Exhibit 10.1
 
 
AGREEMENT AND DECLARATION OF TRUST
 
AGREEMENT AND DECLARATION OF TRUST, dated as of December 26, 2012, by and
between Mission West Properties, Inc., a Maryland corporation (the “Company”),
and Carl E. Berg, an individual resident of the State of California (the
“Trustee”).
 
WHEREAS, the Company’s Board of Directors (the “Board”), the Independent
Directors Committee of the Board and the Company’s stockholders have approved
the voluntary liquidation and dissolution of the Company pursuant to a Plan of
Liquidation (the “Plan”);
 
WHEREAS, the Plan provides, among other things, that the Board will cause the
Company to dispose of all of the assets of the Company, wind up its affairs, pay
or adequately provide for the payment of all of its liabilities and distribute
to or for the benefit of its stockholders all of the Company’s assets, including
interests in any liquidating trust established in connection with the complete
liquidation of the Company;
 
WHEREAS, as of the date hereof, substantially all of the assets of the Company
have been sold or otherwise disposed of;
 
WHEREAS, the Board believes it to be in the best interest of the Company to
complete the liquidation of the Company by transferring all remaining assets of
the Company to a liquidating trust (the “Trust”) on the Transfer Date with the
Trustee serving as the initial trustee, including a cash reserve set aside for
the contingent and existing obligations of the Company and the Trust (the “Cash
Reserve”); and
 
WHEREAS, the Trustee shall administer the Trust pursuant to the terms of this
Agreement and, upon satisfaction of all liabilities and obligations of the
Company and the Trust, the Trustee shall distribute the residue of the proceeds
of the liquidation of the assets of the Company in accordance with the terms
hereof;
 
NOW, THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
 
ARTICLE I
 
NAMES AND DEFINITIONS
 
1.1           Name.  The Trust shall be known as the Mission West Liquidating
Trust.
 
1.2           Defined Terms.  For all purposes of this instrument, unless the
context otherwise requires:
 
(a)           “Affiliate” of any Person means any entity that controls, is
controlled by, or is under common control with such Person. As used herein,
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such entity, whether
through ownership of voting securities or other interests, by contract or
otherwise.
 
 
 

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(b)           “Agreement” shall mean this instrument as originally executed or
as it may from time to time be amended pursuant to the terms hereof.
 
(c)           “Beneficial Interest” shall mean each Beneficiary’s proportionate
share of the Trust Assets initially determined by the ratio of the number of
Shares held of record by the Initial Beneficiary as of the Record Date over the
total number of Shares issued and outstanding on such Record Date and thereafter
shall be determined by the ratio of the number of Units held by such Beneficiary
to the total number of Units held by all Beneficiaries; provided, however, that
the proportional Beneficial Interest of each Optionholder shall be reduced by
the exercise price underlying any stock options held by the Optionholder and
applicable withholding taxes that would have been payable had the Optionholder
exercised such option on the Record Date.
 
(d)           “Beneficiary” shall mean, initially, each Initial Beneficiary and,
thereafter, each Initial Beneficiary who holds Units and each transferee of
Units initially held by an Initial Beneficiary and subsequently transferred to
such transferee pursuant to and in accordance with the terms and conditions of
this Agreement.
 
(e)           “Initial Beneficiary” shall mean each of the Stockholders and
Optionholders.
 
(f)           “Liabilities” shall mean all of the Company’s unsatisfied debts,
claims, liabilities, commitments, suits and other obligations, whether
contingent or fixed or otherwise (including, without limitation, any costs and
expenses incurred or to be incurred in connection with the liquidation of the
Company).
 
(g)           “Optionholders” shall mean those persons who held vested options
to purchase shares of the Company’s common stock on the Record Date.
 
(h)           “Person” shall mean an individual, a corporation, a partnership,
an association, a joint stock company, a limited liability company, a trust, a
joint venture, any unincorporated organization, or a government or political
subdivision thereof.
 
(i)           “Record Date” shall mean the close of business on December 28,
2012.
 
(j)           “Retained Assets” shall mean all of the Company’s right, title and
interest in, to and under, all of the Company’s assets, including, without
limitation, its accounts receivable, cash, securities, claims, causes of action,
contingent claims and reserves distributed to the Trustee.
 
(k)           “Shares” shall mean, as of the Record Date, (i) the issued and
outstanding shares of common stock, $0.001 par value per share, of the Company
and (ii) the shares of common stock, par value $0.001 per share, of the Company
that would have been issued had the Optionholders exercised their options on the
Record Date, the latter of which shall also be deemed to be issued and
outstanding for purposes of this Agreement.
 
 
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(l)           “Stockholders” shall mean the holders of record of Shares on the
Record Date, except where inclusion of Optionholders in the definition of
Stockholders would be contrary to Sections 1.2(c) and 3.1(a) of this Agreement.
 
(m)           “Transfer Date” shall mean December 28, 2012.
 
(n)           “Trust” shall mean the Trust created by this Agreement.
 
(o)           “Trust Assets” shall mean all the property held from time to time
by the Trustee under this Agreement, which initially shall consist of the
Retained Assets (excluding any liquidating distributions declared, but unpaid,
having a record date prior to the Transfer Date), and in addition, shall
thereafter include all dividends, distributions, rents, royalties, income,
payments and recoveries of claims, proceeds and other receipts of, from, or
attributable to any assets held by the Trust, less any of the foregoing utilized
by the Trustee to pay expenses of the Trust, satisfy Liabilities or to make
distributions to the Beneficiaries pursuant to the terms and conditions hereof.
 
(p)           “Trustee” shall mean the original Trustee under this Agreement and
any successors thereto, pursuant to and in accordance with the terms of this
Agreement.
 
(q)           “Units” shall have the meaning given to such term in
Section 3.1(a).
 
ARTICLE II
 
GRANT TO AND NATURE OF TRANSFER
 
2.1           Formation.  The Company hereby grants, delivers, releases, assigns
and conveys to the Trustee, and the Trustee hereby accepts, the sum of $100 to
be held in trust for the benefit of the Beneficiaries of the Trust.
 
2.2           Grant.  On the Transfer Date, the Company shall grant, deliver,
release, assign and convey to the Trustee, to be held in trust for the benefit
of the Beneficiaries of the Trust, all of the Company’s right, title, interest
in, to and under, the Retained Assets, for the uses and purposes stated herein,
subject to the terms and provisions set out below, and the Trustee agrees to
accept such Retained Assets, subject to the following terms and provisions.
 
2.3           Purpose of Trust.
 
(a)           The Trust is organized for the sole purpose of winding up the
Company’s affairs and the liquidation of the Retained Assets with no objective
to continue or engage in the conduct of a trade or business, except as necessary
for the orderly liquidation of the Trust Assets.
 
(b)           It is expected that the Company shall liquidate and dissolve prior
to fully winding up its affairs, including, but not limited to, the collection
of its receivables and the payment of any unsatisfied Liabilities of the
Company.
 
(c)           The Retained Assets granted, assigned and conveyed to the Trustee
shall be held in the Trust, and the Trustee will (i) allocate, protect, conserve
and manage the Trust Assets in accordance with the terms and conditions hereof,
(ii) complete the winding up of the Company’s affairs, (iii) act on behalf of
the Beneficiaries, and (iv) distribute the Trust Assets in accordance with the
terms and conditions hereof.
 
 
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(d)           It is intended that the granting, assignment and conveyance of the
Retained Assets by the Company to the Trustee pursuant to the terms hereof shall
be treated for Federal and state income tax purposes as if the Company made such
distributions directly to the Stockholders. It is further intended that for
Federal, state and local income tax purposes the Trust shall be treated as a
liquidating trust under Treasury Regulation Section 301.7701-4(d) and any
analogous provision of state or local law, and the Beneficiaries shall be
treated as the owners of their respective share of the Trust pursuant to
Sections 671 through 679 of the Internal Revenue Code of 1986, as amended (the
“Code”) and any analogous provision of state or local law, and shall be taxed on
their respective share of the Trust’s taxable income (including both ordinary
income and capital gains) pursuant to Section 671 of the Code and any analogous
provision of state or local law. The Trustee shall file all tax returns required
to be filed with any governmental agency consistent with this position,
including, but not limited to, any returns required of grantor trusts pursuant
to Section 1.671-4(a) of the Income Tax Regulations.
 
2.4           No Reversion to the Company.  In no event shall any part of the
Trust Assets revert to or be distributed to the Company.
 
2.5           Instruments of Further Assurance.  Prior to the dissolution of the
Company, such Persons as shall have the right and power to so act, will, upon
reasonable request of the Trustee, execute, acknowledge, and deliver such
further instruments and do such further acts as may be necessary or proper to
carry out effectively the purposes of this Agreement, to confirm or effectuate
the transfer to the Trustee of any property intended to be covered hereby, and
to vest in the Trustee and his successors and assigns, the estate, powers,
instruments or funds in trust hereunder.
 
2.6           Payment of Liabilities.  The Trustee, in his capacity as Trustee
hereunder and not in his individual capacities, shall assume all Liabilities and
agrees to cause the Trust to pay, discharge and perform when due all of the
Liabilities on and as of the Transfer Date.  Should any Liability be asserted
against the Trustee as the transferee of the Trust Assets or as a result of the
assumption made in this Section 2.6, the Trustee may use such part of the Trust
Assets as may be necessary in contesting any such Liability or in payment
thereof, but in no event shall the Trustee, Beneficiaries or employees or agents
of the Trust be personally liable, nor shall resort be had to the private
property of such Persons, in the event that the Trust Assets are not sufficient
to satisfy the Liabilities.
 
2.7           Incidents of Ownership.  The Stockholders and the Optionholders
shall be the Initial Beneficiaries of the Trust created by this Agreement and
the Trustee shall retain only such incidents of legal ownership as are necessary
to undertake the actions and transactions authorized herein.
 
2.8           Notice to Unlocated Stockholders.  If the Trustee holds Trust
Assets for unlocated Stockholders and Optionholders, due notice shall be given
to such Stockholders and Optionholders in accordance with Maryland law.
 
 
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ARTICLE III
 
BENEFICIARIES
 
3.1           Beneficial Interests.
 
(a)           The Beneficial Interest of each Initial Beneficiary shall be
determined in accordance with a certified copy of (i) the Company’s stockholder
list as of the Record Date and (ii) the Company’s list of Optionholders.  The
Company’s transfer agent will deliver such a certified copy of the Company’s
stockholder list to the Trustee within a reasonable time after such date and the
Company will deliver such a certified copy of the Company’s list of
Optionholders.  The Trustee shall be entitled to rely and shall be fully
protected in relying upon the certified copy of the Company’s stockholder list
and Optionholder list.  For ease of administration, the Trustee shall express
the Beneficial Interest of each Beneficiary in terms of units (“Units”). Each
record owner of Shares as of the close of business on the Record Date shall
receive one Unit for each Share then held of record. Except as otherwise
provided in this Agreement, each record owner of Shares shall have the same pro
rata interest in the Trust Assets as such holder’s pro rata interest in the
aggregate outstanding Shares on the Record Date.
 
(b)           On and after the Transfer Date, all Shares shall automatically be
deemed cancelled.
 
(c)           The rights of Beneficiaries in, to and under the Trust Assets and
the Trust shall not be represented by any form of certificate or other
instrument, and no Beneficiary shall be entitled to such a certificate.  The
Trustee shall maintain at his place of business a record of the name and address
of each Beneficiary and such Beneficiary’s aggregate Units in the Trust.
 
(d)           If any conflicting claims or demands are made or asserted with
respect to the ownership of any Units, or if there is any disagreement between
the transferees, assignees, heirs, representatives or legatees succeeding to all
or part of the interest of any Beneficiary resulting in adverse claims or
demands being made in connection with such Units, then, in any of such events,
the Trustee shall be entitled, at his sole election, to refuse to comply with
any such conflicting claims or demands. In so refusing, the Trustee may elect to
make no payment or distribution with respect to such Units, or to make such
payment to a court of competent jurisdiction or an escrow agent, and in so
doing, the Trustee shall not be or become liable to any of such parties for
their failure or refusal to comply with any of such conflicting claims or
demands or to take any other action with respect thereto, nor shall the Trustee
be liable for interest on any funds which it may so withhold. Notwithstanding
anything to the contrary set forth in this Section 3.1(d), the Trustee shall be
entitled to refrain and refuse to act until either (i) the rights of the adverse
claimants have been adjudicated by a final judgment of a court of competent
jurisdiction, (ii) all differences have been adjusted by valid written agreement
between all of such parties, and the Trustee shall have been furnished with an
executed counterpart of such agreement, or (iii) there is furnished to the
Trustee a surety bond or other security satisfactory to the Trustee, as he shall
deem appropriate, to fully indemnify him as between all conflicting claims or
demands.
 
 
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3.2           Rights of Beneficiaries.  Each Beneficiary shall be entitled to
participate in the rights and benefits due to a Beneficiary hereunder according
to the Beneficiary’s Beneficial Interest. Each Beneficiary shall take and hold
the same subject to all the terms and provisions of this Agreement. The interest
of each Beneficiary hereunder is declared, and shall be in all respects,
personal property and upon the death of an individual Beneficiary, the
Beneficiary’s Beneficial Interest shall pass as personal property to the
Beneficiary’s legal representative and such death shall in no way terminate or
affect the validity of this Agreement. A Beneficiary shall have no title to,
right to, possession of, management of, or control of, the Trust Assets except
as expressly provided herein. No widower, widow, heir or devisee of any person
who may be a Beneficiary shall have any right of dower, homestead, or
inheritance, or of partition, or of any other right, statutory or otherwise, in
any property forming a part of the Trust Assets but the whole title to all the
Trust Assets shall be vested in the Trustee and the sole interest of the
Beneficiaries shall be the rights and benefits given to such Persons under this
Agreement.
 
3.3           Limitations on Transfer of Interests of Beneficiaries.
 
(a)           THE BENEFICIAL INTEREST OF A BENEFICIARY MAY NOT BE TRANSFERRED;
PROVIDED THAT THE BENEFICIAL INTERESTS SHALL BE ASSIGNABLE OR TRANSFERABLE BY
WILL, INTESTATE SUCCESSION, OR OPERATION OF LAW AND THAT THE EXECUTOR OR
ADMINISTRATOR OF THE ESTATE OF A BENEFICIARY MAY MORTGAGE, PLEDGE, GRANT A
SECURITY INTEREST IN, HYPOTHECATE OR OTHERWISE ENCUMBER, THE BENEFICIAL INTEREST
HELD BY THE ESTATE OF SUCH BENEFICIARY IF NECESSARY IN ORDER TO BORROW MONEY TO
PAY ESTATE, SUCCESSION OR INHERITANCE TAXES OR THE EXPENSES OF ADMINISTERING THE
ESTATE OF THE BENEFICIARY, UPON WRITTEN NOTICE TO, AND WRITTEN CONSENT OF, THE
TRUSTEE, WHICH CONSENT MAY NOT BE UNREASONABLY WITHHELD.
 
(b)           Except as may be otherwise required by law, the Beneficial
Interests of the Beneficiaries hereunder shall not be subject to attachment,
execution, sequestration or any order of a court, nor shall such interests be
subject to the contracts, debts, obligations, engagements or liabilities of any
Beneficiary, but the interest of a Beneficiary shall be paid by the Trustee to
the Beneficiary free and clear of all assignments, attachments, anticipations,
levies, executions, decrees and sequestrations and shall become the property of
the Beneficiary only when actually received by such Beneficiary.
 
 
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3.4           Trustee and Related Persons as Beneficiary.  The Trustee, as well
as certain members of the Trustee’s family, are Beneficiaries to the same extent
as if he were not a Trustee hereunder and each of them have all the rights of a
Beneficiary, including, without limitation, the right to vote and to receive
distributions, to the same extent as if he were not a Trustee hereunder.
 
ARTICLE IV
 
DURATION AND TERMINATION OF THE TRUST
 
4.1           Duration.  The existence of the Trust shall terminate upon the
earliest of (i) such time as termination is required by the applicable laws of
the State of Maryland, (ii) the distribution of all the Trust Assets as provided
in Section 5.7, or (iii) the expiration of a period of three years from the
Transfer Date; provided that the Trustee, in his discretion, may extend the
existence of the Trust to such later date as they may designate, if he
determines that an extension is reasonably necessary to fulfill the purpose of
the Trust, as specified in this Agreement, and, prior to such extension, the
Trustee shall have requested and received additional no-action assurances from
the Securities and Exchange Commission regarding the registration and reporting
requirements of the Trustee under the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and any other applicable Federal
securities act. The Trust shall not in any event terminate pursuant to
subparagraph (iii) of this Section 4.1 prior to the date on which the Trustee is
permitted to make a final distribution in accordance with Section 5.7.
 
4.2           Other Obligations of Trustee upon Termination.  Upon termination
of the Trust, the Trustee shall provide for the retention of the books, records,
lists of holders of Units, certificates for Shares and files that shall have
been delivered to or created by the Trustee. At the Trustee’s discretion, all of
such records and documents may be destroyed at any time after seven years from
the distribution of all the Trust Assets. Except as otherwise specifically
provided herein, upon the distribution of all the Trust Assets, the Trustee
shall have no further duties or obligations hereunder; provided, that the
Trustee shall execute and deliver such other instruments and agreements as shall
be reasonably necessary to effect the termination of the Trust.
 
ARTICLE V
 
ADMINISTRATION OF TRUST ASSETS
 
5.1           Efforts to Resolve Claims and Liabilities.  Subject to the terms
and conditions of this Agreement, the Trustee will make appropriate efforts to
resolve any contingent or unliquidated claims and outstanding contingent
Liabilities for which the Trust may be responsible, dispose of the Trust Assets,
make timely distributions and not unduly prolong the duration of the Trust.
 
5.2           Continued Collection of Property of Trust Assets.  All property
that is determined to be a part of the Trust Assets shall continue to be
collected by the Trustee and held as a part of the Trust. The Trustee shall hold
the Trust Assets without being obligated to provide for or pay any interest
thereon to any Beneficiary, except to the extent of such Beneficiary’s share of
interest actually earned by the Trust after payment of the Trust’s liabilities
and expenses as provided in Section 5.5.
 
 
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5.3           Transactions with Related Persons.  Notwithstanding any other
provisions of this Agreement, except as set forth in Sections 5.6 and 5.7 and
Schedule A attached hereto, the Trustee shall not knowingly, directly or
indirectly, transfer all or any part of the Trust Assets to, or contract with,
(i) any agent or employee (acting in their individual capacities) of the Trust;
or (ii) any Person of which any agent or employee of the Trust is an Affiliate
by reason of being a director, officer, partner or direct or indirect beneficial
owner of 5% or more of the outstanding capital stock, shares or other equity
interest of such Persons unless in each such case, after disclosure of such
interest or affiliation such transaction is approved by the Trustee, if any, who
is not interested in the transaction and such Trustee determines that such
transaction is on its terms fair and reasonable to the Trust and is in the best
interests of the Beneficiaries, and in no event less favorable to the Trust than
terms available for a comparable transaction with unrelated Persons.
 
5.4           Restriction on Trust Assets.  The Trust shall not receive
transfers of any assets prohibited by Revenue Procedure 82-58, as the same may
be amended, supplemented, or modified, including, but not limited to, any listed
stocks or securities, any readily-marketable assets, any operating assets of a
going business, any unlisted stock of a single issuer that represents 80% or
more of the stock of such issuer or any general or limited partnership interest.
The Trustee shall not retain cash in excess of a reasonable amount to meet
expenses, charges and obligations of the Trust, the Trust Assets and all
Liabilities.
 
5.5           Payment of Expenses and Liabilities.  The Trustee shall pay from
the Trust Assets all expenses, charges, and obligations of the Trust and of the
Trust Assets and all Liabilities and obligations that the Trustee specifically
assumes and agrees to pay pursuant to this Agreement and such transferee
liabilities which the Trustee may be obligated to pay as transferee of the Trust
Assets, including, but not limited to, interest, penalties, taxes, assessments,
and public charges of any kind or nature and the costs, charges, and expenses
connected with or growing out of the execution or administration of the Trust
and such other payments and disbursements as are provided in this Agreement or
which may be determined to be a proper charge against the Trust Assets by the
Trustee.
 
5.6           Interim Distributions.  At such time as may be determined by him
in his sole discretion, the Trustee shall distribute, or cause to be distributed
to the Beneficiaries, in proportion to the number of Units held by each
Beneficiary on the record date for such distribution, such cash comprising a
portion of the Trust Assets as the Trustee may in his sole discretion determine
may be distributed without detriment to the conservation and protection of the
Trust Assets.
 
5.7           Final Distribution.  If the Trustee determines that the
Liabilities and all other claims, expenses, charges, and obligations of the
Trust have been paid or discharged or if the existence of the Trust shall
terminate pursuant to Section 4.1, the Trustee shall, as expeditiously as is
consistent with the conservation and protection of the Trust Assets, distribute
the remaining Trust Assets, if any, to the Beneficiaries in proportion to the
number of Units held by each Beneficiary. The Trustee shall hold in the Trust
and thereafter make disposition of all liquidating distributions and other
payments due any Beneficiaries who have not been located, in accordance with
Maryland law, subject to applicable state laws regarding escheat and abandoned
property.  To the extent that the amount of the ultimate distribution to
Beneficiaries is determined to be impracticable to distribute, such amount may
be distributed in accordance with applicable law.
 
 
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5.8           Reports to Beneficiaries and Others.
 
(a)           As soon as practicable after the Transfer Date, the Trustee will
mail to each Beneficiary a notice indicating how many Units such person
beneficially owns and the contact details of the Trustee. As soon as practicable
after the end of each tax year and after termination of the Trust, but in any
event within 90 days after each such event, the Trustee shall submit a written
report and account to the Beneficiaries showing (i) the assets and liabilities
of the Trust at the end of such taxable year or upon termination and the
receipts and disbursements of the Trustee for such taxable year or period,
prepared in accordance with generally accepted accounting principles, (ii) any
changes in the Trust Assets and Liabilities that they have not previously
reported, and (iii) any action taken by the Trustee in the performance of his
duties under this Agreement that he has not previously reported, and which, in
his opinion, materially affects the Trust Assets or Liabilities.
 
(b)           The tax year of the Trust shall end on December 31 of each year
unless the Trustee deems it advisable to establish some other date as the date
on which the tax year of the Trust shall end.
 
(c)           During the course of a tax year, whenever a material event
relating to the Trust Assets occurs, the Trustee shall, within a reasonable
period of time after such occurrence, prepare and mail to the Beneficiaries an
interim report describing such event. The occurrence of a material event need
not be reported on an interim report if an annual report pursuant to
Section 5.8(a) will be issued at approximately the same time that such interim
report would be issued and such annual report describes the material event as it
would be discussed in an interim report. The occurrence of a material event will
be determined solely by the Trustee or as may be required by the rules and
regulations promulgated by the Securities and Exchange Commission.
 
(d)           The Trustee’s reports pursuant to this Section shall be in
accordance with Maryland law.
 
5.9           Federal Income Tax Information.  As soon as practicable after the
close of each tax year, the Trustee shall mail to each Person who was a
Beneficiary at the close of the year, a statement showing, on a Unit basis the
information necessary to enable a Beneficiary to determine its taxable income
(if any) from the Trust as determined for federal income tax purposes.  In
addition, after receipt of a request in good faith, the Trustee shall furnish to
any Person who has been a Beneficiary at any time during the preceding year, at
the expense of such Person and at no cost to the Trust, a statement containing
such further tax information as is reasonably available to the Trustee that
shall be helpful in determining the amount of taxable income that such Person
should include in such Person’s Federal income tax return.
 
5.10           Books and Records.  The Trustee shall maintain in respect of the
Trust and the holders of Units books and records relating to the Trust Assets,
income and liabilities of the Trust in such detail and for such period of time
as may be necessary to enable it to make full and proper accounting in respect
thereof in accordance with this Article V and to comply with applicable law.
Such books and records shall be maintained on a basis or bases of accounting
necessary to facilitate compliance with the tax reporting requirements of the
Trust and the reporting obligations of the Trustee under Section 5.8. Except as
provided in Section 5.8, nothing in this Agreement requires the Trustee to file
any accounting or seek approval of any court with respect to the administration
of the Trust or as a condition for managing any payment or distribution out of
the Trust Assets. Beneficiaries shall have the right upon 30 days’ prior written
notice delivered to the Trustee to inspect during normal business hours such
books and records (including financial statements); provided that, if so
requested, such Beneficiaries shall have entered into a confidentiality
agreement satisfactory in form and substance to the Trustee.
 
 
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5.11           Employment of Agents, etc.
 
(a)           The Trustee shall be responsible for the general policies of the
Trust and for the general supervision of the activities of the Trust conducted
by all agents, employees, advisors or managers of the Trust. The Trustee shall
have the power to appoint, employ or contract with any Person or Persons as the
Trustee may deem necessary or proper for the transaction of all or any portion
of the activities of the Trust.
 
(b)           The Trustee shall have the power to determine the terms and
compensation of any Person whom he may employ or with whom he may contract
pursuant to Section 5.11(a), subject to the provisions of Section 5.3 and
Schedule A attached hereto.
 
(c)           The Trustee shall not be required to administer the Trust as his
sole and exclusive function and the Trustee may have other business interests
and may engage in other activities similar or in addition to those relating to
the Trust, including the rendering of advice or services of any kind to
investors or any other Persons and the management of other investments, subject
to the Trustee’s obligations under this Agreement and applicable law.
 
5.12           Fiduciary Duty.
 
(a)           To the extent that, at law or in equity, the Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust, the
Beneficiaries or to any other Person, the Trustee acting under this Agreement
shall not be liable to the Trust, the Beneficiaries or to any other Person for
its good faith reliance on the provisions of this Agreement. The provisions of
this Agreement, to the extent that they restrict the duties and liabilities of
the Trustee otherwise existing at law or in equity are agreed by the parties
hereto to replace such other duties and liabilities of the Trustee.
 
(b)           Unless otherwise expressly provided herein:
 
(i)            whenever a conflict of interest exists or arises between the
Trustee or any of his Affiliates, on the one hand, and the Trust or any
Beneficiaries or any other Person, on the other hand; or
 
(ii)           whenever this Agreement or any other agreement contemplated
herein provides that the Trustee shall act in a manner that is, or provides
terms that are, fair and reasonable to the Trust, any Beneficiaries or any other
Person, the Trustee shall resolve such conflict of interest, take such action or
provide such terms, considering in each case the relative interest of each party
(including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Trustee, the
resolution, action or terms so made, taken or provided by the Trustee shall not
constitute a breach of this Agreement or any other agreement contemplated herein
or of any duty or obligation of the Trustee at law or in equity or otherwise.
 
 
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(c)           Notwithstanding any other provision of this Agreement or otherwise
applicable law, in this Agreement the Trustee is permitted or required to make a
decision:
 
(i)            in its “discretion” or under a grant of similar authority, the
Trustee shall be entitled to consider such interests and factors as it desires,
including its own interests, and, to the fullest extent permitted by applicable
law, shall have no duty or obligation to give any consideration to any interest
of or factors affecting the Trust, the Beneficiaries or any other Person; or
 
(ii)           in its “good faith” or under another express standard, the
Trustee shall act under such express standard and shall not be subject to any
other or different standard.
 
(d)           The Trustee and any Affiliate of the Trustee may engage in or
possess an interest in other profit-seeking or business ventures of any nature
or description, independently or with others, whether or not such ventures are
competitive with the Trust and the doctrine of corporate opportunity, or any
analogous doctrine, shall not apply to the Trustee. No Trustee who acquires
knowledge of a potential transaction, agreement, arrangement or other matter
that may be an opportunity for the Trust shall have any duty to communicate or
offer such opportunity to the Trust, and such Trustee shall not be liable to the
Trust or to the Beneficiaries for breach of any fiduciary or other duty by
reason of the fact that such Trustee pursues or acquires for, or directs such
opportunity to another Person or does not communicate such opportunity or
information to the Trust. Neither the Trust nor any Beneficiary shall have any
rights or obligations by virtue of this Agreement or the trust relationship
created hereby in or to such independent ventures or the income or profits or
losses derived therefrom, and the pursuit of such ventures, even if competitive
with the activities of the Trust, shall not be deemed wrongful or improper. Any
Trustee may engage or be interested in any financial or other transaction with
the Beneficiaries or any Affiliate of the Trust or the Beneficiaries, or may act
as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Trust or the Beneficiaries or
their Affiliates.
 
ARTICLE VI
 
POWERS OF AND LIMITATIONS ON THE TRUSTEE
 
6.1           Limitations on Trustee.  The Trustee shall not at any time, on
behalf of the Trust or Beneficiaries, enter into or engage in any trade or
business except as necessary for the orderly liquidation of the Trust Assets.
The Trustee shall be restricted to the holding, collection and sale of the Trust
Assets and the payment and distribution thereof for the purposes set forth in
this Agreement and to the conservation and protection of the Trust Assets and
the administration thereof in accordance with the provisions of this Agreement.
In no event shall the Trustee take any action that would jeopardize the status
of the Trust as a “liquidating trust” for Federal income tax purposes within the
meaning of Treasury Regulation Section 301.7701-4(d). The Trustee shall not
invest any of the cash held as Trust Assets, except that the Trustee may invest
in (i) direct obligations of the United States of America or obligations of any
agency or instrumentality thereof which mature not later than one year from the
date of acquisition thereof, (ii) money market deposit accounts, checking
accounts, savings accounts, or certificates of deposit, or other time deposit
accounts which mature not later than one year from the date of acquisition
thereof which are issued by a commercial bank or savings institution organized
under the laws of the United States of America or any state thereof, or (iii)
other temporary investments not inconsistent with the Trust’s status as a
liquidating trust for tax purposes.
 
 
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6.2           Specific Powers of Trustee.  Subject to the provisions of the
terms and conditions of this Agreement, the Trustee shall have the following
specific powers in addition to any powers conferred upon them by any other
Section or provision of this Agreement or any statutory laws of the State of
Maryland; provided that the enumeration of the following powers shall not be
considered in any way to limit or control the power of the Trustee to act as
specifically authorized by any other Section or provision of this Agreement and
to act in such a manner as the Trustee may deem necessary or appropriate to
conserve and protect the Trust Assets or to confer on the Beneficiaries the
benefits intended to be conferred upon them by this Agreement:
 
(a)           to determine the nature and amount of the consideration to be
received with respect to the sale or other disposition of, or the grant of
interest in, the Trust Assets;
 
(b)           to collect, liquidate or otherwise convert into cash, or such
other property as it deems appropriate, all property, assets and rights in the
Trust Assets, and to pay, discharge, and satisfy all other claims, expenses,
charges, Liabilities and obligations existing with respect to the Trust Assets,
the Trust or the Trustee;
 
(c)           to elect, appoint, engage, retain or employ any Persons as agents,
representatives, employees, or independent contractors (including without
limitation real estate advisors, investment advisors, accountants, transfer
agents, attorneys-at-law, managers, appraisers, brokers, or otherwise) in one or
more capacities, and to pay reasonable compensation from the Trust Assets for
services in as many capacities as such Person may be so elected, appointed,
engaged, retained or employed (provided that any such agreements or arrangements
with a person or entity affiliated with the Trustee shall be on terms no less
favorable to the Trust than those available to the Trust in similar agreements
or arrangements with unaffiliated third parties, and such agreements or
arrangements shall be terminable, without penalty, on 60 days prior written
notice by the Trust), to prescribe the titles, powers and duties, terms of
service and other terms and conditions of the election, appointment, engagement,
retention or employment of such Persons and, except as prohibited by law, to
delegate any of the powers and duties of the Trustee to agents, representatives,
employers, independent contractors or other Persons;
 
(d)           to retain and set aside such funds out of the Trust Assets as the
Trustee shall deem necessary or expedient to pay, or provide for the payment of
(i) unpaid claims, expenses, charges, Liabilities and obligations of the Trust,
the Company or any Subsidiary; and (ii) the expenses of administering the Trust
Assets;
 
 
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(e)           to do and perform any and all acts necessary or appropriate for
the conservation and protection of the Trust Assets, including acts or things
necessary or appropriate to maintain the Trust Assets held by the Trustee
pending sale or disposition thereof or distribution thereof to the
Beneficiaries;
 
(f)           to institute or defend actions or judgments for declaratory relief
or other actions or judgments and to take such other action, in the name of the
Trust or the Company or as otherwise required, as the Trustee may deem necessary
or desirable to enforce any instruments, contracts, agreements, causes of
action, or rights relating to or forming a part of the Trust Assets;
 
(g)           to determine conclusively from time to time the value of and to
revalue the securities and other property of the Trust, in accordance with
independent appraisals or other information as it deems necessary or
appropriate;
 
(h)           to cancel, terminate, or amend any instruments, contracts,
agreements, obligations, or causes of action relating to or forming a part of
the Trust Assets, and to execute new instruments, contracts, agreements,
obligations or causes of action notwithstanding that the terms of any such
instruments, contracts, agreements, obligations, or causes of action may extend
beyond the terms of the Trust;
 
(i)           in the event any of the property that is or may become a part of
the Trust Assets is situated in any state or other jurisdiction in which the
Trustee is not qualified to act as Trustee, to nominate and appoint an
individual or corporate trustee qualified to act in such state or other
jurisdiction in connection with the property situated in that state or other
jurisdiction as a trustee of such property and require from such trustee such
security, if any, as may be designated by the Trustee, which, in the Trustee’s
sold discretion may be paid out of the Trust Assets.  The trustee so appointed
shall have all the rights, powers, privileges and duties and shall be subject to
the conditions and limitations of the Trust, except as limited by the Trustee
and except where the same may be modified by the laws of such state or other
jurisdiction (in which case, the laws of the state or other jurisdiction in
which such trustee is acting shall prevail to the extent necessary). Such
trustee shall be answerable to the Trustee herein appointed for all monies,
assets and other property which may be received by it in connection with the
administration of such property. The Trustee hereunder may remove such trustee,
with or without cause, and appoint a successor trustee at any time by the
execution by the Trustee of a written instrument declaring such trustee removed
from office, and specifying the effective date of removal;
 
(j)           to cause any investments of any part of the Trust Assets to be
registered and held in its name or in the names of a nominee or nominees without
increase or decrease of liability with respect thereto;
 
(k)           to terminate and dissolve any entities owned by the Trust; and
 
(l)           to perform any act authorized, permitted, or required under any
instrument, contract, agreement, right, obligation, or cause of action relating
to or forming a part of the Trust Assets whether in the nature of an approval,
consent, demand, or notice thereunder or otherwise, unless such act would
require the consent of the Beneficiaries in accordance with the express
provisions of this Agreement.
 
 
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ARTICLE VII
 
CONCERNING THE TRUSTEE, BENEFICIARIES, EMPLOYEES AND AGENTS
 
7.1           Generally.  The Trustee accepts and undertakes to discharge the
trust created by this Agreement, upon the terms and conditions hereof, on behalf
of the Beneficiaries. The Trustee shall exercise such of the rights and powers
vested in him by this Agreement in accordance with applicable law and use the
same degree of care and skill in his exercise as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs. No provision of
this Agreement shall be construed to relieve the Trustee from liability for his
own grossly negligent action, his own grossly negligent failure to act, or their
own fraud or willful misconduct, except that:
 
(a)           the Trustee shall not be liable to the Beneficiaries for the acts
or omissions of an agent, employee, advisor or manager of the Trust appointed by
the Trustee hereunder, except where the Trustee specifically directs the act of
such Person, delegates the authority to such Person to act where the Trustee was
under a duty not to delegate, does not use reasonable prudence in the selection
or retention of such Person, does not periodically review such person’s overall
performance and compliance with the terms of such delegation; conceals the act
or omission of such Person; or neglects to take reasonable steps to redress any
wrong committed by such Person when the Trustee is aware of such Person’s act or
omission;
 
(b)           the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement, and no
implied covenants or obligations shall be read into this Agreement against the
Trustee;
 
(c)           in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this Agreement;
but in the case of any such certificates or opinions which are specifically
required to be furnished to the Trustee by any provision hereof, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Agreement;
 
(d)           the Trustee shall not be liable for any reasonable error of
judgment made in good faith; and
 
(e)           the Trustee shall not be liable with respect to any action taken
or omitted to be taken by the Trustee in good faith in accordance with the terms
and conditions of this Agreement and at the direction of Beneficiaries having
aggregate Units of at least two-thirds of the total Units held by all
Beneficiaries relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any right or
power conferred upon the Trustee under this Agreement.
 
 
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7.2           Reliance by Trustee.  Except as otherwise provided in Section 7.1:
 
(a)           The Trustee may consult with legal counsel, auditors or other
experts to be selected by him, and the advice or opinion of such counsel,
auditors, or other experts shall be full and complete personal protection to the
Trustee and agents of the Trust in respect of any action taken or suffered by
the Trustee in good faith and in the reliance on, or in accordance with, such
advice or opinion.
 
(b)           Persons dealing with the Trustee shall look only to the Trust
Assets to satisfy any liability incurred by the Trustee to such Person in
carrying out the terms of the Trust, and the Trustee shall have no personal or
individual obligation to satisfy any such liability.
 
(c)           As far as reasonably practicable, the Trustee shall cause any
written instrument creating an obligation of the Trust to include a reference to
this Agreement and to provide that neither the Beneficiaries, the Trustee nor
their agents shall be liable thereunder, and that the other parties to such
instrument shall look solely to the Trust Assets for the payment of any claim
thereunder or the performance thereof; provided that the omission of such
provision from any such instrument shall not render the Beneficiaries, the
Trustee or their agents liable, nor shall the Trustee be liable to anyone for
such omission.
 
7.3           Limitation on Liability to Third Persons.  No Beneficiary shall be
subject to any personal liability whatsoever, in tort, contract, or otherwise,
to any Person in connection with the Trust Assets or the affairs of the Trust,
and, to the fullest extent permitted by law, the Trustee, employee or agent of
the Trust shall be subject to any personal liability whatsoever in tort,
contract, or otherwise, to any Beneficiary or any other Person in connection
with the Trust Assets or the affairs of the Trust, except to the extent
determined by a court of competent jurisdiction from which no appeal can be or
is taken, to have resulted from the gross negligence, fraud or willful
misconduct knowingly and intentionally committed in bad faith by the Trustee,
employee or agent of the Trust; and all such other Persons shall look solely to
the Trust Assets for satisfaction of claims of any nature arising in connection
with the affairs of the Trust. The Trustee shall, at all times, at the expense
of the Trust, maintain insurance for the protection of the Trust Assets, its
Beneficiaries, the Trustee, employees and agents in such amount as the Trustee
shall deem adequate to cover all foreseeable liability to the extent available
at reasonable rates.
 
7.4           Recitals.  Any written instrument creating an obligation of the
Trust shall be conclusively taken to have been executed or done by a Trustee,
employee or agent of the Trust only in its capacity as Trustee under this
Agreement, or in its capacity as an employee or agent of the Trust.
 
 
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7.5           Indemnification.  Each Trustee and Person appointed or employed by
the Trustee pursuant to Section 5.11, and the directors, officers, employees and
agents of each such Person (each an “Indemnified Person” and collectively the
“Indemnified Persons”), shall, to the fullest extent permitted by law, be
indemnified out of the Trust Assets against all liabilities and expenses,
including amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees, reasonably incurred by the Indemnified Persons
in connection with the defense or disposition of any action, suit or other
proceeding by the Trust or any other Person, whether civil or criminal, in which
the Indemnified Person may be involved or with which the Indemnified Person may
be threatened: (i) in the case of a Trustee or Person appointed or employed by
the Trustee pursuant to Section 5.11, while in office or thereafter, by reason
of his being or having been such a Trustee, employee or agent including, without
limitation, in connection with or arising out of any action, suit or other
proceeding based on any alleged breach of duty, neglect, error, misstatement,
misleading statement, omission or act of any such Trustee or Person in such
capacity; and (ii) in the case of any director, officer, employee, or agent of
any such Person, by reason of any such Person exercising or failing to exercise
any right or power hereunder; provided that the Indemnified Person shall not be
entitled to such indemnification with respect to any matter as to which the
Indemnified Person shall have been adjudicated by a final order of a court of
competent jurisdiction from which no appeal can be or is taken, to have acted
with gross negligence, fraud or willful misconduct knowingly and intentionally
committed in bad faith. The rights accruing to any Indemnified Person under
these provisions shall not exclude any other right to which the Indemnified
Person may be lawfully entitled; provided that no Indemnified Person may satisfy
any right of indemnity or reimbursement granted herein, or to which the
Indemnified Person may be otherwise entitled, except out of the Trust Assets,
and no Beneficiary shall be personally liable to any person with respect to any
claim for indemnity or reimbursement or otherwise. The Trustee may make advance
payments in connection with indemnification under this Section 7.5, provided
that the Indemnified Person shall have given a written undertaking to repay any
amount advanced to the Indemnified Person and to reimburse the Trust in the
event that it is subsequently determined that the Indemnified Person is not
entitled to such indemnification. The Trustee may purchase such insurance as
they believe, in the exercise of their discretion, adequately insures that each
Indemnified Person shall be indemnified against any such loss, liability, or
damage pursuant to this Section 7.5.  Nothing contained herein shall restrict
the right of the Trustee to indemnify or reimburse such Indemnified Person in
any proper case, even though not specifically provided for herein, nor shall
anything contained herein restrict the right of any such Indemnified Person to
contribution under applicable law.
 
ARTICLE VIII
 
PROTECTION OF PERSONS DEALING WITH THE TRUSTEES
 
8.1           Action by Trustee.  At any time there is more than one Trustee,
all action with respect to the disposition and distribution of the Trust Assets
required or permitted to be taken by the Trustees, in their capacities as
Trustees, shall be taken by approval, consent, vote or resolution authorized by
at least a majority of the Trustees.
 
8.2           Reliance on Statements by Trustee.  Any Person dealing with the
Trustees shall be fully protected in relying upon the Trustee’s certificate,
signed by the Trustee, or if at such time there is more than one Trustee, any
one or more of the Trustees, with respect to the authority that the Trustee or
one or more Trustees has to take any action under the Trust.  Any Person dealing
with the Trustee shall be fully protected in relying upon the Trustee’s
certificate setting forth the facts concerning the action taken by the Trustee
pursuant to this Agreement, including the aggregate number of Units held by the
Beneficiaries causing such action to be taken.
 
 
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ARTICLE IX
 
COMPENSATION OF TRUSTEE
 
9.1           Amount of Compensation
 
.  In lieu of commissions or other compensation fixed by law for trustees, the
Trustee shall receive as compensation for services as Trustee hereunder the
amounts set forth in Schedule A attached hereto to the extent identified as
applicable to that Trustee, or as may subsequently be approved by Beneficiaries
a majority of the total Units present in person or by proxy at any meeting
validly called for such purpose pursuant to Section 12 hereof.
 
9.2           Expenses.  The Trustee shall be reimbursed from the Trust Assets
for all expenses reasonably incurred, and appropriately documented, by the
Trustee in the performance of that Trustee’s duties in accordance with this
Agreement.
 
ARTICLE X
 
TRUSTEE AND SUCCESSOR TRUSTEE
 
10.1         Number and Qualification of Trustee.
 
(a)           Subject to Section 10.3, there shall be one Trustee of the Trust,
who shall be a citizen and resident of, or a corporation which is incorporated
under the laws of, a state in the United States and, if a corporation, which is
authorized to act as a corporate fiduciary under the laws of the State of
Maryland.  The number of Trustees may be increased or decreased from time to
time by the Trustee.
 
(b)           If a corporate Trustee shall ever change its name, or shall
reorganize or reincorporate, or shall merge with or into or consolidate with any
other bank or trust company, such corporate trustee shall be deemed to be a
continuing entity and shall continue to act as a trustee hereunder with the same
liabilities, duties, powers, titles, discretions, and privileges as are herein
specified for a Trustee.
 
10.2         Resignation and Removal.  Any Trustee may resign and be discharged
from the Trust hereby created by giving written notice to the Beneficiaries at
their respective addresses as they appear on the records of the Trustee. Such
resignation shall become effective on the date specified in such notice, which
date shall be at least 30 days after the date of such notice, or upon the
appointment of such Trustee’s successor, and such successor’s acceptance of such
appointment, whichever is earlier. Any Trustee may be removed at any time, with
cause, by Beneficiaries having aggregate Units of at least a majority of the
total Units held by all Beneficiaries. Any Trustee may be removed at any time,
without cause, by Beneficiaries having aggregate Units of at least two-thirds of
the total Units held by all Beneficiaries.
 
10.3         Appointment of Successor.  Should at any time the initial Trustee
resigns or is removed, dies, becomes mentally incompetent or incapable of action
(as determined by the Beneficiaries holding Units representing an aggregate of
at least a majority of the total Beneficial Interests in the Trust), or is
adjudged bankrupt or insolvent, the successor trustee shall be Michael
Knapp.  Should at any time such successor Trustee or any other Trustee resigns
or is removed, dies, becomes mentally incompetent or incapable of action (as
determined by the Beneficiaries holding Units representing an aggregate of at
least a majority of the total Beneficial Interests in the Trust), or is adjudged
bankrupt or insolvent, unless any remaining Trustee(s) shall decrease the number
of Trustees of the Trust pursuant to Section 10.1 hereof, or shall the number of
Trustees be increased in accordance with Section 10.3 hereof, a vacancy shall be
deemed to exist and a successor shall be appointed by any remaining
Trustees.  If (i) such a vacancy is not filled by any remaining Trustees within
ninety (90) days, and the remaining Trustees, if any, have notified the
Beneficiaries of their inability to fill such vacancy or (ii) there is no
remaining Trustee then the Beneficiaries may, pursuant to Article 12 hereof,
call a meeting to appoint a successor Trustee by Beneficiaries holding Units
representing an aggregate of at least a majority of the total Beneficial
Interests in the Trust present at the meeting, in person or by proxy pending the
appointment of a successor Trustee, the remaining Trustee or Trustees then
serving may take any action in the manner set forth in Section 8.1.
 
 
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10.4         Acceptance of Appointment by Successor Trustee.  Any successor
Trustee appointed hereunder shall execute an instrument accepting such
appointment hereunder and shall deliver one counterpart, in case of a
resignation, to the retiring Trustee. Thereupon such successor Trustee shall,
without any further act, become vested with all the estates, properties, rights,
powers, trusts, and duties of its predecessor in the Trust hereunder with like
effect as if originally named therein; but the retiring Trustee shall
nevertheless, when requested in writing by the successor Trustee, execute and
deliver an instrument or instruments conveying and transferring to such
successor Trustee upon the trust herein expressed, all the estates, properties,
rights, powers, and trusts of such former Trustee, and it shall duly assign,
transfer, and deliver to such successor Trustee all property and money held by
such Trustee hereunder.
 
10.5         Bonds.  Unless required by the Board prior to the Transfer Date, or
unless a bond is required by law, no bond shall be required of any original
Trustee hereunder. Unless a bond is required by law and such requirement cannot
be waived by or with approval of the Beneficiaries holding aggregate Units of at
least a majority of the total Units held by all Beneficiaries, no bond shall be
required of any successor trustee hereunder. If a bond is required by law, no
surety or security with respect to such bond shall be required unless required
by law and such requirement cannot be waived by or with approval of the
Beneficiaries or unless required by the Board. If a bond is required by the
Board or by law, the Board or the Trustee, as the case may be, shall determine
whether, and to what extent, a surety or security with respect to such bond
shall be required. The cost of any such bond shall be borne by the Trust.
 
ARTICLE XI
 
CONCERNING THE BENEFICIARIES
 
11.1         Evidence of Action by Beneficiaries.  Whenever in this Agreement it
is provided that the Beneficiaries may take any action (including the making of
any demand or request, the giving of any notice, consent, or waiver, the removal
of a Trustee, the appointment of a successor Trustee, or the taking of any other
action), the fact that at the time of taking any such action such Beneficiaries
have joined therein may be evidenced: (i) by any instrument or any number of
instruments of similar tenor executed by the Beneficiaries in person or by agent
or attorney appointed in writing; or (ii) by the record of the Beneficiaries
voting in favor thereof at any meeting of Beneficiaries duly called and held in
accordance with the provisions of Article XII.
 
 
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11.2         Limitation on Suits by Beneficiaries.  No Beneficiary shall have
any right by virtue of any provision of this Agreement to institute any action
or proceeding at law or in equity against any party other than the Trustee upon
or under or with respect to the Trust Assets or the agreements relating to or
forming part of the Trust Assets, and the Beneficiaries (by their acceptance of
any distribution made to them pursuant to this Agreement) waive any such right.
 
11.3         Requirement of Undertaking.  The Trustee may request any court to
require, and any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in any suit against
the Trustee for any action taken or omitted to be taken by him as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section 11.3 shall not
apply to any suit by the Trustee.
 
ARTICLE XII
 
MEETING OF BENEFICIARIES
 
12.1         Purpose of Meetings.  A meeting of the Beneficiaries may be called
at any time and from time to time pursuant to the provisions of this Article for
the purposes of taking any action which the terms of this Agreement permit
Beneficiaries having a specified aggregate Beneficial Interest to take either
acting alone or with the Trustees.
 
12.2         Meeting Called by Trustee.  The Trustee may at any time call a
meeting of the Beneficiaries to be held at such time and at such place within
the State of Maryland (or elsewhere if so determined by the Trustee) as the
Trustee shall determine. Written notice of every meeting of the Beneficiaries
shall be given by the Trustee (except as provided in Section 12.3), which
written notice shall set forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, and shall be mailed not
more than 60 nor less than 10 days before such meeting is to be held to all of
the Beneficiaries of record not more than 60 days before the date of such
meeting. The notice shall be directed to the Beneficiaries at their respective
addresses as they appear in the records of the Trust.
 
12.3         Meeting Called on Request of Beneficiaries.  Within 30 days after
written request to the Trustee by Beneficiaries holding an aggregate of at least
a majority of the total Units held by all Beneficiaries to call a meeting of all
Beneficiaries, which written request shall specify in reasonable detail the
action proposed to be taken, the Trustee shall proceed under the provisions of
Section 12.2 to call a meeting of the Beneficiaries, and if the Trustee fails to
call such meeting within such 30 day period then such meeting may be called by
such Beneficiaries, or their designated representatives, requesting such
meeting.
 
12.4         Persons Entitled to Vote at Meeting of Beneficiaries.  Each
Beneficiary shall be entitled to vote at a meeting of the Beneficiaries either
in person or by his proxy duly authorized in writing. The signature of the
Beneficiary on such written authorization need not be witnessed or notarized.
Each Beneficiary shall be entitled to a number of votes equal to the number of
Units held by such Beneficiary as of the applicable record date.
 
 
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12.5         Quorum.  At any meeting of Beneficiaries, the presence of
Beneficiaries having aggregate Units sufficient to take action on any matter for
the transaction of which such meeting was called shall be necessary to
constitute a quorum; but if less than a quorum be present, Beneficiaries having
aggregate Units of at least a majority of the total Units held by all
Beneficiaries represented at the meeting may adjourn such meeting with the same
effect and for all intents and purposes as though a quorum had been present.
Except to the extent a different percentage is specified in this Agreement for a
particular matter or is required by law, when a quorum is present, the approval
of Beneficiaries having aggregate Units of at least a majority of the total
Units present or presented by proxy at such meeting shall be required for taking
action on any matter voted on by the Beneficiaries.
 
12.6         Adjournment of Meeting.  Subject to Section 12.5, any meeting of
Beneficiaries may be adjourned from time to time and a meeting may be held at
such adjourned time and place without further notice.
 
12.7         Conduct of Meetings.  The Trustee shall appoint the Chairman and
the Secretary of the meeting. The vote upon any resolution submitted to any
meeting of Beneficiaries shall be by written ballot. An Inspector of Votes,
appointed by the Chairman of the meeting, shall count all votes cast at the
meeting for or against any resolution and shall make and file with the Secretary
of the meeting their verified written report.
 
12.8         Record of Meeting.  A record of the proceedings of each meeting of
Beneficiaries shall be prepared by the Secretary of the meeting. The record
shall be signed and verified by the Secretary of the meeting and shall be
delivered to the Trustee to be preserved by them. Any record so signed and
verified shall be conclusive evidence of all of the matters therein stated.
 
ARTICLE XIII
 
AMENDMENTS
 
13.1         Consent of Beneficiaries.  At the written direction or with the
written consent of Beneficiaries holding at least a majority of the total Units
present, in person or proxy, at any meeting validly called for such purpose
pursuant to Section 12 hereof, or such greater or lesser percentage as shall be
specified in this Agreement for the taking of an action by the Beneficiaries
under the affected provision of this Agreement, the Trustee shall promptly make
and execute a declaration amending this Agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or amendments thereto; provided that no such amendment shall
increase the potential liability of the Trustee hereunder without the written
consent of each Trustee; provided, further, that no such amendment shall permit
the Trustee to engage in any activity prohibited by Section 6.1 hereof or affect
the Beneficiaries’ rights to receive their pro rata shares of the Trust Assets
at the time of any distribution, and that no such amendment shall jeopardize the
status of the Trust as a “liquidating trust” for Federal, state or local income
tax purposes within the meaning of Treasury Regulation Section 301.7701-4(d), or
jeopardize the Beneficiaries treatment as owners of their respective shares of
the Trust’s taxable income pursuant to Section 671 through 679 of the Code and
any analogous provision of state or local law.
 
 
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13.2         Notice and Effect of Amendment.  Promptly after the execution by
the Trustee of any such declaration of amendment, the Trustee shall give notice
of the substance of such amendment to the Beneficiaries or, in lieu thereof, the
Trustee may send a copy of the amendment to each Beneficiary. Upon the execution
of any such declaration of amendment by the Trustee, this Agreement shall be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties, and immunities of the
Trustee and the Beneficiaries under this Agreement shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modification and amendments, and all the terms and conditions of any such
amendment shall thereby be deemed to be part of the terms and conditions of this
Agreement for any and all purposes.
 
ARTICLE XIV
 
MISCELLANEOUS PROVISIONS
 
14.1         Filing Documents.  This Agreement shall be filed or recorded in
such office or offices as the Trustee may determine to be necessary or
desirable. A copy of this Agreement and all amendments thereof shall be
maintained in the office of each Trustee and shall be available at all times
during regular business hours for inspection by any Beneficiary or his duly
authorized representative. The Trustee shall file or record any amendment of
this Agreement in the same places where the original Agreement is filed or
recorded. The Trustee shall file or record any instrument which relates to any
change in the office of a Trustee in the same places where the original
Agreement is filed or recorded.
 
14.2         Intention of Parties to Establish Trust.  This Agreement is not
intended to create, and shall not be interpreted as creating, a corporation,
association, partnership, or joint venture of any kind for purposes of Federal
income taxation or for any other purpose.
 
14.3         Beneficiaries Have No Rights or Privileges as Stockholders of the
Company.  Except as expressly provided in this Agreement or under applicable
law, the Beneficiaries (by their vote with respect to the Plan and/or their
acceptance of any distributions made to them pursuant to this Agreement) shall
have no rights or privileges attributable to their former status as stockholders
or optionholders of the Company.
 
14.4         Laws as to Construction.  This Agreement and the trust created
hereby shall be governed by and construed in accordance with the laws of the
State of Maryland. The Trustee, the Company and the Beneficiaries (by their vote
with respect to the Plan and/or their acceptance of any distributions made to
them pursuant to this Agreement) consent and agree that this Agreement shall be
governed by and construed in accordance with such laws.
 
14.5         Severability.  In the event any provision of this Agreement or the
application thereof to any Person or circumstances shall be finally determined
by a court of proper jurisdiction to be invalid or unenforceable to any extent,
the remainder of this Agreement, or the application of such provision to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law.
 
 
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14.6         Notices.  Any notice or other communication by the Trustee to any
Beneficiary shall be deemed to have been sufficiently given, for all purposes,
if deposited, postage prepaid, in the post office or letter box addressed to
such Person at his address as shown in the records of the Trust.
 
All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by cable,
telegram, telecopier or telex to the parties at the following addresses or at
such other addresses as shall be specified by the parties by like notice:
 
(a)           If to the Trustee:
Carl E. Berg, Trustee
Mission West Liquidating Trust
c/o Berg & Berg Enterprises, Inc.
10050 Bandley Drive
Cupertino, CA  95014
 
Facsimile: (408) 725-1626
 
with a copy to:
[To be added by Trustee]
 
Attention:
Facsimile:
 
(b)           If to the Company:
Carl E. Berg
Chief Executive Officer
Mission West Properties, Inc.
10050 Bandley Drive
Cupertino, CA  95014
 
Facsimile:
 
with a copy to:
Pillsbury Winthrop Shaw Pittman LLP
2550 Hanover Street
Palo Alto, CA  94304
 
Attention:   Allison Leopold Tilley
Facsimile:  650-233-4545

 
14.7         Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
 
 
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IN WITNESS WHEREOF, Mission West Properties, Inc. has caused this Agreement to
be executed by an authorized officer, and the Trustee herein have executed this
Agreement, as Trustee and not as an individual, effective this 26th day of
December, 2012.
 

 
MISSION WEST PROPERTIES, INC.
         
 
By:
/s/ Raymond V. Marino      
Name: Raymond V. Marino
     
Title:   President and Chief Operating Officer
 

 
 
 

 
MISSION WEST LIQUIDATING TRUST
         
 
By:
/s/ Carl E. Berg      
Name: Carl E. Berg
     
Title:  Trustee
         

 
 
[SIGNATURE PAGE TO LIQUIDATING TRUST AGREEMENT]
 
 
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Schedule A
 
Management services for the Trust shall be provided by Berg & Berg Enterprises,
Inc., an affiliate of the Trustee, Carl E. Berg.  Pursuant to the this
management arrangement, the Trust shall compensate the Trustee and reimburse the
Trustee for any and all reasonable out-of-pocket expenses (“Expenses”) incurred
by the Trustee in connection with providing the services.  These estimated
Expenses are currently estimated to not exceed $70,000 per month as more
specifically set forth on the attached schedule.
 
 
A-1

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FIRST AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
 
THIS FIRST AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST (this “Amendment”),
dated as of December 28, 2012, by and between Mission West Properties, Inc., a
Maryland corporation (the “Company”), and Carl E. Berg, an individual resident
of the State of California (the “Trustee”).
 
WHEREAS, the Company and the Trustee have entered into that certain Agreement
and Declaration of Trust dated as of December 26, 2012 (the “Original Trust
Agreement”, and as amended hereby, the “Trust Agreement”), pursuant to which the
Company agreed to grant to the Trustee, to be held in trust for the benefit of
the Beneficiaries of the Trust, all its rights to the Retained Assets;
 
WHEREAS, the Company has not made the grant to the Trustee as provided for in
Section 2.2 of the Original Trust Agreement;
 
WHEREAS, the Company and the Trustee desire to amend certain provisions to the
Original Trust Agreement, pursuant to this Amendment, subject to the terms and
conditions set forth herein;
 
 
AGREEMENTS
 
In consideration of the mutual covenants in this Amendment and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Trustee agree as follows.
 
14.8         Capitalized Terms.  The Capitalized terms not specifically defined
in this Amendment have the meanings ascribed to such terms in the Original Trust
Agreement.
 
14.9         Defined Terms.  Section 1.2 of the Original Trust Agreement is
amended and restated in its entirety to read as follows:
 
For all purposes of this instrument, unless the context otherwise requires:
 
(a)           “Affiliate” of any Person means any entity that controls, is
controlled by, or is under common control with such Person. As used herein,
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such entity, whether
through ownership of voting securities or other interests, by contract or
otherwise.
 
(b)           “Agreement” shall mean this instrument as originally executed or
as it may from time to time be amended pursuant to the terms hereof.
 
(c)           “Beneficial Interest” shall mean each Beneficiary’s proportionate
share of the Trust Assets initially determined by the ratio of the number of
Shares held of record by the Initial Beneficiary as of the Record Date over the
total number of Shares issued and outstanding on such Record Date and thereafter
shall be determined by the ratio of the number of Units held by such Beneficiary
to the total number of Units held by all Beneficiaries; provided, however, that
the proportional Beneficial Interest of each Optionholder shall be reduced by
the exercise price underlying any stock options held by the Optionholder and
applicable withholding taxes that would have been payable had the Optionholder
exercised such option on the Record Date.
 
 
 

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(d)           “Beneficiary” shall mean, initially, each Initial Beneficiary and,
thereafter, each Initial Beneficiary who holds Units and each transferee of
Units initially held by an Initial Beneficiary and subsequently transferred to
such transferee pursuant to and in accordance with the terms and conditions of
this Agreement.
 
(e)           “Initial Beneficiary” shall mean each of the Stockholders,
Optionholders and the Limited Partners.
 
(f)           “Liabilities” shall mean all of the Company’s unsatisfied debts,
claims, liabilities, commitments, suits and other obligations, whether
contingent or fixed or otherwise (including, without limitation, any costs and
expenses incurred or to be incurred in connection with the liquidation of the
Company).
 
(g)           “Limited Partners” shall mean certain former limited partners of
the Company’s operating partnerships who received upon conversion of their
limited partnership interests an agreement to pay in lieu of shares of the
Company’s common stock.
 
(h)           “Optionholders” shall mean those persons who held vested options
to purchase shares of the Company’s common stock on the Record Date.
 
(i)           “Person” shall mean an individual, a corporation, a partnership,
an association, a joint stock company, a limited liability company, a trust, a
joint venture, any unincorporated organization, or a government or political
subdivision thereof.
 
(j)           “Record Date” shall mean the close of business on December 28,
2012.
 
(k)           “Retained Assets” shall mean all of the Company’s right, title and
interest in, to and under, all of the Company’s assets, including, without
limitation, its accounts receivable, cash, securities, claims, causes of action,
contingent claims and reserves distributed to the Trustee.
 
(l)           “Shares” shall mean, as of the Record Date, (i) the issued and
outstanding shares of common stock, $0.001 par value per share (“Common Stock”),
of the Company, (ii) the shares of Common Stock that would have been issued had
the Optionholders exercised their options on the Record Date; and (iii) the
number of shares of Common Stock that would have been issued had the Company
converted the Limited Partners’ ownership interests into shares of Common Stock
on a one-for-one basis, it being agreed that (ii) and (iii) are deemed to be
issued and outstanding for purposes of this Agreement.
 
(m)           “Stockholders” shall mean the holders of record of Shares on the
Record Date, except where inclusion of Optionholders in the definition of
Stockholders would be contrary to Sections 1.2(c) and 3.1(a) of this Agreement.
 
(n)           “Transfer Date” shall mean December 28, 2012.
 
 
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(o)           “Trust” shall mean the Trust created by this Agreement.
 
(p)           “Trust Assets” shall mean all the property held from time to time
by the Trustee under this Agreement, which initially shall consist of the
Retained Assets (excluding any liquidating distributions declared, but unpaid,
having a record date prior to the Transfer Date), and in addition, shall
thereafter include all dividends, distributions, rents, royalties, income,
payments and recoveries of claims, proceeds and other receipts of, from, or
attributable to any assets held by the Trust, less any of the foregoing utilized
by the Trustee to pay expenses of the Trust, satisfy Liabilities or to make
distributions to the Beneficiaries pursuant to the terms and conditions hereof.
 
(q)           “Trustee” shall mean the original Trustee under this Agreement and
any successors thereto, pursuant to and in accordance with the terms of this
Agreement.
 
(r)           “Units” shall have the meaning given to such term in
Section 3.1(a).
 
14.10       Incident of Ownership.  Section 2.7 of the Original Trust Agreement
is amended and restated in its entirety to read as follows:
 
For all purposes of this instrument, unless the context otherwise requires:
 
The Stockholders, the Optionholders and the Limited Partners shall be the
Initial Beneficiaries of the Trust created by this Agreement and the Trustee
shall retain only such incidents of legal ownership as are necessary to
undertake the actions and transactions authorized herein.
 
14.11       Notice to Unlocated Stockholders.  Section 2.8 of the Original Trust
Agreement is amended and restated in its entirety to read as follows:
 
For all purposes of this instrument, unless the context otherwise requires:
 
If the Trustee holds Trust Assets for unlocated Stockholders, Optionholders and
Limited Partners, due notice shall be given to such Stockholders and
Optionholders in accordance with Maryland law.
 
14.12       Beneficial Interests.  Section 3.1(a) of the Original Trust
Agreement is amended and restated in its entirety to read as follows:
 
For all purposes of this instrument, unless the context otherwise requires:
 
(a)           The Beneficial Interest of each Initial Beneficiary shall be
determined in accordance with a certified copy of (i) the Company’s stockholder
list as of the Record Date, (ii) the Company’s list of Optionholders and (iii)
the Company’s list of Limited Partners.  The Company’s transfer agent will
deliver such a certified copy of the Company’s stockholder list to the Trustee
within a reasonable time after such date and the Company will deliver such a
certified copy of the Company’s list of Optionholders and Limited Partners.  The
Trustee shall be entitled to rely and shall be fully protected in relying upon
the certified copy of the Company’s stockholder list, Optionholder list and list
of Limited Partners.  For ease of administration, the Trustee shall express the
Beneficial Interest of each Beneficiary in terms of units (“Units”). Each record
owner of Shares as of the close of business on the Record Date shall receive one
Unit for each Share then held of record. Except as otherwise provided in this
Agreement, each record owner of Shares shall have the same pro rata interest in
the Trust Assets as such holder’s pro rata interest in the aggregate outstanding
Shares on the Record Date.
 
 
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14.13       Express Change Only.  The parties intend to amend the Original Trust
Agreement only as set forth herein, and the parties hereby agree that, except as
expressly amended hereby, all other terms and conditions of the Original Trust
Agreement are hereby confirmed and shall remain in full force and effect.
 
14.14       Counterparts.  This Amendment may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original,
and all of which shall be deemed to be one and the same
instrument.  Electronically transmitted signatures shall be deemed originals.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
effective this 28th day of December, 2012.
 

 
MISSION WEST PROPERTIES, INC.
         
 
By:
/s/ Raymond V. Marino      
Name: Raymond V. Marino
     
Title:   President and Chief Operating Officer
 

 
 
 

 
MISSION WEST LIQUIDATING TRUST
         
 
By:
/s/ Carl E. Berg      
Name: Carl E. Berg
     
Title:  Trustee
         

 
 
[SIGNATURE PAGE TO AMENDMENT TO LIQUIDATING TRUST AGREEMENT]
 
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