EXHIBIT 10.1

                                 ZOOM GROUP LLC

                               OPERATING AGREEMENT


     This  Operating  Agreement  of ZOOM  GROUP LLC (the  "Company"),  a limited
liability  company  organized  pursuant to the Act, is entered into and shall be
effective  as of March  ____,  2002 by and  among  the  Persons  executing  this
Agreement as Members and the Persons executing this Agreement as Managers.
                              PRELIMINARY STATEMENT

     WHEREAS the Company was formed as a Massachusetts limited liability company
pursuant  to a  Certificate  filed with the  Secretary  of State of the State on
March __ 2002; and

     WHEREAS the Members and Managers  desire to enter into this  Agreement  to,
among other things,  provide for the operation of the Company,  and, in general,
to set out fully the rights and  obligations  of the Members and Managers of the
Company.

     NOW, THEREFORE,  in consideration of the foregoing,  and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the Members and Managers hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

     The defined terms used in this Agreement shall have the meanings  specified
below, unless otherwise defined in this Agreement:

     "AAA" has the meaning set forth in Section 11.03.

     "Accountants"  means such firm of independent  certified public accountants
as may be engaged by the Company.

     "Act" means the Massachusetts Limited Liability Company Act.

     "Additional  Capital  Contributions"  has the  meaning set forth in Section
4.09.

     "Adjusted  Capital  Account" means the Capital Account  maintained for each
Member as of the end of each fiscal year as adjusted  under Section 4.02 hereof,
and  further (i)  increased  by any amounts  which such Member is  obligated  to
restore  pursuant  to any  provision  of this  Agreement  or is treated as being
obligated to restore pursuant to Regulations Section  1.704-1(b)(2)(ii)(c) or is
deemed to be  obligated  to restore  pursuant to the  penultimate  sentences  of
Regulations  Sections  1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by the
items    described    in    Regulations    Sections     1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5),  and 1.704-1(b)(2)(ii)(d)(6).  The foregoing definition
of  Adjusted  Capital  Account is  intended  to comply  with the  provisions  of
Regulations Section  1.704-1(b)(2)(ii)(d)  and shall be interpreted consistently
therewith.

     "Affiliate"  means, with respect to a specified Person, (i) any Person that
directly or indirectly  controls or is controlled by or is under common  control
with the specified  Person,  and (ii) any Person that is an officer of,  general
partner in or trustee of, or serves in a similar  capacity  with respect to, the
specified Person or of which the specified Person is an officer, general partner
or trustee,  or with respect to which the  specified  Person serves in a similar
capacity.

     "Agreement"  means this  Operating  Agreement,  including  all Exhibits and
Schedules attached hereto, as it may be amended from time to time.

     "Allocation  Period" means (i) the period commencing on the date hereof and
ending on December 31, 2002, (ii) any subsequent  period commencing on January 1
and  ending on the  following  December  31, or (iii) any  portion of the period
described in clause (ii) for which the Company is required to allocate  profits,
losses and other items of income,  gain,  loss or deduction  pursuant to Article
IV.

     "Assign" or "Assignment" has the meaning set forth in Section 9.01.

     "Call" has the meaning set forth in Section 9.06.

     "Call Option Price" has the meaning set forth in Section 9.06.

     "Call Period" means the period  beginning on the Option  Effective Date and
ending on December 31, 2005.

     "Capital Account" has the meaning set forth in Section 4.02(a).

     "Capital Contribution" means the amount of cash or the fair market value of
property contributed to the Company by each Member as the consideration for such
Member's  interest  in  the  Company  pursuant  to  Article  IV  (including  any
Additional  Capital  Contributions).  Any  reference  in this  Agreement  to the
Capital  Contribution  of a then  Member  shall  include a Capital  Contribution
previously  made by any prior  Member with  respect to the interest of such then
Member in the Company.

     "Capital  Event"  means  a  sale  of all or a  substantial  portion  of the
Company's  assets or a revaluation  of the Company's  assets in connection  with
maintaining Capital Accounts or any transaction in contemplation of liquidation.

     "Certificate"  means the  Certificate  of  Organization  as filed  with the
Secretary of State of the State, as the same may be amended from time to time.

     "Change In Control"  means with respect to any ultimate  parent  company of
the  Company or a Member,  as the case may be (or the  Company or such Member if
there is no ultimate parent company) (the "Subject Entity").

          (i) the  acquisition by any Person,  including any "person" within the
     meaning of Section  13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial
     ownership,  within the meaning of Rule 13d-3 promulgated under the Exchange
     Act, of more than 50% of either (i) the then  outstanding  shares of common
     stock of the Subject  Entity (the  "Outstanding  Common Stock") or (ii) the
     combined  voting power of the then  outstanding  securities  of the Subject
     Entity  entitled  to vote  generally  in the  election  of  directors  (the
     "Outstanding Voting Securities");

          (ii) the consummation of a reorganization,  merger or consolidation of
     the Subject Entity or sale or other disposition of all or substantially all
     of the assets of the Subject Entity (a "Corporate Transaction"); excluding,
     however, a Corporate Transaction pursuant to which all or substantially all
     of  the  Persons  who  are  the  beneficial  owners,  respectively,  of the
     Outstanding Common Stock and the Outstanding Voting Securities  immediately
     prior to such Corporate  Transaction  will  beneficially  own,  directly or
     indirectly,  more  than 50%,  respectively,  of the  Outstanding  shares of
     Common Stock and the combined  voting power of the  outstanding  securities
     entitled to vote  generally in the election of  directors,  as the case may
     be, of the Person  resulting  from such Corporate  Transaction  (including,
     without limitation, a Person which as a result of such transaction owns the
     Subject Entity or all or  substantially  all of the Subject Entity's assets
     either  directly  or  indirectly)  in  substantially  the same  proportions
     relative  to each  other  as  their  ownership,  immediately  prior to such
     Corporate Transaction,  of the Outstanding Common Stock and the Outstanding
     Voting Securities, as the case may be;

          (iii)  the   consummation  of  a  plan  of  complete   liquidation  or
     dissolution of the Subject Entity; or

          (iv) an Event of Bankruptcy with respect to the Subject Entity.

          "Closing Credit" has the meaning set forth in the Second Amendment.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Contribution Loan" has the meaning set forth in Section 4.09(b)(i).

          "Contributing Member" has the meaning set forth in Section 4.09(b).

          "Convertible  Securities"  means any rights or securities  convertible
     into or exchangeable for Units.

          "Depreciation"  means, for each Allocation  Period, an amount equal to
     the depreciation,  amortization, or other cost recovery deduction allowable
     for  federal  income  tax  purposes  with  respect  to an  asset  for  such
     Allocation Period, except that if the Gross Asset Value of an asset differs
     from its adjusted basis for federal income tax purposes at the beginning of
     such  Allocation  Period,  Depreciation  shall be an amount which bears the
     same ratio to such  beginning  Gross Asset Value as the federal  income tax
     depreciation,  amortization,  or other  cost  recovery  deduction  for such
     Allocation  Period bears to such  beginning  adjusted tax basis;  provided,
     however,  that if the adjusted  basis for federal income tax purposes of an
     asset at the  beginning  of such  Allocation  Period is zero,  Depreciation
     shall be  determined  with  reference to such  beginning  Gross Asset Value
     using any reasonable method selected by the Managers.

          "Dispute" has the meaning set forth in Section 11.01.

          "Earnest Money" has the meaning set forth in the Purchase Agreement.

          "Event of Bankruptcy" means, with respect to any Person:

          (i) the  entry  of a decree  or order  for  relief  by a court  having
     jurisdiction  in the  premises in respect of such Person in an  involuntary
     case under the Federal bankruptcy laws, as now or hereafter constituted, or
     any other  applicable  Federal  or state  bankruptcy,  insolvency  or other
     similar  law,  appointing  a  receiver,  liquidator,  assignee,  custodian,
     trustee or  sequestrator  (or similar  official)  of such Person or for any
     substantial part of its property, or ordering the winding-up or liquidation
     of its affairs and the continuance of any such decree or order unstayed and
     in effect for a period of one hundred eighty (180) consecutive days; or

          (ii) the  commencement  by such  Person  of any  proceeding  seeking a
     decree, order, appointment or other relief referred to in clause (i) above,
     the  consent to or failure to oppose the  granting of such  relief,  or the
     failure of such Person generally to pay its debts as such debts become due,
     or the taking of any  action by such  Person in  furtherance  of any of the
     foregoing.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Gross Asset  Value"  means,  with  respect to any asset,  the asset's
     adjusted basis for federal income tax purposes,  except as follows: (i) The
     initial  Gross  Asset  Value of any  asset  contributed  by a Member to the
     Company  shall be the gross fair market value of such asset,  as determined
     by the Managers;

          (ii) The Gross Asset Values of all Company assets shall be adjusted to
     equal their  respective  gross fair market  values,  as  determined  by the
     Managers,  as of the following  times: (A) the acquisition of an additional
     interest in the Company by any new or existing  Member in exchange for more
     than a de minimis Capital Contribution; (B) the distribution by the Company
     to a Member of more than a de minimis  amount of property as  consideration
     for an  interest in the  Company;  and (C) the  liquidation  of the Company
     within the meaning of Regulations Section  1.704-1(b)(2)(ii)(g):  provided,
     however,  that  adjustments  pursuant to clauses (A) and (B) above shall be
     made only if the Managers  reasonably  determine that such  adjustments are
     necessary or appropriate to reflect the relative economic  interests of the
     Members in the Company;

          (iii) The Gross  Asset  Value of any Company  asset  distributed  to a
     Member shall be adjusted to equal the gross fair market value of such asset
     on the date of distribution as determined by the Managers; and

          (iv) The Gross Asset Values of Company  assets shall be increased  (or
     decreased) to reflect any  adjustments to the adjusted basis of such assets
     pursuant to Code  Section  734(b) or Code Section  743(b),  but only to the
     extent that such adjustments are taken into account in determining  Capital
     Accounts   pursuant  to   Regulation   Section   1.704-1(b)(2)(iv)(m)   and
     subparagraph (vi) of the definition of Profits and Losses herein; provided,
     however,  that Gross Asset  Values  shall not be adjusted  pursuant to this
     subparagraph  (iv) to the extent the Managers  determine that an adjustment
     pursuant to  subparagraph  (ii) is necessary or  appropriate  in connection
     with a transaction that would otherwise result in an adjustment pursuant to
     this subparagraph (iv).

     If the  Gross  Asset  Value of an asset  has been  determined  or  adjusted
pursuant  to  subparagraphs  (i),  (ii),  or (iv),  such Gross Asset Value shall
thereafter  be adjusted by the  Depreciation  taken into account with respect to
such asset for  purposes of computing  profits and losses.  For purposes of this
definition of Gross Asset Value, a Capital Contribution or distribution shall be
considered de minimis if its value is less than $25,000.

     "Intangible  Personal  Property"  has the meaning set forth in the Purchase
Agreement.

     "Investment  Capital   Contributions"   means  that  portion  of  aggregate
Additional Capital  Contributions that is used solely to cover expenses that are
amortizable or depreciable  under the terms of the Internal Revenue Code of 1986
and the Treasury  regulations  issued  thereunder,  each as amended from time to
time.

     "Leases" has the meaning set forth in the Purchase Agreement.

     "Level 1 Review" has the meaning set forth in Section 11.02.

     "Level 2 Review" has the meaning set forth in Section 11.02.

     "License Agreements" has the meaning set forth in the Purchase Agreement.

     "Liquidator" has the meaning set forth in Section 10.01(b).

     "Majority  Consent  of the  Members"  means  the vote at a  meeting  or the
Written  Consent  of  Members  holding  at  least a  majority  of the  aggregate
Percentage Interests in the Company.

     "Managers",  "Board" or "Board of Managers"  means those  Persons  named as
managers  of the  Company  in this  Agreement  and any  Person  who  becomes  an
additional,  substitute or replacement  Manager in accordance with Article V, in
such Person's capacity as a Manager, and "Manager" means any of the Managers.

     "Members"  means the parties  executing  this  Agreement as Members and any
Person  subsequently  admitted  to the  Company  as a  Substitute  Member  or an
additional  Member  in  accordance  with the  terms of this  Agreement,  in such
Persons capacity as a Member, and "Member" means any of the Members.

     "Net Purchase Equity" has the meaning set forth in Section 9.07.

     "Neutral" has the meaning set forth in Section 11.03.

     "Non-Contributing Member" has the meaning set forth in Section 4.09(b).

     "Non-Zoom Members" means the Members of the Company other than Zoom.

     "Non-Zoom Members' Net Profit" has the meaning set forth in Section 9.06.

     "Option  Effective Date" means the date of complete  execution and delivery
of the Second Amendment.

     "Option Notification" has the meaning set forth in Section 9.07.

     "Percentage  Interest" means, for each Member,  at any particular time, the
percentage  obtained by dividing the number of Units owned by such Member by the
total number of Units outstanding.  The Percentage Interest of each Member is as
indicated  on Schedule A, as amended  from time to time in  accordance  with the
terms of this Agreement.

     "Permitted Transferees" has the meaning set forth in Section 9.03.

     "Person" means any individual,  general  partnership,  limited partnership,
limited liability company,  corporation,  joint venture,  trust, business trust,
cooperative or  association,  and the heirs,  executors,  administrators,  legal
representatives,  successors  and  assigns of the  "Person"  when the context so
permits.

     "Prime Rate" means the prime rate as defined in the "Money  Rates"  section
of The Wall Street Journal on the date in question.

     "Profits" and "Losses" means for each Allocation Period, an amount equal to
the  Company's  taxable  income or loss for such year or period,  determined  in
accordance  with Code  Section  703(a) (for this  purpose,  all items of income,
gain,  loss or  deduction  required  to be stated  separately  pursuant  to Code
Section  703(a)(1)  shall be  included  in  taxable  income or  loss),  with the
following adjustments (without duplication):

          (i) any income of the Company that is exempt from  federal  income tax
     and not otherwise taken into account in computing  Profits and Losses shall
     be added to such taxable income or loss;

          (ii)  any  expenditures  of the  Company  described  in  Code  Section
     705(a)(2)(B) or treated as Code Section 705(a)(2)(B)  expenditures pursuant
     to Section 1.704-1(b)(2)(iv)(i) of the Regulations, and not otherwise taken
     into account in computing Profits or Losses,  shall be subtracted from such
     taxable income or loss;

          (iii) in the event  the  Gross  Asset  Value of any  Company  asset is
     adjusted  pursuant to paragraph  (ii) or (iii) of the  definition  of Gross
     Asset  Value  herein  the  amount of such  adjustment  shall be taken  into
     account as gain or loss from the  disposition of such asset for purposes of
     computing Profits or Losses;

          (iv) gain or loss resulting from any  disposition of Company  property
     with  respect to which gain or loss is  recognized  for federal  income tax
     purposes  shall be  computed by  reference  to the Gross Asset Value of the
     property disposed of,  notwithstanding  that the adjusted tax basis of such
     property differs from its Gross Asset Value;

          (v) in lieu of the depreciation,  amortization and other cost recovery
     deductions  taken into  account in computing  such taxable  income or loss,
     there shall be taken into account  Depreciation for such Allocation  Period
     or other period, computed in accordance with the definition of Depreciation
     herein;

          (vi) to the  extent an  adjustment  to the  adjusted  tax basis of any
     Company  asset  pursuant  to Code  Sections  734(b) or 743(b) is  required,
     pursuant to Regulations Section  1.704-1(b)(2)(iv)(m)(4),  to be taken into
     account in determining Capital Accounts as a result of a distribution other
     than in  liquidation of a Member's  interest in the Company,  the amount of
     such  adjustment  shall  be  treated  as an item of gain or loss  from  the
     disposition of such asset for purposes of computing Profits or Losses; and

          (vii) notwithstanding any other provisions hereof, any items which are
     specially  allocated  pursuant to Section 4.04(a) hereof shall not be taken
     into account in computing Profit or Losses.

     The amounts of items of Company income,  gain, loss or deduction  available
to be specially allocated pursuant to Section 4.04(b) hereof shall be determined
by applying  rules  analogous to those set forth in paragraphs  (i) through (vi)
above.

     "Project" has the meaning set forth in Section 2.03.

     "Property" has the meaning set forth in the Purchase Agreement.

     "Purchase  Agreement"  means the  Agreement  of Purchase and Sale having an
effective  date of January 11, 2001 with  respect to the land with  improvements
thereon  known and numbered as Building 114,  Section A, 27-29  Drydock  Avenue,
South  Boston,  Massachusetts,  entered  into  between  Zoom and SKW Real Estate
Limited Partnership, as amended from time to time.

     "Purchase Price" has the meaning set forth in the Purchase Agreement.

     "Real Property" has the meaning set forth in the Purchase Agreement.

     "Regulations" or "Treasury Regulations" means regulations promulgated under
the Code, as in effect from time to time.

     "Retirement"  means in the case of any Member,  the death or  incapacity of
such Member or an Event of  Bankruptcy  with respect to such Member.  Incapacity
shall mean an  adjudication  of insanity or  incompetency.  Upon  Retirement,  a
Member shall be referred to as a "Retired Member."

     "Second Amendment" means the Reinstatement Agreement,  Assignment Agreement
and Second  Amendment  to the Purchase  Agreement  entered into by and among SKW
Real Estate Limited Partnership, Zoom and the Company.

     "Securities Act" means the Securities Act of 1933, as amended.

     "State" means the Commonwealth of Massachusetts.

     "Substitute Member" means an assignee of a Unit who is admitted as a Member
of the Company pursuant to this Agreement.

     "Supermajority  Consent of the Members"  means the vote at a meeting or the
Written  Consent of Members holding at least  two-thirds  (2/3) of the aggregate
Percentage Interests in the Company.

     "Tangible  Personal  Property"  has the meaning  set forth in the  Purchase
Agreement.

     "Unit"  means an interest in the  Company  held by a Member.  The number of
Units held by each Member is as indicated on Schedule A, as amended from time to
time in accordance with the terms of this Agreement.

     "Written  Consent"  means the written  consent or approval of the  affected
Member or Manager, as the case may be. The Company shall deliver, or cause to be
delivered, to each affected Member or Manager reasonable prior written notice of
any  proposed  action the taking of which would  require the Written  Consent of
such  Member or Manager  pursuant to this  Agreement.  Each  affected  Member or
Manager  shall  deliver  to  the  Company  written  notice  of its  approval  or
disapproval  of any such proposed  action on or before the fifth (5th)  business
day after  delivery of the notice from the Company  referred to in the preceding
sentence.  If any affected Member or Manager fails to deliver such notice within
such five (5) business day period,  such proposed action shall be deemed to have
been approved by such Member or Manager.  All  deliveries  of writings  shall be
governed by Section 13.01.

     "Zoom" means Zoom Telephonics, Inc., a Delaware corporation.

     "Zoom Option" has the meaning set forth in Section 9.07.

     "Zoom Option  Period"  means the period  beginning on the Option  Effective
Date and ending on January 5, 2003.

     "Zoom Option Price" has the meaning set forth in Section 9.07.

     "Zoom's Legal Share" has the meaning set forth in Section 9.07.

     "Zoom's Net Profits" has the meaning set forth in Section 9.07.

     Words used  herein,  regardless  of the number  and gender  used,  shall be
deemed and construed to include any other numbers,  singular or plural,  and any
other gender,  masculine,  feminine or neuter, as the context requires,  and, as
used herein, unless the context clearly requires otherwise,  the words "hereof,"
"herein,"  and  "hereunder"  and words of  similar  import  shall  refer to this
Agreement as a whole and not to any particular provisions hereof.

                                   ARTICLE II
                               GENERAL PROVISIONS

     2.01 Formation of the Company.  The parties hereby confirm the formation of
the Company as a limited  liability  company  pursuant to the  provisions of the
Act.  Except as expressly  provided  herein,  the rights and  obligations of the
Members and Managers and the administration and termination of the Company shall
be governed by the Act. The Managers shall take all actions  necessary to assure
the prompt filing of any documents or  instruments  necessary or  appropriate to
effectuate the provisions of this Agreement and the conduct of the operations of
the Company as contemplated hereby.

     2.02 Name of the Company. The name of the Company shall be "Zoom Group LLC"
or such other name as the Managers may from time to time determine. The Managers
shall  cause to be filed on behalf of the  Company  such  corporate,  assumed or
fictitious name certificate or certificates as may from time to time be required
by law.

     2.03 Business of the Company.  The Company shall be organized as a "special
purpose  entity",  whose  business  shall  consist  solely  of the  acquisition,
ownership, operation,  development,  renovation,  management, leasing, financing
and refinancing of Building 114, Section A, 27-29 Drydock Avenue,  South Boston,
Massachusetts  (the "Project") and such activities as are necessary,  incidental
or  appropriate  in  connection  therewith;  further,  the Company will not: (a)
engage in any  business  or  activity  other  than the  acquisition,  ownership,
operation,   development,   renovation,   management,   leasing,  financing  and
refinancing of the Project and activities incidental thereto; (b) acquire or own
any  material  assets  other  than (i) the  Project,  and (ii)  such  incidental
personal  property as may be necessary  for the  operation  of the Project;  (c)
consent to the  dissolution  or winding up, in whole or in part, of the Company,
nor shall the Managers of the Company consent to the dissolution or liquidation,
in whole or in part,  of the Company;  (d) fail to preserve its  existence as an
entity duly formed,  validly existing and in good standing (if applicable) under
the laws of the State;  (e)  commingle its assets with the assets of its Members
or of any other person or entity, or (f) make any loans or advances to any third
party  (including  any Affiliate of the Company or any member or principal of an
Affiliate of any Member or principal of the Company); further, the Company shall
(i)  maintain  its  assets,  books and  records  in a way which  segregates  and
identifies such assets separate and apart from the assets of any other person or
entity,  (ii) hold itself out to the public as a separate legal entity  distinct
from any other person or entity, (iii) conduct business solely in its name, (iv)
not  incur any debt,  secured  or  unsecured,  direct or  contingent  (including
guaranteeing  any  obligation);  (v) be solvent and pay its liabilities from its
assets as the same shall become due;  (vi) file its own tax  returns;  and (vii)
maintain adequate capital for the normal obligations reasonably foreseeable in a
business of its size and  character  and in light of its  contemplated  business
operations.

     2.04 Place of Business of the  Company;  Registered  Office and  Registered
Agent.  The  principal  place of business of the Company shall be located at c/o
Northstar  Management,  205 Portland Street,  Boston,  Massachusetts  02114. The
Managers  may,  at any time and from time to time,  change the  location  of the
Company's  principal place of business upon written notice of such change to the
Members.  The  Managers  shall  have the  authority  to cause the  Company to do
business in jurisdictions other than the State. The registered agent for service
of process for the Company in the State  shall be the initial  registered  agent
named in the  Certificate  or such other  Person or Persons as the  Managers may
designate  in the  manner  provided  in the Act.  The  registered  office of the
Company  required by the Act to be  maintained in the State shall be the initial
registered  office named in the Certificate or such other office (which need not
be a place of business of the Company) as the Managers may  designate  from time
to time in the manner provided by the Act.

     2.05 Duration of the Company. The Company shall continue in existence until
terminated in accordance with Article X hereof.

     2.06 Title to Company Property. All property owned by the Company,  whether
real or  personal,  tangible or  intangible,  shall be deemed to be owned by the
Company as an entity, and no Member,  individually,  shall have any ownership of
such property.  The Company may hold any of its assets in its own name or in the
name of its nominee, which nominee may be one or more individuals, partnerships,
trusts or other entities.

     2.07 Members  Names and  Addresses.  The names and addresses of the Members
are as set forth on Schedule A, as amended from time to time in accordance  with
the terms of this Agreement.

     2.08 No Partnership  Relationship.  Notwithstanding,  but not in limitation
of, any other provision of this Agreement, the parties understand and agree that
the creation,  management and operation of the Company shall not create or imply
a general  partnership  or joint venture  between or among the Members and shall
not make any Member the agent or  partner  of any other  Member for any  purpose
other than Federal and state tax purposes.

                                   ARTICLE III
                                  DISTRIBUTIONS

     3.01 General.  The Board of Managers shall  determine the amount and timing
of all distributions to the Members of the Company; provided,  however, that the
Members, by Supermajority Consent of the Members, may from time to time override
such  determination  by Board of Managers and change the amount and/or timing of
distributions  to the Members.  All  distributions  shall be  distributed to and
among the Members in  accordance  with their  respective  Percentage  Interests,
except liquidating distributions shall be made as set forth in Article X.

                                   ARTICLE IV
      CAPITAL CONTRIBUTIONS, LOANS AND ALLOCATION OF PROFITS AND LOSSES

     4.01  Capital  Contributions;  No  Withdrawal  Rights;  Loans  By  Members.

     (a) Each Member has made one or more Capital  Contributions  to the Company
in the aggregate  amount set forth opposite such Member's name under the heading
"Capital  Contribution"  on Schedule A hereto,  as amended  from time to time in
accordance with the terms of this Agreement.  Except as specifically provided in
this  Agreement,  no Member  shall be  required to make any  additional  Capital
Contributions or any loans to the Company.

     (b) No interest  shall  accrue on any  contributions  to the capital of the
Company,  and no Member  shall  have the right to  withdraw  or to be repaid any
capital  contributed  by him or it or to receive any other payment in respect of
his  or its  interest  in  the  Company  (including,  without  limitation,  upon
withdrawal from the Company), except as specifically provided in this Agreement.

     4.02 Capital Accounts.

     (a) In  determining  allocations  of income and loss for federal income tax
purposes, a capital account (the "Capital Account") shall be maintained for each
Member in accordance  with the capital  account  maintenance  rules set forth in
Treasury Regulations Section 1.704-1(b)(2)(iv).  Without limiting the generality
of the foregoing,  each Member's  Capital  Account shall be increased by (i) the
amount of money contributed by such Member to the Company,  (ii) the Gross Asset
Value of property  contributed by such Member to the Company (net of liabilities
that the Company is considered  to assume or take subject to in accordance  with
Section 752 of the Code), and (iii)  allocations to such Member of Profits;  and
shall be decreased by (w) the amount of money  distributed  to such Member,  (x)
the Gross Asset  Value of any  property  distributed  to such Member (net of any
liabilities  that such  Member is  considered  to assume or take  subject  to in
accordance with Section 752 of the Code),  and (y) allocations to such Member of
Losses.

     (b) The foregoing  provisions  and the other  provisions of this  Agreement
relating to the  maintenance  of Capital  Accounts  are  intended to comply with
Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in
a manner  consistent with such Treasury  Regulations.  In the event the Board of
Managers shall determine, in its reasonable discretion,  that it is necessary or
advisable to modify the manner in which the Capital  Accounts,  or any debits or
credits thereto, are computed in order to comply with such Treasury Regulations,
the Board of Managers may make such modification;  provided,  however, that such
modification shall not have a material adverse effect on any Member.

     4.03  Determination  and  Allocations  of Profits and  Losses.  The income,
gains,  losses,  deductions  and credits of the Company shall be determined  for
each fiscal year in accordance with generally  accepted  accounting  principles,
consistently applied.

     (a) Profits for a fiscal year, other than Profits attributable to a Capital
Event, shall be allocated among the Members:

          (i) first,  to eliminate a negative  Adjusted  Capital  Account of any
     Member; and

          (ii) thereafter, in proportion to each Member's Percentage Interest.

     (b) Losses for a fiscal year,  other than Losses  attributable to a Capital
Event, shall be allocated among the Members in the following order:

          (i) first,  to reduce the Adjusted  Capital  Account of each Member to
     zero; and

          (ii) thereafter, in proportion to each Member's Percentage Interest.

     (c) Items of income,  gain,  loss and deduction  attributable  to a Capital
Event shall be  allocated  among the Members so as to cause the Members  Capital
Accounts to be in proportion to their respective Percentage Interests.

     4.04 Regulatory Allocations.

     (a)   Tax Allocations:  Code Section 704(c).

          (i) Except as otherwise  provided herein,  all items of income,  gain,
     loss,  deduction and credit realized by the Company shall,  for each fiscal
     year, be allocated for Federal,  state and local income tax purposes  among
     the  Members  in the same  manner  as the  items  of  income,  gain,  loss,
     deduction and credit were allocated pursuant to Section 4.03.

          (ii) In  accordance  with  Code  Section  704(c)  and the  Regulations
     thereunder,  income, gain, loss, and deduction with respect to any property
     contributed to the capital of the Company  shall,  solely for tax purposes,
     be  allocated  among the  Members so as to take  account  of any  variation
     between  the  adjusted  basis of such  property  to the Company for federal
     income  tax  purposes  and its  initial  Gross  Asset  Value  (computed  in
     accordance with subparagraph (i) of the definition of Gross Asset Value).

          (iii) In the event  the  Gross  Asset  Value of any  Company  asset is
     adjusted  pursuant to  subparagraph  (ii) of the  definition of Gross Asset
     Value,  subsequent  allocations of income,  gain,  loss, and deduction with
     respect to such asset  shall take  account  of any  variation  between  the
     adjusted  basis of such asset for federal income tax purposes and its Gross
     Asset  Value in the  same  manner  as under  Code  Section  704(c)  and the
     Regulations thereunder.

          (iv) Any  elections or other  decisions  relating to such  allocations
     shall be made by the  Managers in any manner that  reasonably  reflects the
     purpose  and  intention  of this  Agreement.  Allocations  pursuant to this
     Section 4.04(a) are solely for purposes of federal,  state, and local taxes
     and shall not affect, or in any way be taken into account in computing, any
     Capital Account or share of profits,  losses, other items, or distributions
     pursuant to any provision of this Agreement.

          (v)  Except as  otherwise  provided  in this  Agreement,  all items of
     Company  income,  gain,  loss,  deduction,  and any other  allocations  not
     otherwise  provided  for shall be  divided  among the  Members  in the same
     proportions  as they share  profits or losses,  as the case may be, for the
     Allocation Period.

     (b) Notwithstanding Section 4.03, the following allocations shall apply:

          (i) the "minimum gain chargeback  requirement" of Regulations  Section
     1.704-2(f);

          (ii)  the  "chargeback  of  partner  nonrecourse  debt  minimum  gain"
     requirement of Regulations Section 1.704-2(i)(4); and

          (iii) the "qualified income offset"  provision of Regulations  Section
     1.704-1(b)(2)(ii)(d).

     (c) The  economic  arrangement  intended  by the  Members  with  respect to
distributions on liquidation is based on Capital  Accounts  adjusted for profits
and losses as set forth in Section 4.03 without consideration of the allocations
specified in Section  4.04(b),  above.  Therefore,  in the event the allocations
specified in Section  4.04(b) or any other  allocations  required by the Code or
other  applicable  tax law would  cause the  Capital  Accounts  balances  of the
Members to differ from the Capital  Account  balances which would have pertained
in the absence of such allocations,  the Managers will specially  allocate items
of income, gain, loss and deduction in a manner which complies with Code section
704(b)  and  causes the  Capital  Account of each  Member to equal as closely as
practicable the Capital Account such Member would have had in the absence of any
such allocations  required by Section 4.04(b) or other  allocations  required by
the Code or other applicable tax law.

     4.05  Allocations  Upon Transfer or Admittance.  In the event that a Member
acquires an interest in the Company either by transfer from another Member or by
acquisition  from the  Company,  unless a  different  method is  selected by the
Managers, (i) an equal portion of the profits or losses from ordinary operations
of the Company for the year in which such acquisition  occurs shall be allocated
to each day of such year, and the profits and losses so allocated to the portion
of the year prior to the date of the  acquisition of the interest in the Company
by the Member shall be allocated among the Members without giving effect to such
acquisition,  and the profits and losses so allocated to the portion of the year
from and after the date of the  acquisition  of such interest shall be allocated
among the Members by giving  effect to such  acquisition,  and (ii)  profits and
losses realized from the sale or other  disposition of the assets of the Company
outside of ordinary  operations  shall be allocated among the Members based upon
the actual ownership of interests in the Company on the date of the event giving
rise to such profits or losses.

     4.06 Allocations with Respect to Non-cash  Distributions.  In the case of a
non-cash distribution,  the Company shall be deemed to have recognized income or
loss  as if the  distributed  property  were  sold  for  fair  market  value  as
determined  in good faith by the Board of Managers  and the Capital  Accounts of
the Members will be adjusted accordingly.

     4.07 Amounts  Withheld.  All amounts  withheld  pursuant to the Code or any
provisions  of any state,  local or foreign tax law with respect to any payment,
distribution  or  allocation  to the Members shall be treated as amounts paid or
distributed,  as the case may be, to the  Members  with  respect  to which  such
amount was withheld  pursuant to this  Section 4.07 for all purposes  under this
Agreement.   The  Company  is   authorized   to  withhold   from   payments  and
distributions, or with respect to allocation to the Members, and pay over to any
Federal,  state and local  government  or any  foreign  government,  any amounts
required to be so withheld  pursuant to the Code or any  provisions of any other
Federal,  state or local law or any foreign  law,  and shall  allocate  any such
amounts to the Members with respect to which such amount was withheld.

     4.08 Loans by Members.

     (a) In the event the  Company  requires  additional  funds to carry out its
purposes,  conduct its business,  meet its  obligations or make any  expenditure
authorized by this Agreement,  and additional funds are not available from third
parties on terms acceptable to the Board of Managers in its sole discretion, any
Member may, but shall not be obligated  to, loan such funds to the Company.  Any
loan made pursuant to this Section shall be nonrecourse to the Member,  shall be
evidenced  by a  promissory  note,  shall be  unsecured,  shall not  violate the
Company's  other  loan  or  contractual   arrangements,   shall  bear  interest,
compounded  monthly, at a rate of interest equal to the Prime Rate plus four (4)
percentage points, shall be repaid out of the first funds available therefor and
in any  event  prior to any  distribution  to any  Member,  and shall be due and
payable  in full on the first  (1st)  anniversary  of the date on which any such
loan is made.

     (b)  Loans by a Member  to the  Company  shall  not be  considered  Capital
Contributions. If any Member shall advance funds to the Company in excess of the
amounts  required  hereunder to be  contributed by such Member to the capital of
the Company, the making of such advances shall not result in any increase in the
amount of the Capital  Account of such Member.  The amounts of any such advances
shall  be a debt  of the  Company  to  such  Member  and  shall  be  payable  or
collectible  only out of the  Company  assets in  accordance  with the terms and
conditions  upon which such  advances  are made,  subject to the  provisions  of
Section  4.08(a).  The  repayment  of loans  from a Member to the  Company  upon
liquidation shall be subject to the order of priority set forth in Article X.

     4.09 Additional Capital Contributions.

     (a)  Obligation  to  Make  Additional  Capital  Contributions.   Except  as
otherwise  provided in Section 9.07(c) below,  each Member shall be obligated to
(and does hereby  covenant  and agree to)  contribute,  at such times and in the
manner as may be determined  by  Supermajority  Consent of the Members,  its pro
rata share (based on Percentage  Interests) of  additional  capital  required to
fund the  operations of the Company from time to time (the  "Additional  Capital
Contributions").  All such Additional Capital Contributions shall be paid within
thirty (30) days of receipt of a capital  call notice from the Board of Managers
requiring that such Additional Capital Contributions be made; provided, however,
that the total of all required Capital Contributions, including, but not limited
to, Additional  Capital  Contributions,  prior to the closing under the Purchase
Agreement shall not exceed $540,000 per Member.

     (b) Non-Contributing  Members. If any Member (hereinafter  referred to as a
"Non-Contributing  Member") fails to make an Additional Capital  Contribution at
the time specified  above, any Member who made its required  Additional  Capital
Contribution  (hereinafter  referred  to as  the  "Contributing  Member")  shall
thereafter  have the  right,  but not the  obligation,  to do one or more of the
following,  in addition to all other rights and remedies under this Agreement or
otherwise available at law or in equity by notice to the Non-Contributing Member
of the amount which has been advanced and/or contributed (as the case may be) by
the Contributing Member pursuant to this Section 4.09:

          (i) To make a loan (a  "Contribution  Loan")  to the  Non-Contributing
     Member by advancing funds directly to the Company in an amount equal to all
     or  a  portion   of  the   Additional   Capital   Contribution   which  the
     Non-Contributing  Member  failed to make,  which  Contribution  Loan  shall
     (except to the extent Section  4.09(d)(iii)(A))  treatment is elected) be a
     recourse obligation of the Non-Contributing Member, and shall bear interest
     and be repayable in accordance with the provisions hereof; or

          (ii) To make a Capital  Contribution to the Company in an amount equal
     to all or a  portion  of the  Additional  Capital  Contribution  which  the
     Non-Contributing  Member  failed  to  make,  and to cause  dilution  of the
     Non-Contributing  Member's  Percentage  Interest  in  accordance  with  the
     provisions of Section 4.09(e) below.

     If more than one (1) Member wishes to be a Contributing  Member, they shall
do so in such  proportion as they shall agree,  or, failing such  agreement,  in
proportion to the Contributing Members' respective Percentage Interests.

     (c) Intentionally Omitted.

     (d) Contribution Loan Terms.

          (i) If a  Contributing  Member elects to make a  Contribution  Loan on
     behalf of a  Non-Contributing  Member,  such  Contribution  Loan shall bear
     interest at a rate equal to the Prime Rate plus six (6) percentage  points,
     and  shall  be  repayable  in  accordance  with  Section   4.09(d)(ii).   A
     Contributing  Member shall be entitled to make a  Contribution  Loan in any
     amount equal to or less than the entire  amount of the  Additional  Capital
     Contribution  which the  Non-Contributing  Member  failed to make, in which
     event the  Company  and/or the  Contributing  Member  shall be  entitled to
     exercise any other  remedies  hereunder or at law or in equity with respect
     to the balance of such unpaid Additional Capital Contribution.

          (ii) A  Contribution  Loan shall be  repayable  out of any  subsequent
     distributions to which the  Non-Contributing  Member (for whose account the
     Contribution  Loan was made) would otherwise be entitled in accordance with
     this  Agreement,  which amounts shall be applied first to interest and then
     to principal,  until the Contribution Loan is paid in full. If not paid out
     of  distributions  as provided  above, a Contribution  Loan,  together with
     accrued but unpaid interest thereon, shall be payable sixty (60) days after
     the  date  on  which  such  Contribution  Loan  is  made.  Repayment  of  a
     Contribution Loan shall be secured by the Non-Contributing  Member's Units,
     and each Member hereby  grants a security  interest in such Units which may
     be invoked by a Contributing Member who has advanced a Contribution Loan to
     the Company on behalf of such Member (who would then be a  Non-Contributing
     Member).  If requested by the  Contributing  Member,  the  Non-Contributing
     Member shall be obligated,  and each Member hereby agrees,  to execute such
     documents,  including  UCC-1s,  as  reasonably  may  be  requested  by  the
     Contributing Member to perfect such security interest.

          (iii)  If any  Contribution  Loan  has  not  been  repaid  in  full in
     accordance  with and within the applicable time period set forth in Section
     4.09(d)(ii) above, then at any time thereafter the Contributing  Member may
     elect to proceed under subsections 4.09(d)(iii)(A) or (B) below.

               (A) Upon thirty (30) days written notice to the  Non-Contributing
          Member  (during  which  thirty  (30) day period  the  Non-Contributing
          Member  shall have the right to cure  nonpayment  of its  Contribution
          Loan), the Contributing  Member may elect to treat all or a portion of
          the outstanding  principal balance of a Contribution Loan as a Capital
          Contribution by the  Contributing  Member and to dilute the Percentage
          Interest  of  the  Non-Contributing  Member  in  accordance  with  the
          provisions of Section  4.09(e).  Accrued  interest on any Contribution
          Loan so converted to capital as provided  above shall not be converted
          to capital  and shall  thereafter  be  payable  upon  demand  from the
          Contributing Member; provided,  however, that if such accrued interest
          is not paid in full upon demand,  the Member making such demand may at
          any time  thereafter  exercise his rights under  subsection  (B) below
          with respect to the then-outstanding amount of such accrued interest.

               (B) The Contributing Member may elect to make written demand upon
          the  Non-Contributing  Member for payment in full of such Contributing
          Member's  Contribution  Loan,  including all interest accrued thereon,
          and  upon   failure  of  the   Non-Contributing   Member  to  pay  the
          Contribution  Loan and all interest thereon in full within one hundred
          twenty (120) days after such demand, the Contributing Member may cause
          all  available  remedies  against  the  Non-Contributing  Member to be
          enforced,  including but not limited to a suit for damages in the full
          amount of the Contribution Loan.

               (C) Until a  Contributing  Member has  elected  to proceed  under
          subsections  4.09(d)(iii)(A) or (B), above, such Contributing Member's
          Contribution Loan shall remain in place and shall bear interest and be
          repaid as provided  above.  The rights of a Contributing  Member under
          this Section shall be  non-exclusive,  and a  Contributing  Member may
          elect to proceed under either or both provisions of this Section as to
          all or any portion of any  particular  Contribution  Loan,  or, in the
          event of an election  under  subsections  4.09(d)(iii)(B)  followed by
          nonpayment,  in whole or in part, of the Contribution  Loan within the
          time period  provided  for therein  the  Contributing  Member may then
          elect to proceed  under  Section  4.09(d)(iii)(A)  with respect to the
          unpaid principal amount of such Contribution Loan.

     (e) Penal Dilution.  If a Contributing Member makes a Capital  Contribution
to the Company  pursuant to the preceding  provisions,  or elects to convert the
principal amount of a Contribution Loan to capital pursuant to the provisions of
subsections 4.09(d)(iii)(A) above, the Percentage Interests of the Members shall
be adjusted, effective as of the date of such contribution or conversion, as the
case may be (hereinafter referred to as the "Computation Date"), as follows:

          (i)  The  Percentage  Interest  of  the  Member  making  such  Capital
     Contribution   or  electing  to  convert  the  principal   amount  of  such
     Contribution  Loan to capital shall be adjusted to an amount  calculated in
     accordance with the following formula: NCP*(C/(NCP*AC)) + P = NP

     P    = The Percentage  Interest of the Contributing  Member then in effect,
          expressed as a decimal

     AC   = The aggregate amount of Capital Contributions required to be made by
          all Members pursuant to this Agreement and not previously  returned at
          the Computation Date

     C    = The  amount  of the  Additional  Capital  Contribution  made  by the
          Contributing   Member  on  behalf  of  the   Non-Contributing   Member
          multiplied by 2

     NP   = The Percentage Interest of the Contributing Member immediately after
          such Additional Capital Contribution, expressed as a decimal

     NCP  = The Percentage Interest of the  Non-Contributing  Member immediately
          before such Additional Capital Contribution, expressed as a decimal

          (ii) The Non-Contributing  Member's Percentage Interest shall be equal
     to one hundred  percent  (100%) less the  aggregate  of (i) the  Percentage
     Interest of the Contributing Members adjusted pursuant to the provisions of
     this  Section and (ii) the  Percentage  Interest of the Members who are not
     Contributing  Members  but who make  Additional  Capital  Contributions  as
     required pursuant to this Section.

     To  effectuate  the  foregoing,  the  Contributing  Members shall be issued
additional Units in the Company.

     (f) Adjusting  Allocations.  If the Percentage Interests of the Members are
adjusted  during an Allocation  Period  pursuant to this Section,  the Company's
books shall,  unless otherwise  approved by Majority Consent of the Members,  be
closed as of the date immediately preceding the Computation Date. For the period
ended on such date,  profits,  losses and  distributions  shall be allocated and
distributed  pursuant to the  provisions  of Sections 3 and 4,  according to the
Percentage  Interests  in  effect  prior to the  Computation  Date.  Thereafter,
distributions,  profits  and losses for the  balance of such  Allocation  Period
shall be  distributed  and allocated  pursuant to the provisions of Articles III
and IV according to the  Percentage  Interests of such Members,  as so adjusted;
provided   that  nothing  in  this   Section   shall  be  construed  to  require
distributions at a date earlier than specified in Articles III and IV.

                                    ARTICLE V
                                   MANAGEMENT

     5.01 Board of Managers.  The overall management and control of the business
and affairs of the Company will be vested  solely in the Board of Managers.  The
Board of Managers shall direct,  manage, and control the business of the Company
to the best of its ability.  Subject to the  provisions of this  Agreement,  the
Board  of  Managers  shall  have the full and  complete  authority,  power,  and
discretion to manage and control the business,  affairs,  and  properties of the
Company,  to make all decisions  regarding  those matters and to perform any and
all other acts or  activities  customary  or incident to the  management  of the
Company's business.

     5.02 Number and Election of Managers. The number of Managers of the Company
shall be fixed and the  Members of the Board of Managers  shall be elected  from
time to time by the Members in accordance with Section 6.08. Upon election, each
Manager  shall  execute a counterpart  to this  Agreement or another  instrument
accepting and adopting the terms of this Agreement.  The Board of Managers shall
consist  initially  of two (2)  Managers,  who  shall be Peter  Kramer  and Jeff
Wallace. Managers need not be residents of the State.

     5.03 Resignation of Managers.  Any Manager of the Company may resign at any
time by giving  written  notice to the Company.  The  resignation of any Manager
shall take effect upon  receipt of that notice or at such later time as shall be
specified  in the  notice and the  acceptance  of the  resignation  shall not be
necessary  to make it  effective.  The  resignation  of a Manager  who is also a
Member  shall  not  affect  the  Manager's  rights  as a Member  and  shall  not
constitute a withdrawal of such Manager as a Member.

     5.04  Removal of  Managers.  All or any lesser  number of  Managers  may be
removed at any time, with or without cause, by Majority  Consent of the Members,
except the Manager to be removed.  The removal of a Manager who is also a Member
shall not affect the  Manager's  rights as a Member and shall not  constitute  a
withdrawal of such Manager as a Member.

     5.05 Vacancies on Board of Managers.  Any vacancy  occurring for any reason
in the  Board of  Managers  of the  Company  may be  filled  by the  Members  in
accordance  with Section  6.08. A Manager  elected to fill a vacancy  shall hold
office until the Manager's successor shall be elected and shall qualify or until
the Manager's earlier death, resignation, or removal.

     5.06 Certain Powers of Managers. Without limiting the generality of Section
5.01 above or Section 2.03, and subject to the  limitations set forth in Section
5.07 below,  the Board of Managers shall have power and authority,  on behalf of
the Company:

     (a) to acquire from any Person by purchase, lease or otherwise, any real or
personal  property  which may be  necessary,  convenient  or  incidental  to the
accomplishment of the purposes of the Company;

     (b) to borrow money for the Company from banks, other lending institutions,
the Managers, Members, or Affiliates of the Managers or Members on such terms as
the Members,  by Majority  Consent of the  Members,  deems  appropriate,  and in
connection therewith, to hypothecate,  encumber, and grant security interests in
the assets of the Company to secure repayment of the borrowed sums;

     (c) to enter into,  perform and carry out  contracts of any kind  necessary
to, in connection with or incidental to, the  accomplishment  of the purposes of
the Company, which contracts may extend beyond the term of the Company;

     (d) to prepay in whole or in part, refinance,  recast, increase,  modify or
extend any deed of trust, mortgage or other indebtedness of the Company, and, in
connection  therewith,  to execute any extensions,  renewals or modifications of
such deeds of trust or mortgages;

     (e) to employ or engage persons,  firms or companies (including any Manager
or  Member  or an  Affiliate  of any  Manager  or  Member)  for  the  operation,
maintenance,  marketing  and  financing  of the  Company  and to pay  reasonable
compensation for such services;

     (f) to cause to be paid any and all taxes, charges and assessments that may
be levied, assessed or imposed upon any assets of the Company;

     (g) to purchase  liability  and other  insurance  to protect the  Company's
property and business;

     (h) to hold and own any Company real and/or personal properties in the name
of the Company;

     (i) to invest any  Company  funds  temporarily  (by way of example  but not
limitation) in time deposits,  short-term governmental  obligations,  commercial
paper, or other investments;

     (j) to employ accountants, legal counsel, managing agents, or other experts
to perform services for the Company and to compensate them from Company funds;

     (k) to sell or otherwise  dispose of all or substantially all of the assets
of the  Company  as  part  of a  single  transaction  or  plan  or to  merge  or
consolidate the Company with or into another Person;

     (l) to execute on behalf of the  Company  all  instruments  and  documents,
including,  without  limitation:  checks;  drafts;  notes and  other  negotiable
instruments;  mortgages,  or  deeds of  trust;  security  agreements;  financing
statements; documents providing for the acquisition,  mortgage or disposition of
the  Company's  property;   assignments;  bills  of  sale;  leases;  partnership
agreements;  operating agreements of other limited liability companies;  and any
other  instruments  or  documents  necessary,  in the  opinion  of the  Board of
Managers, to the business of the Company; and

     (m) to engage in such other activities and incur such other expenses as may
be reasonably  necessary,  advisable or appropriate  for the  furtherance of the
Company's  purposes so long as such  activities  may be  lawfully  carried on or
performed  by a  limited  liability  company  under  the  Act,  and to  execute,
acknowledge  and deliver any and all  instruments  necessary  to  implement  the
foregoing.

     5.07  Certain  Actions  Requiring  Supermajority  Consent  of the  Members.
Notwithstanding  anything to the contrary  contained in this  Agreement,  and in
addition  to any other  actions  required by the terms of this  Agreement  or by
applicable  law to be approved by Members,  each of the following  actions shall
require both the approval of the Managers and the  Supermajority  Consent of the
Members:

     (a) any  amendments  to or changes in the purposes of the  Company,  as set
forth in Section 2.03 of this Agreement;

     (b) any  transaction  or series of  transactions  pursuant to which (i) the
Company would sell,  assign,  lease or otherwise  dispose of or voluntarily part
with the control of all or  substantially  all of its assets to any  Person,  or
(ii) a Change In Control of the Company would be effected;

     (c) decisions  regarding the raising of capital for the Company,  including
the incurring of any indebtedness for borrowed money or the issuance of Units or
options or warrants therefor (other than the issuance of any Units in connection
with the  exercise  of  warrants  or options  issued  pursuant  to  arrangements
approved by Supermajority Consent of the Members or any repurchase or redemption
by the Company of any Units;

     (d) the  granting  of any  lien,  security  interest  or  other  charge  or
encumbrance  upon, in or with respect to any assets or rights of the Company and
the  prepayment,  refinancing,  modification  or  extension  of any  such  lien,
security interest or other charge or encumbrance;

     (e) any agreement,  arrangement,  transaction or series thereof between the
Company  and any  Member or Manager  of the  Company  or any direct or  indirect
Affiliate thereof;

     (f) any other agreement, contract,  transaction,  series of transactions or
plan of action involving  aggregate  payments,  liabilities,  obligations or the
forgiveness  of any of the same in excess of  $50,000  in value  that is not set
forth in an annual budget  previously  approved by Supermajority  Consent of the
Members;

     (g) the  acquisition  of any assets  other than in the  ordinary  course of
business;

     (h) to sell or otherwise  dispose of all or substantially all of the assets
of the  Company  as  part  of a  single  transaction  or  plan  or to  merge  or
consolidate the Company with or into another Person; and

     (i) any  decision  involving  (1) the filing by the  Company of a voluntary
bankruptcy  case, (2) the making by the Company of a general  assignment for the
benefit of its  creditors,  (3) the  admission  in writing by the Company of its
inability to pay its debts as they  mature,  (4) the filing by the Company of an
application  for, or consent to, the  appointment of any receiver or a permanent
or interim  trustee of the  Company  or of all or any  portion of its  property,
including,  without  limitation,  the appointment or authorization of a trustee,
receiver,  or agent under  applicable  law or under a contract to take charge of
its property  for the purposes of enforcing a lien against such  property or for
the purpose of general  administration  of such  property for the benefit of its
creditors,   or  (5)  the  filing  by  the  Company  of  a  petition  seeking  a
reorganization  of its financial affairs or to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute, or an answer admitting the material  allegations of a petition filed
against the Company in any proceeding under any such law or statute.

     5.08 Certain Transactions.

     (a) No contract or  transaction  between the Company and one or more of its
Managers,  or between the  Company and any other  Person in which one or more of
its Managers are directors,  managers or officers, or have a financial interest,
shall be void or  voidable  solely  for this  reason,  or  solely  because  such
Manager(s)  is  present at or  participates  in the  meeting of the Board  which
authorizes  the  contract  or  transaction  or solely  because the votes of such
Manager(s) are counted for such purpose, if:

          (i) The material  facts as to his  relationship  or interest and as to
     the  contract or  transaction  are  disclosed  or are known to the Board of
     Managers and the Board in good faith authorizes the contract or transaction
     by the affirmative vote of a majority of the disinterested  Managers,  even
     though the disinterested Managers be less than a quorum; or

          (ii) The material facts as to his  relationship  or interest and as to
     the  contract  or  transaction  are  disclosed  or are known to the Members
     entitled to vote thereon,  and the contract or transaction is  specifically
     approved in good faith by Supermajority Consent of the Members; or

          (iii) The  contract  or  transaction  is fair to the Company as of the
     time it is authorized, approved or ratified by the Board of Managers or the
     Members.

     (b)  Interested  Managers may be counted in  determining  the presence of a
quorum at a meeting of the Board of Managers which  authorizes any such contract
or transaction. 5.09 Meetings of Managers.

     (a)  Place  of  Meetings.  Meetings  of the  Managers  need  not be held in
the State.

     (b) Regular Meetings. Regular meetings of the Board of Managers may be held
without call or notice at such places and at such times as the Managers may from
time to time  determine,  provided  that any  Manager  who is  absent  when such
determination  is made shall be given  written  notice of the  determination.  A
regular meeting of the Board of Managers may be held without a call or notice at
the same place as the annual  meeting of Members,  or a special  meeting held in
lieu thereof, following such meeting of Members.

     (c) Special  Meetings.  Special  meetings  of the Board of Managers  may be
called by any  Manager.  Notice of the time and  place of all  special  meetings
shall be given by the  Manager(s)  calling  the  meeting.  Notice  must be given
orally,  by  telephone,  by facsimile,  or in writing,  and such notice shall be
sufficient if given in time to enable the Manager to attend, provided, that such
notice must, in any event,  be received at least  twenty-four  (24) hours before
the meeting.  No notice of any meeting of the Board of Managers need be given to
any Manager if such Manager,  by a writing filed with the records of the meeting
(and whether executed before or after such meeting),  waives such notice,  or if
such Manager  attends the meeting  without  protesting  prior  thereto or at its
commencement the lack of notice to him.

     (d)  Quorum of  Managers;  Required  Vote.  At any  meeting of the Board of
Managers a majority of the number of Managers then  constituting  the full Board
shall constitute a quorum, but a lesser number may adjourn any meeting from time
to time without  further  notice.  Unless  otherwise  provided by law or by this
Agreement, business may be transacted by vote of a majority of the Managers then
present at any meeting at which there is a quorum.

     (e) Action Without a Meeting.  Unless otherwise provided by law, any action
required or  permitted  to be taken at any meeting of the  Managers may be taken
without a meeting if all Managers  consent to the action by Written  Consent and
the written  consents  are filed with the records of the  meetings of  Managers.
Such consents shall be treated for all purposes as a vote at a meeting.

     (f)  Telephone  Conference  Meetings.  Any Manager may  participate  in any
meeting  of  the  Board  by  means  of  a   conference   telephone   or  similar
communications  equipment  by means of which all  Persons  participating  in the
meeting  can hear each  other at the same time and  participation  by such means
shall constitute presence in person at a meeting.

     5.10  Authority to Act.  Subject to the provisions of this  Agreement,  the
signature of any  Manager,  or any Person  authorized  by the  Managers,  on any
agreement,  contract,  instrument or other  document shall be sufficient to bind
the Company in respect thereof and  conclusively  evidence the authority of such
Person and the Company with respect thereto, and no third party need look to any
other  evidence  or require the  joinder or consent of any other  party.  Unless
authorized  to do  so  by  this  Agreement  or by  the  Board  of  Managers,  no
attorney-in-fact,  employee,  or other agent of the Company shall have any power
or  authority  to bind the Company in any way, to pledge its credit or to render
it  liable  pecuniarily  for any  purpose.  No  Member  shall  have any power or
authority to bind the Company unless the Member has been authorized by the Board
of Managers to act as an agent of the Company in  accordance  with the  previous
sentence.

     5.11 Standard of Care; Limitation of Liability. Each Manager of the Company
shall perform his duties in good faith, in a manner he reasonably believes to be
in the best  interests  of the  Company,  and with  such  care as an  ordinarily
prudent  person in a like  position  would use under  similar  circumstances.  A
Manager of the Company who so performs the duties of Manager  shall not have any
liability by reason of being or having been a Manager of the Company.  The Board
of  Managers  of the  Company do not,  in any way,  guarantee  the return of the
Members'  Capital  Contributions or a profit for the Members from the operations
of the Company.  No Manager  shall be liable to the Company or to any Member for
any loss or damage  sustained  by the Company or any Member,  unless the loss or
damage shall have been the result of fraud,  deceit,  gross negligence,  willful
misconduct, or a wrongful taking by the Manager.

     5.15  Managers  Have No  Exclusive  Duty to  Company.  Except as  otherwise
Provided  in this  Agreement  or any other  agreement  between the Company and a
Manager,

     (a) no Manager  shall be  required  to manage  the  Company as his sole and
exclusive function;

     (b) any Manager may have other  business  interests and may engage in other
activities in addition to those relating to the Company;

     (c) neither the Company nor any Member  shall have any right,  by virtue of
this Agreement,  to share or participate in such other investments or activities
of any Manager or to the income or proceeds derived therefrom and;

     (d) no Manager  shall incur any  liability  to the Company or to any of the
Members as a result of engaging in any other business or venture.

     5.16  Indemnity of Managers, Employees and Other Agents.

     (a) Indemnification and Advancement of Expenses.  Subject to the provisions
of this Section,  the Company shall, to the fullest extent it would be permitted
under Section 145 of the Delaware  General  Corporation  Law, as the same may be
amended and supplemented from time to time or any successor  provision ("Section
145"), if the Company were a Delaware corporation (provided such indemnification
is at the time  also  permitted  by  Section  8 of the  Act,  as the same may be
amended and supplemented from time to time or any successor  provision ("Section
8")), indemnify and advance expenses to (i) its Managers (as if directors),  and
(ii) any  person  who at the  request  of the  Company  is or was  serving  as a
director,  manager,  officer,  employee  or agent of  another  Person,  from and
against any and all of the expenses,  liabilities,  or other matters referred to
in or covered by Section 145 or Section 8. The  Company,  by action of its Board
of Managers,  may indemnify  and advance  expenses to its  employees,  and other
agents and other persons who are not Managers up to the fullest extent permitted
by Section 145 and Section 8 provided that such  indemnification and advancement
of  expenses  in any given  situation  is  approved  or ratified by the Board of
Managers.

     (b) Actions  other than by or in the Right of the  Company.  Subject to the
provisions of Subsection (a) above,  the Company shall  indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or  investigative  (other  than an action by or in the right of the  Company) by
reason  of the  fact  that he is or was a  Manager,  employee  or  agent  of the
Company,  or is or was  serving  at the  request of the  Company as a  director,
manager,  officer,  employee  or agent of another  company,  partnership,  joint
venture,  trust or other  enterprise,  against  expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by him in connection  with such action,  suit or proceeding if he acted
in good faith and in a manner he reasonably  believed to be in or not opposed to
the best interests of the Company,  and, with respect to any criminal  action or
proceedings,  had no reasonable  cause to believe his conduct was unlawful.  The
termination of any action,  suit or proceeding by judgment,  order,  settlement,
conviction,  or upon a plea of nolo contendere or its equivalent,  shall not, of
itself,  create a presumption that the person did not act in good faith and in a
manner  which  he  reasonably  believed  to be in or not  opposed  to  the  best
interests  of  the  Company,  and,  with  respect  to  any  criminal  action  or
proceeding, had reasonable cause to believe that his conduct was unlawful.

     (c) Actions by or in the Right of the Company. Subject to the provisions of
Subsection  (a) above,  the Company  shall  indemnify any person who was or is a
party  or is  threatened  to be  made a  party  to any  threatened,  pending  or
completed action or suit by or in the right of the Company to procure a judgment
in its  favor by reason of the fact  that he is or was a  Manager,  employee  or
agent of the  Company,  or is or was  serving at the request of the Company as a
director,   manager,  officer,   employee,  or  agent  of  another  corporation,
partnership,   joint  venture,  trust,  or  other  enterprise  against  expenses
(including   attorneys'  fees)  actually  and  reasonably  incurred  by  him  in
connection  with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and except that no  indemnification  shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged  to be liable to the  Company  unless and only to the  extent  that the
Court of  Chancery of the State of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the  circumstances  of the case,  such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery of the State of Delaware or such other court shall deem proper.

     (d)  Success on the  Merits.  To the extent  that any person  described  in
Subsections  (b) or (c) of this  Section  has been  successful  on the merits or
otherwise  in defense of any  action,  suit or  proceeding  referred  to in said
Subsections,  or in defense of any claim,  issue or matter therein,  he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.

     (e) Specific Authorization. Any indemnification under Subsection (b) or (c)
of this Section (unless ordered by a court) shall be made by the Company only as
authorized in the specific case upon a determination that indemnification of any
Person described in said Subsections is proper in the  circumstances  because he
has met the applicable  standard of conduct required by said  Subsections.  Such
determination shall be made by Supermajority Consent of the Members.

     (f) Advance Payment.  Expenses  incurred in defending any civil,  criminal,
administrative  or investigative  action,  suit or proceeding may be paid by the
Company in advance of the final  disposition of such action,  suit or proceeding
upon receipt of an undertaking  by or on behalf of any person  described in this
Section to repay such amount if it shall ultimately be determined that he is not
entitled to indemnification by the Company as authorized in this Section.

     (g)  Non-Exclusivity.  The  indemnification  and  advancement  of  expenses
provided by, or granted  pursuant to, this Section shall not be deemed exclusive
of any other rights to which those  provided  indemnification  or advancement of
expenses may be entitled under any agreement,  vote of Members or  disinterested
Managers or otherwise,  both as to action in such person's official capacity and
as to action in another capacity while holding such office.

     (h) Insurance.  The Members may, by  Supermajority  Consent of the Members,
authorize the Company to purchase and maintain insurance on behalf of any Person
who is or was a Manager,  employee or agent of the Company, or is or was serving
at the request of the Company as a director, manager, officer, employee or agent
of another Person against any liability asserted against him and incurred by him
in any such capacity,  or arising out of his status as such,  whether or not the
Company would have the power to indemnify him against such  liability  under the
provisions of this Section.

     (i)  Continuation  of  Indemnification  and  Advancement  of Expenses.  The
indemnification and advancement of expenses provided by, or granted pursuant to,
this  Section  shall  continue  as to a person who has ceased to be a  director,
manager, officer, employee or agent and shall inure to the benefit of the heirs,
executors and  administrators  of such person.  (j)  Severability.  If any word,
clause or provision of this  Section or any award made  hereunder  shall for any
reason be determined to be invalid, the provisions hereof shall not otherwise be
affected thereby but shall remain in full force and effect.

     (k)  Intent of  Section.  The  intent of this  Section  is to  provide  for
indemnification  and advancement of expenses to the fullest extent that would be
permitted  by Section 145 if the Company were a Delaware  corporation,  provided
such  indemnification also is permitted by Section 8. To the extent that Section
145 or Section 8 or any successor section thereto may be amended or supplemented
from time to time, this Article shall be amended  automatically and construed so
as to permit  indemnification  and advancement of expenses to the fullest extent
from time to time permitted by law.

     5.17  Compensation; Expenses of Managers; Loans; Guaranties.

     (a) Compensation and  Reimbursement.  Except as otherwise  provided in this
Agreement,  no Member or Manager shall receive any salary,  fee, or draw for any
services  rendered  to or on behalf  of the  Company,  nor  shall any  Member or
Manager be  reimbursed  for any  expenses  incurred by such Member or Manager on
behalf  of the  Company.  For the  performance  of their  services  as  Managers
hereunder,  the  Board of  Managers,  in the  aggregate,  shall be  entitled  to
compensation  equal to two percent  (2%) of the  Project's  net income,  up to a
total of $25,000 per fiscal year (the  "Management  Fee"). The Board of Managers
may determine the timing and  apportionment  of such  Management Fee in its sole
discretion,  with any deadlock among the Managers with respect to the Management
Fee to be resolved in  accordance  with the  procedures  described in Article XI
below.

     (b) Engagement of Asset Manager. The Company may engage and retain an asset
manager (the "Asset  Manager") in accordance  with such terms and  conditions as
are  mutually  agreeable  to the  Company and the Asset  Manager,  and the Asset
Manager or its Affiliate may be a Manager  and/or  Member  hereunder.  It is the
intention  of the  parties  that the  Asset  Manager  shall be  responsible  for
property management,  including leasing  coordination and negotiation,  investor
correspondence  and  oversight  of  preparation  of  information  for tax return
preparation.  For its  services,  the Company  shall pay to the Asset Manager an
asset  management  fee to be  mutually  determined  by the Company and the Asset
Manager.  The Asset Manager shall also be reimbursed at cost for any maintenance
personnel,   including  an  on-site  maintenance  person  (if  approved  by  the
Managers), but not for a non-maintenance property manager.

     (c) Expenses.  The Managers may charge the Company for any direct  expenses
reasonably incurred in connection with the Company business.

     (d) Loans.  The  Managers  may, but are not  obligated  to, lend or advance
money to the Company to further the purposes of the Company.  If a Manager shall
make any loan or loans to the Company or advance money on its behalf, the amount
of any such  loan or  advance  shall not be  treated  as a  contribution  to the
capital of the Company but shall be a debt due from the  Company.  The amount of
any such loan or advance by a Manager  shall be repayable  out of the  Company's
cash and shall  bear  interest  at a rate not in excess of the lesser of (i) the
Prime Rate plus four (4) percentage  points,  or (ii) the maximum rate permitted
by law,  which  interest  shall  accrue  and be  payable at the same time as the
principal amount of such loan shall be repaid as hereinafter provided. Each such
loan made by a Manager  shall be due and payable on demand and may be  evidenced
by a promissory note  substantially  in accordance with the terms and conditions
outlined in this  Section  5.17(d).  Said loan or loans shall be secured in such
manner as  reasonably  requested by a Manager and the Company  agrees to execute
such  security  agreements,   financing  statements  and  other  instruments  as
necessary to evidence the same.

     (e) Guaranties.  The Managers may charge the Company a fee for any personal
guaranty  required  to be  executed in  connection  with any loan,  or any other
hazardous  substances  or similar  indemnification  required  to be  executed or
delivered in connection with any loan to the Company.  Such fee shall not exceed
five percent (5%) of the amount of the  guaranty,  or if no amount is specified,
then the fee shall not  exceed  one  percent  (1%) of the  amount of the loan to
which the guaranty relates.

                                   ARTICLE VI
                               MEETINGS OF MEMBERS

     6.01 No Annual Meeting. No annual meeting of the Members shall be required.

     6.02 Special Meetings.  Special meetings of the Members, for any purpose or
purposes,  unless otherwise prescribed by the Act, may be called by the Board of
Managers  or by  Written  Consent  of any  Member or  Members  having  aggregate
Percentage Interests of at least ten (10) percent.

     6.03 Place of  Meetings.  The Board of Managers  may  designate  any place,
either  within or outside the State,  as the place of meeting for any meeting of
the Members.  If no  designation  is made, or if a special  meeting be otherwise
called, the place of meeting shall be the principal office of the Company.

     6.04 Notice of Meetings.  Except as provided in section 6.05 below, written
notice  stating  the place,  day,  and hour of the  meeting  and the  purpose or
purposes  for which the meeting is called  shall be delivered no fewer than five
(5) nor more  than  thirty  (30) days  before  the date of the  meeting,  either
personally or by mail, by or at the direction of the Board of Managers or Person
calling the meeting, to each Member entitled to vote at the meeting.

     6.05 Meeting of All Members.  If all of the Members  shall meet at any time
and place,  either within or outside of the State, and consent to the holding of
a meeting at that time and place,  the meeting  shall be valid  without  call or
notice, and at the meeting lawful action may be taken.

     6.06 Record Date. For the purpose of determining Members entitled to notice
of or to vote at any meeting of Members or any  adjournment  of the meeting,  or
Members  entitled  to  receive  payment  of  any  distribution,  or  to  make  a
determination of Members for any other purpose,  the date on which notice of the
meeting is mailed or the date on which the resolution declaring the distribution
is adopted,  as the case may be, shall be the record date for the  determination
of Members.  When a determination  of Members entitled to vote at any meeting of
Members has been made as provided in this section, the determination shall apply
to any adjournment of the meeting.

     6.07 Quorum.  Members  having at least  two-thirds  (2/3) of the  aggregate
Percentage  Interests,  represented  in person or by proxy,  shall  constitute a
quorum at any meeting of  Members.  In the absence of a quorum at any meeting of
Members,  a majority of the aggregate  Percentage  Interests so represented  may
adjourn the meeting from time to time for a period not to exceed 60 days without
further  notice.  However,  if the  adjournment  is for more than 60 days, or if
after the  adjournment a new record date is fixed for the adjourned  meeting,  a
notice of the adjourned meeting shall be given to each Member of record entitled
to vote at the  meeting.  At an  adjourned  meeting  at which a quorum  shall be
present or  represented,  any business may be  transacted  which might have been
transacted at the meeting as originally  noticed.  The Members present at a duly
organized  meeting  may  continue  to  transact   business  until   adjournment,
notwithstanding  the withdrawal  during the meeting of Members having  aggregate
Percentage Interests whose absence would cause less than a quorum.

     6.08 Manner of Acting.  All elections of Managers  shall be determined by a
vote of a plurality of the Percentage Interests  represented at a meeting called
for such purpose, provided, however, that in no case shall the Managers have the
ability to control such  plurality.  All other  matters  shall be  determined by
Majority Consent of the Members,  unless Supermajority Consent of the Members or
the vote of another  proportion or number is otherwise required by the Act or by
this Agreement.

     6.09 Proxies. At all meetings of Members, a Member may vote in person or by
proxy   executed   in   writing   by  the   Member  or  by  a  duly   authorized
attorney-in-fact.  The proxy  shall be filed with the  Managers  of the  Company
before or at the time of the meeting.  No proxy shall be valid after eleven (11)
months from the date of its execution, unless otherwise provided in the proxy.

     6.10 Action by Members  Without a Meeting.  Action required or permitted to
be taken at a meeting of Members may be taken without a meeting if the action is
evidenced by one or more Written Consents describing the action taken, signed by
Members entitled to vote having the aggregate  Percentage  Interests required to
take such action at a duly called  meeting and delivered to the Secretary of the
Company for inclusion in the minutes or for filing with the Company records.

     6.11  Waiver of  Notice.  When any  notice is  required  to be given to any
Member,  a waiver of the notice in writing signed by the person  entitled to the
notice,  whether  before,  at,  or  after  the  time  stated  therein,  shall be
equivalent to the giving of the notice.

                                 ARTICLE VII
              RIGHTS, OBLIGATIONS AND REPRESENTATIONS OF MEMBERS

     7.01 Limitation of Liability.  Each Member's  liability shall be limited as
set forth in this  Agreement,  the Act,  and  other  applicable  law.  Except as
otherwise  expressly  provided,  no Member  shall be  personally  liable for any
debts, obligations, liabilities or losses of the Company nor shall any Member be
required to restore a negative Capital Account balance.

     7.02  Company  Books and  Records.  Subject  to such  reasonable  standards
(including  standards  governing  what  information  and  documents  are  to  be
furnished at what time and location and at whose  expense)  imposed by the Board
of Managers,  upon written request stating the purpose, a Member may examine and
copy in  person,  at any  reasonable  time,  for any proper  purpose  reasonably
related  to such  Member's  interest  as a Member of the  Company,  all  records
required to be maintained under the Act and such other information regarding the
business  affairs  and  financial  condition  of  the  Company  as is  just  and
reasonable for the Member to examine and copy.

     7.03  Expenses.  Any Member may charge the Company for any direct  expenses
reasonably incurred in connection with the Company business.

     7.04  Guaranties.  Any Member may charge the Company a fee for any personal
guaranty  required  to be  executed in  connection  with any loan,  or any other
hazardous  substances  or similar  indemnification  required  to be  executed or
delivered in connection with any loan to the Company.  Such fee shall not exceed
five percent (5%) of the amount of the  guaranty,  or if no amount is specified,
then the fee shall not  exceed  one  percent  (1%) of the  amount of the loan to
which the guaranty relates.

     7.05 Priority and Return of Capital. Except as may be expressly provided in
Articles III and IV, no Member shall have priority over any other Member, either
for  the  return  of  Capital   Contributions   or  for  profits,   losses,   or
distributions.

     7.06  Representations.  Each  Member  hereby  represents  and  warrants  as
follows:

     (a) Such  Member is  acquiring  its Units for  investment,  solely for such
Member's  own  account and not for  distribution,  transfer or sale to others in
connection with any distribution or public offering.

     (b)  Such  Member  is  financially  able to bear  the  economic  risk of an
investment  in the Company  and has no need for  liquidity  in this  investment.
Furthermore,  the financial capacity of such Member is of such a proportion that
the total costs of such Member's  investment in the Company is not material when
compared with such Member's total financial capacity.

     (c) Such Member has such  knowledge,  experience and skill in financial and
business  matters in general and with respect to investments of a nature similar
to an investment in the Company so as to be capable of evaluating the merits and
risks of,  and  making an  informed  business  decision  with  regard  to,  this
investment.  Such Member  acknowledges  and understands that the purchase of its
Units  involves an investment  in a new business that has no previous  operating
experience,  and, therefore,  this is a speculative investment with no assurance
of success.

     (d) Such Member (i) has  received  all  information  that such Member deems
necessary to make an informed  investment decision with respect to an investment
in the  Company;  (ii)  has  had  the  unrestricted  opportunity  to  make  such
investigation as such Member desires pertaining to the Company and an investment
therein and to verify any  information  furnished to such Member;  and (iii) has
had  the  opportunity  to  ask  questions  of  representatives  of  the  Company
concerning the Company and such Member's investment.

     (e) Such Member understands that such Member must bear the economic risk of
an investment  in the Company for an  indefinite  period of time because (i) the
Units have not been  registered  under the Securities  Act and applicable  state
securities  laws and (ii) the Units  may not be sold,  transferred,  pledged  or
otherwise  disposed of except in accordance with this Agreement,  the Securities
Act and any applicable state securities laws.

     (f) Such Member  understands  that the Company is not obligated to register
the Units for resale under the Securities Act or any applicable state securities
laws  and  that  the  Company  is not  obligated  to  supply  such  Member  with
information or assistance in complying  with any exemption  under the Securities
Act or any applicable state securities laws.

     (g) Such  Member has full power and  authority  to  execute,  deliver,  and
perform  this  Agreement  in  accordance  with its  terms,  and  this  Agreement
constitutes the valid and binding obligation of such Member, enforceable against
such Member in accordance with its terms.

     7.07  Confidentiality.

     (a) Each Member agrees not to divulge, communicate, use to the detriment of
the Company or for the benefit of any other  Person,  or misuse in any way,  any
confidential  information  of  the  Company  or  any  subsidiary  or  any  other
information  received by the Company under an obligation of confidentiality that
is  disclosed  to the  Members,  except  as may be  required  by law;  provided,
however,  that this prohibition shall not apply to any information which, (i) is
or becomes  generally  available  to the public or within the  industry to which
such  information  relates other than as a result of a breach of this Agreement,
or (ii) at the time of  disclosure  to a Member by any other  party was  already
known by such Member as evidenced by such  Member's  written  records,  or (iii)
becomes available on a non-confidential  basis from a source that is entitled to
disclose  it on a  non-confidential  basis,  or  (iv)  was  or is  independently
developed by or for a Member without reference to the confidential  information,
as evidenced by such Member's written records.

                                  ARTICLE VIII
                        BOOKS, RECORDS AND BANK ACCOUNTS

     8.01 Books and Records.  During the term of the Company's existence and for
a period of five (5) years  thereafter,  there shall be  maintained  all records
required  to be kept  pursuant  to the Act,  including,  without  limitation,  a
current  list of the  names,  addresses  and Units  held by each of the  Members
(including  the dates on which each of the  Members  became a  Member),  all tax
records, copies of this Agreement and the Certificate,  including all amendments
or  restatements,  and correct and complete  books and records of account of the
Company.  Notwithstanding  the  foregoing,  it is understood  that all books and
records of the Company  shall be retained for any period  required by applicable
law or any pending audit or similar proceeding.  The Company shall keep just and
true books of account with respect to the  operations  of the Company.  All such
books shall be maintained at the principal place of business of the Company, or,
for the period  following  dissolution,  at such other  place as the  Liquidator
shall determine.

     8.02 Accounting  Basis and Fiscal Year. The books of account of the Company
shall  be kept on the tax  basis  of  accounting,  or on such  other  method  of
accounting as the Board of Managers may from time to time determine.  The fiscal
year of the Company shall be the calendar year.

     8.03  Reports.

     (a) Within ninety (90) days after the end of each fiscal year,  the Company
shall  furnish to each Member such  information  as may be needed to enable such
Member to file its Federal  income tax return,  any  required  state  income tax
return  and  any  other  reporting  or  filing   requirements   imposed  by  any
governmental agency or authority.

     (b) Within thirty (30) days after the end of each fiscal year,  the Company
shall  prepare and deliver to the  Members a  financial  report of the  Company,
including a balance  sheet,  a profit and loss statement and, if such profit and
loss  statement  is not  prepared  on a cash  basis,  a cash flow or source  and
application of funds  statement,  which shall be accompanied by a certificate of
the Treasurer,  stating that such financial report presents fairly the financial
condition of the Company as of the date of such financial report and the results
of the Company's operations for such year.

     (c) Within twenty (20) days after the end of the months of March,  June and
September  of each year,  the Company  shall  prepare and deliver to each of the
Members an estimate of the Company's  Profit or Loss for the fiscal quarter just
ending and such Member's share thereof.

     (d) The Managers  shall cause to be maintained an annual budget and monthly
financial statements.  At a minimum, these reports shall contain (i) the balance
sheet of the  Company  as of the end of the month,  the fiscal  quarter or year,
(ii) an income  statement  of the Company for such month,  quarter or year,  and
(iii) a statement showing the revenues  distributed by the Company to Members in
respect of such  month,  quarter or year.  Such  financial  statements  shall be
available to any Member that from time to time requests such reports.

     (e) The Managers shall timely provide the Members with adequate information
to meet its periodic securities filing obligations,  including,  but not limited
to,  financial   statements  prepared  in  accordance  with  generally  accepted
accounting principles

     8.04 Bank Accounts.  The Managers  shall be responsible  for causing one or
more  accounts to be  maintained  in a bank (or banks)  which is a member of the
F.D.I.C.,  which  accounts  shall be used for the  payment  of the  expenditures
incurred  by the  Board of  Managers  in  connection  with the  business  of the
Company,  and in which shall be deposited  any and all cash  receipts.  All such
amounts shall be and remain the property of the Company,  and shall be received,
held and disbursed by the Managers for the purposes specified in this Agreement.
There shall not be deposited in any of said  accounts any funds other than funds
belonging to the Company, and no other funds shall in any way be commingled with
such funds. All checks,  drafts or other orders for the payment of money,  notes
or other evidences of indebtedness  issued in the name of the Company,  shall be
signed by such  Manager,  agent or agents of the  Company  and in such manner as
shall from time to time be determined by resolution of the Board of Managers.

     8.05 Tax  Matters.  The  Members  intend for the Company to be treated as a
partnership for tax purposes.  The Managers shall designate one Member to be the
"tax  matters  partner"  (the "Tax Matters  Member") of the Company  pursuant to
Section  6231(a)(7)  of the Code.  Such Member  shall take such action as may be
necessary  to cause each other  Member to become a "notice  partner"  within the
meaning of Section 6223 of the Code.  Such Member shall inform each other Member
of all significant matters that may come to its attention in its capacity as Tax
Matters  Member by giving  notice  thereof on or before the fifth  Business  Day
after becoming aware thereof and, within that time,  shall forward to each other
Member copies of all significant  written  communications it may receive in that
capacity.  Such Member may not take any action  contemplated  by  Sections  6222
through  6232 of the Code  without the  Written  Consent of all Members but this
sentence  does  not  authorize  such  Member  to  take  any  action  left to the
determination  of an individual  Member under  Sections 6222 through 6232 of the
Code. The initial Tax Matters Member shall be Jeff Wallace.

                                   ARTICLE IX
                            TRANSFERABILITY OF UNITS

     9.01 General. No Member may voluntarily retire or withdraw from the Company
or sell, transfer,  assign, pledge,  encumber or otherwise dispose of all or any
part of its interest in the Company  (whether  voluntarily,  involuntarily or by
operation of law)  ("Assign" or  "Assignment")  except in  compliance  with this
Article IX. Any purported Assignment of any Units in violation of the provisions
of this  Agreement  shall be wholly void and shall not effectuate the Assignment
contemplated thereby. Notwithstanding anything to the contrary contained herein,
the provisions of Sections  9.03,  9.04 and 9.05 shall not apply to any transfer
made pursuant to the exercise of the Call or the Zoom Option under Sections 9.06
and 9.07, respectively.

     9.02 Retirement of a Member.  The Retirement of a Member shall not dissolve
or  terminate  the  Company.  In  the  event  of a  Member's  death,  the  legal
representative  of the  Retired  Member  shall be the  assignee  of the  Retired
Member's  Units and may become a  Substitute  Member  upon  compliance  with the
provisions  of Section  9.04 hereof.  The estate of the Retired  Member shall be
liable  for all of the  Retired  Member's  liabilities  and  obligations  to the
Company as a Member.

     9.03  Assignment.  This Section  governs only the  Assignment of a Member's
economic  rights in the  Company.  With respect to admission of an assignee as a
Member, the provisions of Section 9.04 shall govern. No Member may Assign all or
any part of its Units without first complying with the following provisions:

     (a) the assignor shall, at the request of the Board of Managers, deliver an
opinion of counsel, in form and substance  satisfactory to counsel designated by
the Board of Managers, that such Assignment and any offerings made in connection
therewith are in compliance with applicable  Federal and state laws,  including,
without limitation, the Act and applicable securities laws;

     (b) the assignee  shall execute a statement  that it is acquiring the Units
for its own account for  investment and not with a view to the  distribution  or
resale thereof; and

     (c) in the opinion of counsel  designated  by the Board of  Managers,  such
assignment  would not result in  substantial  adverse  tax  consequences  to the
Members under the Code.

     If the foregoing  conditions are complied with, the Board of Managers shall
consent  to any  Assignment  made by a Member  (a)(i) to such  Member's  spouse,
children,  grandchildren,  or siblings, or a trust for the benefit of any or all
of such individuals  ("Permitted  Transferees") or (b) to another Member or to a
third party pursuant to Section 9.05 below.

     9.04  Substitution.  An assignee of Units  assigned in accordance  with the
provisions  of Section 9.03 may become a Substitute  Member of the same class of
its assignor only if: (a) such Person executes an instrument satisfactory to the
Managers accepting and adopting the terms and provisions of this Agreement;

     (b) in the case of Assignments other than by operation of law, the assignor
states its intention in writing to have its assignee become a Substitute Member;
and

     (c) such Person  agrees,  at the option of the  Company,  to pay any filing
fees,  reasonable counsel fees, and other reasonable expenses in connection with
its becoming a Substitute Member hereunder.

     An assignee of Units who does not become a Substitute  Member in accordance
with this Section 9.04 and who desires to make a further assignment of its Units
shall  nonetheless  be subject to all the  provisions  of this Article IX to the
same extent and in the same manner as any Member  desiring to make an assignment
of its Units.  The Units held by an assignee who is not admitted as a Substitute
Member shall in no way affect the right of such assignee to receive the share of
capital,  profits  and  losses and  distributions  to which its  predecessor  in
interest  was  entitled.  The Units held by an assignee who is not admitted as a
Substitute  Member shall not be counted for the purpose of  determining  whether
the  requisite  consent or vote of the  Members  has been given to any  proposed
action for which the vote or consent of the Members is required.

     9.05  Right of First Refusal.

     (a) If at any time any Member (the "Selling  Member") intends to Assign any
of its Units to any Person (including another Member), other than to a Permitted
Transferee or pursuant to the  provisions  of Sections 9.06 or 9.07 below,  then
the Selling Member shall, prior to any such Assignment, give written notice (the
"Sale  Notice") of such  intention  to the Company  and the other  Members  (the
"Buying  Members").  The Sale  Notice  shall  include  the name of the  proposed
assignee,  the proposed  purchase  price per Unit,  the terms of payment of such
purchase  price and all other matters  relating to such  Assignment and shall be
accompanied by a copy of a binding written agreement of the proposed assignee to
purchase such Units from the Selling Member.  The Sale Notice shall constitute a
binding  offer by the  Selling  Member to Assign to the  Company  such number of
Units (the "Offered  Units") then owned by the Selling Member as are proposed to
be Assigned in the Sale Notice at the monetary price per Unit  designated in the
Sale Notice, payable as hereinafter provided.

     (b) Not later than thirty (30) days after  receipt of the Sale Notice,  the
Company  shall  deliver to the Selling  Member and the Buying  Members a written
notice (the "Buying  Notice") stating whether the Company has accepted the offer
stated in the Sale  Notice.  If the  Company  accepts  the offer of the  Selling
Member in full,  the Buying  Notice shall fix a time,  location and date for the
closing  of such  purchase,  which date shall be not less than ten (10) nor more
than sixty (60) days after delivery of the Buying Notice. The Company shall have
no right to purchase any Offered  Units unless the Company  accepts the offer of
the Selling  Member in whole.  In the event the Company  elects to purchase less
than all the Offered Units, the Buying Members shall have fifteen (15) days from
the date of the Buying  Notice to elect to purchase the Offered  Units which the
Company did not elect to purchase,  by giving  written notice to the Company and
the  Selling  Member  specifying  the  number of Offered  Units  each  elects to
purchase and a time, location and date for the closing for such purchase,  which
date  shall be not less that ten (10) nor more than sixty (60) days from the end
of such  fifteen  (15) day  period.  If the  Company is  purchasing  some of the
Offered  Units,  the closing of the  Company's  purchase  shall be on such date.
Unless otherwise agreed between or among the Buying Members, the purchase by the
Buying Members shall be pro rata to their then Percentage  Interests;  provided,
however,  that if one or more of the Buying  Members  elects not to purchase any
Offered  Units  subject to the Sale Notice,  the  remaining  Buying  Members may
purchase  all of the Offered  Units,  without the consent of any  non-purchasing
Members,  pro rata  between or among  them or in such  other  manner as they may
agree.  Notwithstanding the foregoing, neither the Company nor any Buying Member
shall have a right to purchase any Offered  Units unless the Company  and/or the
Buying Members  accept the offer of the Selling  Member in whole.  The place for
the closing of any purchase and sale described in this Section 9.05 shall be the
principal  office of the  Company or at such other  place as the  parties  shall
agree.  At the closing,  the Selling  Member  shall accept  payment on the terms
offered by the proposed  assignee named in the Sale Notice;  provided,  however,
that  neither the Company nor the Buying  Members,  as the case may be, shall be
required to meet any non-monetary terms of the proposed  Assignment,  including,
without  limitation,  delivery of other  securities  in  exchange  for the Units
proposed to be Assigned,  but rather,  shall be entitled to substitute therefore
monetary terms having the same fair market value as the  non-monetary  terms, as
conclusively  determined  by the  Managers in good faith.  At the  closing,  the
Selling  Member  shall  execute  and  deliver to the  Company  and/or the Buying
Members such  documents,  certificates  and  instruments  of  Assignment  as the
Company  and/or the Buying  Members shall require to evidence and effectuate the
Assignment.

     (c) If the  Company and the Buying  Members  shall fail to accept the offer
stated in the Sale Notice  within such thirty (30) day period,  then the Selling
Member shall be free to Assign all, but not less than all, of the Offered  Units
to the  designated  assignee  at a price and on terms no less  favorable  to the
Selling Member than described in the Sale Notice;  provided,  however, that such
Assignment is consummated within one hundred fifty (150) days after the delivery
of the Sale  Notice  to the  Company  and  otherwise  satisfies  the  terms  and
conditions  of this  Agreement;  and  provided,  further,  that  the  designated
assignee may become a Substitute Member only upon compliance with the provisions
of Section 9.04 hereof.

     9.06  Call Option.

     (a) At all  times  during  the Call  Period,  Zoom  shall  have the  right,
provided  that  Zoom  has not  (i)  sold,  assigned  or  transferred  any of its
interests  under the Purchase  Agreement,  or (ii) failed to make and Additional
Capital Contribution under Section 4.09 above beyond any applicable cure period,
to  purchase  from the  Non-Zoom  Members,  and the  Non-Zoom  Members  shall be
obligated to sell to Zoom, all, but not less than all, of the Non-Zoom  Members'
collective  Units  (free and clear of all  liens,  encumbrances,  and the like),
including,  but not limited to, all of the Non-Zoom  Members'  right,  title and
interest  in and to the  Real  Property,  Leases,  Tangible  Personal  Property,
Intangible  Personal  Property,  License Agreements and Earnest Money, under the
Purchase  Agreement and the Second  Amendment  (the "Call").  If Zoom desires to
exercise the Call, Zoom shall provide written notice to the Non-Zoom  Members at
least thirty (30) business  days prior to the Call  purchase  date. In the event
that the Call  transaction  has not closed by December 31, 2005 (other than as a
result of a default of the  Non-Zoom  Members),  all of Zoom's Call rights shall
expire.

     (b) The purchase price for the Non-Zoom Members' interest (the "Call Option
Price") shall be as follows:

          (i) If the closing of the Call transaction  occurs within one (1) year
     after the  Option  Effective  Date,  an amount  equal to the sum of (A) the
     Purchase  Price  (less,  if  applicable,  the  Closing  Credit),  plus  any
     Investment  Capital  Contributions  made from time to time by the  Non-Zoom
     Members to the Company,  plus the  Non-Zoom  Members'  collective  pro rata
     share of any  undistributed  net  Profits  of the  Company  (the  "Non-Zoom
     Members' Net Profits") and (B) twenty  percent (20%) of the Purchase  Price
     (less, if applicable,  the Closing  Credit).  For example,  if the Purchase
     Price is  $6,250,000.00  (including  all  closing  costs,  adjustments  and
     credits),  the total Investment Capital  Contributions made by the Non-Zoom
     Members to the Company  are  $500,000.00,  and the  Non-Zoom  Members'  Net
     Profits are $100,000.00,  then the Call Option Price would be $8,100,000.00
     ($6,250,000.00 + 1,250,000.00 + 100,000.00 + 500,000.00).

          (ii) If the closing of the Call  transaction  occurs more than one (1)
     year after the Option Effective Date, an amount equal to the sum of (A) the
     Purchase  Price  (less,  if  applicable,  the  Closing  Credit),  plus  any
     Investment  Capital  Contributions  made from time to time by the  Non-Zoom
     Members to the Company,  plus the Non-Zoom Members' Net Profits and (B) (x)
     twenty  percent (20%) of the the Purchase Price (less,  if applicable,  the
     Closing Credit), multiplied by (y) a fraction, the numerator of which shall
     be the number of months from the Option  Effective Date to the close of the
     Call transaction, and the denominator of which shall be twelve (12).

     9.07  Zoom Option.

     (a) At all times during the Zoom Option  Period,  Zoom shall have the right
to sell to the Non-Zoom Members,  and the Zoom Members shall be obligated to buy
from Zoom,  all,  but not less than all, of Zoom's  Units (free and clear of all
liens, encumbrances, and the like), including, but not limited to, all of Zoom's
right, title and interest in and to the Real Property, Leases, Tangible Personal
Property,  Intangible  Personal  Property,  License Agreements and Earnest Money
under the Purchase  Agreement and the Second  Amendment (the "Zoom Option").  If
Zoom desires to exercise the Zoom Option, Zoom shall provide written notice (the
"Option  Notification")  to the Non-Zoom  Members prior to the expiration of the
Zoom Option Period.

     (b) The purchase  price for Zoom's Units (the "Zoom Option Price") shall be
an amount equal to the sum of (w) Zoom's  allocable  share,  i.e. twenty percent
(20%),  of the Net  Purchase  Equity  (as  hereinafter  defined),  plus  (x) any
Investment  Capital  Contribution made from time to time by Zoom to the Company,
plus (y) Zoom's pro rata share of any  undistributed  net Profits of the Company
("Zoom's Net  Profits"),  plus (z) Zoom's pro rata share of any of the Company's
legal fees in  connection  with the  acquisition  and  financing of the Property
("Zoom's Legal Share"). The term "Net Purchase Equity" as used herein shall mean
the amount of the  Purchase  Price for the  Property,  increased  by any closing
costs and  adjustments,  and decreased by the Closing Credit (if applicable) and
by the net  proceeds  of the  mortgage  used to fund  the  Purchase  Price.  For
example,  if the Purchase Price is  $6,250,000.00  (including all closing costs,
adjustments and credits) and the net mortgage  proceeds are  $4,000,000.00,  the
total  Investment  Capital  Contributions  made  by  Zoom  to  the  Company  are
$50,000.00,  Zoom's  Net  Profits  are  $25,000.00,  and Zoom's  Legal  Share is
$25,000.00,   then  the  Zoom  Option  Price  would  be   $550,000.00   (20%  of
$2,250,000.00, plus $50,000.00, plus $25,000.00, plus $25,000.00).

     (c) In the event that Zoom exercises the Zoom Option,  each of the Non-Zoom
Members hereby agrees (i) to jointly and severally  consummate such  transaction
within ninety (90) days after Zoom's  delivery of the Option  Notification,  and
(ii) to contribute  its pro rata share of the Zoom Option Price.  Any member who
fails to timely  contribute  its pro rata share of the Zoom  Option  Price shall
suffer  punitive  dilution  vis-a-vis the other  Members,  using the formula set
forth in Section  4.09(e) above.  Immediately  upon Zoom's  exercise of the Zoom
Option,  Zoom shall have no further  obligation to make any  Additional  Capital
Contribution  under  Section  4.09  above,   including  any  Additional  Capital
Contribution required by a pending capital call notice.

     (d) The Members  hereby agree to execute and deliver any and all  documents
and instruments  reasonably necessary to effect the exercise of the Zoom Option,
including, but not limited to, all documents required under Section 9.03 above.

     9.08 Rights and  Liabilities of an Assigning  Member.  Any Member who shall
have  assigned its Units shall cease to be a Member of the  Company,  except for
the purpose of  determining  the profits and losses and assets  allocable to its
assignee and shall no longer have any of the rights or privileges of a Member.

                                    ARTICLE X
                           DISSOLUTION AND TERMINATION

     10.01 Events of Dissolution.

     (a) The Company shall be dissolved at 12:00  midnight on a date  designated
by the Board of Managers with the Supermajority Consent of the Members.

     (b) The Company shall not terminate until (a) a Certificate of Cancellation
shall  have  been  filed  with the  Secretary  of State of the state and (b) the
assets  of  the  Company  shall  have  been   distributed  as  provided  herein.
Notwithstanding the dissolution of the Company,  prior to the termination of the
Company, as aforesaid,  the business of the Company and the affairs of the Board
of Managers  and the  Members,  as such,  shall  continue to be governed by this
Agreement.  Upon  dissolution,  the Managers or, if there are none, a liquidator
appointed   by  the   Majority   Consent  of  the  Members   (hereinafter,   the
"Liquidator"),  shall  liquidate  the  assets  of  the  Company  and  apply  and
distribute the proceeds  thereof as contemplated by this Agreement and cause the
filing of a Certificate of Cancellation.

     (c) Without  limiting the  generality of the  foregoing,  in winding up the
affairs of the  Company,  the  Liquidator  shall  have full right and  unlimited
discretion, in the name of and for and on behalf of the Company to:

          (i)  Prosecute,  defend and settle civil,  criminal or  administrative
     suits;

          (ii)  Collect  Company  assets,  including  obligations  owed  to  the
     Company;

          (iii) Settle and close the Company's business;

          (iv) Dispose of and convey all Company  property for cash or any other
     form of consideration  which would  facilitate  liquidation or distribution
     thereof,  and in  connection  therewith to determine  the time,  manner and
     terms of any sale or sales of Company  property,  having due regard for the
     activity and  condition of the relevant  market and general  financial  and
     economic conditions;

          (v) Pay all reasonable  selling costs and other  expenses  incurred in
     connection  with the winding up out of the proceeds of the  disposition  of
     Company property;

          (vi) Discharge the Company's known  liabilities and, if necessary,  to
     set up,  for a period  not to  exceed  five  (5)  years  after  the date of
     dissolution,  such cash  reserves  as the  Liquidator  may deem  reasonably
     necessary for any  contingent or unforeseen  liabilities  or obligations of
     the Company;

          (vii)  Distribute,  in accordance  with Section  10.02,  any remaining
     proceeds from the sale of Company property to the Members;

          (viii)  Prepare,  execute,  acknowledge  and  file  a  Certificate  of
     Cancellation  under  the Act and any other  certificates,  tax  returns  or
     instruments  necessary or advisable  under any applicable law to effect the
     winding up and termination of the Company; and

          (ix) Exercise,  without further authorization or consent of any of the
     parties  hereto or their legal  representatives  or successors in interest,
     all of the  powers  conferred  upon the  Managers  under  the terms of this
     Agreement to the extent  necessary or desirable in the good faith  judgment
     of the Liquidator to perform its duties and  functions.  The Liquidator (if
     not a Manager)  shall not be liable as a Manager to the  Members and shall,
     while acting in such capacity on behalf of the Company,  be entitled to the
     indemnification rights set forth in Section 5.16.

     10.02 Distributions Upon Liquidation.

     (a) After payment of liabilities  owing to creditors  (including any Member
or  Manager  that  has  made a loan  to the  Company  in  accordance  with  this
Agreement),  the Liquidator  shall set up such reserves as the President or such
Liquidator  deems   reasonably   necessary  for  any  contingent  or  unforeseen
liabilities or obligations of the Company. Said reserves may be paid over by the
Liquidator  to a bank,  to be held in escrow for the  purpose of paying any such
contingent or unforeseen  liabilities or  obligations  and, at the expiration of
such  period  as the  Liquidator  may deem  advisable,  such  reserves  shall be
distributed  to the Members or their  assigns in the manner set forth in Section
10.02(b) below.

     (b) After paying such  liabilities  and  providing for such  reserves,  the
Liquidator shall cause the remaining net assets of the Company to be distributed
to and among the Members in accordance with their  respective  positive  Capital
Account balances, as determined after taking into account all profits and losses
of the Company.

     10.03 Final Audit. Within a reasonable time following the completion of the
liquidation,  the  Liquidator  shall  supply to each Member a statement  setting
forth the  assets and  liabilities  of the  Company  as of the date of  complete
liquidation  and each  Member's  pro rata portion of  distributions  pursuant to
Section 10.02.

                                   ARTICLE XI
                               DISPUTE RESOLUTION

     11.01 Procedures for Dispute Resolution. Any dispute,  controversy or claim
(a  "Dispute")  between  any parties  hereto  arising out of or relating to this
Agreement shall be resolved in accordance with the procedures  described in this
Article XI. The parties  hereto  agree to  establish  an internal  hierarchy  to
facilitate resolution of these issues as set forth below.

     11.02 Informal Resolution.

     (a) The Managers of the Company and any Member  involved in a Dispute shall
discuss  the  Dispute  and  negotiate  in good faith in an effort to resolve the
Dispute without the necessity of any formal proceeding  relating thereto ("Level
1 Review").

     (b) If  the  Dispute  cannot  be  resolved  within  ten  (10)  days  of the
commencement of the Level 1 Review, then the Dispute shall be brought before all
of the Members  ("Level 2 Review").  The Board of Managers or a duly  authorized
committee  thereof  (excluding for this purpose any Manager  affiliated with the
Members  involved in the Dispute)  shall meet in person or by telephone as often
as the parties  reasonably  deem necessary in order to gather and furnish to the
participants  in the Dispute all  information  with respect to the Dispute which
the  parties  believe  to be  appropriate  and  germane in  connection  with its
resolution.  The Board of Managers or such  committee  shall discuss the Dispute
and negotiate in good faith with senior  management of any Member  involved in a
Dispute in an effort to resolve the Dispute  without the necessity of any formal
proceeding relating thereto.  During the course of negotiations,  all reasonable
requests  made by the Board of  Managers  or such  committee  or any  Member for
nonprivileged  information,  reasonably related to the Dispute, shall be honored
in order that all parties may be fully advised of each Member's position.

     11.03 Non-Binding Mediation.

     (a) If resolution of the Dispute is not resolved within thirty (30) days of
the first  Level 2 Review  meeting,  then any  party to a Dispute  may refer the
Dispute to non-binding mediation.

     (b) The  parties  to a Dispute  shall  endeavor  to agree  upon a  mutually
acceptable professional mediator not affiliated with any party to the Dispute (a
"Neutral"). If no Neutral is selected within twenty (20) days after the referral
to non-binding mediation,  any party to the Dispute may request, within five (5)
days of the end of such period, the American Arbitration Association ("AAA"), or
other similar nationally recognized independent dispute resolution  organization
agreed to by the parties,  to supply within ten (10) days of such request a list
of at least three (3) potential  Neutrals who are  knowledgeable in the business
in which the  Company  is  engaged.  If a  mutually  acceptable  Neutral  is not
selected  by the  parties  within  five (5) days  after  receipt  of the list of
potential  Neutrals,  the Dispute shall be resolved in  accordance  with Section
11.04.

     (c) Within ten (10) days after the appointment of the Neutral,  the parties
to the Dispute  agree to meet with the Neutral for a prehearing  conference.  At
such conference the parties shall arrange for the exchange of information in the
possession  of any other party,  including  certain  limited  depositions  where
appropriate,  and stipulation of uncontested  facts. The parties shall establish
the  extent  of  and  schedule  for  the   production  of  relevant   documents,
depositions,  and the  identification of witnesses.  Should a dispute arise over
the extent of document  production,  appropriate  witnesses or the scheduling of
any  activity,  including  the  hearing  date,  the  Neutral  shall make a final
determination   after  hearing  each  party's   position.   At  such  prehearing
conference,  or at a later scheduled  conference as agreed by all parties to the
Dispute,  the date of the  hearing  shall be set which  shall  not,  unless  all
parties agree,  be more than  forty-five  (45) days from the date of the initial
pre-hearing conference.

     (d) One week prior to the  scheduled  hearing,  each  party to the  Dispute
shall  deliver to the Neutral  and to any other  party a written  summary of its
views on the matter in dispute.  The summary shall be no longer than twenty (20)
double-spaced pages unless the parties agree otherwise.

     (e) At the hearing each party shall be represented by counsel if so desired
by any party.  Each party  shall have an  agreed-upon  time,  not to exceed four
hours, in which to present its case,  including live or recorded testimony.  The
Neutral will be permitted to ask questions after the  presentation by each side.
No party  shall  interrupt  any  other  party or lodge  objections  unless  such
procedures are agreed to in advance by all parties and the Neutral.

     (f) If the parties agree to a settlement,  the parties, with the assistance
of the Neutral,  shall  endeavor to draft and execute a settlement  agreement at
that time.  The  settlement  agreement  shall be a final and binding  settlement
among the  parties  of all  claims,  cross-claims  and  counterclaims  among the
parties  relating to the  Dispute.  The facts  reflected  in the  Dispute  shall
thereafter   not  serve  as  the  basis  of  any   other   claim,   cross-claim,
counter-claim,  action or other form of recovery by one party  against any other
party or parties to the settlement.

     (g) If a settlement  agreement is not executed by the parties,  the Neutral
will meet  separately  with each party and orally  summarize the dispute and the
strengths and weaknesses of that party's  position.  If all parties agree,  this
oral  summary  can  be  conducted  as a  joint  conference.  There  shall  be no
stenographic,  visual  or audio  recording  made of the  hearing  or  subsequent
discussions.

     (h) To the extent any issues arise as to the conduct of the mediation  that
are not  specifically  addressed by the rules  specified  above,  the Commercial
Mediation  Rules of the AAA shall apply to the extent that they do not  conflict
with the procedures and rules specified above.

     (i) The mediation  proceedings  and all testimony,  filings,  documents and
information  relating to or presented during the mediation  proceedings shall be
disclosed  exclusively for the purpose of facilitating the mediation process and
for no other  purpose  and  shall be  deemed to be  information  subject  to the
confidentiality provisions of this Agreement.

     11.04  Binding  Arbitration.  If  resolution of the Dispute still cannot be
achieved  pursuant to Section  11.03,  the  Dispute  shall be settled by binding
arbitration  conducted in Boston,  Massachusetts,  in  accordance  with the then
current  Commercial  Arbitration  Rules of the AAA as modified by the  following
provisions:

     (a)  Selection of one neutral  arbitrator  by the parties shall be from the
AAA panel list in accordance with the appointment rules of the AAA.

     (b) The arbitration process shall be conducted on an expedited basis by the
Boston Office of the AAA.  Proceedings in arbitration  shall begin no later than
forty-five  (45) days after the filing of the Dispute and shall be  scheduled to
conclude no later than  two-hundred  seventy  (270) days after the filing of the
Dispute. All hearings,  unless otherwise agreed to by the parties, shall be held
in Boston, Massachusetts.

     (c) The arbitrator may in his  discretion  order a pre-hearing  exchange of
information  including  production  of  documents,   exchange  of  summaries  of
testimony or exchange of statements of position or depositions.

     (d) The arbitration proceedings and all testimony,  filings,  documents and
information relating to or presented during the arbitration proceedings shall be
disclosed  exclusively for the purpose of facilitating  the arbitration  process
and for no other  purpose and shall be deemed to be  information  subject to the
confidentiality provisions of this Agreement.

     (e)  The  award  of the  arbitrator  shall  be made  in a  written  opinion
containing a concise analysis of the basis upon which the award was made.

     (f) A judgment upon the award  rendered by the arbitrator may be entered in
any court having jurisdiction thereof.

     (g) The  parties  agree  to  equally  split  the  cost  of any  arbitration
including the  administrative  fee, the  compensation  of the arbitrator and the
expenses  of any  witnesses  or proof  produced  at the  direct  request  of the
arbitrator.

     (h) The parties shall each bear all their own costs and expenses, including
the fees and expenses of legal counsel and expert witnesses.

     (i)  Notwithstanding  the agreement to arbitrate  contained in this Article
XI,  any party  may  apply to any court  having  jurisdiction  to  enforce  this
Agreement to seek provisional injunctive relief so as to maintain the status quo
until the arbitration award is rendered or the dispute is otherwise resolved.

     (j) The  arbitrator  shall have the right only to  interpret  and apply the
terms and conditions of this  Agreement in accordance  with the law of the State
and to order any remedy allowed by this  Agreement,  but may not change any term
or  condition  of this  Agreement,  deprive  any party of any  remedy  expressly
provided  hereunder  or provide any right or remedy that has not been  expressly
provided hereunder.

     (k) The arbitrator shall not have the power to award consequential  damages
or punitive damages.

     (l) The Federal Arbitration Act, 9 U.S.C.  Sections 1 through 14, except as
modified hereby, shall govern the interpretation and enforcement of this Article
XI.

     11.05 Performance of Obligations.  Notwithstanding anything to the contrary
in this Article XI, the Members agree to continue  performing  their  respective
obligations  under this Agreement while the Dispute is being resolved unless and
until  such  obligations  are  terminated  or  expire  in  accordance  with  the
provisions hereof.

                                   ARTICLE XII
                                POWER OF ATTORNEY

     12.1 Managers as Attorney-In-Fact.  Each Member hereby makes,  constitutes,
and  appoints  the  Managers  and each  successor  Manager  with  full  power of
substitution and resubstitution,  such Member's true and lawful attorney-in-fact
for,  and in the name,  place,  and stead  and for the use and  benefit  of such
Member, to sign, execute, certify,  acknowledge,  swear to, file, and record (a)
all  certificates  and  other  instruments   (including   counterparts  of  this
Agreement)  that the Managers may deem  necessary or  appropriate to be filed by
the Company under the laws of the  Commonwealth  of  Massachusetts  or any other
state or jurisdiction in which the Company is doing, or intends to do, business;
(b) any and all  amendments  or changes to this  Agreement  and the  instruments
described  in (a),  as now or  hereafter  amended,  that the  Managers  may deem
necessary or  appropriate to effect a change or  modification  of the Company in
accordance  with the terms of this  Agreement,  including,  without  limitation,
amendments  or changes to reflect (i) the  exercise by the Managers of any power
granted to them under this Agreement, (ii) any amendments adopted by the Members
in  accordance  with the terms of this  Agreement,  (iii) the  admission  of any
substituted  Member,  and (iv) the  disposition  by any Member of such  Member's
Units in the Company; (c) all certificates of cancellation and other instruments
that the Managers may deem necessary or  appropriate  to effect the  dissolution
and termination of the Company pursuant to the terms of this Agreement;  and (d)
any other instrument that is now or may hereafter be required by law to be filed
on behalf of the Company or is deemed  necessary or  appropriate by the Managers
to carry out fully the  provisions  of this  Agreement  in  accordance  with its
terms. Each Member authorizes such  attorney-in-fact  to take any further action
that such  attorney-in-fact  shall consider necessary or advisable in connection
with any of the foregoing,  hereby giving such  attorney-in-fact  full power and
authority to do and perform each and every act or thing whatsoever  requisite or
advisable to be done in  connection  with the  foregoing as fully as such Member
might or could do personally,  and hereby ratifying and confirming all that such
attorney-in-fact  shall  lawfully  do or cause to be done by virtue  thereof  or
hereof.

     12.2 Nature of Special  Power.  The power of attorney  granted  pursuant to
this Article XII:

     (a) Is a  special  power  of  attorney  coupled  with  an  interest  and is
irrevocable;

     (b) May be  exercised  by such  attorney-in-fact  by  listing  the  Members
executing any  agreement,  certificate,  instrument,  or other document with the
single signature of such  attorney-in-fact  acting as attorney-in-fact  for such
Members; and

     (c) Shall  survive  the death,  disability,  legal  incapacity  bankruptcy,
insolvency, dissolution, or cessation of existence of a Member and shall survive
the  delivery  of an  assignment  by a Member of the whole or a portion  of such
Member's Units;  provided,  however, that where the assignment is of all of such
Member's Units and the assignee is admitted as a substituted  Member,  the power
of attorney  shall survive the delivery of such  assignment for the sole purpose
of enabling such attorney-in-fact to effect such substitution.

                                  ARTICLE XIII
                                  MISCELLANEOUS

     13.01  Notices.  Any  and  all  notices,  elections,  consents  or  demands
permitted  or  required  to be made or given  under this  Agreement  shall be in
writing and shall be delivered personally, made by telex, telecopy, or facsimile
transmission, sent by overnight courier or sent by registered or certified mail,
return receipt  requested,  to the addressee as follows:  if to a Member, to its
address  set forth on  Schedule  A,  and,  if to the  Board of  Managers  of the
Company,  to the Company's  principal  office.  Any and all notices,  elections,
consents  or  demands  permitted  or  required  to be made or given  under  this
Agreement  shall be  deemed to have  been  given if by hand,  at the time of the
delivery thereof to the receiving party, if made by telex, telecopy or facsimile
transmission,  at the  time  that  receipt  thereof  has  been  acknowledged  by
electronic  confirmation or otherwise, if sent by overnight courier, on the next
business day following the day such notice is delivered to the courier  service,
or if sent by registered or certified mail, on the third (3rd) business day (ten
(10) if overseas) following the day such mailing is made.

     13.02  Successors and Assigns.  Subject to the restrictions on transfer set
forth herein,  this  Agreement,  and each and every provision  hereof,  shall be
binding  upon and shall inure to the benefit of the  Members,  their  respective
successors,   successors-in-title,   heirs  and  assigns,  and  each  and  every
successor-in-interest  to any  Member,  whether  such  successor  acquires  such
interest by way of gift,  purchase,  foreclosure,  or by any other method, shall
hold such interest subject to all of the terms and provisions of this Agreement.

     13.03  Amendments.  This  Agreement may be amended from time to time by the
Board of Managers;  provided,  however, that: (a) all Members must vote in favor
of, or give their  Written  Consent  to, any  amendment  which  would amend this
Section 13.03;  (b) each Member to be affected must give its Written  Consent to
any  amendment  which would (i) increase the amount of the Capital  Contribution
payable by such Member;  (ii)  increase the  liability of such Member;  or (iii)
cause  such  Member's  share of the  Company's  assets,  profits or losses to be
modified,  unless such modification is in connection with the admission of a new
Member or Members and all  interests  of persons or entities  who are Members of
the same class immediately prior to such admission are similarly  modified;  (c)
no  provision  of this  Agreement  requiring  that an action be taken  only upon
approval of Members  holding a specified  Percentage  Interest  may be modified,
amended or repealed  unless Members  holding at least such  Percentage  Interest
vote in favor of, or give their Written Consent to, such modification, amendment
or repeal,  and (d) the Board of  Managers  is  authorized,  without the vote in
favor or Written  Consent of any Member,  to make  amendments to this Agreement:
(i) to add to the duties or  obligations  of the Board of Managers or  surrender
any right or power  granted to the Board of  Managers  herein for the benefit of
the Members;  (ii) to preserve the status of the Company as a "partnership"  for
federal  income tax purposes;  (iii) to amend the  provisions of this  Agreement
relating  to  allocations  of profits  and losses for tax  purposes so that such
provisions comply with applicable  regulations  adopted under the Code; and (iv)
to reflect the admission or withdrawal of Members and the terms as authorized by
this Agreement.

     13.04  Partition.   The  Members  hereby  agree  that  no  Member  nor  any
successor-in-interest  to any Member,  shall have the right while this Agreement
remains in effect to have any property of the Company partitioned,  or to file a
complaint or institute  any  proceeding at law or in equity to have any property
of  the  Company  partitioned,  and  each  Member,  on  behalf  of  itself,  its
successors, representatives, heirs, and assigns, hereby waives any such right.

     13.05  No  Waiver.  The  failure  of  any  Member  to  insist  upon  strict
performance of a covenant hereunder or of any obligation hereunder, irrespective
of the length of time for which such failure continues, shall not be a waiver of
such  Member's  right to demand strict  compliance in the future.  No consent or
waiver, express or implied, to or of any breach or default in the performance of
any  obligation  hereunder,  shall  constitute  a consent or waiver to or of any
other breach or default in the  performance of the same or any other  obligation
hereunder.

     13.06 Exhibits and Schedules.  All exhibits and schedules  attached  hereto
are an  integral  part of this  Agreement  and are  incorporated  herein by this
reference.

     13.07 Entire  Agreement.  This Agreement  constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.

     13.08  Captions.  Titles or captions of articles or sections  contained  in
this Agreement are inserted only as a matter of  convenience  and for reference,
and in no way define,  limit,  extend or describe the scope of this Agreement or
the intent of any provision hereof.

     13.09  Applicable Law. This Agreement and the rights and obligations of the
parties  hereunder shall be governed by and interpreted,  construed and enforced
in accordance with the laws of the State.

     13.10 Equitable Remedies. Each Member shall, in addition to rights provided
herein or as may be provided under  applicable law, be entitled to all equitable
remedies, including those of specific performance and injunction, to enforce its
rights hereunder.

     13.11 Creditors.  None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditor of any Member or of the Company.

     13.12  Offset.  Whenever  the Company is to pay any sum to any Member,  any
amounts  that  Member  owes the  Company  may be  deducted  from that sum before
payment.

     13.13 Separability of Provisions. Each provision of this Agreement shall be
considered  separable.  To the extent that any  provision  of this  Agreement is
prohibited  or  ineffective  under the Act, this  Agreement  shall be considered
amended to the smallest degree possible in order to make the Agreement effective
under the Act (and, if the Act is  subsequently  amended or  interpreted in such
manner as to make  effective any provision of this  Agreement  that was formerly
rendered invalid,  such provision shall  automatically be considered to be valid
from the effective date of such amendment or interpretation).

     13.14  Counterparts.  This  Agreement  may  be  executed  in  a  number  of
counterparts,  all of which  together  shall  for all  purposes  constitute  one
Agreement, binding on all of the Members and Managers,  notwithstanding that all
Members and Managers have not signed the same counterpart.


                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>


  WITNESS the execution hereof under seal as of the day first above written.


MEMBERS:                                  MANAGERS:

BRUCE M. KRAMER LIVING TRUST


By:  /s/ Bruce M. Kramer                    /s/ Peter Kramer
-----------------------------------       -----------------------------------
   Bruce M. Kramer, as Trustee and        Peter Kramer
   individually
                                            /s/ Jeff Wallace
                                          -----------------------------------
                                          Jeff Wallace

JEWEL FAMILY LIMITED PARTNERSHIP


By:  /s/ Jeff Wallace
-----------------------------------
   Jeff Wallace, as General Partner
   and individually



ZOOM TELEPHONICS, INC.


By:   /s/ Peter Kramer
-----------------------------------
   Peter Kramer
   Executive Vice President


  /s/ Frank Manning
-----------------------------------
Frank Manning

  /s/ Peter Kramer
-----------------------------------
Peter Kramer



<PAGE>



                     Counterpart Signature Page For Members


      The undersigned hereby agrees to become a party to that certain Operating
Agreement dated as of March ___, 2002 (the "Agreement") of Zoom Group LLC, a
Massachusetts limited liability company (the "Company"). From and after the
undersigned's execution and delivery and the Company's acceptance of this
Counterpart Signature Page, the undersigned shall be a party to the Agreement as
a "Member" and the Units owned by the undersigned as set forth below shall be
deemed to be "Units" for all purposes of the Agreement.


-------------------------------------------
Printed Name of Member

-------------------------------------------
Signature of Member

Name:  ___________________________________

Title:  ____________________________________

Type and Number of Units: ___________________

Capital Contribution: ________________________


Date: _____________________________________


Agreed and accepted:

ZOOM GROUP LLC


By:
   ---------------------------------------


Date:
     -------------------------------------


<PAGE>



                   Counterpart Signature Page For Managers


      The undersigned hereby agrees to become a party to that certain Operating
Agreement dated as of March ___, 2002 (the "Agreement") of Zoom Group LLC, a
Massachusetts limited liability company (the "Company"). From and after the
undersigned's execution and delivery of this Counterpart Signature Page, the
undersigned shall be a party to the Agreement as a "Manager" and shall be
entitled to the rights, and subject to and bound by the obligations set forth
therein.


------------------------------------------
Printed Name of Manager

------------------------------------------
Signature of Manager


Date:
     -------------------------------------





<PAGE>



                                 ZOOM GROUP LLC


                                   SCHEDULE A

                                     MEMBERS

                              As of _________, 2002


<TABLE>
----------------------------------------------------------------------------------------
                                                    Capital     Percentage     Capital
Name                  Address              Units  Contribution   Interest      Account
                                                                               Balance
----------------------------------------------------------------------------------------
<S>                   <C>                  <C>    <C>           <C>         <C>

Bruce M. Kramer       2738 N. Radford St.
Living Trust          Arlington, VA         20    $540,000.00       20%     $540,000.00
                      22207

Peter Kramer          1067 Beacon St.
                      Brookline, MA         20    $540,000.00       20%     $540,000.00
                      02446

Jewel Family Limited  8 Sessions St.
Partnership           Wellesley, MA         20    $490,000.00       20%     $490,000.00
                      02482

Zoom Telephonics,     207 South St.
Inc.                  Boston, MA 02111      20    $540,000.00       20%     $540,000.00

Frank Manning         36 Pinckney St.
                      Boston, MA 02114      20    $540,000.00       20%     $540,000.00
----------------------------------------------------------------------------------------
</TABLE>