Confidentiality Agreement
Mountain View Apartments
14067 & 14078 Astoria Street, 13140 Dronfield Avenue
Sylmar, California

This CONFIDENTIALITY AGREEMENT (“the Agreement”) is made this __ day of _________________, 2006 by ____________________________________________________ (“Prospective Investor”), and California Home Builders, (“Owner”) and Highroad Realty & Management, Inc. (“HRM”), as agent for the Owner (HRM and Owner are sometimes collectively referred to as “HRM/Owner”), with respect to the following facts:

                                                  RECITALS

A.            Prospective Investor (or its affiliates) is a sophisticated investor, and currently holds a substantial portfolio of real property or secured loans and is competent, qualified, and interested in acquiring, the property referenced herein.

B.            Prospective Investor wishes to discuss with HRM/Owner, Prospective Investor’s or its affiliate’s possible investment in that certain real property located at the address noted above (the “Property”).

C.            HRM/Owner and Prospective Investor agree that it is necessary and convenient for HRM/ Owner to provide Prospective Investor with certain Confidential Information (as defined herein) related to the Property. In addition, Prospective Investor may want to undertake its own studies regarding the Property which HRM/Owner may also wish to be treated as Confidential Information.

D.            Prospective Investor agrees that all Confidential Information is confidential in accordance with this Agreement and if provided by HRM/Owner constitutes proprietary information, and HRM/Owner, and Prospective Investor wish to enter into this Agreement to confirm that the Confidential Information will be treated as confidential in accordance with the terms of this Agreement, and to provide the parties hereto with certain rights and remedies and to protect the confidentiality of the Confidential Information.

1. Prospective Investor acknowledges that it shall be responsible for all commissions to its brokers, agents or advisors. Prospective Investor shall have no fee arrangement with HRM/Owner.

NOW, THEREFORE, in consideration of the foregoing recitals which are incorporated herein and other good and valuable consideration receipt of which is hereby acknowledged, HRM/Owner and Prospective Investor, for themselves and their respective successors and assigns, agree as follows:

1.            Definition of Confidential Information. The parties agree that, as used in this Agreement, the term “Confidential Information” means all information which may be disclosed to Prospective Investor by HRM/Owner with regard to the Property or Owner or its partners and includes, without limitation, financial statements, photographs or summaries, whether oral or written, all documents, reports, computer disks or other prepared summaries based in whole or in part on Confidential Information, and all reports and other information given to Prospective Investor by any Representative, agent, attorney, consultant or engineer of Owner. Prospective Investor agrees that this Agreement is a material inducement for HRM/Owner to provide Prospective Investor with Confidential Information and to consider the sale of the Property to the Prospective Investor. The term Confidential Information, as used herein, does not include any information which (a) is already or becomes known to Prospective Investor or its Representatives (as hereinafter defined) from sources other than HRM/Owner and which sources are not known by Prospective Investor to be violating any contractual, legal or fiduciary obligations in disclosing such information; (b) is or becomes generally available to the public without breach of Prospective Investor’s obligations hereunder; (c ) is developed by Prospective Investor or its Representatives without reliance upon and independently of otherwise Confidential Information; (d) is lawfully in Prospective Investor’s or its Representatives’ possession prior to disclosure by Owner; or (e) is required to be disclosed by law or by regulatory or judicial process (including without limitation as required by any regulatory or supervisory authority or self-regulatory organization having jurisdiction over Prospective Investor or its affiliates).

2.            Representations and Warranties of Prospective Investor. Prospective Investor hereby represents and warrants to HRM/Owner that Prospective Investor and its relevant affiliates are sophisticated and experienced investors in and now hold a substantial portfolio of real property or loans secured by real estate and by virtue of this experience and ownership have the ability to make their own assessments of the risk, benefit and value of the Property and that the Confidential Information is being used only to assist in making this independent assessment of the Property.

3.            Treatment of Confidential Information. Prospective Investor agrees that the intent of this Agreement is to protect the legitimate business interest of HRM/Owner and agrees (except to the extent otherwise provided in this Agreement):

(a)            not to disclose any Confidential Information to any third party or entity other than Prospective Investor’s directors, officers, partners, employees, existing and potential financing sources, financial institutions, agents and representatives (including without limitation counsel, accountants, experts, consultants and financial advisors, collectively, “Representatives”), without first obtaining Owner’s prior written consent; provided, however, that no Confidential Information may be disclosed to any person or entity which is not an employee, director, or officer of Prospective Investor unless such person or entity also signs and delivers to HRM/Owner an agreement not to disclose any Confidential Information, which agreement shall contain the same terms and conditions as this Agreement;

(b)            to disclose Confidential Information only to those of its Representatives and only to the extent necessary for Prospective Investor to evaluate the Confidential Information with regard to Prospective Investor’s possible purchase of the Property;

(c )            prior to disclosing any Confidential Information to any of its Representatives, to require its Representatives to comply with the terms of this Agreement; and

1. not to disclose the results of any studies, analysis, examination or investigations undertaken by Prospective Investor in connection with the Property to any person or entity other than its Representatives without Owner’s prior written consent.
2.  
3. In addition, Prospective Investor agrees not to disclose to any person or entity other than its Representatives the nature or terms of any agreement or letter of intent to purchase the Property, which Prospective Investor and Owner may enter into, unless and until Prospective Investor acquires the Property.

4.          Rights to Confidential Information.  Prospective Investor hereby agrees that:

(a)            All Confidential Information disclosed by or belonging to HRM/Owner is and shall remain the property of Owner;

(b)            Prospective Investor does not hereby obtain any right title interest or license or other interest in or to any of the Confidential Information or the Property;

(c )            Neither HRM/Owner have any obligation to provide Prospective Investor with any Confidential Information or to continue providing or to update any Confidential Information if it has been provided;

(d)            At the request of HRM/Owner, Prospective Investor will promptly, within five (5) business days, return to HRM/Owner all Confidential Information as well as all records of other things in any medium containing or embodying the Confidential Information including all copies thereof, including without limitation all Confidential Information and such records and things which are in the possession of the Representatives; and,

(e)            Prospective Investor will have no right or claim against HRM/Owner with respect to any transaction or proposed transaction as a result of this Agreement or any Confidential Information provided to Prospective Investor, and Prospective Investor’s claim, if any, would only arise out of, and be allowed by, an executed and mutually delivered purchase agreement or other agreement signed by both the Owner and Prospective Investor and by which Prospective Investor would purchase the Property.

5.            Conduct of Due Diligence.  Prospective Investor agrees that in conducting its due diligence and investigation or analysis of the Property, Prospective Investor will:

(a)            not interfere or knowingly attempt to interfere with the operation or management of the Property; and

(b)            not initiate contact (except for those contacts made in the ordinary course of business) with any person known to Prospective Investor to be the current owner or any current or prior property manager, or tenant of the Property regarding the Property or the proposed transaction, without the prior written consent of Owner.

1. Equitable Relief. Prospective Investor agrees that it would be difficult or impossible to measure damage suffered by HRM/Owner resulting from any breach by Prospective Investor of any of its undertakings and that monetary damages would not be an adequate remedy for such breach. Prospective Investor therefore agrees that HRM/Owner shall be entitled, in addition to any other remedy available to HRM/Owner at law or in equity, to (a) an injunction restraining any breach or threatened breach of any of Prospective Investor’s obligations hereunder, (b) specific performance of Prospective Investor’s obligations hereunder, and (c) to such other relief as the court may find appropriate to restrain any such breach or threatened breach. Though not signatories hereto, Prospective Investor agrees that this Agreement is for the benefit of each general or limited partner, agent or other representative of Owner and that they are each an intended third party beneficiary hereto.

7.            Authority of HRM. Prospective Investor acknowledges that HRM does not have the authority to bind and make any representation or warranty on behalf of Owner without Owner’s express written consent and that Owner and HRM have not made any promise, representation or warranty regarding the Property or any matters related thereto except as expressly otherwise provided herein. HRM represents that it is authorized to deliver this Agreement on behalf of Owner so long as there are no changes made to the form of the Agreement other than the insertion of the date of this Agreement and the name of and information pertaining to Prospective Investor. HRM also represents that it is authorized to furnish Confidential Information to Prospective Investor.

8.            GENERAL PROVISIONS

8.1            Survival of Terms. The terms of this Agreement shall survive the completion of any due diligence or review of the Property conducted by Prospective Investor, but will not supersede, amend or otherwise modify a Purchase and Sale Contract. This Agreement will terminate upon the earliest of the following to occur: Owner enters into a definitive agreement to sell the Property to the Prospective Investor; Prospective Investor and HRM/Owner agree in writing to terminate this Agreement; or two years elapses from the date of this Agreement.

8.2            Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

8.3            Amendment. No amendment or modification hereto, or waiver of the terms hereof, shall be valid unless in a written instrument executed by each of the parties hereto.

8.4            Severability. If any provision hereof, or the application thereof to any circumstances, is found unenforceable, invalid, or illegal, such provision shall be deemed deleted from this Agreement or not applicable to such circumstance, as the case may be, and the remainder of this Agreement shall not be affected or impaired thereby.

8.5            Attorney’s Fees. If any action, including, without limitation, arbitration, should arise among the parties hereto to enforce or interpret the provisions of this Agreement, the prevailing party in such action shall be reimbursed for all reasonable expenses incurred in connection with such action, including reasonable attorney’s fees.

8.6            Integration. This Agreement expresses the entire agreement and understanding of the parties hereto with respect to the matters set forth herein and, except for a Purchase Agreement signed by both Owner and Prospective Investor, supersedes all prior agreements, arrangements, and understandings among the parties hereto with respect to the matters set forth herein. Nothing contained herein shall be construed as an agreement to sell the Property to the Prospective Investor, and only a separate written purchase and sale agreement can obligate HRM/Owner to sell the Property to the Prospective Investor.