BUSINESS CONTINUITY PLAN

I. Emergency Contact Persons
Our firm’s two emergency contact persons are: Richard P. Conway, (562) 493-8881, rickc@divsecs.com and Joseph W. Stok, (562) 493-8881, jstok@divsecs.com both of whom are Registered Principals of the firm. These names will be updated in the event of a material change.

II. Firm Policy
Diversified Securities, Inc. (“DSI”) has implemented a business continuity plan (“BCP”) in the event that a function deemed critical to DSI’s ongoing business operations fails. The plan will assist DSI to eliminate and minimize any business interruptions as a result of an unexpected disaster. The plan has been tested at various times. Our firm’s policy is to respond to a Significant Business Disruption (SBD) by safeguarding employees’ lives and firm property, making a financial and operational assessment, quickly recovering and resuming operations, protecting all of the firm’s books and records, and allowing our customers to transact business.

A. Significant Business Disruptions (SBDs)
Our plan anticipates two kinds of SBDs, internal and external. Internal SBDs affect only our firm’s ability to communicate and do business, such as a fire in our building. External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, a city flood, or a wide-scale, regional disruption.

B. Approval and Execution Authority
Robert J Conway, CEO & FINOP, a registered principal, is responsible for approving the plan and for conducting the required annual review. Robert J. Conway, CEO & FINOP has the authority to execute this BCP.

C. Plan Location and Access
Our firm will maintain copies of its BCP plan and the annual reviews, and the changes that have been made to it for inspection. An electronic copy of our plan is located on our network server at our corporate headquarters in Long Beach.

III. Business Description
DSI is an introducing broker/dealer which has currently limited its business to servicing and maintaining limited partner clients within its DSI Realty Income DPPs. Consistent with its business continuity plan, DSI maintains back-up facilities in geographic locations separate from its primary facilities. Using these back-up facilities, DSI intends to continue its business in the event of a significant business disruption. Nevertheless, there are some disruptions that may render the firm unable to conduct business. Under such circumstances, DSI will ensure that clients will be able to access their account information within a reasonable time via either the internet or telephone.

IV. Office Locations
A. Office Location #1 Corporate Headquarters & Branch Office
Our Main Office is located at 6700 E. Pacific Coast Hwy, Suite. #150, Long Beach, CA 90803. Its main telephone number is (562) 493-8881. Our employees may travel to that office by means of; foot, car, bus, cab, or boat.

B. Office Location #2 Tustin Office
Our Tustin Office is located at 17822 E. 17th St. #104, Tustin, CA 92780. Its main telephone number is (714) 547-0000. Our employees may travel to that office by means of; foot, car, bus, or cab.

C. Office Location #3 West Covina Office
Our West Covina Office is located at 1000 Lakes Dr., Suite #420, West Covina, CA 91790. Its main telephone number is (626) 919-3456. Our employees may travel to that office by means of; foot, car, bus, or cab.

D. Office Location #4 Visalia Office
Our Visalia Office is located at 2906 W. Main St. Visalia, CA 93278. Its main telephone number is (559) 732-3916. Our employees may travel to that office by means of; foot, car, bus, or cab.

V. Alternative Physical Location(s) of Employees
In the event of an SBD, we will move our staff from affected offices to the closest of our unaffected office locations. If none of our other office locations is available to receive those staff, we have the ability to work remotely by accessing an archived version of the DSI Realty Income Fund software program from one of our offsite archive locations.

VI. Customers’ Access to Funds and Securities
DSI does not maintain custody of customers’ funds or securities. In the event of an internal or external SBD, if telephone service is available, our limited partners will receive status updates by calling our emergency hotline at (800) 732-1733. If our Web access is available, our firm will post emergency notifications on our Web site. In addition, the firm will make this information available to customers through its disclosure policy.

SIPC Trustee Appointment

If SIPC determines that we are unable to meet our obligations to our customers or if our liabilities exceed our assets in violation of Securities Exchange Act Rule 15c3-1, SIPC may seek to appoint a trustee to disburse our assets to customers. We will assist SIPC and the trustee by providing our books and records identifying customer accounts subject to SIPC regulation.

VII. Data Back-Up and Recovery (Hard Copy and Electronic)
Our firm maintains its primary hard copy and electronic books and records at our Corporate Headquarters located at 6700 E. Pacific Coast Highway, Suite #150, Long Beach, CA 90803. Our department managers are responsible for the maintenance of these books and records.

In addition to duplicate records that are maintained at each of our Branch Locations, our firm maintains its archived hard copy books and duplicate electronic records at our offsite storage facility. This facility, Mini-U-Storage is located at 7611 Talbert Ave., Huntington Beach, CA.

DSI backs up its electronic records daily on several hard drives that are configured in a RAID array. In addition duplicate copies of electronic records are stored at the Mini-U-Storage facility in Huntington Beach.

In the event of an internal or external SBD that causes the loss of our paper records, we will physically recover them from our Branch locations. For the loss of our electronic records, we will physically recover the storage media from our back-up site.

VIII. Financial and Operational Assessments
A. Operational Risk
In the event of an SBD, we will immediately identify what means will permit us to communicate with our customers, employees, critical business constituents, critical banks, critical counter-parties, and regulators. Although the effects of an SBD will determine the means of alternative communication, the communications options we will employ will include our website at www.divsecs.com, our emergency telephone number (800) 732-1733, and our emergency email address: 911@divsecs.com. In addition, we will retrieve our key activity records as described in Section VII above, Data Back-Up and Recovery (Hard Copy and Electronic).

B. Financial and Credit Risk
In the event of an SBD, we will determine the value and liquidity of our investments and other assets to evaluate our ability to continue to fund our operations and remain in capital compliance. We will contact critical banks, and investors to apprise them of our financial status. If we determine that we may be unable to meet our obligations to those counter-parties or otherwise continue to fund our operations, we will request additional financing from our bank or other credit sources to fulfill our obligations to our customers and clients. If we cannot remedy a capital deficiency, we will file appropriate notices with our regulators and immediately take appropriate steps as necessary.

IX. Mission Critical Systems
Our firm’s “mission critical systems” are those that ensure prompt and accurate processing of our proprietary DPP transactions, including the maintenance of customer accounts, access to customer accounts, and the delivery of income distributions and certificates. These tasks are accomplished by utilizing our proprietary software program which was developed to perform these functions. This software system is the means by which we access all of our DSI Realty accounts.

Recovery-time objectives provide concrete goals to plan for and test against. They are not, however, hard and fast deadlines that must be met in every emergency situation, and various external factors surrounding a disruption, such as time of day, scope of disruption, and status of critical infrastructure—particularly telecommunications—can affect actual recovery times. Recovery refers to the restoration of clearing and settlement activities after a wide-scale disruption; resumption refers to the capacity to accept and process new transactions and payments after a wide-scale disruption. All DSI operational facilities are equipped for resumption of business and are tested several times per year. Our recovery time objective for our critical systems, including those involving a relocation of personnel or technology, is four (4) hours. This recovery objective may be negatively affected by the unavailability of external resources and circumstances beyond our control.

X. Alternate Communications Between the Firm and Customers, Employees, and Regulators

A. Customers

Currently, we communicate with our customers using the telephone, e-mail, our Web site, fax, U.S. mail, and in person visits at our firm or at the other’s location. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. For example, if we have communicated with a party by e-mail but the Internet is unavailable, we will call them on the telephone and follow up where a record is needed with paper copy in the U.S. mail.

B. Employees

We now communicate with our employees using the telephone, e-mail, and in person. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. We will also employ a call tree so that senior management can reach all employees quickly during an SBD. The call tree includes all staff home and office phone numbers. We have identified persons, noted below, who live near each other and may reach each other in person:

The person to invoke use of the call tree is Richard P. Conway:

Caller Call Recipients
Richard P. Conway Robert J. Conway, Sr., Joseph Conway, Joseph W. Stok, Louisa Gac
Robert J. Conway Branch Locations
Joseph Conway Branch Locations
Joseph W. Stok Kenneth Caleb, Michael Conway
Louisa Gac Administrative Personnel
Kenneth Caleb Operations Personnel
Michael Conway Sales Personnel

C. Regulators

We are currently members of the following SROs: The FINRA and SIPC. We communicate with our regulators using the telephone, e-mail, internet-based systems, fax, U.S. mail, and in person. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party.

XI. Critical Business Constituents, Banks, and Counter-Parties
A. Business constituents
We have contacted our critical business constituents and have determined the extent to which we can continue our business relationship with them in light of the internal or external SBD. We will quickly establish alternative arrangements if a business constituent can no longer provide the needed goods or services when we need them because of a SBD to them or our firm.

B. Banks
We have contacted our bank to determine if they can continue to provide the operational capacities that we will need in light of the internal or external SBD. The bank maintaining our operating account is: Union Bank of California, 400 California Street, 9th Floor, San Francisco, CA 94104 (415) 765-2969. If our bank and other lenders are unable to provide the financing, we will seek alternative financing immediately via alternative recommendations from our existing banks.

C. Counter-Parties
We have contacted our critical counter-parties, such as other broker-dealers or institutional customers, to determine if we will be able to carry out our transactions with them in light of the internal or external SBD. Where the transactions cannot be completed, we will consult their Business Continuity procedures in order to make alternative arrangements to complete those transactions as soon as possible.

XII. Regulatory Reporting
Our firm is subject to regulation by the SEC and the FINRA. We now file reports with our regulators using paper copies in the U.S. mail, and electronically using fax, e-mail, and the Internet. In the event of an SBD, we will check with the SEC, FINRA, and other regulators to determine which means of filing are still available to us, and use the means closest in speed and form (written or oral) to our previous filing method. In the event that we cannot contact our regulators, we will continue to file required reports using the communication means available to us.

XIII. Disclosure of Business Continuity Plan
We provide in writing a BCP disclosure statement to customers at account opening. We also post the disclosure statement on our Web site and mail it to customers upon request. Our disclosure statement is attached.

XIV. Updates and Annual Review
Our firm will update this plan whenever we have a material change to our operations, structure, business or location or to those of our clearing firm. In addition, our firm will review this BCP annually, on August 1st, to modify it for any changes in our operations, structure, business, or locations mentioned herein.