| (a)   | "affiliate" means, with respect to any person, another person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with such person. |
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| (b)   | "Code" means the Internal Revenue Code of 1986, as amended. |
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| (c)   | "governing instruments" means the articles or certificate of incorporation or other charter, as the case may be, and bylaws of the Company and its subsidiaries. |
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| (d)   | "mortgage loans" means construction, mixed use, land acquisition and development loans primarily secured by mortgages or deeds of trust on real estate properties. |
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| (e)   |  “Net Value” of the Company has the same meaning and is determined in the same manner as it is in the Company’s public statements and disclosures. |
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| (f)   | "unaffiliated directors" shall mean those members of the Board of Directors of the Company, who are not officers, directors or affiliates of the Manager. |
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| (g)   | Net Realizable Value (“NRV”) will be equal to the estimated net realizable value of the Company’s assets per common share, as established by the Board of Directors and  reported in the Company’s quarterly report on Form 10-Q as filed with the Securities and Exchange Commission. |
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| (a)   | Administrative Services Provided by the Manager.  The Manager will be responsible for the day-to-day operations of the Company and shall perform such services and activities relating to the assets and operations of the Company as may be appropriate, including: |
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| (1)   | in accordance with the directions and subject to the supervision of the Company's Board of Directors, investing or reinvesting any money of the Company; |
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| (2)   | furnishing reports and statistical and economic research to the Company regarding the Company's real estate investment activities and the performance of its portfolio of mortgage loans; |
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| (3)   | administering the day-to-day operations of the Company and performing administrative functions necessary in the management of the Company, including the collection of revenues, the payment of the Company's expenses, debts and obligations and the maintenance of appropriate computer services to perform such administrative functions; |
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| (4)   | counseling the Company’s officers and Board of  Directors in connection with policy decisions to be made by the Board of Directors; |
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| (5)   | overseeing the servicing of the Company's construction related activities pertaining to its mortgage loans and other investments; |
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| (6)   | providing all actions necessary for compliance by the Company with all federal, state and local regulatory requirements applicable to the Company in respect of its business activities, including maintaining books and records, maintaining current shareholder records, and preparing or causing to be prepared all periodic reports and all financial statements required under applicable regulations and contractual undertakings; |
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| (7)   | providing all actions necessary to enable the Company to make required federal, state and local tax filings and reports and generally enable the Company to maintain its status as a corporation, including, but not limited to, soliciting stockholders for required information to the extent required by the provisions of the Code; |
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| (8)   | communicating on behalf and with the direction of the Company (with content approved in advance by the Company’s Board of Directors) with the stockholders of the Company as required to satisfy any reporting requirements and to  maintain effective relations with such stockholders; |
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| (9)   | performing such other services as may be required from time to time for management and other activities relating to the assets of the Company as the Board of Directors shall reasonably request or the Manager shall deem appropriate under the particular circumstances; and |
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| (10)   | acting as the Company’s transfer agent and registrar for all Company initiated stock transactions. |
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| (b)   | Administrative Services Provided by Subcontractors.  The Manager may enter into subcontracts with other parties to provide any such services to the Company, so long as it exercises reasonable care in the selection of such subcontractors. |
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| (c)   | Compliance with Public Disclosure Rules.  Manager agrees to comply and, in performing its services as Manager, to cause the Company to comply with all disclosure rules applicable to the Company, including the statutes, rules and regulations governing publicly held entities under the Securities Exchange Act of 1934 as now in effect and as it may be amended from time to time. |
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| (d)   | Cooperation of the Company.  The Company agrees to take all action reasonably required to permit the Manager to carry out its duties and obligations.  The Company further agrees to make available all materials reasonably required to enable the Manager to satisfy its obligations to deliver financial statements and any other information or reports with respect to the Company. |
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| (a)   | Except as expressly provided in paragraph 3(b) below, nothing in this agreement shall prevent the Manager or any of its officers, directors, employees or affiliates from engaging in other businesses or from rendering services of any kind to any other person or entity, including the purchase of, or advisory services to others investing in, any type of real estate investment, including investments which meet the principal investment objectives of the Company.  Notwithstanding the foregoing, the Manager shall at all times during the term of this Agreement devote such time and attention, and maintain sufficient personnel and resources, to assure that it can adequately manage the operations and administration of the Company. |
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| (b)   | Manager agrees that certain proposed transactions, as defined below, will be considered “Company Opportunities,” and any Company Opportunity that comes to the Manager’s attention will first be offered or made available to the Company as provided herein before Manager or any of Manager’s affiliates may enter into any such transaction for its or their own account or may offer such transaction to any third party.  “Company Opportunities” will include any proposed investment or investment disposition transaction brought to the Manager’s attention in its capacity as Manager under this Agreement, including transactions brought to its attention by members of the Company’s Board of Directors, by any other party to a then existing non-Manager sourced Company investment, or by any party contacting the Manager concerning such a proposed transaction in its capacity as Manager of the Company.  Manager shall initially pursue any such Company Opportunity on behalf of the Company, and will provide the Board of Directors promptly in writing with notice of the material proposed terms of any such transaction, to the extent practicable.  The Board of Directors will meet within thirty (30) days following the date such notice is received by the Board to consider whether the Company will elect to pursue the Company Opportunity described in the notice.  If the Board elects to have the Company pursue the Company Opportunity, it will so notify the Manager and direct the Manager’s efforts in seeking to complete the transaction.  The Manager will thereafter diligently and in good faith analyze the proposed transaction on the Company’s behalf, negotiate the terms of the transaction solely in the Company’s interest, communicate with the Board concerning the ongoing status of the transaction, and seek to consummate any such transaction on behalf of the Company.  If the Company either notifies the Manager that it will not seek to pursue the Company Opportunity described in the notice, or fails to notify the Manager of its intention by the end of a thirty day period following the Board’s receipt of such notice, the Manager may pursue such transaction for its own account or offer the transaction to a third party in its discretion. |
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| (a)   | The Manager shall receive a quarterly management fee for investments not sourced by Manager equal to 0.25% of the Net Realizable Value (“NRV”) of the Company attributable to those investments not sourced by Manager, payable as of the end of the quarter and calculated based on the NRV as published in the quarterly report for the preceding calendar quarter. |
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| (b)   | The Manager shall also receive a quarterly management fee for Manager sourced investments equal to 0.125% of the Net Realizable Value (“NRV”) of the Company attributable to those investments sourced by Manager, payable at the end of the quarter and calculated based on the NRV as published in the quarterly report for the preceding calendar quarter. |
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| (c)   | Payment.  The Manager shall calculate the precise figures of the Compensation Schedule in order to determine the Manager's Fee within 15 days after the end of each calendar quarter.  This calculation shall be completed promptly and delivered to the Board of Directors along with a summary of all material transactions, a cash flow analysis of income and expenses, and reconciliation of bank accounts as overseen by manager on behalf of the Company for approval and payment of management fee. |
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| (a)   | Expenses borne by the Manager.  Without regard to the compensation received by the Manager, the Manager shall bear any and all expenses internal to the operations of the Manager or incurred in connection with the Manager’s performance of the services to be provided under this Agreement, including, but not limited to, the following expenses: |
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| (1)   | employment expenses of the personnel employed by the Manager, including, but not limited to, salaries, wages, payroll taxes, and the cost of employee benefit plans; |
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| (2)   | rent, telephone, utilities, office furniture, equipment and machinery (including computers, to the extent utilized) and other office expenses (such as asset/liability software, modeling software and other software and hardware) of the Manager needed in order to perform its duties as set forth herein; |
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| (3)   | bookkeeping fees and expenses including any costs of computer services; |
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| (4)   | miscellaneous administrative expenses incurred in supervising and monitoring the Company's investments or any subsidiary's investments or relating to performance by the Manager of its functions; |
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| (5)   | expenses connected with the acquisition of the Company's assets and mortgage loans; |
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| (6)   | travel and related expenses of personnel of the Manager when attending meetings or performing other business activities which relate to the Company or any subsidiary of the Company. |
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| (b)   | Expenses borne by the Company.  The Company or any subsidiary of the Company shall pay all of its expenses except those which are the specific responsibility of the Manager pursuant to this agreement; and, without limiting the generality of the foregoing, it is specifically agreed that the following expenses of the Company or any subsidiary of the Company shall not be paid by the Manager.  Further, it is understood that none of the expenses listed below will include any expenses internal to the operations of the Manager or related in any way to the Manager’s performance of the services detailed in this Management Agreement: |
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| (1)   | the Company’s cost of borrowed money; |
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| (2)   | all taxes applicable to the Company or any subsidiary of the Company including interest and penalties; |
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| (3)   | legal, accounting and auditing fees and expenses relating to the Company and/or any subsidiary; |
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| (4)   | expenses connected with the ownership and disposition of the Company's or any subsidiary's assets, including, but not limited to, costs of completion, foreclosure, maintenance, repair and improvement of property and premiums for insurance on property owned by the Company or any subsidiary of the Company; |
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| (5)   | legal, audit, accounting, underwriting, brokerage, listing, rating agency, registration and other fees, printing, engraving and other expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of the Company's or any subsidiary's equity securities or debt securities; |
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| (6)   | the expenses of organizing, modifying or dissolving the Company or any subsidiary of the Company; |
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| (7)   | all insurance costs incurred in connection with the Company or any subsidiary of the Company; |
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| (8)   | expenses connected with payments of dividends or interest or distributions in any other form made or caused to be made by the Board of Directors to holders of the securities of the Company or any subsidiary of the Company; |
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| (9)   | expenses connected with the structuring and issuance of mortgage securities by the Company or any subsidiary of the Company, including but not limited to trustee's fees, insurance premiums, and costs of required credit enhancements; |
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| (10)   | travel and related expenses of the directors of the Company when attending meetings or performing other business activities which relate to the Company; |
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| (11)   | all expenses of third parties connected with communications to holders of equity securities or debt securities of the Company or any subsidiary of the Company and the other bookkeeping and clerical work necessary in maintaining relations with holders of such securities and in complying with the continuous reporting and other requirements of governmental bodies or agencies, including any costs of computer services in connection with this function, the cost of printing and mailing certificates for such securities and proxy solicitation materials and reports to holders of the Company's or any subsidiary's securities and reports to third parties required under any indenture to which the Company or any subsidiary of the Company is a party; |
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| (12)   | fees and expenses paid to trustees or directors of the Company or any subsidiary of the Company, the cost of director and officer liability insurance and premiums for fidelity and errors and omissions insurance; |
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| (13)   | any judgment rendered against the Company or any subsidiary of the Company, or against any trustee or director of the Company or any subsidiary of the Company in his capacity as such for which the Company or any subsidiary of the Company is required to indemnify such trustee or director, or any court or governmental agency; and |
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| (14)   | other miscellaneous expenses of the Company or any subsidiary of the Company which are not specified expenses of the Manager under this agreement. |
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| (a)   | This agreement shall commence on January 1, 2011, and shall continue in force for an initial period of one year, and thereafter it shall be renewed automatically for successive one-year periods unless a termination notice is delivered by either party as specified in (b) below. |
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| (b)   | This agreement may be terminated with a minimum of 90 days notice by either party by delivering a written termination notice.  Such termination notice will specify a plan, acceptable to the Company, for the orderly transition of the Manager’s duties, activities and responsibilities to such entity as specified by the Company. |
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| (c)   | In addition to any other liability or obligation of either party to the other due upon termination of this agreement, if this agreement is terminated by the Company without cause (as "cause" is defined below), the Company shall pay the Manager a fee for the successful transition, as determined by the Company, to such entity as specified by the Company if the Company determines that such transition was accomplished  successfully in an amount equal to the compensation paid for the quarter immediately preceding the date of termination pursuant to Section 6(b) and (c) above. |
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| (a)   | if a majority of the unaffiliated directors determines that the Manager has violated or is in breach of this agreement in any material respect and, after notice of such violation, the Manager has failed to cure such violation within 60 days; or |
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| (b)   | there is entered an order for relief or similar decree or order with respect to the Manager by a court having competent jurisdiction in an involuntary case under the federal bankruptcy laws as now or hereafter constituted or under any applicable federal or state bankruptcy, insolvency or other similar laws; or the Manager: |
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| (1)   | ceases, or admits in writing its inability, to pay its debts as they become due and payable, or makes a general assignment for the benefit of, or enters into any composition or arrangement with, creditors; |
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| (2)   | applies for, or consents, by admission of material allegations of a petition or otherwise, to the appointment of a receiver, trustee, assignee, custodian, liquidator or sequestrator, or other similar official, of the Manager or of any substantial part of its properties or assets, or authorizes such an application or consent, or proceedings seeking such appointment are commenced without such authorization, consent or application against the Manager and continue undismissed for 60 days; |
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| (3)   | authorizes or files a voluntary petition in bankruptcy, or applies for or consents, by admission of material allegations of a petition or otherwise, to the application of any bankruptcy, reorganization, arrangement, readjustment of debt, insolvency, dissolution, liquidation or other similar law of any jurisdiction, or authorizes such application or consent, or proceedings to such end are instituted against the Manager without such authorization, application or consent and are approved as properly instituted and remain undismissed for 60 days or result in adjudication of bankruptcy or insolvency. |
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| (a)   | after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled, pay over to the Company or any subsidiary of the Company all money collected and held for the account of the Company or any subsidiary of the Company pursuant to this agreement; |
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| (b)   | deliver to the Board of Directors a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board of Directors with respect to the Company or any subsidiary of the Company; and |
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| (c)   | deliver to the Board of Directors all property and documents of the Company or any subsidiary of the Company then in the custody of the Manager. |
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|   | Board of DirectorsAttn:  William OffenbergP.O. Box 3195Monterey, CA  93942Email:  weobvc@sbcglobal.netWith Copy to:  Jeff.Black@cbre.com and Pattibwolf@aol.com. |   |
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|   | LG Servicing, Inc.Attn:  Dan Shaw15700 Winchester Blvd.Los Gatos, CA  95030Fax:  (408) 395-9777Email:  dan@lgservicing.comWith Copy to:  janjayshaw@nwlink.com |   |
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|   | /s/ William E. OffenbergBy:  William E. OffenbergIts:  Chairman |   |
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|   | /s/ Gerald H. ShawBy:  Gerald H. ShawIts:  President  /s/ Daniel J. ShawBy:  Daniel J. ShawIts:  Vice - President |   |
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