neither the Agency nor the Owner has
committed or represented that such dollar figures may be the final actual
acquisition costs for the Project Site. The Owner further recognizes that
notwithstanding the estimated dollar amounts set forth in Section&nbsp;2.4, in the
event the actual costs exceed said amounts, the Owner will be required to pay
all such excess amounts if the Owner elects to continue with this Agreement and
the development of the Project.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In the event that at any time after the Agency has transmitted one or
more offers to acquire any Site Parcel for the Project Site, the Executive
Director determines that the acquisition costs payable by the Agency before the
Site Transfer Escrow is in a condition to close, as applicable, may exceed the
sum as estimated in Section&nbsp;2.4(a), then in such event, the Executive Director
shall give the Owner written notice of such determination, and the parties
shall consider in the mutual discretion of each of them, when the Agency
acquisition costs in excess of such estimate shall be paid by the Owner.
During such period of consideration by the


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Owner whether to pay such excess acquisition costs, the Agency may in its
discretion elect to delay the transmittal of a notice of termination of this
Agreement to the Owner or to defer the termination date as previously set forth
in such notice as otherwise provided under Section&nbsp;5.10(c).



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.19. No Assistance to the Owner in Connection with the
Construction of the Project. </B>It is understood and agreed by the Owner that
the Agency shall not provide any financial assistance to the Owner in
connection with the construction of the Project. The Owner shall be solely
responsible for paying for the costs of all design work, construction, labor,
materials, fees and permit expenses associated with the improvement of the
Project.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.20. Insurance. </B>The Owner shall continuously maintain
comprehensive general liability insurance applicable to the Property, buildings
and improvements thereon, covering losses from damage to property and injury or
death to persons with a policy limit of no less than Ten Million Dollars
($10,000,000), including an extended liability endorsement, if applicable to
the Property and naming the Agency as an additional insured. Unless otherwise
specified in the Agreement, or unless expressly and in each instance waived by
the Agency in writing, said insurance shall (a)&nbsp;be placed with companies
licensed to do business in the State of California, and (b)&nbsp;be placed with
companies with a Best&#146;s rating of &#147;A&#148; or better and indicated to be of
sufficient size to qualify for Best&#146;s designation VIII. The Owner assumes all
risk of insufficient coverage of risks or amounts and acknowledges that the
insurance requirements set forth herein are not intended to indicate what the
Owner should, in its exercise of its prudent and reasonable judgment, obtain.
The insurance certificates shall confirm that no insurance policy shall be
cancelled or modified without thirty (30)&nbsp;days prior written notice to the
Agency, except that the notice period shall be ten (10)&nbsp;days for non-payment of
premiums. The Owner shall maintain said policies in the possession of the
Owner and said policies shall be kept available by the Owner at all times for
inspection by the Agency, its agents or insurers. Upon request, the Owner
shall provide the Agency with proof of premiums paid for each policy term so
long as the Agreement remains in effect.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.21</B>. <B>Warranties and Representations by the Owner</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Owner hereby makes the following representations, covenants and
warranties as of the date of this Agreement and acknowledges that the execution
of this Agreement by the Agency has been made in material reliance by the
Agency on such covenants, representations and warranties:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each of the persons acting on behalf of the Owner has been
duly authorized to so act in such capacity under the laws of the
State of California. The Owner has the legal power, right and
authority to enter into this Agreement and the instruments and
documents referenced herein, and to consummate the transactions
contemplated hereby.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Owner has taken all requisite action and obtained all
requisite consents in connection with entering into this Agreement.</TD>
</TR>

</TABLE>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The persons executing any instruments for or on behalf of the
Owner were fully authorized to act on behalf of the Owner and that
the Agreement is valid and enforceable against the Owner in
accordance with its terms and each instrument to be executed by the
Owner pursuant hereto or in connection therewith will, when
executed, be valid and enforceable against the Owner in accordance
with its terms. No approval, consent, order or authorization of, or
designation or declaration of any other person, is required in
connection with the valid execution and delivery of and compliance
with this Agreement by the Owner.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There are no pending or, to the best of Owner&#146;s knowledge,
threatened claims, actions, allegations or lawsuits of any kind,
whether for personal injury, property damage, landlord-tenant
disputes, property taxes or otherwise, that are not covered by
insurance or that could materially and adversely affect the
operation or value of the Project or prohibit the performance of any
provision of this Agreement by the Owner.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes of this Section&nbsp;2.21, the terms &#147;to the best of
Owner&#146;s knowledge&#148; or &#147;to Owner&#146;s knowledge&#148; shall mean the actual
knowledge of Jack H. Brown and Bruce D. Varner.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If the Owner becomes aware of any act or circumstance which would
change or render incorrect, in whole or in part, any representation or warranty
made by the Owner under this Agreement, whether as of the date given or any
time thereafter whether or not such representation or warranty was based upon
Owner&#146;s knowledge and/or belief as of a certain date, the Owner will give
immediate written notice of such changed fact or circumstance to the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.22</B>. <B>Warranties and Representations by the Agency</B>. The Agency
hereby makes the following representations, covenants and warranties and
acknowledges that the execution of this Agreement by the Owner have been made
in material reliance by the Owner on such covenants, representations and
warranties:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Agency is a duly organized and validly existing joint powers
authority authorized to exercise the powers of a community
redevelopment law under the laws of the State of California. The
Agency has the legal right, power and authority to enter into this
Agreement and the instruments and documents referenced herein and to
consummate the transactions contemplated hereby. The persons
executing this Agreement and the instruments referenced herein on
behalf of the Agency hereby represent and warrant that such persons
have the power, right and authority to bind the Agency.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Agency has taken officials actions required in connection
with entering into this Agreement.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Agreement is, and all agreements, instruments and
documents to be executed by the Agency pursuant to this Agreement
shall be, duly executed by and are or</TD>
</TR>

</TABLE>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shall be valid and legally binding upon the Agency and enforceable
in accordance with their respective terms.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Neither the execution of this Agreement nor the consummation
of the transactions contemplated hereby shall result in a breach of
or constitute a default under any other agreement, document,
instrument or other obligation to which the Agency is a party or by
which the Agency may be bound, or under law, statute, ordinance,
rule, governmental regulation or any writ, injunction, order or
decree of any court or governmental body applicable to the Agency or
to the Project Site.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 2.23. Special Financial Incentives of Agency for Benefit of the
Owner.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Notwithstanding the provisions of Section&nbsp;2.19, the Agency hereby
commits to provide financial incentives to the Owner equal to the dollar amount
of the purchase price received by the Agency for the (i)&nbsp;Master DDA Property,
(ii)&nbsp;the Parcel D-1, and (iii)&nbsp;the SBIAA Properties to the extent that the
Owner pays to the Agency and which payment is permitted to be retained by the
Agency as to any of such purchase price with respect to the Parcel D-1 and the
SBIAA Properties, less any other incentives provided in the form of demolition
work or other on-site preparation work with respect to the Project Site (herein
referred to, together with the deductions for funds expended by the Agency on
the Project Site, as the &#147;Purchase Price Incentive&#148;). To the extent that all
or any portion of the purchase price paid by the Owner to the Agency for either
or both the Parcel D-1 and/or the SBIAA Properties, must be remitted to third
parties due to factors not within the control of the Agency, including without
limitation amounts payable for the release of any FAA airport use restriction
affecting such land, such portion of the purchase price amounts as remitted to
this parties shall not be deemed to be a part of the Purchase Price Incentive.
The form of the Purchase Price Incentive to be offered to the Owner by the
Agency may take any form of financial assistance to the extent limited only by
the CRL with regard to any site preparation cost, demolition, infrastructure
costs, utilities construction and undergrounding, and off-site public
improvements. Such Purchase Price Incentive shall be provided to the Owner not
later than the date of issuance of a Certificate of Completion pursuant to this
Agreement unless agreed otherwise by the Owner at its sole discretion. The
Owner shall submit a written request to the Agency specifying the form and
dollar amount of each component of the requested Purchase Price Incentive. The
Executive Director is hereby authorized to remit on behalf of the Agency such
payments subject to the approving legal opinion of the Agency General Counsel
as to the legality of such request for the Purchase Price Incentive and the
compliance with the specified use of the Purchase Price Incentive with the
terms and provisions of this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Subject to the specific pledge as hereinafter provided and the further
limitations provided in this subsection (b)&nbsp;and for the real property as
described herein, the Agency has pledged to the Owner those certain tax
increment revenues available to the Agency that are net of (i)&nbsp;payments
required pursuant to the Redevelopment Plan to be distributed by the County of
San Bernardino Auditor-Controller in accordance with the requirements of the
Redevelopment Plan, (ii)&nbsp;payments to be made to taxing entities pursuant to all
pass-through agreements and any other fiscal impact agreements with taxing
entities, (iii)&nbsp;all statutory pass-through payments or reimbursement payments
whether to the State or to any other governmental entity, including the


<P align="center" style="font-size: 10pt">39
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">County, municipalities and school districts, inclusive of what is presently
referred to as ERAF payments, and (iv)&nbsp;such deposits as may be made annually to
the Low and Moderate Income Housing Fund of the Agency (such net amount is
herein referred to as the &#147;Tax Increment Revenues&#148;). The parties reasonably
estimate that the Tax Increment Revenues are approximately equal to twenty-five
percent (25%) of the one percent (1%) real property taxes paid based upon a
series of calculations that shall be preformed by a consultant selected by and
retained by the Agency. All costs of said consultant to produce the reports
and reconciliation required pursuant to this Agreement shall be paid from the
Tax Increment Revenues as a first lien thereon.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Owner recognizes that the Agency has previously pledged to the Master
Developer all tax increment revenues generated from properties located within
the &#147;Property&#148; as said term is defined in the Master DDA. The Owner also
recognizes that the properties which comprise the Master DDA Property (defined
in the Master DDA as the Property) only comprise a portion of the land area
included within the Project Site. To the extent Tax Increment Revenues are
generated within those land areas of the Project Site that are not a part of
the Property (as this term defined in the Master DDA) and as determined by the
Owner subject to acceptance of such determination by the County of San
Bernardino Tax Assessor, the Agency hereby pledges such Tax Increment Revenues
(herein referred to as the &#147;Non-DDA Tax Increment&#148;) to Owner for the repayment
and reimbursement of &#147;Qualified Redevelopment Expenditures&#148; (as hereinafter
defined) paid and incurred by the Owner in furtherance of the Project. Such
pledge of Non-DDA Tax Increment shall be for the period of time from the date
of this Agreement through and including the date which is ten (10)&nbsp;years after
the termination of the Redevelopment Plan, or such later date as may then be
allowed pursuant to State law or any amendment to the Redevelopment Plan if
permitted by State law.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Agency further pledges to the Owner those additional Tax Increment
Revenues attributable to the Project which are not otherwise required to be
paid pursuant to the Master DDA to the Master Developer based upon written
direction of the Master Developer to the Agency from time-to-time in accordance
with any agreements by and between the Owner and the Master Developer (herein
referred to as the &#147;Surplus DDA Tax Increment&#148;). The Surplus DDA Tax Increment
shall be payable to the Owner from and after the first available date
subsequent to the date of execution of this Agreement through and including the
date which is ten (10)&nbsp;years after the termination of the Redevelopment Plan,
or such later date as may then be allowed pursuant to State law or any
amendment to the Redevelopment Plan if permitted by State law. The Owner
recognizes that the Master DDA pledges certain tax increment revenues of the
Agency to the Master Developer for the period of time from the date of the
Master DDA through and including June&nbsp;30, 2018. The Owner further recognizes
that it is possible for the Owner to receive some portion of the Surplus DDA
Tax Increment prior to said date of June&nbsp;30, 2018, and subsequent to such date
all of the tax increment revenues generated by the Project will be deemed to be
Surplus DDA Tax Increment and shall be payable to the Owner together with the
Non-DDA Tax Increment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Qualified Redevelopment Expenditures&#148; as used herein shall mean any
expenditures paid and incurred by the Owner in furtherance of the Project for
such items which include specifically the following: (i)&nbsp;fees paid to the City,
school districts and any other governmental


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">entities; (ii)&nbsp;the costs of demolition of all above ground and below ground
buildings, structures and infrastructures and removal of existing streets,
driveways and utilities; (iii)&nbsp;the costs of any public improvements, backbone
utilities and infrastructure items, including, but not limited to, streets,
roads, utilities, landscaping, drainage and flood control improvements, water
and sewer improvements, freeway on and off ramps, bridges and general site
grading and site development work exclusive of any vertical structures and
buildings; (iv)&nbsp;all construction work for the items set forth in (ii)&nbsp;and (iii)
above, engineering design and supervision, construction management paid to
third parities but not including any internal staff costs, overhead,
administration or other charges incurred by employees of the Owner. The Owner
shall pay prevailing wages for all such works of improvement which the Owner
may claim as Qualified Redevelopment Expenditures in the manner as required by
Labor Code Section&nbsp;1720.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Owner shall submit to the Agency a Certificate of Qualified
Redevelopment Expenditures not more frequently than once each calendar month to
include the dollar amount thereof as a portion of the principal balance then
owed to the Owner pursuant to the Reimbursement Agreement to be executed after
the date of this Agreement substantially in the form as attached hereto as
Attachment No.&nbsp;8 together with the Promissory Note substantially in the form as
attached to said Reimbursement Agreement. All advances which have been
accepted by the Agency as validly submitted pursuant to a Certificate of
Qualified Redevelopment Expenditures and verified as in compliance with this
Agreement by a licensed civil engineer to be retained by the Agency shall
accrue interest at the annual rate of five percent (5%) per annum compounded
annually until paid from the date of acceptance by the Agency of each Qualified
Redevelopment Expenditure until paid in full. All Tax Increment Revenues
payable to the Owner shall first be applied to pay the accrued and unpaid
interest and then to pay the unpaid principal balance then owed pursuant to the
Reimbursement Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Notwithstanding the provisions of Section&nbsp;2.19 to the contrary, the
Agency further commits a number of Vehicle Trip Credits to the Project equal to
an amount not to exceed 15,000 Vehicle Trip Credits. The Agency has reserved
in the Master DDA, Exhibit&nbsp;D, for SBIAA uses an amount of Vehicle Trip Credits
equal to 21,500 for current and anticipated development within the various
SBIAA controlled properties on the Airport. The Agency hereby assigns said
number of Vehicle Trip Credits to the Owner subject to the following
conditions: (i)&nbsp;in the event that a lesser number of Vehicle Trip Credits are
actually required for the Project, such excess number shall revert to the
Agency, and (ii)&nbsp;the Owner shall enforce any agreement with the Master
Developer that requires the Master Developer to transfer to the Owner any
Vehicle Trip Credits then held by the Master Developer upon reasonable adequate
assurances that no further Vehicle Trip Credits will be required for additional
developments of the Master Developer on the Master DDA Property. The Owner
shall not amend any such agreement with the Master Developer that would
diminish, adversely affect or reduce the ability of the Agency or SBIAA to
receive the Vehicle Trip Credits that may subsequently be transferred or
assigned by the Master Developer which are surplus to the reasonable
development requirements of the Master Developer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Agency shall use best efforts to cause SBIAA to perform, or the
Agency shall directly perform, certain building and site beautification
improvements to the SBIAA building commonly referred to as Building No.&nbsp;747
which is immediately adjacent to the easternmost


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">portions of the Project Site. Such building and site beatification
improvements may consist of painting the exterior of said building, improvement
and upgrading landscaping, installation of fencing and decorative block walls
as may be acceptable to SBIAA. The Agency shall perform or cause to be
preformed all such building and site beautification work on or before the date
that the City grants a Certificate of Occupancy to the Owner for the first
portion of the development on the Project Site.



<P align="center" style="font-size: 10pt"><B>ARTICLE III</B>



<P align="center" style="font-size: 10pt"><B>REDEVELOPMENT OF THE PROJECT SITE</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 3.1. Development of the Project by Owner</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Subject to variances granted by the City and as otherwise approved by
the City, the redevelopment of the Project Site shall be accomplished in
substantial accordance with the Project Improvement Plan Concept as approved by
the Agency concurrently with the approval of this Agreement by the governing
board of the Agency, together with such changes in the Owner Improvement Plan
Concept as may be approved by the Agency either before or after the date of
submission of the Development Project Application to the City pursuant to this
Agreement. The Owner Improvement Plan Concept is attached to this Agreement as
Attachment No.&nbsp;2.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The development regulations of the City, including, but not limited to,
on-site parking and on-premises outdoor advertising sign structure requirements
are applicable to the use and development of the Project pursuant to this
Agreement. The City is not a party to this Agreement and no provision hereof
shall be deemed to confer any right or privilege upon the Owner as may
otherwise arise under Government Code Section&nbsp;65850, et seq. The City retains
the sole and absolute discretion under its regulatory and other police powers
to review and approve the Development Project Applications and the issue the
Development Project Permits for the Project, including without limitation the
power to impose such development conditions of the City as may be applicable in
its discretion to: (i)&nbsp;the City&#146;s approval of a Development Project
Application; (ii)&nbsp;a final order of public street vacation affecting any public
street right-of-way within or adjacent to the Site as may be necessary or
appropriate to accommodate the Projects; (iii)&nbsp;any Certificate of Subdivision
Compliance as may be applicable under Section&nbsp;2.8 for the close of the Site
Transfer Escrow. No action by the Agency with reference to this Agreement or
any of the related documents or attachments shall be deemed a waiver of any
City development standard which is applicable to the improvement and
redevelopment of the Project and the City&#146;s approval of a Development Project
Application or Certificate of Subdivision Compliance or order of public street
vacation or the issuance by the City of any Development Project Permit, it
being understood that, on a best efforts basis, the Agency shall assist the
Owner in obtaining any desired approval from the City as required to facilitate
the redevelopment of the Project.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Owner and/or its agents shall prepare at its sole cost and expense
for submission to the City, all plans, drawings, specifications and studies
necessary to accompany the Development Project Application for the Project in
sufficient detail for the City to accept as complete the Development Project
Application. In the event that the Owner may seek to


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">substantially modify, revise or amend the Owner Improvement Plan Concept or
submit plans and Development Project Application drawings which provide for
development of the Project (or a major functional element thereof) which the
Executive Director determines is materially different from the Owner
Improvement Plan Concept, then in such event, the Owner shall obtain the
approval of the Agency of the indicated modification, revision or amendment of
the Owner Improvement Plan Concept before the Development Project Application
is submitted to the City. The Owner may request by written notice to the
Agency that the Executive Director determine whether a feature of the
Development Project Application is at material variance with the Owner
Improvement Plan Concept and the Executive Director shall respond to such a
written request within five (5)&nbsp;business days after receipt thereof. The
Agency approval of a proposed substantial modification, revision or amendment
to the Owner Improvement Plan Concept shall at the reasonable discretion of the
Agency and such approval shall not be unreasonably withheld, conditioned or
denied.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Agency shall cooperate with and shall assist the Owner in order to
obtain the approval by the City of any and all development approval plans
submitted by the Owner to the City which are consistent with the Owner
Improvement Plan Concept and this Agreement. In the event that the City
disapproves any element of the Development Project Application, the Owner may
revise and resubmit said plans to the City in accordance with the City&#146;s
requirements or the Owner may appeal the rejection in the manner provided by
law.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Landscaping plans for the Project shall be prepared by a licensed
landscape architect. The Owner shall submit a preliminary draft of the
landscaping plan to the Executive Director for concurrence prior to the
submission of such landscaping plan to the City either as part of the
Development Project Application, or later as part of a Owner submission for the
issuance of any Development Project Permit by the City. The landscaping plans
submitted for Agency concurrence shall provide for the installation of high
quality and attractive landscaping and related improvements on the Project
Site, as applicable, as well as within the public parkway and rights-of-way
adjacent to the Project Site consistent with the Owner Improvement Plan Concept
and the Design Guidelines. All landscaping within public rights-of-way and
public landscape easements shall be included for maintenance purposes within
the LLMD as required pursuant to the Master DDA.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Owner shall prepare and submit all other construction drawings and
related documents for the Project (including, but not limited to, architectural
review of the exterior by the City as part of its consideration of the
Development Project Application) and written approval as and at the times
established in the Schedule of Performance.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Owner and the Agency staff shall hold regular progress meetings to
coordinate the preparation, submission and review of the Development Project
Application and related documents by the City as part of the Site Parcel
assembly program and issuance of the Development Project Permits as set forth
in Section&nbsp;2.3. The Agency Staff and the Owner shall communicate and consult
informally as necessary to ensure that the formal submittal of the any
documents to the City and the Agency can receive prompt and speedy approval.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;No matter relating to the Development Project Application once
approved by the Agency shall be subsequently disapproved unless mutually agreed
by the parties. Nothing contained herein shall preclude the City from
conducting its review, modification or rejection of all plans, drawings and
documents for the development of the Projects as required by all applicable
development laws and regulations. The Owner shall revise each such plan,
drawing or related document in a manner that addresses the basis of proposed
modification or rejection recommended by the City. The Owner shall promptly
revise and resubmit to the City any plans, drawings or related documents which
are conditionally approved or rejected by the City as part of the consideration
and approval by the City of the Development Project Application and/or the
issuance of Development Project Permits. Upon request by the Owner, the Agency
shall consider one or more requests for the extension of the period of time set
forth in the Schedule of Performance during which the preparation of such
revision to plans or drawings may be necessary, not to exceed in the aggregate
for all such extensions of ninety (90)&nbsp;days. Further, the Schedule of
Performance shall automatically be extended for any additional period required
for the resubmission of plans by the Owner to the City for approval; provided
however, that the Owner makes a good faith effort to correct or address any and
all reasons for disapproval earlier set forth by the City and cause such plans
to be resubmitted to the City at he earliest feasible time.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;After the approval by the City of the Development Project Application,
if the Owner desires to make any material change in the final construction
drawings and related documents which are not consistent with the Development
Project Application as approved by the City (either before or after the time
when the City has issued the Development Project Permits to the Owner), the
Owner shall first submit the proposed change to the Agency for its
consideration and approval. At such time the Owner may also submit a request
for extension of the Schedule of Performance, if such extension is necessary.
The proposed change shall be approved or rejected by the Agency in writing
within twenty (20)&nbsp;business days after submission to the Agency. Such a change
shall, in any event, be deemed approved by the Agency unless rejected by the
Executive Director, in whole or in part, by written notice thereof submitted by
the Agency to the Owner, setting forth in detail the reasons therefor, and such
rejection shall be made within said twenty (20)&nbsp;business day period. The
Owner, upon receipt of a disapproval, may revise such portions as are rejected,
or may appeal or dispute such rejection.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once the Development Project Permits have been issued and the work of
improvement of the Project has commenced, the Owner shall have the right during
the course of construction of the Project to make &#147;minor field changes&#148; without
seeking the prior approval of the Agency. Said &#147;minor field changes&#148; shall be
defined as those changes from the final construction drawings which have no
material or adverse effect on the quality or appearance of the improvements and
include changes made in order to expedite the work of construction in response
to field conditions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;All of the other costs of redeveloping the Project Site and the
Project, including the cost of preparing and submitting the Development Project
Application to the City for its review and approval, the performance of all
Owner Investigations, the costs and charges of any public agency with
jurisdiction associated with the issuance of any Development Project Permit,
demolition of structures, abatement of ACM and LBP, if any, response, removal
and remediation


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">of hazardous substances, if any, the removal of all subsurface structures
improvements and conditions as necessary, grading, the reorganization of
existing or proposed utility services and of constructing all new structures
and improvements on the Project Site, development project impacts as identified
the City, shall be borne solely by the Owner.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;The Owner shall begin and complete the redevelopment of the Project
within the times specified in the Schedule of Performance or within such
reasonable extensions of time as may be granted by the Agency or as provided
for in this Agreement. The Schedule of Performance is also subject to revision
from time to time as mutually agreed upon in writing by and between the Owner
and the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&#091;RESERVED&#093;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;The Owner for itself and its successors and assigns agrees that in the
construction of the improvements for the Project as provided for in this
Agreement, the Owner will not discriminate against any employee or applicant
for employment because of sex, marital status, race, color, religion, creed,
national origin, or ancestry.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;The Owner shall be responsible for carrying out its construction of
the improvement of the Project in conformity with all applicable laws,
including all applicable federal and state labor standards and requirements.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 3.2. Security Financing; No Encumbrances Except for Development
Purposes. </B>For the purposes of this Section&nbsp;3.2 and Section&nbsp;3.3, the words
&#147;Owner Lands&#148; mean and refer to the lands acquired by the Owner on the Project
Site upon the close of the applicable Site Parcel Escrows and Site Transfer
Escrow. Notwithstanding any other provision of this Agreement, mortgages and
deeds of trust, or any other reasonable method of security, are permitted to be
placed upon the Owner Lands for its redevelopment, but only for: (i)&nbsp;the
purpose of securing loans of funds to be used for the design and construction
of the Project and any other expenditures necessary and appropriate to
redevelop the Owner Lands under this Agreement, and costs and expenses incurred
or to be incurred by the Owner in furtherance of this Agreement and/or (ii)
with respect any permit financing affecting such portion of the Owner Lands for
which a Certificate of Completion has been issued by the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Owner shall provide a suitably detailed written description of the
terms of any mortgage, deed of trust, sale and lease-back or other financing,
conveyance, encumbrance or lien which the Owner may propose to create or attach
to the Owner Lands or any portion thereof, to pay for any part of the Project
Site purchase price and/or to provide the Owner with a source of funds to
construct the Project. The words &#147;mortgage&#148; and &#147;deed of trust&#148; as used in
this Agreement include all other appropriate modes of financing the real estate
acquisition, construction, and land development obligations of the Owner.
Mortgages, deeds of trust and other reasonable methods of security referred to
as Permitted Transfers in Section&nbsp;3.2, are collectively referred to in Section
3.3 as a &#147;Security Financing Interest&#148;.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 3.3. Security Financing Interests</B>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The holder of any Security Financing Interest authorized by this
Agreement is not obligated to construct or complete any improvement of the
Project. However, nothing in this Agreement shall be deemed to permit or
authorize any such holder of a Security Financing Interest to devote the Owner
Lands, or any portion thereof, to any use, or to construct any improvements
thereon, other than those uses of improvements provided for or authorized by
this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Whenever the Agency, pursuant to its rights set forth in this
Agreement, delivers any notice or demand to the Owner to cure or correct a
default or breach with respect to the redevelopment of the Project, the Agency
shall at the same time deliver to each holder of record any Security Financing
Interest creating a lien upon the Owner Lands or any portion thereof a copy of
such notice or demand of the Agency. Each such holder shall (insofar as the
rights of the Agency are concerned) have the right, but not the obligation, at
its option, within ninety (90)&nbsp;days after the receipt of the notice, to cure or
remedy or commence to cure or remedy any such default or breach affecting the
Owner Lands which is subject to the lien of the Security Financing Interest
held by such holder and to all the costs thereof to the security interest debt
and the lien on the security interest.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;In any case where within one hundred and eighty (180)&nbsp;days after the
occurrence of a default or breach by the Owner for which the Agency has given
notice to the holder of any Security Financing Interest under Section&nbsp;3.3(b),
and such holder has exercised its option to construct the Project, but such
holder has not proceeded diligently with construction, the Agency shall
thereupon be afforded the same rights against such holder for such default or
breach as the Agency would otherwise have against Owner under this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;In the event of a default or breach by the Owner under a Security
Financing Interest prior to the completion of redevelopment of the Project or
portion thereof, and the holder has not exercised its option to complete the
improvement of the Project Site (or such portion thereof encumbered by the
Security Financing Interest), the Agency, at its sole option and election, but
without any obligation to do so, may cure the default or breach of the Owner to
such holder, prior to the completion of any foreclosure under its Security
Financing Interest. In such event the Agency shall be entitled to
reimbursement from the Owner of the principal amount paid by the Agency to cure
or satisfy the defaults plus all reasonable costs and expenses incurred by the
Agency in curing the default of the Owner. The Owner hereby agrees that the
Agency shall also be entitled to a lien upon the Owner Lands, or any portion
thereof to secure the repayment of such amount to the Agency. The Agency
agrees that in the event that the such a lien in favor of the Agency may arise,
that the lien of the Agency shall be subordinate to any other Security
Financing Interest approved or deemed approved by the Agency. The Agency shall
execute from time to time any and all documentation reasonably requested by
Owner to effect such subordination of the lien right of the Agency as may arise
under this Section&nbsp;3.3.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;In addition to the optional right of the Agency to cure a default or
breach of the Owner under a Security Financing Interest as set forth in Section
3.3(d), the Agency, at its sole option and election, shall have the right to
satisfy any other lien or encumbrance affecting the Owner Lands after the Owner
has received a thirty (30)&nbsp;day notice of intention of the Agency to pay such
lien or encumbrance. The Agency shall not transmit such a notice of intention
until the Owner has been accorded a reasonable period of time to challenge,
cure or satisfy such a lien or encumbrance provided however, that nothing in
this Agreement shall require the Owner to pay or make provisions for the
payment of any lien or charge (except a lien or charge for ad valorem property
taxes) so long as the Owner in good faith shall contest the validity or amount
therein and so long as such delay in payment by the Owner shall not subject the
Owner Lands or any portion thereof to forfeiture or sale. In the event that
the Agency may satisfy any such lien or encumbrance the Agency shall be
entitled to reimbursement from the Owner of the principal amount paid by the
Agency to cure or satisfy the lien or encumbrance plus all reasonable costs and
expenses incurred by the Agency in satisfying the lien or encumbrance. The
Owner hereby agrees that the Agency shall also be entitled to a lien upon the
Owner Lands, or any portion thereof, to secure such repayment to the Agency.
Any such lien of the Agency under this Section&nbsp;3.3(e) shall be subordinate to
each Security Financing Interest approved or deemed approved by the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;The Owner, for itself, its successors and assignees hereby warrants
and agrees that the Owner shall give to any holder of a Security Financing
Interest notice of the terms and conditions contained in this Section&nbsp;3.3 and
shall use commercially reasonable efforts to cause each term contained herein
dealing with Security Financing Interests and rights of holders of such
interests either to be inserted into the relevant deed of trust or mortgage or
to be acknowledged by the holder prior to its perfection of any such Security
Financing Interest right or interest in the Owner Lands.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 3.4. Estoppel Statement. </B>Upon the request of the Owner or any
holder or a Security Financing Interest in the Project Site or portion thereof,
the Agency shall issue a signed estoppel statement stating that this Agreement
is in full force and effect and that no default hereunder exists on the part of
the Owner or any successor, or if such default is claimed to exist, such
estoppel statement shall identify the nature of such default. Such estoppel
statement shall be delivered by the Agency within thirty (30)&nbsp;days following
receipt of written request therefor.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 3.5. &#091;RESERVED&#151;NO TEXT&#093;</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 3.6. &#091;RESERVED&#151;NO TEXT&#093;</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 3.7. Certificate of Completion.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Upon substantial completion of the relevant phases of the Project, the
Agency shall prepare a Certificate of Completion substantially in the form of
Attachment No.&nbsp;11, within thirty (30)&nbsp;days following receipt by the Agency of a
written request therefor by the Owner. Upon the request of the Owner, the
Agency may issue one or more Certificates of Completion


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">when the Owner has completed (or caused third party tenants to so complete) the
improvements as follows:



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>upon completion of the improvement of corporate headquarters
office building of the Project;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>upon completion of the improvement of other portions of the
Project Site; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>upon completion of the Project in its entirety.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Certificate of Completion shall evidence a conclusive determination
by the Agency of satisfactory completion of the improvement of the Project (or
such portion thereof, as applicable) by the Owner. After the recordation of
the Certificate of Completion by the Agency, neither the Owner, nor any party
then owning or thereafter purchasing, leasing or otherwise acquiring any
interest in the Project Site (or such portion thereof affected by the
Certificate of Completion) shall (because of such ownership, purchase, lease or
acquisition) have any further obligation or liability under this Agreement for
matters arising prior to the date of recordation of the Certificate of
Completion or thereafter; provided however, that the covenants contained in
Section&nbsp;4.1 through Section&nbsp;4.4, shall bind each successor in interest of the
Owner in the Project Site (or such portion thereof affected by the Certificate
of Completion) as covenants which run with the land.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If the Agency seeks to withhold the execution of Certificate of
Completion, then the Agency shall, within said thirty (30)&nbsp;days of the date of
the written request for the issuance of a Certificate of Completion, provide to
the Owner a written statement setting forth the reasons with respect to the
Agency&#146;s refusal or failure to prepare and execute a Certificate of Completion.
The statement shall also contain a detailed description of the action the
Owner must take to obtain a Certificate of Completion. If the reason for such
refusal is confined to minor building &#147;punch list&#148; items, the Agency shall
issue its Certificate of Completion conditioned upon the delivery of cash or
other reasonably acceptable surety in an amount and terms subject to the
reasonable approval of the Executive Director.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No such Certificate of Completion of the Agency shall be deemed to
constitute a notice of completion as referred to in Section&nbsp;3093 of the
California Civil Code.


<P align="center" style="font-size: 10pt"><B>ARTICLE IV<BR><BR>USE AND OPERATION OF THE PROJECT SITE</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 4.1. Permitted Uses of the Project Site by the Owner. </B>The Agency
acknowledges that occupancy of the Project Site for the following types of uses
is consistent with the development regulations of the City of San Bernardino:
corporate office, distribution, manufacturing warehouse, auto and truck
maintenance facilities, and other uses reasonably related to the operation of
an office, warehouse and distribution facility.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following special retail uses as defined under applicable State law as
a &#147;relocation&#148; may be permitted; provided that the Agency in its reasonable
discretion, has first made the finding that such retail user &#147;relocation&#148; is
outside the same market area,&#148; as each of these terms is defined in Health and
Safety Code Section&nbsp;33426.7:



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;automobile dealership, or



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;big box retailer, in a store greater than 75,000
square feet of gross buildable area that will
generate sales or use tax pursuant to Part&nbsp;1.5
(commencing with Section&nbsp;7200) of Division 2 of the
Revenue and Taxation Code), or



<P align="left" style="margin-left:6%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a business entity that sells or leases land to an
automobile dealership or big box retailer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provisions of this covenant shall be included in the Agency Quit Claim
Deed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 4.2</B>. <B>&#091;RESERVED&#151;NO TEXT&#093;</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 4.3. Obligation to Refrain from Discrimination. </B>The Owner
covenants and agrees for itself, its successors, assigns and every successor in
interest to the Project Site or any part thereof, there shall be no
discrimination against or segregation of any person, or group of persons, on
account of sex, marital status, race, color, religion, creed, national original
or ancestry in the sale, lease, sublease, transfer, use occupancy, tenure or
enjoyment of the Project Site nor shall the Owner, itself or any person
claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use of occupancy of tenants, lessees, subtenants, sublessees
or vendees of the Project Site. The covenant of the Owner as provided in this
Section&nbsp;4.3 shall be included in the Agency Quit Claim Deed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 4.4. Form of Nondiscrimination and Nonsegregation Clauses. </B>The
Owner shall refrain from restricting the sale, lease, sublease, rental,
transfer, use, occupancy, tenure or enjoyment of the Project Site or part
thereof on the basis of sex, marital status, race, color, religion, creed,
ancestry or national original of any person. All such deeds, leases or
contracts pertaining thereto shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clauses:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(1) &#091;in deeds&#093;<B>:</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;The grantee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, that
there shall be no discrimination against or segregation of, any
person or group of persons on account of sex, marital status,
race, color, religion, creed, national origin or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land herein conveyed, nor shall the grantee
itself or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or</TD>
</TR>

</TABLE>

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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="6%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>segregation with reference to the selection, location, number, use
of occupancy of tenants, lessees, subtenants, sublessees or
vendees in the land herein conveyed. The foregoing covenants
shall run with the land.&#148;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(2) &#091;in leases&#093;<B>:</B></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;The lessee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, and this
lease is made and accepted upon and subject to the following
conditions: That there shall be no discrimination against or
segregation of any person or group of persons, on account of sex,
marital status, race, color, religion, creed, national origin or
ancestry, in the leasing, subleasing, renting, transferring, use,
occupancy, tenure or enjoyment of the land herein lease, nor shall
lessee itself, or any person claiming under or through it,
establish or permit such practice or practices of discrimination
or segregation with reference to the selection, location, number
or occupancy of tenants, lessees, sublessees, tenants or vendees
in the land herein lease.&#148;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(3) &#091;in material contracts&#093;:</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;There shall be no discrimination against or segregation of, any
person or group of persons on account of sex, marital status,
race, color, religion, creed, national origin or ancestry in the
sale, lease, sublease, rental, transfer, use, occupancy, tenure or
enjoyment of the land, nor shall the transferee itself or any
person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of
tenants, lessees, subtenants, sublessees or vendees of the land.&#148;</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><B>ARTICLE V<BR><BR>
DEFAULTS, REMEDIES AND TERMINATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.1. Defaults&#151;General. </B>Failure or delay by a party to perform
any term or provisions of this Agreement constitutes a default under this
Agreement, except, inability of the Agency, after exhausting all reasonable
efforts, to acquire any property by condemnation shall not be deemed a default
under this Agreement. The party in default must immediately commence to cure,
correct, or remedy such default within thirty (30)&nbsp;days after receipt of
written notice of such default, and if the defaulting party does not diligently
complete such cure, correction or remedy within a reasonable time, then a
breach shall be deemed to have occurred and the non-defaulting party may assert
its other rights and remedies. No default under this Agreement shall be deemed
to exist during those periods of time as provided in Section&nbsp;6.5 hereof during
which a force majeure event has occurred and written notice has been delivered
to the other parties. The party which claims that a default or breach has
occurred shall give written notice of default, specifying the default
complained of by the injured party in accordance with Section&nbsp;5.8. Except as
required to protect against further damage, the injured party may not


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<P align="left" style="font-size: 10pt">institute proceedings against the party in default until thirty (30)&nbsp;days after
giving such notice. Failure or delay in giving such notice shall not
constitute a waiver of any default, nor shall it change the time of default.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.2. Bankruptcy, Insolvency or Dissolution of Owner. </B>The
occurrence of any of the following events prior to the issuance of a
Certificate of Completion for the Project shall be deemed a material default by
the Owner:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner files for bankruptcy protection or reorganization
or becomes involved in any proceedings under the bankruptcy laws of
the United States, or in the event that the Owner may be insolvent,
or in the event that a receiver may be appointed for the Owner under
state or federal law;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Owner suspends or terminates its legal status as a
California limited liability company authorized to transact business
in California.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In view of the special community redevelopment goals and covenants for
community redevelopment covenants which affect this Agreement, in the event
that either the Owner shall be adjudicate bankrupt, or become involved in any
proceedings under the bankruptcy laws of the United States, or if the interest
of either of them in this Agreement shall be transferred by operation of law at
any time prior to the issuance of a Certificate of Completion for the Project,
the trustee in bankruptcy, receiver, assignee or judgment purchaser shall be
bound by all provisions of this Agreement, including but not limited to the
provisions of Section&nbsp;4.1.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.3. Institution of Legal Actions. </B>Subject to the default
provisions of Section&nbsp;5.1, any party may institute legal action to cure,
correct or remedy any default, to recover damages for any default, or to obtain
any other remedy consistent with the purpose of this Agreement; provided,
however, that no damages shall be sought by Owner against the Agency nor shall
the Agency be liable for any damages or other expenses to the Owner in the
event the Agency is unable to acquire any portion of the Project Site either as
a Condemnation Parcel or through other means as may be required for the
assembly of the Project Site or in the event there are any delays in the
acquisition of all or any portion of the Project Site. Any legal action,
initiated pursuant to this Agreement or otherwise with respect to its subject
matter, must be instituted in the Superior Court of the County of San
Bernardino, State of California.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.4. Applicable Law. </B>The laws of the State of California shall
govern the interpretation and enforcement of this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.5. Acceptance of Service of Process.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;In the event that any legal action is commenced by the Owner against
the Agency, service of process on the Agency shall be made by personal service
upon the Agency Secretary.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In the event that any legal action is commenced by the Agency against
the Owner, service of process on the Owner may be made in any lawful manner
including service upon Owner&#146;s designated agent for service of process.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.6. Rights and Remedies are Cumulative. </B>Except as otherwise
expressly stated in this Agreement, the rights and remedies of the parties are
cumulative, and the exercise by any party of one or more of such rights or
remedies shall not preclude the exercise by it, at the same or different times,
of any other rights or remedies for the same default or any other default by
any other party.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.7. Inaction Not a Waiver of Default. </B>Any failure or delay by a
party in asserting any of its rights and remedies as to any default shall not
operate as a waiver of any default or of any such rights or remedies, or
deprive any party of its right to institute and maintain any actions or
proceedings which it may deem necessary to protect, assert or enforce any such
rights or remedies.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.8. Notice of Default and Termination Prior to Issuance of a
Certificate of Completion for the Project. </B>Except as set forth in Section
5.10, if a party is in material breach or default with regard to any of the
provisions of this Agreement prior to the issuance by the Agency of a
Certificate of Completion for the Project, the non-defaulting party may, in
addition to its assertion of any other right or remedy upon the occurrence of
such default, elect to terminate this Agreement, unless such default is cured
or corrected within the time period set forth in a notice of default. If the
party exercises such an election of termination, such party shall include in
its written notice of default to the defaulting party (with a copy to the
remaining party) a statement that the Agreement shall be terminated if the
default is not cured or commenced to be cured by the defaulting party within
thirty (30)&nbsp;days after service of the notice of default (or within such other
longer period as is set forth therein). The defaulting party shall be liable
to the other party for any damage caused by such default and termination.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.9. Failure to Complete Project After Acquisition of the SBIAA
Property and the Master DDA Property.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;If after the Site Transfer Escrows has closed and title to the Master
DDA Property and the SBIAA Property have transferred to the Owner, the Owner
shall thereafter fail to either commence the construction of the Project or
shall abandon the construction of the Project and fail to complete the
construction of the Project, the Agency shall be entitled to seek such
additional legal and equitable relief and monetary damages from the Owner,
including, but not limited to, a reversion of the Master DDA Property and the
SBIAA Property to the Agency, under such terms and conditions as the court may
award under the circumstances. It is recognized by the Owner that the Agency
has entered into this Agreement specifically to achieve the relocation of the
facilities of the Owner and the consolation thereof on the Project Site for the
redevelopment of the NAFB properties through the construction and operation of
the Project by the Owner. Failure of the Owner to complete the Project and to
operate the Project as anticipated shall be deemed to be a material failure of
consideration of the covenants and agreements of the Owner as contained herein.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In addition to any other remedies that the Agency may obtain from a
court of competent jurisdiction upon any such default specified in subsection
(a)&nbsp;above, any amounts then owed by the Agency to the Owner pursuant to the
Reimbursement Agreement shall be deemed to


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<P align="left" style="font-size: 10pt">be forgiven and said Reimbursement Agreement, and all amounts owed thereunder,
shall become null and void. Any Tax Increment Revenues previously paid by the
Agency to the Owner shall be returned to the Agency together with interest from
the date of each payment of the Tax Increment Revenues at the maximum interest
rate then allowed under applicable State law. Additionally, the Agency shall
have no further obligation or duty to remit any portion of the Purchase Price
Incentive, and any portion of the Purchase Price Incentive that may have been
previously remitted by the Agency to the Owner shall be due and payable
immediately upon a default specified in subsection (a)&nbsp;above together with
interest at the maximum interest rate then allowed under applicable State law.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;In the event this Project is abandoned by Owner, the Agency shall have
the right of reversion under the circumstances described herein. The Agency
shall have the right to repurchase the Master DDA Property and all site
improvements installed or constructed thereon at a value based upon verified
invoices of the Owner setting forth the actual expenditures incurred and paid
by the Owner as of the date that a notice of default issued by the Agency has
not been cured by the Owner. Such repurchase may be exercised by the Agency
upon the declaration of a default pursuant to the terms and conditions of this
Agreement for failure of the Owner to either (i)&nbsp;commence the construction of
the Project, or any aspect thereof as set forth hereinbelow, upon the Property,
or (ii)&nbsp;after the commencement of the construction thereon, failure of the
Owner to complete the construction and operate the facility as intended by this
Agreement and within the time frames set forth in the Schedule of Performance.
The Agency shall give sixty (60)&nbsp;days notice to Owner of Agency&#146;s interest in
repurchase of the Master DDA Property; escrow shall close sixty (60)&nbsp;days
thereafter. In the event this Project is abandoned by the Owner, the Agency
shall have the right to repurchase the remaining parcels (SBIAA Property, the
Third Party Parcels, or Parcel D-1). The terms, conditions, and purchase price
of the repurchase of such remaining parcels shall be jointly determined by the
Owner and the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The provisions contained in this Section&nbsp;5.9 (a), (b), and (c)&nbsp;shall
no longer have any force or effect nor shall such provisions be enforceable by
the Agency against the Owner from and after the date of the recordation of the
last Certificate of Completion for the completion of the construction of the
Project in its entirety in conformity with this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.10</B>. <B>Termination Without Fault of Parties.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The occurrence of any of the following events prior to the date on
which the close of the Site Transfer Escrow may occur constitutes a basis for
any party to terminate this Agreement without fault or liability:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Owner has failed to deliver and/or the Agency has failed
to accept the written confirmation to the Agency as set forth in;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Despite its good faith and diligent efforts, the Owner is
unable to obtain any permit or approval from the City as may be
necessary to construct the Project substantially in accordance with
the Owner Project Improvement Plan Concept;</TD>
</TR>

</TABLE>

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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Owner may reject the environmental condition of any Site
Parcel as provided in Section&nbsp;2.5(f);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>After the Owner has provided the Agency with the necessary
funds for a Condemnation Parcel as set forth in Section&nbsp;2.2(d), the
Agency may fail to initiate proceedings for the acquisition of any
Condemnation Parcel;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Owner rejects or the Agency fails to cure any Title
Exceptions and/or the Owner fails to waive the cure of any Title
Exception under Section&nbsp;2.9(d) or 2.9(d);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="right">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The necessary Site Parcels for the Project cannot be
assembled and the Site Transfer Escrow placed in a condition to
close on or before January&nbsp;1, 2005, subject to such extensions of
time as may be approved by the Owner and the Agency as set forth in
Section&nbsp;2.3(f).</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&#091;RESERVED&#093;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The party which may elect to terminate this Agreement on any of the
grounds described in Section&nbsp;5.10(a) shall transmit a written notice of
intention to terminate the Agreement at least thirty (30)&nbsp;days prior to the
date of termination specified in such written notice. The written notice of
intention to terminate the Agreement shall identify this Section&nbsp;5.10 and
generally describe the grounds on which the termination of this Agreement is
based. Upon the termination of this Agreement pursuant to this Section&nbsp;5.10,
no party shall have any claim upon the other for costs, reimbursement or
damages against or liability to the other under this Agreement, except that if
a termination occurs as a result of the occurrence of the matters described in
Section&nbsp;5.10(a)(5), then any Owner funds disbursed to the Agency for
Condemnation Parcels shall be returned to the Owner, net of abandonment costs
incurred by the Agency, and further provided that the indemnity obligations of
the parties under Section&nbsp;6.5(b) and Section&nbsp;6.8 shall survive with respect to
any matters or claim arising under any of those provisions of this
Agreement.<BR><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 5.11</B>. <B>Rights of Mortgages. </B>Any rights of the Agency under this Article
V shall not defeat, limit or render invalid any lease, mortgage, deed of trust
or any other security interest permitted by this Agreement or any rights
provided for in this Agreement for the protection of holder of security
interests in the Site, or portion thereof.


<P align="center" style="font-size: 10pt"><B>ARTICLE VI</B>



<P align="center" style="font-size: 10pt"><B>GENERAL PROVISIONS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.1. Notices, Demands and Communications Between the Parties.</B>
Notices, demands and communications among the Agency, the Owner as required by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or, if mailed, upon receipt or rejection. If notice
is given by mailing, it shall be sent by registered or certified mail, postage
prepaid, return receipt requested, and properly addressed to


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<P align="left" style="font-size: 10pt">the principal office of the party, as further designated in Section&nbsp;6.12. Such
written notices, demands and communications may be sent in the same manner to
such other addresses as either party may from time to time designate in
writing.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.2. Conflict of Interest. </B>No member, official or employee of the
Agency having any conflict of interest, direct or indirect, related to this
Agreement and the development of the Project, shall participate in any decision
relating to the Agreement or the implementation thereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.3. Warranty Against Payment of Consideration for Agreement. </B>The
Owner and the Agency each warrant that neither of them has paid or given, and
will not pay or given, any third-party money or other consideration for
obtaining this Agreement. For the purpose of this Section&nbsp;6.3, the term &#147;third
parties&#148; shall not include persons to whom fees were paid for professional
services if rendered by attorneys, financial consultants, accountants,
engineers, architects and the like when such fees are considered necessary by
the Owner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.4. Non-Liability of the Agency Officials and Employees. </B>No
member, official or employee of the Agency shall be personally liable to the
Owner, or any successor in interest of either of them, in the event of any
default or breach by the Agency or for any amount which may become due to the
Owner or to its successor or on any obligations under the terms of this
Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.5. Enforced Delay: Extension of Time of Performance</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;In addition to specific provisions of this Agreement, performance by
either party hereunder shall not be deemed to be in default, or considered to
be a default, where delays or defaults are due to the force majeure events
beyond the control of such party, including without limitation war,
insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties,
acts of God, acts of the public enemy, epidemics, quarantine restrictions,
government imposed moratorium legislation, freight embargoes or lack of
transportation, weather-caused delays, inability to secure necessary labor,
materials or tools, delays of any contractors, subcontractor or supplier, which
are not attributable to the fault of the party claiming that an event suspends
the close of the Site Transfer Escrow, or if after the close of the Site
Transfer Escrow has occurred, suspends the prosecution of the work of
improvement of the Project. An extension of time for any such force majeure
cause shall be for the period of the enforced delay and shall commence to run
from the date of occurrence of the delay; provided however, that the party
which claims the existence of the delay has first provided the other party with
written notice of the occurrence of the delay within ten (10)&nbsp;days of the
commencement of such occurrence of force majeure event and thereafter takes
prompt and reasonable action within its control to resume the performance of
the applicable work or obligation, and if applicable restore, reconstruct,
rebuild any damage to the Project caused by such force majeure event provided
further that no force majeure event (or series of such events ) shall have the
effect of delaying the close of the Site Transfer Escrow for more than a total
of ninety (90)&nbsp;days.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The inability of either the Owner to obtain the land acquisition or
construction loans for the Project, or the failure of the City to approve the
Development Project Application or to issue


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<P align="left" style="font-size: 10pt">any Development Project Permit (except by virtue of the effect of moratorium
legislation) or the inability of the Owner to satisfy any other condition of
this Agreement relating to the redevelopment of the Project, shall not be
deemed to be a force majeure event or otherwise provide grounds for the
assertion of the existence of a delay under this Section&nbsp;6.5. The parties each
expressly acknowledge and agree that changes in either general economic
conditions or changes in the economic assumptions of any of them which may have
provided a basis for entering into this Agreement occurring at any time after
the execution of this Agreement, are not force majeure events and do not
provide any party with grounds for asserting the existence of a delay in the
performance of any covenant or undertaking which may arise under this
Agreement. Each party expressly assumes the risk that changes in general
economic conditions or changes in such economic assumptions could impose an
inconvenience or hardship on the continued performance by such party under this
Agreement, but that such inconvenience or hardship is not a force majeure event
and does not excuse the performance by such party of its obligations under this
Agreement.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Owner acknowledges that the Agency is a &#147;public entity&#148; and/or a
&#147;public agency&#148; as defined under applicable California law. Therefore, the
Agency, in coordination with the City, must satisfy the requirements of certain
California statutes relating to the actions of public entities, including,
without limitation, CEQA before the redevelopment activities contemplated under
this Agreement may be implemented. Also, as a public body, the action of the
governing board of the Agency in approving this Agreement may be subject to
proceedings to invalidate the Agreement. The Owner hereby assumes the risk of
delays and any loss that may result from any such third-party legal actions
related to the CEQA compliance with this Agreement and the Project, and the
Agency&#146;s approval of this Agreement or the pursuit of the redevelopment
activities contemplated by this Agreement, even in the event that an error,
omission or abuse of discretion by the Agency which a court of competent
jurisdiction may determine to have occurred. If a third-party files a legal
action regarding the Agency&#146;s approval of this Agreement, or any of the related
agreements with the Master Developer, the Agency may terminate this Agreement
on sixty (60)&nbsp;days written notice to the Owner of the Agency&#146;s intent to so
terminate this Agreement, referencing this Section&nbsp;6.5(b), without any further
obligation to perform the terms of this Agreement and whereupon the parties
shall be mutually released from any further responsibility under this
Agreement. Within ten (10)&nbsp;days of receipt of the Agency&#146;s notice of intent to
terminate this Agreement as provided in the preceding sentence, the Owner may
offer to defend the Agency, in the third-party legal action and pay all of the
court costs, attorney fees, monetary awards, sanctions, attorney fee awards and
the expenses of any and all financial or performance obligations that may
result from the disposition of the legal action. Any such offer from the Owner
must be in the form of a written agreement to be considered by the Agency. The
Agency is under no obligation to accept any such offer from the Owner and may
elect to terminate this Agreement, under this subsection (b)&nbsp;notwithstanding
any offer from the Owner under this subsection (b).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.6</B>. <B>Approvals. </B>Approvals required by the Agency shall not be
unreasonably withheld and approval or disapproval shall be given within the
time set forth in the Schedule of Performance, or as set forth in this
Agreement or, if no specific time is set forth for such approval, within thirty
(30)&nbsp;days. If no disapproval is given within the time stated therefor, the
item in question shall conclusively be deemed approved.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.7</B>. <B>No Real Estate Commissions Payable. </B>Each party to this
Agreement represents and warrants to the others that said party has not dealt
with any broker or real estate agent in connection with this transaction, and
that insofar as that party knows no broker, real estate agent, or other party
is entitled to any commission or fee in connection herewith. Each party to
this Agreement agrees to indemnify, defend and hold harmless the other parties
from and against any and all broker or real estate commissions or finder fees
by any person or entity claiming to have been retained by such indemnifying
party in connection with this transaction.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.8. Indemnification.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;To the fullest extent permitted by law, Owner shall, at its sole
expense and with counsel reasonably acceptable to the Agency, indemnify,
defend, and hold harmless the Agency from and against all Claims arising out of
or relating (directly or indirectly) to the Project, any negligence or fault
attributable to the Owner, any interest of the Owner in any parcel within the
Project Site, or the Owners&#146; activities, including without limitation:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;The use or occupancy, or manner of use or occupancy, of any property
at the Airport, the Project Site, or any other property, areas or building(s)
owned, occupied or used by the Owner;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Any act, error, omission, or negligence attributable to the Owner in,
on, or about the areas described in (a)&nbsp;and (a)(i), above;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;Owner conducting its business;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;Any construction work, development work, tenant improvements,
activities, work, or things done, omitted, permitted, allowed, or suffered by
the Owner in, at, or about the areas described above, or anywhere at the
Airport, including the violation of or failure to comply with any applicable
laws, statutes, ordinances, standards, rules, regulations, order, decrees, or
judgments; and


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;Any breach or default in performance of any obligation by Owner to be
performed under this Agreement, including obligations that survive expiration
or earlier termination of this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;For purposes of this Agreement, &#147;Claims&#148; means any and all claims,
losses, costs, damage, expenses, liabilities, liens, actions, causes of action
(whether in tort or contract, at law or in equity, or otherwise), charges,
assessments, fines, and penalties of any kind and environmental matters
(including consultant and expert expenses, court costs, and attorneys fees
actually incurred).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;This indemnification extends to and includes Claims for:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Injury to any persons (including death at any time resulting from an
injury);


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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Loss of, injury or damage to, or destruction of property (including
all loss of use resulting from that loss, injury, damage, or destruction); and


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;All economic losses and consequential or resulting damages of any
kind.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Except as provided in this subsection (d), the indemnification
requirements shall apply regardless of the contributory or passive negligence
of the Agency and regardless of whether liability without fault or strict
liability is imposed or sought to be imposed on the Agency. The
indemnification requirements shall not apply to the extent that a final
judgment of a court of competent jurisdiction establishes that a Claim against
the Agency was caused by the sole and active negligence or willful misconduct
of the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;The indemnification provided by Owner may not be construed or
interpreted as in any way restricting, limiting, or modifying Owner&#146;s insurance
obligations or other obligations under this Agreement and is independent of the
such insurance obligations and other obligations. Compliance by Owner with the
insurance requirements and other obligations under this Agreement shall not in
any way restrict, limit, or modify its indemnification obligations under this
Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Agency shall be entitled to recover its actual attorney fees and court
costs incurred in enforcing these indemnification clauses.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;These indemnification clauses shall survive the expiration or early
termination of this Agreement until all claims against the Agency involving any
of the indemnified matters are fully, finally, and absolutely barred by
applicable statutes of limitations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;The duty of Owner to defend the Agency is separate and independent of
Owner&#146;s duty to indemnify the Agency. The duty to defend includes claims for
which the Agency may be liable without fault or strictly liable. The duty to
defend applies regardless of whether the issues of negligence, liability,
fault, default, or other obligation on the part of the Owner or the Agency have
been determined. The duty to defend applies immediately, regardless of whether
the Agency paid any sums or incurred any detriment arising out of or relating
(directly or indirectly) to any Claims. It is the express intention of the
parties that the Agency be entitled to obtain declaratory relief, summary
adjudication or summary judgment regarding the Owner&#146;s duty to defend the
Agency at any stage of any Claim or suit.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;The Owner agrees to indemnify, defend and hold the Agency harmless
from and against all damages, judgments, costs, expenses and fees, including
attorneys fees and expenses, arising from any claim or liability asserted
against the Agency or any matter described in Section&nbsp;2.3(d) with respect to
any claim of inverse condemnation relating to any Site Parcel or Condemnation
Parcel which may be asserted against the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;The Owner shall, at its sole expense, comply with all requirements,
guidelines, rules, orders, and similar mandates and directives pertaining to
the Owner&#146;s activities relative to the Project, whether or not imposed by the
Owner&#146;s insurers. The Owner shall, at its sole expense, comply with all rules,
orders, regulations, or requirements of the American Insurance


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Association (formerly the National Board of Fire Underwriters) and of any
similar body applicable to the Owner&#146;s activities relative to the Project.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;The Owner shall be the first or primary named insured.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;The Agency shall be named by endorsement as additional insured under
Owner&#146;s liability coverage. The additional insured endorsement must be on ISO
Form&nbsp;CG 20 11 11 85 or an equivalent acceptable to the Agency, with such
modifications as the Agency may require.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;The Owner&#146;s liability policies shall be endorsed as needed to provide
cross-liability coverage for the Owner and Agency and to provide severability
of interests.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;The Owner&#146;s liability policies shall be endorsed as needed to provide
that the insurance afforded by those policies to the additional insured is
primary and that all insurance carried by the Agency is strictly excess and
secondary and shall not contribute with the Owner&#146;s liability insurance.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;The coverage afforded to the Agency must be at least as broad as that
afforded to the Owner and may not contain any terms, conditions, exclusions, or
limitations applicable to the Agency that do not also apply to the Owner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;The Owner shall deliver to the Agency the above mentioned endorsements
as well as a certified copy of the Owner&#146;s liability policy or policies and an
original certificate of insurance, executed by an authorized agent of the
insurer or insurers, evidencing compliance with the liability insurance
requirements of this Agreement. The certificate shall provide for no less than
thirty (30)&nbsp;days&#146; advance written notice to the Agency from the insurer or
insurers of any cancellation, nonrenewal, or material change in coverage or
available limits of liability and shall confirm compliance with the liability
insurance requirements in this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;Any &#147;endeavor to&#148; or &#147;failure to mail such notice shall impose no
obligation or liability of any kind upon the Company&#148; language and any similar
language shall be stricken from the certificate.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;The Owner&#146;s liability insurance coverage may be provided by a
combination of primary, excess, and umbrella policies, but those policies must
be absolutely concurrent in all respects regarding the coverage afforded by the
policies. The coverage of any excess or umbrella policy must be at least as
broad as the coverage of the primary policy.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;The Owner shall, at its sole expense maintain in full force and effect
the liability insurance coverage required under this Agreement and shall
maintain the Agency as additional insured for a period of no less than two (2)
years after expiration or earlier termination of this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;The insurance requirements set forth above are independent of the
Owner&#146;s exculpation, indemnification, and other obligations under this
Agreement and shall not be


<P align="center" style="font-size: 10pt">59
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">construed or interpreted in any way to restrict, limit, or modify the those
exculpation, indemnification, or other obligations or to limit the Owner&#146;s
liability under this Agreement.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;If the Owner fails to procure and maintain the insurance required of
it under this Agreement and does not cure such failure within thirty (30)&nbsp;days
of the date of notice of such failure to the Owner from the Agency, the Agency
may, but shall not be required to, procure and maintain such insurance and be
reimbursed for the cost of such insurance by the Owner or, alternatively, the
Agency may terminate this Agreement upon written notice to the Owner.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;The Agency makes no representation that the limits or forms of
coverage of insurance specified in this Agreement are adequate to cover the
Owner&#146;s property, business operations or obligations under this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;The Agency and the Owner agree to cause the insurance companies
issuing their respective insurance to waive any subrogation rights that those
companies may have against the Owner and the Agency, respectively, as long as
the insurance is not invalidated by the waiver. If the waivers of subrogation
are contained in their respective insurance policies, the Agency and the Owner
waive any right that either may have against the other on account of any loss
or damage to their respective property to the extent that the loss or damage is
insured under their respective insurance policies.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.9. No Partnership. </B>Nothing in the Agreement nor any acts of the
parties hereto shall be deemed or construed by the parties hereto, or any of
them, or by any third person, to create the relationship of principal and
agent, or of partnership, or of joint venture, or of any association between
any of the parties to this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.10. Attorney&#146;s Fees. </B>If either party hereto files any action or
brings any action or proceeding against the other arising out of this
Agreement, then as between the Owner and the Agency, the prevailing party shall
be entitled to recover as an element of its costs of suit, and not as damages,
its reasonable attorneys&#146; fees as fixed by the court in such action or
proceeding or in a separate action or proceeding brought to recover such
attorneys&#146; fees. Any action brought at the request of the Owner by the Escrow
Agent or title company in the form of declaratory relief or a quiet title
action to determine the rights of the parties or the rights of third parties
pursuant to recorded and unrecorded easements and other agreements shall have
all the costs thereof paid by the Owner including costs incurred by the Agency
to review or participate in any proceeding brought by the Escrow Agent or any
title company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event either the validity of this Agreement or the implementation
hereof is at any time challenged by a third party through the filing of a
validation action or any other court proceeding, the Owner may elect to either
terminate this Agreement or to dispute such challenge. In the event the Owner
elects to dispute any such challenge, the Owner shall either (i)&nbsp;provide a full
defense to the Agency of such challenge at the sole cost and expense of the
Owner and pay all expenses incurred by the Agency in connection therewith, or
(ii)&nbsp;reimburse the Agency for providing for the defense of such challenge.


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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.11. Severability. </B>If any clause, sentence or term or condition
of this Agreement is held invalid or unenforceable for any reason by a court of
competent jurisdiction, the remaining portions of this Agreement will remain in
full force and effect, provided the resulting agreement preserves the material
economic effect of this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.12. Notices. </B>Any notice to be provided or permitted under this
Agreement shall be in writing, signed by the party giving such notice and
sufficiently given if hand delivered, delivered by an overnight
messenger/delivery service, delivered by facsimile or mailed by registered or
certified mail, postage prepaid, return receipt requested, to the principal
offices of the Agency and the Owner set forth below (and to the Persons named
below to receive copies). Such notices, if delivered (i)&nbsp;by hand, shall be
deemed given when delivered, (ii)&nbsp;by an overnight messenger/delivery service,
shall be deemed given upon delivery or one Business Day after the sending of
such notice, whichever occurs earlier, (iii)&nbsp;by facsimile, shall be deemed
given upon confirmation of receipt, and (iv)&nbsp;by mail, shall be deemed given
five (5)&nbsp;Business Days after deposit in the U.S. mail. Notice that starts the
running of any cure period and is delivered on a non-Business Day shall be
deemed delivered on the next following Business Day if left at the notice
address or the next Business Day on which it is redelivered if it is not left
at the notice address.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The names and addresses of those representatives of each party to which
notices shall be sent are:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="14%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To Owner:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stater Bros. Markets<BR>
21700 Barton Road<BR>
Colton, California 92324<BR>
Telephone: (909)&nbsp;783-5000<BR>
Facsimile: (909)&nbsp;783-5098</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To Agency:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Inland Valley Development Agency<BR>
294 S. Leland Norton Way, Suite&nbsp;100<BR>
San Bernardino, California 92408<BR>
Attention: Executive Director<BR>
Telephone: (909)&nbsp;382-4100<BR>
Facsimile: (909)&nbsp;382-4106<BR></TD>
</TR>

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</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Such addresses shall be subject to change from time to time to such other
representatives or addresses as may have been specified in written notice given
by the intended recipient to the sender in accordance with this Section&nbsp;6.12.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.13. Environmental Compliance Provisions.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Owner has reviewed and examined all applicable environmental
information, studies and documentation deemed necessary by the Owner regarding
the prior designation of the Project Site as a NPL site by the EPA. The Owner
is aware of the Environmental Laws and the prior presence of Hazardous
Substances that were present at one time on the Project Site.


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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Agency shall enforce with respect to the Master DDA Property,
subject to any change or modification in requirements imposed by the federal
and State environmental regulators and future policy of the Department of
Defense and the USAF, the obligations of USAF relating to the leasing or
conveyance of the Master DDA Property to the Agency, including obligations
regarding environmental remediation of the Master DDA Property; provided,
however, the Agency shall not be required by this Agreement to institute
litigation against the USAF or to in any manner participate in such litigation
in any capacity; provided, however, if the Owner does not have legal standing
to enforce the rights of the Agency to compel the obligations of USAF regarding
the Master DDA Property, the Agency shall take all reasonably necessary steps
to enforce such obligations. With respect to the Master DDA Property, at the
request of the Owner, the Agency shall assist and cooperate with the Owner in
the enforcement of the USAF&#146;s obligations regarding such Master DDA Property,
including assigning appropriate rights to the Owner. The Agency shall not
release or amend any USAF obligations regarding the Master DDA Property without
the prior written consent of the Owner unless otherwise required by law. All
funds received by the Agency relating to the above shall be used by the Agency
solely for the purposes for which such were paid by the USAF. The Agency has
advised the Owner (i)&nbsp;that the legal position of the USAF is that there
presently is no enforceable obligation that may be exercised by the Agency
against the USAF regarding the condition of the title to the Master DDA
Property (except the USAF&#146;s obligations regarding conveyance of title to the
Agency), (ii)&nbsp;that the USAF has made no representation as to the condition of
title or the existence of recorded and unrecorded easements that would in any
manner be enforceable against the USAF, and (iii)&nbsp;that the USAF has made no
representation as to when (a)&nbsp;title to the remaining portions of the Property
will be transferred to the Agency, and (b)&nbsp;the Basewide Feasibility Study will
be completed and all required environmental remediation will be completed. The
USAF has also informed the Agency of the possibility of deed restrictions to be
contained in the conveyance documents for certain portions of the Master DDA
Property previously conveyed to the Agency to assure F&#038;WS that no disturbance
of the soils occurs without proper consultation with F&#038;WS and that either the
EPA or the State DTSC may require a separately executed and recorded land use
covenant document on certain portions of the Master DDA Property that have
residual contamination at levels that do not allow for unrestricted uses under
applicable federal and State environmental laws. In the event of any
negotiations or other discussions between the Agency and the USAF concerning
the foregoing, the Agency shall consult with and receive input from the Owner
regarding the Owner&#146;s position and afford the Owner the opportunity to
participate in such negotiations and/or discussions with the USAF if acceptable
to the USAF at its sole discretion. The Agency makes no representation that
the USAF will allow the Owner to participate in such negotiations and/or
discussions. In the event the Owner&#146;s reasonable, good faith interpretation of
the obligations of the USAF is different from the Agency&#146;s reasonable, good
faith interpretation of such obligations, the Agency shall not be obligated to
enforce the Agency&#146;s interpretations of such USAF obligations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.14. SBIAA Not a Party; Agency Members Not a Party; No Third
Party Beneficiaries.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;SBIAA is not a party to this Agreement nor is SBIAA bound by any
provision hereof. SBIAA will not be a party to any escrow established in
connection with a disposition as provided in this Agreement. The governmental
members of the Agency and SBIAA are not


<P align="center" style="font-size: 10pt">62
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">parties to this Agreement nor are the governmental members of the Agency and
SBIAA separately bound by any provisions hereof. Any disposition, whether by
lease or sale, of the SBIAA Property will require the approval of the governing
board of the SBIAA at its sole discretion at a later date after the execution
and delivery of this Agreement together with the concurrence of the FAA for any
such use, transfer or development for non-aviation purposes of the SBIAA
Property.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;There are no third party beneficiaries to this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.15. Compliance with Prevailing Wage Requirements.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Project is a &#147;public work&#148; as this term is defined in Labor Code
Section&nbsp;1720. All employees of both the Owner and any employee of Owner&#146;s
contractors and their subcontractors, who perform construction work described
in the Agreement relative to the Project, shall be compensated at prevailing
wage rates and the Owner for itself and its contractors and subcontractors,
shall pay prevailing wage rates under California and Federal law, as
applicable, in performance of any such construction work.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Owner recognizes and is aware of the existence of State
legislation adopted by the California Legislature in 2001 and generally
referred to as SB975 and the present provisions contained in Labor Code Section
1720, et seq. The Owner shall prepare and maintain, or cause each of its
construction contractors and subcontractors to prepare and maintain certified
payroll records for all work of improvement undertaken by the Owner on the
Project. The Owner shall provide the Agency with copies of all certified
payroll records as prepared and maintained by the Owner and its contractors and
subcontractors, for all work of improvement undertaken by the Owner on the
Project within ten (10)&nbsp;days following written request thereof as provided in
Labor Code Section&nbsp;1776. The Owner shall cause to be included in all of its
third-party construction contracts relating to the construction and improvement
of the Project suitable provisions which compel its contractors and each
subcontractor to pay not less than prevailing wages to their employees engaged
in the work of improvement of the Project and to provide the Agency with copies
of the certified payroll records maintained by such contractors and
subcontractors upon ten (10)&nbsp;days written notice of request for inspection by
the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Agency shall never be responsible for the payment of any sums
under Labor Code Section&nbsp;1720, et seq., or other prevailing wage requirements
as the result of the activities of the Owner and the development and
improvement of the Project. The Owner shall indemnify and hold harmless the
Agency and all officers, officials, employees, consultants and attorneys of the
Agency with respect to all such prevailing wage compliance issues arising out
of the activities of the Owner acquiring portions of the Project Site from the
Agency or the Master Developer pursuant to this Agreement in constructing the
Project or other public improvements under this Agreement or other agreements
between the Owner and third parties. The Owner agrees to apprise in writing
all third parties seeking to provide labor and construction work on the Project
as to the provisions of this Section&nbsp;6.15 and the compliance required pursuant
to State law regarding the payment of prevailing wages. Any indemnifications
received by the Owner from such third parties shall not relieve the Owner of
its indemnification obligations to the Agency.


<P align="center" style="font-size: 10pt">63
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 6.16. Existing Private Streets. </B>Certain roadways and driveways
within the Project Site are currently private streets as set forth in Article&nbsp;8
and Exhibit&nbsp;N of the Master DDA and shall not be dedicated to the City as
public streets but shall remain as privately owned roadways and driveways
(&#147;Private Streets&#148;). The Owner shall have the right to alter the Private
Streets (whether by widening, removing, repositioning or otherwise) and alter
or remove appurtenances thereto (including without limitation driveways, curbs,
and sidewalks). All driveway entrances and exits from the Project Site to the
adjacent public street network consisting of Tippecanoe Avenue and Harry
Sheppard Boulevard shall be subject to the approval by the City at its sole
discretion, and any access to the other roadways and driveways that are within
the ownership of SBIAA shall be subject to the reasonable approval of SBIAA for
access to Leland Norton Way and the non-public right-of-way portions of Harry
Sheppard Boulevard.


<P align="center" style="font-size: 10pt"><B>ARTICLE VII<BR><BR>
ENTIRE AGREEMENT, WAIVERS AND AMENDMENT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 7.1. Attachments. </B>This Agreement shall be executed in three (3)
duplicate originals, each of which is deemed to be an original. The Agreement
includes 66 pages and sixteen (16)&nbsp;attachments indicated as Attachment No.&nbsp;1A
through and including Attachment No.&nbsp;12 which constitute the entire
understanding and agreement of the parties.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 7.2. Amendment of Agreement. </B>This Agreement may be amended from
time to time by written agreement executed by the parties.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 7.3. Operating Memoranda. </B>It is recognized and acknowledged that
the implementation of the development of the Project will require a close
degree of cooperation between the Owner and the Agency. Therefore, any written
operating memorandum shall be given reasonable and fair consideration, as
necessary, and such approval shall not be unreasonably withheld. Such
memoranda shall, upon approval, become an addendum hereto and become a part
hereof. Additionally, in the event that a lender, which proposes to loan funds
to the Owner with respect to the Project, requires commercially reasonable
amendments or modifications to this Agreement, the Agency shall promptly give
due consideration to the written request of such lender.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 7.4</B>. <B>Date of Agreement. </B>This Agreement has been dated as of April
14, 2004 for purposes of reference and convenience. The terms &#147;date of
execution of the Agreement&#148; or &#147;date of the Agreement&#148; or &#147;date of approval of
this Agreement,&#148; and the like, refer to the date of which the Agreement is
approved by the governing board of the Agency at a duly called and held public
meeting. This Agreement shall have no force nor effect in the event that the
parties may fail to cause the authorized officers of each of them to execute it
for any reason within thirty (30)&nbsp;days following such approval by the governing
board of the Agency.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>SECTION 7.5</B>. <B>Execution in Counterpart Originals. </B>The Agreement may be
executed by the parties in counterparts and when each such counterpart is
delivered by the parties, this Agreement shall be deemed to be fully executed
and in effect.


<P align="center" style="font-size: 10pt">64
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS AGREEMENT HAS BEEN APPROVED BY THE GOVERNING BOARD OF THE AGENCY AS
OF &nbsp;&nbsp;&nbsp;, 2004.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top"><B>OWNER:</B><BR>
Stater Bros. Markets, Inc.<BR>
a California Corporation</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date June____, 2004
</DIV></TD>

<TD align="left" valign="top" colspan="2">By:<DIV style="margin-left:20px"><HR size="1" noshade></DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jack H. Brown<BR>
Chairman of the Board, President and Chief<BR>
Executive Officer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>

<TD align="left" valign="top" colspan="2">By:<DIV style="margin-left:20px"><HR size="1" noshade></DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bruce D. Varner<BR>
Secretary</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" colspan="2" valign="top"><B>AGENCY:</B><BR>
Inland Valley Development Agency</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date June_____, 2004
</DIV></TD>

<TD align="left" valign="top" colspan="2">By:<DIV style="margin-left:20px"><HR size="1" noshade></DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Judith Valles<BR>
Co-Chairperson<BR>
Development Commission of the<BR>
City of San Bernardino</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>

<TD align="left" valign="top" colspan="2">By:<DIV style="margin-left:20px"><HR size="1" noshade></DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Dennis Hansberger<BR>
Co-Chairperson</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">ATTEST:<BR>
(SEAL)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD colspan="3" align="left" valign="top"><HR size="1" width="30%" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Agency Secretary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">APPROVED AS TO FORM:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD colspan="3" align="left" valign="top"><HR size="1" width="30%" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Agency General Counsel</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">65
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;1A</B>



<P align="center" style="font-size: 10pt"><B>Plat Map of the Project Site</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;1B</B>



<P align="center" style="font-size: 10pt"><B>Legal Description and Plat Map for the Master DDA Property</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;1C</B>



<P align="center" style="font-size: 10pt"><B>Tentative Legal Description and Plat Map of the SBIAA Property</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;1D</B>



<P align="center" style="font-size: 10pt"><B>Tentative Legal Descriptions and Plat Maps of the Third Party Parcels</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;1E</B>



<P align="center" style="font-size: 10pt"><B>Legal Description and Plat Map of the Parcel D-1</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;2</B>



<P align="center" style="font-size: 10pt"><B>Owner Improvement Plan Concept</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;3</B>



<P align="center" style="font-size: 10pt"><B>Site Parcel Identification List</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;4</B>



<P align="center" style="font-size: 10pt"><B>Description of the Project</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;5</B>



<P align="center" style="font-size: 10pt"><B>Required Tenant Relocations</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;6</B>



<P align="center" style="font-size: 10pt"><B>Schedule of Performance</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;7</B>



<P align="center" style="font-size: 10pt"><B>Site Parcel Acquisition
Agreement<BR>
(general form for use by Owner)</B>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;8</B>



<P align="center" style="font-size: 10pt"><B>Reimbursement Agreement and<BR>
Promissory Note</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;9</B>



<P align="center" style="font-size: 10pt"><B>Form of Agency Quit Claim Deed</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;10</B>



<P align="center" style="font-size: 10pt"><B>&#091;RESERVED&#093;</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;11</B>



<P align="center" style="font-size: 10pt"><B>Certificate of Completion</B>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>Attachment No.&nbsp;12</B>



<P align="center" style="font-size: 10pt"><B>&#091;Reserved &#150; No Text&#093;</B>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


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